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Goods and Services Tax – GST – By: – Pradeep Jain – Dated:- 10-2-2017 – GST DAILY DOSE OF UPDATION BY CA PRADEEP JAIN Definition of Principal place of business, Proper Officer and Services Taking further to our discussion, we are continuing our discussion the definitions given under Section 2 of revised GST law and comparing the same with old model GST law to know the changes made in revised law:- 2(77) Principal place of business: the new definition reads as follows: Principal place of business means the place of business specified as the principal place of business in the certificate of registration; The old definition read as follows: principal place of business means the place of business specified as the principal place of business in

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tion. Deleting the condition of keeping books of accounts has made the definition simple to follow and now the assessee can name any of his premises as principal place of business. But there is no need to keep books of accounts there only. It can be kept at any place of business. 2(79) Proper Officer: the new definition reads as follows: Proper Officer in relation to any function to be performed under this Act, means the officer of goods and services tax who is assigned that function by the Commissioner of CGST / SGST; The old definition reads as follows: proper officer in relation to any function to be performed under this Act, means the officer of goods and services tax who is assigned that function by the Board/Commissioner of SGST; The

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r than an activity relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged. The old definition read as follows: services means anything other than goods; Explanation: Services include intangible property and actionable claim but does not include money. The amendment bought in the definition is that Securities explicitly excluded from services definition. We have told in our earlier update that securities are excluded from the definition of goods under Section 2(49) also. Thus securities won t be considered as goods or services and as a result, GST won t be applicable on the same. The definitio

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Goods and Services Tax – GST – By: – Mr. M. GOVINDARAJAN – Dated:- 9-2-2017 Last Replied Date:- 9-2-2017 – In the course of time the GST Authorities may take various decisions, issued orders, issued summons, notice or other communications to the assessee or other required persons. The service of communication of any sort is to fulfill the requirements of principles of Natural Justice. Serving the same is not enough and the confirmation of receipt of the said communication should be ensured by the issuing authorities. Some sort of notices, orders, summons etc., to be issued or communicated by the proper officers under the provisions of this Act is discussed in this Article as below. Cancellation or revocation of registration Section 26 (4) of the Act provides that the proper officer shall not cancel the registration without giving a notice to show cause and without giving the person a reasonable opportunity of being heard. Section 27 (3) provides that the proper officer shall not rejec

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sis, 90% of the total so claimed, excluding the amount of input tax credit provisionally accepted, in the manner and subject to the conditions, limitations and safeguards as may be prescribed and thereafter make an order for final settlement of the refund claim after the due verification of documents furnished by the applicant. Section 48 (11) provides that where an order giving rise to a refund is the subject matter of an appeal or further proceeding or where any other proceeding under this Act is pending and the Commissioner is of the opinion that grant of such refund is likely to adversely affect the revenue in the said appeal or other proceeding on account of misfeasance or fraud committed, he may, after giving the taxable person an opportunity of being heard, withhold the refund till such time as he may determine. Electronic Commerce Section 56 (9) provides that any authority not below the rank of Joint Commissioner may serve a notice either before or during the course of any proc

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Section 58(1), pass the final order after taking into account such information as may be required for finalizing the assessment. Assessment of non filers of returns Section 60 (1) provides that where a registered taxable person fails to furnish the return required under Section 34 or Section 40, even after the service of a notice under Section 41, the proper officer may proceed to assess the tax liability of the said person to the best of judgment taking into account all the relevant material which is available or which he has gathered and issue an assessment order within time limit specified in Section 67 (8). Assessment of unregistered persons Section 61 provides that notwithstanding anything to the contrary contained in Section 66 or Section 67 where a taxable person fails to obtain registration even though liable to do so, the proper officer may proceed to assess the tax liability of such taxable person to the best of his judgment for the relevant tax periods and issue an assessme

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fund has erroneously been made, or who has wrongly availed or utilized input tax credit, requiring to show cause why he should not pay the amount specified in the notice along with interest payable thereon under Section 45 and a penalty leviable under the provisions of this Act or the rules made there under. Section 66(7) provides that where the proper officer shall, after considering the representation, if any, made by the person chargeable with tax, determine the amount of tax, interest and a penalty equivalent to 10% of tax or ₹ 10,000/- whichever is higher, due from such person and issue an order. Section 67 (1) provides that where any tax has not been paid or short paid or erroneously refunded, or where input tax credit has been wrongly availed or utilized by reason of fraud or willful mis-statement or suppression of facts to evade tax, the proper officer shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to who

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een so paid, the proper officer may serve on the person liable to pay such amount a notice requiring to show cause why the said amount as specified in the notice, should not be paid by him to the credit of the Central or a State Government and why a penalty equivalent to the amount specified in the notice should not be imposed on him under the provisions of this Act. Section 69 (6) provides that the proper officer shall issue an order within one year from the date of issue of the notice. Recovery of tax Section 72 (c) (i) provides that the proper officer may, by a notice in writing, require any person from whom money is due or become due to such person or who holds or may subsequently hold money for or on account of such person, to pay to the credit of the Central or a State Government either forthwith upon the money becoming due or being held, or at or within the time specified in the notice not being before the money becomes due or is held, so much of the money as is sufficient to pa

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mmon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making for any of the purposes of this Act. Power to impose penalty in certain cases Section 88 provides that where the proper officer is of the view that a person is liable o a penalty and the same is not covered under any proceeding under Sections 59, 60, 61, 62, 66, 67, 89 or 90, he may issue an order levying such penalty after giving a notice and after giving a reasonable opportunity of being heard to such person. Confiscation of goods Section 90 (4) provides that no order of confiscation of goods and/or conveyance and/or imposition of penalty shall be issued without serving a notice on such person requiring him to show cause and without giving the person a reasonable opportunity of being heard. First appeal Section 98 (11) provides that the order of the First Appellate Authority disposing of the appeal shall be in writing

