ITC is ineligible in relation to construction work of immovable property which is further let out
The Company constructed a warehouse and let it out. The Company paid the GST on such outward supply. The Company sought an advance ruling from WBAAR that whether the company is entitled to claim ITC on inward supplies received for construction of such warehouse. The Hon’ble WBAAR held that the restriction given under Section 17(5)(d) of CGST Act in respect of ITC on goods or services used for construction of warehouse is applicable in the instant case, i.e., the Company is not eligible for ITC with respect to inward supplies to the extent such expenditure is capitalised. However, where construction expenses are not capitalized in books, the claim of ITC is admissible.
By CA. Sachin Jindal
Last update on March 19,2024
GST Authorities can’t transgress the boundaries of the Show Cause Notice
The Petitioner received an order for imposition of penalty. Show Cause notice was issued on the ground that the vehicle was traveling to a destination not mentioned in the invoice. However, while issuing the order, the appellate authority has imposed a penalty on a different ground.Hon’ble High Court held that “Show Cause Notice” serves as a vital checkpoint which defines the boundaries within which any authority can operate. Show cause notice is an initial document which impose allegations or discrepancies on the taxpayer and provide an opportunity to the taxpayer to present their side of the story. Any action beyond the scope defined in SCN not only undermines the legitimacy of the authority but also compromises the rights of the individuals or entities involved.
By CA. Sachin Jindal
Last update on March 12,2024
GST registration can’t be cancelled with retrospective effect mechanically| GST Officer must provide reason for such action
These days, Taxpayers are genuinely facing issues in Input Tax credit due to back date cancellation of GST registrations of the suppliers. For FY 2017-18 and 2018-19, show cause notices were issued to various Assessee to disallow ITC on ground of cancellation of GST registration with retrospective effect. In most of such cases, GSTIN was cancelled due to non-filing of GST return for continuous period of six months. To resolve this issue, Hon’ble High Court of Delhi has passed a judgment to grant relief to taxpayers in the matter of ARYAN TIMBER STORE KUMAR SALES TAX OFFICER CLASS II/ AVATO WARD 62 DEPARTMENT OF TRADE AND TAXES IP ESTATE NEW DELHI (WP 628/2024 dated 18th January, 2024)
By CA. Sachin Jindal
Last update on March 5,2024
Interest is not payable on late filing of GSTR-3B when the tax amount is deposited in Electronic Credit Ledger by the due date
The Petitioner was having an accumulated Input Tax Credit under pre-GST regime. The petitioner filed GST TRAN-01 for transmission of such accumulated ITC under GST. However, due to technical glitches, entire amount of ITC was not transmitted under GST and complete amount was not available under electronic credit ledger of the petitioner.
By CA. Sachin Jindal
Last update on February 21,2024
Beware of Fake GST Notices and Summons, Caution by Ministry of Finance
Central Board of Indirect Taxes (CBIC) has come across certain cases where taxpayers are getting fake GST summons and GST Notices. Some persons are involved in these kind of activities with fraudulent intent. Notices are sent to taxpayers who may or may not be covered under the DGGI.
By CA. Sachin Jindal
Last update on February 13,2024
GST Portal may facilitate revision of GST returns
Concept of revision of Tax returns is a very usual and vital part of the tax system as it allows taxpayers to rectify unintentional errors made while filing tax returns. Every tax system including income tax provides a facility to revise tax returns upto specified time period. Under pre-GST regime as well, taxpayers were available with the option file revised VAT, Central Excise and Service Tax return. However, Goods and Service Tax has not yet provided that facility to revise GST returns to the taxpayers.
By CA. Sachin Jindal
Last update on February 7,2024
Deduction made by the applicant from employees for canteen services is not supply and ITC will be available for obligatory canteen services
The Kohler India Corporation Private Limited (“The Applicant '') was mandatorily required to provide a canteen facility to the workers. The Applicant entered into a contract with Canteen service provider wherein invoice is raised by the CSP in the name of the applicant. Cost of CSP is borne by the applicant partially and the balance amount is recovered from the employees by way of deduction from salary. The amount is collected by the applicant from the employees without any commercial objective, i.e., without any profit markups. The question before Hon’ble AAR is Whether the subsidized deduction made by the applicant from the employees would be considered as 'supply' under CGST Act. Further, whether the applicant is entitled to claim ITC on invoice raised by the CSP.
By CA. Sachin Jindal
Last update on February 7,2024
Assessment order under GST can’t be passed against a deceased person
The petitioners are the legal heir of Mr. M K Grish, who was running a business under name of M/s M. K. M. & Sons. However, Mr. M K Grish passed away on 25th Feb, 2021 and same are intimated to the respondent by way of online application.
By CA. Sachin Jindal
Last update on January 23,2024
Reasons of issuance of Show Cause Notice (DRC-01) under GST
Assessments under GST are going on and businesses across the countries are immersed with Show Cause Notices being issued on various grounds. Show Cause Notice under GST are issued in Form DRC-01 and the process is going on from the last 2-3 years. However, what has triggered the issuance of SCN at such a large scale in the last 4-5 months? Reason for the same is Section 73(10) of CGST Act, 2017. Section 73(10) specifies time line for determination of tax not paid or short paid or Incorrect ITC Claimed.
By CA. Sachin Jindal
Last update on January 23,2024
CBIC issued instruction on issuance of Show Cause Notice on employee Secondment pursuant to NOS Judgment
The Department has showered the Industries with Show Cause Notices, issued in Form DRC-01, as the last date of issuance of SCN was 30th September, 2023 for FY 2017-18 and 31st December, 2023 for FY 2018-19. One of the major grounds on which thousands of MNCs were served with Show Cause Notice was the taxability of Secondment of employees in Indian Company by Foreign Holding Company.
By CA. Sachin Jindal
Last update on January 9,2024