E-Book: GST UPDATEZ

The Central Government has issued the following three (03) notifications giving effect to changes in law and procedures that were proposed as part of the Finance (Bill) Act 2022 1.Notification No: 18/2022 –CT, dated: 28- 09-2022 2.Notification No: 19/2022 –CT, dated: 28- 09-2022 3.Notification No: 20/2022 –CT, dated: 28- 09-2022 A detailed analysis will make us comprehend the following very important changes to be carefully abided. 1. New restrictions on the claim of Input Tax Credit: From 01st October 2022 Government can restrict the Taxpayer’s ITC if his vendor has: Defaulted in paying tax for such a period or Short paid taxes by a certain percentage Availed excess ITC by such limit or Utilized ITC to pay taxes in excess of the maximum allowable limit Taken registration within such period Other cases as may be prescribed The period, limit and percentage of such restriction are yet to be finalized & fixed and may be done in due course of time. Thus, availment of ITC now needs an extra caution. Safeguard to choose a vendor with proper established credentials alone will help in enjoying the facility of ITC without litigations. 2. Extension of Time Limit: This is a path breaking relaxation as it gives and additional elbow room for Taxpayers to avail their genuine ITC with additional time. For any particular financial year, the following can be done up to 30th November of the succeeding financial year: a) Avail ITC for any invoice/debit note of a financial year b) Issuance of credit notes for supplies made in a financial year 191 R. Srivatsan, IRS route was deliberated and not an error since driver covered such a long distance without being deliberated is an absurd defense. Further, it was submitted that affidavit of driver and communication by purchaser is an afterthought and hence, requested that the court should not rely upon this argument. However, the Court held that the driver was carrying E-way bills and tax invoices to deliver the goods. Further the diversion occurred at late night and hence, there are chances of human error. Hence, the impugned order of detention of the vehicle and imposition of penalty was set aside by the Judiciary and petition was disposed off accordingly. Well...... The above decision is yet another example in the catena of cases stating that goods cannot be seized on the sole grounds of routing the vehicle in the wrong direction. One can also recollect the decision given by hon’ble Telangana High Court in the case of M/S COMMERCIAL STEEL COMPANY V/S ASSISTANT COMMISSIONER OF STATE TAX, and M/S SHREE RAMA STEELS V/S DEPUTY STATE TAX OFFICER where the court has upheld the same point of view. It is high time that the decisions rendered by the appellate authorities should be considered as a binding precedent thereby avoiding any unwanted litigations. Reason to believe should never defy LAW… GST UPDATEZ ON 30-09-2022 10 Important key changes notified taking effect from 1st October 2022 Click here to read full document

ii. A Regular Taxpayers didn't file return for such a continuous tax period as may be prescribed. Please note that as it stands, Rule 21 says that if monthly return filler does not file return for a continuous period of 6 months or if quarterly return filler does not file return for a continuous period of two tax periods, then registration can be cancelled. The current change will ensure disciplined compliance as so many facilities including ITC availability are now linked to filing of returns. 4. Changes in Statement of Outward Supply - GSTR 1: It is now compulsory that the Statement of outward supply (known as GSTR-1 Return) must be filed in chronological order.This means sequencing of returns is mandatory. Unless the earlier return is not filed current month return cannot be filed. Further Government can prescribe conditions/restrictions in filling of details of outward supply and subsequent communication to recipient. 5. Other Changes in GST Returns: Similarly, all returns are now sequenced like i. Restricts filling of GSTR 3B of current period if GSTR 1 of previous period is not filled. ii. Due date for filling of GSTR 5 and GSTR 5A is now 13th of next month ii. Late fee for delay in filling of TCS Return has been introduced. 6.Claiming Input Tax Credit on SelfAssessment basis: Every Taxpayer’s self-assessed ITC will be credited to GST PMT-02 i.e., the electronic credit ledger. The concept of Provisional ITC which has been creating a lot of confusions has been omitted now. Further if one’s supplier didn't pay taxes to the Government then ITC shall be reversed along with Interest. This makes all the more reason to ensure that the procurements are made only from suppliers of established integrity. 192 R. Srivatsan, IRS c)Rectification of errors in respect of GSTR 1, GSTR 3B and GSTR 8. The Central Government now has notified what was proposed under Section 100 of Finance Act 2022 effective from 1.10.2022. Section 100 of the Finance Act 2022 amends Section 16 of the CGST Act 2017 as follows: The due date for taking input tax credit for a Financial Year shall be 30th November of following Financial Year or date of filing Annual Returns, whichever is earlier. Generally, the Annual Returns are to be filed by 31st December of the succeeding Financial Year.The time limit to issue credit note is also extended to 30th November of next Financial Year. The mute question now is Whether this change is applicable for FY 2021-22 as it is made effective only from 1.10.2022 and the benefit of extended time lines upto 30th November can be availed for 2021-22. Let us understand that as per the legal precedents and principles of interpretation, the new clause effectively substitutes the existing clause. In general, any amendment in time limit is considered as procedural only. Earlier in case of debit note amendment also, CBIC clarified that it would apply for DNs issued for earlier periods also. Similar situation should prevail here in this amendment also. Hence, there should not be any difficulty for the Financial Year 2021-22. However, for the sake of better understanding, if a clarificatory circular is issued, by which several infructuous litigations leading us nowhere can be avoided. So, to sum up, one can conclude that, the extension of time limit would apply for ITC and credit notes attributable to Financial Year2021-22 also though the changes have come into force w.e.f. 01-10.2022. 3. Cancellation of Registration: On notified situations the Tax officers have been vested with powers to Suo moto cancel registration i. A composite taxpayer didn't file return for a financial year beyond three months from the due date

Although lot of changes have been brought in, time and again, these are all done only in the best interest of Trade and industry from the varies experiences gained over the period and also taking suggestions and opinions from stake holders as a mark of ease of legislative compliance. Progressive……………… R. Srivastava, IRS Assistant Director NACIN, Chennai 167 7. Refund GST more facilities: As a further facility in refund process, a) Refund application is to be filled if you want to claim a refund of excess balance in GST-PMT-03 i.e., Electronic Cash Ledger. b) For supplies to SEZ Developer/SEZ Units, refund is to be filled within 2 years from the due date on which GSTR 3B is filed or ought to have been filed. There were lots of confusions on this matter especially with reference to the relevant date. Now the situation has been clarified and things are clear. c)A specialised agency of the UNO, Consulate, Embassy etc. can claim a refund of tax on inward supply within 2 years.Earlier, at the time of introduction of GST it was Six months which was extended to 18 months and now it is further made as 2 years from the last day of the quarter in which the supply was made in line with other refunds. 8. Consequences of not paying the vendor in time: The Taxpayer need to pay tax along with interest from now on, if one has availed ITC but failed to pay the supplier within 180 days from Invoice date. Earlier there were recommendations to impose interest for delayed payment beyond 180 days by the buyer to the vendor if ITC has been availed. But it was not notified. Now with new changes in place, the interest liability also accrues.This means that though the buyer can reclaim the credit after making the payments, the interest would become a cost. 9. Two-way communication and matching concepts are omitted: As made very clear, during the presentation of budget and that the forms GSTR-2 and GSTR-3 have never been notified, the matching concept and the two-way communication process in return filing etc. is now omitted. However, newly inserted provisions under Section 16(2) will take care of self-policing mechanism for genuine ITC availment. 10. QRMP dealers QRMP optees can now pay taxes on a self-assessment basis or in an alternate way that the government will prescribe later. Before bidding adieu…. GST UPDATEZ ON 01-10-2022 GST revenue collected in the month of September 2022 is ₹1,47,686 crore gross The gross GST revenue collected in the month of September 2022 is ₹ 1,47,686 crore of which CGST is ₹ 25,271 crore, SGST is ₹ 31,813 crore, IGST is ₹ 80,464crore (including ₹ 41,215 crore collected on import of goods) and Cess is ₹ 10,137 crore (including ₹ 856 crore collected on import of goods). The revenues for the month of September 2022 are 26% higher than the GST revenues in the same month last year. During the month, revenues from import of goods was 39% higher and the revenues from domestic transaction (including import of services) are 22% higher than the revenues from these sources during the same month last year. This month witnessed the second highest single day collection of Rs. 49,453 crores on 20th September with second highest number of 8.77 lakh challans filed, next only to Rs. 57,846 crores collected on 20th July 2022 through 9.58 lakh challans, which pertained to end of the year returns. This clearly shows that the GST portal maintained by GSTN has fully stabilized and is glitch free. 193 R. Srivatsan, IRS

2. The taxpayer is advised to fill in the complete details afresh in case they are revising the earlier filed TRAN-2 Form. 3. In compliance with the Supreme Court’s directive as above, the TRAN forms are enabled and the default filing status of TRAN forms for all taxpayers is now visible as “Not Filed”. 4. The status “Not Filed” only implies that TRAN forms are not filed in the new window provided by the Hon’ble court during 01.10.2022 to 30.11.2022. 5. The Department has also clarified that those registered persons, who had successfully filed TRAN-1/TRAN-2 earlier, and who do not require to make any revision in the same, are not required to file/ revise TRAN-1/TRAN-2 again during this period from 01.10.2022 to 30.11.2022. 6. The option of filing or revising TRAN1/TRAN-2 on the common portal during the period from 01.10.2022 to 30.11.2022 is a one-time opportunity for the applicant to either file the said forms, if not filed earlier, or to revise the forms filed earlier. 194 R. Srivatsan, IRS September 2022, also saw another milestone getting crossed when more than 1.1 crore e-way bills and e-invoices, combined (72.94 lakh e-invoices and 37.74 lakh e-way bills), were generated without any glitch on the portal run by NIC on 30th September 2022. GST UPDATEZ ON 03-10-2022 GST on International outbound freight (Ocean and Air freight) GST UPDATEZ ON 02-10-2022 GSTN Re-opens GST TRAN Forms to claim Transitional ITC: Step by step guide In compliance with the Hon’ble court’s directive, the facility for 1. filing TRAN-1/ TRAN-2 or 2. revising the earlier filed TRAN-1/TRAN-2 on the GST common portal by aggrieved taxpayers is now available on GSTN for two months from 01.10.2022 till 30.11.2022. The taxpayers who wish to file or revise TRAN-1/2 should kindly note that the present process flow of TRAN filing is different from the filing process in the financial year 2017-18. As per the present workflow, the transitional credit availed by the taxpayer in TRAN-1/2 forms shall be verified by the jurisdictional tax officer before the credit entry is made in the respective ledgers. The TRAN filing process has been improved vis-à-vis the previous instances and the user interface of the portal has been made simpler for the taxpayers to file their TRAN-1/2 forms. However, it is quite pertinent that before attempting to file the TRAN forms, the taxpayers should note some important points as mentioned below for smooth filing of the forms. 1. TRAN-2 form shall be made available only if the taxpayer has filed TRAN-1 and has made the declaration in table 7 of TRAN-1. As one may be aware the levy of GST on ocean freight has all along been a point of discussions and litigations at the time of export and more contentious at the time of import of Goods. CBIC vide its Notification number: - 02/2018 (R) IGST, dt 25/01/2018 granted complete exemption from GST liability, in terms of powers vested under Section 11 of CGST Act 2017 for out bound international freight with a sunset clause upto 30 Sept 2018. It was extended time and again and finally

High Courts have a binding effect that predeposit is towards the” OUTPUT TAX”. Yet a suitable clarification in this respect from the concerned authorities will definitely resolve prospective litigation. 195 R. Srivatsan, IRS Further, it was submitted that there is a pre-condition to filing of appeal which states that unless the pre-deposit is paid, appeal cannot be filed. Provisions of Section 49 of CGST Act, 2017 were referred to and it was contended that as per the said section, amount available in the Electronic Cash Ledger may be used for making any payment towards tax, interest, penalty, fee or any other amount payable and amount available in the Electronic Credit Ledger may be used for making any payment towards output tax in the prescribed manner. The defendant (revenue) argued that the amount available in credit ledger can be used for making payment of output tax and cannot be utilized for making payment of pre-deposit as under Section 107 of the Act. The amount of pre-deposit can be made only through electronic cash ledger. Reliance was placed on decision of Odisha High Court in the case of M/S JYOTI CONSTRUCTION V/S DEPUTY COMMISSIONER CT & GST. The Court referred to Section 107 of the Act wherein a pre-condition is provided i.e. “unless the appellant has paid (not deposited)” an amount of 10% of tax in dispute. Further, the credit available in electronic credit ledger can be used towards making payment of output tax only. Therefore, in the considered view the petitioner can use electronic credit ledger for making payment of pre-deposit amount. Further, the same can also be made by utilising the electronic cash ledger. It was further stated that any payment towards output tax, whether self-assessed in the return or payable as a consequence of any proceeding can be made by utilization of the amount available in the Electronic Credit Ledger. The pre-deposit amount can be paid through cash as well as credit ledger. Well……. The above decision in favour of the Taxpayers will definitely prove to be beneficial for the trade and industry since now the taxpayer will not have to face tough situation resulting into blocking of working capital towards payment of predeposit. There had been various decisions for and against the motion although it is well settled that through various rulings of GST UPDATEZ ON 06-10-2022 Levy of Central Excise duty+ NCCD on Tobacco Products has Constitutional Validity The honourable Karnataka High Court has ruled that the Union Government is entitled to levy Central GST (CGST) as well as Central Excise duty on tobacco and tobacco-derived products. It dismissed a bunch of petitions by tobacco manufacturers who had challenged the same. In fact, the levy of excise duty on tobacco and tobacco products is a matter of public policy and the honourable HC held in exercise of writ jurisdiction would not interfere with the same. The Dharwad bench of the HC heard petitions by Ghodawat Packers LLP, H I Tamboli and Sons, Rajnandini Foods Pvt Ltd, Balajee Pouches, Ghodawat Foods International Limited and Ghodawat Industries India Private Limited, against the Ministry of Finance, Union of India and Joint Commissioner of CGST and Central Excise. The Joint Commissioner, KSGST had issued an order imposing Central Excise duty and National Calamity Contingent Duty (NCCD) on tobacco products manufactured and sold in the Belagavi jurisdiction. Looking back at the history, before the Central Goods and Services Act, 2017, tobacco products were taxed under Central Excise Act 1944 read with Central Excise Tariff Act 1987. Actually, the Central Excise Act 1944 was repealed except for goods included in Union List of article 246 of Seventh Schedule of the Constitution.

The Central Excise Tariff Act 1987 was also repealed. The HC said that though the Central Excise Act 1944 was repealed, tobacco and tobacco products were added to the Seventh Schedule of the Constitution under Entry 84. Thus, apart from levy of taxes under the provisions of CGST Act, 2017, Central Excise duty can be levied on tobacco and tobacco products under the Central Excise Act, 1944 as well. As for the NCCD, the HC noted that Section 136 of the Finance Act, 2001 contemplates levy of such a duty. NCCD is a surcharge and a type of central excise duty which can be levied independently of the central excise duty as contemplated under the provisions of Fourth Schedule to the Central Excise Act, 1944. Thus, levy of NCCD even in the absence of levy of central excise duty cannot be considered as bad in law. Well...... Repealing of Central Excise Act does not absolve the levy and payment of NCCD as determined under the Seventh Schedule. Unquestionably when there is a Sovereign "RIGHT", can anything be wrong! As an additional facility, now, user can login on any one portal and switch between the two portals without further login. Both the portals (e-invoice and e-way bill Portal) have a link for direct login without entering the login credentials again separately. This will save users time by avoiding to toggle between the two sites. Well...... An excellent facility that will progressively increase compliance. 196 R. Srivatsan, IRS GST UPDATEZ ON 10-10-2022 No GST On Subsidised Deduction made From Employees Availing Food in Factory or Corporate Office: Gujarat AAR The Gujarat Authority of Advance Ruling (AAR) has ruled that GST is not payable on the subsidised deduction made by the applicant from the employees who are availing food in the factory/corporate office. The applicant is in the business of manufacturing, supplying, and distributing various pharmaceutical products. The applicant has 1,200 employees in their factory and is registered under the provisions of the Factories Act of 1948. The applicant is required to comply with all the obligations and responsibilities cast under the provisions of the Factories Act 1948. The employees are charged only for the days on which the employee has punched his ID card, and an amount equal to a predetermined percentage shall be deducted from the salary payable to the respective employee. The deduction was credited to the expense account in which the canteen expense was booked while the full amount of the invoice issued by the Canteen Service provider was booked as an expense in the applicant's profit & loss account without taking the benefit of the ITC of the GST paid on the Canteen Service Provider's invoice. GST UPDATEZ ON 08-10-2022 Single Sign-on facility enabled for eInvoice and e-way bill login GST System has achieved a remarkable milestone of 300 Crore+ e-way bills generation and 200 Crore+ e_invoice generation since its inception till now

The move aims at bringing all businesses with turnover above ₹1 crore under this framework by next fiscal year, 2023-24. From October 1, 2022 businesses having aggregate annual turnover of Rs 10 crore and above have moved to e-invoicing for business-to-business (B2B) transactions. E-invoicing for B2B transactions was first made compulsory for companies with turnover of ₹500 crore from October 1, 2020. This threshold was then lowered to businesses with turnover of ₹100 crore from January 1, 2021 onwards and again was revised to companies having a turnover of ₹50 crore from April 1, 2021. From April 2022, it was extended to businesses with turnover above ₹20 crore. Well…. It would help in syncing sales data of a small business vendor and large corporate clients, which is used to claim *input tax credit. This, would also help in swift detection of false ITC claims, broaden GST base and improve compliance. 197 R. Srivatsan, IRS The applicant sought an advance ruling on the issue of Whether the subsidised deduction made by the applicant from the employees who are availing food in the factory/corporate office would be considered as a supply and liable for GST. The AAR has observed that the applicant was providing a canteen facility to its permanent employees (on payroll) as per the contractual agreement between the employer and employee relationship and also in compliance of obligations and responsibilities cast under the provisions of the Factories Act 1948. The AAR ruled that the provision of the services of canteen facilities cannot be considered as a supply of goods or services to their employees (Schedule – III) as they are neither Activities pertaining to Supply of Goods or Services and hence cannot be subjected to GST. Well…I presume that similar concept can be extended to employees TRANSPORTATION SERVICE also equally. Food for thought! PS: Ref: Case No: GUJ/GAAR/R/2022/42, dated:28th September 2022. GST UPDATEZ ON 20-10-2022 Next GST Council meeting before 15th November 2022 GST UPDATEZ ON 11-10-2022 Govt likely to mandate E-Invoice for Businesses having Annual Turnover of Above Rs. 5 Crore The Government is likely to mandate Businesses with annual turnover of over ₹5 crore to move to e-invoicing under goods and services tax (GST) from January 1, 2023. The GST Network has asked its technology providers to make the portal ready to handle the increased capacity by December, 2022. The GST Council had decided to implement electronic invoices in a phased manner. It is almost four months since last meeting took place but there is still no clear indication about when the next meeting will happen. Technically, the meeting should be held at least once in three months. Actually, the delay in holding the meeting is likely to have an impact on reform measures and new initiatives under GST. In terms of Rule 6 of the Procedure and Conduct of Business Regulations of GST “The Council shall meet at least once in every quarter of the financial year. Click here to read full document

already overburdened dockets of the Courts!!!!! Expecting the Sun rises soon in Madurai. 198 R. Srivatsan, IRS Going by this rule, the next meeting should have taken place by September 30. A key reason for not fixing a date is delay in reworking of report by group of ministers (GoM) on online gaming, Casinos & Horse Racings. This along with a report by another GoM on setting of GST Appellate tribunals is key agenda items to be taken up in next meeting. The last meeting took place in June 28 and 29 at Chandigarh, At the end of that meeting, it was announced that next meeting will take place during the first week of August at Madurai. Since then, there was no information about when exactly the meeting will take place. Now, it is reliably learnt that GST Council is likely to meet in the first half of November 2022 to discuss 1.the reports of the panel of ministers on setting up GST appellate tribunal and 2. levy of tax casinos and online gaming. The status on the much-awaited full report of the committee tasked with rationalisation of GST rates may also come up for discussion at the 48th Council meeting scheduled in Madurai. The GoM on rate rationalisation set up on September 24, 2021 was originally due to submit its report within two months or November 2021. The panel has got subsequent extensions since then. The Council, in its last meeting in June, 2022 had given the GoM time till September 2022 to submit a full report. Well...... The uncertainty qua taxation of online gaming industry is leading to flurry of tax claims (recall the tax notice of INR 21,000 Cr alleging indirect tax evasion on a betting amount of INR 77,000 Cr between July 2017 and June 2022 against a Bengaluru based company issued recently) thereby increasing litigation, & the delay in constitution of the GST Appellate Tribunal and absence of a national appellate forum for advance rulings are adding to the GST UPDATEZ ON 21-10-2022 GST is not liable on Healthcare Services at home/residence of patients AAR Kerala The Patients using health services at home from qualified nurses and other technically qualified persons engaged by clinical establishments are not required to pay the goods and services tax (GST). The Kerala-based Authority for Advance Ruling (AAR) recently held that these services are exempt from GST. It relied on SL No. 74 of Notification No 12/2017 CT (Rate) dated 28.06.2017 issued by Government which says that healthcare services provided by clinical establishments or authorised medical practitioners or paramedics would not attract GST. The case is related to Arden Health Care Private Limited, which provides various healthcare services. The company’s employees—qualified nurses — live at the homes of patients to provide various healthcare services such as physiotherapy, ventilator care, CPR, and emergency. The court said if services provided are for healthcare and the company is a clinical establishment, there would be no GST on these services. Healthcare service is defined to include any service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognized system of medicines in India. (AYUSH).

working on dedicated tribunals for dispute resolution as the GoM set up for this purpose has already finalised its proposals and submitted it to GST Council. Amnesty is as good for those who give it as for those who receive it. It has the admirable quality of bestowing mercy on both sides. But in taxation it's Harsh Injustice to the most compliant. Practically, setting up tribunals may take some time on realistic terms and in the interim, as things should move forward, a one-time dispute settlement mechanism may speedily help clean up small disputes. 199 R. Srivatsan, IRS Clinical establishment includes a nursing home, clinic, sanatorium or any other institution by, whatever name called that offers services or facilities requiring diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicines in India. Well....... Nowadays with advanced medical systems in place, health services are not necessarily provided at a clinical establishment like a hospital but at homes as well. This healthy decision by AAR will definitely avoid the Headache of unwanted litigations. GST UPDATEZ ON 27-10-2022 Detention for expiry of E-way bill by few hours- Unwarranted. GST UPDATEZ ON 26-10-2022 GST Offences: Govt likely to Introduce One-Time Settlement to Avoid Litigations Presumably, the scheme will be a timebound one covering only minor GST offences while offering a one-time opportunity to settle past disputes under central excise duty, service tax and customs duty also to completely wipe off legacy issues. The scheme of course will need to be approved by the GST Council, the apex decision-making body for the indirect taxes. As it is understood, the scheme will not cover 1. Wilful tax evasion, 2. Repeat offenders and 3. Offenders against whom enforcement agencies have initiated proceedings. The proposed scheme is likely to be on the lines of the Centre’s Sabka Vishwas Scheme of 2019, which sought to resolve all legacy disputes relating to erstwhile service tax and central excise. Well......... The GST Council is already The drama unfolds here. The Assistant Commissioner at 04:35 am as on 20.05.2022 stopped the truck and demanded all the relevant documents which were duly furnished by the driver. However, the authority objected the E-way bill stating that it got expired as on 19.05.2022 at 12:00 am. Hence, immediately GST MOV-02 was issued to the petitioner stating that e-way bill is expired and the vehicle was detained. The written submissions of petitioner were not accepted and hence, GST MOV-06 & 07 were also issued specifying the penalty demanded under Section 129 of the CGST Act 2017. The Petitioner submitted that the proceedings under Section 129 are not justifiable and principles of natural justice were not followed. Further, no penalty should be imposed for “minor breaches” or procedural lapses. Also, the petitioner is not guilty of any fraudulent or gross negligence, hence

, penalty imposed is totally unwarranted. Reliance was placed on decision of Telangana High Court in the case of Satyam Shivam Papers Pvt. Ltd. V/s Asst. Commissioner, ST & Others, Calcutta High Court in the case of Ashok Kumar Sureka V/s Asst. Commissioner, State Tax, Durgapur Range Divisional Bench in the case of Robbins Tunnelling & Trenchless Technology (India) Pvt. Ltd. V/s State of Madhya Pradesh & Others. Further reference was made to Circular No. 64/38/2018-GST dated 14.09.2018. The Court held that there was violation as regards to violation of principle of natural justice and gross negligence by the respondent department, *since there is no tax evasion established. It was to be treated as bonafide mistake only and hence, no penalty should be imposed. It was also directed to refund the amount of penalty paid within 30 days failing which interest at the rate of 6% is payable to the petitioner by the department. Well......... The above decision is yet another example in support of the fact that harsh and vindictive penalties should not be levied in case of technical breaches and minor… An Indian firm making pizza toppings mounted a different challenge in Punjab & Haryana High court jurisdiction recently. It was not about the taste of the toppings. It was a dispute over the rate of Goods and Services Tax (GST) that they attracted. In the honourable court, M/s. Khera Trading Company argued that their mozzarella topping should be classified as cheese, which attracts a lower GST of 12% as cheese and milk solids made up more than a third of the topping's contents. But a court completely disagreed. It said the cheese in the topping alone could be truly classified as cheese and not all. The toppings it contained vegetable oil22% of the ingredients, to be precise. However, the firm defended that the oil helped with the texture, added flavour to the pizza and was cheap as well. The court said vegetable fat was not an ingredient of cheese. That would disqualify the toppings to be counted as cheese - instead, it would be called an "edible preparation" and taxed at a higher 18%. Ultimately, the firm lost its case. Well....... It can be a challenge to get the right mix of toppings that makes a pizza delicious. An overload of toppings could make the dough soggy and a wrong mix can affect the flavour. This is a smaller surmountable challenge when compared to classification and assessing the right rate of Tax, if one can say so. A low single rate is likely to eliminate classification disputes, reduce incentives for evasion and bring down compliance costs. But, ........the moment you conflate or reduce the rates classification disputes will reduce, but on the contrary, in a country like India with high income disparities a single or even a dual rate structure risks imposing a larger tax burden on the poor with a higher mean rate. Is it not lip smacking? 200 R. Srivatsan, IRS GST UPDATEZ ON 31-10-2022 GST Classification a "Cheesy" row Click here to read full document

Well...... The fact that the collections have moved up to a new level in excess of Rs 1.5 lakh crore is impressive and is on account of the festive primary and secondary demand together with the various measures taken to improve compliance. On the flip side, it should also not miss our attention that while overall GST collections posted an impressive year-on-year growth in October, several states and Union Territories (UTs) continued to see sub-14 percent growth in their revenues. In all, 17 states and UTs saw their GST revenues rise by less than 14 percent in September. Several states saw a fall in their GST revenues year on year. With the protected GST revenue period having ended on June 30, states are no longer compensated if their collections aren't 14 percent higher compared to the corresponding month of last year. A point to note...... 201 R. Srivatsan, IRS GST UPDATEZ ON 01-11-2022 GST Portal Update GSTN Portal is NOT ALLOWING TO OPEN GSTR-3B of Oct, if GSTR-1 for the same tax period i.e. Oct has not been filed. Due to amended Section 39(10) w.e.f. 1st Oct 22, which says GSTR 3B for a tax period cannot be filed if "CURRENT" tax period's GSTR-1 is not filed! Well...... At last, .... proper sequencing in return filing! GST UPDATEZ ON 02-11-2022 GST revenue collected for October2022 ₹1,51,718 crore The gross GST revenue collected in the month of October 2022 is ₹1,51,718 crore of which CGST is ₹26,039 crore SGST is ₹33,396 crore IGST is ₹ 81,778 crore (including ₹ 37,297 crore collected on import of goods) and Cess is ₹10,505 crore (including ₹ 825 crore collected on import of goods). The revenue for October 2022 is second highest monthly collection, next only to the collection in April 2022 and it is for the second time the gross GST collection has crossed Rs. 1.50 lakh crore mark. October 2022 also saw the second highest collection from domestic transactions next only to April 2022. This is the ninth month and for eight months in a row now, that the monthly GST revenues have been more than the ₹ 1.4 lakh crore mark. GST UPDATES ON 10-11-2022 Centre allows rupee settlement in export promotion schemes The change in the Foreign Trade Policy 2015-22 comes after the Reserve Bank of India had, on 11th July 2022, issued guidelines for the settlement of international trade in Indian rupees. The central government has made changes to the Foreign Trade Policy 2015-22 also to allow for rupee settlement of international trade for export promotion schemes immediately. Given the rise in interest in internationalisation of Indian Rupee, this Policy amendments have been undertaken to facilitate and to bring ease

enter into agreements with Russian entities, the move to allow settlement of trade in Indian rupees came amid increasing pressure on the Indian currency in the wake of Russia's invasion of Ukraine in late February. However, with the might of growing Indian Economy, in comparison with world economic growth, this move will be receiving "Encouraging response" from a large number of countries to participate in rupee-based trading. Aiming to shore up FOREX!!!! 202 R. Srivatsan, IRS in international trade transactions in Indian Rupees, for Indian EXIM business entities. Further, the changes have been notified 1. for imports 2. for exports, 3. export performance for recognition as Status Holders, 4. realisation of export proceeds under advance authorisation & Duty-Free Import Authorisation schemes and 5. realisation of export proceeds under export promotion capital goods scheme. (EPCG). The changes mean benefits, incentives, and fulfilment of export obligation under the Foreign Trade Policy can be extended to export payments made in Indian rupees, as outlined by the Reserve Bank of India (RBI) on 11th July 2022 wherein it had announced the setting up of a mechanism to settle global trade in rupees. Under the mechanism, all exports and imports may be denominated and invoiced in rupees, with the exchange rate between the currencies of the two trading partner countries to be market determined. To settle these transactions, authorised Indian banks have to open Special Rupee Vostro Accounts of correspondent banks of the partner trading country. While the mechanism is yet to see its first transaction, as a first step forward, UCO Bank and YES Bank had joined hands with Russian lenders under the framework. RBI Deputy Governor T Rabi Sankar said in a speech on October 20 that it was receiving "encouraging response" from countries to participate in rupee-based trading. Well...... Though stake holders may be wary of the mechanism on fears that they could face sanctions from Western nations should they GST UPDATEZ ON 16-11-2022 Scope of intermediary services In a major ruling, Punjab & Haryana High Court has quashed a demand by the GST Department against Genpact India on the issue of intermediary versus BPO (Business Process Outsourcing). The Court also directed refunds to be sanctioned. GST laws classifies that intermediaries are taxable and do not qualify as exports and Refunds filed by them for Zero rated supplies were accordingly rejected. The honourable court while passing the order opined, they were of the considered view that the impugned order dated February 15, 2021 (Demand Order by GST Department) holding the petitioner to be an ‘intermediary’ under Section 2 (13) of the IGST Act, cannot sustain and was quashed. It also restored the refund order amounting to over ₹26.34 crore. It also directed that the “benefit of this order shall ensure to the petitioner for grant of subsequent refunds as well. A peep into the case reveals that the

