Full ITC on goods and services not available if consideration is netted off against receivables
Under the GST law, different units of the same entity functioning in different States are treated as ‘distinct persons,’ and as per Schedule I of the CGST Act, the supply of goods or services or both between such distinct persons, even if made without consideration are treated as supply. This deeming fiction was created so that the Input Tax Credit (ITC) chain is maintained intact. The recipient is required to make payment to the supplier within 180 days to claim ITC. Recently, the Appellate AAR, in the case of Sanghvi Movers Ltd.i (‘the taxpayer’), has held that full ITC is eligible to the taxpayer. However, the consideration is netted off in the books of accounts. In the instant case, the taxpayer is engaged in the business of providing cranes on lease/hire to its clients. The Head Offic...
World Health Day: Making Healthcare Agile, Accessible & Affordable
This year’s World Health Day will be a poignant one, as almost every nation battles one of the biggest healthcare crises known to mankind in this century. This is a time to assess the true power of technology in assisting frontline medical workers everywhere – be it 3D printing face shields, developing contact tracing solutions using AI to track COVID19 patients, analysing chest X-Rays using AI, or managing the excessive workloads on hospital staff by digitising their work records. In light of this, Harish Rijhwani recommends a Healthcare Triple A rating. Read on.. It’s a Friday in June 2015, and its 8:30 AM. I have reached the Apollo Clinic in Chembur, Mumbai for my Annual Health checkup. It’s the first time I am undergoing an Annual check-up, courtesy my organization’s...
AAR has jurisdiction to determine Place of Supply
As per Section 97(2) of the CGST Act, an advance ruling can be sought in respect of: a. Classification of any goods or services or both; b. Applicability of a notification issued under provisions of the GST Act(s); c. Determination of time and value of supply of goods or services or both; d. Admissibility of input tax credit of tax paid or deemed to have been paid; e. Determination of the liability to pay tax on any goods or services under the Act; f. Whether the applicant is required to be registered under the Act; g. Whether any particular thing done by the applicant with respect to any goods or services amounts to or results in a supply of goods or services, within the meaning of that term. In the past, in many taxpayer cases , the AAR has rejected the applications for Advance Ruling in...
IGST levied on ocean freight transportation held unconstitutional
In 2017, the Ministry of Finance had imposed service tax on a reverse charge basis on ocean freight incurred by an importer. This tax was payable even if the importer did not directly pay the ocean freight charges to the shipping company/freight forwarder. This proposition has been continued into the GST regime as well. The GST law specifically provides that the importers are required to discharge IGST at 5% on ocean freight charges under the reverse charge mechanism. However, at the same time, customs duty on the CIF value (which includes the freight component as well) of the goods imported into India is also paid by the importer. As a result, there is double taxation on the ocean freight under GST law, which is an impediment and has bloated the cost of imports. Recently, in a landmark ru...
Exporters to follow Standard Operating Procedure (SOP) issued by CBIC
The Central Board of Indirect Taxes and Customs (CBIC), vide Circular No.131/1/2020 GST dated January 23, 2020, has issued Standard Operating Procedure (SOP) for exporters to follow. Here is a brief summary of the Circular below: CBIC, on verification, has found that many exporters were non-existent, and it is noticed that ITC was taken by the exporters based on fake invoices to pay IGST on exports; The CBIC has taken measures using rigorous data analytics and Artificial Intelligence tools to mitigate the risk. Based on these analytics, individual exporters will be taken up for further verification. The refund scrolls in such cases will be kept in abeyance till the verification is received from the field formations. Moreover, the export consignments or shipments of concerned exporters will...
Role Of Technology In Revolutionizing The Travel & Tourism Industry
Gone are those days when a visit to a brick-and-mortar travel agent was mandatory every time one needed to plan a family vacation. Fast forward to now, in the era of digital transformation and next-gen mobility, travelers today, are playing a much larger role in building their holiday experiences. Technology has revolutionized the way we travel, and with an exclusive focus on customer experience today, it is only set to get better in the following years. Let us look at a typical customer journey through their travel itinerary from holiday planning to its completion. Destination and Holiday Planning through Travel Aggregator Websites: Customers majorly approach online travel agencies (OTAs) over the internet to get access to a plethora of travel and stay options to their vacation destinatio...
Provisions of Insolvency and Bankruptcy Code override GST provisions
The Insolvency and Bankruptcy Code 2016 (IBC) was introduced to promote the ease of doing business in India, to address the issue of liquidity in cases relating to insolvency/bankruptcy in India. It consolidates all existing insolvency-related laws like the Sick Industrial Companies, Special Provisions Act 1985, and many more. The IBC also specifies that it will override any other legislation in cases of conflict. The companies going through a resolution mechanism under the IBC, the revenue authorities are insisting on having a priority in the collection of past tax dues. In December 2019, the National Company Law Tribunal (NCLT), Chennai, in the case of T. R. Ravichandran – Resolution Professional (RP) for Kiran Global Chem Limited1. (Corporate Debtor), has directed the revenue auth...
Healthcare Cloud solutions- A boon for the Healthcare industry.
In an upcoming era, The organization is looking up for data privacy, hospitals looking to move to the cloud of the Patient Engagement, there is no way better than Healthcare cloud computing. If data gets compromised, it’s gone forever. It does help with the enterprise being more fragile, spending less on the IT, and develop time reducing applications for the use. Cloud-based solutions are way more secure than the local’s servers. We can use it as a process to complete tasks in minutes. Since cloud computing automates the virtualization process, it is being streamlined and shortened. Cloud technology helps us to connect hundreds of clinicians using an IBM cloud-based social business that provides collaboration services to a global network of Healthcare software developmen...
Impact of Goods & Services Tax on Gifts and Free Samples
The GST law has introduced the concept of ‘supply’ as a taxable event and done away with the erstwhile taxable events of manufacture, sale, service. The taxability and availability of Input Tax Credit (ITC) on gifts have always been a subject matter of discussion. The gifts are provided by the taxpayer for the purpose of advancement of its business or for sales promotion. The term gift is not defined under the GST law; thus, reliance could be placed on the definition provided under the Gift Tax Act, 1858. As per Section 2(xii), the term ‘gift’ means the transfer by one person to another of any existing movable or immovable property voluntarily and without consideration in money or money’s worth. The incidence of tax, under GST law, is on ‘supply’. The term ‘supply’, as defined under Sectio...
Interest on delayed GST payment whether payable on gross or net tax liability?
Traditionally, under the erstwhile Indirect Tax Laws viz. Service Tax, VAT, etc. interest is payable on the amount of tax due after adjustment of the Input Tax Credit (ITC), which remains unpaid by the due date. However, under the GST law, the said practice got destroyed under the concepts of ‘Electronic Cash Ledger’, ‘Electronic Credit Ledger’, etc. and offsetting the liabilities with amounts in cash and credit ledgers through return in Form GSTR-3B. Section 50 of the CGST Act prescribes for payment of interest when there is a delay in payment of tax. It does not expressly provide that interest is payable even on the tax liability that was offset with accumulated ITC. In February 2019, the Principal Commissioner (Hyderabad) had issued a Standing Order No. 01/2019 to clarify that interest ...