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Corporate News *  Missing seized records must be considered while testing ITC claim; duplicate GST demands ordered corrected: Delhi High Court. *  GST appeal can’t be rejected without addressing taxpayer’s grounds: Allahabad High Court. *  Surplus IGST credit can offset CGST, SGST shortfall: GSTAT. *  GST refund can’t be denied when cancelled airfares are returned with tax: GSTAT. *  3 Hearing notices issued within 2 minutes: Gujarat High Court flags portal flaw, seeks report. *  GSTR-9, GSTR-9C filing for FY 2025-26 enabled; pending GSTR-1 and GSTR-3B must be filed first. *  Dupattas are exempt fabrics, can’t be taxed as fibres at 4%: Madras High Court. *  Full transitional credit allowed on capital goods received after GST rollout: GSTAT denies Rs. 6.99 lakh export duty credit. *  GST return mismatch alone can’t justify fraud proceedings: GSTAT orders fresh adjudication under section 73. *  Supplier found non-existent later can’t alone justify input tax credit denial: GSTAT. *  GST interest stops once tax reaches government account, can’t run until return filing: GSTAT. *  Cancelled flat booking- GST refund can’t be denied without excluding COVID period from limitation: GSTAT. *  India notifies rules of origin for India–New Zealand FTA. *  Incomplete E-bike kits classifiable as complete vehicles, but not eligible for CKD duty concession: CESTAT. *  Same GST rate on main input and output can’t by itself bar inverted duty refund: GSTAT. *  Unjust enrichment doesn’t apply to customs refunds from assessments finalised before July 13, 2006: Gujarat High Court. *  CENVAT credit can’t be denied solely because plant And machinery are embedded in earth: Karnataka High Court. *  DFIA exports ineligible for RoDTEP benefits; customs directs repayment with applicable interest. *  Second E-Way bill alone doesn’t prove another supply: GSTAT. *  Bail denied in Rs. 1.19 crore fake GST refund case over risk of accused absconding again: Punjab and Haryana High Court. *  GST registration can be restored after revocation deadline if outstanding dues are paid: Gauhati High Court. *  Multiple GST proceedings over same suppliers: Calcutta High Court directs dept. to share findings for adjudication. *  E-Governance portal services not OIDAR, fixed deposit interest not taxable: CESTAT. *  Rs. 500 Stamp duty required on authority letters for CAs, CMA and GST practitioners in Pune GST division.  *  Rs. 1.10 crore GST refund must be paid in cash after business closure: Allahabad High Court. *  Godown rent attracts 18% GST even when used exclusively for exempt agricultural warehousing: AAR. *  GST portal launches "Multi-State Registration" facility: one master TRN for registration applications across multiple States/UTs. *  RoDTEP scheme extended till 31st December, 2026.  *  Mere disagreement with order can’t override Rs. 20 lakh appeal limit: GSTAT. *  Customs interest can’t be backdated before confiscation liability is determined; nearly 8 year period excluded: Delhi High Court.
Subject News *  GST summons: anticipatory bail maintainable without arrest order, but relief denied in evasion case: Allahabad High Court. *  GST Appeal can’t be decided without hearing taxpayer’s objections to fresh evidence: Allahabad High Court. *  GST ITC can’t be reversed merely because supplier grants discount without reducing tax liability: GSTAT. *  Mere quoting of GST provision is not a valid charge: GSTAT quashes ITC denial. *  Personal hearing mandatory before adverse GST order, even without taxpayer’s request: Rajasthan High Court. *  Parallel bail pleas without full disclosure amount to abuse of process Rs. 43.08 crore GST case sent for fresh hearing: Supreme Court. *  GST refund based on unchallenged advance ruling can’t be recovered using later circular: GSTAT. *  Payment of GST alone doesn’t end interest and penalty liability when tax and interest remain unpaid beyond 30 days of notice: GSTAT. *  GST demand over builders’ 80% procurement rule requires reasoned adjudication: GSTAT. *  Eligible ITC doesn’t automatically entitle taxpayers to compensation cess refund on domestic sales: GSTAT. *  GST confiscation order passed before reply deadline invalid: GSTAT. *  GST interest can’t be retained after tax refund on delayed export receipts: Punjab & Haryana High Court. *  GST appeal can’t be dismissed over pre-deposit shortfall without opportunity To respond: Bombay High Court. *  DGGI SCN can’t be challenged before reply and adjudication:Chhattisgarh High Court. *  GST input tax credit can’t be denied solely due to supplier’s retrospective registration cancellation: GSTAT. *  GST notice must explain fraud allegations; merely repeating section 74 Is not enough:  Himachal Pradesh High Court. *  Audit detection alone can’t justify GST fraud penalty; specific suppression must be proved: GSTAT. *  GST order uploaded only under ‘Additional Notices’ tab without separate intimation set aside: Calcutta High Court. *  Service Tax appeal can’t be rejected for missing pre-deposit proof when payment is already recorded: CESTAT. *  SGST dept. can’t hear appeal against CGST order: Calcutta High Court. *  Mere dispatch of tax order can’t prove service or make appeal time-barred: CESTAT. *  Dealer incentives can’t be taxed merely on ledger entries: CESTAT. *  DGFT orders quashed for failure to supply DRI letter relied upon in SCN: Bombay High Court. *  GST penalty u/s 122(1A) can’t apply to Pre-2021 transactions; unregistered beneficiaries also covered: Delhi High Court. *  Expired E-way bill caused by wrong PIN code can’t justify GST penalty without intent to evade tax: GSTAT. *  Used railway rails can’t be taxed as track material without proof they are fit for reuse: CESTAT. *  Earlier DGGI notice doesn’t bar separate GST demand on different issue: Delhi High Court. *  ITC dispute involves no question of law: GSTAT directs appeal to Vice-President. *  Earlier DGGI notice doesn’t bar separate GST demand On different issue: Delhi High Court. *  No E-way bill required for interstate goods movement in november 2017: GSTAT quashes detention and penalty.  

