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Corporate News *  Service tax penalty can’t survive when assessee acted on dept.’s own view of non-taxability: Delhi High Court. *  GST section 74 extended limitation questionable when form 26AS mismatch was already known: Karnataka High Court grants interim relief. *  CGST demand prima facie impermissible after state GST settlement under section 128A: Bombay High Court. *  Supreme Court asks GSTAT to sympathetically consider delay as taxpayers pursued remedy before wrong forum. *  Supreme Court stays Tripura High Court ruling protecting genuine buyers from ITC denial over supplier’s GST default. *  Diary entries alone can’t prove clandestine removal of goods: CESTAT quashes excise penalty on steel trader. *  Customs could investigate preferential tariff claims even before sec. 28DA: Delhi High Court. *  Customs dept. relied on fake AI generated case laws: supreme court quashes Rs. 425.28 crore penalty. *  No GST exemption in affiliation and annual registration charges for admission or conduct Of examinations: GSTAT. *  Mere invoices, cheque payments insufficient to establish genuine movement of goods: GSTAT restores Rs. 43.44 lakh ITC demand. *  Consolidated GST show cause notice covering multiple financial years is not without jurisdiction: Delhi High Court. *  Construction of independent houses on separate plots not taxable as ‘Residential Complex’ without common facilities: CESTAT. *  GST penalty exceeding statutory maximum unsustainable; Allahabad High Court quashes ? 50,000/- penalty after taxpayer filed return and paid late fee. *  GST order against standard chartered bank passed without hearing set aside by Bombay High Court. *  Retracted statements can’t be relied upon without cross-examination: CESTAT quashes gold confiscation. *  Burden to prove misclassification lies on customs department: CESTAT. *  CESTAT quashes Rs. 98 lakh excise demand on clearance of used refractory brick scrap. *  Service tax demand on irrigation works quashed: Karnataka High Court rules sale of goods component not taxable as service. *  GSTAT restores tax and penalty for transporting iron scrap without E-way bill citing intent to evade tax. *  Madras High Court stays GST recovery from directors without opportunity to show cause under section 89. *  Madras high court stays GST recovery notice against directors; finds prima facie case on applicability of section 79(1)(c). *  Procedural lapses can’t justify harsh punishment without serious customs breach: CESTAT quashes customs broker licence revocation. *  Service tax payable on land leasing and sports complex charges: CESTAT. *  Settled customs dispute can’t be reopened through Article 226 challenge to interest liability: Delhi High Court. *  Mere facilitation of customs clearance can’t establish knowledge of smuggling: Madras High Court. *  GST registration cancellation stayed: Allahabad High Court questions 99% ITC utilisation cap under rule 86B. *  Composition scheme lapses automatically on crossing Rs. 1.5 crore turnover: GSTAT. *  Gujarat High Court quashes GST cancellation orders after officer relied on non-existent AI-generated case laws. *  Importers liable for customs duty benefits availed through manipulated scrips: Delhi High Court. *  Procedural E-way bill lapse alone can’t justify penalty where genuine transaction and absence of tax evasion are established: GSTAT.
Subject News *  Documentary evidence dominates probe, further custody unwarranted: mumbai court grants bail in Rs. 22.44 crore customs duty evasion case. *  Business premises can’t remain sealed for non-participation in GST search: Allahabad High Court. *  GST pre-deposit must be refunded proportionately when taxpayer partly succeeds in appeal: Bombay High Court. *  Supreme Court grants 30 days to file GST appeal; keeps pre-deposit issue open due to deposit in parallel CGST proceedings. *  GST demand can’t exceed amount proposed in SCN: Allahabad High Court quashes Rs. 20.47 Crore order. *  Hundreds-of-crores GST demand and heavy 10% pre-deposit no ground to bypass statutory appeal: Punjab & Haryana High Court. *  Delhi High Court refuses to entertain challenge to gold confiscation due to statutory appeal remedy and unexplained delay. *  Procedural error in customs broker licence inquiry can be rectified through remand: Delhi High Court. *  GSTR-2A mismatch alone can’t justify ITC denial without invoice-wise verification; personal hearing mandatory: GSTAT. *  GST order passed without uploading personal hearing notices violates sec. 75(4): Allahabad High Court. *  TAX EVASION - Sec. 74 GST SCN quashed for not spelling out fraud, wilful misstatement or suppression: Allahabad High Court. *  STPI’s SOFTEX certification and NoC charges taxable as business support services: CESTAT. *  Suspicion can’t replace proof: CESTAT quashes penalty in alleged gold-smuggling operation. *   Limitation runs from communication of order: Madras High Court upholds rejection of delayed GST Appeals. *  Rajasthan High Court quashes GST demand over unsigned show cause notice. *  ITC recovery upheld where supplier failed to deposit GST: Rajasthan High Court. *  Customs commissioner’s empowered to make port trust liable for duty on pilfered goods: Supreme Court. *  Rectification proceedings can’t be used to challenge an uncontested GST assessment through a writ petition: Andhra Pradesh HC. *  GST proceedings against deceased proprietor unsustainable without notice to legal heir: GSTAT. *  Mere availment of ineligible self-assessed ITC doesn’t amount to suppression without evidence of fraud or wilful misstatement: GSTAT. *  Disposal of mining overburden by entity authorised by mining lease holder constitutes taxable service: CESTAT. *  Toll plaza data not mandatory for ITC refund: GSTAT. *  Disputed GST fraud allegations require investigation: Punjab and Haryana High Court makes interim bail absolute in alleged fraud and GST fraud case. *  Non-manufacturer contractor liable to deposit excess excise duty collected from buyer: CESTAT. *  GST order can’t reject taxpayer’s reply as “not satisfactory” without reasons: Madhya Pradesh High Court. *  Uncorroborated statements can’t establish alleged diversion of duty-free goods: CESTAT. *  Erection services were not liable to service tax prior to 10th september 2004: CESTAT. *  Sec. 74 GST notice must spell out statutory ingredients for invoking extended tax demand proceedings: Allahabad High Court. *  No jurisdictional bar under section 6(2)(b) in parallel CGST SGST proceedings: Delhi High Court refuses to bypass GST appeal remedy. *  Madras High Court remits GST demand for fresh adjudication after taxpayer claims it was unaware of SCN following business closure.  

