9 Facts You Must Know about the New GST Limit of Rs.40 lakh
1. Next Year: This limit is applicable from FY 2019-20 onward, i.e., for financial year starting from 1 April 2019.
2. Goods, Not Services: The limit is applicable only for sale of goods. For service providers limit continues to be Rs. 20 lakh for all states except for special states where it is Rs10 lakh.
3. Not for Interstate Sales: The limit is not applicable if you are selling goods inter-state, i.e., from one state to another.
4. Amendments: GST being a dual tax (Central and state), the limit for turnover will have to be changed in both the Acts. This will have to be done for each state in Central Goods and Services Act, 2017 as well.
5. Registration: Section 24 of GST Act makes it compulsory to register in certain circumstances, and this Section is not amended. Hence, if a small businessman is registered due to that, he will have to continue with the registration. Exporters and those selling on websites like Flipkart, Amazon, Snapdeal will have to continue with their registration.
6. No Clarity on Service Income: If a person, who is selling goods, has even small service income like rent for neon signs or product placements at his shop, it is not clear whether the limit of Rs20 lakh or Rs40 lakh will apply to him. For example, a person may have sales of Rs25 lakh and rental income of Rs5 lakh, will he be covered by the new exemption limit? Since increase in limit is for goods only and there no separate limit for goods and services for aggregate turnover, once registered, GST has to be charged on all outward supplies whether goods or service.
7. Turnover Calculation: Section 22 of GST Act uses the word aggregate turnover (taxable goods plus taxable services plus exempt/nil rated goods plus exempt/nil rated services) while describing persons who are liable for registration. Hence, small shop-owners will have to see their turnover in totality before deciding. Even for as basic an issue as the limit for registration , what was the need to have so much complications.
8. GST Paid Becomes Cost: All GST paid on purchases will become cost to the person and he cannot charge any GST on outward supplies, i.e., sales.
9. Draconian Consequences: On top of all this, please remember Section 17(5)(i), which says that if you decide that tax is not payable but GST department asks for tax and you lose in appeal, you may not be eligible for input tax credit on purchases.
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IT: Where assessee's application for renewal of recognition under sec. 80G(5)(vi) was rejected on ground that its income was not being used for charitable purpose, since question of applicability of income of assessee can be gone into by assessing authority only at time of assessing income of assessee, impugned order deserved to be set aside.
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[2019] 101 taxmann.com 124 (Karnataka)
HIGH COURT OF KARNATAKA
D.R. Ranka Charitable Trust
v.
Director of Income-tax, (Exemptions), Bengaluru
NOVEMBER 20, 2018
Section 80G of the Income-tax Act, 1961 - Deductions - Donations to certain funds, charitable institutions (Sub-section (5)) - Assessment year 2009-10 - Assessee was a charitable trust registered under section 12A - It was also granted recognition under section 80G(5)(vi) - During relevant year, assessee filed an application in form 80-G seeking renewal of the recognition - Director (Exemption) rejected said application on ground that income of assessee-trust was not being used for charitable purpose - Tribunal confirmed order passed by Director (exemption) - Whether applicability of income of assessee whether it is for charitable purposes or not are all questions of fact and necessarily can be gone into by assessing authority only at time of assessing income of assessee - Held, yes - Whether, therefore, impugned order passed by authorities below holding that assessee was not eligible for renewal of approval under section 80G as its income was not used for charitable activities, was unjustified and deserved to be set aside - Held, yes [Para 4][In favour of assessee]
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Export Of Service Conditions-
All Five Conditions To Be Fulfilled for treating the service as ‘export of service’ (as per Section 2(6) of the IGST Act] –
1. Supplier of service-located in India
2. Recipient of service-located outside India
3. Place of supply of service-is outside India
4. Payment for such service- has been received by the supplier of service in convertible foreign exchange; and
5. Supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8.
Example To Explain The Above Conditions-
ABC Ltd is providing services to its Principals at London, by way of procuring Purchase Orders (P. O.) from the parties desirous of purchasing advanced type of Equipment, by negotiating the terms of supply including fixation of price above the floor price fixed by the Principals. If ABC Ltd can negotiate better price than the floor price, the difference between the floor price and actual price is given to ABC Ltd by way of “Commission” in “convertible foreign exchange”.
