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Interest under GST – Late Reporting of Invoice vs Late Filing of Return

Under GST, interest is charged for delay in payment of tax and not merely for delay in filing the return, as provided under Section 50 of the CGST Act, 2017. Even when sufficient ITC is available in the Electronic Credit Ledger, the applicability of interest depends on whether the tax liability was reported on time or reported later.

Late Reporting of Invoice- Late reporting occurs when an invoice is not disclosed in the return of the correct tax period and is instead reported in a subsequent return or discharged through Form GST DRC-03. In such cases, the tax itself remains undisclosed and unpaid by the due date. Therefore, interest is payable on the entire tax amount, even if sufficient ITC was available.

Example: -An invoice of April involving GST of ₹18,000 is not reported in April GSTR-3B and is reported in May.

👉 Interest is payable on ₹18,000 👉 ITC availability does not reduce interest

Late Filing of Return -Late filing refers to a situation where the invoice is correctly reported in the return of the appropriate tax period, but the return is filed after the due date. In this case, the tax liability is already disclosed on time. As per the proviso to Section 50(1), interest is applicable only on the net cash liability. If the entire tax is discharged through ITC, no interest is payable.

Example: An invoice of April involving GST of ₹18,000 is correctly reported in April GSTR-3B, the return is filed late, and ITC of ₹18,000 is available.

👉 No interest is payable, as the net cash liability is NIL

Under GST, interest is charged for delay in payment of tax and not merely for delay in filing the return, as provided under Section 50 of the CGST Act, 2017. Even when sufficient ITC is available in the Electronic Credit Ledger, the applicability of interest depends on whether the tax liability was reported on time or reported later.

Late Reporting of Invoice- Late reporting occurs when an invoice is not disclosed in the return of the correct tax period and is instead reported in a subsequent return or discharged through Form GST DRC-03. In such cases, the tax itself remains undisclosed and unpaid by the due date. Therefore, interest is payable on the entire tax amount, even if sufficient ITC was available.

Example: -An invoice of April involving GST of ₹18,000 is not reported in April GSTR-3B and is reported in May.

#gst #GST UPDATE #tax

Advisory on Appeal Withdrawal under Waiver Scheme, May 14, 2025

Taxpayers are advised to take note of the following important guidelines regarding the withdrawal of appeals (APL-01) under the Waiver Scheme as per Section 128A of the CGST Act:

1. Withdrawal Before Acknowledgment (APL-02):

If the Withdrawal Application (APL-01W) is filed before the issuance of the Final Acknowledgment (APL-02) by the Appellate Authority, the system will automatically update the appeal status from “Appeal Submitted” to “Appeal Withdrawn”.

2. Withdrawal After Acknowledgment (APL-02):

If the withdrawal is requested after the issuance of the Final Acknowledgment, it will be processed only after approval by the Appellate Authority. Upon approval, the system will update the status to “Appeal Withdrawn”.

3. Compliance under Waiver Scheme (Section 128A):

The scheme requires that no appeal should remain pending with the Appellate Authority against the demand order. In both the above scenarios, once the appeal status is updated to “Appeal Withdrawn”, this condition is deemed to be fulfilled.

#GST #GST RETURNS #INCOME #TAX

AIS-TIS, Form 26AS & GSTR-2A-2B – Reference Tools, Not Final Compliance

AIS/TIS, Form 26AS & GSTR-2A/2B Are Only Reference Tools, Not Final Compliance Documents

– CA Himanshu Dubey

Taxpayers are reminded that the Annual Information Statement (AIS), Taxpayer Information Summary (TIS), and Form 26AS are merely reference documents provided by the Income Tax Department. While these tools are intended to assist in return preparation, the final Income Tax Return (ITR) must be filed strictly on the basis of actual income and accurate records maintained in the books of accounts.

In the event of any mismatch or incorrect entry in AIS or TIS, taxpayers are advised to promptly submit feedback on the portal to ensure data correction.

A similar approach applies in the context of Goods and Services Tax (GST). GSTR-2A and GSTR-2B are facilitative statements designed to assist taxpayers in reconciling Input Tax Credit (ITC). However, the filing of GST returns should be grounded in the actual books of accounts and supported by valid tax invoices, rather than being solely dependent on portal data.

#GST #gst returns #INCOME TAX

AIS-TIS, Form 26AS & GSTR-2A-2B – Reference Tools, Not Final Compliance

AIS/TIS, Form 26AS & GSTR-2A/2B Are Only Reference Tools, Not Final Compliance Documents

– CA Himanshu Dubey

Taxpayers are reminded that the Annual Information Statement (AIS), Taxpayer Information Summary (TIS), and Form 26AS are merely reference documents provided by the Income Tax Department. While these tools are intended to assist in return preparation, the final Income Tax Return (ITR) must be filed strictly on the basis of actual income and accurate records maintained in the books of accounts.

In the event of any mismatch or incorrect entry in AIS or TIS, taxpayers are advised to promptly submit feedback on the portal to ensure data correction.

