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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 simplified return format

GST update on simplified return format
The GST Council Meeting under the Chairmanship of Shri Piyush Goyal , acting as Finance minsiter in its 28th council
meeting has provided the details on the simplified return filling process and steps to make the cumbersome process
easier. The following have been put forward in the press release issued on 21st July 2018.
1. One Monthly return
  • The Council has approved to file one monthly return for all taxpayers excluding small taxpayers and a few
exceptions like ISD etc. This return shall constitute of two tables.
a) One is for reporting outward supplies and
b) Other is for availing input tax credit based on invoices uploaded by the supplier.
  •  The Press Release says that “Invoices can be uploaded continuously by the seller and can be continuously viewed
and locked by the buyer for availing input tax credit. This process would ensure that very large part of the return
is automatically filled based on the invoices uploaded by the buyer and the seller. Simply put, the process would
be “UPLOAD – LOCK – PAY” for most tax payers.”
  • But the process of uploading the invoices has not been elaborated that whether it would be online on real time
basis or not. If it is to be done as and when the invoice is prepared, then the supplier can take credit whenever
the same is received in his portal. But other conditions of receipt of material should also be satisfied. Suppose a
supplier from Jodhpur raises the bill on recipient of Ahmadabad and file the same online then the credit will be
reflected in the return of recipient. But as per provision of CGST Act, the credit can be taken only after receipt of
material. Hence, the option of accepting this credit should be given to recipient and if it is done then this is same
procedure as like of GSTR-2 return which has not worked earlier also.
If it is to be done in return, in same way as is being done in GSTR-1 return now, then how shall it be possible to
claim the input tax credit on monthly basis if the other person files the return on Quarterly basis. These issues
need clarification which can be better obtained when notification is issued which is expected on 27th of July
2018. The system on portal will also have vital role to play to implement this system. Let us hope for the best.
 
2. Quarterly return filing
  • The Council approved quarterly filing of return for the small taxpayers whose turnover is below Rs. 5 Cr.
Quarterly return shall be similar to main return with monthly payment facility but for two kinds of registered
persons – small traders making only B2C supply or making B2B + B2C supply.
  • Here the council has used the term “Small traders”. It is not clear whether this shall be applicable to the
manufacturers, service providers or not. Further it has been stated by Finance Minster in the meeting that 93 %
of the taxpayers have a turnover of Rs. 5Cr and these taxpayers would benefit from this simplification. This gives
another interpretation that the term small traders shall include manufacturers as well as service providers also.
This matter can be resolved only by way of notification only.
 
  •  When the return filing is done on quarterly basis and around 93% of assessee are filing it on quarterly basis then
the same should be prescribed for all. The quarterly return was being filed by all under VAT system. When the
tax payment is done on monthly basis then the revenue of Government will not hamper. Then ease in filing of
return will relax all the assessee and Chartered accountants who are over burdened with filing of returns.
  • The press release states that Simplified returns have been designed, naming them as Sahaj and Sugam. In these
information required to be filled is lesser than that in the regular return. However, this return is applicable for
assessee operating under composition scheme only or otherwise. It is to be seen. The details of returns and its
format are awaited.
  •  Further as per the decisions in the meeting, the new return design provides facility for amendment of invoice
and also other details filed in the return. Amendment shall be carried out by filing of a return called amendment
return. Payment would be allowed to be made through the amendment return as it will help save interest
liability for the taxpayers. This is welcome step but the operation of the same is to be seen at the time of
implementation.
  •  Taxpayers would have facility to create his profile based on nature of supplies made and received. The fields of
information which a taxpayer would be shown and would be required to fill in the return would depend on his
profile. This is also new concept and details of the same will be known only when it is implemented.
3. Nil Return by way of SMS
  •  NIL return filers (no purchase and no sale) shall be given facility to file return by sending SMS.
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