92 R. Srivatsan, IRS of the goods whose tax rate is 12% and if he is discharging his tax liability more than 99% through ITC, then he has to pay only Rs 1200 as cash under this rule. On the other hand, a composition dealer would have paid Rs 10,000 in cash with this volume of sale. Misconception 03: This rule adversely affects small and medium enterprises. Fact: The new provision which restricts the use of ITC for discharging output liability is applicable to the registered person whose value of taxable supply other than exempt supply and export, in a month exceeds Rs 50 lakh — that means those whose annual turnover is more than Rs 6 crore. Therefore, the rule does not apply to micro and small businesses, and Composition dealers. Misconception 04: All the registered persons will be required to pay 1% cash liability. Fact: This rule is applicable to only those registered persons whose value of taxable supply, other than exempt supply and export, in a month exceeds Rs 50 lakh – that means those whose annual turnover is more than Rs 6 crore. The rule is also not applicable in the cases where the registered person: has deposited more than Rs 1 lakh rupees as Income Tax in each of the last two years. 1. has received a refund of more than Rs 1 lakh in the preceding financial year on account of export or inverted tax structure. 2. has paid output tax through cash in excess of 1% of the total output tax liability, applied cumulatively, upto the month in the current financial year. 3. is a government department, PSU, local authority, statutory body. 4. Misconception 05: The rule has no specific objective. Objective of the Rule is that it would help to control such fraudsters, who issue fake invoices and show high turnovers, but have no financial credibility and flee after misusing ITC without payment of any tax liability in cash. GST UPDATEZ ON 01-02-2021 The gross GST revenue collected in the month of January 2021 stands at ₹ 1,19,847 crore of which CGST is ₹ 21,923 crore, SGST is ₹ 29,014 crore, IGST is ₹ 60,288 crore (including ₹ 27,424 crores collected on import of goods) and Cess is ₹ 8,622 crore (including ₹ 883crore collected on import of goods). The total number of GSTR-3B Returns filed for the month of December up to 31st January 2021 is 90 lakhs. In line with the trend of recovery in the GST revenues over the past five months, the revenues for the month of January 2021 are 8% higher than the GST revenues in the same month last year, which in itself was more than ₹ 1.1 lakh crore. The GST revenues during January 2021 are the highest since the introduction of GST and have almost touched the ₹ 1.2 lakh crore mark, exceeding the last month’s record collection of ₹1.15 lakh crore. GST revenues above ₹ 1 lakh crore for a stretch of the last four months and a steep increasing trend over this period are clear indicators of rapid economic recovery post-pandemic. With the sustained economic revival witnessed in the past few months, the increased GST collections are also on account of the initiatives taken by the tax administration to curtail evasion, monitor input tax credits and build taxpayer profiles based on third party databases. The surge in GST collections observed during the past four months is expected to be sustained in the coming months of the current fiscal with more of service sector activities like aviation, hospitality, entertainment etc opening up across states since January 21. Source: PIB, Government of India.
I. AMENDMENTS IN THE CGST ACT, 2017: a. A new clause (aa) in sub-section (1) of Section 7 of the CGST Act is being inserted, retrospectively with effect from the 1st July, 2017, so as to ensure levy of tax on activities or transactions involving supply of goods or services by any person, other than an individual, to its members or constituents or vice-versa, for cash, deferred payment or other valuable consideration. b. A new clause (aa) to sub-section (2) of the section 16 of the CGST Act is being inserted to provide that input tax credit on invoice or debit note may be availed only when the details of such invoice or debit note have been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note. c. Sub-section (5) of section 35 of the CGST Act is being omitted so as to remove the mandatory requirement of getting annual accounts audited and reconciliation statement submitted by specified professional. d. Section 44 of the CGST Act is being substituted so as to remove the mandatory requirement of furnishing a reconciliation statement duly audited by specified professional and to provide for filing of the annual return on self-certification basis. It further provides for the Commissioner to exempt a class of taxpayers from the requirement of filing the annual return. e. Section 50 of the CGST Act is being amended, retrospectively, to substitute the proviso to sub-section (1) so as to charge interest on net cash liability with effect from the 1st July, 2017. R. Srivatsan, IRS GST UPDATEZ ON 02-02-2021 GST changes in Budget 2021. f. Section 74 of the CGST Act is being amended so as make seizure and confiscation of goods and conveyances in transit a separate proceeding from recovery of tax. g. An explanation to sub-section (12) of section 75 of the CGST Act is being inserted to clarify that “self-assessed tax” shall include the tax payable in respect of outward supplies, the details of which have been furnished under section 37, but not included in the return furnished under section 39. h. Section 83 of the CGST Act is being amended so as to provide that provisional attachment shall remain valid for the entire period starting from the initiation of any proceeding under Chapter XII, Chapter XIV or Chapter XV till the expiry of a period of one year from the date of order made thereunder. i. Section 129 of the CGST Act is being amended to delink the proceedings under that section relating to detention, seizure and release of goods and conveyances in transit, from the proceedings under section 130 relating to confiscation of goods or conveyances and levy of penalty. j. Section 130 of the CGST Act is being amended to delink the proceedings under that section relating to confiscation of goods or conveyances and levy of penalty from the proceedings under section 129 relating to detention, seizure and release of goods and conveyances in transit. k. Section 151 of the CGST Act is being substituted to empower the jurisdictional commissioner to call for information from any person relating to any matter dealt with in connection with the Act. l. Section 152 of the CGST Act is being amended so as to provide that no information obtained under sections 150 and 151 shall be used for the purposes of any proceedings under the Act without giving an opportunity of being heard to the person concerned. m. Section 168 of the CGST Act is being amended to enable the jurisdictional commissioner to exercise powers under section 151 to call for information. 93
In fixed sum method, the 35% Challan can be generated by selecting the Reason for Challan>Monthly Payment for Quarterly Return> 35% Challan which is in turn calculated as per following situation: 35% of amount paid as tax from Electronic Cash Ledger in their preceding quarter GSTR 3B return, if it was furnished on quarterly basis; or 100% of the amount paid as tax from Electronic Cash Ledger in their GSTR-3B return for the last month of the immediately preceding quarter, if it was furnished on monthly basis. It is to note that, for the months of Jan and Feb, 2021, in Q4 of 2020-21, the autopopulated challan generated under 35% Challan would contain 100% of the tax liability discharged from Electronic Cash Ledger for the month of December, 2020 (and not 35%). Reason: Till December 2020, all taxpayers were filing GSTR-3B return on a monthly basis. From April, 2021 onwards, the pattern as suggested in the original scheme would follow. It is noteworthy, that the taxpayers are not required to deposit any amount for the first 02 months of a quarter, if: Balance in Electronic Cash Ledger / Electronic Credit Ledger is sufficient for tax due for the first/ second month of the quarter; or There is NIL tax liability. n. Consequent to the amendment in section 7 of the CGST Act paragraph 7 of Schedule II to the CGST Act is being omitted retrospectively, with effect from the 1st July, 2017. II. AMENDMENTS IN THE IGST ACT, 2017: Section 16 of the IGST Act is being amended so as to: (i) zero rate the supply of goods or services to a Special Economic Zone developer or a Special Economic Zone unit only when the said supply is for authorised operations; (ii) restrict the zero-rated supply on payment of integrated tax only to a notified class of taxpayers or notified supplies of goods or services; and (iii) link the foreign exchange remittance in case of export of goods with refund. When? Amendments carried out in the Finance Bill, 2021 will come into effect from the date when the same will be notified, as far as possible, concurrently with the corresponding amendments to the similar Acts passed by the States and Union territories with Legislature. 94 R. Srivatsan, IRS GST UPDATEZ ON 08-02-2021 QRMP - Monthly payment W.e.f. 1st January, 2021, following two options are available to the Taxpayers who are under Quarterly Returns and Monthly Payment of Tax (QRMP) Scheme for tax payment for first 02 months of a quarter: Fixed Sum Method: Portal can generate a pre-filled challan in Form GST PMT-06 based on his past record. Self-Assessment Method: The Tax due is to be paid on actual supplies after deducting the Input Tax Credit available. GST UPDATEZ ON 27-02-2021 There was one interesting query today on the question of ITC. Whether ITC should be reversed on Impairment of capital goods value to the extent of write off value? An analysis revealed gave a good insight that Firstly, an impaired asset is an asset that has a market value less than the value listed on the company's balance sheet. When an asset is deemed to be impaired, it will need to be written down on the company's balance sheet to its current market value. When an impared
asset's value is written down on the balance sheet, there is also a loss recorded on the income statement. R. Srivatsan, IRS Capital Goods, there will be NO IMPACT ON ITC and there is NO REQUIREMENT REVERSE CREDIT AVAILED. 95 GST UPDATEZ ON 28-02-2021 Last date for filing GSTR 9C for 2019-20 has been extended upto 31-03-2021 as per the message in CBIC twitter handle. Secondly that impairment of Capital Goods does not have anything to do with usage. ITC is availed or eligible to be availed once the capital goods are received and put to use in the course or furtherance of business. Moreover, at the time of capitalization of the said Asset, the taxpayer has capitalised the value of the CG on which ITC availed only on the value of net off ITC and avail depreciation under Section 32(1) Income Tax Act 1961. Thirdly as per the existing conditions under Section 17(5) (h) the provision uses the word "Write off" (goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples;). Written off will cover only full write off and not partial write offs. Unless the entire value of goods is written off, it is felt that there is no need to reverse ITC. Even though this interpretation is logically not correct and gives an undue benefit to the tax payers but legally one cannot demand reversal of ITC proportionate to the value of the impaired Capital Goods. Fourthly the provisions of Blocked credit under Section 17(5) denies credit of ITC only when the goods are destroyed and subsequently ITC contained in inputs to that written off portion is reversed. So, unless goods are destroyed or stolen, or written off (not written down) or disposed of ITC reversal will not come into play. Looking back, in Cenvat Credit Rules 2004, this issue was there but the lacuna was set right by amending the rule to include partial write off or provision for write off also. No such provision is seen under GST ITC obligations. So, in my opinion as for as partial Impairment is considered as it is only written down of value and not write off of GST UPDATEZ ON 01-03-2021 The gross GST revenue collected in the month of February 2021 is ₹ 1,13,143 crore of which CGST is ₹ 21,092 crore, SGST is ₹ 27,273 crore, IGST is ₹ 55,253 crore (including ₹ 24,382 crore collected on import of goods) and Cess is ₹ 9,525 crore (including ₹ 660 crore collected on import of goods). In line with the trend of recovery in the GST revenues over past five months, the revenues for the month of February 2021 are 7% higher than the GST revenues in the same month last year. The GST revenues crossed ₹ 1 lakh fifth time in a row and crossed ₹ 1.1 lakh crore third time in a row post pandemic despite this being revenue collection of the month of February with 28 days. This is a clear indication of the economic recovery and the impact of various measures taken by tax administration to improve compliance. Revenue collection in February 2021 GST UPDATEZ ON 08-03-2021 It is understood from various press reports that the Finance Ministry is not planning to
bring petrol and diesel under the ambit of GST in the near future, even though some states and economists have asked for the move to give some relief to consumers. It has been observed that there is a huge revenue implication attached to it and even when all the states agree to it, it will take several meetings and deliberations to take a final call, it appears. The decision to bring the fuels under GST obviously will have to be taken by the GST Council. However, more than the Centre, many states are not likely agreed to the move since the VAT levied on the fuel is a major source of state government revenue. Petrol prices are currently hovering between Rs 90-100 per litre across the country. While the average basic cost of producing petrol in the country is Rs 32.00 per litre all other additions are due to Central Excise duty (32%) Value Added Tax (VAT 23%) taking the total tax portion to about Rs. 55.00 per litre. Similarly, the average basic cost of production of diesel is Rs 33.00 per litre, total tax charged (28% + 18%) on it adds another Rs 46 per litre. This is just my understanding based on various press reports and not to be treated otherwise. 96 R. Srivatsan, IRS The applicability of E-invoicing threshold was Rs.500 crores till December 31, 2020 thereafter 100 crores till 31-03-2021 and now it is again capped to Rs.50 Crores with effect from 01-04-2021. E-invoicing’ facilitates exchange of the invoice document i.e., structured invoice data between a supplier and a buyer in an integrated electronic format by way of standard e-invoice schema (INV-01) through invoicing portal (IRP) to keep a check on GST UPDATEZ ON 11-03-2021 The following 10 points are the important to be noted. 1.For Aggregate Turnover upto Rs.5 Crore 4 digits to be mentioned if supplied to Registered person and NIL digits if supplied to unregistered person; 2.For Aggregate Turnover above Rs.5 Crore 6 digits to be mentioned for all supplies; 3.For exports 8 digits to be mentioned in export invoices and is also a requirement as per Foreign Trade Policy; GST UPDATEZ ON 09-03-2021 Implementation of e-Invoicing from 01-04-2021 for units > 50 Crore The mandatory requirement for generating e-Invoice in terms of Rule 48(4) has been extended to all registered Taxpayers whose annual aggregate turnover in any of the three preceding financial years from 2017- 18 has been more than Rs.50 Crore. This compliance obligation takes effect from 1st of April 2021, vide Notification No: 05 /2021, dated:08-03-2021 superseding the earlier parent notification number 13/2020, 21-03-2020 and 88/2020, dated: 10-11-2020. Click here to read full document A major compliance obligation that comes up from 01st April 2021 is mentioning of HSN codes on all the tax invoices.
4.It’s optional to show HSN codes in B2C invoices for turnover below 5 crores; 5.49 chemicals as per Notification no. 90/2020 dated 01/12/2020 have to be mandatorily shown under 8 digits code; 6.It is mandatory to report minimum digits as above in Table 12 of GSTR 1 and Tax Invoice also. 7.The Govt. plans implementing text mining a new data analytic tool through ADVAIT in the GST Regulatory Framework. 8.This will be an extremely useful tool for the Department to track mismatches and mistakes in Tax Invoices, GSTR 1, GSTR 9, E Way Bill, Shipping Bill and Bill of Entry especially based on HSN. 9.There is also a fine of Rs. 50,000/- (Rs. 25,000/- under each of CGST + SGST Acts) for committing a mistake related to this particular scenario under section 125 of the GST Acts. 10.All the tax invoices therefore should contain HSN digits, description of goods and tax rates specifically for better transparency and avoid any future litigations. The following (03) Three notifications are relevant in this regard. a) Notification 12/2017-Central Tax, dt:28/06/2017 b) Notification No. 78/2020 dated 15/12/2020. c) Notification no. 90/2020 dated 15/12/2020. 97 R. Srivatsan, IRS Core Business Activity means which kind of business you primarily deal in. For example, if you are a Soap manufacturer you may select “manufacturer” in Core Business Selection. One may choose any ONE of the aforesaid activities based on below criterion: Manufacturing: A manufacturer is a registered person produces new products from raw materials and components using tools, equipment and machines and then sells them to the consumers, wholesalers, distributors, retailers or to the other manufacturers. Further, a manufacturer may sell some more brought out items or may provide some ancillary services with his manufactured goods, but he would continue to be classified as manufacturer because it is the Primary Business Activity. Trader: A trader is a registered person who engages in the buying and selling of goods. Traders have been further recognised as Wholesaler or Distributor and Retailer: The Retailer includes a registered person selling goods through e-commerce operators. Service Provider and Other: A service provider is a registered person who provides service to a recipient of service and is neither a manufacturer nor a trader. The Procedure to be followed is if you open GST Portal, you will see a new pop-up wherein you will have to identify your core business as either manufacturer or trader or service provider and others. It is noteworthy that you can select only one core business activity. In case all activities are applicable to you, kindly select your core business activity. GST UPDATEZ ON 13-03-2021 Click here to read full document New facility on Common Portal - Core business Activities. The GST Network (GSTN) in order to curb unscrupulous businesses from taking Input Tax Credit (ITC) on unrelated activities, has enabled a new feature that requires the taxpayer to select one core business activity on the GST Portal.
