Month: August 2017

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When we issue gold as raw material to our Job Worker for Job Work and he returns that gold as finished goods,what GST treatment will be done and how to calculate the value

  1. The job worker, if registered, would be required to pay GST at the rate of 5% on job charges only.
  2. The jewellery manufacturer would in turn take credit of GST paid on such
    job work and may utilize the same for payment of GST on his outward supply of manufactured jewellery.
  3. However, if the job worker is exempted from registration, the jewellery
    manufacturer would be required to pay GST on his input supply from the job worker [of jewellery made out of precious metal given by him] on reverse charge basis.
  4. Nonetheless, he would be eligible to avail input credit of the tax so paid under
    reverse charge mechanism.

( FAQ 8: GEMS AND JEWELLERY)

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When we are selling Gold, Diamond or Silver Jewellery to the end consumer (Customer) like a Gold Chain weighing10gm at a total value of Rs. 30,000/- (gold value is Rs. 28000/- and making charges on that gold chain is Rs 2000/-), can we charge GST @3% on the total value or @3% on the gold value and @5% on making charges

GST is payable at the rate of 3% of the total transaction value of jewellery, whether the making charge is shown separately or not.

( FAQ 7: GEMS AND JEWELLERY)

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Banks pay provisional VAT currently at the time of delivery of gold on the basis of ongoing market prices. When customer fixes the price of metal, Banks pay actual VAT on the maturity date of the Gold Loan. Banks must be allowed to set-off the excess provisional GST paid to the government against future fixation of prices. In case of excesspayment, the same should be refunded on Pan – India basis and not on the basis of States.

  1.  Banks may claim refund in accordance with the provisions of section 54 of the CGST Act, 2017.
  2. Interest is payable in such cases as provided in section 56 of the CGST Act, 2017.
  3. In this connection, section 60(5) of the CGST Act, 2017 may be referred to.

( FAQ 6: GEMS AND JEWELLERY)

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Banks lend gold in physical form for a period not exceeding 6 months. Banks receive interest on the gold ounces disbursed and the same is converted into Rupees after calculation of interest on the ounces and the USD/INR conversion. Will the same methodology continue in case of GST as well wherein Banks shall pay a provisional GST (i.e. IGST/SGST/CGST) on ongoing market prices and pay the final GST as and when the prices are fixed

Yes, Banks may avail of the benefit of provisional assessment provided under section 60 of the CGST Act, 2017.

( FAQ 5: GEMS AND JEWELLERY)

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Banks import gold / silver on consignment basis wherein the ownership of the metal is with the supplier of the bullion which maybe an overseas entity. Is the overseas entity required to have GST registration because currently they do not file returns and are governed by multi-nation treaties

  1. This amounts to an import in accordance with the definition of the word “import” in the IGST Act, 2017 which provides that “bringing into India of any goods from any place outside India” is an import of the goods.
  2. What is material in this definition is the mere act of bringing into India; the ownership is not material for determining whether an import has taken place. Banks, being registered entities, would be liable to pay IGST on such imports but not the overseas entities since they are not effecting the import.

( FAQ 3: GEMS AND JEWELLERY )

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Whether advertising and communication material (banners/hoardings/posters) provided to distributors would be treated as supply in the course of business by the company thereby not requiring any reversal of ITC

  1.  Where the material is provided free of cost: This would not amount to a supply and hence no tax is payable on such transaction and in such a case credit availed by the company would need to be reversed in accordance with section 17(5) of the CGST Act, 2017.
  2. Where the material is provided for a consideration: This would amount to a normal supply.

(FAQ 1: GEMS AND JEWELLERY )

Comments There is no provision under 17(5) requiring reversal of ITC on supply of free material

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Actual linking of adhar with PAN can be done but any time before 31-08-2017 as per due date extension Order dated 31-07-2017

  1. The ‘due-date’ for filing income-tax returns for Assessment-Year 2017-2018 is 31-7-2017 for certain categories of taxpayers. It has been reported that some of the taxpayers are facing difficulties in filing their tax-returns due to various reasons including technical difficulties.

2. The Central Board of Direct Taxes, in exercise of powers conferred under section 119 of the Income-tax Act, 1961 (‘Act’), hereby extends the ‘due-date’, as prescribed under section 139(1) of the Act, for filing returns of income from 31st July, 2017 to 5th August, 2017 in cases of all taxpayers who are liable to file their income-tax return by the said ‘due-date’.

3. Further, for the purpose of filing return, it shall be sufficient as of now to quote Aadhaar or Aadhaar Enrolment Number. The actual linking of PAN with Aadhaar can be done subsequently, but any time before 31st August, 2017. However, these returns shall not be processed u/s 143(1) until the linkage of Aadhar with PAN is completed.

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Search and Survey Post Demonitization: Press Release 01-08-2017

  1. 1.  Post demonetization, the Income Tax Department (ITD) conducted searches in 900 groups of persons during November 2016 to March, 2017 leading to seizure of Rs 900 crores and admission of undisclosed income of Rs 7961 crores.
  3. 2. During the same period, 8239 surveys were conducted leading to detection of undisclosed income of Rs 6745 crores.
  5. 3. Information of various kinds of wrong-doings by about 400 persons was also shared with other law enforcement agencies such as Enforcement Directorate and Central Bureau of Investigation for appropriate action.

4. Further, during the current Financial year (01.04.2017 to 30.06.2017) the ITD has conducted searches in 102 groups, seizing assets worth Rs. 103 crore.

5. The persons searched have admitted undisclosed income of Rs. 2670 crore. During the same period surveys conducted in 202 cases (01.04.2017 to 31.05.2017) led to detection of Rs. 150 crore as undisclosed income.