POINTS FROM OPEN HOUSE DISCUSSION ORGANISED BY ICAI:-

Open House Discussion on various issues that have remained unanswered in the Final GST Laws and Final GST Rules was convened by Jodhpur Branch of ICAI on 28.05.2017. The discussion was knowledge enhancing as gathering comprised of Chartered Accountants wherein various new points emerged that may invite litigation after implementation of GST. All the experts present consented that initiatives should be taken for making representations about the contentious issues to the government so that the GST Law which is implemented is free from any flaws or drafting lacunas.

One of the major concerns of Sales Tax Consultants was the treatment of refund claims filed under RIPS scheme of the Rajasthan Government but it was informed that it was communicated by Sales Tax Officer in one of the GST Meets that a separate notification will be issued for benefit admissible under RIPS Scheme. The issue as regards availment of credit to the extent of 40% of the Central Taxes paid under GST regime by an un-registered trader was also deliberated upon. It was agreed that a higher percentage of credit should be allowed by the government.

Another major point that emerged during the course of discussion was regarding availment of credit with respect to supply of GTA services. If we observe the Schedule for GST rates for services as approved by GST Council, it is found that GST rate for services of GTA have been specified as 5% with no ITC thereby indicating that the provider of GTA service cannot avail credit. However, at the same time, section 17(5) of the CGST Act allows credit availment on motor vehicle and other conveyance except when they are used for transportation of goods. Hence, there is clear contradiction between the provisions of section 17(5) of the CGST Act and that of Schedule prescribing rate of GST for services. This anomaly needs to be removed at the earliest possible.

Apart from this, another issue that received attention was the exemption given to services by way of pure labour contracts of construction, erection, commissioning or installation of original works pertaining to a single residential unit otherwise than as a part of a residential complex. Presently, similar exemption is provided on levy of service tax on construction of a single residential unit but there is no restriction that only pure labour contracts are exempt. Presently, construction contracts involving material also attract exemption if they pertain to construction of single residential unit but under GST regime only pure labour contracts will enjoy exemption. This is a major change that will impact the construction services relating to single residential complex.

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POINTS FROM OPEN HOUSE DISCUSSION ORGANISED BY ICAI:-

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