Law Legends

There might be cases, where taxpayers have deposited the tax before the due date of filing GST Return. So, in this case, will the taxpayer liable for the interest or not?

This is a very critical issue and we shall understand this issue by the Madras High Court Ruling in the case of Eicher Motors Limited v. the Superintendent of GST and Central Excise.

Court: Madras High Court

Case: Eicher Motors Limited vs. Superintendent of GST and Central Excise

Judgment Date: January 2, 2024

Background of the case: In this case, the petitioner could not file GSTR-3B for the month of July 17 due to some technical glitches and since Section 39(10) of CGST Act disables an assessee from filing returns for the subsequent period if the returns for the previous tax period are not furnished. This resulted in delayed filing of subsequent tax periods from August to December 2017.

The petitioner had deposited the balance liability in the e-cash ledger within the due date for each month of filing the GSTR-3B. However, the department had issued a recovery notice for interest (as per section-50 of CGST Act) on account of delayed payment of tax to the Government.

Petitioner’s Contentions:

Though there was a delay in filing the returns, the entire tax amount has been deposited in time to the Government without any delay.

Deposits made into ECL (Electronic cash ledger) are considered as payments to the Government.

After depositing the funds, these funds belong to the Government and can be used by them without waiting for the GSTR-3B filing.

Respondent’s Contentions:

Deposit of tax in Electronic Cash Ledger would not amount to payment of tax and would be tantamount to failure to remit GST in time, for which interest liability would be attracted i.e. Electronic Cash Ledger deposits are not considered tax payments until debited through GSTR-3B filing.
Taxpayers can apply for refund of unused Electronic Cash Ledger balances. Hence, it will not be considered as tax payments until debited.

Court Observations:

• Section 39(7) of the CGST Act mandates tax payment before the last date of GSTR-3B filing.

Extract the provisions of Section 39(7) of the Act :
“39. (7) Every registered person, who is required to furnish a return under sub-section (1) or sub-section (2) or sub-section (3) or sub-section (5), shall pay to the Government the tax due as per such return not later than the last date on which he is required to furnish such return.”

• Interest liability arises only if the tax amount is deposited after the due date.

• The payment of tax to the account of Government, the filing of GSTR-3B is immaterial, which means either with or without filing of monthly returns, the tax can be remitted to the Government.

Ruling :

Court ruled in favour of Eicher Motors.

Since, Eicher Motors deposited the tax amounts in the Electronic cash ledger within the due dates. Therefore, no interest liability will arise despite the delayed filing of GSTR-3B.

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Introduction:

If a person is registered under the Composition scheme and now converts from the Composition to the Normal scheme, they shall be entitled to take credit of input tax in respect of inputs held in stock, inputs contained in semi-finished or finished goods held in stock, and on capital goods on the day immediately preceding the date of conversion.

In the case of inputs, the tax invoice should not be more than one year old. In the case of capital goods, ITC can be claimed for tax invoices that are not more than one year old. For capital goods, ITC is reduced at the rate of 5% per quarter or part of the quarter.

For Example:

In the Case of Inputs, Semi-finished Stock, and Finished Goods: If a person converts from the Composition scheme to the Normal scheme on 24.08.2023, ITC can be claimed on the stock held in the form of inputs, semi-finished stock, and finished goods on the preceding date, 23.08.2023. However, as of 24.08.2023, GST paid in respect of such stocks with invoices that are more than one year old cannot be availed as ITC.

In the Case of Capital Goods: As of 01.04.2020, capital goods were purchased at the cost of Rs. 100,000 with GST paid of Rs. 18,000 (i.e., at the rate of 18%). Assume conversion from the Composition scheme to the Normal scheme on 24.08.2023. In such a case, ITC can be claimed in the following manner:

For F.Y. 2020-21 20% ( 4 Quarter*5%)
For F.Y. 2021-22 20% ( 4 Quarter*5%)
For F.Y. 2022-23 20% ( 4 Quarter*5%)
For F.Y. 2023 -24 10 % ( 2 quarter*5%)
Total     70 %

 

Total ITC Rs.18000
Less : ITC to be reduced i.e. 70% Rs.12600 (18000*70%)
Net ITC available Rs. 5400

In the case of capital goods, Rs. 5,400 ITC is availed.

Form Used for Transferring ITC:

The ITC-01 form is filed by the taxpayer to claim ITC.

Time Limit to File ITC-01 Form:

The ITC-01 form must be filed within 30 days from the date of conversion from the Composition scheme to the Normal scheme.

It is important to file the ITC-01 form timely to claim ITC. If the ITC-01 form is not filed within the stipulated time, ITC cannot be availed.

Example: You are registered under the Composition scheme. As of 12/12/2023, you opt out of the Composition scheme and file the CMP-08 form. In this case, you must file the ITC-01 form within 30 days from 12/12/2023, i.e., by 10/01/2024.

Disclaimer:-The information available on this website/ App is solely for informational purposes. We make no representation or warranties of any kind, express or implied about the accuracy, reliability, with respect to information and material or video available on website/APP, any reliance you place on such information is therefore strictly at your own risk. We are not liable for any consequence of any action taken by you relying on the material/information provided on this website.
In this article, we will discuss all about incentives, discounts and schemes earned by dealers and SAC code and taxability. Incentives, discounts and schemes are integral part of business. It is very common to give trade discount, post-sale discount, and cash discount in business. Generally business discount is offered to increase the sales and a cash discount given to dealers for recover such payment early.

