E-Book: GST UPDATEZ

process, and therefore confident of justice in the apex court against the high court order. Looking back on the past events, during the course of examination at the High Court the department had highlighted that the platform allows players of online rummy to place stakes and bet on the outcome. In addition, it was also contended that the Bengaluru firm is making profit and gains from rummy played on its platform, which clearly amounts to betting and gambling. It said that the contention that the game of rummy played on its platform was a game of skill and therefore deserved to be rejected. On the contrary the taxpayer defended saying that it is nothing but a pure game of chance. The existing tax rules under GST are clear in terms of betting. So, the department is determined and confident that the case will soon reach finality in the court of law. If one can recollect, GST office had imposed a 28% tax on a betting amount (Transaction Value) of nearly Rs 77,000 crore. It was alleged that Gameskraft was engaged in betting by allowing its players/gamers to place bets in the form of money stakes on the outcome of card games played online. The taxation issue in respect of online gaming firms has been contentious. In fact, that is precisely the reason why the GST Council had formed a committee of GoM and tasked it to look into the distinction between game of skill and game of chance and the taxation issue around it. The panel is yet to arrive at a consensus but has referred the matter back to the GST Council and is expected to resolve the issue. Well...... The progress of the case is on expected lines, as the department is taking a chance relying on its skill to defend its case, so as to reach a logical end! 241 R. Srivatsan, IRS GST UPDATEZ ON 12-06-2023 GST officials can initiate action on omissions and commissions by an SEZ unit - Gujarat HC The court in its judgement held a view that GST authorities are empowered to carry out proceedings in SEZ a division while dismissing a petition filed by RHC Global Exports Private Ltd. Further, the Honourable High Court also held GST- Tax Department’s jurisdiction is unquestionable as the Central Government has already authorised those officers by virtue of a notification dated August 5, 2016. Further, provision under the State GST law indicates that where any proper officer issues an order under this Act, he is also issuing an order under the CGST Act as authorised by the Act, or under intimation to the jurisdictional officer of the Central Government, Cross Empowerment. Therefore, it cannot be said that Tax officers were acting without the authority of law or jurisdiction. Further, by virtue of a circular dated July 7, 2017, the functions of proper officers under the CGST Act are also defined. Hence, once the Central Government has notified the functions of proper officers, the said functions shall be applicable to be carried out equally by the officers under the CGST Act and SGST Act. Hence, it cannot be said there was a lack of authority on the part of the GST officers, as contended, by the appellant. The petitioner submitted that since the petitioner’s unit was within the area earmarked and is a SURSEZ unit, which is a distinctly foreign territory, administered under control and directions of the Development Commissioner and as such, is a tax-neutral or revenue-neutral area, it is outside the ambit of the provisions of the CGST Act, 2017 or the SGST Act, 2017. The state authorities are not empowered to initiate any action since every SEZ unit is a tax-neutral zone.

242 R. Srivatsan, IRS However, the honourable court did not buy this argument and said it deemed it proper to dismiss the petitions with costs of Rs 10,000 for each petition to be paid to the Gujarat State Legal Service Authority within 10 days from the date of order. Well...... SEZ - Safe Economic Zones from the scanner of enforcing agencies - not anymore? 3. Using ‘NIC-GST-Shield’ app: ‘NIC-GSTShield’ is a mobile app provided by e- way Bill /e-Invoice System, so that OTP can be generated by using the app. This app can be downloaded only from the e-Waybill / eInvoice portal from the link “Main Menu 2- Factor Authentication Install NIC-GSTShield”. The taxpayers are required to download, install and register this app on their registered mobile number. It has to be ensured that the time displayed in the app is in sync with e-waybill / e-Invoice system. On opening the app, OTP is displayed. The taxpayer may enter this OTP and continue the authentication. The OTP gets refreshed after every 30 seconds. The taxpayer does not require internet or any dependency on mobile network for generating the OTP on this app. Though it has doubled the security of access and data protection which is the primary objective on the flip side, Taxpayers who have several GST registrations across India are facing difficulty in complying with 2-Factor authentication. This is particularly relevant for taxpayers in e-commerce sector where lakhs of invoices/ e-way bills are generated on a daily basis. Further, there may also be cases where OTPs are generated simultaneously by the taxpayers for different GSTINs. The OTP that the taxpayer gets on the registered mobile number lacks an identity number (like which state or which GSTIN OTP it pertains to). When a taxpayer is registered in multiple states, it is difficult to track which OTP pertains to which GSTIN. Well....... All said and done, the Two-factor authentication (2FA) adds another layer of security to the entire authentication process by making it difficult for attackers/hackers to gain access to an assessee’ s accounts. Even if the assessee’ s password is hacked, the password alone isn’t enough to pass the authentication check. Going next Gen.....!!!!! GST UPDATEZ ON 13-06-2023 2-Factor Authentication in e-Invoice System/e-Way Bill made mandatory The National Informatics Centre (NIC) has recently enabled 2-Factor authentication for e-waybill and e-invoice system to further enhance the security of the systems. 2 Factor Authentication will be made mandatory from 15th July 2023 for all the taxpayers with (Aggregate Annual Turnover) AATO above 100 Crore. This 2-Factor authentication is required in addition to the username and password for logging in to the system. With the 2-Factor authentication, a One Time Password (OTP) is generated and sent to the mobile number of the registered taxpayer. There are 3 different ways of receiving the OTP as discussed below: 1. SMS: OTP is sent to registered mobile number as SMS. 2. On ‘Sandes’ app: Sandes is a messaging app provided by government so that taxpayers can send and receive messages. Taxpayers may download and install the Sandes app on the registered mobile number and receive the OTP in it. Click here to read full document

The gross GST revenue collected for June 2023 stood at 1,61,497 crores. Gross GST collection crosses 1.6 lakh crore mark for 4th time since inception of GST; 1.4 lakh crore for 16 months in a row; and 1.5 lakh 7th times since inception. The gross GST revenue collected in the month of June, 2023 is 1,61,497 crores of which CGST - 31,013 crore SGST - 38,292 crore IGST - 80,292 crore (including ₹ 39,035 crore collected on import of goods) and Cess is ₹11,900 crore (including ₹ 1,028 crore collected on import of goods). India, in April 2023, saw a record-high GST collection of Rs 1.87 lakh crore and Rs 1,57,090 crore in May 2023. During the month, the revenues from domestic transactions (including import of services) are 18% higher than the revenues from these sources during the same month last year. Well.... India's unprecedented indirect tax reform that dared to revolutionise the economic landscape is slowly but effectively reaching stability in revenue collections on the expected lines. This growth coincides with GST's sixth anniversary in India. The chart below shows trends in monthly gross GST revenues during the current year. 243 R. Srivatsan, IRS Goods and Services Tax Network (GSTN) has introduced a new functionality through Form GST-DRC-01B to enable taxpayers to explain the difference in liability between their GSTR-1 and GSTR-3B returns online. This development comes as a directive from the GST Council and aims to streamline compliance procedures for taxpayers. The new functionality compares the liability self-assessed and declared in GSTR-1 or IFF (Invoice Furnishing Facility) with the liability paid in GSTR-3B or 3B (Q) for each return period. If the declared liability exceeds the paid liability by a predefined limit or the percentage difference surpasses the configurable threshold, taxpayers will receive an intimation in the form of DRC-01B. Upon receiving the intimation taxpayers are required to file a reply in Form DRC-01B Part B providing a clarification through a reason selected from the automated dropdown. In case the reason for the discrepancy is not available in the dropdown, taxpayers must provide the necessary details manually. To assist taxpayers in using the functionality effectively, GSTN has published a detailed manual on the GST portal. This manual provides step-by-step instructions, including navigation details and addresses various scenarios related to the functionality. It is highly recommended for taxpayers to refer to the manual for a better understanding of the process and to ensure compliance. The soft copy of the link to guide the taxpayers for usage of this facility is provided below: https://tutorial.gst.gov.in/downloads/ne ws/return_compliance_in_form_drc_0 1b.pdf Well…………… It is essential for taxpayers to utilize this functionality and comply with the requirements to maintain smooth GST compliance procedures. GST UPDATEZ ON 01-07-2023 GST revenue collected for June 2023 records 12% Year-on-Year growth GST UPDATEZ ON 03-07-2023 Functionality of Form GST DRC-01B enabled by GSTN on 29-06-2023

244 R. Srivatsan, IRS Customs has submitted a proposal to introduce additional validations in GST Online return filing system and risk ratings for GST registrations. The GST Council is also likely to consider this proposal favourably and accord its recommendations especially as it will help to check large scale GST evasion and fake input tax credit (ITC) claims, to curb fake entities issuing fake bills just to claim ITC benefits and defraud the exchequer.Well…. All these above points are quite important from the Taxpayers perspective as any delay in implementing corrective measures has been causing businesses to have an enormous blockage of working capital, besides inflationary pressure. Hopefully every such issue is resolved ASAP! GST UPDATEZ ON 04-07-2023 The all-important 50th meeting of the GST Council will be held on 11th July 2023 at Vigyan Bhawan, New Delhi The council inter-alia is expected to discuss the following important issues: - 1. More strict measures are expected to be recommended to tighten the lasso on fake registrations and fraudulent availment of ineligible Input Tax Credit leading to largescale Tax evasion. 2. The GoM formed to harmonise the levy of tax on online gaming, casinos, and horse racing has submitted its final report in December 2022 which has not yet been discussed in the earlier meetings for various reasons. This requires to be circulated to all states to take a consensus view and consequently formulate a uniform policy on levy of GST on such activities. This is a high point agenda. 3. The GST Rate rationalization also requires important decisions to be taken and a convener for the Group of Ministers (GoM) on rate rationalization is expected to be nominated. 4. The long-pending demand for the establishment of GST Appellate Tribunals (GSTAT) is also expected to be discussed. The urgent need for GSTATs is felt by the stake holders without further delay as GSTATs will definitely reduce the burden on taxpayers and courts by streamlining and expediting indirect tax litigations. At present, the taxpayers who are aggrieved with the ruling of tax authorities are required to move to the respective High Courts for relief. Actually, the resolution process takes a much longer time as the honourable High Courts do not have specialized benches to deal with GST litigations. After approval from the GST Council the Centre will formulate the procedure to appoint members as soon as possible. Therefore, setting up of State and national level benches with pave a quicker way for faster dispute resolution. Another subject having high point agenda. 5. The Central Board of Indirect taxes and GST UPDATEZ ON 08-07-2023 Geocoding functionality for Principal place of business now is live for everyone The functionality for geocoding the principal place of business address is now live for all States and Union territories. This feature, which converts an address or description of a location into geographic coordinates, has been introduced to ensure the accuracy of address details in GSTN records and streamline the address location and verification process. It is learnt that GSTN themselves has successfully geocoded more than 1.8 crore addresses of principal places of business. Furthermore, one may be aware that all new addresses post-March 2022 are geocoded at the time of registration itself, ensuring the accuracy and standardization of address data from the outset. So, how taxpayers can access and use this functionality: 1.Accessing the Functionality: One can find this functionality under the Services /Registration tab in the common portal.

