Tax complications under GST law

- Sales tax: Soham Mashruwala

There is a great deal of controversy over taxation under the GST Act. On the one hand, the government is moving and on the other hand, it is making drastic provisions in the law. As per Section 13 of the CGST Act, the provision for reimbursement of shares in case of waiver and taxable supply by the trader will be broken. In addition, when the Advance Ruling Authority responds in the negative to offset the dividend of one business against another, will the traders open separate units per business? There are immense disasters under the GST Act instead of the uninterrupted flow of taxes. Today's article also discusses the issue of inheritance.

Reimbursement time limit of 150 days

Pursuant to Section 13 (2) (d) of the CGST Act, in case the registered person pays the supplier a substitute for 180 days after the supply, the tax has to be refunded and such amount has to be added to the external supply liability. In addition, you have to re-claim the tax at the time the compensation is paid later. According to this provision, when the compensation is not paid on time and tax has to be paid, 15% interest has to be paid. Of special note is that as per Section 30 (2) of the CGST Act, 3% interest is not payable. In many cases, the registered person has a continuous accumulation of tax and if the tax has to be repaid due to non-payment of compensation under this provision, the tax has to be paid as the tax is deducted on 'avail' and not on 'consumption'. At present, the 8th meeting of the GST Council has been convened and it has been considered that if the tax is deposited and has to be repaid for any reason, no interest has to be paid. In fact, as per the provision of Section 30 of the CGST Act, there is no provision for recovery of interest in such cases. The officer also imposes a penalty at the time of assessment when it is suggested to return the tax on the subject which is improper. This is because it is a revenue neutral provision. Note that the provision of section 12 (2) (d) of the CGST Act does not apply to the deemed supply mentioned in Appendix I in which the transaction takes place with the supplier's own branch or agent. In addition, in cases where a certain amount is to be left as security deposit or as retention as per the terms of the agreement, failure to pay compensation is not to be considered and is out of the labyrinth of section 13 (2) (d).

Dividends of reverse charge

Today, as per Section 3 (2) of the CGST Act and Section 4 of the IGST Act, tax has to be paid on reverse charge on special goods or services. Pursuant to Section 41 (2) (f) of the CGST Act, the registered person who is to pay the reverse charge has to make his own self-invoice on the date of receipt of the goods or supplies. Invoice in section CGST Act means tax invoice shown in section 21. Rule 3 has been framed for the form of tax invoice in which the details of the tax invoice are indicated and provision has been made for the invoice for the transaction where the provision of reverse charge under section 3 (2) of the CGST Act is applicable. Nowhere is provision or mention made for special supplies included under reverse charge under section 3 (2). In such a case, if the reverse charge has to be paid on the pre-procured supply after the end of the financial year, then the dividend is recoverable. In addition, when a GST audit assessment is directed to pay a reverse charge on a transaction, the dividend is payable and there is no obligation under the GST Act. This provision is revenue neutral in cases where the amount of tax paid under the reverse charge is recoverable and no recovery can be made if the tax is not paid. Respect earlier in this matter. CCEx v. By Gujarat High Court. Creative Enterprises (2008 (2) ELT 785 (Guj)) has ruled in favor of the trader. In addition respect. Gujarat Value Added Tax Tribunal also gave a very noble verdict to Kejriwal Ind. (SANO 344, 345 (2012) in which the provision of entry tax is revenue neutral and if it is not paid, the demand will not appear.