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CAIT seeks extension of last date to file GST annual return to October 31

Traders' body CAIT on Thursday asked the finance ministry to extend the last date for filing annual GST return by two months to October 31.

The last date to file the return is August 31. In a letter to Finance Minister Nirmala Sitharaman, the Confederation of All India Traders (CAIT) said prescribed Form GSTR 9 for filing annual return "is still very complicated".

According to it, several information sought in the Form are new and in spite of best efforts traders are finding it difficult to comply with the same.

Friday, August 23, 2019

Fifteen percent taxpayers have been able to file an annual return under Goods and Services Tax (GST) amid fast approaching due date owing to complexities raising worries among dealers fraternity, who are now demanding exemption from filing annual returns for first-year 2017/18. In wake of lacklustre response and hurdles faced by taxpayers in filing annual return forms 9, 9A and 9C, Ahilya Chamber of Commerce and Industry has urged the government to exempt taxpayers from filing annual returns for the first year. Ahilya Chamber of Commerce and Industry general secretary Sushil Sureka said, “Except some big corporates, details demanded an annual return form is next to impossible for small traders to provide due to which they are not able to file GST returns. As everything is online and we have been filing monthly returns, software should auto compile annual return data.”

There are four lakh taxpayers in Madhya Pradesh registered with GST department, of which not more than 15 percent have been able to file annual returns so far, officials from state GST department said. Lack of provision for rectification in annual return in case of any error and complex nature of forms are delaying return filing, said, industry experts. Some industries associations have also demanded an extension of the last date and to allow rectification in returns. The last date for filing GST annual returns is August 31, that has been extended once from July 31. An official from State GST department wishing anonymity said, “Response is not great with just 15 percent taxpayers able to file annual returns till date. Looking at the slow pace we are anticipating that the last date for filing the returns will get extended again.”

Wednesday, August 21, 2019 Read More

Parle Products Private Limited said that product demand for its products has diminished in the past two quarters. In an exclusive interview to Bloomberg Quint, Mayank Shah, category heads at Parle Products said, “Consumers have become more value-conscious during the times of slowdown in the last six months. Consumers are not buying enough. Offtake from the shops is getting affected. The number of shops stocking these products is the same, but the number of products being sold from these shops is going down due to weakening consumer demand,” His remarks came after Varun Berry, managing director, Britannia Ltd, in a post-earnings conference said the consumers are thinking twice before buying even a ₹5 product. He indicated towards a “serious issue in the economy”.

“We’ve only grown 6 percent and the market is growing slower than that,” Varun Berry, managing director at the maker of Good Day and Tiger biscuits, said. Britannia Industries market shares have declined more than 3 percent since it announced its first-quarter results on August 9, 2019.  Mayan Shah of Parle Products held higher slabs in Goods and Services tax and lack of adequate government stimulus responsible for the slowdown in demand. “Imposing higher taxes on biscuits bought typically by lower-income consumers will definitely impact sales. The government needs to spruce up demand. There has also been a long pending demand to reduce GST on biscuits priced at ₹100 per kg or below.” “These biscuits were taxed at only 12-14 percent under the previous excise and value-added tax regime. Under GST, they are priced at 18 percent. This forces companies to increase prices, impacting sales,” said Shah

Wednesday, August 21, 2019 Read More

In its first review of the performance of the goods and services tax (GST), the Comptroller and Auditor General (CAG) on Tuesday pointed to several gaps in the new regime and said even after two years, system-validated input tax credit (ITC) through "invoice matching" was not in place and a non-intrusive e-tax system remained elusive. "The complexity of the return mechanism and the technical glitches resulted in rollback of invoice-matching, rendering the system prone to ITC frauds. Without invoice-matching and auto generation of refunds, assessments, etc on the whole, the envisaged GST tax compliance system is non-functional," the CAG said. The audit pointed out the vulnerability of the system to fraudulent ITC claims. It found the system allowed unrealistic and erroneous claim of ITC of IGST by one taxpayer, representing 79% of total ITC claim by all taxpayers for a month, thus exposing the vulnerability of the system to fraudulent ITC claims.

