GST Collection for the month of May came in at ₹1.02 lakh crore, official data by the Ministry showed on June 5. While this was the eighth consecutive month of GST being above ₹1 lakh crore, it was also the lowest collection since September 2020. The May GST collections were also a 27.6% drop from record sum of ₹1.41 lakh crore in April.
A plan to merge goods and services tax (GST) slabs of 12% and 18% into a single rate that will apply to most goods is expected to get delayed, while the GST compensation cess levied on items like cars may be extended. This will imply a change in the design of the GST structure itself and impact some of the goods.
In redevelopment the grant of development right by society member and the construction of the building by a developer is barter. The definition of ‘supply’ contained in S.7 (supra) includes a barter arrangement. But this transaction is not liable for GST as grant of development right is not a taxable supply as the entire consideration is being received from the sale of additional flats only.
The Delhi High Court has held that the Government’s imposition of Goods and Services Tax (GST) on oxygen concentrators imported for personal use as ‘unconstitutional’ and said oxygen concentrators constitute a life-saving device during the COVID-19 pandemic, therefore, should be treated on par with life-saving drugs.
Equalization levy (EL 1.0) was introduced as a direct tax at 6% on payment made to a non-resident by an Indian resident with an annual payment exceeding of Rs. 1,00,000 in a financial year in respect of online advertisements. The Govt. further expanded the scope of EL to include a levy of 2% on online sales through a non-resident e-commerce operator.
The promotional products/materials & marketing items used in promoting brand & marketing products and the goods procured on payment of GST which are disposed of by way of gifts are barred from being eligible for ITC, even if they are used in the course or furtherance of business. Therefore, the ITC is not eligible on the promotional items distributed as give away items
GST is leviable on COVID vaccines @5%, and on oxygen concentrators and other COVID related drugs @12%. As per the Finance Minister GST on such essentials cannot be eliminated as it will deny the mechanism of ITC, as set off of their input taxes will not be possible leading to a huge increase in their prices, thereby having a counter-productive effect on such citizens.
There is a debate over tax exemptions for COVID-19 vaccines and other drugs, or keeping them out from the purview of the GST. The debate picked up after Mamata Banerjee wrote to Prime Minister an exemption from GST, custom duty, other duties and taxes on COVID-19-related drugs. The Finance Minister believe that making it exempt would infact lead to rise in prices of these supplies.
In its recent ruling, Gujarat’s AAR directed that commodities used under health care for diagnosis or treatment such as medicines, consumables etc are part of a ‘Composite Supply’. The applicant, a chain of multispecialty hospitals, sought the information from AAR about these supplies used in medical treatment. A composite supply includes a bundle of 2 or more supplies which are naturally supplied in tandem.
In pursuance of the government’s action plan to smoothen up bilateral trade, the CBIC launched National Trade Facilitation Action Plan (NTFAP) to curb red tapism in administration and legislation surrounding trade practices. The action plan can result in quicker shipments for importers and low penalties in case of any breach. The objective is to reduce costs involved in terms of money as well as time.
In a ruling, the AAR (Authority of Advance Rulings) of Gujarat said that Bollards, Bolts, Nuts, Screw, Washer, Frontal Frames and Fascia Pads would attract GST at 18%. The petitioner was confused about the rates to be levied on the products and whether any VAT is applicable on the same. The AAR cleared the doubts and cited the provision levying 18% GST on these goods.
Highlighting the importance of GST Audit, the ICAI president reiterated that it is not an ‘Avoidable Compliance’ and the eligible persons must consider it an advantage. It was emphasised that GST audit enforces the maker-checker concept and consequently detects the regularities and inefficiencies within the system. It is not a cost for the taxpayer but an investment to reap long term benefits.
In a recent order, the Madhya Pradesh HC held that GST registrations for supply of goods will get cancelled in case of failure to produce necessary documents. The notice came in light of rule 21 (b) of the CGST rules, 2017 which mandated the termination of registration of the persons if the given person issues bills without supply of goods or services.
With the influx of investors towards gold, the imports of gold for March touched record highs in two years, primarily due to lower taxes and price correction. Buying gold attracts GST at 3% on the total transaction value including making charges. GST is levied at 18% in case of redesigning old gold ornaments. Digital gold and Gold Exchange Traded Funds (ETFs) also attract 3% GST.
The Tax Consultants at Central Gujarat Chamber have made representations to the Finance Minister for extending due dates of March’s GSTR-1, composition taxpayers’ CMP-08 and GSTR-38 for March’21 among others. The representatives are seeking extension of such dates by a month approximately in view of the recent country-wide second COVID wave and related disruptions.