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Waiver of Interest or Penalty or both_Section 128A

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  INTRODUCTION: - Section 128A, as proposed by the Finance Act, 2024 (No. 2), dated 16.08.2024, through Section 146, was notified via Notification No. 17/2024 – Central Tax, dated 27.09.2024, and will be applicable from 01.11.2024. Section 128A provides a unique opportunity for taxpayers to settle their tax liabilities without paying interest and penalties under certain circumstances. This section focuses on cases where a taxpayer has an outstanding tax liability for the period from July 1, 2017, to March 31, 2020. It allows such taxpayers to settle their dues with significant relief if they meet the specific conditions outlined in this section.   PERIOD FOR WHICH RELAXATION IS PROVIDED: - July 1, 2017, to March 31, 2020 (covering the financial years 2017-18, 2018-19, and 2019-20).   ANALYSIS AND INTERPRETATION OF SECTION 128A: -   Key Points: -   Who is eligible? Taxpayers who have received tax notices or orders under Section 73 (Non fraud Case) or Sections 10
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Taxability of Loan Transactions Between Overseas and Indian Affiliates.

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  INTRODUCTION: - The Goods and Services Tax (GST) applicability on transactions of providing loans between overseas affiliates and Indian affiliates, or between related persons, has raised concerns within the trade and industry. Specifically, clarity has been sought on whether such loan transactions, where consideration is only represented by way of interest or discount, would attract GST. This article provides a clear understanding of the taxability of these transactions based on the provisions of the Central Goods and Services Tax (CGST) Act, 2017.   LEGAL PROVISIONS AND CLARIFICATION: - 1.      Supply of Goods or Services Between Related Persons: ·        As per Section 7(1)(c) of the CGST Act, read with Schedule I (S. No. 2 and S. No. 4), any supply of goods or services between related persons made in the course or furtherance of business is considered a supply, even if made without consideration. ·        Therefore, the provision of loans/advances between an overseas
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ITC Entitlement on Repair Expenses in Reimbursement Claim Settlements.

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  INTRODUCTION TO GENERAL INSURANCE SETTLEMENT. Insurance companies providing general insurance for motor vehicles settle repair or damage claims through two modes: ·        Cashless Mode: The insurance company directly pays the repair charges to a network garage. ·        Reimbursement Mode: The insured first pays the repair costs to a non-network garage, and the insurance company later reimburses the insured for the approved amount. LIABILITY FOR REPAIR COSTS. In both settlement modes, the insurance company accounts for the repair liability as assessed by a surveyor or loss assessor. The approved repair charges are paid to the garage, and the garages usually issue invoices in the name of the insurance companies. CLAIM PROCESS FOR EACH MODE. ·        Cashless Mode: The insurance company directly settles the payment with the network garage based on the approved repair costs. ·        Reimbursement Mode: The insured pays the non-network garage, and then the insuranc
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GST Implication on Replacement of PARTS or GOODS AS SUCH & REPAIR Service under warranty.

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GST Liability & ITC Reversal: Replacement of Parts or Goods as such and Repair Services Provided by the Manufacturer.   GST Liability on Replacement of Parts or goods Repair Services During Warranty (By Manufacturer): Question: Is GST payable on replacement of parts or repair services provided by the manufacturer during the warranty period without charging any consideration from the customer? Answer: No GST is payable if no additional consideration is charged. GST is already paid on the original supply of goods, which includes the cost of future replacement or repair during the warranty period. However, GST will apply to any additional consideration charged.   ITC Reversal (By Manufacturer): Question: Is the manufacturer required to reverse the input tax credit (ITC) for replacement parts or repair services provided during the warranty period without charging additional consideration from the customer? Answer: No reversal of ITC is required. The original
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