GST: 2019 IN RETROSPECT

[Dr. Sanjiv Agarwal]

India economy is steadily slowing down amidst slower global economy and there is a dire need for urgent policy changes to ensure that slow down is checked and we are back on recovery path. It is time for the Government now to shift focus from politics to economics. As the Government prepares for Financial Year 2020-21 Union Budget to be presented next month, it is looking for all measures to reverse the down trend in economy. Based on indicators, it is optimistic on recovery and demand revival. It may take a GDP growth target of 6 to 6.5 percent.

GST in India also rolls into its 31^st month (introduced w.e.f. 1^st July, 2017) still struggling with attaining maturity, consistency and settlement of issues and procedural hiccups.

Number of GST Council Meetings

The GST Council had 38 meetings. In 2019, total 7 GST Council Meetings were held.

GST Council Meetings in 2018	Held on
32nd GST Council Meeting	10.01.2019
33rd GST Council Meeting	24.02.2019
34th GST Council Meeting	19.03.2019
35th GST Council Meeting	21.06.2019
36th GST Council Meeting	27.07.2019
37th GST Council Meeting	20.09.2019
38st  GST Council Meeting	18.12.2019

GST Collections

Total GST Collections upto December, 2019 (Rs. in crores)

Month	2017-18	2018-19	2019-20
April	-	1,03,459	1,13,865
May	-	94,016	1,00,289
June	-	95,610	99,939
July	21,572	96,483	102083
August	95,633	93,960	98202
September	94,064	94,442	91916
October	93,333	1,00,710	95380
November	83,780	97,637	103492
December	84,314	94,726	103184
January	89,825	1,02,503	-
February	85,962	97,247	-
March	92,167	1,06,577	-
Total	7,40,650	11,77,369	908350
Average	89,885	98,114	100927

Number of Notification issued in 2019     78 (CT)

Number of Circulars issued in 2019         50

Number of Orders issued in 2019              2

Legislative Changes

• Finance Bill (No. 2), 2019 has got the assent of President on 1^st day of August , 2019 and is now the Finance Act, 2019.
• Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 applicable from 01.09.2019 : The Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019,(SVLDRS)  application made available online at  https://cbic-gst.gov.in from 01.09.2019. The declaration under Section 125 of the Finance (No. 2) Act, 2019 can now be made electronically in Form SVLDRS-1 by the declarant.

Scheme extended upto 15.01.2020.

Major Landmark Events

• Constitution of State/Area benches of GSTAT and Extension of last date for filing appeal before GSTAT

In terms of provisions of Section 109 of the CGST Act, GST Council recommended constitution of GST Appellate Tribunal and its benches in following states:

Sl. No.	Name of States/UT	State Bench	Area Bench
	Meghalaya	Shillong	No bench
	Mizoram	Aizawl	-do-
	Rajasthan	Jaipur	Jodhpur
	Karnataka	-----	Two Area benches at Bengaluru

Landmark Judgement on Transitional Credit

• The Punjab and Haryana High Court vide Order dated 04.11.2019 in CWP No.30949 of 2018(O&M) =  2019 (11) TMI 282 - PUNJAB AND HARYANA HIGH COURT has directed Goods and Services (GST) Department to allow filing or revising Form TRAN-1 either electronically or manually.
• It held 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”.
• The Court also directed the Government / GST Department 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.
• Further, the Department will be at liberty to verify the genuineness of claim of Petitioners but nobody shall be denied to carry forward the legitimate claim of CENVAT / ITC on the ground of non-filing of TRAN-I by 27.12.2017.
• By this Order, 102 Petitions have been disposed off.

