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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 Draft Rules on Accounts and Record

GST Update on Draft Rules on Accounts and Record

There has been a new Draft Rule put in public domain lately which relates to Accounts and Records. While the taxpayers would be required to maintain all account and records electronically, certain requirements in the rules could be burdensome, especially for smaller taxpayers. Hence we put forth the said Rule under a “feasibility test” as under:
1. Every registered person is required to keep the books of account not only at the principal place of business but also at every related place(s) of business mentioned in his certificate of registration. Example, If an assessee has its 6 other units in a state same as its principal place of business then, he will be required to keep at each of the 7 places records of its own and rest 6 places also. This requirement isn’t any fruitful; it is a mere exercise to increase detailed paperwork of the assessee. If the requirement of keeping books of accounts in digital form is there then it is feasible to do so. If it extends to keeping of all records including invoices etc. in hard copy then it is very impractical.
 

2. The Draft Rules require maintenance of trail of each deleted or edited entry in electronic records. While this is supported by major enterprise resource planning (ERP) software, complying with this may be a major challenge for small enterprises which may be using readily-available, basic accounting software. It was asked by a senior Chartered Accountant in a seminar that the above provision is applicable for GST stock records or even for accounting enteries also.
 

3. Every registered person manufacturing goods shall maintain monthly production accounts, showing the quantitative details of raw materials or services used in the manufacture and quantitative details of the goods so manufactured including the waste and by products thereof. The aim of the GST law was to curb Excise and Service tax practices and bring them under a common umbrella. Bringing such Rules that keep the assessee occupied in the same old documentary procedures isn’t in spirit of new law as the record-keeping requirements continue to be based on lines of Excise law.
 

4. The Rule also provides that accounts or records shall be maintained separately for each activity, including manufacturing, trading or provision of service. Therefore, the classification of these activities will continue even in the new regime even though it is not relevant for the concept of supply which underlines GST
 

5. Every registered person supplying services shall maintain the accounts showing the quantitative details of goods used in the provision of each service, details of input services utilized and the services supplied. For example, For a Chartered Accountant services in form of internet facility, telecommunication facility etc. are the basic input services. Now, the question arises here is that how can he maintain one to one record of availing these services with providing final consultancy services to the client.
 

6. Every registered person executing works contract shall be required to keep detailed records that too as a separate account for each works contract. Records like- the names and addresses of the persons on whose behalf the works contract is executed, description, value and quantity of goods or services received for the execution of works contract and utilized in it etc need to be maintained for each works contract. In the practical scenario the works contractors generally belong to a class that isn’t much educated and well versed with keeping and maintaining records. Keeping such detailed records might come as an unmanageable and costly affair for them.

 

7. Any person engaged in the business of transporting goods shall maintain records of goods transported, delivered and goods stored in transit by him and for each of his branches. Also, the rules shower upon responsibility too every owner or operator of a warehouse or godown to maintain books of accounts, with respect to the period for which particular goods remain in the warehouse, including the particulars relating to dispatch, movement, receipt, and disposal of such goods. The plight of the small transporters and godown owners with a turnover less than Rs. 20 lacs is that it will not be feasible for them to maintain so many records of every movement attached with the goods.
The Draft Rule as a whole seems to fail the feasibility test and thus its reframing needs to be considered. In the opinion of authors of these updates is that it is impossible to maintain such detailed records not only for small scale enterprises but also very difficult for big business house. The number of records to be maintained under Current system of Central Excise and service tax seems to be very simple after seeing these draft rules.

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