Article

CBDT has again received the information from foreign jurisdictions under the Automatic Exchange of Information (AEOI) program regarding the Foreign Assets and foreign source of Income held by Indian Residents. They have again started intimating such taxpayers to disclose their foreign assets in their ITRs by 10th December 2025 or incase they have filed their ITRs, then to revise by 31st December 2025. This program is called “Nonintrusive Usage of Data to Guide and Enable (NUDGE)”. There would not be a scrutiny, assessment, etc but residents should just disclose their Foreign Assets and foreign source of Income in their ITRs.

Date:2025-12-10

The CBDT it seems now wishes AOs to focus on the entertainment sector. It has directed AOs vide F.No.225/215/2018/ITA-II to ensure uniformity in assessing the entertainment sector by examining pre-operative expenses under Section 35D, verifying Form No. 52A (with possible Section 272A penalty) from film producers, and allowing deductions per Rules 9A/9B. Please refer the circular for more details.

Date:2025-11-24

Consider the situation – An assessee subject to Transfer Pricing pays its AE for “provision of basic market research and testing services”. Further it also pays “infrastructure services fees and reimbursement of expenses” separately. However, actually this “infrastructure services fees and reimbursement of expenses” is also as a part of “basic market research and testing services”. The TP officer accepts the expenditure for “basic market research and testing services” to AE but disputes “infrastructure services fees and reimbursement of expenses”.

Date:2025-11-22

A Look Out Circular (LOC) is essentially an administrative mechanism whereby certain designated authorities (like Customs) are permitted to issue requests to the immigration/emigration authorities to monitor and control the movement of individuals, whether they are Indian or freeing nationals, arriving or departing India at various points of entry and exit, such as airports, seaports, and land borders. In Customs recourse to LOC can be taken in cognizable offence, where the accused is deliberately evading arrest or not appearing in the trial court despite Non Bailable Warrants (NBWs) and other coercive measures and there is likelihood of the accused leaving the country to evade trial / arrest. A person can be intercepted / interrogated/ baggage examined/ searched even in the case of non -cognizable offence. The only restriction is that the person can not be detained/ arrested/ prevented from leaving the country.

Date:2025-11-21

The following are offences to note in Income Tax Act 1961 & Income Tax Act 2025

Consider the case The assessee company filed its income tax return for AY 2023-24 belatedly on 31.12.2023 without paying the admitted tax liability of Rs.8,72,81,520/-. Notices were issued to the company to pay the tax dues, but it failed to do so.

Date:2025-11-21

The Income Tax Department and GST Dept share information on the basis of which the other Department Act. However, this Act should not be in haste but on own inquiry. A hasteful action on GST Department�s information has caused some embarrassment for the Income Tax Dept in the case of VASUKI GLOBAL INDUSTRIAL LIMITED Vs PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX [2025-VIL-293-GUJ-DT], where it had received information from the GST Department that the petitioner was involved in GST invoice fraud and was availing or passing on fraudulent Input Tax Credit on fake invoices. Based on this information, the Income Tax Department had issued notices under Section 148A(b) of the Income Tax Act, 1961 to various buyers and sellers who had transacted with the petitioner. 

Date:2025-11-20

In a horde of matters, especially in Tamil Nadu, the taxpayers were unaware of the proceedings because the show cause notice and the assessment order were only uploaded on the GST portal � they were neither physically delivered nor sent by registered post. Now the contest was against the ex-parte orders, especially because there is a huge liability of 10% pre-deposit. Ironically from 1st October 2025, even on penalty Orders. Hence, lets understand the issue.

Date:2025-11-20

Fines and penalties under Customs can be disproportionate and may need to be contested. However, to contest these, more is required to be done than merely citing case laws. Let us understand some penal provisions under Customs as follows �

SECTION 111: Confiscation of improperly imported goods, etc.

SECTION 112: Penalty for improper importation of goods, etc.

Any person, -

(a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act, or�

Date:2025-11-19

Non-Filing of ITR and non-payment of taxes can cause prosecution u/s Section 276 C which provides that a person who willfully attempts to evade tax, penalty, or interest under the Income Tax Act, 1961, or under-reports income, may be subject to rigorous imprisonment and fines. If the amount evaded or tax on under-reported income exceeds Rs.25 Lakhs, imprisonment ranges from 6 months � 7 years with a fine; otherwise, imprisonment ranges from 3 months � 2 years with a fine.

