Southern India Regional Council of
The Institute of Chartered Accountants Of India
(Setup by an Act of Parliament)

Professional Updates- November 2017

 

Professional Updates- November 2017

TAX NOTES – KARNATAKA

By CA. Annapurna Kabra

  • With Reference to Notification No.PT.CR-01/2017-2018 dated 23.10.2017 it is notified that every employer liable to be registered under the Karnataka Professional Tax Act shall submit an Application for a Certificate of Registration electronically through Internet. The details like legal name of employer PAN of employer, Trade name, Constitution of Profession, Nature of Profession, Postal Address and Contact Numbers, GSTIN Number, Scanned Photographs, Bank Account Proof and other relevant details. After entering the Permanent Account Number, the legal name and constitution will be validated from the CBDT data base. The person shall enter the details and upload the required documents. The Computer would generate a registration certificate with a unique number.
  • With reference to Notification No FD 47 CSL 2017 Bangalore dated 4/10/2017 the Government of Karnataka hereby constitutes the Karnataka Authority for Advance Ruling for the State of Karnataka. As per section 96 the Authority for Advance Ruling constituted under the provisions of a State Goods and Services Tax Act shall be deemed to be the Authority for Advance Ruling in respect of that State.
  • As per Amended Rule 103 of KGST Rules 2017 (Vide Notification No FD 47 CSL 2017 Bengaluru dated 29/08/2017) the Government shall appoint officers not below the rank of Joint Commissioner as member of the Authority for Advance Ruling.
  • Karnataka Government has started Eway bill registration. The common portal for generation of e-way bill is http://gst.kar.nic.in/ewaybill and register by providing GSTIN.
  • The Commissioner of Commercial Taxes have started @Karnataka CTD twitter account for GST updates to benefit all the stakeholders including officers, GSTPs and Tax Payers.
  • Vide Notification (2-A/2017) No KGST CR 45/17-18 dated 17.08.2017 wherein Karnataka Government appoints Authority for GST Practioners enrollment as GST Practioners. The Authorities are Additional Commissioner of Commercial Taxes (Revision and Recovery) and Office of the Commissioner of Commercial Taxes (Karnataka). The officer may make necessary enquiry with regard to application for enrolment as GST Practioner made electronically in Form GST PCT-01 and either issue certificate in Form GST PCT-02 or reject the application where it is found that application is not qualified to be enrolled as Goods and Service Tax Practioner.
  • Vide Notification No FD 47 CSL 2017, Bengaluru dated 24.10.2017, wherein the Government of Karnataka on the Recommendations of the Council hereby waives the late fee payable under Section 47 of the KGST Act for all the registered persons who failed to furnish the return in Form GSTR- 3 B for the month of August and September 2017 by due date.


Professional Updates- September 2017

Karnataka State GST and Central GST- Updates

By CA. Annapurna Kabra

The concept of deducting tax at source was conventionally introduced by the Income Tax authorities, and soon, was adopted by the Commercial Tax Department of various states. The provision for deduction of tax at source in case of works contracts gained its importance in the recent years. On transition to GST which is considered to be the biggest tax reform of our country, it is important to understand the applicability of such TDS provision in the earlier law, and also under GST, further special attention should be given during the transition period. Section 9-A of the Karnataka VAT Act provides for deduction of tax at source in case of works contract. This provision applies to works contract involving transfer of property in goods being executed within the State of Karnataka. The following are responsible to deduct out of the amount payable to the dealers, tax at source and remit the collected tax to the Commercial Taxes Department i.e. The Central government, The State government, Public sector undertaking of the central or state Government or any such undertaking in Joint sector or any other industrial, commercial or trading undertaking or body, a local authority and a statutory body. The amount payable is in respect of sale of goods in course of interstate trade or commerce, in course of export out of the territory of India or import into the territory of India or outside the State. It is to be made by the Authority on the basis tax payable calculated by the dealer. Earlier law provided for deduction of tax deduction for specific dealers. However, the GST regime provides for deduction of tax for all dealers as mentioned in Section 51 of the CGST Act, 2017.

On the rollout of GST, certain transitional clarifications have been issued by the Commercial Tax Department regarding the deduction of tax at source.

