E-Book: GST UPDATEZ

44 R. Srivatsan, IRS GST UPDATEZ ON 26-08-2019 crore, State GST Rs 24,239 crore, and Integrated GST Rs 48,958 crore (including Rs 24,818 crore collected on imports) during August 2019, this year. Cess collection stood at Rs 7,273 crore (including Rs 841 crore collected on imports). The number of GSTR 3B Returns (summary of self-assessed return) filed for the month of July up to end-August totalled 75.80 lakh. Gross GST collections during April-August stood at Rs 5,14,378 crore, up from Rs 4,83,538 crore in the corresponding period of the last fiscal. This shows a growth of 6.3 per cent during the five months of the current fiscal. Fall in revenue because of 1. Economic slowdown 2. Dwindling imports - IGST 3. Both.... what else? GST UPDATEZ ON 03-09-2019 The most sought-after extension granted. The last date for furnishing of Annual Return in the FORM GSTR-9 / FORM GSTR-9A and Reconciliation Statement in FORM GSTR-9C for the financial year 2017-18 has been extended from 31st August, 2019 to 30th November, 2019. RoD Order No.07/2019-CT dt. 26.08.2019 Click here to read full document GST UPDATEZ ON 30-08-2019 The Goods & Services Tax (GST) Council will hold its 37th meeting on September 20 in Goa, but is unlikely to consider any rate reduction. Many sectors are clamouring for a rate reduction. They range from automobile to cement to biscuit. Now, if it is done for one sector, it can open floodgates and therefore it is unlikely. GST UPDATEZ ON 02-09-2019 The tax collection was at Rs 1.02 lakh crore in July this year. The August 2019 mop-up was, however, 4.5 per cent higher than the Rs 93,960 crore collected in the same month last year 2018-19. This is the second time during this year that the revenue collection from the GST has slipped below the Rs 1 lakh crore mark. First, it happened in June 2019, when the collection was Rs 99,939 crore. Central GST collections stood at Rs 17,733 GST collection slips below Rs 1 lakh crore mark to Rs 98,202 crore in August 2019 The Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, (SVLDRS) application has been made available online at https://cbic-gst.gov.in from 01-09-2019. This is in terms of the Notification No.4/2019 CE-NT, dt. 21-08-2019, wherein the appointed date for beginning of the scheme has been fixed as 1st September 2019. The declaration can now be made electronically in Form SVLDRS-1 by the declarant. The scheme closed on 31-12-2019. Click here to read full document GST UPDATEZ ON 04-09-2019 The Finance (No.2) Act 2019, which received the assent of the President on 01-08-2019, under Section 103, the Provisions of Section 54

45 R. Srivatsan, IRS of the CGST Act 2017 dealing with the subject of Refunds, has been amended in so far as after sub-section (8), the following (new) sub-section has been inserted, namely: – “(8A) The (Central) Government may disburse the refund of the State tax in such manner as may be prescribed”. The effect of the insertion is that henceforth the SGST portion of the sanctioned refund amount by the Central Tax Officer can be disbursed by the Central Tax Officer himself. Earlier, before this amendment was put into effect, the Central Tax officer will sanction both CGST and SGST portion of the refund while he will disburse only the CGST amount and the SGST amount will be disbursed only by the nominated Nodal Officer of the respective state. Now this position has changed and the Central Tax officer will sanction as well as disburse both CGST and SGST of the respective state. Vide Notification No:39/2019-Central Tax, dt:31-08-2019, 01st September 2019 has been notified as the appointed date for the amendments to take effect. ☝In continuation of the above, the Business Process related to this is: The sanction order along with payment order will be transmitted to GSTN and from there to PFMS which will disburse the entire amount sanctioned including SGST. Similarly for refund sanctioned by state tax officer, the sanction order and payment order will be transmitted to GSTN and from there to PFMS. PFMS will disburse the entire amount. PFMS of centre is the single disbursement authority. No role for state treasuries. Later settlement will be done through RBI to collect sgst disbursed. All DC/AC will be issuing payment orders in RFD-05 through CBIC-GST portal while recredits will be through GST-PMT 03. The Government has waived off late fee payable under section 47 of the Central Goods and Services Tax Act, 2017 (i.e., Rupees 100/- for every day during which such failure continuous subject to a maximum amount of Rs. 5,000/- under each Act – Central + State) for Form GSTR-1 and GSTR-6 for the month of July, 2019 provided such returns are furnished on or before the 20th September, 2019: for the taxpayers having principal place of business is in the State of Jammu and Kashmir, and for taxpayers in the specified districts of the States – Bihar, Gujarat, Karnataka, Kerala, Maharashtra, Odisha and Uttarakhand. Vide Notification No. 41/2019–Central Tax dated 31.08.2019 the above changes have been Notified. Please note that these relaxations are given only to the listed areas as specified in Col:3 of the Table under the Notification and not universally to all Taxpayers. Late fees for GSTR1 and GSTR-6 waived off GST UPDATEZ ON 06-09-2019 IGST refund - revised mechanism The revised IGST refund mechanism provides for interim solutions in case where records could not be transmitted to ICEGATE to verify the IGST payments for goods exported out of Click here to read full document Click here to read full document GST UPDATEZ ON 05-09-2019

46 R. Srivatsan, IRS India in certain cases, like in case of mismatch between GSTR-1 and GSTR-3B. In order to provide resolution to such problems, it is now provided that the comparison as provided in Para 3A (Cases where there is no Short Payment of IGST) and 3B (Cases where there is Short Payment of IGST on account of Mis-Match between GSTR-1 and GSTR-3B) of Circular 12/2018- Customs would be done between the cumulative IGST Payments in GSTR-1 and GSTR-3B for the period April, 2018 to March, 2019. A CA certificate evidencing no discrepancy between the amount of IGST refunded and actual amount of IGST paid on exports for the period April, 2018-March, 2019 shall be furnished by 30th October, 2019. The above guidelines have been issued by CBIC vide Customs Circular No: 25/2019- Customs dated 27.08.2019 as a trade facilitation measure towards incentivising exports. more than what was collected in the corresponding month a year ago, but lower than the over ₹1 lakh crore collected in July 2019 this year. The initial momentum of April 2019 could not be sustained subsequently. The subdued trend in GST receipts is in its slowest pace in two years. To analyse, the growth in indirect tax mopup in the first five months of the current fiscal has been 6.4%, well below the 10% estimated for the year. If this pace is maintained for the full year, the shortfall could be a huge ₹40,000 crore. Also, the central government compensates states from the revenue generated through a cess imposed on sale of certain products such as automobiles, aerated water etc. If the compensation need exceeds (the) cess collected, the extra funds would probably go out from general fiscal expenses which can have a further negative growth impact, a study said. GST UPDATEZ ON 08-09-2019 Things which every GST registered person must do in September 2019: September always is a critical month for GST Compliance and therefore the following are important to be ensured with reference to 2018-19. 1. Reconciliation of ITC claimed in GSTR 3B 2.Reconciliation GSTR 2A with books of Accounts 3. Reconciliation GSTR 1 with Sales Invoices 4. Reconciliation GSTR 1 with GSTR 3B 5. Ensure filing of GSTR 1 & GSTR 3B for FY 2018-19 6. Rectification of Mistakes while filing GSTR 3B 20th October, 2019 is approaching soon & Click here to read full document GST UPDATEZ ON 07-09-2019 Dip in gst collection could be a cause of worry: In the period of past 26 months, GST rates have been lowered on an array of commonly used goods and services which resulted in monthly savings for consumers, but GST receipts which had touched ₹1.13 lakh crore in April 2019 this year could not sustain that growth in the subsequent months. The subdued trend in GST receipts also coincides with a sharp slowdown in economy. This sluggish growth in Goods and Services Tax (GST) revenue receipts, unless reversed quickly, could possibly lead to a whopping shortfall by the end of the current fiscal, 2019-20, straining finances of the central government which is required to make good on states’ revenue losses also, analysts opine. The Revenue collection figures show that the Centre and state governments collected ₹98,202 crore in GST in August, 2019, is 4.5%

47 R. Srivatsan, IRS every person registered under GST must be aware that 20th October, 2019 is the due date for availing ITC for FY 2018-19. The extract of the section 16(4) of CGST Act, 2017 is reproduced below for reference. “A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier.” As per the aforesaid provision, the time limit for taking input tax credit for the financial year 2018-19 is up to the filing of GSTR-3B for the month of September 2019. The due date of filing of GSTR-3B for the month of September 2019 is 20/10/2019. Hence any rectification required needs to be done on or before filing GSTR 3B for Sept-19 and GSTR 1 for the month/quarter ending Sept-19. In case one has committed any mistake while filing GSTR 3B, then the same need to rectified. There may a case that IGST incorrectly reported as CGST / SGST or vice a versa, Zero Rated Export Sales reported as normal sales or vice a versa, ITC wrongly shown in any other head instead of correct head in GSTR 3B. Then it is the time to rectify the same at the earliest in next GSTR 3B. The above reconciliation is not one time exercise, but should be regular one, in order ensure correct & timely tax compliance. Gujarat High Court in the Special Civil Petition in the case of M/S Siddharth Enterprises ... vs The Nodal Officer on 6 September, 2019 under Writ Petition Ref. No. C/SCA/5758/2019 expressed the following. Writ-application has been filed seeking appropriate writ, order or direction to the respondents for being permitted to file declaration in the form GST TRAN- 1 and GST TRAN-2 respectively to enable the writapplicants to claim transitional credit of the eligible duties in respect of the inputs held in the stock on the appointed day in terms of Section 140(3) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as, ‘the Act’) read with Rule 117 of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as, ‘the Rules’). It is the case of the writ-applicants that the declaration in the form GST TRAN- 1 could not be filed on account of the technical glitches in terms of poor net connectivity and other technical difficulties on the common portal. The writ-applicants, in the alternative, have prayed for a declaration that the due date contemplated under Rule 117 of the Rules to claim transitional credit is procedural in nature, and thus, merely directory and not a mandatory provision. The HC ruled that Transitional credit can’t be denied only because form Tran 1/ Tran 2 couldn’t not be filed. Requirement of filing of Trans 1 and Trans 2 returns is procedural in nature and not mandatory and therefore right of transitional credit cannot be denied to those taxpayers who could not file such returns. Procedure provided cannot overtake law. The respondents are directed to permit the writ-applicants to allow filing of declaration in form GST TRAN- 1 and GST TRAN-2 so as to GST UPDATEZ ON 09-09-2019 Non filing of TRAN Forms in-time due to technicalities should not be a cause for denial of substantial benefit extended by law:

48 R. Srivatsan, IRS enable them to claim transitional credit of the eligible duties in respect of the inputs held in stock on the appointed day in terms of Section 140(3) of the Act. It is further declared that the due date contemplated under Rule 117 of the CGST Rules for the purposes of claiming transitional credit is procedural in nature and thus should not be construed as a mandatory provision. why the Petitioner needs copies and only an inspection by the Chartered Accountant will suffice has to be rejected. As regards the tampering of evidence is concerned, it is not explained how, when the originals are with the respondentauthorities, the said documents will be tampered by the Petitioner. Second, if the soft copies are available with the Petitioner, the argument that if the copies are given, now the Petitioner will alert its associates is also not explained. Hence the refusal by the respondentauthorities to give copies of the documents to the Petitioner which are seized under Panchanama is not justifiable. GST UPDATEZ ON 11-09-2019 In the case of High Ground Enterprises vs UOI, under WP no: - 8075 of 2019 the honourable High Court of Bombay passed the following judgement. Click here to read full document 1. The Petitioner has sought to question the refusal by the Officers of the DirectorGeneral of GST Intelligence, Mumbai to supply documents to the Petitioner seized by the officers. The Petitioner has also sought a direction to the Respondents to hand over copies of the documents seized. 2. According to the Respondents, that the investigation is at the sensitive stage and considering the complexity, it would be prejudicial to the investigation, if the copies are given to the Petitioner. The stand taken on the affidavit is that the Petitioner is likely to manipulate the documents and alert its associates and stall the progress of the investigation. The HC ruled that Section 67(5) of the Act creates a right to receive the copies by a person from whose custody the documents are seized. The said person need not give justification why he needs the copies of the documents seized. Therefore, the argument that the Petitioner must show a cogent reason Click here to read full document GST UPDATEZ ON 12-09-2019 Status of filing Annual Returns In a bid to ease the compliance burden for small taxpayers, the upcoming Goods and Services Tax (GST) Council meeting on 20th September 19 at Goa, may consider the proposal to waive off the mandatory requirement to file GST Returns -- GSTR9, GSTR9A and GSTR9C for the financial year 2017-18, 2018-19 to those taxpayers below annual turnover of Rs. Two (2.00) crores. It appears that, GST Council nominated law committee has already started working on the amendments which will be required to facilitate the proposed changes. The due date for filing annual return forms and annual audit forms for the financial year 2017-18, i.e. GSTR-9, GSTR-9A, and GSTR-9C respectively have already been extended for the fourth time from August 31 to November 30, 2019. The suggestion to do away with annual returns

49 R. Srivatsan, IRS for small taxpayers is based on the recommendations and suggestions that honourable finance minister got after several meetings with industry/ taxpayers and tax officers across India. If this decision goes through, then it will be considered a step in the right direction especially by stakeholders as this may be quite an aid from the ease of compliance perspective for small businesses. An annual return requirement historically was adopted from the VAT regime in fact was exempted for businesses with a specified threshold and hence this proposal may be aligned to the pre-GST regime. Also, smaller businesses are looking for this relief because they had not maintained quite a lot of details which were required to be reported in the annual return essentially owing to the suspension of GSTR-2. However, a final call on the proposal will rest ONLY with the GST Council. So, 20th September meeting is very significant. The AAR ruled that ‘Security services’ provided to Government Hospitals and Medical Colleges are not covered under either the 11th schedule or the 12th schedule or activities is an activity relatable to a function listed under Art 243 G or 243 W of the Constitution. Cleaning and sweeping services’ can be considered as related to the function listed under SI No. 26 of the Eleventh Schedule, namely “Health and sanitation, including hospitals, primary health centres and dispensaries”, provided ‘sanitation service’, as classified under SAC 99945, includes sweeping and cleaning of places like hospitals etc. As the scope of the functions listed under the Eleventh Schedule is considered with respect to applicability of the Exemption Notification under the GST, the scope of any service should be determined in terms of the Scheme of Classification of the Services referred to in Explanation 3(i) of the Exemption Notification. ‘Sanitation and similar services’, classified under SAC 99945 includes sweeping and cleaning, but only with reference cleaning of a road or street. Cleaning of hospital premises is not, therefore, classified under ‘Sanitation or similar service’. The services the Applicant are, therefore, not exempt under SI No. 3 or 3A of the Exemption Notification. GST UPDATEZ ON 14-09-2019 Legal update on hospitality services GST UPDATEZ ON 16-09-2019 Classification of Power bank Citation is Reliable Hospitality service., Date: 09-Sep-2019 Authority for Advance Ruling - West Bengal Advance Ruling Order No. 21/WBAAR/2019-20. The Applicant, stated to be supplying facility management services like mechanised and manual cleaning, housekeeping, security services etc. to various Central Government and State Government hospitals, seeks a ruling as to whether exemption from payment of GST is available for such supplies in terms of Notification No 12/2017-CT(Rate) dated 28.06.2017? Click here to read full document Citation: Xiaomi Technology India Private Limited, Ref.Date: 16-Aug-2019 Appellate Authority for Advance Ruling - Karnataka Advance Ruling Advance Ruling No. KAR/AAAR/02/2019

