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Monday, 6 August 2018

06 August 2018 Updates

ICAI allows Open Book Exam in Elective Subjects of Paper 6 of Final (New) Course*

Read more at: http://www.taxscan.in/icai-open-book-exam-final-course/26870/
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*Providing Food by maintaining Menu Card with Fixed Price is ‘ Restaurant Services ’, not Outdoor Catering: CESTAT* [Read Order]

Read more at: http://www.taxscan.in/providing-food-maintaining-menu-card-fixed-price-restaurant-service-outdoor-catering-cestat/26846/
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*Effluents are not ‘Goods’ for imposing Service Tax on GTA Services: CESTAT Quashes Tax Demand on ONGC* [Read Order]

Read more at: http://www.taxscan.in/effluents-goods-service-tax-gta-services-cestat-quashes-tax-demand-ongc/26838/
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Supply of UPS along with battery could be considered as Mixed Supply: AAR
August 4, 2018[2018] 96 taxmann.com 106 (AAAR-WEST BENGAL)

CGST : Storage battery has multiple uses and can be put to different uses and when supplied separately with static converter (UPS) it cannot be considered as a composite supply or a naturally bundled supply....

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Mobile Phone Batteries sold to Customers attract 28% GST: AAR* [Read Order]

Read more at: http://www.taxscan.in/mobile-phone-batteries-sold-customers-attract-28-gst-aar/26816/
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*Breaking: GST Council Special Meet approves Cashback for Digital Payments*

Read more at: http://www.taxscan.in/gst-council-special-meet-cashback-digital-payments/26883/
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GST Council may replace 12% and 18% slabs with 14-15% tax rate: Sushil Modi https://m.businesstoday.in/story/gst-council-may-replace-18-percent-tax-slab-with-new-rate/1/280939.html
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29th GST Council Meeting (New Delhi dt. 4 August 2018): Updates on Highlights of Key Recommendations.

August 04, 2018

29th GST Council Meeting has made recommendations/ decisions mainly on issues relating to incentivising digital payments, constituting new panel for reviewing law/ rates/ refunds related issues of MSMEs and Small Taxpayers, etc., as summarised here-under:

i) 20% of GST as Cash Back on Digital Transactions: To promote digital transaction, increase compliance and collection in taxes, GST Council has recommended cash back of 20% of GST paid via Bhima App, RuPay Debit and UPI-based transaction, capped at Rs 100. The GST Council has recommended to develop such software and any State willing to do so can implement the same on a pilot basis.
ii) Sub-committee for MSME Issues: To address the issues of MSMEs and Small Taxpayers, the GST Council has decided to constitute a new Panel/ Sub-Committee to review the concerns of stakeholders on various law related and GSTrates related issues, including issues relating to refunds, followed with submission of a report thereon.
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Summary of Gst meeting 04th August 2018 today’s discussion is as follows:
1. GOM for MSME Issues :
a. GST Council constitutes a Group of Ministers (GoM) to look into issues of MSME’s.
b. Finance Minister’s of Assam, Delhi, Punjab & Kerala will be part of this GoM.
c. Finance Minister of State – Shri Shiv Pratap Shukla ji will be head of this GoM.
d. A further a Sub-Committee to be formed under this GoM. This Committee will interact with MSME’s
and listen to issues like
i. Return filing with Turnover upto Rs. 1.50 Crores
ii. Competition & Benefits of co’s with turnover upto Rs. 1.50 Crores
e. Further another sub-committee named fitment committee will submit report and will provide
suggestions where rate changes are required.
2. Adding more MSME in GST Network
a. After GST Council meeting Mr. Sushil Modi, Finance Minister of Bihar, stated that it was also discussed
to add more MSME to the GST Network.
b. He also discussed that steps would be taken in next meeting to benefit MSME’s.
3. Cash Back Facility :
a. GST Council gives approval for Pilot Project to promote Digital Payments through cash back of GST.
b. 20% cash back of GST paid to be proposed. Subject to maximum Rs. 100/-.
c. Cash Back applicable on payments through RuPay Debit Card, Bhim, USSD etc.
d. It’s on wish of States to launch this incentive scheme or not.
4. West Bengal opposes idea of Digital incentivization of GST!!
a. West Bengal Finance Minister Mr. Amit Mitra opposes the idea of Digital incentivization.
b. He said that these incentives will come from the GST's revenue that was collected dearly.
c. He also says that total revenue loss in Q1 has been Rs 43,000 cr.
5. Next meeting to be held on month end of September’18 at Goa.
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GST update:-
August 4, 2018

No more 12%, 18% slab? Here’s what GST Council is planning to doGST Council member and Bihar Deputy Chief Minister Sushil Kumar Modi said that the GST Council may replace two tax brackets 12% and 18% with 14-15% if tax collections stabilise at Rs 1 lakh crore. Speaking at a seminar, Sushil Kumar Modi said that further rate rationalisation will likely be taken up once revenue reaches Rs 1 lakh crore.The GST collection in June came close to Rs 1 lakh crore, falling short of nearly Rs 3,600 crore.However, after recent rate cut on over 100 items including up to 10% on white goods, the collections may take a hit, experts say. In April, the collections did hit Rs 1 lakh crore mark but also included arrears of the previous months.The GST currently has five tax slabs — 0%, 5%, 12%, 18%, and 28%. The government has often hinted at more rate rationalisation once there is revenue buoyancy and that 28% tax slab will be limited to only sin and demerit goods. After rate rationalisation on July 21, only 35 items have been left in the highest tax bracket.Experts have often advocated for fewer tax slabs, saying that merging 12% and 18% tax slab into a 16% slab would make it easier.Meanwhile, the Sushil Modi-led ministerial panel has approved a proposal for incentivising digital payments through Rupay card and BHIM app by way of cashback Recommendations of the Group of Ministers (GoM) is set to be placed before the GST Council on Saturday.The Council had in its meeting on July 21 tasked the GoM to work out modalities for incentivising digital payments under Goods and Services Tax (GST) for users of Rupay and BHIM.The GST Council may also decide on increasing import duty on white goods with an aim to create a level playing field for domestic manufacturers.****""
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NCLAT : In Ajay Agarwal vs. Central Bank of India and State Bank of India*

