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The Allahabad High Court has held that for initiating proceedings under Section 74 of the Goods and Service Tax Act, 2017, it is necessary for the adjudicating authority to record prima facie satisfaction regarding the assessee having wrongfully availed input tax credit (ITC) by fraud, willful misstatement or suppression of facts.

The Court held that once the proceedings under Section 73 have been closed regarding wrongful availment of ITC, proceedings for the same cannot be initiated under Section 74 without recording prima facie satisfaction regarding wrongful availment of ITC by either fraud or willful misstatement or suppression of facts.

Continue reading “[S.74 GST Act] Adjudicating Authority Must Record Prima Facie Satisfaction Regarding Assessee Wrongfully Obtaining Input Tax Credit: Allahabad HC”

The practice of the GST Department issuing a single Show Cause Notice (SCN) for multiple assessment years has raised significant legal concerns. While this practice may be convenient to the GST Department, it often creates challenges for both the GST Department as well as taxpayers.

In some instances, the GST Department conducts audits spanning for several years and issues a consolidated SCN for all the audit periods. In other cases, when the deadline to issue SCN for a certain year has expired, the GST Department combines that expired period with a valid period in one single SCN attempting to validate the expired period. According to the GST Department, a single SCN can be issued for multiple assessment years as there is no explicit prohibition under Section 73 of the Act 2017.
Continue reading “Legality of Issuing a Single Show Cause Notice for Covering Multiple GST Assessment Years”

Patna: The state commercial taxes department on Wednesday notified the reduction of GST on three medicines—Tratstuzumab Daruxtecan, Onimartinib and Durvalumab—used for the treatment of cancer, and also on extruded salty items. It also freed govt undertakings, research associations, colleges and institutions which conduct research and development with govt or private grant under Section 36 of the IT Act, from the GST.

With a view to preventing tax theft in the trade of scrap metal, the department has also notified the payment of tax by the non-registered and registered persons who deal in the sale and purchase of scrap metal.

Continue reading “Govt cuts GST on three cancer drugs”

The Group of Ministers (GoM) on Goods and Services Tax (GST) rate rationalisation is likely to push for phasing out the 12 percent tax slab by gradually shifting items to either the 5 percent or 18 percent slabs to simplify the tax framework and ease compliance for businesses, people familiar with the development said.

The gradual elimination of the 12 percent slab will consolidate the GST system into a three-tiered structure of 5 percent, 18 percent, and 28 percent rates.

Continue reading “GoM may gradually phase out of 12% GST slab to rationalise rates, sources say”

“But sir, most of GST is paid by the poor in India.” This innocuous comment by a student during a discussion on the state of the Indian economy made me realise the extent to which some data lingers in people’s mind.

The source of this claim was a report, ‘Survival of the Richest: The India Story’, published by the think-tank Oxfam and released at the World Economic Forum. The report claimed 64.3 percent of India’s goods and services tax came from the poorest 50 percent of the population, while the wealthiest 10 per cent contributed a mere 3-4 percent.

This stark portrayal of an unfair tax system made global headlines, influencing media and policy discussions in India—including as a question raised in parliament. Released in January 2023, the figures are still cited at various places and linger on in people’s mind, creating an impression of an unfair taxation system in place.

Continue reading “Taxing truths: Decoding appropriate GST shares”

The Supreme Court on Thursday (October 3) outlined the principles governing the interpretation of taxation statutes in the context of the Central Goods and Services Tax (CGST) Act, 2017.

A bench of Justice Abhay Oka and Justice Sanjay Karol summarised the principles of interpretation while dealing with a case involving the interpretation of Section 17(5)(d) of the CGST Act, which disallows Input Tax Credit (ITC) on goods and services used in the construction of immovable property, except for “plant or machinery.”

The Court reiterated several established principles for interpreting taxation statutes.

Continue reading “Supreme Court Sumarises Principles For Interpreting Tax Statutes In Judgment On GST Input Tax Credit”

The GST laws have seen plethora of changes during the recent times. Recent Council meetings and budget sessions have introduced various complexities for businesses. GST being a destination-based consumption tax is levied at every stage of the supply chain. The challenge arises when the invoicing location is different from that of the location where consumption takes place, particularly in a ‘bill to ship to’ transaction.

Recently, a circular dated June 26, 2024 (Ref: Circular No. 209/3/2024 – GST) was issued to clarify the place of supply for supplies made to unregistered persons (Circular). This Circular is in furtherance to a notification dated September 29, 2023 (Ref: Notification 02/2023 – Integrated Tax) which amended certain provisions of the Integrated Goods and Services Tax Act, 2017 (IGST Act). The said amendment introduced clause (ca) to Section 10(1) of the IGST Act, to inter aliaprescribe that the place of supply for supplies made to an unregistered person would be the location as per the address of the relevant person as recorded in the invoice.

Continue reading “Place of supply clarification – Clarificatory or Misleading?”