Date:2025-11-19

Consider a 100% subsidiary Co. B provides a corporate guarantee to Bank C for Holding Co. A. This means that incase Co. A defaults, then Co. B would make good the borrowed amount to Bank C. A �negative lien� on the other hand means an undertaking by the owner of assets to a lender not to sell these assets on which a charge or a lien without the prior permission of the lender. It is an undertaking of convenience for not to sell the encumbered assets. It does not create any liability on the assessee.

Date:2025-11-17

Consider a case � A SCN in DRC 01 was issued and the taxpayer was asked to submit reply in one week. Taxpayer does not respond. Order is issued in DRC-07 confirming the demand. Hence, a short time was provided to reply to SCN and as mandated u/s 75(4) of CGST Act 2017, an opportunity of hearing has not been granted where an adverse decision is contemplated against the taxpayer. Section 75(4) states as follows �

Date:2025-11-17

GST 2.0 has eased out the burden on textiles with a value between Rs.2500/- to Rs.1000/- from 12% to 5%. However, of textiles with a value above Rs.2500/- GST remains 18%, but the arbitrage becomes 13% and this could lead to some questions, given that for consumers the final price matters as they cannot take ITC. Consider a pyjama set with a Kurta (Top) of value Rs.2000/- and Pyjama (Bottom) of value Rs.1000/-. If both are considered separately the GST would be 5%, but incase they are considered as a set, then it would be 18%. This was precisely the question asked before the AAR of Tamil Nadu in LINK UP TEXTILES PRIVATE LIMITED [2025-VIL-162-AAR]. To understand, a pyjama� is �a soft, loose clothing

Date:2025-11-15

Section 37(1) of Income Tax Act 1961 (ITA�61) provides that �Any expenditure (not being expenditure of the nature described in sections 30 to 36 1[****] and not being in the nature of capital expenditure or personal expenses of the assessee), laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head "Profits and gains of business or profession".�

Date:2025-11-01

The Core Issue is that Circular No. 170/02/22 dated 06.07.2022 was issued with an objective as follows: �It is desirable that correct reporting of information is done by the registered person in FORM GSTR-3B and FORM GSTR-1 so as to ensure correct accountal and accurate settlement of funds between the Central and State Governments�

Date:2025-11-01

The question which has arisen many a times is that how TDS Provisions can be applied where Payee is not known as TDS is deducted and deposited in payee�s name? At the year-end on accrual basis and prudence, certain expenses have to be accounted for in the relevant financial year on �estimated basis� to bring true and fair financial picture. As the payee name or amount in some cases is not known at the time of provisions, how can TDS be deducted?

Date:2025-10-30

Road transportation is not certain 100% of the times. Vehicles do breakdown and the sequence of events on a vehicle breakdown is generally as follows �

A. Vehicle develops a break down.

B. Driver of the vehicle tries to get it repaired, but fails.

C. Goods are shifted in another vehicle.

D. Goods cannot be transported within the time-line as prescribed in the e-way bill

E. E-way bill expires

F. New E-way bill is generated

Now the question is whether the transporter should generate new EWB before onward journey or on

Date:2025-10-29

Rule 10(1)(c) of Customs Valuation Rules states that: "10. Cost and services. - (1) In determining the transaction value, there shall be added to the price actually paid or payable for the imported goods,

(c) royalties and licence fees related to the imported goods that the buyer is required to pay, directly or indirectly, as a condition of the sale of the goods being valued, to the extent that such royalties and fees are not included in the price actually paid or payable."

Date:2025-10-23

In few cases it is seen in certain pockets that just to pass an adverse order, the reply of the taxpayers is not taken on record contesting that the reply was filed after the time which was granted in the SCN. In such cases the question to be answered it �Whether the proper officer is obliged in law to consider the reply/representation submitted by the assessee in response to the show cause notice issued under Section 73(1) of the SGST Act, 2017 where the reply has not been submitted within the period stipulated in the show cause notice, but before an order under Section 73(9) of the SGST Act, 2017 is passed?�

Date:2025-10-22

Can �Cloud Data� incase of Income Tax Act 2025 (ITA�25) be considered �books� �
If Loose papers incase of Survey/ Search or Seizure are incriminating evidence when tallied to Books, under Income Tax Act 1961 (ITA�61)

Date:2025-08-25

Section 153A and 153C of The Income Tax Act 1961 were in force till 31-3-2021. The trigger for section 153C is the discovery of incriminating materials in the course of a search [by the AO of the search party � AO1] that pertain or belong to a third party and which may have a bearing on the determination of the total income of such third party for the six-assessment year period or the relevant assessment years.

