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Vol: 3 Issue : 11 February 2016
February, the shortest month of
the year with only 28 days in
common years and 29 days in
leap years. Despite this, bears
all the capabilities to affect the
of the country. Like Mark Twain
said “It’s not the size of the dog
With expectations like never before, all eyes will
be on Budget 2016 to be laid down by the end of the month for
which the pre-budget meetings are already underway.
may increase the service tax exemption limit. If the exemption
limit is increase, it will be almost after 8 years. The increase in
businessmen, but also ensure that the compliance burden to
monitor the indirect tax administration will be reduced, allowing it
to focus on bigger taxpayers. This will also seen as a major step
the ambit of the proposed Goods and Services Tax (GST).
Recently, numbers of orders are being issued by the Service Tax
Department, Kolkata to reduce the pendency of the cases. We
like to remind that the period of delays that may be condoned by
the Commissioner (Appeals) is only one month. The assessee
should be careful with the number of delay days, since the
once the limit of one month is exceeded. The assessee then will
be left with no other option but to pay the demanded amount.
The faith of GST will be decided in the Budget session of the
Parliament as the Finance Minister is quite hopeful that the
hindrance in the introduction of GST in our country will overcome during this session. Hence, GST seems to be
implemented during the year. We are also hopeful that
path will be set in budget session that GST will be light
of the day.
Instruction has been issued to clarify the dilemma arising
due to divergence of view between Para 6.2.1 of the
Education Guide 2012 and the CBEC Circular No.
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over to land owners are to be valued for the purpose of
levy of service tax. The issue is discussed in detail at
Page – 2 of this issue.
The CBEC has issued a circular prescribing procedure
for e-payment of refund/rebate claim in order to speed
bank account after sanction of the refund/rebate claim
formations. These instructions will be effective from
The Joint committee on Business processes for GST
after having an elaborate discussion with the trade,
industry and other stakeholders had come up with its
report on GST return. The report has been discussed in
detail at page 3 of this issue.
We hope this newsletter will add some value and prove
suggestions/opinions of the readers. Please feel free to
convey your views at firstname.lastname@example.org.
We are regularly receiving request for early issues of
Tax Talk. Understanding the needs of our valued readers
we have posted the soft copy of the newsletter at our
website. You may refer all earlier issues of Tax Talk at
PAYMENT FORM DUE DATE
Payment for the Month ending
January 2016 (assessees other
than individual, proprietorship
CA Sushil Kr Goyal
Instruction regarding valuation of flats for levy of Service Tax
E-Payment of Refund/ Rebate
Issue No. 47 February 2016I
The Ministry of Finance has set up a High Level Committee
(HLC) as announced by the Finance Minister in his Budget
Speech 2014-15 to interact with trade and industry and ascertain
areas where clarity on tax laws is required. It has been pointed
out by the HLC that there is a divergence of view between Para
6.2.1 of the Education Guide 2012 and the CBEC Circular No.
land owners by the developer/builder are to be valued for the
purpose of levy of service tax.
effect from 01.07.2010 to impose tax on builders/developers
where the consideration or part of a consideration for sale of
by the competent authority. In case of tri-partite construction
business model, there are 3 parties involved:
iii. The contractor (who undertakes the construction).
In such a model, the land owner enters into an agreement with
the builder in which the land owner gives either land/development
rights to the builder i.e. right to construct/develop a residential
builder/developer, in turn, agrees to assign a portion of the
buyers. The builder/developer receives consideration for the
construction service provided by him, from two categories of
ii. from other buyers, normally in the form of money.
be valued for the purpose of levy of service tax. In this respect
the CBEC had issued Circular No. 151/2/2012-ST dated
the land owner will be determined in terms of Section 67(1)(iii)
read with Rule 3(a) of Service Tax (Determination of Value)
In order to speed up the transfer of the fund directly to the
claim and thereby promote ease of doing business, CBEC has
prescribed the following procedure for e-payment of refund/
I. E-PAYMENT THROUGH AUTHORIZED BANKS
a) The payment under the system of electronic payment of
refund/ rebate amounts through RTGS/ NEFT facility shall
b) The Commissioner concerned, after obtaining concurrence
for payment of refund/ rebate to assesses through RTGS/
authorities within their jurisdiction to make e-payment of
c) The banks may charge the refund claimant fee for remitting
refund amount through RTGS/ NEFT as per RBI guidelines |:$%%}+\
: / ~
being made available for construction should be used for arriving at the
value for the purpose of tax.