Others will include Works Contract and other Miscellaneous items. In order to understand further you can click on “Information Button”. Also, if you want to change it in the future you can do it by navigating MY PROFILE>CORE BUSINESS ACTIVITY STATUS. 98 R. Srivatsan, IRS GST UPDATEZ ON 14-03-2021 Merger of mid slab rates Upcoming 44th GST Council Meeting May Merge 2 Tax Slabs (12% & 18%) The union government appears to have accepted for merging the goods and services tax (GST) slabs of 12% and 18% in the single slab as per the demand developed through some states and endorsed through the 15th finance commission (FFC). If the 12% and 18% slabs are merged to form a new slab somewhere in between, the tax burden on items currently in the 12% slab will rise. It remains to be seen how businesses and consumers will respond to this rise. On the other hand, tax on items in 18% slab will come down in an upside for consumers. This Rate rationalization will help reduce classification disputes, but the merging of 12% and 18% rate could lead to some revenue implications and, hence, proper number crunching is essential. The next GST Council meeting may be held virtually like before. There could be many more items for discussion on the agenda, but the major GST rate rejig will remain the highlight. GST UPDATEZ ON 20-03-2021 GST UPDATEZ ON 25-03-2021 Cancellation of Invoice Reference Number (IRN) Cancellation of IRN is possible for the invoice which is already uploaded/ reported to the Invoice Registration Portal (IRP) and for which IRN is generated. This has to be done within 24 hours of its generation. Some of the basic reasons for the cancellation of IRN by the supplier can be1. Cancellation of order by the buyer, or 2. Mistakes in e-invoice, or 3. Incorrect/ wrong entry in e-invoice, or 4. Duplicate entry. Thumb rule for cancellation of Invoice Reference Number (IRN) We have to wait and watch for the next GST council meeting!!
Some of the important rules relating to the cancellation of IRN are hereunder: 1.Cancellation of IRN is possible only within 24 hours of the generation of the IRN. Post completion of 24 hours, the supplier will have to issue either a debit note/ credit note or edit Form GSTR-1 modifying the respective invoice details. 2.Cancellation of IRN is not possible in case the e-way bill is already generated/ active for the respective IRN. 3.Once the e-invoice (IRN) is cancelled, the same invoice number cannot be re-used to generate another IRN. 4.Partial cancellation of e-invoice (i.e., IRN) is not possible. The step-by-step procedure for cancellation of e-Invoice where IRN has been generated will be explained in the next Updatez. 99 R. Srivatsan, IRS GST UPDATEZ ON 26-03-2021 Steps for cancellation of Invoice Reference Number As committed in the earlier updatez on 25- 03-2021, the step-by-step procedure for cancellation of e-Invoice where IRN has been generated is explained below. In order to cancel the IRN within 24 of generation of IRN, the supplier can adopt any of the following modes: 1.Cancellation via e-invoice portal; or Cancellation via ERP/ accounting software using API direct integration or GSPs integration with the portal. 2. Steps to be followed for cancelling IRN via e-invoice portalSTEP 1 – Visit site https://einvoice1.gst.gov.in/ STEP 2 – Click ‘Login’ and enter the appropriate ‘User name’; ‘Password’ and characters mentioned in the image. STEP 3 – Select ‘e-invoice’. STEP 4 – Select ‘Cancel’ from the dropdown list. STEP 5 – Enter either ‘Ack No.’ or ‘IRN’. STEP 6 – Click ‘Go’. STEP 7 – Respective e-invoice will be displayed. Select ‘Cancel Reason’ from the drop-down list and mention remarks, if any. STEP 8 – Click ‘Submit’. GST UPDATEZ ON 29-03-2021 The Finance Bill 2021 has received the assent of the President on 28-03- 2021. Notably, cancellation of IRN is much easier and faster when done via ERP/ accounting software using API direct integration or GSPs integration with the portal. Here, the supplier just needs to mark the respective invoice as cancelled. Accordingly, the software will automatically integrate with the Invoice Registration Portal (e-invoice portal) for cancelling the respective IRN, of course within the stipulated time! The Lok Sabha had passed the Finance Bill, 2021 on March 23, 2021 is now notified on 28-03-2021as the Finance Act 2021 after the Presidential assent. GST UPDATEZ ON 31-03-2021 Extension of timelines for Capturing of Dynamic QR Code in GST Invoices
100 R. Srivatsan, IRS The GST revenue witnessed growth rate of (-) 41%, (-) 8%, 8% and 14% in the first, second, third and fourth quarters of this financial year, respectively, as compared to the same period last year, clearly indicating the trend in recovery of GST revenues as well as the economy as a whole. GST revenues crossed above ₹ 1 lakh crore mark at a stretch for the last six months and a steep increasing trend over this period are clear indicators of rapid economic recovery post pandemic. Closer monitoring against fake-billing, deep data analytics using data from multiple sources including GST, Income-tax and Customs IT systems and effective tax administration have also contributed to the steady increase in tax revenue over last few months it is believed. Source: PIB Message on 01-04-2021 @ 14:00 Hrs. Release ID: Release ID: 1708930 The CBIC vide Notification No. 06/2021 – Central Tax dated March 30, 2021 amended Notification No. 89/2020 – Central Tax dated November 29, 2020 to extend the waiver of penalty leviable under Section 125 of the CGST Act, 2017 (i.e. general penalty) for non-compliance of provisions of Notification No. 14/2020–Central Tax dated March 21, 2020 (Provisions of Capturing of Dynamic QR Code in GST Invoices) between the period from December 1, 2020 to June 30, 2021, subject to the condition that the said person complies with the provisions of the said notification from July 1, 2021. GST UPDATEZ ON 01-04-2021 GST Revenue collection for March’ 21 sets new record GST UPDATEZ ON 02-04-2021 Important Compliances for April 2021 with due dates The gross GST revenue collected in the month of March 2021 is at a record of ₹ 1,23,902 crore of which CGST is ₹ 22,973 crore, SGST is ₹ 29,329 crore, IGST is ₹ 62,842 crore (including ₹ 31,097 crore collected on import of goods) and Compensation Cess is ₹ 8,757 crore (including ₹ 935 crore collected on import of goods). The GST revenues during March 2021 are the highest since introduction of GST. In line with the trend of recovery in the GST revenues over past five months, the Total revenues for the month of March 2021 are 27% higher than the GST revenues in the same month last year. During the month, revenues from import of goods was 70% higher and the revenues from domestic transaction (including import of services) are 17% higher than the revenues from these sources during the same month last year. Being the first month of the financial year 2021-22, April 2021 is a significant month from the point of view of the tax compliance and other statutory requirements as well as the due dates for GST return filings. I have tried sort out date wise compliance calendar for April 2021. Click here to read full document
, 2021 for the period of March, 2021. GSTR 7 is a return to be filed by the persons who are required to deduct TDS (Tax deducted at source) under GST. The due date for filing the GSTR-8 is April 10, 2021 for the period of March, 2021. GSTR-8 is a return to be filed by the e-commerce operators who are required to deduct TCS (Tax collected at source) under GST. 11th April 2021 The due date for filing the GSTR-1 is April 11, 2021 for the period of March, 2021. Taxpayers having an aggregate turnover of more than Rs. 1.50 Crores or those who opted to file a Monthly Return. 13th April 2021 The due date for auto filling (not filing) the GSTR-2B the Auto generated ITC statement is April 13, 2021 for the period of March, 2021 for the recipients. The due date for filing the *GSTR-6 – return for Input Service Distributor is April 13, 2021 for the period of March, 2021. The due date for filing the GSTR-1 is April 13, 2021 for the period of JanuaryMarch, 2021 for those Taxpayers who have opted for Quarterly Return Monthly Payment (QRMP) Scheme are supposed to file GSTR-1 on quarterly basis. 18th April 2021 The due date for filing the GST-CMP- 08 i.e., Quarterly challan-cum-statement to be furnished by composition dealers is April 18, 2021 for the period of January-March, 2021. 20th April 2021 The due date for filing the GSTR-3B is April 20, 2021 for the period of March, 2021. Taxpayers having an aggregate turnover of more than rupees 5 Crores (> Rs 5 Cr) in the preceding financial year or have not opted for QRMP Scheme. 101 R. Srivatsan, IRS The due date for filing the GSTR-5 (Non-Resident Taxable Persons) & GSTR-5A (OIDAR) is April 20, 2021 for the period of March, 2021. 22nd April 2021 The due date for filing the GSTR-3B is April 22, 2021 for the period of January- March, 2021. Taxpayers who have opted for QRMP Scheme in the state of Chhattisgarh, Madhya Pradesh, Gujarat, Daman and Diu and Dadra and Nagar Haveli, Maharashtra, Karnataka, Goa, Lakshadweep, Kerala, Tamil Nadu, Puducherry, Andaman & Nicobar Island, Telangana and Andhra Pradesh. 24th April 2021 The due date for filing the GSTR-3B is April 24, 2021 for the period of January- March, 2021. Taxpayers who have opted for QRMP Scheme in the state of Jammu and Kashmir, Ladakh, Himachal Pradesh, Punjab, Chandigarh, Haryana, Delhi, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand, Odisha and Uttarakhand. 30th April 2021 The due date for Yearly return for taxpayers opted for the composition levy scheme under Section 10 of the CGST Act 2017 which is GSTR-4. This Compliance calendar hopefully will be helpful for every registered business entity as well as professionals to be ready for observance well in advance. GST UPDATEZ ON 07-04-2021 Auto population of e-Invoice data in GSTR1 for March 2021 GST UPDATEZ ON 01-05-2021 GST Revenue April 2021
102 R. Srivatsan, IRS This is in the circumstance that a number of states like Punjab, Chattisgarh, West Bengal, Delhi and including the newly formed Government in Tamil Nadu, have sought GST rate cuts and certain other concessions on essential Covid supplies, on products like oxygen cylinders, ventilators, concentrators, and life-saving drugs like Remdesivir etc., and have been seeking a Council meeting to discuss these matters. Besides, MoS, GoI, Finance Ministers of States & Union Territories and senior officers from Union Government & States will be attending the meeting. At last, the Wait is Over! The gross GST revenue collected in the month of April’ 2021 is at a record high of Rs. 1,41,384 crores of which CGST is Rs. 27,837 crores, SGST is Rs. 35,621, IGST is Rs 68,481 crore (including Rs. 29,599 crores collected on import of goods) and Cess is Rs. 9,445 crores (including Rs. 981 crores collected on import of goods). Indian businesses have once again shown remarkable resilience by not only complying with the return filing requirements but also paying their GST dues in a timely manner during the month. The revenues for the month of April 2021 are 14% higher than the GST revenues in the last month of March’2021. GST revenues have not only crossed the Rs. 1 lakh crore mark during successively for the last seven months but have also shown a steady increase. Source: Press Release ID: 1715314 GST UPDATEZ ON 15-05-2021 GST Council Meeting GST UPDATEZ ON 16-05-2021 Form GSTR-2B for April, 2021 to be generated on May 29, 2021 The last date of filing Form GSTR-1 for April 2021 has been extended up to May 26, 2021, and IFF up to May 28, 2021. Accordingly, it has been confirmed by GSTN that the Form GSTR-2B for April 2021 shall be generated on May 29, 2021. GSTR-2B is an auto-drafted static ITC statement that will be generated for every registered person by 14th day of succeeding month on the basis of the information furnished by his suppliers in their respective GSTR-1/IFF, GSTR-5 (nonresident taxable person), and GSTR-6 (input service distributor). The statement will indicate the availability of input tax credit to the registered person against each document filed by his suppliers. In fact, GSTR-2B consists of the Summary statement showing ITC available and nonavailable for every section, Advisory for every section that clarifies the kind of action that taxpayers must take, Document-wise details such as invoices, credit notes, debit notes, etc. to view and download, Cut-off dates and advisory for generating and using GSTR-2B. After a long gap of seven (07) months, the GST Council is scheduled on 28th May 2021, (Friday), as confirmed by Finance Minister office's tweet. The Union Minister for Finance being the ex-officio chairman of GSTC, will chair the meeting via video conference at 11 a.m.
103 R. Srivatsan, IRS have passed by the vehicles of a given eWay bill number. 3. RFID related report for Vehicle: This report can be used to know the last tolls that have been passed by any vehicle. 4. RFID related report for Vehicle between two dates: This report can be used to know the tolls that have passed by any vehicle between any two dates. The officers can make best use of these data while conducting in transit checks and make the activity more effective. Also, these reports can also be used to identify the fraudulent transactions like bill trading, recycling of EWBs etc. It has been stated that NIC has released the feedback form for officers to provide their feedback about the new facilities in the MIS system so that it will help them to improve it further. It is not known who & which level officers will be given access to such information. The GSTR-2B statement also features details on the import of goods fetched from the ICEGATE system including details of inward supply of goods from Special Economic Zone units/developer, to be made available soon to all. GST UPDATEZ ON 18-05-2021 Integration of EWB with FASTag GST UPDATEZ ON 19-05-2021 Snapshot of CGST (Fourth Amendment) Rules, 2021 In the next futuristic step forward the eWay Bill system has been successfully integrated with FASTag and RFID, and details of commercial vehicle movements through the state and national highway tolls are received into e-Waybill system on a near real time basis. On an average 25 Lakh goods vehicle movements from more than 800 tolls are reported on a daily basis to the e-Way Bill system. It also includes live RFID data sent by border posts. Based on the RFID information received, the following reports are made available in the MIS System and also on the Officer's mobile App. 1. Live enforcement: This report can be used by the enforcement officers to know the vehicles that have passed the selected tolls without e-Way Bills in the past few minutes. 2. RFID related report for e-Way Bill: This report can be used to know the tolls that CBIC has issued Notification No. 15/2021 – Central Tax dt: 18-05-2021 notifying Central Goods and Services Tax (Fourth Amendment) Rules, 2021. A brief summary of it is as under: 1. Rule 23(1) is amended to allow filing of application for revocation of cancellation of registration within a period of 30 days from date of service of order of cancellation or within such time period as extended by the Additional Commissioner or the Joint Commissioner or the Commissioner, as the case may be.
