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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 ON ANNUAL RETURN COMPLIANCE-PART-5

GST UPDATE ON ANNUAL RETURN COMPLIANCE-PART-5
GST UPDATE ON ANNUAL RETURN COMPLIANCE-PART-5
 
In earlier update, we discussed about the practical difficulties encountered with respect to transactions and input tax credit pertaining to reverse charge mechanism. In the present update, we wish to discuss the clarifications issued by the recent Press Release dated 4.6.2019 which seeks to resolve various doubts prevailing in the minds of assessee.  
 
We had mentioned in our earlier updates while discussing the change in method of cross-utilisation of input tax credit that the change in law would not have any effect unless and until the common portal of GST supports the change as the online portal has precedence over law in the GST regime. Similarly, although the government has allowed assessees to avail the input tax credit for the financial year 2017-18upto the due date of filing return for the month of March, 2019 vide Removal of Difficulty Order No. 02/2018-Central Tax dated 31.12.2018, but the online utility mentions the period of credit availment as “April to September, 2018” in serial no. 8(C). Consequently, there was doubt in the minds of assessee that whether the input tax credit availed in the returns filed during the period October, 2018 to March, 2018 is to be reported in the said serial no. 8(C) or not? The Press Release has clarified in point no. (b) that input tax credit on inward supplies shall be declared from April, 2018 to March, 2019 in table 8C of Form GSTR-9. This clarification indicates that the Removal of Difficulty Order is to be followed irrespective of the format of GSTR-9 available online on the common portal which is a huge sigh of relief to the assessees.
 
The point no. (d) of the Press Release confirms our view given in our GST Update on Annual Return Compliance Part-1 that although the Instructions to the format of Annual Return makes reference of contents to be taken from GSTR-1 but in reality, the tax paying return being GSTR-3B is required to be given precedence. Therefore, the year in which tax has been paid in GSTR-3B will be taken as the basis of presentation of figures in the annual return.
 
Another important clarification has been given in point no. (g) according to which if IGST has been paid at the time of import of goods but has been availed in the return of April, 2018 to March, 2019 is required to be reflected in table 6(E) of GSTR-9 itself without the need of bifurcating the same as credit of previous financial year availed in subsequent financial year.
 
Lastly, we wish to bring out the contradiction in the clarification given in point no. (e) and point no. (h) of the Press Release. According to point no. (e), any outward supply that was not declared by the assessee in Form GSTR-1 or GSTR-3B shall be declared in Part II of Form GSTR-9 and thereafter, such additional liability will be reflected by the difference between the “tax payable” and “paid through cash” in serial no. 9 of Part IV of the annual return. The additional tax payable shall be paid through DRC-03. This is one method of presentation of additional liability not reported in GSTR-1 or GSTR-3B till date discussed in the Press Release. However, in point no. (h), it is simply stated that payments made through Form DRC-03 for any supplies relating to the period between July, 2017 to March, 2018 will not be accounted for in Form GSTR-9 but shall be reported during reconciliation in Form GSTR-9C. The Press Release does not indicate that the assessee has option to follow either point no. (e) or point no. (h). One may interpret that point no. (e) is to be followed for assessees filing annual return and having turnover upto Rs. 2 Crores who are not liable to submit reconciliation statement while point no. (h) is to be followed for assessees filing annual return along with reconciliation statement. However, the Press Release is clarifications for filing of Annual Return. However, both the points are merely different presentations for additional liability not declared in returns filed by the assessee but clarity in this aspect is needed from the government as following point no. (h) may attract the allegation of improper presentation of data in annual return. 
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