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Manish Sisodia’s judicial custody further extendedCus - Export of non-basmati rice - Notification 20/2023 insofar as it denies the benefit of the transitional arrangement as contained in para-1.05 of the FTP 2023, is bad in law: HCCus - Refund of SAD - 102/2007-Cus - Areca Nut and Supari are one and the same - Objections with regard to name, nature and status of importer or buyers or the end use of goods purchased by them etc. are extraneous: HCCX - Interest on Refund - Since wrong order annexed by petitioner in paper book, Bench is unable to proceed further - Petition is dismissed with liberty to file a fresh one: HCGST - No E-way bill - When petitioner imports machinery and after Customs clearance, transports same to his own factory, it cannot be said that such a transportation would fall within the definition of term 'supply' - Penalty imposable under second limb of s.129(1)(a): HCGST - Fix responsibility on officers who allowed BG to lapse - Petitioner not justified in not renewing BG - Cost of Rs.15 lacs imposed, to be paid to PM Cares Fund: HCGST - Since the parties agree that petition can be disposed of on the basis of records available before Appellate Authority, petitioner is directed to enclose all documents filed before Appellate Authority in a compilation, in form of a paper book: HCWrong RoadST - Whether any service is used for personal consumption or not is certainly question of fact and being question of fact, no substantial question of law arises: HCGovt proposes to amend Geographical Indication of Goods Rules; Draft issued for feedbackST - If what has been paid as tax is without authority of law, Revenue should refund the same - Denial of credit would result in the whole exercise being tax neutral: HCWarehousing Authority notifies several agri goods to be stored in only registered warehousesST - Even if the petitioner may have a case on merits, it is best left to be decided by the Appellate Authority under the hierarchy prescribed under the FA, 1994: HCUS FDA okays Eli Lilly Alzheimer’s drugGST - Petitioner challenges jurisdiction of assessing officer - Petitioner is entitled to file an appeal u/s 107 by availing an alternate efficacious remedy: HCFive from Telangana killed in car accident on Pune-Solapur HighwayGST - Existence of an alternative remedy is a material consideration but not a bar to the exercise of jurisdiction: HCHush money case against Donald Trump - Sentencing deferred to Sept 18GST - It is open to a trader to take goods by whichever route he opts, unless the law otherwise requires, destination point being intact: HCDeadly hurricane Beryl smashes properties in JamaicaIsrael claims 900 militants killed in Rafah since May monthGST - Order expressly records that personal hearing notice was returned with endorsement 'no such person at address' - Since petitioner has shifted to a new premises, it is just and necessary to provide an opportunity to contest demand: HC116 die in stampede at UP ’Satsang’I-T- Application for revision of order dismissed in limine on grounds of delay; case remanded for re-consideration: HCWe are deepening economic ties with India, says US officialI-T- As per Section 119(2)(b), power to condone applications relate to claims for amount exceeding Rs 50 lakhs are to be considered by CBDT; however it is impermissible for CBDT to pass order on merits: HC8 Dutch engineers build world’s longest bicycle - 180 feet, 11 inchesRailways earns Rs 14798 Crore from Freight loading in June monthMoD inks MoU to set up testing facilities in Unmanned Aerial System in TN Defence Industrial CorridorGovt proposes Guidelines for ethical approach to Coal MiningI-T- TDS credit can be allowed based on AIS, where details pertaining to TDS, advance tax & other payments are reflected in Form 26AS: ITATVaishnaw to inaugurate Global IndiaAI Summit 2024
 
Working Capital goes for a toss under GST

APRIL 12, 2017

By Preety Parik, CA

WITH the start of new Financial Year and the Government's Target date of Goods and Service Tax (GST) roll out approaching near, it's time for businesses to relook and revise their working capital needs in view of the following GST provisions:-

- GST Liability will be due on Advance receipt of consideration for supply. The liability for payment of the current Taxes of Central Excise/VAT was only on removal/sale of Goods and there was no liability on advance receipt. Say, you are a supplier and against supply of Rs.4Lacs, you take advance of Rs.1Lacs. You may now either ask for advance of 1Lacs + GST or out of advance of Rs.1Lacs, part away with Rs.18000 into the GST kitty (assuming GST @18%).

- GST on advance payment of consideration for supply will not be eligible as input tax credit till the receipt of Goods/ services. Say, you are buyer and on an advance payment of Rs.1 Lacs, you pay GST of Rs.18000/-. This 18000/- will not be available for credit immediately and gets blocked till you receive the goods. (The provisional claim of credit allowed in Nov- Model GST Law has been removed in GST Bill passed by Lok Sabha.)

- At present there is no VAT liability on branch transfers. There is GST liability in case of interstate branch transfers. Working capital will be required for this additional compliance and the same shall be blocked till actual sale at the branch.

- In case of resale business, where the Trader, at present, is subject only to VAT (5/6/13.5 tax rate) will be liable to 12% or18% GST rate and working capital will be required for additional deposit of tax on monthly basis.

- In case of businesses where larger credit period on purchases beyond 180 days is legitimately availed,same will be subject to Tax liability for amount of ITC claimed on purchases along with interest in case payment alongwith Tax has not been made to the supplier for supplies of goods and services within 180 days from the date of invoice.

- In case of supplies from unregistered person, the registered recipient will have to pay tax on reverse charge basis. Many businesses have production cycle of more than one month or even in businesses where there is large stock holding, capital will be blocked till the actual sales. The tax liability of unregistered PAN India is shifted to the estimated 70-90Lacs registered PAN India. ( One may note that this provision has suddenly crept into GST bill and was not there in any of the earlier two GST drafts.)

- The claim of ITC on purchases will be provisional and finally allowed only on matching of details filed by the supplier. In case of mismatch or non – payment of tax by the supplier, the recipient will be subject to Tax for amount of mismatch of ITC along with interest. The working capital will be blocked till the reconciliation/ liability accepted and paid by the supplier.

So, "A Careful Planning for A Happy Beginning" should be your New GST Mantra.

GST Rollout | simply inTAXicating

GST RO(W)AD AHEAD | Episode 8 | Panel Discussion | simply inTAXicating

GST RO(W)AD AHEAD | Episode 7 | Panel Discussion | simply inTAXicating

Also See : TIOL TUBE Videos on GST

 

(DISCLAIMER : The views expressed are strictly of the author and Taxindiaonline.com doesn't necessarily subscribe to the same. Taxindiaonline.com Pvt. Ltd. is not responsible or liable for any loss or damage caused to anyone due to any interpretation, error, omission in the articles being hosted on the site)

 


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