Weekly Tax Gyan(W-07)

Form 26AS and IAS Update

Form 26AS will only display TDS/TCS data starting with Assessment Year 2023–24, according to an update from the Income Tax Department and an annual information release. Other information such as advance tax, self-assessment tax, rebate, and so forth, would be accessible only in the AIS.

FAQs on PAN-Adhaar Link

The Income Tax Department has issued FAQs on the PAN-Aadhaar Link. The FAQs are provided in the link mentioned below.

https://www.incometax.gov.in/iec/foportal/help/e-filing-link-aadhaar-faq

Income Tax exemption to IBBI u/s 10(46)

CBDT notifies Exemption to Insolvency and Bankruptcy Board of India with respect to certain specified incomes. The exemption is provided u/s 10(46) with respect to specified incomes listed below.

(a) Grants-in-aid received from Central Government;

(b) Fees received under the Insolvency and Bankruptcy Code, 2016 (31 of 2016);

(c) Fines collected under the Insolvency and Bankruptcy Code, 2016 (31 of 2016); and

(d) Interest income accrued on (a), (b) and (c) above.

 

 

 

Highlights of the 49th GST Council Meeting

On February 18, 2023, the 49th GST Council meeting was held in New Delhi.

This is the first GST Council Meeting soon after the Budget 2023.

Highlights of 49^th GST Council Meeting.

 

1)    GST on Liquid Jaggary reduced

The GST rate on liquid jaggery has been reduced from 18% to 0%. The GST rate on labelled/packaged liquid Jaggary has been reduced to 5%.

2)    GST on pencil sharpeners reduced

The tax on pencil sharpeners has been reduced from 18% to 12%. 

3)    RCM to be levied on services provided by courts and tribunals

The taxable services provided by the courts and tribunals will be subject to GST on RCM basis.

4)    Exemption to educational institutions in respect of entrance exams

Exemption is granted to educational institutions and Central and State educational boards for conducting entrance exams to any authority, board, or body established by the CG or SG for conducting entrance exams for admission to educational institutions

 

5)    Late fees for delayed filing of annual returns rationalized

Late fees has been reduced to Rs. 25/50 per day depending upon the turnover. Currently, the late filing fee is Rs. 200 per day irrespective of turnover.

 

6)    IGST on a device attached to a container

If a device such as a tag-tracking device or data logger is already attached to a container, no separate IGST shall be levied on such affixed device, and the containers shall be eligible for the 'nil' IGST treatment.

 

7)    Time limit for filing an application for revocation or cancellation of  registration  

The time limit for filing an application for revocation or cancellation of registration is extended from 30 to 90 days.

8)    Late fees waiver in respect of pending GSTR4, GSTR9 and GSTR10.

The Council recommended amnesty schemes in respect of pending returns in FORM GSTR-4, FORM GSTR-9, and FORM GSTR-10 by way of conditional waiver/reduction of late fee to provide relief to a large number of taxpayers.

 

A quick referencer to E-invoice applicability under GST

 

Central Board of Indirect Taxes and Customs (CBIC) has further reduced the threshold limit for generation of E-invoices vide Notification no. 17/2022-Central tax dated 1st August, 2022.

 

The table below summarises the various notifications issued by the department about the turnover limit for E-invoice applicability.

Sl.No.	Notification No.	Applicable Date	Aggregate turnover exceeding
1	61/2020 – Central Tax and 70/2020 – Central Tax	1-10-2020	500 Crores
2	88/2020 – Central Tax	01-01-2021	100 Crores
3	5/2021 – Central Tax	01-04-2021	50 Crores
4	1/2022 – Central Tax	01-04-2022	20 Crores
5	17/2022 – Central Tax	01-10-2022	10 Crores

 

Ø Aggregate turnover has to be calculated for each of the financial years starting from FY 2017-18.

Ø PAN-based aggregate turnover shall be considered for computing aggregate turnover.

Ø ‘Aggregate turnover’ means the aggregate value of

a)     all taxable supplies

b)    non-taxable supplies

c)     exempt supplies,

d)    exports of goods or services or both

e)     Inter-State supplies of persons having the same Permanent Account Number.

