BLOGS

Major Highlights of Budget 2024 – GST related

CA Chandrasekhar Kutty. B.Com, F.C.A.
Sl NoChanges proposedImpact1In section 9 after the words “alcoholic liquor for human consumption”, the following words are inserted “and un-denatured extra neutral alcohol or rectified spirit used for manufacture of alcoholic liquor, for human consumption”No GST levy on Extra Neutral Alcohol (ENA) used for manufacture of alcoholic liquor for human consumption2Insertion of new section 11A: If the Government is satisfied that- A practice was, or is generally prevalent regarding levy of tax (including a non-levy) on any supply of goods or services or both and such cases are liable to:Tax if no tax is being levied orA higher amount of GST is liable to be levied   Then the Government may on the recommendation of the Council, by notification will not collect such tax in excess of that payable on…
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Pay up your pre-deposit if you have lost your case in First Appellate Authority and planning to approach Appellate Tribunal

CA Chandrasekhar Kutty. B.Com, F.C.A.
As per Circular no.224/18/2024 – GST dated 11th July 2024, CBIC has clarified that though Appellate tribunal is not functional, where the first appellate authority has confirmed the demand either fully or partially, the taxpayers willing to approach the appellate tribunal under section 112 of the CGST Act, should pay the pre-deposit as mentioned in sub section (8) of section 112 to bring a stay against the recovery proceedings under section 78 of the CGST Act. The payment of pre-deposit to be made by navigating from GST dashboard to: Services  >> Ledgers  >> Payment towards demandThe taxpayer would be navigated to Electronic Liability Register (ELL) Part-II in which he can select the order, out of the outstanding demand orders, against which payment is intended to be made. The amount so…
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GSTN advisory on refund of additional IGST paid on account of post-export upward price revision

CA Chandrasekhar Kutty. B.Com, F.C.A.
GSTN issues advisory for claiming refund of additional IGST paid on account of upward revision in prices of goods subsequent to exports, till the time such separate category is developed on the common portal; Explains that, exporter may claim refund of the additional IGST by filing an application of refund in FORM GST RFD-01 under the category “Any other” with suitable remark and upload Statement 9A & 9B along with the relevant documents as specified in the Circular 226/20/2024-GST which shall be processed by the officer based on the documentary proof submitted by the applicant; Apprises that, GSTN is in the process of development of a separate category of refund application in FORM GST RFD-01, for filing an application of refund of additional IGST paid on account of upward revision in prices of goods subsequent to exports.
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CBIC issues rate notifications pursuant to GST Council’s 53rd meeting

CA Chandrasekhar Kutty. B.Com, F.C.A.
Sr. NoNotification No. & DateSubject1Notification No. 02/2024-Central Tax (Rate)Notifies uniform GST rate of 12% on Cartons, boxes, and cases of both corrugated and non-corrugated paper or paperboard, milk cans (of steel, iron, and aluminium) irrespective of their use, solar cookers, w.e.f July 15, 2024.2Notification No. 03/2024-Central Tax (Rate)Notifies that supply of agricultural farm produce in package(s) of commodities containing a quantity of more than 25 kg or 25 ltr shall not be considered as a supply made within the scope of expression ‘pre-packaged and labelled’ from July 15, 2024.3Notification No. 04/2024-Central Tax (Rate)Notifies exemption, w.e.f July 15, 2024, on certain services provided by India Railways to individuals by sale of platform tickets, facility of retiring/waiting rooms, cloak room services, battery operated car services; Also exempts Services provided by Special Purpose…
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Summary of Circular No. 226/20/2024-GST

CA Chandrasekhar Kutty. B.Com, F.C.A.
The Ministry of Finance's GST Policy Wing issued Circular No. 226/20/2024-GST on July 11, 2024, detailing the procedure for claiming refunds of additional Integrated Tax (IGST) paid due to upward price revisions of goods after export.Key Points:1. Issue and Context:   * Exporters have faced difficulties claiming refunds for additional IGST paid due to post-export price increases, often linked to international indices or contractual terms.2. New Procedure:   * Exporters must file for refunds electronically using FORM GST RFD-01 on the common portal.   * Until a specific category is developed, these claims should be filed under “Any other” with relevant remarks and documents.   * The jurisdictional GST officer will process these applications based on the provided documents and details from the GST Network (GSTN).3. Documentation Required:   * Copies of shipping bills, original…
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Summary of Circular No. 225/19/2024-GST

CA Chandrasekhar Kutty. B.Com, F.C.A.
S. No.IssueClarification1Whether sub-rule (2) of rule 28 of CGST Rules will apply to the corporate guarantees issued prior to insertion of the said sub-rule on 26th October 2023? Also, where intra-group corporate guarantees have been issued before 26th October 2023, which are still in force today, would they be liable to pay GST on “1% of the amount of such guarantee offered” on such guarantees?The supply of service of providing corporate guarantee to any banking company or financial institution by a supplier to a related recipient was taxable even before the insertion of sub-rule (2) in rule 28 of CGST Rules with effect from 26th October 2023. Rule 28(2) of CGST Rules is only for determination of the value of the taxable supply of providing corporate guarantee and not regarding…
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Extract from Circular No. 224/18/2024 – GST