Analysis of Above Example- In the Above Example Our Of Five Only Four Conditions Are Fulfilled-
Condition Fulfilled are 1, 2, 4, 5
Condition Not Fulfilled is 3
In The Present Case The Service Of ABC Ltd is Classified As Intermediary Service
Because as Per Section 13(8)(b) of IGST Act The place of supply of the following services shall be the location of the supplier of services Namely “Intermediary services”
Since In the Above Case ABC Ltd is Providing Intermediary Services The Place Of Supply Is India and Thus Condition 3 Not Fulfilled and therefore it will not be treated as Export Of Service And is Taxable Under GST.
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Chowkidaar per GST RCM hai
Arjuna (Fictional Character): Krishna, “Chowkidaar” word is nowadays famous in political world . However are there any changes occurred regarding “Chowkidaar ki services” that is Security Services on 31st of December, . What are the changes brought in ?
Krishna (Fictional Character): Yes Arjuna, the word “ Chowkidaar “ Security Services’ has become a big topic of discussion nowadays and Security Service Provider as well as Receiver, both Taxpayers need to be aware of the newchanges. Let’s discuss about the same.
From 1st January, 2019, Government has made certain changes in Tax Rates. As per the changes made, Security Service Provider has been exempted from GST liability for non corporate suppliers . The changes made the Security Service taxable under RCM which means Security Service Receiver who will be a registered taxpayer have to bear the GST liability.
Arjuna (Fictional Character): Krishna, what were the tax provisions for Security Services previously?
Krishna (Fictional Character): Arjuna, under Service Tax, Security Services were taxable under RCM. However, under GST, it was kept out of RCM and therefore it was taxable at 18 % GST. Whereas, as per the changes brought in by Government on 31st December, 2018 , RCM will be applicable for Security Services under GST.
Arjuna (Fictional Character): Krishna, what are the provisions applicable to Service Provider?
Krishna (Fictional Character): Arjuna, when a Security Service Provider (other than Company) provide servicesto a registered person, then such Service Receiver will be liable to pay tax under RCM. The Service Provider will not make the tax payment. So, the Service Provider will not be able to issue Tax Invoice to the Service Receiver for the services rendered, resulting in issue of Bill of Supply instead.
Arjuna (Fictional Character): Krishna, what should the Service Receiver do?
Krishna (Fictional Character): Arjuna, when the Security Service Receiver receives services from any person (other than company), the Service Receiver shall be liable to pay tax under RCM. The Service Receiver can claim ITC for the same. For example, A provides Security Service to B before 31st December, 2018; then A will have to pay tax. Whereas, now A being any person (other than company) provides Security Service to B after 31st December,2018; then B will be liable to pay tax under RCM.
Arjuna (Fictional Character): Krishna, what if the Company provides Security Services?
Krishna (Fictional Character): Arjuna, in the case where Company is a Security Service Provider, it has to pay tax at 18 % GST. This service will not be taxable under RCM. Therefore, Service Provider will have to issue Tax Invoice in this case.
Arjuna (Fictional Character): Krishna, What lesson should the Taxpayer draw from this?
Krishna (Fictional Character): Arjuna, the Taxpayers should understand well before taking Security Services because Government has brought provision of RCM for the same from 1st January, 2019. The Taxpayers should note the changes in law properly and pay the taxes thereby for their safety. Thus, the work of a “Chowkidaar “Security Personnel is to get hold of the thieves whereas lack of attention to GST would result in tax evasion, therefore for “Chowkidaar “ providing Security Services, one needs to be alert!
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Kerala High Court stays GST on tax collected at source on cars.
PSN Automobiles P Ltd Vs UOI & CBIC
The petitioner has submitted that the amount of 1% the dealer collects from the purchaser of a car worth more than ten lakhs, under Section 206C(1F) of the Income Tax Act, cannot be treated as an integral part of the value of the goods and services supplied by the petitioner.
According to him, the petitioner, as the dealer of the motor vehicle, acts only as an agent for the State to collect the income tax under Section 206C(1F). And that amount will eventually goes to the vehicle purchaser’s credit.
CBIC has clarified vide Circular No. 76/50/2018-GST dated 31st December, 2018 that taxable value for the purposes of GST shall include the TCS amount collected under the provisions of the Income Tax Act since the value to be paid to the supplier by the buyer is inclusive of the said TCS. The present writ been filed against this clarification.
