An unexpected issue emerged, in which it was stressed that technicalities made via the Department and not the assessee must not be put forth by the department to defeat the legal rights and entitlements of the assessees.

It was carried out by the Bombay High Court that the related Revenue officials (respondent) could not refuse the advantage of the accrued Input tax credit to the taxpayer (applicant) merely because the specified forms had not been furnished electronically but furnished manually.

Since the GST ITC-02 Form was not available for electronic filing, neither the applicant nor TDN could be held responsible for not submitting Form GST ITC-02 electronically on the department’s common portal, the Court stated.

Consequently, the Division Bench of Justice M.S. Sonak and Justice Jitendra Jain asked the respondents to regard the manually filed forms via the TDS as expeditiously as feasible.

The bench therefore specified that if on the due consideration of manual forms the respondents still discovered that the ITC of Rs 18,30,58,995 was not due or was claimed erroneously of and used by the applicant, they are free to pass a relevant order.

Case Facts

The applicant has the business of providing internet services, entered in the Business Transfer Agreement (BTA) with Tikona Digital Networks (TDN), where TDN business was transferred before the applicant as a present concern. Hence TDN approached the AO jurisdictional notifying them of the non-availability of Form ITC-02 functionality on the department’s common portal.

TDN has the objective to transfer unused credit in its electronic credit ledger on the date of slump sale before the applicant. However as Form ITC-02 was not available till now on the GSTIN portal for filing, TDN can not follow with the electronic filing need of the mentioned form.

The applicant in the second half of the year 2017 claimed the ITC to the tune of Rs 18.30 crores. As the respondents do not incur the available electronic facility to file Form GST ITC-02, the applicant has furnished the form manually.

The applicant has received a notice after 6 years alleging that the applicant has erroneously claimed and used the ITC of Rs 18 crores, as the applicant manually furnished the forms. Therefore the applicant has approached the HC contesting the notice and the demand asked from the Respondent department.

High Court Observations

The Bench remarked that the only claim made in the show cause notice is related to the non-electronic submission of Form GST ITC-02 on the department’s shared portal.

The Bench expressed the view that these allegations would be valid if the Department’s shared portal were operating properly, allowing TDN or the petitioners to submit Form GST ITC-02 electronically through it.

The Bench acknowledged that the TDN or the petitioner was unable to submit Form GST ITC-02 on the department’s shared portal during the applicable period due to functionality problems associated with that portal.

Therefore the Bench noted that after the same has been considered that Form GST ITC-02 was not e-filed on the shared portal of the department as it was not operational to generate and accept the Forms, the issuance of the Show cause notice (SCN) is to practice of excessive jurisdiction under the CGST act and the rules.

The Bench noted that the petitioner only claimed the ITC after the CA’s certificate was submitted, which confirmed that the business transfer from TDN to the Petitioner included specific provisions for transferring liabilities.

Respondents can have processed the forms and wished on the issued of ITC if they had problems with the Form GST ITC-02 or GSTR-3B manual filing, the bench said.

The bench outlines that the respondents on the specious plea can not have avoided processing the manual return that Section 18(3) & Rule 41(1) of the CGST Act and Rules identify only electronic filing and not manual filing.

Similarly, the Bench determined that the Allahabad High Court observed that, at the time when BTA transferred its business along with liabilities to the petitioner, the option to file Form IT-02 was not accessible on the department’s common portal, thus ruling that the petitioner should not be denied the ITC.

Moreover, the Gujarat High Court, Delhi High Court, and Bombay High Court determined under the same conditions that the Department’s failure to recognize and transfer the ITC owed to the petitioner was highly unlawful, the Bench noted.

It was therefore specified that the respondents were bound from duty to take cognizance of the decisions of the Allahabad, Gujarat, and Delhi High Courts in dealing with the almost same problem related to the applicant, the Bench quashed the SCN asking for the ITC and permitted the petition of the taxpayer.

