List of Goods and Services Not Eligible for Input Tax Credit

Goods and Services Not Eligible for ITC

Input tax credit is considered very significant for every business unit which is always in the need to invest in the business in the manner of capital. The need of capital is required each and every time a business gets ready for its next project. This time in GST, a business unit will be eligible for input tax credit, only if certain cases are met with the transactions.

Recommended: All Decisions & Latest Updates on 32nd GST Council Meeting

Invoice matching of both the parties will be the key issue for checking and granting the input tax credit to the dealer while in certain cases, input tax credit may not be available for some rules and regulation purpose.

Some of the Goods and Service which are not Eligible for Input Tax Credit

Read Also: Input Tax Credit Guide Under GST: Calculation with Proper Examples

1Motor VehiclesExcept in casesExtended supply of such vehicles or conveyances;Transportation of passengers or
2Other ConveyancesProviding training on driving, navigating such vehicles orConveyances for transportation of goods;
3Foods, Outdoor Catering, Beauty Treatment, Health Services Cosmetic, Plastic SurgeryExcept where an inward supply of goods or services or both of a particular category is consumed by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply
4Membership of a Club,
5Membership of a Health Centre
6Membership of a Fitness Centre;
7Rent-a-cab, Life Insurance, Health InsuranceThe Government states the services which are mandatory for an employer to provide to its employees under any law for the time being in force; orSuch inward supply of goods or services or both of a particular category is used by a registered person for making an outward taxable supply of the same Category of goods or services or both or as part of a taxable composite or mixed supply.
8Travel benefits extended to employees on vacation such as leave
9Travel benefits on home travel concession
11Works contract services when supplied for construction of an immovable propertyExcept where it is an input service for extended supply of works contract service and plant and machinery
12Goods or services or both received by a taxable person for construction of an immovable propertyExcept goods or services received on his own account including when such goods or services or both are used in the course or furtherance of business and plant and machinery
13Goods or services or both on which tax has been paid under section 10;ie. Under section 10 composition scheme
14Goods or services or both received by a non-resident taxable personExcept on goods imported by him
15Goods or services or both used for personal consumption
16Goods lost
17Goods written off
18Goods destroyed
19Goods stolen
20Goods disposed of by way of gift or free
21Any tax paid in accordance with the provisions of sections 74, 129 and 130.I.e. In

Due Dates of Filing ROC Annual Return for FY 2018-19

Every company is required to file the annual accounts and annual return as per The Companies Act, 2013 within 30 days and 60 days respectively from the conclusion of the Annual General Meeting. The ROC filing of annual accounts is governed under Section 129 (3), 137, of The Companies Act , 2013 read with Rule 12 of the Company (Accounts) Rules, 2014 and annual return is governed under Section 92 of the Companies Act, 2013 read with Rule 11 of the Companies (Management and Administration) Rules, 2014.

Recommended: Free Download MCA/ROC Return Filing Software

Due Dates of ROC Return Filing (FY 2018-19)

Name of E-formPurpose of E-formDue date of FilingDue Date for FY 2018-19
Form ADT-1Appointment of Auditor15 days from the conclusion of AGM15th October 2019
Form AOC-4 and Form AOC-4 CFS (in case of Consolidated financial statements)Filing of Annual Accounts30 days from the conclusion of the AGM (In case of OPC within 180 days from the close of the financial year)30th October 2019
Form MGT-7Filing of Annual Return60 days from the conclusion of AGM29th November 2019
Form CRA-4Filing of Cost Audit Report30 days from the receipt of Cost Audit Report30 days from the receipt of Cost Audit Report
Form MGT-14Filing of resolutions with MCA regarding Board Report and Annual Accounts30 days from the date of Board Meeting30 days from the date of Board Meeting
Form MSMEHalf yearly return with the registrar in respect of outstanding payments to Micro or Small Enterprise.Within a month for each half of the year31st October 2019 (April 2019 to September 2019)30th April 2020 ( for October 2019 to March 2020)

The Concept of Penalty/Additional Fees

NOTE: Additional Fees for E-form AOC-4 (XBRL and Non-XBRL) and E-form MGT-7 after the due date is RS. 100 per day with effect from 1st July 2018.

For other forms, docs etc.