245 R. Srivatsan, IRS 2.Using the Functionality: The systemgenerated geocoded address will be displayed, and you can either accept it or update it as per your requirements. In cases where the system-generated geocoded address is unavailable, a blank will be displayed, and you can directly update the geocoded address. 3.Viewing the Geocoded Address: The geocoded address details will be saved separately under the "Place of Business" tab on the portal. They can be viewed under My profile>>Place of Business tab under the heading "Principal Geocoded" post login. Please note that this will not change your existing addresses. 4.One-time Activity: The geocoding link will not be visible on the portal once the geocoding details are submitted by you. This is a one-time activity, and once submitted, revision in the address is not allowed. The functionality will not be visible to the taxpayers who have already geocoded their address through new registration or core amendment. The address appearing on the registration certificate can be changed only through the core amendment process. This geocoding functionality would not impact the previously saved address record. 5. Availability: This functionality is available for Normal registrants, Composition registrants’ units, SEZ developers, ISD, and Casual taxpayers who are active, cancelled, and/or suspended. Well...... Geocoding is the latest trend/tool used by a variety of industries, e-commerce, transport, gaming, marketing and more. Geocode applications transform a description of a location in text into a pair of coordinates, —to a location on the earth generally in latitude and longitude. They can can provide location intelligence, risk assessment and location analysis, to route planning, address verification, data cleaning, and enhancing local search in GIS-based apps. Using geo-tagging will definitely help in location accuracy, security and more efficient optimisation of digital data. GST UPDATEZ ON 10-07-2023 Time limit to file appeal in GSTAT when formed Any appeal to GST tribunal can be made within three months from the date of constitution of Appellate Tribunal The Hon’ble Bombay High Court in M/s Essar Steel Suppliers v. Union of India & Ors. [W.P.No.2301 OF 2022 dated July 03, 2023] held that the appeal to tribunal can be made within three months from the date of constitution of the Appellate Tribunal. M/s Essar Steel Suppliers filed the writ challenging the Order-in appeal dated April 21, 2021 passed by the Commissioner of Central Taxes, Central Excise, and Service Tax (Appeals), Mumbai. Due to the non-constitution of the GST tribunal the Petitioner was not able to file appeal before the GST tribunal and filed writ before the Hon’ble Bombay High Court. Relying on the judgment of Co-ordinate Bench of the Hon’ble Bombay High Court in Rochem India Pvt. Ltd. v. The Union of India & Ors. [Writ Petition No.10883 of 2019 dated February 08, 2023] the honourable Bombay HC held that the period of filing the Appeal will stand extended as indicated in Clause 4.2 of Circular No.132/2/2020- GST dated March 18, 2020 and the impugned order will not be given effect until two weeks after the period prescribed for filing an appeal as under Clause 4.2 of the Circular. For ease of comprehension the Relevant Extract of the Circular: Para 4.2 is as below: The appellate tribunal has not been constituted in view of the order by Madras High Court in case of Revenue Bar Assn. v. Union of India and therefore the appeal cannot

246 R. Srivatsan, IRS be filed within three months from the date on which the order sought to be appealed against is communicated. In order to remove difficulty arising in giving effect to the above provision of the Act, the Government, on the recommendations of the Council, has issued the Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019 dated 03.12.2019. It has been provided through the said Order that the appeal to tribunal can be made within three months (six months in case of appeals by the Government) from the date of communication of order or date on which the President or the State President, as the case may be, of the Appellate Tribunal enters office, whichever is later.” Well....... So, that’s precisely why with GST Scrutiny & Audit mechanism in full steam, formation of GST Tribunal has become the need of the hour. Hope the proposed 50th GST council meeting resolves this most wanted litigation resolution necessity. Notification No. G.S.R. 491(E) dated 07-07- 2023, under Sl.no.26, Goods and Services Tax Network (GSTN) was added to the parent notification, (Notfn. No. GSR 381E dated 27th June 2006) as one more Body/authority. This created a flurry of mischievous interpretation, views, observations and opinions especially in the social media making one to believe that GST offences are brought under PMLA2002 which in fact is a thoroughly misconceived notion. The fact of the matter is that with the implementation of the said order, the information stored on the GST Network is now mandated to be shared under the PMLA Act 2002 if need be. The contents of the notification goes thus, In the exercise of the powers conferred by clause (ii) of sub-section (1) of section 66 of the Prevention of Money-laundering Act, 2002 (15 of 2003), the Central Government, being satisfied that it is necessary in the public interest to do so, hereby makes the following further amendment in the notification of the Government of India, in the Ministry of Finance, Department of Revenue, published in the Gazette of India, Extraordinary, Part II, “Section 3, Subsection (i), vide number G.S.R. 381(E), June 27, 2006. This effectively added GSTN. So, in effect, in the said notification, after the serial number (25) a new entry namely (26)-Goods and Services Tax Network has been added to legislatively obligate GSTN for Sharing and Disclosure of Information available with it for subsequent / consequent action under PMLA 2002. Well…......... The reality is that it is the GSTN which has been included in PMLA-2002 not GST Offence. The latest notification has only added GSTN for the purpose of sharing of mutual information between ED (Enforcement Directorate) and GSTN. Offences under GST is not yet predicate/Scheduled offences (just like Income Tax which is also not) to be considered as money laundering offence directly unless there is a flushing in and out money through illegitimate means. So be informed that Offences under GST are yet scheduled offence under PML GST UPDATEZ ON 11-07-2023 GST offences under PMLA -Fact Check The Central Government on 08-07-2023 issued a notification to bring the Goods and Services Tax Network (GSTN) under the Prevention of Money Laundering Act (PMLA). Under Section 66 of the Prevention of Money Laundering Act, 2002 (PMLA,2002) it contains a provision for sharing of information, by an authority, body or officers, specified under it in connection with the effective implementation of the Act. Recently, by amendment Notification No.

247 R. Srivatsan, IRS A 2002 and hence in reality the myth associated with it as widely apprehended requires to be demystified. GST UPDATEZ ON 11-07-2023 50th GST Council Meeting: Key Highlights The Honourable Union Finance Minister presided over the 50th meeting of the GST Council today (11th July 2023) at Vigyan Bhawan in New Delhi. The following are the first cut key highlights of the 50th GST Council meeting: 1.28% GST on Online Gaming, Horse racing on Full Face Value Amount, Schedule 3 of GST Act to be amended. 2.GST Exempted on certain cancer medicines and medicinal food products 3.GST exemption on rare medicines 4.GST Slashed on Four Items a. Uncooked, unfried snacks reduced from 18% to 5% b. Fish soluble paste reduced from 18% to 5% c.Imitation Zari threads reduced from 12% to 5% d.LD Slag reduced from 18% to 5% 5.Raw Cotton including kala cotton is taxable Item 6.GST on SUV Vehicles Clarified, Sedan vehicles are excluded 7.Decision on GST on Chewing Tobacco 8.No GST on Private Satcoms 9.GST on food/beverage supplied in Cinemas clarified 10.Major reforms in GSTN discussed Enclosing the Press Release of the Recommendations. GST UPDATES ON 12-07-2023 Some more Important Decisions taken in 50th GST council meeting In continuation of the GST UPDATEZ ON 11-07-2023, yesterday, some more changes brought through 50th GST Council meeting on 11-07-2023 are highlighted below. 1. The GTA will not be required to file declaration opting for paying GST under forward charge every year. Once filed it is perineal unless reverted to RCM. Such declaration can be filed between the window 01st January to 31st March. 2. No RCM liability on services supplied by a director of a company to the company in his private or personal capacity such as supplying services by way of renting of immovable property to the company. However, if the supply of service is made not in individual capacity but as a director to a registered entity, then such supply of service is liable for GST under RCM. 3.On Reconciliation of GSTR 3B vs GSTR 2A, Government has extended the special procedure regarding mismatch in ITC availed in GSTR-3B and 2A for two more years i.e 2019-20 and 2020-21 (from 01-04- 2019 to 31-12-2021) 4. As a trade facility Amnesty schemes which were notified vide on 31.03.2023 for non-filers of FORM GSTR-4 /9/9A/10, returns, revocation of cancellation of registration extended till 31.08.2023 5. The requirement of physical verification of business premises is to be conducted only in the presence of the applicant has been done away with. However, physical verification in high-risk cases even where Aadhaar has been authenticated would continue. 6. Computer driven System-based intimation

248 R. Srivatsan, IRS to the taxpayers in respect of the excess availment of ITC in FORM GSTR-3B vis a vis FORM GSTR-2B will be made available for reconciliation. 7. Supply of food and beverages in cinema halls is taxable at 5% like restaurant services if they are stand-alone supplies and unless they are composite supplies being part of services of cinema screening services. If the sale of cinema ticket and supply of food and beverages clubbed together then gst rate of cinema ticket shall apply. 8.28% GST on the value of the chips purchased in casinos full value of the bets placed in Online Gaming full value of the bets placed with bookmakers’ full value of the bets placed with totalizers in Horse Racing and not on Gross Gaming Revenue (GGR) 9. GST Appellate tribunal will be started in a phased manner. Related sections to be notified w.e.f. 01-08-2023 to make way for framing necessary Rules. 10. Few relaxations provided in FY 2021-22 in respect of various specified tables of FORM GSTR-9 and FORM GSTR-9C be continued for FY 2022-23 also and No GSTR-9 need to be filed for turnover up to 2 crores 11. As per the present position of GST laws, Input Services Distributor (ISD) mechanism is not mandatory for distribution of input tax credit of common input services procured from third parties to the distinct persons. However, amendment will be made in GST law to make ISD mechanism mandatory prospectively. This will help in proper tracking & distribution of ITC between distinct persons. 12. A Detailed clarificatory Circular to be issued to provide clear view on liability to reverse input tax credit in cases involving warranty replacement of parts and repair services during warranty period and also the GST liability on such supplies. 13. Refund of accumulated input tax credit (ITC) to be restricted to ITC appearing in FORM GSTR-2B only, being a validated transaction. Anything beyond GSTR-2B cannot be part of Net ITC in the formula prescribed. 14. For e- commerce transactions only Name of state on tax invoice, not the name and full address of the recipient, in cases of supply of taxable services by or through single or multiple ECO. 15. Special procedures to file appeals for litigations on TRAN-1/TRAN-2 to be notified. Section 108(1) & 109(1) to be amended. All legislative changes proposed are prospective and will take effect only from the date notified later unless specifically made retrospective. GST UPDATEZ ON 18-07-2023 CBIC issued 08 circulars dated 17 July 2023 Consequent upon the recommendations of the 50th GST Council meeting CBIC has issued (08) eight Circulars No. 192 to 197 giving clarification to various issues on 17- 07-2023. A snap shot of the contents are 1. 192/04/2023-GST dated 17 July 2023 - Clarification on charging of interest under section 50(3) of the CGST Act, 2017, in cases of wrong availment of IGST credit and reversal thereof. 2. 193/05/2023-GST dated 17 July 2023 - Clarification to deal with difference in Input Tax Credit (ITC) availed in FORM GSTR-3B as compared to that detailed in FORM GSTR-2A for the period 01.04.2019 to 31.12.2021 3. 194/06/2023-GST dated 17 July 2023 - Clarification on TCS liability under Sec 52 of the CGST Act, 2017 in case of multiple Ecommerce Operators in one transaction. 4. 195/07/2023-GST dated 17 July 2023 - Clarification on availability of ITC in respect of warranty replacement of parts and repair services during warranty period. 5. 196/08/2023-GST dated 17 July 2023 -

249 R. Srivatsan, IRS Clarification on taxability of share capital held in subsidiary company by the parent company 6. 197/09/2023-GST dated 17 July 2023 - Clarification on refund-related issues 7. 198/10/2023-GST dated 17 July 2023- Clarification on issue pertaining to einvoice 8. 199/11/2023-GST dated: 17-Jul-2023- Clarification regarding taxability of services provided by an office of an organisation in one State to the office of that organisation in another State both being distinct persons. These aspects were triggering a lot of uncertainty on GST liability and after the issue of these 8 Clarificatory Circulars they have been put to rest. GST UPDATEZ ON 21-07-2023 No GST on Free replacement of parts of goods under warranty. In line with recommendation of 50th GST Council meeting, CBIC has issued a clarification vide Circular No: 195/07/2024-GST, dt: - 17-07-2023 clarifying that free replacement of spares and parts during warranty does not attract Goods and Services Tax but tax would be payable if customers are charged for new parts. Free replacement of parts does not attract tax because the cost of replacement is included in the original sale value of the item. The value of original supply of goods (provided along with warranty) by the manufacturer to the customer includes the likely cost of replacement of parts and (or) repair services to be incurred during the GST UPDATEZ ON 19-07-2023 Buying Movie Tickets and Food as Combo- What if? The GST Council, in its 50th meeting, came up with several key decisions. One such decision was a clarification regarding the tax on food served in cinema halls, which was fixed at 5%. Confusion arose due to the fact that cinema theatres received ‘notices’ regarding the GST being 12% (or) 18% on Combo sales on tickets which includes cost of screening and cost of food at halls. So, what does ‘5% tax’ mean from now on? At present, the GST rate structure for entry tickets (movies, amusement parks etc) priced above ₹100 are taxed at 12%, and those above ₹500, at 18%. Now, when theatres offer moviegoers an online combo option of the food and the film, the GST will be on the total amount, and will, therefore, be taxed at 12% if it is more than the prescribed ticket values as the case may be. The 5% GST on the other hand, is applicable when the food is brought separately from the movie ticket, i.e., at the cinema hall itself separately it would be classified as a stand-alone Supply of Restaurant Services instead of Composite Service of Screening a movie. To avoid the higher GST, therefore, movie goers are generally advised not to pre-book their snacks because Food and beverage account for more than half of (about 58% in India) the ticket price. Well...... So, when you buy them separately you pay only 12% GST for Cinema Tickets and 5% GST on food ordered. Watch a movie with lip smacking food............ but keep them separately while buying!!!!!! Click here to read full document

250 R. Srivatsan, IRS warranty period, on which tax would have already been paid at the time of original supply of goods, and hence in such cases no further tax is to be paid. However, if any additional amount is charged by the manufacturer from the customer for parts replacement or for service, then GST is be payable on such sale on the additional payment. Well.... This valuable clarification is absolutely warranted to spare the taxpayers from additional tax burden. GST UPDATEZ ON 26-07-2023 Distribution of Service ITC from HO to BO - ISD mandatory On the basis of recommendations during the 50th GST council meeting the GST law will be amended to make input service distributor (ISD) mechanism mandatory prospectively for distribution of input tax credit of such common input services procured from third parties by Head office to Branch Offices. In a recent Circular No. 199/10/2023, dated 17-07-2023 the Central Board of Indirect Taxes and Customs clarified that for common input services procured by the head office (HO) from a third party, but attributable to both HO and branch offices (BOs) or exclusively to one or more BOs, HO has the option to distribute input tax credit by following the ISD mechanism. If it wishes to distribute the ITC to its BOs, the HO will have to mandatorily register itself under the ISD mechanism. GST UPDATEZ ON 22-07-2023 Choco in Chikki will attract higher GST! In an interesting decision, the GSTAuthority for Advance Rulings (GST-AAR), Karnataka in the case Sirimiri Nutrition Food Products, a Bengaluru-based chikki manufacturer agreed that several of their chikkies, including the new varieties of dry fruit chikki and spirulina chikki will be subject to 5% GST. These varieties of chikkies were categorised under Chapter heading 17 as ‘sugar confectionery not containing cocoa’. However, when it came to ‘chocolatepeanut chikki’, the Karnataka bench of the GSTAAR pointed out that this product contains cocoa powder and is covered under Chapter 18, which covers chocolate and other food preparations containing cocoa. The tax in this case is a higher 18%. There are many such instances of differential rate slabs. The Gujarat AAR in the case of Amul, had held that flavoured milk (milk with sugar and added flavours) would attract 12% GST. But, in another case, the Gujarat AAR held that ‘lassi’, a fermented milk drink, would be exempt from GST. While a fruit-pulp or fruit-juice based tetra pack could entail a GST of just 12%, if it's fizzy / carbonated the basic GST rate would be 28% topped with a, compensation cess as well Well...... It’s the perfect snack for munching the jaggery-based Indian confectionery — the good wholesome chikki. The flavours available suit every palate, from the simple sesame chikki, to the widely popular peanut chikki or the rich dry fruit chikki. Never mind. But, beware, if cocoa powder is added to make a chocolate-peanut chikki, well it gets a whole new avatar in the realm of GST — with a higher tax of 18%. Click here to read full document Click here to read full document

251 R. Srivatsan, IRS A lot of representations appeared to have been received by CBIC seeking clarification on the taxability of activities performed by an office of an organisation in one State to the office of that organisation in another State, which are regarded as distinct persons under section 25 of Central Goods and Services Tax Act, 2017. The circular also clarifies that taxpayers can also adopt for a cross charge mechanism and bill the branches by adopting the value as per Rule 28 of the CGST Act, which would effectively mean that any value is acceptable if the recipient branch is entitled for full credit. The circular is expected to bring to rest a number of legal disputes. Well...... Businesses across the industry have been struggling to find the correct method for distribution of credit between Head Office and Branch Office. This recent circular, while proving relief in making ISD optional also endeavours to clarify on the way forward for distribution of input tax credit specifically when it comes to salary costs and other third-party costs. It will definitely help in settling a long pending interpretational issue between the tax payer and tax department in days to come because it is said clarity is the essence of Taxation. GST UPDATEZ ON 27-07-2023 Next GST Council meeting - Prime Agenda The details regarding the required legal amendment and tweaks in rules will be presented before the Council at this meeting and resolve the issues associated with it, especially the issue of whether the 28% GST levy should be on entry value or each bet. The legal amendment will provide specific details about the rate, the methodology of the face value on which the 28% GST rate would be levied for online gaming, casinos and horse racing. The initial understanding, after the 50th GST Council decision is that the implementation framework will be decided in the rules to be issued by the finance ministry and the approval for the legal amendment would be taken up later in the Council after taking a deemed approval from the Chairperson of the Council, which is the Union Finance minister. In the last GST Council meeting on 11th July 2023, it was decided to levy a uniform 28% on full face value for online gaming, casinos and horse racing. The government was expected to bring in a legal amendment to facilitate this in the monsoon session of Parliament to enable inclusion of online gaming and horse racing under actionable claim and facilitate taxation of these categories with no distinction for game of skill or chance. Click here to read full document The GST Council will next meet via video conferencing on 2nd August 2023 to take a final call on the levy of 28% GST on online gaming, casinos and horse racing. It appears there will be no backtracking on the proposal. GST UPDATEZ ON 01-08-2023 E-Invoice - Doing business with ease From today 01-08-2023 generating eInvoice has become mandatory for a B2B supply of Goods and Service or both or for exports/supplies to SEZ for taxpayers whose Annual Aggregate Turnover exceeds Rs. 5 Crore in any preceding financial year. e-Invoice benefits in 1. Uniform and Standardized invoice. 2. Auto population of GST returns 3. Auto generation of E-way bill. 4. Lesser compliance burden

5. Reduction in transcriptional errors 6. Seamless transmission of Invoice data 7. Auto reporting in GST portal. 8.Auto sharing with buyers for reconciliation. 9. Lesser paper work. 10.Respect to honest taxpayers with sovereign validation. For exceptions other than notified categories of taxpayers please refer to Notification No. 10/2023, dt: 10-05-2023 read with Principal Notification No 13/2020, dt: 23.03.2020. 252 R. Srivatsan, IRS GST UPDATEZ ON 01-08-2023 GST revenue collected for July 2023 ₹1,65,105 crore gross. The gross GST revenue collected in the month of July, 2023 is ₹1,65,105 crore of which CGST is ₹29,773 crore, SGST is ₹37,623 crore, IGST is ₹85,930 crore (including ₹ 41,239 crore collected on import of goods) and cess is ₹11,779 crore (including ₹ 840 crore collected on import of goods). The revenues for the month of July 2023 are 11% higher than the GST revenues in the same month last year. During the month, the revenues from domestic transactions (including import of services) are 15% higher than the revenues from these sources during the same month last year. It is for the fifth time the gross GST collection has crossed Rs. 1.60 lakh crore mark. The chart below shows trends in monthly gross GST revenues during the current year. The table-1 shows the state-wise figures of GST collected in each State during the month of July 2023 as compared to July 2022. Source: PIB release No:1944590 GST UPDATEZ ON 02-08-2023 Key Highlights of 51st GST Council Meeting The key highlights are: 1. No Change for 28% GST on Online Gaming, Casinos, Horse Racing 2. Amendments in CGST and SGST Act regarding online gaming taxes 3. Council to review GST implementation of online gaming after its 6 months implementation period for online gaming. 4. Approves clear definition of actionable claims 5. Approves inclusion of Online Money Gaming in definition of Online Gaming 6. Approves definition of online money gaming includes games based on both skill & chance 7. Approves definition of online gaming as those ‘offered on internet or e-network including online money gaming’ 8. Approves to insert definition of ‘virtual digital asset’ in GST law as defined in IT Act 9. Council approves in bringing online money gaming supplied by entity located outside taxable territory under IGST ambit 10. Approval of proposal to block all online gaming apps/platforms not complying with tax rules 11. Offshore Gaming companies’ registration and liable to action under IT act if not complied with provisions. 12. Council to differentiate Online gaming and online money gaming.