If certain targets are achieved, discounts are given after sales and promotional schemes are run by distributors. However, the taxability of these Incentives, Discounts and Schemes under GST are complex.

What are Incentive, Discount and Schemes?

Incentive –
Rewards or bonuses are provided by the supplier to dealers to encourage them to achieve specific targets. For example, if during the month a dealer sells goods worth Rs. 10,00,000, then a Rs. 50,000 bonus is given to the dealer or Rs. 50,000 is reduced in the next purchase.

Discount –
Normally, a discount is given at the time of sale; such a discount is called a trade discount. This discount is offered to every customer, but after the sale, to recover payment, the company offers a cash discount. For example, after the sale, if payment is made within 30 days, an additional 2% discount is given.

Schemes –
Suppliers offer schemes to motivate dealers to increase sales. For example, 'Buy One, Get One Free' offers and coupons are provided. These coupons can be used for future payments.

Taxability of Incentives, Discounts and Schemes

• As per Section 15(3) of CGST Act 2017 if any discount is given before or at the time of sale and such discount is recorded in an invoice, then in that case the discount is not included in value of supply.

• If after the sale any discount is given and such discount is as per terms of agreement and linked to relevant invoice and input tax credit as is attributable to the discount on the basis of document issued by the supplier has been reversed by the recipient of the supply then in that case discount is not included in value of supply.

• If the discount is given after sale and not known at the time of supply then such discount is included in value of supply.

GST treatment in case of Incentive

Case 1 – If Credit note issued within the time limit as per CGST Act 2017.

Then in such case the supplier will issue a credit note and the recipient (buyer) will reverse the Input Tax credit (ITC).

Case-2 If Supplier issues Financial Credit Note -

In that case if the supplier issued a financial credit note without GST adjustment, then there is no need for GST reversal to the recipient (buyer).

FAQs on Incentives, Discounts and Schemes Earned by Dealers

Q.1 What is the HSN/SAC code of Incentive, Discount and Schemes?
Ans. HSN/SAC codes depend on the nature of the goods or services. Discounts fall under the main category of goods or services being sold.

• In the case of goods - Same HSN code as the main product.
• In the case of services- Same SAC code as the main service.

Q.2 Is discount included in the value of supply?
Ans. If any discount is given before or at the time of sale and such discount is recorded in the invoice then in that case the discount is not included in value of supply.

Disclaimer:-The information available on this website/ App is solely for informational purposes. We make no representation or warranties of any kind, express or implied about the accuracy, reliability, with respect to information and material or video available on website/APP, any reliance you place on such information is therefore strictly at your own risk. We are not liable for any consequence of any action taken by you relying on the material/information provided on this website/APP.

Topic Covers:

1. Applicability
2. Disabilities fall under Section 80U
3. Conditions to be Satisfied
4. Quantum of Deduction
5. Revision of Medical Certificate

Individual taxpayers who are suffering from disability can benefit from section 80U of the income tax act.

Applicability:

A resident individual (irrespective of citizenship). NRI cannot take benefit of this section. This deduction can be claimed by the taxpayer for himself.

Disabilities fall under Section 80U

The following disabilities are covered under section 80U of the Income Tax Act:

• Autism
• Cerebral palsy
• Blindness
• Low vision
• Leprosy cured
• Hearing impairment
• Locomotor disability
• Mental retardation
• Mental illness

Conditions to be Satisfied:

Assessee is a disabled individual: The assessee, at any time during the previous year, must be certified by a medical authority as a person with a disability.

Report: The assessee must furnish a copy of the certificate issued by the medical authority in the prescribed form along with the return of income for the relevant assessment year.

Quantum of Deduction:

Assessee suffering from severe disability (80% or more disability): ₹1,25,000

Assessee suffering from a disability (40% or more but less than 80% disability): ₹75,000

Deduction under this section is irrespective of the actual expenditure incurred, making it a statutory deduction.

Revision of Medical Certificate:

If the extent of disability requires reassessment after a specified period in the existing certificate, the assessee must obtain a new certificate from the medical authority and furnish it with the return of income.

Note:

If the taxpayer opts for the new tax regime, a deduction under section 80U is not allowed.

Deduction under Section 80U is available for the disabled assessee, whereas deduction under Section 80DD is for dependant disabled relatives.

New ITR forms commencing from the FY 23-24 require more details like:

• Nature of disability
• Date of filing Form 10-IA
• Acknowledgment number of the Form 10-IA
• UDID number (If available)

Disclaimer:-The information available on this website/ App is solely for informational purposes. We make no representation or warranties of any kind, express or implied about the accuracy, reliability, with respect to information and material or video available on website/APP, any reliance you place on such information is therefore strictly at your own risk. We are not liable for any consequence of any action taken by you relying on the material/information provided on this website/APP.
As per existing GST law water is subject to different GST rates, namely 0%, 5%, 12%, 18%, and 28%.

Nil GST Rate on Water and Water Base Product

1. Water other than aerated, mineral, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed containers.
2. Non-alcoholic Toddy.
3. Neera including date and palm neeras.

GST on water-based products with 5% GST

1. Ice and Snow.

GST on Water and Water based products with 12% GST

1. Mineral water packed in 20 litres bottles
2. Aerated waters
3. Coconut water when put up in a container
4. Non-alcoholic beer (other than tender coconut water)
5. Soya milk drinks, whether or not sweetened or flavoured
6. Beverages containing milk

GST on Water and Water based products with 18% GST

1. Mineral waters and aerated waters
2. Non-alcoholic beer

GST Rate on Water and Water Based Product with 28% GST

1. Aerated waters, Lemonade containing added sugar or other sweetening matter or flavoured.
2. Fruit pulp or fruit juice-based drinks [Carbonated Beverages of Fruit Drink or Carbonated Beverages with Fruit Juice]

HSN Code and GST rate of Water Base product -

HSN Code Description of Goods GST Rate %
2201 10 10 Mineral waters and aerated waters : Mineral waters (Drinking water packed in 20 litres bottles) 12%
2201 10 10 Mineral waters and aerated waters : Mineral waters (other than Drinking water packed in 20 litres bottles) 18%
2201 10 20 Mineral waters and aerated waters : Aerated waters (Drinking water packed in 20 litres bottles) 12%
2201 10 20 Mineral waters and aerated waters : Aerated waters ( other than Drinking water packed in 20 litres bottles) 18%
2201 90 10 Other : Ice and snow 5%
2201 90 90 Other: Water [other than aerated, mineral, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed container] and Non-alcoholic Toddy, Neera including date and palm neera 0%
2201 90 90 Other : Other 18%
2202 10 10 Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured : Aerated waters 28%
2202 10 20 Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured : Lemonade 28%
2202 10 90 Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured : Other 28%
2202 91 00 Other: Non-alcoholic beer (other than tender coconut water [and caffeinated beverages]) 12%
2202 91 00 Other: Non-alcoholic beer 18%
2202 99 10 Other : Soya milk drinks, whether or not sweetened or flavoured 12%
2202 99 20 Fruit pulp or fruit juice based drinks [other than Carbonated Beverages of Fruit Drink or
Carbonated Beverages with Fruit Juice]
12%
2202 99 20 Fruit pulp or fruit juice based drinks [Carbonated Beverages of Fruit Drink or
Carbonated Beverages with Fruit Juice]
28%
2202 99 30 Other : Beverages containing milk 12%
2202 99 90 Other : Other (other than tender coconut water [and caffeinated beverages]) 18%
2209 00 10 Vinegar and substitutes for vinegar obtained from acetic acid : Brewed vinegar 18%
2209 00 20 Vinegar and substitutes for vinegar obtained from acetic acid : Synthetic vinegar 18%
2209 00 90 Vinegar and substitutes for vinegar obtained from acetic acid : Other 18%

FAQ,s on Water and Water Based Products

Q.1 What is the GST rate on Mineral water?
Ans. If Mineral water is packed in 20 litres bottles then the GST rate is 12%.

Q.2 What is the GST rate on Ice and Snow?
Ans. 5 % GST charge on Ice and Snow.

Q.3 What is the GST rate on Fruit pulp or fruit juice- based drinks ?
Ans. Carbonated beverages that contain fruit pulp or fruit juice, such as fruit drinks or carbonated beverages with fruit juice, are subject to a GST charge of 28%.

Q.4 What is the GST rate on water ?
Ans. Water other than aerated, mineral, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed container charge are subject to GST @ Nil rate (zero).

Disclaimer:-The information available on this website/ App is solely for informational purposes. We make no representation or warranties of any kind, express or implied about the accuracy, reliability, with respect to information and material or video available on website/APP, any reliance you place on such information is therefore strictly at your own risk. We are not liable for any consequence of any action taken by you relying on the material/information provided on this website/APP.

Topic Covers:

1. Important Documents Required for Filing ITR
2. Documents are Required to Claim a Deduction u/s 80C to 80U
3. Documents are Required for Income from House Property
4. Do I Need to Attach the Document with the Income Tax Return?

Important Documents Required for Filing ITR?

As per the source of the income of the taxpayer requirement of documents differs. But, there are some mandatory documents for every taxpayer, irrespective of income sources. Following is a list of common documents that are required to file a return of Income.

1. PAN Card

Basic and Mandatory document..

2. Aadhaar Card

Aadhaar card details are mandatory according to Section 139AA of the Income Tax Act, individuals need to provide his/her while filing the returns.

It helps to verify the income tax return through an OTP.

3. Form 16

Taxpayers having income from salary receives Form 16 from the employer. Form 16 consists of two parts, Part A and Part B. Part-A provides the details of

i. tax deducted by the employer during the financial year,
ii. PAN and
iii. TAN details of the employer.

Part B of the form consists breakup of income and TDS calculations like gross salary breakup, exempt allowances, perquisites, etc.

4. Bank Account details and bank statement

From this financial year, it is mandatory to disclose all active bank accounts are in the ITR form.

Bank account details like

i. bank name,
ii. account number,
iii. IFSC,

Out of all accounts, one account should be selected as primary to get a tax refund by electronic transfer to such account. This account must also be validated on the portal to receive the refund.

