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News Indirect Tax-GST

  • May 23, 2022
  • Is the SC’s new ruling a death knell for the GST regime?

    On Thursday, in a major judgment, the Supreme Court held that the recommendations of the Goods and Services Tax Council would not be binding on the Centre and the states. The council fixes GST rates and its recommendations were considered binding until now.

    The ruling could have far-reaching implications for the “one nation, one tax” regime that was introduced in July 2017 when the GST was launched to subsume all indirect taxes collected by the Centre and the states.

  • May 23, 2022
  • Taxpayers can claim refund of IGST on ocean freight, experts say on SC ruling

    Taxpayers who have paid GST on ‘Ocean Freight’ on imported goods will be entitled to claim refunds, following the Supreme Court verdict, provided they have not claimed input tax credit, experts said.

    Giving its ruling in the Mohit Minerals case, the Supreme Court held that since the Indian importer is liable to pay IGST on the ‘composite supply’, comprising of supply of goods and supply of services of transportation, insurance, etc in a CIF (Cost Insurance Freight) contract, a separate levy on the Indian importer for the ‘supply of services’ by the shipping line would be in violation of … the CGST Act.

  • May 23, 2022
  • GST Council may consider modification in monthly tax payment form for better ITC reporting

    The GST Council is likely to consider modification in summary return and monthly tax payment form, GSTR-3B, in its meeting next month, with a view to check fake input tax credit claims and expedite settlement of genuine ones, an official said.

    According to officials, the modified form will provide clarity with regard to gross input tax credit (ITC) due to the taxpayer, the amount claimed in a particular month and the net amount left in the taxpayer’s ledger.

  • May 20, 2022
  • SC ruling unlikely to alter GST regime; power to reject Council's recos never used: Revenue Secy

    The Supreme Court ruling on the goods and services tax framework is unlikely to materially impact the one-nation-one-tax regime, as it is only a reiteration of the existing law that gives states the right to accept or reject the GST Council's recommendation on taxation, revenue secretary Tarun Bajaj said.

    "In this judgement, there is nothing new or which has not been discussed," Bajaj told reporters on Thursday.

    On Thursday, the Supreme Court held that the recommendations of the GST Council were not binding on the central and state governments and that they only had a persuasive value. The apex court said Parliament and state legislatures could equally legislate on GST.

    India rolled out the GST regime in 2017, following a constitutional amendment by subsuming nearly one-and-a-half-dozen central and state levies. The amendment provided for the creation of a council with representation from the Centre and states for decision-making.

  • May 20, 2022
  • Supreme Court’s observation in Ocean Freight ruling could change landscape of GST framework: Experts

    The Supreme Court’s ruling in the case of ocean freight that is set to give relief to several Indian companies and importers could also change the way the Goods and Services Tax (GST) framework operates in the country, say legal experts.

    The Supreme Court on Thursday, ruling has held that GST on ocean freight paid in case of import of goods is unconstitutional. Also, the Indian importers who had paid such tax will be eligible to refund.

    Further, those importers who had not paid the tax on import of services will now not be required to pay tax because of this Supreme Court ruling.

    The court also said that recommendations by the GST council are not binding on either the union or the state and it has persuasive value.

  • May 20, 2022
  • GST Council recommendations not binding on Centre and states: Supreme Court ruling may impact GST provisions

    The Supreme Court has ruled that the GST Council recommendations are not binding on the Centre and the states, and are only ‘persuasive, in a landmark judgement that may impact the landscape of GST provisions under judicial review. The Parliament and state legislatures possess equal powers to legislate on GST, the Supreme Court said, upholding the judgement of the Gujarat High Court in Ocean Freight matter in the case of Mohit Minerals. It is for the GST Council to suitably advise the Central government and the state governments, the Supreme Court bench led by Justice DY Chandrachud said.

    “As the court has gone ahead to categorically hold that the GST Council recommendations have only persuasive value, there will be a pragmatic approach to the provisions which are subject to judicial review by way of challenge to the constitutionality of such provisions based on GST Council recommendations, Abhishek A Rastogi, Partner at Khaitan & Co, added. Rastogi argued for the companies in the Ocean Freight matter in the Mohit Minerals case.

  • May 19, 2022
  • Group of ministers for raising GST on online gaming to 28%

    A group of ministers (GoM) has recommended raising the goods and services tax (GST) on online gaming from 18% to 28%, to bring the skill game tax rate on a par with chance games involving gambling and betting, sources said.