253 R. Srivatsan, IRS 13. Notifications will be provided on ‘Place of supply’ if required. 14. GST Council recommends GST on valuation of supply of online gaming and actionable claims in casinos at entry level. 15. Council recommends valuation of supply of online gaming and actionable claims in casinos may be done based on the amount paid or payable to or deposited with the supplier, by or on behalf of the player (excluding the amount entered into games/ bets out of winnings of previous games/ bets) and not on the total value of each bet placed. Finally, was also decided by the Council that all progressive effort will be made to complete the process of making amendments in the Acts and bring the amendments into effect ASAP. Well............. Toss the coin, I bet........... It will happen from 01st October 2023. GST UPDATEZ ON 22-08-2023 ‘Mera Bill Mera Adhikar’ App: Upload GST Invoice and Win Cash Prize up to 1 Crore-Central Government initiative Click here to read full document The Central Government is launching a mobile application named ‘Mera Bill Mera Adhikar’ as part of the ‘Mera Bill Mera Adhikar Scheme’. This mobile Application is available for both iOS(Apple) and Android platforms. A notable aspect of this program is that individuals who upload Goods and Services Tax (GST) invoices upon their purchases could potentially receive cash prizes ranging from Rs. 10 lakhs to Rs. 1 crore through a lucky draw either on a monthly or quarterly basis. The uploaded invoice on the app needs to include the seller’s GSTIN, invoice number, paid amount, and applicable tax. The individuals are allowed to upload a maximum of 25 invoices each month, with each invoice needing to have a minimum purchase value of Rs. 200/-. By participating in the monthly 500 lucky draw, individuals have the opportunity to win cash prizes amounting to several lakhs of rupees, while additionally, two lucky draws will take place every quarter, with the prize amount reaching up to 1 crore rupees. The Goods and Service Tax Network, in collaboration with its application partner (M/s e-connect Solutions Pvt. Ltd.), has already created a technological platform and is in the process of activating at, 12.00 midnight from 1st September 2023 to participate in the reward scheme. This platform is designed to facilitate citizens in registering and uploading invoices through a user-friendly mobile application and web portal. Well………. To curb the menace of GST evasion, the government has already made electronic invoice mandatory for B2B transactions where the annual turnover exceeds Rs 5 crore. The 'Mera Bill Mera Adhikar' scheme would ensure electronic invoice generation even in case of B2C customers so as to enable the buyer to be eligible to participate in the lucky draw. The scheme is conceptualised in a way so as to incentivise citizens and consumers to ask for genuine invoices from the seller when making business to consumer (B2C) purchase of goods or services, which are under the purview of Goods and Services Tax. The scheme upon its launch would serve multiple objectives of incentivising and rewarding compliant behaviour by the consumers, encouraging tax compliant businesses, boosting consumer spending, and checking tax evasion. The Application can be downloaded from The Central Government is launching a mobile application named ‘Mera Bill Mera Adhikar’ as part of the ‘Mera Bill Mera Adhikar Scheme’. This mobile Application is available for both iOS(Apple) and Android platforms.

254 R. Srivatsan, IRS A notable aspect of this program is that individuals who upload Goods and Services Tax (GST) invoices upon their purchases could potentially receive cash prizes ranging from Rs. 10 lakhs to Rs. 1 crore through a lucky draw either on a monthly or quarterly basis. The uploaded invoice on the app needs to include the seller’s GSTIN, invoice number, paid amount, and applicable tax. The individuals are allowed to upload a maximum of 25 invoices each month, with each invoice needing to have a minimum purchase value of Rs. 200/-. By participating in the monthly 500 lucky draw, individuals have the opportunity to win cash prizes amounting to several lakhs of rupees, while additionally, two lucky draws will take place every quarter, with the prize amount reaching up to 1 crore rupees. The Goods and Service Tax Network, in collaboration with its application partner (M/s e-connect Solutions Pvt. Ltd.), has already created a technological platform and is in the process of activating at, 12.00 midnight from 1st September 2023 to participate in the reward scheme. This platform is designed to facilitate citizens in registering and uploading invoices through a user-friendly mobile application and web portal. Well………. To curb the menace of GST evasion, the government has already made electronic invoice mandatory for B2B transactions where the annual turnover exceeds Rs 5 crore. The 'Mera Bill Mera Adhikar' scheme would ensure electronic invoice generation even in case of B2C customers so as to enable the buyer to be eligible to participate in the lucky draw. The scheme is conceptualised in a way so as to incentivise citizens and consumers to ask for genuine invoices from the seller when making business to consumer (B2C) purchase of goods or services, which are under the purview of Goods and Services Tax. The Application can be downloaded from https://play.google.com/store/apps/detai ls? id=com.gstn.msma&pcampaignid=web_shar e GST UPDATEZ ON 01-09-2023 GST officers cannot seize currency at the time of search In a very important decision the honourable Delhi High Court has held that Section 67(2) of the GST Act does not empower the seizure of currency available on premises during a search. The two member bench dealing with the case directed the department to remit the amount seized into the petitioner’s bank account within a period of two weeks, along with accrued interest. The petitioner whose premises was searched sought the direction be issued to the respondent/department to release Indian currency amounting to Rs.15,92,000 which was seized by the respondent during the search. The respondent or department conducted a search under Section 67 of the Central Goods and Services Tax Act at the residential premises of the petitioner. The department had no reason to conduct any search at the petitioner’s premises, particularly as he is not a ‘taxpayer' under the CGST Act. During the course of the search, the concerned officers seized various documents as well as currency lying in a locker at the petitioner’s premises. The petitioner claims that he was not present at the time of the search, but the family members who were present at the material time requested that the officials not seize the amount as it belonged to the family. It is averred that they explained that the currency was kept in the locker as a precautionary

255 R. Srivatsan, IRS measure because the house was under renovation or construction and a number of labourers were working at the premises. The department claimed that the petitioner had made a voluntary statement and admitted that he was involved in a racket involving the issuance of fake invoices along with other accused. The respondent claimed that the persons have issued invoices from various firms without the supply of goods, resulting in an input tax credit (ITC) of approximately Rs. 11 crores being availed of. However, it is alleged that the petitioner attempted to evade the investigation but finally appeared before the concerned officers as a last resort. The petitioner also claimed that he had signed various documents and statements under threat and coercion by the concerned officers. He was not involved in making any supplies, is not a taxpayer, and is not concerned with the alleged fake ITC availed by any other entity. The court held that Section 67(2) of the CGST Act does not empower any seizure of the currency. It was clarified that the department was not precluded from taking any steps or measures as available in accordance with the law. Resource: - Case Title: Rajeev Chhatwal Versus Commissioner of Goods and Services Tax (East) Case No.: W.P.(C)5880/2021 Date: 24.08.2023 The gross GST revenue collected in the month of August, 2023 is ₹1,59,069 crore of which CGST-₹28,328 crore, SGST-₹35,794 crore IGST-₹83,251 crore (including ₹43,550 crore collected on import of goods) and Cess-₹11,695 crore (including ₹1,016 crore collected on import of goods). Notable that ₹1,59,069 crore gross GST revenue collected during August 2023; records 11% Year-on-Year growth The government has settled ₹37,581 crore to CGST and ₹31,408 crore to SGST from IGST. The total revenue of Centre and the States in the month of August, 2023 after regular settlement is ₹65,909 crore for CGST and ₹67,202 crore for the SGST. During the month, revenue from import of goods was 3% higher and the revenues from domestic transactions (including import of services) are 14% higher than the revenues from these sources during the same month last year. Source: - PIB Release ID: 1954077 GST UPDATEZ ON 02-09-2023 GST revenue collections in August 2023 Click here to read full document GST UPDATEZ ON 05-09-2023 Sales incentives given by companies to be treated as supply- AAR Karnataka Click here to read full document In an important decision the honourable Karnataka Authority for Advance Rulings has held that Companies offering incentives to their dealers in the form of assets, such as gold coins, will have to pay GST as it amounts to Supply.

256 R. Srivatsan, IRS In a case involving Orient Cement Industries the AAR determined that such incentives provided by companies to dealers should be classified as a “supply" under GST rules and be subject to tax. The case is with reference to two special dealer schemes offered by Orient Cement, in which dealers get rewards in gold coins based on their cement purchases during a specific period. The central question in this case was Whether distribution of gold coins (incentives) should be considered ‘permanent transfer’ of assets? According to GST Laws any permanent transfer or disposal of business assets, where input tax credit is claimed, will be considered as supply of goods. However, M/s.Orient Cement Industries argued that its scheme should not be categorized as a supply of goods because the gold coin is not an asset of the firm, but is treated as expenses according to accounting standards and were not capitalized in the company’s books. Furthermore, it also asserted that the company did not receive any consideration for these gold coins, but they were offered as a reward when a dealer achieved a specific target. In fine, the ruling clarifies that distribution of promotional materials should be considered a supply, even if done without any consideration, falling under the Schedule 1 (permanent transfer or disposal of business assets) when input tax credit is claimed on those assets. This ruling may contradict with previous judgments of courts but has only persuasive value and not precedential value being AAR decision. The revenue contended that the gold coins were indeed permanently transferred to the dealers, and input tax was also being claimed. They further defended the authority that the GST Act does not stipulate that transfer of assets must be reflected in a company’s balance sheet to be considered a supply. The applicant’s obligation to issue gold coins and white goods to dealers or customers upon achieving the stipulated lifting of the material or purchase target during the scheme period would be regarded as a “permanent transfer or disposal of business assets where ITC has been availed on such assets, and will be treated as a supply even if made without consideration and subjected to GST under SI. No. 1 of the Schedule I to the Central Goods and Services Tax Act, 201 7. The case also delved into another question whether these gold coin transfers should be classified as gifts, where input tax credit will not be available? According to the GST law, gifts do not qualify for input tax credit and blocked under Section 17(5) of CGST Act 2017. M/s. Orient Cement Limited has contended that these were promotional items not gifts provided to dealers only when specific conditions, such as the quantity of cement purchased were met. The AAR concurred with the company’s position and permitted input tax credits not treating it as gifts. Since such incentive schemes are very common across companies a clarification from GST Council would allay industry concerns. GST UPDATEZ ON 06-09-2023 GST E-Way Bill: New HSN Code requirements effective from October 1, 2023 Click here to read full document The GST E-way bill system has issued an Update dated September 05, 2023 stating that, as per the Notification No. 78/2020 dated October 15, 2020, the taxpayers, having Aggregate Annual Turn Over (“AATO”) above Rs 5 Crore, shall use at least 6 digit HSN code in the e-Invoices and eWaybills and other taxpayers shall use at least 4 digit HSN code in E-Invoices and EWay Bills.

