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    Common Credits - GST

    • Contributed by CA Sri Harsha and CA Manindar

    It is not a rocket science to understand why the credit of taxes paid on inputs, input services and capital goods were given to the tax payer and allow him to set off against his output tax liabilities. This is purely to avoid the cascading effect that is to avoid taxes on taxes. In the event of inputs, input services and capital goods were used in generating exempted outputs, then credit of taxes paid on inputs, input services and capital goods will not be given as there was no cascading effect for the reason that no tax is collected on output.

    What does LEI means?

    A LEI is a 20 digit Unique Identification Number that shall be assigned to all entities who are parties to financial transactions being borrowers, lenders, market participants, financial and market regulators, mutual fund / Alternative Investment Fund (AIF) and its schemes including sub-schemes if any, etc. LEI is global in nature and is administered by GLEIF (Global LEI Foundation, Switzerland). As of India is concerned, Reserve Bank, being the country’s financial regulator, is entrusted with the task of effective implementation of LEI.   

    CONTENTS

    AUDIT

    • AUDIT COMMITTEE

    INDIRECT TAX

    • GST RATE FOR OUTSOURCED CANTEEN FACILITIES

    DIRECT TAX

    • EXEMPTION UNDER SECTION 11 OF INCOME TAX ACT, 1961

    FEMA

    • SETTING UP OF SEZ
    • FEMA UPDATES FOR THE MONTH OF OCT'18

    COMPANIES ACT, 2013

    • RULES, CIRCULARS, NOTIFICATIONS AND ORDERS ISSUED DURING THE MONTH OF SEPTEMBER, 2018

    GST

    • GST UPDATES FOR SEPTEMBER 2018

     

    GST UPDATES FOR THE MONTH OF OCTOBER 2018— BULLETIN I

    CIRCULARS

    1. CLARIFICATION ON LAPSING OF ITC AS ON 31st JULY 2018 IN CASE OF FABRIC MANUFACTURERS:

    In Fabric manufacturing, inputs like yarn, process chemicals, packing materials and other services are subject to GST at varied rates from 5% to 18%. The finished fabrics are subject to GST at 5% which has resulted into inverted tax structure i.e. tax paid on inputs is more than the tax payable on output. Section 54(3) has provided for refund of such excess input tax in these scenarios. However, Notification No. 5/2017-Central Tax dated 28.06.2017 was issued by Government to deny refund on 10 categories of fabrics. This restriction was taken away through Notification No. 20/2018-Central Tax with effect from 01.08.2018.

    In this regard, it is clarified that Section 54(3) permits refund of ITC availed on inputs alone under inverted tax structure scenario. The excess input tax credit after paying the tax for the month of July, 2018 that is attributable to inputs alone shall be lapsed out. The same shall be determined using the formula prescribed in Rule 89(5) of CGST Rules, 2017. It is also clarified that no refund of ITC availed on input services and capital goods can be claimed and need not be lapsed. It is further clarified that there no restriction with respect to claim of refund of ITC accumulated because of exports i.e. Zero-rated supplies in Notification 5/2017-Central Tax and accordingly ITC on Zero rated supplies shall not lapse.

    {Circular No.56/30/2018-GST dated 24th August 2018}

    GST UPDATES FOR THE MONTH OF SEPTEMBER 2018

    CIRCULARS

    1. CLARIFICATION ON LAPSING OF ITC AS ON 31st JULY 2018 IN CASE OF FABRIC MANUFACTURERS:
    2. SCOPE OF PRINCIPAL-AGENT RELATIONSHIP IN THE CONTEXT OF SCHEDULE I OF THE CGST ACT:
    3. RECOVERY OF WRONGLY AVAILED CENVAT CREDIT OR TRANSITIONAL CREDIT:
    4. SIMPLIFICATION OF EXPORT REFUND PROCESS:
    5. PROCEDURAL ASPECTS RELATING TO REFUNDS FILED BY CANTEEN STORES DEPARTMENT:
    6. E-WAY BILLS FOR STORING GOODS IN GODOWN OF TRNSPORTER:
    7. CLARIFICATION ON TAX LIABILITY OF PRIORITY SECTOR LENDING CERTIFICATES (PSLC):
    8. CLARIFICATIONS REGARDING REFUND CLAIMS BY UIN ENTITIES:
    9. MODIFICATION OF PROCEDURE FOR INTERCEPTION OF CONVEYANCE:
    10. AMENDMENTS IN CENTRAL GOODS AND SERVICES TAX RULES, 2017
    11. EXTENSION OF DUE DATE FOR FILING FORM GST ITC-04 UP TO 30TH SEPTEMBER 2018:
    12. WAIVER OF LATE FEE IN FILING GSTR-3B, GSTR-4 AND GSTR-6 FOR CERTAIN SPECIFIED CASES
    13. EXTENSION OF TIME LIMIT TO FILE ITC-01 IN SPECIFIED CASE
    14. EXTENSION OF DUE DATE FOR FILING GSTR-1 BY TAXPAYERS HAVING TURNOVER UPTO 1.5 CR
    15. EXTENSION OF DUE DATE FOR FILING GSTR-1 BY TAXPAYERS HAVING TURNOVER UPTO 1.5 CR
    16. TDS AND TCS PROVISIONS ARE NOTIFIED
    17. RECONCILIATION STATEMENT AND GST AUDIT REPORT IN FORM GSTR-9C IS NOTIFIED
    18. AMENDMENT OF CGST RULES, 2017 TO EXTEND THE DUE DATE FOR TRAN-01 FOR SPECIFIED CASES
    19. EXPLAINATION TO EXPAND THE SCOPE OF GOVERNMENT ENTITY TO EXEMPT LONGTERM LEASES

     

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