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Navigating the complexities of GST can be a daunting task, even for seasoned business owners and tax professionals. With constant changes and updates to GST regulations, it can be challenging to stay up-to-date with the latest developments. In this article, we will explore key updates that businesses should be aware of to help them navigate the complexities of GST.
One important update is the introduction of e-invoicing for businesses with a turnover of more than 50 crore rupees. E-invoicing has been introduced to improve compliance and reduce errors in the invoicing process. It is mandatory for businesses to generate invoices through the GST portal, and failure to do so can result in penalties.
Another significant update is the extension of due dates for filing GST returns. The government has announced an extension of deadlines for various GST returns, providing businesses with additional time to comply with their filing obligations.
Moreover, the GST Council has made several changes to the GST rates for various goods and services. For instance, the GST rate on COVID-19 vaccines has been reduced to zero, while the GST on certain medical devices has been reduced to 5%.
In conclusion, navigating the complexities of GST can be challenging, but staying up-to-date with the latest updates can help businesses stay compliant and avoid penalties. By understanding the key updates, businesses can ensure they remain compliant with GST regulations while also taking advantage of any opportunities that arise.
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Officers of CGST Mumbai South Commissionerate have busted a fake GST invoice racket, which was used to pass on fake GST Input Tax Credit (ITC) of Rs. 27.80 crore on invoices of Rs 142 Crore, and have arrested the Director of M/s Techno Satcomm India Pvt. Ltd. for issuing GST invoices without actual supply of goods.
Acting on a specific input received from Central Intelligence Unit of CGST Mumbai Zone, the anti-evasion wing of CGST Mumbai South Commissionerate initiated an investigation against this company. During investigation, the company was found to be non-existent at the declared business address. Subsequently, statement of its Director was recorded on 05.09.22 wherein he admitted his role in generation of fake ITC and passing on this ITC in the downward supply chain.
Investigation revealed that this company had fraudulently claimed input tax credit of Rs. 27.80 Crore in its GST returns and passed on this ITC to its various recipients. Bogus invoices of around Rs. 142 Crore were issued for passing on this tax credit, without any supply of goods, in gross violation of provisions of the CGST Act, 2017.
Based on material evidence gathered during the investigation, the Director of the company was arrested on 06.09.2022 and produced before the Hon’ble Additional Chief Metropolitan Magistrate, Esplanade on the same day who has remanded him to judicial custody for 14 days. Further investigation is under progress.
This is the seventh arrest by the officers of CGST Mumbai South Commissionerate, in the current financial year. During the financial year 2021-22, the CGST Mumbai South Commissionerate had detected GST evasion of Rs. 949 Crore, recovered Rs. 18 Crore and arrested 9 tax evaders
CGST officers are using data analysis and network analysis tools to identify and trace the potential fraudsters. This case is a part of the special drive launched by the CGST Mumbai Zone against the tax fraudsters and fake ITC networks. The CGST officers will intensify this drive against the tax evaders in the coming days.
GST Goods and Service Tax GST News GST evasion GST Mumbai
Read more at : https://www.taxgyata.com/ap/gst-mumbai-officers-busts-rs-142-crore-fake-invoice-racket/
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G.S.R. 513(E).—In exercise of the powers conferred by the first proviso to section 44 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Commissioner, on the recommendations of the Council, hereby exempts the registered person whose aggregate turnover in the financial year 2021-22 is up to two crore rupees, from filing annual return for the said financial year.
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GSTN enabled changes in Table 4 of GSTR-3B related to the claim of ITC
Govt. issued guidelines for the launching of prosecution under GST law
Income-tax officials raids on a prominent Transmission Tower manufacturing group in West Bengal
Challan Form (CRN) service user manual is made available to all the users
Income-tax Dept enabled payment via UPI and credit card on the e-filing portal
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Once the enrollment application is submitted on the GST portal, it takes a certain specified time to get approved. In the meantime, an applicant can track his application status online by using the Application Reference Number (ARN). GST registration application may be approved, rejected or the officer may ask to submit some clarification also.
What is ARN number?
Application Reference Number (ARN) is a 15 digit unique number generated after submission of a registration application on the GST portal. It can be used to track the application status. If the applicant doesn’t receive ARN within 15 minutes of submission of the application, an e-mail will be sent to him with detailed instructions for further course of action.
