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Tuesday, 14 May 2019

Accounting and its Importance

Tuesday, May 14, 2019 0

Introduction to Accounting and Its Importance

Accounting and its Importance on taxonline24

Accounting is a way to organize the finances of a business so that its financial transactions can be tracked accurately. Accounting is extremely significant to every business. Therefore, every individual involved in a business is required to have basic knowledge about accounting and its importance, which we have elaborated below.

The topics covered in this article are:
1.      What is accounting?
2.      Importance of Accounting
3.      Types of Accounting

What is accounting?

Accounting is an organized and systematic way of recording the financial transactions which are made by a business. It is a process which summarizes, analyses, and reports the business transactions to third parties like regulators, oversight agencies, and tax collectors.
Being a one of the most important functions of a business, accounting is carried out by a professional accountant or bookkeeper in small firms, and by financial departments at bigger companies. Accounting generates various important reports of cost accounting and managerial accounting which the management helps the business management in making informed decisions.

Bookkeepers may handle basic functions of accounting, but only qualified accountants who are designated by the central authorities (Chartered Accountant, etc.) are supposed to handle advanced accounting functions of a business.

Accounting helps in creating financial statements of a company. Financial statements of a business summarize its operations, cash flow, and financial position in the market for a said period of time. They concisely summarize several financial transactions which the business may have made and recorded in the particular time period.This helps investors and other entities to analyze the financial position of a business and make decisions accordingly.

While preparing financial statements of a business, accountants usually follow the Generally Accepted Accounting Principles (GAAP). GAAP is basically a set of accounting principles or standards which follows the double-entry system of accounting. It is used in identification of balance sheets, measuring outstanding shares, and other issues of accounting.



Importance of Accounting 

Accounting mainly helps in recording transactions in an organized manner and creating financial statements for a business. However, accurate and proper accounting can pose as a defense mechanism of a business. Accurate accounting helps in reducing the business exposure to fraudulent risks. If the accounting is done right, then the audits conducted by the government will not create any hurdle in the daily operations of the business.

Accounting allows the business to grow in a measured and planned manner. It helps in tracking the business assets, liabilities, expenses, and incomeso that the business can make informed financial decisions. Decisions made on the basis of present financial health and past performance of the business will help in molding a more financially stable future. This will propel the growth of the business and guide it to the path of attaining maximum profit.

Accounting done wisely will help the business in attracting and satisfying its customers. It helps the business to have knowledge of its financial position and understand its sources of revenue and expenses. This gives a better understanding of the business to the management and shows how the business can be grown while maintaining customer satisfaction.

Lastly, accounting informs the business what it owes and what it is owed. It helps in tracking loanand interest repayments, managing payroll records, maintaining a budget, attracting potential investors, and setting up accurate financial records for payment of business taxes.



Types of Accounting

There are three main categories of accounting: financial accounting, managerial accounting, and cost accounting. They are elaborated as follows:
·         Financial Accounting: Financial accounting involves those processes which are used by professional accountantsto generate the accounting and financial statements of a business, annually. These statements are then made public to be viewed by investors, creditors, customers, and regulatory bodies.It aims at providing the financial information of a business to its outsider parties. Financial accounting considers money to be a measure of the economic performance of a business.

·         Managerial Accounting: Managerial or Management accounting involves those processes which are used by professional accountants to generate monthly and quarterly reports, which can be used by the management of the business to make important business decisions. It aims at helping managers and supervisors of the company in making financial decisions.

·         Cost Accounting: Cost accounting involves those processes which take into account all the costs related to the manufacturing of a product. The information produced by cost accounting further helps managers, analysts, accountants, and business owners to do the costing of their products. Cost accounting considers money to be an economic factor of production.



Author Details
Name :- Anil Tanwar
Contact No. :- 9318353236
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Thursday, 25 April 2019

Important updates for GSTR4 and E-Way bill

Thursday, April 25, 2019 0
Important Update :

📍1. Now GSTR-4 is required to be filed annually & payment shall be made on Quarterly basis Vide notification no. 21/2019-Central Tax dated April 23, 2019, CBIC has notified that GSTR-4 is required to be filed on Annual basis by Composition Dealers & Service Providers paying GST @ 6% and the payment of self-assessed tax shall be made in Form GST CMP-08 on quarterly basis.
   
