BLOGS

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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SC 9-Judge Bench hears Intervenor’s application advancing GST related arguments in ongoing ‘royalty’ matter

CA Chandrasekhar Kutty. B.Com, F.C.A.
SC 9-Judge Bench concludes hearing the submissions on behalf of private parties and PSUs in the 9 judge Constitutional Bench matter on the issue of nature of ‘royalty’ payable to State Government u/s 9 of Mines & Minerals (Regulation & Development) Act, 1957; Reference is made to 9-judge bench in view of conflict between 7-judge bench decision in the case of India Cement Ltd. and 5-judge bench decision in the case of Kesoram Industries Ltd.; The ongoing marathon hearing is about States’ power to tax mineral rights and other substantive issues pertaining to (i) power of State Legislature to levy tax on land under Entry 49 List II, (ii) meaning of taxation on mineral rights subject to limitations imposed by Parliament by law relating to mineral development under Entry 50 of List of Seventh Schedule, (iii) construction of expression “tax on land…
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Calcutta HC: Non-consideration of extension application for reply ‘colorable exercise of power’

CA Chandrasekhar Kutty. B.Com, F.C.A.
In the case of Anurag Garodia Calcutta HC deems as ‘a colorable exercise of power’ the manner in which Assistant Commissioner of State Tax (Revenue) passed final order u/s 73 “without granting extension to the petitioner either to file its response or to be offered personal hearing, despite the petitioner showing sufficient cause,”; Rules that once, the Assessee had sought for an extension to file reply to show cause notice (SCN) Revenue was obliged to consider such extension application and ought not to have passed the final order; Perusing SCN, HC observes that Revenue had granted liberty to the Assessee to file its response on/or before October 25, 2023, though personal hearing was offered only on October 10, 2023; Considers Assessee’s stance that immediately after reopening of the office of the Authority…
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Advisory on GSTR-1/IFF: Introduction of New 14A and 15A tables

CA Chandrasekhar Kutty. B.Com, F.C.A.
It is informed to all taxpayers that as per Notification No. 26/2022 – Central Tax dated 26th December 2022 two new Table 14A and Table 15A have been introduced in GSTR-1 to capture the amendment details of the supplies made through e-commerce operators (ECO) on which e-commerce operators are liable to collect tax under section 52 or liable to pay tax u/s 9(5) of the CGST Act, 2017. These tables have now been made live on the GST common portal and will be available in GSTR-1/IFF from February 2024 tax period onwards. These amendment tables are relevant for those taxpayers who have reported the supplies in Table 14 or Table 15 in earlier tax periods. Please click here to view the complete advisory on the captioned subject.Team GSTN
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Madras HC: Quashes assessment against Future General India Insurance Co. for ‘patent errors’

CA Chandrasekhar Kutty. B.Com, F.C.A.
Madras HC quashes assessment orders owing to ‘patent errors’ like (i) imposing GST at the rate of 36% instead of applicable rate of 18% (ii) non-consideration of variance in turnover for an entity operating in multiple States in India, as reflected in the financial statements, and the turnover attributable to its operations in Tamil Nadu; Accordingly, disposes of writ petition.
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Delhi HC: Quashes demands imposed without consideration of SCN reply, remands matter

CA Chandrasekhar Kutty. B.Com, F.C.A.
In the matter of Max Health Care Institute Ltd Delhi HC quashes order passed imposing demand u/s 73 of the CGST Act as unsustainable, holds that the Proper Officer has not applied his mind to the Assessee’s reply and didn’t consider it on merits; Thus, remands the matter for re-adjudication with a direction that hearing opportunity shall be granted and a fresh speaking order u/s 75(3) of the CGST Act shall be passed; As regards the Officer’s stance that reply to SCN was unsatisfactory, HC opines that the reply is a detailed reply and the Proper Officer had to at least consider the reply on merits and then form an opinion whether the reply was devoid of merits; Observes that if the Proper Officer was of the view that further details…
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Rajasthan HC: Denies absolute-stay on demand against HUL basis failure to produce ITC-reversal proof