Format of ARN:
AA - Alphabets
09 - State Code
10 - Month
21 -Year
555555 - Six Digits System Generated Code
1- CheckSum Digit
Steps to track the status of registration application on GST portal
This is a pre-login option available to users who have applied for registration and want to know the status of their registration application.
Step 1: Visit the GST official website
Step 2: Navigate to ‘Services’ > ‘Registration’ > ‘Track Application Status’
Step 3: Select the “Registration” tab from the dropdown menu.
Step 4: Enter ARN or SRN in the respective field and click on the 'SEARCH' button
Step 5: The application status will be displayed on your screen.
What is the meaning of different GST registration statuses?
1. Pending for processing - This status means the registration application has been successfully filed but the same is not processed by the GST officer yet.
2. Pending for clarification - This status means notice seeking clarification/additional information has been issued by the GST officer to the applicant.
3. Approved - This status means login ID and password have been emailed to an applicant after the approval of the new registration application.
4. Rejected - This status will be shown when the registration application has been rejected by the GST officer.
Recent updates related to GST registration
November 2021
1. Functionality has been introduced on the GST portal for taxpayers to withdraw their application for cancellation of registration (Form REG-16) provided no action has been initiated by the tax officer against their application.
2. Now the effective date of suspension of a taxpayer is also displayed on the portal when his profile is accessed using "Search Taxpayer" functionality.
24th September 2021
An applicant shall undergo Aadhaar authentication for filing an application for revocation of cancellation of registration in FORM GST REG-21 under Rule 23. (Notification No. 35/2021–Central Tax)
Under Aadhar authentication, an authentication link is sent on the registered mobile number and email id. On clicking the verification link, a window for Aadhaar Authentication will open where an applicant needs to enter Aadhaar number and the OTP received on the mobile number linked with Aadhaar.
29th July 2021
The taxpayers who have been newly registered on the GST portal but have not yet furnished their Bank Account details, may login and update the same through the Non-core amendment.
28th May 2021
The last date for filing application for revocation of canceled GSTIN falling between 15th April 2021 to 29th June 2021 extended to 30th June 2021.
5th March 2021
The search ARN functionality for registration on the common portal has been enhanced for taxpayers.
31st January 2021
(i) SEZs while applying for GST registration will have to provide the validity period as per the letter of authorisation (LOA).
(ii) Aadhaar authentication has been implemented on the Common portal for existing taxpayers.
GST registration GST Goods and Service Tax
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New Delhi: An Income Tax raid has been conducted at the Gurmail Medical Stores in Ludhiana today. Highly placed sources in the department confirmed that about 150 IT sleuths, staff, police personnel are part of the team that is conducting raids at total 35 premises of Gurmail Medical Stores.
These include shops on Pakhowal Road, Near Mohan Dai Hospital, Medicity Hospital, etc.
A senior official, wishing not to be named, said the raid were conducted under the directions of Principal Director, Income Tax.
“The raids on premises are expected to continue for another 24-36 hours till the department gets each and every detail of the transactions made. There are doubts that huge investments are also made by them in connivance with political bigwigs. More than 50-60 vehicles of IT department with staff have arrived from Jalandhar, Patiala, etc., to conduct the raids,” said the official.
Meanwhile panic gripped the entire Pindi street (wholesale market of medicines) here as soon as chemists got to know about raids. Many shopkeepers did not even open the shops till late noon.
income tax news Income Tax Income Tax Raid
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The Income Tax Department has issued notice to industrialist Anil Ambani to prosecute him under the Black Money Act for allegedly evading Rs.420 crore in taxes on undisclosed funds worth more than Rs 814 crore held in two Swiss bank accounts.
The department has accused Ambani with “wilful” tax evasion, alleging that he “deliberately” withheld information about his financial interests and overseas bank account information from Indian tax officials.
A show cause notice in this context was issued to Ambani early this month. When this report was filed, Ambani’s office still hadn’t responded to a question regarding the situation.
According to the government, he could face legal action under Sections 50 and 51 of the Black Money (undisclosed foreign income and assets) Imposition of Tax Act of 2015, which carries a maximum penalty of 10 years in prison and a fine.
The businessman has been accused with avoiding taxes for the assessment years 2012–2013 through 2019–2020 by holding undeclared assets abroad. Tax authorities discovered that Ambani was a “economic contributor as well as beneficial owner” of two businesses: Northern Atlantic Trading Unlimited (NATU), which was incorporated in the British Virgin Islands, and Diamond Trust, which has its headquarters in the Bahamas (BVI).
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ICAI Announcements: The Institute of Chartered Accountants of India (ICAI) through its Committee on Career Counselling and with the support of Eastern India Regional Council (EIRC) of ICAI signed a Memorandum of Understanding (MoU) on 19th August, 2022 with the School Education Department, Mizoram, Government of Mizoram to advance commerce education among secondary and higher/senior secondary students in public and public-aided schools.
Five years have been agreed upon for the term of this MOU. The Outreach meeting was also planned with the Mizoram High Secondary and Higher Secondary School Principals and Headmasters. Dr. Lalzirmawia Chhangte, IAS, Secretary of School Education for Mizoram, served as the event’s chief guest. CA. Hans Raj Chugh, Chairman Committee on Career Counseling, CA. Purushottam Khandelwal, Vice-Chairman, CA. Ravi Kumar Patwa, Chairman EIRC, and CA. (Dr.) Jai Kumar Batra, Secretary, were all there to represent the ICAI. The ICAI Secretary and the Mizoram Secretary of School Education both signed the MOU.
Dr. Lalzirmawia Chhangte, IAS, Secretary, School Education Department, Mizoram, praised the initiatives made by the institution for the students of the State of Mizoram and asked the ICAI to run a special drive for financial literacy in the state to raise awareness about the knowledge of finance, tax, banking, etc. The department of education will work in partnership with the ICAI and provide its full support for promoting commerce education and chartered accountancy for this initiative.
During the programme, the President CA. (Dr.) Debashis Mitra and the Vice-President CA. Aniket Sunil Talati offered their congratulations and best wishes, expressing their desire to see more students and members from the State of Mizoram in the future with the help of the ICAI’s Career Counseling Committee.
Representatives of the profession, students enrolled in the Chartered Accountancy Program, principals and headmasters of schools, and members of the media all attended the occasion.
ICAI
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New Delhi: Retirement fund body Employees’ Provident Fund Organisation (EPFO) has started an investigation into possible wrongdoing by its staff at a Mumbai suburban office, which could involve estimated losses of up to Rs 1,000 crore for the organisation.
Citing people with knowledge of the matter, ET reported that the modus operandi is believed to be creating fake accounts and transferring funds or settling claims in defunct firms such as cash-strapped Jet Airways which later went into the National Company Law Tribunal (NCLT) for transfer of ownership.
“We expect EPFO losses due to this particular fraud to mount to up to Rs 1,000 crore, arising due to violation of rules and tax evasions,” Prabhakar Banasure, a member of EPFO’s central board of trustees, told the financial daily, highlighting that “offenders should be punished for doing injustice to members’ life savings and maligning this apex retirement body.”
EPFO payroll data: 18.33 lakh jobs generated in June
Officials mentioned that an internal investigation is underway and the vigilance department is scrutinising past records to determine the actual quantum of losses. Plus, a final report will soon be submitted to the EPFO central body. People cited above are of the view that the scam was allegedly committed in Mumbai’s Kandivali office, using employment funds of then pilots, including many expats, and crew members of Jet Airways.
Proposal to hike equity investment limit to 20 pc deferred by EPFO trustees
The senior social security assistant of Kandivali PF office, Machindra Bamne, was reportedly suspended over the alleged fraud of Jet employees’ PF claims. Bamne was found to have “received illegal gratification from some members into his bank account for settlement of PF claims related to employees of M/s Jet Airways”, regional provident fund commissioner-1 RO, Kandivali East, wrote in an order dated August 18, the financial daily reported, citing the letter.
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There is an exemption limit for registration under Goods and Services Tax (GST) in India. If the annual turnover of any person exceeds the exemption limit then he will have to enroll himself under the Goods and Services Tax regime. This is also known as a GST registration limit or GST threshold.
A lot of queries have been revolving around the GST threshold due to frequent changes in the law. This article has been republished with the latest amendments to the GST threshold.
Registration limit in case of goods
GST registration is mandatory for every person who is engaged in the exclusive supply of goods and his aggregate turnover exceeds Rs 40 lakh in a financial year. Earlier, the limit was 20 lakhs for a supplier of goods. However, the same was increased to 40 lakhs vide notification No. 10/2019-Central Tax, dated 07.03.2019.