📍2. E-way bill can’t be generated if the registered person has not filed return for 2 consecutive tax periods
  Vide notification no. 22/2019-Central Tax dated April 23, 2019 CBIC announces June 21, 2019 to be the date from which no person (including a consignor, consignee, transporter, an e-commerce operator or a courier agency) shall be allowed to furnish the information in PART A of FORM GST EWB-01 in respect of a registered person, whether as a supplier or a recipient, if he has not furnished the returns for two consecutive tax periods.
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Tuesday, 23 April 2019

Delay GSTR-3B Return: Pay Interest on Gross liability HIGH COURT OF TELANGANA

Tuesday, April 23, 2019 0

Pay GST Interest on Cash and ITC (Gross Tax Liability) if delay in filing Returns : HC

Until a return is filed as self-assessed, no entitlement to credit and no actual entry of credit in the electronic credit ledger takes place. As a consequence, no payment can be made from out of such a credit entry. It is true that the tax paid on the inputs charged on any supply of goods and/services, is always available. But, it is available in the air or cloud. Just as information is available in the server and it gets displayed on the screens of our computers only after connectivity is established, the tax already paid on the inputs, is available in the cloud. Such tax becomes an in-put tax credit only when a claim is made in the returns filed as self-assessed. It is only after a claim is made in the return that the same gets credited in the electronic credit ledger. It is only after a credit is entered in the electronic credit ledger that payment could be made, even though the payment is only by way of paper entries.

the petitioner filed returns belatedly, for whatever reasons . the liability to pay interest under Section 50 (1) arose automatically.
Only when the payment is made, the Government gets a right over the money available in the ledger. Since ownership of such money is with the dealer till the time of actual payment, the Government become entitled to interest upto the date of their entitlement to appropriate it.

the claim made by the respondents for interest on the ITC portion of the tax cannot be found fault with. Hence, the Writ Petition is dismissed. However, in the circumstances, there shall be no order as to costs.

HIGH COURT OF TELANGANA

Megha Engineering & Infrastructures Ltd.

v.

Commissioner of Central Tax

V. RAMASUBRAMANIAN AND P. KESHAVA RAO, JJ.
WRIT PETITION NO. 44517 OF 2018

APRIL  18, 2019

Gandra Mohan Rao for the Petitioner. B. Narasimha Sarma, Sr. Standing Counsel for the Respondent.

ORDER




V. Ramasubramanian, J. – Aggrieved by a demand made by the respondent for payment of interest on the ITC portion of the tax paid for the months of July, 2017 to May, 2018, the petitioner has come up with the above writ petition.

2. Heard Mr. Gandra Mohan Rao, learned counsel for the petitioner and Mr. B. Narasimha Sarma, learned Senior Standing Counsel for the Department.

3. The petitioner is engaged in the manufacture of MS Pipes and in the execution of infrastructure projects. After the enactment of the Central Goods and Services Tax Act, 2017 (for short ‘CGST Act, 2017’), the petitioner registered themselves as a dealer under the Act and they claim to be regularly filing returns and paying taxes.

4. Under the CGST Act, 2017, the registration of dealers, input tax credit, filing of returns, payment of duty and issue of notices, all happen only on-line. All Assesses are required to log into the GST Portal for payment of duty and for filing of returns. The Assesses are required under the Act to file a return in Form GSTR – 3B on or before the 20th of every month, for the discharge of their liability of the previous month. The GST liability is permitted to be discharged by utilizing the ITC available. An electronic ledger is maintained, showing the amount available to the account of an assessee through the ITC.

5. The case of the petitioner is that the GST Portal is designed in such a manner that unless the entire tax liability is charged by the assessee, the system will not accept the return in GSTR – 3B Form. As a result, even if an Assessee was entitled to set off, to the extent of 95%, by utilizing the ITC, the return cannot be filed unless the remaining 5% is also paid.

6. It appears that there was a delay on the part of the petitioner in filing the returns in GSTR – 3B Forms, for the period from October, 2017 to May, 2018. This was due to the shortage of ITC, available to off-set the entire tax liability. According to the petitioner, the delay in filing the returns was also not huge. The returns for the months of October and November, 2017 and February and May, 2018 were filed with a delay of only one day. The return for December, 2017 was filed with a delay of three days. The return for January, 2018 was filed with a delay of seventeen days, the return for April, 2018 was filed with a delay of nineteen days and the return for March, 2018 was filed with a delay of twenty nine days.