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the Appellate Authority Section 119 (2) provides that the order shall be passed within a period of 90 days from the date of filing of appeal. Service of notice Section 159 of the Act provides that any decision, order, summons, notice or other communication under the Act or the rules made there under shall be served by any one of the following methods- by giving or tendering it directly or by a messenger including a courier- to the addressee; or the tax payer; or to his manager; or to agent duly authorized; or to an advocate or a tax practitioner holding authority to appear in the proceeding on behalf of the tax payer; or to a person regularly employed by him on connection with the business; or to any adult member of family residing with the tax payer; or by registered post or speed post or courier with acknowledgement due, to the person for whom it is intended or his authorized agent, if any at his last known place of business or residence; or by sending a communication to his e-mail

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Goods and Services Tax – Started By: – RAM SHARMA – Dated:- 8-2-2017 Last Replied Date:- 15-2-2017 – Dear Experts,Whether a manufacturer can take cenvat credit on freight and commission given to our consignment agent in gst draft law just like as current service tax law. Pl clarify.Thanks & Regards – Reply By MARIAPPAN GOVINDARAJAN – The Reply = GST law is not in final shape. Any change can occur. Please await till that time. – Reply By KASTURI SETHI – The Reply = Rightly advised by Sh.MARI

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Goods and Services Tax – GST – By: – Mr. M. GOVINDARAJAN – Dated:- 8-2-2017 Last Replied Date:- 9-2-2017 – Section 2(9) of Model Goods and Services Tax Act, 2016 ( Act for short) defines the phrase, Appellate Tribunal as the National Goods and Services Tax Appellate Tribunal constituted under Section 100. Appeal to the Appellate Tribunal in this act is the second stage of the appeal. Section 101(1) of the Act provides that any person aggrieved by an order passed against him Section 98 or Section 99 of the Act may appeal to the Appellate Tribunal against such order within three months from the date on which the order sought to be appealed against is communicated to the person preferring the appeal. Section 98 provides for the appeals to fir

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officer subordinate to him is erroneous in so far as it is prejudicial to the interest of the revenue and is illegal or improper or has not taken into account certain material facts, whether available at the time of issuance of the said order or not or in consequence of an observation by the Comptroller and Auditor General of India, he may, if necessary, stay the operation of such decision or order for such period as he deems fit and after giving the person concerned an opportunity of being heard and after making such further inquiry as may be necessary, pass such order, as he thinks just and proper, including enhancing or modifying or annulling the said decision or order. Section 100 provides for the constitution of the National Appellate

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National President, Members (Judicial) and the Member (Technical-CGST) shall be such as may be prescribed by the Central Government on recommendations of the Council. The qualifications, eligibility conditions and the manner of selection and appointment of State Presidents and the Member s (Technical – SGST) shall be such as may be prescribed by the State Government, on the recommendations of the Council. The National President and the State Presidents shall exercise such powers and discharge such functions as may be prescribed on the recommendations of the Council. On ceasing to hold office, the National President, the State Presidents or other Members of the Appellate Tribunal shall not be entitled to appear, act or plead before the Appel

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Asst Accounts Manager – Goods and Services Tax – Started By: – Banamali Das – Dated:- 7-2-2017 Last Replied Date:- 11-2-2017 – Rate of Entry Tax, Vat, Quartly Return, GST of odisha on Construction pro

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Goods and Services Tax – GST – Dated:- 7-2-2017 – The Government is not thinking to hike service tax if GST roll out is delayed. The Government is taking steps to expedite the GST and to take the concerns of the States on board. Goods and Services Tax Council (GST Council) has been constituted on 15.09.2016 under Article 279A of the Constitution. The GST Council consists of the Union Finance Minister, the Union Minister of State in charge of Revenue or Finance and the Minister in charge of Fina

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Central Excise – Started By: – SUNIL NAMA – Dated:- 7-2-2017 Last Replied Date:- 10-2-2017 – DEAR SIR , WE ARE ON THE VERGE OF STARTING A NEW UNIT IN MARCH 2017 – NOW SINCE GST IS AROUND THE CORNER , PLEASE ADVICE 1 } SHOULD WE TAKE NEW CENTRAL EXCISE REGISTRATION FOR NEW UNIT OR WAIT TILL GST COMES IN TOO TAKE CENVAT CREDIT OF NEW MACHINES COMING IN MARCH ? 2) OR SHOULD WE TAKE NEW EXCISE REGISTRATION AND TAKE CREDIT AND WAIT FOR GST TO TRANSFER THE CREDIT IN IGST . 3) WILL IGST AND CGST BE US

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Goods and Services Tax – Started By: – monika gupta – Dated:- 7-2-2017 Last Replied Date:- 10-2-2017 – Whether GST will be applicable on educational trust? – Reply By KASTURI SETHI – The Reply = If trust is registered under Section 12 AA of the Income Tax Act, then exemption from GST is possible. Sometimes changes take place at the last moment. – Reply By YAGAY AND SUN – The Reply = Well, in our the tax position is not clear. The tax position will be cleared once the final GST Law will come. –

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Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 7-2-2017 Last Replied Date:- 22-2-2017 – Budget 2017-18 contains 3 major reforms. These are- Presentation of Budget advanced to 1st February to enable the Ministries to operationalise all activities from the commencement of the financial year. Merger of Railways Budget with General Budget to bring Railways to the centre stage of Government s Fiscal Policy, and Removal of plan and non-plan classification of expenditure to facilitate a holistic view of allocations for sectors and ministries. After it was almost clear after 9th meeting of GST Council that GST may now be implemented from July, 2017 only, at the earliest, all eyes were on the Union Budget 2017-18 which has since been presented in the Parliament of India on 1st February, 2017. Only time will tell us whether it is the last Budget for Service Tax, Central Excise and Central Sales Tax and that whether fiscal 2017-18 is going to be the historic year of transition

