• Clarification on what is the value to be adopted for the purpose of computing GST on services provided by BF/BC to a banking company GST on Services of Business Facilitator (BF) or a Business Correspondent (BC) to a Banking Company. 

• The board stated that “As per RBI’s Circular No. DBOD.No.BL.BC. 58/22.01.001/2005-2006 dated 25.01.2006 and subsequent instructions on the issue (referred to as ‘guidelines’ hereinafter), banks may pay reasonable commission/fee to the BC, the rate and quantum of which may be reviewed periodically. The agreement of banks with the BC specifically prohibits them from directly charging any fee to the customers for services rendered by them on behalf of the bank. On the other hand, banks (and not BCs) are permitted to collect reasonable service charges from the customers for such service in a transparent manner. The arrangements of banks with the Business Correspondents specify the requirement that the transactions are accounted for and reflected in the bank’s books by end of the day or the next working day, and all agreements/ contracts with the customer shall clearly specify that the bank is responsible to the customer for acts of omission and commission of the Business Facilitator/Correspondent.

• Hence, banking company is the service provider in the business facilitator model or the business correspondent model operated by a banking company as per RBI guidelines. The banking company is liable to pay GST on the entire value of service charge or fee charged to customers whether or not received via business facilitator or the business correspondent.

The Central Board of Indirect taxation and customs has issued clarifications on treatment of various sales promotion scheme’s under Circular No. 92/11/2019 dtd.7th March 2019. Circular provides the following clarification: 

a) Free samples and gifts: The Board highlighted and reiterated that the certain practises in the industry require supply of samples etc. Accordingly, it is clarified that samples which are supplied free of cost, without any consideration, do not qualify as “supply‟ under GST. The circular exempts  taxability of the same . Further the board also clarified ITC shall not be available in respect of goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples. Thus, it is clarified that input tax credit shall not be available to the supplier on the inputs, input services and capital goods to the extent they are used in relation to the gifts or free samples distributed without

any consideration. However, where the activity of distribution of gifts or free samples falls within the scope of „supply‟ on account of the provisions contained in Schedule I of the said Act, the supplier would be eligible to avail of the ITC.

b) Buy 1 get 1 free: The Board also issued clarification on taxability on 1+1 schemes run by various business. The circular reads : Goods or services which are supplied free of cost (without any consideration) shall not be treated as „supply‟ under GST (except in case of activities mentioned in Schedule I of the said Act). It may appear at first glance that in case of offers like „Buy One, Get One Free‟, one item is being „supplied free of cost‟ without any consideration. In fact, it is not an individual supply of free goods but a case of two or more individual supplies where a single price is being charged for the entire supply. It can at best be treated as supplying two goods for the price of one.Taxability of such supply will be dependent upon as to whether the supply is a composite supply or a mixed supply and the rate of tax shall be determined as per the provisions of section 8 of the said Act.

c) Treatment of Discounts:  The board extensively clarified in the circular that the treatment of volume discounts and discounts offered to customers shall be done in a particular way. They shall be excluded while determining the value of supply.

The discounts offered by the suppliers to customers (including staggered discount under “Buy more, save more‟ scheme and post supply / volume discounts established before or at the time of supply) shall be excluded to determine the value of supply provided they satisfy the parameters laid down in sub-section (3) of section 15 of the said Act, including the reversal of ITC by the recipient of the supply as is attributable to the discount on the basis of document (s) issued by the supplier.

It is further clarified that the supplier shall be entitled to avail the ITC for such inputs, input services and capital goods used in relation to the supply of goods or services or both on such discounts.

The Statement and object of the bill has been based and in reference to the Article 46 of Directive Principles of State Policy that has catered to the socially disadvantaged sections and who have reaped the benefits of the same. Howsoever, the economically weaker have been left out. 

What would be interesting to see is whether reservations in private institutions can be guaranteed. There was a previous ruling of Supreme Court in 2005 in the case of PA Inamdar V. State of Maharashtra  where in it was upheld that government cannot impose restrictions of reservations on the private unaided educational institutions. 

It would be interesting to see what the ceiling for quota or the mandate would be given the speculation of 8 Lakhs Per annum being the bar. 

• Due date for filing of GSTR 3b return for the month of January 2019 has been extended to 22nd
  February 2019.
• The GST council has Increased the GST threshold for registration of Suppliers of Goods from 20
  Lakhs to 40 Lakhs.
• The GST committee as a initiative introduced a newly made composition scheme for service
  providers and for those parties which are engaged in providing services along with the supply of
  goods. The turnover limit in this case has been devised at Rs 50 lakhs and the rate of taxation
  has been kept at 6%.
• GSTR 9A, 9C ,9 filing due date extended till 30th June 2019. The trials for filing the new returns
  have encouraged from April 1st 2019.
• Clarification on refund related issues was made vide circular No. 75/53/2018, where in it
  highlighted the following issues for refund seekers and addressed them:
  a) Physical submission of refund claims with jurisdictional proper officer
  b) Calculation of refund amount for claims of refund of accumulated Input Tax Credit
  (ITC) on account of inverted duty structure
  c) Mode of disbursal of refund amounts after sanction:
  d) Issues related to refund of accumulated Input Tax Credit of Compensation Cess
  e) Refund of accumulated ITC of input services and capital goods arising on account of
  inverted duty structure/li>

No rate cuts were announced this time. GoMs were formed to study taxation of under-construction
properties & lotteries.
Calamity cess up to 1% for up to 2 years will be charged for supplies made within the State of
Kerala<

It is interesting to see how it would function in the light of the political situation in the country. The Lokpal aims to establish the confidence in public that no one is above law. Thus the lokpal will have jurisdiction over central government on matters where allegations of corruption against its
public offices is concerned.

The Lokpal would consist of 8 member team, where 4 would be judicial members and the other 4 would be non judicial members of impeccable integrity and having experience in field of anti
corruption, public administration and so forth etc.

The highlight of Lokpal being no minister and no influential bureaucrat would be able to influence the same, the likes of election commission etc.

Furthermore the Lokpal has been loaded with having power over the CBI, where in it can give directions to CBI, barring transfers of CBI officers involved in investigation, search and seizure so
forth so on, lastly it has power to suspend a public servant connected with allegation of corruption.

It is a ray of hope but time would only tell how it would function. Whether it has a chink in the armour and in the light of given corrupt circumstances in the nation would it really stand for
principles. Whether it would fizzle out like other initiatives by the government and CBI.