50 R. Srivatsan, IRS The Applicant claims to be primarily engaged in trading of electrical and electronic goods such as Mobile Phones, Power Banks etc. The applicant sought to know whether the “Power Bank”, traded by the Applicant, is classifiable under Heading 8504 40 90 as ‘Static Converter – Others’? The AAR ruled that Accumulators are covered under heading 8507 whether or not they include any ancillary components which contribute to their function of storing and supplying electric energy. Further the accumulators are classified under the heading 85.07 even if they are designed for use with a specific device. Therefore, even though the battery in the said “Power Bank” is attached to the ancillary circuitry of “Voltage Booster System”, for effective function of the said battery, the principal function of the said Power Bank remains the same i.e. storing and supplying of electric energy and hence the said product merits classification of the heading 85.07, as an accumulator. Being aggrieved by the above-mentioned Ruling of the Authority, an appeal was preferred by the applicant. The AAAR ruled that Power Banks consists of not only the Lithium-ion Polymer battery but also the circuitry such as ‘charge management system’ and ‘voltage boost converter’. All the components together make up the Power Bank. Admittedly, it is not the battery alone which makes up a Power Bank. The battery combined with the charge management system and the voltage boost convertor constitute the Power Bank. All three components work in tandem to perform the function of storing electrical energy and discharging it to the connected device when required. The mere fact that there is a converter in the Power Bank will not take make it a Static Convener. It is emphasised that the primary difference between the Static Converter and the Accumulator is the fact of storage of electrical energy. It is not the function of converting the direct current from its input supply to its output device by either stepping up the voltage which characterises an accumulator. Accumulation of electrical energy and the conversion of electrical energy from DC to DC that step up the voltage from its input supply to its output load together characterise the function of a Power Bank. The critical aspect of storage of electrical energy is what distinguishes an accumulator from a static converter. In view of the aforesaid, we hold that the Power Bank traded by the Appellant is classifiable as an accumulator under Chapter heading 85.07. GST UPDATEZ ON 18-09-2019 GST e-Invoicing system Click here to read full document Shortly, in future, all invoices of sales and purchase are likely to be replaced via the government prescribed e-invoice pan-India from January 2020. The goods and services tax (GST) council will deliberate on new format and system for issuing of e-invoice during their meeting on September 20. The Union government has already announced the proposal of an e-invoice system to replace all sales and purchase invoices from January 2020 and in the next GST council meeting, which is scheduled on September 20, at Goa, the government is going to unveil the new prescribed format and the system through which an e-invoice can be generated. The move will be up for council’s approval. There will be a standard template of GST invoice and a unique invoice number which will be generated through a system created by the GST Network. This unique invoice reference number (IRN) or the unique invoice number, will be based on the computation of a firm's GSTIN. This measure probably, could help in arresting frauds with fake invoices. Let's wait and watch for the scheme. GST UPDATEZ ON 19-09-2019 Stay for service tax audit

51 R. Srivatsan, IRS In the case of M/s. Solvina India Pvt. Ltd. v. Union of India & Ors, the Hon’ble Delhi High Court in W.P.(C) 9264/2019 dated August 27, 2019, has granted a stay on the Service Tax audit proceedings instituted under Rule 5A of the Service Tax Rules, 1994 which was initiated after implementation of GST. The court observed as under: “Looking into the facts and circumstances of the case and looking to the provisions in Chapter V of the Finance Act, 1994 and Rule 5A of Service Tax Rules read with Sections 6(1) and (2) of the General Clauses Act and Section 173 and 174 of the Central Goods and Services Tax Act, 2017, there is a prima facie case in favour of the petitioner. Balance of convenience is also in favour of this petitioner. Irreparable loss will be caused to the petitioner, if the stay as prayed for, is not granted. We, therefore, stay further proceedings initiated pursuant to the communication dated 20.02.2019 (Annexure P-1 to the memo of this writ petition) as well as communication dated 07.08.2019 (Annexure P-4 to the memo of this writ petition) till the disposal of this writ petition.” HC has now listed the writ petition in the category of ‘After Notice Miscellaneous Matters’ for final disposal on January 31, 2020. In July, 2019, AAR (Tamil Nadu) had passed an order in response to a clarification (Application) sought by TVH Lumbini Square Owners Association, Purasawalkam. The association said it was registered under the Societies Act and Goods and Services Tax Act. The society consists of 9 residential blocks and there are 448 flats, it said. Post the AAR ruling, the CBIC also clarified vide Circular No. 109/28/2019, dt. 22-07- 2019, that the GST would be applicable on the entire maintenance amount if it exceeds ₹7,500 per month per person and only if the turnover of such residential association exceeds ₹20 lakh. TVH Lumbini Square Owners Association moved the Madras High Court against the AAR ruling. In its petition, the Association said the notification used the word “up to” ₹7,500 and argued that only the amount in excess of this is liable for the tax and not the whole amount. The court sought a response from the Centre on the issue. It also allowed TVH Lumbini Square Owners Association to pay GST only on the maintenance amount over and above the sum of ₹7,500, until further orders. Final decision of the Court is (Anxiously) awaited...... GST UPDATEZ ON 22-09-2019 Consolidation of changes on law and Rate as Recommended by The GST Council in Its 37th Meeting Click here to read full document GST UPDATEZ ON 20-09-2019 GST on Maintenance Charges from flat owners The Honourable Madras High Court has stayed an order of the Tamil Nadu Authority for Advance Ruling (AAR) that 18% GST is applicable on the entire amount of the maintenance charges collected from residential welfare association if they exceed ₹7,500 per month per flat. GST Council in its 37th meeting held at Panaji, GOA, took following decisions relating to changes in GST rates, ITC eligibility criteria, exemptions and clarifications on connected issues. I have tried to consolidate everything together so as to have a single one-point reference. (A) Miscellaneous changes in gst rates / ITC eligibility criteria: Rate reduction sector wise:

52 R. Srivatsan, IRS Hospitality and tourism (lodging) 1. To reduce the rate of GST on hotel accommodation service as below: – Transaction Value per Unit (Rs) per day GST Rs 1000 and less Nil Rs 1001 to Rs 7500 12% Rs 7501 and more. 18% Outdoor catering 5. To exempt prospectively services by way of storage or warehousing miscellaneous pulses, fruits, nuts and vegetables, spices, copra, sugarcane, jaggery, raw vegetable fibres such as cotton, flax, jute etc., indigo, unmanufactured tobacco, betel leaves, tendu leaves, rice, coffee and tea. Transportation: 6. To increase the validity of conditional exemption of GST on export freight by air or sea by another year, i.e. till 30.09.2020. Insurance: 7. To exempt “BANGLA SHASYA BIMA” (BSB) crop insurance scheme of West Bengal Government. 8. To exempt services of life insurance business provided or agreed to be provided by the Central Armed Paramilitary Forces (under Ministry of Home Affairs) Group Insurance Funds to their members under the respective Group Insurance Schemes of these Central Armed Paramilitary forces. Export promotion: 9. To exempt services provided by an intermediary to a supplier of goods or recipient of goods when both the supplier and recipient are located outside the taxable territory provided by Indian pharma companies to foreign service recipients, as the place of effective use and enjoyment of a service. 10. To issue a notification under Section 13(13) of IGST Act notifying the place of supply of specified R&D services (such as Integrated discovery and development, Evaluation of the efficacy of new chemical/ biological entities in animal models of disease, Evaluation of biological activity of novel chemical/ biological entities in invitro assays, Drug metabolism and pharmacokinetics of new chemical entities, Safety Assessment/ Toxicology, Stability Studies, Bio Equivalence and Bio Availability Studies, Clinical trials, Bio analytical studies) provided by Indian pharma companies to foreign service recipients, as the place of effective use and enjoyment of a service i.e. location of the service recipient. 2. To reduce rate of GST on outdoor catering services other than in premises having daily tariff of unit of accommodation of Rs 7501 from present 18% with ITC to 5% without ITC. The rate shall be mandatory for all kinds of catering. Catering in premises with daily tariff of unit of accommodation is Rs 7501 and above shall remain at 18% with ITC. Job work service: For diamond related services 3. To reduce rate of GST from 5% to 1.5% on supply of job work services in relation to diamonds. For engineering related services other than bus body building. 4. To reduce rate of GST from 18% to 12% on supply of machine job work such as in engineering industry, except supply of job work in relation to bus body building which would remain at 18%. Exemption sector wise: Warehousing: Exempt warehousing of Agri and related products.

53 R. Srivatsan, IRS 11. To clarify that the place of supply of chip design software R&D services provided by Indian companies to foreign clients by using sample test kits in India is the location of the service recipient and section 13(3)(a) of IGST Act, 2017 is not applicable for determining the place of supply in such cases. 12. To allow the registered authors an option to pay GST on royalty charged from publishers under forward charge and observe regular GST compliance. 13. To notify grant of liquor licence by State Governments against payment of license fee as a “no supply” to remove implementational ambiguity on the subject. 14. To exempt services related to FIFA Under-17 Women’s World Cup 2020 similar to existing exemption given to FIFA U17 World Cup 2017. (B)Rationalization/ trade facilitation measures: Securities lending service 15. To allow payment of GST on securities lending service under reverse charge mechanism (RCM) at the merit rate of 18% and to clarify that GST on securities lending service for period prior to RCM period shall be paid on forward charge basis. IGST shall be payable on supply of these services and in cases where CGST/SGST/UTGST have been paid, such taxpayers will not be required to pay tax again. Renting of vehicles petroleum crude or natural gas or both”. 18. To clarify taxability of Passenger Service Fee (PSF) and User Development Fee (UDF) levied by airport operators. It is proposed to issue notifications giving effect to these recommendations of the Council on 1st October, 2019. The GST Council, in its meeting recommended the following Law & Procedure related changes: 1. Relaxation in filing of annual returns for MSMEs for FY 2017-18 and FY 2018-19as under: NO ANNUAL RETURNS FOR COMPOSITION TAX PAYER a. Waiver of the requirement of filing FORM GSTR-9A for Composition Taxpayers for the said tax periods; and Optional filing of Annual return to tax payer of turnover upto 2 cr. b. Filing of FORM GSTR-9 for those taxpayers who (are required to file the said return but) have aggregate turnover up to Rs. 2 crores made optional for the said tax periods. SIMPLIFIED ANNUAL RETURN 2. A Committee of Officers to be constituted to examine the simplification of Forms for Annual Return and reconciliation statement. DATE FOR APPEAL EXTENDED 3. Extension of last date for filing of appeals against orders of Appellate Authority before the GST Appellate Tribunal as the Appellate Tribunals are yet not functional. ITC RELATED CHANGE 4. In order to nudge taxpayers to timely file their statement of outward supplies, imposition of restrictions on availment of input tax credit by the recipients in cases where details of outward supplies are not furnished by the suppliers in the statement under section 37 of the CGST Act, 2017. NEW RETURN SYSTEM POSTPONED TO APR 2020 16. To allow RCM to suppliers paying GST @ 5% on renting of vehicles, from registered person other than body corporate (LLP, proprietorship) when services provided to body corporate entities. (C) Clarifications: 17. To clarify the scope of the entry ‘services of exploration, mining or drilling of

54 R. Srivatsan, IRS 5. New return system now to be introduced from April, 2020 (earlier proposed from October, 2019), in order to give ample opportunity to taxpayers as well as the system to adapt and accordingly specifying the due date for furnishing of return in FORM GSTR-3B and details of outward supplies in FORM GSTR-1 for the period October, 2019 -March, 2020. 6. Issuance of circulars for uniformity in application of law across all jurisdictions: a. procedure to claim refund in FORM GST RFD-01A subsequent to favourable order in appeal or any other forum; b. eligibility to file a refund application in FORM GST RFD-01A for a period and category under which a NIL refund application has already been filed; and c. clarification regarding supply of Information Technology enabled Services (ITES services) (in supersession of Circular No. 107/26/2019-GST dated 18.07.2019) being made on own account or as intermediary. PSD CIRCULAR RESPONDED 7.Rescinding of Circular No.105/24/2019- GST dated 28.06.2019, ab initio, which was issued in respect of post-sales discount. 8. Suitable amendments in CGST Act, UTGST Act, and the corresponding SGST Acts in view of creation of UTs of Jammu & Kashmir and Ladakh. SINGLE AUTHORITY FOR REFUND 9. Integrated refund system with disbursal by single authority to be introduced from 24th September, 2019. REGISTRATION 10. In principle decision to link Aadhar with registration of taxpayers under GST and examine the possibility of making Aadhar mandatory for claiming refunds. 11. In order to tackle the menace of fake invoices and fraudulent refunds, in principle decision to prescribe reasonable restrictions on passing of credit by risky taxpayers including risky new taxpayers. For all the proposed changes recommended, Notification and Circulars etc., will be issued separately to give effect. GST UPDATEZ ON 24-09-2019 ITC availability check: The GST Council, in its 37th meeting held at Goa, has come up with various proposals to simplify and strengthen the tax filing system and one such decision is aimed at ensuring taxpayers file their GSTR 1 in time. In order to encourage and enforce taxpayers to timely file their statement of outward supplies, imposition of restrictions on availment of input tax credit by the recipients in cases where details of outward supplies are not furnished by the suppliers in the statement under section 37 of the CGST Act, 2017, will be initiated. This means when taxpayers (suppliers) do not file a GSTR 1, they (recipient s) would not be able to claim input tax credit. There will be restrictions on ITC claim for those who fail to submit GSTR-1. ITC will only be allowed to be claimed where outward supplies have been in time. This is an important step to ensure validity of ITC claim in the system and sets the stage for the new simplified return filing mechanism. Those whose suppliers do not submit GSTR1 will be restricted from availing ITC credit. Incidentally one may recall that the Government also announced that the new return system that was to be introduced in October 2019, would now be introduced from April, 2020. This is in order to give ample

55 R. Srivatsan, IRS opportunity to taxpayers as well as the system to adapt. Accordingly furnishing of return in FORM GSTR-3B and details of outward supplies in FORM GSTR-1 for the period October, 2019 - March, 2020 will continue on the specified due dates. With the Government now showing full intention to plug ITC leakages, businesses cannot do without a robust internal control and balances mechanism that will keep suppliers in check and make sure they are complying in a timely manner. The "Common Portal" is also expected to synchronise with this requirement. extended time for filing the form GSTR-1 ending on 31st December, 2017, the accountant of the Petitioner is said to have missed noticing that the time for filing GST TRAN-1 was extended only till 27th December, 2017. The Petitioner was accordingly not able to file the GST TRAN-1 declaration online within time and claim the ITC of the eligible amounts. Thereafter, in order to be permitted to manually file the GST TRAN-1, the Petitioner made two representations dated 8th March and 19th March, 2018 to the jurisdictional GST Authorities, as well as representations dated 20th March, 2018 and 21st March, 2018 to the Ministry of Finance, Union of India and the GST Council respectively. With no response having been received from any of the aforesaid authorities, the Petitioner filed the present petition claiming the above relief. The HC ruled that The Petitioner was unable to fill the TRAN-1 Form on account of bonafide difficulties and that, therefore, the Petitioner should be afforded one more opportunity to do so. Accordingly, a direction is issued to the Respondents to permit the Petitioner to either submit the TRAN-1 form electronically by opening the electronic portal for that purpose or allow the Petitioner to tender said form manually on or before 15th October, 2019 and thereafter, process the Petitioner’s claim for ITC in accordance with law. For all the Tran-1 misses, I think approaching the Court to issue directions is the only solution now. GST UPDATEZ ON 30-09-2019 Assessment under Best Judgement Method GST UPDATEZ ON 25-09-2019 Submission of Tran-1 Citation: High Court of Delhi in the case of M/s Krish Auto motors Private limited vs UOI & Others WP (C) no. 3736/2018, St 16- 09-2019, delivered the following judgement. The Petitioner is a dealer/distributor of Maruti Suzuki India Limited and is engaged in the business of trading and servicing of motor vehicles and parts and accessories of said motor vehicles. On the appointed day i.e. 1st July, 2017 when the CGST Act came into force the Petitioner was entitled to a credit of Rs.1,41,02,394/- in respect of the duties paid at the time of purchase of goods/stock on which central excise duty had already been paid. In terms of Rule 117 of the CGST Rules, 2017, the GST TRAN-1 was required to be filed by 30th September, 2017. Later, this time limit was extended till 30th November, 2017 and then till 27th December, 2017. The Petitioner states that in view of the maze of compliance due dates, with the time Click here to read full document The honourable High Court of Kerala passed the following judgement on the issue of extension of time limit for filing the return after assessment under Best Judgement Method by the department. Citation: Bridge Hygiene Services Private limited vs State Tax Officer. WP.No.25066 of 2019 (G) dt:23-09-2019