The Kerala High Court has put on hold the computation of GST on TCS amount till disposal of the petition.
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1. The Goods and Services Tax Network (GSTN) is developing such IT system that businesses who have not filed returns for 6 consecutive months, would be barred from generating E-Way Bills
2. The Income Tax Department Has Come Across Several Cases Where Tax Payers Have Taken Credit for Payment Of "Self-Assessment tax" without actually clearing the dues, resulting in arrears of around Rs 5,000 crore. Now, I-T dept is chasing those tax payers to recover Rs 5,000 cr.
3. SEBI issues Show-Cause Notice to Raymond alleging Multiple Securities Market Violations. The allegations include failure to obtain necessary approvals for related party transactions in the JK House episode, Corporate Governance Violation for Non-Disclosure of material information about litigations and Non-Compliance of Shareholder Reclassification Norms.
4. Exporters body, Federation of Indian Export Organisations (FIEO) seeks immediate intervention of the Govt. and RBI to resolve issues related to payment mechanism for Iran and flow of credit to push shipments. It also said that a clarity is required on product coverage under rupee payment mechanism to Iran.
5. Confederation of All India Traders (CAIT) urges Minitsry to make it mandatory for E-commerce players to Furnish Certificates about their compliance with Foreign Direct Investment (FDI) norms every year. It also said that "those who are unable to obtain the said certificate should not be allowed to raise funds and the operations of their portal should be suspended".
6. NCLAT tells NCLT that it should not hear any third party, other than the applicant who has taken a company to the NCLT and the company which is the corporate debtor itself, at the time of the admission of a case.
7. SEBI rejects Larsen & Toubro's Rs 9,000 Crore Buyback Offer, citing Compliance Issues over its Post-Buyback Debt-Equity Ratio.
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ITax Update- Section 80G renewal could not be rejected on the ground that the Income of the Trust was not utilized for Charitable purposes held by THE HIGH COURT OF Karnataka in the case of D.R. Ranka Charitable Trust v. Director of Income-tax, (Exemptions), Bengaluru
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In pursuance to Section 10A(1) (a) of the Companies Act 2013 and rule 23A of the Companies (Incorporation) Rules 2014, the eform INC 20A (Declaration of commencement of business) is available for filing purposes, Stakeholders are plan accordingly.
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Whether it is mandatory to furnish inward details in Table 4A of GSTR-4?
As per Rule 62 sub-rule (3)(a) of CSGT Rules, 2017 Part-A (as on 31.12.2018), Composition dealers are required to furnish invoice wise inter-State and intra-State inward supplies received from registered and unregistered persons in the FORM GSTR - 4
And as per FORM GSTR-4 of CGST Rules, 2017 Part-B (Forms), in the instructions provided it is clearly mentioned that TABLE 4A will be auto-populated from the information reported by Supplier in GSTR-1 and GSTR-5.
Practical Problem
As mentioned in the GST law, details shall be auto-populated in GSTR-4A, but due to technical issues and in some cases, where supplier failed to file GSTR-1 or GSTR-5, this auto-population is not happening.
And even some cases where details are auto-populated in GSTR-4A but the same is not reflecting in Table 4A of GSTR-4. And Taxpayer has to suffer to upload the inward details manually from the books.
Relief:
Considering the practical difficulties and to facilitate simple return filing process, The Ministry of Finance on 17-10-18 issued a press release & clarified the taxpayers who have opted to pay tax under the composition levy shall not furnish the data in Table 4A of FORM GSTR-4.
Thereafter, vide Notification No. 60/2018-CT dated 30/10/18 government amended GSTR-4 as below.
“10. Information against the Serial 4A of Table 4 shall not be furnished.”
☝So we may conclude that REPORTING OF TABLE 4A IN GSTR-4 IS STILL NOT MANDATORY.
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Capital Market Updates -
1. The management of Titagarh Wagons sounds optimistic about the current year’s workings on account of its strong order book. BUY.
2. Indusind Bank’s Q3 PAT rose 5% to ₹985 crore beating market expectations despite a huge one-time provision of ₹607 crore. BUY.
3. Tata Consultancy Services, Asia’s largest software outsourcing provider, is likely to continue its good performance in the next quarter as well. ACCUMULATE.