"The system of payment and settlement of tax that was envisaged for GST was based on 100% invoice-matching and availment of input tax credit, as well as settlement of IGST on the basis of invoice matching. Neither is possible as of now, as an invoice matching system has not kicked in," the CAG said. This is the first audit report of CAG on GST based on review of the system for the financial year 2018 19. The auditor said the extent of changes, having to be now undertaken, as well as the suspension of key aspects of the system, pointed to inadequate coordination among the stakeholders such as department of revenue, Central Board of Indirect Taxes and Customs (CBIC) and GSTN as well as failure to try out the system adequately before rollout.

Thursday, August 1, 2019 Read More

GSTN releases offline tool of new GST return for trial run

Goods and Services Tax Network (GSTN) on July 30 released trial version of offline tools of GST forms related to supply of goods and services. The offline tools have been released for Annexure of supplies (GST ANX-1) and Annexure of Inward Supplies (GST ANX-2), GSTN, which is the IT backbone of the indirect tax regime, said in a statement.

These two forms would be part of the proposed GST Return filing system under which a taxpayer would have to file FORM GST RET-1 (Normal) or FORM GST RET-2 (Sahaj) or FORM GST RET-3 (Sugam) on either monthly or quarterly basis.

Wednesday, July 31, 2019

GST Highlights 25th July 2019

Now, interest to apply only on net cash liability of unpaid GST The amendment to section 50 was proposed in the Union Budget on the July 5, 2019, and the Finance Bill 2019 was passed in the Lok Sabha on the July 18, 2019. 

The Union Budget 2019 has provided relief to GST-registered taxpayers with several new updates. One such amendment relates to the interest on the delayed payment of GST liability. This is a big relief for taxpayers, because, until this amendment was passed, interest has always been charged on the entire amount of tax paid after the due date 

Thursday, July 25, 2019

Bombay HC sets aside AAAR order denying ITC on ‘cash carry vans’ for fresh disposal in accordance with law

Recently, the Hon’ble HC of Bombay has admitted the writ petition challenging the order dated August 6, 2018 passed by Appellate Authority for Advance Ruling (“AAAR”), Maharashtra ruling that the input tax credit (“ITC”) is not available on purchase of motor vehicle/vans to carry cash. HC set aside the AAAR order and directed to consider the submissions made by the petitioner and give its conclusion thereon duly supported by the reasons.

Facts:

M/s. CMS Info Systems Limited (“the Petitioner”) is having cash management network pan India. During the course of providing the cash management services, the Petitioner is, inter alia, engaged in managing cash circulation through transporting cash from currency chest to bank branches through the security vans popularly known as “cash carry vans”.

The Hon’ble AAAR, Maharashtra vide order dated August 6, 2018, observed that ITC is not available on purchase of motor vehicles i.e. cash carry vans, which are purchased and used for cash management business and supplied post usage as scrap. It was observed that since the cash carry vehicles are deployed to carry cash and bullion for other than for numismatic purposes, the cash carried by them is to be construed as money and not goods.

Being aggrieved, the Petitioner challenged the order of AAAR, claiming that there was a flaw in the decision making the process as the order failed to deal with the principal submissions of the assessee (after recording the same in the impugned order) viz. ITC would be available in respect of motor vehicles used for transport of money, in view of the definition of ‘goods’ and ‘money’ in the GST law.

Issue involved:

Whether ITC is available on purchase of motor vehicles i.e. cash carry vans which are purchased, used for cash management business and supplied post usage as scrap?

Held:

The Hon’ble High Court of Bombay in Writ Petition No. 5801 of 2019 dated July 9, 2019, noted Petitioner’s submission that the ‘goods’ would include ‘money’ as the cash being transported by them in motor vehicles was not used as a legal tender. Therefore, it was to be treated as ‘goods’ and Section 17(5) of the CGST Act, 2017 at the relevant time had excluded the benefit of ITC in respect of motor vehicles, unless used for transport of ‘goods’.

Accordingly, the HC observed as under:

• The aforesaid principal submission though recorded, has not been dealt with at all in the impugned order. This there is a flaw in the decision making process of AAAR.

• Reliance placed in the impugned order upon the press note issued subsequent to a GST Council recommending to allow ITC in respect of the motor vehicles used for transportation of money, would not by itself lead to the conclusion that prior thereto, money was not included within the definition of ‘goods’. This has to examined in terms of the definition of 'goods' and 'money' found in the CGST Act.

