Goods and Services Tax

Yesterday government released the figures of GST collection. It has been reported that total GST collection has been worth Rs. 94,726 crores which constitutes CGST Rs. 16,442 crores, SGST Rs. 22,459 crores, IGST 47,936 crores and Cess Rs. 7,888 crores. Curiosity to understand the difference of Rs. 6,017 crores between CGST and SGST made us analyse the collections during nine months of FY 2018-19. What came out of the analysis was an eye-opener. At the very outset we need to understand that the liability   and input tax credit on account of CGST/SGST is calculated equally. Both the head work hand in hand. Then why is the difference in collection. There could be two major reasons, one claim of input tax credit on stock as on 30.06.2017 by the non-excisable unit/traders and the second could be surplus input tax credit of IGST.  Source: The Economic Times - 02.01.2019 On the appointed day when GST was implemented i.e. 01.07.2017, it was provided by law that no ...

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 ...