CA Chandrasekhar Kutty. B.Com, F.C.A.
Subject: Guidelines for Recovery of Outstanding Dues 1. Background and Context Issues have arisen regarding the recovery of outstanding dues where the first appellate authority has confirmed demands by the adjudicating authority.Appeals against such orders cannot currently be filed with the GST Appellate Tribunal as it is not operational.2. Clarifications and Guidelines:Taxpayers are unable to file appeals due to the non-operation of the Appellate Tribunal. As per Section 112 of the CGST Act, an appeal should stay recovery proceedings once the prescribed pre-deposit is made. Tax officers have initiated recovery proceedings due to the inability of taxpayers to file appeals.3. Payment of Pre-DepositTaxpayers intending to file an appeal can pay the pre-deposit amount via their Electronic Liability Register (ELL) on the GST portal.Upon payment and providing an undertaking to file…
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TCS rate reduced to 0.5% w.e.f 10.07.2024

CA Chandrasekhar Kutty. B.Com, F.C.A.
Notification No. 52/2018 CT dated 20.09.2018 is amended by Notification No. 15/2024 CT dated 10.07.2024 reducing the tax collected at source rate from 1% (CGST 0.5% + SGST 0.5%) to 0.5% (CGST 0.25% + SGST 0.25%) for the electronic commerce operator, not being an agent, of the net value of intra-State taxable supplies made through it by other suppliers where the consideration with respect to such supplies is to be collected by the said operator.
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Summary of changes in GST rules as amended by Notification No. 12/2024 CT dated 10.07.2024

CA Chandrasekhar Kutty. B.Com, F.C.A.
RuleOriginal ProvisionAmendedProvisionImpact/NotesRule 8Application processunder rule 8including Aadhaarauthentication.Insertion ofadditional provisofor applicationprocess whereapplicant has notopted for anAadhaarauthentication, toundergo photographand documentverification atfacilitation centers.Ensures properverification ofapplications withadditionaldocumentation andphotographrequirements.Rule 21Conditions forcancellation ofregistration underrule 21.Insertion of clausesfor amendments tobring in the effect ofnewly introducedform GSTR-1A.Further givingpowers to cancel theregistration if theregistered persondoes not file hisreturns within thespecified time fromthe date ofcancellation to thedate of revocation.Rule 21AProvisions forsuspension ofregistration underrule 21A.Insertion of clausesfor amendments tobring in the effect ofnewly introducedform GSTR-1A.Rule 28Valuation of supplybetween relatedpersons under rule28.Amendment madeto includeguarantees givenonly to recipientslocated in India. The value is deemed toone percent of theamount of suchguarantee offered“per annum”Further it clarifieswith an insertion ofa proviso in sub rule(2), which says if therecipient is eligiblefor a full input taxcredit, then thevalue declared inthe invoice shall bedeemed to be thevalue of the…
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Entitlement of ITC by the insurance companies on the expenses incurred for repair of motor vehicles in case of reimbursement mode of insurance claim settlement

CA Chandrasekhar Kutty. B.Com, F.C.A.
Circular No.: 217/11/2024-GSTDate: 26th June, 2024Subject: Entitlement of ITC by the insurance companies on the expenses incurred for repair of motor vehicles in case of reimbursement mode of insurance claim settlement Key Points and Clarifications: Background: This circular addresses the eligibility of insurance companies to claim input tax credit (ITC) on the expenses incurred for the repair of motor vehicles when the insurance claims are settled through the reimbursement mode. This clarification is important for ensuring uniformity and understanding of the provisions related to ITC in the context of insurance claim settlements. Key Provisions Involved: Section 16 of the CGST Act, 2017: Pertains to eligibility and conditions for taking input tax credit. Section 17(5) of the CGST Act, 2017: Lists the blocked credits where ITC is not allowed. Section 168(1)…
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Clarification in respect of GST liability and input tax credit (ITC) availability in cases involving Warranty/ Extended Warranty

CA Chandrasekhar Kutty. B.Com, F.C.A.
Circular No.: 216/10/2024-GSTDate: 26th June, 2024Subject: Clarification in respect of GST liability and input tax credit (ITC) availability in cases involving Warranty/ Extended Warranty Key Points and Clarifications: Background: This circular addresses the GST liability and the availability of input tax credit (ITC) in scenarios involving the provision of warranty and extended warranty services. It aims to provide clarity on how GST applies to these services and the implications for ITC, ensuring uniformity in the implementation of these provisions across all field formations. Key Provisions Involved: Section 2(102) of the CGST Act, 2017: Defines "services". Section 2(30) of the CGST Act, 2017: Defines "composite supply". Section 15 of the CGST Act, 2017: Determines the value of supply. Section 16 of the CGST Act, 2017: Pertains to eligibility and conditions for…
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Clarification on taxability of salvage/ wreck value earmarked in the claim assessment of the damage caused to the motor vehicle

