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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 NOTIFICATION ISSUED FOR GST RATE ON REAL ESTATE SECTOR W.E.F. 01.04.2019 PART-2

GST UPDATE ON NOTIFICATION ISSUED FOR GST RATE ON REAL ESTATE SECTOR W.E.F. 01.04.2019 PART-2
GST UPDATE ON NOTIFICATION ISSUED FOR GST RATE ON REAL ESTATE SECTOR W.E.F. 01.04.2019 PART-2
 
In the earlier update, we had discussed the basic scheme announced vide Notification No. 03/2019-Central Tax (Rate) dated 29.03.2019. In the present update, we discuss the computations to be done as prescribed in Annexure I to the notification. Annexure I pertains to computation of input tax credit on inputs and input services attributable to the construction of residential portion in a Real Estate Project (REP) in case of ongoing project which has time of supply on or after 01.04.2019 and which is not to be taken by the developer. It also seeks to compute input tax credit attributable for construction of residential portion in REP in case where the project commences on or after 01.04.2019.  
Where % completion as on 31st March, 2019 is not zero or where there is inventory in stock Where % completion as on 31st March, 2019 is zero but invoicing has been done having time of supply before 31st March, 2019 and no  input services or inputs have been received as on 31st March, 2019
 
Te= Tc + Tr
Te means total eligible credit
Tc means ITC attributable to construction of commercial portion in REP which is calculated as follows:-
Tc = T* (Carpet area of commercial apartments in the REP/total carpet area of commercial and residential apartments in the REP)
Tr means ITC attributable to construction of residential portion in the REP which has time of supply on or before 31st March, 2019 calculated as follows:-
Tr= T * F1* F2* F3* F4
T is the total ITC availed (utilised or not) on inputs and input services used in construction of the REP from 1st July, 2017 to 31st March, 2019 including transitional credit taken on 1st July, 2017.
F1= Carpet area of residential apartments in REP/Total carpet area of commercial and residential apartments in the REP
F2= Total carpet area of residential apartment booked on or before 31st March, 2019/Total carpet area of the residential apartment in REP
F3= Such value of supply of construction of residential apartments booked on or before 31st March, 2019 which has time of supply on or before 31st March,    2019/Total value of supply of construction of residential apartments booked on or before 31st March, 2019
F4= 1/% completion of construction as on 31st March, 2019.
ALTERNATE CALCULATION OF Te
Te= Tc+T1+Tr
Tc is the ITC attributable to construction of commercial portion in the REP calculated as
Tc=T3* (carpet area of commercial apartments in the REP/total carpet area of commercial and residential apartments in the REP)
T3= T-(T1+T2)
T1= ITC attributable exclusively to construction of commercial portion in the REP
T2= ITC attributable exclusively to construction of residential portion in the REP
Tr is the ITC attributable to the construction of residential portion in the REP which has time of supply on or before 31.03.2019 and which shall be calculated as follows:-
Tr= (T3+T2) * F1*F2*F3*F4		  
Te= Tc + Tr
Te means total eligible credit
Tc means ITC attributable to construction of commercial portion in REP which is calculated as follows:-
Tc = Tn* (Carpet area of commercial apartments in the REP/total carpet area of commercial and residential apartments in the REP)
Tr means ITC attributable to construction of residential portion in the REP which has time of supply on or before 31st March, 2019 calculated as follows:-
Tr= Tn * F1* F2* F3
Tn means tax paid on such inputs and input services on which ITC is available under the CGST Act received in 2019-20 for construction of REP.
F1, F2 and F3 are the same as discussed in column no. 1.
 
Te shall be determined in the following situations as under:
 
(i) where percentage invoicing is more than the percentage completion and the difference between percentage invoicing (per cent. points) and the percentage completion (per cent. points) of construction is more than 25 per cent. points; the value of percentage invoicing shall be deemed to be percentage completion plus 25 percent points;
 
(ii) where the value of invoices issued on or prior to 31st March, 2019 exceeds the consideration actually received on or prior to 31st March, 2019 by more than 25 per cent. of consideration actually received; the value of such invoices for the purpose of determination of percentage invoicing shall be deemed to be actual consideration received plus 25 percent. of the actual consideration received; and
 
(iii) where, the value of procurement of inputs and input services prior to 1st April, 2019 exceeds the value of actual consumption of the inputs and input services used in the percentage of construction completed as on 31st March, 2019 by more than 25 percent. of value of actual consumption of inputs and input services, the jurisdictional commissioner or any other officer authorized in this regard may fix the Te based on actual per unit consumption of inputs and input services based on the documents duly certified by a chartered accountant or cost accountant submitted by the promoter in this regard, applying the accepted principles of accounting.
 
Finally, the amount of input tax credit attributable to construction of residential portion in a REP which has time of supply on or after 01.04.2019 with respect to column no. 1 will be calculated as follows:-
Tx= T-Te
If the Tx is positive, Te < T, the registered person will pay the amount equal to difference between T and Te and such amount shall form part of the output liability of the registered person and furnished in ITC-03.
If the Tx is negative, Te > T, the registered person will be eligible to take ITC on goods and services received on or after 01.04.2019 for construction of residential portion in REP to the extent of difference between Te and T.
The above computation will be explained with the help of illustration in our next update.
This is solely for the educational purpose.
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