Date:2025-08-18

Clarification regarding requirement of reversal of Input Tax Credit by electronic commerce operators in respect of supplies made under section 9(5) of CGST Act, 2017: The GST Council recommended that no proportional reversal of ITC under section 17 (1) or section 17 (2) of CGST Act, 2017 is required to be made by the ECO in respect of supplies for which they are required to pay tax under section 9(5) of CGST Act, 2017.

Date:2024-12-31

In a significant move to address long-standing concerns regarding the taxability of vouchers under GST, the GST Council made the following recommendations:

i. To omit sections 12(4) and 13(4) from CGST Act, 2017 and rule 32(6) from CGST Rules, 2017 to resolve ambiguities in the treatment of vouchers.

Date:2024-12-31

To clarify that RBI regulated Payment Aggregators are eligible for the exemption under entry at Sl. No. 34 of notification No. 12/2017-CT(R) dated 28.06.2017 since they fall within the ambit of �acquiring bank� as defined in the said entry.

Date:2024-12-31

Decision:

To omit the definition of declared tariff and suitably amend the definition of specified premises (from the services rate and exemption notifications) to link it with actual value of supply of any unit of accommodation provided by the hotel and to make the rate of GST applicable on restaurant services in such hotels, for a given financial year, dependent upon the �value of supply� of units of accommodation made in the preceding financial year, i.e. 18% with ITC if the �value of supply� exceeded Rs. 7,500 for any unit of accommodation in the preceding financial year, and 5% without ITC otherwise.

Date:2024-12-31

The GST Council recommended inter-alia-

i. To amend section 38 of CGST Act, 2017 and rule 60 of CGST Rules, 2017 to provide a legal framework in respect of generation of FORM GSTR-2B based on the action taken by the taxpayers on the Invoice Management System (IMS).

ii. To amend section 34(2) of CGST Act, 2017, to specifically provide for requirement of reversal of input tax credit as is attributable to a credit note, by the recipient, to enable the reduction of output tax liability of the supplier.

Date:2024-12-31

Amendment in Schedule III of CGST Act, 2017

To insert clause (aa) in paragraph 8 of Schedule III of the CGST Act, 2017w.e.f.01.07.2017, to explicitly provide that supply of goods warehoused in a Special Economic Zone (SEZ) or Free Trade Warehousing Zone (FTWZ) to any person before clearance of such goods for exports or to the Domestic Tariff Area, shall be treated neither as supply of goods nor as supply of services.

Date:2024-12-31

Analysis of GST Council�s Decision on Clarification on availability of Input Tax Credit as per section 16(2)(b) of CGST Act, 2017 in respect of goods which have been delivered by the supplier at his (supplier�s) place of business; & Impact of Place of Supply u/s 10(1)(a) & (b) of IGST Act

Date:2024-12-31

Now that the new Government has been formed, the policy landscape would again get moving. The long pending GST Tribunals would finally see light of day soon. With around 15000 cases pending to be filed before the GSTAT, the following are the reasons why taxpayers should start preparing for the GSTAT from now�

Date:2024-06-11

Date:2024-03-31

In March and April, along with the closure of books of accounts for tax departments and finance departments, it is also important to do multi-ference tax compliances as per GST and income tax norms.
In this article, we will go through a 20-point checklist for GST and income tax compliance which are required to be done in March and April so that the tax compliances can be adequately taken care of.
1. Stock Taking & ITC Reversals � for Stock lost/ stolen/ Destroyed/ Written Off � But Not stock �damaged�/ provision for non-moving items. In such stock taking, there are various items which are found destroyed, stolen, and which are written off or found lost. In such case, ensure that corresponding GST/ITC reversal is done. However, for merely slow-moving and non-moving items which are not destroyed but damaged or not even damaged. There is no required for GST/ITC reversal even in case a provision is made in the books of accounts.

