CONTENTS

AUDIT

• AUDIT COMMITTEE

INDIRECT TAX

• GST RATE FOR OUTSOURCED CANTEEN FACILITIES

DIRECT TAX

• EXEMPTION UNDER SECTION 11 OF INCOME TAX ACT, 1961

FEMA

• SETTING UP OF SEZ
• FEMA UPDATES FOR THE MONTH OF OCT'18

COMPANIES ACT, 2013

• RULES, CIRCULARS, NOTIFICATIONS AND ORDERS ISSUED DURING THE MONTH OF SEPTEMBER, 2018

GST

• GST UPDATES FOR SEPTEMBER 2018

GST UPDATES FOR THE MONTH OF OCTOBER 2018— BULLETIN I

CIRCULARS

1. CLARIFICATION ON LAPSING OF ITC AS ON 31^st JULY 2018 IN CASE OF FABRIC MANUFACTURERS:

In Fabric manufacturing, inputs like yarn, process chemicals, packing materials and other services are subject to GST at varied rates from 5% to 18%. The finished fabrics are subject to GST at 5% which has resulted into inverted tax structure i.e. tax paid on inputs is more than the tax payable on output. Section 54(3) has provided for refund of such excess input tax in these scenarios. However, Notification No. 5/2017-Central Tax dated 28.06.2017 was issued by Government to deny refund on 10 categories of fabrics. This restriction was taken away through Notification No. 20/2018-Central Tax with effect from 01.08.2018.

In this regard, it is clarified that Section 54(3) permits refund of ITC availed on inputs alone under inverted tax structure scenario. The excess input tax credit after paying the tax for the month of July, 2018 that is attributable to inputs alone shall be lapsed out. The same shall be determined using the formula prescribed in Rule 89(5) of CGST Rules, 2017. It is also clarified that no refund of ITC availed on input services and capital goods can be claimed and need not be lapsed. It is further clarified that there no restriction with respect to claim of refund of ITC accumulated because of exports i.e. Zero-rated supplies in Notification 5/2017-Central Tax and accordingly ITC on Zero rated supplies shall not lapse.

{Circular No.56/30/2018-GST dated 24th August 2018}

Read more: SBS "i" 10th Edition

CIRCULARS

1. CLARIFICATION ON LAPSING OF ITC AS ON 31st JULY 2018 IN CASE OF FABRIC MANUFACTURERS: 

In Fabric manufacturing, inputs like yarn, process chemicals, packing materials and other services are sub− ject to GST at varied rates from 5% to 18%. The finished fabrics are subject to GST at 5% which has resulted into inverted tax structure i.e. tax paid on inputs is more than the tax payable on output. Section 54(3) has provided for refund of such excess input tax in these scenarios. However, Notification No. 5ƒ2017−Central Tax dated 28.06.2017 was issued by Government to deny refund on 10 categories of fabrics. This restriction was taken away through Notification No. 20ƒ2018−Central Tax with effect from 01.08.2018.

In this regard, it is clarified that Section 54(3) permits refund of ITC availed on inputs alone under inverted tax structure scenario. The excess input tax credit aGer paying the tax for the month of July, 2018 that is at− tributable to inputs alone shall be lapsed out. The same shall be determined using the formula prescribed in Rule 89(5) of CGST Rules, 2017. It is also clarified that no refund of ITC availed on input services and capi−

t1a.l goods can be claimed and need not be lapsed. It is further clarified that there no restriction with respect to  claim  of  refund  of  ITC  accumulated  because  of  exports  i.e.  Zero−rated  supplies  in  Notification

5ƒ2017−Central Tax and accordingly ITC on Zero rated supplies shall not lapse. 

{Circular No.56/30/2018-GST dated 24th August 2018} 

Read more: SBS "i" 9th Edition

Key Topics:

EDITORIAL

GENERAL LAWS

• LEGAL ENTITY IDENTIFIER

GST

• COMMON CREDITS
• ANALYSIS OF GSTR - 9, GSTR - 9C AND ANNUAL AUDIT

RERA

• ANALYSIS OF JUDGMENT IN LAVASA CORPORATION

DIRECT TAXES

• NOTE ON APPLICABILITY OF SEC 44ADA