The following circular clarifies the following:

Circular No. 07/2017-18,No. KSA/GST/ Cr. 02/ 2017-18, dated 18/07/2017

Various representations were made before the departmental authorities with regard to applicability of TDS on works contracts during transition to GST. The Department has clarified the deduction of TDS in case of works contracts falling under the Transition period i.e., executed prior to 30/06/2017, payment for which is received after 01/07/2017.

Deduction of TDS on works contracts – Transition Period

The circular has referred to Section 7(1) of the KVAT Act, 2003 and has clarified that even those works contracts which have been executed up to 30/06/2017, shall be liable for deduction of TDS by the concerned Governmental authority or undertaking, though payments for the same are made on or after 01/07/2017.

Rate of tax: 4% or an amount equal to the tax payable by such dealer as permitted by the prescribed authority.

However, the provision relating to TDS under GST Law has been put on hold for the time being and the same will be brought into force from a date which shall be communicated later.

II) Amendment in the Central Goods and Services Tax Rules, 2017 to prescribe the E- way bill procedure (Notification No 27/2017 Central Tax dated 30/8/2017):

Rule 138 of the CGST Rules, 2017 provides the following procedures and information to be furnished for the generation of E- way Bill. Every registered person causing the movement of goods of consignment value exceeding Rs. 50,000/- in relation to:

  1. (1) Supply

  2. (2) Reasons other than supply

  3. (3) Due to inward supply from an unregistered dealer


shall furnish the information thereto in Part A of FORM GST EWB- 01 before commencement of such movement.

Where the goods are transported by registered person as consignor/ recipient of supply as consignee, the said person or recipient may generate E- way Bill in FORM GST EWB- 01 electronically.

Where goods are handed over to the transporter, registered person shall furnish transporter’s information in Part B of FORM GST EWB- 01 and the E- way bill shall be generated by the transporter on the basis of information furnished by the registered person in Part A.

There is no requirement to generate E- way bill where goods are transported for a distance of less than 10 km within the State or Union Territory.

In case of multiple consignments are intended to be transported in one conveyance, the transporter may indicate the serial number of E- way Bills generated in respect of each such consignment and a consolidated E- way bill in FORM GST EWB- 02 may be generated.

The validity of the E- way Bill will be 1 day for distance upto 100 km and an additional one day for every 100 km or part thereof in every State or Union Territory.

On the following, there is no requirement of E- way Bill:

  1. (i) In case of 154 goods as specified,

  2. (ii) Goods transported by non- motorized conveyance,

  3. (iii) Goods transported from port/ airport/ air cargo complex/ land customs stations to inland container depot/ container freight station for customs clearance,

  4. (iv) Movement of goods within the notified areas

  5. (v) An option is provided to the registered person and the transporter to generate the E- way Bill even if the consignment value is less than Rs. 50,000/-.

  6. (vi) Upon generation of the E- way bill, a unique e-way bill number (EBN) shall be made available to the supplier, the recipient and the transporter on the common portal.

  7. (vii) The information furnished in Part A of FORM GST EWB-01 shall be made available to the registered supplier on the common portal who may utilize the same for furnishing details in FORM GSTR-1.

  8. (viii) Where an e-way bill has been generated under this rule, but goods are either not transported or are not transported as per the details furnished in the e-way bill, the e-way bill may be cancelled electronically on the common portal, either directly or through a Facilitation Centre within 24 hours of generation of the e-way bill.


Professional Updates- August 2017

KARNATAKA GST 2017

Commissioner of Commercial Taxes Circular No. 6/2017-18 / Submission of bond/ LUT by the Exporter.