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because widening of tax base. Not many changes in current central excise and Service Tax regime as these will be replaced soon by GST No change in tax rates of excise duty as well as service tax. Abolishment of R & D cess is in allignment with GST The present Budget is focused on TEC, i.e., transform, energize and clean India which contains measures for stimulating growth, digital economy and ease of doing business. This agenda of TEC India seeks to – Transform the quality of governance and quality of life of our people; Energies various sections of society, especially the youth and the vulnerable, and enable them to unleash their true potential; and Clean the country from the evils of corruption, black money and non-transparent political funding. It also seeks to facilitate RAPID, i.e., Revenue, Accountability, Probity, Information and Digitalization. There are number of clues on goods and services tax but without any assurance on implementation schedule. Finance Minister in his B

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atory work for this path-breaking reform has been a top priority for the Government. In this context, several teams of officers both from the States and Central Board of Excise and Customs have been working tirelessly to give finishing touch to the Model GST law and rules and other details. Government on its part has promptly given effect to various provisions of the Constitutional Amendment Act, including constitution of the GST Council. Since then, the GST Council held 9 meetings to discuss various issues relating to GST, including broad contours of the GST rate structure, threshold exemption and parameters for composition scheme, details for compensation to States due to implementation of GST, examination of draft model GST law, draft IGST law and the Compensation Law and administrative mechanism for GST. It is my privilege to inform this august house that the GST Council has finalised its recommendations on almost all the issues based on consensus and after spirited debate and disc

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Goods and Services Tax – GST – By: – Pradeep Jain – Dated:- 7-2-2017 Last Replied Date:- 30-12-1899 – GST DAILY DOSE OF UPDATION BY CA PRADEEP JAIN Definitions of Accounts, Custom frontiers of India and non-taxable online recipient Taking further to our discussion, we are continuing our discussion the definitions given under Section 2 of revised IGST law and comparing the same with old model GST law to know the changes made in revised law:- Section 2(1) Accounts: the newly added definition reads as follows: Account means an account bearing interest to the depositor, and includes a non-resident external account and a non-resident ordinary account New definition of Account has been inserted which refers to bank account. It seems that interes

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individual or any person not registered under section 23 19 of the CGST Act, 2017 receiving online information and database access or retrieval services in relation to any purpose other than commerce, industry or any other business or profession, located in taxable territory; Explanation.-For the purposes of this clause, ―governmental authority‖ means an authority or a board or any other body: (i) set up by an Act of Parliament or a State legislature; or (ii) established by Government, with 90% or more participation by way of equity or control, to carry out any function entrusted to a municipality under article 243Wof the Constitution This is a newly added definition which has been added keeping in view the recent amendments mad

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Goods and Services Tax – GST – Dated:- 4-2-2017 – New Delhi, Feb 3 (PTI) Keen to rollout the Goods and Services Tax by July, the government plans to take the supporting legislations to Parliament next month, Finance Minister Arun Jaitley said today. While the all-powerful GST Council has already decided on a four-slab tax structure for the indirect tax regime, the levy for different goods and services will be decided by May or June. Jaitley said he hopes to get Central GST (CGST) and Integrated GST (IGST) draft legislations approved at the next GST Council meeting on February 18 and bring them in the second half of ongoing Budget Session. It will reconvene on March 9 after a month long break and continue till April 12. Now the main policy

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nsation Act needs to be approved by Parliament to provide for compensation to states that lose revenue from implementation of GST in first five years. One parallel exercise is fitment of various commodities in to the rate structure for that the officer have to meet, Jaitley said. The GST Council has fixed the four-tier structure of 5 per cent, 12 per cent, 18 per cent and 28 percent. Revenue Secretary Hasmukh Adhia said a good or service will be put in a slab which is closest to the current rate at taxes. As far as fitment of rate is concerned there are four slabs. The present incidence of VAT plus excise duty, or VAT plus service tax it whatever is the incidence, the slab closer to that is the slab where it will fall, he said. Also, there

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Goods and Services Tax – GST – By: – Pradeep Jain – Dated:- 4-2-2017 – GST DAILY DOSE OF UPDATION Definition of First Stage Dealer Taking further to our discussion, we are continuing our discussion the definitions given under Section 2 of revised GST law and comparing the same with old model GST law to know the changes made in revised law:- Section 2(46): First Stage Dealer: The new definition reads as follows: First Stage Dealer means a dealer, who purchases the goods directly from,- (i) the manufacturer under the cover of an invoice issued in terms of the provisions of Central Excise Rules, 2002 or from the depot of the said manufacturer, or from premises of the consignment agent of the said manufacturer or from where the goods are sold

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ion was there in Model GST law for the dealers. As the cenvat credit of excise duty was not allowed to dealers, it would have also resulted in heavy burdening in terms of cost for them. The trade associations were demanding the transitional provision for the same. This is welcome step on behalf of the Government that they have adhered to the same. But it is interesting to note that no mechanism has been prescribed to avail the cenvat for the dealers. They are maintaining RG 23 D register and there is clear cut balance of credit can be worked out for them. Even they need not to follow the FIFO method. They can clearly tell which inputs are lying with them and invoice relating to them as well as the credit available for the same. This details

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Goods and Services Tax – GST – Dated:- 3-2-2017 – All decisions of GST Council so far have been taken unanimously. Various states may have different points of view on an issue but the final decisions have been unanimous. The issue regarding treatment of the existing tax incentive schemes of the Central and State Governments was discussed during the 2nd Meeting of the GST Council held on 30th September, 2016 and the Council agreed that all entities exempted from payment of indirect tax under any