7. According to the petitioner, the total tax liability of the petitioner for the period from July, 2017 to May, 2018 was Rs.1014,02,89,385/- and the ITC available to the credit of the petitioner during this period was Rs.968,58,86,133/-.

8. Thus, there was a short fall to the extent of 45,44,03,252/-, which the petitioner was obliged to pay by way of cash. According to the petitioner, they could not make payment and file the return within time due to certain constraints. However, the entire liability was wiped out in May, 2018.

9. After the petitioner discharged the entire tax liability, the Superintendent of Central Tax issued letters dated 29.06.2018 and 06.07.2018 demanding interest at 18%, in terms of Section 50 of the CGST Act, 2017. The Assistant Commissioner also issued a letter dated 04.10.2018 demanding payment of interest.

10. In response, the petitioner sent a letter dated 15.10.2018, pointing out that interest is to be calculated only on the net tax liability after deducting ITC from the total tax liability. The petitioner also paid an amount of Rs.30,92,522/- towards interest on their net tax liability.




11. However, the Department demanded interest on the total tax liability and hence the petitioner has come up with the above writ petition.

12. The respondents have filed a counter affidavit contending inter alia that under Section 39(7), every registered person, who is required to furnish a return, should have paid to the Government, the tax due as per such return, not later than the last date on which he is required to furnish such return; that Section 50 of the Act imposes a burden in the form of interest, upon every person who is liable to pay tax, but failed to pay the same; that the liability to pay interest under Section 50 (1), is a statutory obligation which the registered persons are obliged to comply on their own accord; that Section 50 (1) is not confined only to the cash component of the tax payable; that the claim of the petitioner is based upon the wrong presumption as though ITC amount was lying with the Government Treasury; and that since the liability under Section 50 is not penal in nature, the petitioner cannot escape liability.

13. From the pleadings, the only issue that arises for consideration is as to whether the liability to pay interest under Section 50 of the CGST Act, 2017 is confined only to the net tax liability or whether interest is payable on the total tax liability including a portion of which is liable to be set-off against ITC?

14. For finding an answer to the said question, we may have to look at (i) the procedure for filing of returns and payment of tax; (ii) the eligibility and conditions for taking input tax credit and (iii) the wording of Section 50.

FILING OF RETURNS:

15. Under Section 40 of the CGST Act, 2017, the procedure for filing of the first return, corresponding to the period between the date on which the dealer became liable to registration, till the date on which registration is granted, is prescribed.

16. Under Section 39, a detailed procedure is stipulated for the filing of the monthly returns. In brief, the Scheme of Section 39 is as follows:

(i)Every registered person should furnish for every Calendar Month or part thereof, a return, electronically, of inward and outward supplies of goods or services, ITC availed, tax payable, tax paid etc., on or before the 20th day of the succeeding calendar month;
(ii)The Commissioner is empowered to extend, by notification, for reasons to be recorded in writing, the time limit for furnishing the returns, for such Class of registered persons;
(iii)Every registered person, who is required to furnish a return, should pay to the Government the tax due as per such return not later than the last date on which he is required to furnish such return;
(iv)If a registered person discovers any omission or incorrect particulars in the return already filed by him, he shall rectify such omission or incorrect particulars in the return to be furnished.
17. We should point out that what we have indicated in the preceding paragraph as the essence of Section 39, are confined only to every registered person other than an input service distributor or a non-resident taxable person or a person paying tax under Section 10/51/52.

CLAIM OF ITC:

18. Section 41 deals with the claim of ITC and the provisional acceptance thereof. Under this provision, every registered person is entitled to take the credit of eligible input tax, as self-assessed in his return. The amount so claimed shall be credited on a provisional basis to his electronic credit ledger. But, this credit can be utilized only for payment of self-assessed out-put tax as per the return.

19. While Section 41 deals with the claim of ITC and provisional acceptance, Section 16 deals with the eligibility and conditions for taking ITC. Under Section 16 (1), every registered person shall be entitled to take credit of input tax charged on any supply of goods or services, which are used or intended to be used in the course of his business. The amount should be credited to the electronic credit ledger of such a person. But, the entitlement to take credit of input tax is subject to such conditions and restrictions as may be prescribed and in the manner specified in Section 49.