• The entire issue before the AAR that whether the vans/motor vehicles in which the Petitioners were transporting cash, would be money for the purpose of Section 2(52) of the CGST Act, has not been dealt with in the impugned order.

• It is necessary for the Authority to consider the submissions made by the parties before it and give its findings in the context of the submissions made. Ignoring a submission would render the order vulnerable to judicial review by this Court.

Hence, the Hon’ble HC set aside the impugned order and directed the AAAR to consider the submissions made by th

Thursday, July 18, 2019 Read More

Case Law

AAP AND CO., CHARTERED ACCOUNTS THROU AUTHORISED PARTNER

Versus

UNION OF INDIA & others

Summary of the case

The writ-application has been filed seeking quashing and setting aside of the press release dated 18th October 2018 to the extent that its para 3 purports to clarify that the last date for availing the input tax credit relating to the invoices issued during the period from July 2017 to March 2018 is the last date for the filing of the return in Form GSTR-3B for the month of September 2018.

It is submitted that the aforesaid clarification is not in consonance with Section 16(4) of the CGST Act/GGST Act which provides for the last date for taking the input tax credit.

Section 16(4) of the CGST Act/GGST Act provides that the last date for taking the input tax credit in respect of any invoice or debit note pertaining to a financial year is the due date of furnishing of the return under Section 39 for the month of September following the end of the financial year or furnishing of the relevant annual return, whichever is earlier.

However, considering technical glitches in the GSTN portal as well as difficulty faced by the tax payers it was decided to keep filing of GSTR-2 and GSTR-3 in abeyance. Therefore, in order to ease the burden of the taxpayer for some time, it was decided in the 18th GST Council meeting to allow filing of a shorter return in Form GSTR-3B for initial period. It was notified vide Notification No.44/2018 Central Tax dated 10th September 2018 that the due date of filing the return under Section 39 of the Act, for the months of July 2017 to March 2019 shall be subsequently notified in the Official Gazette.

Thus, in view of the above, the impugned press release dated 18th October 2018 could be said to be illegal to the extent that its para-3 purports to clarify that the last date for availing input tax credit relating to the invoices issued during the period from July 2017 to March 2018 is the last date for the filing of return in Form GSTR-3B.

The said clarification could be said to be contrary to Section 16(4) of the CGST Act/GGST Act read with Section 39(1) of the CGST Act/GGST Act read with Rule 61 of the CGST Rules/GGST Rules.

With the above, this writ-application stands disposed of for Detail

Thursday, July 11, 2019 Read More

Changes in respect of GST

Updation of Aadhar No. is compulsory for all existing and new registrations.

Taxpayers having annual turnover of less than ₹5 crore can now file quarterly returns in GST.

An electronic invoice system is proposed that will eventually eliminate the need for a separate e-way bill.

Fully automated GST Refund module shall be implemented; multiple tax ledgers to be replaced by one; invoice details to be captured in a central system.

"Section 31A" The Government may, on the recommendations of the Council, prescribe a class of registered persons who shall provide prescribed modes of electronic payment to the recipient of supply of goods or services or both made by him and give option to such recipient to make payment accordingly, in such manner and subject to such conditions and restrictions, as may be prescribed.”

 In "Section 50" The interest on tax payable in respect of supplies made during a tax period and declared in the return for the said period furnished after the due date in accordance with the provisions of section 39, except where such return is furnished after commencement of any proceedings under section 73 or section 74 in respect of the said period, shall be levied on that portion of the tax that is paid by debiting the electronic cash ledger.”.

 In "Section 49" A registered person may, on the common portal, transfer any amount of tax, interest, penalty, fee or any other amount available in the electronic cash ledger under this Act, to the electronic cash ledger for integrated tax, central tax, State tax, Union territory tax or cess, in such form and manner and subject to such conditions and restrictions as may be prescribed and such transfer shall be deemed to be a refund from the electronic cash ledger under this Act.

Monday, July 8, 2019

The CBIC has issued a Circular No. 102/21/2019-GST dated 28 June 2019, in which clarification has been made regarding leviability of GST on Additional/Penal Interest in case of late payment of Equated Monthly Instalments (EMI).