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Goods and Services Tax – GST – By: – Mr. M. GOVINDARAJAN – Dated:- 3-2-2017 Last Replied Date:- 3-2-2017 – A taxable person is required to furnish proper explanation to the officer in case any discrepancy is detected in the return filed under model GST law ( law for short). Such information is required to be furnished within 30 days of being informed. Such date may be extended further by the officer if sufficient cause is shown. If a taxable person does not furnish the required information within the time specified or does not take corrective action within a reasonable period after accepting the discrepancies, the Proper Officer may take recourse to any of the following provisions- To proceed to conduct audit under Section 63 of the law; To direct the conduct of a special audit under Section 64 which is to be conducted by a Chartered Accountant or a Cost Accountant nominated for this purpose by the Commissioner; or To undertake procedures of inspection, search and seizure under Sectio

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udit is required to be completed within three months from the date of commencement of audit. If the audit cannot be completed within three months from the date of commencement of audit the Commissioner may, if he is satisfied, extend the period of audit for a further period not exceeding six months. The reasons for such extensions shall be reduced in writing. The term commencement of audit is important because audit has to be completed within a given time frame in reference to the date of commencement. Commencement of audit means the later of the following- the date on which the records/accounts called for by the audit authorities are made available to them, or the actual institution of audit at the place of business of the taxpayer. Section 63(5) provides that during the course of audit, the authorized officer may require the taxable person to afford him the necessary facility to verify the books of account or other documents as he may require and which may be available at such place

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k of Deputy/Assistant Commissioner, having regard to the nature and complexity of the case and the interest of the revenue, is of the opinion that the value has not been correctly declared or the credit availed is not within the normal limits, he may, with the prior approval of the Commissioner, direct such taxable person by notice in writing to get his records including books of account examined and audited. The special audit shall be carried out by a Chartered Accountant or the Cost Accountant nominated by the Commissioner. Section 64 (2) provides that the Chartered Accountant or Cost Accountant shall within the period of 90 days, submit a report of such audit duly signed and certified by him to the Deputy/Assistant Commissioner mentioning therein such other particulars as may be specified. The proper officer may extend the time limit of special audit by another ninety days on the application of the Chartered Accountant or Cost Accountant on behalf of the taxable person or for any ma

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Budget – Dated:- 1-2-2017 – GST Council has finalised its recommendations on almost all the issues based on consensus, says Finance Minister in his Budget Speech Extensive reach-out efforts to trade & industry for GST to start from 1st April, 2017 The Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley while presenting the General Budget 2017-18 in Parliament today said that the GST Council has finalised its recommendations on almost all the issues based on consensus after spirited debate and discussions. The Finance Minister said that the Government on its part has promptly given effect to various provisions of the Constitutional Amendment Act, including constitution of the GST Council. The GST Council held 9 meetings

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preparatory work towards ushering in GST which is by far the biggest tax reform since Independence. Several teams of officers both from the States and Central Board of Excise and Customs (CBEC)have been working to give finishing touch to the Model GST law, rules and other details, he added. Shri Jaitley said that the Government, through the Central Board of Excise & Customs (CBEC) shall continue to strive to achieve the goal of implementation of GST as per schedule without compromising the spirit of co-operative federalism. He added that the implementation of GST is likely to bring more taxes both to Central and State Governments because of widening of tax net. The Finance Minister Shri Jaitley stated that not many changes have been pro

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Goods and Services Tax – GST – By: – Pradeep Jain – Dated:- 1-2-2017 – GST DAILY DOSE OF UPDATION Definition of Consideration Taking further to our discussion, we are continuing our discussion the definitions given under Section 2 of revised GST law and comparing the same with old model GST law to know the changes made in revised law:- Section 2(28): Consideration: the new definition reads as follows: Consideration in relation to the supply of goods or services includes (a) any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or

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utmost importance in the light of decision of Supreme Court in the case of Maruti Suzuki Ltd. which states that subsidy provided by the government in form of adjusted payment of VAT will be treated as additional consideration and will be added in the assessable value of the goods for the purpose of excise duty. Relying on this decision, notices were sent to assessees claiming this subsidy. Now the new definition has specifically excluded the subsidies from its purview putting rest to all the possible litigations that may arise on this issue. Another point of probable litigation is that the definition states that consideration can be voluntary or non voluntary. Although the main phrase uses the term any act or forbearance , but it does not

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Goods and Services Tax – GST – By: – Mr. M. GOVINDARAJAN – Dated:- 1-2-2017 Last Replied Date:- 3-2-2017 – In GST there is no separate meaning for goods or service. Supply is common for both of the goods and service. Section 3 defines the term supply . The provisions of Finance Act, 1994 and Central Excise Act, 1944 and State Value Added Tax laws give powers to the respective Government to exempt any goods/service. The exemption may be full or partial; permanent or for a particular period. The Government may review the exemption given to such goods/services and do necessary action on exemption according to the situation requires. Many a notification is being issued for exemption in respect of service tax as well as central excise duty by the CBE&C and also by the State Governments for their respective VAT. All exemptions under these Acts will come to an end on the introduction of GST regime. The Model GST law and IGST law also provides for exemption from GST. Section 2(44) of the

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ing such goods and/or services shall not pay the tax on such goods and/or services. Section 11(2) provides that if the Central or a State Government is satisfied that it is necessary in the public interest so to do, it may, on the recommendation of the Council, by special order in each case, exempt from payment of tax, under circumstances of an exceptional nature to be stated in such order, any goods and/or services on which tax is leviable. Section 11(3) provides that the Central or a State Government may, if it considers necessary or expedient so to do for the purpose of clarifying the scope or application of any notification issued under Section 11(1) or order issued under Section 11(2), insert an explanation in such notification or order, as the case may be, by notification at any time within one year of issue of the notification under Section 11(1) or order under Section 11(2), and every such explanation shall have effect as if it had always been the part of the first such notific

