sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
GST - Goods and Services Tax »
 Five reasons why government should cut GST rate for private security industry
 More rate cuts likely at GST Council meet
 Infosys working on simplified GST returns forms, roll out in 6 months
 Revenue shortfall may limit the scope of GST rate cuts
 No GST slab cuts if govt revenue doesn't increase
  GST annual return forms to help check tax evasion
  Government notifies new annual return form for GST
 Centre extends GSTR-1 filing date till Oct 31, announces late-fee waiver
 Foreign ecommerce companies rush to register for GST in all states
 GST can do a lot without troubling taxpayers
  Communication to the Central Excise/Service Tax Taxpayers on migration to GST

One country, one GST, lots of confusion
June, 20th 2018

What happens when two units of the Authorities of Advance Ruling (AAR) hold divergent views on whether cess can be transitional under Goods and Services Tax (GST)? Confusion reigns, for sure.

While the Andhra Pradesh AAR declined to comment on the issue, the Maharashtra AAR ruled that the Krishi Kalyan Cess (KKC) credit cannot be transitioned.

Experts believe that to avoid such situations, the GST Act should be amended to prescribe cases where transitional credit would be available; they want a national authority on such matters to ensure common rulings on such matters.

Vizag-based Sind Resources had petitioned the Andhra Pradesh AAR seeking an advance ruling on “whether input tax credit is available on Clean Environment (Energy) Cess paid at the time of coal import”. The company said it had a stock of 13,000 tonnes of coal, of which 4,000 tonnes were imported.

The company paid ?16 lakh as cess and took credit, filing TRANS-1 (form for transitional credit). It wanted to know if this was permissible. The State AAR said the issue was beyond its jurisdiction and rejected the application.

However, when Kansai Nerolac Paints approached the Maharashtra AAR for an advance ruling on whether “accumulated credit by way of KKC... will be considered as admissible input tax-credit”, it got a negative answer.

Abhishek Jain, Partner with EY, said “Such differing stands of AARs of different States highlight the acute need for a National Advance Ruling Authority.”

Echoing this sentiment, Anita Rastogi, Indirect Tax Partner with PwC, said divergent rulings on the same issue created confusion, rather than giving clarity. “Before the rulings are issued, a Central team should review the findings so there is alignment across the country,” she felt.

GST has subsumed 17 types of taxes and 26 cesses from both the Centre and the States. There is provision to provide tax credit on stocks prior to July 1; this is called transitional credit. But much of the credit of Education cess, Secondary Higher Education cess, Krishi Kalyan cess has been claimed as transitional credit, which is not allowed under the CGST law. Even the primers released by the Central Board of Indirect Taxes and Customs (CBIC) mentioned that cesses such as the KKC will not be transitional.

However, Section 140 of the CGST is yet to be amended to prescribe that “credit of cesses may be specifically excluded from the list of eligible duties”; this has forced companies to seek rulings on the issue at appropriate forums.

The GST Council had, at its January 18 meeting, approved an amendment, but it was not introduced during the Budget Session. The hope is that the government will move a bill during the Monsoon session.

Rastogi said the underlying legislation should be clear so that companies take the correct legal approach. “The act should spell this out in a manner so that there is no confusion in the minds of the taxpayer. If this needs an amendment of the act, it should be done,” she said.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Web Application Development Web based Software Solution Web Application Deployment Web Application Solutions Web Application Software Development Web Application Deployment Web Application Programming Web Application Design and Development

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions