RECENT DEVELOPMENTS IN GST

[Dr. Sanjiv Agarwal]

RBI has kept the rates unchanged in its latest policy review on 6^th April, 2023. It has raised GDP growth forecast to 6.5% (earlier 6.4%) for the current fiscal 2023-24. On the other hand, World Bank had reduced it to 6.3% from 6.6%.

While the Budget session of Parliament was concluded with passage of Finance Bill 2023, this Budget session is reported to be least productive in recent years. As against proposed Bills, only 3 non-finance bills were passed by Rajya Sabha and only one bill by Lok Sabha.

Economic Advisory Council to the Prime Minister (EAC-PM) has released a Paper on GSTN performance is last five years. Accordingly, GSTN’s performance has improved steadily resulting in steady increase in taxpayers, presently @1.12 crore as against just 38 lakhs in July, 2017. The complaints have declined from 2.36 lakh in 2018 to 17000 in Q3 of 2022. However, technology related issues like bugs and defects still exist.

It is gathered from media reports that Group of Ministers (GoM) set up to recommend GST rate on online gaming, casinos etc may propose 18% GST in games of skills and 28% on game of chance. GST Council in its next meeting in June, 2023 may decide on the same.

Generation and quoting of Document Identification Number (DIN) is mandatory under CGST. Government of West Bengal vide Trade Circular No. 01/2023 dated 29.03.2023 has issued directions w.e.f. 01.04.2023 in this regard. For all communications issued under GST by the officers of the Directorate to taxpayers and other concerned persons u/s 168 of the WBGST Act, 2017, DIN will be required on all communications.

Liquidated damages received by a service receiver from a service provider for not meeting terms of contract would attract 18 per cent goods and services tax (GST) in certain cases, the authority for advance rulings (AAR) in Andhra Pradesh has ruled. Liquidated damages are the sum that one party receives when the other party fails to meet provisions of a contract between them.

Legislative changes in CGST Act

1. Section 30 of the CGST Act has been amended to provide an enabling provision for prescribing the time limit, manner, conditions and restriction for filing application of revocation of cancellation of registration through relevant rules, so as to provide more flexibility in the provision. (Section 141 of the Finance Act, 2023 refers).
2. Section 62 of the CGST Act has been amended to increase the time period from 30 days to 60 days for filling returns by the registered person for enabling deemed withdrawal of the assessment order issued under sub-section (1) of section 62 of the said Act. A proviso has been inserted to the said sub-section to provide an additional time period of 60 days to the registered person to file his returns, after the completion of specified time period under sub-section (2) of said section, with payment of an additional late fee during this extended period, for enabling deemed withdrawal of the assessment order issued under sub-section (1) of the said section.(Section 148 of the Finance Act, 2023 refers).
3. Section 109, 110 and 114 of CGST Act have been substituted to provide for, -

1. Constitution of Appellate Tribunal and Benches thereof (by substitution of section 109).
2. Qualification, appointment, conditions of service etc of the President and members of the Appellate Tribunal (by substitution of section 110).
3. Financial and administrative powers of the President of the Appellate Tribunal (by substitution of section 114).

(Sections 149-151 of the Finance Act,2023 refers)

4. Section 117, 118 and 119 of CGST Act have been amended to harmonize the nomenclature in the Act by replacing “National and Regional Benches” with “Principal Bench” and “State and Area Benches” with “State Benches”. (Sections 152-154 of Finance Act 2023 refers)
5. Section 23 of CGST Act has been amended retrospectively with effect from 1st July 2017 to clearly provide for overriding effect of sub-section (2) of section 23 over section 22(1) and 24 of CGST Act. (Section 140 of the Finance Act, 2023 refers).

IGST Act

Sub-section (9) of section 13 of IGST Act has been omitted to provide that the place of supply of services of transportation of goods, in cases where location of supplier of services or location of recipient of services is outside India, shall be determined as per provisions of sub-section (2) of the said section (section 162 of the Finance Act, 2023 refers)

(Source: D.O. F.No. 334/03/2023-TRU dated 31.03.2023 issued by Ministry of Finance)

Late fee reduction enabled @ GSTN

• GSTN has enabled late fee reduction for pending annual returns in Form GSTR-9 or 9C and final return in form GSTR-10 on the GST portal.

• Maximum GST Late Fees has been fixed upto Rs. 20,000/- (CGST + SGST) for filing pending Annual Returns (GSTR-9/9C) for financial years from 2017-18 to 2021-22, provided the same is filed between April 01, 2023 to June 30, 2023.

• Late Fees reduction for pending Final Return GSTR-10 shall be maximum late fees of Rs. 1,000/- (CGST + SGST), provided the same is filed between April 01, 2023 to June 30, 2023.

(Source: GSTN Portal dated 03.04.2023)

GSTN Advisory on Time limit for Reporting Invoices on the IRP Portal

GSTN as issued the following advisory fixing the time limits on reporting old invoices on e-invoice IRP portal:

• It has been decided by the Government to impose a time limit on reporting old invoices on the e-invoice IRP portals for taxpayers with AATO greater than or equal to 100 crores.
• To ensure timely compliance, taxpayers in IRP category will not be allowed to report invoices older than 7 days on the date of reporting.
• This restriction will only apply to the document type invoice, and there will be no time restriction on reporting debit/credit notes.
• For example, if an invoice has a date of April 1, 2023, it cannot be reported after April 8, 2023. The validation system built into the invoice registration portal will disallow the user from reporting the invoice after the 7-day window. Hence, it is essential for taxpayers to ensure that they report the invoice within the 7-day window provided by the new time limit.
• There will be no such reporting restriction on taxpayers with AATO less than 100 crores, as of now.
• In order to provide sufficient time for taxpayers to comply with this requirement, which may require changes in IT software / systems, this will be implemented from 01.05.2023 onwards.

(Source: GSTN Advisory dated 12.04.2023)