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the Central Government to grant exempt generally either absolutely or subject to such conditions as may be specified in the notification, inter-state supply of goods and/or services of any specified description from the whole or any part of the tax leviable thereon. The Central Government is to satisfy that it is necessary in the public interest so to do and on the recommendations of the GST council. Where an exemption in respect of any goods and/or services from the whole of the tax leviable thereon has been granted absolutely, the taxable person providing such goods and/or services shall not pay the tax on such goods and/or services. Section 6(3) provides that where the Central Government is satisfied that it is necessary in the public interest so to do, it may, on the recommendation of the GST Council, by special order in each case, exempt from payment of tax, under circumstances of an exceptional nature to be stated in such order, any goods and/or services on which tax is leviable

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Sale of immovable property treated as Supply – Goods and Services Tax – Started By: – NANDAKUMAR KONKAR – Dated:- 31-1-2017 Last Replied Date:- 4-2-2017 – Under MGST Law, Clause 5 (b) of Schedule II [transactions to be treated as 'Supply'] states that : construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or before its first occupation, whichever is earlier. broadly construed to mean that transfer of property under construction (where entire consideration has been received after issuance of comple

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, it would not be a supply. So regardless of whether entire consideration is paid by buyer after CC or before 1st occupation, it would not be a supply. Alternately, if first occupation exception is not linked with receipt of entire consideration, it could mean in cases of occupation before issuance of CC, transaction would not be supply. Kindly clarify CA Nandakumar Konkar – Reply By KASTURI SETHI – The Reply = Dear Sir, Note the words, In GST there is no separate meaning for goods and services. written by Sh.M.Govindarajan, Sir in his article dated 1.2.17. – Reply By KASTURI SETHI – The Reply = Pl. read Goods or Services instead of goods and services . – Reply By NANDAKUMAR KONKAR – The Reply = Sir,My query is not whether sale of immovable

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Goods and Services Tax – GST – Dated:- 31-1-2017 – GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE CENTRAL BOARD OF EXCISE & CUSTOMS NORTH BLOCK, NEW DELHI-110001 F.No. IV/26/24/2016-Systems (S) Tel. : +91-11-23092628 Fax : +91-11-23092346 27.01.2017 Dear Colleague, Sub: Service Tax -Monitoring of Non-Filers/Stop-Filers & Widening of Taxpayer base- Reg. As you are aware, the Directorate General of Systems has been regularly taking several initiatives to enable the field formations to closely monitor the compliance levels in the Service Tax. Both in ACES as well as in EDW, there are several methods for identifying the Non-filers and Stop-filers of ST-3 Returns. The Directorate General of Systems has taken steps to send

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Budget – Dated:- 31-1-2017 – Economic Survey: The Constitutional Amendment on GST will create a common Indian market, improve tax compliance and governance and boost investment and growth. The Economic Survey states that the world GDP is expected to grow because of a fiscal stimulus in the United States but points out that there are considerable risks. Economic Survey: Addressing the Twin Balance Sheet problem of over-indebted corporates and bad-loan-encumbered Public Sector Banks will be vital. The Economic Survey 2016-17 presented in Parliament today states that against the backdrop of robust macro-economic stability, the year was marked by two major domestic policy developments-the passage of the Constitutional Amendment, paving the way for implementing the transformational Goods and Services Tax (GST), and the action to demonetize the two highest denomination notes. The GST will create a common Indian market, improve tax compliance and governance, and boost investment and growth;

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vements, especially involving the Chinese yuan, and from geo-political factors. Another serious medium-term risk is an upsurge in protectionism that could affect India s exports. The Survey states that the year also saw a number of legislative accomplishments in the country. In addition to the GST, the Government: Overhauled the bankruptcy laws so that the exit problem that pervades the Indian economy-with deleterious consequences highlighted in last year s Survey-can be addressed effectively and expeditiously; Codified the institutional arrangements on monetary policy with the Reserve Bank of India (RBI), to consolidate the gains from macroeconomic stability by ensuring that inflation control will be less susceptible to the whims of individuals and the caprice of governments; and Solidified the legal basis for Aadhaar, to realise the long-term gains from the JAM trifecta (Jan Dhan-Aadhaar-Mobile). Beyond these headline reforms were other less-heralded but nonetheless important actions

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ates and bad-loan-encumbered public sector banks-a legacy of the years surrounding the Global Financial Crisis will be vital. Looking further ahead, societal shifts at the level of ideas and narratives will be needed to overcome three long-standing meta-challenges: inefficient redistribution, ambivalence about the private sector and property rights, and improving but still-challenged state capacity. Doing so would lift an economy that is oozing with potential. In the aftermath of demonetisation, and at a time of gathering gloom about globalization, articulating and embracing those ideational shifts will be critical to ensuring that India s sweet spot is enduring not evanescent. The report says that India seems to be a demographic sweet spot with its working age population projected to grow by a third over the next three decades providing it a potential the growth boost from the demographic divided which is likely to peak within next five years. The Survey report also states that the Sw

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Goods and Services Tax – GST – By: – Pradeep Jain – Dated:- 30-1-2017 Last Replied Date:- 30-1-2017 – DAILY DOSE OF GST UPDATE BY CA PRADEEP JAIN Definition of Business Vertical Taking further to our discussion, we are continuing our discussion the definitions given under Section 2 of revised GST law and comparing the same with old model GST law to know the changes made in revised law:- 2(18): Business Vertical: The new definition reads as follows: business vertical means a distinguishable component of an enterprise that is engaged in supplying an individual product or service or a group of related products or services and that is subject to risks and returns that are different from those of other business verticals; Explanation: Factors t

