According to MOF’s annual review of economy, India appears to be poised to sustain its growth in a durable manner but at the same time has warned that it is not the time to be complacent, due to various risks. The Indian economy grew @ 7.2% in FY 2023 which made it fastest growing major economy of the world. According to a Goldman Sachs report, India is poised to become second largest economy in the world by 2075 surpassing Japan, Germany and United States. It will only be behind China. At present, India is world’s fifth largest economy.
The 50th meeting of GST Council was held on 11.07.2023. In the 50th Council meeting, a short film on ‘GST Council – 50 steps towards a journey’ was released, besides release of a special cover ‘My stamp’ of Indian post office. The Council took various steps and measures towards trade facilitation and streamlining the GST compliances which, inter alia, include few tax rate changes on goods and services, acceptance of report of Group of Ministers on GST on casinos, race courses and online games and deciding rate of 28% thereon, approval of GSTAT rules for appointment, classifications on various issues, recovery of tax and interest under rule 88C(3), mechanism for differences in ITC between forms 2B and 3B, registration, returns, compensation cess on SUVs, exemption from IGST on certain imported medicines, extension of date for amnesty scheme notified in March, 2023, extension of exemption for filing form GSTR-9 / 9C, directors services in personal capacity not to be covered under reverse charge and so on.
CBIC has prepared a standard operating procedure (SOP) to track poll expenditure. It aims at stepping up of preventive vigilance mechanism by CBIC field formation and to prevent flow of suspicious cash, drugs, liquor, freebies etc during elections.
In one of the recent interviews, CBIC Chairman has stated that rationalization of GST rates may be implemented in a gradual manner.
GSTN has been notified as a reporting entity for the purpose of Prevention of Money Laundering Act (PMLA) u/s 66 of PMLA Act, 2002. This will facilitate sharing of information by ED (FIU) with GSTN and help curb tax evasion and money laundering.
GSTR-3B related update on GSTN portal
GSTN portal has been recently updated to the following effect for filing of monthly GSTR-3B return:
- GSTR-3B tab on portal will not open up before filing of GSTR-1 return.
- Following message with pop up on the portal:
- “You have not filed GSTR-1 of the selected tax period. Please file the same to enable filing of GSTR-3B”
- “You have not filed GSTR-1Q of the selected tax period. Please file the same to enable filing of GSTR-3BQ” (or QRMP)
(Source GSTN Portal dated 06.07.2023)
GSTN update on Geo-coding Functionality
- GSTN has now made live the ‘Geo-coding’ functionality for all the states and Union Territories
- Geo-coding, which converts an address or description of a location into geographic coordinates, has been introduced to ensure the accuracy of address details in GSTN records and streamline the address location and verification process.
- This functionality is available for normal, composition, SEZ units, SEZ developers, ISD, and casual taxpayers who are active, cancelled, and suspended.
- Taxpayers can find this functionality under the Services/Registration tab in the FO portal.
- The geo-coding link will not be visible on the portal once the geo-coding details are submitted. This is a one-time activity, and once submitted, revision in the address is not allowed.
- The system-generated geo-coded address will be displayed, and one can either accept it or update it as per requirements. In cases where the system-generated geo-coded address is unavailable, a blank will be displayed, and one can directly update the geo-coded address.
- All new addresses post-March 2022 are geo-coded at the time of registration itself, ensuring the accuracy and standardization of address data from the outset.
[Source: GSTN Advisory dated 07.07.2023(www.gst.gov.in)]
GSTN becomes reporting entity under PMLA
- Ministry of Finance has notified Goods and Services Tax Network (GSTN) under Prevention of Money Laundering Act, 2002 (PMLA) as an entity for sharing information with Financial Intelligence Unit (FIU)
- Section 66 of PMLA prescribes sharing of information by officers responsible for enforcement of PMLA.
- GSTN is the 26th entity in the list of entities
- Sharing the information with GSTN, IT backbone for indirect taxes is meant to comply with commitments to Financial Action Task Force, which is the global anti-money laundering alliance.
- The Notification would empower the tax authorities with more relevant information as GSTN will be the recipient of information.
- This is likely to help ED-FIU to investigate tax evasion, GST recovery and attachment of assets.
- The Financial Intelligence Unit (FIU) will provide information to authorities that will help to reduce chances of tax evasion and money laundering.
- This move may curb fake registration / invoices and bogus transactions besides check the illegal money transactions.
- GSTN will not share the information about & assessees to other law enforcement agencies.
[Source: Notification GSR 491(E) dated 07.07.2023
issued by Ministry of Finance (Department of Revenue)]
50th GST Council meeting dated 11 July, 2023 : Takeaways
Major decisions are as follows:
- Classification on GST rates on goods and services
- To set up state level coordination committee for GST knowledge sharing and administrative collaboration
- Clarification on place of supply of goods supplied to unregistered persons (IGST)
- Exemption / rate reduction for certain medicines
- Compensation cess @ 22% on SUVs; SUVs redefined
- Consent based sharing of information with account aggregators, new rule 163 in CGST Rules
- Rules finalized for appointments to GSTAT- to start with state capitals
- Mechanism to address ITC differences between Forms 2B and 3B
- 28% GST rate on full value for horse races, casinos, online games
- Services of directors in their personal capacity to company not to be under reverse charge mechanism
- Extension of time for amnesty schemes for non-filers / registration revocation
(Source: MoF Press Release dated 11.07.2023)