Information of the interest earned on a savings account, fixed deposits, etc, during a financial year are required to file an ITR. And Bank statements provides all such information.

5. Form 26AS and AIS/TIS

Form 26AS gives details of the taxes deposited against the PAN of the taxpayer. These provide the details of gross income and tax deducted or collected on it.

AIS: Annual Information Statement (AIS) is a comprehensive view on the information of income of taxpayers from the various sources.

TIS: Taxpayer Information Summary (TIS) is a category-wise aggregated information summary for a taxpayer. It shows information under various categories like Salary, Interest, Dividend, etc.

6. Tax Saving Investments

If the taxpayer invested in any tax-saving schemes like tax-saving FDs, ELSS, etc., He must have the relevant documents at the time of filing ITR.

7. Capital Gains Details

If a taxpayer has capital gain or loss by the sale of shares, mutual funds, securities, or property. This gain or loss must be disclosed in the ITR. The documents like share capital gain statements, property sale deeds, etc. can help to calculate the income.

8. Rental Income

Income from house or property, should be disclosed in the ITR.

9. Foreign Income

The documents for any income earned in or from a foreign country during a job deployment or for part of the year should be furnished with your tax consultant to help you claim the benefit of tax credits and DTAA. The documents for any foreign income need to be arranged with the employer or contractor.

10. Dividend Income

Taxpayers receives dividend income on the investment of shares or mutual funds and this should be reported in the income tax return.

Documents are Required to Claim a Deduction u/s 80C to 80U

The following documents are important and should be compiled by the taxpayer to claim the deduction:

1. Home Loan Statement

Taxpayer who has taken a home loan from financial institutions like banks, NBFC etc., should collect the statement for the last financial year. To provide the information of repayment of the loan and take deduction in the appropriate clause.

2. School fee receipt for tuition fees

The tuition fee i.e. fee paid for education in India is allowed as a deduction under section 80C of the Income Tax Act. Taxpayer must have fees receipts to claim deduction under this section. The deduction is not allowed for bus fee, amount paid for food to the educational institute.

3. Contribution to PPF, Life Insurance Premium Receipts

Contributions to PPF, investments in LIC, tax saving FD, etc. are eligible for deduction under section 80C, aggregate deduction of Rs.1.5 lakhs can be claimed in this section.

4. Donation Receipts

Donations made to the trust or charitable institute which qualify for deduction @ 50% or 100% u/s 80G required donation receipts to claim the deduction.

5. Details of Medical Insurance

Premium paid for the health insurance policy can be claimed as deduction u/s Section 80D. This policy can be taken for self, spouse, children, and parents.

Deduction can be claimed for medical expenditures up to Rs 50,000 For senior citizens' parents that are not covered in medical policy.

6. Education loan

Taxpayer can claim a deduction under section 80E of interest paid on education loan. This loan can be taken for higher studies of self, spouse, or children.

Documents are Required for Income from House Property

The following details are required to disclose income from house property:

(a) Address of Property

(b) Ownership details Or Co-owner details

(c) Rent agreement, if any for Rental income details etc

(d) Interest certificate for home loan

(e) Pre-Construction Interest Details if any

(f) Municipal Tax Receipts

Do I Need to Attach the Document with the Income Tax Return?

Taxpayers must file income tax returns in online mode. And documents are not required to be attached with ITR. However, it is advisable to keep the documents safe for 7 years on the basis of which taxpayer has disclosed his income and claim deductions. This will be helpful if the return is taken for scrutiny by the income tax department.

Disclaimer:-The information available on this website/ App is solely for informational purposes. We make no representation or warranties of any kind, express or implied about the accuracy, reliability, with respect to information and material or video available on website/APP, any reliance you place on such information is therefore strictly at your own risk. We are not liable for any consequence of any action taken by you relying on the material/information provided on this website/APP.

In order for any business to thrive, it often relies on various promotions such as trade discounts, volume discounts, freebies, special offers, and more, which are made possible with the support of taxpayers.Discounts play an integral role in business operations. Offering trade discounts, cash discounts, and post-sale discounts are common practices in the business world. Businesses offer trade discounts to boost sales, cash discounts to expedite payment collection and post-sale discounts when specific targets are met or as part of promotional schemes facilitated by distributors.

These measures are essential for organizations to capture market share, attract new customers and boost profits. While meeting these business requirements, taxpayers must also ensure compliance with all relevant laws and stay updated on any legal changes.

Discounts under GST regime

Section 15 of the CGST Act 2017, which is reproduced below, deals with the provision of discounts:

“The value of the supply shall not include any discount which is given:

(a) before or at the time of the supply if such discount has been duly recorded in the invoice issued in respect of such supply; and

(b) After the supply has been effected, if –

(i) Such discount is established in terms of an agreement entered into at or before the time of such supply and specifically linked to relevant invoices, and

(ii) Input tax credit as is attributable to the discount on the basis of a document issued by the supplier has been reversed by the recipient of the supply.”

The logical inference drawn from a plain reading of the above provision is:

Discounts mentioned on the face of the invoice can be reduced from the taxable value of the supplied goods. Even if discounts are not specified on the invoice, they can still be reduced from the taxable value if the following conditions are satisfied:

i) The discount is established through an agreement made before the supply, wherein both the supplier and the recipient have agreed upon the discount terms.

ii) Discount is associated with a specific supply invoice.

iii) The recipient or buyer of the supply is required to reverse the Input Tax Credit (ITC) attributable to the discount.

