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February 3, 2021
ITC on Personal Effects

A question that often arises in a common buyer’s mind is whether or not they will get ITC on purchases like phones, watches, I-pads, etc. which was purchased for business use. They find it hard to distinguish whether it is used for office purposes or personal consumption, owing to the thin line between the two.  ...

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February 2, 2021
ITC on Purchasing motor vehicles and their repairs

A lot of car dealers get this question from their customers, what is the GST provision on the credit admissibility on purchase of a motor vehicle and the repairs done on it? From the customer’s point of view, section 17 (5) of CGST Act clearly states, if a motor vehicle has a capacity of fewer...

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January 30, 2021
Budget 2021 Expectations
Expectations from the upcoming Union Budget

We are just 2 days away from a historical, promised budget where the Hon’ble Finance Minister, Nirmala Sitharaman, will give her third budget speech on Feb 1.  We hope that this new Union Budget infuses hope in the economy, especially for the infrastructure sector that is reeling. It should provide a road map to the...

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January 11, 2021
ITC eligibility when the supplier has not paid GST to the Government. 

All tax-paying businesses are eligible for a certain amount of Input Tax Credit (ITC) on the GST paid for goods that were purchased for reselling. This is one of the basic tenets of taxation law. But what happens if the supplier of those goods hasn't paid their GST? Can the purchaser avail for ITC under...

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January 11, 2021
ITC on damaged goods

Let us suppose that a car dealer owns a warehouse full of cars. Due to a natural calamity, this warehouse is flooded. All the cars are damaged - some completely, others partially. In this situation, what happens to the ITC claim of the dealer on those cars? What does the GST Act provide for on...

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January 11, 2021
ITC can be claimed on the GST paid for distributable promo merchandise

Bringing a fair conclusion to the long-disputed issue of whether or not ITC is admissible on GST paid for promotional expenses, the Karnataka bench of Authority for Advance Ruling (AAR) ruled that ITC will be available on such cases. As the supply of promotional goods within related parties, such as franchise, is considered a 'taxable...

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December 10, 2020

Since the introduction of GST in India a few years ago, there has been much discourse and deliberation on whether or not the power sector (or electricity) should be brought under the GST umbrella. With many entities, big and small (including power companies), maintaining that it should be brought under GST since it would be...

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December 1, 2020
Are discounts really incentives, and should they be taxed?

As one might experience, big Car manufacturers (popular known as Original Equipment Manufacturer - OEM) often come out with special discounts and offers that provide buyers with a considerable concession on the products. These are due to the trade incentives (discounts)that manufacturers offer to a car dealer to incentivize sales on special occasions and festivals....

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November 25, 2020
All about the Quarterly Return Monthly Payment (QRMP) Scheme

A new scheme - Quarterly Return Monthly Payment (QRMP) Scheme - is being introduced by The Central Board of Indirect Taxes and Customs. As per the scheme, which will be effective from January 1st, 2021, Registered Person (herein after referred as RP), with an aggregate annual Turnover of upto 5 Cr rupees in the preceding...

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November 12, 2020
Is the idea of GST Rate Cut in Automotive Sector just a mirage?

As the economy stepped out of the lockdown, multiple industries are pleading to the GST Council to reduce their tax rates. One of the major appealers is the automotive sector, which has been a victim of exaggerated tax rates to facilitate the cess collection for the states. With the recent statement from Maruti Suzuki chairman,...

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