CA Chandrasekhar Kutty. B.Com, F.C.A.
In the case of Hindustan Unilever Limited Rajasthan HC, in petitions challenging the workability of section 15(3)(b)(ii) of the CGST Act, 2017 due to the absence of a matching mechanism between a supplier's credit note and the reversal of ITC by recipient/customer, refuses to grant absolute stay of the entire demand raised against HUL and Tata Motors; Opines that while the provision may seem “a harsh provision” by requiring suppliers to provide evidence of ITC reversal by customers w.r.t post sales discount given by supplier, “.. it being a tax statute, one may not jump to the conclusion that the provision suffers from manifest arbitrariness”; Assessees argued that since the matching mechanism u/s 43 was omitted, they're burdened with an impossible task of producing statutory records of the recipient's electronic credit ledger for proof of reversal, making the current process manifestly arbitrary;…
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Madras HC: Quashes assessment order rejecting ITC claim solely for non-reflection in GSTR-3B

CA Chandrasekhar Kutty. B.Com, F.C.A.
Madras HC quashes assessment orders rejecting Input Tax Credit (ITC) of assessee entirely on the ground that the GSTR-3B returns did not reflect the ITC claim; Perusing the operative portion of assessment order, HC observes that when the registered person asserts that he is eligible for ITC by referring to GSTR-2A and GSTR-9 returns, the assessing officer should examine whether the ITC claim is valid by examining all relevant documents, including by calling upon the registered person to provide such documents; Thus, permits assessee to place all documents pertaining to its ITC claims before the assessing officer, directs assessing office to pass fresh assessment orders.
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Allahabad HC: No penalty for carrying e-invoice without signature absent challenge to EWB-authenticity

CA Chandrasekhar Kutty. B.Com, F.C.A.
Allahabad HC quashes the penalty imposed u/s 129(3) of the CGST Act for carrying e-invoice without the signatures of authorised signatory, underscores the statutory scheme that as per fifth proviso to Rule 46 of the CGST Rules, 2017 “the requirement of signatures is dispensed with as regards digital invoice”; Noting that not only the driver of vehicle carrying the goods was carrying e-invoice and e-way bill (EWB) in his mobile, but at the time of interception by Mobile Squads, the representative of assessee also reached and produced hard copies of same documents, and therefore, “there was no cause for detention, seizure or imposition of the penalty as has been done by the authorities in this case.”; Emphasizing on the responsibility of the Revenue to verify digital copies, the court notes…
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HC: Rules on importer’s entitlement to IGST-refund on ‘ocean freight’ as levy remains ‘unconstitutional’

CA Chandrasekhar Kutty. B.Com, F.C.A.
Gujarat HC allows refund of IGST paid on ocean freight in light of Top Court’s dicta in case of Mohit Minerals which struck down the levy stemming from Notification No.10/2017 dated June 28, 2017 (IGST Reverse Charge Notification); In turn, allows refund to assessee basis principle of unjust enrichment and clarifies that when the IGST Reverse Charge Notification for levy of IGST on ocean freight is held to be unconstitutional, assessee/ importer is entitled to the refund of such IGST on ocean freight paid under protest; Citing ‘trite law’ that “once the Apex Court declares a Notification being ultra vires and unconstitutional, such law becomes the law of land and is liable to be followed by the respondent authorities without raising any objection.” observes that the Assistant Commissioner of CGST and Central Excise (Revenue)…
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Madras HC: Quashes small-dealer’s registration cancellation; Stresses on uneducated background, unawareness about consequences

CA Chandrasekhar Kutty. B.Com, F.C.A.
Madras HC quashes order cancelling GST registration of the Assessee (executing contract works for Government and its Agencies) on account of lapse by assessee’s accountant in filing returns on time; Harping on uneducated background of small enterpreneurs who are not accustomed with handling of e-mails, HC states that, “They are also not aware about the consequences of not paying the Returns in Time”; Suggests the Department to workout the possibilities of issuing these notices in the respective regional languages and also by SMS and registered post so that, the uneducated traders can also respond to these notices to some extent; Follows decision in Suguna Cutpiece Center.
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Telangana HC: ‘Transfer of development rights’ by landowner to developer a service, not outright ‘sale of land’

