CARRA Associates

28/09/2026

"My container hasn't even reached Chennai and a buyer wants it. How much GST do I charge?"

Zero. Legally. As long as you sell before one moment.

A high sea sale is when you transfer imported goods to a buyer by endorsing the bill of lading, after the ship leaves the foreign port and before the goods are cleared for home consumption in India. The GST rule behind it, CGST Act Schedule III para 8(b), never mentions the sea. It checks timing and paperwork, not nautical miles.

For the seller: it is neither a supply of goods nor a supply of services. No GST on your invoice, and no ITC reversal, because the s.17(3) Explanation keeps 8(b) out of "exempt supply".

For the buyer: they become the importer. The bill of entry is filed in their name, under their IEC, and they pay customs duty and IGST at the port. IGST is charged once, and every high sea markup is counted in its value (Circular 33/2017-Customs).

Where to report it: the GSTR-9 instructions say it in writing. The value of "no supply" goes in Table 5F, non GST supply. Not exempt, not nil rated; those are still supplies, and this isn't one. GSTR-1 and GSTR-3B have no row named "no supply" and practice varies, so settle one treatment with your CA and keep it consistent with the annual return.

The trap: sell after the goods are cleared and it's an ordinary sale inside India, with full GST. Date the high sea sale agreement and the endorsed bill of lading before clearance.

Got a shipment on the water right now? DM IMPORT and we'll check the deal while it's still at sea.

The client, the route and the goods in this reel are illustrative.

18/09/2026

From 15 October 2026, UPI stops being free for merchants.

The headline: 0.4 percent on merchant payments above Rs 2,000, and the fee stops at Rs 300 once a payment reaches Rs 75,000. At Rs 2,000 or below it is nil, and that covers more than 95 percent of what most shops take. Your customer pays none of it, and person to person transfers stay free.

The part being reported wrongly: everyone is saying small merchants under Rs 1 lakh a month are exempt. That is not the test. NPCI's own answer is that it is decided by how your merchant account is categorised, not by how much you collect.

Which means both of these are true:

A shop onboarded as a regular merchant pays 0.4 percent on sales above Rs 2,000 even if it collects only Rs 8,000 a month. If you took a soundbox, a card machine or a payment gateway, this is probably you.

A small vendor in the P2PM category, taking a QR straight into their own account, pays nothing at any ticket size, even on a Rs 50,000 sale, while receipts stay at or below Rs 1 lakh a month. That status only changes after three consecutive months above it.

Three more things worth knowing:

Railways, telecom, insurance, fuel and utilities such as electricity, water and piped gas are on a flat Rs 5 above Rs 2,000, not 0.4 percent. NPCI's list is open ended.

Mutual funds, shares and broking are on 0.02 percent, capped at Rs 300.

A RuPay credit card or a credit line on UPI sits outside this framework and follows credit card pricing, which NPCI puts at 1.5 to 2.5 percent. AutoPay mandates carry no prescribed fee.

One rule that will catch people out: an onboarded merchant cannot pass this charge on to the customer. Keep showing your listed price.

Before 15 October: ask your bank or aggregator in writing which category your account sits in, and what they will actually bill you. NPCI set what a merchant pays its bank. It did not reprice your gateway contract.

Source: NPCI, Merchant Discount Rate on Select UPI (P2M) Transactions, FAQ dated 15 September 2026.

DM UPI and we will tell you how to check your category.

14/09/2026

May this Ganesh Chaturthi bring your home and your work more prosperity and blessings.

His name, written in eight Indian languages: Kannada, Hindi, Tamil, Telugu, Bengali, Malayalam, Gujarati and English.

From all of us at CARRA Associates LLP, Bengaluru.

Questions on your books, your GST or your next filing? Send us a DM.

08/09/2026

He built a mall in Bhubaneswar to let out, not to sell. Cement, steel, aluminium, architects, consultants. Rs 34,40,18,028 of GST on the way in. The department said section 17(5)(d) blocked every rupee of it.

On 3 October 2024 the Supreme Court rejected that reading. It held that "plant or machinery" in clause (d) is not the defined "plant and machinery" of clause (c), and that a building essential for carrying out the activity of supplying services can itself be a plant (2024 INSC 756, Oka and Karol JJ). He proved the department wrong.

The order was narrower than the headlines. The appeals were partly allowed, the 2019 Orissa High Court judgment was set aside, and the matter went back for the functionality test on facts. No court has since awarded the credit.

Then section 124 of the Finance Act 2025 substituted "plant and machinery" into clause (d), in force 1 October 2025 and deemed effective from 1 July 2017, with an Explanation that applies notwithstanding any judgment, decree or order of any court. For a building you let out, that route is shut.