*_Mere mismatch of the figures will ipso facto not invalidate the order initiating ‘Corporate Insolvency Resolution Process’ under Section 7 of the ‘I&B Code’._*

*_Read full case law at :_* https://dasgovernance.com/2018/08/05/nclat-in-ajay-agarwal-vs-central-bank-of-india-and-state-bank-of-india/
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  AO can't review his order u/s 154 of the Income Tax Act, 1961 on the basis of Audit Objection

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GST news:-

The Goods and Service Tax was criticised from the very first day for its multiple tax slabs. A major point that was raised in favour of multiple tax slabs in the ‘One Nation, One Tax‘ regime was the great disparity in the purchasing capacity of the common Indian citizens. Recently though GST rate rationalization is on top priority for the Central Government. The prime agenda of the upcoming GST Council meeting will revolve around rate rationalization and demonetization-hit SME sectors. In line with this development, another news suggests that the *GST Council might replace the 12 per cent and 18 per cent slabs with a 14-15 per cent* . The same has been confirmed by Bihar Deputy Chief Minister Sushil Modi.

Recently, Mr Sushil Kumar Modi attended a seminar organized by the Institute of Chartered Accountants of India. While addressing the seminar participants, Mr Sushil Modi shared that the GST Council was contemplating on the possibility of slab relaxation in upcoming days. But this would be ideal only when GST accrues cross the  Rs 1 trillion mark. *This would take almost a year to happen and when done would bring down the number of GST rates to four.*

Quarterly Return :

• Option to create profile in the quarterly return shall also be available. Sahaj and Sugam are predetermined profiles of the quarterly return.

Sahaj and Sugam Returns :

• Small taxpayers often have purchased only from the domestic market and sales in the domestic market i.e. B2B purchases locally and supplies either as B2C or B2B+B2C.

Two simplified quarterly returns are proposed for them - "Sahaj" (only B2C outward supplies) and "Sugam" (both B2B and B2C outward supplies

Uploading of invoices :

• The recipients from these small taxpayers would need uploaded invoice for availing ITC.

• Thus, small taxpayers would be given facility to continuously upload invoices in the normal course. Invoices uploaded by 10th of the following month which would be available as ITC to the recipient in the same month as is the case in case of purchases from large taxpayers

Payment declaration form for payment of monthly taxes:

• Small taxpayers would continue to pay taxes on monthly basis by using a payment declaration form in first and second month of every quarter.

• In the payment declaration form, self-assessed liability and ITC on self-declared basis shall be declared.

• Late payment of tax liability including that in first and second month of the quarter shall attract interest liability.

  HSN :

• HSN wise details would need to be provided at 4-digit level or more in the quarterly return.

*Pending and missing invoices:*

• Quarterly return shall not have the compliance requirement of missing and pending invoices as small businesses do not use these procedures in their inventory management
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Key features of Draft GST Simplified Returns*

 *Exports* :

• The table for export of goods in return would contain details of the Shipping Bill also which can be filled either at the time of filing the return or after filing the return. A separate facility for uploading shipping bill details at a later date shall be provided to the exporters.

• Filing the details of the Shipping Bill in the return at a later date shall not be considered as filing of an amendment return.

• Once the information of Shipping Bill is completed, the entire data shall be transmitted to the ICEGATE. The amended data would also be transmitted to ICEGATE.

• Till data starts flowing online from ICEGATE or SEZ online in the input tax credit of the return, credit on imports and supplies from SEZ shall be availed on self-declaration basis

Supply side control :

• For a newly registered taxpayer and a taxpayer who has defaulted in payment of tax beyond a time period and/or above a threshold, uploading of invoices shall be allowed only up to that threshold amount or only after the default in payment of tax is made good respectively.

• If the supplier does not make the default good, the invoice of such supplier shall not be populated in the viewing facility of the recipient and consequently, the recipient would not be able to avail ITC on such invoices till the default in payment of tax by the supplier for the past period is made good
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ENA Attracts 18% Tax: GST dept asks Suppliers of ENA to obtain Registration* [Read Letter]

Read more at: http://www.taxscan.in/ena-gst-dept-suppliers-registration/26874/
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No Service Tax on Renting of Office Fit Outs to Tenants If there is Separate Agreement: CESTAT* [Read Order]

Read more at: http://www.taxscan.in/service-tax-renting-office-fit-tenants-agreement-cestat/26833/
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Relying on the judicial decisions, the bench noted that since VAT and service tax being mutually exclusive, service tax cannot be demanded on the very same consideration received for renting of movable properties.

Read more at: http://www.taxscan.in/service-tax-renting-office-fit-tenants-agreement-cestat/26833/
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ICAI writes to Newspaper for publishing Misleading Content*

Read more at: http://www.taxscan.in/icai-newspaper-misleading-content/26879/
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NCLAT : In Amar Remedies Ltd. vs. IDBI Bank Ltd. and Ors.

*_The Adjudicating Authority is required to extend the period of Resolution Process to enable the Committee of Creditor to find out whether a suitable Resolution Plan is to be approved or not instead of passing order for liquidation, which is the last recourse to be taken on failure of resolution process._*

*_Read full case law at :_* https://dasgovernance.com/2018/08/06/nclat-in-amar-remedies-ltd-vs-idbi-bank-ltd-and-ors/