Who filed the PIL?
CA Pradeep Goyal filed a petition arguing on the erroneous data collected from overseas online service providers. He said that the B2C transaction was submitted, while the B2B transaction was absent. Sonia Mathur, a senior advocate spat an argument in the court on Wednesday with the three-judge bench led by CJI SA Bobde. Notices were also sent to the CBDT, the GST Council, and the principal commissioner of direct tax seeking their opinions.
What does the PIL contain?
It propounded the glaring loopholes in the GST scheme. It accentuated the tax to be collected from foreign companies in B2B transactions by way of IGST for Online Information and Database Access and Retrieval (OIDAR) services. It cites that the government has no mechanism to track GST paid on OIDAR services used by non-taxable online recipients on a reverse charge basis. Such figures are not reported in the GST returns as they have no permanent establishments in India and maintain their accounts in foreign jurisdictions and are audited in those jurisdictions.
It read: the government of India has no control or access to their accounting records to verify compliance under GST law.
TPT Policy Advocacy & Recommendations
- The government should take learnings from France, Germany, New Zealand, and Spain. The EU soviet imposed tax on the tech giants on the foundation of the companies ‘tax residence’. No breach of service and rate hike were the principles of the enactment.
- It is the responsibility of the government to avoid companies that would become private states, have all the privileges of the state without having the constraints and the surveillance. Levying GST on OTTs and e-commerce giants will elude the transfer of profits to countries with lower taxation in turn scaling India’s economy.