We are an India-based company that was established in 2018. Our monthly rent amounts to approximately 18,000 Rs, totaling 2,16,000 Rs annually, and similarly, our annual electricity bills are around 20,000 Rs. All these payments were made through online transactions. In the fiscal year 2018-19, I encountered an issue with my GST professional's guidance. He categorized these payments as non-composite payments, as my building owner did not have a GST number and her income was below 20 lakh Rs. However, my GST professional changed in 2019, and the new professional did not categorize the building rent and electricity payments as non-composite GST. Subsequently, a GST officer who reviewed my accounts contended that I had incorrectly utilized this amount, and that I owed a total of 2,36,000 Rs for 2018-19. I presented evidence that all transactions were conducted online with no cash involved, which the GST officer accepted. However, he mentioned that I might still be liable for tax and penalties. My current GST professional believes this situation could be attributed to a clerical error, especially given that GST was relatively new in that year. He subsequently corrected the categorization to ensure that the money was not misutilized and that all transactions were transparent and online. I am seeking assistance to avoid being penalized for what appears to be a clerical mistake, especially when all transactions are well-documented and clear.
When no GST has been paid on rent and electricity expenses, question of incorrect utilization does not arise. Electricity is still out of the GST applicability. Need more details to discuss at length
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Owner is liable to pay electricity bill. Electricity bill is considered as reimbursement with the supply of renting services of commercial property which is the main supply and thus liable for gst at the rate at which rental service is liable to gst. Commercial space is the key word here.
Hello,
I understand your concern. If no GST has been paid on your rent and electricity expenses, the question of incorrect utilization under GST should not arise. Electricity expenses are typically out of the GST applicability.
Ensure that your GST categorization for rent and electricity payments is accurate. keep an open line of communication with the GST officer who reviewed your accounts. Explain the nature of these transactions and provide the evidence of online payments.Familiarize yourself with the appeals process in case of any adverse decisions. You have the right to appeal to the Appellate Authority for GST if needed.
Hope you find the information helpful. You are free to contact me for further discussion.If you could spare two minutes of your time to write a review, It would be really grateful and very happy to read it.
Thank you.
Shubham Goyal
In my opinion categoritsation of expenses will not have any impact on triggering tax liability since its mere a matter of disclosure and do not have tax liability on transaction and without any tax liability on actual transaction mere a classification will not trigger any liability under GST Law
So we only need to give relevant justification and documents and there is nothing to worry for penalty
