Tag Archives: CBIC

GST exempt on exam fees

CBIC has clarified vide its circular dated 17th June 2021 that GST is exempt on exam fees in respect of exams conducted by central board or state boards. This includes conduct of entrance examination for admission to educational institutions.

Operative part of their circular is reproduced below:

(i) GST is exempt on services provided by Central or State Boards ( including the boards such as NBE – National Board of Examinations) by way of conduct of examination for the students, including conduct of entrance examination for admission to educational institution [under S. No. 66 (aa) of notif No. 12/2017-CT(R)]. Therefore, GST shall not apply to any fee or any amount charged by such Boards for conduct of such examinations including entrance examinations.
(ii) GST is also exempt on input services relating to admission to, or conduct of examination, such as online testing service, result publication, printing of notification for examination, admit card and questions papers etc, when
provided to such Boards [under S. No. 66 (b) (iv) of notif No. 12/2017-CT(R)].
(iii) GST at the rate of 18% applies to other services provided by such Boards, namely of providing accreditation to an institution or to a professional (accreditation fee or registration fee such as fee for FMGE screening test ) so as to authorise them to provide their respective services.

Copy of the circular can be found at the below site

https://www.cbic.gov.in/htdocs-cbec/gst/cgst-circ-idx-2017

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helpdesk for trade – covid

https://pib.gov.in/PressReleasePage.aspx?PRID=1714090

Central Board of Indirect Taxes and Customs (CBIC) has set up dedicated helpdesk to handle queries related to Covid related Imports and handhold the trade, industry and individuals  for expeditious customs clearance. As you are aware, the Government of India is committed to ensure seamless and quick customs clearance of COVID related imports, so that it reaches the users/beneficiaries in time.

Queries and requests are being received by the Department from various quarters. These relate to availability of duty exemption benefits,   to clearance procedures, registration requirements from various ministries etc. In order to streamline this  process and cater to all the queries and grievances of the trade, a dedicated cell I has been  set up by the CBIC.

To handhold the trade relating to clearances, an online form has been created under this URL ( https://t.co/IAOQenWwO2) to seek details in a structured format and redress the grievances,at the earliest. For general queries, the users may send an email through icegatehelpdesk@icegate.gov.in or call up toll free number 1800-3010-1000. The requests being received at Helpdesk  will  be closely monitored for early resolution.

Further, to resolve the grievances at the local level,  zonal level nodal officers have also been nominated and this list can be found in the following URL (https://www.cbic.gov.in/resources//htdocs-cbec/CBIC%20Nodal%20Officers%20for%20Covid%2019%20Revised.pdf).

Shri Gaurav Masaldan, Joint Secretary, Customs will be the nodal officer in the CBIC for  appropriate  resolution of grievances and expeditious clearances of goods, relating to Covid related equipment and raw materials, especially oxygen and oxygen related equipment   In case of non- resolution of grievances through the helpdesk or zonal officers, the same may be escalated by way of a self-explanatory SMS or Whatsapp on his number : 9810619628 or email: masaldan.gaurav@nic.in .

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GSTR-1 non QRMP scheme

update from CBIC twitter handle

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central excise return

update from CBIC twitter handle

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e-com operators

update from CBIC twitter handle

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sea cargo manifest transhipment

update from CBIC Twitter handle

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bill of entry

update from CBIC twitter handle

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deferred payment of customs duty

CBIC twitter handle

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HSN Code

update from CBIC twitter handle

One more round of compliance for the tax payers from the new financial year in India.

By the way I am already mentioning the 6 digit HSN Code in all my tax invoices from 1st July, 2017 onwards, so don’t know what has changed.

That is ease of doing business for you.

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clarification on new TCS provisions

There are reports in certain sections of media wherein certain doubts have been raised regarding the applicability of the provisions relating to Tax Collection at Source (TCS) on certain goods introduced vide Finance Act, 2020. This press note is being issued to clarify those doubts about the applicability of these provisions.

Finance Act, 2020 amended provisions relating to TCS with effect from 1st October, 2020 to provide that seller of goods shall collect tax @ 0.1 per cent (0.075% up to 31.03.2021) if the receipt of sale consideration from a buyer exceeds Rs. 50 lakh in the financial year. Further, to reduce the compliance burden, it has been provided that a seller would be required to collect tax only if his turnover exceeds Rs. 10 crore in the last financial year. Moreover, the export of goods has also been exempted from the applicability of these provisions.

