Dec 212017

Advisory for Taxpayers Filing of Quarterly Returns FORM GSTR1

  • Taxpayers opting for quarterly filing of return will have to select the last month of the quarter from the drop down menu. However, for the month of July 2017, GSTR-1 has to be filed separately by all taxpayers, as option to file quarterly returns is applicable for returns from August 2017 onwards.
  • If a taxpayer opts to file quarterly return, and their annual turnover is less than Rs 1.5 Cr (on basis of their turnover in previous financial year or in case of new registration obtained after 1st July 2017, expected turnover for current financial year), then in such cases GSTR-1 of August, 2017 is disabled and he can file details for August and September, 2017 in GSTR 1 of September,2017 and so on.
  • Thus, taxpayers who opt for quarterly return filing will have to file GSTR-1 of the various tax periods in the following manner:
    • For July: Monthly (by choosing July from drop down menu)
    • For 2nd Quarter (August and Sept): Quarterly, by choosing Sept.
    • For 3rd Quarter (Oct-Dec): Quarterly, by choosing December
  • Taxpayer who has already filed GSTR 1 for July 2017, will not be able to revise the same. However, amendment relating to invoices and other relevant document of July 2017 can be made through amendment Table (Table 9).
  • Once taxpayer has chosen the option “Quarterly”, they cannot change this option in the remaining part of the financial year 2017-18. Thus, they will be required to file Quarterly returns and they cannot opt for Monthly filing of returns during current financial year.


Dec 182017

Liability of employer for not deducting PF under Employer Provident Funds and Misc. Provisions Act, 1952

  1. Liability to deduct PF on overtime:

For ascertaining whether to deduct PF on particular component of Basic Wages one has to determine:-

Whether the payment which has been made to a workman / employee in respect the period which does not fall within normal duty hours or within over time hours would be said to be overtime allowance or is a payment of similar nature to fall within the category of similar allowance payable.

Over time allowance as generally understood and defined under factories act 1948 means working in a factory for more than 9 hours in any day or for more than 48 hours in any week, and shall, in respect of overtime work, be entitled to receive wages at the rate of twice his/her ordinary rate of wages. Further, no worker can work more than 10-1/2 hours a day. In essence, worker working more than 48 hours in a week shall be paid overtime with the rate of double wages and further overtime hours can not in any case exceed 24 hours in a week.

The PF is deductible on all emoluments which are earned by an employee while on duty excluding specifically overtime. As mentioned above overtime could only limited within the range of 48 hours in week to 72 hours work in a week. [1 week = 6 days]

Any payment to worker for work more than 72 hours is not overtime and hence PF deduction liability is not applicable on the same.

  1. PF is not liable to be deducted on salary / wages payable to trainees:

In industries it is observed that trainees are deployed within the floor of industry and skilled and developed workmen is again kept on permanent pay roll of the industry. In such cases PF is not deducted on whatever amount is being paid to such trainees if following conditions are met:

  1. Training has been introduced with a view to impart training to persons with specified qualifications.
  2. Minimum qualification and training period has to be mentioned in the training scheme. However, manager may reserve its right to determine the period of training to a particular trainee if they find that there is no proper response from the trainees.
  3. Trainees are being paid a consolidated stipend. This may increase year after year during the period of training.
  4. No other benefit, except for stipulated stipend, shall be paid to such trainees.
  5. Trainees should be recruited for a specified period under the scheme.
  6. There should not be any guarantee for their employment in the company after the completion of their training period.
  7. Training may be terminated at any time without any notice or reason if trainees are found to be medically unfit or unable to accommodate with training environment.

  1. Non-payment of contribution – Recovery can’t be done from director working in the professional capacity:

In case director was not in the position to control financial and managerial aspect of the company, it is wrong to enforce recovery from such director for the default made by the company.

Dec 112017

Refund under GST

Characteristics of refund procedure under GST:

Under GST refund of excess GST paid or erroneously paid is time bound procedure led by a simplified and technology driven exercise with minimal human interface. An application has to make in FORM GST RFD – 01 online with requisite documents. However, refund claim arising from balance in Electronic Cash Register can be made through the filing of regular return.

When a claim of refund arises under GST:

Following are the few cases wherein refund claim might arise under GST:

  1. Mis-calculation or wrong calculation leading to excess payment of GST: The chances of such calculation are minimal as complete process of filing GST return is technology driven. However, such error may arise if wrong tax is selected at the filing of GST return.
  2. Export / deemed export of goods / services: GST being a destination based consumption tax and hence if any goods and / or services is not consumed within India and same can’t be taxed in India and hence supplies are Zero rated. Any tax, if any paid, may be refunded to taxpayer.
  3. SEZ supply: Supply of goods and / or services to units located in SEZ area are also termed zero rated supply and hence above consequences of export will also apply here.
  4. Refunds may arise due to judgment of appellate authority or court.
  5. Refund may arise at the time of finalization of provisional assessment

