Category: Miscellaneous

Bhagavad Gita : Discharge one’s prescribed duties (Text 35, Ch 3, Karma Yoga)

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Sreyan sva-dharmo vigunah para -dharmat sv-anusthitat
sva-dharme nidhanam sreyah para-dharmo bhayavahah
(Text 35, Ch 3, Karma Yoga)

Meaning: It is far better to discharge one’s prescribed duties, even though faultily, than another’s duties perfectly. Destruction in the course of performing one’s own duty is better than engaging in another’s duties, for to follow another’s path is dangerous.

GST FAQs Series 26: Input Tax Credit(ITC) under GST

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Frequently asked questions on Input Tax Credit(ITC) under GST ….Continue(Refer last post on link http://gstindia1.blogspot.in/2017/07/gst-faqs-series-25-input-tax-credititc.html 


Q 21. If input tax credit is allowed only in respect of goods or services or both for effecting taxable supplies, would it not lead to loss of input tax credit on exempt supplies when exported?

Ans. Zero-rated supplies have been covered within taxable supplies for the purpose of allowing input tax credit. The scope of zero-rated supply is provided in the Integrated Goods and Services Tax Act which includes even exempt supplies.

Q 22. Which of the following is included for computation of taxable supplies for the purpose of availing credit?
(a) Zero-rated supplies
(b) Exempt supplies
(c) Both

Ans. Zero rated supplies.


Q 23. Where goods or services received by a registered person are used partly for the
purpose of business and partly for other purposes, whether the input tax credit is
available to the person?

Ans. The input tax credit of goods or services or both attributable only to the purpose of business can be taken by registered person. The manner of calculation of eligible
credit would be provided by rules.


Q 24. A person paying tax under composition scheme crosses the composition threshold and becomes a regular taxable person. Can he avail ITC and if so from what date?

Ans. He can avail ITC in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock and on capital goods (reduced by prescribed
percentage points) on the day immediately preceding the date from which he ceases to be eligible for composition scheme. The manner of calculation of eligible credit would be provided by rules.


Q 25. Are there any special provisions in respect of banking companies?

Ans. A banking company or a financial institution including a non-banking financial company engaged in supply of specified services would either avail proportionate credit or avail 50% of the eligible input tax credit.

Q 26. Mr. A, a registered person was paying tax under composition scheme up to 30th July, 2017. However, w.e.f 31st July, 2017, Mr. A becomes liable to pay tax under regular scheme. Is he eligible for ITC?

Ans. Mr. A is eligible for input tax credit on inputs held in stock and inputs contained in semi-finished or finished goods held in stock and capital goods (reduced by such
percentage points as may be prescribed) as on 30th July, 2017.


Q 27. Mr. B applies for voluntary registration on 5th June, 2017 and obtained registration on 22nd June, 2017. Mr. B is eligible for input tax credit on inputs in stock as on…………..

Ans. Mr. B is eligible for input tax credit on inputs held in stock and inputs contained in semi-finished or finished goods held in stock as on 21st June, 2017. Mr. B cannot take input tax credit in respect of capital goods.


Q 28. What would happen to the input tax credit availed by a registered person who opts for composition scheme or where the goods or services or both supplied by him become wholly exempt?


Ans. The registered person has to pay an amount equal to the input tax credit in respect of stocks held on the day immediately preceding the date of exercise of option or date of exemption. In respect of capital goods, the payable amount would be calculated by reducing by a prescribed percentage point. The payment can be made by debiting electronic credit ledger, if there is sufficient balance in the credit ledger, or by debiting electronic cash ledger. If any balance remains in the credit ledger, it would lapse.

Q 29. Is there any restriction on period for availment of ITC?

Ans. In cases of new registration, change from composition to normal scheme, from exempt to taxable supplies, the concerned person cannot avail ITC after the expiry of one year from the date of issue of tax invoice relating to such supply.

Q 30. What happens where the details of inward supplies furnished by the recipient do not match with the outward supply details furnished by the supplier in his valid return?

Ans. In case of mismatch, the communication would be made to the both parties. If the mismatch is not rectified, then the amount will be added to the output liability of
recipient in the return for the month succeeding the month in which discrepancy is communicated.


Bhagavad Gita : Not under the control of attachment and aversion (Text 34, Ch 3, Karma Yoga)

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Indriyasyendriyasyarthe raga-dvesau vyavasthitau
tayor na vasam agacchet tau hy asya paripanthinau
(Text 34, Ch 3, Karma Yoga)

Meaning:  There are principles to regulate attachment and aversion pertaining to the senses and their objects. One should not come under the control of such attachment and aversion, because they are stumbling blocks on the path of Self-Realization.

***The whole purpose of detachment from all kinds of sense attachment is ultimately to become situated on the platform of divine consciousness.

Bhagavad Gita: Situated in divine consciousness(Text 33, Ch 3, Karma Yoga)

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Sadrsam cestate svasyah prakrter jnanavan api
Prakrtim yanti bhutani nigrahah kim karisyanti
(Text 33, Ch 3, Karma Yoga)

Meaning: Even a man of Knowledge acts according to his own nature, for everyone follows the nature he has acquired from the three modes. What can repression accomplish?

***Unless one is situated on the transcendental platform of divine consciousness, he cannot get free from the influence of the modes of material nature.

