Central Board of Indirect Taxes and Customs

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Karnataka High Court’s decision on GST levy provides a comfort to highway projects

The concessionaire or contractors/ sub-contractors of the national/ state highways face a possible levy of Goods and Services Tax (“GST”) on their supplies. However, GST is exempted for services when toll is paid to access the roads or bridges.[1] The exemption is also applicable on payment of annuity for access to roads.[2] A contract in relation to highways may deal with several aspects such as construction of a highway, shops, operation of highways, maintenance of highways, collection of toll or separate charges like overhead charges, etc. Further, with different models of highway projects, it becomes essential to analyse the nature of supply, party rendering such supply to determine if any exemption or concessional rate is available.Continue Reading Karnataka High Court’s decision on GST levy provides a comfort to highway projects

GST obligations of employer on services rendered to its own employees

With re-opening of offices post the second wave of COVID-19, various employers have re-initiated providing canteen, cab, health insurance and many other services to their employees as part of welfare programme as well as obligations under various labour law regulations. The employer may choose to recover the cost of providing such services in full or offer a concession or deduct it from the concerned employees’ salaries or supply them free of cost. Surprisingly, the Goods and Services Tax (“GST”) legislation neither provides for any exemption nor declares that services rendered by the employer to its employees would not be in the nature of goods or services.Continue Reading GST obligations of employer on services rendered to its own employees

The conundrum created by AAR regarding GST on damages

With the ongoing pandemic, the odds of invocation of clauses such as liquidated damages, price variation clause, compensation clause or forfeiture of deposits for the delay in adhering to contractual timelines, etc. have become very high. Such additional payments could also bring out an exposure on account of taxability under Goods and Services Tax (“GST”) legislations.Continue Reading The conundrum created by AAR regarding GST on damages

With the decision in Sh. Rishi Gupta v. M/s Flipkart Internet Pvt. Ltd.[1], the National Anti-profiteering Authority (NAA) has shifted the focus from the Fast Moving Consumer Goods (FMCG) sector to the e-commerce sector.

In this case, the applicant alleged that the excess amount charged at the time of placing the order should be refunded to him, given that the rate of Goods and Services Tax (GST) reduced from 28% to 18%, between the date of placing the order and the date of supply. It was further alleged that the respondent, i.e. Flipkart, was resorting to profiteering in contravention of the provisions of Section 171 of the Central Goods and Services Tax Act, 2017 (CGST Act), by not refunding the differential amount.
Continue Reading Anti-Profiteering Orders – A Right Step Forward? Part II