CA Chandrasekhar Kutty. B.Com, F.C.A.
Circular No.: 215/9/2024-GSTDate: 26th June, 2024Subject: Clarification on taxability of salvage/ wreck value earmarked in the claim assessment of the damage caused to the motor vehicle Key Points and Clarifications: Background: This circular addresses the issue of whether the salvage or wreck value earmarked in the claim assessment for damage caused to a motor vehicle is subject to Goods and Services Tax (GST). Insurance companies, which provide general insurance services for motor vehicles, need clarity on the tax implications when they account for the salvage value during claim settlements. Key Provisions Involved: Section 7 of the CGST Act, 2017: Defines "supply" for the purposes of GST. Section 168(1) of the CGST Act, 2017: Empowers the Board to issue instructions and directions to GST officers to ensure uniformity in the implementation…
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Clarification on the taxability of ESOP/ESPP/RSU provided by a company to its employees through its overseas holding company

CA Chandrasekhar Kutty. B.Com, F.C.A.
Circular No.: 213/07/2024-GSTDate: 26th June, 2024Subject: Clarification on the taxability of ESOP/ESPP/RSU provided by a company to its employees through its overseas holding company Key Points and Clarifications: Background: This circular addresses the taxability of Employee Stock Option Plans (ESOPs), Employee Stock Purchase Plans (ESPPs), and Restricted Stock Units (RSUs) provided by an Indian company to its employees through its overseas holding company. It aims to provide clarity on whether such transactions are liable to GST and under what conditions. Key Provisions Involved: Section 2(52) of the CGST Act, 2017: Defines "goods". Section 2(102) of the CGST Act, 2017: Defines "services". Schedule III of the CGST Act, 2017: Specifies activities or transactions which shall be treated neither as a supply of goods nor a supply of services. Section 168(1) of…
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Mechanism for providing evidence of compliance with conditions of Section 15(3)(b)(ii) of the CGST Act, 2017 by the suppliers (Post Sale Discount)

CA Chandrasekhar Kutty. B.Com, F.C.A.
Circular No.: 212/6/2024-GSTDate: 26th June, 2024Subject: Mechanism for providing evidence of compliance with conditions of Section 15(3)(b)(ii) of the CGST Act, 2017 by the suppliers Key Points and Clarifications: Background: This circular addresses the mechanism for verifying the compliance with the conditions specified in Section 15(3)(b)(ii) of the Central Goods and Services Tax (CGST) Act, 2017, regarding the reversal of input tax credit (ITC) by recipients when suppliers offer post-supply discounts through tax credit notes. The aim is to ensure uniformity and clarity in the implementation of these provisions across all field formations. Key Provisions Involved: Section 15(3)(b)(ii) of the CGST Act, 2017: Specifies that the value of supply shall not include any discount given after the supply has been effected if the recipient reverses the ITC attributable to the…
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Clarification on time limit under Section 16(4) of CGST Act, 2017 in respect of RCM supplies received from unregistered persons

CA Chandrasekhar Kutty. B.Com, F.C.A.
Circular No.: 211/5/2024-GSTDate: 26th June, 2024Subject: Clarification on time limit under Section 16(4) of CGST Act, 2017 in respect of RCM supplies received from unregistered persons Key Points and Clarifications: Background: This circular addresses the applicability of the time limit specified under Section 16(4) of the Central Goods & Services Tax (CGST) Act, 2017 for the availment of input tax credit (ITC) by recipients on tax paid under the reverse charge mechanism (RCM) for supplies received from unregistered persons. It aims to ensure uniformity in the implementation of these provisions across all field formations. Key Provisions Involved: Section 16(4) of the CGST Act, 2017: Specifies the time limit for availing ITC. Section 31(3)(f) of the CGST Act, 2017: Requires registered persons to issue an invoice in respect of supplies received…
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Clarification on valuation of supply of import of services by a related person where recipient is eligible to full input tax credit

CA Chandrasekhar Kutty. B.Com, F.C.A.
Circular No.: 210/4/2024-GSTDate: 26th June, 2024Subject: Clarification on valuation of supply of import of services by a related person where recipient is eligible to full input tax credit Key Points and Clarifications: Background: This circular addresses issues related to the valuation of imported services provided by a related person to a domestic entity, particularly when the domestic recipient is eligible for full input tax credit (ITC). It aims to ensure uniformity in implementing the provisions of the Central Goods and Services Tax (CGST) Act, 2017. Key Provisions and Rules Involved: Section 25(4) and (5) of the CGST Act, 2017: Defines distinct persons and related persons. Rule 28 of the CGST Rules, 2017: Specifies the value of supply of goods or services between distinct or related persons. Section 168(1) of the…
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Clarification on place of supply of goods to unregistered persons.

