Q. 367 My outward tax of April 2Lakh, May2Lakh, Jun-1 Lakh total 5Lakh. My Taxable sales in June is above 50 Lakh. Rule 86B becomes applicable in the month of Jun. ITC available for utilization at the end of Jun is 510000. Total tax payment of April and May was made through Input tax credit. How much amount of tax is payable by cash in the tax payment of Jun ?

Ans. As per rule 86B, 99% of the output tax liability can be discharged from the amount available in electronic credit ledger. However, the taxpayer has to compulsorily discharge the balance output tax liability i.e.1% through electronic cash ledger only.

Q. 366 My client is hotelier. His tariff is April to Novembr is below 7500/- In December he charges 8000/- for some rooms of hotel. From January he charges less than 7500 for each room. My Query is that from January he is charging less than 7500 so he is liable to pay tax @ of 18% or 12% ?

Ans. Room or unit accommodation services provided by Hotels, INN, Guest House, Club etc having value of supply of a unit of accommodation less than or equal to seven thousand five hundred rupees per unit per day or equivalent is taxable at the rate of 12 %. Room or unit accommodation services provided by Hotels, INN, Guest House, Club etc having value of supply of a unit of accommodation above seven thousand five hundred rupees per unit per day or equivalent is taxable at the rate of 18%. In the above case, where the room charges are reduced below INR 7500 /- the applicable GST rate would be 12%. 

Q. 365 Is refund available to a registered pe'rson whose sales were returned after stipulated time limit to issue credit note and tax was duly paid in 3B . The recipient has never availed ITC of above transaction ?

Ans. In terms of section 34 of the CGST Act, “Any registered person who issues a credit note in relation to a supply of goods or services or both shall declare the details of such credit note in the return for the month during which such credit note has been issued but not later than [the thirtieth day of November] following the end of the financial year in which such supply was made, or the date of furnishing of the relevant annual return, whichever is earlier, and the tax liability shall be adjusted in such manner as may be prescribed” In other words, credit notes can be issued but not later than 30th November of the succeeding year. However, as per section 54 read with rule 89 of the CGST Act, any taxpayer can claim refund of tax and interest by making an application before the expiry of two years from the relevant date as may be prescribed. Therefore, in case the limit of issuing credit note is lapsed, you can avail tax refunds within the time period as may be prescribed.