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    Introduction: 

    In general, Supplier is liable for payment of Goods and Services Tax on the outward Supplies he made during a period of time by filing the required returns as per Sec 39 of the Central Goods and Services Tax Act,2017 (herein after referred to as CGST Act,2017). At the time of payment, he is provided an option for utilization of taxes paid on purchase of inputs or input services or both which are used against the output tax liability and balance to be paid in cash.

    Section 16(1) of the CGST Act,2017 provides for various conditions to be satisfied in order to claim input tax credit. However, Section 17(5) states that “notwithstanding anything contained in Section 16(1) of the CGST Act,2017 input tax credit (here in after referred to as ITC) shall not be availed in respect of following transactions”. So, the main objective of this article is to understand the list of transactions specified under Section 17(5) on which credit is not allowed to be adjusted against outward supplies. These are also called blocked credits which include the following;

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    What is Fundamental Risk

    Fundamental risk is the risk that the business's fundamentals are degrading or about to degrade. If you see sales declining or the company is selling an outdated product, you need to stay away from this company. Increasing debt and an eroding cash position are other danger signs. 

    Over time, organizations have created a plethora of functions that manage business risks from their own point of view.

    Researchers look at risk by product or market life cycle. For example, missing customer needs, mistakes in product design, poor messaging, insufficient trial or repeat purchases, product extensions, upgrades, and delays in discontinuing a product are all risks that product managers routinely face. Mathematically, a key formula is “expected value of perfect information.”

    Product managers are constantly asking themselves, “What is the risk (probability) of missing an insight if we don’t invest more in research?” 

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    Important Definitions:

     

     

     

    Section

     

     

    Phrase

    Definition

     

     

     

     

     

     

     

     

     

     

     

     

    2(59)

     

    Input

     

     

     

     

     

     

    means any goods other than capital goods used or intended to be

     

     

     

     

     

     

     

     

     

     

     

    used by a supplier in the course or furtherance of business.

     

     

     

     

     

     

     

     

    2(19)

     

    Capital Goods

     

     

    means goods, the value of which is capitalised in the books of

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    accounts of person claiming the input tax credit and which are

     

     

     

     

     

     

     

     

     

     

     

    used or intended to be used in course or furtherance of business.

     

     

     

     

     

     

     

     

    2(60)

     

    Input Service

     

     

    means any service used or intended to be used by a supplier in the

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    course or furtherance of business.

     

     

     

     

     

     

     

    2(63)

     

    Input Tax Credit

     

    means the credit of input tax.

     

     

     

     

     

     

     

     

     

     

     

    2(62)

     

    Input Tax

     

    In relation to a registered person, means the central tax, state tax,

     

     

     

     

     

     

     

     

     

     

     

    integrated tax or UT charged on supply of goods or services or both

     

     

     

     

     

     

     

     

     

     

     

    made to him and includes –

     

     

     

     

     

     

     

     

     

     

     

    a)the integrated goods and services tax charged on import of goods

     

     

     

     

     

     

     

     

     

     

     

    b)the tax payable under the provisions of Section 9(3) and 9(4)

     

     

     

     

     

     

     

     

     

     

     

    c)the tax payable under the provisions of Section 5(3) and 5(4) of IGST

     

     

     

     

     

     

     

     

     

     

     

    d)the tax payable under the provisions of Section 9(3) and 9(4) of SGST

     

     

     

     

     

     

     

     

     

     

     

    e)the tax payable under the provisions of Section 7(3) and 7(4) of UGST

     

     

     

     

     

     

     

     

     

     

     

    But does not include the tax paid under composition levy.

     

     

     

     

     

     

     

    2(82)

     

    Output Tax

     

    In relation to a taxable person, means the tax chargeable under

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    this Act on taxable supply of goods or services or both made by

     

     

     

     

     

     

     

     

     

     

     

    him or by his agent but excludes tax payable by him on reverse

     

     

     

     

     

     

     

     

     

     

     

    charge basis.

     

     

     

     

     

     

     

     

     

     

     

     

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    1. An establishment has less than 10 employees; one of the employees quits his employment after serving for a period of 7 years. Will he be entitled to receive gratuity? 

    No. The employee is not entitled to receive gratuity under the Payment of Gratuity Act, as the establishment is not covered under the Act. The Payment of Gratuity Act is applicable only to shops and establishments in which 10 or more persons are employed or were employed on any day of the preceding twelve months. 

    1. Whether the Payment of Gratuity Act is applicable to educational institution?

    Yes. An educational institute will be covered under the Payment of Gratuity Act. The Act has been amended with effect from 3.4.1997 to cover the educational institutes. [Shri GurudevAyurvedMahavidyala Gurukul Ashram Vs Madhav 1994 LLR 894 Bom HC] 

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    Issue: - Provisions of Sec 40(a)(ia) and it’s retrospective application 

    CIT vs Calcutta Export Compan 1 - Supreme Court 

    Facts: - Assessee is a partnership firm and claimed export commission charges on which TDS was deducted but paid the same after the end of previous year 2004-05i.e. beyond the time limit mentioned in sec 201(1) of the Act. 

    The AO has disallowed the export commission as TDS should have paid before the end of the previous year 2004-05 as per the provisions of Sec 40(a)(ia) as stood then. 

    Assessee has filed an appeal against order of AO and CIT(A) has allowed appeal as result the export commission was allowed as deduction. 

    Revenue filed appeal against order of CIT(A) before Tribunal, which was dismissed. Revenue further appealed before High Court. The honorable High Court dismissed appeal. Finally, an appeal was filed before the honorable Supreme Court. 

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