Goods and Services Tax

Looking at the various issues being discussed by the GST council we expect following to happen in the year 2019. S. No. Brief Details 1. Formation of Central Authority for Advance Ruling Central authority for Advance Ruling might get established to settle difference of opinion in various state level AAR. The decision towards this has been taken in recent GST Council meeting held on 22 nd December 2018. 2. GST Rate to settle at 15% The GST Tax rate of 18% and 12% might get merged to one rate of 15%. This might come from the political compulsion of the ruling party as the opposition is strongly marketing the idea of one rate under GST. 3. Simplification of Annual Return Since the filing of annual return itself has been extended up to 30.06.2019 we can expect major simplification in the GSTR 9 and GSTR 9C return format. The issues relating to bifurcation of ITC in capi...

Source : The Economic Times dated 29.12.2018 In yet another judgment from Appellate Authority to Advance Ruling of Karnataka it has been established that the employee cost borne by the head office for rendering of services to the branches in other states shall be a taxable supply. For instance A company registered under GST has corporate office in Delhi and branch in Chandigarh. In such a case the employee cost borne by the head office at Delhi for assistance to Chandigarh shall be treated as supply chargeable to GST. The authority held that two units which are separately registered shall be distinct person in terms of section 25(4) of the Central GST Act 2017. It further held that employee working in one unit shall be treated as an employee for that particular unit for the purposes of employer-employee exemption under Schedule III of the Act. In our above example the employee who is working for Delhi unit shall be treated as employee of Delhi Unit and not of Chandigarh fo...

The government mulling over separate invoices for exempt and non-exempt services under GST. The basic concept of composite supply is being hampered. The act provides that where the taxpayer supplies goods/services or both which are naturally bundled, it shall be composite supply chargeable at the rate of the principal supply. The very purpose of composite supply is defeated if the law is amended to allow separate invoices. To my mind, it may not remain restricted only to the services, the demand would shortly arise in case of goods as well. Further the legal position as adopted by Advance Ruling in case of Columbia Asia hospital Private Limited seems to be reversed if the new idea is implemented. The very concept of composite supply in the healthcare industry needs to be revamped. The supply which are result of hospitalisation and upon recommendation of the doctor must be treated as a part of the hospitalisation services. No patient can be treated without the necessary medi...

31 st GST Council meet concludes – BIG Relief to the taxpayer – CA. Keshav R Garg GST council meeting has just concluded and it was an utter disappointment looking at that most of the policy decisions have been deferred. Looks like the focus was only on rationalization of rates of tax. Most of the items presently charged at 28% has been reduced to 18%. The frozen vegetables has also been reduced from 5% to zero. So not much apart from rate of tax has been done. What has not been reduced on rate of tax is cement, automobiles part, Air Conditioner and Dishwasher. The auto parts also continue to be charged at 28%. The Council analysed that 22% of the tax revenue is collected from items charged at 28%. Sin Goods and luxury items also continue into 28% bracket. 1. Religious visits to Haj/pilgrimage through chartered plane has been reduced to rate of tax charged with normal flights. 2. But there were no sound related to refund for railway sector or implementation ...

I remember when my mother used to cook, I used to eat half cooked boiled potatoes and my mom used to say “Namak Haldi to dalne do”. Crux was not she wanted me to eat spices but they certainly added taste to the dish. At times I feel that journey of GST had been some what same, the spices of investigations, search, assessments, audits are yet to be added in GST Version 2.0. But we feel that there are few things which needs to be changed before GST departments starts spreading colours on this new and vibrant tax law. At the very outset there is  a need that the field formations and the people at the helm of the affairs should be on same page. Whatever circulars/notifications/instructions are issued they must be properly communicated and practically implemented at the ground level. One such example is reconciliation between GSTR 2A and GSTR 3B which top bureaucracy feels is not required, where as the field formations hold a different view. Also the pro-active approach ...

Recovery from Employee – Now subject to GST In yet another ruling by AAR in case of M/s Caltech Polymers Private Limited, the scope of term “Supply” has been further widened. Even the companies running canteen as per statutory norms would also be required to pay GST on the amount recovered from the employees. The Ruling held that exemption in respect of canteen run as per Factories Act was available under Service Tax and not under GST. The authority emphasized that supply of food to the employees is covered under Schedule II of the CGST Act 2017, despite the fact that such service is provided with no profit. This means that reimbursement on actual basis will also considered as supply. The authority held that where the supply is made for a consideration it shall be chargeable to GST. It deliberated on the definitions of term “Supply” and “Consideration” and came to the conclusion that the recovery of food charges from the employees tantamount to consideration for the ...