Period of DelaysFees
Up to 30 days2 times of normal fees
More than 30 days and up to 60 days4 times of normal fees
More than 60 days and up to 90 days6 times of normal fees
More than 90 days and up to 180 days10 times of normal fees
More than 180 days and up to 270 days12 times of normal fees

Income Tax Return Filing Due Dates for FY 2018-19 (Last Date)

File Tax Returns for A.Y. 2019-20 before 31st March with INR 10,000 Penalty

The income tax department notified the taxpayers for late filing of tax returns for A.Y. 2019-20, along with a penalty of INR 5000 (on filing the return after the due date but on or before 31st December) and INR 10000 (on the filing of return after 31st December to 31st March). The taxpayer has to file the late filing of tax returns for A.Y. 2019-20 before 31st March anyhow. Also to note that the penalty is applicable even if the taxpayer files the returns before 31st March while there is no option to file the returns after 31st March 2020.

Last Date of Income Tax Return Filing for AY 2019-20

(Assessee who are required to furnish report under sec 92E)

  • Due date of filing the Income Tax Return by Assesse who are required to furnish report under sec 92E is 30th November 2019.

Advance Income Taxes Filing Due Dates FY 2018-19

If the tax liability is more than Rs 10,000 in a financial year then advance tax needs to be paid by the assessee.

15th June (15%) | 15th Sept. (45%) | 15th Dec. (75%) | 15th March (100%)

The assessee who are covered under section 44AD, are also required to pay the advance tax on or before the 15th march of the previous year.

  • A Company
  • A Person (Other Than a Company) whose accounts are required to be audited under this Act or under any other law for the time being in force, or
  • A working partner of a firm whose accounts are required to be audited under this Act or under any law for the time being in force

What is the Income Tax?

There are two types of tax levy one is direct tax second one is an indirect tax. Income tax is a direct tax which is directly attributable to the income of the assessee. Income which is generated from the various head of income viz.Salary, House Property, Business, Capital Gain and Income from other sources. The assessee has to pay Income tax if his total Income after allowing Chapter VI-A Deduction is more than the taxable income limit.

Filing Income Tax Return Due Dates for FY 2018-19 (AY 2019-20)

There is a different category of taxpayer viz. Individual, HUF, Firm, LLP, Company, Trust and AOP/BOI. Due Date is different according to audit or non-audit case of such categories as defined in section 139(1)

Last Date of Income Tax Return Filing for AY 2019-20 (Non-Audit Cases)

  • Due date of filing the Income Tax Return by Assesse whose Books of Account are not required to be audited is 31st July 2019. The income tax department has extended the due date till 31st August 2019Notification here

Filing Income Tax Return Due Date for AY 2019-20 (Audit Cases)

The due date for filing the Income Tax Return by Assesse is 30th September 2019.

Note: “On consideration of representations recd from across the country,CBDT has decided to extend the due date for filing of ITRs & Tax Audit Reports from 30th Sep, 2019 to 31st October 2019 in respect of persons whose accounts are required to be audited. Formal Notification will follow.” as Income tax department tweeted on 26th September.

IT Department Released Online Complaint Form for Technical Issues

Nowadays, tax-filing is a digital-centric mechanism with every process being digitally accomplished. Going back to the issue of the IT department’s inefficient redressal mechanism, the department is now directing all the users to file a complaint online via a simple form available on the link:

Marked are instances when people call on the numbers mentioned on the IT department’s websites to address their tax-related queries, the calls either get unanswered or busy. People end up blaming the IT department’s redressal mechanism. Now the department has come up with the solution for the same, all your issues are expected to be heard and solved on time

Any issue related to refunds, e-verification, tax-ability, tax filing process, the rectification of filed returns, discrepancies between TDS deducted, Form 16 or any other technical issues in validating PAN, Aadhaar ID, can easily be quoted via the above-mentioned Complaint Form. One can even put forward the queries which were earlier communicated to e-nirvana on the Income Tax department’s e-portal and are unresponded. There is no need to create a separate login to register a query.

Read also:

Income Tax Online Compliant Form Format
  • Contents of the form include:
  • Taxpayer’s name
  • PAN (Permanent Account Number)
  • Assessment Year for which query is placed
  • Mobile number/email

To one’s surprise, the form also has a room for entering a social media ID (Twitter/FaceBook/Quora) of the assessee. Anyone who is not willing to share his/her social media account or does not have one then he/she can provide only his email id. Following the submission of the form, a ticket number will be generated and will be communicated to the assessee on his mail id and mobile number. Information related to tracking the status of the complaint filed is still to be updated by the department.

Companies Knocked Court Gates Against GST on Land Lease Agreement

Some major companies have recently moved towards legal proceedings in court to seek permission for revoking or making a credit claim against GST on long-term land lease deals. Many tax experts, on this matter, have suggested that if a particular recipient in the long-term land lease deal decides to build a commercial building on the same, then he cannot claim an input tax credit against the GST paid for the same.