As this mandate was issued way back in October 2020 itself, and most of the tax payers are already following this now. All other tax payers have been advised to adapt to the change and comply by the due date. This will be made Mandatory from October 01, 2023 in e-Waybill and e-Invoice Systems. As one may be aware, E-Way bill system is for GST registered person / enrolled transporter for generating the way bill (a document to be carried by the person in charge of conveyance) electronically on commencement of movement of goods exceeding the value of Rs. 50,000 in relation to supply or for reasons other than supply or due to inward supply from an unregistered person. Apart from the description of the goods in the movement, declaration of HSN is also mandatory in Part A of E-way bill. This will definitely help in proper identification and tracking of goods in movement. 257 R. Srivatsan, IRS A bench led by CJI is likely to hear the case for final hearing in three weeks’ time, it is learnt.Just to recollect the proceedings the GST intelligence unit issued a show-cause notice to Gameskraft Technology failed to pay Rs 21,000 crore allegedly by not issuing invoices to customers. During the course of hearing, the Additional Solicitor General (ASG) argued that they have approached the Supreme Court as the High Court has relied heavily on a judgment of a two judge bench of the same court. According to the ASG, the observations made by the HC in the judgment, have put a pause on other show cause notices leading to a problem to the GST department. He argued that the department has put a pause on at least 35 different show cause notices owing to the HC's judgment on same or similar issues. The CJI on hearing the case directed Gameskraft to file their response to the case and permitted DGGI to file a rejoinder to the same. The court further stayed the operation of the judgment as a result of which the GST department can now initiate proceedings against Gameskraft and other same or similar such notices. Well..... A final order by the Supreme Court will reaffirm the resolution of the dispute and correct position of law discussed for over five decades and vindicate the point of Natural Justice taking no further chance on the subject. GST UPDATEZ ON 11-09-2023 GST Audit u/s 65 of CGST Act Cannot be Conducted after Closure of Business Click here to read full document GST UPDATEZ ON 08-09-2023 SC stays Karnataka HC's judgment quashing Rs 21,000 cr GST "NOTICE" to Gameskraft If one can recollect in September 2022, the GST intelligence unit issued a show-cause notice to M/s Gameskraft Technology, an online gaming company alleging that the company failed to pay Rs 21,000 crore as GST, the biggest such claim in the history of indirect taxation. This Notice was quashed by the honourable Karnataka High court. On 6th September 2023, the honourable Supreme Court of India stayed Karnataka High Court's judgment, which quashed the GST notice by DGGI.

258 R. Srivatsan, IRS The Madras High Court in a significant ruling observed that the GST Audit under Section 65 of the Central Goods and Service Tax (CGST) Act, 2017 cannot be conducted after closure of business, can be conducted only on registered entities. The petitioner, Tvl.Raja Stores, is a partnership firm. The petitioner, a partnership firm called Raja Stores, had received permission to close its business. However, a notice was issued for conducting a GST audit, prompting the filing of a Writ Petition to quash the notice. Raja Stores argued that under Section 65 of the CGST Act, audits are meant for registered businesses. Since their business was closed and registration cancelled, the authorities have no jurisdiction to conduct an audit. The High Court observed that Section 65 refers to audits for registered businesses “for such period,” “at such frequency,” and “In such manner.” It concluded that if the authorities had failed to conduct an audit while the business was operational, they could not do so after it had closed. Well....... This ruling clarifies that businesses that have officially closed are not subject to GST audits, though the court leaves room for assessment proceedings under Sections 73 and 74 of the CGST Act. This judgement sets a precedent that audits under GST cannot be conducted on businesses that have officially closed. The judgment underscores the importance of jurisdictional limits in tax audits, thus providing crucial guidance for both businesses and tax authorities. CBIC recently notified norms to determine the value of supply in case of online gaming and casinos. Norms are based on recommendations by GST Council in its 50th & 51st meetings It may be noted that the rate of GST will be 28% on full face value. Two new Rules have been proposed to be inserted to deal with Online Gaming and Casino related Supplies. “31B. Value of supply in case of online gaming including online money gaming 31C. Value of supply of actionable claims in case of casino These new rules will take effect only from the date to be notified later. What does the new norms say? Let us explore. According to the Notification No.45/2023 (CT), dt: -06-09-2023 the value of supply of online gaming, including supply of actionable claims involved in online money gaming, shall be the “total amount paid or payable to or deposited with the supplier by way of money or money’s worth, including virtual digital assets, by or on behalf of the player.” For Supply in case of Casinos, the value of the supply of actionable claims in a casino shall be ”the total amount paid or payable by the player for buying tokens, chips, coins or tickets. The same will be applicable for the amount paid to participate in any event, including game, scheme, competition or any other activity or process, in the casino, in cases where the token, chips, coins or tickets are not required It has also been provided in the new Rules that for any reason any amount returned or refunded by the supplier of Online Gaming GST UPDATEZ ON 12-09-2023 Value of Supply for Online Gaming and Casinos Click here to read full document

259 R. Srivatsan, IRS Services / the casino to the player on return of tokens, coins, chips, or tickets, including the player not using the amount paid or deposited with the supplier for participating in any event, shall not be deductible from the value of the supply of actionable claims in the casino. The notification has also made it clear that deployment of winning amount for further play will not be considered part of value of supply for both online gaming and casinos. Any amount received by the player by winning any event, including game, scheme, competition or any other activity or process, which is used for playing by the said player in a further event without withdrawing, shall not be considered as the amount paid to or deposited with the supplier by or on behalf of the said player. Well…………. This means if a player withdraws the winning amount and then goes for a fresh round of gaming or casinos, then that will be treated separate entry and accordingly GST will be levied. In case winning amount not redeployed, then it will be subjected to Income Tax. Next few days are very critical for all GST assessments related to FY 2017-18 (Genuine Cases). If the department views a particular case as Fraudulent case, then time till 05.02.2025 is available. Notices will be issued only electronically and will come in the registered email only. Please check the emails for any GST notices / log into the GST Portal to check for any GST notices / any physical letters received also. In Addition, all GST department audits for FY 2017-18, responses must be given / obtained immediately as there is limited time for response. GST UPDATEZ ON 13-09-2023 An important alert on GST Assessment Click here to read full document For FY 2017-18, the last date for passing Assessment Order for genuine cases under Section 73 is 31.12.2023, A Show cause notice in DRC 1 must be issued at least 3 months before i.e. on or before 30.09.2023 (this month end). Before that, DRC 1A is to be issued ascertaining liability at least 15 days before i.e. on or before 14.09.2023 (tomorrow). GST UPDATEZ ON 15-09-2023 Centre notifies setting up of 31 state benches of GST Appellate Tribunal The Central government has established a 31-state bench of the GST Appellate Tribunal (GSTAT) covering all 28 states and 8 union territories. This development has come after a wait for six years of GST rollout in India. In March 2023, the Parliament had cleared changes in the Finance Bill 2023 to pave the way for setting up appellate tribunals for resolution of disputes under GST. Currently, taxpayers who are aggrieved with ruling of tax authorities are constrained to move to the respective jurisdictional High Courts for legal relief. Obviously this resolution process takes longer time as High Courts are already burdened with backlog of cases and do not have a specialised bench to deal with GST cases.The number of State Benches is determined for each state as per the table in the Notification vide F. No. A50050/150/2018-CESTAT-DoR dated September 14, 2023, in accordance with Section 109 of Central Goods and Services Tax Act, 2017 and their respective locations.

260 R. Srivatsan, IRS Locations shown in the notification shall be operational in such manner as the President (of the GSTAT) may order, depending upon the number of appeals filed by suppliers in the respective States. This notification which takes effect upon its publication in the Gazette of India (Extraordinary) is enacted based on the recommendation of the Goods and Services Tax Council. The Notification can be accessed at:https://egazette.gov.in/WriteReadData/ 2023/248743.pdf Well....... The move is part of efforts to expand the taxpayer base, improve data triangulation and give accelerated resolutions to legal disputes under GST legislations. According to the amendments, registration for offshore e-gaming companies operating in India is mandatory. The law also allows blocking of access in case offshore platforms fail to comply with GST registration and taxation norms. The states were required to make similar changes in their respective SGST laws. October 1, 2023 was fixed as a deadline for all states to implement the amended provisions. Well...... After the amendment to GST law, horse racing, casinos, online money gaming are treated as actionable claim similar to lottery, betting, and gambling. The amendments were aimed at combating money laundering, illegal income and black money. GST UPDATEZ ON 27-09-2023 52nd GST Council Meeting Scheduled Click here to read full document The 52nd Goods and Services Tax (GST) Council is to be held on October 7, 2023, Saturday at Vigyan Bhavan, New Delhi. The meeting will be presided over by the honourable Union Finance Minister along with Revenue Secretary, State Finance Minister. Etc. The GST Council meeting will review the progress with regard to amendments in the SGST law by different states. Last month, in the 51st meeting GST Council cleared amendments to Central GST and Integrated GST laws to give clarity on the levy of 28% tax on the full face value of bets in online gaming, casinos and horse race clubs. GST UPDATEZ ON 28-09-2023 Exemption from Ocean Freight for imported goods The government has exempted payments made for goods imported through ocean freight from 5 per cent integrated GST with effect from October 1, 2023. The Finance Ministry has notified changes through the IGST Act 2017 with regard to payment of integrated GST on 'ocean freight' on imported goods with effect from October 1, 2023 vide Notification No. 11/2023-IGST, dt:26-09-2023 amending original Notification No: 08/2017 Integrated (Rate), dt:28-06-2017. Currently, importers are required to pay 5% GST under the Reverse Charge Mechanism vide notification 10/2017 Integrated Tax. Well....... Actually, in the case of import of Goods, customs duty is applicable on assessable