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ion itself seems to be a complicated definition to understand. A preliminary interpretation led to a belief that as like the current system of registration in excise and service tax where separate registration is taken for separate premise, the new regime will also provide a similar facility. It is expressly stated in the new law that the business verticals situated in the same State will have an option to avail single or separate registration for all such business verticals. A very important thing to note here is that the term used here is business vertical and not business premise. Thus the definition becomes critical altogether when it comes to registration. A business segment is a part of the company that can be identified by the produc

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n or not. There is no specific provision in this regard and it is not clear that whether all the business verticals located in the same premises can be registered separately or not. However, if one looks into the practical aspect, it is found that for registration, details of constitution, name, bank account etc. is to be given by the assesses. This indicates that different business segments in the same premises may be separately registered only if the bank account is separate and separate accounting is being done for the said business as risks and returns are also required to be different. Moreover, practically assessees would avoid taking separate registration as taking separate registration will increase the administrative costs of the o

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Goods and Services Tax – GST – By: – Pradeep Jain – Dated:- 30-1-2017 Last Replied Date:- 30-1-2017 – DAILY DOSE OF UPDATE BY CA PRADEEP JAIN Definition of Common Working Days Taking further to our discussion, we are continuing our discussion the definitions given under Section 2 of revised GST law and comparing the same with old model GST law to know the changes made in revised law:- 2(25) Common working days: The new definition reads as follows: Common working days in respect of a State shall mean such days in succession which are not declared as a gazetted holiday by the Central Government or the concerned State Government; This is a new definition added in the Revised GST Act. There is no reference of common working days at any place other than this definition in the Act. However, as per opinion of the author the working days wherever used in Act should be taken as common working days. In the In the absence of the definition, there could have been a scope of litigation because now

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means of a wire, cable, pipeline or other conduit, and for which the supplier invoices the recipient on a regular or periodic basis; 2(31) Continuous supply of services: the definition reads as follows: means a supply of services which is provided, or agreed to be provided, continuously or on recurrent basis, under a contract, for a period exceeding three months with periodic payment obligations and includes supply of such service as the Central or a State Government may, whether or not subject to any condition, by notification, specify; There is no concept of continuous supply of goods under present Central excise or VAT/CST laws. Under service tax, continuous supply of service is defined to mean any service which is provided or agreed to be provided continuously or on recurrent basis, under a contract, for a period exceeding three months with the obligation for payment periodically or from time to time. Govt notified telecom services, works contract service are examples of continuou

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ued or any payment has been received by the supplier of service; (ii) Where the due date of payment is not ascertainable from the contract: When the supplier of service receives the payment, or issues an invoice, whichever is earlier; (iii) Where the payment is linked to the completion of an event: The time of completion of that event; The event of supply is central to levy of GST. When supply of goods or services is not done, mere raising of invoice/payment received is being treated as time of supply. It is not made clear what happens in such a scenario whereby payment is received/invoice raised but supply does not take place. The multiple events, namely raising invoice/making payment in case of supply of goods/services or say completion of event-in case of supply of service triggering the tax levy, confirms that the Govt wants to ensure tax is collected at the earliest point of time. This would create difficulties for long term contracts for supply of goods and/or services, especiall

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GST won t lead to job losses at tax dept: Jaitley – Goods and Services Tax – GST – Dated:- 28-1-2017 – New Delhi, Jan 27 (PTI) Ahead of the rollout of GST, Finance Minister Arun Jaitley today sought to address concerns of job loss from reduced work of tax officials, saying they should have no insecurity as enough work and opportunities will be available to them in the new indirect tax regime. I see no reason really for disquiet for the simple reason (that) opportunities which are available to people in service and the matter of policy and constitutional guarantee are all protected, he said at the Investiture Ceremony 2017 and International Customs Day 2017 organised by CBEC here. Only the nature of activity will change because there will be

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l be integrated into one and therefore resulting in one assessment. Multiple systems on assessment which is there at present will evolve into a newer kind of system, he said. He was responding to Central Board of Excise and Customs (CBEC) Chairman Najib Shah's remarks drawing his attention to the rising disquiet in the cadre , saying there were human resource issues in the service. Jaitley said the revenue to be collected is going to expand and there will be expansion of economic activity as well. Therefore even though you have two parallel machineries which could now be converging into similar kind of activities and shared responsibility, I think the future will stand witness to the fact that there will be adequate amount of opportunit

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Goods and Services Tax – GST – By: – Ranjan Mehta – Dated:- 28-1-2017 – Prelude:- Revised Model GST Law has been released by GST Council Secretariat in the month of November, 2016. Whatever be the fate of GST in this Budget session, this is certain that Govt. needs to bring it by 15th Nov, 2017, otherwise we will be living in an Indirect Tax Free World. In this context, it is very pertinent to understand, the impacts, GST is going to have on the various aspects of business. Since the incidence of GST, the ways in which businesses are done in India are going to change. Major re-hauling will be required, since currently taxes in a big away effect the Business Modelling in India. Every business process will needed to be relooked critically and re-engineered as per the foregoing provisions of GST Law to achieve the maximum benefit for business. Present Regime: – CST:- In Case of inter state sale of goods, presently CST is levied. CST is a Central Govt duty which is an origin based levy an

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s in case imported products, which we are not focussing in this article. Subsumation of duties under GST:- Following are the duties are going to be subsumed in relation to IGST. CST Additional duty of customs/countervailing duty u/s 3(1) in lieu of Excise Special Additional Duty u/s 3(5) in lieu of VAT/Sales Tax Anti-dumping, anti-subsidy duties and Basic Customs duties are not going to be subsumed under GST. Thus, we can understand that largely GST is going to subsume only those levies/duties which were part of or relevant to current levies of excise and VAT. Provisions and Law:- The provisions related to Interstate trade are contained in the IGST Law. IGST- The Integrated Goods and Service Tax Act contains the provisions related to assessment of Place of Supply of Goods. It is only the Place of Supply provisions which will determine that whether on a particular transaction IGST will be charged or CGST & SGST will be charged. Sec 5 of IGST Act is the charging section, it explains