Accordingly, changes have been made in instructions to FORM REG-21 in line with the changes made in Rule 23. Comment: This amendment is done to bring the rules in line with the amendment made in Section 30 of the CGST Act which allows the time period for filing revocation application to be extended. 2. Proviso has been added to Rule 90(3) to exclude the time period from the date of filing of the refund claim in FORM GST RFD-01 till the date of communication of the deficiencies in FORM GST RFD-03 by the proper officer, from the period of two years as specified under sub-section (1) of Section 54, in respect of any such fresh refund claim filed by the applicant after rectification of the deficiencies. Comment: - In effect, the days counting from RFD 01 to RFD 03, will not be counted in the period of 2 years (Max. time limit) in case of a "fresh refund application* after rectifying the deficiencies. This is a welcome relief as it was practically seen that in many cases the deficiency memos are being issued very late, in some cases almost at the time of expiry of the statutory time period of 2 years. 3. Sub-rule (5) has been inserted to Rule 90 which provides that an applicant may at any time before issuance of provisional refund or final refund or payment order or refund withhold order or notice withdraw the refund application filed by him by filing a new FORM GST-RFD-01W. Comment: - This will facilitate reduction of refund related notices if the applicant is also of the view that he is not eligible for sanction of applied refund. Now Form GST RFD-01W will facilitate it. 4. Sub-rule (6) has been inserted to Rule 90 providing that on submission of FORM RFD-01W, any amount debited by the applicant from electronic credit ledger or electronic cash ledger, as the case may be, while filing application for refund in FORM GST RFD-01, "shall be credited back* to the ledger from which such debit was made. Comment: This is a facilitation for natural consequence of Rule 90(5) above. On submission of RFD 01W, amount debited from ECL shall be credited back. 104 R. Srivatsan, IRS 5. Proviso has been inserted to Rule 92(2) to allow the proper officer or the Commissioner to pass on order for release of withheld refund in PART B of FORM RFD-07 where refund is no longer liable to be withheld. The format of *FORM GST-RFD-07 has also been substituted to incorporate the abovementioned changes. All the above procedural changes have been made to sync. with the legislative changes made earlier as a measure of facilitation. GST UPDATEZ ON 20-05-2021 GSTR-2B for April 2021 will be generated after the Due date of GSTR-1 / IFF for April 2021 Click here to read full document There were lot of queries that if the due date for filing GSTR-3B is 20th May 2021 how to take credit of ITC satisfying the condition under Rule 36(4) of CGST Rules 2017 for the month of April 2021. The relevant provisions are as under: Rule-60(7) of CGST Rules-2017 prescribes for generation of auto-drafted statements containing the details of input tax credit in FORM GSTR-2B for counter-party recipients. As per Rule-60(8) of CGST Rules-2017, FORM GSTR-2B shall be made available to the recipients after the due date of filing GSTR-1/IFF by the suppliers. In fact, Notification No. 12/2021-CT and 13/2021-CT, both dated 1st May 2021 extended the due date of GSTR-1 and IFF for April 2021 to 26th and 28th May 2021, respectively due to pandemic. Consequently, GSTR-2B for April 2021 will be generated after the due dates, on 29th May 2021. Taxpayers willing to file FORM GSTR-3B for April 2021 before GSTR-2B generation may do so on self-assessment basis. Notification No. 13/2021-CT dated May 1, 2021 prescribes a cumulative limit under
Rule 36(4) for ITC claimed in periods April & May 2021 Therefore, there will not be any compliance issue under Rule 36(4) for ITC availment for April 2021. 105 R. Srivatsan, IRS GST UPDATEZ ON 29-05-2021 Analysis of Recommendations of 43rd GST Council meeting: - (Part-1) The GST Council has made several recommendations relating to changes in GST rates on supply of goods and services and changes related to GST law and procedure: The recommendations covered varied issues from Rate reductions on Goods, Services, Late fees past and future, Simplification of Annual Returns will be discussed in Two (02) parts on 29th & 30th. Today (29-05-2021) it will be Part-1 A: COVID-19 TAX RELIEF GST UPDATEZ ON 28-05-2021 The 43rd GST Council chaired by Finance Minister Nirmala Sitharaman made key decisions as follows: GST Exemption to some COVID-19 supplies till 31st August 2021 A Particular Medicine for Black Fungus also exempted GoM to be formed to check if further reductions to be given to new items, GoM to submit reports before 8th June Amnesty Scheme with reduced late fee to be launched for GST Small Taxpayers Rationalization of Late fee for Small Taxpayers to be applicable to future liabilities Annual Return form to be rationalized, Govt to amend CGST Rules Annual Return filing to continue to be optional for Small Taxpayers A Special Session on GST Compensation Cess before 22nd July 2021 Details will be updated after receipt of press release by PIB… A number of specified COVID-19 related goods such as medical oxygen, oxygen concentrators and other oxygen storage and transportation equipment, certain diagnostic markers test kits and COVID-19 vaccines, etc., have been recommended for full exemption… GST (flash) UPDATEZ 29-05-2021. The Government as a follow-up of the decision of the GST Council at its 43rd meeting notified the constitution of a Group of Ministers (GoM) to examine the issue of GST concession/exemption to COVID relief material. The GOM shall consist of 8 ministers namely 1. Conrad Sangma (Chief Minister of Meghalaya) as a Convenor, 2. Nitin Bhai Patel (Deputy Chief Minister of Gujarat), 3. Ajit Pawar (Deputy Chief Minister of Maharashtra),
4. Mauvin Godinho (Minister for Transport & Panchayati Raj, Housing, Protocol and Legislative Affairs, Goa), 5. K.N. Balagopal (Minister for Finance, Kerala), 6. Niranjan Pujari (Minister for Finance and Excise Orissa), 7. T. Harish Rao, (Minister for Finance, Telangana), and 8. Suresh K.R. Khanna (Minister for Finance, U.P.) as its members. The GOM shall examine the need for GST concession/exemption and make recommendations on COVID treatment related goods and submit the report on 08- 06-2021 106 R. Srivatsan, IRS a. March & April 2021 tax periods: i. NIL rate of interest for first 15 days from the due date of furnishing the return in FORM GSTR-3B or filing of PMT-06 Challan, reduced rate of 9% thereafter for further 45 days and 30 days for March,2021 and April, 2021 respectively. ii. Waiver of late fee for delay in furnishing return in FORM GSTR-3B for the tax periods March / QE March, 2021 and April 2021 for 60 days and 45 days respectively, from the due date of furnishing FORM GSTR-3B. iii. NIL rate of interest for first 15 days from the due date of furnishing the statement in CMP-08 by composition dealers for QE March 2021, and reduced rate of 9% thereafter for further 45 days. b. For May 2021 tax period: i. NIL rate of interest for first 15 days from the due date of furnishing the return in FORM GSTR-3B or filing of PMT-06 Challan, and reduced rate of 9% thereafter for further 15 days. ii. Waiver of late fee for delay in furnishing returns in FORM GSTR-3B for taxpayers filing monthly returns for 30 days from the due date of furnishing FORM GSTR-3B. 2. For large taxpayers (aggregate turnover more than Rs. 5 crore) i. A lower rate of interest @ 9% for first 15 days after the due date of filing return in FORM GSTR-3B for the tax period May, 2021. ii. Waiver of late fee for delay in furnishing returns in FORM GSTR-3B for the tax period May, 2021 for 15 days from the due date of furnishing FORM GSTR-3B. Certain other COVID-19 related relaxations (i) Extension of due date of filing GSTR-1/ IFF for the month of May 2021 by 15 days. (ii) Extension of due date of filing GSTR-4 for FY 2020-21 to 31.07.2021. (iii) Extension of due date of filing ITC-04 for QE March 2021 to 30.06.2021. GST UPDATEZ ON 30-05-2021 The 43rd GST Council chaired by Finance Minister Nirmala Sitharaman made key decisions as follows: The analysis covered few issues from Rate reductions on Goods, Late fees for past and future, etc., yesterday (29-05-2021) under Part-1 and Today (30-05-2021) it will be Part-2 covering further COVID-19 related measures, interest payments, Time limitations for various actions simplification of Annual returns and Supply of services. COVID-19 related Trade facilitation measures for taxpayers: The following further relaxations are being provided to the taxpayers in addition to the one’s extended on 01-05-2021. 1. For small taxpayers (aggregate turnover upto Rs. 5 crore)
(iv) Cumulative application of rule 36(4) for availing ITC for tax periods April, May and June, 2021 in the return for the period June, 2021. (v) Allowing filing of returns by companies using Electronic Verification Code (EVC), instead of Digital Signature Certificate (DSC) till 31.08.2021. (vi) Time limit for completion of various actions, by any authority or by any person, under the GST Act, which falls during the period from 15th April, 2021 to 29th June, 2021, to be extended upto 30th June, 2021 subject to some exceptions. (vii) The all-important Retrospective amendment in section 50 of the CGST Act with effect from 01.07.2017, providing for payment of interest on net cash basis, to be notified at the earliest. F. Simplification of Annual Return for Financial Year 2020-21: i. Taxpayers would be able to self-certify the reconciliation statement, instead of getting it certified by chartered accountants. This change will apply for Annual Return for FY 2020-21. ii. The filing of annual return in FORM GSTR-9 / 9A for FY 2020-21 to be optional for taxpayers having aggregate annual turnover upto Rs 2 Crore; iii. The reconciliation statement in FORM GSTR-9C for the FY 2020-21 will be required to be filed by taxpayers with annual aggregate turnover above Rs 5 Crore. SERVICES: - Services supplied to an educational institution by way of serving of food including mid- day meals under any midday meals scheme, sponsored by Government is exempt from levy of GST irrespective of funding of such supplies from government grants or corporate donations. Services provided by way of examination including entrance examination where fee is charged for such examinations, by National Board of Examination (NBE), or similar Central or State Educational Boards, and input 107 R. Srivatsan, IRS services relating thereto are exempt from GST. To make appropriate changes in the relevant notification for an explicit provision to make it clear that land owner promoters could utilize credit of GST charged to them by developer promoters in respect of such apartments that are subsequently sold by the land promotor and on which GST is paid. The developer promotor shall be allowed to pay GST relating to such apartments any time before or at the time of issuance of completion certificate. OTHER MEASURES GST Council has also recommended amendments in certain provisions of the Act so as to make the present system of GSTR-1/3B return filing as the default return filing system in GST in place of GSTR-2 / GSTR-3. Part 1 & 2 Concluded!!!! GST UPDATEZ ON 31-05-2021 GST Levy on unregistered - branded rice The honourable Tripura High Court in an interesting judgement ruled that the GST is applicable on Sale of Rice even if Brand name is not registered. The Petitioner, M/S Sarva siddhi Agrotech Pvt. Ltd. is a registered company and is engaged in the supply of rice in the State of Tripura. According to the petitioner, the company supplies non-Basmati un-branded rice. However, the State Goods and Service Tax Authorities, on a prior intelligence that the petitioner is dealing in branded rice, carried out a raid at the godown and other premises of the petitioner- company which revealed that the company is engaged is selling "Unregistered Branded" rice leading to issue of Show Cause Notice to the petitioner in
which it was conveyed that as the entity was engaged in manufacturing, package and supply of branded rice in 25 kilogram bags having product names “Aahar Normal”, “Aahar Gold” and “Aahar Premium” without payment of GST, for the period between 01.07.2017 to 17.07.2018, total taxable value of which came to Rs.27,28,85,021/- resulting is a liability of Rs.1,03,35,028/- as GST along with interest. The crux of the matter is that the petitioner was supplying rice in unit containers bearing brand names such as Sarva siddhi Agrotech Pvt. Ltd. and Aahar Normal, Aahar Gold, and Aahar Premium on which an actionable claim or enforceable right in a court of law is available. The entity had not voluntarily forgone the actionable claim or enforceable right in respect of the brands in question. In view of these averments, the demand was confirmed and on appeal the bench of Tripura High court held that the original expression of “Put up in unit container and bearing a registered brand name” is now substituted as " put in unit container and may be bearing a registered brand name or bearing a brand name on which an actionable claim or enforceable right in a court of law is available" Thus, from the previous requirement of supply of goods in unit containers and bearing a registered brand name, the expanded requirement is of the same either bearing of a registered brand name or bearing a brand name on which actionable claim or enforceable right in a court of law is available. “The brand names under which the petitioner was selling the rice may not have been registered, nevertheless it could lead to an actionable claim in a court of law. In order to avoid inviting liability of tax, the petitioner had to forgo such actionable claim which also the authorities found the petitioner had not done, and therefore liable for GST, was the decision of court. So, to conclude.... I feel that firstly, manufacturers of rice (Agriculturists are different) who sells rice 108 R. Srivatsan, IRS under Registered Brand name are liable to GST @ 5% on such sale of rice. Secondly, manufacturers who sells rice under unregistered Brand name & foregoing their actionable claim or enforceable right on such brand name by filing an affidavit and printing disclaimer on unit container to that effect are exempted from GST. GST UPDATEZ ON 04-06-2021 NIC Syncs. with legislational changes for GST E-Way Bill business processes: The National Informatics Centre (NIC) has released the changes in Blocking of Goods and Services Tax Identification Number (GSTIN) and E-Way Bill generation. This is in line with Notification 15/2021-CT dated May 18, 2021, that blocking of GSTIN for e-Way Bill generation is now considered only for the defaulting Supplier GSTIN; and not for the defaulting Recipient or Transporter GSTIN. The NIC has also updated the Mode of transport Ship as Ship / Road cum Ship so that the user can enter Vehicle number in case the goods are moved by Road initially, and for movement by Ship, the Bill of lading Number and date may be entered. Further, Suspended GSTINs shall be allowed for E-Waybill generation. That is, the GSTINs which are suspended on the GST Common Portal can continue generating e-way bills on the e-way bill portal. Similarly, the recipient and transporter GSTINs which are suspended are also allowed for generation of e-waybill. The MIS Reports have also received a face lift, i.e. for the report on e-way bills about to expire, a download Excel option has been provided, and in the Outward Supplies report an additional column for mode of generation i.e. Online, App. based, API or SMS etc., is also provided as a measure of facilitation. Click here to read full document
It has been clarified that services provided to an educational institution by way of serving of food (catering including mid- day meals) is exempt from levy of GST irrespective of its funding from Government grants or corporate donations [under entry 66(b)(ii) of Notification No. 12/2017-Central Tax (Rate) dated 28th June, 2017]. [Circular No. 149/05/2021 dated 17th June, 2021]. Clarification regarding GST on supply of various services by Central and State Boards (such as National Board of Examination). It has been clarified that GST is exempt on services provided by Central or State Boards (including the boards such as National Board of Examination) by way of conduct of examination for the students, including conduct of entrance examination for admission to educational institution [under S. No. 66 (aa) of Notification No. 12/2017-CT(R)]. GST is also exempt on input services relating to admission to, or conduct of examination, such as online testing service, result publication, printing of notification for examination, admit card and questions papers The gross GST revenue collected in the month of May 2021 is ₹1,02,709 crore of which CGST is ₹17,592 crore SGST is ₹22,653 crore IGST is ₹53,199 crore (including ₹26,002 crore collected on import of goods) and Cess is ₹ 9,265 crore (including ₹868 crore collected on import of goods). The above figure includes GST collection from domestic transactions till 4th of June since taxpayers were given various relief measures in the form of waiver/reduction in interest on delayed return filing for 15 days for the return filing month May’21 in the wake of covid pandemic second wave. The revenues for the month of May 2021 are 65% higher than the GST revenues in the same month last year. This is the eighth month in a row that GST revenues have crossed ₹ 1 lakh crore mark. R. Srivatsan, IRS GST UPDATEZ ON 05-06-2021 Revenue Collection for May 2021 109 GST UPDATEZ ON 12-06-2021 A special GST Council meeting on June 12 to decide tax on COVID-19 vaccine etc. The issue of reduction of tax rate on COVID-19 related goods and equipment was taken up in the council meeting held on May 28 2021. However, the council could not arrive at a consensus. Accordingly, a special Goods and Service Tax Council meeting is being held today to discuss recommendations of Group of Ministers (GoM) on tax on COVID-19 vaccine and other equipment. Waiting for the outcome........!!!! GST UPDATEZ ON 22-06-2021 The Central Board of Indirect Taxes & Customs (CBIC) has released updated Central Goods & Services Tax Rules, 2017 (“CGST Rules”) as on June 01, 2021 both rules and forms. GST UPDATEZ ON 23-06-2021 Clarification regarding applicability of GST on supply of food in Anganwadis and Schools
etc., when provided to such Boards [under S. No. 66(b)(iv) of Notification No. 12/2017- CT(R)]. However, GST at the rate of 18% applies to other services provided by such Boards, namely of providing accreditation to an institution or to a professional (accreditation fee or registration fee) so as to authorise them to provide their respective services. [Circular No. 151/07/2021 dated 17th June, 2021] Clarification regarding GST on service supplied by State Government to their undertakings or PSUs by way of guaranteeing loans taken by them. It has been re-iterated that guaranteeing of loans by Central or State Government for their undertaking or PSU is specifically exempt under entry No. 34A of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.[Circular No. 154/10/2021 dated 17th June, 2021]. Clarification regarding GST rate on laterals/parts of Sprinklers or Drip Irrigation System. It has been clarified that that laterals/parts to be used solely or principally with sprinklers or drip irrigation system, which are classifiable under heading 8424, would attract a GST of 12%, even if supplied separately. However, any part of general use, which gets classified in a heading other than 8424, in terms of Section Note and Chapter Notes to HSN, shall attract GST as applicable to the respective heading. [Circular No. 155/11/2021 dated 17th June, 2021] 110 R. Srivatsan, IRS Once a complaint is registered, it will be sent to the concerned jurisdictional authority where the registration is claimed to be fraudulently taken, for necessary enquiry and suitable action. Step 1: A search functionality is given at the GST Common Portal to find out whether any GSTIN is issued on a particular PAN or not, under Search taxpayer > Search by PAN. The System displays details of the GST registration available on that PAN. In case, no registration is available on that PAN then the message is shown as No records found. Step 2: Any person aggrieved of having his PAN misused may directly or through an authorized representative, register a complaint at GST Portal. He may search the GSTIN based on PAN and the registration(s) which are not taken by him, may be selected and reported to the jurisdictional officer. Step 3: Once the request is submitted, ARN will be generated. In case multiple GSTNs are selected for such complaints, ARN for each GSTIN shall be generated separately and will be assigned to their respective jurisdictional officers on their dashboard for further necessary action. The ARNs are shown to the complainants on registering complaints on the user’s screen. Step 4: The complaints so registered, shall be made available to the competent authorities at their dashboard under – “Application for Reporting Fake GSTIN’s for further necessary action. The officers shall have a new Role of “PAN Vigilance officer” in the Back Office for this purpose. Step 5: The Complainant can further track the status of application through track ARN at GST Portal pre-login. This facility will definitely help in plugging fake registrations using PAN of innocuous and unintended persons. GST UPDATEZ ON 29-06-2021 NIC Syncs. with legislational changes for GST E-Way Bill business processes: Click here to read full document GSTN has enabled a Functionality to register complaints on misuse of PAN in GST Registration. It will check the misuses, control the frauds and help officers in enquiry and cancellation of such registration.