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GST UPDATE ON INDUSTRY WANTS TO KNOW

Daily Dose of GST update on FAQ in seminar with Industries

Daily Dose of GST update on FAQ in seminar with Industries
INDUSTRY WANTS TO KNOW – PART IV

 

Here is the 3rd installment to the series where we try to find answers to the unanswered questions and queries coming from the trade and industry.
Question: What will be the tax rate for the Construction Service?
Answer: The exact tax rates have not been notified yet. Although as per the last meeting of GST Council where the slab system of rates was notified, we expect that it may fall under slabs of 12% or 18%. At present, the Construction Service is subject to both VAT and Service Tax. The effective tax rate comes to around 3.75% for Service Tax. Other than that, VAT is also leviable on the Construction contracts, generally paid by way of composition. 
Question:- This is very high rate for the construction industry. Whether the industry suffering from recession will be able to aborb such a high rate? 
Answer:-In our opinion, a representation maybe filed for considering the Construction Service in the lower tax rate slab of 5%.
Question: How will the Construction Industry be benefitted by the implementation of GST?
Answer: Construction Industry is largely to be benefitted after the advent of GST. Firstly, the assessees shall be liable to single indirect tax after GST comes into play. Secondly, there will be a smoother flow of credits thus reducing their costs. In the current regime, they are not able to avail credits of excise duty, CST, Entry Tax on various inputs which used to form a non-creditable tax cost. They are able to avail only the credit of input services only. But they will be able to take the credit of inputs also like cement, tor steel, tiles etc. In current regime, they have to pay the tax on 40 or 70% under service tax composition scheme. Similarly, industry has to pay VAT under composition scheme under works contract. If we add both the composition schemes, the industry is paying tax on more than 100% in most of the cases. But under current regime, both CGST and SGST will be charged on 100% only. Hence, the net tax payable by the industry will come down. Also, increased credit flow on inputs will also bring down the tax burden. If add all, the effective tax payable will come down from current regime.
Question: What are adverse effect of GST on reality industry?
Answer:-A higher tax rate can be a damper for the construction services. Not only that, the construction industry is known to be one amongst the most unorganized industries. With the GST in force, the entire Construction Industry will have to be organized and infact the builders and contractors will have to ensure proper payment of tax by their sub-contractors. This is big difficulty in current regime for the department. But this burden will be shifted from the department to builder or main contractors. Also, on the transitional front, GST can be a setback as credit of inputs is not availed in the current regime and will thus not be carried forward. Under the transitional provisions, the credit of input services will be carried forward as shown in their return. But the construction industry is not taking credit on inputs and there is no provision also for taking the credit of the same. This is provision for not taking credit due to exemption under current regime then the credit on stock will be available if the same is chargeable to GST under proposed regime. But there is no transitional provision of taking of credit on stock of inputs when the credit is not allowed in law itself due to abatement. The industry should demand transitional provision for the same.
Question: Will the department provide any help in filing of the said minimum 37 Returns annually?
Answer: The department shall not extend any help with regards to the filing of 37 returns. Instead it is expected that these returns will be highly software dependent particularly extracting data automatically. Although being highly software driven, it should also have features of editing required to make necessary amendment, monitoring of debit and credit notes and also human intervention about which credits to be availed or not, etc.
It is important to note that this may turn out to be a complex task for Small Scale Industries and Units both in terms of time and cost.

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