Goods and Services Tax

A year to remember, a year to cherish and a year which wrote history for India. India witnessed the major tax reform since its independence which replaced the traditional indirect tax law to modern GST. G overnment, S ystem, T axpayers are the three pillars of this modern tax law. Like a mother who goes under severe labour pain to give birth to her child, same way we all had similar pains to give birth to the child of the nation “GST”. Like a mother who faces what not while first year of her motherhood, we also had the same feeling grooming GST towards its first birthday – 1 st July 2018. We have seen a lot of ups and downs in past 52 weeks and every day was a new challenge for the taxpayer, be it technical glitches, change of tax rate, change of returns etc. etc. etc. But one thing is pretty sure that the way both taxpayers and government has responded to the problems, it was commendable. By the end of the year it seems that GST portal which is the backbone of the modern l...

After much thought and understanding its time to analyse the GST provisions on the real estate. Since the Real Estate sector is vast, we are starting a series of blog dedicated to the real Estate. Series would be name as GSTonRealEstate – Part 1. Real estate is one of the most tedious sector for discussion of applicability of GST. Various dimensions on which the applicability of GST on real estate can be discussed are as follows: 1)  Valuation : At the very outset it needs to be understood that the construction services provided by the developer shall be construed as services as per Schedule II of the CGST Act 2017. There is no concept of abatement as in the earlier laws. What is taxable is the sale of under construction property and not the one for which completion certificate has been obtained. The intent of the law is very clear, it wants to charge tax on the construction services per se and not the completed buildings. Once the property is complete and so...

In the case of Rishi Shipping – Gujarat Authority for Advance Ruling has cleared the air that Storing/warehousing and renting of immovable property are two different type of services. Merely because the agricultural produce is stored in an immovable property it would not classify it as Storage and Warehousing Services. Therefore the same shall not be covered under S. No. 54 of Negative List (Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017), hence taxable under the purview of CGST and IGST Act. The Authority held that in order to classify a service as Storage and Warehousing, it should be coupled with loading/unloading/packing services etc. The authority was of the view that where mere building is let out, it shall be classified as renting of immovable property which is chargeable to tax. It is the composite supply, principal supply being renting of immovable property for storage of agricultural produce which is exempt from tax. It further held that once the...

What to do if you have paid penalty under GST – Contest your case at Appeal Level Almost a year has gone, real work under GST begins now. It has been brought to notice that many taxpayers are being penalized for one or the other contravention of act. But since Goods and Services Tax Act is a new law and certainly has interpretational issues, a taxpayer who does not agree with the penalty charged or tax recovered by the proper officer can prefer an appeal with the Appellate Authority. As per section 107 of the Central Goods and Services Tax Act, 2017 an appeal can be filed within 3 months from the date of communication of order. There is no specific category of orders/intimation which are appealable, rather any order can be appealed by the taxpayer, except those specifically provided in clause (a) to Clause (d) of section 121. The orders not appealable as per section 121 are as follows: a)  An order of transfer of proceedings from one officer to other     ...

Preparing for GST Audit – Books to be maintained – A Practical Approach Most of the taxpayers by now have started feeling that GST has eased down and things will settle soon. But as soon as the assessments and audit will start, it will open up another pindora box of difficulties for most of the taxpayers. Taxpayers having aggregate turnover exceeding Rs. 2 crores shall be required to get their accounts audited separately under GST. As per section 44 read with section 35(5), a taxpayer is required to submit audited financial statements as well as a reconciliation statement between monthly returns and the audited financial statements of the previous financial year. Such statements need to be endorsed by a Chartered Accountant or a Cost Accountant. But before we even start discussing audit, we need to first prepare for it. Preparation starts with maintaining of proper books of accounts, records, registers etc. It must be noted that a GSTIN shall be treated as a separate taxpa...