Date:2024-03-13

ITC is the biggest area of dispute in GST. Already many taxpayers are dwindling
with issues in claiming ITC itself such as the following �
1. Time barring period of ITC due to claiming ITC in GSTR-3B late � Claim of
ITC in GSTR-3B after the time barring period. Say The ITC of FY 21-22 is availed in the GSTR-3B of Nov�2022 filed in Dec�22 instead of the GSTR-3B filed in Nov�22 for Oct�22.
2. Time barring period of ITC due to filing GSTR-3B late � Delayed filing of
GSTR-3B as per erstwhile time barring period u/s 16(4) of CGST Act 2017. Say the GSTR-3B of Sep�2021 is filed on 25th Oct�21 instead of 20th Oct�21, which is the time barring date for taking ITC for FY 2020-21

Date:2024-02-22

Ordinarily, SCNs may be challenged at High Courts on account of �
A. SCN issued without jurisdiction.
B. Even if one proceeds on the basis that statements in the SCN are correct, no case is made out for the threatened action.
C. There is a gross violation of natural justice or a right of the taxpayer.
The question is whether a case can be said to be made out by merely alleging �fraud/suppression/misrepresentation� without mentioning the reasons of the allegation. Is a nonspeaking order w.r.t. invocation of a larger period of limitation, not a violation of the right of the taxpayer.

Date:2024-02-15

Section 75 of The CGST Act 2017 is a Code in Itself for invocation of Natural Justice in GST
Cases and states as follows �
�75 (4) An opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person.
75 (5) The proper officer shall, if sufficient cause is shown by the person chargeable with tax, grant time to the said person and adjourn the hearing for reasons to be recorded in writing:
Provided that no such adjournment shall be granted for more than three times to a person during the proceedings.
75 (6) The proper officer, in his order, shall set out the relevant facts and the basis of his decision.
75 (7) The amount of tax, interest and penalty demanded in the order shall not be in excess of the amount specified in the notice and no demand shall be confirmed on the grounds other than the grounds specified in the notice.�

Date:2024-01-28

Recognising the distinction between technical errors and intentional evasion is essential for maintaining a balanced and equitable approach to tax enforcement. As nations continue their pursuit of effective tax administration, upholding this principle becomes paramount in fostering voluntary compliance, preserving trust in the tax system, and ensuring the judicious use of regulatory powers. In this backdrop, we are discussing E-Waybill detention cases which
are being handled by Industry as well as by consultants on a regular basis.

Date:2024-01-09

Consider a case as follows �
GST Amount Payable For Jan 2024 period Rs.10,00,000/-
Electronic Credit Ledger Balance Rs.8,00,000/-
Electronic Cash Ledger Balance Rs.2,00,000/-
Due Date of return for Jan 2024 period 20th Feb 2024
Return for Jan 2024 period filed on 25th Feb 2024
Interest Liability NIL
While Section 50 of The CGST Act was retrospectively amended to provide that there would be
no interest liability on delayed filing of GSTR-3B to the extent of balance in The Electronic Credit
Ledger, the Courts in the following and other cases had held that interest was payable even
after there was balance in the Electronic Cash Ledger �
(i) Refex Industries vs. Assistant Commissioner of CGST reported in 2020 SCC Online Mad 587 � 2020-VIL-71-MAD;
(ii) Manasarover Motors P Ltd vs Assistant Commissioner reported in 2020 SCC Online Mad 28155 � 2020-VIL-524-MAD;
(iii) Srinivasa Stampings vs. SPT of GST & CE in W.P.No.7129 of 2021 � 2022-VIL-285-MAD
(iv) P.K. Ores P Ltd vs Commissioner of State Tax reported in MANU/OR/236/2022 � 2022-VIL-365-ORI;
(v) Orissa Stvedores Ltd vs. Union of India reported in MANU/OR/1116/2022;
(vi) RSB Transmission (India) Ltd. vs. Union of India reported in MANU/JH/1260 � 2022-VIL-745-JHR;
(vii) Haji Lal Mohd Biri Works vs. State of Uttar Pradesh reported in (1974) 3 SCC 137 � 1973-VIL-22-SC;
(viii) The Sales Tax Officer vs. Dwarika Prasad Sheo Karan Dass reported in (1977) 1 SCC 22 � 1976-VIL-43-SC;
(ix) Khazan Chand vs. State of Jammu and Kashmir reported in (1984) 2 SCC 456 � 1984-VIL-12-SC;
(x) Prahlad Rai vs. Sales Tax Officer reported in (1991) Supp (2) SCC 612 � 1990-VIL-20-SC;
(xi) Commissioner of Sales Tax vs. Qureshi Crucible reported in (1993) Supp (3) SCC 495 � 1993-VIL-10-SC;