GSTN has enabled a new functionality to discharge Goods and Service Tax (GST) liability with reference to ‘Reconciliation Statement i.e. GSTR-9C. To avail this facility the taxpayers must 1. login to the GST portal, 2.Then choose ‘Reconciliation Statement’ from the dropdown menu 3. Under the head Cause of Payment’, 4. Then specify payment date and 5. Financial Year. As we are aware, every registered person whose aggregate turnover during a financial year exceeds two crore rupees (or) five crore as the case may be, shall get his accounts audited as specified under subsection (5) of section 35 of the CGST Act. They shall furnish a copy of the audited annual accounts and a reconciliation statement, duly certified, in form GSTR-9C. GSTR-9C must be prepared and certified by a Chartered Accountant or Cost Accountant. It must be filed on the GST portal or through a facilitation centre by the taxpayer, along with other documents such as the copy of the Audited Accounts and Annual Return in form GSTR-9. This statement is applicable to all those taxpayers who must get their Annual Accounts audited under the GST laws. This New Functionality will be very helpful for the taxpayers to discharge their additional GST liability on account of reconciliation through GSTR-9C. R. Srivatsan, IRS GST UPDATEZ ON 04-07-2021 New Functionality to discharge GST Liability with reference to ‘Reconciliation Statement’ GSTR-9C 111 The gross GST revenue collected in the month of June’ 2021 is ₹92,849 crore of which, CGST is ₹16,424 crore SGST is ₹20,397 crore IGST is ₹49,079 crore (including ₹25,762 crore collected on import of goods) and Cess is ₹6,949 crore (including ₹809 crore collected on import of goods). The above figure includes GST collection from domestic transactions between 5th June to 5th July’2021 since taxpayers were given various relief measures in the form of waiver/reduction in interest on delayed return filing for 15 days for the return filing month June’21. The revenues for the month of June 2021 are 2% higher than the GST revenues in the same month last year. However, with reduction in caseload and easing of lockdowns, the e-way bills generated during June 2021 is 5.5 crore which indicates recovery of trade and business. Therefore, it is expected that while the GST revenues have dipped during the month of June, the revenues will see an increase again from July 2021 onwards. GST UPDATEZ ON 06-07-2021 GST Revenue collection for June2021: GST UPDATEZ ON 13-07-2021 RWAs liable to pay GST only on amount exceeding Rs.5000 or Rs.7500: Madras HC quashes AAR Ruling The honourable Madras High Court while quashing the Authority of Advance Ruling (AAR) held that the Resident Welfare Association (RWA) liable to pay GST on the members’ monthly contribution, only on the amount exceeding Rs.5000 / Rs.7500 and
not on the entire amount in the context of exemption as per S.No. 77 of Notification 12/2017 – Central tax (Rate) dated June 28, 2017 as amended by Notification 2/2018 – Central Tax (Rate) dated January 25, 2018. 112 R. Srivatsan, IRS The applicant of the Advance Ruling was a Palakkad based supplier of various kinds of chips (including salted and masala varieties) made out of Jackfruit, Banana, Potato. All these were sold without a brand name. He also sold un-branded Halwa and roasted and salted groundnuts and cashew nuts. He contended that these products are classified as ‘Namkeen” under Entry 101A of Schedule I of Central Tax (Rate) Notification No.1 of 2017 and therefore would attract GST at 5% only. Though GST-AAR agreed that Halwa, which is made by cooking Maida-flour in oil and adding sugar and flavourings will be taxed at 5% it contended that the other products would be taxed under various specific heads at 12% only. Understandably, these rulings, unlike judicial orders, do not set a precedent, they do have persuasive value in GST assessments. So, feasting on roasted and salted groundnuts or cashew nuts Masala chips during Online meetings (of course with the camera switched off) if it's a routine habit is going to become costly. The Tamil Nadu Authority of Advance Ruling held that if a service by a registered housing society/resident welfare association to its members by way of reimbursement of charges or share of contribution, for sourcing of goods or services from a third person for the common use of its members, is such that it is above ₹7500 rupees per month effective from 25.01.2018 (₹5000 rupees before), it is not eligible for exemption and CGST + SGST has to be paid for the entire amount. With this order of the court concluded that if the monthly RWA contribution is say 10,000/- per dwelling, GST has to be paid only on the difference from exemption (i.e. 10000 - 7500=2500) To clarify, it is only contributions to RWA in excess of Rs.7,500/- that would be taxable @ 18% under GST Act. Confusions put to rest! GST UPDATEZ ON 16-07-2021 Rate of GST on Masala chips. Click here to read full document The GST Authority for Advance Rulings Kerala bench has recently held that products like salted or masala Potato or Tapioca chips or roasted and salted groundnuts or cashew nuts readily available at your neighbourhood stall would attract tax at 12%, even if these commodities were unbranded. GST UPDATEZ ON 28-07-2021 A new functionality for AATO Click here to read full document GSTN has implemented a new functionality on taxpayers’ dashboards with the following features: •The taxpayers can now see the exact Annual Aggregate Turnover (AATO) for the previous FY, instead of just the two slabs of Above or Upto Rs. 5 Cr.
•The taxpayers can also see the Aggregate Turnover of the current FY based on the returns filed till date. •The taxpayers have also now been provided with the facility of turnover update in case taxpayers feel that the system calculated turnover displayed on their dashboard varies from the turnover as per their records. •This facility of turnover update shall be provided to all the GSTINs registered on a common PAN. All the changes by any of the GSTINs in their turnover shall be summed up for computation of Annual Aggregate Turnover for each of the GSTINs •The taxpayer can amend the turnover twice within a period of one month from the date of roll out of this functionality. Thereafter, the figures will be sent for review of the Jurisdictional Tax Officer who then can amend the values furnished by the taxpayer. 113 R. Srivatsan, IRS 2. Whether input tax credit (ITC) is available on GST charged by the service provider on the canteen facility provided to employees working in the factory. In its ruling, the AAR observed that as per the agreement, the applicant has arranged a canteen for its employees, which is run by a third-party canteen service provider. Accordingly, part of the canteen charges is borne by the applicant whereas the remaining part is borne by its employees. The said employees' portion of such canteen charges are collected by the company and paid to the third-party canteen service provider. Also, the applicant also had submitted that it does not retain with itself any profit margin in this activity of collecting employees' portion of canteen charges and pays in full the entire amount so collected. Be it as the facts may be, in its ruling the AAR said that the ITC on GST paid on canteen facility is blocked credit under Section 17 (5)(b)(i) of CGST Act and in any case is naturally inadmissible to applicant. While, the GST, at the hands of the applicant, is not leviable on the amount representing the employees’ portion of canteen charges, which is collected by the applicant and paid to the canteen service provider. In real terms, there is also this current practice generally in place that business entities providing subsidised food facilities are charging 5 per cent tax on food recoveries made from employees. Here the Authority has ruled that where canteen charges are borne by the employer and only a nominal part is charged from employees, clearly, no GST would be payable on such recoveries! This categorical judgement, though it is applicable only for the applicant, still it has enough persuasive value for all the taxpayers to take a tax-efficient position, from what they are practicing now. Order Reference No: Advance Ruling no. GUJ/GAAR/R/39/2021 Dated 30.07.2021 This important ruling has in fact Stirred the hornet's nest.!!!! GST UPDATEZ ON 23-08-2021 Employee Canteen Expenses Are Not Subject To GST. In a radically different but a meritfull decision, the AAR Gujarat has held that GST will not be levied on the amount paid by employees for availing canteen facilities provided by their employers. The applicant a corporate giant had approached the Gujarat bench of Authority for Advance Ruling (AAR) seeking a ruling on 1. Whether Goods and Services Tax (GST) is applicable on the nominal amount recovered by it from employees for the usage of their in-house canteen facility. The applicant also sought a ruling on
114 R. Srivatsan, IRS The Gujarat AAR itself, in the case of Amul, which manufactured and supplied flavoured milk (made of milk added with sugar and permitted flavours) had held that a GST rate of 12% would apply (HSN 22029930). Impact analysis: In essence, both lassi and flavoured milk are dairy-based drinks, but the classification codes treat them differently as Lassi falls under HSN Code 040390 which is exempted while Flavoured milk falls under HSN Code: 22029930 attracting 12% adv. Tax. GST UPDATEZ ON 24-08-2021 Lassi exempted from GST while flavoured milk finds no favour Click here to read full document The GST Authority for Advance Rulings (AAR-Gujarat) has held that lassi, the fermented milk product, is exempt from goods and services tax (GST). The AAR made the ruling in a recent case where a Valsad-based manufacturer and supplier had approached it on the applicable GST rate. While, on the flip side, owing to the complexities in classification, AAR benches across the country have held in the past that flavoured milk is not exempt from GST. Flavoured milk has not found such a favour from Tax Officers. The applicant sold lassi under the brand name ‘Elan’ in four flavours — plain (with no sugar or salt added), salted with cumin, strawberry sweetened with sugar, and blueberry sweetened with sugar. The AAR bench noted that the main ingredients of the lassi that was being manufactured and sold were curd, water and spices. The ingredients displayed on the bottle were pasteurized toned milk, spices, pudina, green chilli, ginger, salts, active culture, added nature-identical flavour and stabiliser. The bottle displayed that it was a ‘dairy-based fermented drink’. Fortunately for the manufacturer, and the end consumer, curds, lassi and buttermilk come under a specific classification (HSN 040390) and are exempt from GST, while manufacturers & suppliers of flavoured milk have not been as lucky. GST UPDATEZ ON 29-08-2021 Click here to read full document 1. GST returns amnesty scheme relating to Late fee payments extended upto 30-11- 2021. 2. Request for Revocation of Cancellation has also been extended upto 30-09-2021. 3. Filing of GSTR1/GSTR3B/ IFF using EVC instead of DSC has been extended upto 31- 10-2021. Notification no. 33, 34 & 32/2021 respectively all dt: 29-08-2021 has been issued in this regard. GST UPDATEZ ON 31-08-2021 Click here to read full document As per notification no. 34/2021-CGST dated 29th Aug 2021, the Central Board of Indirect Taxes and Customs (CBIC) notified the extension of the due date to September 30, 2021 for filing an application for revocation of cancellation of registration where the due date falls between March 1, 2020 to August 31, 2021. GST Portal now accepting Application for Revocation of Cancelled GST Registration
IGST is Rs 56,247 crore (including Rs 26,884 crore collected on import of goods) and Cess is Rs 8,646 crore (including Rs 646 crore collected on import of goods). The mop up in August 2021 is, however, lower than Rs 1.16 lakh crore collected in July 2021. In August 2020, Goods and Services Tax (GST) collection was Rs 86,449 crore. Compared to the August 2019 revenues of Rs 98,202 crore, this is a growth of 14 per cent. During August this year, the revenues from domestic transactions (including import of services) were 27 per cent higher than the revenues from these sources during the same month last year. The GST collection, after posting above Rs 1 lakh crore mark for nine months in a row, dropped below Rs 1 lakh crore in June 2021 due to the second wave of COVID19. With the easing out of COVID restrictions, GST collection for July and August 2021 have again crossed Rs 1 lakh crore, which clearly indicates that the economy is recovering at a fast pace. Coupled with economic growth, anti-evasion activities, especially action against fake billers have also been contributing to the enhanced GST collections. The robust GST revenues are likely to continue in the coming months too, HOPEFULLY. The extension would be applicable only in those cases where registrations have been cancelled under clause (b) or clause (c) of sub-section (2) of section 29 of the CGST Act. The extension of the closing date of the late fee amnesty scheme and extension of time limit for filing of the application for revocation of cancellation of registration will benefit a large number of taxpayers, especially small taxpayers, who could not file their returns in time due to various reasons, mainly because of difficulties caused by COVID-19 pandemic, and whose registrations were Cancelled due to the same. 115 R. Srivatsan, IRS GST UPDATEZ ON 01-09-2021 Goods and Services Tax (GST) collection in August 2021 was above Rs 1 lakh crore mark once again. It is therefore a benefit to the Taxpayers and they are requested to avail the benefit of these extensions at the earliest and get their disputes resolved. GST collections came in at Rs 1,12,020 crore in August2021, up 30% from the same time last year. This is the second straight month when GST revenue remained above Rs 1 lakh crore. The gross GST revenue collected in the month of August 2021 is Rs 1,12,020 crore of which CGST is Rs 20,522 crore, SGST is Rs 26,605 crore, GST UPDATEZ ON 02-09-2021 The 45th GST Council meeting is scheduled to be convened on 17th September 2021 at Lucknow (not through video conferencing) wherein the discussion about the revenue collections & shortfall from estimated levels and compensation mechanisms for the different states shall be discussed, while significant decisions are expected to be taken on these aspects. GST UPDATEZ ON 04-09-2021 An interesting question has been answered by the Telangana State Authority for Advance Ruling, Hyderabad, in the application filed by M/s. Deccan Transco Leasing Private Limited, Hyderabad, Telangana.