56 R. Srivatsan, IRS As per provisions of Section 62 of the GST Act, it is only in circumstances where an assessee refuses to furnish the particulars required for an assessment under the Act, through the filing of a return within time, that the proper officer has to proceed to finalise the assessment on the best of his judgment, taking into account all relevant material which is available or which he has gathered for the said purpose. Sub section (2) of Section 62 indicates that even after the service of the best judgment assessment order on the assessee, if the assessee furnishes a valid return within 30 days thereafter, the assessment order passed on best judgment basis will be deemed to have been withdrawn save for the continuance of the liability to pay interest for late payment of the tax. 2. The submission of the learned counsel for the petitioner in the instant case however is that he cannot resort to even this procedure since even if he were to file returns within the period of 30 days specified in Section 62(2) of the SGST Act, he would not be able to pay the admitted tax liability on account of paucity of funds. 3.This Court may not be justified in granting an extension of the period contemplated under sub section (2) of Section 62, so as to enable the assessee to file a return beyond the said period for the purposes of getting the benefit of withdrawal of an assessment order passed on best judgment basis under Section 62(1) of the GST Act. Under such circumstances I find that the prayer sought for in the writ petition cannot be granted. The writ petition therefore fails, and is accordingly dismissed. In the SVLDRS 2019, any amount collected as representing Tax by an assessee from his customer and not paid to the Government is also eligible for Tax reliefs provided all other conditions of the scheme are full filled. A clarity was sought whether the waived tax amount in those cases will be treated as income under IT Act 1961 and whether Income Tax is chargeable on the same? The answer in my opinion is YES! Whatever collected but not paid should be recognised as Income and that portion is liable for Income Tax. To explain this in detail, all the Taxes collected under any Act will be recognised in the books of accounts by (02) two methods. The first method is to include the Taxes in the head of income by reckoning the gross amount of the invoices as income and claim the actual taxes paid as expenses subsequently in the profit and loss account of the respective year. In this method the taxes charged in the invoices will obviously become an income to the extent it is not paid. This fact can be verified from the IT Form 3CD which is a detailed statement in accordance with Rule 6G (2) and Section 44AB of the Indian Income Tax Act, 1961. The second method is to account all the taxes as liability and report them in the Balance sheet of the respective year and reduce the amount of taxes actually paid on the Balance sheet date. If any tax collected (and accounted) but subsequently waived, like the current LDRS, then to that extent it has to be declared as a Taxable income in the year in which it is absolutely waived and reported in the Notes to Balance sheet. In this method also the amounts collected as Taxes, but not paid to the Government but later gets waived off by an amnesty scheme becomes income and chargeable to Income Tax. The other provision which is important here is Section 43 B of the IT Act 1961, which speaks about eligible deductions, also treats such receipts as income. It says that w.r.t taxes, GST UPDATEZ ON 01-10-2019 SVLDRS an Interesting Situation Click here to read full document

57 R. Srivatsan, IRS deduction is allowed only when actual payment is made. So, in these cases, as payment is not made, no deduction can be allowed. If the taxes collected and specified expenses if not paid before the said due date, then the same will be added as income and taxed. If the same is paid subsequently, then it will be allowed as a deduction from taxable income of that year in which it was paid. So, the bottom line is only the taxes paid will be allowed as deduction in the year of payment unless otherwise ineligible. Therefore, in all cases, where an amount is collected as Tax (Central Excise Duty and / or Service tax) and not paid to the Government, but later a Tax relief is granted, under SVLDRS-2019, such relief shall be treated as Income, and Income Tax is payable on such amount. May be in all such cases, the Income tax department should be alerted. Will it lead to double jeopardy requires to be seen! Golden Vacations Tours and Travels. Date: 23-Sep-2019 Authority for Advance Ruling - West Bengal Advance Ruling Order No. 26/WBAAR/2019-20 The Applicant is stated to be a tour operator. It seeks a ruling on the classification of the service it provides when it arranges the client’s accommodation in hotels. It further wants to know whether the GST on the hotels charge by it can be claimed as an input tax credit. The AAR ruled that 1. Tour operator means any person engaged in the planning, scheduling, organising, and arranging tours by any mode of transport. Arranging accommodation might be provided as add-ons, but that is not the essence of the tour operating service. The Applicant’s service under focus in the Application is not, therefore, to be treated as that of a tour operator. 2. It is also not accommodation service as classified under SAC 996311. Accommodation service under SAC 996311 is limited to the one provided by the hotels, guest house etc. SI No. 7 of the Rate Notification refers to the accommodation service as classified under SAC 996311, and, therefore, leaves no room for the suppliers like the Applicant who arrange such accommodation in hotels. 3.The support services covered under SI No. 23(iii) of the Rate Notification include services classified under SAC 998552. Services covered under SAC 998552 include arranging reservations for accommodation services for domestic accommodation, accommodation abroad etc. The Applicant’s supply is specifically covered and, therefore, classifiable under SAC 998552. Applicant is eligible to claim the input tax credit as admissible under the law. GST UPDATEZ ON 01-10-2019 SVLDRS an Interesting Situation A lot of notifications issued dt.30.09.2019 bringing to affect the various recommendations of latest 37th GST council meeting. Notfn. No.43/2019 -CT & Notfn. from 14/2019 to 25/2019 -CT (R). GST UPDATEZ ON 05-10-2019 Classification of tour operation service with accommodation Click here to read full document GST UPDATEZ ON 10-10-2019 GST on Preferential Location Service (PLA)

58 R. Srivatsan, IRS Case of M/s Bengal peerless housing development company. WBAAAR order no.9/2019, dt.25-09-2019. The Applicant is developing a residential housing project and supplying construction service to the recipients for possession of dwelling units in the year 2023. The Applicant is enjoying abatement, prescribed for construction service under Sl No. 3(i) read with Paragraph 2 of Notification No 11/2017 – CT (Rate) dated 28/06/2017. In addition to the construction service, the Applicant provides services like preferential location service (PLS), which includes services of floor rise and directional advantage at additional cost. It seeks a ruling on whether the supply of these services constitutes a composite supply with construction service as the principal supply, and if so, whether abatement is applicable on the entire value of the composite supply. Also, the Applicant is providing service of construction of a dwelling unit in a residential complex, bundled with services relating to the preferential location of the unit and right to use car parking space and common areas and facilities. It is a composite supply, construction service being the principal supply. Entire value of the composite supply is, therefore, to be treated, for the purpose of taxation, as supply of construction service, taxable under Sl No. 3(i) read with Paragraph 2 of Notification No 11/2017 – CT (Rate) dated 28/06/2017 (corresponding State Notification No. 1135-FT dated 28/06/2017), as amended from time to time. Aggrieved by above ruling, the department filed an appeal on the following grounds has been passed not only for this purpose but also for “right to use of car parking space”. However, PLS does not include any facility related to car parking space. The WBAAR erred in treatment of PLS as a composite supply with construction service, which resulted in inclusion of the value for PLS with the value for construction services. The AAAR ruled that No abatement prescribed for construction service under SI. No. 3(i) read with paragraph 2 of Notification No. 11/2017 CT(Rate) dated 28/06/2017 is applicable on the value of Preferential Location Service realised separately from the buyers. This decision will also hold for right to use car parking space. Cannot be composite supply as they are not naturally bundled. Click here to read full document GST UPDATEZ ON 11-10-2019 CBIC has issued various CGST Notifications These notifications are to give effect to various recommendations of 37th GSTC meeting. 1.Notification No. 44/2019-Central Tax, dated 09-10-2019 (Due date of GSTR-3B for October, 2019 to March, 2020 notified to be 20th succeeding month) 2.Notification No. 45/2019-Central Tax, dated 09-10-2019 (Due date of GSTR-1 if aggregate turnover is up to Rs. 1.5 Cr – Quarterly Oct-Dec 19 by 31st Jan-20 and Jan-Mar 20 by 30th April 20) 3.Notification No. 46/2019-Central Tax, dated 09-10-2019 (Due date of GSTR-1 if aggregate turnover is exceeding Rs. 1.5 Cr, 11th of succeeding month) 4.Notification No. 47/2019-Central Tax, dated 09-10-2019 (CBIC notifies GST Annual Return GSTR- 9 voluntary if Turnover is less than Rs 2 Cr) The applicant applied for ruling for the limited purpose to know whether the supply of PLS constitutes a composite supply with construction service as the principal supply or not. But the ruling

59 R. Srivatsan, IRS 5.Notification No. 48/2019-Central Tax, dated 09-10-2019 (Extension of due date for GSTR-1, GSTR-7 and GSTR-3B (only) for Jammu and Kashmir) 6.Notification No. 49/2019-Central Tax, dated 09-10-2019 (CBIC notifies Restriction on ITC in case of difference’ GTR 3B is a Return - new restriction new Rule inserted Rule 36(4)) 16 is the appropriate provision suggested by the law maker to place such limit. Hence can it be construed to be a case of delegate exceeding its authority. Any comment’s opinion on this? Click here to read full document GST UPDATEZ ON 21-10-2019 CBIC has issued various CGST Notifications Apparently, the reason behind this is that there are subsidiaries and other companies related to the large conglomerates who make use of the brand names and that too, for free. The government also wants these companies to get their brand names and logos evaluated, and also make their subsidiaries and group companies to pay a fee for using the brand names and logos. TATAs, Mahindra, HSBC, ICICI, Citi Bank etc., Should GST Be Applied or Not? It is opinioned that GST of 18% will probably be liable to be paid by such companies who lend their brands to be used, sometimes even without consideration. These companies, Some big companies, especially in auto sector like Tata and Mahindra, etc., will now be asked to pay GST upon lending their brand names. The reason behind this is that their established names, brands, logos are being used by their partners, subsidiaries and connected companies for free. The authorities in fact will be right in asking them to put a price on the brand names and pay GST on them at the rate of 18% treating it as supply of services. GST UPDATEZ ON 18-10-2019 20% cap on ITC against invoices not uploaded by supplier Notification No. 49/2019 dated 9-10-2019 places the 20% as maximum cap for availing ITC on Invoices not uploaded by the supplier. Section 16 authorizes to prescribe certain conditions or restrictions for taking credit. It does not authorize placing any limits for taking of credit. However, Rule 36(4) places the limit on Invoice based ITC not uploaded by the supplier. Section 43A has been recently added to the Central Goods and Services Tax Act, 2019 (CGST Act). This section deals with the procedure for furnishing returns and availing input tax credit. Section 43A operationalises the new GST return procedures. The detailed guidelines in rules are yet to be notified. It is expected that these rules would be issued in due course so that the exact details would be available to taxpayers well in advance. It should be noted that Section 43A begins with a ‘notwithstanding’ clause. This means that provisions of Section 43A will override Section 16(2) of CGST Act [which states conditions for availing ITC] Therefore, the vires of Rule 36(4) may be under challenge. Further section 43A and not Section

60 R. Srivatsan, IRS conglomerates and banks will most likely have to determine the value of their brands and logos*, which many of them haven’t done. Admittedly, Charging of GST could be an entirely revenue-neutral exercise as credit may be available to the recipient. But if not done, (this) could result in unnecessary litigation. As per the GST law, any transaction between related parties, which includes a company and its subsidiary or an Indian arm and its parent overseas, is liable to pay GST even though there is no consideration. Refer Schedule-I of CGST Act 2017. This will result in the indirect tax department legally asking for companies and banks to put a GST on the brands and logos. nothing to do with it. The applicant scrutinizes whether the payment is done or not and once the payment is done to the Hospital as per their schedule of charges, they carry out the diagnostic tests on the patients. The service thus provided is to the contractee and not to the patients. Ruling: Since the applicant is offering diagnostic services, they would be covered under the term “clinical establishment”. Further, the service provided by the applicant would be covered under ‘Services by way of health care services by a clinical establishment” and hence covered under entry 74 of the Notification No.12/2017- Central Tax (Rate) dated 28.06.2017 and therefore is exempted from GST. Click here to read full document GST UPDATEZ ON 23-10-2019 GST - Relevance of Principles of Natural Justice The High Court of Bombay in the case of McDonald's franchisee M/s. Hardcastle Restaurants Pvt Ltd vs UOI, writ petition no: 3492/2018, has set aside a National Antiprofiteering Authority order against the company holding it guilty of denying tax cut benefits to consumers. A high court bench in a recent ruling observed that the term ‘profiteering’ under the Goods and Services Tax Act and rules is used in a “pejorative” sense and such a finding can severely dent business reputation. The crux of the issue is that National Antiprofiteering Authority (NAA) had found Hardcastle Restaurants guilty of not passing on GST rate cut benefits of over Rs 7.49 crore to consumers. Complaints had been filed against the restaurant, accusing it of keeping the prices of the products same despite a reduction in the GST rate to 5% from 18% effective from November 15, 2017. GST UPDATEZ ON 22-10-2019 Taxability of Diagnostic services provided on Contract to Government by private entity The Authority for Advance Rulings Karnataka has held the following on the above subject in the application filed by M/s Matrix. Imaging Solutions India Private Limited The applicant has been allotted the contract of providing diagnostic services in the Government Hospitals through a tender selection process. They sought to know whether they are exempted from GST. Issue: The transaction of the applicant is examined and it is seen that the applicant has entered into a contract with the contractee (hospital) for providing diagnostic services in their premises for the patients referred to by the hospital. The patients are liable to pay charges on that account to the Hospital and the applicant has