Date:2024-01-29

Going to Tribunal under GST requires 30% pre-deposit. Moving to High Court in each case requires hefty charges which may be affordable in some cases but not in all cases. It seems that due to the said reasons taxpayers have now
surrendered to the fact that in many cases and in many states ADT-02 and DRC01A and thereafter DRC-01 is issued within a gap of one week sometimes in one day also!� However, if an Order is also issued without providing opportunity of being heard, then the back of the taxpayer is against the wall and he has to move forward and approach High Court. The question thus arises that what should be the reasonable time limit to be granted to reply to a SCN under GST. Section 73 does not provide the same and hence would it be left to the discretion of the officers? Let us therefore read Section 73(8) & 73(9), which state as follows �
(8) Where any person chargeable with tax under sub-section (1) or subsection (3) pays the said tax along with interest payable under section 50 within thirty days of issue of show cause notice, no penalty shall be payable and all proceedings in respect of the said notice shall be deemed to be concluded.

Date:2023-02-18

Consider the situation where the input product was chargeable only at the rate of 5% and assesses supplier mistakenly charged a higher rate of 18% GST on input for the final product, which is chargeable to a lower rate of GST of 5%. Inverted duty refund was denied on the grounds that �
1. Assesse should also have collected 18% GST, at par with the rate of tax paid
by the supplier for the input product.
2. Since the input product is chargeable only at the rate of 5%, however, it has
been wrongly made at the rate of 18% by the vendor of the assesse. Therefore,
the assesse cannot invoke Section 54(3) of CGST Act.

Date:2023-02-06

Recently, the Hon�ble Supreme Court of India vide its decision dated 13.03.2023 in the case of State of Karnataka Versus M/s Ecom Gill Coffee Trading Private Limited [CIVIL APPEAL NO. 230 OF 2023 (Arising from SLP (Civil) No. 2572/2022)] � 2023-VIL-20-SC in paragraph Nos.14 and 15 held as under:
�..While claiming ITC as per section 70 of the KVAT Act, 2003, the purchasing dealer has to prove the genuineness of the transaction and as per section 70 of the KVAT Act, 2003, the burden is upon the purchasing dealer to prove the same while claiming ITC.
In view of the above and for the reasons stated above and in absence of any further cogent material like furnishing the name and address of the selling dealer, details of the vehicle which has delivered the goods, payment of freight charges, acknowledgement of taking delivery of goods, tax invoices and payment particulars etc. and the actual physical movement of the goods by producing the cogent materials, the Assessing Officer was absolutely justified in denying the ITC, which was confirmed by the first Appellate Authority��

Date:2023-03-13

A very important judgment as held in the case of BANSAL INTERNATIONAL Vs COMMISSIONER OF DGST [2023-VIL-809-DEL], on Interest available to taxpayers on GST refunds needs thorough discussion.

Date:2023-11-24

Date:2023-11-15

Status Holder Certificates issued under FTP 2015-20 will remain valid till 30th September 2023 only and any IEC holder willing to avail the Status Holder Certificate under the FTP 2023. It has been provided by Public Notice No: 32/2023 & Trade Notice No. 28/2023-24 issued by the DGFT that The Status Holder Certificate (SHC) shall now be electronically generated based on export data available in DGCI&S database with no requirement by the exporter to file any kind of application in most cases. However, in certain cased an application may still be required to be filed online.

Date:2023-11-05

The gold coins and white goods distributed by principals to the dealers, on the quantity lifted by the dealers, cannot be regarded as �gifts� as the dealer is eligible for the gold coins and white goods only to the extent of amount lying as credit to his account and is subjected to the satisfaction of the terms and conditions of the Scheme. This would result in the enhancement of the sales of the company and could be considered as furtherance of business.
The transfer is not gratuitous and cannot be demanded, to qualify as gifts. Hence ITC on transfer of such gold coins would not be regarded as blocked ITC u/s 17(5)(h) of The CGST Act 2017. The Honourable Supreme Court in the case of Sonia Bhatia v. State of UP [1981 (3) TMI 250- Supreme Court) � 1981-VIL-06-SC, ruled wherein �gift� has been held to hit a voluntary transfer of property by one to another, without any consideration or compensation.
Therefore A �gift� is a gratuity and an act of generosity and does not require a consideration:
if there a consideration for the transaction, it is not a gift. In the same case, it was also held that a gift is a transfer which does not contain any element of consideration in any shape and form Love, affection, spiritual benefit and many other factors may enter in the intention of the donor to make a gift, but these filial considerations cannot be called or held to be legal considerations as understood by law.