As a Sub-contractor it is receiving fee/charges from the main contractor. The bench in its ruling clarified that subcontracting for a service is not an “intermediary” service. 203 R. Srivatsan, IRS petitioner, Genpact, is a BPO service provider which challenged an order passed by the Additional Commissioner CGST (Appeals) Gurugram. It was held that the services provided by the petitioner are in the nature of “Intermediary Services” as per Section 2 (13) of the IGST Act and do not qualify as “export of services” in terms of Section 2 (6) of the Act. The order had rejected the refund claim of unutilized Input Tax Credit (ITC) used in making zero-rated supplies of services without payment of IGST. The bench observed while discussing the scope of intermediary services, that as per the definition of “intermediary” under GST law, three conditions must be satisfied. First, the relationship between the parties must be that of a principal-agency relationship. Second, the person must be involved in the arrangement or facilitation of provisions of the service provided to the principal by a third party. Finally, the person must not actually perform the main service intended to be received by the service recipient itself. The scope of an “intermediary” is to mediate between the principal service provider (the third party), and the beneficiary (the agent principal), who receives the main service and expressly excludes any person who provides such main service “on his own account. The bench also noted that the petitioner provides the main service directly to the overseas clients of Genpact International Incorporated (GI) but does not get any remuneration from such clients. It is GI which gets paid by its customers to whom the services are being provided directly by the petitioner. There is also nothing to show that the petitioner neither has a direct contract with the customers of GI, nor it is liaisoning or acting as an “intermediary” between GI and its customers. “All that is evident from the record is that the petitioner is providing the services which have been sub contracted to it by GI. GST UPDATEZ ON 17-11-2022 GST Annual Return: GSTR-9 to Allow ITC Claims and Amendment of Invoices till 30th November 2022 Amid conflicting opinions & interpretations, the CBIC has issued a notification as proposed during Budget 2022, to allow Input Tax Credit (ITC) claims and amendment of invoices till 30th November 2022. Notification No:.22 /2022 CT dt: 15-11-2022, states that “In the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the said rules), in FORM GSTR-9, under the heading Instructions, in paragraph 7, – (A) for the figures, letters and words “between April, 2022 to September, 2022”, the figures, letters and words “of April, 2022 to October, 2022 filed upto 30th November, 2022” shall be substituted; (B) in the Table, in second column, – (I) against serial numbers 10 & 11, for the figures and words “April, 2022 to September, 2022”, the figures, letters and words “April, 2022 to October, 2022 filed upto 30th November, 2022” shall be substituted; (II) against serial number 12, for the figures and words “April 2022 to September 2022”, the figures, letters and words “April, 2022 to October, 2022 upto 30th November, 2022” shall be substituted; (III) against serial number 13, for the figures Click here to read full document

The Central Board of Indirect Taxes and Customs has declared that the GST department will not challenge the Supreme Court decision in the case of Mohit Minerals wherein the Apex Court had quashed the levy of IGST on ocean freights at the time of import. In a letter issued to Commissioner of GST, Central Mumbai dt: 4th November 2022, it has been informed that the Board has decided not to file a Review Petition in the subject matter. Looking back at the issue, a final decision was in favour of the taxpayer was given by a division bench of the honourable Supreme Court while considering a petition filed by Mohit Minerals Pvt Ltd challenging the ultra-vires nature of the CBIC notification imposing such levy. The petition had principally three elements. First, having paid the tax under IGST Act on the entire value of imports (inclusive of the ocean freight), the petitioner cannot be asked to pay tax on the ocean freight all over again under a different notification. Secondly, in case of CIF (Cost, Insurance and Freight) contracts, the service provider and service recipient both are outside the taxable territory of India. No tax on such service can be collected even on reverse charge mechanism. And thirdly, in case of High Sea sales, the burden is cast on the petitioner as an importer whereas, the petitioner is not the recipient of the service at all. It is the petitioner’s seller of goods on high sea basis who has received the services from the exporter/ transporter. Earlier, the honourable High Court of Gujarat held that the GST law specifically provides that the importers are required to discharge IGST at the rate of 5 percent on ocean freight services under the Reverse Charge 204 R. Srivatsan, IRS and words “April 2022 to September 2022”, the figures, letters and words “April, 2022 to October, 2022 upto 30th November, 2022” shall be substituted.” In line with this recent change in the GST Law the GST portal has also started allowing the amendment related to FY 2021-22 in October 2022 return period. So, the taxpayer can amend the details of taxable outward supplies made to the registered person that is already reported in table 4A, 4B, 6B, 6C – B2B Invoices. The taxpayer shall provide the financial year and invoice number and click on Amend Record to search for the relevant invoice. Importantly, 30th November is the deadline only for making GSTR-1 amendments and claiming pending input tax credit (ITC) for FY 2021-22. However, the actual due date is dependent on November’s GSTR-1/GSTR-3B filing deadlines (i.e. pertaining to October’s return period). If a taxpayer misses the relevant deadlines, the GSTR-1/3B cannot be revised. Pending ITC for FY 2021-22, if any, will be forfeited forever. Well.... In a nutshell, GST input Tax Credit for FY 2021-22 / Credit notes for FY 2021-22 must be recorded in GSTR 3B of October 2022 (to be Filed by 20th November 2022). Alternatively, it can be filed belatedly with late fee and interest if accounts could not be finalised but on or before 30th Nov 2022 for availing the benefits. GST UPDATEZ ON 23-11-2022 No Review Petition Against Supreme Court Decision Against IGST Levy on Ocean Freight Click here to read full document

Mechanism (RCM) under which, the duty of importer have to pay IGST on behalf of the foreign buyer. However, at the same time, customs duty on the CIF value (which includes the component of freight as well) of the goods imported into India is also paid by the importer. As a result, there is double taxation on the component of ocean freight under GST law which is an impediment and has bloated the cost of imports. Further, after the final ruling of the Apex Court the Gujarat High court had directed the CBIC to grant refund of goods and services tax paid on ocean freight within six weeks with interest, in a relief for importers. Concurrently, in the case of COMSOL Energy private Limited Vs State of Gujarat (Gujarat High Court) Special Civil Application No. 11905 of 2020, dt: 22-12- 2020 also it has been held that, the amount collected without authority of law cannot be considered as tax collected and therefore, Section 54 of the CGST Act 2017 shall not be applicable. Further, noted that the refund claim was within the time limit prescribed under the Limitation Act, 1963 (the Limitation Act). Also, it held that imposition of IGST on ocean freight under the Notification No. 8/2017 – Integrated Tax (Rate) dated June 28, 2017, and Entry No. 10 of the Notification No. 10/2017 – Integrated Tax (Rate) dated June 28, 2017, lack legislative competency and the same were declared as unconstitutional. Well.......... Have all the disputes laid to rest? What is the impact of Hon'ble SC’s judgement on ocean freight if non-GST goods like crude is imported on CIF basis? Here the levy is under independent laws and will prevail without the question of double taxation. May be refunds issues will pick up now. Notification No. 23/2022-Central Tax From 01st December 2022, Competition Commission of India is empowered to handle anti-profiteering cases under CGST Notification No. 24/2022–Central Tax Corresponding changes have been made in the CGST Rules 2017 (Rules 122 to 137) to omit rules of constitution, terms of services of chairman and member etc related to the National Anti-profiteering Authority. (NAA) The authority for anti-profiteering is the Competition Commission of India (CCI) In simple words, from 01 December 2022, CCI shall examine whether ITC availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him. 205 R. Srivatsan, IRS GST UPDATEZ ON 24-11-2022 CBIC issued notifications to empower the Competition Commission of India to handle antiprofiteering cases under CGST Act, 2017 with effect from 01.12.2022 GST UPDATEZ ON 25-11-2022 Sequential filing of returns enabled on the portal from 01st November 2022 The Government has amended Section 37 (GSTR-1) & Section 39 (GSTR-3B) of Central Goods & Service Tax Act (CGST), 2017 vide Notification No. 18/2022–Central Tax dated 28th September, 2022 with effect from 01 October, 2022. Click here to read full document

The Central Government has informed that, the 48th Meeting of the GST Council will be held on 17th December, 2022 by Video Conference. (not at Madurai as was originally proposed) The 47th GST Council meeting was conducted on June 28 and 29, 2022 in Chandigarh. The ministerial panel (Gop) formed for casinos, race courses and online gaming under the Goods and Services Tax (GST) regime is likely to reiterate its earlier stance of a uniform 28 per cent tax rate for the three categories, irrespective of whether it is a game of skill or chance. The final call about the valuation mechanism, however, will be taken by the GST Council as the GoM members have differed on whether it should be levied on the platform fee or the entire amount paid by the participants. Well, in the proposed meeting apart from a decision on formation of GST tribunals, could this be a major agenda for deliberation? 206 R. Srivatsan, IRS According to section 37(4) of CGST, Act 2017, a taxpayers shall not be allowed to file GSTR-1 if previous GSTR-1 is not filed and as per sec 39(10) a taxpayer shall not be allowed to file GSTR-3B if GSTR-1 for the same tax period is not filed. For the sake of better comprehension Section 37(4) & 39(10) of Central Goods & Service Tax Act, 2017 are reproduced below: Section 37(4): A registered person shall not be allowed to furnish the details of outward supplies under sub-section (1) for a tax period, if the details of outward supplies for any of the previous tax periods has not been furnished by him. Section 39(10): A registered person shall not be allowed to furnish a return for a tax period if the return for any of the previous tax periods or the details of outward supplies under sub-section (1) of section 37 for the said tax period has not been furnished by him. These changes are already implemented prospectively and are operational on GST Portal from 01st November, 2022. Accordingly, from October-2022 tax period onwards, the filing of previous period GSTR-1 will be mandatory before filing current period GSTR-1. Further, from October, 2022 tax period onwards, filing of GSTR-1 will also be mandatory before filing GSTR-3B. To understand it better, the following illustrations will help. Illustration -1 Filing of October, 2022 period GSTR-1 will be mandatory before filing GSTR-1 of November, 2022 period. Illustration-2 Taxpayer will not be allowed to file GSTR-3B for October, 2022 period if GSTR-1 of October, 2022 period is not filed. Well...... A Progressive need of the hour. An indispensable obligation to ensure legislative compliance discipline. GST UPDATEZ ON 26-11-2022 48th GST Council Meeting will be held on 17th December 2022 GST UPDATEZ ON 30-11-2022 GST Due Date Reminder [30.11.2022] For all registered Taxpayers who want to avail the benefit of Transitional Credit, Today is the last day to file TRAN-1 / TRAN-2.

It is reasonably learnt that the Union finance ministry has turned down the commerce ministry’s proposal to provide tax incentives to units set up in special economic zones (SEZs) as part of the Development of Enterprises and Services Hub (DESH) Bill, 2022, holding that it would “create havoc” for units outside such zones. It has been explicitly communicated that the commerce department should do whatever it takes to make the scheme beneficial to encourage these units but tax incentives should be kept out of the scheme. Such concessions under the proposed scheme may help one identified sector, but it will create havoc for the other business units. So, it has been suggested that one should not create islands of no taxation within the country. First proposed by Finance Minister during the FY22-23 Budget speech in February 2022, the DESH Bill aims to replace the existing special economic zone (SEZ) law. This will cover all large existing and new industrial enclaves to optimally utilise the available infrastructure and enhance competitiveness of exports. Key tax proposals under the Bill devised by the commerce ministry include allowing SEZ units to sell in the domestic tariff area (an area within the country that falls outside the zones) on payment of duties foregone on raw materials. It also offers a concessional corporate tax rate of 15 per cent for an extended period to greenfield as well as brownfield units in such development hubs. With the revenue department in the finance ministry objecting to the proposed benefits the government may have to modify the Bill and that can delay the implementation of the proposal of the Bill. Accordingly, the Bill is unlikely to be presented in the upcoming Winter Session as the scheme needs to be reworked. Further explaining the rationale, if the proposal under the DESH Bill to allow SEZ units to sell within the country is accepted, the country will have one business unit which is in a “DESH area” and is not required to pay taxes, another similar unit in “VIDESH area” which is required to pay taxes. This will lead to conflict and disparity which is not the idea. 207 R. Srivatsan, IRS This is the last chance to claim transitional credit under GST. The special window opened in terms of the honourable Supreme court will freeze by today. Well...... Let it not be a LOST Chance. GST UPDATEZ ON 01-12-2022 GST revenue collected for November 2022 is ₹1,45,867 crore The gross GST revenue collected in the month of November 2022 is ₹1,45,867 crore of which CGST is ₹25,681 crore SGST is ₹32,651 crore IGST is ₹77,103 crore (including ₹38,635 crore collected on import of goods) and Cess is ₹10,433 crore (including ₹817 crore collected on import of goods) The revenues for the month of November 2022 are 11% higher than the GST revenues in the same month last year, which itself was Rs. 1.31,526 crore. During the month, revenues from import of goods was 20% higher and the revenues from domestic transaction (including import of services) are 8% higher than the revenues from these sources during the same month last year. Continuing trends....... GST UPDATEZ ON 07-12-2022 Finance Ministry rejects provision for tax benefits to SEZs under DESH Bill

Most recently, numerous writ petitions were filed before the High Courts as the taxpayers were aggrieved by the action of GST department in suspending the registration as a statutory remedy was unavailable due to the absence of the GST Tribunal till date. Now once the missed compliance is rectified the registration can be selfactivated! Ease of doing Business. 208 R. Srivatsan, IRS GST UPDATEZ ON 08-12-2022 Dropping of Proceedings for suspension of GST Registration by SELF In a very progressive move, which will be a major relief to the taxpayers, the GST portal has introduced a new facility to drop the proceedings for suspension of registration at the GST portal and revoke the suspension of registration which means that now taxpayers themselves can initiate Drop the GST Registration cancellation proceedings. This functionality is for Taxpayers who file their pending returns after the receipt of the Show cause notice (SCN) issued by the GST system. Before this functionality was made available, Taxpayers who file their pending returns, but have not responded to the SCN their registration still remained suspended despite filing their returns. Now such Taxpayers have been given the facility to initiate Drop Proceedings on their own once the pending returns are filed. So, if Taxpayers have filed all pending returns, and their registration status is still suspended, then Taxpayers can revoke the suspension with a single click by initiating Drop Proceeding. The taxpayers can log on to GST portal > Services > User Services > View Notices & Orders > Click on ‘Initiate Drop Proceeding’, to use the facility. Well.... This positive move would definitely be a very important and significant step which will reduce the litigations before the Courts. GST UPDATEZ ON 09-12-2022 One of the contentious supplies under GST is the services provided by an employer to his employee and notably the canteen services provided to them. Canteens are generally arranged by the corporates by engaging a third part entities who provide supply of Food and related canteen services and the expenditure are borne by the Employer or a nominal amount is recovered from the employees. The question is Whether such transactions attract GST liability? Most recently, the Uttarakhand bench of the GST Authority for Advance Rulings (GSTAAR) has held that the nominal sum recovered from employees for provision of subsidised canteen facilities will be subject to Goods and Services tax (GST), while passing the ruling in respect of M/s. Tube Investment of India who had set up such an arrangement for their employees as mandated under the Factories Act, 1948. The bench held that the supply of such food by the applicant company is a ‘supply of service’ to its employees. This is because it is not part of the employment contract, but rather mandated by the Factories Act,1948.