61 R. Srivatsan, IRS Hardcastle Restaurants, operates quick service restaurants under the brand name "McDonald's" in the western and southern regions of the country, appealed against the decision. The company's main contention was that relevant NAA order was pronounced by four members of the authority while only three of them were there for the hearing of the case, and thus the company was not given an opportunity to present its case before the fourth signatory. The high court observed that NAA is guided by the principles of natural justice and a hearing is contemplated not merely for looking at the records. It said the litigant is entitled to be heard by all members who are the ultimate decision makers so that he can try to convince each member of the adjudicating authority. If the scheme itself provides for hearing by all members, not giving hearing itself will cause prejudice, it said. The court also rejected the contention of the respondents that if the role of the fourth member is removed, then the remaining three constitute a quorum and the order can be sustained, and set aside the order. The case would now be heard by the NAA in presence of the fourth member. I think this is an important ruling as it accentuates the fact that principles of natural justice are statutorily ingrained in the anti-profiteering hearings and unbridled powers in any proceedings are not acceptable to courts. Judiciary has consistently held that a chance for proper hearing before adjudication is the sine-qua-non for any proceedings before the authorities. During the 37th GST Council meeting held on September 20, 2019 one of the important decisions taken and refomented was that GST will not apply to intermediaries dealing with certain kinds of international transactions. Due to this change, GST will not apply to intermediaries providing services where, both, the person they supply to and the recipient of such supply are outside India. The decision has been recommended but not notified yet. As per the existing law, all intermediaries including the ones supplying services to any person outside India are subject to GST at the rate of 18%. ‘Intermediaries’ are specifically defined under the GST Act as a broker, an agent or any other person who arranges or facilitates the supply of goods or securities or services between two or more persons. The definition excludes a person who supplies such goods or services or both or securities on his own account. Currently, the GST law applies to such transactions as mentioned above, where either the supplier or the recipient is in India. Therefore, those transactions attract GST levy. To decide the type of tax, whether IGST, CGST or SGST place of supply provisions under IGST Act shall apply. The place of supply in respect of supply of intermediary service is usually the location of the supplier. This situation includes the export of intermediary services as well. However, as per the general rule, the place of supply of export is outside India and therefore exports are zero-rated. Since there is a specific rule, it will prevail over the general rule, and accordingly, in case of export of intermediary services, the place of supply will be within India. Now, when we apply the above provision to intermediary service where both the seller of goods and buyer is outside India, the location of the supplier, i.e. the location of GST UPDATEZ ON 25-10-2019 Supply of Services (export) by Intermediaries Click here to read full document

intermediary becomes the place of supply. This transaction gets covered under GST, despite the fact that the origin and the consumption of goods are occurring outside India. The decision of GST Council, will diametrically change the scenario and these services will now be kept out of the scope of GST. This will definitely reduce compliance obligation. So, the intermediaries will henceforth not be classified as ‘exporters. Of course, consequently, they will not stand to receive the refund benefits of an exporter either IGST or ITC refund. Further on the flip side, in case an outward supply is exempt, it requires the reversal of the input tax credit claimed if any, on all the inward supplies. Once this exemption is notified, the intermediary services will not be subject to GST. On account of this, the intermediary service providers must reverse the ITC if any claimed on their inward supplies to export such intermediary services. Such intermediary service providers may have incurred huge rental expense on commercial premises and may also have ITC on other expenses like legal expenses. The tax credits on these input goods/services must be forgone and eventually added to cost. The decision of GSTC, is likely to have a ripple effect on how the intermediary service providers do business. It can not only affect their cash flows due to the disallowance of the input tax credit, but can also increase the cost of supply of such services and potential disputes. CBIC is yet to notify this exemption. 62 R. Srivatsan, IRS Upcoming GST Practitioners Exam is to be held on 12th December, 2019 from 1100 hrs to 1330 hrs at designated examination centres across India. The National Academy of Customs, Indirect Taxes and Narcotics (NACIN) has been authorized to conduct an examination for confirmation of enrolment of Goods and Services Tax Practitioners (GSTPs) in terms of the sub-rule (3) of Rule 83 of the Central Goods and Services Tax Rules, 2017, vide Notification No. 24/2018-Central Tax dated 28.5.2018. The GSTPs enrolled on the GST Network under sub-rule (2) of Rule 83 and covered by clause (b) of sub-rule (1) of Rule 83, i.e. those meeting the eligibility criteria of having enrolled as Sales tax practitioners or Tax return preparer under the existing law for a period not less than five years, are required to pass the said examination before 31.12.2019 in terms of Notification no. 03/2019-Central Tax dated 29.01.2019. Three such examinations for such GSTPs have already been conducted on 31.10.2018, 17.12.2018 and 14.06.2019. It will be a Computer Based Exam. The registration for the exam can be done by the eligible GSTPs a registration portal, link of which will be provided on NACIN and CBIC websites. The registration portal for the exam scheduled on 12.12.2019 will be activated on 22nd November, 2019 and will remain open up to 5th December, 2019. For the convenience of candidates, a help desk on will be provided on NACIN and CBIC websites. The applicants are required to make online payment of examination fee of Rs. 500/- at the time of registration for this exam. The Pattern and Syllabus of the Examination will be on GST Law & Procedures as usual covering CGST, SGSTs, IGST, UTGST, Compensation Cess ACTs and Rules along with notification and Circulars issued from time to time. Time allowed: 2 hours and 30 minutes Number of Multiple-Choice Questions: 100 Language of Questions: English and Hindi Maximum marks: 200 Qualifying marks: 100 No negative marking. Source: Press release dt. 24-10-2019, by NACIN available in cbic official website. GST UPDATEZ ON 25-10-2019 GSTP exam in December 2019

One of the Private sector banks and a stake holder in GSTN, ICICI Bank exited the GST Network, the not to profit non-Government company facilitating collection of the indirect tax, by selling its entire 10 per cent stake to as many as 13 state governments. The Stake transfer to various State Governments is scheduled to be completed by the end of March 2020. The bank will transfer 0.14 per cent stake to the Assam government and 0.81 per cent stake to the Telangana government. Besides, it will transfer Goa, Kerala, Manipur, Tripura, West Bengal, Delhi, Jharkhand, Uttar Pradesh, Chhattisgarh, Madhya Pradesh and Arunachal Pradesh governments 0.82 per cent stake each. ICICI Bank has exited the company following the government of India's decision to make GST Network into a public sector entity last year. 63 R. Srivatsan, IRS The applicant has submitted that ‘Children’ are neither “goods” nor is there any “service” provided by them to the adoptive parents and therefore the essential element of supply namely “in the course or furtherance of business” is missing from the chain of activities, because their activities neither answer the definition of ‘businesses under section 2(17) of the CGST Act nor do the fees received from the adoptive parents to be a ‘consideration’ under the Section 2(31) of the CGST Act. The applicant is a Specialized Adoption Agency as defined under the relevant laws and they have established a shelter, namely, “Vishwa Balak Kendra”, in their own building and provide shelter, food, clothing, healthcare, foster care and basic education to abandoned, orphaned or homeless children below 6 years of age till the time of adoption. The activities which are in the nature of “Charitable Activities” also consists of the advancement of educational programmes or skill development relating to abandoned, orphaned or homeless children. Such activities are clearly covered under Sr. No. 1 of Notification No.12/2017- C.T. (Rate) dated 28.06.2017 as amended from time to time and the applicant is an entity registered under Section 12AA of the Income Tax Act, such activities carried out by the applicant is exempted by the said notification. The receipt of the Adoption Fees paid under Regulation 46 of the Adoption Regulations, 2017 by the Prospective Adoptive Parents to the Trust is exempted from the levy of Goods and Services Tax under Notification No.12/2017- Central Tax (Rate) dated 28.06.2017 as amended”. Logical and Lawgical…. GST UPDATEZ ON 06-11-2019 Constitution of GST Appellate Tribunal held unconstitutional GST UPDATEZ ON 28-10-2019 GST UPDATEZ ON 1-11-2019 GST not applicable on Adoption Fees received from Adoptive Parents by Trust under Adoption Law. The Authority of Advance Ruling in Maharashtra vide Application Reference No: GST-ARA No:15/2019, dated:13-05-2019, has ruled that, GST is exempted on Adoption Fees received from Adoptive parents by Trust under Adoption Law. The AAR was hearing a question, Whether the activities conducted by The Children of the World (India) Trust are the “Charitable Activities” exempted under the Notification No.12/2017- Central Tax (Rate) dated 28.06.2017 as amended and consequently, the receipt of the Adoption Fees paid under Click here to read full document

64 R. Srivatsan, IRS The Hon’ble Madras High Court in the case of Revenue Bar Association versus Union of India, The Goods and Services Tax Council, The State of Tamil Nadu, has struck down Section 109(3) and 109(9) of the CGST Act, 2017, which prescribes that GSTAT shall consists of one Judicial Member, one Technical Member (Centre) and one Technical Member (State) as unconstitutional. The composition of the Appellate Tribunal under Section 109(3) and 109(9) of the CGST Act, 2017 prescribes that the tribunal will consists of one Judicial Member, one Technical Member (Centre) and one Technical Member (State). Thus, there are two Technical Members as against one Judicial Member. The two Technical Members therefore can overrule the Judicial Member who will be in minority. Any tribunal where the Judicial Member is in the minority in a Bench, is violative of Articles 14 and 50 of the Constitution of India. It is the plea that for independence, impartiality and to ensure public confidence in the justice delivery system, it is essentially incumbent that the administrative members should not be in majority in a Bench. It was contended that the Administrative Members would only be the mouth piece of the Government and this will not instil confidence in the minds of the litigant. It is therefore made known that any tribunal in which the Government is always the party against whom the relief is sought for, the number of administrative members cannot be more than the judicial member in the Bench. Simply put, bureaucrats cannot overrule a Judicial Member, who is or has been a Judge. It is stated that the proceedings in the tribunal are judicial proceedings and the administrative members cannot overrule a Judge. The expert members who are not well trained in law, cannot be permitted to overrule the judicial member on these aspects. The Bench, comprising Justice S Manikumar and Justice Subramanium Prasad, observed that there should be primacy for judicial members and technical members cannot exceed the number of judicial members. The petitioners also challenged Section 110 of the Act, which details the qualification, appointment, conditions of service of the president and members of the tribunal. The contention was that the section did not give an option to the advocates to be eligible for the post of judicial member. In the courts and tribunals, advocates are necessarily considered for the post of judicial member, with certain experience criteria. This was also struck down. I think, the government, if it is not going for an appeal, may have to bring in an amendment to the CGST Act, especially Section 109 and 110. And This is very much essential to put the Dispute resolution Mechanism in GST on rails to repose faith on natural justice and Judiciary! GST UPDATEZ ON 02-11-2019 Resale of Food Items and Sale of Bakery Products not Restaurant Services: AAR – Kerala The Kerala Authority of Advance Rulings in an application filed by M/s Square One Homemade Treats while prescribing the rates applicable on different items on bakery products held that resale of food and bakery products are not restaurant services. The applicant is engaged in the business of reselling pre-packed food products like cakes, baked items like cookies, brownies, ready to eat homemade packed food, ready to eat snacks, hot and cold beverages through dispensing machine. In the bakery premises, they have provided a table for customers who like to eat food items procured from the counter. An advance ruling is sought on (1) whether resale of food and bakery products fall under restaurant services and (2) whether the classification of HSN and Tax rates are done by the applicant is correct or not.

65 R. Srivatsan, IRS The Bench of Authority held the following: With respect to the first issue, it was held that resale of food and bakery products does not fall under restaurant services. The Authority differentiate between the services provided by a restaurant and a bakery wherein, in the latter, ready to eat items are sold. With respect to the second issue, the Authority classifies different products under different Schedules. It provides for the classification of Sweets, Chapati, Coconut Chutney Powder, etc. specifically by providing the rate applicable on each of the specified item as mixed supply. disbursement. address concerns related to refunds being held up from filing to sanction till Under this, GSTN and the Government’s Public Financial Management System (PFMS) have joined hands to speed up refunds disbursement and the system is stabilising as the two agencies are closely working in tandem. GST UPDATEZ ON 17-11-2019 Cancellation of Registration in case of Non-compliance The government is set to crack the whip on GST non-filers with plans afoot to cancel registration of repeat offenders. In the back drop of lower-than-expected GST collection in the past few months of the current fiscal, the CBIC has directed its officers to go tough on non-filers of GST returns for ensuring strict compliance. The development has come close on the heels of CBIC expressing serious concern over non-compliance by GST registrants. Actually, the registration of entities that have not filed GSTR-3B returns for six or more than six return periods are liable for punitive action under section 29(2) of CGST Act 2017. The GST law provides for cancellation of registration in case of repeat noncompliance. But when somebody intentionally refrains to discharge his legislative obligation and that too repeatedly and habitually, why not the provision be made for auto cancellation of registration? Click here to read full document GST UPDATEZ ON 16-11-2019 Amid repeated concerns over glitches in filing of GST returns and getting refunds, honourable Finance Minister has invited Tax practitioner associations, MSME sector representatives and Institute of Chartered Accountants of India representatives today 16-11-2019 (Saturday) to hear their concerns and seek to address them. These practitioners are expected to demonstrate in real time the various practical difficulties and system issues encountered during filing of GST forms. The top officers of GST and GST Network too are expected to be present. This innovative exercise, being first of its kind along with the different steps being suggested by the various internal committees of the department, aims to further simplify GST forms and make the filling process more user friendly. Small businesses have been complaining about difficulties in filing returns, which they say consumes a lot of time and requires detailed maintenance of accounts, which many are finding difficult to handle. This involves huge cost further trimming their merger profits. The move comes ahead of the launch of the new tax return forms shortly and after the government announced a Completely automated refund mechanism and single disbursement authority w.e.f. 26-09-2019 to GST UPDATEZ ON 19-11-2019 Probable Challenges Envisaged in New Return System

4. Invoice tracking: There may be cases of missing invoices where the recipient will have a physical invoice, but the same is not available on the GST portal to take the necessary actions. The recipient has to track these missing invoices and report them to the supplier. The recipient has to continuously check whether the supplier has uploaded invoices on the portal. The above process will put additional responsibility on the recipient even though he has paid the tax amount to his supplier. The challenge here is to continuously follow up with the supplier to upload invoices. This may impact the relationship between the supplier and the recipient. Opinion: Being a self-policing mechanism, the cooperation from all sides is essential. This will in fact enable both the supplier and the recipient to ensure the integrity of transaction. 66 R. Srivatsan, IRS 1. Educating the Taxpayers: The taxpayers will take some time to understand the changes in tax laws. During this transition phase, taxpayers will get ample time to comply with the law. However, it is a big challenge for the department to educate a taxpayer about how a new GST return system works. For example, someone has to take the responsibility to explain to the taxpayer about how a real-time upload of invoices works, how a taxpayer has to take actions in ANX-2 to claim ITC, and how a taxpayer has to report missing invoices. Opinion: Trial period has been given to have Real time user experience, usage of which will facilitate the Registered Person to work seamlessly when made mandatory. The taxpayer usually matches their invoices with books of account at the time of filing their GST return. The pain point involved in frequent matching is that the taxpayer has to allocate time from his daily business activities or he has to dedicate personnel to do the same. For example, under new GST return system, if the taxpayer matches invoices at the time of filing his return, he will not have enough time to follow up with the supplier, and this leads to an incorrect or inaccurate claim of ITC. Opinion: But being on real time, this can be done on consolidated basis also, 24x7 at one’s convenience. 2. Invoice upload: Under the new GST return system, there will be a facility provided for taxpayers to upload invoices continuously on a real-time basis in GST ANX-1. If the taxpayers intend to upload invoices continuously, they will need a new mechanism that will capture and upload all the invoices issued and other related documents into the portal. This becomes a challenge to a taxpayer as there is no such concept of real-time invoice upload under the present return system. The taxpayer has to put additional effort to upload the invoices with accurate details continuously. Opinion: Alternatively, they have to make a onetime tweak in their ERP to sync. with the requirements of the Simplified returns scheme. 3. Frequent matching: The frequent matching involves matching the invoices uploaded by the supplier with the books of accounts to claim ITC. As the supplier uploads invoices on a real-time basis, the recipient has to match the invoices continuously. The invoices uploaded by the supplier in his GST ANX-1 will auto-populate to GST ANX-2 of the recipient. 5.Vendor communication: Vendor communication is vital while following up for missing invoices and reconciling differences. This is one of the foremost things which needs to be taken care of by a taxpayer for hassle-free submission of GST returns.