It was specified by the Bench that if the respondent concludes that the Input tax credit (ITC) was claimed erroneously. Then the respondents can take action by complying with natural justice.

1. NRI Meaning:

• Non-Resident Indian (NRI) refers to an Indian citizen or a person of Indian origin who resides outside India for employment, business, or any other purpose indicating an indefinite stay abroad.

2. NRI Status Calculation Process:

• NRI status is determined based on the individual’s physical presence in India during a financial year (April 1 to March 31).
• If an individual stays in India for less than 182 days in a financial year, they are considered an NRI for that year subject to meet out other conditions of status determination

3. Income Tax Applicable to NRIs:

• NRIs are taxed on income earned or accrued in India, such as income from property, capital gains, interest, dividends, etc.
• Income earned outside India is generally not taxable in India for NRIs.
• The tax rates applicable to NRIs are the same as those for residents of India.

4. Interest in NRE and NRO Accounts:

• NRE (Non-Resident External) accounts: Funds in NRE accounts are freely repatriable (can be transferred abroad) and are exempt from Indian taxes, including interest earned.
• NRO (Non-Resident Ordinary) accounts: Funds in NRO accounts are not freely repatriable, and the interest earned is subject to Indian taxes.

5. Double Taxation Avoidance Agreements (DTAA):

• DTAA aims to prevent double taxation of income in two countries.
• NRIs can benefit from DTAA provisions by claiming tax credits or exemptions in one country for taxes paid in the other country.

6. High-Value Transactions to be Kept in Mind by NRIs:

High-value transactions for NRIs can include various activities or financial transactions that involve significant sums of money or assets. Here are some examples of high-value transactions that NRIs should be mindful of:

Property Transactions:

• Purchase or sale of real estate: NRIs investing in or disposing of property in India should be aware of the high value associated with real estate transactions. This includes buying, selling, or gifting property.
• Rental income: NRIs earning rental income from properties in India should keep track of the high-value transactions associated with rental payments, lease agreements, etc.

Investments:

• Stock Market Investments: NRIs investing in the Indian stock market may engage in high-value transactions through buying or selling shares, mutual funds, or other securities.
• Fixed Deposits and Financial Instruments: Investments in fixed deposits, bonds, debentures, and other financial instruments may involve significant sums of money.

Banking and Remittances:

• Transfer of Funds: NRIs transferring large sums of money to or from India for investment, business, or personal purposes should be aware of the high-value nature of these transactions.
• Foreign Currency Accounts: Opening or closing foreign currency accounts, especially NRE and NRO accounts, involves high-value transactions that NRIs should monitor.

Loans and Borrowings:

• Loans and Mortgages: NRIs obtaining loans or mortgages from Indian banks or financial institutions for property purchase or other purposes may involve high-value transactions.
• Repayment of Loans: NRIs repaying loans or mortgages to Indian lenders also constitutes high-value transactions.

Business Transactions:

• Setting up Business Entities: NRIs establishing businesses or investing in Indian companies may engage in high-value transactions related to company formation, capital infusion, etc.
• Commercial Contracts: Business agreements, contracts, and transactions involving significant monetary values should be carefully documented and monitored.

Tax Payments and Compliance

• Payment of Taxes: NRIs fulfilling their tax obligations in India, including payment of income tax, property tax, or other levies, may involve high-value transactions.
• Compliance Reporting: Meeting reporting requirements for high-value transactions, such as filing tax returns, disclosing foreign assets, and complying with regulatory norms, is essential for NRIs.

7. Tax Filing for NRIs:

• NRIs are required to file income tax returns in India if their total income exceeds the basic exemption limit.
• Even if income is below the taxable threshold, filing a return may be necessary to claim a refund of taxes withheld at source or if certain types of income (like capital gains) are involved.
• Timely filing of tax returns and compliance with reporting requirements are crucial for NRIs to fulfill their tax obligations in India.