The Question for which ruling was sought was Is GST liable to be paid on leasing of tank containers taken from a supplier i e., lessor who is located outside India and the tank containers do not reach India, as it is finance lease, it is supply of goods and tank containers do not reach the Indian Territory Quite an interesting question to which the Authority has answered that yes. The terms of the agreement clearly indicate that the property in goods passes to the applicant only when he exercises the option failing which the property has to be returned back to the lessor at a specific deposed time indicated by him. Therefore, during the period of lease, the transaction remains a service and the moment the option to purchase the goods is exercised by the applicant it becomes the transaction of sale. Hence the transaction made by the applicant does not fall under Entry 1 (c) of Schedule II to the CGST Act 2017 and therefore is to be treated as Supply of Service and categorically ruled that the applicant is liable to pay IGST on importation of lease services into India. 116 R. Srivatsan, IRS The Kerala High Court while dismissing an appeal ruled that used personal cars are exempted from the requirement of an eway bill under Rule 138(14)(a) of the Central Goods and Services Tax Rules, 2017. By the impugned judgment, the learned Single Judge allowed the writ petition and quashed notices which detained the vehicle which was used for the transportation of the said used vehicle on the allegation that the same was transported without the Eway bill as contemplated. The court while quashing the detention and ordering the release of the vehicle held that used vehicles, even if it has run only negligible distances are to be categorized as used personal effects in which case no EWB is required. Appears a fair call!!!! GST UPDATEZ ON 06-09-2021 E-Way Bill not required for Transportation of ‘Used Personal Vehicle’' GST UPDATEZ ON 16-09-2021 Click here to read full document E-Way Bill not required for Transportation of ‘Used Personal Vehicle’' Now you can easily get the Jurisdictional Address, email, phone number of all the Central GST offices. The details are very well arranged and you can find Zone wise, Commissionerate wise, Division wise, Range wise details all in one place. The link is: https://cbic-gst.gov.in/cbecportal-ui/?knowYourJuris This is a very useful link in times of emergency.
117 R. Srivatsan, IRS 3.Major recommendations on GST rate changes in relation to Goods w.e.f 01.10.2021 unless otherwise stated;(Please refer to press note table for details) 4.Supply of mentha oil from unregistered person has been brought under reverse charge. 5.Brick kilns would be brought under special composition scheme with threshold limit of Rs. 20 lakhs, with effect from 1.4.2022. Bricks would attract GST at the rate of 6% without ITC under the scheme. GST rate of 12% with ITC would otherwise apply to bricks. 6.GST rate changes in order to correct inverted duty structure, in footwear and textiles sector, will be implemented with effect from 01.01.2022. 7.After due deliberation, the Council was of the view that it is not appropriate to bring specified Petroleum products within the ambit of GST at this stage. 8.Major GST changes in relation to rates and scope of exemption on SEVEN Services w.e.f 1.10.2021 unless otherwise have been recommended. (Please refer to press note table for details) 9.E Commerce Operators are being made liable to pay tax on services provided through them for transport of passengers, by any type of motor vehicles through it [w.e.f. 1st January, 2022] & for restaurant services provided through it with some exceptions [w.e.f. 1st January, 2022]. 10.Clarification in relation to GST rate in respect of 12 Goods & 8 Services provided. (Please refer to press note table for details) 11.On the issue of compensation scenario, a presentation was made to the Council wherein it was brought out that the revenue collections from Compensation Cess in the period beyond June 2022 till April 2026 would be exhausted in repayment of borrowings and debt servicing made to bridge the gap in 2020-21 and 2021-22. A final decision will have to be taken in this regard. 12.The Council decided to set up a GoM to examine the issue of correction of inverted duty structure for major sectors; rationalize the GST UPDATEZ ON 17-09-2021 The 45th GST Council meeting will be held in Lucknow today - Friday to take forward some of the following crucial issues. 1. likely to extend concessions to specified drugs used in COVID-19 treatment till December 31. from 30th September 2021. 2. to extend more relief for additional drugs by reducing GST rates from 12 percent to 5 percent, till December, 31, 2021. 3. Deliberations of various recommendations of rate fitment committee. Compensation Cess?! GST UPDATEZ ON 17-09-2021 Recommendations of the 45th GST Council meeting held on 17-09-2021: The 45th GST Council’s meeting was held in Lucknow on 17-09-2021 and has made the following recommendations relating to changes in GST rates on supply of goods and services and changes related to GST law and procedure. The most important 25 are amplified here: - 1.Extension of existing concessional GST rates (currently valid till 30th September, 2021) on various Covid-19 treatment drugs, up to 31st December, 2021(Please refer to press note table for details) 2.Reduction of GST rate to 5% on more Covid-19 treatment drugs, up to 31st December, 2021;(Please refer to press note table for details)
the rates and review exemptions from the point of view of revenue augmentation, from GST and also to discuss ways and means of using technology to further improve compliance including monitoring through improved e-way bill systems, einvoices, FASTag data and strengthening the institutional mechanism for sharing of intelligence and coordinated enforcement actions by the Centre and the States. 13. Requirement of filing FORM GST ITC-04 (ITC on Job work) under Rule 45 (3) of the CGST Rules has been relaxed as under, while a Taxpayers whose annual aggregate turnover in preceding financial year is above Rs. 5 crores shall furnish ITC-04 once in six months, a Taxpayers whose annual aggregate turnover in preceding financial year is upto Rs. 5 crores shall furnish ITC-04 annually. 14. Interest is to be charged only in respect of net cash liability, under section 50 (3) of the CGST Act 2017 and in cases should be charged on ineligible ITC availed and utilized at 18% w.e.f. 01.07.2017. Interest is to be paid by a taxpayer on “ineligible ITC availed and utilized” and not on “ineligible ITC availed” 15. Interestingly, unutilized balance in CGST and IGST cash ledger may be allowed to be transferred between distinct persons (entities having same PAN but registered in different states), without going through the refund procedure, subject to certain safeguards to be prescribed. 16. Clarification on scope of “intermediary services”; and Clarification relating to interpretation of the term “merely establishment of distinct person” in condition (v) of the Section 2 (6) of the IGST Act 2017 for export of services i.e., A person incorporated in India under the Companies Act, 2013 and a person incorporated under the laws of any other country are to be treated as separate legal entities and would not be barred by the condition (v) of the sub-section (6) of the section 2 of the IGST Act 2017 for considering a supply of service as export of services; Detailed clarification is expected. 17. With effect from 01.01.2021, the date of issuance of debit note (and not the date of underlying invoice) shall determine the relevant financial year for the purpose of 118 R. Srivatsan, IRS section 16(4) of CGST Act, 2017 which stipulates time restriction on the availment of ITC on Debit Notes; 18. There is no need to carry the physical copy of tax invoice in cases where an einvoice has been generated by the supplier in the manner prescribed under rule 48(4) of the CGST Rules, 2017; 19. Only those goods which are actually subjected to export duty i.e., on which some export duty has to be paid at the time of export, will be covered under the restriction imposed under section 54(3) of CGST Act, 2017 from availment of refund of accumulated ITC. 20. Provision to be incorporated in in CGST Rules, 2017 for removing ambiguity regarding procedure and time limit for filing refund of tax wrongfully paid as specified in section 77(1) of the CGST/SGST Act and section 19(1) of the IGST Act where the nature of tax has been wrongly assessed and wrongfully paid; 21. Aadhaar authentication of registration to be made mandatory for being eligible for filing refund claim and application for revocation of cancellation of registration. 22. Late fee for delayed filing of FORM GSTR-1 to be auto-populated and collected in next return in FORM GSTR-3B. 23. Refund to be disbursed in the bank account, which is linked with same PAN on which registration has been obtained under GST. 24. Rule 59(6) of the CGST Rules to be amended with effect from 01.01.2022 to provide that a registered person shall not be allowed to furnish FORM GSTR-1, if he has not furnished the return in FORM GSTR-3B for the preceding month. 25. Rule 36(4) of CGST Rules, 2017 to be amended, once the proposed clause (aa) of section 16(2) of CGST Act, 2017 is notified, to restrict availment of ITC in respect of invoices/ debit notes, to the extent the details of such invoices/ debit notes are furnished by the supplier in FORM GSTR-1/ IFF and are communicated to the registered person in FORM GSTR-2B.
The impact analysis with reference to each recommendation will be done from time to time when changes are notified. All the changes which have been recommended would be given effect through relevant Circulars/ Notifications/ Law amendments in due course which alone shall have the force of law. 119 R. Srivatsan, IRS namely complete details of BE records i.e. GSTIN, BE Number, BE Date, Port Code, Reference Number; Screenshot of ICEGATE portal with BE record and any error that they may have encountered while using the “Search BoE” functionality on GST Portal. A very constructive & very useful facility provided on the portal now. GST UPDATEZ ON 19-09-2021 Another Self-Service Functionality on GST Portal for Importers: GSTN has made available self-service functionality on GST Portal for those importers of goods, recipients of supplies from SEZ, and the Bill of Entry details, which didn’t auto-populate in GSTR-2A to fetch the missing records from ICEGATE. Auto population usually takes 2 days (after reference date) for BE details to get updated on GST Portal from ICEGATE. This functionality should, therefore, be used if data is not available after this period. Taxpayers can fetch the requisite details by Login to GST Portal, Navigate to Services > User Services > Search BoE> Enter the Port Code> Bill of Entry Number> Bill of Entry Date > Reference Date and > click the SEARCH button. History of fetched BoE details from ICEGATE along with status of query are displayed after 30 minutes from the time of triggering the query. In case of any problem the taxpayer may create a ticket at the GST Helpdesk or GST Self-service portal by including details GST UPDATEZ ON 22-09-2021 Clarification on Cut-off date for availing Input Tax Credit in Debit Notes Section 16 (4), as amended with effect from 01.01.2021, provides that a registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or debit note pertains or furnishing of the relevant annual return, whichever is earlier. With effect from 01.01.2021, section 16(4) of the CGST Act, 2017 was amended vide the Finance Act, 2020, so as to delink the date of issuance of debit note from the date of issuance of the underlying invoice for purposes of availing input tax credit. The Board has clarified, vide Circular No. 160/16/2021-GST, dated 20-09-2021 that w.e.f. 01.01.2021, in case of debit notes, the date of issuance of debit note (not the date of underlying invoice) shall determine the relevant financial year for the purpose of section 16(4) of the CGST Act 2017. Accordingly, for availment of ITC on or after 01.01.2021, in respect of debit notes issued either prior to or after 01.01.2021, the eligibility for availment of ITC will be governed by the
provision of section 16(4), whereas any ITC availed prior to 01.01.2021, in respect of debit notes, shall be governed under the provisions of section 16(4), *as it existed before the said amendment on 01.01.2021. To make it clear for understanding, a debit note dated 01.08.2021 is issued in respect of the original invoice dated 01.03.2021. As the invoice pertains to F.Y. 2020- 21, the relevant financial year for availment of ITC in respect of the said invoice in terms of section 16(4) of the CGST shall be 2020-21. However, as the debit note has been issued in FY 2021-22, the relevant financial year for availment of ITC in respect of the said debit note shall be 2021-22 in terms of amended provision of section 16(4) of the CGST Act. An important clarification which will ensure proper availability of ITC on Debit notes for that financial year irrespective of the FY in which the underlying Tax invoice was issued. 120 R. Srivatsan, IRS So, earlier if you ordered food worth Rs 2000/- from any of food delivery platforms, the restaurant would charge 5% GST on the cost (Rs 100/- in GST). Now, 5% GST will apply on the landed cost of Rs 1,100/-. Cascading effect???? The question is, what happens to the input tax credit, as restaurants are not allowed tax credit, while paying tax at the concessional rate of 5% adv. As GST would be applied on two stages of the supply chain - once by the restaurants, then by the platforms while they would not be able to set it off under the input tax credit mechanism. This could definitely see a jump in total cost of supply especially in the absence of ITC. GST UPDATEZ ON 28-09-2021 GST by Food delivery companies GST UPDATEZ ON 01-10-2021 Two new notifications issued today by CBIC to implement the recommendation of rate changes for various services of the GST Council. 06/2021-Central Tax (Rate): Seeks to amend the Rate notification so as to notify CGST rates of various services 07/2021-Central Tax (Rate): Seeks to amend exemption notification so as to implement recommendations made by GST Council in its 45th meeting Click here to read full document As per the recommendation of the 45th GST Council meeting, food delivery companies like Swiggy, Dunzo and Zomato etc., are to be treated on a par with restaurants under the Goods and Services Tax and should also pay 5% GST, just like restaurants. The tax for such platforms will come into effect from 1st January 2022. As of now, these companies pay GST only on the amount they charge as Service Charges over and above the cost of food. Going ahead, as one shall understand, GST will apply on the total price of the order. Click here to read full document GST UPDATEZ ON 01-10-2021 Revenue for September 2021
The gross GST revenue collected in the month of September 2021 stood at ₹1,17,010 crore, which is 23% higher than the GST revenues in the same month last year. The collection under CGST ₹ 20,578 crore, SGST ₹ 26,767 crore IGST ₹ 60,911 crore (including ₹29,555 crore collected on import of goods) and cess ₹ 8,754 crore (including ₹ 623 crore collected on import of goods). The average monthly gross GST collection for the second quarter of the current year has been ₹ 1.15 lakh crore, which is 5% higher than the average monthly collection of ₹ 1.10 lakh crore in the first quarter of the year. This clearly indicates that the economy is recovering at a fast pace. Coupled with economic growth, anti-evasion activities, have been contributing to the enhanced GST collections. It is expected that the positive trend in the revenues will continue and the second half of the year will post higher revenues. The constant increase in collections in last five months since April, 2021 clearly indicates that the economy is recovering at steady pace. Hopefully, with the formation of GoMs on Rate Rationalization to rationalize tax rates we may see acceleration in revenue from GST in next half of this fiscal. As per Section 16(4) of CGST Act, 2017, no taxpayer shall take input tax credit in respect of records -invoices and debit notes for supply of goods or services (or both) for Financial Year 2020-21 after the due date of furnishing the return for the month of September 2021. The due date for the GSTR-3B for September 2021 is either 20th October 2021 for monthly filers and 22nd or 24th October 2021 depending on the State/UT of registration of the taxpayer. Records- invoice or debit notes pertaining to Financial Year 2020-21 reported in GSTR-1 after the due date of GSTR-3B of September 2021 will not reflect as “ITC Available” in GSTR-2B of the recipients. Such records will be reflected in “ITC Not Available” section of GSTR-2B and such ITC shall in turn not be auto-populated in GSTR-3B. Further, invoice or debit notes pertaining to Financial Year 2020-21 reported in GSTR-1 after the due date of GSTR-3B of September 2021 will also not reflect as “ITC as per GSTR-2A” in Table-8A of GSTR-9 of the recipients. The taxpayers should take note of the above and ensure that their records pertaining to Financial Year 2020-21 are reported on or before the due date of their GSTR-3B for the month September 2021, or for the quarter of July to September 2021 in case of quarterly GSTR-3B filers. Availment of ITC by the recipient’s contrary to the legal provisions in GST may entail action by initiation of recovery of ITC which may be ineligible. This measure will help taxpayers of their entitled ITC credit. 121 R. Srivatsan, IRS GST UPDATEZ ON 18-10-2021 GSTN issues Advisory on availability of ITC for FY 2020-21 GST UPDATEZ ON 29-10-2021 Recommendations of the 45th GST Council meeting held on 17-09-2021:
