Banking company is liable to pay GST on the entire value of service charges

Services are provided by the BF/BC to the customers on behalf of the banking company.

As per the agreement between the bank and the BC, BC cannot directly charge any fee to the customer. In fact, banks are permitted to collect reasonable service charges from the customer for such services in a transparent manner.
Further agreement with the customer specifically mentions that bank is responsible for the acts of omission and commission of the BF/BC.

In view of above, it has been clarified that the banking company is the service provider and the banking company is liable to pay GST on the entire value of service charges / fee charged to the customer whether or not received via BF or BC.

Clarification on scope of Services by BF/BC to a Banking Company

Sr. No. 39 to notification no. 12/2017 – Central Tax (Rate) dated 28th June, 2017, provides exemption from GST to services falling under heading 9971 provided by the BF/BC to a banking company with respect to accounts in its rural area branch.

In order to claim the above exemption, services provided should mandatory be with respect of accounts in a branch located in the rural area of the banking company.

It is clarified that the guidelines provided by the RBI would be accepted in order to classify the branch of a bank in the rural area and exemption would be applicable accordingly.

MCA imposed Penalty for failure to issue and transfer shares in Demat form

Others

MCA imposed Penalty for failure to issue and transfer shares in Demat form

As per Section 29(1A) of Companies Act read with Rule 9A of The Companies (Prospectus and Allotment of Securities) Rules, 2014, every unlisted public company shall ensure that before issuance of any securities entire holding of securities of its promoters, directors, key managerial personnel has been dematerialised in accordance with provisions of the Depositories Act 1996. Further, every shareholder of an unlisted public company is required to dematerialise its securities before transfer, if such transfer is made on or after 2nd October, 2018.

23/04/2024 No Comments

Proceedings can’t be initiated under Section 74 when tax liability is already discharged along with interest

Judgements

Proceedings can’t be initiated under Section 74 when tax liability is already discharged along with interest

The petitioner is engaged in the business of generation of electricity through solar plants. The GST returns filed by the petitioner for the period of July, 2017 to March, 2019 were subject to audit. The petitioner was informed about tax liability during audit proceedings on account of wrong availment of ITC and ITC availed with respect to exempted supply. Upon receipt of initial audit observation, the petitioner discharged the entire tax liability alongwith interest. The final audit report was issued much after payment of GST liability. Post audit, the respondent issued show cause notice to the petitioner under Section 74 of CGST Act and confirmed the demand through DRC-07. The petitioner contended that it falls under purview of Section 73(1) and 73(5) of CGST Act and therefore, SCN under section 74 is not sustainable. Whereas, the respondent contended that this is the case of fraud and willful misstatement.

23/04/2024 No Comments

Establishment of Non-SEZ IT/ITES business in IT/ITES Special Economic Zones| Insertion of Rule 11B to SEZ Rules

Information

Establishment of Non-SEZ IT/ITES business in IT/ITES Special Economic Zones| Insertion of Rule 11B to SEZ Rules

Post COVID-19, there are many corporate entities which are allowing employees to work on Complete Work From Home (WFH) basis or on hybrid basis, i.e., Employees are required to come to office on selected days. This approach has reduced occupancy of physical premises by corporate offices and caused vacation of various rented premises.

23/04/2024 No Comments

Banking company is liable to pay GST on the entire value of service charges

Introduction