23 May 2018
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Indirect Tax GST 002007

  • Canteen supplies provided by outside vendors to attract 18% GST
    May 22, 2018
    The Authority of Advanced Ruling (AAR) for the goods and services tax (GST) has ruled that firms supplying food and beverages to canteens of other organisations are ‘outdoor caterers’ and the service would attract an 18% GST. The ruling was delivered by Gujarat AAR on an application filed by Rashmi Hospitality Services. The firm is engaged in supplying food, beverages and other eatables at various places of their customers having in-house canteens at their factories. The authority said the assessee provides services from other than its own premises to the recipient. So, the nature of service provided by the applicant is that of an outdoor catering service.
  • Country-wide intra-state e-way bill system mandatory from June 3
    May 22, 2018
    The e-way bill for moving goods within a state will become mandatory from June 3, with the country-wide roll out of the mechanism. The government had launched the electronic-way or e-way bill system from April 1 for moving goods worth over Rs 50,000 from one state to another. The same for intra or within the state movement has been rolled out from April 15. So far, 20 states/Union Territories have made e-way bill mandatory for intra-state movement of goods. These states include -- Gujarat, Uttar Pradesh, Rajasthan, Assam, Karnataka, Kerala, Madhya Pradesh and Haryan
  • Damages paid for cancellation contract to attract 18% GST
    May 21, 2018
    The Authority for Advance Rulings (AAR) has ruled that payments in respect to nonperformance of a contract would be liable to goods and services tax (GST). This has made multinational companies, especially those executing infrastructure projects, and the mining sector jittery, and it could have implications on mergers and acquisitions, franchise arrangements too. Liquidated damages are payments in lieu of non-performance of a contract. The Contract Act envisages these damaged under a contract as genuine pre-estimate so as to avoid hassles of computation of damages and possible contractual disputes, or litigations, in case of non-performance.
  • Deadline for filing April GSTR-3B return extended by two days
    May 19, 2018
    The last date for filing of return in Form GSTR-3B for the month of April has been extended by two days. Taxpayers can now file their April GSTR-3B return till May 22. Filing GSTR 3B is mandatory for all those who have registered for the Goods and Services Tax (GST) The move to extend the due date follows the “emergency maintenance” being carried out on the system in the wake of technical issues being faced by the taxpayers during the filing of Form GSTR-3B.
  • Liquidated damages proceeds to attract 18% GST, says AAR
    May 19, 2018
    Mumbai-based Authority of Advanced Ruling (AAR) for the goods and services tax (GST) has held that payment made on account of ‘liquidated damages’ will attract an 18% GST as it is an independent levy which can’t be treated as reduction of the contract price. Tax experts said the ruling would hurt contractors, especially those engaged in supplying exempted services and may lead to litigation. ‘Liquidated damages’ is usually a part of contracts and is considered as a penalty on a contractor who is responsible for delays in handing over the project to the client.
  • Coaching centres for entrance exams liable to 18% GST: AAR
    May 19, 2018
    Coaching centres providing tuition to prepare students for entrance examination are liable to pay 18 percent GST, according to the Authority for Advance Rulings (AAR). An application was filed before the Maharashtra bench of the AAR to seek advance ruling on whether the services related to providing the coaching for entrance examination will come under the ambit of the Goods and Services Tax (GST).
  • ‘GSTN has stabilised, can’t fault Infosys’
    May 17, 2018
    The Goods and Services Tax Network (GSTN) — which handles a mammoth taxpayer base (over 1 core at last count) and over 50 crore invoices every month — was bound to have some “teething problems”, but the system has “stabilised” and has been working without any major glitches since December, its chairman Ajay Bhushan Pandey said on Wednesday. The e-way bill mechanism to track movement of goods in the GST regime — which has lately seen a near-pan-India roll-out — was running smoothly too, he added.
  • Free banking services out of GST net: Finance ministry official
    May 16, 2018
    Free banking services like cheque book issuance and ATM withdrawals is likely to remain out of the ambit of the GST, a senior finance ministry official said. The Department of Financial Services had approached its revenue counterpart to clear the confusion over the levy of Goods and Services Tax (GST) on some of the free services offered by banks to their customers. "The revenue department is likely to tell the financial services department that GST will not be levied on free banking services," an official told PTI.
  • Punjab among states with highest revenue shortfall under GST
    May 15, 2018
    The Congress government in Punjab was gung-ho about the goods and services tax (GST), with both chief minister Capt Amarinder Singh and finance minister Manpreet Singh Badal calling it a “game changer” for the fund-crunched state when it was rolled out in July last year. But GST has been anything but that so far. Punjab is among the states with maximum shortfall in revenue collection under GST in the first nine months after rollout of the new indirect tax regime across the country.
  • 28% GST to be levied on e-rickshaw tyres: AAR
    May 14, 2018
    E-rickshaw tyres will attract GST at the highest slab of 28 per cent as they are registered as 'motor vehicles' under the Motor Vehicle Act, according to the order of the Authority for Advance Rulings (AAR). The Maharastra-bench of the AAR passed the order on an application filed by tyre-maker Ceat LtdNSE -0.08 %, seeking to clarify whether e-rickshaw can be classified under the head "three-wheeled powered cycle rickshaw", which attracts a 5 per cent GST.