CA Chandrasekhar Kutty. B.Com, F.C.A.
Telangana HC rules that transfer of development rights (TDR) "is a service" under GST Law which the landowner is offering to Developer and that too for a consideration and thus, same is "not an outright sale" of an immovable property, dismisses realtor’s writ; For the core issue relating to TDR getting covered under Entry 5 of Schedule III of the CGST Act, 2017 which deals with sale of land being not exigible to GST, HC explains how it cannot be brought under the purview of Entry 5; Finding no quarrel to the fact that ownership, title and possession of the property is vested with the landowners and assessee is engaged as an agency by the landowners for the purpose of developing their property into a commercial complex, HC observes that, neither there is “mere transfer of development rights” nor is “automatic…
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Advisory on GSTR-1/IFF: Introduction of New 14 and 15 tablesNotification No.: 26/2022 – Central Tax dated December 26, 2022

CA Chandrasekhar Kutty. B.Com, F.C.A.
Purpose: The purpose of this advisory is to make taxpayers aware of the new Table 14 and 15 in FORM GSTR-1 and IFF. These tables are relevant for only those taxpayers who either supply through E-Commerce operator (ECO) or are themselves liable to pay tax under Section 9(5) of the GST Act. Introduction: As per Notification No. 26/2022 – Central Tax dated 26th December 2022 two new tables Table 14 and Table 15 were added in GSTR-1 to capture the details of the supplies made through e-commerce operators (ECO) on which e-commerce operators are liable to collect tax under section 52 of the Act or liable to pay tax u/s 9(5). These tables have now been made live on the GST common portal. These two new tables will be available…
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Madras HC: ‘Voucher’ is ‘actionable claim’; Modifies AAR, AAAR over taxability at the point of issuance

CA Chandrasekhar Kutty. B.Com, F.C.A.
In the case of Kalyan Jewellers India Pvt Ltd Madras HC modifies AAAR by clarifying that ‘Gift Voucher’ is an ‘actionable claim’ which constitutes as neither a supply of goods nor supply of services specifically mentioned in Schedule III at sl. No. 6 and consequently, assessee is not liable to pay tax;  In turn, holds that ‘Gift Voucher/Cards’ is a ‘Prepaid Instrument’ which acknowledges debt and so becomes a “debt instrument” which in case of breach (i.e. failing to allow redemption)becomes enforceable at the hands of the customer  who has a “right to approach a civil court to recover the amount paid” in terms of RBI’s Master Circular; As for when can ‘Gift Vouchers’ be taxed, HC observes that if the ‘Gift Voucher/Card’ are issued for a specified and identified goods, or for a…
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Advisory on the functionalities available on the portal for the GTA taxpayers:

CA Chandrasekhar Kutty. B.Com, F.C.A.
The following Functionalities are made available on the portal for the GTA Taxpayers. Filing of Online Declaration in Annexure V and Annexure VI for the existing GTA Taxpayers: As per the Notification No. 06/2023-Central Tax (Rate), dated 26.07.2023 (https://taxinformation.cbic.gov.in/view-pdf/1009783/ENG/Notifications), the option by GTA to pay GST on Forward Charge mechanism or the Reverse Charge mechanism respectively on the services supplied by them during a Financial Year shall be exercised by making a declaration in Annexure V or Annexure VI from the 1 January of the current Financial Year till 31 March of the current Financial Year, for the next Financial Year. To comply with the above notification, online filing in Annexure V Form and Annexure VI Form is available on the portal for the existing GTA taxpayers for filing declaration in…
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CBIC extends time limit for issuance of Order for tax/ITC recovery for FY 2018-19 and FY 2019-20

