No more re-registering for GST, states AAR

A separate GST registration is not required in the state (the site of supply) by a subcontractor who is executing an infrastructure project, according to the Karnataka bench of the GST Authority for Advance Rulings (AAR). In a recent judgement, the bench upheld the principle of ‘Ease of Doing Business,’ saying the subcontractor can raise the invoice by charging integrated goods and service tax (IGST) from its office in Noida, Uttar Pradesh.

When goods and services are supplied between states, the IGST is imposed. The AAR’s decisions have persuasive power. According to tax professionals, if this judgement is implemented across the country, it will help businesses save money on registration and other administrative charges.

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On the negative side, the AAR ruled that a subcontractor cannot register as an input service distributor if it does not have an office in Karnataka. This registration was required in order to claim input tax credits for goods/services purchased from vendors on-site and distribute those credits to the company’s Noida registration.

GEW India, a private limited company with a unit in Noida and a registered office in Pune (Maharashtra), received a work order from Larsen & Toubro to complete a works contract at a naval base in Karwar, Karnataka. It entailed a mix of commodities and services, such as the construction of a steel structure for ship mooring. The steel was fabricated and installed on-site at the company’s Noida facility.

According to GEW India, the resident engineer and anyone who may visit the work site will likely be housed in Karnataka, but there will be no office or administrative employees. The applicant company had only one major place of business, Noida, for which GST registration had been secured, according to the AAR. As a result, there was no need for a separate registration in Karnataka to carry out its contract.

Other Updates

1. CBDT has expanded scope information included in Form 26AS to include more high-value financial transactions and additional information. As per the rules reformed by the taxman, the Form 26AS will include details of mutual fund purchases, foreign remittances, as well as information in income tax returns of other taxpayers.

2. Submission of Form 3CA-3CD,3CB-3CD for AY 2021-22, AY 2020-21 is enabled. Download and use latest utility – e-Filing, Income Tax Department.

3. CBDT has notified an e-settlement scheme to settle pending income-tax settlement applications transferred to a settlement commission. The scheme will be applicable to “pending applications in respect of which the applicant has not exercised the option under sub-section (1) of Section 245M of the Act and which has been allotted or transferred by CBDT to an interim board.

4. Manpower Agency cannot escape GST liability on Gross amount by showing Services Charges and Salary/Wages Separately. Case Name : In re Prodip Nandi (GST AAR West Bengal)

5. BSE has collaborated with private sector lender HDFC Bank to further encourage and promote the listing of startups and small and medium enterprises (SMEs) across India. Through this pact, HDFC Bank and BSE will evaluate banking and lending solutions for startups, undergoing a listing process on startups and SME platforms.