 

✍

CA Ramakrishna Sanjay

 

 

GST ON RENTING OF RESIDENTIAL PROPERTY

 The 47^th GST Council meeting has brought numerous changes in the rate of GST, Introduced GST on certain food items, removed certain exemptions, etc. Of which, introducing the GST on residential house property is the one.

Renting of any immovable property being residential house property was exempt till 17^th July 2022. A specific exemption was given to renting of residential house property vide Notification No. 12/2017-Central Tax (Rate) dated 28^th June 2017. The exemption notification reads as below.

 “Services by way of renting of residential dwelling for use as a residence”.

However, the said notification is modified to bring the renting of residential property into tax purview. Now, GST will be applicable if the residential property is given for rental to any registered person with effect from 18^th July 2022 as per Notification No. 04/2022-Central Tax (Rate) dated 13^th July 2022. GST at the rate of 18% has to be discharged by the recipient of the service being a tenant on RCM basis as per the Notification No. 05/2022-Central Tax (Rate) dated 13^th July 2022. Now the exemption notification reads as below.

“Services by way of renting of residential dwelling for use as a residence except where the residential dwelling is rented to a registered person”.

The Implications of these amendments are explained below.

1)    Renting of Residential property to registered person where the service provider (lessor) is registered under GST

GST has to be discharged by the recipient of service (Tenant) on RCM basis. The tenant can claim the ITC on GST paid on RCM basis. The service provider (Lessor) has to declare such supplies in his GSTR1 under B2B supplies attracting RCM. The Lessor cannot claim the GST ITC as the tax is paid on RCM basis.

 

2)    Renting of Residential property to an unregistered person where the service provider (lessor) is registered under GST.

The transaction is exempt from the levy of GST. However, the Service provider has to declare such supplies in his GSTR1 under ‘supplies exempted from the levy of GST’.

 

3)    Renting of Residential property to a registered person where the service provider (lessor) is not registered under GST.

GST has to be discharged by the recipient of service (Tenant) on RCM basis. The tenant can claim the ITC on GST paid on RCM basis.

 

4)    Renting of Residential property to a registered person where the service receiver (Tenant) is a Composition dealer.

GST has to be discharged by the recipient of service (Tenant) on RCM basis. However, a Composition dealer cannot claim the GST paid on an RCM basis as ITC.

 

THE IMPLICATIONS OF GST ON RESIDENTIAL PROPERTY ARE SUMMARISED IN THE TABLE BELOW.

SCENARIOS	SERVICE PROVIDER (LESSOR)	SERVICE RECIPIENT (TENANT)	GST APPLICABILITY
1	Registered	Registered	GST has to be discharged by the recipient of service (Tenant) on RCM basis.
2	Registered	Unregistered	GST is not applicable since the service recipient is unregistered.
3	Unregistered	Registered	GST has to be discharged by the recipient of service (Tenant) on RCM basis.
4	Unregistered	Unregistered	GST is not applicable since the service recipient is unregistered.

✍

CA Ramakrishna Sanjay

TEN BASIC PROVISIONS OF THE GOODS AND SERVICES TAX ACT, 2017 EVERYONE MUST KNOW

1)    REGISTRATION: Businesses whose Aggregate Turnover in a financial year exceeds Rs. 20 Lakhs are required to get the registration. However, the limit is Rs. 40 Lakhs per annum in the case of businesses that are into purely trading activity.

 

2)    E-WAY BILL: E-way bill is a document to be generated electronically in the E-way bill Portal for the movement of goods in vehicles from one place to another. A registered person who supplies the goods without generating an e-way bill may have to suffer a penalty of Rs. 100% of the value of supply and the goods in question would also be confiscated. The E-way bill has to be generated where the value of supply is more than Rs. 50,000 (including the taxes) per consignment.

