List of Goods and Services not Eligible for Input Tax Credit under GST
According to Section 17, the input tax credit is available only to the extent of the goods or services used for the business purpose or effecting taxable supplies including zero rated supplies as discussed earlier in Rule 42 & 43.
Apart from the above, there are goods and services which are not eligible for input tax credit, have been listed out under section 17 (5) as below:
1. Motor Vehicles and other conveyances Input tax credit on purchase, maintenance, insurance in respect of motor vehicles are not eligible.
Input tax credit is available only when they are used for providing the following taxable supplies:
a. Further supply of such vehicles or conveyances
b. Transportation of passengers
c. Imparting training on driving, flying, navigating such vehicles or conveyances
d. Transportation of goods
2. Supply of Goods or Services not eligible for Input Tax Credit:
The following goods or services are not eligible for input tax credit:
a. Food and beverages
b. Outdoor catering
c. Beauty treatment
d. Health services
e. Cosmetic and plastic surgery
Note: If the above goods or services are used to provide outward taxable supplies of the same category then, input tax credit is available.
a. Membership of a club, health and fitness centre
b. Rent-a-cab, life insurance and health insurance - input tax credit available only where the same is provided to the employees by the employer as a statutory obligatory under any law as notified by the Government or such services are used to provide outward taxable supplies of the same category
c. Travel benefits extended to employees on vacation such as leave or home travel concession
3. Works Contract Service
Works contract services are not eligible for input tax credit when supplied for construction of an immovable property other than plant and machinery except where it is used as input service for further supply of works contract service.
Example 1: If ABC, a manufacturing company who manufactures steel, gives contract to XYZ, a construction company to construct a building for its office, ABC cannot take input tax credit on the invoice issued by XYZ. While XYZ receives the service of painting of the office, from DEF, a service provider, XYZ can take input tax credit of the invoice issued by DEF as it is used as input service for providing works contact service of constructing the office to ABC.
4. Construction of Immovable Property by own account
When the goods or services received for construction of an immovable property other than plant and machinery by own account including when such goods or services or both are used in the course or furtherance of business.
Example 2: XYZ, a building contractor company, builds an office for its own use, it cannot take input tax credit.
Note: 'Construction' as mentioned in the point No.3 & 4, includes re-construction, renovation, additions or alterations or repairs to the extent of capitalisation to the said immovable property.
Example 3: ABC as in the Example 1, makes some repair work in its office building and treats the expenditure as revenue expenditure, then it can take input tax credit. If the expenses are capitalised in the books, then no ITC is available.
5. Composition Scheme
Composition dealers who pay tax under section 10, cannot take input tax credit on the goods or services or both received by them.
6. Non-Residents
Non-resident taxable person cannot take input tax credit on the goods or services or both received except on goods imported by him.
7. Personal Consumption
When the goods or services are used for personal consumption, input tax credit is not available.
8. Lost, Stolen, Destroyed, Free Samples, Gifts
Input tax credit is not available on the goods which are lost, stolen, destroyed, written off or disposed of by way of gift or free samples.
9. Fraud, Seizure and Confiscation
Input tax credit is not available on any tax paid under the circumstances of the following sections:
Section 74 - Input tax credit wrongly availed or utilised by reason of fraud or any wilful-misstatement or suppression of facts.
Section 129 - Input tax credit on the goods seized.
Section 130 - Input tax credit on the goods confiscated
Note: Plant and Machinery means apparatus, equipment, and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports but excludes the below:
• Land, building or any other civil structures
• Telecommunication towers
• Pipelines laid outside the factory premises.
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CA Start-Ups can apply for Incubation Centres in ICAI Mumbai
Read more at: http://www.taxscan.in/ca-start-ups-incubation-centres-icai/31831/
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HIGH COURT OF GUJARAT : In Gaurang Balvantlal Shah vs. Union of India
Section 164(2) of the Act of 2013, which had come into force from 1.1.2014 would have prospective and not retrospective effect and thus the respondents could not have deactivated the DINs allotted to the Directors under Section 154 of the said Act, except under the circumstances mentioned in Rule 11 of the said Rules of 2014.