20. Sub-section (2) of Section 16 lays down four conditions subject to which a registered person will be entitled to the credit of any input tax. These conditions are (i) he should be in possession of a tax invoice or debit note issued by a supplier registered under the Act; (ii) he should have received the goods or services; (iii) the tax charged in respect of such supply should have been actually paid to the Government, either in cash or through utilisation of ITC; and (iv) he should have filed the return under Section 39.




21. Section 49 of the Act, which deals with payment of tax, also speaks about the manner in which ITC shall be credited. Sub-section (2) of Section 49 stipulates that the input tax credit as self-assessed in the return of a registered person should be credited to his electronic credit ledger in accordance with Section 41. The amount available in the electronic credit ledger may be used by virtue of Sub-section (4) of Section 49, for making any payment towards output tax under the Act.

22. Thus, the broad scheme of Section 39 which deals with the filing of returns, Section 41 which deals with the claim of ITC and its provisional acceptance, Section 16 which deals with the conditions and eligibility for taking ITC and Section 49 which deals with payment of tax, make it clear that the moment all the four conditions stipulated in Sub-section (2) of Section 16 are complied with, a person becomes entitle to take credit of ITC. Once a person takes credit of ITC, the amount gets credited on a provisional basis to his electronic credit ledger under Section 41 (1).

23. In other words, Section 16 (2) makes a registered person entitled to take credit of input tax. Section 41 (1) provides for a credit entry to be made on a provisional basis in the electronic credit ledger. But, the time at which this credit is made under Section 41 (1) is important. Section 41 reads as follows:

“41. Claim of input tax credit and provisional acceptance thereof .— (1) Every registered person shall, subject to such conditions and restrictions as may be prescribed, be entitled to take the credit of eligible input tax, as self-assessed, in his return and such amount shall be credited on a provisional basis to his electronic credit ledger.

(2) The credit referred to in sub-section (1) shall be utilized only for payment of self-assessed output tax as per the return referred to in the said sub-section.”

24. It is seen from Section 41 (1) that a person gets credited with the input tax, in his electronic credit ledger, only upon his filing of the return on self-assessment basis. Till a return is filed, no credit becomes available to his electronic credit ledger.

25. It is only after a credit becomes available in the electronic credit ledger that the utilization of the same for payment of self-assessed out-put tax, arises under Section 41 (2).

26. Thus, the scheme of the Act makes a distinction between (i) the entitlement to take credit which comes first; (ii) the actual entry of credit in the electronic credit ledger, which comes next; and (iii) the actual payment from out of the credit, which comes last.

27. There can be no doubt about the fact that even in respect of the input tax credit available in the electronic credit ledger, there is a necessity to make payment. Section 41(2) talks about utilization of the credit available in the electronic credit ledger, for payment of the self- assessed output tax. Section 49(2) also confirms the stage at which a credit entry is made and Section 49(4) enables a registered person to make payment from out of the credit so available in the electronic credit ledger. Therefore, for finding an answer to the dispute on hand, one must find out (i) when a credit entry is entered in the electronic credit ledger of the registered person; and (ii) when payment out of the same is made in lieu of cash. Once it is statutorily prescribed that payment can be made either by way of cash or from out of the credit available in the electronic credit ledger, the date of payment in respect of both assumes significance for determining the liability to pay interest.

Wording of section 50

28. Having thus seen the scheme of Sections 39, 41, 16 and 49, let us now take a look at Section 50 about which present dispute revolves, which reads as under:

50. Interest on delayed payment of tax.—(1) Every person who is liable to pay tax in accordance with the provisions of this Act or the rules made there under, but fails to pay the tax or any part thereof to the Government within the period prescribed, shall for the period for which the tax or any part thereof remains unpaid, pay, on his own, interest at such rate, not exceeding eighteen per cent., as may be notified by the Government on the recommendations of the Council.

(2) The interest under sub-section (1) shall be calculated, in such manner as may be prescribed, from the day succeeding the day on which such tax was due to be paid.

(3) A taxable person who makes an undue or excess claim of input tax credit under sub-section (10) of section 42 or undue or excess reduction in output tax liability under sub-section (10) of section 43, shall pay interest on such undue or excess claim or on such undue or excess reduction, as the case may be, at such rate not exceeding twenty-four per cent., as may be notified by the Government on the recommendations of the Council.”