If both the supplier and the recipient of the goods or services are aware of the discount before the supply, the supplier's GST liability would be reduced, meaning GST would not be charged on the discount.

There will be no distinction in GST treatment between trade discounts and cash discounts. If a discount is provided before or at the time of supply and is separately mentioned on the invoice, it will not be included in the value of the supply.

Types of Discount and GST Implications:

In the world of trade and commerce, various types of discounts, known by different names, are offered both before and after the time of supply.

The broad categories of discounts observed across industries include:

1. Discounts are given before or at the time of sale, also known as pre-supply discounts, in-bill discounts or trade discounts.
2. Discounts given after the sale are also known as post-supply discounts or off-bill discounts.

After-sale discounts come in various types, such as:

• Cash discount or early payment discount
• Bulk discount or quantity discount
• Turnover discount

Analysis of GST Implications on various Discounts

Pre-supply discounts/ In-bill discounts/Trade discounts:

In common parlance, trade discount generally refers to the discount given at the time of sale of goods or provision of services.

According to section 15(3)(a) of the CGST Act 2017, if a discount is provided before or at the time of sale and is properly documented in the invoice, it is not included in the taxable value. Since GST is levied on the taxable value, there will be no GST applicability on the discount.

Example- Mr. X sold goods worth Rs.10,000 and offered a discount of Rs.1,000 at the time of sale. If this discount is correctly recorded in the invoice, it will not be included in the transaction value and GST will not be applicable on the discount.

       Particular        Amount
       Sale value Rs. 10000
       Less Discount Rs. 1000
       Transaction value Rs. 9000

Post-supply discounts/ Off-bill discounts:

These discounts are provided by issuing credit notes after the sale of goods or provision of services. According to Section 15(3)(b) of the CGST Act 2017, if a discount is given after the supply and the following condition is fulfilled, then such discount is not added to the taxable value, and GST is not applicable on that discount.

The condition is as follows:

• Such discount is established through an agreement made at or before the time of such supply, and
• Such discount is established through an agreement made at or before the time of such supply, and
• Based on the documents issued by the supplier, the recipient of the supply is required to reverse the input tax credit related to the discount.

Example- Mr. X sold goods to Mr. Y with an agreement that if Mr. Y purchases goods worth more than Rs 10 lakh between April and June 2024, then Mr. X will allow a discount of 10%. The sales figures for the relevant quarter were received in July 2024, confirming that Mr. Y was eligible for the discount as agreed upon. In this scenario, since the discount terms were agreed upon before the supply and the discount is being provided after the sale, GST will not be applicable on the value of the discount. Consequently, Mr. Y will need to reverse the Input Tax Credit (ITC) attributed to the GST on the discount amount.

GST implication on Cash Discount:

If a cash discount is allowed as a normal trade practice through an agreement made at or before the supply and relevant invoices can be traced, the supplier can deduct it from the transaction value provided that the recipient reverses the relevant Input Tax Credit.

However, if this discount is provided on an ad-hoc basis to prevent bad debts and recover underlying dues, it will not be eligible to be reduced from the transaction value. In this case, this amount will not be considered as a discount.

Seasonal Discount:

Seasonal discounts are offered during the off-season to boost sales of seasonal products. During this period, discounts are provided to clear surplus stock at discounted prices.

Example: Sale of woollen sweaters by clothing retailers at discounted prices during summer.

These discounts are generally given on the invoice value at the time of supply and are eligible for bill discount. However, these can also be given as discount after supply in the form of cash discounts / bulk discounts / turnover discounts etc.

Taxability of seasonal discount:

If a seasonal discount is offered before the sale of goods, GST will not be applicable on it. This is because the value of the discount will be deducted from the supply amount, and it will be clearly recorded on the invoice.
If a seasonal discount is provided after the sale of goods, the applicability of GST depends on whether the conditions of Section 15(3) are satisfied for that specific transaction.

FAQ’s

Q-1: What is the HSN code for discount on sales?
Ans.There is no specific HSN code for discounts on sales. Discounts are not     separately classified under HSN codes. If discounts like Trade discounts, quantity discounts etc. are given before or at the time of the supply, GST will not be applicable on such trade/Quantity discount.

Q-2: What is the SAC code for discount on sales?
Ans.There is no specific SAC code for discounts on sales. Discounts are not separately classified under SAC codes. If discounts like Trade discount, quantity discount etc. are given before or at the time of the supply, GST will not be applicable on such trade/Quantity discount.

Q-3: What is the HSN code for rebate and discount?
Ans. There is no specific HSN code for rebates and discounts. They are not separately classified under HSN codes.

Q-4: Is Input Tax Credit (ITC) available on business promotion expenses?
Ans. Yes, Input Tax Credit (ITC) is available on business promotion expenses if they are incurred in the course or furtherance of business and are not specifically restricted under GST laws.

Q-5: What is the turnover discount?
Ans. Turnover discount refers to the discount given by a supplier to the buyer based on the volume or value of purchases made by the buyer during a specified period.

Q-6: Is post-sale discount applicable under GST?
Ans. Yes, post-sale discounts are applicable under GST if they meet certain conditions as specified under the GST law.

Q-7: What is the transaction value in GST?
Ans. Transaction value is the price actually paid or payable for the supply of goods or services where the supplier and recipient of the supply are not related and the price is the sole consideration for the supply.

Q-8: What is the taxable value in GST?
Ans. Taxable value in GST is the value on which GST is levied. It includes all costs, expenses and taxes incurred by the supplier in relation to the supply of goods or services.

Q-9: What is the value of taxable supply under GST?
Ans. The value of taxable supply under GST is the transaction value of goods or services supplied, excluding taxes and other charges.

Q-10: How to calculate taxable value from the total invoice value?
Ans. Taxable value = Total invoice value - (Discounts + Other charges + Taxes)

Q-11: Is GST applicable on discount received?
Ans. No, GST is not applicable on the discount received by the recipient of goods or services.

Q-12: What is the purchase discount?
Ans. Purchase discount is a reduction in the price of goods or services offered by the seller to the buyer as an incentive for early payment or other reasons.

Q-13: Does MRP include GST?
Ans. Yes, the Maximum Retail Price (MRP) includes all taxes including GST.

Q-14: What is an upfront discount?
Ans. An Upfront discount is a discount given by the supplier to the buyer at the time of purchase.

Q-15: How to reduce GST from the total amount?
Ans. GST can be reduced from the total amount by subtracting the GST amount from the total invoice value.

Q-16: What is the sales discount?
Ans. Sales discount is a reduction in the price of goods or services offered by the seller to the buyer as an incentive for early payment or other reasons.

Disclaimer:-The information available on this website/ App is solely for informational purposes. We make no representation or warranties of any kind, express or implied about the accuracy, reliability, with respect to information and material or video available on website/APP, any reliance you place on such information is therefore strictly at your own risk. We are not liable for any consequence of any action taken by you relying on the material/information provided on this website.

 

A. Introduction:

Remittance made outside India requires reporting to the income tax department through various forms relevant to the transaction. Furnishing information to the department is mandatory to comply with the law. Relief from compliance is also provided under the Income Tax Act for specific transactions. In this article, we discuss about the cases where Form 15CA/CB is required to be filed when the remittance is made under LRS.

B. Liberalised Remittance Scheme (LRS) :

Liberalised Remittance Scheme, allows all resident individuals, including minors, to freely remit up to USD 2,50,000 per financial year (April – March) for any permissible current or capital account transaction or a combination of both. The Scheme is not available to corporates, partnership firms, HUF, Trusts etc.

One can remit money within the LRS limit of $2,50,000 per financial year, for the following:

a. Private visits to any country (except Nepal and Bhutan).
b. Gift or donation.
c. Going abroad for employment.
d. Emigration.
e. Maintenance of close relatives abroad.
f. Travel for business, or attending conferences, or specialised training, or meeting medical expenses, or check-up abroad, or for accompanying as an attendant to a patient going abroad for medical treatment.

Remittance beyond the prescribed limit requires prior approval of RBI.

C. Form 15CA and CB:

• Every person who is making payment to a non-resident (not being a Company), or to a Foreign Company is required to deduct tax if the sum is chargeable to Income Tax and these details are required to be furnished in Form 15CA.

• Form 15CA is required to be furnished before making such remittance by the person responsible for making the remittance. There are two modes to submit the form one is online and another is offline. In certain cases, certificate in Form 15CB is also required to upload with Form 15CA.

Two types of transactions where Form 15CA and CB is not required to be filed are:

1. Not taxable Remittance is made by an individual and does not require prior approval of RBI.

2. Not taxable Remittance is of the nature specified under the relevant purposes code as per RBI as per the list given under rule 37BB(3).

D. Transaction under LRS required to file Form 15CA/CB:

Transactions which do not fulfill the conditions of non-filing Form 15CA & CB as mentioned above. In other words following transactions are required to file Form 15CA

• Remittance taxable under the income tax act.
• Non-taxable but does not fulfill the above condition for not-filing Form 15CA.

E. Transaction under LRS not required to file Form 15CA and CB:

As per the Rule 37BB(3) of the income tax rules, remittance which is not chargeable to tax and where the approval of RBI is not required, Form 15CA is not required to be filed.
So following transactions under LRS up to the prescribed limit is not required to file Form 15CA.

Remittance within the LRS limit of $2,50,000 per financial year, one can remit money for the following:

a. Private visits to any country (except Nepal and Bhutan).
b. Gift or donation.
c. Going abroad for employment.
d. Emigration.
e. Maintenance of close relatives abroad.
f. Travel for business, or attending conferences, or specialised training, or meeting medical expenses, or check-ups abroad, or for accompanying as an attendant to a patient going abroad for a medical treatment.

F. Conclusion

It can be concluded that the liability to furnishing Form 15CA & CB not depends on the transaction falling under the LRS or not. Even though the transactions falls or fulfils the LRS conditions payer is required to file Form 15CA. one should deal with both the provisions separately.