By CA Annapurna D Kabra

Section 16(3) provides that a Registered person making zero rated supply shall be eligible for refund under either of the options as supply goods under bond/ LUT without payment of tax and claim refund of the unutilized input tax credit or supply goods with payment of tax and claim refund of such tax paid on goods or services or both. Rule 96A of Karnataka GST Rules, 2017, provides that refund of IGST paid on export can be availed by submission of bond/ LUT in ‘FORM GST RFD-11. Any registered person availing the option to supply goods or services for export without payment of integrated tax is required to furnish, prior to export, a bond or a Letter of Undertaking in FORM GST RFD-11 to the Jurisdictional Commissioner binding himself to pay the tax due along with the interest specified under sub-section (1) of section 50 within a period of fifteen days after the expiry of 3 months from the date of issue of the invoice for export, if goods are not exported out of India or fifteen days after the expiry of one year from the date of issue of the invoice for export, if the payment of such services is not received by the exporter in convertible foreign exchange. As per the Rule 96A of CGST Rules, 2017, every person exporting goods under a letter of undertaking, is required to furnish ‘FORM GST RFD – 11’ before the Jurisdictional Commissioner. Since, large numbers of exporters are located at a distance from the office of the Jurisdictional Commissioner, it causes hardships to the exporters to file the form before the Jurisdictional Commissioner. Therefore, vide Circular No. 2/2/2017- GST dated July 4th, 2017, the authority to accept FORM GST RFD – 11 has been delegated to Jurisdictional Deputy / Assistant Commissioner having jurisdiction over the principal place of business of the exporter. The exporter is at the liberty to furnish bond/ LUT before Central Authority/ State Tax Authority till the administration mechanism for assigning taxpayers to respective authority is implemented. However, if in a State, the Commissioner of State Tax by general instruction to exporter can accept the bond/ LUT and this responsibility is provided to Central Tax Officer. In reference to notification 16/2017-18, the Karnataka Government in its circular has provided the Authority with whom the bond/ LUT to be submitted. This circular is clarificatory in nature and cannot be used for interpretation of provisions of law. In order to mitigate the issues involved in relation to fulfill the mandate of Sec 16 of the IGST Act, 2017 and Rule 96A of the Karnataka GST Rules, 2017 has informed the exporters in this State to submit the bond/ letter of undertaking to the following Authorities till the administrative mechanism for assignment of tax payers to Respective Authority is implemented.

  • Jurisdictional Assistant Commissioner of Commercial Taxes
  • Local Goods and Services Tax office/ Commercial Tax Officer of Local Goods and Service Tax Office in the absence of Assistant Commissioner of Commercial Taxes, and
  • Commercial Tax Officer, Sub GST Office


Professional Updates- July 2017

UPDATE UNDER KARNATAKA VAT LAWS – WITH REFERENCE TO GST LAW

By CA Annapurna D Kabra

As per E- way Rules, the information should be furnished before commencement of movement of Goods. The information relating to the Goods needs to be furnished before commencement of movement of goods in cases where consignment value exceeds Rs. 50,000. The Generation of E-Way Bill by the supplier being registered person or recipient of supply. The E way Bill can be generated by the Transporter even if value of consignment is less than Rs. 50,000. The person in charge of a conveyance shall carry the invoice or bill of supply or delivery challan, as the case may be and a copy of e-way bill. Where a vehicle has been intercepted and detained for a period exceeding 30 minutes, the transporter may upload the said information. Until an E- way Bill system is developed and approved by Council, the Govt. may notify the specific documents that a person in charge of a conveyance shall carry while goods are in movement or in transit storage. It is believed that the documents for movement specified in the local VAT laws can be applied as E-way bill in Karnataka.

Esugam Notification in Karnataka (No. ADCOM(I&C)/DC(A3)- CR:158/2013-2014 dated 5/3/2014

  • Part A - For dispatch by Registered Dealer as result of sale: If value of listed goods sold exceeds Rs. 25,000 – details of such goods to be entered before commencement of movement of goods
  • Part B - For transportation not as result of sale: Every Registered dealer transporting taxable goods not as a result of sale shall enter details of goods before commencement of movement of goods
  • Part C - For receipts of goods from places outside the state: Every Registered Dealer receiving listed goods from outside the state shall enter details of goods before the goods vehicle enter the state

The above E-sugam Notification is applicable only for notified goods and where the value exceeding 25000. Therefore it is advised that as the E-way bill format is not ready we can apply the E-sugam form and it is advisable to issue for all the goods. It is not clarified that whether it should be issued for above 25000/- or 50000/- so it is advisable to issue e-sugam for the movement above 25000/-.