209 R. Srivatsan, IRS The nominal cost, which is recovered from salary as deferred payment, is consideration’ for the supply and GST is liable to be paid. In a concurrent stand, the Tamil Nadu bench of AAR, in the case of M/s. Kothari Sugars and Chemicals had also taken an identical view. The dispute is not restricted to two states alone. In fact, a large majority of rulings given by various benches of AAR across different states have held views otherwise as well. These include the Haryana bench of AAR, in the case of M/s.RITES, which is a company set up under the aegis of Indian Railways, or by the Gujarat bench of AAR in the case of M/s Cadila Healthcare and M/s. Tata Motors. In the RITES ruling, the bench held that it was mandatory for the company to provide canteen facilities under the Factories Act 1948. So, the transaction of recovering part payment of the meals from the staff is outside the purview of ‘scope of supply’ and no GST incidence arises. Well...... The difficulty is that such conflicting rulings will definitely leave Indian Business perplexed. There should be no GST on nominal sums from employees, as there is no intention of a taxable supply for business. Alternatively, it can also be argued that it is acting as a pure agent, as the entire sum collected is passed on to the third-party caterer. Thus, the value of the supply would be nil, little over stretched, though. There is no iota of doubt that the advance rulings do not set a judicial precedent, they do have a persuasive value in the course of assessments. Further, in view of the conflicting rulings, while the industry in general is not paying GST on canteen recoveries, the tax authorities during GST audits are raising this issue which results in undue litigation. GST UPDATEZ ON 17-12-2022 Key Highlights of 48th GST Council Meeting It would be another welcome measure, if GST Council explicitly clarifies this issue in the forthcoming 48th meeting itself. The 48th Goods and Service Tax (GST) Council meeting was held at New Delhi virtually on 17th December 2022 and has concluded without any decisions on the highly anticipated 1. GST Appellate Tribunals, 2. Tax rate applicable on gutkha and pan masala 3. Tax levy on Casinos The following are the few very Important highlights of 48th GST Council meeting 1. Threshold limit of for launching of prosecution in GST offences cases increased to Two Crores except in case of fake invoices. 2. A levy of 5% GST Ethyl Alcohol applicable to Blended Petrol. 3. Decided to Decriminalized certain offences of Obstruction of services by officers, failure to supply information etc. While the Central government will include these decriminalisation changes in the Finance Bill for 2023-24, States will have to also suitably amend their legislations to bring the changes into effect. 4. E-Com Portals can supply goods of Unregistered Suppliers 5. No Claim Bonus offered by Insurance Companies does not attract GST 6. No Decision on GSTAT at the time when it is most required. Click here to read full document

210 R. Srivatsan, IRS 7. GoM Reports on Pan Masala, Gutka and GSTAT to be discussed in Next Meeting. Importantly, No GST is payable where the residential dwelling is rented to a registered person if it is rented it in his/her personal capacity for use as his/her own residence and on his own account and not on account of his business. Refund to unregistered persons: There is no procedure for claim of refund of tax borne by the unregistered buyers in cases where the contract/ agreement for supply of services, like construction of flat/house and long-term insurance policy, is cancelled and the time period of issuance of credit note by the concerned supplier is over. The Council recommended amendment in CGST Rules, 2017, along with issuance of a circular, to prescribe the procedure for filing application of refund by the unregistered buyers in such cases. Circular to be issued for clarifying the issue of treatment of statutory dues under GST law in respect of the taxpayers for whom the proceedings have been finalised under Insolvency and Bankruptcy Code, 2016. Rule 161 of CGST Rules, 2017 and FORM GST DRC-25 also to be amended for facilitating the same. Clear Sop/ Procedure for verification of input tax credit in cases involving difference in input tax credit availed in FORM GSTR-3B vis a vis that available as per FORM GSTR-2A during FY 2017-18 and 2018-19 to be made available. Clarifying the manner of re-determination of demand in terms of sub-section (2) of section 75 of CGST Act, 2017. Clarification in respect of applicability of einvoicing with respect to an entity. Proposal to conduct a pilot in State of Gujarat for Biometric-based Aadhaar authentication and risk-based physical verification of registration applicants. Amendment in rule 8 and rule 9 of CGST Rules, 2017 to be made to facilitate the same. This will help in tackling the menace of fake and fraudulent registrations. GST UPDATEZ ON 23-12-2022 Refund of Tax on cancelled contracts to unregistered person PAN-linked mobile number and e-mail address (fetched from CBDT database) to be captured and recorded in FORM GST REG-01 and OTP-based verification to be conducted at the time of registration on such PAN-linked mobile number and email address to restrict misuse of PAN of a person by unscrupulous elements without knowledge of the said PAN-holder. Section 37, 39, 44 and 52 of CGST Act, 2017 to be amended to restrict filing of returns/ statements to a maximum period of three years from the due date of filing of the relevant return / statement. The meeting had to be concluded by 1.30 p.m. as most State ministers had other engagements, so some important subjects could not be taken up due to paucity of time. Discussion on the GoM report on tax regime for casinos, online games and horse racing also could not be taken up. These pending items will be taken up at the next GST Council meet, which hopefully will be held as in-person meeting. The Goods and Services Tax Council in its 48th meeting held virtually has approved a formal procedure to seek refund of taxes collected under cancelled contracts which is especially beneficial to home buyers while cancelling their booking from real estate companies. Currently, under the GST law there is no procedure for claim of refund of tax borne by the unregistered buyers in cases where the contract or agreement for supply of services, like construction of flat or house and long-term insurance policy, is cancelled and the time period of issuance of credit note by the concerned supplier is also lapsed

The Council recommended amendment in CGST Rules, 2017, along with issuance of a circular, to prescribe the procedure for filing application of refund by the unregistered buyers in such cases. It may be noted that it was a gap in the law as there was no process prescribed for these kinds of cases, though the Act allows claim of Refund by "Any Person" and not only to "Registered Person" This move would certainly help unregistered recipient of Supplies to claim back the GST collected by such suppliers in the event of cancellations. Hopefully, once the Sops are prescribed, the process would be smooth and hasslefree especially since unregistered common man would be claiming refund. Bridging the legislative gaps with all fairness. 211 R. Srivatsan, IRS proposal before the Government, at present, to reduce this threshold limit to Rs 5 Crore with effect from 01.01.2023, as no such recommendation has been made by GST Council as yet. Well could possibly be in the pipeline from the beginning of Next Financial year 2023- 24? A Way forward! GST UPDATEZ ON 27-12-2022 Threshold Limit for Mandatory eInvoicing There were a lot of speculations in social media suggesting that though GST Council has recommended reducing threshold for generation of e-invoice to Rs. 5 Crore with effect from 01st January 2023, though Government is yet to issue notification in the matter, in terms of Sub Rule (4) of Rule 48 of CGST Rules 2017 giving rise to uncertainties and anxiety amongst the taxpayers especially those who are below the Annual Aggregate Turnover of Rs. 10 Crores. It has been clarified by the Government that presently, e-invoicing has been made mandatory for registered persons having aggregate turnover more than Rs. 10 crores in any preceding financial year from 2017- 18 onwards (Refer Notification no. 17/2022- Central Tax dated 01.08.2022). There is no

Authored ByR. Srivatsan, IRS Compiled ByA. Siva Superintendent of Customs TUTICORIN FY 2023

212 R. Srivatsan, IRS of takeaway will attract GST at the rate of 5% with no Input Tax Credit (ITC). However, if an item or beverage not prepared in restaurant but served over the counter will not be treated as part of restaurant service and attract GST of individual items. For example, ice-cream served will attract a GST rate of 18 per cent. Well....... There is a thin line of distinction between pure supply of food and food being processed/cooked and supplied along with services, but as per the AAR, one would need to distinguish the same to arrive at correct GST rate classification. Restaurant would generally have some food items that are used in cooking as well as sold as it is. It appears that one would now need to keep track/ log of all items that are simply bought and sold as it is, to apply the correct GST rate. Differentiation between what was cooked inside and what was sourced from outside will add work to retailers. Yet another Fodder(!) for litigations GST UPDATEZ- 03-01-2023 Food & beverages not prepared in a restaurant will attract GST at the rate of 18%: Gujarat’s AAR ruling In the present matter, Ahmedabad-based Ridhi Enterprises runs standalone restaurant. It offers a variety of food items including food and beverages prepared at the restaurant as well as readily purchased food and beverage sold over the counter. It moved to GAAR for ruling on two queries. 1. Whether consumed in the restaurant or by way of takeaway qualifies — as restaurant services? 2. Whether the readily available food not prepared in the restaurant sold over the counter whether consumed in the restaurant or by way of takeaway qualifies as restaurant services or not? After going through all the facts presented and arguments made, GAAR observed in its ruling on 30-12-2022, that the supply of cooked foods and other food items in the restaurant are covered under ‘restaurant service’. The supply of already cooked/prepared food-items purchased from local market is considered as supply of goods. Therefore, it is understood that the readily available food items (not prepared/cooked in the restaurant) sold over the counter to the customer whether consumed in the restaurant or by way of takeaway does not qualify as ‘restaurant services’ instead of falls under supply of goods which is liable to applicable rate of GST Tax. Accordingly, the food and beverages prepared and supplied by the Applicant to its customers whether consumed in the restaurant or by way GST UPDATEZ- 04-01-2023 Pencil sold with sharpener will attract higher GST than a pencil sold alone - Mixed Supply: Gujarat AAR (GAAR) M/s. Doms Industries based in Umbergaon (Gujarat), are engaged in the business of three products. First pencils along with sharpener and eraser; Second a colouring book, pencil, colour pencils, oil pastels, plastic crayons, wax crayons, eraser, scale and sharpener, and Third pencils, erasers, scale and sharpener.

213 R. Srivatsan, IRS Looking back In July 2022, based on the recommendation of GST Council, the Finance Ministry notified 18% GST for sharpeners, and that changed the equation completely for them with far reaching impact. Accordingly, the above referred company moved GAAR to seek advance rulings on three questions. (1) Whether the supply of pencil sharpeners along with pencils, being the principal supply, will be considered “Composite Supply” or “Mixed Supply”? (2) The HSN code to be used. (3) Whether the supply of a sharpener along with the kit having a nominal value will have an impact on the rate of tax. If yes, what will the rate of tax? GAAR said each of the items in the products cannot be naturally bundled or supplied in conjunction with each other in the ordinary course of business. Also, each one can be sold independently. This means that the supply of pencils sharpeners along with pencils is covered under the category of ‘Mixed Supply’. Also, the supply of sharpeners along with the kit having a nominal value will have an impact on rate of tax, GAAR ruled. It is a general practice that businesses either supply goods or services alone, or bundle goods and/ or services. Under GST, bundled supplies are categorised into two – mixed and composite supply. While mixed supply refers to supply of two or more goods and/ or supplies together at a single price and each of them can be supplied separately, Composite supply refers to supply of two or more goods or services or both, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply. The tax liability in case of mixed supply is fixed on the basis of goods or services that have the highest rate. In case of composite supply, one good or service is taken as a principal supply, the tax rate for which will apply to the entire supply. GST UPDATEZ- 11-01-2023 Administration of Covid vaccine by hospitals would not qualify as a ‘healthcare service’: AAAR Maharashtra. Classification of supply as composite or mixed continues to be an item of perennial dispute between authorities and the industry. This is because there is no onesize-fits-all logic/ principle that can be applied. In the instant case, generally, pencils are sold along with sharpener, and hence the view that the same is a composite supply. Alternatively, can a pencil be sold without a sharpener or vice-versa, the answer is affirmative and hence the alternative view that both are not naturally bundled and thereby becomes a Mixed Supply. Finally, GAAR ruled that Pencil sold with sharpener will attract higher GST i.e. 18% on the value of combo selling price, than a pencil sold alone as it shall be categorised only as a Mixed Supply. Well....... As long as the question of subjectivity is involved, leading to varied interpretations disputes are a consequence. Interestingly a multi-specialty hospital chain, has not succeeded in its appeal that administration of Covid vaccine by hospitals would qualify as a ‘healthcare service’ and be exempt from GST. The Appellate Authority for Advance Rulings (AAAR)-Maharashtra upheld an original ruling, against which an appeal had been filed and reconfirmed GST applicability at 5%. Click here to read full document

214 R. Srivatsan, IRS Looking back, GST Authority for Advance Rulings (AAR), in March 2022 had held that administration of the Covid vaccine by hospitals is a ‘composite supply’, where principal supply is the sale of vaccine and auxiliary supply is the service of administering the vaccine. Thus, the total transaction would be taxable at the rate applicable to the principal supply, which is 5%. This led to the hospital chain filing an appeal with the AAAR. It contended that the AAR bench had erred in interpreting the basic fact of the case that an individual is visiting the hospital not to buy the vaccine but to get ‘served’ through vaccination. The AAAR pointed to a clarification issued by the department of health and family welfare. The price of the vaccine, the GST component on the vaccine, the service charge that can be collected per dose by the vaccination centre were also specified by the government. Given the above, the AAAR bench in their order stated, the vaccine is the ‘goods’ component in the entire transaction, accompanied by administration of the vaccine as the ‘service’ component the principal supply and therefore liable for GST Well....come what may.... No immunity from GST GST UPDATEZ ON 27-01-2023 No GST payable under RCM on Procurement of Renting of Immovable Property Services from SEZs: AAAR Maharashtra nstalled is blocked credit under Section 17(5)(c) and (d) of CGST/TNGST Act, 2017? It has been ruled that, Electrical Energy is goods classified under HSN 2706 and exempted by Notification No.02/2017 CT(R) dated 28.06.2017 vide Sl. No.104. Therefore, electrical energy generated by Solar Panel installed by the applicant is exempted goods supplied to tenants and consequently input tax paid on the Solar Panels are ineligible as credit of input tax on Capital Goods used exclusively for supply of exempted supply are not eligible under Section 17(2) of CGST Act 2017 read with Rule 43(a) CGST Rules 2017. We… Definitely not a Shocking decision...... The Appellate Authority for Advance Ruling (AAAR) Maharashtra, has ruled that Goods and Service Tax shall not be payable under Reverse Charge Mechanism on procurement of renting of immovable property services from Special Economic Zones (SEZ). In an application for Advance Ruling filed by the appellant, M/s Portescap India Private Limited who is a private limited company incorporated in India, who were inter alia engaged in manufacturing of customised motors in India. As the Appellant was an SEZ Unit, it was engaged in exports of the manufactured goods outside India. Click here to read full document GST UPDATEZ- 11-01-2023 Goods/ Services for Installation of Solar Power Panel are Plant and Machinery, ineligible for ITC, rules AAR-TN The Tamil Nadu Authority for Advance Ruling (AAR) held that the applicant, VBC Associates is not eligible for claim of Input Tax Credit (ITC), as per Section 17 (2) of the CGST /TNGST Act read with Rule 43(a) of CGST /TNGST Rules 2017, on the Goods/Services used in installation of Solar Power Panels. The question represented before AAR, Tamil Nadu was, Whether the input tax credit on solar power panels procured and i

215 R. Srivatsan, IRS The Appellant procures Rental Services from “Santacruz Electronics Export Processing Zone (SEEPZ) wherein GST was presently being discharged by the Appellant under the Reverse Charge Mechanism. The appellant sought advance ruling as to 1. Whether an SEZ unit is required to comply with the reverse charge mechanism as a service recipient for local domestic renting of immovable property services procured by the unit from SEEPZ Special Economic Zone Authority? and 2. Whether an SEZ unit is required to pay tax under reverse charge mechanism on any other services? The Appellant contended that in order to implement the Notification No. 10/2017 I.T. (R) dated 28.06.2017, the SEEPZ SEZ, which is also a SEZ developer, has to be construed as a local authority as per the provisions of section 2(69) of the CGST Act 2017. As such, the transaction under consideration, i.e., renting of immovable property, would turn out to be between DTA and a SEZ unit, and hence, they would be in position to avail the benefit of LUT as per the SEZ (Amendment) Rules, 2018, and accordingly, they would not be required to pay any GST on the receipt of impugned services. On behalf of the revenue, it was submitted that all the conditions laid down under Notification No. 03/2018- C.T. (R) dated 25.01.2018, and the Notification No. 03/2018-1. T. (R) dated 25.01.2018 are squarely satisfied, that the appellant, being registered under the CGST Act, 2017, were liable to pay GST under RCM on the impugned transaction, i.e., supply of services of renting of immovable property by SEZ authority to them. The AAAR bench set aside the ruling of MAAR and held that that the Appellant were not required to pay GST under RCM on the impugned services of renting of immovable property services received from SEEPZ SEZ for carrying out the authorised operation in SEZ subject to furnishing of LUT or bond as a deemed supplier of such services and that the Appellant were not required to pay GST under RCM on any other services received GST UPDATEZ ON 30-01-2023 SCNs for FY 2017-18 can be issued till September 30, 2023 as Time Limit for Issue of Demand Order stands Extended from the suppliers located in DTA for carrying out the authorised operation in SEZ subject to furnishing of LUT or bond as a deemed supplier of such services. Well...... A very important decision having only persuasive value. In a very important judgement delivered recently, a Single Bench of the Kerala High Court, has held that the extension granted to the time limit of passing demand order under the Central Goods and Services Tax (CGST) Act 2017 and State Goods and Services Tax (SGST) Act 2017 are applicable to issue of Show Cause Notice (SCN) also. The petitioner assessee challenged that the GST demand issued under Section 73 of the CGST/SGST Acts imposing on the petitioner a total liability of Rs. 9.7 Lakhs, towards CGST and SGST payable for the period from July 2017 to March 2018. The period for which the liability that was imposed on the petitioner was on the ground that under sub-section (10) of Section 73 of the CGST/SGST Acts, the time limit for completion of proceedings is three years from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilized. It was further argued that, by virtue of a Click here to read full document