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In this article, we will discuss the types of notices under GST, when notices are issued, and the mode of sending GST notices. Before starting this article, let's understand the meaning of a notice.
The Meaning of ‘Notice’ is not defined under the GST. But, in general terms notice means – “A warning or announcement of something that is going to happen in the future or the act of observing or paying attention to something.”Every registered person is required to comply with the provisions, rules, circulars, notifications, and guidelines issued by GST law. If such person does not comply with the provisions of GST Act, like delay in filing of returns or not filing of GST returns or non-payment of GST or short payment of GST or excess ITC claim or ITC utilized in the wrong manner, then in such cases proper officer can issue notice.There are different types of notices like Show Cause Notice (SCN), Scrutiny Notice, or Demand Notice, depending on the issue. These notices can be sent if the GST department finds something concerning in a taxpayer's GST Returns or if they get information from another Government department or third parties.

There are some reasons for receiving GST Notice

  1. A person is liable to register under the GST Act but GST registration is not taken.
  2. GST returns not filed on time.
  3. Difference between filed GSTR-1 and GSTR-3B.
  4. ITC not claimed as per GSTR-2B.
  5. GST collected but not paid to the Government.
  6. Tax invoices not issued as per GST law.
  7. Wrongly claimed GST refund.
  8. After GST registration cancellation, the final return (GSTR-10) is not filed.

We shall understand different types of Notices with the help of below table :-

S.No.

Form Name/Type of Notice. Description Action to be taken Time limit to reply Notice Consequence if Not Reply.
1 GSTR-3A. Notice to return defaulter u/s 46 for not filing return i.e. GSTR-1, GSTR-3B, GSTR-4 and GSTR-8. File GST returns with late fee and Interest. Within 15 days of receiving such notice. To furnish the said return within 15 days failing which the
be assessed u/s 62 of the Act, based on the relevant material available with this
office.
2 CMP-05. Violated
the conditions and restrictions necessary for availing of the composition scheme u/s 10.
Why the taxpayer should continue to be eligible for the composition scheme justify in Form  CMP-06. Within 15 working days from the date of service of this notice. Penalty Imposed under section 122 and order issued in CMP-07 denying the benefit of composition scheme.
3 REG-03. Clarification is required in respect of information furnished at the time of New registration or amendment in registration. Reply in form Reg-04 with clarification. Reply within 7 working days from the date of receipt of notice. Reject the application.
4 REG-17. Show Cause Notice for Cancellation of GST Registration. Reply in REG-18 with the reason for non-cancellation of GST registration. Reply within 7 working days from date of receipt of notice. Cancel GST registration.
5 REG-23. Show Cause Notice for rejection of application for revocation of cancellation of GST registration. Reply in REG-24. Reply within 7 working days from the date of receipt of notice. Cancellation of GST registration.
6 PCT-03. Show Cause Notice for disqualification of GST practitioner. Reply in PCT-04. Reply within time prescribed in Show Cause Notice. Cancellation of GST Practitioner license.
7 RFD-08. If the proper officer is satisfied, that the whole or any part of the amount claimed as refund is not admissible or is not payable to applicant. Reply in Form GST RFD-09. Within 15 days of receipt of such notice. Order issue in Form GST RFD-06.
8 ASMT-02. Additional information or documents in support of Provisional assessment under GST. Reply in Form GST ASMT-03. Within 15 days of service of the notice. Application may be rejected.
9 ASMT-06. Additional information for final assessment. Reply in Form GST ASMT-03 with supporting documents. Within 15 days of service of the notice. Order issue in ASMT-07.
10 ASMT-10. Notice for intimating discrepancies in the return after scrutiny under section 61. Reply in ASMT-11 furnish reason for discrepancy in GST returns. Within time prescribed in Show cause notice or not exceeding  30 days from the date of service of notice. Exe-parte assessment. Proper officer pass an order on the basis of information available to him.
11 ASMT-14. Show cause notice for assessment under section 63
(Best Judgment assessment).
Reply furnished in written manner and appear before the GST Authority issuing GST notice. Reply furnish within 15 days. Assessment order pass in Form GST ASMT-15.
12 ADT-01. Notice for Audit conduct under section 65 – Audit by Tax Authorities Directed to attend in person or through an authorised representative or produce record Reply furnished in time prescribed in notice. Proper officer may initiate action under section 73 or Section 74.
14 RVN-01 Notice u/s 108 issued by Revisional  Authortiy. Reply within prescribed time and appear before the authority. Reply furnish within 7 working days from the service of Notice. Issue a summary of the order in Form GST APL 04 clearly indicating the final amount of demand confirmed.
15 DRC-01 Summary of Show Cause Notice for demand of tax. Reply submit in DRC-06. Reply furnish within 15 days of receipt of notice. Pass order in Form GST ASMT -15.
16 DRC-10 Notice for Auction under section 79 (1) (b) or section 129(6) of the Act. Pay outstanding demand as per DRC-09. last day for submission of bid or the date of auction shall not be earlier than 15 days from the date of issue of the Notice. Proceed e-auction and sale proceed.
17 DRC-11 Notice to successful bidder. Pay bid amount. Within 15 day of Auction. Re-auction if not pay amount.
18 DRC-13 Notice to a third person under 79 (1) (c). Deposit the  amount specified in notice and reply in DRC-14 Not applicable. fail to make payment then treat  deemed to be a defaulter
19 DRC-16 Notice for attachment and sale of immovable/movable goods/shares under section 79.  Creating charge on assets. Not applicable. If contravention of notice penalty and prosecution

Mode of Sending of GST Notice :

As per Section 169(1) of CGST Act 2017 Notice can be issued in the following manner.