CA Chandrasekhar Kutty. B.Com, F.C.A.
Circular No.: 209/3/2024-GSTDate: 26th June, 2024Subject: Clarification on the provisions of clause (ca) of Section 10(1) of the Integrated Goods and Service Tax Act, 2017 relating to place of supply of goods to unregistered persons Key Points and Clarifications: Background: The Circular No. 209/3/2024-GST was issued to clarify the provisions of clause (ca) of Section 10(1) of the Integrated Goods and Services Tax Act, 2017 (IGST Act), which came into effect from 1st October 2023. This clause deals with determining the place of supply of goods when supplied to unregistered persons. Clause (ca) Details: Clause (ca) was inserted in Section 10(1) of the IGST Act, providing that: When goods are supplied to an unregistered person, the place of supply is the location as per the address recorded in the invoice…
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Detailed Analysis of Recommendations from the 53rd GST Council Meeting

CA Chandrasekhar Kutty. B.Com, F.C.A.
CategoryRecommendationImpactInterest and Penalties WaiverWaiver of interest and penalties for demand notices under Section 73 for FY 2017-18, 2018-19, and 2019-20, if paid by 31.03.2025.This move aims to ease the financial burden on taxpayers who faced challenges during the initial years of GST implementation. Encourages voluntary compliance and reduces backlog of cases.Input Tax Credit (ITC) Time LimitTime limit to avail ITC for FY 2017-18, 2018-19, 2019-20, and 2020-21 is set to 30.11.2021.Provides clarity and relief to taxpayers who may have missed original deadlines, ensuring they can claim ITC due to them, promoting better cash flow management. For all the said years if the ITC is claimed by 30.11.2021, then credit will be allowed.Monetary Limits for AppealsMonetary limits for filing appeals: Rs. 20 lakh for GSTAT, Rs. 1 crore for High Court,…
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Recommendations from the 53rd GST Council Meeting

CA Chandrasekhar Kutty. B.Com, F.C.A.
CategoryRecommendationInterest and Penalties WaiverWaiver of interest and penalties for demand notices under Section 73 for FY 2017-18, 2018-19, and 2019-20, if paid by 31.03.2025.Input Tax Credit (ITC) Time LimitTime limit to avail ITC for FY 2017-18, 2018-19, 2019-20, and 2020-21 is set to 30.11.2021.Monetary Limits for AppealsMonetary limits for filing appeals: Rs. 20 lakh for GSTAT, Rs. 1 crore for High Court, and Rs. 2 crore for Supreme Court.Reduction of Pre-deposit for AppealsReduction in the pre-deposit amount required for filing appeals under GST.Amendments in Appeal FilingThree-month period for filing appeals in GSTAT will start from a date to be notified by the Government.Interest on Delayed ReturnsNo interest on delayed filing of returns if amount available in Electronic Cash Ledger on due date of filing the return.Sunset Clause for Anti-ProfiteeringNew applications…
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Agenda of the GST Council meeting to be held on June 22nd 2024 as per CNBC TV 18

CA Chandrasekhar Kutty. B.Com, F.C.A.
Proposal of the Petroleum Ministry to bring ATF under GST at 5% and natural gas either at 12% or 18% Clarity on claiming ITC in several sectors where the industry has been facing issues Lay down a proposal on tax applicability on metal and steel scrap Consider a proposal to correct the inverted duty on as many as 14 items, including textiles, leather, pharma, engineering goods, etc. Clarifying norms on claiming and applicability of input tax credit on telecom services and spectrum charges To bring in further ease of doing business and better compliance Could bring a circular for clarity for global companies with branch offices in India and head offices abroad Clarifications are likely to be issued by the approval of the council for foreign airlines and shipping lines…
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Kerala HC: Grants 30-days window to claim ITC not taken for initial rollout challenges; Dismisses challenge to Section 16(2)(c), 16(4)

CA Chandrasekhar Kutty. B.Com, F.C.A.
In the case of M. Trade Links Kerala HC, recognizing the challenges during the initial GST rollout, particularly the unavailability of GSTR 2A, allows liberty to assessees, who couldn’t claim ITC, taking the benefit of  Circular No. 183/15/2022- GST dated December 27, 2022 and Circular No. 193/05/2023- GST dated July 17, 2023, to submit their claims within 30 days from the judgment date, subject to review by GST authorities based on the scenarios specified in the Circulars; Clarifies that, for the period July 1, 2017 to November 30, 2022, the time limit for furnishing the return for the month of September is to be treated as November 30 in each financial year w.e.f. July 01, 2017, in respect of the Assesses who had filed their returns for the month of…
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Gauhati High Court grants stay on demand premised on DRC-01, unsigned documents on GST portal

CA Chandrasekhar Kutty. B.Com, F.C.A.
In the case of Veerprabhu Auto Pvt Ltd Gauhati HC noting that “prima facie appears that the provisions have not been adhered to by the respondents while issuing the demand”, orders stay on a demand of about Rs. 10.29 crores for violation of section 16 (4). Accordingly, while issuing notice directs “the impugned order of demand shall remain stayed” and lists after 4 weeks.
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CBIC issues guidelines for early recovery before stipulated date to protect revenue’s interest

