GST refund brings relief to businesses, advisory on Opting-in for Composition Scheme, GST on Directors' salary, no detaining goods for bonafide misclassification: GST News In A Minute
- Apr 17, 2020 | Divita S Gupta
Relief to one lakh registered businesses as Government announces the release of GST refunds. Check out all updates on #GSTThisWeek
Government to release all GST, customs refund worth Rs 18k crore
The Government has decided to issue all pending GST and Custom refunds, which would provide benefit to around 1 lakh business entities, including MSMEs granting a total refund of approximately ₹18,000 crores. Last month, the Government extended the filing of Returns for the month of March, April, and May 2020 and composition returns under GST to June 30. The Finance Minister also said companies that have less than Rs 5 crore turnover would not have to pay interest, late fee, or penalty. For more prominent companies, late fees and penalties will not apply, and only interest at a reduced rate of 9% will be charged.
GSTN issues Advisory on Opting-in for Composition Scheme for 2020-21
Due to the COVID-19 pandemic and subsequent lockdown, taxpayers are facing many challenges while filing returns, and to ease this concern, the Government has extended dates for those businesses who have opted for the composition scheme under GST for the financial year 2020-21. Additionally, regular and registered taxpayers who want to opt-in for the Composition Scheme under the Goods and Services Tax in FY 2020-21 can apply using Form GST CMP-02 by June 30, 2020.
Remuneration paid to directors to attract GST
The Authority for Advance Ruling has issued a ruling stating that companies will be required to pay GST on the compensation paid to directors. The AAR announced that the consideration paid to the directors by companies would attract GST under the reverse charge mechanism. According to Central Tax law, services supplied by a Director of a company will be considered as supply, and hence directors cannot be called employees.
Lowest ever IGST collection in March
Integrated Goods and Services Tax collection hit its lowest record ever with just over ₹18,000 crores collected in the month of March. Experts say this figure is likely to plummet further due to the novel Coronavirus pandemic and subsequent lockdown. Low collections from imports point to a significant decline in the value of shipments as well as moderation in economic activity.
GST Department cannot detain Goods for bonafide misclassification
The Kerala High Court, in a judgment that has brought much relief to the Hindustan Coca Cola company, has directed the release of seized goods which were detained on the ground of bonafide misclassification of goods and has quashed claims by tax authorities under GST. A consignment of soft drink beverages manufactured by Hindustan Coca Cola was recently seized as the Goods were believed to be incorrectly classified and ought to have attracted 28% GST instead of 12%. The High Court of Kerala has directed that goods cannot be detained when the dispute is bonafide and concerns tax eligibility.
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