67 R. Srivatsan, IRS 6. Transition to the new GST return system: Taxpayers under the present return system will need ample time to adapt to the new GST return system. The government has already provided the prototype of the new GST return system. But all the specified features are not enabled in prototype returns. The pain point during the transition is that the taxpayer must get used to new features such as the upload of invoices in GST ANX-1, taking action in GST ANX-2 for ITC claims, regular reconciliation of differences, claiming provisional credit for missing invoices, and more. To overcome the above challenges, taxpayers can use the latest technologies available in the market so the adapting process to new GST returns becomes easy. New features such as bulk upload and tracking of invoices, regular reconciliation of books of accounts with GST returns, continuous follow up with vendors, and hassle-free communication to bulk vendors are available. Opinion: These tools available in the market can be used on need basis. Let's wait and watch! Citation: Adfert Technologies Pvt. Ltd. Vs Union of India & Ors, Writ Petition CWP No. 30949 of 2018. In yet another latest case of Alfred Technologies vs UOI, dt. 04-11-2019, the honourable High Court of Punjab and Haryana has held that Unutilized credit arising on account of duty/tax paid under erstwhile Acts is vested right which cannot be taken away on procedural or technical grounds. The Petitioners who were registered under Central Excise Act or VAT Act must be filing their returns and it is one of the requirements of Section 140 of CGST Act, 2017 to carry forward unutilized credit. The Respondent authorities (UOI) were having complete record of already registered persons and at present they are free to verify fact and figures, thus in spite of being aware of complete facts and figures, the Respondent cannot deprive Petitioners from their valuable right of credit. Further the court had distinguished and were not in agreement with the cited SC judgment as a precedent by the Revenue of Hon’ble Gujrat High Court in Willowood Chemicals case as revant because the Gujarat High Court itself in subsequent judgments and Delhi High Court in a number of judgments have permitted petitioners (therein) to file TRAN-I Forms even after 27.12.2017. It was also found that the Sub Rule (1A) added/inserted to Rule 117 w.e.f. 10.09.2018 has not been noticed and taken cognizance in the cited judgment by the Revenue, which goes to the roots of findings recorded by the Hon’ble Gujrat High Court. Thus, all the petitions deserve to succeed and are hereby allowed. Rule 117(1A) provides that GST UPDATEZ ON 20-11-2019 SVLDRS 2019 A total of Rs 5,472 crore has been declared under the indirect tax amnesty scheme, Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, a mid-term review of the scheme by the Central Board of Indirect Taxes and Customs (CBIC) has revealed. The department is making all efforts with intensive outreach programme to reach out to such taxpayers under the scheme to maximise declarations by December 31, 2019, when the scheme ends. The scheme is being monitored on the daily basis at the highest level in the department. Senior officials in CBIC are confident that the Scheme is likely to gain momentum in the coming days as the taxpayers would not forego this opportunity and put an end to all legacy disputes. GST UPDATEZ ON 21-11-2019 One more judgement on Tran-1 issue

68 R. Srivatsan, IRS the Commissioner may, on the recommendations of the Council, extend the date for submitting the declaration electronically in FORM GST TRAN-1 by a further period not beyond 31st March, 2019, in respect of registered persons who could not submit the said declaration by the due date on account of technical difficulties on the common portal and in respect of whom the Council has made a recommendation for such extension. Accordingly, directions were issued to Respondents to permit the Petitioners to file or revise where already filed incorrect TRAN-1 either electronically or manually statutory Form(s) TRAN-1 on or before 30th November 2019. The Respondents are at liberty to verify genuineness of claim of Petitioners but nobody shall be denied to carry forward legitimate claim of CENVAT/ITC on the ground of non-filing of TRAN-I by 27.12.2017. But how it is being done, case to case or in person or in rem is the question though Revenue would have preferred an Appeal. GST UPDATEZ ON 21-11-2019 E-Way bill system Alert During this month tax payer will be alerted with a cautionary message while generating the e-Waybills, in case GST - Return 3B for the past 2 successive months of the consignor/consignee GSTIN has not been filed. Non-Filers, who haven’t filed the Returns for the last two successive months i.e. August and September 2019, will see a cautionary message while generating e-way bill after 21-11-2019. GST UPDATEZ ON 26-11-2019 Refreshing the UPDATEZ - Some important changes which came into existence from 1st February 2019- A lookback Click here to read full document In case, you have filed the Return, but still the system shows you have not filed, then you may update the status by clicking on the following link: https://ewaybillgst.gov.in -> Search –> ‘Update Block Status’ However, from next month onwards, such GSTINs who are non -filers will be blocked. Alert please... 1. The upper limit of turnover for opting composition scheme increased from Rs. 1 Cr to Rs. 1.50 Cr. 2. A Composite dealer (in goods) shall be allowed to supply services (other than restaurant services), for a value not exceeding — Higher of 10% of turnover in the preceding financial year, or Rs. 5 lakhs. 3. In case of purchase of goods from unregistered suppliers- Reverse charge mechanism shall be applicable to notified registered persons only. 4. The threshold limit of Turnover for exemption from registration in the States of Assam, Arunachal Pradesh, Himachal Pradesh, Meghalaya, Sikkim, and Uttarakhand – increased to Rs. 20 Lakh from Rs. 10 Lakh. 5. Taxpayers may opt for multiple registrations within a State/U. T in respect of multiple places of business located within the same State/U.T on the same PAN even if same vertical of business. Earlier it was allowed for different vertical of business only.

69 R. Srivatsan, IRS 6. Registration shall remain temporarily suspended while the cancellation of registration is under process so that the taxpayer could get relief of further continued compliance. (i.e. Taxpayers will not be required to file returns for that period of pending order). 7. Mandatory registration is required for only those e-commerce operators who are required to collect tax at source. 8. The following transactions shall not be treated as supply for imposing GST under Schedule III: • Supply of goods from a place in the nontaxable territory to another place in the non-taxable territory without such goods entering into India; • Supply of warehoused goods to any person before clearance for home consumption; and • Supply of goods in case of high sea sales. 9. Registered persons may issue consolidated credit/debit notes to a party in respect of multiple invoices issued in a Financial Year to that party. 10. Commissioner may extend the time limit for return of inputs and capital sent on job work, up to a period of 1 year and 2 years, respectively. 11. Place of supply shall be outside India, where job work or any treatment or process has been done on goods temporarily imported into India and then exported out of India without putting them to any other use in India except the uses which were necessary for the purpose of such job work or treatment or process. 12. Recovery of taxes, interest, fine, penalty etc. can be made from distinct persons, even if such distinct persons are present in different State/Union territories. If RBI would permit, 13. Supply of services outside India shall be regarded as exports, even if payment is received in Indian Rupees. 14. Input tax credit will be available in respect of the following: GST UPDATEZ ON 27-11-2019 Tax revenues for centre upto October 2019 • Motor vehicles for transportation of persons having seating capacity of more than thirteen (including driver), vessels and aircraft; • Services of general insurance, repair and maintenance in respect of motor vehicles, vessels and aircraft on which credit is available; and • Goods or services which are obligatory for an employer to provide to its employees, under any law. All these changes have come to force long back i.e. 1st February 2019. This is just to refresh and recollect the amendments. The Central's GST (GST) collection so far, this fiscal 2019-20 stood at ₹ 3.26 lakh crore, which is around half the government's target for 2019-2O. The Budget Estimates for Central's Goods and Services Tax (GST) for 2019-20 (Target) has been fixed at ₹ 6,63,343 crore. The actual net GST collection for the Centre till October 2019 in current fiscal year is ₹3,26,490 crore The balance of ₹ 3.37 lakh crore is to be collected in the remaining 5 months. On direct taxes, for 2019-20, the budget estimate is ₹ 13,35,000 crore. Between AprilOctober, 2019 the net collection of direct taxes is ₹.5,18,084 crore. The balance to be collected is 8.17 lakh crore. Generally, the expected central taxes revenue for 2019-20 will be re-assessed and presented as revised estimate in the general budget, 2020-21.

As per Jammu and Kashmir Reorganisation Act, 2019, the State of J & K has been divided between Union Territories, namely, UT of J & K and UT of Ladakh. The appointed date for the same was 1st October 2019. Now, in order to give effect to the changes brought by Jammu and Kashmir Reorganisation Act, 2019, the CBIC has issued Notification No. 62/2019-Central Tax dated 26th November 2019 which seeks to notify the transition plan with respect to J & K reorganization w.e.f. 31.10.2019. As per Jammu and Kashmir Reorganisation Act, 2019, the State of J & K has been divided between Union Territories, namely, UT of J & K and UT of Ladakh. The appointed date for the same was 1st October 2019. Now, in order to give effect to the changes brought by Jammu and Kashmir Reorganisation Act, 2019, the CBIC has issued Notification No. 62/2019-Central Tax dated 26th November 2019 which seeks to notify the transition plan with respect to J & K reorganization w.e.f. 31.10.2019. The Notification prescribes a special procedure for those persons whose principal place of business or place of business lies in the erstwhile State of Jammu and Kashmir till the 30th day of October, 2019 and lies in the Union territory of Jammu and Kashmir or in the Union territory of Ladakh from the 31st day of October, 2019 onwards. This special procedure is to be followed till 31st December 2019. The significant takeaways of the Notification are as follows: 70 R. Srivatsan, IRS Tax Period: For the month of October 2019 and November 2019, the tax period would be as follows: October 2019 1st October 2019 to 30th October 2019 November 2019 31st October 2019 to 30th November 2019 Appropriate Applicable tax to be paid in return u/s 39: Irrespective of the particulars of tax charged in the invoices, or in other like documents, raised from 31st October, 2019 till the transition date, pay the appropriate applicable tax in the return under section 39 of the said Act Option to transfer Input Tax Credit to New GSTIN: The registered person has an option to transfer the input tax credit (ITC) from the registered Goods and Services Tax Identification Number (GSTIN), till the 30th day of October, 2019 in the State of Jammu and Kashmir, to the new GSTIN in the Union territory of Jammu and Kashmir or in the Union territory of Ladakh from the 31st day of October by following a procedure prescribed and claimed through GSTR-3B. Exemption from taking registration under GST: The persons making inter-state supplies between UT of J & K and UT of Ladakh from 31st October 2019 till the transition date (31st December 2019) would not be required to take compulsory registration u/s 24(i) of the CGST Act, 2017. As per the Notification, it looks like that an existing registered person may have to take another registration in UT of J & K and UT of Ladakh. There will be separate state codes for UT of J & K and UT of Ladakh. New GST Registration numbers of customers have to be reported in November 2019, GSTR-1 otherwise it will not be reflected in the GSTR-2A of new GST registration. GST UPDATEZ ON 29-11-2019 Migration Plan from Erstwhile State of J & K to UTs of J & K and Ladakh

An important change has been introduced around the e-way bill generation in terms of Rule 138 E, with effect from December 2, 2019. The blocking and unblocking of the eway bill generation facility has been implemented on the e-way bill portal. E-way bill generation has been barred for taxpayers who have not filed their returns for the previous two consecutive tax periods. As per the new rule, when a taxpayer fails to file his GST returns (GSTR-3B) for two continuous months, he will get blocked from generating an e-way bill. A GSTIN which is blocked cannot be used for generating an eway bill either as a consignor or consignee. For example, if a taxpayer has not filed his GSTR-3B return for September 2019 and October 2019, his e-way bill generation facility would get blocked from 2 December 2019. Only after the blocked GST taxpayer files his pending GSTR-3B for the default period(s), the blocked GSTIN will get unblocked automatically. He can visit the e-way bill portal and choose the option Search Update Block Status Two forms have also been prescribed, GSTEWB 05 & 06 for unblocking by officer manually. Not generating an e-way bill will be considered as non-compliance as per the provisions of the GST law attracting penal provisions. CBIC has issued clarifications Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 vide one more Circular No:1074/07/04/2019 dt:12-12-2019. Six Key takeaways from that circular are: 1.Cess imposed under (07) Seven more legislations have been added apart from existing 26 legislations to be covered under the scheme. 2. Pre-Deposits or any Deposit paid during the proceedings of adjudication, Audit or investigation can be deducted/adjusted when issuing the statement indicating the amount payable by the declarant. 3.There is no question of refund of any excess deposit in any case, including any amount paid under protest. 4.For the purpose of eligibility under the Scheme in some of the categories such as litigation, audit/enquiry/investigation etc., the relevant date is 30.06.2019. Since 30.06.2019 was a public holiday being a Sunday the relevant date shall be considered as 01.07.2019 instead of 30.06.2019, in line with the provisions of Section 10(1) of General Clauses Act 1897. 5.Many times, the audit report contains more than one para. It is, clarified, that in such cases the option is available with the taxpayer to file separate declarations for each para or file a declaration for two or more paras together. 6.Some units were closed long back before the introduction of PAN-based CX registration. Such units want to avail the Scheme but are unable to file the declaration due to mandatory requirement of PAN. 71 R. Srivatsan, IRS In my opinion, this self-policing move will push taxpayers to be more compliant and make sure they file their returns/make their tax payments on time. GST UPDATEZ ON 05-12-2019 Blocking of EWB Similarly, taxpayers shall be required to report their new GST registration numbers to their suppliers so that they can mention the new GST number while filing their GSTR-1. GST UPDATEZ ON 13-12-2019 Clarifications on Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019

72 R. Srivatsan, IRS months, which has been a cause of concern for the Government. Waiting !!!!!! anxiously, though…. GST UPDATEZ ON 14-12-2019 GST Council meet – What to expect? Similarly, taxpayers shall be required to report their new GST registration numbers to their suppliers so that they can mention the new GST number while filing their GSTR-1. GST UPDATEZ ON 16-12-2019 E-invoicing under GST? CBIC have issued five Central Tax notifications on 13.12.2019 i.e. Notification no. 68/2019 –Central Tax to Notification no. 72/2019 –Central Tax. Starting from APRIL 1,2020 a new invoicing system is to be introduced in the Goods and Services Tax (GST) business process. A standardised protocol will be enabled to generate and read electronic invoices. An e-invoice raised by a trader can be read’ by computer systems using dynamic QR code up or down the supply chain. The consumer, too, can integrate the data on their systems. Following Portal (10 URLs) shall be used for the purpose of preparation of these einvoices w.e.f. 1st January 2020 on trial basis. www.einvoice1.gst.gov.in to www.einvoice10.gst.gov.in The GST Council has approved the introduction of e-invoicing in phases for reporting of business-to-business (B2B) invoices to the GST System. This will be introduced on a voluntary basis to begin with. Taxpayers with a turnover of over ₹500 crore can implement it on voluntary (trial) basis from January 1, 2020 while those with a turnover of over ₹100 crore can adopt it (on voluntary trial basis) from February,1 2020. It has been made mandatory for all taxpayers with a turnover of over ₹100 crore from April 1, 2020. The e-invoice schema and template, as approved by the GST Council, are available in the GSTN website. Taking forward, It is expected that E-invoicing should help The GST Council is set to meet on December 18, 2019 in the backdrop of lowerthan-expected GST collection and pending compensation to many states. The Council is likely to deliberate on raising cess rate on some products to meet the growing need of compensation as the compensation requirements have increased significantly and are unlikely to be met from the compensation cess being collected. A detailed presentation on rate rationalisation will also take place and the goods and services tax (GST) rates and slabs may be raised among other issues. As of now, there are five slabs under the GST regime — 0, 5, 12, 18 and 28 per cent. Goods and services under the 28 per cent category also attract cess over and above the rate, which ranges between 1 and 25 per cent. The Council may explore possibility of merger of slabs to bring down the number of slabs to three, sources said. It is speculated that various options including raising rates from 5 per cent to 8 per cent and 12 per cent to 15 per cent are in the pipeline. It is likely to revisit exemption list and explore whether Cess can be levied on some services also which is not there at present. The Central GST collection fell short of the Budget Estimate by nearly 40% during the April-November period of 2019-20. The actual CGST collection during AprilNovember stood at ₹3,28,365 crore, while the Budget Estimate is of ₹5,26,000 crore for these

73 R. Srivatsan, IRS At present lotteries sold within the organising state attract 12% GST, while those of other states authorised to be sold elsewhere are taxed at the highest rate of 28%. The decision to set a 28% tax rate on lotteries across the board was taken with 27 states in favour of the decision and seven voting against it. The voting was necessitated after one state requested for it due to local political reasons, it appears. GST UPDATEZ ON 18-12-2019 1.To avoid errors caused by manual entry of data, 2. End duplication, 3. Facilitate auto population of GST returns 4. Quick availability of ITC 5. Do away with EWB and 6 Keep tabs on unscrupulous elements. GST UPDATEZ ON 18-12-2019 No Extension of Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 after Dec 31, 2019: The Central Board of Indirect Taxes and Customs (CBIC) is unlikely to extend Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 after December 31st 2019. It implies that, this is the last opportunity for all the potential declarants to avail the benefit of the scheme and finalize their pending cases by paying concessional amounts on or before December 31, 2019. Otherwise, it will become a lost opportunity. The said Scheme offers both taxpayers and Department a golden opportunity to settle past cases under Central Excise and Service Tax. Needless to state, it must be realised by all potential declarants that the Scheme shall not be available after 31.12.2019 and this is the last opportunity for them to take its advantage and finalize their pending cases with extremely good tax relief and paying highly concessional amounts. The Goods and Services Tax (GST) Council on Wednesday decided to set a uniform tax rate of 28% for lotteries, by voting. This is the first time the GST Council has decided on a proposal by voting, said two persons familiar with the development.