    However, it was not immediately clear whether the enhanced GST rate would be on the full contest entry amount (platform fee and prize pool) or only on the platform fee. A member of the GoM told FE that it may be levied on the “initial gaming amount”, but he did not elaborate.

  • May 19, 2022
  • SC rules GST Council's recommendations are not binding on Centre and states

    In a significant verdict, the Supreme Court today ruled that recommendations of the GST Council isn't binding on Centre and States. It only has a persuasive value

    A bench led by Justice DY Chandrachud held that the Central government and States have simultaneous powers to legislate on Goods and Service Tax (GST).

    Hence, the GST council must work in harmonious manner to achieve workable solution between Centre and States, the top Court said.

  • May 18, 2022
  • GST levy based on capacity on pan masala, gutkha unlikely

    A plan to levy goods and services tax (GST) on pan masala and gutkha on the basis of installed manufacturing capacity may be dropped due to the difficulties in administering the input tax credit (ITC) mechanism, sources told FE.

    In May 2021, the GST Council had set up a group of ministers (GoM), led by Odisha finance minister Niranjan Pujari, to examine the feasibility of levying GST on products such as pan masala and gutkha, on the basis of the installed capacity, rather than actual production. This was in view of large-scale tax evasion detected by under-reporting of output by the units.

  • May 18, 2022
  • Govt extends April GST payment deadline till May 24 amid tech glitches

    As taxpayers face technical glitches on the GST portal, the government on Tuesday extended the due date for April tax payment till May 24 and has directed Infosys for early resolution of the problem.

    The due date for filing FORM GSTR-3B for the month of April 2022 has been extended till 24th May 2022, the Central Board of Indirect Taxes and Customs (CBIC) said in a late-night tweet.

    Earlier in the day, the CBIC had said that a technical glitch has been reported by Infosys in the generation of April GSTR-2B and auto-population of GSTR-3B on the portal.

    "Infosys has been directed by Govt for early resolution. Technical team is working to provide GSTR-2B & correct auto-populated GSTR-3B at the earliest," the CBIC tweeted.

  • May 16, 2022
  • Incomplete GSTR-2B in some cases - regarding.

    It has been noticed that in a few cases, certain records are not reflected in the GSTR-2B statement for the period of April 2022. However, such records are visible in GSTR-2A of such recipients.

    2. The technical team is working to resolve this issue for the impacted taxpayers and generate fresh GSTR-2B at the earliest.

    3. In the interim, affected taxpayers interested in filing GSTR-3B are requested to file the return on self-assessment basis using GSTR-2A.

    Inconvenience caused in this regard is deeply regretted.

  • May 14, 2022
  • Non-commercial construction in education institutions to draw less GST

    Construction of buildings, such as hostels, principal's bungalow and staff quarters, in educational institutions is taxable at lower rate of goods and services tax (GST), if the structures are not used for commercial activities than those for normal business purposes, ruled Gujarat Authority for Advance Rulings (AAR).

    The court ruled that such buildings would draw 12 per cent GST, and not 18 per cent levied for other construction activities. It should be noted that education draws zero GST, while construction work and the iputs used therein attract tax.

    The applicant, Tirupati Construction, approached AAR to find out about the applicability og GST on these activities. The company was awarded a works contract for constructing a hostel and staff quarters at a village in Surat by the Road and Building Department of the Gujarat government.

    While the company argued for 12 per cent GST rate, the revenue department opposed it on the ground that the co

  • May 12, 2022
  • Module wise new functionalities deployed on the GST Portal for taxpayers

    Various new functionalities are implemented on the GST Portal, from time to time, for GST stakeholders. These functionalities pertain to different modules such as Registration, Returns, Advance Ruling, Payment, Refund and other miscellaneous topics. Various webinars are also conducted as well informational videos prepared on these functionalities and posted on GSTNs dedicated YouTube channel for the benefit of the stakeholders.

  • May 12, 2022
  • Reporting 6% rate in GSTR-1

    A new tax rate of 6% IGST or 3% CGST+ 3% SGST has been introduced on certain goods vide Notification No. 02/2022 dated 31st March 2022. Changes are being made on the GST portal to include this rate in GSTR-1. As a temporary measure, taxpayers who have to report goods at this rate may do so by reporting the entries in the 5% heading and then manually increasing the system computed tax amount to 6%. This can be done by entering the value in the ‘Taxable value’ column next to 5% tax-rate and then increasing the system computed tax-amount to 6% IGST or 3% CGST + 3% SGST in the ‘Amount of Tax’ column under the relevant Table, namely B2B, B2C or Export, as applicable. This will ensure that correct tax amount is reported in GSTR-1. Meanwhile, this rate will be made available on the GST portal shortly.

