
No GST on CXO salaries: Government set to clarify
The government is looking to clarify that goods and services tax (GST) should not be applicable on salaries of chief executives sitting in head offices, two people in the know said.
This comes after the tax department started raising queries on how companies have dealt with this issue. ET had first written on November 14 that some of the top companies headquartered in Pune, Mumbai and New Delhi have started receiving queries from the tax department on cross-charging of CEO and CFO salaries.
According to a person close to the development the Central Board of Excise and Customs (CBEC), is set to clarify that common function like Human Resources should be out of the GST gamut.
“The intention of the GST law was never to tax salary and any other interpretation should be avoided as this would lead to prolonged litigation. Salary cannot be under the GST net and there is an urgent need for a clarification around this,” said Rohit Jain, partner, ELP, a law firm.
The tax department has started questioning top companies and banks if they were passing on some of the common costs like salaries of chief executives to their branch offices.
The department wants companies to proportionately distribute common costs from head office to branch offices and treat this as a supply. Once this is treated as a supply, 10% of it has to be added to the cost and 18% GST could be levied on the total amount.
Industry trackers say that ideally this would be a revenue neutral transaction but still impact the cash flows of the company.
Source: Economic-Times
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Source: Business-Standard.

But several indirect tax experts find that they still haven’t been approved as GST practitioners, despite having applied for registration months ago via the GST portal.



With the deadline for filing Goods and Services Tax (GST) returns for August coming to an end in less than 72 hours, only 6.9 lakh taxpayers have filed their GSTR-3B- a short summary return, at the end of Monday, said sources familiar with the development. The government expects tax returns from about 64 lakh tax payers for the month of August. According to the data accessed by The Indian Express, about 4.99 lakh tax payers had filed 3B returns for August till September 17. The deadline for filing GSTR-3B will end on September 20.

The Council cuts rate on job works for the textile sector to 5% from 18%, approves e-way bill without revising a threshold of Rs 50,000 and allows setting up of screening panels under the anti-profiteering measure. Rates on inputs specific to tractors cut to 18% from 28%, on government works contract cut to 12% from 18%. Rates on other services — including rent-a-car, job work in newspaper printing, entry to planetariums — reduced. Council recommends the Centre come out with an amendment in the compensation Bill to increase the ceiling on cess on luxury cars from 15% to 25%.