261 R. Srivatsan, IRS value, and the assessable value includes freight amount. IGST is payable on the freight element by including it in the assessable value of goods. So, the applicability of GST on an RCM basis had presumably led to double taxation. The amendments now proposed are aligned with the apex court’s ruling in the case of Mohit Minerals and help explicitly mention the government’s alignment to the position prospectively. Actually, the industry has been successfully claiming refund of taxes already paid for the past period, where credit has not been availed. Just looking back, giving its ruling in the Mohit Minerals case, the Supreme Court in May 2022 had held that since the Indian importer is liable to pay IGST on the 'composite supply', comprising of supply of goods and supply of services of transportation, insurance, etc in a CIF (Cost Insurance Freight) contract, a separate levy on the Indian importer for the 'supply of services' by the shipping line would be in violation of the GST Act. In the Mohit Minerals case, the company challenged the validity of the CBIC notification regarding the levy of IGST on ocean freight in the Gujarat High Court. The Supreme Court upheld the decision of the High Court. Now the litigation has been laid to rest. 3. Sale of warehoused goods before filing BOE includible in value of exempt supply for reversal of common ITC u/s 17(2) and (3) r.w. Rule 42/43: 4. ITC blocked on CSR activities under Section 17(5) (fa): - 5. Retrospective overriding effect of Sec. 23(2) on Sec. 22 and Sec.24: - 6. Time limit on application for revocation of cancelled registration under Section 30 of CGST Act 2017. 7. Limitation of 3 years on filing of returns under Section 37, 39, 44, 52 of CGST Act 2017. 8. Assessment of unregistered persons under Section 62 of CGST Act 2017: 9. Penalty for certain offences on the ECommerce Operators under Section 122(1b) of CGST Act 2017: 10. Punishment of certain offences (Section 138): 11. Compounding of offences under Section 132 of CGST Act 2017. 12. Consent based sharing of information furnished by taxable person Section 158 (A) inserted: 13. Retrospective applicability of Para 7, 8(a) and 8(c) of Schedule III: 14. Scope of OIDAR services widened in definition under Section 2(17) of CGST Act 2017. 15. Place of Supply i.r.o. Transportation of Goods changes in Section 12(8) and 13 (9) of the IGST Act 2017: 16. Zero-rated supplies to SEZ for authorized operations under Section (1)(b) of the IGST Act 2017: 17. Zero-rated supplies not permitted with payment of IGST until notified under Section 16 (3) & (4) of IGST Act 2017: GST UPDATEZ ON 29-09-2023 Important changes applicable w.e.f. 1st October 2023 under GST Click here to read full document 1. Benefits of Composition levy extended to suppliers of goods under e- commerce model: 2.Clarificatory amendment concerning payment to supplier within 180 days:

262 R. Srivatsan, IRS 18. Notifications deleting the entries casting liability on importers on import ocean freight in CIF imports under RCM to align with the Supreme Court Judgement in UOI vs Mohit Minerals. For detailed analysis clause by clause, please refer to my article in on the web. resident and members of GST appellate tribunals. Goods and Services Tax Appellate Tribunal (Appointment and Conditions of Service of President and Members) Rules, 2023, defines the rule for appointment and removal of the president and members of the appellate tribunals, their salary, allowances, pension, provident fund, gratuity and leave. Earlier, the GST council, chaired by the Union Finance Minister and comprising state counterparts, in its 52nd meeting on October 7 decided that the maximum age limit for the president and members of the GST Appellate Tribunal (GSTAT) would be 70 years and 67 years, respectively. In September, the finance ministry had notified 31 benches of GSTAT, which will be set up in 28 states and 8 Union Territories. As per the notification, 1. Gujarat and UTs — Dadra and Nagar Haveli and Daman and Diu — will have two benches 2. Goa and Maharashtra together will have three benches. 3. Karnataka and Rajasthan will have two benches each, 4. Uttar Pradesh will have three benches. 5. West Bengal, Sikkim, Andaman and Nicobar Islands, Tamil Nadu (and Puducherry together) have two GSTAT benches each, 6. Kerala and Lakshadweep will have one bench. 7. The seven northeastern states — Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura — will have one bench each. 8. All other states will have one bench of the GSTAT. Well……………. Currently, taxpayers aggrieved with the ruling of tax authorities are required to move to the respective High Courts. The resolution process takes longer time as High Courts are GST UPDATEZ ON 28-10-2023 Notification of rules for appointment of President and Members of GSTAT GST UPDATEZ ON 05-10-2023 Due dates on issue of Notice / OiO for Short Payments and erroneous refunds Click here to read full document A very important information on due dates for issue of SCNs and OiO through various Financial Year endings has been tabulated and posted below. The tabulation contains the due dates under Section 73 and 74 along with Limitation period to recover erroneous refunds and the corresponding authority Notifications. This information will be extremely useful for keeping tab on the due dates for various compliance for demand and recovery proceedings from the perspective of Proper officers delegated for those purposes. The finance ministry has notified vide Notification No. G.S.R. 793(E) [F. No A50050/69/2023-CESTAT-DOR] dated October 25th, 2023 the rules for the appointment of the

263 R. Srivatsan, IRS already burdened with a backlog of cases and do not have a specialised bench to deal with GST cases. With the issuance of this notification, it can be expected that the expeditious commencement of activities related to identification, selection, appointment and training of tribunal members will begin. Setting up state-level benches of GSTAT would help businesses by way of faster dispute resolution. to the director by the company, directly or indirectly, in lieu of providing a personal guarantee to the bank for borrowing credit limits. Since there is no consideration, the open market value may betreated as zero and therefore no tax liability. There may, however, be cases where the director, who had provided the guarantee, is no longer connected with the management but continuance of his guarantee is considered essential because the new management’s guarantee is either not available or is found inadequate, or there may be other exceptional cases where the promoters, existing directors, other managerial personnel, and shareholders of borrowing concerns are paid remuneration/ consideration in any manner, directly or indirectly. In all these cases, they are liable for GST the taxable value of such supply of service shall be the remuneration/consideration provided to such a person/ guarantor by the company, directly or indirectly. Further, the circular has envisaged two more scenarios in such situations. One is when the corporate guarantee is provided by a company to the bank/financial institutions for providing credit facilities to the other company and where both the companies are related. In such a situation, the activity is to be treated as a supply of service between related parties as per Schedule -I even when made without any consideration. Second, where the corporate guarantee is provided by a holding company, for its subsidiary company, those two entities also fall under the category of ‘related persons’. Hence the activity of providing corporate guarantee by a holding company to the bank/financial institutions for securing credit facilities for its subsidiary company, even when made without any consideration, is also to be treated as a supply of service. Here arriving at Transaction Value is difficult as no consideration flows between the two parties. Considering different practices being followed in determining taxable value, a new provision has been added (i.e. sub-rule (2) has been GST UPDATEZ ON 01-11-2023 GST liabilities on Corporate Guarantee- different scenarios Click here to read full document Any Remuneration or consideration received, directly/indirectly by a serving or separated director, for providing corporate guarantee will be treated as taxable value for GST, as per the recent Circular No. 204/16/2023-GST dated October 27, 2023 issued by CBIC on the basis of recommendations of GSTC pertaining to taxability of personal guarantee and corporate guarantee. The Council, in its meeting on October 6, gave two recommendations on corporate guarantee. First, the parent company’s corporate guarantee to its subsidiary for a bank loan will attract 18 per cent GST. Second, there will be no GST if a director provides a personal guarantee for a loan from a bank or any financial institution to his/her own company. The circular recognized the mandate provided by a RBI ( Circular No. RBI/2021- 22/121 dated 9th November, 2021,) which says no consideration by way of commission, brokerage fees, or any other form, can be paid

264 R. Srivatsan, IRS inserted in rule 28 of vide Notification No. 52/2023 dated 26.10.2023,) in CGST Rules 2017 w.e.f October 26, 2023. This rule says: ”The value of supply of services by a supplier to a recipient who is a related person, by way of providing a corporate guarantee to any banking company or financial institution on behalf of the said recipient, shall be deemed to be one per cent of the amount of such guarantee offered, or the actual consideration, whichever is higher. Well...... To illustrate, if the corporate guarantee was ₹100 crore, then ₹18 lakh would be the GST liability @18% on ₹1 crore. This clarification Guarantees litigation free GST liabilities. Here, the principal supply is renting of immovable property and/or maintenance of the premise, as the case may be, and the supply of electricity is an ancillary supply to it. So, even if electricity is billed separately, the supplies will constitute a composite supply and therefore, the rate of the principal supply that is the GST rate on renting of immovable property and maintenance of premise, as the case may be, would be applicable. In fine, the tax would eventually have to be borne by the tenant which could impact rents and maintenance fee charged by the owner and GST should be deposited to the Tax department as the case may be. This clarification issued also aligns with the West Bengal Advance Ruling on Airports Authority of India, which deemed the supply of electricity as part of a composite supply. This clarification could potentially lead to issue new notices to landlords who have not charged GST on electricity reimbursements. This is not an amendment to the law but only an amplification of the existing provisions clarifying the intent of the legislation and therefore applicable from the appointed date. However, in case where electricity is supplied by the real estate owners, residents’ welfare associations or real estate developers, as a “pure agent” i.e., when the charge is on actual amounts charged by state electricity board or discoms (distribution companies), it will not attract GST as a composite supply. Though circular has carved out an exception in case of ‘pure agent’ where the reimbursement is collected at actuals, it will be difficult to establish non-existence of a principal supply as a person cannot be considered to solely act as ‘pure agent’ for the purpose of collecting and discharging electricity charges. The businesses may have to obtain an authorisation from the actual consumer of electricity to act as its “pure agent” and to make payment to third parties on its behalf under a contract. Well...... This clarification could potentially lead to issue new (shocking) notices to landlords who have not charged GST on electricity reimbursements. GST UPDATEZ ON 02-11-2023 GST on Electricity Charges in Rent & Maintenance fees Click here to read full document The Electricity charges if bundled with rent or maintenance fee by real estate companies, malls or airports will be deemed to be a composite supply of Services and attract goods and services tax (GST) at the rate of 18%. The CBIC has now issued a clarification vide Circular No. 206/18/2023-GST, dated:31-10-2023 on the question- whether GST is applicable on reimbursement of electricity charges received by real estate companies, malls, airport operators from their lessees or occupants. It has been clarified that whenever electricity is being supplied bundled with renting of immovable property and or maintenance of