122 R. Srivatsan, IRS GST collection for October 2021 registered the second highest since implementation of GST ₹ 1,30,127 crore gross GST revenue collected. Revenues for the month of October 2021 are 24% higher than the GST revenues in the same month last year 2020-21 and 36% over 2019-20. The gross GST revenue collected in the month of October 2021 is ₹ 1,30,127 crore of which CGST is ₹ 23,861 crore, SGST is ₹ 30,421 crore, IGST is ₹ 67,361 crore (including ₹ 32,998 crore collected on import of goods) and Cess is ₹ 8,484 crore (including ₹ 699 crore collected on import of goods). This is very much in line with the trend in economic recovery. This is also evident from the trend in the e-way bills generated every month since the second wave. The revenues have also been aided due to the efforts of the State and Central tax administration resulting in increased compliance over previous months. In addition to action against individual tax evaders, this has been a result of the multipronged approach followed by the GST Council. On one hand, various measures have been taken to ease compliance like nil filing through SMS, enabling Quarterly Return Monthly Payment (QRMP) system and autopopulation of return. The Council has also taken various steps to discourage non-compliant behaviour, like blocking of e-way bills for non-filing of returns, system-based suspension of registration of taxpayers who have failed to file six returns in a row and blocking of credit for return defaulters. Number of returns (GSTR-3B) of every month/quarter by the end of next month is a good parameter indicating timely payment of returns and filing of returns. The revenues would have still been higher if the sales of cars and other products had not been affected on account of disruption in supply of semi-conductors. 1) No Facility to File Revised Return. 2)Input Tax Credit Mismatch Issue restrictions and conditions require orderly procedures. 3) ITC Denial, If Payment Is Not Made to Supplier within 180 Days. 4) High Rate of Interest for Late Payment 18%/24%, Whereas for Late Refund, Interest Rate Is Just 6%. 5) E-Way Bill Not Be Required, In Case of Applicability Of E-Invoice generation. 6) Minor Discrepancies in E Way Bill Causing Penalties in Lakhs and Crores to Honest Taxpayer. 7) Waiver/Reduction of Late Fee for GSTR 4, GSTR 10 For 2017 To 2021- one-time Amnesty would help. 8) Appeals are Not Being Heard, In the Absence of Formation of GST Tribunal. 9)ITC On Business Promotional Expenses/Samples - clarification required for reducing conflicting decisions leading to disputes. 10) Forms of Annual Return & Reconciliation requires further simplification and Automation. GST UPDATEZ ON 01-11-2021 Revenue Collections for October 2021
123 R. Srivatsan, IRS Due date for filing GSTR-8 (to be filed by the e-commerce operators required to deduct TDS under GST for October 2021 month is 25-11-2021. RFD-10 – application made by any specialized agency of UN or any multilateral financial institution and organization - 18 Months after the end of quarter for which refund is to be claimed. GST UPDATEZ ON 06-11-2021 Due dates for Compliances under GST for the Month of November 2021 GSTR-3B – Monthly GST Return: For Taxpayer with Annual Turnover More than Rs 5 crore & for Taxpayer who is not opting for QRMP Scheme having Turnover up to 5 crores the due date for the Returns for October 2021 is 20th November 2021 GSTR-1- Statement of Outward Supplies: For taxpayers with Annual Turnover More than Rs 5 crore the due date for the Returns for October 2021 is 11th November 2021. For Taxpayer who is not opting for QRMP Scheme having Turnover up to 5 crores the due date for the Returns for October 2021 is 13th November 2021. Taxpayer who is opting for QRMP Scheme has to deposit tax using form GST PMT-06 for the OCTOBER-2021 Month on or before the due date of 25-11-2021. Other due dates: Due date for filing GSTR-5 (to be filed by Non-Resident taxable person) for Oct-2021 month is 20-11-2021. Due date for filing GSTR-5A (to be filed by the OIDAR) for October -2021 month the due date is 25-11-2021. Due date for filing GSTR-6 (to be filed by Input Service Distributor for October-2021 month is 25-11-2021. Due date for filing GSTR-7 (to be filed by the by the person who is required to deduct TDS under GST under GST for October 2021 is 25-11-2021. GST UPDATEZ ON 01-12-2021 Gross GST revenue collected in November 2021 is ₹ 1,31,526 crore The gross GST revenue collected in the month of November 2021 is ₹ 1,31,526 crore of which CGST is ₹ 23,978 crore SGST is ₹ 31,127 crore IGST is ₹ 66,815 crore (including ₹ 32,165 crore collected on import of goods) and Cess is ₹ 9,606 crore (including ₹ 653 crore collected on import of goods). For the second straight month gross GST collection crossed ₹ 1.30 lakh crore. The revenues for the month of November 2021 are 25% higher than the GST revenues in the same month last year and 27% over 2019-20. The GST revenues for November 2021 have been the second highest ever since introduction of GST, second only to that in April 2021 (always UNIQUE) which related to year-end revenues and higher than last month’s collection, which also included the impact of returns required to be filed quarterly. The recent trend of high GST revenues has been a result of various policy and administrative measures that have been taken in the past to improve compliance.
A large number of initiatives undertaken in the last one year like, enhancement of system capacity, nudging non-filers after last date of filing of returns, autopopulation of returns, blocking of e-way bills and passing of input tax credit for non-filers has led to consistent improvement in the filing of returns over the last few months. {Source: - PIB- Release ID: 1776730} 124 R. Srivatsan, IRS In its recent judgement, Telangana Authority for Advance Ruling has held that a charitable religious institution will be liable to pay GST (Goods & Services Tax) on renting of rooms to devotees and shops for religious programmers provided rent is more than ₹1,000 a day and ₹10,000 per month, respectively. The applicant is a Hyderabad-based Acharya Shree Mahashraman Chaturmas Vyvastha Samiti — is a charitable religious institution. It provides space for rent on temporary basis during chaturmas. As it doesn’t perform this activity with a profit motive, it was desirous of clarification regarding eligibility of their supplies (Renting of temporary residential rooms for consideration to the devotees and renting of space for shops and stalls for the purpose of religious programmers where the predominant object is not to do business but for advancement of religion) to GST. The AAR took note of a GST notification 12/2017, CTR, dated July 27, 2017 talks about exemption for services provided by an entity registered under Income Tax providing charitable activities. Specifically, entry 13 of said notification prescribes exemption for services related to conduct of any religious ceremony and renting of precincts of a religious place meant for general public, but nothing more than that. Also, under Proviso (i & ii) this exemption will not be available in case rent is ₹1,000 or more for rooms and for renting of premises, community halls, Kalyan mandapam or open area, and the like where charges are ₹10,000 or more per day, or for shops or other spaces for business or commerce where charges are ₹10,000 or more per month. An apt decision, notwithstanding it is in favour of the revenue. GST UPDATEZ ON 07-12-2021 CBIC Launches Separate Portal for All Information Related To GST, Customs, Service Tax etc. CBIC has launched a revamped tax information portal through which all indirect tax legislations, rules, regulations and forms will be available for ease of reference of taxpayers. The content on this portal will be continuously updated and expanded in a phased-manner. Eventually, information under all categories in Customs, GST, Central Excise and erstwhile Service Tax will be available under one portal. Through this portal, you can search information related to all indirect tax laws, their rules/ forms/ regulations. The portal can be visited at https://taxinformation.cbic.gov.in In case, any user comes across any anomaly or error in content, it has been requested to notify the same on [email protected] This will improve the validity of the contents as well as user experience. GST UPDATEZ ON 12-12-2021 Charitable Institutions - renting of rooms to devotees is liable for GST
Though AAR’s orders are applicable only on applicants and corresponding jurisdictional tax officers, and have no precedential value, they are cited in similar cases. In fact, many such rulings have also become the basis for notifications and circulars by the department. Therefore, its importance cannot be brushed aside with impunity!!!!! 125 R. Srivatsan, IRS terms of section 52 of CGST Act, 2017 in the same manner at present. As ECOs are already registered in accordance with rule 8(in Form GST-REG 01) of the CGST Rules, 2017 (as a supplier of their own goods or services), there would be no mandatory requirement of taking separate registration by ECOs for payment of tax on restaurant service under section 9(5) of the CGST Act, 2017. The aggregate turnover of person supplying restaurant service through ECOs shall be computed as defined in section 2(6) of the CGST Act, 2017 and shall include the aggregate value of supplies made by the restaurant through ECOs. Accordingly, for threshold consideration or any other purpose in the Act, the person providing restaurant service through ECO shall account such services in his aggregate turnover. It may also be noted that on restaurant service, ECO shall pay the entire GST liability in cash. No ITC could be utilized for payment of GST on restaurant service supplied through ECO. ECOs provide their own services as an electronic platform and an intermediary for which it would acquire inputs/input service on which ECOs avail input tax credit (ITC). The ECO charges commission/fee etc. for the services it provides. The ITC is utilized by ECO for payment of GST on services provided by ECO on its own account (say, to a restaurant). The situation in this regard remains unchanged even after ECO is made liable to pay tax on restaurant service. ECO would be eligible to ITC as before. Accordingly, ECO shall not be required to reverse ITC on account of restaurant services on which it pays GST in terms of section 9(5) of the Act. Well!!! These clarifications issued well ahead of the date of implementation will go a long way in a correct understanding of the legislative requirements and compliance of the same. A pro-active step indeed! GST UPDATEZ ON 18-12-2021 E-Commerce Operators liable to pay GST on Restaurant Services W.E.F 01- 01-2022 The GST Council in its 45th meeting held on 17th September, 2021 recommended to notify Restaurant Service under section 9(5) of the CGST Act, 2017. Accordingly, to effectuate this recommendation, Notification No. 17/2021 (CTR) dated 18.11.2021 has been issued and now a separate clarification vide Circular No. 167 / 23 /2021 – GST, dated: 17-12-2021, also has been issued to the extent that that the e-commerce operators (ECO) are liable to pay GST on restaurant services. So, the scenario is as ‘restaurant service’ has been notified under section 9(5) of the CGST Act, 2017, the ECO shall be liable to pay GST on restaurant services provided, with effect from the 1 January, 2022, through ECO. Accordingly, the ECOs will no longer be required to collect TCS and file GSTR 8 in respect of restaurant services on which it pays tax in terms of section 9(5)..On other goods or services supplied through ECO, which are not notified u/s 9(5), ECOs will continue to pay TCS in Click here to read full document
126 R. Srivatsan, IRS 4. Correction in Inverted Duty structure in Footwear and Textiles sector: The GST Council recommended to introduce GST rate changes from January 2022 in order to correct the inverted duty structure in the Footwear and Textile Sector. All footwear, irrespective of prices will attract GST at 12 percent, while barring cotton, all textile products including readymade garments will have GST at the rate of 12 percent. 5. Self-assessed tax shall include the tax payable in respect of details of outward supplies: In the Provisions of section 75, in subsection (12), a new Explanation has been inserted, namely “For the purposes of this subsection, the expression “self-assessed tax” shall include the tax payable in respect of details of outward supplies furnished under section 37, but not included in the return furnished under section 39.” So, whatever is declared in the Statement of Outward supply i.e., GSTR-1 shall also be treated as a Self-Assessed liability. 6. No appeal to be filed against section 129(3) order, unless a sum equal to 25% of the penalty is paid: Under Section 107, sub-section (6), has been amended with an insertion of new proviso, namely “Provided that no appeal shall be filed against an order under subsection (3) of section 129, unless a sum equal to twenty-five percent of the penalty has been paid by the appellant.” This will add additional compliance burden in respect of penalties imposed in the Adjudicating Orders while filing appeals. 7.Rules related to Mandatory Aadhaar authentication for GST Refund & Revocation application: Aadhaar authentication with the GSTIN for claiming GST Refunds (all types of refunds and irrespective of the amount of claim involved) and Revocation application has been made Mandatory and are to be effective from 1 January 2022. 8. Proper officer detaining or seizing goods or conveyance to issue notice within 7 days of such detention or seizure: When the proper officer has detained or seized goods or conveyance, he shall issue a notice within seven days of such detention or GST UPDATEZ ON 23-12-2021 Important changes in GST Law effective from January 1st, 2022 1.New GST Compliance obligation for providing restaurant Services on ECommerce Operators: All the E-Commerce Operators providing “Restaurant Services” will be liable to pay GST on such services instead of the hotel suppliers. The GST @ 5% will be paid by such e-Commerce Operators like Zomato, Swiggy, etc. 2.Blocking of GSTR-1 for non-filing of GSTR 3B: GSTR-1 return filing facility will be blocked if a registered Taxpayer have not submitted the return in FORM GSTR-3B for the previous two return periods. For example, if a taxpayer has not filed GSTR-3B for October 2021 and November 2021, the GSTR-1 filing facility will be blocked from the 1st January 2022. 3. GST Provision related to communication of Details of invoice or debit note to the recipient: The provisions of Section 16 of the CGST Act have been amended wherein subsection (2), after clause (a), the clause has been inserted, namely “(aa) the details of the invoice or debit note referred to in clause (a) has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section 37. This will ensure validated credit by the recipient before availing the same. Click here to read full document
127 R. Srivatsan, IRS While delivering this judgement, they were upholding the position laid in Young Men’s Indian Association where it was held that supply of various preparations by each club to its members would not amount to a transfer of property from one to another and hence there would be no sale eligible to tax. The club would only act as an agent for its members even if the club is a distinct legal entity and hence the Doctrine of Mutuality subsists. Drawing parallel to it, under GST, it was opined that there is no GST on the services rendered by a club to its members. However, with the above insertion under the Section 7 (1) (aa) dealing with the Meaning and scope of supply the entire dispute will come to an end and it WILL BE TREATED AS SUPPLY which will be taxable. A VERY IMPORTANT Retrospective amendment and may have far reaching impact with retrospective liability. GST UPDATEZ ON 27-12-2021 GST payable on Goods or Services Provided by any Club or Association to its Members seizure, specifying the penalty payable, and thereafter, pass an order within a period of seven days from the date of service of such notice, for payment of penalty. The time lines have been set clearly. The changes are in terms of the recommendations of the recent GST Council meeting with an eye to curb evasion of tax. The above message will serve as a onepoint reference for compression of important changes. As part of the recent recasting of the scope of Supply, in the Central Goods and Services Tax Act, 2017, Section 7 (1) (aa) has been inserted and shall be deemed to have been inserted retrospectively with effect from the 1st day of July 2017. (vide Clause 108 of the Finance Act 2021) Section 7 (1) (aa) says that the person (association or club) and its members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter-se shall be deemed to take place from one such person to another. Further, the activities or transactions, by a person, other than an individual, to its members or constituents or vice-versa, for cash, deferred payment, or other valuable consideration is treated as supply. If one can recollect, the Hon’ble Supreme Court of India in the case of State of West Bengal v Calcutta Club Ltd. ruled that services rendered by incorporated clubs to members are exempted from service tax. It held while referring to the Statement of Objects and Reasons that sub-clause (f) to Article 366 of clause 29-A (which permits the States to impose a tax on the supply of food and drink) does not include ‘goods’ in their entirety. GST UPDATEZ ON 28-12-2021 Alert for Annual Returns For Financial Year 2020-2021: 1. GSTR 9 (Annual Return) applicable if Turnover exceeds 2 Crores. 2. GSTR 9C applicable if Turnover exceeds 5 Crores. 3. No GST Audit by CA or CMA. GSTR-9C to be self-certified. 4. Due date is 31st December 2021 5. No extension has been granted so far.