It has been reported in the media that TCS has been made applicable to the amount received before 1st October, 2020.  It is clarified that this report is not correct. In this connection, it may be noted that this TCS shall be applicable only on the amount received on or after 1st October, 2020. For example, a seller who has received Rs. 1 crore before 1st October, 2020 from a particular buyer and receives Rs. 5 lakh after 1st October, 2020 would be required to collect tax on Rs. 5 lakh only and not on Rs. 55 lakh [i.e Rs.1.05 crore – Rs. 50 lakh (threshold)] by including the amount received before 1st October, 2020.

It has also been reported in certain section of the media that every transaction will attract this TCS.  This report is not correct. It may be noted that this TCS applies only in cases where receipt of sale consideration exceeds Rs. 50 lakh in a financial year. As the threshold is based on the yearly receipt, it may be noted that only for the purpose of calculation of this threshold of Rs. 50 lakh, the receipt from the beginning of the financial year i.e. from 1st April, 2020 shall be taken into account.  For example, in the above illustration, the seller has to collect tax on receipt of Rs. 5 lakh after 1st October, 2020 because the receipts from 1st April, 2020 i.e. Rs. 1.05 crore exceeded the specified threshold of Rs. 50 lakh.

Further, the seller in most of the cases maintains running account of the buyer in which payments are generally not linked with a particular sale invoice. Therefore, in order to simplify and ease the compliance of the collector, it may be noted  that this TCS provision shall be applicable on the amount of all sale consideration received on or after 1st October, 2020 without making any adjustment for the amount received in respect of sales made before 1st October, 2020. Mandating the collector to identify and exclude the amount in respect of sales made up to 30th September, 2020 from the amount received on or after the 1st of October, 2020 would have resulted into undue compliance burden for the collector and also litigation.

It has been reported in certain section of the media that this TCS is an additional tax. This is obviously not correct. In this regard, it may be noted that TCS is not an additional tax but is in the nature of advance income-tax/TDS for which the buyer would get the credit against his actual income tax liability and if the amount of TCS is more than his tax liability, the buyer would be entitled for refund of the excess amount along with interest.

It may also be noted that this TCS shall be applicable only on the receipt exceeding Rs. 50 lakh by a seller from a particular buyer. Therefore, on payment of Rs. 1 crore made by a buyer to a particular seller only Rs.5,000 (Rs. 3,750 this year) i.e. [0.1% of (Rs. 1 crore – Rs. 50 lakh)] shall be collected. Hence, in case of a person making payment of Rs.1 crore each to 10 different sellers, the total tax collected shall be only Rs.50,000 (Rs. 37,500 this year)  i.e 10 x [0.1% of (Rs. 1 crore- Rs. 50 lakh)] on the total payment made for purchase of Rs. 10 crore to ten different sellers.

Assuming a net profit of 8% on sales, his business income in respect of this payment of Rs. 10 crore made for purchase would be around Rs. 87 lakh. The income-tax liability on the income of Rs. 87 lakh for an individual in the new taxation regime would be around Rs. 27 lakh. Hence, the amount of TCS collected i.e. Rs.50,000 (Rs. 37,500 this year) would be a miniscule part of his actual tax liability and would be easily adjusted against his tax liability. In a rare case, if his tax liability is less than even Rs.50,000 (Rs. 37,500 this year), he shall be entitled for refund of excess TCS with interest.

It has also been reported in certain section of media that every seller will have to collect TCS. This is also not correct. In this context, it may be noted that in order to reduce the compliance burden, this TCS is made applicable to only those sellers whose business turnover exceeds Rs. 10 crore.  In other words, those having turnover of less than Rs. 10 crore will not be required to collect TCS. There are only around 3.5 lakh persons who have disclosed business turnover of more than Rs. 10 crore in FY 2018-19. There are around 18 lakh entities which already deal with TDS/TCS. Therefore, this TCS collection under these new provisions would be required to be made by persons who, in most of the cases, would already be complying with the other provisions of TDS/TCS.

https://www.pib.gov.in/PressReleasePage.aspx?PRID=1660392

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faqs on e-invoicing

CBIC has issued FAQs on e-invoicing system that it is planning to introduce from 1st October, 2020 onwards. Businesses with turnover of Rs.500 crores and above will generate all invoices on centralised government portal. The e-invoicing will be aimed at curbing fake invoicing. It will cut down errors on the system and make filing simpler and smoother.