Two things survived. Genuine plant and machinery, with its foundations and structural supports, was always creditable and still is. And the words "on his own account" were never amended. On 28 August 2026 the Madras High Court set aside assessment orders because the officer rejected a construction and leasing claim without applying Safari Retreats at all, and remanded for fresh consideration (ESNP Property Builder and Developers, W.P. 21432, 21433 and 22392 of 2026). That is an argument worth making, not an entitlement. No advance ruling has accepted it yet.

DM PLANT and I will walk you through it.

04/09/2026

Your supplier filed his GSTR-1. The invoice sat in your 2B. You paid him, price plus tax, through the bank. You claimed exactly what 2B showed.

Then the notice came.

Because in his own GSTR-3B he cut the taxable value, cut the tax, and never paid the difference. You could not have seen it. A supplier's 3B is his own.

Two High Courts have said a supplier's shortfall is not, by itself, a reason to bill the buyer. Madras in 2021, D.Y. Beathel Enterprises, W.P.(MD) 2127 of 2021, 24 February 2021. Calcutta in 2023, Suncraft Energy, MAT 1218 of 2023, 2 August 2023. Both sent the department to the supplier first. Neither binds outside its own state.

The statute already has a tool for it. Since 1 January 2022, tax declared in GSTR-1 but left out of GSTR-3B is the supplier's self assessed tax, recoverable from him under section 79 (Explanation to section 75(12)), after the intimation under Rule 88C.

Now the honest part. This does not make your credit safe. Section 16(2)(c) still says the tax must actually reach the government, and on 24 July 2026 the Supreme Court in Bhandari Scrap Traders upheld it and declined to read it down for a bona fide buyer. If he never pays, you may have to reverse, and you can re avail once he does, under section 41(2). Your money claim is against him.

So this is a defence, not a licence. A High Court view, not settled law. And only if you can prove the deal was real.

Start with four. The invoice. The e-way bill and transport papers. Payment through the bank. And your 2B for that month, with his invoice in it. That is the floor, not the ceiling.

DM PROOF and I will send you the file we tell clients to keep for every vendor.

Scenario, not a reported case.

03/09/2026

The smallest item in this GST audit was ₹492.

They found it anyway.

Seven credit notes issued by suppliers. Total taxable value: ₹4,169. The input tax credit on that — ₹492.

Cross-checked on the portal. Found unreversed. Demanded, with interest. Total collected: ₹912.

Think about what that took. Someone pulled every credit note in the file, matched each one against the return, and raised a demand — for nine hundred rupees.

And today it's tighter than it was then. Under Section 34 as amended, your supplier's output liability only reduces where you have actually reversed the corresponding credit. On IMS, accepting a credit note now asks you directly whether ITC is to be reduced — Yes, Partial or No — with remarks mandatory on Partial and No. Your answer goes on record, with your reason attached.

Here's what nobody tells you: there is no threshold below which the system stops matching.

It doesn't get tired, it doesn't get bored, and it doesn't decide ₹492 isn't worth the effort.

Every rate difference, quantity claim and scheme credit note has a GST tail. You match invoices every month. Almost nobody matches credit notes.

Comment MATCH and I'll send you the credit note tracker we use.

01/09/2026

Twelve observations in one GST audit. Eight of them moved. Four survived a fully reconciled reply.

Look at what those four have in common.

₹492 of input tax credit on seven supplier credit notes that were never reversed. They cross-checked the portal and found it — down to the last rupee.

₹29,730 of reverse charge sitting in the expense ledger. Office and travelling expenses, in the P&L, never read as a GST document.

₹4,515 of interest on belated GSTR-3B — running even though the tax was eventually paid in full.

Not one of them was fraud.

Every single one was a ledger nobody was reconciling. The credit note register. The expense ledger. The filing calendar.

Here's what nobody tells you: nothing in this audit was hidden. All of it was unattended.

The big frightening numbers in a notice are the ones you can kill with a working. The small ones you never look at are the ones that survive.

Reply CONTROL and I'll send you the four reconciliations we run every month.

01/09/2026

Twelve observations in one GST audit. Eight of them moved. Four survived a fully reconciled reply.

Look at what those four have in common.

₹492 of ITC on seven supplier credit notes nobody reversed. The department cross-checked the portal and found it — under Section 34, the supplier's output liability only comes down where you actually reversed the credit.

₹29,730 of reverse charge on office and travelling expenses. Sitting in the P&L, never read as a GST document.

₹4,515 of interest on returns filed late — even though the tax was eventually paid in full. Section 50(1) runs from the day succeeding the due date.

Not one of them was fraud.

Every single one was a ledger nobody was reconciling. The credit note register. The expense ledger. The filing calendar.

Here's what nobody tells you: nothing in this audit was hidden. All of it was unattended.

There is no threshold below which the system stops matching. They came looking for ₹492.

Reply CONTROL and I'll send you the four reconciliations we run every month.

28/08/2026