Read full case law at : https://dasgovernance.com/2018/12/20/high-court-of-gujarat-in-gaurang-balvantlal-shah-vs-union-of-india/
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GST Evasion: Two Directors of Two Companies arrested for evading Rs 660 crore
Read more at: http://www.taxscan.in/gst-evasion-two-directors-arrested/31836/
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GSTN started sharing Data with Tax Authorities
Read more at: http://www.taxscan.in/gstn-sharing-data-tax-authorities/31869/
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C R Chaudhary enumerates Key Initiatives for Industrial Development Post-GST and Demonetisation
Read more at: http://www.taxscan.in/c-r-chaudhari-industrial-development-post-gst-demonetisation/31882/
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CBI Arrests Three Income Tax Officials in Separate Cases of Bribery
Read more at: http://www.taxscan.in/cbi-arrests-income-tax-officials-bribery/31891/
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👉Shiv Pratap Shukla, Minister of State for Finance in a written reply to a question in Rajya Sabha says that the GSTN is developing a new return filing system, further improving the user interface, and Business Intelligence and Analytics.
👉GST dept arrests two directors of two different firms for evasion of around Rs. 660 crores. The persons were allegedly indulged in availing input tax credit (ITC) fraudulently by using forged purchase and sale invoices.
👉Hon’ble Public Accounts Committee recommends that the process of the Registration Process of Charitable Trusts / Institutions should be brought under the purview of internal audit.
👉CBI arrests 3 officers of the Income Tax dept, an Inspector, Income Tax, Ward No. 42 (3), New Delhi for demanding and accepting a bribe of Rs. 60,000/- from the complainant.
👉The Lok Sabha passes the Consumer Protection Bill 2018, which seeks to wholly replace the Consumer Protection Act 1986 & to establish a national level regulator -Central Consumer Protection Authority- to deal with consumer complaints on a proactive measure.
👉After a series of relaxations in the external commercial borrowings (ECB) norms, RBI announces a cap of 6.5 % of GDP at current market prices giving lot more headroom for raising money overseas.
👉DoT tells RCom and Reliance Jio that it can’t enforce the Supreme Court order for clearing their airwaves deal, as the buyer is unwilling to accept the responsibility for Anil Ambani-owned RCom’s arrears, thus violating a key clause in the spectrum-trading rules.
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NCLAT : In V. R. Hemantraj vs. Stanbic Bank Ghana Ltd. & Anr.
Adjudicating Authority has made prima facie case and expressed its final satisfaction about existence of debt and default, CIRP process could not be challenged as illegal and void raising untenable grounds.
Read full case law at : https://dasgovernance.com/2018/12/21/nclat-in-v-r-hemantraj-vs-stanbic-bank-ghana-ltd-anr/
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GST: Tax Lawyers approaches Delhi High Court to resolve GSTN Glitches [Read Order]
Read more at: http://www.taxscan.in/gst-tax-lawyers-delhi-high-court-gstn-glitches/31903/
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CBDT warns Cash Transactions above Permissible Limits
Read more at: http://www.taxscan.in/cbdt-cash-transactions-limits/31907/
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GST Council Meeting on 22nd December.discussion
1. Slimming of the 28% GST Slab-
a) Cement is expected to move down from 28% to 18%.
b) Computer Monitor.
c) Power Banks.
d) Third Party Vehicle Insurance.
e) Automobile Tyres.
2. Rate Cuts in the Housing Sector- GST rates for real estate to be brought down from 12% to 8%.
3. Further simplifying the Annual Returns i.e. Form GSTR 9.
4. Driving the completely online refunds process.
5. Decision to be taken on introducing Sugar Cess and Exigency / Disaster Cess based on the reports submitted by the sub-committees formed for analysing the same.
6. Deliberations on bringing Petrol and Diesel in the GST fold................🙏🌷
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Delhi HC: Upholds special audit initiation on Patanjali citing complexities in accounts
Delhi HC dismisses Patanjali Ayurveda’s writ, upholds initiation of special audit u/s 142(2A) for AY 2010-11 citing complexity in the accounts; Rejects assessee’s stand that once its accounts were audited, tax audit report was filed, all the necessary information was submitted in response to scrutiny notices, AO’s inability to exert himself to inquire diligently cannot result in a special audit; Though HC acknowledges that AO cannot fall back upon special audit in all routine cases, it observes that “AO has carefully outlined what were the salient aspects in the accounts and returns of the assessee that needed to be looked into and made the impugned order directing special audit.”; Opines that AO correctly ordered special audit having regard to - maintenance of large number of imprest accounts involving sizeable amount for which expenditure details not furnished, revision of returns whereby income offered was reduced substantially, assessee’s ‘first-time’ claim of deduction u/s. 80-IC needed inquiry; Further notes that AO had referred to the three segments or sources of revenue of the assessee and had held that it is required to identify the method and the relevant accounting standard applicable for recognition of income from these revenues and also to ascertain the correctness of the income recognized.:HC
The ruling was delivered by division bench comprising of Justice S. Ravindra Bhat and Justice Prateek Jalan.