29. It is seen from Sub-section (1) of Section 50 that the liability to pay interest arises automatically, when a person who is liable to pay tax, fails to pay the tax to the Government within the period prescribed. The liability to pay interest is in respect of the period for which the tax remains unpaid. In fact, the liability to pay interest under Section 50 (1) arises even without any assessment, as the person is required to pay such interest “on his own“.

30. While Sub-Section (1) of Section 50 speaks about the liability to pay interest under one contingency, viz., the failure to pay tax within the period prescribed, Sub-Section (3) of Section 50 speaks about the liability to pay interest under a different contingency. Whenever an undue or excess claim of ITC is made or whenever an undue or excess reduction in out-put tax liability is made, a liability to pay interest arises under Sub-section (3). The words “on his own” used in Sub-section (1), are not used in Sub-section (3) of Section 50.



31. Therefore, it is clear that the liability to pay interest under Section 50 (1) is self-imposed and also automatic, without any determination by any one. Hence, the stand taken by the department that the liability is compensatory in nature, appears to be correct.

32. Once it is clear that the liability to pay interest arises for non-payment within the period prescribed, we should see; (i) what is the period prescribed for payment of tax and (ii) the mode of such payment. Under Section 39 (7), every registered person (other than an Input Service Distributor or a Non-resident taxable person or a person paying tax under Sections 10/51/52) is obliged to pay to the Government, the tax due as per such return, not later than the date on which he is required to furnish such return. Sub-sections (1) and (7) of Section 39 read as follows:

“39. Furnishing of Returns.—(1) Every registered person, other than an Input Service Distributor or a non-resident taxable person or a person paying tax under the provisions of section 10 or section 51 or section 52 shall, for every calendar month or part thereof, furnish, in such form, manner as may be prescribed, a return, electronically, of inward and outward supplies of goods or services or both, input tax credit availed, tax payable, tax paid and such other particulars as may be prescribed on or before the twentieth day of the month succeeding such calendar month or part thereof.


(2) to (6)******
(7) Every registered person, who is required to furnish a return under sub-section (1) or sub-section (2) or sub-section (3) or sub-section (5), shall pay to the Government the tax due as per such return not later than the last date on which he is required to furnish such return.

(8) to (10)******”
33. Therefore, the period prescribed for payment of tax in respect of every month is on or before the 20th day of the succeeding calendar month.

34. The mode of payment is stipulated in Section 49. Section 49 reads as follows:

“49. Payment of tax, interest, penalty and other amounts.—(1) Every deposit made towards tax, interest, penalty, fee or any other amount by a person by internet banking or by using credit or debit cards or National Electronic Fund Transfer or Real Time Gross Settlement or by such other mode and subject to such conditions and restrictions as may be prescribed, shall be credited to the electronic cash ledger of such person to be maintained in such manner as may be prescribed.

(2) The input tax credit as self-assessed in the return of a registered person shall be credited to his electronic credit ledger, in accordance with section 41, to be maintained in such manner as may be prescribed.

(3) The amount available in the electronic cash ledger may be used for making any payment towards tax, interest, penalty, fees or any other amount payable under the provisions of this Act or the rules made thereunder in such manner and subject to such conditions and within such time as may be prescribed.

(4) The amount available in the electronic credit ledger may be used for making any payment towards output tax under this Act or under the Integrated Goods and Services Tax Act, 2017 (Act No.13 of 2017) in such manner and subject to such conditions and within such time as may be prescribed.

(5) The amount of input tax credit available in the electronic credit ledger of the registered person on account of,–

a)integrated tax shall first be utilised towards payment of integrated tax and the amount remaining, if any, may be utilised towards the payment of central tax and State tax, or as the case may be, Union Territory tax, in that order;
(b)the central tax shall first be utilised towards payment of central tax and the amount remaining, if any, may be utilised towards the payment of integrated tax;
(c)the State tax shall first be utilised towards payment of State tax and the amount remaining, if any, may be utilised towards payment of integrated tax;
(d)the Union territory tax shall first be utilised towards payment of Union territory tax and the amount remaining, if any, may be utilised towards payment of integrated tax;
(e)the central tax shall not be utilised towards payment of State tax or Union territory tax; and
(f)the State tax or Union territory tax shall not be utilised towards payment of central tax.
(6) The balance in the electronic cash ledger or electronic credit ledger after payment of tax, interest, penalty, fee or any other amount payable under this Act or the rules made thereunder may be refunded in accordance with the provisions of section 54.