4. 離 Take Solutions plans to acquire two US-based companies in an all cash deal amounting to $72 million. These acquisitions will strengthen its capabilities in new markets. BUY.
5. Analysts seem apprehensive about Avenue Supermarkets considering its dwindling profitability. It is therefore advisable to SELL now and enter later.
6. Karnataka Bank’s Q3 results point towards a better future on the back of higher credit growth. BUY.
7. With the continuous ramp-up in business and R&D technology, Havells India is poised to reach new heights. BUY for the long term.
8. After reporting a good quarter, Indiabulls Ventures looks attractive in spite of the recent run-up seen in the counter.
9. Shriram Transport Finance plans to raise ~$300 million via dollar bonds. The NBFC does not seem to have any financial crunch. BUY.
10. Zee Entertainment Enterprises posted 50% higher PAT for Q3, driven by the strong performance of its broadcast business. BUY for the long term.
11. L&T Hydrocarbon Engineering, an arm of Larsen & Toubro (L&T), has obtained two big orders from Saudi Aramco. A positive for L&T. BUY.
12. Network18 Media & Investments posted a consolidated PAT of ₹77 crore for Q3FY19 as against ₹3 crore in Q3FY18. ACCUMULATE on dips.
13. With 1160% higher PAT for Q3, Speciality Restaurants looks like a good BUY.
14. The Godrej Agrovet counter has witnessed heavy volumes of late, which is quite likely an indication of its future workings. ACCUMULATE.
15. ☕ Tata Global Beverages has fallen over 30% in the last few months. A value pick.
16. Philips Carbon Black posted 92% higher PAT for Q3 at ₹108.58 crore on account of higher realisation from value-added products. It also announced a 1,50,000 TPA greenfield project in South India. BUY.
17. Private lender DCB Bank posted 51% higher PAT for Q3 at ₹86 crore. Gross NPAs were stagnant. The bank is likely to perform better going forward. ACCUMULATE.
18. Mahindra & Mahindra has hiked its stake in Ssangyong (South Korea) to 74.65% by investing ₹316 crore. A big POSITIVE for the company. BUY.
19. Mindtree looks attractive after reporting a good set of numbers for Q3. BUY.
20. Maruti Suzuki (India) plans to launch close to a dozen new models apart from setting up new facilities in Gujarat and Haryana. A capex of about ₹14000 crore is in the pipeline. ACCUMULATE on dips.
21. White Organic Agro reported a good set of numbers for Q3 along with a 1:1 bonus issue. BUY for the long term.
22. Mishra Dhatu Nigam (a government enterprise) and Tubacex (a Spanish multinational) have teamed up to develop advanced materials for the energy sector. A POSITIVE for the company. BUY from a medium-to-long term perspective.
23. ⛰ Pokarna is likely to notch an EPS of ₹22-24 for FY19. A reasonable P/E of 10x will take its share price to ₹200-240.
24. Torrent Power is expected to notch an EPS of ₹25 for FY19 going by its robust H1FY19 numbers. The stock has the potential to cross ₹375 on a reasonable P/E of 15x.
25. Vesuvius India is reportedly doing well and is likely to notch an EPS of more than ₹50 for FY19. BUY for about 20% returns.
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Women Can Be Karta In a HUF Governed By Mitakshara Law: Delhi HC- https://thetaxtalk.com/2019/01/18/women-can-be-karta-in-a-huf-governed-by-mitakshara-law-delhi-hc/
Premium is abnormally high as per test of human probabilities is not sufficient for its taxation - https://thetaxtalk.com/2019/01/19/premium-is-abnormally-high-as-per-test-of-human-probabilities-is-not-sufficient-for-its-taxation/
Whether all Transporter of Goods are Goods Transport Agency and liable to reverse charge mechanism (RCM)?- https://thetaxtalk.com/2019/01/18/whether-all-transporter-of-goods-are-goods-transport-agency-and-liable-to-reverse-charge-mechanism-rcm/
S. 50C vs. 54F: If the assessee has invested the entire sale consideration in new house property, the capital gains are exempt u/s 54F.- https://thetaxtalk.com/2019/01/17/s-50c-vs-54f-if-the-assessee-has-invested-the-entire-sale-consideration-in-new-house-property-the-capital-gains-are-exempt-u-s-54f/
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