216 R. Srivatsan, IRS notification issued under the provisions of Section 168A of the CGST Act, 2017, the time limit for issuance of an order for the financial year 2017-18 has been extended up to 30.09.2023. It was thus contended that the terms of said notification only the time limit for issuance of order has been extended and the time limit for issuance of a show cause notice has not been extended. On the contrary, the department contended that, “when the time limit for issuance of an order under sub-section (10) of Section 73 stands extended, automatically the time limit for issuance of a show cause notice under subsection (2) of Section 73 also stands extended. The Kerala High Court Bench observed that, “the show cause notice can also be issued with reference to the date 30.09.2023 and not with reference to any other date” and dismissed the writ petition. Further, milk products like curd, lassi, buttermilk and paneer are also exempt from GST if sold in a form other than prepackaged and labelled. GST at the rate of 5% applies to curd, lassi, buttermilk and paneer, when sold in pre-packaged and labelled form and also UHT milk. Further, a GST of 12 % applies to condensed milk, butter, ghee and cheese. A Madurai-based Madurai Famous Jigarthanda LLP, one of the manufacturers of the product with a brand name said it is packed its product in unit containers and is also available in loose form/in bottles without sealing. The firm said that its final product is not fermented but a pasteurised milk product. Further it was submitted that GST is being levied at 5 %. The firm moved to TNAAR to find 1. Whether the product manufactured as pasteurised milk and milk cream but named ‘Jigarthanda’ can be classified as Jigarthanda under description of goods? also 2. Whether this good was taxable or exempted and if taxable then what would be the rate and HSN (Harmonised System of Nomenclature)? Based on all the facts presented and arguments made, TNAAR first categorised the said product as a goods taking note of explanation given along with HSN and went on to examine whether the said product can be classified a beverage. It said that ‘milk and cream’ referred to in HSN 0402 and Jigarthanda manufactured by the applicant are not the same and, on this ground, it means that the said product will not attract a GST of 5%. The next issue was about categorising the product as a beverage. The word ‘beverage’, though not defined under the CGST Act, 2017, in common parlance, it is considered as a drink that can be consumed directly. The said product can be consumed directly and hence is a beverage with a base of milk. GST UPDATEZ ON 31-01-2023 Jigarthanda attracts higher rate of GST - AAR TN Jigarthanda, a popular milk-based beverage sold in Tamil Nadu, will attract 12% GST, according to TN State’s Authority for Advance Ruling (TNAAR). Before looking at the issue, let's first look at the contents of this drink. The main ingredients that go into the making of Jigarthanda are milk, almond Pisin, basundi, ice cubes and sherbet. One may be aware that at present, fresh milk and pasteurised milk are fully exempt from GST. Click here to read full document

217 R. Srivatsan, IRS Further, based on the explanation it is clear that milk flavoured with cocoa or other substances are specifically excluded from Chapter heading 0402 (GST at the rate of 5 %) and included under Chapter heading 2202 (GST at the rate of 12 per cent). Accordingly, it ruled that Jigarthanda will attract GST at the rate of 12 %. In the quarter Oct-Dec 2022, total 2.42 crore GST returns were filed till end of next month as compared to 2.19 crore in the same quarter in the last year. Is this cumulative progress due to various policy changes introduced during the course of the year to improve compliance? S(t)aying positive.!!!!!!! GST UPDATEZ ON 01-02-2023 Gross GST revenue collected in the month of January 2023 was Rs 1,55,922 crore In a very promising trend, the gross GST revenue collected in the month of January 2023 on 31.01.2023 is Rs 1,55,922 crore of which CGST: Rs.28,963 crore, SGST: Rs 36,730 crore, IGST: Rs 79,599 crore (including Rs 37,118 crore collected on import of goods) and Comp. Cess Rs:10,630 crore (including Rs 768 crore collected on import of goods). This is the Second highest collection ever, next only to the Rs 1.68 lakh crore gross collection in April 2022, breaching earlier 2nd highest record in the Month of October 2022. The revenues in the current financial year up to the month of January 2023 are 24% higher than the GST revenues during the same period last year. The revenues for this period from import of goods are 29% higher and from domestic transaction (including import of services) are 22% higher than the revenues from these sources for the same period last year. The percentage of filing of GST returns (GSTR-3B) and of the statement of invoices (GSTR-1), till the end the month, has improved significantly over years. Click here to read full document GST UPDATEZ (Additional) ON 01-02-2023 Expected Changes in GST- Union Budget 2023-24 in Finance Bill 2023 Recommendations of 48th GSTC likely to be legislated are: - 1. Raising the minimum threshold for launching prosecution under GST from Rs. One Crore to Rs. Two Crores, except for the offence of issuance of invoices without supply of goods or services or both; 2. Decriminalize certain offences specified u/s 132(1) (g), (j) and (k) of CGST Act, 2017, – obstruction or preventing any officer in discharge of his duties; deliberate tempering of material evidence; failure to supply the information. 3. Reduce the compounding amount from the present range of 50% to 150% to 25% to 100%; 4. Facilitate to make Intra-state supply of Goods by Un-registered Suppliers/ Composition Taxpayers through ecommerce operator, will be implemented w.e.f 10.2023. 5. No GST on Third Country Exports, HSS, In Bond Sale – Schedule III Paras 7, 8(a) and 8(b) were inserted in Schedule III of CGST Act, 2017 with effect from 01.02.2019, will be amended to apply retrospectively from

01.07.2017. However, no refund of tax paid will be available in cases where any tax has already been paid w.r.t such transactions/ activities during the period 01.07.2017 to 31.01.2019. 6. Dispute of GST Credit on POS – Freight Forwarder – 01-10-2022 – Ocean/ Air Freight – S. 12(8) of IGST Act: GST credit would be available even though POS is outside India as per clarification issued vide Circular No. 184/16/2022 – 27-12-2022. 7. Paving towards streamlining of GST Statements/ Returns – 3 Yrs. time limit to file statement/ returns GSTR-1, GSTR-9, GSTR 9/ 9C and GSTR-8 u/s 37, 39, 44 and 52 of CGST Act, 2017 to be amended to restrict filing of returns/ statements to a maximum period of three years from the due date of filing of the relevant return / statement. 8. Amendment in definition of “non-taxable online recipient” under section 2(16) of IGST Act, 2017 and definition of “Online Information and Database Access or Retrieval Services (OIDAR)” under section 2(17) of IGST Act, 2017 to include training or coaching through online mode so as to reduce interpretation issues and litigation on taxation of OIDAR Services. 9. Amnesty Scheme (?) may be announced for procedural non-compliances viz. Registration, Revocation for cancellation of GST Registration, GST Statement and Return filing. 218 R. Srivatsan, IRS 2. Payment of amount towards ITC reversal in case payment of invoice not made within 180 days. 3. Value of exempt supply for purposes of apportionment of credits shall include sale of warehoused goods to any person before clearance for home consumption. 4. ITC on CSR Expenses has now specifically been blocked. 5. Persons exempt from registration u/s 23(1) need not take GST Registration u/s 22 (Threshold) /24 (Compulsory). 6. Filing of belated GSTR-1 / GSTR 3B / GSTR 8/ cannot be beyond three years of due date. 7. Filing of belated Annual Returns cannot be beyond three years of due date. 8. Provisional refund eligible for provisionally accepted ITC. 9. A Manner will be prescribed for computing Interest on delayed refunds beyond 60 days of filing refund application. 10. New Section 122(1B) is being inserted so as to provide for penal provisions applicable to Electronic Commerce Operators in case of contravention of provisions relating to supplies of goods made through them by unregistered persons or composition taxpayers. 11. Decriminalization of certain offences under Section 132(1) 12. Increase in monetary threshold limit for launching prosecution for the offences from one hundred lakh rupees to two hundred lakh rupees, except for the offences related to issuance of invoices without supply of goods or services or both. 13. Amendment in compounding of offences under Section 138(1). 14. A new section 158A in the CGST Act is being inserted so as to provide for prescribing manner and conditions for sharing of the information furnished by the registered person. GST UPDATEZ ON 02-02-2023 Union Budget 2023-24: Synopsis Proposed Important Changes in GST Law AMENDMENTS IN THE CGST ACT, 2017: 1. Supplier of goods through Electronic Commerce operators will now be eligible to opt for composition Scheme.

219 R. Srivatsan, IRS 15. Schedule III of the CGST Act is being amended to give retrospective applicability to Para 7, 8 (a) and 8 (b) of the said Schedule viz High seas Sale, Supply of warehoused goods before clearance and Supply by endorsement of documents of title before clearance for home consumption, with effect from 01st July, 2017. AMENDMENTS IN THE IGST ACT, 2017: 16. Amendment in definition of non-taxable online recipient and online information and data base access or retrieval services Section 2(16) 17. Amendment in Place of Supply of services by way of transportation of goods - Proviso to section 12(8) It may be noted that these amendments will see the light of the day once these are incorporated in the respective GST legislations by the Centre and all the States from a date to be notified later. casinos and horse racing, while the decision on much needed formation of GST Tribunals is also a key agenda. These GoMs reports were to have been taken up for consideration by the 48th GST Council last 17th December 2022, but couldn't be taken up due to paucity of time. GST UPDATEZ ON 08-02-2023 Next GSTC Meeting may be delayed The 49th GST Council meeting chaired by Union Finance Minister and comprising of state counterparts, is expected to be rescheduled, with the meeting likely to be held by the month end may be last weekdate yet to be decided. The meeting is rescheduled due to the busy schedule of all stakeholders involved, post budget The meeting was initially scheduled to be held at New Delhi on February 18. The agenda for the Council is to consider a report by the Group of Ministers (GoM) chaired by Meghalaya chief minister Conrad Sangma for levying GST on online gaming, GST UPDATEZ ON 13-02-2023 GST on Gift Vouchers, Cash Back Vouchers, and E-Vouchers In a very important decision, the honourable High court of Karnataka in the petition filed by Premier Sales Promotion Limited has held that Gift Vouchers, Cash Back Vouchers, and E-Vouchers are not goods or services, and will not attract GST In fact, earlier, Authority for Advance Rulings had ruled these vouchers will be taxable. Later, this ruling was affirmed by Appellate Authority for Advance Ruling (AAAR), Karnataka. It was opined by the court that the printed forms are like currency. The value printed on the form can be transacted only at the time of redemption of the voucher and not at the time of delivery of vouchers to the clients. Therefore, the issuance of vouchers is similar to pre-deposit and not the supply of goods or services. Hence, vouchers are neither goods nor services and therefore cannot be taxed. These are mere instruments accepted as consideration for the supply of goods or services. They have no inherent value of their own. Well.... While looking at the nature of transactions vouchers are semi-closed PPIs (Prepaid payment Instruments) in which the goods or services to be redeemed are not identified at

220 R. Srivatsan, IRS the time of issuance. These are distributed to its employees or customers and can be redeemed by them. These PPIs do not permit cash withdrawal, irrespective of whether they are issued by banks or nonbanking Companies and they can be issued only with the prior approval of the RBI. Hence treating them on par with money/ negotiable instruments appears to be fair. In the sense of Sense, a prudent verdict. According to the mandate in terms of Section 135 of Companies Act 2013 every company having net worth of ₹500 crore or more or turnover of ₹1,000 crore or more or a net profit of ₹5 crore or more during any financial year will be required to spend in every financial year, at least 2 per cent of the average net profits made during the three immediately preceding financial years, in pursuance of its corporate social responsibility policy. The subject of ITC on CSR became the headline especially after various companies approached AARs to get clarity but ended up only to get contradictory rulings from various states. While, Telangana AAR favoured ITC on CSR related purchases, Kerala AAR in the matter of Polycab Wires held that ITC shall not be available on free distribution of electrical items like switches, fans, cables, etc., to flood affected people under CSR. Well.... Actually, under Income Tax Act, 1961 no "deduction on expenditure" is allowed for CSR expenses, so “Why expect a special treatment under GST?” GST UPDATEZ ON 14-02-2023 Authorities to come out with clarificatory circular on ITC for CSR - Change unlikely in budget provisions It is understood from various sources that Business entities are unlikely to see any relaxation in the budget provision related with no ITC (Input Tax Credit) for CSR (Corporate Social Responsibility) expenses. However, it appears they will not be asked to deposit ITC back which was availed any time since implementation of GST till date. The Finance Bill 2023 proposes to amend section 17 of CGST Act “to provide that input tax credit shall not be available in respect of goods or services or both received by a taxable person which are used or intended to be used for activities relating to his obligations under corporate social responsibility referred to in section 135 of the Companies Act, 2013. It is justified that CSR expenditure is not for furtherance of business, but a give back to the society. A detailed clarificatory circular post enactment of Finance Bill 2023 is expected to be issued on this subject. GST UPDATEZ ON 18-02-2023 49th GST Council Meeting: Key Highlights Click here to read full document Union Finance Minister Nirmala Sitaraman chaired the 49th meeting of the GST Council today, 18-02-2023, at Vigyan Bhawan, New Delhi. The matter of discussion of the meeting held was focused on the following: 1. All GST Compensation Dues pending for the month of June 2022, will be cleared by 18-02-2023; The funds have been proposed to be released from the consolidated fund of India and recouped later.

221 R. Srivatsan, IRS 2. Nil GST Rate on ‘Loose Rab’, 5% on Packaged Rab i.e. liquid jaggery famous in North Indian states like UP. 3. GST Rate on Pencil Sharpener reduced to 12% from 18% 4. Late Fee for Annual Return up to 5 Crore Rs. 25/day subject to maximum of 0.02% of turnover. For Taxpayers having TO of 5 cr to 20 cr, Late fee would be Rs. 50/day subject to maximum of 0.02% of turnover. Same shall be applicable from FY 2022- 2023. 5. Two Reports of GoM Accepted including Special Composition Scheme for certain Industries Guthka, Chewing Tobacco and Pan Masala based on their capacity of production. 6. GST Tribunal- slight Modifications were felt required in Report of GoM on GST Tribunal. The modification in language will be made and a draft is expected to be circulated by 19-02-2023 with the GSTC members. Further it has been suggested that clarification will then by included and circulated again with the members as a final draft to post the comments so as to include the constitution of GSTATs as part of the Finance bill, 2023. 7. GST would be applicable to Court fee by Courts and Tribunals under Reverse Charge Mechanism (RCM). 8. On SUVs and MUVs, there was no recommendation from the fitment committee as they weren’t able to arrive at a decision. The matter will be re-looked and presented at the next Council meeting. 9. GoM report on online gaming could not be taken up at the meeting as the chair of the GoM, Meghalaya chief minister Conrad Sangma was unable to attend because of the elections in the state of Meghalaya. 10. Proposal for rate reduction on healthbased millet products sent back to fitment committee for their detailed opinion. No Service Tax on take away from restaurants Takeaway food from the restaurant counters will not to attract service tax, CESTAT (Customs, Excise & Service Tax Appellate Tribunal) bench of New Delhi has ruled in the matter of Haldiram. CESTAT in its ruling delivered last week opined that: “It has to be held that no service tax can be levied on the activity of takeaway of food items as it would amount to sale and would not involve any element of service.” Delhi-based Haldiram Marketing is engaged in running food outlets where customers can either purchase packaged foods such as sweets or namkeen, or avail of restaurant dining facilities. Additionally, the appellant also provides the facility of ‘takeaway’ of food items. The bench took the reference from an order passed by the Commissioner (Appeals) in the matter of Anjappar Chettinad (2019) and noted that it was accepted by the tax department. That order had said: “In the appellant’s case the activity neither falls under restaurant service as the food is not consumed in the restaurant/ any part of the restaurant, nor under outdoor catering as the food/ beverages are served in the customer’s premises. Under the circumstances, it was of the opinion the appellant is not liable to pay service tax on such take away/ parcel/ home delivery sales. The bench said when the department has accepted the decision of the Commissioner (Appeals) that no service tax is leviable on takeaway food items, it is not open to the department to take a contrary stand in this appeal. The appeal arose after a show cause notice in 2020 issued proposing service tax demand of GST UPDATEZ ON 21-02-2023 Click here to read full document

