Goods and Services Tax

Date: 12-10-2017 To Ministry of Commerce and Industry Department of Industrial Policy and Promotion New Delhi Subject: representation against the notification regarding budgetary support under Goods and Services Tax Regime to the units located in states of Jammu & Kashmir, Uttarakhand, Himachal Pradesh and North East including Sikkim Dear Sir, The Ministry of Commerce and Industry through Department of Industrial Policy & Promotion has released a notification dated 05.10.2017 wherein the procedure for claim of refund for units availing area based exemption under Central Excise.  In this regards we would like to raise the following objections: 1.                  It has been clearly stated as per para 5.1 that the reimbursement shall be granted only to the extent of 58% of CGST and 29% of IGST paid through cash ledger by the eligible units. In this regards, following ob...

With Diwali round the corner and GST being implemented, the businesses are in a state of confusion as to what would happen to tax paid by them during the purchase of Diwali gifts. Various questions like whether such gifts are eligible for claiming input tax credit? Are these gifts used in the course or furtherance of business? How the invoices should be taken for these gifts. These questions are but obvious because Diwali is one occasion where business tries to fulfil all its obligations towards vendors, customers, government officials, consultants etc. As per section 16 a taxpayer is entitled to take credit of input tax charged on any supply of goods or services to him which are used in the course or furtherance of his business.  Therefore at the very first instance, we need to understand, what is in the course or furtherance of business. Course of business means usual business practice such as manufacturing, trading etc. It implies those transactions which are directly r...

22 nd GST Council meet which concluded yesterday was nothing more than a political drama. Relief to small traders and taxpayers whose annual turnover is less than Rs. 1.5 crores is merely an eyewash. It is going to make the procedures more cumbersome and lead to more tax evasion. 1. The basic concept of invoice level matching has now been virtually abolished. The person buying goods from a small taxpayer (who is liable to file returns and pay tax on quarterly basis) shall claim the input tax credit on the basis of the invoice in his possession without matching it on monthly basis. Also government has agreed to provide input tax credit without payment of tax by the small taxpayer. It is illegal and against the provisions of section 16(c) of the Act. Law needs to be amended in this regards. The small taxpayers shall now become the den of tax evasion as people will start forming multiple entities and fraudulent acts such as bogus GSTIN shall now commence. 2. The turnover lim...

H’ble Finance Minister has tabled the CGST Law in Lok Sabha which is due for discussion today. As per section 9(4) of the Central GST Act it has been proposed that the purchaser of agricultural produce shall be liable to pay tax in lines of purchase tax levied in present tax regime. In such a scenario where a registered company buys agricultural produce from a farmer, GST has to be paid. Although the rate for GST for produce cultivated out of land has been proposed at zero, the segments like poultry farming, dairy farming, animal rearing are likely to be taxed at higher rate. In such a scenario there shall be compliance involved in case of agriculture. In the law tabled in the parliament the definition of agriculture has been deleted and it has been prescribed that agriculture would mean the produce cultivated out of land. It has also been proposed that apart from agriculture if a registered person buys any goods or services from unregistered persons, the receiver shall be ...

It has been contested by the big players that E-permits for entering into the states shall be a bane under a GST Regime. What if the Invoice Reference Numbers (IRN) work like Fast tag at the toll plazas. The concept of the Invoice Reference Number has been brought since the discussions about GST Implementation had started. As per sub-rule (4) of rule (2) of the Draft Invoice Rules had already prescribed the Invoice Reference Number which shall be generated online after uploading the relevant Invoice. The IRN will work as the smart number which shall be presented by the transporter at the barriers and the through online verification such transporter shall be given the green signal to move ahead. Most of us are comparing it with the traditional inspector raj, where the transport vehicles used to remain stuck for hours and hours. But this would not be the scenario in case of IRN. Practically it takes only few seconds for crossing a toll/barrier provided you have proper doc...

Anti-Profiteering Measure to reap benefits to consumers The 10 th GST Council Meeting which concluded on 18.02.2017 at Udaipur has approved the anit-profiteering Measure as illustrated by section 163 of the Revised Draft of Goods and Services Tax Law. But what it is exactly here we illustrate for you: 1.  What is the provision in the law? The Central Government may by law constitute an Authority, or entrust an existing Authority constituted under any law, to examine whether input tax credits availed by any registered taxable person or the reduction in the price in account of any reduction in the tax rate have actually resulted in a commensurate reduction in the price of the said goods and/or services supplied by him. 2.   What is the implication of the Anti-profiteering measures? The provision clearly indicates that in case a business/registered taxable person avails any benefit under GST due to availment of extra tax credit or due to reduction in tax r...

In the revised model GST Law supply is the point of tax. Section 3 of the act defines supply as: ( 1) Supply includes— (a) all forms of supply of goods and/or services such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business, (b) importation of services, for a consideration whether or not in the course or furtherance of business, and (c) a supply specified in Schedule I, made or agreed to be made without a consideration. (2) Schedule II, in respect of matters mentioned therein, shall apply for determining what is, or is to be treated as a supply of goods or a supply of services. (3) Notwithstanding anything contained in sub-section (1), (a) activities or transactions specified in schedule III; or (b) activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are enga...