A.Rastogi News

Supreme Court of India has admitted a petition challenging imposition of the Goods & Services Tax (GST) on the transfer of development rights within joint development agreements between realty developers and landowners.

Central Board of Indirect Taxes and Customs (CBIC) has raised the threshold for filing of appeals before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) by ten times to Rs 50 lakh, as it looks to reduce the number of litigations. The thresholds for appeals in the high courts and the Supreme Court have been doubled to Rs 1 crore and Rs 2 crore, respectively.

additional tax liabilities of about $1 billion on the telecom sector this fiscal year alone, impacting operator cash flows, the Supreme Court on Monday held that licence fees payable by the telcos will be treated as entirely «capital in nature». It set aside a Delhi HC order that categorised licence fees before and after July 31, 1999, differently, as capital expense and revenue expense, respectively. Rejecting this recharacterisation, a top court bench comprising Justices B V Nagarathna and Ujjal Bhuyan said the licence fees remain capital regardless of instalment payments after the New Telecom Policy 1999 came into effect. Big setback for older telcos The order is a setback for older telecom companies Bharti Airtel and Vodafone Idea, and, to a lesser extent, even for Reliance Jio, as they will need to reassess their financial structures and potentially face increased tax liabilities. «Variable licence fees will be treated as a capital expenditure and, as a corollary, the deduction will not be allowed in the year of the expenditure now,» said taxation lawyer Abhishek A Rastogi, founder of Rastogi Chambers.

If a developer constructs a commercial building and sells it before obtaining an occupancy certificate, they may be eligible to claim credit, provided they pay the output GST on the sale transaction. However, if the developer uses the building for leasing, such an ITC is not available for set-off. «This impacts the overall business as this increases the cost of construction, thereby increasing rentals. Multiple representations have been sent to the government, but developers have yet to get any relief.

GST Appellate Tribunal, the Bombay High Court has said. The order has come as a relief for some 10,000 taxpayers, whose writ petitions on GST are pending at various HCs in absence of resolution mechanism.

India and were paid in cryptocurrencies are rushing to their tax advisors seeking clarity over applicability of the goods and services tax (GST). Many individuals have claimed that they got paid in cryptocurrency after they did some work such as graphic designing or advisory for clients based in the US or Singapore. The question is whether this is supply of services or an export, and what is the GST applicable on it.