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T. In case of Import of Goods:- In case of import of goods the provision is as follows:- PROVIDED that the Integrated Goods and Services Tax on goods imported into India shall be levied and collected in accordance with the provisions of section 3 of the Customs Tariff Act, 1975 (51 of 1975) at the point when duties of customs are levied on the said goods under section 12 of the Customs Act, 1962 (52 of 1962), on a value as determined under the first mentioned Act. Thus in case of imports, levy of IGST arise when the goods are going to cross the custom barriers of India and where the custom duties are levied. The Custom duty is levied at time when good are cleared from the port/airport after showing proper documentation (Bill of entry, Invoice etc.) This leads to a further question whether on High Sales and Transhipment GST will be levied? This question is unclear as of now as currently under customs duty is paid at the time when goods are cleared for Home Consumption. However the duty

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upply shall be Principal Place of Business of that third person. Ex 1 A Ltd in Ahmedabad directed B Ltd in New Delhi to deliver goods to C Ltd in Bangalore; Place of supply shall be Ahmedabad and B Ltd shall charge IGST. Ex-2 A Ltd in Kanpur directed B Ltd in Dehradun to supply material to Branch of A Ltd in Haridwar. The Place of supply for B Ltd shall be Kanpur; even where goods physically has not crossed the boundary of Uttarakhand. 4 Where there is no movement Where there is no movement involved; Place of supply shall be the location of goods at the time of delivery to recipient. A Ltd a Mining unit in Raipur made available lumps of Marble to B Ltd. However since lumps were huge, B Ltd asked A Ltd for permission to break them into pieces do some preliminary work and then transfer from there to Ranchi; Place of supply shall be Raipur. 5 When goods are assembled/ Installed Place of supply shall be place of such Installation or assembly. A Ltd in New Delhi installed a lift in the hosp

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to incorporate a few here for your knowledge. Problem in sec 7(2) Ex- A Ltd situated in Mumbai want to supply some material to B Ltd at Indore. A supplies material ex-factory usually, however since B Ltd could not arrange vehicle, they asked A Ltd to arrange for the vehicle for them for which they will reimburse. In This case the Place of supply shall be Indore, being the movement terminated for delivery at Indore only. A Ltd would Charge IGST on the invoice. Consider the same example and choose the answer if the vehicle was arranged by B Ltd. The Place of supply in this case will be Mumbai, since the movement of goods terminated for delivery in Mumbai itself i.e. material delivered to the transporter on behalf of B Ltd. A Ltd will charge CGST and SGST in his invoice since this is an Intra state supply of goods. Problem starts here, As soon as CGST & SGST are charged, the credit flow hampers for B Ltd, as by law credit of SGST is not available interstate; and further to that, as p

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ax since the place of actual supply is Uttarakhand only. However through flow back of invoice from Kanpur HO to Haridwar, Uttarakhand is in anyway going to get their share in IGST. But still the state tax authorities will try to get taxes at first stage only, as it may be difficult to get it at later stage. Further, it will be difficult for the assessee also, to prove such flowback. Ex-2 A Ltd in Kanpur supplied material to B Ltd in Nagpur on the direction of C Ltd in Kolkata; The place of supply in this case shall be Kolkata and the goods shall be deemed to be supplied to Kolkata as per sec 7(3). However the actual delivery took place at Nagpur. Here to move the complete cycle of credit; A Ltd will raise invoice to C Ltd and who in turn will raise invoice to B Ltd. All invoices will be IGST. Again the tax authorities of Kolkata and Nagpur will fight over the issue. Since the Kolkata would like that tax to remain in their state, while Nagpur would say that tax to be in their hands bein

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Goods and Services Tax – GST – By: – Ravi Kumar Somani – Dated:- 28-1-2017 Last Replied Date:- 20-6-2017 – The Indian auto industry is one of the largest in the world. The industry accounts for 7.1 per cent of the country's Gross Domestic Product (GDP). Almost 13% of the revenue from central excise is from this sector and claims a size of 4.3% of total exports from India. Despite its contribution to the economy and growth potential, this sector has been combating the hardship of high tax rates for substantially a long period of time now with central excise duty ranging between 12.5% to 30% coupled with introduction of multiple cesses at revenues whims and fancies, most recent being infrastructure cess. Apart from the high tax rates, industry has seen extensive litigations on VAT v/s Service Tax tussle, valuation issues in case of PDI charges, warranties, taxation on handling charges and many more. Thus, introduction of GST shall be a breather for this sector wherein taxes on vehic

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nter-state sale of the vehicles, they will be collecting and paying IGST (i.e. Integrated GST, which is nothing but the summation of CGST + SGST). Impact of GST on various aspects is as examined below: 1) Impact on Credits: Currently, automobile dealers are not able to avail CENVAT credit on the following indirect taxes paid by them: CST Paid on purchase of vehicle, spares, consumables, accessories and assets; Excise Duty paid on purchase of vehicles, spares, consumables and accessories; NCCD, Auto Cess and Infrastructure Cess paid on purchase of vehicles; CVD paid on any imported Spares, accessories and consumables; SBC paid on input services; Reversal of proportionate CENVAT credit of service tax due to trading activity – Showroom Rent, Advertisement expenses etc. In GST Regime, all the above duties/ taxes will get subsumed, therefore dealers should be able to avail the input tax credit of all its procurements of goods/ services except for few restrictions laid in the Model GST Law.

