RECENT DEVELOPMENTS IN GST

[Dr. Sanjiv Agarwal]

Economists are now predicting of lower than 9.2% economic growth in financial year 2021-22. The third quarter has been hit by Omicron wave and expansion as expected could not take place. Economic growth is expected to be lower in Q3 and Q4 as compared to Q1 and Q2 of current fiscal.

According to RBI, economic recovery from the pandemic still remains incomplete and uneven and it will be crucial to have continued support from various policies for a sustained economic recovery.

According to NSO, Indian economy has slowed down in Q3 from 8.4% to 5.4%. Full financial year 2022 growth is expected to be at 8.9% This slow down can be mainly attributed to slow down in manufacturing output and impact of Covid Omicron variant. Even at 8.9 percent, India will be among the fastest growing large economies. The RBI has projected 9.2 percent GDP growth for 2021-22.

In yet another development, Moody’s has raised GDP growth forecast from 8.4% to 9.5% following withdrawal of most of covid curbs while Fitch has now projected growth of 10.3% for the Financial Year 2033.  But given the present Russia Ukraine Crises, it may have challenges.

CBIC Chairman in his weekly communication to CBIC officers dated 21.02.2022 has advised that coaching institutes providing supply of goods and services to students  should be considered as bundled services and hence as composite supply of coaching services attracting 18% GST. But we fear that each supplier may have a different business model and hence may not fit in this formula. We need to understand and appreciate facts of each case in isolation. Recently, Authority for Advance Ruling in Rajasthan pronounced two different rulings on same issue wherein coaching services were provided. One of these rulings is different from what CBIC Chairman has opined. The taxpayers continue to be confused because of conflicting rulings and Chairman’s advices. Furthermore, Chairman’s views does not have any legal force on the taxpayers but an advice for officials, subject to judicial scrutiny.

GST authorities in Maharashtra State have issued guidelines with respect to legal issues pertaining to scrutiny of return for tax periods/financial yea₹ 2017-2019 which are welcome. These clarifies certain doubts, besides providing guidelines on how to scrutinize the  GST returns (GSTR-1, GSTR 2A, GSTR-3B).

CBIC / GSTN has issued certain clarifications on incorrect reporting of GSTR-1 and ITC claims. These are new enhancements and improvements on the portal.

The GST collections for the month of February, 2022 have once again crossed the figure of one lakh crore rupees viz ₹ 133026 crore which is 18% higher than in February, 2021. This is for the fifth time GST collection has crossed ₹ 1.30 lakh crore mark. Since implementation of GST, for the first time, GST cess collection crossed ₹ 10,000 crore mark, which signifies recovery of certain key sectors, especially, automobile sales. This high growth during February 2022 should also be seen in the context of partial lockdowns, weekend and night curfews and various restrictions that were put in place by various States due to the omicron wave, which peaked around 20th January.

Mandatory E-invoicing for turnover of ₹ 20 crore

• In exercise of the powers conferred by sub-rule (4) of rule 48, the Government has reduced the E-invoicing threshold limit from INR 50 crores to INR 20 crores w.e.f. 01.04.2022.
• CBIC for turnover of ₹ 20 crore has notified that E-invoicing will be mandatory for aggregate threshold limit of ₹ 20 crore w.e.f. 01.04.2022.
• This shall come into force w.e.f. 01.04.2022.

(Source: Notification No. 01/2022-Central Tax dated 24.02.2022)

LUT FOR FY 2022-23

• GSTN has advised that option to furnish a Letter of Undertaking (LUT) for FY 2022-23 is now available on the GST portal.
• The same is available under the tab Services>User Services> Furnish Letter of Undertaking (LUT).
• Please note that the validity of LUT for FY 2021-22 will expire on 31st March, 2022.
• Further, two witnesses are required for filing of the said application. Below are details required for the witness:

• Name of Witness
• Complete address of witness (Building no./ flat no., Floor no., Name of premises/building, Road/ Street, City/Town/ Locality/ Village, State, District, PIN Code).

(Source: GSTN dated 22.02.2022)

GSTR-1 updation on GSTN portal

• The statement of outward supplies in FORM GSTR-1 is to be furnished by all normal taxpayers on a monthly or quarterly basis, as applicable. Quarterly GSTR-1 filers have also been provided with an optional Invoice Furnishing Facility (IFF) for reporting their outward supplies to registered persons (B2B supplies) in the first two months of the quarter.
• GSTN has made certain improvements and upgradation in respect of GSTR-1 return to enhance the performance and user experience.
• These enhancements are summarized below:

• GSTR-1/IFF can be viewed as usual by navigating in the following manner:
  Return Dashboard > Selection of Period > Details of outward supplies of goods or services GSTR-1 > Prepare Online
• Following changes were take place:

• Removal of ‘submit’ button before filing
• Consolidated summary
• Recipient wise summary

• This will be available soon.

• For detailed advisory & sample screenshots of the upcoming GSTR-1/IFF improvements & enhancements, please click here -

(https://tutorial.gst.gov.in/downloads/news/gstr1_enahcment_phase_2.pdf)

(Source: GSTN dated 23.02.2022)

Map Location must for GST Registration

• GSTN has made ‘map location’ mandatory for new registrations under GST law as well as for amendment in address in case of existing registration on the GSTN common portal.
• Assessees seeking registration or amendment in registration will have to mention or enter exact location of premises to be registered as per ‘google’ map location.
• This is to curb the practice of registration of non-existent premises or premises with fake addresses.

(Source: GSTN Portal dated 01.03.2022)

February, 2022 GST collections

• The gross GST revenue collected in the month of February 2022 is ₹ 1,33,026 crore of which CGST is ₹ 24,435 crore, SGST is ₹ 30,779 crore, IGST is ₹ 67,471crore (including ₹ 33,837 crore collected on import of goods) and cess is ₹ 10,340 crore (including ₹ 638 crore collected on import of goods).
• The revenues for the month of February 2022 are 18% higher than the GST revenues in the same month last year and 26% higher than the GST revenues in February 2020.
• In all the states there is positive growth in GST collection over February, 2021 except in J & K, Himachal Pradesh, Arunachal Pradesh and Daman & Diu.

(Source: GST Collection PIB Release ID 1802040 dated 01.03.2022)