According to NSA’s latest data released on 31.05.22, India’s economy grew at 8.7 percent in 2021-22 against the 6.6 percent contraction in 2020-21. At 4.1 percent, the growth in the January-March (Q4) of Financial Year 2022 was the lowest among four quarters but higher on a yearly basis.
In 2021-22, all sectoral performances were positive challenges loom over India’s economic prospects for FY 23, in the form of a global slowdown (even if not recession), elevated food and crude oil prices which are worsening the trade deficit and mounting pressure on the Reserve Bank of India to front-end its rate hikes to rein inflation and ward off a run on the rupee. But there are offsetting factors. However, India’s high nominal GDP growth for the first time in many years is supportive of healthy incomes and tax buoyancy, which can help the Government deliver on its capex plans.
RBI in its annual report has observed that Indian economy is relatively better placed to strengthen the recovery and improve macro-economic prospects even as geopolitical conflict in Europe threatens to overwhelm the global economy and its constituents.
According to Government, there is no case for revising the growth estimates downward from current 7.5% as of now. Not only this, no rating agency has talked about growth rate which is lower than 7.5%.
CBIC has recently issued instruction on deposit of tax during the course of search, inspection or investigation through DRC-03. There have been allegation of use of force and coercion by the officers for making recovery during search etc. The instruction clarify the legal position as well as is an advisory against use of coercion or force by any officer for getting the amount deposited during search proceedings. Another set of instructions have been issued in the form of Standard Operating Procedure (SOP) for NCLT cases in relation to proceedings under IBC Code, 2016. This would help protect the revenue.
Central Government has cleared the payment of entire GST compensation of Rs. 86912 core that was due to states. As of now, compensation scheme, if not extended shall come to end on 30th June, 2022, through there is a loud demand for extending the same by many states. The GST Council may take a view on the same in the ensuing meeting on June, 2022. This has been done to assist the states in managing their resources during the financial year.
GST collection figures for May, 2022 are once again above rupees one lakh crore. For May, 2022, gross collection reported is Rs. 1,40,885 crore which indicates a growth of 44% on YoY basis. For last three months, tax collection has been more than Rs. 1,40,000 crores. The historical data show that the collection in the month of May, which pertains to the returns for April, the first month of the financial year, has always been lesser than that in April, which pertains to the returns for March, the closing of the financial year. However, it is encouraging to see that even in the month of May 2022, the gross GST revenues have crossed the Rs. 1.40 lakh crore mark.
Waiver of late fee under section 47 in filing FORM GSTR-4
- CBIC has waived the late fee payable for delay in furnishing Form GSTR-4, annual return for composition dealers.
- The late fee payable for delay in furnishing of FORM GSTR-4 for the Financial Year 2021-22 under section 47 of the said Act shall stand waived for the period from the 1st day of May, 2022 till the 30th day of June, 2022.
- This period of waiver shall operate from 1st May, 2022 to 30th June, 2022 only (i.e. 2 months).
(Source: Notification No. 07/2022-Central Tax dated 26.05.2022)
Taxpayer friendly measures in GST – Haryana State
Government of Haryana has decided to re-engineer internal processes to implement inter alia, following measures:
- No officer / official shall enter the premises of any taxpayer without display of proper Identity card.
- Tax inspectors shall not visit any premise except when they are conducting physical inspection under Rule 25 of the HGST Rules, 2017 or if they are part of a search, inspection or an audit operation.
- While conducting any enquiry, suitable opportunity of being heard should be given to the complainant.
- Repeated summons and calling for records should be discouraged.
- In case the system does not provide for specific functions such as summons etc. then the ID can be generated using Enforcement / Enquiry ID module of the BO web system.
- 1st April, 2022 GSTN has initiated automatic un-blocking of ITC, blocked for period of more than 1 year.
(Source: Memo No. 362/GST dated 19.05.2022 by Excise Taxation Department, Government of Haryana)
SOP for IBC cases- Role of GST officers
- CBIC has issued a ‘Standard Operating Procedure’ (SOP) in relation to NCLT cases (before National Company Law Tribunal) in matters under Insolvency & Bankruptcy Code, 2016 (IBC).
- GST and Customs Authorities have been classified as operational Creditors and are required to submit their claims against corporate debtors when the Corporate Insolvency and Resolution Process (CIRP) is initiated and public announcement inviting claims is made by the insolvency professional.
- The delay in filing the claims by GST / custom authorities as operational creditors leads to their claims hot being admitted and extinguished once a resolution plan is approved.
- CBIC shall appoint a Nodal Officer to ensure filing of the claims with the IBBI in a timely manner and within the period of 90 days from the insolvency commencement date.
- Nodal officer nominated by CBIC shall be Additional Director General, DGPM as the Nodal Officer for the CBIC for the receipt of information regarding initiation of the insolvency resolution process and dissemination of the same to the field formations for necessary action.