CA Chandrasekhar Kutty. B.Com, F.C.A.
CBIC extends time limit for issuance of Orders u/s 73(9) for recovery of tax not paid or short paid or of ITC wrongly availed or utilized for the FY 2018-19 to April 30, 2024 and FY 2019-20 to August 31, 2024 Note: Notice time limit is now extended for FY 2018-19 from Dec 31st 2023 to January 31st 2024 and for FY 2019-20 notice has to be issued before March 31st 2024.
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GSTN enables Feature for Online Filing of Annexure-V by Newly Registered GTAs Opting for Forward Charge

CA Chandrasekhar Kutty. B.Com, F.C.A.
The GSTN has introduced the much-awaited feature to file Annexure-V online on the GST Portal. This option is specifically designed for newly registered Goods Transport Agencies (GTAs) opting for Forward Charge. The new facility allows users to upload manual Annexure-V, which might have been submitted to the jurisdictional office before the commencement of the online filing option. If you are a GTA providing services and wish to pay tax under Forward Charge for the current financial year and beyond, filing your declaration Annexure V Form by January 28, 2024, is essential. By selecting “YES,” you will be directed to the Annexure V Form. If you are not involved in providing GTA services or prefer to pay tax under Reverse Charge, you can choose “NO.” It’s important to note that the…
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SC: Dismisses SLP against HC-order quashing demand against service recipient for GSTR 2A- GSTR 3B mismatch

CA Chandrasekhar Kutty. B.Com, F.C.A.
SC dismisses Revenue’s SLP against  Calcutta HC decision which quashed demand of ITC against service recipient for mismatch in GSTR 2A and GSTR 3B in absence of any investigation done at the end of the supplier whose invoices are not reflecting in GSTR 2A; HC cited lack of exceptional case like missing dealer, closure of business by supplier or supplier not having adequate assets etc. and concluded that, straight away Revenue “was not justified” in directing the assessee to reverse the ITC availed by it. Order copy awaited
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CBIC issues clarification vide instruction No. 05/2023-GST dated December 13th 2023

CA Chandrasekhar Kutty. B.Com, F.C.A.
Judgment of the Hon’ble Supreme Court in the case of Northern Operating Systems Private Limited (NOS). Attention is invited to the Hon’ble Supreme Court’s judgment dated 19.5.2022 in the case of CC, CE & ST, Bangalore (Adj.) etc. Vs. Northern Operating Systems Private Limited (NOS) in Civil Appeal No. 2289-2293 of 2021 on the issue of nature of secondment of employees by overseas entities to Indian firms and its Service Tax implications. Representations have been received in the Board that, subsequent to the aforesaid judgment, many field formations have initiated proceedings for the alleged evasion of GST on the issue of secondment under section 74(1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the ‘CGST Act’).  The matter has been examined by the Board. It…
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GSTN’s Advisory for online compliance pertaining to ITC mismatch in GSTR-2B & 3B

CA Chandrasekhar Kutty. B.Com, F.C.A.
GSTN issues advisory for online compliance pertaining to ITC mismatch, explains that, a new functionality has been developed to generate automated intimation in Form GST DRC-01C which enables a taxpayer to explain the difference in ITC available in GSTR-2B statement & ITC claimed in GSTR-3B return online as directed by GST Council; Notifies that, the functionality compares the ITC declared in GSTR-3B/3BQ with ITC available in GSTR-2B/2BQ for each return period and if the percentage difference exceeds the configurable threshold, taxpayer will receive an intimation in the form of DRC-01C; On such intimation, the taxpayer shall file a response using Form DRC-01C and has the option to either provide details of the payment made to settle the difference using Form DRC-03, or provide an explanation for the difference, or even choose a combination of both…
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CBIC notifies Amnesty Scheme for extension of appeal-filing period in relief to taxpayers

CA Chandrasekhar Kutty. B.Com, F.C.A.
CBIC in a relief to taxpayers, introduces amnesty scheme which allows appeal filing till January 31, 2024 for taxable persons who could not file an appeal against the order passed by the proper officer on or before March 31, 2023, u/s 73 or 74 of CGST Act within the time period specified in section 107; States that it shall also apply to the taxable persons whose appeal against the said order was rejected solely on the grounds that the said appeal was not filed within the time period specified in section 107 and prescribes special procedure for the same; Appeals to be filed in FORM GST APL-01 in accordance with subsection (1) of Section 107; Specifies that no appeal shall be filed under this notification, unless the appellant has paid…
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CBIC clarifies on taxability of corporate guarantee; Personal guarantee valuation to be ‘Zero’