[Source : Adfert Technologies Pvt. Ltd. v. Union of India (Punjab & Haryana) = 2019 (11) TMI 282 - PUNJAB AND HARYANA HIGH COURT]

Fully electronic refund process through GST – RFD-1 and single disbursement

• In order to make the process of submission of the refund application electronic, Circular No. 79/53/2018-GST dated 31.12.2018 was issued wherein it was specified that the refund application in FORM GST RFD-01A, along with all supporting documents, shall be submitted electronically. However, various post submission stages of processing of the refund application continued to be manual.
• This Circular stipulate the modalities to be followed for all refund application filed in Form GST RFD-1 on common portal w.e.f. 26.06.2019, i.e., in relation to:

• Refund forms
• Deficiency memos
• Scrutiny of applications
• Re-crediting of electronic credit ledger on account of rejection of refund claims
• Application for refund of IGST paid on export of services and supplies made to SEZ
• Disbursal of refunds
• Refund of unutilized input tax credit
• Refund of tax paid on deemed exports guidelines for refund claim of Compensation Cess
• Zero rated supplies
• Refund of transitional credit
• Restrictions under Rule 96(10)
• Calculation of refund amount for claims of refund of accumulated input tax credit on account of inverted duty structure refund of TDS / TCS deposited in excess
• Debit of electronic credit ledger by using Form GST DRC-3
• Refund of IGST paid on exports etc 

[Source: Circular No. 125/44/2019- GST dated 18.11.2019]

Gearing up for a transition to the new return regime

The regular filers of GSTR-1 and GSTR-3B will soon have to prepare themselves for yet another change. They will begin to submit ANX-1, take actions in ANX-2 and file RET-1/2/3 from April, 2020. The forms and procedure along with the trial version in offline utility had been made available in GST portal.

Scope of Composition Scheme expanded

The composition scheme was extended to service providers after a long row. A new composition scheme was introduced to service providers having an annual turnover of up to ₹ 50 lakhs only with a nominal tax payment on a turnover basis at 6%.

The process of filing taxes under the scheme was further simplified with a single page form in CMP-08 since April 2019. In contrast, the return in GSTR-4 was pushed for annual compliance.

Blocking of e-way bills for non-filing of GSTR-1 and 3B panicked businesses

In order to encourage more filing of GSTR-1 and GSTR-3B returns among businesses, the GST Council took a bold step. It disabled taxpayers from generating e-way bill, in case of non-filing of two or more consecutive GSTR-3B on GST portal, by such taxpayers with effect from 1 December, 2019.

E-Invoicing in GST

The Central Government has recently clarified vide Notification No. 68/2019–Central Tax dated 13.12.2019 so as to provide change in the mechanism to issue tax invoice. The manner of issuance of invoice has been changed for such persons. The taxpayers are required to generate an Invoice Reference number (IRN) from the e-way bill portal by uploading an invoice in Form GST INV- 01. This will be valid for a period of 30 days and can be used instead of a physical tax invoice. The IRN can replace the physical copy of the invoice and reduce the burden of carrying a physical invoice by transporters. These provisions shall come into force w.e.f. 01.04.2020. The provisions are applicable for registered persons, whose aggregate turnover in a financial year exceeds one hundred crore rupees.

GST, as a tax law with widest ramifications from any tax law in India, was introduced with much hopes on reforms and ease of doing business front but has somehow not been able to meet that end. All stakeholders still struggle to pay tax, file returns or to make other compliances on GSTN portal. Too many and too frequent changes has made this law fragile to handle and deal with. In all fairness and fitness of things, Central Government and GST Council must take immediate steps to redress all issues once for all, interact with policy makers, law framers, tax experts and all other stakeholders to identify the holes and plug them. A major restructuring is called for in GSTN portal and its deliverables. Let 2020 be the year dedicated for GST back office and portal re-corrections and re-transformation so that GST actually becomes a law it was dreamt of.

Of late, there have increased number of tax evasion cases being reported and arrests being made. These emanate from fake invoices, fake input credit claims etc. There is a need for intelligent use of data analytics to curb such abuse. At the same time, GST refunds must be made seamless and simple for the eligible ones.