For personalized advice and assistance with tax matters, NRIs should consult with qualified tax professionals or chartered accountants familiar with Indian tax laws and regulations pertaining to NRIs.

The GST Council concluded its discussion and held a press briefing at 3:30 P.M on October 7, 2023, to announce the following outcomes:

1. Regarding the formation of the GSTAT (Goods and Services Tax Appellate Tribunal), the Finance Minister stated that the council had previously made decisions. In this meeting, they recommended amending the law to set a maximum age limit of 70 years for the President and 67 years for members, with a minimum age requirement of 50 years. The age limit for members has been raised from 65 to 67, and for the President, it has been increased from 67 to 70 years. Additionally, advocates with up to 10 years of experience can now be appointed as judicial members of GSTAT.
2. Millet flour blended with other atta, comprising 70% millets under HS1901, will be subject to nil GST when sold unpackaged or in loose form, and 5% GST when pre-packaged or labeled.
3. Regarding the taxation of Extra Neutral Alcohol (ENA) used in alcoholic beverages, the Allahabad High Court ruled that states do not have the authority to tax ENA after the 101st Constitutional Amendment. The GST Council retains the right to tax ENA by law, but it has granted this right to states despite the court ruling.
4. The GST rate on molasses has been reduced from 28% to 5%, benefiting sugarcane farmers and lowering the cost of cattle feed.
5. Rectified spirit for industrial use will now have a separate HSN code, and an 18% tax will be applicable to ENA for industrial use.
6. To boost tourism, foreign-flagged/owned or foreign-going vessels will receive a conditional GST exemption of 5% if they operate in India’s coastal areas during the upcoming winter season.
7. An extension has been granted for the GST Amnesty Scheme, allowing appeals to be filed until January 31, 2024, with enhanced pre-deposit. An additional 2.5% pre-deposit will be charged for the extended period, payable from the electronic cash ledger.
8. Zari will be taxed at a 5% rate instead of 18% under GST.
9. Job work services related to the processing of barley into malt will attract a 5% GST rate for food and food products but 18% for the production of alcoholic beverages.
10. Exemptions have been provided to Government Authorities for services related to water supply, public health, sanitation, conservancy, solid waste management, slum improvement, and upgradation. This also applies to composite services involving up to 25% of the mentioned services. Clarification has been given regarding the eligibility of the District Mineral Foundation Trust (DMFT) for these exemptions.
11. All services provided by Indian Railways will be subject to forward charge, with Input Tax Credit (ITC) available for discharging liabilities.
12. The GST Rules will now specify a one-year time limit for the provisional attachment of property to avoid practical difficulties during property release from banks after one year.
13. The Finance Minister clarified that there were no discussions on GST rate rationalization or Input Tax Credit (ITC) recoveries.
14. Currently, 18 states have passed amendments to impose a 28% GST on gaming companies starting from October 1, 2023, along with corresponding GST Rules. Thirteen states are yet to pass such amendments.
15. The Revenue Secretary clarified that when a director provides a corporate guarantee to a company, it does not attract GST unless there is specific consideration. However, if a company provides a corporate guarantee to its subsidiary, 1% of the total guaranteed amount is considered as value and attracts an 18% GST.

Background: –

In India, Goods and Services Tax (GST) is applicable to the services provided by freelancers. As per the GST law, freelancers are considered to be providing services in the course or furtherance of business, and hence, their services are subject to GST. If the annual turnover of a freelancer exceeds the threshold limit of INR 20 lakhs (INR 10 lakhs for some special category states), they are required to register for GST. This is to be noted that in case of export of services, Registration under GST is required by each freelancer or service provider irrespective of Turnover.

Once registered, they must collect and pay GST on their taxable services at the applicable rate. The GST rate on freelance services in India is 18%. However, certain services may attract a lower rate of GST or may be exempt from GST altogether.

