gst

Section 17(5): Blocked ITC – List
1. Motor vehicles and conveyances (except when used for):
• Further supply of such vehicles or conveyances;
• Transportation of passengers;
• Imparting training on driving, flying, navigating;
• Transportation of goods.
2. Vessels and aircraft (except when used for):
• Same purposes as above (further supply, transportation of passengers or goods, training).
3. Services of general insurance, servicing, repair, and maintenance related to:
• Motor vehicles, vessels, aircraft (with the same exceptions as above).
4. Food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery (except where inward supply is used for making an outward taxable supply of the same category or as part of a composite/mixed supply).
5. Membership of a club, health and fitness centre.
6. Rent-a-cab, life insurance, and health insurance, except when:
• Government mandates such services for employees;
• Used for making outward taxable supply of the same category.
7. Travel benefits extended to employees on vacation (leave or home travel concession).
8. Works contract services for construction of immovable property (other than plant and machinery) except:
• When it’s an input service for further supply of works contract service.
9. Goods or services received for construction of immovable property (other than plant and machinery) on own account, including when used in the course or furtherance of business.
10. Goods or services where tax has been paid under Section 10 (Composition Scheme).
11. Goods or services received by a non-resident taxable person, except on goods imported by him.
12. Goods lost, stolen, destroyed, written off, or disposed of by way of gift or free samples.
13. Any tax paid in terms of:
• Section 74 (tax paid for fraud, willful misstatement, or suppression of facts),
• Section 129 (detention and seizure of goods),
• Section 130 (confiscation).

Key Notes:
• Plant and machinery is specifically excluded from the definition of “immovable property” for the purpose of the works contract and construction clauses, so ITC on plant and machinery is generally allowed.
• There are exceptions to many of these restrictions, and businesses should assess the nature of use before claiming ITC.

GST Amnesty 2024: GSTN in an new advisory said now GST SPL-02 form has been made available on the GST portal. GST SPL-02 form can be used to apply for GST Amnesty Scheme waiver of interest and penalty. Read below to find out how to apply for GST Amnesty Scheme.

Good news for GST registered taxpayers who wish to avail the GST Amnesty Scheme waiver of interest and penalty under section 128A announced in Budget 2024. GST SPL 02 form, using which a GST registered person can apply for this Amnesty Scheme, has now been enabled on the GST portal. The other form-GST SPL 01, will soon be made available, said GSTN.

Taxpayers who have only been issued a notice under section 73 but no final order has been passed need to apply for the Amnesty Scheme using GST SPL 01 form. Form GST SPL 02 applies to situations where an order has been passed by the authorities at the first level tax authorities or by the appellate authorities.

“Presently, Form GST SPL 02 is made available in the GST portal. Form GST SPL 01 will be available soon in the GST portal,” said GSTN in an advisory dated December 29, 2024.

Who can apply for GST Amnesty Scheme 2024 under section 128A

Samsuddha Majumder, Tax Partner, Trilegal, says the Amnesty scheme under section 128A grants waiver of interest and penalty liabilities relating to the period July 1, 2017 to March 31, 2020, in cases that do not involve fraud or wilful misstatement or suppression of facts.

“The scheme covers notices or statements issued under Section 73, and the proceedings following thereafter till the order of the first appellate authority, against which no appeal has been filed before the appellate tribunal. It also covers situations where the proceedings that were initiated under Section 74 as involving fraud, wilful misstatement or suppression of facts, but were ordered to not be involving these ingredients subsequently pursuant to Section 75(2). For context, Section 75(2) provides that where any appellate authority, appellate tribunal, court concludes that a case, which was initiated under Section 74 as involving fraud, wilful misstatement or suppression, did not involve such elements, the liabilities in such a case will be determined by deeming it be proceedings under Section 73. Notably, the situations where any interest or penalty liabilities on account of late fee, redemption fine etc. are not covered under the scheme,” says Majumder.

How to apply for GST Amnesty Scheme 2024 under section 128A

GSTN in the advisory said the process to file GST SPL 02 is fully online and it can be filed from the GST portal only. However before filing the application for GST Amnesty Scheme under section 128A you need to pay the disputed GST liability.

Here’s a step by step guide on how to file the application for GST Amnesty Scheme under section 128A: 

Step 1: Login into the GST portal and then navigate to ‘Services’ and then click on ‘User Services’ and then select ‘My Applications’. On Navigating to ‘My Applications’ page,you have to select ‘Apply for Waiver Scheme under Section 128A’ option under ‘Application type’ dropdown. If you want to file a new application for availing waiver on Interest and Penalty, then click on ‘New Application’ button.