SHRUTHI M
With a view to ensure uniformity in implementation of provisions vis-a-vis taxability of personal/corporate guarantee across field formations, CBIC issues clarification as follows ; i) that providing personal guarantee by director to banks/financial institutions for securing credit facilities for their companies, is a taxable service even if provided without consideration; However considering that as per RBI guidelines no payment can be made to director for the same, taxable value shall be the open market value of such supply, which shall be Zero; As regards Corporate Guarantee provided by a company to 'related' person, including a subsidiary company, the same shall be considered a supply of service, the taxable value of which shall be determined as per Rule 28, Sub-rule 2 of CGST Rules ( inserted vide Notification dated 52/2023 dated…
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CBIC issues clarification regarding Place of supply in case of supply of the “co-location services” vide Circular No. 203/15/2023 dated 27.10.2023

SHRUTHI M
Issue: Co-location is a data center facility in which a business/company can rent space for its own servers and other computing hardware along with various other bundled services related to Hosting and information technology (IT) infrastructure. A business/company who avails the co-location services primarily seek security and upkeep of its server/s, storage and network hardware; operating systems, system software and may require to interact with the system through a web-based interface for the hosting of its websites or other applications and operation of the servers. In this respect, various doubts have been raised as to i. whether supply of co-location services are renting of immovable property service (as it involves renting of space for keeping/storing company’s hardware/servers) and hence the place of supply of such services is to be determined…
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CBIC issues clarification relating to export of services vide Circular No. 202/14/2023 dated 27.10.2023

SHRUTHI M
Various representations have been received requesting for clarification regarding admissibility of export remittances received in Special INR Vostro account, as permitted by RBI, for the purpose of consideration of supply of services to qualify as export of services as per the provisions of clause (6) of section 2 of the Integrated Goods & Services Tax Act, 2017 (herein after referred to as the ‘IGST Act”). The issue has been examined and to ensure uniformity in the implementation of the provisions of law across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of the Central Goods & Services Tax Act, 2017 (herein after referred to as the ‘CGST Act”), hereby clarifies the issue as under: Relevant legal provisions: 3.1 Export of services has been…
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Clarification issued vide Circular No. 203/15/2023 dated 27.10.2023 regarding Place of supply in case of supply of service of transportation of goods, including through mail and courier

SHRUTHI M
Issue: Sub-section (9) of section 13 of Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as “IGST Act”) has been omitted vide section 162 of Finance Act, 2023 which will come into effect from 01.10.2023. After the said amendment, doubts have been raised as to whether the place of supply in case of service of transportation of goods, including through mail and courier, in cases where location of supplier of services or location of recipient of services is outside India, will be determined as per sub-section (2) of section 13 of IGST Act or will be determined as per sub-section (3) of section 13 of IGST Act. Clarification: Place of supply of services where location of supplier or location of recipient is outside India is determined as per…
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CBIC gives clarification on certain issues on place of supply in respect of advertising sector vide Circular No. 203/15/2023 dated 27.10.2023

SHRUTHI M
Advertising companies are often involved in procuring space on hoardings/ billboards erected and mounted on buildings/land, in different States, from various suppliers (“vendors”) for providing advertisement services to its corporate clients. There may be variety of arrangements between the advertising company and its vendors as below: Issue: There may be a case wherein there is supply (sale) of space or supply (sale) of rights to use the space on the hoarding/ structure (immovable property) belonging to vendor to the client/advertising company for display of their advertisement on the said hoarding/ structure. What will be the place of supply of services provided by the vendor to the advertising company in such case? Clarification: The hoarding/structure erected on the land should be considered as immovable structure or fixture as it has been…
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Processing of returns with refund claims under section 143(1) of the Income-tax Act, 1961 beyond the prescribed time limits in non-scrutiny cases.

