Unraveling complex questions regarding taxation

- Sales Tax - Soham Mashruwala

Under the GST law, the problem of taxation is much greater. The prohibitions which have been placed in Section 17 (5) of the GST Act. Besides, under the previous law, the tax liability was increased by taking gross profit and making an outrageous addition. Today's article discusses two important issues related to taxation. In which the goods are destroyed. What is the impact on taxation if for any reason and if the supply is lower than the purchase price?

Goods destroyed

A very noble judgment has been given by the Gujarat Value Added Tax Tribunal in the case of Himani Distributors (SA No. 364/2010) under the earlier Gujarat VAT Act, where there is no refund of VAT if the goods are destroyed due to an accident. Annoyed by this, Hon. A petition was filed in Gujarat High Court. (Tax Appeal No. 1112/2013) whichever is greater. was rejected by the court. Section 17 (5) of the CGST Act falls under Section 17 (5) of the CGST Act to take advantage of such a noble ruling under the GST Act. For example, if there is a storm and all the goods are destroyed, Section 17 (5) of the CGST Act will be violated and the supplier will have to bear the tax liability. Such a provision would certainly break the supplier's back when the cost of the raw material is lost on the purchase bill and there should be a solid basis of documentation in case of loss of manufactured goods there should be proof and basis of costing so that dispute does not arise at the time of assessment. 17 (5) The amendment is very necessary that when there is an emergency over which no man has control, then the taxes do not have to be returned but the government is sitting to collect them from all sides.

Sometimes it happens that the goods are damaged due to rain, for example chemicals, even if the goods are damaged due to this, they can still be sold as chemicals. to be done. Improvement in this regard is very necessary.

Selling price less than buying price

In the old law, sales price was fixed on the basis of gross profit by account and there were many disputes. When goods are received by the branch by way of branch transfer, the valuation of the same was done as under the old law, F form was issued and the difference was compared with the selling price and tax was levied as sales. In order to avoid all such conflicts in the GST Act, provision has been made in Section 15, nowhere it is mentioned that the sale price cannot be lower than the purchase price. This is supported by Advance Ruling Authority of West Bengal Toplink Motorcar Pvt. Ltd. (Advance Ruling No. 03/WBAAR/2022-23) judgment found above. It is noted that when the sale is less than the purchase amount, the tax is fully recoverable and there is no bar.