CA. Mohit Kumar’s Post

❓ Can Airlines rightfully retain taxes, such as GST, when a passenger misses their flight? 👉 This very question will now be investigated by the Directorate General of Goods and Services Tax Intelligence (DGGI). 👉 The DGGI has initiated investigations into airlines retaining taxes collected from customers in cases of no-show by passengers. 👉 The sale of airline tickets is subject to GST, with economy class tickets taxed at 5% and business class tickets at 12%. 👉 However, concerns have been raised regarding the taxation of consideration collected from passengers who do not avail of the airline service due to a no-show scenario. 👉 The debate continues on whether airlines should refund GST collected from no-show passengers, sparking discussions on the appropriate tax rate for consideration retained in such cases. More info in the link below! #DGGI #GST #noshow #passengers #Indianairlines #taxes #investigation #taxrefund

India may consider exempting services rendered between the head offices and local branches of foreign airline operators from the goods and services tax (GST).   In recent months, foreign airlines having offices in India have been issued GST notifications for failing to pay taxes on services imported by Indian entities from their headquarters, according to a report in the Economic Times.   The issue has been brought before the fitment committee within the GST Council, and there is a growing inclination towards granting tax exemption and providing relief to airlines. A definitive decision regarding this clarification will be made following the fitment committee’s thorough examination of the issue, the report said.   The report quoted a senior official as saying, “There is a grey area on the services from head office to branch office which is unique to both airlines industry and the shipping industry as it is difficult to determine place of service in case of maintenance and rental from one office to other.”   Last year, notices were sent by the Directorate General of GST Intelligence (DGGI) to 12 foreign airlines regarding the imposition of GST on services imported by Indian branch offices.   The headquarters of airlines or shipping companies cover expenses such as maintenance, crew payments, and rental costs. Tax authorities said these services were provided by the headquarters to the local entity, constituting transactions between legal entities and subject to taxation in India.   Foreign airlines have informed the government, including the Ministry of Finance, regarding the matter, contending that the service location encompasses both the head office and branch office. They said airlines should only be responsible for taxes applicable within India. For instance, they cited payments for hotel accommodation used by Indian staff outside of India. Similarly, certain shipping companies have also been served with comparable notices, the report said.   Following the summoning of airline management by the DGGI, embassies of the respective countries have engaged in discussions on the issue. Reports said the DGGI has instructed its officials to refrain from any coercive actions.   The report quoted the senior official as saying, “It is (whether the service is taxable) required to be determined on the basis of each transaction, which can be a complicated process, especially for these two sectors.”   https://lnkd.in/g4Sad8Dn

Colombia Three months postponement of the mandatory issuance of new electronic document types was announced by the National Tax and Customs Directorate (DIAN) with the publication of Resolution Nr. 000008 from 31 January 2024. The deadlines for implementation are between 1 May and 1 November, according to the classification of the taxpayer or the type of equivalent document. 1 May 2024: For the generation of the new electronic POS for Large Taxpayers who are electronic billers and issue cash register machine tickets with a POS system to support sales operation 1 June 2024: For Income Tax filers who are not Large Taxpayers 1 July 2024: For non-Income Tax filers and those who do not have any of the qualifications of the previous groups Between 1 August 2024 and 1 November 2024: The 11 documents that the DIAN considers as equivalent to the invoice * 1 August 2024 – for passenger transport tickets * 1 September 2024 – for passenger air transportation tickets * 1 October 2024 – for documents issued for the collection of tolls * 1 November 2024 – for movie tickets and entrance tickets to public performances (performing arts, and other public shows).

Under the new scope, logistics service providers such as freight forwarders, shipping, aviation, or cold chain services are no longer required to incur service tax for delivery, distribution or transporting services, which were previously listed as a separate taxable item. To further preserve the country’s competitiveness, the government will also not impose service tax in free zones. Additionally, all logistics services provided in or between special and designated areas are not subject to service tax, except for customs agent services which remain taxable. The exemptions also apply to maintenance services for repairs of residential buildings; sinking funds and maintenance services related to land or buildings for residential purposes provided by developers, joint management bodies, or resident associations