Date:2023-10-06

Date:2023-10-20

Many cases are pending wherein, during the initial years of GST, the taxpayers had issues and technical problems and the GST Authorities also did not have a solution. The cases include few like the following �
A. GSTR 3B return filed without showing an amount as payable in a month and the taxpayers were not guided that Form DRC-03 could be used to pay such an amount. Thus, they paid the same vide next GSTR-3B. Important to note
also is that Circular 26/26/2017 in this respect also was issued after quite some time into the GST regime.
B. Taxpayers were automatically migrated, and they could not file returns.
C. Taxpayers clicked the �save� button and not �submit� button while filing GSTR-3B and the same was considered as filed.

Date:2023-09-22

a. Exporters and importers in New Delhi/CLA, Mumbai, Coimbatore, Kolkata, Surat, Ahmedabad, Bangalore, Rajkot, Hyderabad, Chennai and Ludhiana, can get their pending EODCs for AdvanceAuthorisations and EPCG disposed off
b. GST-ITC allowed in case of transfer of duty free imported or indigenously procured materials, between the units located in same or different States
Exporters and importers in New Delhi/CLA, Mumbai, Coimbatore, Kolkata, Surat, Ahmedabad, Bangalore, Rajkot,Hyderabad, Chennai, and Ludhiana, can get their pending applications for Export Obligation Discharge Certificate
(EODC) for Advance Authorisations and EPCG disposed off with ease between 13.11.2023 to 24.11.2023, as provided by Trade Notice No. 29/2023-24 dated 13th October 2023. Exporters whose EODC applications are pending, and
their licence status is not reflected as �Closed� on the DGFT Website, should make use of the 2-week EODC camp and ensure that un-redeemed licence pendency is disposed. The following points should be noted �
i. For applications wherein physical files were submitted for redemption / closure to the RA earlier, the RA on examination of the said files should generate the EODC letter online.
ii. Also, for cases where the authorisation was redeemed earlier but not updated by the RA online, the authorisation status should be duly updated in the online systems.
iii. Alternatively, the AAEPCG Authorisation holder may also submit EODC status update application by navigating to DGFT website �> Services �> AA / EPCG �> EODC Status update.
iv. RA as well as the Exporter is mandated to ensure that the status of all redeemed AA/EPCG authorisations are duly updated in the DGFT online systems.
v. EODC issued online are transmitted electronically to Customs ICEGATE System in near real-time, to facilitate the discharge of Customs bond and other related activities at the Customs port.
In another development, in a welcome move, vide Public Notice No. 34/2023 dated 13th October 2023, in case of transfer of duty free imported or indigenously procured materials, on which GST has been paid, between the units located in same or different States, the availment of Input Tax Credit has been allowed and shall be governed as per the provisions of the GST law & the rules made thereunder. Vide Para 4.10 (i) of the Handbook of Procedures 2023,
The DGFT had already permitted the transfer of any duty-free material imported or procured against Advance Authorisation from one unit of a company to another unit for manufacturing purpose with prior intimation to
jurisdictional Customs Author.

