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: Jolt amid power crisis, inverters to attract dual taxes #finance #StockMarketNEWS #Business New Delhi: If you are looking at buying a power inverter to get a good night’s sleep amidst frequent power

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Posted in: #Business #finance #StockMarketNEWS

Jolt amid power crisis, inverters to attract dual taxes #finance #StockMarketNEWS #Business
New Delhi: If you are looking at buying a power inverter to get a good night’s sleep amidst frequent power cuts, be ready to shell out more as the government has decided on a two-tier taxation on the product.



Accordingly, an inverter system with battery will attract 18 per cent GST towards the power backup machine while another 28 per cent on the battery coming with it. 



The Central Board of Indirect Taxes and Customs (CBIC) has clarified that even if the UPS/ inverter and external battery are sold on the same invoice, their prices are separately known, and they constitute two separately identifiable items.



 Accordingly, GST is payable at 18 per cent on UPS/ inverter (classifiable under heading 8504), and GST is payable at 28 per cent on external batteries (classifiable under heading 8507 for all batteries except lithium-ion battery).



The clarification is a setback to customers as it would add another 5-8 per cent to the overall tax they pay on buying an inverter system. Coming at a time when purchase of this item is being looked at by consumers in wake of a fuel driven power crisis gripping the nation, it is surely going to add up to a series of woes faced by them in the ongoing Covid-19 pandemic. 



At present, inverters sold across the trade are levied 18 per cent GST on a single voucher issued by the seller. But several sellers faced issues with the tax department that found inadequate collection of tax as the two items associated with the product had separate tax rates. 



The CBIC circulars seek to clarify certain ambiguous areas of classification based on industry representations. While some of the clarifications have been welcomed and are likely to settle existing and potential disputes, some of them need further clarity. 



A PwC report said that the clarifications issued in light of conflicting advance rulings also pose an issue as to the binding nature of these circulars vis-a-vis the advance rulings issued to the specific taxpayer.



It is also interesting to note that a few clarifications have recognised the past industry practice and have sought to regularise the same, which would neither result in higher liability for the past, nor result in refund of taxes already paid in excess. 
The post Jolt amid power crisis, inverters to attract dual taxes appeared first on The Navhind Times.


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