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July 26, 2020

ICAI paid GST Interest Rs 2.35 Cr and Late Fees Rs 7.58 lakh

by facelesscompliance in Compliance Law

ICAI paid GST Interest Rs 2.35 Cr and Late Fees Rs 7.58 lakh

GST is a complex subject. What can be proof of this statement, than ICAI worlds one of the largest accounting body has taken so much time to interpret applicability of GST on services provided to members, which resulted in ICAI paying Rs. 2.35 cr as interest on late deposit of GST and Rs. 7.58 lakhs as late fee

The ICAI Annual Accounts for FY 2018-19 shows GST payable provision of Rs 13.89 Crore and GST expenses of 20.59 Crore

Further its Notes to Accounts says

The Institute has taken a view that the GST Act is applicable to it. The reconciliation of GST paid, payable and GST input is in progress. An amount of 2,059 Lakhs including ineligible input tax credits and credits attributable to exempted supplies and additional liability and 140 lakhs of interest on delayed payments has been charged off to the Income and Expenditure Account. GST payable at the end of the year of1,389 lakhs has been included under other liabilities (Note No. 8). An amount of Rs 966 lakhs as GST input recoverable has been shown under ‘Advances (Note No. 14)’. The management is of the opinion that no material adjustments are likely to arise when the reconciliation is completed.

The Contingent Liability for FY 2018-19 says

The institute has received a show cause notice from the Additional Director General, Goods and Service Tax Intelligence, that an amount of 7,032 lakhs Is proposed to be demanded from the Institute claiming that annual fee, certificate of practice fee. entrance fee etc.  are liable to service tax The Institutes of the Opinion that no service  lax is payable as mentioned in show cause notice Steps are being taken to send appropriate  response to the show cause notice.

Based on the discussion with the solicitor, expert opinions taken/status of the case, the management believes that it has a strong chance of success in above mentioned cases and hence no provision there against is considered necessary at this point of time

The Institute has taken a view that the GST Act is applicable to it. The reconciliation of GST paid, payable and GST input is in progress An amount of  2,059 Lakhs including ineligible input tax credits and credits attributable to exempted supplies and additional Liability and Rs. 140 lakhs of Interest on delayed payments has been charged off to the Income and Expenditure Account GST payable at the end of the year of Rs. 1,389 lakhs has been included under other liabilities (Note No 8) An amount of Rs 966 lakhs as GST input recoverable has been shown under ‘Advances (Note No. 14) The management is of the opinion that no material adjustments are likely to arise when the reconciliation is completed

The ICAI Annual Accounts for FY 2019-20 shows GST payable provision of Rs 13.89 Crore and GST expenses of 2.29 Crore

Further its Notes to Accounts says

The reconciliation of GST paid, payable and GST input is in progress. An amount of 1,213 Lakhs ( 2,059 Lakhs) including ineligible input tax credit and input credit attributable to exempted supplies, has been charged off to the Income and Expenditure Account as ‘GST Expenses’. GST payable at the end of the year of 784 Lakhs (.1389 Lakhs) has been included under other liabilities (Note No.8) and amount of 1,230 Lakhs ( 966 Lakhs) as GST input credit recoverable has been shown under ‘Loans and Advances (Note No.14)’. The management is of the opinion that no material adjustments are likely to arise when the reconciliation is completed

The GST is new law which is applicable from 1st July 2017. The issue of whether ICAI is liable to pay GST has contradicting views and latter it was settled with department concluding GST is applicable, which led to late fees and interest payable

GST interest & late fees paid from July 2017 to 31 March 2020 in Rs

GST2017-182018-192019-20
Late Fees Rs9,9507,42,2806,340
Interest Rs1,77,81,7306,13,89351,49,173

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