Date:2023-09-12

Rule 31B of The CGST Rules inserted vide Not No 45/2023, provides for determining the Value of supply in case of online gaming including online money gaming. The same goes as follows �
Notwithstanding anything contained in this chapter, the value of supply of online gaming, including supply of actionable claims involved in online money gaming, shall be the total amount paid or payable to or deposited with the supplier by way of money or money�s worth, including virtual digital assets, by or on behalf of the player:
Provided that any amount returned or refunded by the supplier to the player for any reasons whatsoever, including player not using the amount paid or deposited with the supplier for participating in any event, shall not be deductible from the value of supply of online money gaming.
To explain with an example � Say a gamer deposits Rs. 1 Lakh before starting an online gaming session. He has to additionally pay Rs.28,000/- as GST. Thereafter he utilizes only Rs. 50,000 worth of his deposit, yet he will be refunded only Rs.50,000/- and not the proportionate GST of Rs.14,000/-.
Again, Rule 31C provides for Value of supply of actionable claims in case of casino as follows�
Notwithstanding anything contained in this chapter, the value of supply of actionable claims in casino shall be the total amount paid or payable by or on behalf of the player for �
(i) purchase of the tokens, chips, coins, or tickets, by whatever name called, for use in casino;
or
(ii) participating in any event, including game, scheme, competition or any other activity or
process, in the casino, in cases where the token, chips, coins or tickets, by whatever name called,
are not required:
Provided that any amount returned or refunded by the casino to the player on return of token, coins, chips, or tickets, as the case may be, or otherwise, shall not be deductible from the value of the supply of actionable claims in casino.
To explain with an example � Say a better deposits Rs. 1 Lakh before starting an a betting session. He has to additionally pay Rs.28,000/- as GST. Thereafter he utilizes only Rs. 50,000 worth of his deposit, yet he will be refunded only Rs.50,000/- and not the proportionate GST of Rs.14,000/-.
The silver lining is in the explanation to 31B & 31C which provides as follows �
Explanation.- For the purpose of rule 31B and rule 31C, any amount received by the player by winning any event, including game, scheme, competition or any other activity or process, which is used for playing by the said player in a further event without withdrawing, shall not be considered as the amount paid to or deposited with the supplier by or on behalf of the said player.�
To explain with an example � Say a better/gamer deposits Rs. 1 Lakh before starting a betting/gaming session. He has to additionally pay Rs.28,000/- as GST. Thereafter he utilizes only Rs. 50,000 worth of his deposit, but wins Rs.5,00,000/-, he will take home as follows �
Particulars Base Value GST Total
Inital Deposit -1,00,000.00 -28,000.00 -1,28,000.00
Prize money 5,00,000.00 5,00,000.00
refund of unutilized deposit amt. 50,000.00 50,000.00
Excess Take home 4,50,000.00 -28,000.00 4,22,000.00
Hence, the proviso to Rule 31B & 31C seems to change the taxable event from �supply� to �expected supply�. Even though an actionable claim is a beneficial ownership in debt, yet when no supply is received at all, the non-reduction of the refunded amount from the value of supply seems to stretch the taxability. However, the explanation to the Rules makes it clear that the GST Authorities seek to control only the entry point and not post that and hence even the prize money is not taxable, just like in case of a lottery.

Date:2023-09-05

Discipline regarding penal action under various tax laws are widely discussed. Two interesting recent cases under Income Tax allows one to reflect further. Generally, losses are contested and seldom is it seen that assessee accept a loss return to be assessed as NIL. However, what if in spite of an irrefutable loss the assessee in good faith and, to avoid undue litigation, harassment and, to buy peace of mind agrees to get assessed at NIL income instead of declared loss, can a penalty/prosecution proceeding be initiated against the assessee u/s
271(1)(c) of the Income Tax Act? The answer is that it can be initiated. There is no provision for such pleas of bargain under the Income Tax Act to act as estoppels upon AOs. However, in case the plea is not accepted by the AO, the assessee should be show caused and there should be substance in enquiry and evidence to prove concealment. Penalty proceedings are distinct from assessment proceedings, though they emanate from the assessment proceedings; still, they are separate and independent proceedings all together. The Hon�ble Supreme Court of India in the case of CIT & Act. Vs. M/s SSA�s Emerald Meadows in CC dated 05.8.2016 [2016]73 Taxmann.com 48 (SC) has held that notice issued by the Assessing Officer under section 274 read with section 271(1)(c) of the Act was bad in law, as it did not specify under which limb of section 271(1)(c) of the Act, penalty proceedings has been initiated, i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The assessee should know the grounds which has to meet, otherwise the principles of natural justice are offended. Further, the order has to specify the offence alleged to be committed, as was held in the case of M/s UNITECH REALTY PVT. LTD Vs DCIT, CIRCLE � 27(1), NEW DELHI [2023-VIL- 1036-ITAT-DEL].

Date:2023-08-27

In some cases, such is the interpretation of some of certain field officers that SCNs flow to recipients of earlier supplies, even after a prospective cancellation/suspension of registration of suppliers after the date of such supply. Hence, retrospective cancellation would certainly involve denial of ITC of recipients who have received supplies before the cancellation/suspension of registration. However, It seems that for certain GST field officers cancellation of registration means retrospective cancellation � something which has serious ramifications. Section 29 of the CGST Act, 2017, grants discretionary powers to the concerned authority to cancel the registration from a retrospective date. However, such powers have to be exercised only in eligible cases. Cancellation on grounds that the petitioner had not filed the returns for a continuous period of six months does not justify retrospective cancellation from the date when the registration was granted. Where the taxpayer has closed its business altogether and thereafter stopped filing returns, a stand cannot be taken by the dept. to cancel the GST registration retrospectively thereby even making the earlier supplies of the taxpayer irregular. It�s a simple case when one reads the order in hindsight but it had to be contested by the taxpayer in High Court and a decree taken in the case of ASHISH GARG PROPRIETOR SHRI RADHEY TRADERS Vs ASSISTANT COMMISSIONER OF STATE GOODS AND SERVICE TAX, DELHI ZONE 7 WARD 82 .

