GST Compendium May 2024

The May edition of GST compendium covers recent developments in indirect and direct taxation. It highlights record-breaking GST collections and ongoing legal issues surrounding taxation of online gaming, corporate guarantee, etc. It also explores court decisions on interest liability, credit note errors, amendment of Bill of Entry along with Ministry directives. The edition concludes with expert views on a key principle in customs law and updates on India's tax treaties and income tax return procedures.

Key highlights of the GST Compendium May 2024:

Important updates/announcements: The online money gaming industry has been in the limelight since the GST Council recommended various changes. The validity of amended provisions has been challenged in different high courts. However, now the Supreme Court has permitted the transfer of 27 writ petitions pending before 9 high courts dealing with the valuation aspects in online gaming to be heard with a SLP in the case of Delta Tech Gaming Limited (Gameskraft).

Key judicial pronouncements: The Patna High Court has recently held that the interest liability arises on delayed return filing, irrespective of payment mode. This decision is expected to increase the litigation and will likely be challenged. In addition, the Punjab and Haryana High Court has stayed the operation of the Board’s Circular which clarified that the provision of corporate guarantee by a company to banks/financial institutions on behalf of its related company is to be treated as a supply of service liable to GST. 

Important developments in direct taxes: The Ministry of Finance has notified the benefit of a lower rate in Article 13 (Royalties and Fees for Technical Services) of the India-Spain DTAA based on its MFN clause. Further, the Government of India has signed the protocol amending the India-Mauritius tax treaty. The CBDT and amended Clause 22 of Form 3CD has notified the ITR Verification and Acknowledgment Form for AY 2024-25.