- The Nodal Officer will disseminate the information received by him, through official email, to all Zonal Principal / Chief Commissioners with a copy to the concerned Principal Commissioner/ Commissioner within 02 (Two) working days.
- The concerned office/ Commissionerate which has arrears pending against the unit/ company shall file its claims timely for safeguarding and realisation of the government dues and inform the fact of having filed its claim to the Nodal Officer through the ADC/ JC in the Chief Commissioner's Office (CCO).
- Correspondences with the Resolution Professional (RP) should be made regarding finalisation of the Resolution Plan. Timely verification should also be done from the website www.ibbi.gov.in to check if any orders were issued by NCLT with respect to resolution, liquidation, and/or withdrawal of application.
(Source: CBIC Instruction No. 1083/04/2022-CX9 dated 23.05.2022)
CBIC Clarification on Tax Deposited during Search / Investigation
- CBIC has clarified on recovery of tax / deposit of tax during the course of search, inspection or investigation through Form DRC-03 as the taxpayers subsequently have made allegation of use of force and coercion for such recovery in few cases.
- It has been clarified that as per law, a taxpayer has an option to deposit the tax voluntarily by way of submitting DRC-03 on GST portal. Such voluntary payments are initiated only by the taxpayer by logging into the GST portal using its login id and password. Voluntary payment of tax before issuance of show cause notice is permissible in terms of provisions of Section 73(5) and Section 74 (5) of the CGST Act, 2017.
- Recovery of taxes not paid or short paid, can be made under the provisions of Section 79 of CGST Act, 2017 only after following due legal process of issuance of notice and subsequent confirmation of demand by issuance of adjudication order. No recovery can be made unless the amount becomes payable in pursuance of an order passed by the adjudicating authority or otherwise becomes payable under the provisions of CGST Act and rules made therein.
- It has been clarified that there may not be any circumstance necessitating `recovery' of tax dues during the course of search or inspection or investigation proceedings. However, there is also no bar on the taxpayers for voluntarily making the payments on the basis of ascertainment of their liability on non-payment/ short payment of taxes before or at any stage of such proceedings. The tax officer should however, inform the taxpayers regarding the provisions of voluntary tax payments through DRC-03.
- Further, cases of complaints should be enquired at the earliest and in case of any wrongdoing on the part of any tax officer, strict disciplinary action as per law may be taken against the defaulting officers.
[Source: CBIC Instruction No. 01/2022-23 (GST-Investigation) dated 25.05.2022]
GST compensation of states
- Goods and Services Tax was introduced in the country w.e.f. 1st July, 2017 and States were assured for compensation for loss of any revenue arising on account of implementation of GST as per the provisions of the GST (Compensation to States) Act, 2017 for a period of five years.
- For providing compensation to States, Cess is being levied on certain goods and the amount of Cess collected is being credited to Compensation Fund. Compensation to States is being paid out of the Compensation Fund w.e.f. 1st July, 2017.
- The Government of India has released the entire amount of GST compensation payable to States up to 31st May, 2022 by releasing an amount of Rs.86,912 crores.
- The details of GST compensation payable for the past financial years and for the period of April-May of the current financial year are given as per the table below: -
Dues for the months of April and May, 2022
Dues for the months of February and March, 2022
Balance of compensation payable upto January 2022
- With this release of Rs. 86,912 crore, the compensation to States till May 2022 gets fully paid and only compensation for June 2022 would remain.
(Source: PIB Release ID 1829777 dated 31.05.2022)
GST Collection in May, 2022
- The gross GST revenue collected in the month of May 2022 is Rs.1,40,885 crore of which CGST is Rs.25,036 crore, SGST is Rs.32,001 crore, IGST is Rs.73,345 crore (including Rs. 37469 crore collected on import of goods) and cess is Rs.10,502 crore (including Rs.931 crore collected on import of goods).
- The revenues for the month of May 2022 are 44% higher than the GST revenues in the same month last year of Rs.97,821 crore. During the month, revenues from import of goods was 43% higher and the revenues from domestic transaction (including import of services) are 44% higher than the revenues from these sources during the same month last year.
- This is only the fourth time the monthly GST collection crossed Rs.1.40 lakh crore mark since inception of GST and third month at a stretch since March 2022.
- The collection in the month of May, which pertains to the returns for April, the first month of the financial year, has always been lesser than that in April, which pertains to the returns for March, the closing of the financial year. However, it is encouraging to see that even in the month of May 2022, the gross GST revenues have crossed the Rs.1.40 lakh crore mark.
- In almost all states (except Andaman & Nicobar), there is a positive growth of tax with more than 100% growth reflected in Arunachal Pradesh, Manipur, Daman & Diu, Goa and Lakshdeep.
- In terms of value, Maharashtra State tops with GST collection of Rs. 20313 crore (growth of 50%)
(Source: GST Collection PIB Release ID 1830039 dated 01.06.2022)