The enhanced exemption figure of 40 lakhs shall not apply to the following category of persons:
Service providers
Persons engaged in making supplies of ice cream and other edible ice, whether or not containing cocoa [2105 00 00], Pan masala [2106 90 20] and all goods of Chapter 24, i.e. Tobacco and manufactured tobacco substitutes.
Persons required to obtain compulsory GST registration
Persons obtained voluntary registration under GST
Persons engaged in making intra-State supplies in the States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura, Uttarakhand and the Special Category States as per section 22.
Illustration:
1. Vijay of Assam is exclusively engaged in an intra-State supply of cloths. His aggregate turnover in the current financial year is 22 lakh. In view of the above discussion, the applicable GST limit for registration for Vijay in the given case is 40 lakh. Thus, he is not liable to enroll under GST.
2. If in the above example, all other things remaining the same, Vijay is exclusively engaged in the supply of pan masala instead of cloths, he will not be eligible for a higher threshold of 40 lakh and the applicable limit for GST registration in the given case will be 20 lakh. Consequently, Vijay will be liable to enrolled under GST.
3. Further, if Vijay is engaged in supply of both taxable goods and services, the applicable threshold for registration will be 20 lakh only.
Registration limit for services
The registration limit for service providers in GST in India is Rs. 20 lakhs. There has been no modification in the threshold for service providers. They will have to get registered under GST if the aggregate value of services in a financial year exceeds 20 lakhs
Registration limit for Special Category States
The registration limit will be Rs 10 lakhs if the person is carrying out business in the Special Category States.
As per Article 279A(4)(g) of the Constitution, there are 11 Special Category States, namely, States of Arunachal Pradesh, Assam, Jammu and Kashmir1, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand. However, as per the explanation (iii) to section 22, for the purposes of registration under GST, only Mizoram, Tripura, Manipur and Nagaland are the Special Category States.
Therefore, the GST exemption threshold of Rs 10 lakh will be applicable for Mizoram, Tripura, Manipur and Nagaland.
New GST registration limit State-wise
States
For Goods
For Services
Mizoram, Tripura, Manipur and Nagaland
10 lakhs
10 lakhs
Arunachal Pradesh, Meghalaya, Puducherry, Sikkim, Telangana, Uttarakhand
20 lakhs
20 lakhs
Jammu and Kashmir, Assam, Himachal Pradesh and all other States
40 lakhs
20 lakhs
How is aggregate turnover calculated for the GST threshold?
Now one thing is clear that aggregate turnover is the main parameter to determine whether the person is eligible for GST exemption or not. “Aggregate turnover” is defined under section 2(6) of the CGST Act.
“Aggregate turnover” means the aggregate value of all taxable and non taxable supplies, exempt supplies and exports of goods and/or services of a person having the same PAN, to be computed on all India basis and excludes taxes, if any, charged under the CGST Act, SGST Act and the IGST Act, as the case may be; Explanation – Aggregate turnover does not include the value of supplies on which tax is levied on reverse charge basis and the value of inward supplies”.
In simple language, to compute GST limit, Turnover includes
Taxable supplies
Exempted supplies
Non-GST supplies
Interstate supplies
Zero-rated supplies
Goods sent for job work
Turnover excludes
Goods or services received on which tax payable under reverse charge mechanism
GST paid
Goods received for job work
Take note that aggregate turnover shall be taken on a PAN India basis, not a state basis. To learn more about the computation of the threshold, please check out the examples given in the next section.
Computation of GST threshold in various situations
The below tables manifest the calculation of aggregate turnover in various situations and the requirement of registration in each situation.
Situation 1: Turnover for FY 2020-21 less than the threshold.
Particulars
(Rs in lakhs)
Registration requirement
Taxable supplies (a)
20
Registration will not be required in the given case as aggregate turnover is not crossing the exemption threshold.
Note- GST payment and inward reverse charge supplies will not be included in aggregate turnover.
Exempted supplies (b)
5
Non-GST supplies ©
7
GST paid (d)
3.6
Inward supplies attracting reverse charge(e)
8
Total
43.6
Aggregate turnover (a + b + c)
32
Situation 2: Inter-state supply of goods and turnover less than the threshold.