It will actually be useful for the MSME sector, because what happens today in India is that there is no payment culture at all. Companies pay at their whims and fancies, and many a times, they do not even book the invoices in their system for months together. If by this e-invoicing system, MSME suppliers are able to record their invoices on the portal, then companies will not be able to escape their liability. That is my view. But right now only large companies with turnover above Rs.500 crores are required to upload their invoices on the portal.

The FAQs on e-invoicing is available at this link i.e.

https://einvoice1-trial.nic.in/Others/Faqs

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faqs on anti profiteering provisions

Published by CBIC.

Q 1. What is profiteering?
Ans. In terms of Section 171 of the CGST Act, 2017, the suppliers of goods and services should pass on the benefit of any reduction in the rate of tax or the benefit of input tax credit to the recipients by way of commensurate reduction in prices. The wilful action of not passing on the above benefits to the recipients in the manner prescribed is known as “profiteering”.
Q 2. What is the background to providing statutory provisions on antiprofiteering in GST law?
Ans. The Study Report titled ‘Implementation of Value Added Tax (VAT) in India-Lessons for transition to GST’ released by the Comptroller & Auditor General (C&AG) of India in June, 2010 mentioned about several cases of profiteering by dealers by not passing on the benefit of tax rate reduction to the consumers in the wake of implementation of VAT in the country. The above C&AG report, after checking the records of 13 manufacturers in a State in three initial months of implementation of VAT, found that the manufacturers did not reduce the MRP of the goods despite sharp fall in the tax rate post-VAT implementation. As a learning from the VAT experience, legal teeth was sought to be provided in GST law by incorporating anti-profiteering provisions to check profiteering by businesses when GST
was being rolled out in the country.
Q 3. What are the statutory provisions of anti-profiteering in GST law?
Ans. Section 171 of CGST Act, 2017, provides that any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices.
Chapter XV of the CGST Rules, 2017 comprising of 16 Rules (Rule 122 to Rule 137), contains the detailed mechanism and procedure.
Q 4. Is there a sunset clause for Anti-Profiteering law’?
Ans. Yes. In terms of Rule 137 of the CGST Rules, 2017, the Anti-profiteering Authority shall cease to exist after the expiry of two years from the date on which the Chairman of the Authority enters upon his office unless the GST Council recommends otherwise.
Q 5. What are some of the instances in which the statutory provisions of antiprofiteering will kick in?
Ans. The different situations in which Section 171 of CGST Act, 2017 & the identical provision in State/ UT GST Act will get attracted include:
i. reduction in tax rate;
ii. benefit of Input Tax Credit (ITC) available to the registered person/ supplier.
Q 6. What is the function of National Anti-Profiteering Authority (NAA)?
Ans. The National Anti-Profiteering Authority (NAA) is required to determine whether the benefit of input tax credit or reduction in the tax rate has actually resulted in a commensurate reduction in the price of the goods or services or both. The NAA has the power to identify the registered person who has not passed on the benefit of reduction in tax rate or input tax credit by way of commensurate reduction in prices and it may order reduction in prices; return to the recipient, an amount equivalent to the
amount not passed on by way of commensurate reduction in prices along with interest; cancellation of registration of the supplier and imposition of penalty. In case the eligible recipient is not identifiable or does not claim return of the amount, the NAA may order the supplier to deposit the amount in the Consumer Welfare Fund.
Q 7. Should a customer pay extra GST on Maximum Retail Price (MRP) affixed on goods?
Ans. No. MRP is inclusive of GST and is the maximum retail price that can be charged from the consumers.
Q 8. In cases of over-charging in the name of GST, where can a consumer register his complaint for redressal?
Ans. Charging more than MRP attracts the provisions of Legal Metrology Act. In case of over-charging over MRP, a complaint can be lodged on toll-free number 1800-11-4000/14404. There are multiple ways through which aggrieved consumers or suppliers of goods and services can register their complaints against profiteering:
a. Online complaint facility: Complainant can register an online complaint at http://www.naa.gov.in/complaint.php Link to see the guidelines to register online complaint:
http://www.naa.gov.in/page.php?id=guidelines-for-consumers
b. Via Mail:
User can mail the complaint at:
Standing Committee sc.antiprofiteering@gov.in OR
anti-profiteering@gov.in
For Complaints involving issues of all-India nature.
State-Screening Committees
For State-wise E-mail Addresses please refer to:
http://www.naa.gov.in/docs/screening%20committees%
2020-08-18.xlsx
For Complaints involving issues of local nature.
c. By Post:
National Anti-profiteering Authority
Dept. of Revenue, Ministry of Finance
6th Floor, Tower One, Jeevan Bharati Building
Connaught Place, New Delhi-110 001.
Directorate General of Anti-profiteering,
Dept. of Revenue, Ministry of Finance, 2nd Floor,
Bhai Vir Singh Sahitya Sadan,
Gole Market, New Delhi -110 001.
Q 9. In cases of profiteering in the name of GST, what is the complaint redressal mechanism available to the consumer?
Ans. The CGST Act, SGST Acts & the CGST/ SGST Rules framed thereunder provide for the following complaint redressal mechanism.