One of the tax experts at Khaitan & Co. suggested that “The recipient has to bear 18% GST for various long term lease agreements. Due to the absence of provision of credit, it becomes a cost. We have challenged not getting credit, especially when the output supply is taxable, for example, a hotel or any other commercial property.

Currently, 18% of GST is charged on long term lease transactions by the government, which has been strongly opposed by many companies.

Recently, some of the companies in Rajasthan have filed a petition in the Rajasthan High Court demanding that GST should be removed from the long-term land lease deals or they should be allowed to claim a tax credit against the same. For long-term lease deal of 99 years, GST is levied. In most of the cases, the land leased in such long-term deals belongs to the government and is offered to build a hotel or port.

In the current case, the question arises whether the lease payment received by the government against land provided to the recipient for the purpose of building a hotel or port, is a tax input or not? Some companies have argued that leasing should be considered as an input for which ITC can be claimed.

As per the current GST framework, in order to claim an input tax credit (ITC), the companies must prove that they have paid tax against raw material used to build the final product. ITC is a mechanism under the GST system, in which a portion of the tax paid on raw material can be used in lieu of future tax liabilities.

Read Also:High Court Asks to Suspend Advance Authorization Licence of Exports

GST: High Court Asks to Suspend Advance Authorization Licence of Exports

A case relating to advance authorization scheme has been pending in the Gujarat High Court. Abhishek Rastogi, counsel, petitioners, and partner at Khaitan & Co stated that apart from Gujarat, the High Courts in different states are still getting these kinds of notices, so the Punjab and Haryana Court has initiated actions. “The pre-import condition has been a subject of debate even after the stay by the Gujarat HC against DRI notices.”

An advance authorization scheme has been implemented by the government officials under which the taxpayer doesn’t require to pay basic customs duty on imports, although, he is entitled to pay Integrated Goods & Services Tax (IGST) under the advance authorization scheme which can be claimed in the form of ITC if eligible based on export fulfillment.

Previously, the Central Bureau of Indirect Taxes and Customs (CBIT) and the commerce ministry had implemented a clause of “pre-import” to exempt custom duties on the import under the advance authorization scheme.

After the changes in the advance authorization scheme, the Directorate of Revenue Intelligence (DRI) has started sending notices to the exporters.

The Good and Services tax Council (GST), the Finance Ministry and the Commerce Ministry have received the notification from the Punjab and Haryana High Court to stop providing the benefits of advance authorization scheme to exporters under the Goods and Services Tax (GST) reform.

Karnataka GST Collection Provides Multiple Insights

GST Collection

Karnatak SGST department recently collected increased 14.3 per cent of GST revenues for the 5 months i.e. (April- August ) for the FY 2019-20 (FY 20).

While the Karnataka state has already gained a good amount of GST collections of 33,618 crores in comparison to the target of 76,046 crores for the financial year.

Also, the Karnataka state was successful in increasing taxpayer base from the earlier 4.5 lakh to 8.16 lakhs which is impressive double-digit growth. However, the collections have improved due to the effective implementation of GST.

One of the higher senior of the authorities stated that “Only 20-30 per cent of the GST taxpayer base in the state currently contributes to the major portion of the kitty. The new businesses on-boarding into GST system may not have any significant impact in terms of increased collection.”

While right now there are no sector-wise GST collections, which can make clear how much each industry have collected as per the target. Chief Minister of Karnataka, BS Yediyurappa also asked the tax department for the individual performance of their authority.

As per the target, the Excise revenues have been 9,145.36 crores (April-Aug 2019) against the target of 20,950 crores while taking the figures of stamps and registration department has collected 4,620 crores (April-August 2019) in the front of target 11,828 crores for FY20.

Read Also: GST: Aadhaar Authentication Now A Prime Requirement To Qualify As Dealer

Former Chief Minister of Karnataka H D Kumaraswamy in the meeting attended of Niti Aayog has asked for the extension in the compensation to the states for better performance which is currently at 2022.

Hotel Industry May Get to See GST Rate Cut

FICCI Low GST on Hotels

The goods and services tax council may try to cut GST rates applicable currently on the hotel industry for the better and therefore all those states which are protesting against the rate cut on the automobile and biscuit sector may also get benefits.

The GST council may also make a decision on central and state expected income compensation-related 15th finance commission’s 2 circulars. The states are demanding the compensation period must be extended from 2022 to 2025.

The government is ready to implement a GST rate cut of 18 per cent on the hotels having the tariff of more than 7500 and having 28 per cent highest GST slab rate.