Particulars
(Rs in lakhs)
Registration requirement
Taxable supplies (a)
20
Registration is mandatory in the given case as the entity is engaged in inter-state supplies irrespective of that aggregate turnover is less than the exemption threshold.
Exempted supplies (b)
5
Inter-state supplies ©
5
Total
30
Aggregate turnover (a + b + c)
30
Situation 3: Turnover of entire entity (all states) exceeds the threshold.
Particulars
(Rs
in lakhs)
Registration requirement
Mumbai branch sale (a)
20
Registration will be required in all three states as the turnover of the entire entity exceeds the exemption threshold.
Haryana branch sale (b)
15
Rajasthan branch sale ©
10
Total
45
Aggregate turnover (a + b + c)
45
When will the GST exemption limit not be applicable?
As per section 24 of the CGST Act, it is compulsory for certain persons to take registration under GST even their aggregate turnover is less than the registration limit. Here is the list of persons who are compulsorily required to register under GST-
Inter-State supplier
Taxpayer under reverse charge mechanism
Casual taxable person
Non-Resident taxable person
E-commerce operator
Any person who requires to deduct tax at source under section 51 of CGST act, 2017
Input service distributor
Any person who engaged in supplies on behalf of another taxable person whether as an agent or otherwise
Every person supplying online information and database access or retrieval services from a place outside India to an unregistered person in India
Other persons may be notified by the Government.
What is the GST composition scheme turnover limit?
Composition scheme is an optional scheme of levy of tax designed for small taxpayers under the Goods and Services Tax (GST) regime. Under the composition scheme, tax is levied at a reduced rate with less compliances subject to certain restrictions.
The composition scheme turnover limit in GST is Rs 1.50 crores, and Rs 75 lakhs with respect to the 8 Special Category States as follows:
Arunachal Pradesh
Manipur
Meghalaya
Mizoram
Nagaland
Sikkim
Tripura
Uttarakhand
Recent updates related to GST registration
November 2021
1. Functionality has been introduced on the GST portal for taxpayers to withdraw their application for cancellation of registration (Form REG-16) provided no action has been initiated by the tax officer against their application.
2. Now the effective date of suspension of a taxpayer is also displayed on the portal when his profile is accessed using "Search Taxpayer" functionality.
24th September 2021
An applicant shall undergo Aadhaar authentication for filing an application for revocation of cancellation of registration in FORM GST REG-21 under Rule 23. (Notification No. 35/2021–Central Tax)
Under Aadhar authentication, an authentication link is sent on the registered mobile number and email id. On clicking the verification link, a window for Aadhaar Authentication will open where an applicant needs to enter Aadhaar number and the OTP received on the mobile number linked with Aadhaar.
29th July 2021
The taxpayers who have been newly registered on the GST portal but have not yet furnished their Bank Account details, may login and update the same through the Non-core amendment.
28th May 2021
The last date for filing application for revocation of canceled GSTIN falling between 15th April 2021 to 29th June 2021 extended to 30th June 2021.
5th March 2021
The search ARN functionality for registration on the common portal has been enhanced for taxpayers.
31st January 2021
(i) SEZs while applying for GST registration will have to provide the validity period as per the letter of authorisation (LOA).
(ii) Aadhaar authentication has been implemented on the Common portal for existing taxpayers.
Frequently asked questions (FAQs)
Whether the taxable supply made by the job-worker on behalf of his principal be considered for computing the limit for GST registration?
Will ISD be required to register separately other than the existing taxpayer registration?
Whether a registered person is liable to collect and deposit the tax even though his aggregate turnover does not exceed the threshold of 40 Lakhs/ 20 lakhs?
What is the time limit for obtaining GST registration?
What documents will be required while applying for registration on the GST portal?
What is Suo Moto Registration?
GST GST registration Goods and Service Tax
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Income Tax Rules Amended to allow Foreign Tax Credit even with Delayed filing of Form 67
Notification Date: 18th August 2022
G.S.R. 636(E).— In exercise of the powers conferred by clause (ha) of sub-section (2) and subsection (4) of section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-
1. Short title and commencement.—
(1) These rules may be called the Income-tax (27thAmendment) Rules, 2022.
(2) They shall be deemed to have come into force from 1at day of April, 2022.
2. In the Income-tax Rules, 1962, in rule 128, for sub-rule (9) the following sub-rule shall be substituted, namely:-
“(9) The statement in Form No. 67 referred to in clause (i) of sub-rule (8) and the certificate or the statement referred to in clause (ii) of sub-rule (8) shall be furnished on or before the end of the assessment year relevant to the previous year in which the income referred to in sub-rule (1) has been offered to tax or assessed to tax in India and the return for such assessment year has been furnished within the time specified under sub-section (1) or sub-section (4) of section 139:
Provided that where the return has been furnished under sub-section (8A) of section 139, the statement in Form No. 67 referred to in clause (i) of sub-rule (8) and the certificate or the statement referred to in clause (ii) of sub-rule (8) to the extent it relates to the income included in the updated return, shall be furnished on or before the date on which such return is furnished.”
Explanatory Memorandum: This amendment is effective from the 1st day of April, 2022 so that it applies to all the claims of foreign tax credit furnished during the financial year 2022-2023. It is hereby certified that no person is being adversely affected by giving retrospective effect to this rule.
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Income Tax rule 17CB amended to replace word trust or institution with specified person
Notification Date: 22nd August 2022
G.S.R. 647(E). - In exercise of the powers conferred by sub-section (2) of section 115TD read with section 295, of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-
1. Short title and commencement.-
(1) These rules may be called the Income-tax (Twenty Eighth Amendment) Rules, 2022.
(2) They shall come into force from the date of its publication in the Official Gazette.
2. In the Income-tax Rules, 1962, in rule 17CB,—
(i) for the words "trust or institution" wherever they occur, the words "specified person" shall be substituted;
(ii) in Explanation, after clause (h), the following clause shall be inserted, namely:-
'(ha) "specified person" shall have the same meaning as assigned to it in clause (iia) of the Explanation to section 115TD;'.
Note: The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section-3, Subsection (ii) vide number S.O. 969 (E) dated the 26th March, 1962 and last amended vide notification number G.S.R 636(E) dated 18th August, 2022.
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Income Tax Dept searches in Gujarat; Unaccounted cash sales, fake loans & bogus share capital detected
NEW DELHI: The Income Tax Department has carried out a search and seizure operation on a business group primarily engaged in manufacturing and trading of ceramic tiles and has detected unaccounted transactions of more than ₹300 crores, said an official statement.
The search conducted earlier this month covered 36 premises spread across Rajkot, Morbi, Ahmedabad, Raipur, Guwahati, Gurgaon and Kolkata. It also covered persons engaged in providing finance, the statement said.
During the course of the search operation, various incriminating pieces of evidence in the form of documents and digital data have been found, the department said. Initial analysis revealed that the group has allegedly been engaged in large scale tax evasion by adopting various methods, including, by way of unaccounted cash sales outside the books of account, under invoicing of sales and booking of bogus purchases, the department said.
The group has also been found to be involved in alleged layering of unaccounted sums through bogus unsecured loans from related parties and share capital from Kolkata-based shell companies, the department said. Several pieces of evidence indicated the group’s involvement in routing of unaccounted funds into the regular books of account using accommodation entries provided by a Gujarat based person engaged in providing finance, the department alleged.
So far, the search action has resulted in unearthing of unaccounted transactions exceeding Rs. 300 crore including cash loans of more than Rs. 100 crore, the department alleged. Further investigations are in progress, the statement said.
Income Tax income tax news Income Tax Raid
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CBIC examining issue regarding applicability of GST on cross charges: Vivek Johri
CBIC has said it is examining the issue related with taxability of activities performed by the office of an organisation in one State to the office of that organisation in another State.
Technically, it is called cross charges and mainly involves remuneration paid to Chief Executive Officer (CEO), Chief Financial Officer (CFO), Chief Experience Officer (CXO), besides other top management officials and also related to officials and employees of departments such as human resources and accounting.
These officials sit in company headquarters, but provide services to all the offices set up in other places. The issue here is how tax can be calculated according to place of supply.
CBIC Chairman Vivek Johri said the issue is whether it is taxable because under the GST law if any payment is made under an employer-employee relationship, then it is not chargeable to GST. This part is clear. It is not treated as supply of service for the purpose of GST because of employment contract.
"The issue here also happens to be that CEO, CXO or CFO is employed by main entity and not by a particular GSTent. So, the main entity may have registration across several states and the problem is the attribution of that liability across different registrations. This issue needs clarification and we are examining it," he said.
GST Goods and Service Tax GST News CBIC
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