India - Goods & Service Tax (GST) Updates (2)

GST in the current form has tried to organize the highly fluid space of Indirect taxes which are currently being levied on supply chain both by the central union government and the state government. Some of the central and state indirect taxes currently being subsumed in GST are Central Excise Duty; Service tax; Central State Tax; Value Added tax; Entry Tax; Purchase Tax; Luxury tax etc.

We have enlisted below some important updates regarding GST:

  1. Blocked Credits: Section 17 of the Central Goods & Service Tax Act, 2017, has carved out certain exceptions wherein credit for GST paid for certain items cannot be availed and hence cannot be deducted while determining the final output liability of GST for a month or period. Please click on the embedded link to view such services/goods
  2. Services taxed at a rate other than 18%: Most of the services have been kept under the rate of 18% but those few which have been kept under different tax rates of 5%, 12% & 28% are mentioned in the update. Also, for such services, there are restrictions with respect to Input Tax Credit (‘ITC’) which have also been mentioned in the update. Please click on the embedded link to view such the list of such services.
  3. Central Board of Direct Taxes has clarified that 'GST on services' is not to be included while making TDS on the remuneration of such services whenever in terms of agreement/contract between payer and payee, such GST component is separately indicated. GST for this purpose includes Integrated Goods and Services Tax, Central Goods and Services Tax, State Goods and Services Tax and Union Territory Goods and Services Tax.

Source: Ashok Maheshwary & Associates LLP (TPA Global Alliance Partner), TPA Global News

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