Service tax is liable to be paid by the builder/developer on the ‘construction
land owner by entering into a conveyance deed or similar instrument (e.g
The same issue has been also dealt in CBEC Education Guide on
Taxation of Services, 2012 wherein it had been mentioned that the value
of construction service provided to such land owner will be the value of
the land when the same is transferred and the point of taxation will also
be determined accordingly.
In order to reconcile the two views, the issue has been examined HLC.
The HLC has opined that the guidelines communicated by the said
circular are more appropriate. Since, the circular is in accordance with
the provision relating to valuation as laid down in the Finance Act, 1994
and the Service Tax (Determination of Value) Rules, 2006. With regards
to the Education Guide, it has been clearly stated in the Education Guide,
2012 that it is merely an educational aid based on a broad understanding
nor a manual of instructions issued by the Central Board of Excise and
Customs. To that extent it does not command the required legal backing
to be binding on either side in any manner. The guide was released
purely as a measure of facilitation so that all stakeholders could obtain
some preliminary understanding of the new issues for smooth transition
to the new regime. Hence, Circulars such as the present one would
prevail over the Education Guide, 2012.
In view of the above, it is directed that in valuing the service of construction
provided by a builder/developer to a landowner, who transfers his land/
dwellings from builder/developer, the Service Tax assessing authorities
should be guided by the said Board Circular dated 10.2.2012 and not the
and the claimant would get only the net amount.
II. PROCEDURE FOR E-PAYMENT
b) The refund sanctioning authority shall ensure that at least one signed
statement of sanctioned orders along with a cheque for the
consolidated refund/rebate amount, in the prescribed format, is
c) Upon receipt of the statement signed by the refund sanctioning
authority and the cheque for the consolidated refund amount, the
bank would credit the refund amounts to the respective accounts of
the claimants through NEFT/RTGS after deducting the applicable
NEFT/ RTGS charges as per RBI guidelines.
Issue No. 47 February 2016Issue
undertaken by the taxable person during a prescribed period. A taxable
person has a legal obligation to declare his tax liability for a given period
in the return, furnish the details about the taxes paid in accordance with
frame. There will be a common e-return for CGST, SGST, IGST and
tax period, even if there is no business activity (i.e. Nil Return) during
the said tax period of return.
the month during which they make purchases (and not regular
return.) They will be required to submit their purchase statements
(without purchase invoices) as per the periodicity prescribed for
Government entities / PSUs , etc. not dealing in GST supplies or
persons exclusively dealing in exempted / Nil rated / non –GST
goods or services would neither be required to obtain registration nor
Periodicity of Return Filing
Common periodicity of returns for a class of taxpayers would be enforced.
taxpayers. The periodicity of return for different categories of taxpayers
is as follows:
1 GSTR 1 Outward supplies made by taxpayer
(other than compounding taxpayer
and ISD) 10th of the next
2 GSTR 2 Inward supplies received by a
taxpayer (other than a compounding
taxpayer and ISD)15th of the next
3 GSTR 3 Monthly return (other than
compounding taxpayer and ISD) 20th of the next
4 GSTR 4 Quarterly return for compounding
Taxpayer 18th of the month
next to quarter
5 GSTR 5 Periodic return by Non-Resident
Foreign Taxpayer Within 7 days after
the date of expiry of
6 GSTR 6 Return for Input Service Distributor
(ISD) 15th of the next
7 GSTR 7 Return for Tax Deducted at Source 10th of the next
8 GSTR 8 Annual Return By 31st December
of next FY
9 Input Tax Credit Ledger of taxpayer Continuous
10 Cash Ledger of taxpayer Continuous
11 Tax ledger of taxpayer Continuous
(i) Normal / Regular taxpayers with multiple registrations (for business
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GSTR-3 for each of the registrations separately.
(ii) Taxpayers otherwise eligible for the compounding scheme can opt
thereby make their supplies eligible for Input Tax Credit in
hands of the purchasers.
mode would have to be uploaded.
Steps for Return Filing:
either directly through data entry at the GST Common Portal or
through Apps by 10thday of month succeeding the month during
which supplies has been made. The increase / decrease (in
supply invoices) would be allowed, only on the basis of the
details uploaded by the counter-party purchaser in GSTR-2,
upto 17th day of the month. (i.e. within a period of 7 days).