222 R. Srivatsan, IRS over Rs 23 crore with interest and penalties. The notice said the company provided services in respect of takeaway orders by way of preparing and packaging food items for the convenience of customers. The customers availed of the services of the chef by placing customised orders, and it was not a case of the company merely purchasing and selling food. The invoices raised by the company involved an inseparable service component charged from the customers. The value of goods was the same in respect of dine-in or takeaway orders. The CBIC had also clarified, by way of a publication in leading newspapers, that takeaway food would also suffer service tax at the same rate as dine-in, the notice said. Further, it said restaurant services were taxable as the service portion of an activity involving supply of food or drinks would constitute a declared service. It also clarified that exemptions were available only in case of non-AC restaurants and accordingly justified the demand. Nevertheless, it did not stand the test of judicial scrutiny. Well... Though this decision of the tribunal relates to a pre-GST regime issue, there is feeling that it could have an impact on GST too. But, under GST, the position is clear.... At present, GST is applicable at the rate of 5% on restaurant services, both in the case of dine-in in the premises or takeaway. GST on dining in a restaurant within hotels, where the daily room tariff is Rs 7,500 or more, is 18 per cent. While 5% rate is without input tax credit, 18% rate is with input tax credit. No takeaways from this order under GST current regime? Click here to read full document GST UPDATEZ ON 25-02-2023 Geocoding of the Address of their Principal Place of Business is available on GST Portal GSTN on the Common Portal has introduced new functionality for geocoding the principal place of business address (i.e. the process of converting an address or description of a location into geographic coordinates, i.e. Address into Latitudes and Longitudes). This feature is introduced to ensure the accuracy of address details in GSTN records and streamline the address location and verification process. This functionality can be accessed post login, under the Services/Registration tab in the Common Portal www.gst.gov.in. The system-generated geocoded address will be displayed, and taxpayers can either accept it or update it as per the requirements of their case. In cases where the system-generated geocoded address is unavailable, a blank will be displayed, and taxpayers can directly update the geocoded address. One has to follow the following steps…. Services > Registration > Geocoding Principal Place of Business The geocoded address details will be saved separately under the "Principal Geocoded" tab on the portal. They can be viewed under My profile > Place of Business tab under the heading "Principal Geocoded" after logging into the portal. It will not change your existing addresses. The geocoded address details will be saved separately under the "Principal Geocoded" tab on the portal. They can be viewed under My profile > Place of Business tab under the heading "Principal Geocoded" after logging into the portal. It will not change your existing addresses. It is not mandatory for taxpayers to geocode their address. At present, Geocoding of

223 R. Srivatsan, IRS Address is only applicable for the Principal Place of Business and not for Additional Places of Business. The geocoding address is a one-time facility provided to eligible taxpayers. The link for Geocoding Address of the Principal Place of Business will not be visible in case the address has already been Geocoded through New Registration/Amendment or through this functionality previously. The Geocoding of Address process is available for Normal Taxpayers/ Composition/ Casual Taxable Person/ Input Service Distributor (ISD)/ SEZ Developer/ SEZ Unit is common for all eligible registered persons. Well…. This a progressive step for error-free data, but this facility is currently provided for Delhi and Haryana taxpayers only. It will gradually be extended to taxpayers from other States and UTs as a way forward, in due course. GST UPDATEZ ON 27-02-2023 GST on Flower bouquets exempt The West Bengal Authority of the Advance Ruling (AAR) has observed that bouquets made with dry parts of plants, such as foliage, flower buds, grasses, and branches of plants, are exempt from GST. The applicant is in the business of manufacturing and processing dry parts of plants, such as foliage, flower buds, grasses, and branches of plants, which are dried, bleached, dyed, and coloured for decorative and ornamental purposes and sold as bouquets made with dried parts of plants and packed in plastic foil packaging. The applicant sought an advance ruling on the issue of Whether the bouquets made with dry parts of plants, such as foliage, flower buds, grasses, and branches of plants that are bleached, dyed, and colored for decorative and ornamental purposes and sold with plastic foil packaging would be considered "exempt supplies" under the GST? The applicant submitted their defense that the bouquets made from dried plant parts and dried flowers would be covered under HSN 0604, and therefore the supply of such goods would be treated as an exempt supply. The AAR has noted that Chapter 6 of the GST Tariff deals with "live trees and other plants; bulbs, roots, and the like; cut flowers and ornamental foliage." Further, in terms of Note 2 of Chapter 6, as it has already been referred to by the applicant, "any reference in heading 0603 or 0604 to goods of any kind shall be construed as including a reference to bouquets, floral baskets, wreaths, and similar articles made wholly or partly of goods of that kind. The AAR held that the supply of goods by the applicant under Tariff Item Nos. 0639000 or 06049900 whether individually or in combination, is also exempt from the payment of tax. Well to sum up.... Bouquet made with dry parts of plants, foliage, flower buds, grasses, and branches of plants that are dried, bleached, dyed, and colored for decorative and ornamental purposes and sold with plastic foil packaging will be classifiable under Tariff Item Nos. 0639000 or 06049900. and are exempted from GST. GST UPDATEZ ON 28-02-2023 Sale of Alcoholic Liquor for Human Consumption Liable to Reverse ITC: West Bengal -AAR Click here to read full document

224 R. Srivatsan, IRS The Authority of Advance Ruling, WB, ruled that the applicant would be required to reverse input tax credit (ITC) in terms of sub-section (2) of section 17 of the GST Act read with Rule 42 of the GST Rules for sale of alcoholic liquor for human consumption. Well...... The objective of ITC is to avoid cascading impact of tax when both input and output is liable for GST. In case the output is not liable, there is no double taxation and credit should not be available. No unsteady or lurching decision though it is with reference to alcoholic intoxication for human consumption. GST UPDATEZ ON 01-03-2023 GST- Revenue for February 2023 Click here to read full document The West Bengal Authority for Advance Ruling (AAR) has held that the sale of alcoholic liquor for human consumption would be liable to reverse Input Tax Credit (ITC). The applicant Karnani FNB Specialities LLP is engaged in the business of providing restaurant services from its lounge bar and was also providing catering services as well as banquet renting services. Along with such supplies or on a standalone basis, at times, the applicant was also engaged in selling/serving alcoholic liquor for human consumption to its customers. The applicant has sought an advance ruling as to -whether the applicant was obliged to reverse input tax credit (ITC)- under section 17(2) of the CGST Act read with rule 42 of the Central Goods and Services Tax Rules, 2017 (CGST Rules) in view of the sale of alcoholic liquor for human consumption made by it at its premises. The applicant also submitted that adopting a meaning where alcoholic liquor was within the scope of "non-taxable supply‟ would also render the charging provision of the CGST Act which defines the term "supply‟ unconstitutional by virtue of being ultra vires Article 366- 12(A) of the Constitution of India. They further submitted that the Applicant was of the firm view that as the sale of alcohol was outside the ambit of GST, it was not liable to reverse ITC on such a supply by way of treating it as a nontaxable supply under Section 2(78) of the CGST Act (and therefore, exempt under Section 2(47)). The Revenue submitted that Section 17(2) of the GST Act, 2017 has stated that where the goods or services or both were used by the registered person partly for effecting taxable supplies including zero-rated supply under this Act or under IGST Act and partly for effecting exempt supplies under this Act, the amount of credit would be restricted to so much of the input tax as was attributable to the said taxable supplies including zero-rated supplies. Further, it was submitted that ITC should be reversed since the applicant affects the sale of alcoholic liquor for human consumption in addition to the supply of restaurant and outdoor catering services The gross GST revenue collected in the month of February 2023 is ₹1,49,577 crore of which CGST is ₹27,662 crore SGST is ₹34,915 crore IGST is ₹75,069 crore (including ₹35,689 crore collected on import of goods) and Cess is ₹11,931 crore (including ₹792 crore collected on import of goods) The government has settled ₹34,770 crore to CGST and ₹29,054 crore to SGST from IGST as regular settlement. The revenues for the month of February 2023 are 12% higher than the GST revenues in the same month last year, which was Rs. 1,33,026 crores. During the month, revenues from import of goods was 6% higher and the revenues from domestic transaction (including import of services) are 15% higher than the revenues from these sources during the same month last year.

225 R. Srivatsan, IRS made to the appellate tribunal whenever it is constituted within three months from the President or the State President enters office. Well.... All the Petitions under Article 226 of the Constitution of India are filed on the ground that the GST Appellate Tribunal (GSTAT) is not yet constituted. Since various such Petitions are being filed in various Courts and taking note of the large pendency of such cases, the Honourable Bombay High Court in addition had directed the Revenue to file a reply affidavit as to the position brought about by nonconstitution of the Appellate Tribunal. In fact, Circular No. 132/2/2020 – GST CBEC-20/16/15/2018-GST 18th March, 2020 has dealt with this matter in clear terms. GST UPDATEZ ON 13-03-2023 E-invoice Portal to block generation of e-invoices with 4-digit HSN codes if taxpayer turnover is more than 5 Crores Click here to read full document This month witnessed the highest cess collection of ₹11,931 crores since implementation of GST. In terms of Notification No.78/2020 – Central Tax dated 15th October, 2020, it is mandatory for the taxpayers to mention 6- digit HSN Codes for their outward supplies having aggregate turnover of more than Rs. 5 Crores. Shortly, e-Invoice System will not accept 4- digit HSN codes. The date for blocking eInvoice generation having HSN code as 4- digits will be intimated in due course on the portal. So, the taxpayers have been advised to make necessary changes in accounting system to report 6-digit HSN codes to eInvoice Portal and comply by the notification obligations The taxpayers can verify all their HSN codes in the GST E-Invoice portal under Search–>Master–>HSN Codes and also test in the sandbox system which is currently available. GST UPDATEZ ON 06-03-2023 Honourable HC advised revenue to include remarks in every order about non-constitution of GSTAT While hearing a petition, in the case of M/s. Rochem India Pvt. Ltd. Vs Union of India the honourable Bombay High Court has advised Revenue to include remarks in every order (which is appealable to GSTAT) that appellate tribunal is not yet constituted and appeal can be filed in tribunal within three months from the date on which President of Tribunal enters office. The learned ASG, who had represented the revenue assured to consider this. It was also submitted by the learned ASG that the delay in the formation of GSTAT is neither intentional nor due to negligence or apathy but due to the circumstances like multiple changes pertaining to the GST Appellate Tribunal in the GST Laws to bring it in conformity with judgments of the Courts in relation to various aspects concerning Tribunals. Also, that no hardship is caused to the taxpayers due to non-formation of GSTAT as period of limitation for filing appeal to the Tribunal is extended vide CGST (Ninth Removal of Difficulties) Order, 2019, so that the appeal can be filed within three months from the date on which the President of Tribunal enter the office. Further, in terms of the Advisory issued by CBIC to the field formations vide, Circular No. 132/2/2020 – GST CBEC20/16/15/2018-GST 18th March, 2020 the above fact that the prescribed time limit to make application to appellate tribunal will be counted from the date on which President or the State President enters office. In addition, it has been instructed that the appellate authority while passing order may mention in the preamble that appeal may

The benefit of generating e-invoice is that the tax authorities will have access to transactions as they take place in real-time since the IRN (not Tax Invoice) will have to be generated through the GST e-invoice portal. Also, it is expected that there will be less scope for manipulating invoices since the invoice gets generated before carrying out a transaction. 226 R. Srivatsan, IRS GST UPDATEZ ON 27-03-2023 Whether the Supply of Services rendered in terms of the service agreement constitutes services as an ‘intermediary’ – It is Export of Services – Honourable Delhi HC In case the 6-digit HSN code is not available, aggrieved taxpayer may raise a ticket at Helpdesk so that it can be included in the system on the date when rolled out. In a very important Judgement, the honourable Delhi High court in the case of M/S. Ernst and Young Limited Vs Additional Commissioner, CGST Appeals - II, Delhi and Others., on the subject of Whether the Service rendered by the petitioner (E&Y) to their own Entities (E&Y) in terms of the service agreement constitutes services as an ‘intermediary’ or Export of Service, delivered its order confirming that it is "Export of Service" Before that, - in terms of Sub-section (8) of Section 13 of the IGST Act, 2017 the place of supply of certain services would be the location of the supplier of the services. In terms of Clause (b) of Sub-section (8) of Section 13 of the IGST Act, 2017 the place of supply of intermediary services is the location of the supplier of services. In the present case, the place of supply of services has been held to be in India by the Original Adjudicating Authority, on the basis of the fact that the petitioner (E&Y) is providing intermediary services. However, the court held that the Services rendered by the petitioner (E & Y) are not to be treated as supply of services by an intermediary and therefore, the place of supply of the Services rendered by the petitioner to GST UPDATEZ on 24-03-2023 GST e-Invoice System enables ‘EInvoice voluntary enablement’ for FY 2022-23 The Goods and Services Tax (GST) EInvoice system enabled E-invoice voluntary enablement for the financial year 2022-23, for GST-registered individuals to upload all B2B invoices to the Invoice Registration Portal (IRP) & use the e-Invoice System. Using the e-invoice system, individuals who are GST registered can upload all B2B invoices to the Invoice Registration Portal (IRP). IRP generates an individual’s Invoice Reference Number (IRN), digitally signed einvoice, and QR code. After recent advancements that included integrating new IRPs, the Goods and Services Tax (GST) e-Invoice System is scheduled to undergo a significant overhaul in the coming weeks. The GST Council resolved to introduce an electronic invoicing system for a select group of notified Taxpayers, primarily large businesses, at its 35th meeting. Subsequently, it was expanded to include small and medium-sized firms as well and as of now it stands at Rs.10 Crore Annual Aggregate turnover. If a taxpayer’s turnover exceeds this stipulated limit in any fiscal year from 2017–18 through 2021–22, they must comply with e-invoicing beginning in FY 2022–23. Moreover, the annual aggregate turnover will comprise the total turnover of all GSTINs that fall under a single PAN. The taxpayers must now include 6-digit HSN Codes for any outbound deliveries with an AATO of more than RS 5 Crores, under notice No. 78/2020 — Central Tax, which was recently issued. This will be an important compliance to note for all those who are obliged to generate e-invoice.

