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GST 2.0 Returns: The Stage for Technical Mastery and Strategic Collaboration

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 With GST 2.0 reshaping the landscape, compliance has evolved into a distinctly technical arena, where the spotlight shines on GST professionals and their expertise with HSN codes, rates realignment, and system navigation. For clients, the role varies—some step up as collaborative partners, providing timely stock details and documentation; others, sensing the winds of potential dispute, keenly watch for developments that could give rise to a spirited case or appeal. The focal point remains 22nd September—now recognized in GST circles as the grand reset, dividing transactions and stock into ‘pre’ and ‘post’ epochs. While professionals work behind the scenes, ensuring a seamless bifurcation of inventory and application of revised rates, clients may experience a spectrum of engagement: from proactive, hands-on involvement to the classic “wait and see” approach, especially when technical aspects come to the fore. Where goods move from taxable to exempt, the reversal of credits is not s...
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GST Implications for Department Store Vendors: Stock Exemption Analysis

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 The recent GST reforms effective September 22, 2025, have significant implications for department store vendors who hold goods in stock that have transitioned from taxable to exempt status. This analysis examines the Input Tax Credit (ITC) reversal requirements, compliance obligations, and practical implementation strategies based on current notifications, GST Council recommendations, and official FAQs. Executive Summary and Key Findings Department store vendors with goods in stock that have become exempt under the new GST regime face mandatory ITC reversal obligations under Section 18(4) of the CGST Act, 2017. The transition requires immediate attention to avoid penalties and ensure compliance with the revised framework effective September 22, 2025. Critical Action Required : Vendors must calculate and reverse ITC on exempt stock in their September 2025 GST returns, as the exemption triggers Section 18(4) provisions that mandate reversal when "goods or services supplied b...
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Retrospective Amendment of Section 17(5)(d) Does Not Overturn Apex Court Judgment: Key Insights

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 The lifeline of the GST framework lies in the context of Input Tax Credit (ITC), moreover, on the principle of eligibility — a principle that becomes even more nuanced when businesses undertake expansion projects. The landmark case of Safari Retreats has served as a turning point, bringing clarity to the treatment of ITC in scenarios involving blocked credits. It has illuminated the judicial interpretation around the eligibility of ITC, especially with respect to immovable property. A significant development is that the Apex Court has broadened the definition of “plant” to include land, buildings, machinery, apparatus, and fixtures — all seen as instrumental to the operation of a trade or business undertaking. The Court further explained that a plant encompasses the totality of facilities available for production or service, including the physical infrastructure of an institution. This interpretation underlines that where such components are essential to a business’s functioning, ...
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Input Service Distributor( ISD) from 1-4-2025- redefined

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Input Service Distributor ( ISD) redefined effective 1st April 2025 for mandatory registration under GST, over this blog, lets analyse various aspects with this change: Who needs to register? This is not a straightforward question though as Section 20 says any office of a registered person who receives input services, for or on behalf of a distinct person is mandated to get registered under GST from 1st April 2025. This obviously opens up questions such as follows: What will be the nature of such input services? Does it mean services procured from third party or internally generated services or both? Should HO or BO or both register as ISD? Will there be multiple ISD registrations for a PAN?   Difference between cross charge and ISD? Historically the very concept was brought forward from Service Tax regime. Why a registration is optional until now, and mandate from 1st April 2025, is a puzzle to be solved along with increased understanding of certain changes introduced to Sec...
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Arrest trick in GST to force collection is condemned as offence by Apex court

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 When an inspection without proper jurisdiction is carried out, the verdict by the Hon’ble Supreme Court to clarify the powers of arrest by the Customs and GST Authorities has restored the rights of Registered Persons under the respective Acts. It is clearly reiterated that the in order to arrest a Registered Person, firstly the provisions of Section 69 read with Section 132 of Central GST Act, 2017 are to be invoked. Few extracts for reference:  The aforesaid exercise should be undertaken in right earnest and objectively, and not on mere ipse dixit without foundational reasoning and material. The arrest must proceed on the belief supported by reasons relying on material that the conditions specified in sub-section (5) of Section 132 are satisfied, and not on suspicion alone. An arrest cannot be made to merely investigate whether the conditions are being met . The arrest is to be made on the formulation of the opinion by the Commissioner, which is to be duly recorded in for th...
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Amnesty under sec 128A read with rule 164 and circular 238/2024- Demystified

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Based on the recommendations of the GST Council made in its 53rd meeting, Section 128A has been inserted in the CGST Act, 2017 with effect from 01.11.2024 to provide for waiver of interest or penalty or both, relating to demands under section 73 of the CGST Act pertaining to Financial Years 2017-18, 2018-19 and 2019-20, subject to certain conditions. Subsequently, based on the recommendations of the GST Council made in its 54th meeting, Rule 164 has been inserted in CGST Rules, 2017 with effect from 01.11.2024 vide notification No.20/2024-Central tax dated 8th October 2024 , providing for procedure and conditions for closure of proceedings under section 128A of CGST Act. Further, on top of this CBIC issued a  Circular No. 238/32/2024-GST dated 15th October 2024 to demystify these new provision and rule, yet there are overlaps unavoidable in this circular as it traces underlying provision and rule as necessary. The FAQs is good value addition though.  Over this blog, the proce...
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Surge of recovery notices for erroneous refunds under rule 96(10)- What should you know as an exporter

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  In the recent days, we might have experienced surge of recovery notices citing rule 96(10) for erroneous refunds deposited under sec 54 read with rule 89 for zero rated supplies with the payment of IGST.  The context and relevant provisions and rules: Rule 86(4B)- Re-credit in electronic credit ledger if erroneous refund deposited - Where a registered person deposits the amount of erroneous refund sanctioned to him -  (a) under section 54(3) of the CGST Act, or  (b) under rule 96(3), in contravention of rule 96(10) of CGST Rules  along with interest and penalty, wherever applicable, through Form GST DRC-03, by debiting the electronic cash ledger, on his own or on being pointed out, an amount equivalent to the amount of erroneous refund deposited by the registered person shall be re-credited to the electronic credit ledger by the proper officer by an order made in form GST PMT-03A - rule 86(4B) of CGST Rules inserted w.e.f. 5-7-2022. Sec 54(3) : Subject to the...
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