Date:2023-08-14

The recent amendments in the Income Tax Act have provided much-needed relief to co-operative sugar factories operating in India by allowing deductions for sugarcane purchases made at or below the government-approved price. The Finance Act 2023 amended section 155 to allow AO to recompute the total income of a sugar mill co-operative and allow the deduction for sugarcane purchase expenditure that was equal to or less than the Government fixed price. The new section 155(19) empowers the Assessing Officer to recompute the total income for previous years with disputed deductions, resolving long-standing tax litigation. By following the SOP provided in Circular 14 of 2023 dated 27th July 2023, co-operative sugar factories can make applications to the JAO with the prescribed documents to resolve their tax disputes amicably.

Date:2023-08-06

Friends,

One more set of notifications have been issued under GST, even as we await the 51^st GST Council Meeting to be held on 2^nd August 2023. The following are our brief analysis of the notifications as follows �

1. Analysis of Not No 31/2023 � Central Tax �

Rule 8(4A) States as follows �

¹⁰[(4A) Where an applicant, other than a person notified under sub-section (6D) of section 25, opts for authentication of Aadhaar number, he shall, while submitting the application under sub-rule (4), undergo authentication of Aadhaar number and the date of submission of the application in such cases shall be the date of authentication of the Aadhaar number, or fifteen days from the submission of the application in Part B of FORM GST REG-01 under sub-rule (4), whichever is earlier.

Date:2023-07-31

Classification under GST Law can sometimes be contrary to general understanding. The charging of a battery in EVs requires electricity and an electricity company will provide electricity supply to the public charging stations which will in-turn provide the electricity to all electric vehicle users who can access these pubic charging stations for battery charging. General understanding is that the EV vehicle battery shall be charged with electricity (which is an exempt goods)�, but The AAR dug deep and concluded that it is �Battery Charging Service�. The AAR Karnataka has opined that the charging of EV vehicles will be a service liable to GST @18% in the case of M/s CHAMUNDESWARI ELECRICITY SUPPLY CORPORATION LIMITED [2023-VIL-147-AAR].

Date:2023-07-29

CGST Rate Notifications

1. Amendment to Notification No. 11/2017-Central Tax (Rate) so as to notify change in GST with regards to services as recommended by GST Council in its 50th meeting

2. Amendment to Notification No. 12/2017-Central Tax (Rate) so as to notify change in GST with regards to services as recommended by GST Council in its 50th meeting

3. Amendment to Notification No. 13/2017-Central Tax (Rate) so as to notify change in GST with regards to services as recommended by GST Council in its 50th meeting

4. Amendment to Notification No. 01/2017-Central Tax (Rate) to implement the decisions of 50th GST Council Meeting

5. Amendment to Notification No. 26/2018-Central Tax (Rate) to implement the decisions of 50th GST Council Meeting

Compensation Cess Notification

1. Amendment to Notification No. 1/2017-Compensation Cess (Rate) to implement the decisions of 50th GST Council Meeting

Customs Notification

1. Amendment to Notification No. 45/2017-Customs, Notification No. 47/2017-Customs and Notification No. 50/2017-Customs all dated

Date:2023-07-27

Government Customers or suppliers always try to have the upper hand in dealings with private players. Incase contracts are cancelled, there is always a question of how to adjust the GST paid earlier, especially if no outward tax liability is available. In this regard, Sl No 3 of Circular No. 137/07/2020-GST dated 13.4.2020 specifies the following �

1. An advance is received by a supplier for a Service contract which subsequently got cancelled. The supplier has issued the invoice before the supply of service and paid the GST thereon. Whether he can claim a refund of tax paid or is he required to adjust his tax liability in his returns?

In case GST is paid by the supplier on advances received for a future event which got cancelled subsequently and for which an invoice is issued before the supply of service, the supplier is required to issue a �credit note� in terms of section 34 of the CGST Act. He shall declare the details of such credit notes in the return for the month during which such credit note has been issued. The tax liability shall be adjusted in the return subject to conditions of section 34 of the CGST Act. There is no need to file a separate refund claim. However, in cases where there is no output liability against which a credit note can be adjusted, registered persons may proceed to file a claim under �Excess payment of tax, if any� through FORM GST RFD-01.

Date:2023-07-22

Date:2023-07-17