Key highlights of changes in GST Proposed in Finance Act 2023

Key highlights of changes in GST Proposed in Finance Act 2023: Composite Levy- Clause (d) of sub-section (2) and Clause (c) of sub-section (2A) in section 10 of the CGST Act is being amended so as to remove the restriction imposed on registered persons engaged in supplying goods through electronic commerce operators from opting to pay tax under the Composition Levy. Blocked or Denied credit - Explanation to sub-section (3) of section 17 of the CGST Act , the value of exempt supply to include certain transactions specified in para 8(a) of Schedule III of the said Act in additions to para 5 of Schedule III Blocked or Denied credit-  Further, sub-section (5) of said section 17 is also being amended to deny ITC for corporate social responsibility referred to in section 135 of the Companies Act, 2013. Persons not liable to register- section 23 of the Central Goods and Services Tax Act relating to persons not liable for registration will have an overriding effect to over sub-section (1) o

Jigarthanda attracts higher rate of GST - AAR TN

Jigarthanda, a popular milk-based beverage sold in Tamil Nadu, will attract 12% GST, according to TN State’s Authority for Advance Ruling (TNAAR). Before looking at the issue, let's first look at the contents of this drink. The main ingredients that go into the making of Jigarthanda are milk, almond pisin, basundi, ice cubes and sherbet.  One may be aware that at present, fresh milk and pasteurised milk are fully exempt from GST. Further, milk products like curd, lassi, buttermilk and paneer are also exempt from GST if sold in a form other than pre-packaged and labelled.  GST at the rate of 5% applies to curd, lassi, buttermilk and paneer, when sold in pre-packaged and labelled form and also UHT milk. Further, a GST of 12 % applies to condensed milk, butter, ghee and cheese.  A Madurai-based Madurai Famous Jigarthanda LLP, one of the manufacturers of the product with a brand name said it is packed its product  in unit containers and is also available in loose form/in bottles withou

SCNs for FY 2017-18 can be issued till September 30, 2023 as Time Limit for Issue of Demand Order stands Extended

In a very important judgement delivered recently, a Single Bench of the Kerala High Court, has held that the extension granted to the time limit of  passing demand order under the Central Goods and Services Tax (CGST) Act 2017 and State Goods and Services Tax (SGST) Act 2017 are applicable to issue of Show Cause Notice (SCN) also. The petitioner assessee challenged that the GST demand issued under Section 73 of the CGST/SGST Acts imposing on the petitioner a total liability of Rs. 9.7 Lakhs, towards CGST and SGST payable for the period from July 2017 to March 2018.  The period for which the liability that was imposed on the petitioner was on the ground that under sub-section (10) of Section 73 of the CGST/SGST Acts, the time limit for completion of proceedings is three years from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilized. It was further argued that, by virtue of a notificat

No GST payable under RCM on Procurement of Renting of Immovable Property Services from SEZs

The Appellate Authority for Advance Ruling (AAAR) Maharastra, has ruled that Goods and Service Tax shall not be payable under Reverse Charge Mechanism on procurement of renting of immovable property services from Special Economic Zones (SEZ). In an application for Advance Ruling filed by the appellant, M/s Portescap India Private Limited who is a private limited company incorporated in India, who were inter alia engaged in manufacturing of customised motors in India.  As the Appellant was an SEZ Unit, it was engaged in exports of the manufactured goods outside India.  The Appellant procures Rental Services from “Santacruz Electronics Export Processing Zone(SEEPZ) wherein GST was presently being discharged by the Appellant under the Reverse Charge Mechanism. The appellant sought advance ruling as to  1. Whether an SEZ unit is required to comply with the reverse charge mechanism as a service recipient for local domestic renting of immovable property services procured by the unit from SEE

Administration of Covid vaccine by hospitals would not qualify as a ‘healthcare service’

Interestingly a multi-specialty hospital chain, has not succeeded in its appeal that administration of Covid vaccine by hospitals would qualify as a ‘healthcare service’ and be exempt from GST. The Appellate Authority for Advance Rulings (AAAR)-Maharastra upheld an original ruling, against which an appeal had been filed and reconfirmed GST applicability at 5%. Looking back, GST Authority for Advance Rulings (AAR), in March 2022 had held that administration of the Covid vaccine by hospitals is a ‘composite supply’, where principal supply is the sale of vaccine and auxiliary supply is the service of administering the vaccine.  Thus, the total transaction would be taxable at the rate applicable to the principal supply, which is 5%. This led to the hospital chain filing an appeal with the AAAR. It contended that the AAR bench had erred in interpreting the basic fact of the case that an individual is visiting the hospital not to buy the vaccine but to get ‘served’ through vaccination. The A

Pencil sold with sharpener will attract higher GST than a pencil sold alone - Mixed Supply - Gujarat AAR (GAAR)

M/s. Doms Industries based in Umbergaon (Gujarat), are engaged in the business of three products.  First pencils along with sharpener and eraser;  Second a colouring book, pencil, colour pencils, oil pastels, plastic crayons, wax crayons, eraser, scale and sharpener, and Third pencils, erasers, scale and sharpener.  Looking back In July 2022, based on the recommendation of GST Council, the Finance Ministry notified 18% GST for sharpeners, and that changed the equation completely for them with far reaching impact. Accordingly, the above referred company moved GAAR to seek advance rulings on three questions. (1) Whether the supply of pencil sharpeners along with pencils, being the principal supply, will be considered “Composite Supply” or “Mixed Supply”?.  (2) The HSN code to be used.  (3) Whether the supply of a sharpener along with the kit having a nominal value will have an impact on the rate of tax. If yes, what will the rate of tax ? GAAR said each of the items in the products canno

Food & beverages not prepared in a restaurant will attract GST at the rate of 18% Gujarat’s AAR ruling

In the present matter, Ahmedabad-based Ridhi Enterprises runs standalone restaurant. It offers a variety of food items including food and beverages prepared at the restaurant as well as readily purchased food and beverage sold over the counter.  It moved to GAAR for ruling on two queries. 1. Whether consumed in the restaurant or by way of takeaway qualifies — as restaurant services? 2. Whether the readily available food not prepared in the restaurant sold over the counter whether consumed in the restaurant or by way of takeaway qualifies as restaurant services or not ? After going through all the facts presented and arguments made, GAAR observed in its ruling on 30-12-2022, that  The supply of cooked foods and other food items in the restaurant are covered under "restaurant service" The supply of already cooked/prepared food-items purchased from local market is considered as "supply of goods" Therefore it is understood that the readily available food items (not prep