Gujarat Government clarifies issues related to GST for Casual Taxable Person and recovery of excess Input Tax Credit distributed by an Input Service distributor

Oct 31, 2018 | by Avantis RegTech Legal Research Team


The Government of Gujarat on October 26, 2018 has issued notification regarding clarifications of issues under Goods and Services Tax (GST) related to casual taxable person and recovery of excess Input Tax Credit distributed by an Input Service distributor.

Representations have been received by the Government of Gujarat seeking clarification on certain issues under the GST laws. The same have been examined by the Government of Gujarat and the clarifications on the same are as below:

S. No

Issue

Clarification

1.        

Whether the amount required to be deposited as advance tax while taking registration as a casual taxable person (CTP) should be 100% of the estimated gross tax liability or the estimated tax liability payable in cash should be calculated after deducting the due eligible ITC which might be available to CTP?

1. It has been noted that while applying for registration as a casual taxable person, the FORM GST REG-1 (S. No. 11) seeks information regarding the “estimated net tax liability” only and not the gross tax liability.

 2. It is accordingly clarified that the amount of advance tax which a casual taxable person is required to deposit while obtaining registration should be calculated after considering the due eligible ITC which might be available to such taxable person.

2.        

As per section 27 which specifies the Special provisions relating to casual taxable person and non-resident taxable person of the Gujarat Goods and Services Tax Act, 2017, period of operation by causal taxable person is ninety days with provision for extension of same by the proper officer for a further period not exceeding ninety days. Various representations have been received for further extension of the said period beyond the period of 180 days, as mandated in law.

1. It is clarified that in case of long running exhibitions (for a period more than 180 days), the taxable person cannot be treated as a CTP and thus such person would be required to obtain registration as a normal taxable person.

2.  While applying for normal registration the said person should upload a copy of the allotment letter granting him permission to use the premises for the exhibition and the allotment letter/consent letter shall be treated as the proper document as a proof for his place of business.

3. In such cases he would not be required to pay advance tax for the purpose of registration.

4. He can surrender such registration once the exhibition is over.

3.        

Representations have been received regarding the manner of recovery of excess credit distributed by an Input Service Distributor (ISD) in contravention of the provisions contained in section 20 of the Gujarat Goods and Services Tax Act, 2017.

1. According to Section 21 which specifies the Manner of recovery of credit distributed in excess of the Gujarat Goods and Services Tax Act, 2017 where the ISD distributes the credit in contravention of the provisions contained in section 20 of the Gujarat Goods and Services Tax Act, 2017 resulting in excess distribution of credit to one or more recipients of credit, the excess credit so distributed shall be recovered from such recipients along with interest and penalty if any.

2. The recipient unit(s) who have received excess credit from ISD may deposit the said excess amount voluntarily along with interest if any by using FORM GST DRC-03.

3. If the said recipient unit(s) does not come forward voluntarily, necessary proceedings may be initiated against the said unit(s) under the provisions of section 73 which specifies the Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason other than fraud or any willful mis-statement or suppression of facts or 74 which specifies the Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any willful mis-statement or suppression of facts of the Gujarat Goods and Services Tax Act, 2017 as the case may be. FORM GST DRC-07 can be used by the tax authorities in such cases.

4. It is further clarified that the ISD would also be liable to a general penalty under the provisions contained in section 122(1)(ix) which specifies penalty  to taxable person for certain offences of the Gujarat Goods and Services Tax Act, 2017.

 

[Circular No. 71/2018]

URL: https://commercialtax.gujarat.gov.in/vatwebsite/download/cir_noti/CIR/Clarification%20on%20issues%20related%20to%20casual%20taxable%20person%20and%20ITC%20by%20ISD.pdf


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