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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 relaxations given by government - 005/2020-21

GST Update on relaxations given by government - 005/2020-21
GST Update on relaxations given by government
On 3rd April 2020, a series of notifications and a circular have been issued notifying the effect of relaxations given by government announced in press Release amid the pandemic spread due to COVID-19. In this update, we shall discuss the relaxation given in the most concerned matter of filing returns that is GSTR-1 and GSTR-3B for taxpayers.
Notification No. 33/2020-Central tax dated 3rd April, 2020 has being issued waiving the late fees payable for the periods March 2020, April 2020 and May 2020 and for the quarter ending 31st March 2020 for those who fail to furnish the details of outward supplies in GSTR-1 by due datebut furnishes such details on or before 30th June 2020.
Though relaxation has been given on waiver of late fees on filing of return subject to the condition mentioned above, but taxpayers shall be keen on filing GSTR-1 timely on or before the due dates. This is due to the fact that the receiver delays the supplier’s payment until it is not reflected in his GSTR-2A due to the limit for availing credit prescribed in Rule 36(4). He releases the payment of supplier only when it is reflected in his GSTR-2A. Hence, the supplier is compelled to file it by due date. Furthermore, provision of Rule 36(4) of CGST Rules has been deferred and it is to be seen on cumulative basis but still the credit will be allowed on showing in GSTR-2A only. A separate update on this amendment in provision of Rule 36(4) is being sent to you. Hence, taxpayers will be filing GSTR-2A at the earliest and there is no payment of tax attached to it.
Further notification 31/2020- Central tax and 32/2020-Central Tax have been issued notifying the reduced rate of interest and waiver of late fees for filing GSTR-3B. This is done by way of inserting proviso. We have explained this provisions in separate update as well as hindi update.
 
Circular No. 136/06/2020-GST dated 3rd April 2020 has clearly mentioned that the due dates for the periods February, march and April 2020 has not been extended. Though the government has given relaxation to rate of interest in the case of GSTR-3B and late fees in the case of both GSTR-1 and GSTR-3B but yet these are subject to fulfilment of conditions as mentioned in our another update. Let us take a few scenarios which are to be faced practically by the taxpayers
Senerio 1: Where entire output liability is paid by way of credit
Mr. A having turnover more than Rs.  Crores is a taxpayer whose entire output tax liability is to be offset by using credit. Though on satisfying the above conditions for relaxation in interest rate yet the interest is to be paid by A on the gross tax liability. This is because the announcement made via press release of retrospective applicability of interest on net tax liability has not been made applicable. So this will again force the taxpayers to file the returns on or before the due dates as we are all aware of the difficulty being faced due to this. Moreover, the delay in filing of return by one day i.e. from June 24 to June 25 will force him to pay huge interest from beginning at higher rate also. This might be due to technical problem of portal. Hence, he will wish to file the return on due date.
Senerio 2: Where there arises a tax liability in cash, payment is made before the due date but return is filed on or before the dates prescribed above
Mr X having turnover above Rs. 5 Crore has made payment for the period of March 2020 before the due date on 20th April 2020 but due to some reasons he filed the return on 24th June 2020. In this situation he shall be liable to pay interest @ 9% from 6th may 2020 as interest is waived for the first 15 days from the due date. This is due to the reason that the portal calculates interest liability from the date when the return is filed. Even the payment is deemed as made by the department only when it is offset in the return. Deposit of cash in electronic cash ledger is not payment. The tax is offset only when the return is filed. Hence, everyone will wish to file the return on due date at least those assessee who have turnover more than Rs.  Crore.
Government needs to look into these matters as well because instead of the act, rules and notifications portal is being superseded.
 
 This is solely for educational purpose.

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