• By Hand delivered either directly or through message.
• By registered post or speed post or courier with acknowledgement due, or his authorised representative, or at his last known place of business or residence
• Communication to his registered e-mail address provided at the time of registration or amend time to time.
• By making it available on the Common GST Portal.
• By publication in a newspaper circulating in the locality where the taxable person is last known to have resided, carried on business, or personally worked for gain.
• Affixing it in some prominent place at his last known place of business or residence. If this is not found as reasonable by the tax authorities, they can affix a copy on the notice board of the office of the concerned officer or authority.

Disclaimer:-The information available on this website/ App is solely for informational purposes. We make no representation or warranties of any kind, express or implied about the accuracy, reliability, with respect to information and material or video available on website/APP, any reliance you place on such information is therefore strictly at your own risk. We are not liable for any consequence of any action taken by you relying on the material/information provided on this website.

 

Topic Covers:

1. Overview
2. Purpose
3. Who can use it?
4. Form at glance
5. Steps for filing

Overview

Form 10-IEA has been introduced in the Income Tax Act, 1961 to select the old tax regime and opt out of the new tax regime.

The new tax regime is the default tax regime from the financial year 2023-24. This means that if a taxpayer does not select the old tax regime, they will be admitted to the by default new regime. However, individual, Hindu undivided families (HUFs) who do not have income from business or profession can directly select the old tax regime while filing income tax returns.

Form 10-IEA is required to be filed by individuals, HUFs, Association of Persons (AOP) (other than co-operative society), Body of Individuals (BOI) & Artificial Judicial Persons (AJP) whose income is from business and profession. If the taxpayer wants to change the tax regime from new to old or want to opt for the new scheme again, he will have to mandatorily submit Form 10-IEA within the time specified in under section 139(1).

Purpose of Form 10 IEA:

Form 10-IEA was notified vide Notification No.43/2023 on 21st June 2023. This form can be filled twice in life, once to opt out of the new tax regime and once to re-enter the new tax regime. Once the old tax regime is selected, it will be applicable for all subsequent assessment years. This means 10 IEA files are not to be filed every year.

Who can use it?

Taxpayers who have income from business and profession can use Form 10-IEA to "Opt out or Re-enter" in the new tax regime.

Form at a Glance

Form 10-IEA is divided into three parts: Basic information, Additional Information, and verification.

1. Basic Information: This part includes the taxpayer's name, PAN, Assessment Year, and Person's status.

2. Additional Information: This part is related to additional information where the taxpayer has to provide additional information related to the IFSC unit (if any).

3. Declaration and Verification: This part is for Declaration and Verification by the taxpayer to opt out or re-enter from the new tax regime.

Filing of Form 10IEA:

Following are steps to fill Form 10IEA

Step 1: Login on the e-Filing portal.

Step 2: Enter your user ID and password.

 

Step 3: Go to e- File menu > Income Tax Forms > File Income Tax Forms.

 

Step 4: On the page- File Income Tax Forms -‘Persons with Business/Professional Income -select the option-Form-10IEA.

Alternatively, enter Form 10IEA in the search box to file the form.

 

Step 5: Select the relevant Assessment Year and click on continue.

 

Step 6: Check the documents required for filing the form and Click on Let’s Get Started

 

Step 7: Select Yes if you have Income under the head “Profits and gains from business or profession” during the assessment year. Select the due date applicable for filing of return of income and click on continue.

 

Step 8: Click ‘Yes’ to Confirm the selection of the regime.

Step 9: Form 10-IEA has 3 sections. Verify and Confirm each section. They are as follows:

i. Basic Information: In the Basic Information section, your basic information will be pre-filled. If you are filing a form for the first time then the opting out option will be auto-selected and if the system has a valid form with opting out option, then re-entering option will be auto-selected. Click on the ‘Save’ button.

 

ii. Additional Information: Fill the necessary details in the Additional information section related to IFSC unit (if any) and click on ‘Save’.

 

If you are opting out of the new Tax regime this Additional Information panel will be greyed off

 

iii. Declaration and Verification: The Verification section contains self-declaration where you will be required to check the boxes and agree to the terms and conditions. Verify whether all the details are correct and save the information. Once done, click on ‘Preview’ to review Form 10-IEA.

 

Step 10: After reviewing all the information, ‘Proceed’ to e-verify'. You can e-verify either through:

1. Aadhaar OTP
2. Digital Signature Certificate (DSC)
3. Electronic Verification Code (EVC)

 

Step 11: After successful e-Verification, a success message is displayed along with a Transaction ID and an Acknowledgement Receipt Number. Please keep a note of the Transaction ID and Acknowledgement number for future reference. You can also download the form and locate the acknowledgment number.

To download the filed form, go to ‘e-File’ → 'Income Tax Forms' → 'View Filed Forms'.

 

Disclaimer:-The information available on this website/ App is solely for informational purposes. We make no representation or warranties of any kind, express or implied about the accuracy, reliability, with respect to information and material or video available on website/APP, any reliance you place on such information is therefore strictly at your own risk. We are not liable for any consequence of any action taken by you relying on the material/information provided on this website/APP.
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