Goods and Services Tax – GST – By: – CA DEV KUMAR KOTHARI – Dated:- 28-12-2018 Last Replied Date:- 26-1-2019 – Links of some of related provisions: THE CENTRAL GOODS AND SERVICES TAX ACT, 2017: Links for some important definitions / meanings for the purpose of study: Meaning of business S. 2.17 Meaning of Capital goods – 2.19, Meaning of Conveyance -2.34 Meaning of motor vehicle 2.76 Meaning of input tax – s.2.62 Meaning of input tax credit S. 2.63 Meaning of Supplier S. 2.105 Meaning of taxable supply S. 2.108 Value of taxable supply S. 15 Apportionment of credit and blocked credits S. 17 Availability of credit in special circumstances S. 18 Corresponding provisions in other related enactment may be referred to. Higher GST on motor car is based on intelligible differential: There is no doubt that higher rate of GST in comparison to other goods is justified for the reason of paying capacity of tax and it is based on intelligible differentia. However the rate is very high and it should
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case of self-driven cars with lesser use also ideally a car need replacement within 6-7 years. At the time of replacement the old car fetches about 15-20 % of cost of old car and new car of same model is priced about 15-20% higher of original cost. Therefore, there is consumption of capital cost of old car to the extent of 80-85%. In case of accidents met by car, its life can come to end at any time , therefore, life is also uncertain. Therefore, one can also take a view that car is a consumable assets which is consumed within a short period Car is used in furtherance of business or profession: Car is used in furtherance of business and profession. Depending on status of businessman and professional man suitable car is required for business and professional purposes. If the car is used in supply ( of goods and/ or service) on which GST is payable, then there is no reason for not allowing ITC paid on car which is used as a capital goods of semi durable nature of short to medium term).
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ions: Readers are requested to refer to latest provisions and provisions as applicable at any relevant times. Such provisions are available on this website and can be easily searched. Therefore, links for all provisions are not added. Few links are added for convenience and illustration for undertaking study with related provisions. Request to honorable Prime Minister and Finance Minister: Author request to them and also to the members of GST council to realize ground realities, and come above bias and presumptions and try to understand role of cars in business and profession and consider importance and allow ITC on all supply of goods and services and capital goods which are used in supply of taxable goods and services. Ground reality is that sale promotion is primary activity, unless reasonable sales projections are available manufacturing plans cannot be made. Unless sales take place, manufacturing cannot continue. The case of cars is an illustration, all other items should also be
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which is inclusive of any GST paid on them) and as such there is no loss on account of denial of such ITC to the professioanls as claimed. (3). The fees or service charges levied by the professioanls on thier clients are not in any way related to the extent of usage of motor vehicles as it is detremined by the time and effort in rendering such services. Unlike other businesses, services by professionals are not cost based but skill based and market related. The moot question is how and by what mechanism the ITC or part of it is going to be passed on their clients I sincerely feel that the demand is not justified J.KUMAR Advocate – Reply By Ganeshan Kalyani – The Reply = In today's time every body is too busy in their work. A businessman, salaried person, daily worker etc. all are busy. Nobody has time to speak to their relatives, friends and also sometime to their own family members. The amount of responsibilities cast upon a person is also high. Expectation from employee by the em
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