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00 5,93,000 Since IGST and cesses shall be fully available as credit in the GST regime, therefore they will not form part of purchase cost and can be set-off from output GST payable on sale of the vehicle. Procurements are assumed to be in the course of Inter-state. GST rates have been assumed to be at such levels based on the various news reports and the reports issued by various committees formed by the Ministry of Finance. As noted above, reduction in procurement cost is substantial as cascading of taxes was just adding to the cost in this sector. 3) Impact on the Sale Price: Since, the procurement cost reduces in GST and if the benefit of the same is fully passed on to the consumer, then it leads to reduction in sale price of the vehicles as tabulated below: Type of Vehicle Sale Price Current Regime Sale Price in GST Regime Sale Price VAT @ 14.5% Total SP Sale Price IGST @ 18% / 30% (2% cess) Total SP Motor Vehicle 61,215 8,876 70,091 52,500 9,450 61,950 Small Cars 4,89,720 71,009

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rate GST registration number is obtained for each such dealership, then transfer of any goods/ services between such dealerships will also be liable for GST. This shall block the working capital as the taxes needs to be paid from own funds and collection of taxes will be at a later date only when such goods/ services are eventually sold. Free Service Coupon vouchers: These coupons will be issued at the time of sale of the vehicle. As per the time of supply rule, GST on such coupons needs to be paid immediately on the date of issue of such vouchers. As per the policy of some manufacturers, the amounts in respect of such coupons will be redeemed to the dealers only once the customer brings the vehicle for repair to the workshop. Therefore, dealers would have to pay tax on such coupons immediately on its issue but the said taxes can be collected from the customers only when the vehicle comes for the repair leading to unnecessary blocking of funds in taxes. Vehicle Booking Advance: It is q

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ufacturer: Various commissions, incentives, reimbursements, warranty receipts etc. are received from manufacturer. Dealer dont pay taxes on these incomes on accrual basis as the same may or may not get approved by the manufacturer at a later date. Therefore, currently service tax is paid on receipt basis only when the amount is credited by the manufacturer and is reflected in the manufacturer s statement. However, the luxury of paying taxes on receipt basis will not be accepted in the GST regime as everything will be system driven. Therefore, dealers will have to either get its system corrected with the bankers and manufacturers immediately to ensure smooth transition into the GST regime or else it would have to take the brunt of taxes on its own due to fault of its vendors. 5) Impact on Valuation: Bundling of Car with accessories, warranty, handling charges: Automobile dealers charge amounts for Sale of vehicle and also for various ancillary services such as insurance, extended warran

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ecurity Number Plate Charges; Credit Card Swiping Charges etc. Currently, Service Tax is not paid on such values, if collected as a pure agent. Ideally, these receipts must also be kept out of the GST net, or else it would create further valuation tussle in the GST regime. Road Tax/ Life Tax: Currently, service tax or VAT is not paid on the Road Tax element. However, in the GST regime, value for the purpose of paying GST must also include Road Tax. Section 15 of the revised model law clearly states that no taxes shall be allowed as reduction from the value except CGST, SGST and IGST. Therefore, duplication of taxes to this extent shall continue, if not timely represented by the associations. Road tax rates are fairly high and it ranges between 2% to 15%. Such increased tax base would unnecessary increase cost for the consumers. Discounts: Generally, dealers receive various discounts from its manufacturers based on targets, vehicles lifted, Special Customers, Year-End Discounts etc. It

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anufacturer can later be taken as a credit. Adoption of this would require tremendous efforts. 6) Reduced current litigations: Currently, the sector is facing disputes on the following areas: Valuation in Servicing of vehicle: Complexity in bifurcation of the material and labour component in the servicing of vehicle has led to multiple disputes as both the service tax and sale tax authorities demand taxes on a higher component. Handling Charges: Whether it is liable for VAT or Service Tax has led to demand of taxes from both the authorities and thereby disputes. Registration charges: Disputes were noted on applicability of service tax on various charges that are merely collected as pure agent such as temporary permanent registration etc. Incentives: It has been a matter of dispute at a various judicial forums as to whether the incentives received by the automobile dealers from the manufacturer whether amounts to any Service to be liable for service tax. Such disputes would end in the G

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a dealer is not availing the credit of VAT/SAD currently due to restriction in the state VAT law, then credit can be availed based on the ascertainment of stock as on appointed day. However, if the credit of VAT is being currently availed then the same needs to be properly reflected in the last VAT return to transfer such credits to the GST regime. Credit of CST: The same cannot be availed based on the stock availability as on the appointed day. Entry Tax: Credit of same can be availed subject to possession of appropriate documents for the same in states where such set off is permissible. 8) Impact due to Anti-Profiteering Measures: Since a dealer will be able to take the credit of goods lying in stock, the tax cost would decrease. This additional benefit accruing to a dealer is expected to be passed on to the end consumer by way of reduction in prices etc. A separate authority will be formed in the GST regime to monitor the non-compliance of the anti-profiteering matters which could

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to the customers. Therefore, timely payment of taxes, filing of returns needs to be ensured in the GST regime. Accounting: Coordination/ communication, flow of documents from various branches to accounts department should be before 10th of the subsequent month. Therefore, accounting function needs to be more robust, live and automatic. As far as possible, a dealer must map its accounting framework with other processes in an ERP environment and therefore finance & accounts department needs to be better structured to cope up with the needs of the GST regime. IT Infrastructure: In GST regime, businesses have to move from the manual environment to computerized environment. Only an efficient IT infrastructure and its best usage can help businesses meet the high compliance needs of the GST. If IT infrastructure is not optimally utilized, then it would be challenging for any business including real-estate sector to function efficiently in the GST regime. Further, in the computerized envir

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