GST – Weekly Updates – 17.07.2021 - CA Vaishali Kharde - vaishali kharde

Please enable JavaScript to view the full PDF

GST – Weekly Updates – 17.07.2021 CA Vaishali Kharde (Founder and CEO of VBK and Company) Overview Export Benefits GST Areas Covered - GST Key Highlights Weekly Advance Ongoing Updates Ruling Litigation Key Pronouncements Key Highlights Taxpayers with canceled registration can also apply for Amnesty Scheme the Finance Ministry is contemplating to restore the registration of taxpayers whose registration has been canceled due to non-filing of returns. There are more than 8 lakh such cancelled registration Thus, taxpayers with canceled registration can also apply for Amnesty Scheme What is Amnesty Scheme Available for period Relief • Non-furnishing FORM • If GSTR-3B returns for GSTR-3B these tax periods are • July, 2017 to April, furnished between • INR 500 per return 2021 01.06.2021 to Caping of late fee if Nil 31.08.2021. Return • INR 1000 per return Caping of late fee for other Taxpayer Covered Condition Key Highlights What about Genuine Taxpayer who had paid late fee and filed return File return within time limit to get relief Available only if GSTR-3B returns for these tax periods are furnished between 01.06.2021 to 31.08.2021. Ongoing Litigation Swiggy fined Rs. 20K for levying GST on MRP Abhishek Garg – A Consumer Complaint • Facts • On August 4, 2018, the complainant placed an online order on Swiggy’s app for two items cheesy garlic stick and three 500ml Coca Cola bottles (each having an MRP of Rs. 30) • Swiggy had charged an additional Rs. 4.50 GST (five percent) on three 500ml bottles having total MRP of Rs. 90. • Then on May 31, 2019, the complainant approached the district consumer forum with his grievance. Swiggy fined Rs. 20K for levying GST on MRP Abhishek Garg – A Consumer Complaint • Facts •Swiggy defended itself by saying it acts as an intermediary and a medium to restaurants/merchants to sell their products to users on its platform. •“All applicable taxes and levies, the rates thereof and the manner of applicability of such taxes on the bill are being charged and determined by merchants. So, there is no deficiency in service and unfair trade of practice on its part,” Swiggy fined Rs. 20K for levying GST on MRP Abhishek Garg – A Consumer Complaint • Conclusion •The forum concluded that Swiggy can’t defend itself by saying that it has no role to play in the entire transaction of the sale and purchase of food between the complainant and the restaurant. • Way Forward •MRP includes all taxes. Thus, before paying any taxes on product check correctness of taxes. Key Pronouncements GST applicable on amount exceeding INR7,500 collected by RWA Case • Greenwood Owners Association [2021-TIOL-1505-HC-MAD-GST] ▪ If the monthly contribution by members is 10,000 then, will GST be Issue applicable on Rs. 10,000/- or Rs.2,500/- Exemption Available • Notification No. 12/2017- CT (R) at Sr. No.77 – ''Service by an unincorporated body or a non- profit entity registered under any law for the time being in force, to its own members by way of reimbursement of charges or share of contribution – (a) ...; (b) for the provision of carrying out any activity which is exempt from the levy of Goods and service Tax; or (c) up to an amount of seven thousand and five hundred rupees per month per member for sourcing of goods or services from a third person for the common use of its members in a housing society or a residential complex Exemption for CHS Till 25th January On or after 25th 2018 January 2018 7,500 5,000 [Refer Not. 2/2018 –CT(R) GST applicable on amount exceeding INR7,500 collected by RWA GST FLYERS Exemption is available up to an amount of Rs.5, 000/ and GST would be applicable on the amount in excess of Rs.5, 000/- Circular No.109/28/2019- GST The exemption from GST on maintenance charges charged by a RWA from residents is available only if such charges do not exceed Rs. 7500/- per month per member. In case the charges exceed Rs. 7500/- per month per member, the entire amount is taxable AAR if the amount collected by a registered housing society/resident welfare association exceeds ₹7,500 per month per flat, Goods and Services Tax of 18% is payable on the entire amount and not on the difference amount. GST applicable on amount exceeding INR7,500 collected by RWA • In