No Input Tax Credit of repair, insurance and servicing of motor vehicle w.e.f 1st Feb 2019

Govt issued Notificatoon No 2/2019-CT dated 29.01.2019 whereby specific provisions of CGST (Amendment) Act 2018 made applicable w.e.f 01st Feb 2019 and accordingly Input tax credit of following services relatable to motor vehicle shall not be available:-

(a) general insurance, 

(b) servicing, 

(c). repair and maintenance

*Cases where ITC on  motor vehicle repairing/ insurance services is  available even after amendment*

1. Motor Vehicle for  transportation of persons having approved seating capacity of  more than 13 persons. ( e.g. A Bus)

2. Motor Vehicle for transportation of goods.  ( e.g. A  Truck)

3. Motor Vehicle used for making  following taxable supplies, namely :-

(A) further supply of such motor vehicles ( e.g. In case of a  Car Dealer)

(B) transportation of passengers (( e.g. In case of a Taxi Service Provider)

(C) imparting training on driving such motor vehicles ( e.g. In case of a Driving School)

4. Services received by a taxable person engaged—

(I) in the manufacture of such motor vehicles

(II) in the supply of general insurance services in respect of such motor vehicles insured by him;

*Thus in all other cases apart from above 4 cases (though in 4 cases it was available prior to amendment also), Input Tax Credit in respect of repairs/ insurance of motor vehicle is not available now on and after 01.02.2019*

Consequences of Not Filling of ITR before 31/03/2018

Last date for filling of the  Income Tax returns of Financial Year 2015-16, and 2016-17 was 31st march 2018. Now we will see what may be the consequences if one failed to file ITR before 31st March 2018.

1) PENALTY U/s 271F :- If person fails to file return before end of the relevant assesmnet year then the assessing office may levy penalty of  RS 5000/-

2) Interest u/s 234A :- Interest u/s 234A an simple interest of 1% is levied till the payment of taxes

3)Best judgement assessment u/s 144 : if return is not filled under Sections 139(1), 139(4) or  139 (5) or in response to section 142(1)

4) Prosecution for not filling return of income :  If the return of income is not filled then we may be prosecuted under section 276CC (3 month to 7 years) 

Filing for Cancellation of Registration by Legal Heir in case of Death of Sole Proprietor

Filing for Cancellation of Registration by Legal Heir in case of Death of Sole Proprietor

1. Can a legal heir transfer the ITC to a new entity in case of death of sole proprietor?
Yes, a legal heir can transfer the ITC to a new entity in case of death of sole proprietor. In such a case, legal heir needs to get a new registration under GST and transfer the ITC through FORM GST ITC-02 to this new entity.

2. What is the process to cancel the registration in case of death of sole proprietor? How can a legal heir transfer the ITC to a new entity in case of death of sole proprietor?
1. In case of death of sole proprietor, Legal heir has to visit office of the Proper Officer (Jurisdiction Officer) and submit the Death Certificate of the sole proprietor along with the Succession Certificate before the Proper Officer as documentary evidence.

2. Proper Officer will add legal heir as the authorized signatory on the GST Portal.

In case the successor is minor, he cannot be added as an authorized signatory. In such cases, minor successor needs to be represented by his legal/ natural / testamentary (appointed by will) guardian. The legal guardian needs to be appointed or nominated by the competent authority (Normally District Judge). Legal guardian can take decisions on behalf of minor legal heir/ successor and he can also appoint authorized signatory for this purpose.

3. Legal heir has to apply for new registration.

4. Once the new registration is approved, Legal heir has to apply for the transfer of ITC by filing FORM GST ITC–02 to new entity. However, there is no restriction on filing of ITC-02 pre or post cancellation. It is an independent form and has no relation with cancellation of the sole proprietorship firm.

5. Username and Temporary password reset will be communicated to the e-mail address of the newly added authorized signatory as entered by the Tax Officer in your jurisdiction. Next, the newly added authorized signatory need to login to the GST Portal available athttps://www.gst.gov.in/ and login using theFirst time login link. He/ She will be forced to change your username and password after first time login with the Username and Temporary password that was emailed on the newly added e-mail address of the Primary Authorized Signatory.

6. Legal heir or his/ her authorized signatory has to submit the application for cancellationand select the “Death of Proprietor” as reason of Cancellation of Registration and attach sufficient proof.