The government is considering amendments in the GST circular 210, which clarifies on valuation of supply of services import by a related party where recipient is eligible to full input tax credit, to make it simpler for its correct interpretation by tax officers, according to a senior finance ministry official.
This is in context of the recent show cause notices sent to Infosys, foreign shipping lines and several food and beverage companies engaged in related-party transactions by the Directorate General of Goods and Services Tax Intelligence (DGGI). The circular was issued in June.
According to the official, despite this circular there have been several instances where GST authorities erroneously sent show cause notices. IT major Infosys was served a show cause notice for evading taxes amounting to Rs 32,000 crore for the period July 2017 to March 2022. Though the government has waived off the tax demand for FY18 of Rs 3,898 crore for remaining years, they are looking at it on year-on-year basis.
“Infosys issue is being addressed at the field level. Infosys has to send its response by November 30, which is the last date for filing the annual return by companies. There seems to be a mistake made by the field officers,” the official said, indicating the likely relief to be given to the IT major, another official said.
Revenue Secretary Sanjay Malhotra, during the press conference held after the 54th GST Council meeting, explained that circulars have already been issued clarifying GST applicability on related-party transactions. While the Council in its last meeting, didn’t announce any relief to Infosys and other sector companies, it exempted import of services by branch offices of foreign airline companies from related entities.
‘Authorities sent several show cause notices’
As per an official, despite this circular there have been several instances where GST authorities erroneously sent show cause notices. Infosys was served show cause notice for evading taxes of Rs 32,000 crore for period July 2017 to March 2022. Though the govt has waived off demand for FY18 of Rs 3,898 cr for remaining years.
Source: The New Indian Express