  1. The aggrieved persons may file an application, in the prescribed format, before the Standing Committee on Anti-profiteering or before the State Level Screening Committee. (If the issue involved is of local nature).
  2. The State Level Screening Committee constituted in every State/UT with legislature examines it & forwards it to the Standing Committee constituted at the national level, if a prima facie case of profiteering is made out against the registered person.
  3. Thereafter, the Standing Committee shall refer the matter to the Director General of Anti-Profiteering (erstwhile DG, Safeguards) for a detailed investigation, if prima facie evidence of profiteering exists.
  4. The DG, Anti-Profiteering shall conduct the investigation and submit its report to the National Anti-Profiteering Authority (NAA) constituted by the Central Government under section 171 (2) of the CGST Act, 2017 for taking appropriate action, as mentioned in the Answer to Q 6. above.
    Q 10. How can one file complaint against profiteering?
    Ans. An online complaint can be filed at http://www.naa.gov.in/complaint.php .
    Complaints of the nature of national-level can be filed by e-mail at
    sc.antiprofiteering@gov.in . Complaints of local nature can be sent by mail to the respective State Screening Committee.
    Q 11. Whether one form is sufficient for multiple goods or services?
    Ans. No, the prescribed application form APAF-01 is with reference to a single Good/Service. In case of application for multiple Goods/Services, separate application for each Good/Service is required to be filed.
    Q 12. What is the methodology to identify cases of profiteering?
    Ans. Rule 126 of the CGST Rules, 2017 vests the power to determine the methodology & procedure with the National Anti-Profiteering Authority constituted by the Central Government under Section 171 (2) of the CGST Act, 2017. The guiding principle mentioned in the said Rule states that the reduction in tax rate on supply of goods or services or benefit of input tax credit has to be passed on to the recipient by way of commensurate reduction in prices. The methodology and procedure adopted to identify cases of profiteering may vary from case to case, depending upon the facts of the case and the nature of goods or services supplied.
    Q 13. What are some of the measures taken by the Consumer Affairs Ministry in the Government of India to check cases of profiteering post implementation of GST?
    Ans. The Consumer Affairs Ministry in the Government of India, vide its letter no. WM10(31)/2017, dated 04.07.2017, permitted the manufacturers or packers or importers of pre-packaged commodities to affix new MRP labels (after incorporating tax changes due to GST) in addition to existing MRP for three months from 1st Jul to 30th Sept 2017. Similar action was taken after the GST rate reduction in November, 2017 and July, 2018.
    Q 14. What can buyers do if shopping malls and retail stores are still selling goods at pre-GST affixed labels?
    Ans. As per the Government’s directive, shopping malls and retail stores are required to affix two MRP labels reflecting both pre-GST & post-GST prices. Despite this, if consumers find that retailers are selling goods at pre-GST affixed labels, they can report to National Consumer Helpline. Also, the administrative machinery of the Controller of Legal
    Metrology can be effectively used by States/UTs to monitor & resolve such cases.
    Q 15. How can buyers of under-construction flats benefit from the antiprofiteering provisions?
    Ans. Section 171 of the CGST Act, 2017 can be invoked when the builder increases the instalment amount to be paid in case of an under construction flat, complex etc, on the pretext of leviability of 12% GST as against the apparently lower tax rates in the earlier indirect tax regime. In pre-GST era, Central Excise duty was payable on most construction
    material at 12.5%. In addition, VAT was payable on construction material at 12.5% to 14.5% in most of the States & the construction material also suffered entry tax. The input tax credit of the above taxes was inadmissible for meeting Service Tax liability of the builder, thus leading to cascading of input taxes on constructed flats & a higher effective
    tax incidence. But GST regime allows full input tax credit for offsetting the headline rate of 12%, thereby reducing the effective tax incidence.
    Q 16. Can action be taken under the anti-profiteering provisions in case benefit of transitional credit availed is not passed to the consumers?
    Ans. The benefit of transitional input tax credit allowed under Section 140 (3) of the CGST Act, 2017, is required to be passed on to the recipient by way of reduced prices.
    Q 17. What is the time-frame for deciding cases of anti-profiteering provisions?
    Ans. The maximum time envisaged for resolution of cases is 9 months excluding the time taken by the State-level screening committee and the Standing Committee (maximum 2 months) for processing the complaints.
    Q 18. What should a complainant ensure while submitting complaint to Screening Committee/ Standing Committee?
    Ans. The complainant should submit a duly filled in application form APAF-01 along with his identification document and evidence of profiteering. The instructions for filling the said form are contained in form APAF-01.
    Q 19. A company in order to justify the prices being charged by it may have to submit information which could be confidential and may impact its business interest?
    Ans. The provisions of section 11 of the Right to Information Act, 2005, shall apply mutatis mutandis to the disclosure of any information which is provided on a confidential basis. The DG, Anti-Profiteering may require the parties providing information on confidential basis to furnish a non-confidential summary thereof. If, in the opinion of the party providing such information, the said information cannot be summarised, such party may submit a statement of reasons as to why summarisation is not possible.
    Q 20. Where can one access the orders passed by NAA?
    Ans. All the orders passed by NAA are available on their website
    http://www.naa.gov.in/news.php?cat=2 .

