Newsletter

Karnataka AAR: Supply of ready built body and the activity of mere mounting the body on chassis supplied by the owner amounts to ‘supply of goods’ and merits classification under HSN 8707 attracting 28% GST. Further clarifies that the activity of step by step building of the body on the chassis supplied by the owner using their own inputs and capital goods amounts to ‘supply of service’ and merits classification under SAC 9988 attracting 18% GST

Gujarat HC holds that Press Release dated 18 October 2018 clarifying the last date of availing ITC for F.Y. 2017-18 to be the due date for filing Form GSTR-3B for the month of September 2018 is in contravention to the provisions of CGST Act, 2017 and CGST Rules, 2017 and accordingly is illegal and void.

This is an interesting development as many taxpayers were unable to avail credit pertaining to FY 2017-18 till March 2019 owing to various issues. This could provide a window to the taxpayers to avail the missed credit till 31 August 2019, as the annual return is extended till such date. However, such a position is likely to be challenged by the tax authorities and the taxpayers will be required to evaluate the need for availment of such missed credit on case to case basis.

In its first budget after the landslide victory in General Elections, the NDA Government has re-iterated its emphasis on Minimum Government with Maximum Governance. In line with the same, the emphasis of the entire budget continues to remain on various initiatives to boost infrastructure and foreign investment. Further, focus has been to encourage the ‘Make in India’ concept as imports of several items have become dearer due to increase in Customs Duty. Various steps are taken to encourage affordable housing, electric vehicles and removal of angel tax for start-ups to demonstrate the optimistic and development-oriented approach of the government.

Attached herewith is a Budget booklet highlighting the key amendments proposed in Union Budget for FY 2019-20.  

Maharashtra AAR holds that ITC is not available on GST paid on expenses towards promotional schemes such as give away of goods as brand reminders. Further, states that such promotional activities are covered under Section 17(5)(h) of the CGST Act, 2017 as gifts and accordingly ITC is not claimable on such transactions.

Ministry of Finance on 03rd July 2019 released a clarification in order to solve various queries raised by taxpayers for filing Form GSTR-9 (Annual Return) and Form GSTR-9C (Reconciliation Statement). Some of the key observations are as follows: 

• Any unpaid tax to be paid alongwith interest vide Form DRC-03;
• It is reiterated that no ITC can be reversed or availed in annual return. In cases where ITC is to be reversed, the same shall be done vide GST DRC-03;
• Auto-populated numbers in Table 8A regarding GSTR-2A data and reconciliation thereafter is only information that the Government needs for settlement purposes purpose;
• Reasonable / explainable overlap of information reported across Table 5D (Exempted), 5E (Nil rated) and 5F (Non-GST Supply) will not viewed adversely;
• RCM tax paid and availed in FY 18-19 (but pertaining to FY 2017-18) shall be reported in annual return of FY 18-19;
• The role of Chartered Accountants and Cost Accountants with respect to reconciliation statement is limited reconciling the values declared in annual return with the audited annual accounts of the taxpayer.

CBIC issues clarifications on various issues which includes GST on additional / penal interest, determination of place of supply in certain cases, processing of refund applications in FORM GST RFD-01A submitted by taxpayers and forwarded to authority wrongly mapped on the common portal and treatment of secondary or post-sales discounts under GST.

CBIC issues the following notifications to extend and notify the due dates of various forms and provides clarification with respect applicability of filing of annual return for supplies related to Online Information Database Access and Retrieval Services (‘OIDAR Services’) as follows:

• Notification No. 26/2019 – Central Tax dated 28 June 2019 extends the due date for filing Form GSTR – 7 for the months of October 2018 to July 2019 till 31 August 2019;
• Notification No. 27/2019 – Central Tax dated 28 June 2019 notifies the due date for filing Form GSTR – 1 for small taxpayers for the months of July 2019 to September 2019 till 31 October 2019;
• Notification No. 28/2019 – Central Tax dated 28 June 2019 extends the time limit for filing Form GSTR – 1 for registered persons having aggregate turnover of more than 1.5 crores in the preceding financial year or the current financial year, till the 11th day of the month succeeding such month for each of the months from July 2019 to September 2019;
• Notification No. 29/2019 – Central Tax dated 28 June 2019 notifies the due date for filing Form GSTR – 3B for the months of July 2019 to September 2019 till the 20th of the month succeeding such month;
• Notification No. 30/2019 – Central Tax dated 28 June 2019 clarifies that persons registered under section 24 of the said CGST Act, 2017 read with Rule 14 of CGST Rules, 2017, supplying online information and data base access or retrieval services from a place outside India to a person in India, other than a registered person as the class of registered persons who shall follow the special procedure shall not be required to furnish annual return in Form GSTR – 9 and reconciliation statement in FORM GSTR – 9C.

In line with the decision taken by the GST Council during its 35th Meeting,

• CBIC vide Removal of Difficulty Order No. 6/2019 - Central Tax dated 28 June 2019 extends the due date for furnishing Annual Return in Form GSTR - 9 / GSTR-9A and reconciliation statement in Form GSTR-9C for the period F.Y. 2017-18 till 31 August 2019
• CBIC vide Notification No. 32/2019 - Central Tax dated 28 June 2019 extends the due date for filing form ITC-04 for the period July 2017 to June 2019 till 31 August 2019

The Directorate General (‘DG’) of Audit, Indirect Taxes, releases the Audit Plan for the F.Y. 2019-20. Provides that the procedure is similar to that of the erstwhile Central Excise and Service Tax Audit manuals. This audit will be conducted on the basis of a Risk Assessment Programme developed in association with Directorate General of Analytics and Risk Management (‘DGRAM’)

CBIC vide Notification No. 25/2019 - Central Tax dated 21 June 2019 amends Notification No. 22/2019 - Central Tax dated 23 April 2019 to extend the facilitation date of blocking / un-blocking of E-Way bill as per the provisions of Rule 138E of CGST Rules, 2017