CA Chandrasekhar Kutty. B.Com, F.C.A.
Instruction No. 01/2024-GST To address the issue of Proper Officers initiating recovery proceedings before 3 months from the date of service of demand order, CBIC issues instructions for early recovery u/s 78 of the CGST Act, 2017,  in the interest of revenue; Clarifies that in such cases, the jurisdictional Dy. or Asst. Commissioner of Central tax shall place the matter before the jurisdictional Principal Commissioner/Commissioner of Central Tax, who will be the ‘Proper Officer’,  along with evidence-backed reasons; Specifies that these reasons must clearly outline the circumstances prompting such  early payment, and might include reason of high risk to revenue due to following apprehensions— (i) potential  closure of business operations,  (ii) potential default due to financial decline or impending insolvency, or (iii) possible initiation of insolvency and bankruptcy proceedings;  Lays…
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Kerala HC: Covid-19 ‘a force majeure’; Notifications extending time-limit for passing assessments not ultra-vires

CA Chandrasekhar Kutty. B.Com, F.C.A.
Faizal Traders Pvt.Ltd vs Deputy Commissioner, Central Tax and Central Excise Kerala HC upholds the validity of  Notification No. 13/2022-CT and Notification No. 09/2023, that extended the limitation period for passing assessment order u/s 73 for the FY 2017-18, finds that, same are not ultra vires the provisions of Section 168A of CGST/SGST Act; Observes that, these Notifications were issued purusant to SC directives in suo motu order, whereby a concious policy decision was taken to extend the limitation for issuance of orders in respect of demand linked with the due date of annual return, in view of impediments caused by Covid-19; Acknowledging that Covid-19 was a force majeure, and that Executive retains the discretion to extend the limitation period considering a force majeure event, finds “no substance” in assessee’s…
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Madras HC: Amount debited from electronic cash and credit ledgers before expiry of statutory period for filing appeal to be refunded

CA Chandrasekhar Kutty. B.Com, F.C.A.
Tvl. Cargotec India (P.) Ltd Recovery of amount - Recovery proceedings - Assessment orders were passed by respondent authority - Period of limitation for filing appeal was three months - However, recovery proceedings were initiated against petitioner-assessee even prior to expiry of three months - Amount was debited from Electronic Cash and Credit Ledgers of assessee - HELD : Proviso to section 78 could be invoked only if proper officer recorded in writing reason as to why he considers it expedient in interest of revenue to require taxable person to make payment even before expiry of prescribed three month period - In instant case, no material was placed on record to justify invoking proviso to section 78 - Respondent had failed to satisfactorily explain recourse to proviso to section 78…
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Can purchasing dealer be denied ITC for non-payment by supplier?’; Reduces deposit

CA Chandrasekhar Kutty. B.Com, F.C.A.
Subhash Singh vs. Deputy Commissioner, SGST Uttarakhand HC citing appeal provisions modifies assessment order to the extent that “appellant will deposit 10% of the amount, which is being demanded by the respondents”; A demand of about Rs. 79 lakhs was raised by the Deputy Commissioner, SGST which was decreased to about Rs. 46 lakhs in the show cause notice and further to about Rs. 19 lakhs in the order; Assessee is into retail and wholesale business of iron scrap and waste; It purchased goods with proper invoices, and made proper payments through banking channels along with applicable GST coupled with recording of details of the invoices and the payment in its books of accounts; HC ruling in favour of assessee (the purchasing dealer) posits twin queries “If the appellant’s suppliers…
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GST-Arrest Provisions’; SC observes on need for safeguards, coercion, payment; To hear Revenue tomorrow

CA Chandrasekhar Kutty. B.Com, F.C.A.
SC continues hearing the Petitioners in 200+ criminal writ petitions challenging  constitutional validity of 'Arrest’ provisions under GST and deliberates upon the need for incorporating safeguards against ‘Arrest’ under the GST law, embarks on doctrine of ‘checks and balances’ as far as the construct of the provision goes since it is seen that summons issued under section 70 are directly leading to arrest on the spot under section 69; Primarily, the Petitioners canvass arguments around powers of search, seizure, investigation, provisional attachment, arrest/authorization to arrest and even the initiation of proceedings having vested in  one ‘Proper Officer’; Further, ‘Power to Arrest’ being ‘exclusive’ and not ‘incidental’; Petitioners also identify gaps in ‘investigation’ mechanism and urge the Bench to examine power of tax authorities to ‘Arrest’ under GST and cite Radha…
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Madras HC: Taxpayers who are assigned to either CGST or SGST authorities can’t be adjudicated by counterparts