  • E-rickshaw tyres to attract 28% GST, says Maharashtra AAR
    May 12, 2018
    Tyres used in e-rickshaws attract the peak goods and services tax (GST) rate of 28%, the Authority for Advanced Ruling (AAR) in Maharashtra said. The ruling dismissed the argument of the applicant, CEAT, that such tyres should be taxed at 5%, as is the case with tyres of ‘three-wheeled powered cycle rickshaw’. The applicant argued that the GST tariff schedule doesn’t specifically mention rates for e-rickshaw tyres, but has kept the rate of tyres meant for ‘three-wheeled powered cycle rickshaw’ at 5%.
  • Tax alert: GST applicable on hotel, restaurant services provided to SEZ units, says AAR
    May 11, 2018
    Hotel or restaurant services provided to SEZ developers or units will not be treated as ‘zero-rated’ supplies and hence will be taxable under the Goods and Services Tax (GST) regime, the Authority for Advance Ruling (AAR) has said. In an application filed before the Karnataka bench of the AAR, the applicant had sought to clarify whether hotel accommodation and restaurant services provided by them, within the premises of the hotel, to the employees and guests of SEZ units be treated as supply of goods and services.
  • GST likely on banks 'free' services as they are actually 'charging' clients
    May 11, 2018
    The so-called ‘free services’ offered by banks to customers are liable for goods and services tax (GST), officials believe, even as notices sent to lenders for taxing these services under the older regime are likely to be withdrawn. According to officials, banks are not offering ‘free services’ but actually charging customers by asking them to maintain a minimum account balance. “In business nothing is free. They penalise you for not maintaining a minimum balance because from the interest of that money you maintain, they service you.
  • GSTR1, e-way bills data to be matched to curb tax evasion
    May 11, 2018
    To curb tax evasion, authorities will start matching details given in the Goods and Services Tax Return (GSTR) Form Number 1 with those given in the e-way bill. The matching will begin with returns to be filed for April as it is the first month when the tax authorities will have both GSTR1 and e-way bill data. In the meantime, tax authorities have issued notices to over 8,000 assessees for differences in sales figures of more than Rs.50 lakh in their GSTR1 and GSTR3B forms. Notices have been served on the basis of returns filed during August and December, 2017.
  • Banks under taxman scanner for GST refund on ATM transactions
    May 11, 2018
    The indirect tax department’s investigation arm is scrutinising the GST credit availed by banks on taxes paid by their ATM vendors and could soon ask banks to cut the credit availed by them, two people with direct knowledge of the matter said. The taxmen are examining whether banks are eligible to avail 100% of Goods & Services Tax (GST) credit on services provided by vendors such as ATM withdrawal when a majority of such transactions are not charged to consumers.
  • All businesses covered by RCM to register for GST
    May 10, 2018
    A business is required to register under the goods and services tax (GST) even if it qualifies to be exempted according to the GST Act, but has liability to collect tax under the reverse charge mechanism (RCM), the authority for advanced ruling (AAR) on GST in Delhi said in a ruling. The GST Act provides exemption to businesses with less than Rs 20 lakh annual revenue from paying indirect taxes.
  • GST: Jump in notices issued over mismatch
    May 10, 2018
    The tax department’s soft approach towards non-compliance under the GST may be coming to an end as the indirect tax regime enters into the new financial year. This is reflected in the spurt of notices received by assessees at the start of this month, urging them to explain mismatches of details in two different returns filed for the same period. Notices issued in the first week of the month have asked taxpayers to explain discrepancies in monthly summary return (GSTR-3B) and GSTR-1 (outward supply details) for the same period.
  • GST: No FMCG demand jump despite price drop
    May 09, 2018
    Despite a drop in prices following GST implementation, consumption patterns across three broad FMCG categories — personal care, household care, and food and beverages — have remained relatively unchanged. According to data from Kantar Worldpanel, volume growth for the categories did not show a significant jump from the quarter preceding GST implementation in July 2017, to the months immediately afterwards. While the overall consumption stood at 8.38 per cent in the second quarter of 2017, it dropped to 7.10 per cent in Q3 (when the GST first took effect), but rose to 8.24 in Q4.
  • GST digital discounts may cost Rs 15,000 crore
    May 09, 2018
    The government has estimated that the Centre and the states may have to forgo up to Rs 15,000 crore in offering discounts of up to Rs 100 on GST for every digital transaction, including those done using credit or debit cards or mobile wallets and mobile and net banking. Sources said the estimate is based on the average ticket size of the transaction being Rs 1,400 and a 2% relief being proposed on it.
  • You don't even have 0.77999999999883585 per cent chance to escape GST scrutiny
    May 09, 2018
    The promise of the Goods and Services Tax (GST) to bring clarity has finally started showing. As GST officers unleash the force of data analytics, no discrepancy or mismatch will escape their scrutiny. Even if it's less than one rupee. GST officers can go as far as 17 decimal points to square their accounts. The intolerance for gaps is so extreme that a proprietor of an Ahmedabad-based engineering company received a notice from the state tax department stating there was a discrepancy of Rs 0.77999999999883585 in his tax payment.
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