CA Venkatesvaran Pandiyan. B.Com, ACA, ACMA., SHRUTHI S
CBDT extends the time frame for processing the validly e-filed returns up to AY 2017-18 with refund claims in non-scrutiny cases from Nov 30, 2021 to Jan 31, 2024 Central Board of Direct Taxes vide its order under section 119 of the Income-tax Act, 1961 dated 05.07.2021 and 30.09.2021, relaxed the time frame prescribed in second proviso to Section 143(1) of the Act and directed that all validly filed returns up to AY 2017-18 with refund claims, which could not be processed under Section 143(1) of the Act and had become time-barred, should be processed by 30.11.2021, subject to the conditions/ exceptions specified therein. The matter has been re-considered by the Board in view of pending taxpayer grievances related to issue of refund and to mitigate the genuine hardship being…
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Kerala HC: Overturns tax-credit disallowance for return mismatch recognizing small dealer’s initial GST implementation challenges – in the case of Anaz Abdul Rahiman Kutty

CA Chandrasekhar Kutty. B.Com, F.C.A.
Kerala HC rules on GST implementation challenges during initial stages faced by small dealers and consequently, sets aside order disallowing input tax credit (ITC) for GSTR 2A -3B mismatch; Discrepancies were noticed in assessee’s GSTR-3B and so considering the difference between GSTR-2A and 3B, Assessing Authority passed DRC-01 disallowing ITC as well as levied interest of Rs. 1 lakh approximately under CGST and SGST with penalty; Assessee contends that due to the initial period of the implementation of the GST regime, assessee and other small dealers were facing a lot of difficulty; Court concurs to this submission noting that “period involved is 2017-18 when the GST regime was rolled out…. petitioner faced enormous difficulty in understanding the provisions of the GST Act”; In this context, Court also notes that Government is not at a loss since tax has…
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Samadhan Scheme – Announced by CM Stalin in Tamil Nadu

SHRUTHI M
(Prepared as per media reports) The scheme intends to help traders with settling their pending tax dues. The pending commercial dues in Tamilnadu is a whooping ₹ 25,000 Crores. With a twin motive of easing the pressure on officials cum judicial machinery and collection of pending dues, Govt has introduced the Samadhan scheme which is effective from 16th October 2023 to 15th February 2024. Range of Pending tax duesLiability to be paid.<Rs.50,000 (Including taxes, interest, and penalty) Complete waiverRs.50,000 – Rs.10,00,000 (Including taxes, interest, and penalty)(i) Flat 20% of dues to be paid in 1 installment(ii) For those who have accepted the tax assessment:66% of dues + 10% interest + 10% Penalty(iii) For those who have filed an appeal33% of dues + 10% interest + 10% Penalty(iv) For those with no…
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Important recommendations of 52nd GST Council Meeting held on 7th October 2023

CA Chandrasekhar Kutty. B.Com, F.C.A.
Amnesty scheme for filing appeals Amnesty scheme for taxable persons who could not file appeal under section 107 of CGST Act. Against demand order under section 73 or 74 of the CGST Act, 2017. Order should be passed before 31st March 2023 or Appeal against such order was rejected solely on the grounds that such appeal was not filed within specified period. Appeal in such cases to be filed before 31st January 2024 Pre-deposit of 12.5% of the disputed tax to be paid in that 2.5% should be paid through electronic cash ledger. Clarifications regarding taxability of personal guarantee offered by directors to banks. Circular to be issued clarifying that when no consideration is paid by the Company to the director in any form, directly or indirectly, for providing personal…
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No more double taxation on ocean freight; CBIC amends IGST Rate Notifications

CA Chandrasekhar Kutty. B.Com, F.C.A.
The CBIC has amended IGST Rate notifications in order to provide that IGST will not be levied on importer under RCM on supply of ocean freight services by foreign shipping line to foreign exporter. In this regard, three notifications have been issued and these notifications shall be effective from October 1st, 2023. Notably, these changes are incorporated to give effect to decision of Apex Court in case of Mohit Minerals since the Government has already amended place of supply provisions for services of transportation of goods by vessel.
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Tamilnadu AAR: School bus fee exempt from GST

