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Show Cause Notices under GST

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Show Cause Notices under GST 1. Acknowledgment of Notice • Notice Dates: There may be a difference between the date of the GST notice and the date of its receipt. Always note the date and time when acknowledging the receipt of the SCN. • Avoidance is Not an Option: Ignoring an SCN is not advisable. Receipt and then a response or contestation is the correct approach. Not acknowledging an SCN is considered equivalent to having received it. 2. Responding to Time-Barred Notices • Challenging Time-Barred SCNs: If the service of notice is beyond the permissible period, it can be contested with appropriate evidence. • Extended Time-Period Rule: For SCNs issued after Section 73 timelines, it is essential to demonstrate that there was no concealment or suppression of facts, preventing the department from extending the SCN issuance period to maximum 54 months. The intention to evade tax is mandatory and this has to be proved by the Department. 3. Proactive Measures • GST Payment before

Rectification of errors apparent on the face of record

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Rectification of errors apparent on the face of record Section 161 Section 161 of the CGST Act, 2017 states the rectification of mistakes or errors that are recognized from the records.  It mentions that the authority responsible for issuing decisions, orders, summons, notices, or certificates may rectify any mistake that is found in the records in such documents. These rectifications are done by the below-mentioned relevant authority: • Suo moto by such authority. • Upon notice by the affected person • Upon notices of such authority by GST officials (both at the Central and State levels). The term “mistake evident from records” remains undefined under the GST Act, indicating an unmistakable error. In this context, Section 154 of the Income Tax Act of 1961, furnishes detailed provisions regarding the concept. The term “mistake,” from a legal perspective, includes the following scenarios: • Misreading a clear provision is an error. • Applying an inapplicable provision. • Ign

Taxability of corporate guarantee by group companies

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Taxability Of Personal and Corporate Guarantee Under GST A corporate guarantee is a contract between a corporate entity or individual and a debtor. In this contract, the guarantor agrees to take responsibility for the debtor's obligations, such as repaying a debt. Recent clarification issued by Central Board of Indirect Tax & Customs (CBIC) with respect to taxability of personal and corporate guarantee provided to a Company under Goods and Services Tax (GST) law. In a recent circular, following clarifications have been provided: 204/16/2023-GST on 27th October, 2023. Taxability of personal guarantee by directors: Directors / promoters / employees and the Company are 'related persons' as per the explanation to Section 15 of the Central Goods and Services Tax Act, 2017 (CGST Act). The circular clarifies that personal guarantees offered by promoters, directors, managerial staff, etc. of borrowing company would be treated as taxable supplies, even if made without considerat

Time of Supply of Goods

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TIME OF SUPPLY OF GOODS The time of supply for goods can be classified into three broad categories. o Time of Supply for Goods – Forward Charge o Time of Supply for Goods – Reverse Charge o Time of Supply for Goods – Miscellaneous Provisions (i) Default Rule: The time of supply of goods section 12 of the CGST act 2017, shall be the earlier of the following dates: (a) The date of issuing of invoice (or) the last day by which invoice should have been issued, OR (b) The date of receipt of payment. Note-1: The date of receipt of payment shall be earlier of- (a) The date on which payment is entered in the books of accounts; OR (b) The date on which the payment is credited to bank account. Note-2: Last date by which invoice should have been issued is the “date of removal of goods”. (ii) Time of supply of goods when the supplier is under composition scheme: • In such cases, time of supply of goods is the date of invoice. Time of supply of goods will be the same in case the turnover is up to

Time of supply of services

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Time of supply of services 13(1) CGST Act 2017 The liability to pay tax on services shall arise at the time of supply, as determined in accordance with the provisions of this section.  13(2) The time of supply of services shall be the earliest of the following dates, namely: — (a) the date of issue of invoice by the supplier, if the invoice is issued within the period prescribed under [sub-section (2) of] 1 section 31 or the date of receipt of payment, whichever is earlier; or (b) the date of provision of service, if the invoice is not issued within the period prescribed under [sub-section (2) of] 2 section 31 or the date of receipt of payment, whichever is earlier: or (c) the date on which the recipient shows the receipt of services in his books of account, in a case where the provisions of clause (a) or clause (b) do not apply: Provided that where the supplier of taxable service receives an amount upto one thousand rupees in excess of the amount indicated in the tax invoice, the time

GST - Valuation

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 GST - Valuation Under GST law as per sec 15 CGST Act taxable value is the transaction value i.e. price actually paid or payable, provided the supplier and the recipient are not related and price is the sole consideration Compulsory Inclusions  Any taxes, fees, charges levied under any law other than GST law, ex¬penses incurred by the recipient on behalf of the supplier, incidental ex¬penses like commission & packing incurred by the supplier, interest or late fees or penalty for delayed payment and direct subsidies (except government subsidies) are also to be added to the price (if not already added) to arrive at the taxable value. Exclusions Discounts like trade discount, quantity discount etc. are part of the nor-mal trade and commerce, therefore pre-supply discounts i.e. discounts recorded in the invoice have been allowed to be excluded while deter-mining the taxable value.  Discounts provided after the supply can also be excluded while deter-mining the taxable value provided tw

Head office and Branch office

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Head office and Branch office The 50th GST Council meeting had recommended to clarify through a circular that Input Services Distributor (ISD) mechanism is not mandatory for distribution of input tax credit of common input services procured from third parties to the distinct persons as per the present provisions of GST law, and also to clarify issues regarding taxability of internally generated services provided by one distinct person to another distinct person [such as branch offices of same entity].  The Council also recommended that amendment may be made in GST law to make ISD mechanism mandatory prospectively [for future] for distribution of input tax credit of such common input services procured from third parties. It would do well to recollect at this juncture that in Schedule I to GST law, it sets out at entry 2 that the supplies between distinct persons would be deemed to be supplies, even when done without consideration. Examples of distinct persons are branch offices in diffe