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Reasons of issuance of Show Cause Notice (DRC-01) under GST
News and Announcements
CA. Sachin Jindal

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.

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CBIC (Central Board of Indirect Taxes and Customs)
Judgements
CA. Sachin Jindal

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.

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Supreme Court
Judgements
CA. Sachin Jindal

ITC can’t be denied to the Recipient if no recovery effort were made from the supplier, Supreme Court dismissed the Department’s SLP

A demand order was served on the Appellant on account of reversal of ITC due to difference in ITC appearing in GSTR-2A and GSTR-3B. The Appellant was available with all tax invoices and payment is also made to the supplier for the value of supply along with taxes. Department denied the ITC on the mere ground that the same is not appearing in GSTR-2A.

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Personal Guarantee and Corporate Guarantee
Notification
CA. Sachin Jindal

Taxability of Personal Guarantee and Corporate Guarantee under GST| Clarified by CBIC

Providing guarantee is a very common part of business finance wherein one person provides guarantee to the bank or financier on behalf of the other person for securing loan or credit facility. In some cases, commission is paid as a consideration for providing guarantee. CBIC has received various representations with respect to applicability of GST on personal guarantee provided by Director to the bank for granting credit facility to the company or corporate guarantee provided by the company on behalf of its sister concern or subsidiary company.

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Council Meeting
Council Meetings
CA. Sachin Jindal

Detailed analysis of 52nd GST Council Meeting 

GST Council met for 52nd time on 7th October, 2023 under the chairmanship of Hon’ble Finance and Corporate affair minister. GST Council discussed various aspects such as Amnesty Scheme for filing of GST Appeal, Clarification on applicability of GST on Guarantee services provided by director and company, changes in GST rates etc.

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