CA Chandrasekhar Kutty. B.Com, F.C.A.
In the matter of Muniyasamy Abinaya Tamil Nadu AAR transport services provided to students and staff of specific schools will not be subject to GST and consequently, the fees collected by service provider directly from parents for these services will also not be subject to GST; Applicant has sought advance ruling whether collection of transportation charges from parents will be taxed or exempted under GST, since only school students are picked up and dropped and school staff which will be covered in the agreement with school; In examining whether activity proposed to be undertaken by way of transport of staff and students of school as school bus operator, by school bus/ van service is applicable to GST or is exempted from GST and if GST applicable then what percentage is to be charged…
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Patna High Court in the case of Sita Pandey raps Revenue for surreptitiously recovering entire tax due against legislative mandate:

CA Chandrasekhar Kutty. B.Com, F.C.A.
HC remarks, “tax authority should also act as a facilitator of business and economy and not merely as an extortionist, always looking to have the pound of flesh, to satisfy his hierarchical superiors to push his/her personal agendas. We have no doubt that the action complained of, was high handed and arbitrary”; Imposes a cost of Rs.5000 on the officer
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GST Due Dates in September 2023

CA Chandrasekhar Kutty. B.Com, F.C.A.
PeriodDue dateFormDescriptionAugust 202310.09.2023GSTR 7Summary of Tax Deducted at Source (TDS) and deposited under GST lawsAugust 202310.09.2023GSTR 8Summary of Tax Collected at Source (TCS) and deposited by e-commerce operators under GST lawsAugust 202311.09.2023GSTR 1GST Filing of returns by a registered person with aggregate turnover exceeding INR 5 Crores during the preceding financial year or any registered person have opted to file monthly returnAugust 202313.09.2023GSTR 1 / IFFDetails of B2B Supply of a registered person with turnover upto INR 5 Crores during the preceding year and who has opted for quarterly filing of return under QRMPAugust 202313.09.2023GSTR 6Details of Input Tax Credit (ITC) received and distributed by an Input Service Distributors (ISD)August 202313.09.2023GSTR 5Summary of outward taxable supplies and tax payable by a non-resident taxable personAugust 202320.09.2023GSTR 5ASummary of outward taxable supplies…
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GSTN issued Important Advisory on Reporting of ITC Reversal Opening Balance

CA Chandrasekhar Kutty. B.Com, F.C.A.
The Goods and Services Tax Network (“GSTN”) has issued an Advisory on Reporting of ITC Reversal Opening Balance. Please read the following advisory carefully before proceeding ahead for reporting the ITC Reversal opening balance: Taxpayers are permitted to use this facility to report their ITC Reversal Balance that has not been re-claimed. The taxpayer is advised to report solely those reclaimable ITC reversal balances that meet the legal criteria for re-claim and have not been previously claimed by the taxpayers. Taxpayers may report their opening balance until 30th November 2023. After November 30, 2023, the option to report the opening balance will be removed, and it will be assumed that the taxpayer has no ITC Reversal Balance to report. Taxpayers may amend their opening balance until December 31, 2023. Any…
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Patna HC: Purchaser cannot raise ITC-claim unless supplier pays tax to Govt.

CA Chandrasekhar Kutty. B.Com, F.C.A.
Patna HC upholds denial of ITC benefit to purchasing dealer (assessee) where the supplying/selling dealer has not paid up the amounts to the Government, despite collection of tax from the purchasing dealer; Referring to the case of Ecom Gill Coffee Trading Pvt Ltd, HC adds that, even if assessee produces not only the invoices but also account details and documents evidencing transportation of goods, “this does not absolve the assessee from the rigor provided under sub-clause (c) of Section 16(2)” and therefore, “unless the credit is available in the ledger account of the purchasing dealer ….” , ITC would not be available; Inviting attention to the nomenclature of ITC, HC explains that it itself contemplates a credit being available for the purchasing dealer in its credit ledger by way of payment of tax by the supplier to the Government; As a corrollary, envisages…
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Cash cannot be during the search – Supreme Court