Authored ByR. Srivatsan, IRS Compiled By- A. Siva Superintendent of Customs TUTICORIN FY 2020

The gross GST revenue collected in the month of December 2019 is ₹ 1,03,184 crore of which CGST is ₹ 19,962crore, SGST is ₹ 26,792crore, IGST is ₹ 48,099crore (including ₹ 21,295crore collected on imports) and Cess is ₹ 8,331crore (including ₹ 847crore collected on imports). The total number of GSTR 3B Returns filed for the month of November 2019 up to 31st December 2019 is 81.21lakh. The GST revenues during the month of December 2019 from domestic transactions have shown a growth of 16% over the revenue during the month of December 2018. If we consider IGST collected from imports, the total revenue during December 2019 has increased by 9% in comparison to the revenue during December, 2018. During this month, the IGST on import of goods has seen a negative growth of (-) 10% but is an improvement over (-) 13% last month and (-) 20% in the month of October. The government has settled ₹ 21,814crore to CGST and ₹ 15,366crore to SGST from IGST as regular settlement to states. The chart shows the comparative revenue collections. R. Srivatsan, IRS GST UPDATEZ ON 01-01-2020 GST Revenue December 2019 Therefore, it is advised to file all pending GSTR-1 (even since Jul 17 upto Nov 19) by or not later than 10.1.20 without late fee to avoid blocking of ewb facility. CBIC vide F.No. CBEC/20/10/08/2019- GST, Dt: 18-09-2020 has issued administrative instruction for recovery of interest on net cash liability applicable from July 1, 2017. One may recollect that the provision of section 50 was amended vide section 100 of the Finance (No. 2) Act, 2019 to provide for charging Interest on the net cash tax liability, which was based on the recommendations of the 35th meeting of the GST Council which came into effect from September 1, 2020. The GST Council, in its 39th meeting, held on 14th March, 2020 recommended interest to be charged on the net cash tax liability w.e.f. 01.07.2017 and accordingly, recommended the amendment of section 50 of the CGST Act retrospectively w.e.f. July 1, 2017. Immediately, post issuance of Notification 63/2020- Central Tax dated the 25 August, 2020, there were apprehensions in the minds of taxpayers that the said notification is issued contrary to the Council’s recommendation to charge interest on net cash liability w.e.f. 01.07.2017. To address this doubt, a press release, dated 26.08.2020 was issued to clarify the position that the retrospective amendment in the GST laws would be carried out in due course through suitable legislation. 74 GST UPDATEZ ON 18-09-2020 Administrative instruction for Recovery of Interest on Net Cash liability retrospectively from July 1, 2017 GST UPDATEZ ON 03-01-2020 Alert for filing returns It has been decided that w.e.f 11.1.2020, eway bill will not be generated - blocked even if GSTR-1 is pending / not filed for two consecutive tax periods.

oNext GST Council meeting on 5th October 2020 (Monday) may take this issue forward. CBDT has authorized the Principal Director General of Income Tax (System) to upload information relating to GST returns in the Annual Information Statement in Form 26AS on a quarterly basis. Thus, GST Returns related information would now be available in Form 26AS on the Income Tax site making comparison between Income Tax filings and GST filings easy for the Income Tax authorities. Modalities are being worked out by CBDT. CBIC vide Notification No. 69/2020- Central Tax dated 30.09.2020 has extended the due date for filing of GSTR-9 and 9C for the year 2018-2019 from September 30, 2020 to October 31, 2020. e-Invoicing has become mandatory from 01-10-2020 for any business entity which has crossed a threshold limit of Rs. 500 Crore in any of the three preceding financial years i.e., (2017-18 onwards) and importantly value of exports has also been included in calculation. The invoices issued from 1st November 2020 in violation of rule 48(4) of the CGST Rules, 2017 i.e., without IRN, (e-Invoice) would not be valid (may lead to availment of ITC issues) and all applicable deterrent provisions of CGST Act and Rules would apply for the said violation. The provisions relating to Dynamic QR code to be made available to the recipient of supply shall be applicable w.e.f. 01.12.2020. Revenue collections have started improving since Covid-19 period was unlocked. Does it indicate an early recovery of economy or calls for a yet another stimulus package? However, now, in order to implement the decision of the Council in its true spirit, and at the same time working within the present legal framework, it has been decided to address the issue through administrative arrangements as a temporary make shift arrangement. Firstly, for the period July 1, 2017 to August 31, 2020 recovery of interest will be restricted only on the net cash tax liability i.e. that portion of the tax that has been paid by debiting the electronic cash Ledger or is payable through cash ledger. Secondly, wherever SCNs have been issued on gross tax payable, the same may be kept in the Call Book till the retrospective amendment in section 50 of the CGST Act is carried out. Great relief, in true intent. 75 R. Srivatsan, IRS Click here to read full document GST UPDATEZ ON 04-10-2020 The gross GST revenue collected in the month of September, 2020 is Rs. 95,480 crores of which CGST is Rs. 17,741 crores, SGST is Rs.23,131 crore, IGST is Rs. 47,484 crores (including Rs. 22,442 crores collected on import of goods) and Comp.Cess is Rs.7,124 crore (including Rs.788 crore collected on import of goods). GST Collections have crossed Rs. 95000 crores for the first time in current financial year. GST compensation option to states, about 20 states have reverted and all these states want to borrow Rs. 97,000 crores without the bligation of paying interest and principal back. GST UPDATEZ ON 04-10-2020 The 42nd GST Council met under the Chairmanship of Union Finance & Corporate Affairs Minister through video conferencing here today.

The GST Council has made the following recommendations: 1.Levy of Compensation Cess to be extended beyond the transition period of five years i.e. beyond June, 2022, for such period as may be required to meet the revenue gap. Further details to be worked out. 2.Centre is releasing compensation of ₹ 20,000 crore to States today towards loss of revenue during 2020-21 and an amount of about ₹ 25,000 crore towards IGST of 2017-18 by next week. 3.Enhancement in features of return filing: In its 39th Meeting held in March 2020; the Council had recommended an incremental approach to incorporate features of the new return system in the present familiar GSTR-1/3B scheme. Various enhancements have since been made available on the GST Common Portal. With a view to further enhance Ease of Doing Business and improve the compliance experience, the Council has approved the future roadmap for return filing under GST. The approved framework aims to simplify return filing and further reduce the taxpayer’s compliance burden in this regard significantly, such that the timely furnishing of details of outward supplies (GSTR-1) by a taxpayer and his suppliers would – (i) allow him to view the ITC available in his electronic credit ledger from all sources i.e. domestic supplies, imports and payments on reverse charge etc. prior to the due date for payment of tax, and (ii) enable the system to auto-populate return (GSTR-3B) through the data filed by the taxpayer and all his suppliers. 76 R. Srivatsan, IRS In other words, the timely filing of GSTR-1 statement alone would be sufficient as the return in FORM GSTR-3B would get auto prepared on the common portal. To this end the Council recommended / decided the following: a. Due date of furnishing quarterly GSTR-1 by quarterly taxpayers to be revised to 13th of the month succeeding the quarter w.e.f. 01.1.2021; b. Roadmap for auto-generation of GSTR3B from GSTR-1s by: i. Auto-population of liability from own GSTR-1 w.e.f. 01.01.2021; and ii. Auto-population of input tax credit from suppliers’ GSTR-1s through the newly developed facility in FORM GSTR-2B for monthly filers w.e.f. 01.01.2021 and for quarterly filers w.e.f. 01.04.2021; c. In order to ensure auto population of ITC and liability in GSTR 3B as detailed above, FORM GSTR 1 would be mandatorily required to be filed before FORM GSTR3B w.e.f. 01.04.2021. d. The present GSTR-1/3B return filing system to be extended till 31.03.2021 and the GST laws to be amended to make the GSTR-1/3B return filing system as the default return filing system. 4.As a further step towards reducing the compliance burden particularly on the small taxpayers having aggregate annual turnover < Rs. 5 cr., the Council’s earlier recommendation of allowing filing of returns on a quarterly basis with monthly payments by such taxpayers to be implemented w.e.f. 01.01.2021. Such quarterly taxpayers would, for the first two months of the quarter, have an option to pay 35% of the net cash tax liability of the last quarter using an auto generated challan. 5.Revised Requirement of declaring HSN for goods and SAC for services in invoices and in FORM GSTR-1w.e.f. 01.04.2021 as under:

GST UPDATEZ ON 16-10-2020 eligible ITC reflected in the GSTR-2A*) shall apply cumulatively for the tax period February, March, April, May, June, July and August, 2020 and that the return in FORM GSTR-3B for the tax period September, 2020 shall be furnished with the cumulative adjustment of the input tax credit for the said months. Now it has been advised that all taxpayers shall ascertain the details of invoices uploaded by their suppliers under section 37(1) of the CGST Act for the periods of February, March, April, May, June, July, and August, 2020, till the due date of furnishing of the statement in FORM GSTR-1 for the month of September, 2020 as reflected in GSTR-2As. Then the taxpayers shall reconcile the ITC availed in their FORM GSTR-3Bs for the period February 2020 to August, 2020 with the details of invoices uploaded by their suppliers of the said months, till the due date of furnishing FORM GSTR-1 for the month of September, 2020. Thereafter, the availability of 110% of the cumulative value of the eligible credit available in respect of invoices or debit notes the details of which have been uploaded by the suppliers under section 37(1) of the CGST Act shall be arrived. The excess ITC availed arising out of reconciliation during this period, if any, shall be required to be reversed in Table 4(B)(2) of FORM GSTR-3B, for the month of September 2020. Failure to reverse such excess availed ITC on account of the cumulative application of sub-rule (4) of rule 36 of the CGST Rules would be treated as availment of ineligible ITC during the month of September, 2020. An illustration has also been given in the circular for ease of understanding. HSN/SAC at 6 digits for supplies of both goods and services for taxpayers with aggregate annual turnover above Rs. 5 crores; HSN/SAC at 4 digits for B2B supplies of both goods and services for taxpayers with aggregate annual turnover upto Rs. 5 crores; Government to have power to notify 8- digit HSN on notified class of supplies by all taxpayers. 6.Amendment to the CGST Rules: Various amendments in the CGST Rules and FORMS have been recommended which includes provision for furnishing of Nil FORM CMP08 through SMS. 7.Refund to be paid/disbursed in a validated bank account linked with the PAN &Aadhaar of the registrant w.e.f. 01.01.2021. 8.To encourage domestic launching of satellites particularly by young start-ups, the satellite launch services supplied by ISRO, Antrix Corporation Ltd. and NSIL would be exempted. 77 R. Srivatsan, IRS CBIC issued clarification on the restrictions for availment of Input Tax Credit (ITC) under Rule 36(4) vide Circular No: 142/12/2020 CT, dt:09-10-2020. Earlier, in view of COVID-19 pandemic notification No. 30/2020-CT, dated April 3, 2020, was issued, which prescribed that the ondition made under rule 36(4) of the CGST Rules provisional tax credit (without invoices on GSTR-2A) can be claimed in the GSTR-3B only to the extent of 10% of GST UPDATEZ ON 10-10-2020 ITC availment - restrictions for February, 2020 to August, 2020 clarified. Education Cess, SHEC and Krishi Kalyan Cess not entitled to adjust against Output GST Tax Liability Click here to read full document

In a landmark judgement in favour of the revenue, the honourable Madras High Court held that Education Cess (EC), Secondary and Higher Education Cess (SHEC), and Krishi Kalyan Cess (KKC) are not entitled to be adjusted against the Output GST Tax Liability. To trace the history of dispute, the issue involved is about the set-off, adjustment or utilization of Education Cess SHE & Krishi Kalyan Cess to be offset against the Output GST liability under the provisions of CGST Act, 2017. 78 R. Srivatsan, IRS Earlier, a Single Judge held the issue in favour of the Assessee that they were entitled to adjust such unutilized CENVAT credit carried forward in its Electronic Ledger, which was so lying unutilized as on 30th June 2017, to be adjusted against the Output GST Liability in terms of Section 140 of the CGST Act, 2017. It has to be noted here that all the three aforesaid types of Cesses were imposed by different Finance Acts. The levy of Education Cess and Secondary and Higher Education Cess was however dropped and deleted by the Finance Act, 2015. The Krishi Kalyan Cess was however abolished only with effect from July 1, 2017 vide Taxation Laws (Amendment) Act, 2017. Now, the two-member division Judge bench in their order in the case of WA No.53 of 2020 Asst. Commissioner of CGST & Central Excise v. Sutherland Global Services Private Limited dt. 16-10-2020 held that the earlier judgement had erred in allowing the claim of the Assessee under Section 140 of the CGST Act on various grounds interalia: 1. The character of the levy in the form of Cess is distinct and stand-alone levies; 2. Their input credit even under the Cenvat Rules which were applicable mutatis mutandis did not permit any such crossInput Tax Credit. GST UPDATEZ ON 23-10-2020 3. Explanation 3 would apply to the entire Section 140 of the Act and since it excluded the Cess of any kind carry forward or adjustment against Output GST liability. Consequently, the court allowed the appeal of the revenue and held that the Assessee are not entitled to carry forward and set off of unutilized Education Cess, Secondary and Higher Education Cess, and Krishi Kalyan Cess against the GST Output Liability with reference to Section 140 of the CGST Act, 2017. This will have a far-reaching impact for the Taxpayers. Supply of Dress, School Bag, Boots etc. to students without consideration to Govt/Govt Aided schools exempted under GST Click here to read full document The Tamil Nadu Authority of Advance Ruling (AAR) ruled that GST is exempted on the supply of Dress, School Bag, Boots etc. to students without consideration to Government and Government Aided schools. The applicant, Tamil Nadu Textbook and Educational Services Corporation is controlled by the Government of Tamil Nadu and therefore they are a government entity. They have been entrusted with the responsibility by the Government for printing and distributing textbooks to students studying in government schools and government-aided schools, besides selling textbooks at a price fixed by the government to self-financing private schools.