When a refund claim can be filed on GST portal:

Refund claim under GST can be filed within 2 years from relevant date. Relevant date depends on facts of each case and can be summarized as below:

Case Activity to be completed Relevant date shall be counted from Other
Export of goods
–  By sea or air
Export manifest or export report is delivered u/s 41 of the customs act. Ship or aircraft loaded with goods leaves India.
Export of goods
–  By land
Export manifest or export report is delivered u/s 41 of the customs act. Goods passes the frontier
Export of goods
–  By Post
Postal receipt is received from post The goods dispatch to outside India
Export of services
–  Services completed prior to receipt of payment
Actual supply of services completed and consideration in convertible foreign exchange is received The date of receipt of payment in convertible foreign exchange.
Export of services
–  Advance receipt of payment
Invoice must be issued The date of issue of invoice
Supplies to SEZ unit or developer Goods / services have been admitted in full by such SEZ or developer of such SEZ. The date of payment of tax.
Deemed Export Return relating to such deemed export is furnished. The date of filing of such return. The application for refund of GST shall be filed by the recipient of deemed export.
Refund arising due to judgment, decree, order or direction of AA, AT or any court Such judgment etc must be communicated to parties concern The date of such communication  
Unutilized input tax credit in electronic credit ledger The end of financial year in which such claim for refund arises  
Provisional Payment of tax Completion of final assessment The date of adjustment of tax after the final assessment  
Other case The date of payment of tax  
Person other than supplier The date of receipt of goods or services  

It is worth to note that acknowledgment of Refund application by the deportment in prescribed formant is mandatory within the prescribed time.

Manner of issue of refund:

Refund type Activity precedence Time limit Refund amount Condition
Provisional Refund The date of acknowledgment 7 days 90% Person claiming refund has not been prosecuted earlier.
Delay in granting refund Beyond 60 days Interest @ 6% will be payable to assessee

Dec 052017

Cancellation of GST Registration

When need for cancellation for registration in required:

  1. In case GST registration is issued by department is the process of migrating the existing registration and under GST regime assessee is not liable to get himself registered.
    1. For example, the dealer is registered under service tax being his turnover exceeding Rs 10 Lacs and his registration is migrated by the department. Now under GST regime such taxable person is not liable to get himself registered if their turnover is less than Rs 20 lacs and hence such persons are in batter position if they cancel their registration.
  2. If there is change is rate of tax of goods and service deal in by the dealer to NIL. In such cases this total turnover is exempt from GST net subsequently and liable for cancellation.
  3. If taxable person have closed his business entity and transfer is whole business ongoing basis.
  4. There is change is constitution of business resulting in change in the PAN number etc. ..

Cancellation in case of voluntarily registration:

No application for the cancellation of registration shall be considered in case of a taxable person, who has registered voluntarily, before the expiry of a period of one year from the effective date of registration. The effective date of registration is “Date of issue of certificate” mentioned in line number 9 of GST REG-06 issued at the time of registration of the firm on the GST portal.

Cases and situations for compulsory cancellation of registration:

The registration granted to a person is liable to be cancelled, if the said person,-

  1. Does not conduct any business from the declared place of business; or
  2. Issues invoice or bill without supply of goods or services in violation of the provisions of this Act, or the rules made thereunder; or
  3. Violates the provisions of section 171 of the Act or the rules made thereunder.

Can department cancel registration of the taxable person in case NIL return being filed or no return is filed during certain tax period:

The answer is no. Because filing NIL return or non filing of return does not mean that registered person is not conducting any business at the declared place. The term conduct of business is not limited to mere purchase and/or sale of goods and/or services. It includes wide range of activities from planning, organizing, directing or controlling, strategy making etc for the business. Thus, filing of NIL return or no return alone can not cause cancellation of registration.

How to apply for cancellation:

A registered person,

  • other than a person to whom a registration has been granted under rule 12 or
  • a person to whom a Unique Identity Number (UIN) has been granted under rule 17,

Seeking cancellation of his registration shall electronically submit an application in FORM GST REG-16.

Such person shall include therein:

  • The details of inputs held in stock or
  • inputs contained in semi-finished or finished goods held in stock and
  • The stock of capital goods held in stock on the date from which the cancellation of registration is sought,
  • liability on the above stock
  • The details of the payment, if any, made against such liability and

Further he may furnish, along with the application, relevant documents in support thereof, at the common portal within a period of thirty days of the occurrence of the event warranting the cancellation, either directly or through a Facilitation Centre notified by the Commissioner.

Process of cancellation:

Where a person who has submitted an application for cancellation of his registration is no longer liable to be registered or his registration is liable to be cancelled, the proper officer shall issue an order in FORM GST REG-19, within a period of thirty days from the date of application cancel the registration,

Such cancellation of registration shall be with effect from a date to be determined by proper officer and he may notify the taxable person, directing him to pay arrears of any tax, interest or penalty including the amount liable to be paid under sub-section (5) of section 29.