Direct Tax

Within 2 years, income taxpayers to start getting refunds within 24 hours

[Excerpts from The Times of India, 5 February 2019]

The revenue department will put mechanism in place within two years to ensure that all returns are processed within 24 hours and refunds issued simultaneously, an official said. The government has already sanctioned INR 42 billion last month for upgradation of information technology infrastructure of Central Board of Direct Taxes (CBDT) for processing returns, refunds, faceless scrutiny and verification.

Linking PAN with Aadhaar mandatory for filing I-T returns: SC

[Excerpts from The Times of India, 7 February 2019]

Putting to rest all doubt, the Supreme Court has said that linking the Permanent Account Number with Aadhaar is mandatory for filing income tax returns. A bench comprising Justices A K Sikri and S Abdul Nazeer said that the top court has already decided the matter and upheld Section 139AA of the Income Tax Act. While several taxpayers wanted to opt out of Aadhaar and did not want to link their PAN, the government has maintained that it is critical to ensure that individuals don’t evade taxes with multiple PANs.

Indirect Tax

Rationalization of GST rate on under-construction residential properties

The GST rate on under-construction properties has been reduced as follows:

Particulars Description of property Old Rate (Effective) Revised rate
(with effect from 1 April 2019)
Max. carpet area Max. price
Residential properties in the affordable housing segment
90 sq. meters in nonmetro cities
INR 4.5 million
(with Input Tax Credit [ITC])
(without ITC)
60 sq. meters in metro cities
INR 4.5 million
(with ITC)
(without ITC)
Residential properties outside the affordable housing segment
Does not meet any or both of the abovementioned criteria
(with ITC)
(without ITC)
*The effective GST rate of 8% was applicable to the residential houses having an area of up to 60 sq. meters. This was irrespective of the price of such residential houses, provided that the housing project was approved by a competent authority under 'Scheme of Affordable Housing in Partnership.'

Instructions on mentioning details of inter-state supplies made to unregistered persons in GSTR-1 and GSTR-3B

  • It has been observed that a number of registered persons have not reported the details of inter-State supplies made to unregistered persons in Table 3.2 of GSTR-3B. However, the said details have been mentioned in Table 7B of FORM GSTR-1.
  • It has been clarified that registered persons making interstate supplies to unregistered persons shall report details of such supplies along with the place of supply in Table 3.2 of GSTR-3B and Table 7B of GSTR-1 as mandated by the law.

[Circular No. 89/08/2019-GST]

Clarification regarding tax payment on the supply of warehoused goods while being deposited in a Customs bonded warehouse

  • Earlier, due to non-availability of the facility on the GST common portal to report such supplies as inter-state supplies, suppliers reported them as intra-state supplies and discharged CGST and SGST on such supplies instead of IGST.
  • The government vide the Circular has clarified that, as a one-time exception, suppliers who have paid CGST and SGST on such supplies would be deemed to have complied with the provisions of GST law on such supplies as long as the sum of tax paid as CGST and SGST is equal to the amount of IGST on such supplies.

[Circular No. 91/10/2019-GST]

Instructions on the compliance of Rule 46(n) of the CGST Rules, 2017 while issuing invoices in case of inter-state supply

  • It has been observed that the companies, especially, from banking, insurance and telecom sectors are not following the practice of mentioning the place of supply along with the name of the State in case of inter-state supplies.
  • The government vide the Circular has clarified that the place of supply shall be specified in order to ensure uniformity in the implementation of the provisions of GST law. Contravention of the provisions will attract penal action under section 122 or 125 of CGST Act, 2017.

[Circular No. 90/09/2019-GST]