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Patna: The state commercial taxes department on Wednesday notified the reduction of GST on three medicines—Tratstuzumab Daruxtecan, Onimartinib and Durvalumab—used for the treatment of cancer, and also on extruded salty items. It also freed govt undertakings, research associations, colleges and institutions which conduct research and development with govt or private grant under Section 36 of the IT Act, from the GST.

With a view to preventing tax theft in the trade of scrap metal, the department has also notified the payment of tax by the non-registered and registered persons who deal in the sale and purchase of scrap metal.

Continue reading “Govt cuts GST on three cancer drugs”

The Group of Ministers (GoM) on Goods and Services Tax (GST) rate rationalisation is likely to push for phasing out the 12 percent tax slab by gradually shifting items to either the 5 percent or 18 percent slabs to simplify the tax framework and ease compliance for businesses, people familiar with the development said.

The gradual elimination of the 12 percent slab will consolidate the GST system into a three-tiered structure of 5 percent, 18 percent, and 28 percent rates.

Continue reading “GoM may gradually phase out of 12% GST slab to rationalise rates, sources say”

“But sir, most of GST is paid by the poor in India.” This innocuous comment by a student during a discussion on the state of the Indian economy made me realise the extent to which some data lingers in people’s mind.

The source of this claim was a report, ‘Survival of the Richest: The India Story’, published by the think-tank Oxfam and released at the World Economic Forum. The report claimed 64.3 percent of India’s goods and services tax came from the poorest 50 percent of the population, while the wealthiest 10 per cent contributed a mere 3-4 percent.

This stark portrayal of an unfair tax system made global headlines, influencing media and policy discussions in India—including as a question raised in parliament. Released in January 2023, the figures are still cited at various places and linger on in people’s mind, creating an impression of an unfair taxation system in place.

Continue reading “Taxing truths: Decoding appropriate GST shares”

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”