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GST Update 08.11.2016

GST DAILY DOSE OF UPDATION

GST DAILY DOSE OF UPDATION

In continuation of last update on dispute on distribution of assessees between centre and state, the conflict of interest on control of assessee is proving to be a big hurdle in the progress of GST and if not resolved it would not take time to convert into a bottleneck. Both the centre and state are agreeing that GST is self assessment procedure and only audit and scrutiny of selected assessees will be done by the state and central tax authorities. The dispute is on the audit of the assessee and basically both the centre and state does not want to lose this “lucrative” section of departmental holdings. 
We all know that GST will be something highly efficient in the use of technology and almost everything will be online. The filing of returns is self contained and verify everything online. The sale figures uploaded by the assessee will be auto populated in return of buyer and he will take the credit online. Hence, it will be verified online. If there is any mismatch then the system will issue notices. Moreover, the GST audit is to be conducted by a Chartered Accountant. Even the annual return is designed to reconcile with the balance sheets and reconciliation statement is also to be uploaded online. The provisions relating to returns are so strict that non payment of taxes would render the returns invalid. Now to put the major question forward and that is whether the departmental audit in the new regime is really necessary? The government should realise that after a technological revolution in taxation, the audit routine of department will also lose its relevance. It is worth noting that the income and taxes will be matched by the GST portal and then the statutory GST audit will be conducted by chartered accountant also. Looking to above situation, there is absolutely no need of audit by the departmental officers. 
Also, look from the point of view of assesses. After filing three returns monthly, getting audit done from a Chartered Accountant, he has to file annual returns also. There are other 12 returns of input service distributor and that of TDS. Then there is departmental audit which is to be completed within three months ( contrary to current department audit which is completed in two or three days). Now the big question is whether he has to do some business also or only to comply with GST rules and regulations? Are we heading towards "EASE OF DOING BUSINESS" ?

It has been argued that even if the departmental audit is not abolished completely, it should be restricted to highly evasion prone units only. But this argument does not hold good. The evasion can be controlled by Anti evasion activities and not by audit. The online GST mechanism will control the accounted frauds very well. But there is no need of audit for the same when the number of returns prescribed are reconciling everything online.
Another issue which is also very important in this discussion of dual jurisdiction. Yes, it is a hard reality which is to be accepted as a necessary consequence of GST, but even if talk of a specific aspect such as refunds, the difficulties arising by it can be clearly visible. It has been mentioned by the model law that not only the refund of CGST & SGST will have to be applied for separately but the assessing authority and the sanction of refund will also be carried separately. Thus, it is inbuilt in the system as well as draft GST law that there will be dual jurisdiction and we cannot avoid it. An exporter, who will apply for the refund of unutilised cenvat credit, has to apply to CGST authorities for refund of CGST and SGST authorities for refund of SGST portion. The concerned authorities will make payment of their part to the exporters. Hence, we cannot avoid the dual jurisdiction in this federal system of dual GST.

We will continue to update you on the latest developments under GST. Till then you may also visit our FB page at the following link

 

https://www.facebook.com/GSTTODAYBYPRADEEPJAIN/

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