Read Also: GST Impact on Hotel and Tourism Industry in India

There are other industries which want to dip in the GST rate however that may not be feasible due to the reduction of the state’s revenue. The industries like the auto sector which after the sales slowdown asking for rate cut to 18 per cent.

On the other side, the biscuit industry is requesting for a 5 per cent GST rate from 18 per cent on the biscuits having a rate of lower than 100/- KG. While the states like West Bengal is also on the request to look out for GST rate cut.

It mentioned that the states who have properly followed the BS-VI plan must be given some GST exemption as a consolation. While there are talks on the rate revision for the real estate industry also.

Online Version of GST ANX-1 & ANX-2 Live on Portal for Simplified Returns

GST ANX-1 & ANX-2 Live on Portal

Probing to the requirements of the taxpayer, Goods and Service Tax Network (GSTN) issued two new GST forms Form ANX-1 and ANX-2 online for easy e-return filing.

FORM GST RET-1 (normal), FORM GST RET-2 (Sahaj), GST RET-3 (Sugam) returns, one of the three forms is filed by the taxpayer depending upon the situation. While filing either of the three forms it is mandatory for the taxpayer to also provide Annexure of supplies (GST ANX-1) and annexure of inward supplies (GST ANX-2) as part of these returns.

The offline version of ANX-1 and ANX-2 was earlier introduced by GSTN.
The online version of GST ANX-1 and GST ANX-2 will facilitate the taxpayer with filling in the details of business-to-business (B2B) supplies, business-to-consumer (B2C) supplies and supplies attracting reverse charge in their online returns, without any hassle.

Prakash Kumar, chief executive officer GSTN, favouring the provision said that the online version will provide working on real circumstances and that they would request taxpayers and tax consultants to make use of the online feature and share feedback to help to make further enhancements.

The new simplified returns will replace the existing forms by January 2020.

FM Pressing for GST Rate Cut On Automobiles: Raising Hope of Revival for Auto Players

GST Rates Automobile Industry

Finance Minister Nirmala Sitharaman has shown a beacon of hope for the automobile dealer regarding the alteration of the GST rate on automobiles as an attempt to piece down the gloomy and stagnant scenario of automobile industries.

The industry had been putting up a howl for bringing down the GST rate from 28% to 18% on automobiles. It’s been 10 months that industry is facing downward slope and many imminent automobile dealers are encountering disheartening sales figures.
On Sunday, FM Nirmala Sitharaman presented a squad of measures which includes hiking depreciation benefit to encourage the domestic automobile industry. The government has set forth a proposal to the GST Council to cut down the tax rate from the highest tax bracket of 28 per cent – a measure to deal with the automobile plunge.

The aggregate sales of the top six car manufacturers of India has showcased a drop of more than 29 per cent (year-on-year) in August 2019. Maruti Suzuki, India’s largest carmaker has shown a decline in sales by 36 per cent with 93,173 units of August 2019 in relation to sales of 145,895 units in August 2018. In last both the months i.e. July & August, Maruti has sent less than 100,000 cars to dealerships.
Other five top carmakers – Hyundai Motor India, Mahindra and Mahindra (M&M), Honda Cars, Tata Motors and Toyota has also registered a decline in sales by 16.6 %, 31.6%, 51.3%, 58% and 24.1%, respectively.
Last four months of April, May, June and July of the year 2019 have been the breakdown phase for the automobile industry with the constant decline in sales figure by 17.07, 20.55, 17.54 and 31 per cent, respectively.

Read Also: GST Impact on Automobile and Spare Parts Industry in India

To breathe new life into the sector, few measures have been declared by our Finance Minister on 23rd August. The measures include increment in depreciation benefit on all automobiles from 15 to 30%, holding off the elevation in the registration fee (as proposed) till June 2020 and backpedalling a five-year-old ban on government purchases.

The concern regarding the unanticipated & chronic downturn in the domestic auto market sustains until the customer reaction on introduction to the shift from BS-IV to VI emission regulation in April 2020.

According to FM, the government has foregathered with stakeholders of different industries, including the auto industry, which is behesting assistance and the government is trying to resolve their issues and implement their suggestions. She said, “One of the suggestions was the reduction of GST rate for the automobile sector,”. She also informed that such authorities are in the hand of the GST Council and the next GST council is going to 37th meet on 20th September in Goa.

After the 10th consecutive month of depressing auto sales and the intensifying outcry for a GST rate cut by the auto industry, the government may take a decision that would prove to be good news for auto players. The automobile industrialists are expecting to encounter higher sales in the forthcoming festive season and envisioning GST rate cut as a sales booster.