The 37th GST council meeting held on 20th September, 2019 was, in the recent past, a muchawaited council meeting and on its conclusion was met with praise and euphemism for its decisions. The GST council meeting was crucial to all the taxpayers regarding compliance related issues, to hotel and food industry; to manufacturers of certain goods; to service providers in warehousing, pharma and freight industries and to service recipients of authors,
musicians and cab services.
The introduction of GST on 1st July 2019 meant that all forms of Indirect taxes prior to GST were subsumed and would no longer be in force. However, assesses would still not be done with Service Tax and VAT as assessments under the old tax regime were still to continue into FY 2019-20 as Service tax and VAT were still in force for part of the FY 2017-18. But now it seems that it’s not just the assesses who want to leave behind the old tax regime to focus on GST.
A composition scheme introduced exclusively for Service providers having aggregate annual turnover in preceding financial year up to Rs. 50 lakhs. Turnover, here, will not include value of supplies made by way of extending deposits, loans or advances for which interest is receivable.
On 18th April 2019, the Telangana High Court pronounced a major verdict for M/s Megha Engineering & Infrastructures Ltd that changed the way interest was to be charged under GST laws. The verdict stated that Interest would be charged on the Total Outward GST liability before setting-off Input Tax Credit against such Output GST. The verdict was significant enough to see a rise in the number of notices to taxpayers for payment of interest due to delay in filing GSTR 3B.
As per Section 17(5) of the CGST Act, 2017 Input Tax Credit (ITC) on works contract services and goods or services received by any person in relation to an immovable property (not being a plant and machinery) are ineligible to be claimed by the taxable person receiving them. This ineligibility is applicable regardless of whether such goods or services are obtained in the course of business or furtherance of business.
The nuances of the GST council’s decision to lower GST rates for Residential property was finally revealed in a series of notifications on 29th March, 2019. The initial announcement was met with scepticism by the Real Estate industry and with cheers by the home buyers but finally the reactions were varied.
The introduction of GST reportedly resulted in a slump in the real-estate with many projects having a low take off in their construction. This was mainly due to compliance concerns, uncertainties in the and lack of clarifications in GST law. One of the most affected areas is the ‘Affordable Housing Schemes’ that is undertaken by various developers.
GST laws have undergone a major change in the form of CGST Amendment Act, 2018 and these changes were made effective from 1st February, 2019. One of the major changes that has brought relief and reduced the number
of litigations is the exclusion of Schedule III activities from Exempt supplies for apportionment of Input Tax Credit purposes.
RCM has been applicable on various goods & services and the most common are GTA and Advocate’s services. But in the recent 31st GST Council meeting which concluded on 22nd December 2018 another service has been brought into the RCM net; Supply of Security Services.
Tax rebate u/s 87A has been increased from Rs.2,500/- to Rs.12,500/- for Resident Individuals whose total income does not exceed Rs.5,00,000 per annum.Therefore Individual taxpayers having total income up to Rs. 5 lakh will get full tax rebate and will NOT BE REQUIRED TO PAY ANY INCOME TAX.
GST brought various taxpayers registered under different indirect tax laws under its rule. As GST is a destination-based tax, so any supplier with an aggregate turnover exceeding Rs 20 lakh needs to register under GST. Certain types of suppliers need to compulsorily register under GST irrespective of their turnover and some have the
option to do so without any compulsion.
The conclusion of September 2018 GST returns was a major landmark in the GST regime. It ended with
reconciliations with GSTR 2A & Books of Accounts, contacting suppliers to upload B2B invoices and claiming ITC
TDS & TCS has been an idea mooted even before GST was implemented in India on 1st July 2017. However, considering the abrupt introduction of GST & the teething issues that it would face the GST council deferred the initial date from 18th September 2017 till 31st March 2018 and again till 30th September 2018.
It is quite often in business that we come across Sale, Merger, Amalgamation, Lease or Transfer of a
business. For all such transactions we legally draft sale deed or Slump agreement, Lease deeds, utilise
merger schemes etc and then we transfer the assets and liability including un-utilised GST – ITC from
existing business to new business.
Recently GST council has published a proposed simplified a single return to be filed under GST and has published for public opinion and suggestions. It is true that the return is one but the same returns are to be operated by the tax payer multiple times. Originally GST council initiated to introduce three returns.
July 1, 2018 marks one year of the launch of Goods and Service Tax in India. GST was launched on 30th June 2017, midnight and was rolled out after small function at the Parliament’s Central Hall.