FUNCTIONALITY TO CHECK MISUSE OF PAN

To address the complaint related to misuse of PAN for obtaining GST registration, a functionality to register such complaints on GST Portal has been introduced. It will check the misuses, control the frauds and help officers in enquiry and cancellation of such registration.

Once complaint is registered, it will be sent to the concerned jurisdictional authority where the registration is claimed to be fraudulently taken, for necessary enquiry and suitable action.

The process of registering complaint is given below:-

1. A search functionality is given at the GST Common Portal to find out whether any GSTIN is issued on a particular PAN or not, under Search taxpayer > Search by PAN. The System displays details of the GST registration available on that PAN. In case, no registration is available on that PAN then the message is shown as “No records found”. Below is the screenshot.

• Any person aggrieved of having his PAN misused, may directly or through an authorized representative, register a complaint at GST Portal. He may search the GSTIN based on PAN and the registration(s) which are not taken by him, may be selected and reported to the jurisdictional officer. The Screenshot is given below:

• On clicking of “Report” button following Pop-up is displayed. In case of Individual PAN (Where 4th letter in PAN is “P”) Legal Name as per PAN will be auto populated. While registering the complaint, the complainant has to provide the e-mail and Mobile Number for validation and the other information like D.O.B. and Address etc. mandatorily. For the GSTIN registered under category, other than Proprietor, complainants have to enter the personal details, which would be followed by Aadhaar Authentication. The screenshots are given below:

• Once the request is submitted, ARN will be generated. In case multiple GSTNs are selected for such complaints, ARN for each GSTIN shall be generated separately and will be assigned to their respective jurisdictional officers on their dashboard for further necessary action. The ARNs are shown to the complainants on registering complaints on the user’s screen like this:

• The complaints so registered, shall be made available to the competent authorities at their dashboard under – “Application for Reporting Fake GSTIN’s for further necessary action. The officers shall have a new Role of “PAN Vigilance officer” in the Back Office for this purposed.

• The Complainant can further track the status of application through track ARN at GST Portal pre-login.

Clarification on section 194Q.

Just before one day of implementation, the CBDT provided FAQ on section 194Q.  The important synopsis of the same is given below.

• Not applicable on securities & commodities  and electricity  traded on recognized stock exchange.

• The counter of Rs. 50 Lakh limit is applicable only from April 1, 2021.

• TDS on the amount without GST. Turnover/ Gross receipts of 10 crore of buyer for applicability of this section 194Q will mean Turnover/ Gross receipts in business only. Hence receipts by way of rent, interest , capital gain etc if not considered as business income are not to be included

• TDS is not applicable if vendor is exempt from tax.

• TDS is applicable on advance payment

• Provision of section 194Q not to apply in first year of an entity as no turnover / gross receipts in preceding year since entity was not in existence..

• Section 194-O is applicable to a transaction then 194Q and 206C(1H) will not apply. If 194Q is applicable then section 206C(1H) shall not be applicable. If section 194-O and 194Q are not applicable section 206C(1H) will be applicable. 

Tax Due Date – July 21.

Sr No	Due Date	Related to	Compliance to be made
1	11.07.2021	GST	Filing of GSTR – 1 for the month of June 2021
2	20.07.2021	GST	Payment and Filing the GSTR – 3B for the month of June 2021
3	07.07.2021	TDS/TCS (Income Tax)	Deposit TDS for payments of Salary, Interest, Commission or Brokerage, Rent, Professional fee, payment to Contractors, etc. during the month of June 2021. Deposit TDS from Salaries deducted during the month of June 2021 Deposit TCS for collections made under section 206C including sale of scrap during the month of June 2021, if any Deliver a copy of Form 15G/15H, if any to CCIT or CIT for declarations received in the month of June 2021, if any
3	31.07.2021	TDS/TCS (Income Tax)	Furnish quarterly statement of tax deducted at source (TDS) and tax collected at source (TCS) for the quarter ended June 2021 in Form 24Q / 26Q / 27Q / 27EQ.

The above chart does not include any extended date.

TAX JOURNAL JULY 2021.

