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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 FILING OF ITC-04

GST UPDATE ON FILING OF ITC-04

GST UPDATE ON FILING OF ITC-04
We submit that the due date for filing of ITC-04 is Oct 25, 2017. We further submit that GST ITC-04 is the quarterly return for submitting the details of goods sent to job worker and received back therefrom or sent to another job worker. This has been prescribed in section 143 of CGST Act, 2017 read with rule 45 of CGST Rules, 2017. However, the offline utility for ITC-04 was made available on the common portal in the evening on 23.10.2017 whereas the online facility was made available on the common portal only on 25.10.2017, being the due date of filing ITC-04. In our opinion, the due date of filing ITC-04 shall be extended so that the assessees are saved from the glitches of haphazard filing of return at the last moment. Not only this, appropriate notification should be issued for waiving initiation of any penal action against the assessees for delay in filing ITC-04 for the quarter July, 2017 to September, 2017.

Apart from the request of extension of the time limit for filing ITC-04 for the quarter July, 2017 to September, 2017, we also wish to highlight certain anomalies in the details required to be submitted in ITC-04 by the job-workers as follows:-
1. The offline utility does not allows to give reference of job work challans issued prior to 01.07.2017 as the requirement to file ITC-04 is only for goods sent to job-work during the period from 01.07.2017 to 30.09.2017. However, there is possibility that the goods sent for job work prior to 01.07.2017 are received back in July, 2017 to September, 2017 or are being sent to another job worker in July, 2017 to September, 2017. In such a situation, the assessee is unable to reflect the details of receipt of job-worked goods or the details of goods sent to another job-worker in the ITC-04 filed by them. A suitable clarification in this regard should be issued as to whether the details of goods sent prior to 01.07.2017 and received subsequently in the GST regime are to be reported in ITC-04 or not.
2. The offline utility also has discrepancy in mentioning the original challan date. The excel sheet depicting details of goods sent for job-work by manufacturer to the job worker mentions the month of July in the challan dates whereas the sheet pertaining to the details of goods received from job worker or sent out from business place of job work mentions the month of August in the original challan date column. The excel sheet pertaining to goods sent from job worker to manufacturer mentions ‘original challan date’ but the information thereon mentions the month of August which is totally wrong. A suitable clarification as regards the meaning of ‘original challan date’ in the excel sheet pertaining to goods sent from job worker to manufacturer should be issued in order to resolve the confusion.
3. There is also no mechanism of reporting in cases where 5 different inputs are sent to job worker which are being used in the manufacture of job-worked goods. To illustrate, if 5 inputs being A, B, C, D and E are being sent to job-worker for manufacturing a product being X, then there is no mechanism for reporting the details of inputs contained in the job-worked goods. It is possible that different proportion of inputs is being used for manufacturing product X and it is also possible that the job-worked goods are received back in lots. Say for example, if 50 Kgs of each inputs is being sent to job-worker to manufacture 75 Kgs of finished product being X, and if the finished products are being received in the lots of 25 Kgs by the principal manufacturer. In such a situation, the mechanism of reporting the goods sent to job-worker and that received back is not at all clear and it is not understandable as to how to report such transactions in ITC-04.
4. There is also no mechanism of reporting cases where a particular quantity of inputs is being sent to job-worker for job work and the job-worked goods are being received back in installments by the principal manufacturer. Say for example, if 100 Kgs of inputs are sent to job worker and the job-worked goods are received in the lots of 20 Kgs. In such a situation, whether reference of original challan is to be given multiple times in the excel sheet pertaining to details of goods received back from the job-worker? A suitable clarification should be issued in this regard for reporting of goods received from job-worker in installments.
5. There is also no clarity as regards the value to be shown in the details of goods received back from job-worker. There is no method to ascertain the value of job work goods since these are not being sold. It might be possible that these job work goods are further used in manufacture of final product. Hence, a suitable clarification should also be issued in this regard.

We have pointed out the practical problems being faced by the assessees in reflecting the details of goods sent to job-worker and received back from the job-worker. We hope that suitable clarifications regarding technical problems being faced in reporting of ITC-04 are issued at the earliest possible.

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