GST Daily
Dear Reader,
Welcome to Taxmann.com | Newsletter – Reporting the Facts with Taxmann's Analysis. Today's Edition Brings to You Comprehensive Coverage of GST Case Laws | Statutory Updates | Analysis.
SCN quashed for wrong availment of ITC as assessee filed form manually due to dysfunctional portal
The petitioner was engaged in providing internet services. It entered into Business Transfer Agreement (BTA) with another company. It was unable to file Form GST ITC-02 on department’s common portal due to non-availability of form. It filed the form manually. The department issued SCN proposing to recover ITC with interest and penalty on the ground of non-filing of Form GST ITC-02 electronically. It filed writ petition against the SCN and contended that such notice was wholly without jurisdiction.
The Honorable High Court noted that Form GST ITC-02 was not available for filing electronically during the relevant period and therefore, the petitioner filed aforesaid form manually. The Court further noted that technicalities created by department should not be put forth to defeat statutory rights and entitlement of assessee. Therefore, it was held that the impugned SCN ought not to have been issued to petitioner and the SCN was quashed.
Global IDT Insights: ECJ Rules on VAT Applicability for Terminated Service Contracts & Others
Global IDT Insights provides a weekly snippet of tax news specifically related to Indirect Taxes from around the globe.
1. European Court of Justice (ECJ) rules on VAT applicability for terminated service contracts
The case involves a contractual dispute between two Austrian entities, 'RHTB' (the contractor) and 'Parkring' (the customer). In March 2018, these two parties entered into a contract for services related to a building project, with the total contract value set at €5,377,399.69, including VAT. While the project commenced as agreed, in June 2018, the customer unilaterally terminated the contract without justification, despite the contractor being ready and willing to fulfil its obligations. Following the termination, the contractor sought payment for the contractually agreed remuneration, minus costs saved due to the termination, including VAT. The customer contended that no VAT was due on the claimed amount as the services had not been fully performed. The Austrian courts reached differing conclusions, leading the Oberster Gerichtshof (Supreme Court of Austria) to refer the matter to the European Court of Justice (ECJ) for a preliminary ruling.
The legal question referred to the ECJ was whether Article 2(1)(c) of Council Directive 2006/112/EC, read together with Article 73, means that the amount owed under a service contract, when the customer ends the contract early after the services have started but not finished, should be considered payment for services and therefore subject to VAT. The key issue was whether this amount qualifies as payment for services under the VAT Directive, even though the services were not fully completed because the customer chooses to cancel the contract.
The ECJ on interpretation of Article 2(1)(c) of Council Directive 2006/112/EC ruled that if a valid service contract is terminated by the customer, the amount still owed under the contract must be treated as payment for the service. This applies when the supplier had already started the work and was willing to complete it. The owed amount is considered as payment for a service provided or to be provided and is subject to VAT.
Source: ECJ Ruling
2. United Kingdom to Introduce 20% VAT on private school fees from January 2025
The United Kingdom (UK) has implemented a notable shift in its VAT policy by introducing a 20% VAT on private education and boarding school fees, set to take effect from January 2025.
Under the previous tax system, private educational institutions, including independent schools and private boarding schools, were exempt from VAT. However, this exemption will be lifted, and these institutions will now be subject to the standard VAT rate of 20%.
This marks a significant departure from the previous tax framework, where school fees were not subject to VAT, even though VAT applied to many other services and goods in the country.
The new VAT charge will impact private educational institutions, including independent and private boarding schools, making this the first time such fees will be taxed in the UK.
Source: Department Update
3. UAE announces E-invoicing rollout for B2B and B2G transactions
The UAE Ministry of Finance has announced the implementation of an e-invoicing system which is set to commence from July 2026. This initiative aims to standardize and automate invoicing processes, enhancing real-time processing, security and tax compliance.
The implementation will initially cover Business-to-Business (B2B) and Business-to-Government (B2G) transactions, with plans for future expansion to include Business-to-Consumer (B2C) transactions in subsequent phases.
The UAE Ministry of Finance has outlined several benefits of E-Invoicing for the business community which are given as below:
Source: Update by Ministry of Finance
That's it from us for today!
We're keen on enhancing Your Taxmann.com | Newsletter Experience and would greatly value your input. Your feedback is pivotal in guiding our improvements. Could you spare a few moments to share your thoughts in the comments on how we might better serve your needs?
Taxmann.com | Research | GST – Largest Database Redefined
About:
The GST repository features an AI-based search engine designed to recreate and simplify the way you conduct your research—a combination of features that are impeccably specified and tied by a common thread.
? 75,000+ Case Laws with Integration and Headnotes/Case-Digest
? Authentic, Amended & Updated 35+Acts/40+Rules with Annotations & Integration
? 345+ Forms Updated in real-time
? 27,800+ Circulars & Notifications
? 'Notifications in Force' tool for a list of currently effective Notifications
? 'Historical Tariff' tool for checking rates at different periods
? Expert Discourse Hub Featuring 10+ Commentaries and 3200+ Articles
? 29,950+ Answers to Your Practical GST Queries from V.S. Datey et al.
? Real-Time Intelligence Feed that Reports from 1,000+ Authentic Sources
Subscribe Now and Transform the Way You Work! https://taxmann.social/BuGXf