Mazars Tax Update | Edition 10.19

Indirect Tax News

Withdrawal of Circular No.107/26/2019 – GST dated 18th July, 2019 on Information technology enabled services (ITeS) 

Above circular was issued by Central Board of Indirect Taxes and Customs (CBIC) providing clarifications in relation to supply of Information Technology enabled Services (ITeS). The circular dealt with taxability of ITeS under various possible scenarios where a supplier of ITeS located in India supplies services for and on behalf of a client located abroad.

CBIC has ab-initio withdrawn such Circular vide Circular No.127/46/2019 – GST dated 4th December, 2019.

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Extension of last date of filing of appeal before GST Appellate Tribunal vide Removal of Difficulty Order No.9/2019 – Central Tax dated 3^rd December, 2019

• CBIC has granted extension in respect of last day of filing of appeal before GST Appellate Tribunal against orders of Appellate Authority.
• The original period of filing of appeal before Appellate Authority was:

1. 3 months in case any person is aggrieved by any order passed by Appellate Authority and
2. 6 months in case appeal is filed by the Commissioner on his own motion.

• Non-constitution of Appellate Tribunal and its benches in many states and Union Territories has resulted into extension of time period for filing of appeal.
• For the purpose of calculating period of 3 months and 6 months, the period shall commence from the later of following dates:

1. date of communication of order or
2. date on which the President or State President of Goods and Service Tax Appellate Tribunal (GSTAT) after its constitution u/s 109, enters office

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AAR Andhra Pradesh in the matter of Chitra Transport ruled that “lorry receipts” issued by transport company constitutes “consignment note” and supply shall be taxable as Goods Transport Agency (GTA) service

Facts of the case:

• The applicant is a regular GST dealer in the name of Chitra Transport and is dealing in engagement of lorries from lorry owners to provide transport facilities to their customers under cover of “Lorry Receipt”.
• The applicant makes payment of amount due to lorry owners after deducting commission on account of arrangement of transport facility for the customers.
• The applicant has filed an application for advance ruling seeking answers to the following questions:

1. Whether GST is payable on the amount of commission or the entire amount received from customer?
2. What is the rate of tax?

Ruling:

• Lorry receipts (LR) issued by the applicant containing details of GST registration, truck number, date of issue of LR, consignor and consignee details constitutes “consignment note”.
• Therefore, the services rendered by the applicant shall be covered within the ambit of definition of “Goods Transport Agency (GTA) service” and GST liability shall arise on the entire consideration charged from customers.
• The GST liability on GTA service shall be payable at the rate of 5% subject to fulfilment of conditions prescribed in the notification failing which tax shall be payable by the applicant at the rate of 12%.

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