𝗩𝗔𝗧 & 𝗜𝗡𝗧𝗥𝗔-𝗘𝗨 𝗧𝗥𝗔𝗗𝗘 | The Court of Justice of the European Union is asked whether the VAT exemption / 0% rate for an intra-EU supply can be denied due to formal defects in one of the documents required under Article 45a(1) VIR. Under Article 138 VD, applying the VAT exemption for intra-EU supplies requires proof of cross-border movement to another Member State. As part of the "2020 Quick Fixes", Article 45a VIR introduced a rebuttable presumption that the intra-EU transport condition is fulfilled if specific evidence is available. In this case, Article 45a(1)(b) VIR applies, as the goods were picked up by the customer rather than shipped by the supplier. Although the supplier had a written statement from the customer (Article 45a(1)(b)(i) VIR), the signed CMR document (Art. 45(3)(a) VIR) contained a formal defect. Despite this defect, there is no question about the intra-EU cross-border movement of the goods. However, the tax authority denied the VAT exemption, arguing that the conditions for the rebuttable 'proof of transport' presumption were not met. The Croatian referring court asks whether this denial is permissible under Union law, given that the substantive requirements for the VAT exemption are undisputedly satisfied. The Court has previously ruled that failing to meet a formal requirement can only result in loss of entitlement to a VAT exemption in two situations (cf. Euro Tyre, C-21/16, para 42): 1)     where a taxable person has intentionally participated in tax evasion; and 2)     where non-compliance with a formal requirement prevents conclusive proof that substantive conditions are met. Nothing suggests that either situation applies to this case. It’s fairly predictable how the Court might respond, as it’s hard to imagine this approach by the Croatian authorities gaining the Court’s approval. Article 45a VIR serves as a safe harbour provision rather than a minimum evidentiary threshold. #VAT #trade #tax

In the case of Hapag Llyod Kenya (Appellant) Vs Commissioner of domestic taxes (Respondent), the primary issue was whether the Appellant was entitled to claim an input VAT refund for zero-rated exported services. The Appellant argued it provided international shipping services under an Agency Agreement with Hapag Lloyd AG, asserting its independence and eligibility for VAT refunds. Relying on precedents and contractual terms, the Appellant contested the Respondent's rejection of its VAT claim. The Respondent, however, argued the Appellant was an agent and not entitled to claim input VAT, as the cost was borne by the principal. The Tribunal reviewed legal provisions, precedents, and the Agency Agreement and concluded that the Appellant acted as an agent, with costs—including VAT—borne by the principal. As such, the VAT refund claim rightfully belonged to Hapag Lloyd AG. IMO, the tribunal's point is valid and raises an important nuance in agency relationships and VAT compliance. While the Tribunal emphasized that VAT costs are borne by the principal in this case, it appears they did not fully consider whether the Appellant incurred separate costs directly related to its own income (i.e the 3% markup), such as audit fees, rent, or other overhead expenses. These costs, arguably distinct from those incurred on behalf of the principal, could potentially justify an input VAT claim by the Appellant.

Passenger transport service supplier is not eligible for the ITC on Mercedes Benz, because at the time of purchases, supplier has opted for concessional tax rate without ITC.Telangana AAR. Noori Travels-Telangana AAR. Ø The applicant Noori travels, registered with Telangana State, provides the services of Transport of passenger services by any Motor vehicle designed to carry passengers. Applicant opted for 5% GST without ITC, where the cost of fuel is included in the consideration charged from the service recipient Ø Supplier opted for higher rate of GST @ 12% with ITC, from Aug 2023, whereas supplier has purchased Mercedes benz and Invoice issued by supplier with date of Aug 2023, but dealer of vehicle reported the same in GSTR 2B of July 2023. Ø Considering the situation, Application is made to availability of ITC. Authority’s Finding and conclusion. Ø The applicant by opting to pay tax at a lower rate by not availing input tax credit on the goods and services used in his supplies has forfeited his right to avail input tax credit on the goods and services procured by him during the earlier period. Ø The car purchased by him was reported by the supplier in his GSTR- 01 in the month of July under section 37 of the CGST Act and the applicant was communicated this invoice in his GSTR 2B return. Ø The statutory returns filed on the common portal stand on a higher pedestal as evidence when compared to the physical invoice adduced by the applicant. Ø Therefore, it is concluded that the supply of car was made in the month of July 2023 when the applicant was still availing the lower rate of tax on his supplies by forfeiting is right to claim input tax credit on purchase of goods and services and hence the ITC pertaining to the purchase of car is not available to the applicant.

