Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 16-8-2017 – GST is now a reality with its mega launch on the midnight of 30th June, 2017 and 1st July, 2017. With about three weeks into GST regime, there have been many teething problems and issues requiring clarity by the tax payers on taxability, tax rates and other procedural aspects. The Government has been very open on this and is coming out with clarifications promptly in many forms, viz, direct interface, webinars, FAQ's, tweets, Circulars, Press Releases and Advertisements. Some of the important issues as clarified are discussed in this write up. TDS on GST TDS (Income Tax) shall not be applicable or deductible on GST component (includes CGST / IGST / SGST / UTGST or even cess). It has been clarified by CBDT vide Circular No. 23/2017 dated 19.07.2017 that wherever in terms of the agreement or contract between the payer and the payee, the component of GST on services comprised in the amount payable to a resi
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) to a registered person (the jeweller in this case) will be paid by the registered person (the jeweller in this case) under reverse charge mechanism. This provision, however, has to be read in conjunction with section 2(105) read with section 7 of the said Act. Section 2 (105) defines supplier as a person supplying the goods or services. Section 7 provides that a supply is a transaction, for a consideration by a person in the course or furtherance of business. Even though the sale of old gold by an individual is for a consideration, it cannot be said to be in the course or furtherance of his business (as selling old gold jewellery is not the business of the said individual), and hence does not qualify to be a supply per se. Accordingly the sale of old jewellery by an individual to a jeweller will not attract the provisions of section 9(4) and jeweller will not be liable to pay tax under reverse charge mechanism on such purchases. However, if an unregistered supplier of gold ornaments
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be entitled to ITC in respect of taxes paid by them on capital goods (generators, water pumps, lawn furniture etc.), goods (taps, pipes, other sanitary/hardware fillings etc.) and input services such as repair and maintenance services. ITC of Central Excise and VAT paid on goods and capital goods was not available in the pre-GST period and these were a cost to the RWA. There is no change made to services provided by the Housing Society (RWA) to its members in the GST era. Hostel facilities by Educational Institutions Services provided by an educational institution to students, faculty and staff are fully exempt. Educational institution has been defined as an institution imparting pre-school education and education up to higher secondary school or equivalent; education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force; education as a part of an approved vocational education course. Services of lodging/boarding in hostels provided b
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ions. Gifts to Employees Gifts upto a value of ₹ 50,000/- per year by an employer to his employee are outside the ambit of GST. However, gifts of value more than ₹ 50,000/- made without consideration are subject to GST, when made in the course or furtherance of business. The services by an employee to the employer in the course of or in relation to his employment is outside the scope of GST (neither supply of goods or supply of services). It follows that supply by the employer to the employee in terms of contractual agreement entered into between the employer and the employee, will not be subjected to GST. Gift has not been defined in the GST law. In common parlance, gift is made without consideration, is voluntary in nature and is made occasionally. It cannot be demanded as a matter of right by the employee and the employee cannot move a court of law for obtaining a gift. If such services are provided free of charge to all the employees by the employer then the same will n
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