Important aspects on Valuation of Goods and Services with practical case studies deliberated by experts at PHD Chamber of Commerce and Industry Webinar

No.PR-71 May 14, 2020 New Delhi Important aspects on Valuation of Goods and Services with practical case studies deliberated by experts at PHD Chamber of Commerce and Industry Webinar Eminent experts in the field of taxation extensively discussed the issues arising in the Valuation of Good & Services under GST regime in a Webinar organized by PHD Chamber of Commerce and Industry on Valuation of Goods/Services – Basis/ Inclusions & Exclusions; Analysis of Valuation Rules with practical case studies on 13th May 2020, said the Industry Body, PHD Chamber of Commerce and Industry in a press statement issued here today. Mr. Pradeep Multani, Vice President, PHDCCI while speaking at Webinar on Valuation of Goods/Services stated that the proactive and combative measures undertaken by the Government to curtail the spread of pandemic COVID-19 are highly appreciable. The announcement of a bold economic relief package of Rs 20 lakh crores, totalling to 10% of India’s GDP is highly laudable. He highlighted that while worrying about the severity of pandemic COVID-19, Governments and tax authorities provided various tax relief measures in response to the pandemic COVID-19.The relief measures and easing of compliance deadlines will enable businesses to sustain themselves in the current atmosphere and is likely to have a positive impact on economic activities and more importantly remove uncertainty in the system. Mr. N K Gupta, Chair, Indirect Taxes Committee, PHDCCI in his theme presentation mentioned that considering the difficulty faced by registered taxpayers in applying DSC, CBIC vide Notification No. 38/2020- Central Tax dated 5th May 2020 has provided that a registered person registered under the provisions of the Companies Act, 2013 (18 of 2013) shall, during the period from the 21st day of April, 2020 to the 30th day of June, 2020, also be allowed to furnish the return under section 39 in FORM GSTR-3B verified through electronic verification code (EVC)i.e One time password. He highlighted that the relaxation is given for filling of GSTR 3B only and not for GSTR-1. He accentuated that CBIC vide Notification No. 40/2020- Central Tax dated 5thMay 2020 provided that where an e-way bill has been generated on or before the 24th day of March, 2020 and its period of validity expires during the period 20th day of March, 2020 to the 15th day of April, 2020, the validity period of such e-way bill shall be deemed to have been extended till the 31st day of May, 2020. He mentioned that in case, the E way bill was generated (assuming for essential commodities) after 24th March 2020 and expired before 15th April 2020, then there is no relaxation. He further explained the provision of Section 15 of CGST Act 2017. The government issued circular with regard to discount, incentive, rebate etc. for the transaction value but the same was withdrawn. It was felt that government should clarify with regards to various schemes given by the manufacturer, distributor, dealer and retailer to the consumer. With regard to taxability of director’s salary there were two adverse decisions, whereas Karnataka advance ruling authority has ruled on taxability. To some extend this is a relief but litigation is on. The government should clarify its stand. Mr. Gaurav Gupta, Co-chairman, Indirect Taxes Committee through his detailed representation on valuation of Inter Branch transactions – Supply and Cross Charge explained the open market value of a supply of goods or services or both means the full value in money, excluding the integrated tax, central tax, State tax, Union territory tax and the cess payable by a person in a transaction, where the supplier and the recipient of the supply are not related and the price is the sole consideration, to obtain such supply at the same time when the supply being valued is made. He further discussed in detail the case study wherein AAR has ruled that the relationship between branch office and corporate office is that of ‘distinct persons’. Under GST regulations, the branches of a company are separate taxable entity and therefore, any goods/services received by one branch from another shall be considered as supply even if without consideration. He also highlighted the critical issue arising out of the recent decision given by Authority of Advance Rulings in the matter of applicability of GST on remuneration paid to the Director by the company. Mr. Saurabh Sanyal, Secretary General, PHDCCI citing the example of other countries suggested that India should do away with multiple tax slabs under GST for greater compliance and easy of doing business. He suggested that India should have only two tax slabs on 8% and 16%, as it will help to avoid interpretational issues and reduce the litigations as well. Other eminent tax experts were Mr. Tushar Aggarwal, Partner, TATTVAM Advisor; Mr Shivam Mehta, Partner, Laxmikumaran and Sridharan; Mr. Deepak Suneja, Partner, Nitya Tax Associates and Shri J K Mittal, Advocate, Supreme Court of India. The Webinar concluded with an extensive discussion and Q & A Session with an overwhelming response from the participants. More than 100 delegates participated in the Webinar. Ends. Media Division PHD Chamber of Commerce and Industry