CA Chandrasekhar Kutty. B.Com, F.C.A.
in the case of Ram Agencies Assessees who are assigned to either Central Tax authorities or State Tax authorities under respective Central Goods and Services Tax Act, 2017 and/or State Goods and Services Tax Act, 2017 cannot be subjected to further proceeding by counterparts under respective GST enactments. Centre/State GST Officers – Cross empowerment - Assessment years 2017-18 to 2019-20 - Assessee had challenged Order-in-Original for assessment years 2017-18, to 2019-20 - Specific case of assessee was that impugned order had been passed despite stay granted by instant court against extending period of limitation which had been stayed – Impugned order was further assailed on ground that assessee was assessed to State Tax Authorities and therefore, impugned order passed by Central Tax Authorities was contrary to law settled in Tvl.…
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Punjab & Haryana HC stays CBIC Circular on corporate guarantee which seeks to take away adjudicatory power of authorities

CA Chandrasekhar Kutty. B.Com, F.C.A.
M/S Acme Cleantech Solutions Pvt Ltd v. Union of India M & C comment: High court stayed the CBIC circular which arbitrarily levies GST on personal guarantee or corporate guarantee given to banks or financial institutions. The circular says the personal guarantee (by director of the company) or corporate guarantee (one corporate to another corporate) given to banks or financial institutions shall be treated as supply even if made without consideration. This view of the Government will put many transactions under the scanner and litigations will only mount. The case: The petitioner filed a writ petition to challenge the part of the Circular issued by CBIC which clarified the taxability of corporate guarantees provided by a company. The challenge to the said Circular was on the ground that it seeks to…
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Calcutta HC: Penalising recipient without causing enquiry with supplier for tax non-remittance “illegal and without jurisdiction”.

CA Chandrasekhar Kutty. B.Com, F.C.A.
Calcutta HC holds that to penalise the assessee (recipient) without causing enquiry with the supplier "would be arbitrary, illegal and without jurisdiction”, emphasizes "on the elementary principle" i.e. the necessity for the Department to conduct an inquiry with the supplier before penalizing the recipient by reversing ITC based on the allegation of non-remittance of tax by supplier to State exchequer; Allowing assessee’s appeal against the order passed in writ petition where the SCN was challenged, and the writ court initially issued directions without quashing the said SCN, HC remarks “decision in Suncraft…applies with full force to the case on hand.”; HC finds that Revenue authorities disregarded tax invoices and CA certificates produced by the assessee, opting instead to immediately proceed with reversal despite acknowledging that the assessee had already paid…
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Chhattisgarh HC: Scheduling personal hearing before SCN-reply ‘superfluous’; Sets-aside Single Judge’s order in Mahindra’s case

CA Chandrasekhar Kutty. B.Com, F.C.A.
Chhattisgarh HC raps Revenue authorities for scheduling Mahindra’s personal hearing even before filing a reply to SCN, observes that Section 75(4) of the CGST Act was completely shelved by Authorities before the order in dispute was passed, sets-aside the order of the learned Single Judge; Opining that, when the assessee is burdened with a tax liability, the intent and the object of the statute are strictly to be complied with, HC renders it to be against the normal procedure that personal hearing is preponed even before the filing of reply as it is not expected that before the reply is filed, an assessee can be heard and thereafter the reply is filed and hence such action is superfluous;  HC explains that as the opportunity of hearing when is contemplated under…
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Order to be set aside and matter to be remanded as no reasons were specified for denying ITC: Madras HC

CA Chandrasekhar Kutty. B.Com, F.C.A.
APL Apollo Tubes Ltd. v. State Tax Officer (Intelligence) - [2024] The petitioner is engaged in the manufacture and supply of tubes and pipes of iron and steel. The department issued SCN and the petitioner replied to the same. Thereafter, the order was passed by the department. It filed writ petition to challenge the order and contended that the order was passed without recording proper reasons.The Honorable High Court noted that the petitioner had placed on record sample invoices and also bifurcated amounts paid towards freight for the Hosur unit, which is the relevant unit and enclosed both a reconciliation statement and a statement from the Chartered Accountant in respect of such bifurcation. However, the department recorded that the petitioner had not filed any documents or evidence with regard to…
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Important for all Principal sending goods for job work – File ITC 04 before 25th April.

CA Chandrasekhar Kutty. B.Com, F.C.A.
The GST laws providesthat the principal can send the goods to the job worker under an intimation. In this regard, the CBIC has clarifiedthat the Form GST ITC-04 will serve as an intimation for the purpose of above provision. The principal is required to furnish the details of following delivery challans in Form GST ITC -04: (a) Goods which are dispatched by the principal to the Job worker (b) Goods which are received back from the job worker (c) Goods which are sent from one job worker to another job worker With effect from October 01, 2021, the frequency of filing Form GST ITC-04 has been reducedfrom quarterly basis to half yearly/yearly basis as under: SL. No.Aggregate turnover in preceding financial yearFrequencyDue date1More than 5 Crore rupeesHalf YearlyApril to September…
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Telangana HC grants interim-relief in Zoomcar’s challenge to ITC-denial for GSTR-2A/3B mismatch:

