CLARIFICATIONS ON CRITICAL ISSUES IN GST – AN UPDATE
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 16-8-2017<\/p>\n
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.
\nSome of the important issues as clarified are discussed in this write up.
\nTDS on GST
\nTDS (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 comp<\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n (gold in this case) by an unregistered supplier (an individual in this case) 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. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n nder GST, the tax burden on RWAs will be lower for the reason that they would now 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. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n oted that this may not hold good for commercial coaching institutes which are not at par with educational institutions. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" CLARIFICATIONS ON CRITICAL ISSUES IN GST – AN UPDATEBy: – Dr. Sanjiv Agarwal Goods and Services Tax – GSTDated:- 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 … Continue reading “CLARIFICATIONS ON CRITICAL ISSUES IN GST – AN UPDATE”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-7160","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/7160","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7160"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/7160\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7160"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7160"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7160"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\nEven 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 mechani<\/p>\n
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\nThere is no change made to services provided by the Housing Society (RWA) to its members in the GST era.
\nHostel facilities by Educational Institutions
\nServices provided by an educational institution to students, faculty and staff are fully exempt. Educational institution has been defined as an institution imparting
\n * pre-school education and education up to higher secondary school or equivalent;
\n * education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force;
\n * education as a p<\/p>\n
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\nGifts to Employees
\nGifts 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.
\nThe 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.
\nGift 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 o<\/p>\n
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