📝 VAT Refund for British Entities The VAT refund for British entities is regulated by an agreement between Italy and the United Kingdom, which came into effect on February 7, 2024. This agreement establishes the mutual recognition of VAT refunds between the two countries. 🇬🇧➡️🇮🇹 As a result, entities based in the United Kingdom can submit a VAT refund claim in Italy if the conditions set forth in Art. 38-ter of Presidential Decree 633/72 are met. This means that for purchases of goods or services made by British operators in Italy, it is possible to request a refund of the VAT paid, following the procedures established by the agreement. 📅 Important Deadline VAT refund claims must be submitted by September 30 of the year following the reference period. For the year 2023, the deadline is September 30, 2024. 🌍 Northern Ireland For transactions involving goods between Northern Ireland and Italy, Union law continues to apply. In these cases, the refund procedure through the "portal" remains available, as it is for entities within the EU. For services, however, refunds follow the procedures for non-EU entities. 🔍 Conditions for the VAT Refund Taxable persons without a permanent establishment in Italy can request a refund of VAT paid within the country, provided the following conditions are met: ✅ No taxable transactions were conducted in Italy during the refund period, except for transactions subject to VAT under the reverse charge mechanism, transport services, related exempt operations (Art. 9 of Presidential Decree 633/72), and transactions carried out pursuant to Art. 74-septies of Presidential Decree 633/72. ✅ The purchases or imports of goods and/or services for which the VAT refund is requested must be related to the taxable person’s business activity. ✅ The VAT requested for a refund must be deductible in Italy, as per the domestic VAT rules. It is no longer necessary to appoint a tax representative or register directly for VAT purposes in Italy. 💼 Need assistance? Our team of tax experts is here to help. Contact us! https://lnkd.in/d-myeEPY #tax #vat #refund

The International Fuel Tax Agreement (IFTA) What is IFTA? IFTA is designed to standardize the reporting and payment of fuel taxes by commercial motor carriers traveling through multiple jurisdictions. It was established to reduce the burden of complying with the various fuel tax laws of each state and province. Purpose of IFTA 1. Simplified Fuel Reporting: Before IFTA, carriers had to obtain fuel permits for each state or province they operated in and report fuel taxes to each jurisdiction individually. IFTA consolidates this process, allowing carriers to file a single quarterly fuel tax report. 2. Uniform Administration: IFTA provides a uniform administration system for the calculation and payment of fuel taxes, which helps in maintaining consistency across member jurisdictions. Benefits of IFTA 1. Reduced Paperwork: Carriers can use a single IFTA license and set of decals for all member jurisdictions, minimizing the need for multiple fuel permits. 2. Centralized Reporting: Carriers file one fuel tax report quarterly to their base jurisdiction, which then distributes the appropriate amounts of fuel taxes to the other jurisdictions where the carrier operated. 3. Fair Distribution of Taxes: IFTA ensures that fuel taxes are fairly distributed based on where the fuel was used, rather than where it was purchased. How IFTA Works 1. IFTA License and Decals: Carriers obtain an IFTA license and decals from their base jurisdiction, which is the state or province where the carrier is registered and maintains operational control. 2. Quarterly Tax Reports: Carriers track fuel purchases and miles travelled in each jurisdiction. They file a quarterly fuel tax report with their base jurisdiction, detailing the total miles travelled and total gallons of fuel purchased. 3. Tax Calculation: The base jurisdiction calculates the fuel taxes owed to each jurisdiction based on the carrier's mileage and fuel consumption. This involves applying the appropriate tax rates for each jurisdiction. 4. Tax Payments: Carriers pay the total fuel tax amount to their base jurisdiction, which then distributes the taxes to the appropriate jurisdictions. To read detailed article, please visit the link - https://lnkd.in/gJvbmbtd #IRS #truckingbusiness #trucker #truckdriver #TruckingCompanies #DepartmentofTransportation #BusinessGrowth #trendingpost #trucks #Trucking #business #usa #article #paperwork #technology #future #industry #BusinessOpportunity #employment #truckingbytes #california #AI

Do you want to recover the foreign VAT incurred in EU countries where you are not registered for VAT? Deadline is approaching :30th September Company established in Ireland can recover VAT paid in other EU countries via Directive 2008/09/EC formerly known as 8th directive Procedure: Application must be submitted electronically through the portal of the tax authorities in the country in which claim established ( www.ros.ie for Ireland established claimants) To file a refund application, the claimant must be registered for Irish and be registered to use the Ros system. Time limits: Refund period will be based on a calendar year. Application must be submitted by 30th September in the calendar year directly following the calendar year in which the expenditure was incurred. Non-refundable VAT: VAT generally cannot be recovered on * Petrol, although watt on diesel is recoverable: *Food, drink, hotels and accommodation or other personal services (however, VAT on accommodation is recoverable if certain conditions are satisfied) *Entertainment , expenses, and *the purchase, higher or importation of passenger motor vehicles bracket open watt on motor vehicle used for certain purposes is recoverable Irish Fiscal representative is not necessary to be appointed to claim a VAT refund based on directive 2008/09/EC #VAT #EUVAT #ForeignVAT