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TMI BlogClarification on various issue pertaining to GSTX X X X Extracts X X X X X X X X Extracts X X X X ..... by employer to the employees as per contractual agreement; and iv. utilization of the amounts available in the electronic credit ledger and the electronic cash ledger for payment of tax and other liabilities. 2. In order to clarify the issue and to ensure uniformity in the implementation of the provisions of law across the field formations, in exercise of its powers conferred by section 168 (1) of the Karnataka Goods and Services Tax Act, 2017 (hereinafter referred to as "KGST Act"), hereby clarify the issues as under: S. No. Issue Clarification Refund claimed by the recipients of supplies regarded as deemed export 1. Whether the Input Tax Credit (ITC) availed by the recipient of deemed export supply for claiming refund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emed export supply for claiming refund of tax paid on supplies regarded as deemed exports is not to be included in the "Net ITC" for computation of refund of unutilised ITC on account of zero-rated supplies under rule 89(4) or on account of inverted rated structure under rule 89(5) of the KGST Rules, 2017. Clarification on various issues of section 17(5) of the KGST Act 3. Whether the proviso at the end of clause (b) of sub-section (5) of section 17 of the KGST Act is applicable to the entire clause (b) or the said proviso is applicable only to sub-clause (iii) of clause (b)? 1. Vide the Central Goods and Service Tax (Amendment Act) 2018, clause (b) of sub-section (5) of section 17 of the KGST Act was substituted with effect from 01.02. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces by way of any type of leasing is barred under the said provisions? 1. Sub-clause (i) of clause (b) of sub- section (5) of section 17 of the KGST Act provides that ITC shall not be available in respect of following supply of goods or services or both- "(i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, leasing, renting or hiring of motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) except when used for the purposes specified therein, life insurance and health insurance: Provided that the input tax credit in respect of such goods or services or both shall be available where an inward supply of such goods or services or both is used by a registered person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al agreement entered into between the employer and the employee, will not be subjected to GST when the same are provided in terms of the contract between the employer and employee. Utilisation of the amounts available in the electronic credit ledger and the electronic cash ledger for payment of tax and other liabilities 6. Whether the amount available in the electronic credit ledger can be used for making payment of any tax under the GST Laws? 1. In terms of sub - section (4) of section 49 of KGST Act, the amount available in the electronic credit ledger may be used for making any payment towards output tax under the KGST Act or the Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as "IGST Act"), subject to the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be used for making payment of output tax only under the KGST Act or the IGST Act. It cannot be used for making payment of any interest, penalty, fees or any other amount payable under the said acts. Similarly, electronic credit ledger cannot be used for payment of erroneous refund sanctioned to the taxpayer, where such refund was sanctioned in cash. 8. Whether the amount available in the electronic cash ledger can be used for making payment of any liability under the GST Laws? As per sub - section (3) of section 49 of the KGST Act, the amount available in the electronic cash ledger may be used for making any payment towards tax, interest, penalty, fees or any other amount payable under the provisions of the GST Laws. 3. Difficulty, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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