128 R. Srivatsan, IRS by the Central Government or, as the case may be, the State Government; The transmission or distribution utilities are exempted under the said notification. SAC 996912 is classified under group 99691 (Electricity and gas distribution services) of GST services classification. In, service tax regime also, electricity transmission or distribution utility was covered under the negative list on which service tax was not applicable. One can also refer to the Circular No. 34/8/2018-GST dated 01.03.2018, Sl. No:4, issued by CBIC as per which ancillary services rendered by the DISCOMS are taxable at the rate of 18% and following are such illustrative but not exhaustive ancillary services: I. Application fee for releasing connection of electricity. ii.Rental charges against metering equipment. iii.Testing fee for meters/ transformers, capacitors etc. iv.Labour charges from customers for shifting of meters or shifting of service lines. v. Charges for duplicate bill. The bottom line is that GST is exempted on the electrical energy whether be it thermal energy, solar energy or hydro-power or any other form of electrical energy. So, there is no GST on Electrical Energy at present under GST as it is exempted supply. At least for once, this aspect of taxability is not shocking !!!!!!!... GST UPDATEZ ON 29-12-2021 Levy of GST on Electricity There are a lot of queries on the subject of levy of GST on Electricity due to recent billing pattern from DISCOM companies. Supply of electricity was and is one of the most contentious issues in the indirect taxes. There are many issues related to it. Yes! Electrical energy is a movable property and hence, is covered under the definition of” Goods” as per Section 2(52) of the CGST Act 2017. However, Supply of electrical energy is exempted vide notification for exemption of goods under Notification no. 02/2017 – Central Tax (Rate) dated 28.06.2017 in Sl. No. 104 under heading “2716 00 00 – Electrical Energy”. The power to levy taxes on consumption or sale of electricity has been provided to the State Government vide Entry 53 of List II of Article 246 of Seventh Schedule of Constitution – Tax on Consumption and Sale of Electricity. Further, Notification no. 12/2017-CT(Rate) dated 28.06.2017. Sl. No:25 exempts the services provided by way of transmission or distribution of electricity by an electricity transmission or distribution utility. As per clause 2(z) of the said notification “Electricity transmission or distribution utility” means the Central Electricity Authority; a State Electricity Board; the Central Transmission Utility or a State Transmission Utility notified under the Electricity Act, 2003; or a distribution or transmission licensee under the said Act, or any other entity entrusted with such function GST UPDATEZ ON 30-12-2021 GST Annual Return: Deadline for filing GSTR-9 and GSTR-9C extended
129 R. Srivatsan, IRS No Input Tax Credit unless details are populated in GSTR 2B. Filing of GSTR-1 by the supplier is now mandatory to take credit. A self-policing mechanism for claiming validated ITC. The due date for Annual Return GSTR 9 and Self certified reconciliation statement in form GSTR- 9C of F.Y. 20- 21 extended to 28th February 2022. This will give more breather for filing the annual return till 28-02-2022 (or seek extension on the last day of extended time limit?) For all special refunds claimed under Section 55 if UIN (Unique Identification Number) is missing in invoice then attested invoice copy can be submitted along with Form RFD 10 for claiming the refund. This will facilitate easy filing of refund claim. If Goods are seized in transit, then payment to be made within 7 days (earlier 14 days) to conclude further proceedings. This will increase the pace of conclusion of investigation w.r.t. detained goods. DRC 07 i.e. summary of the order shall now be made available to the person concerned. FORM GST DRC 07 will include the demand details (like tax/cess, interest, penalty, and any other amounts payable by the taxpayer). As soon as this form is uploaded by the Tax Department on the GST portal, an email and SMS notification is sent to the taxpayer. The taxpayers can view the order on their dashboard. Now it will be made available to the person concerned. Officer can recover of penalty by selling the goods seized if payment is not made within 15 days of order. This deterrent measure will discourage transaction of contraband. Preference of adjusting recovered amount: 1st - Administration cost for recovery 2nd -Amount payable for seizure of Goods 3rd - Any other dues of GST 4th - Balance refund The Central Board of Indirect Taxes and Customs (CBIC) has extended the deadline of GST Annual Returns (GSTR-9 and GSTR9C) for the financial year 2020-21 to February 28th, 2022. The last date for filing these returns was to expire on 31-12-2021 In view of the difficulties expressed by the taxpayers in meeting this time limit, the Government has decided to further extend the due date for furnishing Annual return GSTR-9 and self-certified reconciliation statement GSTR-9C for the financial year 2020-21. Notification No. 40/2021 (CT), dt. 29-12- 2021 has been issued to this effect. GST UPDATEZ ON 30-12-2021 Breaking News!!!!! 46th Meeting of the GST Council scheduled The Government has issued the office memorandum where it has notified that the 46th Meeting of the GST Council is scheduled to Convene on 31st December 2021. The 46th Meeting of the GST Council will be held on December 31, 2021 in New Delhi at 1100 hours under the provisions contained in the proviso to sub-clause (2) of clause 3 of the Procedure and Conduct of Business Regulations of the GST Council. GST UPDATEZ ON 31-12-2021 Important Changes vide New Notification No. 40/2021 - CT in GST law & Procedure
130 R. Srivatsan, IRS Prescribed forms for provisional attachment and made changes to form DRC-10 - “Notice for Auction of Goods under section 79(1)(b), FORM- DRC-22 -For provisionally attaching the properties, bank account etc and a newly inserted Form - DRC-22A -Application for filing objection against provisional attachment of property to give effect to the changes. GST UPDATEZ ON 31-12-2021 The GST Council has recommended to defer the decision to change the rates in textiles recommended in the 45th GST Council meeting. Consequently, the existing rates in textile sector would continue beyond 1st January, 2022. This is the shortest press release of any GSTC meeting. They could have done it through Video Conferencing instead of Physical Meeting at New Delhi. The GST Council’s 46th meeting was held today under the chairmanship of the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman. Click here to read full document
Authored ByR. Srivatsan, IRS Compiled ByA. Siva Superintendent of Customs TUTICORINTutitor FY 2022
131 R. Srivatsan, IRS Notification No. 35/2021 – Central Tax dated 24th September 2021, clause (a) of the sub-rule (6) of Rule 59 of CGST Rules, 2017 when it was amended. By way of this amendment, for the words “for preceding two months”, the words “for the preceding month” were substituted with effect from 1st January 2022. This means that from 1st January 2022 onwards, if a monthly filer has not filed the GSTR-3B for the preceding month, then such taxpayer will not be allowed to file the GSTR-1 for the subsequent month, till the GSTR-3B for the preceding month is filed. This functionality will be implemented on the GST Portal shortly, (possibly before the due dates for GSTR-1 i.e. 10th January 2022) after which the system will check the filing of preceding GSTR-3B before permitting to file GSTR-1 for the subsequent month. For instance: - Let us assume that a registered taxpayer has not filed the monthly GSTR-3B for November 2021. Now, the taxpayer tries to file GSTR-1 for December 2021 on 10th January 2022. The system will not allow filing of GSTR-1 for December 2021, and will allow filing of GSTR-1 for December 2021 only after the filing of GSTR-3B for November 2021. It is therefore alerted that all Taxpayers, may kindly ensure timely filing of GSTR-1 and GSTR-3B for the earlier periods in consonance with amended provisions of Rule 59 of CGST Rules, 2017 to avoid any inconvenience in compliance. GST UPDATEZ- 01-01-2022 Gross GST Revenue collection for December 2021 - Rs.1,29,780 crore. The gross GST revenue collected in the month of December 2021 is Rs:1,29,780 crore of which CGST is Rs 22,578 crore, SGST is Rs 28,658 crore, IGST is Rs 69,155 crore (including Rs 37,527 crore collected on import of goods) and Comp. cess is Rs 9,389 crore (including Rs 614 crore collected on import of goods). The revenues for the month of December2021 are 13% higher than the GST revenues in the same month last year and 26% higher than the GST revenues in December 2019. During the month, revenues from import of goods was 36% higher and the revenues from domestic transaction (including import of services) are 5% higher than the revenues from these sources during the same month last year. Stable........ GST UPDATEZ ON 06-01-2022 Judgement on withheld of refund for verification of suppliers L-1 & L2…. GST UPDATEZ ON 04-01-2022 Blocking of GSTR-1 if GSTR-3B is not filed One may recollect that a self-policing mechanism was put in place in terms of Recently, a petition was filed before the Hon’ble Telangana High Court in case of BHAGYANAGAR COPPER PVT LTD V/S CBIC on the issue of withholding of refund claim on account of verification of L-1 and L-2 suppliers in the supply chain.
132 R. Srivatsan, IRS do not mandate the petitioner to verify the genuineness of the supplier. Moreover, refund cannot be denied to the assessee merely because the verification of L1 and/or L2 supplier is pending. Also, it is not the duty of the exporter to verify the details of supplier’s supplier. The court *directed to grant refund to the petitioner as the withheld of refund was leading to blocking of working capital of the petitioner. Remarks: The above judgement has proved to be a blessing for the assessee. This case indicates that the refund claims filed by the exporters ought to be processed within the stipulated time period of 60 days as it adversely impacts the liquidity of the exporters. The denial of credit or withholding of refund claims for verification of suppliers / supplier’s supplier is not at all justifiable as the department has all the powers to first recover the applicable tax from the suppliers and only if the suppliers are found to be non-existent, the recipients should be approached. Though the order is just, one more headache for the departmental officers complicating the subject of refund!!!!! Issue: The petitioner is a MSME unit, engaged in manufacturing and exporting of copper rods, field coil, copper tube etc. The petitioner paid IGST on exports and applied for refund as Zero-Rated Supplies. The Proper officer had informed the petitioner that the system has given an alert for 100% examination of goods exported, availment of ITC probably on the basis of a fake invoice and hence their refund claim was kept pending GST UPDATEZ ON 07-01-2022 GSTN enables New Functionalities available for Taxpayers on GST Portal. Prayer: The petitioner cited that in terms Circular No. 16/2019-Customs dated 17.05.2019 and as per SOP issued, a report to the respective Chief Commissioner of Central Tax is to be furnished within 30 days specifying clearly whether the amount of IGST paid and claimed as refund is in accordance with law or not. Furthermore, the Chief Commissioner of Central Tax shall compile and forward the report to the concerned customs port of export within five working days and thereafter, upon receiving the verification report from the Chief Commissioner of Central Tax, the Customs Officer at the port of export shall proceed to process the IGST refund to the extent verified by the GST authorities. Défense: The department contended that there has been detection of large number of cases relating to fraudulent ITC based on fake invoices. Hence, to keep a check on the same, government had taken measures in identification of risky exporters and suppliers at least two level up in the supply chain i.e. L1 and L2. As per the data analytics, exporter was identified as risky exporter. Hence, only on receipt of verification from filed formations about the genuineness of Credit IGST refund can be processed further. Decision: The Hon’ble High Court held that as per Section 16 of IGST Act, 2017, exporter petitioner is entitled to claim refund on account of zero-rated supplies made by him. Further, even if the claim of department is considered, petitioner is entitled to provisional refund of 90%. The Court held that CGST and IGST Act Click here to read full document Changes have been made in Form GSTR-1 or IFF by GSTN so as to improve the taxpayer experience. Enhancements have been made in the GSTR-1/IFF user interface wherein taxpayers are provided with
133 R. Srivatsan, IRS 1. a re-organized dashboard; 2. easy amendment and addition of records; 3. Document counts with color-coding and 4. Recipient wise count of records. Further, in order to help the taxpayer in making data entries faster and to reduce errors while creating their Statement of outward supplies in Form GSTR-1, ‘My Master’ facility has been created wherein taxpayers can save details of their recipients and suppliers and the HSN of the commodities they deal in for two masters on the portal namely Product Master, and Supplier/Recipient Master. This facility "is available in the offline tool* also. Now whenever a taxpayer enters data in the related field of GSTR-1 for which master exists, the Offline tool/portal as the case may be will fetch the details from the Master and will show the probable values in the drop-down based on the keywords entered. By selecting the drop down, all the corresponding fields of that row shall be filled up automatically. Taxpayers can also upload master created offline on GST common portal as JSON file to update their online master and similarly download the master created online and import it in the offline tool to update his master created offline. This is a wonderful convenience, similar to the one already available on e-way bill portal. Earlier, the system used to return an error message if a supplier entered the GSTIN of a suspended taxpayer in the B2B, B2BA, CDNR, and CDNRA tables of Form GSTR1/IFF. Now, this validation has been removed and taxpayers would be able to enter a suspended GSTIN as a recipient of taxable supplies in respective tables of Form GSTR-1/IFF. These measures will facilitate faster population of data in the Forms prescribed, increase user experience and enable timely compliance. GSTN added one more facility to the users and launched a revamped & enhanced version of Search HSN Functionality on Common Portal. Now, the taxpayer can find HSN code using commonly used descriptions also. using the "Search HSN" facility by going to the GST Common Portal and navigate through Services> User services> Search HSN Code Search on the basis of General / Technical/ Common Parlance Description Upon entering at least 3 characters, the five nearest possible descriptions, most commonly used trade descriptions along with their respective technical descriptions would be shown in the auto suggested drop down. One can then select the most appropriate suggestion. The best part of this functionality is that it can be used for both Goods and Services search and there is no need to login. It is available in Pre-login stage open to all. GST UPDATEZ ON 08-01-2022 Revamped “Search HSN Code “functionality GST UPDATEZ ON 09-01-2022 Interest on delayed payment of Tax liability will be auto computed in GSTR 3B
134 R. Srivatsan, IRS In order to facilitate taxpayers in doing self-assessment, a new functionality of interest calculator is being released in GSTR-3B shortly. This functionality will assist taxpayers in calculating the interest applicable for delayed payment of tax consequent upon delayed filing of returns and for other reasons also. Interest as per Section 50 of the CGST Act 2017, will be auto populated in GSTR 3B, once this functionality is released. Taxpayers will have to verify and discharge the correct interest liability as per existing provisions, as payment of interest is a statutory compliance. The system computed interest values auto-populated in next GSTR-3B return will be kept editable, initially. However, the system generated data will contain both values i.e., the System computed interest, and the user paid interest values in the GSTR-3B. This new functionality will compute the minimum interest applicable on the basis of the values declared by the taxpayers in GSTR-3B for a particular tax-period. This system computed interest will be auto-populated in Table-5.1 of GSTR-3B for the next tax-period, the way it is done for the Late fees at present. In cases of delayed filling of GSTR 3B, a pop up will appear showing option for delayed declaration of liability. For this a new button will be available to voluntarily declare Tax period wise breakup of liability. If no previous period tax liability, then interest will be computed by assuming that the entire tax liability pertains to the present period. This facilitation measure is expected to assist the taxpayers by helping them with calculation of correct interest while filing of GSTR-3B and will thus improve ease in filing return under GST. This automated process is a protracted requirement as it involves just arithmetic and no interpretation and hence can be calculated by the system without any dispute. This functionality once made available on the GST Portal, will be intimated to the taxpayers. An overlong pending demand of the Officers as well as Taxpayers which is definitely a progressive step. GST UPDATEZ ON 10-01-2022 Recovery process to be initiated only after improper explanation of not paying unpaid tax CBIC has issued a detailed guidelines vide Instruction No. 01/2022, dt: - 07-01-2022, for recovery proceedings under the provisions of section 79 of the CGST Act, 2017 in cases covered under newly inserted explanation to sub-section (12) of section 75 of CGST Act 2017. New provisions vide clause 114 of the Finance Act 2022, have come into effect from January 1, 2022. To recollect, an explanation was added in section 75(12) of CGST Act to clarify that the tax on self-declared supplies by the registered person in GSTR-1, which has not been paid through GSTR-3B, will be considered as his self-assessed admitted liability and can be recovered straight away. Guidelines for new provision have been issued to remove the apprehension of unauthorised visits of the GST officials to the premises of the taxpayers for such recoveries. According to guidelines, where, selfassessed tax reported in GSTR-I is found to be short paid or not paid in GSTR-3B, the proper officer may send a communication to explain the reasons for such short payment or non-payment within a reasonable time.