3)    COMPOSITE SCHEME: Under this scheme, a registered person shall pay a prescribed percentage of sales as GST to the government. Businesses with an aggregated turnover of less than Rs. 1.50 Crores in the previous financial year can opt to pay taxes under the composite scheme. Such businesses neither collect GST on their sales nor claim GST credit on their purchases. The scheme is also extended to service providers, whose Total Turnover in the preceding financial year is up to 50 Lakhs.

GST Rates for Composite Scheme

Type of business	CGST	SGST	Total
Manufacturer and Traders of Goods	0.5%	0.5%	1.00%
Restaurants where alcohol is not serviced	2.5%	2.5%	5.00%
Service Providers	3.00%	3.00%	6.00%

 

4)    HSN CODES: HSN stands for Harmonized System of Nomenclature. It is the system of classification of goods numerically by assigning numbers to a particular class or classes of goods. It generally consists of 8 digits. Businesses whose turnover in the preceding financial year is up to Rs. 5 Crores are required to mention the 4-digit HSN Codes in their tax invoice and the businesses whose turnover exceeds Rs. 5 Crores are required to mention the HSN code at the 6-digit level.

 

5)    RESTRICTION TO CLAIM ITC TO THE EXTENT OF 99% OF THE TAX LIABILITY: ITC- Input Tax Credit is the GST paid by the registered persons on the purchase of goods or services used for his business. Taxpayers are allowed to reduce the GST paid on their purchases before remitting the GST to the government.  However, In the case of businesses whose taxable supply pre month is 50 Lakhs or more, the ITC is restricted to the extent of 99% of their tax liability even though sufficient ITC is available.

 

6)    QRMP SCHEME: QRMP stands for Quarterly Return filing and Monthly Payment of taxes. It is an option given to taxpayers where they can make the tax payment on a monthly basis and file the returns in Form GSTR3B on a quarterly basis. Businesses with turnover up to Rs.5 Crores in the preceding financial year can opt to pay tax under this scheme.

 

 

7)    REFUND: Taxpayers can file an application for a refund of excess GST paid in the Electronic Cash ledger. The applications can also be filed when the taxpayer is supplying the Zero-rated supply or when the supply comes under an inverted duty structure (Where the rate of GST on purchase/inputs is more than the rate of GST on sales). Where the amount of refund is less than Rs. 2 Lakhs, the application for refund needs not be accompanied by any documentary evidence. Further, no refund shall be issued if the amount of refund applied for is less than Rs. 1,000/-

 

8)    TDS: Where payment for taxable supply of goods or services or both under an individual contract exceeds Rs. 2.50 Lakhs, then TDS @ 2% has to be deducted. The amount so deducted shall be reflected in the Electronic Credit Ledgers of the deductees and the same can be utilized to discharge his tax liability. Following are the class of persons liable to deduct the TDS.

a)    Departmental establishment of the Central Government or State Government.

b)    Local authority

c)    Government agencies

 

9)    E-INVOICE: Electronic Invoice is a facility whereby the taxpayers are required to furnish the details of their supply in the E-invoice Portal. The IRP-Invoice Reference Number will be generated for each invoice uploaded to E-invoice Portal. The details uploaded in the E-invoice portal are automatically imported to Form GSTR1 as well as the E-way bill on a real-time basis without any manual intervention. The Businesses whose aggregate turnover is more than Rs. 20 Crores in any financial year are required to comply with the requirement of E-invoice.

10)  RETURNS TO BE FILED: A registered person has to furnish the details of sales, ITC, TDS, etc. the below table summarises the list of key returns to be filed.

Return Form	Nature of Returns	Due date
GSTR1	Details of outward supply – Sales	11th of every succeeding month
GSTR-3B	Summary of Sales, taxes collected, ITC claimed, and payment of Tax	20th of every succeeding month
GSTR7	Return for deducting the TDS	10th of every succeeding month
CMP08	Return cum tax payment under QRMP Scheme	18th of every succeeding month
GSTR9	Annual Return	31st December of the succeeding financial year
GSTR9C	Reconciliation Statement	31st December of the succeeding financial year
GSTR10	Final Return to be filed whose registration has been cancelled	Within 3 months of cancellation of registration

                        ✍

CA Ramakrishna Sanjay