Download the Journal from the below link

July 21Download

CBIC clarifies issues relating to Dynamic QR code on B2C invoices

This Tax Alert summarizes a recent circular¹ issued by Central Board of Indirect Taxes and Customs (CBIC) clarifying applicability of Dynamic Quick Response (QR) Code on B2C invoices.

The key clarifications are:

• Any invoice issued to person having a Unique Identity Number (UIN) shall be considered as B2C invoice and the supplier is required to comply with the requirement of QR Code. 

• In cases where the payment is collected by a person (authorized by the supplier), the UPI ID of such person may be provided in the QR Code, instead of UPI ID of the supplier. 

• Wherever an invoice is issued to a recipient located outside India for supply of services (where place of supply is in India) and the payment is received in foreign currency, the invoice may be issued without QR Code. 

• In case the payment is made through digital display of QR code and the invoice number/ invoice is generated after such payment, the QR code may contain the unique order ID/ sales reference number which is linked to the invoice issued for the said transaction.

When part-payment for any supply has been received from the recipient, in form of either advance or adjustment through voucher/ discount coupon, then the QR code may provide only the remaining amount payable by recipient.   

Imp case laws.

Mr. Mohd. Farhan A. Shaikh v. ACIT (Bombay High Court) (Goa Bench) (Full Bench)

S. 271(1)(c) : Penalty–Concealment-Non-striking off of the irrelevant part while issuing notice under section 271(1)(c) of the Income-tax Act,- Order is bad in law-Assessee must be informed of the grounds of the penalty proceedings only through statutory notice. An omnibus notice suffers from the vice of vagueness. [S. 274]

A Full Bench of the Hon’ble Bombay High Court–Goa Bench in the case of Mr. Mohd. Farhan A. Shaikh v. ACIT TA No. 51 & 57 of 2012 dated March 11, 2021 (FB) (Bom.)(HC) (AY. 2006 -07 , 2007 -08 ) , while dealing with the issue of non-striking off of the irrelevant part while issuing Notice under section 271(1)(c) of the Income-tax Act, 1961held that the assessee must be informed of the grounds of the penalty proceedings only through statutory notice. An omnibus notice suffers from the vice of vagueness.

All India Federation of Tax Practitioners v. ITO (ITAT Mumbai)

Property held for charitable purposes – Assessee is engaged in educational activities to spread education in matters relating to tax laws, other laws and accountancy-Entitled to exemption – Order of CIT (A) denying the exemption was reversed . [S.2(15)12A, 80G]

Proviso to Section 2(15) of the Act i.e., any other activity or object of general public activity, will not apply to the assessee as the assessee is engaged in educational activity. Further, assuming if the assessee is engaged in general public activity, if the Assessee while carrying out charitable objects earns some profit from any commercial activity to supplement, is main object, it cannot be said that the assessee has engaged itself in trade commerce and business so as to attract proviso to section 2(15) of the Act.Further, the assessee has been granted exemption under section 11 of the Act since many years and the same has been accepted. Therefore, applying the rule of consistency the exemption has to be allowed.

HC passes dissenting judgment and refers matter relating to Intermediary services under GST to the Chief Justice

 

This Tax Alert summarizes a recent circular¹ issued by Central Board of Indirect Taxes and Customs (CBIC) clarifying applicability of Dynamic Quick Response (QR) Code on B2C invoices.

The key clarifications are:

• Any invoice issued to person having a Unique Identity Number (UIN) shall be considered as B2C invoice and the supplier is required to comply with the requirement of QR Code. 

• In cases where the payment is collected by a person (authorized by the supplier), the UPI ID of such person may be provided in the QR Code, instead of UPI ID of the supplier. 

• Wherever an invoice is issued to a recipient located outside India for supply of services (where place of supply is in India) and the payment is received in foreign currency, the invoice may be issued without QR Code. 

• In case the payment is made through digital display of QR code and the invoice number/ invoice is generated after such payment, the QR code may contain the unique order ID/ sales reference number which is linked to the invoice issued for the said transaction.

When part-payment for any supply has been received from the recipient, in form of either advance or adjustment through voucher/ discount coupon, then the QR code may provide only the remaining amount payable by recipient.   

