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Intermediary – under GST

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Intermediary – under GST Intermediary – a person who arranges/facilitates the supply between two persons in common parlance. As per   Act, Intermediary means a broker, an agent, or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account. Service Provider: Intermediary/Agent/Broker. Service Recipient: Any person (In India / Outside India). Supply: Facilitation of main supply   Why is Intermediary service an area of concern for taxpayers? Why do not companies want to be classified as intermediary? Why is it unjust to tax intermediary as per taxpayers? The Company carrying on business for recipients in non-taxable territory want to buy the reliefs of exports for themselves. If they get classified as intermediary, the place of supply falls in taxable territory by the specific inclusion
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Understanding E-commerce Operators under GST

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Understanding E-commerce Operators under GST In the rapidly evolving world of online commerce, electronic marketplaces have become instrumental in facilitating seamless transactions between buyers and sellers. With the advent of E-commerce, governments worldwide have been adapting their tax systems to keep pace with the digital economy. In India, the GST was introduced on July 1, 2017, and it brought about significant changes for E-commerce operators.  What is an E-commerce Operator? An E-commerce operator refers to any person or entity that owns, operates, or manages a digital platform that facilitates the supply of goods or services between suppliers and customers. Popular E-commerce platforms like MDND, Amazon, Flipkart, and eBay are classic examples of E-commerce operators. These operators act as intermediaries, bringing sellers and buyers together and facilitating transactions. GST Registration of E-commerce Operator E-commerce operators are required to register under GST, regardl
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GST Reconciliation

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GST Reconciliation GST reconciliation stands as a pivotal task for businesses across India, regardless of their scale.  This critical process involves cross-checking GST data extracted from various sources like invoices, purchase orders, and bank statements to guarantee its precision and entirety.  The intricacies of this task often make it time-consuming, particularly for enterprises dealing with high transaction volumes. However, despite its complexities, GST reconciliation remains indispensable. Compliance with GST regulations hinges on this process, crucial for evading substantial penalties.  Moreover, it enables businesses to maintain an accurate financial trail, identifying potential errors or discrepancies along the way. A Proper Explanation of GST Reconciliation GST reconciliation process serves to pinpoint errors or omissions, allowing for timely rectification. The primary objective is to ensure consistency between your recorded invoices and purchases and the data conveyed to
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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
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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
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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
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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
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