GST FAQs Series 25: Input Tax Credit(ITC) under GST

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Frequently asked questions on Input Tax Credit(ITC) under GST ….Continue(Refer last post on link http://gstindia1.blogspot.in/2017/07/gst-faqs-series-24-input-tax-credititc.html )


Q 11. Where the registered taxable person has claimed depreciation on the tax component of the cost of capital goods under the provisions of the Income Tax Act,1961, will ITC be allowed in such cases?

Ans. The input tax credit shall not be allowed on the said tax component in respect of which depreciation has been claimed.


Q 12. Is credit of tax paid on every input used for supply of taxable goods or services or both is allowed under GST?


Ans. Yes, except a small list of items provided in the law, the credit is admissible on all items. The list covers mainly items of personal consumption, inputs use of which results into formation of an immovable property (except plant and machinery), telecommunication towers, pipelines laid outside the factory premises, etc. and taxes paid as a result of detection of evasion of taxes.

Q 13. A taxable person is in the business of information technology. He buys a motor vehicle for use of his Executive Directors. Can he avail the ITC in respect of GST paid on purchase of such motor vehicle?

Ans. No. ITC on motor vehicles can be availed only if the taxable person is in the business of transport of passengers or goods or is providing the services of imparting training on motor vehicles.


Q 14. Sometimes goods are destroyed or lost due to various reasons? Can a person take ITC to the extent of such goods?

Ans. No, a person cannot take ITC with respect to goods lost, stolen, destroyed or written off. In addition, ITC with respect of goods given as gifts or free samples are also not allowed.

Q 15. Can a registered person get ITC with respect of goods or services used for construction of a building for business purposes?

Ans. No. ITC on goods or services by a person for construction of immovable property, other than plant and machinery, is not allowed. Plant and machinery cover only apparatus, equipment, and machinery fixed to earth by foundation or structural support, and excludes land and building, among other things.


Q 16. What is the ITC entitlement of a newly registered person?

Ans. A person applying for registration can take input tax credit of inputs held in stock and inputs contained in semifinished or finished goods held in stock on the day immediately preceding the date of grant of registration. If the person was liable to take registration and he has applied for registration within thirty days from the date on which he became liable to registration, then input tax credit of inputs held in stock and inputs contained in semifinished or finished goods held in stock on the day immediately preceding the date on which he became liable to pay tax can be taken.

Q 17. A person becomes liable to pay tax on 1st August, 2017 and has obtained registration on 15th August, 2017. Such person is eligible for input tax credit on inputs held in stock as on:
(a) 1st August, 2017
(b) 31st July, 2017
(c) 15th August, 2017
(d) He cannot take credit for the past period

Ans. 31st July, 2017.


Q 18. What is the eligibility of input tax credit on inputs in stock for a person who obtains voluntary registration?

Ans. The person who obtains voluntary registration is entitled to take the input tax credit of input tax on inputs in stock, inputs in semi- finished goods and finished goods in stock, held on the day immediately preceding the date of registration.


Q 19. What would be input tax eligibility in cases where there is a change in the constitution of a registered person?

Ans. The registered person shall be allowed to transfer the input tax credit that remains unutilized in its electronic credit ledger to the new entity, provided that there is a specific provision for transfer of liabilities.


Q 20. Where goods or services or both received by a taxable person are used for effecting both taxable and non-taxable supplies, whether the input tax credit is available to the registered taxable person?

Ans. The input tax credit of goods or services or both attributable only to taxable supplies can be taken by registered person. The manner of calculation of eligible
credit would be provided by rules.


Bhagavad Gita : Wise should not unsettle others (Text 29, Ch 3, Karma Yoga)

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Prakrter guna -sammudhah sajjante guna-karmasu
tan akrtsna – vido mandan krtsna – vin na vicalayet
(Text 29, Ch 3, Karma Yoga)

Meaning: Bewildered by the modes of material nature, the ignorant fully engage themselves in material activities and become attached. But the wise should not unsettle them, although these duties are inferior due to the performers lack of knowledge.

*** Persons who are unknowledgeable falsely identify with gross material consciousness and are full of material designations. This body os a gift of the material nature, and one who is too much attached to the bodily consciousness is called manda, or a lazy person without understanding of spirit soul. Social work, nationalism and altruism are some of the activities for such materially designated persons.

Those who are enlightened in spiritual life, however, should not try to agitate such materially engrossed persons. Better to prosecute one’s own spiritual activities silently.

Optional reporting of details of one foreign bank account by the non-residents in refund cases (Press Release 24-July-2017)

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Optional reporting of details of one foreign bank account by the non-residents in refund cases (Press Information Bureau, Government of India, Ministry of Finance  24-July-2017)

Refund generated on processing of return of income is currently, credited directly to the bank accounts of the taxpayers. Availability of the detail of bank accounts in which the refund is to be credited is a precondition for direct credit of refund in the bank accounts.

Income-tax Return Forms for the Assessment Year 2017-18 were notified on 30th March, 2017. A number of representations were received from the non-residents that they are facing difficulties in getting refund as they do not have bank account in India and there is no column in the notified form of return of income for reporting details of foreign bank account by the non-residents for this purpose.

In view of this, a facility has been provided in return utility for reporting of details of bank account by nonresidents, who do not have bank account in India and who are claiming income-tax refund. Therefore, the nonresidents who are not claiming refund or non-residents who are claiming refund but having a bank account in India are not required to furnish details of their foreign bank account in the return of income. 

However, the nonresidents, who are claiming income-tax refund and not having bank account in India may, at their option, furnish the details of one foreign bank account in the return of income for issuance of refund.