CA Chandrasekhar Kutty. B.Com, F.C.A.
Telangana HC grants interim-relief in a writ petition filed by Zoomcar India challenging an order passed u/s 73 of the CGST Act, 2017 disallowing ITC on basis of mismatch between Form GSTR-2A and Form GSTR-3B; Petitioner argues that the pre-condition to avail ITC based on figures appearing in Form GSTR-2A contained in Section 16(2)(aa) was introduced w.e.f. January 1, 2022 and cannot be applied retrospectively and in this regard, refers to Calcutta HC decision in Suncraft Energy ; Hearing such contentions, HC states "till next date of hearing, no coercive steps be taken against the petitioner" pursuant to the said order and lists the matter on June 07.
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Patna HC: ‘Payment of Tax’ from ECL occurs only upon return-filing; ‘Interest’ liability automatic upon delay. 

CA Chandrasekhar Kutty. B.Com, F.C.A.
Patna HC rules that "on furnishing of delayed returns, interest liability would be automatic, whether the payment be made from the Electronic Credit Ledger or Electronic Cash Ledger as per the provisions of Section 50(1)"; Dismisses writ petition challenging peremptory order of recovery in relation to interest passed by the Proper Officer;  Holds that furnishing of return results in ‘Payment of tax’ and not when deposit is made in cash ledger or remittances made on tax paid on purchases; Remarks "The deposit is akin to a current account maintained, from which debits have to be made for the purpose of payment of tax, interest, penalty or other amounts due under the Act. Such debits would be made and a resultant payment to the coffers of the State, only when a…
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Madras HC quashed order confirming tax demand as disparity was due to wrong reporting of CGST & SGST instead of IGST

CA Chandrasekhar Kutty. B.Com, F.C.A.
Where show cause notice issued in respect of disparity between GSTR-1 and GSTR-3B returns, assessee explained disparity by pointing out that error occurred on account of reflecting amount wrongly towards CGST and SGST instead of IGST, impugned order confirming demand was to be quashed, matter to be remanded subject to condition.
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Assessment order to be quashed if assessee’s explanations to SCN were disregarded in order & no hearing granted: Madras HC

CA Chandrasekhar Kutty. B.Com, F.C.A.
Tvl. Saravanaa Projects & Co. Turnover Discrepancies - Violation of Natural Justice - Petitioner-assessee was engaged in executing road contracts and civil contracts for Highways Department of the State of Tamil Nadu - Assessee received a show cause notice, citing approximately ten discrepancies - Assessee responded to notice, addressing each discrepancy - Assessee contended that their explanations were disregarded in assessment order- Revenue particularly emphasized defects regarding turnover discrepancies and erroneous entries in the GSTR 9C return HELD: Since no personal hearing was granted after assessee’s reply dated 12.12.2023 and principles of natural justice were not adhered to, impugned assessment order was to be quashed and assessee was directed to submit all relevant documents before revenue within a period of 15 days [Section 75 of Central Goods and Services Tax…
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Advisory: Auto-populate the HSN-wise summary from e-Invoices into Table 12 of GSTR-1

CA Chandrasekhar Kutty. B.Com, F.C.A.
09/04/2024 Dear Taxpayers, GSTN is pleased to inform that a new feature to auto-populates the HSN-wise summary from e-Invoices into Table 12 of GSTR-1 is now available on the GST portal. This allows for direct auto-drafting of HSN data into Table 12 based on e-Invoice data. Please note that the HSN-wise summary data auto-populated into Table 12 is intended for your convenience. Please ensure that you reconcile the data with your records before its final submission. Any discrepancies or errors should be manually corrected or added in Table 12 before final submission. Thanking you,Team GSTN
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Advisory on Reset and Re-filing of GSTR-3B of some taxpayers

CA Chandrasekhar Kutty. B.Com, F.C.A.
09/04/2024 Dear Taxpayers, This has reference to the facility for re-filing of GSTR-3B for some of the taxpayers. It was noticed that there were discrepancies in the returns of some taxpayers during the filing process between the saved data in the GST system and actually filed data in the fields of ITC availment and payment of tax liabilities. The matter was examined and deliberated by the Grievance Redressal Committee of the GST Council and as a facilitation measure the Committee decided that these returns shall be reset, in order to give opportunity to such taxpayers to correct the discrepancy. Accordingly, only the affected taxpayers have been communicated on their registered email-ids and the affected returns are visible on their respective dashboards for the purpose of refiling with the correct data.…
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Investigation-Officer’s unregulated use of power in issuing repeated summons challenged before Kerala HC

