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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?”

The Himachal Pradesh High Court held that the cancellation of GST registration on the pretext of violation of Rule 86B of of the Rules framed under GST Act is a disproportionate punishment.

The Court set aside the decision to cancel of petitioner’s GST Registration after noting the shocking and “extreme penalty” imposed on a business on the basis of a “prima facie” investigation conducted by the authorities.

A Division Bench of Chief Justice M.S. Ramachandra Rao and Justice Satyen Vaidya held, “In our opinion, the cancellation of GST Registration on the pretext of violation of Rule 86B is a disproportionate punishment imposed on petitioner and is liable to be interfered in exercise of the power conferred on this Court under Article 226 of the Constitution of India.”

Continue reading “Cancellation Of GST Registration On The Pretext Of Violation Of Rule 86B Of ‘GST Rules’ Is A Disproportionate Punishment: Himachal Pradesh HC”

The Supreme Court on Thursday (October 3) held that if construction of a building is essential for supplying services such as renting out, it could fall into the “plant” exception to section 17(5)(d) of CGST Act which provides that Input Tax Credit cannot be claimed for construction material (other than plant or machinery) for immovable property construction.

“If the construction of a building was essential for carrying out activity of supplying services such as renting or giving on lease or other transactions in respect of the buildings or part thereof which are covered by clauses 2 and 5 of the Schedule 2 of the CGST Act, the building could be held as a plant. Functionality test will have to be applied to decide whether building is a plant”, the Court held.
Continue reading “GST Input Tax Credit On Construction Costs Can Be Claimed If Building Construction Was Necessary For Renting Out Service : Supreme Court”

GST collections in India for September were Rs 1.73 lakh crore, which is lower than August’s Rs 1.75 lakh crore. August saw a 10 per cent increase from last year with collections of Rs 1,74,962 crore. July’s collections were Rs 182,075 crore. In 2024, total collections have increased by 10.1 per cent from the same period in 2023.

India’s Goods and Services Tax (GST) collections in September hit Rs 1.73 lakh crore, marking a growth of 6.5 per cent year-on-year, official data showed.
Continue reading “India’s September GST collection rises 6.5% YoY at Rs 1.73 lakh crore”

GST AMENSTY SCHEME, 2024 (2.0) – Analysis of Section 128A: Waiver of Interest or Penalty for Certain Tax Periods w.e.f 1/11/2024

Overview:
Section 128A provides relief for taxpayers in specific cases where they owe taxes but can avail of a waiver of interest and penalties, provided they meet certain conditions. The section focuses on waiving penalties and interest for tax liabilities pertaining to the period from July 1, 2017, to March 31, 2020. This waiver is contingent upon the taxpayer paying the full amount of tax due within the timeframe notified by the government.
Continue reading “GST AMENSTY SCHEME, 2024 (2.0) – Analysis of Section 128A: Waiver of Interest or Penalty for Certain Tax Periods w.e.f 1/11/2024”