227 R. Srivatsan, IRS The Rajya Sabha has given its approval to the Finance Bill, 2023, on 27-03-2023 presented by the Union Finance Minister. The current Finance Bill 2023 has proposed some 64 amendments to the original Finance Bill 2023 that taxpayers need to look out for. This Finance Bill 2023 was passed by the Lok Sabha on March 24, 2023 with all such official amendments. The second leg of the budget session started from March 13, 2023 and is anticipated to end on April 6, 2023. The final step in this process is to seek and obtain the honourable President's assent for the Finance Bill 2023, after which the process of legislating the changes in the respective Acts will commence. GST UPDATEZ ON 29-03-2023 Who Is the Proper Authority to Decide IGST Refund? Bombay High Court Directs the Dept. To Decide overseas entities is required to be determined on basis of the location of the recipient of the Services. Since the recipient of the Services that is EY Entities is outside India, the professional services rendered by the petitioner would fall within the scope of definition of ‘export of services’ as defined under Section 2(6) of the IGST Act 2017. Well…. There are a few basic requirements as envisaged by the legislation for Intermediary (as defined under Section 2(13) of the IGST Act 2017,) services. (1) Minimum of Three Parties - Supplier / Recipient / Third Party intermediary with clear recognizable contract (2) Two distinct supplies: i.e., Main supply, “arranges or facilitates” between the two principals, which can be a supply of services or Goods and Ancillary supply, which is the service of facilitating or arranging the main supply between the two principals. This ancillary supply is supply of intermediary service and is clearly identifiable and distinguished from the main supply. (3) A person involved in supply of main supply on principal-to-principal basis to another person cannot be considered as supplier of intermediary service. (4) Does not include a person who supplies such goods or services or both or securities on his own account. (5) Intermediary has the character of an agent, broker or any other similar person. (6) Sub-contracting of service is not intermediary service. GST UPDATEZ ON 28-03-2023 Budget 2023: Rajya Sabha gives nod to Finance Bill 2023 Click here to read full document The Honourable Bombay High Court has directed the department to decide who has the proper authority to decide on an IGST refund in case of an exporter. The division bench of the honourable Court has noted the fact that the customs authorities claimed that the GST authority is the proper for processing refund claims, whereas the GST authorities claim that it is the customs officer. The court directed both authorities to discuss amongst themselves and file a joint note, on the jurisdictional authority failing which the officers would be directed to remain present in court. The brief issue involved is that the petitioner/assessee is an exporter. It filed a claim for a refund of IGST through the filing of the shipping bill. The refund claim was not processed by customs. It approached the jurisdictional GST authorities. The claim was

228 R. Srivatsan, IRS s it covers within its ambit floor wall and ceiling coverings of plastics, the AAR said. It ruled that the product comes under 8708, which covers parts and accessories of motor vehicles subject to certain conditions. This classification draws a GST of 28 per cent. The authority went by the principle laid down by a note of HSN, which says that when a part or accessory can fall in more than one code, the final classification is determined by its sole or principal use. Well...... It could be seen that the AAR has applied the general rule of the classification, which goes by its sole or principal use. Applying that rule, classification of the product as part and accessories of motor vehicles seems to be fair and unbiased. GST UPDATEZ ON 18-04-2023 Cross Charge transactions are liable for payment of GST not processed by GST Authorities also. The petition was pending for more than a year on a simple issue of who was the proper authority to decide the petitioner’s claim. The court disapproved of the stands taken by the officers of government, which led to the needless waste of judicial time and harassment of the citizens. Post Script: Case Title: M/s. Bora Mobility versus Union of India and Others; Citation: Writ Petition No. 1168 Of 2022 GST UPDATEZ ON 06-04-2023 Classification of floor mats for fourwheeler - HSN 8708 The Authority for Advance Rulings (AAR) of Gujarat has ruled that Floor mats, made of PVC leather mixed with other substances, for four-wheelers will attract 28 per cent Goods and Services Tax (GST). The ruling was given on an application filed by M/s. Autotech, a proprietary concern that manufactures and supplies floor mats for four-wheelers. The applicant had inferred that the product would draw 18 per cent GST since it is an admixture of PVC leather, PU foam and XLPE foam, bound together by using a cotton thread and adhesive, consequent to which a heel pad is affixed. According to the company, the product should be classified either under the heading 3918 (floor coverings of plastic) or 3904 (PVC not mixed with any other substance), which draw 18 per cent GST. The company cited various court orders to support its point. The AAR, however, observed that since 3904 clearly provides that it covers PVC items not mixed with any other substance, the product does not fall in this category. The product also does not fall under 3918 a Click here to read full document In a very important decision, Tamil Nadu Authority for Advance Ruling (AAR) has held that the services, including those of common employees of a person, provided by branch offices to the head office and vice versa, each having a separate GST registration, will attract GST. This is generally known as Cross Charge and “Cross-charge” is a concept where the GST registration of Corporate Office/HO/ any other office raises invoices on the other offices (having separate GST registration), towards the services provided to such offices. The expression “Cross-charge” is not defined under the GST laws. It is a phrase that is colloquially referred to in the business to identify the supplies made between GST registrations of a single person. Wherever the expression “Crosscharge” is being referred it

229 R. Srivatsan, IRS Supply of goods or services or both between related persons or between distinct persons, as specified in Section 25, when made in the course or furtherance of business, is to be treated as a supply even if made without consideration. would mean as reference to the supplies made between distinct persons. The AAR has observed that even the services of employees deployed from a registered place of business to another registered premises of the same person will attract GST, as the employees are treated as related persons in terms of explanation to Section 15 of CGST Act 2017 and treated as supplies by virtue of Schedule I / (Clause: 2) to the CGST Act, 2017. The applicant registered under the Companies Act 2013 in the state of Karnataka has a branch office in Chennai, and the branch office is registered in the state of Tamil Nadu under the GST Act for providing engineering services for industrial and manufacturing projects. The branch office of the applicant (from Chennai) is providing support services like engineering services, design services, accounting services, etc. to the head office (in Bangalore) and is also registered in the state of Karnataka under the GST Act. The applicant sought an advance ruling on the issue of 1. Whether providing service from a branch office in one state to the head office in another state through employees who are common to the company constitutes a supply of service in terms of Section 7 of the CGST Act? and, if so, 2. Whether such services attract GST liability? The applicant stated that the employees are appointed and working for the company as a whole and not employed for the head office or branch specifically, while recognizing the legal position that the head office and branch office are distinct persons under GST. It is obvious that the service of an employee working in a branch flow only through the branch to the head office or customer. As long as the employee is deployed in a branch of an entity, his services that are rendered directly to the head office will be in his representative capacity as an employee of the branch.The AAR noted that Schedule I (clause -2) to the CGST Act, 2017 states that GST UPDATEZ ON 19-04-2023 Delhi High Court has upheld that auto ride through platforms like Uber will attract GST Click here to read full document The honourable Delhi High Court has upheld the Centre’s decision to levy GST on the services offered by an auto-rickshaw or other non-air-conditioned carriages through electronic commerce operators like Uber. The High Court bench dismissed the petitions of Uber India Systems Private Ltd and others challenging the 2021 Central Government notifications making fare in respect of a booking through the platform of an electronic commerce operator (ECO) for an auto-rickshaw ride or a bus ride eligible to tax. The court said ECOs form a class which is “distinct” from an individual service provider and the notifications, which take away an earlier exemption from tax levy, are in compliance with the object of the GST law to levy tax on every transaction of supply of goods and services. In the opinion of the Court, the distinction of the classification between ECO and the individual service provider has a rational nexus with the object sought to be achieved by the GST Law. The impugned Notifications, which seek to withdraw the exemption and tax the consumers who elect to avail a ride in the auto rickshaw or a non-air-conditioned stage carriage through ECOs, is in conformity with the stated objective of the GST Act of 2017.

230 R. Srivatsan, IRS The transfer of Jaipur international airport operations by Airports Authority of India (AAI) to the M/s. Adani Jaipur International Airport Limited is exempted from Goods and Services Tax (GST), as per the ruling of the Authority for Advance Ruling. In its business transfer arrangement entered vide agreement dated January 16, 2021, between the applicant Airport Authority of India (AAI) and M/s. Adani Jaipur International Airport Limited (a Special Purpose Vehicle) the operations of Jaipur Airport has been transferred as a 'going concern' and consequently the Adani Group had in October, 2021, have taken over the operations, management, and development of the Jaipur International Airport from the AAI. The airport has been leased out to the group by the government of India for a period of 50 years. The AAI had approached the Rajasthan bench of the Authority for Advance Ruling (AAR) seeking a ruling on 1. whether a transfer of the business to Adani Jaipur International Airport Ltd is treated as supply as 'going concern' and whether GST is leviable on transfer of assets? A 'going concern' refers to a business or entity that is expected to continue operating and generating revenue in the future. Transferring a business as a going concern means that the buyer is acquiring all of the assets and liabilities of the business and that the business will continue to operate as usual, without any interruption in its operations. It has been ruled that the transaction is a Supply in terms of Subject Supply of “Transfer of Going Concern Service for a foreseeable future” is under Section 7 CGST Act, 2017, and the same is also not covered in clause 4(c) of schedule II of CGST Act viz-a-viz RGST. The Concession Fee is to be treated as part of the Consideration paid by M/s. Adani Jaipur International Airport Limited (a Special purpose Vehicle created for this purpose) to AAI in subject matter but is covered at Entry No. 2 of Notification 12/2017-CT(R) and attracts NIL rate of Tax while reversal of proportionate ITC is required in accordance with section 17 (2)/ (3) of CGST Act viz-a-viz RGST Act 2017. Uber India had contended the notifications were violative of Article 14 (equality before law) of the Constitution of India as they failed to satisfy the test of reasonable classification. It was stated that no differentiation in tax treatment can be created between passenger transport services rendered by auto drivers facilitated through e-commerce platforms versus passenger transport services rendered by auto drivers offline. The court ruled there was no discrimination on the basis of the mode of booking and observed that the service provided by the individual supplier is only one facet of the bundle of services assured by the ECOs to the consumer. The ECOs are providing bundle of services such as security, digital payments, time sensitivity, etc and partake a charge/commission from both the consumers and the individual supplier, and dismissed the petitions and held in the hearing on Wednesday April 12, 2023, a that the decision to levy GST did not violate fundamental rights. Well…. The Delhi High Court’s decision to uphold the imposition of GST on app-based autorickshaw rides is bound to have farreaching implications for both the ridesharing industry and commuters. For app-based cab aggregators like Uber and Ola, this ruling signifies the need to adapt to new regulatory frameworks and tax policies. They may need to re-evaluate their pricing strategies and consider the additional costs associated with GST on autorickshaw rides. GST UPDATEZ ON 24-04-2023 GST not applicable on transfer of Jaipur International airport business to Adani group: AAR-Rajasthan Click here to read full document

231 R. Srivatsan, IRS The appellant M/s. Anmol Industries entered into a 30-year leasing agreement with the Shyama Prasad Mookerjee Port, Kolkata (SMPK) for a piece of land which will be used for setting up commercial office complex. It has been agreed that the M/s. Anmol Industries will pay over ₹39 crore SMPK as upfront lease premium. It was also said that the allotment letter further seeks to charge GST at 18% on the upfront premium fees payment. As the appellant (Recipient of Supply of Service) was of the view that upfront lease premium is exempt from GST, it moved to West Bengal AAR to seek advance ruling on the question - Whether GST exemption would be available for them? During the course of hearing, the AAR observed that the application cannot be accepted since an application for advance ruling can be filed only by the supplier in relation to supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. Here the applicant was the recipient of services. Further, it contended, if an application is filed by the recipient of goods or services or both on the taxability of his inward supply of goods or services and ruling is pronounced accordingly, such ruling shall be binding only on him and on the concerned officer or the jurisdictional officer of him. In no way, the ruling shall be binding on the supplier of such goods or services. Any provisions of the Law, therefore, should not be interpreted in a way which defeats the very purpose of the objective and purpose of the law provision. Therefore, of the view that in the subject application, the applicant (Recipient of Supply of Service) cannot seek an advance ruling in relation to the supply where he is a recipient of services, AAR said following which Anmol Industries moved to the High Court. After going through all the facts presented and submission made, the Division Bench observed that definition of the applicant in law is ‘any person registered or desirous of obtaining registration. Then a sub-section The Rajasthan bench of the AAR also noted that the decisions taken by the Authority of Advance Ruling of Gujarat, Advance Ruling No. GUJ/GAAR/R/46/2021 dated 27.08.2021 and Authority of Advance Ruling of Uttar Pradesh UP also vide Advance Ruling No Up ADRG-03/2022 dated 13/05/2022 benches of AAR which too had ruled on similar lines that business arrangements between AAI and Special Purpose Vehicle (SPV) are covered under transfer of 'going concern'. However, the invoice raised by AAI for reimbursement of salary /staff cost on Adani Jaipur International Airport Ltd is a supply that falls under the ambit of manpower service and is hence taxable at the rate of 18% (9 % CGST and 9% RajSGST). Well…. This ruling will have a very strong persuasive impact for any other similar transfers by AAI in other locations of India. GST UPDATEZ ON 27-04-2023 Recipient of Supply is entitled to file Advance Ruling application under GST Click here to read full document The Honourable Calcutta High Court in a very significant order has said that ‘recipient of Supply is also entitled to file Advance Ruling application under GST in an order pronounced on April 21, 2023 Many Authorities for Advance Rulings (AARs) have so far ruled that only the service provider (Supplier) can seek advance ruling. The Honourable high court took reference to Definition of applicant and ruled that the recipient of supply clearly falls within the definition of “applicant” as defined under Section 95(c) of the (CGST) Act, therefore, are of the view that the application filed by the appellants (Recipient of Supply) before the AAR has to be decided on merits.

For the first time gross GST collection has crossed ₹1.75 lakh crore mark. Total number of e-way bills generated in the month of March 2023 was 9.0 crore, which is 11% higher than 8.1 crore e-way bills generated in the month of February 2023. The chart below shows trends in monthly gross GST revenues during the current year. 232 R. Srivatsan, IRS of the law deals with the question on which advance ruling can be sought for under the Act. Based on these two, the Bench held that appellants (Recipient of Supply of Service) fulfil the eligibility to seek the advance ruling. Accordingly, the Bench set aside the ruling by AAR and remanded back the matter to AAR to decide the application on merits and in accordance with the law. Interesting......... GST UPDATEZ ON 01-05-2023 GST revenue collection for April 2023 is at Rs 1.87 lakh crore Click here to read full document The Gross GST collection in April 2023 is at all-time high, stands at R.1,87,035 Crore which is Rs.19,495 crore more than the next highest collection of Rs. 1,67,540 crores, in April 2022. GST revenues for April 2023 are 12% higher than the GST revenues year on year. The Highest tax collected on a single day ever at ₹68,228 crore through 9.8 lakh transactions on 20th April 2023. The gross GST revenue collected in the month of April, 2023 is ₹ 1,87,035 crore of which CGST is ₹38,440 crore SGST is ₹47,412 crore IGST is ₹89,158 crore (including ₹34,972 crore collected on import of goods) and Cess is ₹12,025 crore (including ₹901 crore collected on import of goods). During the month, the revenues from domestic transactions (including import of services) are 16% higher than the revenues from these sources during the same month last year. GST UPDATEZ ON 08-05-2023 Deferment of the imposition of time limit of 7 days on reporting old einvoices on IRP GSTN has issued an advisory to inform that it has been decided by the competent authority to defer the imposition of time limit of 7 days on reporting old e-invoices on the e-invoice IRP portals for taxpayers with aggregate turnover greater than or equal to 100 crores by three months. The next date of implementation will be shared in due course of time. Temporary relief!!!!! GST UPDATEZ ON 11-05-2023 Threshold limits for e-Invoice obligations now reduces and fixed at AATO Rs.5 Crore The CBIC vide Notification No: -10/2023 Central Tax dt:10-05-2023 seeks to implement e-invoicing for the taxpayers having aggregate turnover exceeding Rs. 5 Cr from 1st August 2023. This amendment to parent Notification No.13/2020 CT, dt. 21-03-2020 has been m

233 R. Srivatsan, IRS The company again approached the court after the GST Intelligence authorities sent a show cause notice on the same day the court issued the interim stay to the tax demand intimation. The DGGI had contended that the gaming services provided by Gameskraft amounted to betting and gambling and should attract a GST rate of 28% to be paid on full entry fee. In the meantime, in October 2022, not-forprofit gaming body E-Gaming Federation (EGF) filed an intervention application saying that the result in the Gameskraft case will have a direct and material impact on the entire online gaming industry, including online rummy operators. The honourable Karnataka High Court, referred to an old case (in 1957!) of RMC Chamarbaugwala, EGF claimed that the Supreme Court (SC) had in fact recognized the difference between skill-based games and chance-based games. The honourable Karnataka HC, has now put the argument to rest, saying the games provided by Gameskraft come under games of skill and not games of chance. Well.... One is hopeful that this decision will pave the way towards clarity and certainty on the GST levy for this sector. The legal precedence set in this case is expected to guide future discussions on taxation policies pertaining to the skill gaming industry. ade in accordance with sub-rule (4) of rule 48 of the Central Goods and Services Tax Rules, 2017, on the recommendation of the GST Council. The previous limit of Rs. 10 crores have now been revised to Rs. 5 crores. It is important to note that E-Invoice will be applicable if the Aggregate Turnover exceeds Rs. 5 crores in any of the previous 5 years, including the Exempted Turnover. Way forward as expected! GST UPDATEZ ON 12-05-2023 Karnataka HC quashes Rs 21,000 crore show cause notice issued to Games kraft for GST evasion Click here to read full document In a landmark judgement for the online gaming industry the honourable Karnataka High Court has quashed the Rs. 21,000 crores show cause notice issued to online skill gaming platform Gameskraft by the Directorate General of GST Intelligence (DGGI). The final verdict was given by the single judge bench, of honourable HC, Karnataka. The GST- DGGI authorities issued the notice on September 8, 2022, raising a demand of Rs 20,989 crore for the period August 2017 to June 2022. As per the notice, it was alleged that the services provided by Gameskraft come under betting and gambling and are subject to 28% GST and as per Rule 31A of the CGST Rules, 2017, where the value of supply of actionable claim in the form of chance to win in betting, gambling or horse racing in a race club has been fixed be 100% of the face value of the bet or the amount paid into the totalisator. However, the company challenged it before the court which granted stay on September 23, 2022 observing that the case involved several contentious issues. GST UPDATEZ ON 15-05-2023 No GST Exemption for renting immovable properties owned by Charitable Institution and situated outside the premises of a religious place -GAAR Click here to read full document