CA Chandrasekhar Kutty. B.Com, F.C.A.
Kerala HC grants interim stay of further proceedings initiated pursuant to tsunami of summons issued by the  State Tax Officer (Investigation Branch), after the Pr. Addl DGGSTI has already closed the investigation; Challenging the unregulated use of power of summons, Petitioner (engaged in education sector) argues that the barrage of summons u/s 70 by the STO (Inv), during the pendency of SCNs since 2019, amounts to harassment, blatant abuse of power and non-compliance with CBIC’s Circulars/Instructions; Drawing attention of court to the incident where the STO (Inv) has openly threatened the assessee of dire consequences in he fails to appear despite having questioned the officer’s jurisdiction, Petitioner contends that the matter of unregulated power regarding issue of summons is currently pending consideration before the SC; Therefore, Petitioner pleas that the high-handedness of STO…
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State wise GST collection for the month of March 2024

CA Chandrasekhar Kutty. B.Com, F.C.A.
RankState/UTGST Revenue (March 2024) in Crore1Maharashtra27,6882Karnataka13,0143Gujarat11,3924Tamil Nadu110175Haryana95456Uttar Pradesh90877Delhi58208West Bengal54739Telangana539910Odisha510911Rajasthan479812Andhra Pradesh408213Madhya Pradesh397414Jharkhand324315Chhattisgarh314316Kerala259817Punjab209018Bihar199119Uttarakhand173020Assam154321Himachal Pradesh85222Jammu and Kashmir60123Goa56524Dadra and Nagar Haveli and Daman & Diu45225Sikkim30326Chandigarh23827Puducherry22128Center Jurisdiction22029Meghalaya21330Other Territory19631Arunachal Pradesh16832Tripura12133Nagaland8334Manipur6935Mizoram5036Ladakh4137Andaman and Nicobar Islands3238Lakshadweep2
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Guidelines for CGST Field Formations (Instruction No. 01/2023-24-GST)

CA Chandrasekhar Kutty. B.Com, F.C.A.
The Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs, issued guidelines to ensure ease of doing business while conducting investigations involving regular taxpayers. Dated 30th March 2024, the document outlines specific procedures for Central Goods and Services Tax (CGST) field formations to follow: Jurisdictional Accountability: Commissionerates are tasked with developing intelligence, conducting searches, and completing investigations within their jurisdiction as defined in notification No. 2/2017-Central Tax. Approval Process for Investigations: Prior approval from the (Pr.) Commissioner is mandatory for initiating investigations, with specific scenarios requiring the zonal (Pr.) Chief Commissioner's written consent, including cases involving major industrial houses, matters with national implications, or issues before the GST Council. Collaboration and Information Sharing: When investigations concern taxpayers in different jurisdictions or are simultaneously undertaken by the…
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Make outstanding payments to all MSME creditors before 31st March 2024 else pay taxes on the outstanding: Sec 43B(h) of the Income Tax Act

CA Chandrasekhar Kutty. B.Com, F.C.A.
As per the new provisions, payment to MSME will be allowed as deduction for Income Tax purpose in the year in which payment is made, if the payment is made beyond due date.  As per the new provisions, payment to MSME will be allowed as deduction for Income Tax purpose in the year in which payment is made, if the payment is made beyond due date. Steps to be followed to check if you have to make payment by 31st March 2024. 1) Login into this portal and enter the Udhayam number of your supplier https://udyamregistration.gov.in/Udyam_Verify.aspx 2) After entering the udhaym number and submit, details of the enterprise will be displayed. Check in the Section 'Enterprise Type', if the Enterprise Type is Micro or Small. If yes, then this section…
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Madras High Court Decision on Jurisdictional Authority and Cross-Empowerment under GST Regime

CA Chandrasekhar Kutty. B.Com, F.C.A.
The judgement delivered by the High Court of Judicature at Madras, presided over by Hon'ble Mr. Justice C. Saravanan, addressed the issue of cross-empowerment of tax authorities under the Central Goods and Services Tax Act 2017 (CGST Act) and Tamil Nadu Goods and Services Tax Act 2017 (TNGST Act). The court considered a batch of writ petitions challenging the jurisdiction of the Central and State tax authorities over taxpayers assigned to one but subjected to actions by the other. The court examined the recommendations of the GST Council, the constitutional amendments that enabled the GST regime, and the division of taxpayer base between the central and state governments to ensure a single interface under GST. The court noted the issuance of Circular No.1/2017-GST for the division of taxpayer base and…
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Madras HC: Hostel services to girls/working women amount to ‘residential dwelling’; Quashes AAR-Ruling

CA Chandrasekhar Kutty. B.Com, F.C.A.
Thai Mookambikaa Ladies Hostel vs. UOI heading 9963 and is taxable at 18% GST; Carves an important angle that “imposition of GST on the Hostel accommodation should be viewed from the perspective of the recipient of service and not from the perspective of service provider” and places relying upon judgement in Taghar Vasudeva Ambrish case; Observes that “‘hostel services' provided by the petitioners to the girl students and working women will squarely amount to the 'residential dwelling' and accordingly, the same will be squarely covered under the Entry No.12 of Exemption Notification No.12 of 2017”; Finds it evident that the expression ‘residence’ and ‘dwelling’ have more or less the connotation in common parlance and therefore, no different meaning can be assigned to the expression ‘residential dwelling’ and accordingly, the same does include hostel which…
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