135 R. Srivatsan, IRS There may not be any requirement to initiate proceedings for recovery under section 79, where the explanations are proper. However, if the said registered person either fails to reply, or fails to make the payment of such amount short paid or not paid, within the time prescribed in the communication, then the proceedings for recovery of the said amount as per provisions of section 79 may be initiated by the proper officer. The instructions have mandated an opportunity of being heard before the said recovery proceedings and would definitely arrest the misuse of the newly introduced provision of section 75(12) provisions by the Tax officers. At best it will mellow down the fangs of the newly introduced provision of section 75(12) in a more justifiable manner - where in some cases where there may be a genuine reason for difference between the details of outward supplies declared in GSTR-1 and those declared in GSTR-3B. Principles of Natural Justice ensured. requirement of generation of e-way bill. The Petitioner is engaged in the business of selling Sweet Supari and Betel Nut Product. The Petitioner, in its normal course of business sold 90 bags of betel nut product in following manner, i.e. 87 bags to one registered dealer and 3 bags to another registered dealer using common transport, in such manner that the value of second transaction/ consignment was less than Rs. 50,000 and accordingly in the opinion of the Petitioner, did not require e-way bill. With respect to supply of 87 bags of betel product, however, the documentation was complete and e-way bill was also generated. The vehicle was intercepted, and on examination, it was found that while 87 bags of goods were accompanied with valid invoice, e-way bill and all supporting documents, the 3 bags of betel nut product were not accompanied with tax invoice. As a result, the Department formed a view that complete 90 bags are liable to be detained and subsequently were seized. The Hon’ble Court quashed the impugned detention/ seizure orders and allowed the writ petition of the Petitioner and concluded that every transaction has to be looked into independently for determining ceiling of Rs. 50,000 when being transported under different Tax Invoices, though under the same conveyance. Added to that, the Hon’ble Court imposed costs of Rs. 20,000 on the Respondents, granting them liberty to recover the said cost from the erring officer. Taking a different Route? GST UPDATEZ ON 18-01-2022 "GePP-On" new functionality for generating E invoicing Click here to read full document GST UPDATEZ ON 17-01-2022 E-way bill – Every transaction has to be looked into independently for determining ceiling of Rs. 50,000 In a very important decision the Hon’ble Allahabad High Court, in the case of Shri Surya Traders v. Union of India Writ Tax No. 1146 of 2021, Allahabad HC (SB) has passed a detailed ruling on the issue of detention, seizure and release of goods and conveyances in transit. It has been held that every transaction has to be looked into independently for the purpose of determining ceiling of Rs. 50,000 for Click here to read full document
With an intent to help businesses to generate e-invoices, NIC has released an application known as ‘GePP-On’. (GST eInvoice Preparing and Printing (GePP) Tool) To generate e-invoices using GePP-on application, one need to enter the invoice details in the form designed in the application. Following are the features of GePP-On: 1.Browser-desktop based application that works on mobile devices as well 2. Generation of IRN 3. Cancellation of IRN 4. Generation of e-way bill number along with IRN 5. Printing of e-invoice with QR Code, 6. You can create customer and HSN master 7. Designed to work in offline mode 8. Backup and restoration of data and many such related features. Currently, the beta version of "GePP-On" is released for businesses who are enabled for e-invoice generation. These businesses can use the existing login credentials to access the application. Shortly, the final version of GePP-On will be made available. Download link to GePP: https://einv-apisandbox.nic.in/gepp/#/ The efforts to release of GePP-On application for e-invoice generation is a welcome move, not only for businesses that are already enabled for e-invoicing but also would benefit many small businesses in the coming days, when more businesses are brought under the ambit of e-invoicing. 136 R. Srivatsan, IRS In a very important decision, the Madhya Pradesh Authority of Advance Ruling (AAR) has ruled that no GST is leviable on Cash discounts received from the supplier. The facts of the case are that the Applicant, M/S Mahaveer Prasad Mohanlal is having the dealership of a famous rice brand name of India “India Gate Basmati Rice”. GST UPDATEZ ON 24-01-2022 No GST is leviable on Cash Discounts received from Supplier The applicant has sought the advance ruling on the issue of 1. Whether the applicant can avail the Input Tax Credit of the full GST charged on invoice of the supply or a proportionate reversal of the same is required in case of post purchase Cash discount for early payment of supply invoices(bills) given by the supplier of goods to the applicant without adjustment of GST, and Incentive/schemes provided through credit note without adjustment of GST by the supplier to the applicant. 2. Whether GST is leviable on cash discount offered by supplier to applicant through credit note without adjustment of GST for making the early payment from the date stipulated for payment of such supply as output supply? 3. Whether GST is leviable on incentive/schemes provided through credit note without adjustment of GST by the supplier to the applicant (dealer) as output supply? The coram of Central and State AAR of Madhya Pradesh held that 1. The applicant can avail the Input Tax Credit of the full GST charged on the invoice of the supply and no proportionate reversal of ITC is required in respect of commercial credit note issued by supplier for Cash discount for early payment of supply invoices(bills) and Incentive/schemes provided without adjustment of GST, provided the said discount is not covered under Section 15(3) (b) of CGST Act, 2017 and the said discounts is not in terms of prior agreement. IMPORTANTLY,
137 R. Srivatsan, IRS 2. This is subject to the conditions that the GST paid for the said goods/service is not reversed or reimbursed / re-credited by the supplier to the applicant in any manner. Since the amount received in the form of credit note is actually a discount and not a supply by the applicant to the supplier, no GST is leviable on receiver on cash discount/incentive/schemes offered by the supplier to applicant through credit note against supply without adjustment of GST. Looks an appropriate and unflinching decision. In a recent judgement of Bharti Airtel vs UOI, the Punjab & Haryana High Court lifted a stay ordered earlier, to directly recover interest accrued to the tune of Rs 5.77 crore on late payment of tax due to a mismatch. So, Direct recovery means that the tax authorities are not required to send notices. The authorities may recover the amount as an Arrears of Revenue to Government by various means such as deducting the money owed to assesses etc., Or Alternatively, it could also go on to detain their goods and auction them and realise the dues from the proceeds. In the instant case, the tax authorities had found a difference of Rs 29.88 crore in the liabilities declared in the outward supply statement — GSTR-1 and summary inputoutput liability returns GSTR-3B — for the financial year 2017-18 by Bharti Digital Networks Private Ltd. Upon examination of records and data, Bharti Digital paid the tax and mentioned it in the GSTR-3B for December 2018 filed in the month of January 2019, without interest. Since there was a delay of 392 days in the payment of tax from the relevant date, the tax authorities had sought to recover interest of Rs 5.77 crore. The department issued summons to the company. The proceedings were challenged by the company in the high court, and the court had ordered an interim stay on the proceedings initially. Post submission of replies and subsequent proceedings, the court has lifted the stay on the proceedings to recover interest through its order dated December 16, 2021. Airtel deposited the amount (interest) with the tax authorities on January 17, 2022 in compliance. This important decision now allows the GST authorities to directly recover interest if tax is not paid on time due to mismatches in invoices. GST UPDATEZ ON 25-01-2022 Whether amount paid UNDER PROTEST during the course of investigation is refundable? Click here to read full document GST UPDATEZ ON 28-01-2022 Authorities may now directly recover interest accrued on non-payment of GST without sending any notice Click here to read full document
138 R. Srivatsan, IRS Reference is invited to Section 79 of the Central Goods and Services Tax (CGST) Act which empowers the officers to directly recover the unpaid GST through methods cited therein. Though legal provision exists in the GST laws, it has been the practice not to resorted to recovering interest without sending notices. But with court backing, the interest can be recovered directly as it is a Civil liability consequent upon acceptance of Tax liabilities as opined in the landmark judgement in the case of Rajasthan Spinners vs UOI by the Hon'ble Apex Court. The tolerance limit has been kept at 10% in both cases by GSTN as per the alert message. The taxpayer can check the comparison / variances post login by navigating through Services-->Returns--> Tax liabilities-->and ITC Comparison--> Select year (period). This alert will definitely be helpful for the taxpayers to keep a tag on the variance/ anomalies and take corrective measures in time. GST UPDATEZ ON 30-01-2022 Alert on the GST portal Where the liability declared in GSTR-3B varies significantly with Form GSTR-1 or Where ITC taken in GSTR-3B varies significantly in comparison with auto populated GSTR-2B indicating a contravention to the provisions in rules, registration shall be suspended in terms of Rule 21(2A) of CGST Rules 2017. If one could remember, as per Notification 94/2020 dated 22nd December 2020, a new sub-rule 2A has been inserted in Rule 21A of the Central Goods and Services Tax (CGST) Rules. Any significant differences or anomalies observed between the GSTR-3B and the GSTR-1/2B could lead to suspension of GST registration. Further, if these differences remain unexplained, the GSTIN could get cancelled. GST UPDATEZ ON 31-01-2022 ITC cannot be disallowed if genuineness of transaction is established The honourable Calcutta High Court in the case of LGW Industries Limited & Ors. Vs Union of India & Ors. has ruled that taxpayers shouldn’t be denied the benefit of the input tax credit if one is able to establish the genuineness of the transaction through documentary evidence, and statutory obligations where registration of suppliers from whom procurements have been made is cancelled after the execution of transaction. The Court was hearing a batch of four petitions (in the writ petitions in item nos. 1, 4, 6 and 8 – WPA No.23512 of 2019, WPA No.6768 of 2020, WPA No.7285 of 2020 with CAN No.1 of 2020 and WPA No.8289 of 2021) where show-cause notices (SCN) were issued to the taxpayers by the Department, refusing the benefits of input tax credit where registration of their suppliers was cancelled with retrospective effect covering the transactions period in question. Petitioners also challenged the controversial Section 16 (c) 2 of the CGST regulations which denies taxpayers benefits of the input
139 R. Srivatsan, IRS tax credit if their suppliers fail pay taxes for such transactions to the Government. The single member bench of honourable Calcutta High Court held that the purchases and transactions were supported by valid documents and that purchases and transactions made before the cancellation of GST registration were genuine and hence ITC is available. The Court did not consider deciding on the issue of constitutional validity of Section 16(c) (2) of the Central Goods and Services Tax (CGST) Act 2017. The Calcutta High Court’s order is a first of its kind wherein a High Court has decided on such matter. Therefore, this ruling holds great significance for other High Courts where similar writ petitions are pending to be decided and a good precedence to the taxpayers to rely on ITC disputes where genuine transactions are established with documents. CGST is Rs 24,674 Cr. SGST is Rs 32,016 Cr. IGST is Rs 72,030 Cr. (including Rs 35,181 crore collected on import of goods) and Cess is Rs 9,674 Cr. (including Rs 517 crore collected on import of goods). The highest monthly GST collection has been Rs 1,39,708 crore in the month of April 2021. Total number of GSTR-3B returns filed up to 30th January 2022 is 1.05 crore that includes 36 lakh quarterly returns. Source: - PIB Release ID: 1793877 GST UPDATEZ ON 01-02-2022 Gross GST Revenue collected for January 2022 is Rs 1,38,394 crore GST UPDATEZ ON 01-02-2022 Important GST changes update through finance bill 2022 Click here to read full document GST collection crossed Rs 1.30 lakh crore mark for the 4th time. Revenues for the month of January 2022 15% higher than GST revenues in the same month last year and 25% higher than the GST revenues in January 2020. The gross GST revenue collected in the month of January 2022 is Rs 1,38,394 crore of which Alert: - All the changes and amendments proposed in the Finance Bill 2022 shall apply only from date to be notified later in terms of Section1(3) of the CGST Act 2017. 1.Time Limits u/s 16(4), Section 34 & Section 37, Section 52 has been extended by two months. Instead of the last date for filing the return under Section 39 for the month of September of the next Financial Year, it has been proposed to have the last date as 30th November of the next FY. Effect: ITC can now be claimed by 30th November of next financial year instead of September of next financial year and additional time has been provided. 2. Section 42, 43 & 43A of CGST Act are omitted to do away with two-way communication in filing of GST Returns
140 R. Srivatsan, IRS Effect: GSTR 2 and GSTR3 is now finally removed. New Section 38 will take care of the matching mechanism. New Section 38 for prescribes the manner as well as conditions and restrictions for communication of details of inward supplies and input tax credit to the recipient by means of an auto-generated statement and to do away with two-way communication process in return filing. 3. Section 41 of the CGST Act is being substituted so as to do away with the concept of “claim” of eligible input tax credit on a “provisional” basis and to provide for availment of self-assessed input tax credit subject to such conditions and restrictions as may be prescribed. Effect: - NIL. This is a consequential amendment due to removal of Section 42, 43 and 43A 4. Section 47 of the CGST Act is being amended so as to provide for levy of late fee for delayed filing of return under section 52. Further, reference to section 38 is being removed consequent to the amendment in section 38 of the CGST Act. Effect: Late fees shall apply for delay in filing TCS (tax collected at source) return under Section 52. 5. Electronic Cash Ledger - Section 49 of the CGST Act is being amended so as to allow transfer of amount available in electronic cash ledger under the CGST Act of a registered person to the electronic cash ledger under the said Act or the IGST Act of a distinct person; Effect: - Amount lying as balance in the Electronic Cash Ledger can now be transferred to the distinct person for utilisation. Very useful change which will help to tie over financial crunch. 6. Levy of interest u/s: - Sub-section (3) of section 50 of the CGST Act is being substituted retrospectively, with effect from the 1st July, 2017, so as to provide for levy of interest on input tax credit wrongly availed and utilized. Effect: No interest for mere wrong availment of ITC. Interest to be charged only if wrong ITC is availed and utilised. This is a long pending requirement as per the recommendations of the GST Council. 7. Rectification of Errors: - Sub-section (6) of section 52 of the CGST Act is being amended so as to provide for an extended time up to thirtieth day of November of the following financial year for rectification of errors in the statement furnished under sub-section (4) by an e-Commerce operator for TCS 8. Refunds: - Time limit for UN refunds also made two years from the last day of the quarter instead of Six months for the period to which refund is claimed. Also extend the scope of withholding of or recovery from refunds in respect of all types of refund; provides clarity regarding the relevant date for filing refund claim in respect of supplies made to a Special Economic Zone developer or a Special Economic Zone unit as the due date for furnishing of return under section 39 in respect of such supplies. GST UPDATEZ ON 03-02-2022 Electronic Credit Ledger & Bank Accounts should automatically get unblocked after expiry of period of 1 year Rule 86A of the CGST Rules, 2017 and Section 83(2) of CGST Act 2017 provided that the Electronic Credit Ledger / Provisional attachment of Bank Accounts respectively can be blocked for a period of one year. It empowers the Commissioner or its authorized officers to disallow debit of electronic credit ledger and block the credit based on a reasonable belief that credit of input tax available in the electronic credit ledger has been fraudulently availed or is ineligible.