Step 2: On click of ‘New Application’, you will be able to see two forms:

• SPL-01: Application for waiver of interest or penalty or both under Section 128(1)(a) in case of notice or statement (This form will be made available soon).
• SPL-02: Application for waiver of interest or penalty or both under Section 128(1)(b) & Section 128(1)(c) in case of demand order. On selection of SPL-02, the ‘CREATE APPLICATION’ button will be enabled.

On clicking the ‘CREATE APPLICATION’ button , a questionnaire will appear on the dashboard. After answering all the mandatory questions you have to click the ‘NEXT’ button to proceed further. The SPL-02 form will be displayed on the dashboard.

Step 3: A new webpage will open and here you need to upload the supporting documents. You are required to upload the mandatory as well as other relevant supporting documents. A maximum of five documents, each with a size limit of 5 MB, can be uploaded. Once the form is saved and previewed, you may click the “File” button to submit the SPL-02 form.

Step 4: Upon clicking the ‘File’ button, a warning message will be displayed: “Do you wish to proceed with filing the application?”Select ‘Ok’ to continue or ‘Cancel’ to make modifications to the form. Upon selecting ‘Ok’, the application can be filed using either a Digital Signature Certificate (DSC) or an Electronic Verification Code (EVC). ARN will be generated upon the successful submission of the form.

Which taxpayers can use GST SPL 02 form to apply for Amnesty Scheme under section 128A

Sudipta Bhattacharjee, Partner at Khaitan & Co explains the following categories of taxpayers are eligible to apply for the waiver scheme under Section 128A using GST SPL 02 form

• “A person to whom a final order under Section 73 has been issued and who has filed an appeal, but no order on the first appeal has been passed under Section 107 of the CGST Act [Section 128A(1)(b)]. 
• A person to whom the order on first appeal under Section 107 has been issued and who has filed the second appeal, but no order on the second appeal has been passed under Section 113 of the CGST Act [Section 128A(1)(c)].
• A person who was initially issued a notice under Section 74 of the CGST Act (which pertains to suppression or misstatement or intentional evasion of tax), but the said proceeding was subsequently re-classified as a Section 73 proceeding can also take the benefit under Section 128A [First Proviso to Section 128A(1)].”

What are the conditions to avail GST waiver scheme

According to CA Siddharth Surana, PGDM from IIM Bangalore, “The first and foremost condition for applying for amnesty under Section 128A is that the matter should be under dispute. In a situation where to avoid litigation or for peace of mind, the taxpayer has already paid the interest and penalty, such taxpayer will not get benefit of amnesty. Interest and penalty already paid will not be refunded. Further, as mentioned above, amnesty benefits are only available where the order or notice is in relation to non-fraudulent situations. The second condition is that amnesty benefits are not automatic and require an application to be filed within a specific deadline. An application in prescribed form (GST SPL-01 or GST SPL-02) need to be filed within the timeline. The third condition is that the tax amount but not necessarily the interest and penalty needs to be paid. Where the notices are not yet adjudicated, the payment towards tax demanded needs to be done electronically by 31st March 2025 for all standard cases. For certain cases, a special deadline of 6 months from date of communication of order has been mentioned. Taxpayers need to submit proof of payment in Form DRC 03 along with the application in GST SPL-01 or GST SPL-02.”

What is the deadline to apply for GST Amnesty Scheme under section 128A

There are two deadlines to be remembered- GST tax demand payment deadline and application form (GST SPL-01/GST SPL-02) submission deadline. If only you fulfil both the deadlines then your Amnesty scheme application would be considered by the GST department.

GST tax demand payment deadline
“To avail of this waiver under section 128A, the full tax liability must be paid by March 31, 2025. However, if the tax is redetermined by the proper officer in pursuance of an order under section 75, the tax must be paid within six months from the date of such order. Do note, if interest or penalty has already been paid, no refund of these amounts can be claimed,” says Chartered Accountant Ashish Karundia.

GST Amnesty Scheme application submission deadline
Bhattacharjee says: “The payment of tax is required to be made on or before 31 March 2025. As per Section 128A(1) read with Rule 164(6), to avail the benefit of waiver, the procedural forms need to be filed within a period of 3 months from 31 March 2025. Accordingly, the cut-off date is June 30, 2025. 

In cases of application pertaining to a proceeding under Section 74 of the CGST Act which was reclassified under Section 73, the time limit is 6 months from the date of communication of the order by the proper officer re-determining the tax. Six months will therefore need to be accordingly calculated.”

Which taxpayers need to use GST SPL-02 and SPL-01 form?

According to Surana, “For cases where a notice or statement under Section 73 has been issued demanding tax for the period from July 2017 to March 2020, and no order has been issued under section 73, taxpayers can file an application in FORM GST SPL-01 electronically on the common portal. In cases where an order has been issued under Section 73 or under Section 107 or Section 108, but no order has been issued under section 113, taxpayers can file an application in FORM GST SPL-02 electronically on the common portal. Thus, whether to do an application in Form GST SPL 01 or GST SPL 02 depends entirely on the status of the assessments. Where the matter is at Show Cause Notice/ Demand stage, the taxpayer may need to file amnesty application in Form GST SPL 01. But where the order is passed, the amnesty application needs to be filed in Form GST SPL-02. Thus, there is no such situation where taxpayer has to file both the application forms. It is more or an either/ or situation.”

Due to the glitches, the CBIC is expected to extend the due date of GSTR 1

The Central Board of Indirect Taxes and Customs ( CBIC ) has extended the due date of Goods and Services Tax ( GST ) Return GSTR-1 ( GST Returns ) filing to January 13, 2025 for regular filers and to 15th of january for quarterly filers amid GST portal issues. The GST tech team – GSTN under Infosys had already informed that the board is reviewing the incident report to extend the due date and it is under consideration. It states that “GST portal is currently experiencing technical issues and is under maintenance. We expect the portal to be operational by 12:00 noon. CBIC is being sent an incident report to consider extension in filing date.”

Today, the GST tech team confirmed that the portal is facing technical difficulties, but assured that the system will return to normal by 3 pm. The team also informed that the Central Board of Indirect Taxes and Customs ( CBIC ) is reviewing the incident report to extend the GSTR 1 due date is under consideration. Thus, it is expected that the due date will be extended.

Earlier today, the GST portal was shut down for maintenance. According to the official notification displayed on the portal, services will remain unavailable from 12:00 AM to 12:00 PM on 10th January 2025. Taxpayers and businesses relying on the platform for filing returns, generating invoices, and other compliance-related activities are advised to plan accordingly to avoid inconvenience. The message was then further updated to inform the professionals that the portal will be available for filing only at 03:00 PM.

Readymade garments costing up to ₹1,500 would attract 5% GST, those between ₹1,500 and ₹10,000 would attract 18%. Garments costing above ₹10,000 would attract 28% tax

The GoM on GST rate rationalisation on Monday (December 2, 2024) decided to hike tax on sin goods like aerated beverages, cigarettes, tobacco and related products to 35% from the present 28%, an official said.

The Group of Ministers (GoM) on rate rationalisation under Bihar Deputy Chief Minister Samrat Chaudhary also decided to rationalise tax rates on apparel.

As per the decision, readymade garments costing up to ₹1,500 would attract 5% GST, those between ₹1,500 and ₹10,000 would attract 18%. Garments costing above ₹10,000 would attract 28% tax.

In total, the GoM on rate rationalisation will propose tax rate tweaks on 148 items to the GST Council. “The net revenue impact will be positive,” an official said.

The GoM report is expected to be discussed by the GST Council — chaired by Union Finance Minister and comprising her state counterparts — on December 21. A final decision on GST rate changes will be taken by the council.

“The GoM has agreed to propose a special rate of 35% on tobacco and related products and aerated beverages. The four-tier tax slab of 5, 12, 18, and 28% will continue and a new rate of 35% is proposed by the GoM,” said the official.

Currently, GST is a four-tier tax structure with slabs at 5, 12, 18, and 28%.

Under GST, essential items are either exempted or taxed at the lowest slab, while luxury and demerit items attract the highest slab. Luxury goods like car, washing machine, and demerit goods like aerated water and tobacco products attract cess on top of the highest 28% slab.

The official said the GoM on rate rationalisation has finalised its report on Monday (December 2, 2024) to be presented before the council.

The council will now decide whether there is further scope for rate rationalisation and may decide to retain the GoM so that the rationalisation exercise continues periodically, the official added.

In its last meeting in October, the GoM had proposed reducing GST on packaged drinking water of 20 litres and above to 5% from 18%.

It had also decided to propose to the council to reduce GST on bicycles costing less than ₹10,000 to 5%, from 12%.

Also, GST on exercise notebooks would be reduced to 5% from 12%. The GoM also proposed hiking GST on shoes above ₹15,000/pair from 18% to 28%.

It also proposed hiking GST on wrist watches above ₹25,000 from 18% to 28% in the previous meeting on October 19.

Goods and Services Tax (GST): The GST portal is soon going to implement a change which will essentially make GST returns time barred if three years have passed from the due date of filing it.”The said changes are going to be implemented in the GST portal from early next year (2025). Hence, the taxpayers are advised to reconcile their records and file their GST Returns as soon as possible if not filed till now.”