the case of Dilip Kumar (supra), the Supreme Court reiterates the settled proposition that an Exemption Notification must be interpreted strictly. The plain words employed in Entry 77 being, 'upto' an amount of Rs.7,500/- can thus only be interpreted to state that any contribution in excess of the Observation same would be liable to tax. [Para 23] • The term 'upto' hardly needs to be defined and connotes an upper limit. It is interchangeable with the term 'till' and means that any amount till the ceiling of Rs.7,500/- would exempt for the purposes of GST. [ Para 24] GST applicable on amount exceeding INR 7,500 collected by RWA • The discussion as above leaves me no doubt that the conclusion of the AAR as well as the Circular to the effect that any contribution above Rs.7,500/- would disentitle the RWA to exemption, is contrary to the express language Decision of the Entry in question and both stand quashed. To clarify, it is only contributions to RWA in excess of Rs.7,500/- that would be taxable under GST Act. Our Comment • Revisit exemption availed. Advance Rulings GST Liability on Reimbursement of additional discount to distributor Case • Santhosh Distributors [KER/60/2019] • Whether Discount given by the Principal Company to the End Customer through the Distributor attract GST. • Whether amount shown in the commercial credit note attract reversal of Issue ITC. • Is there is any tax liability under GST laws on the distributor for the amount received as reimbursement of discount or rebate provided by the Principal Company as per the agreement. Post supply Discount -Circular 3rd October 2019 Circular No. 112/31/2019– 7th March, 2019 GST Circular No. 92/11/2019-GST Withdrawal of Circular No. issued 105/24/2019-GST 28th June 2019 Circular No. 105/24/2019-GST GST Liability on Reimbursement of additional discount to distributor • As the Commercial Credit note do not satisfy the conditions as per Section 15(3) of the CGST Act the supplier is not eligible to reduce original tax liability. Observation • As suppliers not reducing tax distributor can avail ITC • The additional discount/reimbursement amount liable to be added to consideration payable by the customer for the purpose of arriving value as per section 15 of the CGST Act. • If discount is to be given, then ensure fulfilment of conditions under Way forward section 15 (3) and time limit of section 34! • Review agreements with the dealers for discounts! Export Benefits Implementation of Risk Management System (RMS) RMS in export is to be implemented in two phases. In the first phase - RMS processed the data and provided output to ICES up to goods examination stage. Export RMS thus allowed low risk consignments to be cleared based on self-assessment. In the second phase, RMS will process the shipping bill data after EGM is filed electronically and will provide required output to ICES for selection of shipping bills for risk-based processing of duty drawback claims. Suggestions regarding New Foreign Trade Policy (“FTP”) 2021-26 The Foreign Trade Policy (2015-2020), was extended till 30th September 2021 For new FTP suggestions are invited (link to submit suggestions https://docs.google.com/forms/d/e/1FAIpQLSfpbqk3fkW1XRIFvxBZdLDdBS 3Y_1cuMKeHFNyulTuc0DXGqg/viewform) link shall be valid upto July 31, 2021 [Refer Trade Notice No. 09/2021-22] Extension of RoSCTL – Press Dated 14 JUL 2021 Rebate of State and Central taxes and Levies (RoSCTL) with the same rates as notified by Ministry of Textiles on exports of Apparel/Garments (Chapters-61 & 62) and Made-ups (Chapter-63) will continue till March 31, 2024. The other Textiles products (excluding Chapters-61, 62 & 63) which are not covered under the RoSCTL shall be eligible to avail the benefits, under RoDTEP Filing claims under TMA extended The DGFT extended time limit for filing claims under Transport and Marketing Assistance (TMA) Scheme up to 30th September 2021 for quarter ending on 31st March 2020 and 30th June 2020. [Refer Public Notice No. 14/2015-2020 dated July 13, 2021 ] Thank You Firm CA Vaishali B Kharde and Co. Visit us for YouTube : CA Vaishali Kharde Updates Linked In : linkedin.com/in/ca-vaishali-kharde-6a122539 Share E-Mail : [email protected] Feedback and Queries Mobile : +91 95610 05039 Our GST -Decoding of Amendments of Budget 2021 Books Vivad Se Vishwas Scheme (Direct Tax)