A similar approach applies in the context of Goods and Services Tax (GST). GSTR-2A and GSTR-2B are facilitative statements designed to assist taxpayers in reconciling Input Tax Credit (ITC). However, the filing of GST returns should be grounded in the actual books of accounts and supported by valid tax invoices, rather than being solely dependent on portal data.

#GST #gst returns #INCOME TAX

Old vs. New Tax Regime: Key Thresholds for FY 2024–25

The New Tax Regime is generally more beneficial if total deductions and exemptions are less than ₹4,87,500.

The Old Tax Regime is generally more beneficial when total deductions and exemptions exceed ₹7,75,000.

Where deductions fall between ₹4,87,500 and ₹7,75,000, a case-specific analysis is recommended to determine the optimal regime.

#ITR #GST #INCOMETAX

How to handle a recipient request for a new invoice in place of the original one which has already been reported on the GST portal

The supplier has requested a new invoice to be issued due to the following reasons:

1. The original invoice was not received by the Recipient Department.

2. The recipient team requires an invoice with the current date for payment approval.

3. There are value mismatches between the original invoice and the GRN/recipient records.

Position 1: No Credit Note Issued Yet

(And based on past experience or discussion, we know that if we issue a credit note, the recipient team will reject it.)

Approach:

• First, check the recipient action in IMS and request the recipient team to reject the original invoice in the system. (if not reject or pending)

• Issue a new invoice with the current date for both books and GST purposes.

• Amend the original invoice details in the GSTR-1 or 1A under the amendment table by:

o Updating the invoice date, number, and value, if required.

• No GST credit note will be issued in this case.

Books of Accounts:

• Issue a financial credit note (not reported in GST) to reverse the original invoice entry in the books.

Position 2: Credit Note Already Issued but Rejected by Supplier on IMS

Issue:

• A credit note and a new invoice were already issued and reported in both books and GST portal.

• The supplier rejected the credit note, which has resulted in double tax liability on the same supply.

Proposed Action:

• Amend the original invoice in the GST portal:

o Reduce the invoice value to ₹1 (since GSTN does not allow reduced value to zero).

• Do not alter the credit note, as has already been reported in the GST return.

Documentation:

• Download the recipient action report of the original invoice from IMS (Outward Supply module).

• If IMS shows the original invoice as rejected, retain that record.

• If IMS shows the invoice as accepted, send an email to the supplier confirming:

o The original invoice was accepted for the proper reason.

#gst #incometax #ITR

Supreme Court Landmark Ruling: Hyatt International – Substance Prevails Over Legal Form in PE Determination

Date of Judgment: 25 July 2025

Summary of the Supreme Court Decision (in simple terms)

The Supreme Court of India, in a landmark ruling, has held that Hyatt International Southwest Asia Ltd., a company based in Dubai, UAE, had a Fixed Place Permanent Establishment (PE) in India. This was based on the fact that Hyatt had substantial and continuous control over hotel operations in India, even though it did not maintain any separate or exclusive office in the country.

The Court emphasized that in such cases, economic reality is more important than legal structure. So even if Hyatt was working through agreements and claimed its role was only advisory, its actual conduct showed deep involvement in the day-to-day and strategic operations of Indian hotels.

As a result, income attributable to such PE is taxable in India, regardless of whether the foreign company made profits or losses at the global level.

Background and Facts of the Case

Who is the taxpayer?

Hyatt International Southwest Asia Ltd., a UAE-based company, offering strategic hotel consultancy and oversight services.

Nature of business in India:

Hyatt had entered into Strategic Oversight Services Agreements (SOSA) with multiple hotel owners in India (including in Delhi and Mumbai). Under these agreements, Hyatt:

Gave strategic input on hotel operations

Ensured hotels followed “Hyatt Operating Standards” (HOS)

Helped recruit and assign key personnel like General Managers

Sent employees regularly to India for implementation and supervision

Indian Affiliate:

An Indian company, Hyatt India Consultancy Pvt. Ltd., was affiliated with the taxpayer and handled daily operations through a separate Hotel Operating Services Agreement (HOSA). READ MORE

#supreme court #PermanentEstablishment #FixedPlacePE #TaxLitigation

GST Alert for Taxpayers - “You might get a GST cancellation notice if you pay your GST entirely through the credit ledger and not in cash, under Rule 86B.”

Lately, many taxpayers are receiving notices stating that their GST registration is liable for cancellation because more than 99 percent of their output tax was paid using ITC.

This is generally a misinterpretation of Rule 86B.

🔍 What Rule 86B actually says

Rule 86B applies only when the monthly taxable turnover exceeds ₹50 lakh.

Even then, the rule provides several exemptions:

* Income tax paid above ₹1 lakh in each of the last two financial years

* Refunds above ₹1 lakh under Section 54(3)

* Paying more than 1 percent of output tax in cash during the current financial year

* Government Departments, PSUs, Local Authorities, and Statutory Bodies

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