18% GST on food-drinks within or away from hotel: Maharashtra Authority
In a significant order, the Maharashtra Authority for Advance Ruling (MAAR) rejected a plea by a five-star hotel contending that food and beverages served in a restaurant away from the hotel premises should attract 5 per cent GST instead of 18 per cent.
 
A bench consisting of P. Vinitha Sekhar, Additional Commissioner of Central Tax and A. A. Chahure, Joint Commissioner of State Tax have ruled with reasons that the applicant J. W. Marriott Hotel here would have to pay 18 per cent GST.
 
M/s. Chalet Hotel Ltd, which runs the J. W. Marriott Hotel near Chhatrapati Shivaji Maharaj International Airport, said it was planning to launch a business of providing food-beverages for consumption at 'The Cheaters' which is located in The Orb Mall nearby.
 
Both the hotel and the retail arcade (mall) are owned by M/s. Chalet Hotels Ltd., and are interconnected by a private passageway, and there is no need to exit the premises for access since both are provided with a common entry gate.
 
The company said that there are no residential or lodging facilities in the mall and all such services (residential or lodging) are provided only in the J. W. Marriot Hotel, where the declared tariff is Rs 7,500 and above per room daily.
 
The company questioned the applicability of the amended Section 7 of CGST Act, 2017, since their restaurant (The Cheaters) is located in the mall and not in the hotel premises.
 
It submitted that food-beverages provided for consumption in the restaurant premises are a 'supply' which would attract 18 percent GST if the restaurant is located on the hotel premises.
 
The company contended that since the restaurant will be located in the mall which does not offer residence or lodging services and not in the hotel premises, a GST of only 5 per cent would be applicable.
 
Challenging this, the CGST representatives said that 'The Cheaters' is owned and operated in The Orb mall by M/s. Chalet Hotels Ltd., which also owns and operates the J. W. Marriott Hotel on the same plot, there is a common entry gate and both premises (arcade and hotel) are connected by a private passage and the restaurant's services are primarily intended for the guests of the hotel.
 
After listening to both sides, the MAAR bench ordered last month that the mall restaurant is located in the same premises as the J. W. Marriot Hotel, owned by the same company, and accordingly, the 18 percent GST would be applicable to it as per the law.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    Rs2,000 cr unaccounted income unearthed in Telangana, AP raids
    Unaccounted income of more than Rs 2,000 crore was detected in Telangana and Andhra Pradesh during the searches conducted by the Income Tax Department last week, officials said on Thursday.
     
    The IT sleuths carried out search and seizure at more than 40 premises in Hyderabad, Vijayawada, Kadapa, Vishakhapatnam, Delhi and Pune on February 6. The search action included three prominent infrastructure groups based in Andhra Pradesh and Telangana, said a spokesperson of the Central Board of Direct Taxes (CBDT).
     
    Investigations led to busting of a major racket of cash generation through bogus sub-contractors, over-invoicing and bogus billing. Several incriminating documents and loose papers were found and seized during the search, apart from emails, WhatsApp messages and unexplained foreign transactions unearthed during the search, said an official release.
     
    Search operation was also carried out on close associates including the ex-personal secretary of a prominent person and incriminating evidence seized. The search operations revealed that infrastructure companies had subcontracted work to several non-existent/bogus entities, the official said.
     
    Preliminary estimates suggest siphoning of more than Rs 2,000 crore through transactions that were layered through multiple entities with the last in the chain being small entities with turnover less than Rs 2 crore to avoid maintenance of books of accounts and tax audits etc. Such entities were either not found at their registered address or were found to be shell entities. Several such sub-contractors were controlled by the principal contractors with all their ITR filings and other compliances being done from the IP addresses of main corporate office.
     
    FDI receipts of several crores in the group companies of one of the Infrastructure companies is suspected to be round-tripping of its unaccounted funds. Unexplained cash of Rs 85 lakh and jewellery worth Rs 71 lakh have been seized. More than 25 bank lockers were restrained, the official added.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    1 week ago

    No mention of companies names or promoters\'.

    Centre to raise Rs 46Kcrore as interest on late filing of GST
    The government has discovered a new revenue stream to make up for the shortfall in GST collection and is looking to collect Rs 46,000 crore as interest on late payment of tax.
     
    Tax experts disputed the number saying government had promised to hand-hold the taxpayers at the time of migration to the new indirect tax regime by waiving off interest and penalties for filing their tax returns. Further, it has now resorted to extremely harsh measures to boost its tax kitty.
     
    Moreover, the levying of interest would trigger huge litigations with taxpayers challenging the demand.
     
    A.K. Pandey, Special Secretary and Member, Central Board of Indirect Taxes and Customs in a letter to all the principal chief commissioners and central tax commissioners has said that the law cast liability on the taxpayers to assess and pay the interest on delayed payment of tax.
     
    "Further, interest payable on such delayed payment of tax can be recovered under the provisions of section 79 of the CGST Act read with section 75 (12) which provides for various methods by which the proper officer shall proceed to recover any amount which is payable to the government," Pandey said in his letter seen by IANS.
     
    As per the letter, the Principal ADG (systems) on Feb 1, 2020 generated and shared the GSTIN wise list of the registered persons who have not discharged the due interest liability while filing their GSTR 3B returns belatedly. On perusal of said report, it was observed that the interest amounting to Rs 45,996 crores remains unpaid to the government on account of delayed payment of tax.
     
    The report has been shared on SFTP portal for initiating the process of recovery of such unpaid interest as per the provisions of section 79 read with section 75 (12) of the CGST Act.
     
    But, in the meantime, doubts have been raised by the field formations whether the interest has to be paid on the gross tax liability or on the net cash liability.
     
    "In this regard, the provisions of Section of Section 50 are very clear that interest liability is required to be paid on the tax liability that is paid belatedly, either through cash or through utilization of input tax credit (ITC). In other words, interest is required to be paid on total tax amount of tax liability as shown in Form GSTR 3B," the CBIC letter said.
     
    "In view of the above, you are requested to look into the issue personally and to urge field formations under your jurisdiction for making recovery of applicable interest from identified taxpayers and to furnish weekly report of GSTIN wise recovery of interest made in this regard," it directed.
     
    Rajat Mohan, Senior Partner, AMRG & Associates said that that the move is against the taxpayers who had been promised hand-holding and support at the time of roll-out of the GST.
     
    "It is demotivating for the taxpayers. If at all, the government wants to levy interest on delayed payment of tax it should be on net tax liability and not the gross tax liability," he said.
     
    A senior state GST officer said that the letter had been received but expressed reservations over the way the amount of interest on late payment of tax has been arrived.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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