(7) All liabilities of a taxable person under this Act shall be recorded and maintained in an electronic liability register in such manner as may be prescribed.

(8) Every taxable person shall discharge his tax and other dues under this Act or the rules made thereunder in the following order, namely:–

a)self-assessed tax, and other dues related to returns of previous tax periods;
(b)self-assessed tax, and other dues related to the return of the current tax period;
(c)any other amount payable under this Act or the rules made thereunder including the demand determined under section 73 or section 74.
(9) Every person who has paid the tax on goods or services or both under this Act shall, unless the contrary is proved by him, be deemed to have passed on the full incidence of such tax to the recipient of such goods or services or both.

Explanation:- For the purposes of this section,-
(a)the date of credit to the account of the Government in the authorised bank shall be deemed to be the date of deposit in the electronic cash ledger;
(b)the expression,—
(i)“tax dues” means the tax payable under this Act and does not include interest, fee and penalty; and
(ii)“other dues” means interest, penalty, fee or any other amount payable under this Act or the rules made thereunder.”
35. It is seen from Sub-section (2) of Section 49 that a credit entry is made in the electronic credit ledger of a registered person, only when the ITC, as self-assessed, is found in the return of a registered person. After a credit entry is made in the electronic credit ledger, the same becomes available for making payment. This is clear from Sub-section (3) of Section 49. If after payment, a balance is still available in the electronic credit ledger, the same is liable to be refunded in accordance with Section 54.

36. Therefore, in the entire scheme of the Act three things are of importance. They are; (i) the entitlement of a person to take credit of eligible in-put tax, as assessed in his return; (ii) the credit of such eligible in-put tax in his electronic credit ledger on a provisional basis under Section 41 (1) and on a regular basis under Section 49 (2); and (iii) the utilization of credit so available in the electronic credit ledger for making payment of tax, interest and penalty etc., under Section 49 (3).

37. In other words, until a return is filed as self-assessed, no entitlement to credit and no actual entry of credit in the electronic credit ledger takes place. As a consequence, no payment can be made from out of such a credit entry. It is true that the tax paid on the inputs charged on any supply of goods and/services, is always available. But, it is available in the air or cloud. Just as information is available in the server and it gets displayed on the screens of our computers only after connectivity is established, the tax already paid on the inputs, is available in the cloud. Such tax becomes an in-put tax credit only when a claim is made in the returns filed as self-assessed. It is only after a claim is made in the return that the same gets credited in the electronic credit ledger. It is only after a credit is entered in the electronic credit ledger that payment could be made, even though the payment is only by way of paper entries.

38. If we take a common example of banking transactions, this can be illustrated much better. An amount available in the account of a person, though available with the bank itself, is not taken to be the money available for the benefit of the bank. Money available with the bank is different from money available for the bank till the bank is allowed to appropriate it to itself. Similarly, the tax already paid on the in-puts of supplies of goods or services, available somewhere in the air, should be tapped and brought in the form of a credit entry into the electronic credit ledger and payment has to be made from out of the same. If no payment is made, the mere availability of the same, there in the cloud, will not tantamount to actual payment.

39. Admittedly, the petitioner filed returns belatedly, for whatever reasons. As a consequence, the payment of the tax liability, partly in cash and partly in the form of claim for ITC was made beyond the period prescribed. Therefore, the liability to pay interest under Section 50 (1) arose automatically. The petitioner cannot, therefore, escape from this liability.

40. Let us look at it from another angle. Suppose a registered person under the Act purchases goods, which have suffered tax, to be used as inputs in the goods to be sold by him. Let us assume that the purchase is made in January and hence the same is reflected in the return filed by February 20. While filing the return in February, the dealer could have taken credit and it is possible that the credit is available in the electronic credit ledger for the month of February. If after some kind of processing, the goods are sold in March, the output tax becomes payable while filing the return by April 20. This payment can be either by way of cash or by way of adjustment against the claim for ITC. The payment is made by way of cheque in the case of the former and by way of a claim made in the return by way of an entry. Only when the payment is so made, the Government gets a right over the money available in the ledger. Since ownership of such money is with the dealer till the time of actual payment, the Government become entitled to interest upto the date of their entitlement to appropriate it.