Sr. Advocate Ajay Vohra alongwith Advocates Kavita Jha and Vaibhav Kulkarni argued on behalf of the assessee while Revenue was represented by Sr. Standing Counsel Asheesh Jain and Advocate Dushyant Sarna.
Note:
Sec. 142 (2A) provides that if, at any stage of the proceedings before him, the AO, having regard to the nature and complexity of the accounts of the assessee and the interests of the revenue, is of the opinion that it is necessary so to do, he may, with the previous approval of the Chief Commissioner or Commissioner, direct the assessee to get the accounts audited by a special auditor nominated in this regard.
[TS-709-HC-2018(DEL)]
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👉Senior Officer Pranab Kumar Das has been appointed as the new Chairman of the Central Board of Indirect Taxes and Customs (CBIC).
👉Income Tax Dept cannot probe Foreign Assets of assessee after Six Years as per Delhi High Court.
👉Central Govt notifies the constitution of Special Courts in West Bengal under Section 280A(1) of the Income Tax Act, 1961 and Section 84 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
👉The Advance Ruling Authority (AAR), Kerala holds that the quit rent or lease rent paid to the Govt for the use of land for agricultural purpose is exempted from GST.
👉The Kerala High Court holds that penalty cannot be levied under the GST on the ground of genuine human errors in the E-Way Bill.
👉Free Pharma Samples come under GST lens. The Pharma Companies are being prodded to reverse claims of input tax credit in respect of free samples supplied as part of their promotion efforts.
👉SEBI caps Mutual Funds' annual expense fees at 2.25 % of total expenses.
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👉🏻Supreme Court seeks role for operational creditors in IBC proceedings
(The Supreme Court suggested that operational creditors of bankrupt companies be given a voice in the resolution proceedings in proportion to their debt, including voting rights.)
👇🏻 👇🏻 👇🏻
https://goo.gl/j72JWr
👉🏻Govt plans to amend norms pertaining to incorporation of Companies
(MCA, which is implementing the Companies Act, has sought comments from the public on the proposed changes to the rules)
👇🏻 👇🏻 👇🏻
https://goo.gl/EAXmZq
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# ICAI ELECTION 2018* The polling for the Election of 24th CC and 23rd RCs have been concluded by 17 Dec 2018 (5PM), time reserved for postal ballot. The counting of votes will commence simultaneously for all regions on 19 DEC 2018 @ 10.00 AM at respective regional head-quarters, for Northern-Region it will be at ICAI Bhawan, Sector-62, Noida.
# MCA invites comments on amendments in the Companies (Incorporation) Rules, 2014 w.r.t. name availability by 31st Dec 2018 through email at reservation.name@mca.gov.in.
# GST: MEP activities (Mechanical, Electrical & Plumbing Works) undertaken by the applicant falls within the definition of composite supply of works contract as defined u/s 2(119) of CGST Act - AAR, Maharashtra in Eiffel Hills & Dales Developers Pvt. Ltd. (2018 (12) TMI 844).
# GST: Supply of beer per se is not taxable under GST. What is taxable in the subject case is the job work which is a service provided by PIL to the applicant, for which they are receiving consideration – AAR, Maharashtra in Crown Beers India Pvt. Ltd. (2018 (12) TMI 843).
# IT: Far from the case showing non-application of mind, the AO has carefully outlined what were the salient aspects in the accounts and returns of the assessee that needed to be looked into and made the impugned order directing special audit – Patanjali Ayurveda Ltd. Vs DCIT (2018 (12) TMI 831 - Delhi HC).