They are also entrusted with the responsibility of handling the procurement and distribution of free kits such as school bags, footwear, geometry box, wooden colour pencils, crayons and woollen sweaters to government and government aided schools only based on the instructions from the Education Department, Government of Tamil Nadu. The applicant has sought advance ruling on following issues. First, whether the supply of educational aids to students such as school bags, footwear, geometry box, wooden colour pencils, crayons, woollen sweater to government and government aided schools based on the State Government educational policy for which the consideration is paid to Tamil Nadu Text Book and Educational Services Corporation by the State Government by means of a budgetary allocation constitutes a supply. Second, if the answer to the above is in the affirmative then is Tamil Nadu Text Book and Educational Services Corporation is entitled to avail corresponding input tax Credit on the procurement made? The two-member AAR of Tamil Nadu, ruled that the above activities of the applicant constitute a supply; but exempt with effect from October 13, 2017, vide entry Sl.No.150 in the Notification No. 2/2017-C.T.(Rate) dated 28th June 2017 as amended by Notification No. 35/2017-C.T. (Rate) dated 13th October 2017 and therefore, the applicant is not entitled to claim credit of tax paid on the related purchases of goods and services. GST UPDATEZ ON 07-11-2020 The gross GST revenue collected in the month of October, 2020 is ₹ 1,05,155 crore of which CGST is ₹19,193 crore, SGST is ₹ 25,411 crore, IGST is ₹ 52,540 crore (including ₹ 23375 crore collected on import of goods) and Cess is ₹ 8,011 crore (including ₹932 crore collected on import of goods). The total number of GSTR-3B Returns filed for the month of October 2020 is 80 lakhs. The government has settled ₹ 25,091 crore to CGST and ₹ 19,427 crore to SGST from IGST as regular settlement. The revenues for the month are 10% higher than the GST revenues in the same month last year. During the month, revenues from import of goods was 9% higher and the revenues from domestic transaction (including import of services) are11% higher that the revenues from these sources during the same month last year. The growth in GST revenue as compared to that in months of July, August and September, 2020 of -14%, -8% and 5% respectively clearly shows the trajectory of recovery of the economy & correspondingly, of the revenues. The chart below shows trends in monthly gross GST revenues during the current year. The table below shows the state-wise figures of GST collected during the month of October, 2020 as compared to October, 2019 and for the full year. 79 R. Srivatsan, IRS Service Tax can’t be imposed on Bariatric Surgery as it is a lifesaving procedure and not a cosmetic procedure Click here to read full document GST UPDATEZ ON 01-11-2020 GST revenue collected in the month of October 2020 CESTAT, Delhi, ruled that the service tax cannot be imposed on bariatric surgery as it is a life-saving procedure and not a cosmetic procedure. The appellant, Dr Mohit Bhandari is a part of Bhandari Hospital and Research Centre and claims to be engaged in performing bariatric surgery on patients suffering from morbid

obesity coupled with life-taking diseases like Type-II diabetes and hypertension. Bariatric surgery is a gastrointestinal surgery carried out on the stomach in different manners like, by folding and stitching, by removing fat and cutting down, by insertion of outer bodies or by bonding the stomach. The appellant claimed that bariatric surgery is performed on morbidly obese individuals suffering from hypertension, Type-II diabetes, arthritis, lipid disorder or obstructed sleep apnoea, and therefore, bariatric surgery will not be a cosmetic surgery or plastic surgery and not liable for Service Tax. 80 R. Srivatsan, IRS GST UPDATEZ ON 18-11-2020 E-Way Bill generation facility to be blocked for All Taxpayers who failed to file GSTR-3B from December 2020 CBIC has clarified that, E-Way Bill generation facility to be blocked for all Taxpayers irrespective of their Aggregate Annual Turnover who failed to file GSTR-3B / GST-CMP 08 for 2 or more Tax period from December 1st, 2020 in terms of Rule 138E (a) and (b) of the CGST Rules, 2017. From 1st December, 2020, onwards, the blocking of EWB generation facility would be made applicable to all the taxpayers irrespective of their Aggregate Annual Turnover on the EWB Portal. Thus, on 1st December 2020, the System will check the status of returns filed in Form GSTR-3B or the statements filed in Form GST CMP-08, for the class of taxpayers to whom it applies, and restrict the generation of EWB in case of: Non filing of two or more returns in Form GSTR-3B for the months up to October, 2020; and non-filing of 02 or more statements in Form GST CMP-08 for the quarters up to July to September, 2020. This blocking will take place periodically from 1st December’ 2020 onwards. However, a notice was issued by the department, requiring the appellant to explain why it did not pay service tax on the service provided through surgeries performed to cure obesity, which would be classifiable under cosmetic surgery or plastic surgery as defined in section 65(105) (zizz) of the Finance Act. It was alleged that surgeries were performed with sole motive of weight reduction and had no relation with reconstruction or restoring anatomy or function of body affected due to congenital defects, development abnormalities, body affected due to degenerative diseases, injury or trauma. The two-member bench of CESTAT, headed by the President held that that service tax cannot be imposed on bariatric surgical procedure as it is a life-saving process and never a beauty one. The tribunal said that bariatric surgical procedure is for individuals who have wellbeing points similar to type-2 diabetes, hypertension, sleep apnoea and coronary artery illness, which stem from their extra weight, and is totally different from weightloss procedures similar to liposuction. Hopefully, GST also follows the same path?????? Click here to read full document Therefore, it is important to file all pending GSTR 3B returns/GST CMP-08 statements immediately to avail continuous EWB generation facilities.

3.The option to avail the QRMP Scheme GSTIN wise is available, i.e., some GSTINs for a PAN can opt for the QRMP Scheme and remaining GSTINs may not opt for the Scheme but once it is exercised it would be valid for future tax periods. 4.The registered persons opting for the Scheme would be required to furnish the details of outward supply in Form GSTR-1 on quarterly basis; 5.Invoice furnishing facility (‘IFF’) has been introduced in respect of reporting the invoice for details of supply made to registered persons for the first two months of the quarter. 6.The supplier can upload these invoices on monthly basis. The taxpayer can upload maximum of Rs 50 Lakhs worth invoices in each of the two months of quarter. 7.The IFF facility is optional. 8.The registered persons, whose aggregate turnover for the FY 2019-20 is up to Rs 5 crore and who have furnished the return in Form GSTR-3B for the month of October, 2020 by 30th November, 2020, shall be automatically migrated on the common portal. R. Srivatsan, IRS GST UPDATEZ ON 19-11-2020 Fifteen (15) Important Points about Quarterly Return and Monthly Payment (‘QRMP’) Scheme 9.The registered taxpayer having turnover less than Rs 1.5 crores and filing monthly GSTR 1 would not be automatically migrated to QRMP scheme. 10.The registered person under the QRMP Scheme would be required to pay the tax due on monthly basis in each of the first two months of the quarter by depositing the due amount in Form GST PMT-06. 11.The amount of tax shall be deposited by the 25th day of next month. 12.Two types of Payment schemes are made available for first two months of the Quarter – Fixed Sum Method and Self-Assessment Method. 13.The registered persons opting for the QRPM Scheme would be required to furnish Form GSTR-3B, for each quarter, on or before 22nd or 24th day of the month succeeding such quarter for Class A States and Class B States respectively. 14.The facility for opting out of the Scheme for a quarter will be available from first day of second month of preceding quarter to the last day of the first month of the quarter. 15.Registered person, whose aggregate turnover crosses 5 crore rupees during a quarter in current financial year, shall opt for furnishing of return on a monthly basis from the succeeding quarter. 81 GST UPDATEZ ON 20-11-2020 Invoice Furnishing Facility (IFF) 1.QRMP Scheme will be effective from January 01, 2021 and the GSTN system would itself compute the aggregate annual turnover of the taxpayer. 2.The registered person whose aggregate turnover in the preceding financial year is up to Rs 5 crore & who is required to furnish Form GSTR-3B is eligible; Under QRMP scheme, for each of the first and second months of a quarter, the taxpayer shall have facility (Invoice Furnishing Facility- IFF) to furnish the details of such outward supplies, between the 1st day of the succeeding month till the 13th day of the succeeding month.

The said details of outward supplies shall, however, not exceed the value of fifty lakh rupees in each month. The facility for furnishing IFF for previous month would not be available after 13th of the month. As a facilitation measure, continuous upload of invoices would also be provided for the registered persons wherein they can save the invoices in IFF from the 1st day of the month till 13th day of the succeeding month. The facility of furnishing details of invoices in IFF has been provided so as to allow details of such supplies to be duly reflected in the FORM GSTR-2A and FORM GSTR-2B of the concerned recipient. For example, a registered person who has availed the Scheme wishes to declare two invoices out of the total ten invoices issued in the first month of quarter since the recipient of supplies covered by those two invoices desires to avail ITC in that month itself. Details of these two invoices may be furnished using IFF. The details of the remaining 8 invoices shall be furnished in FORM GSTR-1 of the said quarter. The two invoices furnished in IFF shall be reflected in FORM GSTR-2B of the concerned recipient of the first month of the quarter and remaining eight invoices furnished in FORM GSTR-1 shall be reflected in FORM GSTR-2B of the concerned recipient of the last month of the quarter. The said facility would however be available, say for the month of July, from 1st August till 13th August. Similarly, for the month of August, the said facility will be available from 1st September till 13th September. Invoice Furnishing Facility (IFF) is Optional and not Mandatory. Once Invoice reported in IFF need not be reported again in GSTR 1. 82 R. Srivatsan, IRS GSTR-2B is a new static month-wise autodrafted statement for regular taxpayers introduced on the GST portal. The statement was launched from the tax period August 2020 and can be generated from 12th September 2020 onwards. It is similar to GSTR-2A but remains constant for a tax period. GST UPDATEZ ON 21-11-2020 GSTR 2A is dynamic, as it changes from day to day, as and when the supplier uploads the documents whereas GSTR 2B remains static, as the GSTR-2B for one month cannot change based on future actions of the supplier. GSTR-2B is available to all the regular taxpayers. Every recipient can generate it on the basis of the GSTR-1, GSTR-5 and GSTR-6 furnished by their suppliers. The statement will clearly show documentwise details of ITC eligibility. GSTR 2B ensures that input tax credit is not availed twice against a particular document. It contains information on import of goods from the ICEGATE system including inward supplies of goods Received from Special Economic Zone Units /Developers unlike GSTR 2A. The statement indicates the respective tables or column of GSTR-3B under which the input tax credit of an invoice/debit note must be taken. GSTR-2B has been made available from August 2020 onwards. It can be generated by recipient taxpayers once a month on the 12th of the month next to the tax period. For instance, GSTR 2B for October 2020 can be accessed on 12th November 2020.An email/SMS will be sent to the taxpayer informing about the generation of GSTR 2B. GSTR-2B: Auto-drafted ITC Statement

The Taxpayer can assess their GSTR-2B through: Login to GST Portal >Return Dashboard >Select Return period >GSTR2B. 83 R. Srivatsan, IRS maximum period of 15 days. If the same is not filed within 15 days, the saved draft will be purged. To view the saved application, navigate to Services > User Services > My Saved Applications option. Using Payment Reference Number: If payment has been made and payment reference number (PRN) has been generated, but application in Form GST DRC-03 has not been filed, then in such cases, application available in ‘My Saved Applications’ need to be selected and using PRN already generated, it may be filed. However, if a period of fifteen days has elapsed, then, details in Form need to be filled up again. PRN generated already can be used for filing the application. Filing Form GST DRC 03: Taxpayers are required to file Form GST DRC-03 using DSC or EVC, as the case may be, after making payment. The status will change to “Pending for approval by Tax officer”. Acknowledgment by Tax Official: Upon filing of Form GST DRC-03, the tax officer will issue an Acknowledgement in Form GST DRC-04(Acknowledgement of Acceptance of voluntary payment). There is no bar on making another payment on voluntary basis by a taxpayer, pending issuance of acknowledgement by the tax officer. GST UPDATEZ ON 23-11-2020 Some points for making voluntary payment through drc-03 on common portal This not a new facility but an already existing one. Making Voluntary Payment on GST Portal: A facility is given to taxpayers to make payment on voluntary basis, through Form GST DRC-03. Login into GST Portal and navigate to Services > User Services > My Applications and Select the Intimation of Voluntary Payment – DRC – 03, from the Application Type drop-down list. When to make Payment Voluntary Payment: Payment can be voluntarily made by taxpayer for a self-ascertained liability or in response to the show cause notice (SCN) raised by the tax authorities, u/s 73 or 74 of the CGST Act, 2017, within 30 days of issuance of SCN or even before issuance of the SCN. Partial Payment not allowed: GST Portal does not allow for making partial payments of the amount stated in the SCN. Cause of Payment: Payments through Form GST DRC-03 can be made for any causes like Audit, Investigation, Voluntary Payment, SCN, Annual Return, Reconciliation Statement or Others. Saving Draft DRC 03 Application: Draft of Application for intimation of voluntary payment can be saved for a GST UPDATEZ ON 01-12-2020 GST Revenue collected in the month of November 2020 The gross GST revenue collected in the month of November, 2020 is ₹ 1,04,963 crore of which CGST is ₹ 19,189 crore, SGST is ₹ 25,540 crore, IGST is ₹ 51,992 crore (including ₹ 22,078 crore collected on import of goods) and Cess is ₹ 8,242crore (including ₹ 809 crore collected on import of goods). The total number of GSTR-3B Returns filed for the month of November up to 30 November 2020 is 82 lakhs. The government has settled ₹ 22,293 crore to CGST and ₹ 16,286 crore to SGST from IGST as regular settlement.

84 R. Srivatsan, IRS Further audit by itself is not a liability or due. In fact, the defence was that in past when such decision stopped the authority to conduct audit, the demand was initiated by way of enquiry and investigation keeping the interest of revenue. So now, the consequence for an assessee is where the audit for the past period is pending, the records, documents, reconciliation, etc. to be kept ready by the them. A review either by a professional or self-check all the compliance under the service tax and voluntary discharging of the service tax liability (if any) along with applicable interest will save penalty. For the Tax officer, this is one more important observation/ opinion/ precedence expressed by the High Court, dispelling the apprehensions on conduct of audit for Service tax matters for the past periods. The total revenue earned by Central Government and the State Governments after regular settlement in the month of November 2020 is ₹ 41,482 crore for CGST and ₹ 41,826 crore for the SGST. In line with the recent trend of recovery in the GST revenues, the revenues for the month of November 2020 are 1.4% higher than the GST revenues in the same month last year. During the month, revenues from import of goods was 4.9% higher and the revenues from domestic transaction (including import of services) are 0.5% higher that the revenues from these sources during the same month last year. GST UPDATEZ ON 04-12-2020 Sale of Lottery – Supply of Goods In a recent judgement on 03-12-2020 in the case of Skill Lotto Solutions Vs Union of India vide Writ Petition (Civil) No. 961 of 2018, the Hon’ble Apex Court has upheld the levy of GST on lottery tickets and probably this is the first judgment from the Hon’ble Supreme Court on the vires of levy of GST. The main argument before the Hon’ble SC was that the definition of “goods” under Section 2 (52) of the CGST Act, 2017 which specifically included “actionable claims” is contrary to the definition of “goods” under Article 366 (12) of the Constitution. This argument was negated by the Hon’ble Supreme Court with the view that the constitutional definition is inclusive and does not exclude actionable claim from it. Though the definition of “goods” under various sales tax laws excluded “actionable claims”, it is held that nothing prevents the Parliament from including it in the definition of goods, GST UPDATEZ ON 03-12-2020 Can department conduct service tax audit now? The honourable High Court of Delhi in case of Vianaar Homes Pvt Ltd Vs Assistant Commissioner 2020-1847-HC-DEL-ST has held that an Audit initiation of Rule 5A of the Service Tax Rules, 1994, read with Section 174(2)(e) of the Central Goods and Services Tax Act, 2017 for conducting audit/verification of documents and records at the business premises is very much valid. It all started with the contention stating that provision of finance act has been protected by the saving clause and thus continuity has been saved, but not the rules made there nder, where the provision relating to audit is mentioned. Click here to read full document