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GSTR-4

The CBIC has vide a tweet dated August 31, 2020 extended the last date for filing of GSTR-4 for FY 2019-20 to 31st October, 2020. GSTR-4 is an annual return to be filed by a composition dealer by 30th April following the financial year. A composition dealer is required to file only one return in a year unlike others who have to file several returns during the year.

Notification will be issued by CBIC

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faceless assessment at customs

Circular no. 40/2020 dated 4th September, 2020 by CBIC regarding faceless assessment at the customs ports.

The key elements of the Turant Customs programme are Faceless, Contactless and Paperless Customs clearance processes. This includes faceless or anonymised assessment, self-registration of goods by importers, automated clearances of bills of entry, digitisation of Customs documents, etc. The objectives sought to be achieved are exponentially faster
clearance of goods, reduced interface between trade and Customs officers and enhanced ease of doing business. The phased launch of the Turant Customs programme in select ports of import was aimed at testing in a real-life environment, the IT capabilities as well as the responsiveness of the trade and Customs officers to the various initiatives. The results have
been reviewed and these have confirmed that the stated objectives are being met. The stage is now set for extending the Turant Customs programme across all Customs ports pan India and thereby ushering in a more modern, efficient, and professional Customs administration with
resultant benefits for trade and industry.

Board has decided to roll-out the Faceless Assessment at an All India level in all ports of import and for all imported goods by 31.10.2020

Details of the rollout are given in this circular

https://www.cbic.gov.in/resources//htdocs-cbec/customs/cs-circulars/cs-circulars-2020/Circular-No-40-2020.pdf;jsessionid=64441A000DBE16754AA35051755829FF

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interest on delayed payment of GST

The Central Board of Indirect Taxes & Customs (CBIC) today clarified that the Notification No. 63/2020-Central Tax dated 25th August 2020 relating to interest on delayed payment of GST has been issued prospectively due to certain technical limitations. However, it has assured that no recoveries shall be made for the past period as well by the Central and State tax administration in accordance with the decision taken in the 39th Meeting of GST Council. This will ensure full relief to the taxpayers as decided by the GST Council.

CBIC explanation came in response to an assortment of comments in the social media with respect to Notification dated 25th August 2020 regarding charging of interest on delayed payment of GST on net liability (the tax liability discharged in cash) w.e.f. 1st September 2020.

https://www.pib.gov.in/PressReleasePage.aspx?PRID=1648751

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