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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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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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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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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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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