Friday, 26 May 2017

Special Learning on GST

Ø  No Change in Annual Return Possible
Ø  No GST on gift to employees value less than 50,000
Ø  No Input credit on any tax demand paid u/s 73 , 74, 129 & 130
Ø  Only  E Notices being served and reply require to make within 15 days. 
Ø  In case of related party transactions, where the price made to next party is known, the valuation between related party is 90% value of known price
Ø  Reimbursement of expenses subject to GST
Ø  Disallow portion of input credit in case same being used for exempt items, nil rated, liquor & petroleum, securities& interest, land & sale of building
Ø  For banks , 50% of the input being disallowed.
Ø  No input on construction or extension of immovable property.
Ø  No input credit on goods lost, destroyed, gift, free sample, write off

Ø  For Donation -  reduce the cost by 5% per quarter of capital goods. 

CBDT clarifies financial transaction (SFT) registration not necessary absent ‘reportable transactions’

CBDT issues clarification with respect to filing of Statement of Financial Transaction (‘SFT’) & SFT Preliminary Response; CBDT states that the reporting person/entity is required to register with the Income-tax Department and generate Income Tax Department Reporting Entity Identification Number (‘ITDREIN’) in case there are reportable transactions for the year; Clarifies that ITDREIN registration is mandatory only when at least one of the Transaction Type is reportable; Highlights that a functionality ‘SFT Preliminary Response’ has been provided on the e-Filing portal for the reporting persons to indicate that a specified transaction type is not reportable for the year. 

HC Explains Imp Law On S. 153A Search Assmnts

Balgopal Trust vs. ACIT (ITAT Mumbai)

S. 54F: U/s 161, a trust which is for the sole benefit of an individual, has to be assessed as an “individual” and not as an “AOP”. Consequently, a trust is eligible for s. 54F deduction  

HC : Quashes order denying SSI exemption absent thorough examination of issues; SCN without jurisdiction

HC allows assessee’s appeal, sets aside CESTAT order which denied SSI exemption on ground that turnover of manufactured electric furnace and heating elements exceeded turnover limit prescribed under Notification No. 1/93; Accepts assessee’s plea that aggregate value of clearance of manufactured products was not correctly computed and that Revenue failed to discuss vital issues such as whether bought out items were subjected to processes, and whether furnaces transported to customers’ sites in CKD condition were goods or not; Also finds that show cause notice invoking extended limitation period alleging fraud / suppression by Jt. Commissioner was without authority absent approval from Commissioner u/s 11A(1) of Central Excise Act; Remarks, despite ground of jurisdiction being specifically raised by assessee, lower authorities including CESTAT failed to discuss the same, which in fact goes to root of matter; Finds no mention in CESTAT order as to how conclusion of suppression of material facts had been arrived at, and in this context, states that a charge of suppression is required to be levelled with specificity and conclusion of suppression can be reached only when assessee is unable to rebut same  : Madras HC


The FAQ is based on Draft GST law, and could change after the implementation of Final GST Act.

1.             What is Goods and Service Tax (GST)?
It is a destination based tax on consumption of goods and services. It is proposed to be levied at all stages right from manufacture up to final consumption with credit of taxes paid at previous stages available as setoff. In a nutshell, only value addition will be taxed and burden of tax is to be borne by the final consumer.   

HC : 'Settlement Commission' not an 'adjudicating authority', Writ jurisdiction cannot set-aside conditions imposed thereto

HC dismisses assessee’s writ, refuses to set aside order passed by Settlement Commission’s u/s 32E of Central Excise Act, 1944, which recorded certain findings about clandestine removal of goods, and accepted settlement application by imposing certain conditions; Rejected assessee’s submission that, Commission’s order was passed based on report of Jurisdictional

Search - Whether additions can be made in relation to a particular AY without having any incriminating materials qua that AY - NO: HC

THE issue before the court is - Whether additions can be made in relation to a particular AY without having any incriminating materials qua that AY. NO is the answer.

Facts of the case

Exemption u/s 54 cannot be denied on ground that residential property was purchased outside India when requirement of making investment in property only in India was subsequently added - ITAT

THE ISSUE BEFORE THE TRIBUNAL IS - Whether assessee's claim for exemption u/s 54 can be denied on the ground that residential property was purchased outside India, when there was no scope u/s 54 existing at that time for importing the requirement of making such investment in a residential property located in India. NO is the answer.