265 R. Srivatsan, IRS This is not an amendment to the law but only an amplification of the existing provisions clarifying the intent of the legislation and therefore applicable from the appointed date. Thankfully, Individuals renting residential property need not worry as such supply of services are EXEMPTED. iii.out of the amount payable at least twenty percent (20%) should have been paid in cash by debiting from the Electronic Cash Ledger (d)No refund shall be granted on account of this scheme till the disposal of the appeal. An appeal under this scheme shall not be admissible in respect of a demand not involving taxes. The provisions of Chapter XIII of the Central Goods and Service Tax Rules, 2017 shall mutatis mutandis, apply to an appeal filed so Well……… This “amnesty” of extension of time limit for filing appeals till January 2024 for all the orders passed till March 2023 will without an iota of doubt facilitate a large number of taxpayers, who missing the bus, could not file an appeal in the past within the specified time period, and provide one more opportunity to get their instigation redressed and seek justice. GST UPDATEZ ON 03-11-2023 Central Govt notifies Amnesty Scheme for Condoning Delay in Filing Appeals before 31st January 2024 Click here to read full document In line with the recommendations of 52nd GSTC the Central Government has issued Notification No:53/2023 (CT), dated 02nd November 2023 wherein the process and procedures with reference to the said “Amnesty Scheme” has been drawn the details of which are as follows: - (a)The said aggrieved person shall file an appeal against the said order in FORM GST APL-01 in accordance with sub-section (1) of Section 107 of the said Act, on or before 31st day of January 2024. (b)Provided that an appeal against the said order filed in accordance with the provisions of section 107 of the CGST Act, 2017 and pending before the Appellate Authority before the issuance of this notification, shall be deemed to have been filed if it fulfils the condition specified in the notification of the scheme referred supra. (c) The appeal shall be filed under this scheme only if the appellant has paidi.in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and ii.a sum equal to 12.50%. of the remaining amount of tax in dispute arising from the said order, subject to a maximum of twenty-five crore rupees, in relation to which the appeal has been filed, GST UPDATEZ ON 07-11-2023 GST - Biometric Registration System to be introduced from 7th November 2023 Click here to read full document GST department will put in place a biometric registration system that will be rolled out from Vapi, Gujarat the country’s leading chemical hub from 07-11-2023. Gujarat will be the first state in the country to roll-out the system of biometric databased registration. It's pertinent to note that Gujarat was also the first state to launch ‘Mera Bill Mera Adhikar’ successfully. After the pilot project the GST registration with biometric data will be rolled out in other states too.

266 R. Srivatsan, IRS The department will now collect biometric data of an applicant at the time of registration for a new GST number. In the new biometric registration method, an applicant has to give a thumb impression along with various identification documents. This will help ensure that the applicant is genuine. The GST applicant can be called for cross verification in future only if required. The new system will also help the GST department trace any individual in case of fraud. Innumerable frauds have been reported in which input tax credits were claimed by individuals with fake identification papers. Now, a Pilot is underway in U.T. of Puducherry for risk-based biometric-based Aadhaar authentication of registration applicants. So, U.T. of Puducherry is the second state after Gujarat to have risk-based biometricbased Aadhaar authentication. Provisions of sub-rule (4A) of Rule 8 of the CGST Rules 2017 have be amended regarding the authentication of Aadhaar Numbers which shall apply in the U.T. of Puducherry. The amendment vide Notification No:- 31/2023, dt: 31-07-2023 (further amendments to Notification No. 27/2022- Central Tax dated December 26, 2022) includes adding “State of Puducherry” alongside State of Gujarat in the aforementioned Notification. Additionally, the State of Andhra Pradesh has expressed its intention to participate in this pilot after assessing the system’s readiness in Gujarat and Puducherry. Well....... The new system will also help the GST department trace any individual in case of fraud. Recently frauds have been reported in which input tax credits were claimed by individuals with fake identification papers. There were quite many occasions where individuals have claimed that GST registration was done on their name without their knowledge. They also claimed that their bank and identity documents were used without informing them. So, to put an end to this menace, when the department collects thumb impressions there will be no chances of such fraudulent registrations. An applicant can’t deny that he did not apply for GST registration. Progressing steadily...... GST UPDATEZ ON 07-11-2023 A Common order to decide all GST disputes for Online Gaming being sought In a very important move it is learnt that the Government is likely to request the Supreme Court to club together all the GST online gaming cases that are currently under litigation on the grounds of "single principle". A number of online gaming cases are pending in the Supreme Court and various High Courts on the taxability issue. The final decision on it will be taken by the Supreme Court and one cannot have multiple interpretations of the same law. So, the request is to tag all the cases together appears to be logical. If the Supreme Court agrees, it will pass an order saying that since the cases are pending before it, all the matters can be tagged instead of multiple orders being passed. Some of the earlier major decisions of the Supreme Court are in the name of a company but the list of tagged cases go up in 100s requiring multiple orders. This transfer can only be initiated at the discretion of the Supreme Court. So, clubbing of all the GST online gaming company cases will save a lot of resources and time. The request to transfer comes when the Supreme is about to take up the case of Gameskraft, a Bengaluru-based gaming

267 R. Srivatsan, IRS company that was first issued a notice in 2022, to pay Rs 21,000 crore in GST arrears from July 2017 to June 30, 2022. The company disputed the order. The case is expected to be heard by the SC very shortly. Looking back, the GST Council approved 28% GST on all online games from October 1, 2023. It also interpreted that between July 2017 and Oct 1, 2023 all online games involving bets, irrespective of skill or chance, needed to pay a GST rate of 28% on the full value of the bets placed, as it fell under the category of gambling. Several online gaming firms have been engaged in a tussle ending up in huge litigation over this which matters are subjudice at various courts. Currently, the Bombay HC, Goa bench of Bombay HC, Karnataka HC and the Sikkim HC are hearing cases pertaining to GST notices to online gaming companies. Most of the Popular online gaming companies who had received notices for crores of rupees like Dream 11’s, Games 24x7, Delta Corp and Head Digital Works, have moved petitions in various courts. Well........ If the honourable SC in its discretion takes up the grounds of single principle and passes a common order, it would be a proactive move in the interest of Justice. Entry After Out of Charge (OOC). Now, the System will allow change of GSTIN, provided the PAN no. remains the same. The amendment in GSTIN can be carried out only once. If the same is being done more than once, the system will flash the message “GSTIN Id has already been amended once. No amendment in GSTIN Id is possible now”. If GSTIN in a Bill of Entry has been amended, system will not allow any other amendment on the same day. Similarly, if amendment (other than GSTIN amendment) has been carried out in a BE, GSTIN amendment would not be allowed on the same day. If the same is being done, the system will flash message “An amendment has been carried out and OOC is not given, the amendment of GSTIN is not possible today. Further, the officer will have to give OOC for pushing of the amended data to GSTN. Well.... So, the difficulties faced by EXIM's regarding non-availability of option of GSTIN amendment in Bill of Entry after OOC has been resolved in a progressive way. This will facilitate not only EXIM's, but also tax officers for various compliance validations. GST UPDATEZ ON 10-11-2023 Customs Officials can now Amend GSTN for Bill of Entry after OOC The Directorate General of Systems and Data Management has issued an Advisory No:27/2023, on 7th November 2023 regarding the Goods and Services Tax Identification Number (GSTIN) amendment in the Bill of GST UPDATEZ ON 15-11-2023 2- Factor Authentication for e-Way Bill and e-Invoice System: Click here to read full document In an effort to enhance the security of eWay Bill/e-Invoice System, NIC has introduced 2- Factor Authentication for logging in to e-Way Bill/e-Invoice system. In addition to username and password an OTP will also be authenticated for login.

268 R. Srivatsan, IRS There are 3 different ways of receiving the OTP.One may enter any of the OTP and login to system. The various modes of generating OTP are as follows: - 1. SMS: OTP will be sent to your registered mobile number as SMS. 2. On ‘Sandes’ app: Sandes is a messaging app provided by the government so that you can send and receive messages. You may download and install the Sandes app on your registered mobile number and receive the OTP in it. 3. ‘NIC-GST-Shield’ app: ‘NIC-GST-Shield’ is a mobile app provided by e-Way Bill /eInvoice System, so that OTP can be generated by using the app. This app can be downloaded only from the e-Waybill / eInvoice portal from the link ‘Main Menu 2- Factor Authentication. Install NIC-GSTShield’. Download, install and register this app on your registered mobile number. You should ensure the time displayed in the app should be in sync with e- Waybill / e-Invoice system. On opening the app, OTP is displayed. You may enter this OTP and continue the authentication. The OTP gets refreshed after every 30 seconds. You will not require internet or any dependency on mobile network for generating the OTP on this app. Registration for 2-Factor Authentication: On logging to e-Waybill System go to Main Menu-2 Factor Authentication and confirm the registration. Once confirmed, the system will ask OTP along- with username and password. The OTP authentication is based on individual user accounts. The sub users of GSTIN will have separate authentication depending on their registered mobile number in the e-Way Bill/ e- Invoice System. Once the taxpayer has registered for 2- Factor authentication, then the same is applicable for both e-Way bill and e-Invoice system. Creation of sub-users: For better management of e-waybills, main users may create sub-users and mobile number of the sub-user may be updated periodically. The sub-user may be granted permissions to generate e-waybill or cancel e-waybill or all the options. Further, the activities of the sub-users may be monitored by the main-user on a regular basis. Well.... One more step forward in the right direction. GST UPDATEZ ON 22-11-2023 GSTN has enabled DRC-01C GSTN has developed and released a functionality to generate automated intimation in Form GST DRC-01C which enables the taxpayer to explain the difference in Input tax credit available in GSTR-2B statement & ITC claimed in GSTR-3B return online as per the directions of GST Council. This feature is now live on the GST portal and available for all taxpayers This functionality compares the ITC declared in GSTR-3B/3BQ with the ITC available in GSTR-2B/2BQ for each return period. If the claimed ITC in GSTR 3B exceeds the available ITC in GSTR-2B by a predefined limit or the percentage difference exceeds the configurable threshold, taxpayer will receive an intimation in the form of DRC01C. Upon receiving an intimation, the taxpayer must file a response using Form DRC-01C Part B. The taxpayer has the option to either provide details of the payment made to settle the difference using Form DRC-03, or provide an explanation for the difference, or even choose a combination of both options. Well.........