41. Mr. Gandra Mohan Rao, learned counsel relied upon an approval made in principle by the GST Council for the amendment of the Act. The Press release of the Ministry of Finance in this regard reads as follows:

“The GST Council in its 31st meeting held today at New Delhi gave in principle approval to the following amendments in the GST Acts:

1.Creation of a Centralised Appellate Authority for Advance Ruling (AAAR) to deal with cases of conflicting decisions by two or more State Appellate Advance Ruling Authorities on the same issue.
2.Amendment of section 50 of the CGST Act to provide that interest should be charged only on the net tax liability of the taxpayer, after taking into account the admissible input tax credit, i.e., interest would be leviable only on the amount payable through the electronic cash ledger.
The above recommendations of the Council will be made effective only after the necessary amendments in the GST Acts are carried out.”

42. But, unfortunately, the recommendations of the GST Council are still on paper. Therefore, we cannot interpret Section 50 in the light of the proposed amendment.

43. The learned counsel for the petitioner relied upon two decisions of the Gujarat High Court, one in State of Gujarat v. Dashmesh Hydraulic Machinery, dated 19.01.2015, and another in State of Gujarat v. Nishi Communication, dated 29.01.2015.

44. But, both the above decisions arose out of Gujarat Value Added Tax Act. The VAT regime and the GST regime differ from each other substantially. Therefore, these decisions do not go to the rescue of the petitioner.

45. In view of the above, the claim made by the respondents for interest on the ITC portion of the tax cannot be found fault with. Hence, the Writ Petition is dismissed. However, in the circumstances, there shall be no order as to costs.

As a sequel thereto, miscellaneous petitions, if any, pending in the writ petition, shall stand closed.


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Monday, 8 April 2019

E-Way Bill new features ! Easy to make E-way bill| New changes !

Monday, April 08, 2019 0

E-Way Bill new features ! Easy to make E-way bill| New changes !

E-Way Bill new features ! Easy to make E-way bill New changes !

E-Way Bill new features ! Easy to make E-way bill| New changes !


Following new features shall be added in the Eway bill portal.

1. Auto calculation of route distance based on PIN code for generation of EWB

Now, E-waybill system is being enabled to auto calculate the route distance for movement of goods, based on the Postal PIN codes of source and destination locations. That is, the e-waybill system will calculate and display the actual distance between the supplier and recipient addresses. User is allowed to enter the actual distance as per his movement of goods. However, it will be limited to 10% more than the displayed distance for entry.

2. Blocking of generation of multiple E-Way Bills on one Invoice/document

Based on the representation received by the transporters, the government has decided not to allow generation of multiple e-way bills based on one invoice, by any party – consignor, consignee and transporter. 

3. Extension of E-Way Bill in case Consignment is in Transit

The transporters had represented to incorporate the provision to extend the E-way Bill, when the goods are in transit. The transit means the goods could be on Road or in Warehouse. This facility is being incorporated in the next version for the extension of E-way Bill. 

4. Blocking of Interstate Transactions for Composition dealers

As per the GST Act, the composition tax payers are not supposed to do Interstate transactions. Hence next version will not allow generation of e-way bill for inter-state movement, if the supplier is composition tax payer.



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#generate e way bill

**Disclaimer**

1. This post is for creating awareness about the newly introduced tax reform GST.

2. Here TaxOnline24 team does not intend to advertise/solicit clients & doesn’t take responsibility for any decisions taken on the basis of this post.

For more important updates and resources connect with us on www.taxonline24.in
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Saturday, 6 April 2019

GST Registration Procedure ! REGISTRATION करना नहीं होगा आसान !

Saturday, April 06, 2019 0

GST Registration Procedure ! 

REGISTRATION करना नहीं होगा आसान ! 

Verification of applications for grant of new GST Registration by officer

GST Registration Procedure

GST Registration Procedure


This post helps you to understanding about the strict verification which shall be done now while applying for the new GST Registration. 