  • May 10, 2022
  • India may expand taxes on crypto beyond IT and TDS – government reportedly mulling 28% GST

    The crypto industry’s tax woes in India may get worse as the government looks to expand indirect taxes on the space in the coming days. According to reports from local media, the country is formulating methods to expand the ambit of these indirect taxes, specifically the goods and services tax (GST), to cover a larger section of the crypto space.
    The GST is an indirect tax that replaced many others in the country a year or two ago. It is levied on the supply of goods and services, including things like restaurant bills, e-commerce orders, and others. Some politicians have demanded the highest GST slab, which is levied at 28%, on the crypto industry.

  • May 09, 2022
  • Network18 Exclusive | GST Council to consider slapping highest 28% tax on cryptocurrencies

    The GST Council is considering levying 28 percent tax on cryptocurrencies and related services, sources told CNBC-TV18. The proposal is likely to be tabled in the next GST Council meeting.

    According to the sources, the government’s view is to keep cryptos on par with lottery, casinos, betting and race courses. The law committee’s view will be tabled before the Council for a formal nod.

    Also Read: Bitcoin on a tumble, cryptocurrency down 28 percent over the year

    The date for the next GST Council meeting is yet to be decided.

  • May 09, 2022
  • GST net on crypto may expand to include their sale, purchase

    The government may expand the indirect tax net over cryptocurrencies to cover the entire gamut of activities, including their usage for exchanging goods and services, at the highest slab of 28% as many parliamentarians have demanded to treat them at par with lotteries and gambling, two people aware of the development said.

    Although the finance ministry has already imposed a 30% income tax on earnings from virtual digital asset transactions from April 1, there are still several aspects pertaining to goods and service tax on cryptocurrencies, such as its mining, sale and purchase, and their exchange value when used for buying or bartering goods and services. This matter is under consideration as all such activities may attract GST, they said, requesting anonymity.

  • May 09, 2022
  • HC order to pare GST outgo for buyers of under-construction flats: Experts

    The Gujarat High Court ruling that actual value of land should be deducted before levying GST on under-construction flats would reduce the tax outgo for homebuyers, provided the contractual arrangement transparently denotes the land value, experts said.

    Currently, GST is levied on sale of under-construction flats/units wherein the entire value of flat or unit (including value of underlying land) is taxed after giving Ad Hoc deduction of 1/3 of value of flat/unit towards land irrespective of actual value of land.

    Experts said in urban area or metro cities actual value of land is much higher than 1/3 value of flat and application of 1/3rd deduction is arbitrary in nature as it is applied uniformly irrespective of the area, size and location of land.

  • May 07, 2022
  • Gujarat High Court offers GST relief to homebuyers of certain properties

    Buyers of properties whose land value is more than a third of that of the home, will get relief as the Gujarat high court has said that the current mechanism in the goods and services tax (GST) gives only one-third deduction while levying tax on construction in the real estate is arbitrary.

    Currently, GST of 18 per cent is levied on construction services in real estate. However, one-third abatement is given for land, because of which the effective value of taxation comes to 12 per cent. It should be noted that GST is levied only when the house is purchased without occupancy certificate.

    However, the court held that one-third abatement is arbitrary.

    Abhishek A Rastogi, partner of Khaitan & Co. who is arguing various writs in different courts on GST, said there is no GST on transfer of land and building and hence the actual value of land must be excluded when GST is made applicable on such contracts.

  • May 07, 2022
  • GST 2.0: Ideas to improve indirect taxation

    India is set to complete five years since the implementation of the Goods and Service Tax Law. The journey of the first half decade of this landmark reform has undoubtedly been a rollercoaster ride with a mixed bag of hits and misses.

    During this time, India has witnessed changes in effective tax rates and improved supply chain efficiencies. A tax regime founded on a technology-based monitoring system through e-returns, e-invoices, and e-way bills has been one of the biggest achievements of GST in India. It would also be important to laud the success of the Centre-State partnership under the aegis of the GST Council which has ensured that all policy decisions are implemented seamlessly across states.

    While the implementation of GST in India has been commendable, the time is ripe for the government to take note of some of the challenges which the business community at large has been facing, from blockage of working capital to duplicity of assessment proceedings.