CA Chandrasekhar Kutty. B.Com, F.C.A.
SC: Dismisses Revenue's SLP against HC order allowing release of cash seized during search SC dismisses Revenue’s SLP filed against Kerala High Court’s order directing the Department to release the cash seized during the search since, such cash does not form part of stock in trade or business Earlier the Kerala HC held that the seizure of cash from the premises of the Assessee at the time of investigation by GST authorities as wholly uncalled for and unwarranted, directs release of the same without any delay and at any rate within a week; Note that writ appeal was filed against the learned Single Judge’s order rejecting  the Assessee’s contention that the seizure of cash was unwarranted especially when the investigation itself was for alleged evasion of tax due; Determines that during the…
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Bank account to be frozen in rare situations hold Delhi High Court

CA Chandrasekhar Kutty. B.Com, F.C.A.
Delhi HC: Quashes communication placing debit freeze on bank account, ladles Revenue with cost Delhi HC sets-aside communication by Revenue officer of Anti-evasion group, to the extent that it seeks to place a debit freeze on assessee’s cash credit account; At the outset, Court observes “impugned communication is without authority of law…” reasoning that, same disregards provisions of CGST Act and its adverse effect; Citing well settled principle that, orders of provisional attachment of bank accounts or other assets of a tax payer has serious adverse effect on the business of the tax payer, as also SC dicta in Radha Krishan Industries.
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Changes in GST applicable from 1st October 2023

CA Chandrasekhar Kutty. B.Com, F.C.A.
Vide Notification no. 28/2023 dated 31st July 2023 Sub section 1B inserted in Section 122 of the CGST Act to levy penalty on the following: “(1B) Any electronic commerce operator who–– allows a supply of goods or services or both through it by an unregistered person other than a person exempted from registration by a notification issued under this Act to make such supply; allows an inter-State supply of goods or services or both through it by a person who is not eligible to make such inter-State supply; or fails to furnish the correct details in the statement to be furnished under sub-section (4) of section 52 of any outward supply of goods effected through it by a person exempted from obtaining registration under this Act, shall be liable to…
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Calcutta HC: Quashes recovery action against service recipient for GSTR-2A-GSTR-3B mismatch absent exceptional circumstances

CA Chandrasekhar Kutty. B.Com, F.C.A.
Calcutta HC sets aside demand on recipient of service on account of mismatch in GSTR 2A and GSTR 3B in absence of any investigation done at the end of the supplier whose invoices are not reflecting in GSTR 2A; As regards the allegation of non-payment of tax by supplier and denial of ITC u/s 16(2)(c), while disapproving action of the Assistant Commissioner, State Tax ‘straight away’ directing assessee to reverse ITC without first bringing out the exceptional case where there has been collusion between assessee and selling dealer/supplier or where supplier is missing or the supplier has closed down its business or the it does not have any assets and such other contingencies; Court pointing out that section 16 (2) begins with a non-obstante clause, discusses the effect and purpose…
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Andhra Pradesh HC: Upholds validity of time-limit prescribed for ITC; Return with late-fee not springboard to claim credit

CA Chandrasekhar Kutty. B.Com, F.C.A.
Andhra Pradesh HC holds that (i) time-limit prescribed for claiming ITC as prescribed u/s 16(4) of APGST Act/CGST Act, 2017 is not violative of Articles 14, 19(1)(g) and 300-A of Constitution of India and (ii) Section 16(4) will not be overridden by non-obstante provision u/s 16(2) as both are not contradictory with each other but operate independently; Notes that, assessee, a sole proprietorship doing business in hardware and plywood commenced during Covid-19 pandemic, and could not file its  return within the prescribed time nor file the return on or before time prescribed for filing the return relating to month of September of succeeding year; Revenue observed that assessee can claim ITC subject to fulfillment of conditions stipulated u/s 16 of SGST/CGST Act r/w Section 20 of IGST Act and the claim made through GSTR 3B return filed…
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