Goods and Services Tax : Introduction Coronavirus (COVID-19), a virus that grew stealthily from the end of 2019 has become one of the deadliest viruses tha...
Goods and Services Tax : Rule 36(4), i.e. the ITC matching and claim based on vendor GSTR filings is one such insertion into the law which is creating more...
Goods and Services Tax : Though GST department claims only a miniscule percentage of exporters have been selected for risky exporter verification, it appea...
Goods and Services Tax : Government should consider providing the benefit of zero tax even for the dies and moulds manufactured for further use in manufact...
Goods and Services Tax : One of the GST objectives is to ensure the seamless flow of the credit & avoiding the cascading effect. The success of ITC is ...
Taxes are an important source of revenue to any Government. The government devises mechanism aimed at detecting cases of revenue leakage. It has been witnessed over last few years that there is increased emphasis on making interaction with taxpayers and requiring them to submit various information/records through online or electronic mode. This assists in cross verification of information furnished by assessee before various departments.
One way of reducing burden of tax on export has been to grant refund of service tax under Notification No. 41/2012-ST on services used in relation to export of goods outside India. The refund was allowed in relation to taxable services used beyond the place of removal for export of goods. The intention was to grant refund of tax paid on services used in the course of export of goods from the factory or any premises to port/airport.
Every assessee liable to pay service tax is to take registration with service tax department. Where assessee has been providing services from multiple premises, it may obtain separate registration for each of the premises or may obtain centralized registration for all the premises take together. Tax needs to be paid under the code for which registration has been obtained.
This festive season, service sector has witnessed imposition of Swachh Bharat Cess (SBC) in very hasty move by government. It was promised at the time of the budget that it would only be imposed on some services. Govt has gone back on its word. Further they have been left with very little time to prepare for this new tax. This owed to lack of clarity over various issues, holiday period and limited time between issuance of notification for levy and actual levy.
Finance Act 2015 had provided provision for levy and collection of Swachh Bharat Cess (SBC) under section 119 of the Finance Act, 2015 at a rate not exceeding two percent on the value of services. The levy was to become effective from the date to be notified by the Government. The objective of behind introducing SBC was to fund for Government’s flagship program of Swachh Bharat. Incidentally,
In any value added tax system, credit of tax paid at input stage is eligible for adjustment against output liability. Cenvat credit rules have also been formulated based on the same principles (though have been made very complicated). One can follow a broad principle by looking at Profit & Loss Account that if credit side of P&L has some income on which service tax/excise duty has not been charged, they may not be entitled to take full credit of taxes paid on expenditure incurred by them in their business and may be falling within clutches of Rule 6 of Cenvat Credit Rules.
Once eligible credit has been availed, it becomes part of a pool out of which credit can be utilised to pay output liability. There is no correlation required between availment and utilisation of credit. The disclosure requirement of utilisation/reversal of credit is as below:
Tax credit in any value added taxation is the second most important aspect after the levy as it goes to reduce the basic cost. If credits are not available fully, it adds to the cost of the product or service resulting in cascading effect of taxes. It becomes imperative for assessee to ascertain the credit availability and to ensure that it is disclosed properly in the return.
Self assessment under service tax has been started in the year 2001. In any self assessement taxation system, the onus is on the assessee to make true disclosure of all statutory information required to be disclosed. Non/wrong disclosure of any material information could result in allegation of suppression or deliberate wrong disclosure which may result in invocation of larger period of 5 years along with imposition of penalty which now has become mandatory.
Goods and Service Tax (GST) upcoming in India is likely to result in widening the tax base substantially by covering large number of potential taxpayers who are hitherto not covered in the tax net either due to their activity not being in the nature of taxable or due to some exemption being claimed. It is talked that the present assessee base on Central side itself is expected to rise to approximately 60 lacs assessees from existing base of apprx. 15 lacs.