HC passes dissenting judgment and refers matter relating to Intermediary services under GST to the Chief Justice

 

This Tax Alert summarizes a recent Bombay High Court (HC) judgment^[1]. The issue relates to constitutional validity of section 13(8)(b) of Integrated Goods and Services Tax Act, 2017 (IGST Act) which provides for place of supply of intermediary service. 

The writ petition was heard by divisional bench, of which one judge had given his decision on 9 June 2021, declaring section 13(8)(b) as unconstitutional^[2]. Being unable to share the same opinion as that of the first judge, the second judge has separately pronounced his opinion on 16 June 2021. 

The key observations of the second judge are:

• The power to enact provisions determining the nature of supplies as inter-state or intra state and place of supply originates from Articles 246A, 269A and 286 of the Constitution.    
• When there is a specific provision defining intermediary and place of supply, the question of applying a general provision would not arise.    
• From the plain language of section 13(8)(b), it is clear that section neither seek extra territorial operation nor seek to levy tax on service recipient outside India.  

Accordingly, the second judge held that section 13(8)(b) is constitutionally valid.

In view of the difference in opinion of both the judges, Registry will place the matter before the Chief Justice on administrative side for doing the needful.

 Comments

1. It will be interesting to see the manner in which the matter will get concluded. The Chief Justice may refer the issue to a larger bench. 
2. While on one hand, the validity of place of supply of intermediary service is under question, on the other hand there is an ambiguity in interpreting the scope of intermediary which is leading to unwarranted disputes between Revenue and taxpayers. 

If the place of supply of intermediary service is struck down, the disputes relating to classification of a service as intermediary service or not will not arise.

HC holds GST leviable only on commission received for totalisator service provided by race club

Rule 31A(3) of Central Goods and Services Tax Rules, 2017 provides that value of supply of actionable claim in form of chance to win in horse racing shall be 100% of face value of bet or amount paid into totalisator.

The key observations of HC are:

• Petitioner earns a fixed commission irrespective of outcome of race and cannot be seen to be indulging in betting activity.  

• Betting is not in course or furtherance of business of a race club. The amount received in totalisator for a brief period is in fiduciary capacity for which commission is the consideration. 

• Rule completely wipes out the distinction between bookmakers and totalisator. The bookmakers indulge in betting and receives consideration depending on outcome of race whereas race club provides totalisator service and receives commission.  

• Making entire bet amount received by totalisator liable to GST would take away principle that consideration i.e. commission, can only be taxed. 

Accordingly, HC held that rule 31A(3) is ultra vires the provisions of Central Goods and Services Tax Act, 2017 and GST is payable only on commission received for totalisator service.

Comments

• The Ruling is likely to benefit race clubs providing totalisator service and may also favorably impact industry involved in the business of online gaming. 

• Court has reiterated the important aspect of consideration in a supply transaction while determining its taxability.

• As per the settled principle, the decision of High Court with respect to a Central law, if it is not overruled or there is no contrary ruling, can have binding effect across India. 

• Basis the High court ruling, taxpayers may explore the possibility of claiming refund where tax has been already discharged on entire bet amount.

Recording of satisfaction is legal issue which shall be examined by Ld. CIT (Appeals) after calling the relevant

NAVEEN HOTELS LTD vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE- 2(3)
Issue:  Documents seized during search of a person other than the person against whom assessment proceedings are initiated under section 153A: Basis for passing order under section 153C

The assessees raised the issue of providing order sheet entry and recording of satisfaction before the CIT (Appeals). The CIT (Appeals) did not provide the same and dismissed the appeals in a summary manner observing that document found in the course of search constitute as an incriminating material that points to the undisclosed income of a person other than a searched person, and that the proceedings u/s. 153C r.w.s. 153A of the Act has been rightly initiated. However, the CIT (Appeals) did not give finding that on what basis he came to such a conclusion that there was a recording of satisfaction by the Assessing Officer of searched person. Hence, recording of satisfaction is legal issue which shall be examined by the learned CIT (Appeals) after calling the relevant record from the Assessing Officer of searched person.