269 R. Srivatsan, IRS More importantly in case, no response is filed by the impacted taxpayers in Form DRC-01C Part B, such taxpayers will not be able to file their subsequent period GSTR1/IFF. Point of alert !!!!!! Also, it should be ensured that summary of the order issued under section 52 or section 62 or section 63 or section 64 or section 73 or section 74 or section 75 or section 76 or section 122 or section 123 or section 124 or section 125 or section 127 or section 129 or section 130 of CGST Act 2017 is uploaded electronically on the portal in FORM GST DRC-07. It is important to note that as per sub-rule (5) of rule 142 of CGST Rules 2017, such communication is to be uploaded mandatorily, electronically on the portal by the proper officer. Non-issuance of the summary of such notices/ orders electronically on the portal will be clear violation of the explicit provisions of CGST Rules. Manual service alone appears not acceptable. Well.... These instructions will lead to transparency in tax administration as envisaged by the GST laws and not only makes the said notices/ orders available electronically to the taxpayers on the portal, but also helps in keeping a track of such proceedings and consequential action in respect of recovery, appeal etc, seamlessly. GST UPDATEZ ON 29-11-2023 Serving of DRC-01 and uploading of DRC-07 electronically- CBIC instructions The CBIC issued Instruction No. 04/2023- GST dated November 23, 2023, regarding the serving of the summary of notice in FORM GST DRC-01 and uploading of the summary of order in FORM GST DRC-07 electronically on the portal by the proper officer. Reference is invited to the provisions of section 52, section 73, section 74, section 122, section 123, section 124, section 125, section 127, section 129 and section 130 of Central Goods and Service Tax Act, 2017 as per which a notice is required to be issued by the proper officer to a person for demand and recovery of any amount of tax not paid or short paid/ amount of input tax credit wrongly availed/ amount of refund erroneously made, for recovery of interest and/ or for imposition of any penalty or fine on the said person. Further, a summary of such order is also required to be uploaded electronically on the portal by the proper officer in FORM GST DRC-07, specifying the amount of tax, interest and penalty, as the case may be, payable by the person concerned. In the above instruction, the proper officers have been accordingly directed to ensure that summary of the notices issued under section 52 or section 73 or section 74 or section 122 or section 123 or section 124 or section 125 or section 127 or section 129 or section 130 of CGST Act are served, electronically on the portal in FORM GST DRC-01. GST UPDATEZ ON 30-11-2023 Belated filing of GST Annual returns and late fees Click here to read full document The annual returns in GSTR9/9C for the financial year 2022-23 is to be filed by 31- December-2023. In case it is belatedly filed the Late Fees for GSTR-9 of F.Y. 2022-23 will be attracted as follows. 1. For a AAT/O < Rs. 5 Cr= Rs. 50 per day (Max 0.02% of T/O)

270 R. Srivatsan, IRS 2. For AAT/O Rs. 5-20 Cr= Rs.100 per day (Max 0.02% of T/O) 3. For AAT/O > Rs. 20 Cr= Rs.200 per day (Max 0.25% of T/O) Still one month time is available from today for the last date in the unlikely event of any extension - Alert! GST UPDATEZ ON 02-12-2023 GST Collections for November 2023 Hit Rs 1.68 Lakh Crore In November 2023, Government gathered a gross GST revenue of Rs 1,67,929 crore This includes Rs 30,420 cr CGST Rs 38,226 cr SGST Rs 87,009 cr IGST (which covers Rs 39,198 crore from imported goods), and Rs 12,274 cr-Cess (with Rs 1,036 crore from imported goods). Comparatively, November 2023's revenues have marked a 15% increase from the same month the previous year. This is the highest YoY growth in monthly GST collections. Domestic transactions (including imported services) surged by 20% compared to revenues from the same sources in November 2022. Notably, this marks the sixth instance in FY 2023-24 where gross GST collections exceeded Rs 1.60 lakh crore. Progressively in the FY 2023-24's gross GST collection up to November 2023 stands at Rs 13,32,440 crore which averages Rs 1.66 lakh crore monthly. This showcases an 11.9% hike over FY 2022- 23's gross GST collection, which stood at Rs 11,90,920 crore, up to November 2022, where it was averaging Rs 1.49 lakh crore monthly. GST UPDATEZ ON 08-12-2023 New Functionality on GST Portal Click here to read full document The Goods and Services Tax Portal has been updated with a new functionality to view Address and Contacts of promoters and authorized signatories. The Stakeholders can now take a look at names of all Promoters & Authorized signatories and their mobile +email + address mentioned on the Goods and Services Tax Portal. Earlier only Authorized persons name & mobile email were present in the Portal. GST UPDATEZ ON 14-12-2023 Institution of GST APPELLATE TRIBUNAL – Progress Setting the stage to clear the final hurdle holding up the formation of the GST Appellate Tribunals, the honourable Finance Minister on 13th December 2023, introduced amendments to the Central Goods and Services Tax Act of 2017 in the Lok Sabha to align its provisions with the Tribunal Reforms Act of 2021. The proposed changes which relate to the eligibility criteria for members and the President of the much-awaited tribunals, once approved by Parliament, will facilitate the initiation of the administrative process for operationalisation of the Goods and Services Tax Appellate Tribunals at the earliest. Let's hope it gathers momentum ASAP.

271 R. Srivatsan, IRS GST UPDATEZ ON 15-12-2023 Denial of Input Tax Credit (ITC) to a purchasing dealer The Honourable Supreme Court dismissed the Special Leave Petition (SLP) against the Calcutta High Court judgment in the case of Sunkraft Energy Private Limited The case involved is the denial of Input Tax Credit (ITC) to a purchasing dealer by the department based on the supplying dealer's failure to remit tax. The High Court ruling emphasized that ITC cannot be denied unless exceptional circumstances exist, such as the supplier going missing or situations where tax collection becomes impossible. The matter was appealed by the department through a SLP under Diary No. 44242/2023 in the Supreme Court. The Supreme Court has now taken a final call ' wherein it was held that the purchasing dealer's ITC cannot be denied by the department on the ground that that supplying dealer has not remitted the tax so collected unless there is an exceptional case like the supplier going missing or any situation wherein it becomes impossible for the department to collect tax from such a supplier. As long as “ , ." , . Well....... Very important decision by the honourable SC.....Natural justice rendered to legislative beneficiaries. GST UPDATEZ ON 18-12-2023 GST on Corporate Guaranteeclarified Click here to read full document In a recent circular, Circular No. 204/16/2023-GST, dated 27-10-2023 following clarifications have been provided in respect of GST on Corporate Guarantee. A. Taxability of personal guarantee by directors: Directors / promoters / employees and the Company are 'related persons' as per the explanation to Section 15 of the Central Goods and Services Tax Act, 2017. The circular clarifies that personal guarantees offered by promoters, directors, managerial staff, etc. of borrowing company would be treated as taxable supplies, even if made without consideration, if it is in the course or furtherance of business. In case personal guarantee is provided without any consideration, the value of taxable supply would be determined under Rule 28 of CGST Rules 2017 which provides for determination of the 'Open Market Value'. The Circular No. RBI/2021-22/121 dated 9 November 2021 issued by The Reserve Bank of India, prohibits earning of income from such guarantees. Therefore, the circular clarifies that the taxable value for such provision of personal guarantee provided by under Rule 28 of the CGST Rules would also be zero. Hence, no GST would be payable on such supplies. In cases where specific consideration / remuneration is provided for such guarantee, GST would apply on such consideration. B. Taxability of corporate guarantee by group companies:

272 R. Srivatsan, IRS Any transaction between related / group / holding and subsidiary companies is treated as provision of taxable supply in accordance with Section 7 read with Schedule I of CGST Act, even if it is made without any consideration and is made in the course or furtherance of business. It is clarified that where the corporate guarantee is provided by a related / group / holding company for a borrowing company to the bank / financial institutions for securing credit facilities for its group / subsidiary company, it is regarded as taxable supply under GST even when made without any consideration. As per Notification No. 52/2023-CT dated 26 October 2023, the value of services provided by a supplier to a related person, involving the provision of a corporate guarantee to a banking company or financial institution on his behalf, is deemed to be 1% (one percent) of the guaranteed amount offered, or the actual consideration, whichever is higher. Well.... Historically Valuation of corporate guarantees for transfer pricing even under Income Tax laws has been a contentious issue. The Bombay High Court, in the cases of Everest Kento Cylinders Ltd and Manugraph India Ltd has ruled that a Corporate Guarantee fee of 0.50% can be considered to be at arm's length. Conversely, the Madras High Court in the case of Redington (India) Ltd, has determined that a Corporate Guarantee fee of 0.85% to be at arm's length. However, Rule 10TD of the Income-tax Rules, 1962, sets the safe harbour rate for this fee at 1% of the guaranteed amount. CBIC circular does not make any reference to Rule 10TD of the Income-tax Rules, 1962. As a result, the valuation of Corporate Guarantees extended to government entities or private individuals may be subject to Assessment on discretion and may not put the issue to rest. The two houses of Parliament passed the bill which seeks to cap the age limit for GST appellate tribunals (GSTAT) President and members. The Central Goods and Services Tax (Second Amendment) Bill, 2023, seeks to cap the age for President and members of the GSTAT at 70 years and 67 years respectively, higher than 67 and 65 years specified earlier. The Bill also aligns with the provisions of the Central GST Act in line with the Tribunal Reforms Act, 2021. As per the bill, a lawyer with 10 years of 'substantial experience' in litigation in matters relating to indirect taxes in the Appellate Tribunal, would be eligible to be appointed as a judicial member of the GSTAT. Once the Presidential assent is received for the amendment bill, the process of selection of President and members of GSTAT would be initiated. The honourable CJI has already consented to chair the search and selection committee and has nominated senior judge to chair the search cum selection committee for selection of judicial members and member technical (Centre). GSTAT will have one principal bench based in New Delhi, with a President and one judicial and technical member each. The state benches of GSTAT will have a president and two judicial members and two technical members (one each from Centre and states). GST UPDATEZ ON 22-12-2023 Formation of GSTAT- process gathers momentum

272 R. Srivatsan, IRS Well..... Hopefully the taxpayers who are litigating against GST demands in various High courts or the Supreme Court at present will have the liberty to withdraw their cases from there and approach GSTAT once the benches begin functioning for quick resolution.