85 R. Srivatsan, IRS of release of bank accounts including FDR. the pretext that only show cause notice under Section 74 of the Central Goods and Services Tax Act, 2017 has been issued, the attachment under Section 83 of CGST Act cannot be made. Therefore, the impugned orders of provisional attachment are not sustainable and it is liable to be quashed. for the purposes of levy of goods and services tax, under Article 246 A of the Constitution. The argument that levying GST only on three actionable claims, viz., lottery, betting and gambling and keeping all other forms of actionable claims outside the ambit of the levy is discriminative is also negated by the Hon’ble SC on the ground that the policy decision of the Government in taxing certain actionable claims cannot be faulted. Further, the above three actionable claims are “res extra commercium” (i.e., certain things may not be the object of private rights, and are therefore insusceptible to being traded) and hence no discrimination can be alleged. The plea for levy of GST, after excluding the prize money component and levying GST only on the value of collection towards prize money has also been negated by relying on the scheme of valuation prescribed under Section 15 of the CGST Act, 2017. The practice of such exclusion in several other countries need not necessarily to be followed in India, ruled the Hon’ble SC. Thus, it is a clear/important and landmark win for the Government especially with reference to the policy of imposing GST on “actionable Claims” like Betting, Gambling and Lottery. The single judge bench found that order was issued by the proper officer to the petitioners, informing through GST DRC01A (Intimation of Tax Ascertained Payable) under Section 74(5) of the Act, requiring the petitioners to deposit the ascertained amount along with interest, and penalty or to submit objection. Another opportunity was also given by fresh notice so that petitioners may file an objection against the above ascertainment which evinced no response. The court held that the impugned Provisional attachment order has been issued by the competent authority under Section 83 of the Act for the purpose of protecting interest of the Government revenue. It was further observed that the petitioners have an opportunity to file an objection under sub-Rule 5 of Rule 159 of the Rules against the order of Provisional attachment under Section 83(1) of the Act and therefore is not bad in law. A very important opinion of the court on the deterrent provisions enshrined in the CGST Act solely with an interest to protect the interest of Revenue from the prospective defaulters. Click here to read full document GST UPDATEZ ON 10-12-2020 Provisional attachment of Bank Accounts and FDR is done for protecting interest of Government revenue In a very important decision favouring the department, Honourable Allahabad High Court upheld in the case of M/s R.J. Exim Ltd., vs Pr. Commissioner of CGST Meerut the provisional attachment of Bank Accounts as it was issued for protecting interest of Government revenue in exercise of powers conferred under Section 83 of the Central Goods and Services Tax Act, 2017. The petitioner’s M/s R.J. Exim Ltd, prayed fors Click here to read full document GST UPDATEZ ON 11-12-2020 CBIC enables GSTR-9 of FY 2019- 20 on GST Portal

CBIC has enabled the GST Annual Return (GSTR-9) for the Financial Year 2019-20 on the GST Portal. The Facility to file an annual return in Form GSTR-9 for FY 2019-20 is therefore now available for the taxpayers. The Form is enabled for taxpayers whose table 8A computation has been completed. The process of computation of table 8A of the said return means auto-population from returns is in progress for certain category of taxpayers which is likely to be completed soon. Table 8A in the annual Form GSTR-9 return contains details of the total input tax credit (ITC) available during the financial year from inward supplies. Inward supplies here include all purchases made including services received from SEZs, but excludes imports and inward supplies liable to reverse charge. It is therefore important to ensure that all applicable returns of the said year have been filed before attempting to file the said annual return, else it may not be possible to file the annual return by due date of 31st December 2020. 86 R. Srivatsan, IRS The auto-population of e-invoice details pertaining to the period December, 2020 into GSTR-1 (in incremental manner on T+2-day basis) will also start in December, 2020. Notwithstanding auto-population, it has been advised that the taxpayers who had reported e-invoices should not wait for auto-populated data and they are advised to proceed with preparation and filing of GSTR-1 for the months of November 2020 (before the due date) and for October 2020 (in case not yet filed, as on date). In my opinion, after viewing the autopopulated data, the taxpayer shall verify the propriety and accuracy of the amounts and other data in each field, especially from the perspective of GSTR-1, and file the same, in the light of relevant legal provisions. Autopopulation should be seen only as an extended facility. GST UPDATEZ ON 12-12-2020 Auto-population of E-Invoice details into GSTR-1 GST UPDATEZ ON 13-12-2020 New Enhancements in E-Way Bill System The Goods and Service Tax Network (GSTN) notified the update on autopopulation of e-invoice details into GSTR-1 on the basis of Invoice Reference Number (IRN) on a near to real-time basis. The details of e-invoices pertaining to periods of October and November 2020 would be processed and made available in an incremental manner from 13th December 2020 onwards. 1. The new enhancement emphasizes that recipient GSTIN should be registered and active, on the date of preparation of the EWB document by the supplier. 2. Document Numbers are case sensitive for e-Waybill generation. 3. In the Bulk Upload, if the Pin-to-Pin distance is not known, distance may be passed as zero. The system will automatically populate the distance, if available. However, if the distance is not available then it is returned. For such cases, the user has to provide the distance.

87 R. Srivatsan, IRS shall be extended up to the 30th day of November, 2020.” Now vide Notification this time limit for all GST compliances has been extended upto 31-03-2021. The notification shall be deemed to have come into force with effect from 1st December, 2020. 4. If Pin code does not exist in the EWB system then at-least the first 3 digits of the pin code must match with the State selected. 5. In Bulk upload, 96 can also be passed as state code for Other Country. 6. In case EWB is generated from the eInvoice System, then IRN is displayed in the e-Waybill print. All these enhancements have taken effect from 8th December 2020. GST UPDATEZ ON 14-12-2020 Due Date of GST compliance extended till 31-03-2021 GST UPDATEZ ON 21-12-2020 New Functionality in GSTN - Communication between GST Taxpayers CBIC extended the due date till 31 March, 2021 for all of GST compliance during the period from the 20 March, 2020 to the 29 November, 2020 vide Notification No.91/2020 –Central Tax, dated:14-12- 2020. A new functionality has been introduced in GSTN for communication between GST registered Taxpayers from 14-12-2020. To use this facility, the taxpayer needs to first login on the GTSN portal by using its credentials. The notification seeks to amend the notification No. 65/2020 Central Tax, dated the 1st September, 2020, which provided where, any time limit for completion or compliance of any action, by any authority, has been specified in, or prescribed or notified under section 171 of the said Act, which falls during the period from the 20th day of March, 2020 to the 29th day of November, 2020, and where completion or compliance of such action has not been made within such time, then, the time-limit for completion or compliance of such action, Click here to read full document After login on the GSTN portal one can access this feature through Dashboard > Services > User Services > Communication between Taxpayers. It looks like an email box which has options like inbox, outbox, compose etc. A taxpayer can communicate with the supplier for various issues like file missing invoice, amend uploaded invoice, remove invoice wrongly uploaded or payment related issues. In order to communicate with the suppliers, a taxpayer need to click on “Compose” tab. In the same manner, a taxpayer can communicate with the recipient for issues like payment related issues or any other issue.

88 R. Srivatsan, IRS This Rule is not applicable in following cases: 1.Where the registered person deposited more than Rs 1 lakh rupees as income tax under the Income-tax Act, 1961 in each of the last two financial years. 2.Registered person has received a refund more than Rs 1 lakh rupees in the preceding financial year on account of export under LUT or inverted tax structure. 3.Cumulatively upto the said month in the current financial year registered person has discharged his output tax liability in cash which is in excess of 1% of the total output tax liability. To illustrate, let us say, in the FY 2020- 2021, upto November 2020, cumulatively the output tax liability comes to Rs 10 lakh and taxpayer deposited Rs 10,000/- (1% of total output liability) in cash upto Nov 2020 then this rule is not applicable. If the provisions of the new rule 86(B) attracts, it is very important that the Taxpayer has to track each month that cumulative discharge of output tax liability in cash in current FY is more than 1% up to filing of return. 4.This rule is also not applicable to Government Departments, PSU & Local Authorities. Apart from notification in the inbox of the recipient, an email and SMS will also be sent on the registered email address and registered mobile no. of the recipient. Notification sent to supplier and/or recipient can be viewed under outbox tab and the notification received from supplier and/or recipient can be replied in the same way as of an email. This is definitely a very useful facility for communication within the GTN ecosystem for the Registered Taxpayers especially in reconciliation of invoices. GST UPDATEZ ON 23-12-2020 New Conditions restricting the use of Input Tax Credit for discharging the output tax liability A new Rule 86(B) has been inserted under CGST Rules 2017 bringing in certain restrictions on use of amount available in electronic credit ledger. The provisions of this rule take effect from 1st January 2021. This rule is applicable only to those registered persons whose value of taxable supply other than exempt supplies and exports, in a month exceeds fifty lakh rupees (Rs. 50 Lakhs). This limit of Rs 50 lakhs limit to be checked for each month separately. As per said Rule, taxpayer cannot use Input Tax Credit in excess of 99% of output tax liability. This means in spite of having a balance in the ITC ledger, he has to compulsorily pay 1% of his liability through CASH from his electronic Cash Ledger. Click here to read full document GST UPDATEZ ON 24-12-2020 Changes in GST Rules Government has issued Notification No:94/2020-CT, dated:22-12-2020 bringing in lot of changes in the CGST Rules 2017. Some takes immediate effect i.e. from 22- 12-2020 while some takes effect from 01- 01-2021. Here it goes………...

89 R. Srivatsan, IRS 9. The limitation to avail unmatched credit of ITC under Rule 36(4) on ITC has been further restricted to 5%. This will come into force w.e.f. from 1st Jan 2021. 10. An E-way bill shall be valid for a period of one day for every 200 Kms distance within the country and for every 200 Kms additional one day thereof. This was 100 Kms. Earlier. This change comes into effect from 1-1-2021. 11. A new form GST REG-31 Intimation for suspension and notice for cancellation of registration has been provided. 1. Under Rule 9 of the CGST Rules 2017, the time limit in order to grant approval of Registration by the proper officer has been increased from three working days to SEVEN working days. 2. After registration process, Biometricbased Aadhaar authentication and taking photograph can be made in terms of Rule 8 (4A) 3. The time limit for the notice in FORM GST REG-03 seeking additional information may be issued not later than thirty days from the date of submission of the application. 4. If the proper officer fails to take any action with reference to the application for Registration within Seven / Thirty days as the case may be the application for grant of registration shall be deemed to have been approved. 5.Registration Certificate can be cancelled under Rule 21 in addition to the existing violations, for reasons of (a)availment of input tax credit in violation of the provisions of section 16 of the Act (b)violates the provision of rule 86B (c)furnishes the details of outward supplies in FORM GSTR-1 for one or more tax periods which is in excess of the outward supplies declared by him in GSTR-3B 6. A registered person, whose registration has been suspended shall not be granted any refund under section 54, during the period of suspension of his registration. 7. The words opportunity of being heard has been omitted from clause (2) of Rule 21A, which means now the taxpayer’s registration can be cancelled without the opportunity of being heard, where the proper officer (PO) has reasons to believe that the registration of the person is liable to be cancelled. 8. A registered person shall not be allowed to furnish the details of outward supplies of goods or services or both in FORM GSTR-1 or Invoice Furnishing facility, if he has not furnished FORM GSTR-3B for preceding two months / Tax period; Click here to read full document GST UPDATEZ ON 29-12-2020 New Form GST REG-31 notified The CBIC vide Notification No. 94/2020- Central Tax dated December 22, 2020 has issued Central Goods and Services Tax Rules (Fourteenth Amendment), 2020, inter alia, notifying Form GST REG-31 for ‘Intimation for suspension and notice for cancellation of registration’ under Rule 21A of the Central Goods and Services Tax Rules, 2017. New Form GST REG-31 is an Intimation for suspension and notice for cancellation of registration on account of discrepancies/anomalies which prima facie indicate contravention of the provisions of the Central Goods and Services Tax Act, 2017 and the rules made thereunder, such that if not explained satisfactorily, shall make your registration liable to be cancelled.

90 R. Srivatsan, IRS Considering that the observed discrepancies/anomalies are grave and pose a serious threat to interest of revenue, as an immediate measure, the taxpayer’s registration will stand suspended, with effect from the date of this communication, in terms of sub-rule (2A) of rule 21 A. The Noticee are expected to submit a reply to the jurisdictional tax officer within seven (07) working days from the receipt of such notice, providing explanation to the observed discrepancy/ anomaly. Here is also an opportunity that any possible misuse of their credentials on GST common portal, by any person, in any manner, may also be specifically brought to the notice of jurisdictional officer to prove their innocence. The suspension of registration shall be lifted on satisfaction of the jurisdictional officer with the reply along with documents furnished by the Taxpayer Noticee and any further verification as jurisdictional officer considers necessary. It has also been provided that the registration may be cancelled in case the Noticee fail to furnish a reply within the prescribed period of (07) Seven days or do not furnish a satisfactory reply. Tightening the noose! Click here to read full document

Authored ByR. Srivatsan, IRS Compiled ByA. Siva Superintendent of Customs TUTICORIN FY 2021

GST Collection during December 2020 has been on a record high. Goods and Services Tax revenue collections for December 2020 rose to Rs 1.15 lakh crore, the highest ever since the implementation of the nationwide tax in July 2017. The previous monthly GST collection record was just short of Rs 1.14 lakh crore in April 2019. The December 2020 revenues are significantly higher than November revenues of Rs 1.05 lakh crore. This is the fourth consecutive month this year that GST collections have outperformed comparable months from 2019, a clear sign of strong recovery as the Indian economy slowly came out of its biggest ever contraction in the April-June as well as July-September quarters. In line with the recent trend of recovery in the GST revenues, the revenues for the month of December 2020 are 11.6 percent higher than the GST revenues in the same month last year. During the month, revenues from import of goods were 27 percent higher and the revenues from domestic transaction were 8 percent higher than the revenues from these sources during the same month last year. Out of the headline amount, central GST (CGST) collected was Rs 21,365 crore, state GST (SGST) was Rs 27,804 crore, integrated GST (IGST) was Rs 57,426 crore (including Rs 27,050 crore collected on import of goods) and compensation cess was Rs 8,579 crore. The total number of GSTR-3B Returns filed for the month of November up to December 31, 2020, was 87 lakhs. The nationwide drive against GST evaders and fake bills due to sustained efforts of the officers along with many systemic changes appears to have led to improved compliance. This is the third month in a row in the current financial year after the economy showed signs of recovery post the pandemic that the GST revenues have been more than Rs 1 lakh crore. Road to economic recovery is accelerating……. R. Srivatsan, IRS GST UPDATEZ ON 01-01-2021 GST collections for December 2020 As a very positive news. 91 GST UPDATEZ ON 28-01-2021 Misconceptions and Facts about 1% payment of tax liability in cash in GST under Rule 86B Misconception 01: Large number of taxpayers would be affected by the rule. Fact: It is not quite like that. The rule in fact provides for various exemptions like exporters, suppliers of goods of inverted duty structure, taxpayers having a footprint in the Income Tax data base etc. The rule therefore be applicable to less than 0.5% of total taxpayer base of 1.32 crore which is about 6 lakh taxpayers only. The rule clearly identifies where the risk to revenue is high and imposes deterrence to the fraudsters in a multi-layered fraud of passing fake ITC. Misconception 02: Cash payment of 1% liability will create huge burden on small businesses and will increase their working capital requirement Fact: The cash payment of 1% is to be calculated only on the self-assessed tax liability in a month and not turnover of the month. For example, if a dealer has made sale of Rs 1 lakh