GST Updates

[CA Raj Chawla]

Respected Members,

 

Quotes of the day:

1.  Respect is the most important element of your personality. It is like an investment. Whatever we give to others, it will return to us with profit.

2. A Man is not Poor without a Rupee, But Is Really Poor without a Dream and Ambition.
So think big and never stop trying until you are done.

 

GST Updates:

1.  Gujarat High Court has delivered a significant verdict in favor of businesses, ruling that buyers are not required to mandatorily reverse Input Tax Credit (ITC) on post-sale discounts if the GST liability has already been discharged via debit notes. This decision is expected to provide relief to companies facing ITC reversal demands on post-sale discounts.

2. Key Highlights of the Ruling:
No Mandatory ITC Reversal: The court held that there is no statutory provision mandatorily requiring the buyer to reduce ITC on the basis of credit notes issued by the seller.

3. Rectification of GSTR-1 and GSTR-3B, the court allowed rectification of GSTR-1 and GSTR-3B beyond statutory deadlines for bona fide, revenue-neutral errors, ensuring that human errors in the electronic regime do not result in illegal tax demands.

4. Purposive Interpretation of CGST Act, The court's decision reflects a purposive interpretation of the CGST Act, prioritizing fairness and revenue neutrality.

5. Implications of the Ruling:
Relief to Businesses: This ruling is expected to provide relief to businesses facing ITC reversal demands on post-sale discounts, allowing them to rectify errors and avoid unnecessary tax liabilities.

6. Clarity on ITC Reversal: The court's decision provides clarity on the treatment of ITC on post-sale discounts, reducing uncertainty and potential disputes between businesses and tax authorities.

7. Importance of Documentation: The ruling highlights the importance of proper documentation, including debit notes and credit notes, to support ITC claims and avoid disputes.

8. Relevant Provisions:
Section 15(3)(b) of the CGST Act: This provision states that the value of supply shall not include discounts given before or at the time of supply, or after the supply has been effected, if certain conditions are met.

Section 37(3) of the CGST Act: This provision allows for rectification of errors or omissions in GST returns, subject to certain conditions.

Section 39(9) of the CGST Act: This provision requires taxpayers to rectify errors or omissions in GST returns, subject to payment of interest and other conditions.

9. For getting more updates and developments in the CA professional, kindly follow our LinkedIn https://www.linkedin.com/in/ca-dr-raj-chawla-2104903b/

With best regards

CA (Dr) Raj Chawla

B.Com (Hons), FCA, FCS, FCMA, LLB 

MIMA, DISA, MICA, Phd, ASA (Aust), CMP (USA)

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