Step2: GST Common Portal (GSTN) will auto-draft the
provisional GSTR-2 of taxpayer based on the supply invoice
details reported by the counter-party taxpayer (supplier) on a
near real-time basis.
Step3: Purchasing taxpayer will accept / reject/ modify such
auto-drafted provisional GSTR-2.
Step4: Purchasing taxpayer will also be able to add additional
purchase invoice details in his GSTR-2 which have not been
uploaded by counter-party taxpayer (supplier) as described in
Step 1 and 2 above, provided he is in possession of valid invoice
issued by counter-party taxpayer and he has actually received
Step5: Taxpayers will have the option to do reconciliation of
inward supplies with counter-party taxpayers (suppliers) during
the next 7 days by following up with their counter-party taxpayers
for any missing supply invoices in the GSTR-1 of the counter-
party taxpayers, and prompt them to accept the same as
uploaded by the purchasing taxpayer. All the invoices would be
auto-populated in the ITC ledger of taxpayer. The taxpayer
would, however, indicate the eligibility / partial eligibility for ITC
in those cases where either he is not entitled or he is entitled for
using online facility at Common Portal or using GSTN compliant
off-line facility in their accounting applications, determine the
liability on their supplies, determine the amount of eligible ITC on
their purchases and then generate the net tax liability from the
system for each type of tax. Cash details as per personal ledger/
carried forward from previous tax period, ITC carried forward
from previous tax period, ITC reversal and associated
Interest/Penalty, taxes paid during the current tax period etc.
would get auto-populated in the GSTR-3.
Step7: Taxpayers will pay the amount as shown in the draft
GSTR-3 return generated automatically at the Portal post
Step8: Taxpayer will debit the Input Tax Credit ledger and cash
ledger and mention the debit entry No. in the GSTR-3 return and
would submit the same.
After submission of return, an Acknowledgement Number will be
tools, acknowledgement of submission will generated after
Issue No. 47 February 2016
Owner: M/s. Goyal Tax Services Pvt. Ltd., Printer & Publisher: Mrs. Reena Goyal Published from Stephen House, Room No. 64, 4 B. B. D. Bag (East), 4th Floor, Kolkata-700 001
And Printed from M/s. CDC Printers Pvt. Ltd., Tangra Industrial Estate-II (Bengal Pottery), 45, Radhanath Chowdhury Road, Kolkata - 700 015. Editor: CA Sushil Kumar Goyal.
Bulletin Editorial Board
CA. Sushil Kumar Goyal (Editor) CA. Abhisek Tibrewal
CA. Pinky Agarwal CA. Ashika Agarwal
CA. Nikita Jhawar CA. Neha Gupta
CS. Nikita Saraf
Published from :
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Registration under RNI No. WBENG/2013/55099 Postal Registration No. KOL RMS/465/2015-17 Date of Publication : 1st February 2016
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Stephen House, Room No. 64
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Phone : 2262 4632/33
Q. We had availed works contract service for construction
of building. Whether we can take credit of the tax paid
on works contract service?
A. Rule 2(l) of CENVAT Credit Rules, 1994, provides that any
service used by provider of output service for providing an
credit will be available. However, there are certain
is, if the service portion in the execution of a works contract
and construction services including service listed under
clause (b) of section 66E of the Finance Act (hereinafter
construction or execution of works contract of a building or
a civil structure or a part, or laying of foundation or making
of structures for support of capital goods. In other words,
the service provider cannot avail the credit of works contract
service or construction service if used for the above
However, there is an exception to the above i.e if the said
services then credit will be available.Q. What if the building constructed is used for providing
“Renting of Immoveable Property Service”?
A. We are using works contract service for construction of a building
which will be subsequently let out. Firstly, the credit of input
service is allowed when the same is used for providing taxable
output service. In the instant case, the works contract service
had not been used for providing output service i.e Renting of
Immovable Property Service though it is being used in
construction of the building. Since the output service is provided
after the building is constructed. Further, as discussed if the said
service is being used for construction or execution of works
contract of a building or a civil structure or a part or laying of
foundation or making of structures for support of capital goods
credit will not be available. Hence, we will not be eligible for credit
on said works contract service.
Q. What if the building constructed is used for “Construction
A. We are using works contract service for construction of a building
which in turn will be used by the company for providing
construction service. The said service is used for providing
services. Therefore, credit will be available on the same.
Adjudication at all levels
Appeal at all levels
GST - Impact Study
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