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CBDT issues Advisory on Bogus Donation Racket [Read Advisory]
Read more at: http://www.taxscan.in/cbdt-advisory-bogus-donation-racket/31769/
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You should claim your dividend on regular basis. If remain unclaimed for seven consecutive years, then the dividends along with its related shares transferred to Investor Education and Protection Fund (IEPF) Authority.
Investor Education and Protection Fund (IEPF) Authority of Ministry Of Corporate Affairs, Government Of India has given the procedure to claim unclaimed dividend after seven years.
Toll Free No.1800-114,Email: iepf@mca.gov.in, Website: www.iepf.gov.in.
Procedure to claim unclaimed Dividend
Download the form IEPF-5 from the website of IEPF (http://www.iepf.gov.in) for filing the claim for refund. Read the instructions provided on the website/instruction kit along with the e-form carefully before filling the form.
After filling the form save it on your computer and submit the duly filled form by following the instructions given in the upload link on the website. On successful uploading an acknowledgement will be generated indicating the SRN. Please note the SRN for future tracking of the form.
Take a printout of the duly filled IEPF-5 and the acknowledgement issued after uploading the form.
Submit indemnity bond in original, copy of acknowledgement and self-attested copy of e-form along with the other documents as mentioned in the Form IEPF-5 to Nodal Officer (IEPF) of the company at its registered office in an envelope marked "Claim for refund from IEPF Authority".
Claim forms completed in all aspects will be verified by the concerned company and on the basis of company's verification report, refund will be released by the IEPF Authority in favor of claimants' Aadhaar linked bank account through electronic transfer.
There is no fee charged for filing of the IEPF 5 form.
Don't get misled by any agents or middlemen.
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GST leviable on Warehouse Services used for Packing and Storage of Tea: AAAR [Read Order]
Read more at: http://www.taxscan.in/gst-warehouse-services-packing-storage-aaar/31668/
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Rs. 200 Crores GST Evasion unearthed by Dept
Read more at: http://www.taxscan.in/rs-200-crores-gst-evasion-unearthed-by-dept/31802/
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Bank statements aren't books of account; sum credited thereon can’t be treated as unexplained cash credit
IT : Where certain credit entries were reflecting cash deposit in bank account of assessee, but assessee failed to substantiate her claim for source of such cash deposit and, therefore, same was treated as undisclosed income, bank statement not being considered as books of account, any sum found credited in bank passbook cannot be treated as an unexplained cash credit
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[2018] 100 taxmann.com 325 (Ahmedabad - Trib.)
IN THE ITAT AHMEDABAD BENCH 'C'
Smt. Ramilaben B. Patel
v.
Income Tax Officer
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👉GST Dept unearths an evasion of Rs. 200 crores as a metal scrap business across Madhya Pradesh, Maharashtra and Gujarat availed input tax credit fraudulently.
👉GSTN starts sharing data with tax authorities on the following:
(a) Mis-match between figures reported in GSTR-1 & GSTR-3B.
(b) Mis-match between figures reported GSTR-3B & that computed by the system in GSTR-2A.
(c) Taxpayers who have generated e-way bill but not filed tax returns.
👉CBDT issues an advisory in connection with information regarding the Bogus Donation racket under Section 35(1)(ii) of Income Tax Act, 1961, as the field officers asked for a clarification on a Trust namely M/s Shri Arvindo Institute of Applied Scientific Research Trust at Mumbai.
👉Six new Debts Recovery Tribunals (DRTs) are established and the minimum pecuniary limit for filing of cases in DRTs has been revised in 2018 from Rs. 10 lakh to Rs. 20 lakh to enable focus on higher value cases in these fast-track tribunals.
👉Foreign Direct Invest #FDI has increases constantly from USD 45.15 billion in 2014-15 to USD 60.97 billion in 2017-18.
👉NSE secures permission from SEBI to launch weekly options on the Nifty index. The launch of options contracts on the Nifty is likely to increase volumes in the option segment and provide a hedging tool to market participants.
👉SEBI imposes a penalty of Rs 2 lakh on Joseph Massey, former CEO of Multi Commodity Exchange (MCX), for failing to make disclosure about sale of shares in stipulated time.
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GSTN develops New Return Filing System, says Shiv Pratap Shukla
Read more at: http://www.taxscan.in/gstn-return-filing-system-shiv-pratap-shukla/31805/