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As we all know that procurement of vehicles for demo is common practice in the automobile dealers industry, since the said vehicles are used for promotional purpose including test drive etc. in order to attract buyers, However, unlike purchase of other vehicles, the intention or objective behind the purchase of demo vehicles is not to sell the same but instead it is mainly to use it for the various business promotion / marketing purposes. Needless to say, that once the above purpose is...

GST is not just a tax reform but it is a business reform. It shall change the way in which business processes are performed and the way in which the business transactions are undertaken. Although, GST will bring with it, both positive and negative aspects. However, the organizations that will plan its business processes better in a manner to best suit the needs of the GST regime, then such organization will have competitive edge over others. Therefore, it is of due importance that business...

The concept of Input Service Distributor (hereinafter in this article referred as “ISD”) is not new in Goods and Service Tax law. It carries the legacy from the Service Tax law.

The Concept

The need for ISD arose for providing a chance to the businesses who have multiple units in different locations to receive common invoice for the services attributable to different units at centralised location, in doing so the input credit is accumulated at the centralised unit. The ISD...

Effective from 1^st February 2019, most of the changes proposed by CGST (Amendment) Act 2018 were given effect in CGST Act 2017. Important changes were providing of provision for payment of GST under reverse charge mechanism only on the specified class of supplies by a specified class of registered persons, non-requirement of treating certain activities of Schedule III as exempt supplies for reversal of credit. Certain changes were also made in the input tax credit restrictions provided in...

Section 16(4)

Similar to the restriction under the CENVAT Credit Rules, 2004, availing input tax credit (hereinafter referred to as ITC) under GST also is time-bound. The relevant provision in this regard is section 16(4) of the Central Goods and Services Tax, 2017 (hereinafter referred to as the Act) which reads as under:

“A registered person shall not be entitled to take the input tax credit in respect of any invoice or debit note for supply of goods or services or both after the...

The concept of self-assessment in tax administration was introduced in India with an expectation to usher in a new era of trust-based partnership with the assessees leading to greater facilitation of compliant assessees.

“Circular Trading”, “Fake Bill issue”, “enhanced bill” unfortunately are methods of tax evasion not new in India. Under GST bogus invoices are raised without any actual supply of goods or services or both in several stages culminating finally in no supply or...

India moved into the new regime of the GST taxation, which left the taxpayers with the stock on which the existing tax was paid (central excise and VAT) and also with the balance of the tax credit of the existing law and may other challenges considering this Chapter XX of the Central Goods and Service Tax Act, 2017 has transitional provisions from section 139 to 142.

In order to eliminate double taxation at the time of transition into GST, all taxpayers were given a facility to carry...

GST laws contains Transitional provisions inter alia Section 140 of CGST Act, 2017 (similar provision in State GST laws) enables the taxpayer to carry forward the unutilized input credit under pre-GST regime and allow the credit of taxes paid on the stock as on 30.06.2017 as GST credit. For this, Rule 117 of CGST rules, 2017 as amended inter alia requires the taxpayers to file Form GST TRAN-1 electronically.

This was to ensure smooth transition from old laws (Central Excise, service tax,...

The Constitutional (101) amendment Act 2016 clearly states in the Statement of Objectives for ushering in GST that it is to remove the cascading effect of taxes and allow the seamless flow of the tax credit across the supply chain. It means that it should avaoid tax on tax.

Conceptually, GST is levied on ONLY value addition at each stage of supply chain starting from manufacture or import and till the last retail level. This is with a facility of the Input credit (‘ITC’ for short) of...