Recently, a large number of registrations have been cancelled by the proper officer under the provisions of sub-section (2) of section 29 of the Central Goods and Services Act, 2017 (hereinafter referred to as „CGST Act‟) read with rule 21 of the Central Goods and Services Rules, 2017 (hereinafter referred to as „CGST Rules‟) on account of noncompliance of the said statutory provisions. In this regard, instances have come to notice that such persons, who continue to carry on business and therefore are required to have registration under GST, are not applying for revocation of cancellation of registration as specified in section 30 of the CGST Act read with rule 23 of the CGST Rules. 

Instead, such persons are applying for fresh registration. Such new applications might have been made as such person may not have furnished requisite returns and not paid tax for the tax periods
covered under the old/cancelled registration. Further, such persons would be required to pay all liabilities due from them for the relevant period in case they apply for revocation of cancellation of registration. 


Hence, to avoid payment of the tax liabilities, such persons may be using the route of applying for fresh registration. It is pertinent to mention that as per the provisions contained in proviso to sub-section (2) of section 25 of the CGST Act, a person
may take separate registration on same PAN in the same State.

Therefore, it is advised that where the applicant fails to furnish sufficient convincing justification or the proper officer is not satisfied with the clarification, information or documents furnished, then, his application for fresh registration may be considered for rejection.


**Disclaimer** 

1. This post is for creating awareness about the newly introduced tax reform GST. 

2. Here TaxOnline24 team does not intend to advertise/solicit clients & doesn’t take responsibility for any decisions taken on the basis of this post.

For more important updates and resources connect with us on www.taxonline24.in


gst registration
gst registration online
gst registration process
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Friday, 15 March 2019

Compulsory Acquisition Of Urban Land Eligible For Tax Benefit

Friday, March 15, 2019 0

Compulsory Acquisition of Urban Land Eligible for Tax Benefit; Sri Harimurali Sreedharapanickar Vs. ITAT Cochin case no. – 207/coch/2017 date -5.02.2019

Fact of the Case:-

  1. In the instant case the assessee is the beneficiary of Capital Gain Tax from sale of agricultural land under compulsory acquisition of urban land.
  2. The Assessing Officer reopened the assessment against the assessee for the reason that the assessee had not disclosed capital gains tax for land sold to Vizhinjam International Seaport Limited.
  3. The assessee claimed that the land was compulsorily acquired and the same being an agricultural land, coming within the notified area, was entitled to the benefit u/s 10(37) of the I.T Act.
  4. The contention of the assessee was rejected by the Assessing Officer, solely for the reason that the land in question was not compulsorily acquired but was transferred by executing a sale deed. Therefore, it was concluded by the Assessing Officer that the assessee was not entitled to the benefit of section 10(37) of the I.T Act.
  5. The assessee appeared before Tribunal contesting the decision of A.O

Decision of the Case

  1. The Tribunal noted that the solitary reason for not granting of the benefit of section 10(37) of the Income Tax Act in respect of the acquisition of urban agricultural land was that it was not a
  2. compulsory acquisition, but only executed through a negotiated sale deed.
  3. In the instant case, the entire procedure prescribed under the Land Acquisition Act was followed.
  4. The only price was fixed upon a negotiated settlement.
  5. The Income Tax Appellate Tribunal (ITAT), Cochin bench has held that the compulsory acquisition of urban land is eligible for tax deduction under the Income Tax Act, 1961.

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Thursday, 14 March 2019

Rent Paid In Cash Can’t Be Allowed As Business Expenses

Thursday, March 14, 2019 0

Rent paid in cash can’t be allowed as business expenses without details
Shri Santilal B. Parekh vs. ITAT Mumbai
case no. – 4262/mum/2017 date -4.02.2019

Fact of the Case

  1. In the present case the assessee is a person who is engaged in business.
  2. The assessee claimed deduction of Rs.54000 p.m as rent expenses of his business. But the A.O denied to allow the deduction.
  3. The assessee then appealed to the ITAT against the decision of A.O

Decision of the Case

The Income Tax Appellate Tribunal observed the
followings:-
  1. The assess paid rent in cash.
  2. The rent paid in cash of Rs.54000 p.m without any proper supporting document in respect of rent payment i.e no lease rent agreement.
  3. Even there is no proper evidence that the premise has been used wholly for the running of the said business.
  4. Only the assessee has submitted selfsupporting vouchers with respect to the payment of rent in cash.
  5. Under this situation, the amount of rent paid in cash cannot be allowed as business expenses.
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