Export of services: –

If you are a freelancer or a business providing services and you want to export those services from India, you need to register for Goods and Services Tax (GST). Export of services is treated as zero-rated supply under GST, which means that no GST is charged on such supplies subject to filing of letter of undertaking (LUT) to the GST Department.

Every supply of service made to a person belonging to the outside India and payment also received in convertible foreign exchange cannot be termed as supply of export of service.

 Export of service is defined under section 2(6) of the IGST Act which is reproduced as under: – “export of services” means the supply of any service when, —

• the supplier of service is located in India;
• the recipient of service is located outside India;
•  the place of supply of service is outside India;
•  the payment for such service has been received by the supplier of service in convertible foreign exchange or in Indian rupees wherever permitted by the Reserve Bank of India; and
• the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8;

Under the Goods and Services Tax (GST) regime in India, the export of goods and services is considered as a zero-rated supply. This means that no GST is charged on the export of goods or services, but the exporter can claim input tax credit (ITC) for GST paid on inputs and input services.

To export goods or services without paying GST, the exporter needs to either:

• Furnish a Letter of Undertaking (LUT): If the exporter has a track record of exports and meets certain conditions specified under the GST laws, they can furnish an LUT instead of paying GST on the export of services. The LUT is a written undertaking by the exporter that they will comply with all the GST rules and regulations, and that they will pay the GST in case of any non-compliance.
• Pay the GST and claim refund: If the exporter is not eligible to furnish an LUT or chooses not to furnish an LUT, they can pay the GST on the export of services and then claim a refund of the same.

When a registered person exports goods or services under an LUT, they are not required to pay any GST on such exports. However, they are required to file GST returns to claim the input tax credit and maintain proper records of their exports.

On the other hand, if a registered person exports goods or services without furnishing an LUT, they are required to pay the applicable GST on such exports. They can claim a refund of the GST paid by filing a refund application with the GST department.

GST Return Filing for Export of services:-

Under the Goods and Services Tax (GST) regime in India, exporters of services are required to file GST returns on a regular basis. The GST return filing process for exports of services is as follows:

1. GSTR-3B: Every registered person is required to file GSTR-3B on a monthly or quarterly basis. In case of exports of services, the exporter needs to report the details of exports made during the tax period in Table 3.1(d) of GSTR-3B.
2. GSTR-1: Every registered person is required to file GSTR-1 on a monthly or quarterly basis, which contains details of outward supplies made during the tax period. In case of exports of services, the exporter needs to report the details of exports made during the tax period in Table 6A of GSTR-1.
3. Invoice details: For exports of services, the exporter needs to maintain proper records of invoices issued for the services exported, along with the relevant documents like shipping bills, airway bills, and bank realization certificates.
4. Refund of GST paid: If the exporter has paid GST on the export of services and has not furnished an LUT, they can claim a refund of the same by filing a refund application in Form GST RFD-01.

43rd Council Meeting Announcement – Dated 28th May 2021-

GST Amensty Scheme Announed For Pending Return From July 17 to April 21

1) अगर किसी की टैक्स Liability नही है तो उसकी लेट फ़ीस 500 लगेगी

2) अगर किसी की टैक्स liability है तो उसकी लेट फ़ीस 1000 लगेगी

लेकिन डीलर को अपना पेंडिंग रिटर्न GSTR 3B 01st June से 31st Aug के बीच भरना होगा

Late Fees for Future Return :-
1) अगर किसी का Output Tax नही है तो 500 Per Return होगी

2) जिसका पिछले साल sales 1.5 Cr है, उसकी 2000 Late Fees होगी Per Return

3) जिसका पिछले साल sales 1.5 Cr से 5 Cr है, उसकी late fees 5000 होगी

4) जिसका 5 Cr से ज़ायद है उसके लिए 10000 होगी

5) Composition वालों के लिए अगर टैक्स liability नही है तो 500 और अगर टैक्स है तो 2000 होगी GSTR 4 के लिए

6) GSTR 7 के लिए ये 50 Per day और maximum 2000 होगी