Generally, there are two options involving EMI as prevalent in the industry -

1. X purchases a phone of Rs. 40,000/- from Y. Y gave an option to pay the amount in instalments i.e. Rs. 11,000/- for every four months (Rs 11,000 * 4 = Rs. 44,000). The same has to be paid on 10th day of every month and in case of default an additional / penal interest amounting to Rs. 500/- per month will also be payable. 

2. X purchases phone of Rs. 40,000/- from Y. For making payment to Y, X took loan from Mr. ABC Ltd. of Rs. 40,000/- at interest of 2.5% per month. The terms of the loan from M/s ABC Ltd. allows X a period of four months to repay the loan and an additional / penal interest @ 1.25% per month for any delay in payment.

Here it is pertinent to mention that as per sub-clause (d) of sub-section (2) of section 15 of the CGST Act, the value of supply shall include "interest or late fee or penalty for delayed payment of any consideration for any supply". Further in terms of Sl. No. 27 of exemption Notification No. 12/2017- Central Tax (Rate) dated the 28 June 2017, "services by way of (a) extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount (other than interest involved in credit card services)" stands exempt. 

Accordingly, the taxability as determined by the aforesaid circular in both scenarios is as follows -

In scenario 1, since the transaction is solely between the X and Y, therefore, in terms of sub-clause (d) of sub-section (2) of section 15 of the CGST Act, the penal interest would be taxable and it would form part of the value of mobile, irrespective of the manner of invoicing.

In scenario 2, The additional / penal interest is charged for a transaction between X and M/s ABC Ltd., and the same is getting covered under Sl. No. 27 of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017, and therefore would be exempt from GST. The value of supply of mobile by Y to X would be Rs. 40,000/- for the purposes of levy of GST.

It has been further clarified that the transaction of levy of additional / penal interest does not fall within the ambit of entry 5(e) of Schedule II of the CGST Act i.e. "agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act", as this levy of additional / penal interest is covered under the definition of "interest".

Wednesday, July 3, 2019

Importers do not need state-wise registration under GST regime

Importers with godown or those which store goods at customs warehouses in different states got relief from the advance authority of ruling (AAR) under the goods and services tax (GST) regime.

The AAR, Maharashtra, in two recent rulings, said that these companies do not need a separate registration in each state and that a registration where their headquarters are located would be enough. These firms can sell products in different states and raise invoices against their head offices, it ruled.

Wednesday, June 26, 2019

Cross-country offices of companies to now come under GST: Report

The Center will soon bring services provided by the office of a company in one state to an office in another state under the purview of the goods and services tax (GST), the Economic Times reported.

Those eligible can claim the input tax credit and a circular sanctioned by the GST Council which would enumerate the particulars would be sent out soon, the paper stated. Companies from the power, healthcare, liquor, and education sectors would, however, be exempt.

Wednesday, June 26, 2019

The Government vide Press Release dated June 24, 2019 proposes to integrate a FASTag Bank Mechanism with e-way bill and Logistic Data Services to track movement of goods and check GST evasion. The Government is contemplating integration of E-Way Bill mechanism of GST with FASTag System of National Highway Authority of India (NHAI). The aspect of Logistic Databank integration with FASTag System is being examined.

A Committee of Officers comprising of officers from Central Government, State Governments, GSTN (Goods and Services Tax Network), NIC (National Informatics Centre), GST Council, to examine the issue of use of RFID data for strengthening of E-Way Bill mechanism under GST, was formed by GST Council. The representatives of NHAI and NPCI (National Payments Corporation of India) were also co-opted in the committee. The Committee of Officers has submitted its report to the GST Council, recommending integration of FASTag system with E-Way Bill mechanism. The recommendations of the Committee are under consideration by GST Council. Further, with regard to integration of FASTag with LDB, a committee comprising of Central Board and Indirect Taxes and Customs (CBIC), NHAI & its associates, NPCI, GSTN, NIC, Delhi Mumbai Industrial Corridor Development Corporation (DMICDC) & its associates was formed to examine the feasibility of the same. The committee has submitted its report, which is being examined. This was stated by the Union Minister of Finance & Corporate Affairs, Smt. Nirmala Sitharaman in a written reply to a question in Lok Sabha.