234 R. Srivatsan, IRS of the particular building or place, an enclosed or clearly defined area of ground around a temple, cathedral, church, mosque, etc. Therefore, this implies that if immovable properties owned by charitable trust like marriage hall, convention hall, rest house for pilgrims, shops situated within the premises of a religious place are rented out income from letting out of such property is exempt from GST. If properties are not situated in the precincts of a religious place i.e. not within walls or boundary walls of the religious place, income from such letting out will lose the exemption and income from it will be liable to GST, GAAR ruled. When asked by GAAR whether the Nandini Ashram is owned by the trust managing the Ambaji Temple, the authorised representative of the applicant answered in negative. On being further asked whether the rooms of Nandini Ashram which they were renting to pilgrims is located in the precincts of the Ambaji Temple, he informed that it was not within the boundary of the temple. Therefore, going by the definition of precinct, it is emphatically clear that the applicant is not eligible for the benefit of the notification, GAAR held. Also, it held that applicant is liable for registration, if its Annual aggregate turnover is more than ₹20 lakh per annum. Further, the exemption will not be available if charges for renting of rooms exceeds ₹1,000 per day or charges for renting the premise exceeds ₹10,000 per day. A charitable trust providing accommodation to pilgrims visiting a Temple in a building located outside the boundary of the religious place will not get GST exemption rules Gujarat’s Authority for Advance Rulings (GAAR). The applicant Ahmedabad based Nandini Ashram Trust provides accommodation to pilgrims who visit the Ambaji Temple, located in Banaskantha District, Gujarat. It is also engaged in providing a wide range of professional consulting services such as architecture, engineering, planning, urban design, landscape, sustainability, research and art, building design, interior design, surveying, environmental sciences, project management and project economics, etc., It moved to GAAR to seek advance ruling on 1. Whether it needs GST registration? and 2. Whether the services come under the purview of GST regime? After examining the facts and arguments, GAAR has contended that income from charitable activities such as public health, advancement of spirituality, yoga, advancement of educational programs or skill development and preservation of environment, including watershed, forests and wildlife alone are exempted. In fact, there could be many services provided by charitable and religious trust which are not considered as charitable activities and hence such services will come under GST net. The indicative list of such services includes renting of premises by such entities, grant of sponsorship and advertising rights during conduct of events/functions etc., It has been highlighted & clarified that law gives a limited exemption to renting only religious precincts or a religious place meant for the general public by the entity registered under the lncome Tax Act 1961 In fact, the term “religious place” means a place which is primarily meant for conduct of prayers or worship pertaining to a religion, meditation, or spirituality. The Dictionary meaning of “precincts” is an area within the walls or perceived boundaries GST UPDATEZ ON 18-05-2023 Harmonized Common Audit Manual 2023 for Centre and State tax officials envisaged Click here to read full document

236 R. Srivatsan, IRS formations and disseminate audit outcomes to appropriate stakeholders and perform other functions as per the Model All India GST Audit Manual. Well.... The guidelines provided in the manual are intended to enable audit officers to carry out effective audits in a uniform, efficient and comprehensive manner adopting the best practices of the States and the Centre, as well as international practices. The audit processes can also be assisted by technological tools for data Analytics developed by the Centre as well as state governments. The manual lays out standard principles broadly for 1. the selection of audit cases, 2. Preparation of audit 3. Conduct of audit 4. post-audit follow up 5. Finalization of objections is expected to help both the Central and state GST officials to carry out the process in a uniform manner. The standardized norms which were placed before the GST Council in February 2023, are likely to be taken up for audit cases from this fiscal. Among other measures, the Audit Manual has suggested a common platform for sharing important audit findings and other sources of relevant information to improve the quality and efficiency of audit. Supply of Services already identified include 1. e-commerce, 2. works contract, 3. Hospitality, 4. Banking and financial services and 5.hospitality sectors. At present, one of the main concerns for businesses has been the multiplicity of audit procedures by the Centre and different states, with each one choosing cases based on different parameters and having varying requirements and timelines. In recent months, audits have also gained traction with both the Centre and State GST departments, sending out several notices to taxpayers for this. Audit is expected to be a key tool for tax officials this fiscal given the focus on increasing the GST taxpayer base and cutting down on tax evasion. As part of the exercise, a PAN India Coordination Committee’ of Officers is also being set up with officers from the Centre and States who will choose themes for conducting audit, constitute a Committee of Officers for selecting taxpayers in a state for conducting a thematic audit coordinate among various audit authorities for evolving a common minimum audit plan for a given theme. It will also monitor actual audits by the field GST UPDATEZ ON 19-05-2023 New functionality introduced for search of IRN Click here to read full document GSTN has introduced a new feature that allows users to validate or search for the Invoice Reference Number (IRN) using the document number. Feature enables users to verify authenticity of an E-invoice. By validating IRN, businesses can ensure that their ITC claims are not rejected. It is important to verify the genuineness of an E-invoice to avoid any complications or discrepancies in claiming tax credits. IRN, known as Invoice Reference Number, is a 64-digit alpha numeric unique number allotted by Common portal to tag and identify every valid e-invoice generated & first implemented from 1st October 2020. The e-invoicing system has been introduced to create a standard for all invoices generated.

237 R. Srivatsan, IRS However, the WB-AAAR bench observed that prospective flat buyers may or may not opt for a car parking space when booking their flat. Thus, the argument that the facility of the right to use open parking space is naturally bundled with construction services and is a composite supply fails. Further, the right to use open car parking space means the ownership of the open space is not transferred to the flat buyer, hence it is a separate service altogether. The arguments which were largely related to open car parking space, for which the bench pointed out that under RERA an open parking space is not included in the definition of a garage. Well...... The impact of this ruling is that buying homes with parking spaces will be costlier. Though Advance Rulings are binding only on the parties in question, in respect of the transaction for which the ruling was sought, quite often tax authorities rely on rulings favourable to the department. Some builders, thus, may adopt a cautious approach and charge 18% GST in respect of the car parking space. This functionality can be accessed through following link: https://einvoice.gst.gov.in/einvoice/sear chirng Well........ A very progressive and useful move GST UPDATEZ ON 27-05-2023 Standard Operating Procedure for Scrutiny of GST Returns for FY2019- 20 Onwards Click here to read full document GST UPDATEZ ON 22-05-2023 Sale or right to use an open car park is not naturally bundled with construction services The West Bengal bench of the Appellate Authority of Advance Rulings (WB-AAAR) has upheld an earlier ruling of WBAAR and said that sale or right to use a car park is not naturally bundled with construction services. Thus, it will not be treated as a composite supply and will attract goods and services tax (GST) at the higher rate of 18%. The AAAR’s ruling came in an appeal filed by Eden Real Estates which is engaged in construction of residential apartments. From April 1, 2019, GST is levied at 5% on non-affordable housing projects without input tax credit (ITC). For ongoing projects (as in the case on hand), the builder has the option to pay GST at the old rate of 12% with ITC, which means taxes paid on inputs can be set off. Had the WB-AAAR treated the transaction relating to the car park as a composite supply the GST levy that would have been applicable would be that of primary supply of construction, which is lower. In this case, the Real Estate Developer submitted that the car parking space is only given to flat buyers and stamp duty is paid on the entire consideration charged to them (that is, price of the apartment and the car parking space). The Central Board of Indirect Taxes and Customs (CBIC) has issued the standard operating procedure or SOP for the scrutiny of Goods and Services Tax (GST) Returns for under Section 61 of Central Goods and Services Tax Act, 2017 for the FY 2019-2020 onwards vide Instruction No. 02/2022-GST dated 22nd March, 2022. The instruction informs that the Directorate

General of Systems has developed an online workflow functionality called “Scrutiny of Returns” in the CBIC-GST application. This functionality allows the proper officer to communicate discrepancies noticed in the returns to the registered person, receive replies, issue orders, or take further actions such as issuing show cause notices, conducting audits, or investigations. The selection of returns for scrutiny will be done by the Directorate General of Analytics and Risk Management based on identified risk parameters. The selected GSTINs will be made available on the scrutiny dashboard of the proper officers on the CBIC-GST application. The risk parameters and the amount of tax or discrepancy involved will also be shown on the dashboard of the concerned officer for reference. The SOP provides guidelines for the, v scrutiny process v scrutiny schedule v scrutiny-proper officer v scrutiny timelines v issuance of notice (under Section 73/74) & v acceptance of reply to be followed. Well...... The online scrutiny functionality on CBICGST application will further boost the efforts of the department to leverage technology and risk-based tools to encourage self-compliance and to conduct scrutiny of returns with minimal interaction with the registered person. Monthly GST revenue is more than ₹1.4 lakh crore for 14 months in a row. Collection of ₹1.5 lakh crore crossed for the 5th time since inception of GST in July 2017. Revenue from import of goods 12% higher Y-o-Y; Domestic transactions (including import of services) revenue 11% higher Y-oY To put it in detail the gross Good & Services Tax (GST) revenue collected in the month of May, 2023 is₹1,57,090 crore of which CGST- ₹28,411 crore SGST- ₹35,828 crore IGST- ₹81,363 crore (including ₹41,772 crore collected on import of goods) and C. Cess- ₹11,489 crore (including ₹1,057 crore collected on import of goods). The government has settled ₹35,369 Cr. to CGST and ₹29,769 Cr. to SGST from IGST. Well.... The spill over of year end compliances would have lifted the GST revenues in spite of the fact that last month, (April 2023) GST collection was at a record high of Rs 1.87 lakh crore. Way to go!!!!! 238 R. Srivatsan, IRS GST UPDATEZ ON 01-06-2023 GST collection grows 12% YoY at Rs 1.57 lakh crore in May 2023 The GST revenue collection for the Month of May 2023 shows some significant growth. GST UPDATEZ ON 02-06-2023 Cancellation of GSTIN - Order of Honourable High court of Delhi The Cancellation of GST registration on the basis of physical verification without giving notice under Rule-25 is not sustainable in the views of Honourable Delhi High Court In this case, the Assessee had submitted application notifying change of place of business. In reaction to such request, Registration certificate was cancelled on ground that business was not being carried out from registered place of business after carrying out physical verification of place of business.

239 R. Srivatsan, IRS Tax Act, 2017 for revocation of cancelled registration extending the date till 30-06- 2023 in certain cases. The court had granted the petitioner-firm the liberty to file an application for the restoration of its GST registration before the competent authority. The current writ petition was filed by the petitioner-firm, challenging the cancellation of its GST registration due to non-filing of GST return and eligibility of ITC in the intervening period. The petitioner's appeal against the cancellation order was rejected by the Appellate Authority. The division bench of the Rajasthan High Court observed that while the writ petition was pending, the competent authority under the Goods and Services Tax Act, 2017 had issued a Notification No.03/2023 on 31.03.2023, and as per the said notification, on the conditions being fulfilled, the cancellation of registration effected on the ground of non-filing of GST return, could be revoked and the petitioner firm could submit an application to the competent authority, requesting the restoration of its GST registration, provided that it satisfied all the conditions mentioned in the said notification. The crux of the judgement delivered by the honourable division bench of the Rajasthan High Court also included that the Taxpayer is entitled to claim Input Tax Credit for the period from cancellation of registration till the date of restoration. Well...... It has been made very clear that when the competent authority considers the issue of revocation of cancellation of petitioner firm GST registration under the notification dated 31.03.2023, and restores it, the petitioner-firm, shall be entitled to lodge its claim for availment of Input Tax Credit in respect of the period from the cancellation of the registration till the registration is restored. PS: -Honourable High court of Rajasthan / .. l .. . /. The Court in an appeal by the party held that though registration was cancelled after carrying out physical verification of place of business but the Proper Officer in terms of rule 25 failed to issue notice to assessee mandating his presence at time of verification. In addition, the verification report generated after carrying out physical verification was not uploaded on common portal in Form GST REG-30 within 15 days from date of such verification. Hence court held order cancelling registration was not sustainable and instructed Department to restore registration and give assessee eight weeks time to upload returns for relevant period. Well.... Issuance of Notice and uploading of Physical Verification report in GST REG-30 were found mandatory by the honourable court in this case in the interest of Justice. Tax officers undertaking verification should bear this view in mind, during fake registration cancellation drive for legal sustainability of their efforts. Ref: - Order No. W.P.(C) 9207/2019 & CM No.37947/2019; Bimal Kothari vs. Assistant Commissioner - Delhi High Court. GST UPDATEZ ON 05-06-2023 Taxpayer entitled for ITC during cancellation period if revocation of cancellation is considered favourably The Jodhpur bench of the honourable High Court of Rajasthan has disposed of the writ petition filed by M/s R.K. Jewellers (petitioner-firm), considering the Notification No. 03/2023–Central Tax Dated: 31st March, 2023 issued under the Central Goods and Services Click here to read full document Click here to read full document

240 R. Srivatsan, IRS The applicant sought an advance ruling on the issue of - Whether the service provider can charge GST on the whole amount of the bill (monthly rental + night charges + fuel on a mileage basis) or only on the monthly rental (excluding night charges + fuel on a mileage basis). It is relevant to see Section 15 of the CGST Act, 2017 which mandates that the value of supply shall include any other amount that the supplier is liable to pay in relation to supply but which has been incurred by the recipient of the supply and is not included in the price actually paid or payable for the goods or services, or both. The AAR held that service providers have to charge GST on the whole amount of the bill, i.e., monthly rental, night charges, and fuel on a mileage basis. Well.... Good mileage for Tax revenues... justifiably! GST UPDATEZ ON 06-06-2023 GST is payable on monthly rental, night charges, and fuel on a mileage basis when availing motor vehicle rental services. The Uttarakhand Authority of Advance Ruling- UAAR has observed that without fuel, the motor vehicle does not operate (run), and without running, i.e., moving from one place to another, the act of motor vehicle hire services does not happen. Motor vehicle hire services have the integral component of running or operating the vehicle from one place to another for transportation. To claim to provide the said services, actual transportation has to take place, and without fuel, this cannot happen. The UAAR noted that the contract entered into between the applicant and the provider of services is for motor vehicle hire services, in which the liability to arrange fuel and the maintenance of the vehicle so deployed lies with the service provider and is a comprehensive contract with a consideration that varies depending upon the kilometre travelled. Hence, the reimbursement of expenses for providing said services under any heading is nothing but an additional consideration for the provision of said services and attracts GST on the total value. The applicant received motor vehicle rental services, including fuel charges, from service providers. There can be two types of assessments in this supply of Services. One charging 5% GST on the whole amount of the bill, including monthly rental, night charges, and fuel on a mileage basis. The other charging 5% GST only on the monthly rent component alone of the bill, and no GST is charged on fuel charges. GST UPDATEZ ON 08-06-2023 Department prefers appeal in SC against Gameskraft case judgement CBIC, it appears, has decided to move Supreme Court against the Karnataka High Court order that quashed a Rs 21,000-crore GST show-cause notice on Bengalurubased online gaming company Gameskraft. The notice was issued by the Directorate General of GST Intelligence (DGGI) in September 2022 in which it alleged that GamesKraft short paid GST to the tune of Rs 21,000 crore for the period between July 2017 and June, 2022. The department's legal team is quite clear that the notice followed a thorough investigation Click here to read full document