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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 THIRD CLARIFICATION ISSUED FOR SABKA VISHWAS SCHEME:-

GST UPDATE ON THIRD CLARIFICATION ISSUED FOR SABKA VISHWAS SCHEME:-

The much awaited amnesty scheme for reducing the pending litigation in Central Excise and Service Tax Laws, Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 has been implemented from 1st September, 2019. As the scheme is new, there are lot of confusions and doubts in the minds of assessee regarding the applicability of the scheme and this is evidenced from the fact that the government has already issued two clarifications to address various confusions prevalent in the minds of assessees planning to opt for the amnesty scheme. We have already carried our extensive series of updates on this amnesty scheme and on the clarifications issued by the earlier circulars issued by the government. The present update seeks to highlight another set of important clarifications issued by the government vide Circular No. 1073/06/2019-CX dated 29.10.2019.
  1. Issuance of Final Audit Report is to be considered under situation of audit pending :-It has been brought to the notice that some officers are taking an interpretation that if Final Audit Report (FAR) has been issued on or before 30.06.2019 and no show cause notice has been issued, it cannot be said that audit is pending and the benefit of scheme is not available. It has been clarified that the benefit under this scheme is available even in such cases as till such time an audit does not culminate in a show cause notice, it is to be treated as pending.   
  2. Case where assessee has paid entire tax in return filed is also eligible to file declaration under this scheme for waiver of interest liability:-A doubt has also been raised that whether a party who has filed an ST-3 return and has also paid the dues in full before filing the application but still wants to avail the benefits of the scheme for interest on the late paid dues is eligible. It is clarified that such cases are also covered under scheme as they are arrears of tax liability admitted under returns filed on or before 30.06.2019.
  3. Option to file single declaration for multiple returns:-It was clarified in earlier circular that separate declaration will be needed for each return filed. However, for the sake of administrative convenience, it is clarified that a single declaration can be filed for multiple returns but this will not have any impact on the quantum of tax relief applicable for each return individually. It is clarified that single estimate/statement and discharge certificate shall be issued for a declaration.
  4. Asset Reconstruction Company (ARC) also eligible for filing declaration under this scheme:-In many cases, the assets of a tax defaulter are taken over by an Asset Reconstruction Company (ARC) and the department asks the ARCs to pay the outstanding dues. It is clarified that such persons are allowed to file declaration under this scheme and avail the benefits.
  5. Benefit available event to appeals filed after 30.06.2019:-As stated in our earlier update that there is no clarity as regards admissibility of benefit under this scheme in cases where appeals were filed after 30.06.2019. However, in the earlier circular it was clarified that the assessee has option whether to file appeal against the order passed after 30.06.2019 or to avail benefit under this amnesty scheme. It was clarified that the assessee may avail benefit under this scheme by giving undertaking that they would not file appeal against the order and intend to avail benefit of scheme. But still there was doubt regarding admissibility of benefit where appeals were filed after 30.06.2019. This circular clarifies that if taxpayer withdraws the appeal and furnishes the undertaking to the department, then benefit under this scheme can be availed by filing declaration under the scheme. This is clarification is highly appreciated and welcomed by the trade and industry as it truly supports the intention of the scheme to reduce the baggage of past litigation.  
The content of this GST update is for educational purpose only and not intended for solicitation.
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