Tuesday, June 25, 2019

Manufacturer of exempt supplies requires to take #GST Registration if liable to pay tax on reverse charge basis

M/s. Jalaram Feeds is engaged exclusively in manufacture and sale of animal feeds, making certain quantity of taxable supply of goods transport service by way of reverse charge mechanism would fall within scope of Section 24 of the #CGST Act for the purpose of registration and hence would be required to obtain registration under the #CGST Act in order to discharge his duty liability under reverse charge.

Facts

M/s. Jalaram Feeds (“the applicant”) is engaged exclusively in manufacture and sale of compound animal feeds vide HSN Code: 2309 which are exempt from tax vide Entry No. 102 of the Notification No. 2/2017 Central Tax (Rate) dated June 28, 2017. Further, the applicant also requires Services form Goods Transport Agency (“GTA”) like any other business.

Issue Involved

Whether the firm is liable to take registration under Section 24 or is exempted from registration under Section 23 of Central Goods and Services #Tax Act, 2017 (“CGST Act”)?

Applicant’s Interpretation of Law

The applicant is of the view that they are not required to obtain registration under the #CGST Act as they are engaged exclusively in the business of supply of goods or services or both that are not liable to tax or wholly exempt from tax as provided under Section 23 of the CGST Act.

Further, a person who is engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax is not liable for registration under Section 23 of the CGST Act.

Thus Section 23 is not contrary to Section 22 of the CGST Act but is clear expression of the intent of Section 23. Therefore, there is no force in the contention of the applicant that Section 23 is a specified Section and independent and not over ruled by Section 24 of the CGST Act.

Held

The Hon’ble AAR, Maharashtra vide Order No. GST-ARA-110/2018-19/B-38 dated April 10, 2019 held that the applicant is liable to take registration as per the provisions of Section 24 of the CGST Act.

Further the applicant would go out of the scope of Section 23 of the CGST Act due to making of certain quantity of taxable supply of goods transport service by way of reverse charge mechanism and would fall within scope of Section 24 for purpose of registration and hence would be required to obtain registration under CGST Act in order to discharge his duty liability under reverse charge notwithstanding the turnover limit specified in Sub Section (1) of Section 22 of the CGST Act.

Citation: [2019] 106 taxmann.com 241 (AAR - MAHARASHTRA)

 

Tuesday, June 25, 2019

The Hon’ble AAR, West Bengal vide Order No. 06/WBAAR/2019-20 dated June 10, 2019 held that GST paid on the purchase of motor vehicles for supplying rent-a-cab service is not admissible for credit in terms of Section 17(5)(b)(i) of the GST Act.

Citation: [2019] 106 taxmann.com 108 (AAR-WEST BENGAL)

Tuesday, June 18, 2019

 

The Telangana High Court has ruled that no input tax credit (ITC) is available unless GST returns are filed and a taxpayer is liable to pay penalty on the entire liability. The ruling is expected to have a significant impact on all businesses that use tax credits available on inputs and raw materials to reduce payment in cash. "...until a return is filed as self-assessed, no entitlement to credit and no actual entry in the electronic credit ledger takes place. As a consequence, no payment can be made from out of such a credit entry," Justices V Ramasubramanian and P Keshava Rao said in a case involving Megha Engineering & Infrastructures and GST Authorities.

The company had delayed filing the GST returns from July 2017 to May 2018 when its tax liability added up to Rs 1,014 crore. It had ITC of Rs 968 crore and it claimed that the shortfall was to the tune of Rs 45 crore. While the tax authorities demanded 18% interest on the entire amount, Megha Engineering argued that interest should only be calculated on the net tax liability, after deducting ITC from the total liability. The court upheld the department's view. "The ruling has very wide implication as almost all taxpayers, who delayed filing returns and have paid interest only on cash payment of tax and not on the GST amount set off by them through ITC. The issue will open floodgate of litigation and demands of interest by GST officials are imminent. Even CAs while auditing Annual GST Returns, which have to be filed by June 30, may be required to point out short payment of interest due to delayed set off," said tax lawyer RS Sharma.

 

Tuesday, April 23, 2019 Read More

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Thursday, November 9, 2017

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