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RECENT DEVELOPMENTS IN GST

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RECENT DEVELOPMENTS IN GST
Dr. Sanjiv Agarwal By: Dr. Sanjiv Agarwal
October 7, 2022
All Articles by: Dr. Sanjiv Agarwal       View Profile
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In the latest monetary policy review on 30th September 2022, Reserve Bank of India has hiked key policy rates by 50 basis points in the back drop of rising inflation. This will further increase interest rates on loans. RBI has also slashed the GDP forecast to 7% from 7.2% for the financial year 2022-23. Global uncertainty continues, financial conditions are tightening and fears of recession mounting. On the other hand, OECD and S&P have retained India’s GDP forecast for financial year 2023 at 6.9% and 7.3% respectively.

CBIC has issued three Notifications, on 28th September, 2022, viz, Notification Nos. 18, 19 and 20-Central Tax to notify 1st October, 2022 as the date from which Finance Act, 2022 amendment shall come into force except clause 110 and 111 of the Finance Act, 2022. CGST Rules, 2017 have been further amended to amend rules and forms. These mainly relate to registration, return, input tax credit, refund etc. Based on Apex Court decision in Filco Trade case, filing of TRAN-1 and TRAN-2 have been re-opened by the Government w.e.f. 01.10.2022 and GSTN has issued a detailed advisory in this regard. This will remain open till 30.011.2022.

GST collections in the month of September, 2022 has been Rs. 1.47 lakh crore which is higher than 26% from that of September 2021. The GST collection of over Rs. 1.4 lakh crore has been in a row for seven months now.

E-invoicing has been made mandatory on aggregate turnover criteria of Rs. 10 crore and above. It is likely that as a next step, Government may make it mandatory for Rs. 5 lakh turnover in next year.

GST council’s GoM on real estate sector has been reconstituted with new convener in the form of Maharashtra Dy. Chief Minister

October is the month of festivities and businesses are expected to farewell. This would imply yet larger GST collection for the month.

New Notifications in GST

CBIC has issued following three Notifications on GST on 28.09.2022:

Notification No.

Date

Subject

18/2022-Central Tax

28.09.2022

To notify 01.10.2022 as the date on which provisions of sections 100 to 114, except clause (c) of section 110 and section 111 of Finance Act, 2022 shall come into force.

19/2022-Central Tax

28.09.2022

To make amendments (Second Amendment, 2022) to the CGST Rules, 2017. [In Rules 21, 36, 37, 38, 42, 43, 60, 83, 85, 89, 96 and Form GSTR-1A, 2, 3 and PCT-05] and omit Rules 69 to 78 (all w.e.f. 01.10.2022)

20/2022-Central Tax

28.09.2022

To rescind Notification No. 20/2018-CT dated 28th  March, 2018 relating to due date for refund application under section 55 of CGST Act by notified agencies.

Major Changes in GST law & Procedures w.e.f. 01.10.2022

CBIC has notified various changes in CGST Rules w.e.f. 01.10.2022 which, inter alia include:

  • GST input credit to be reversed mandatorily by recipient for non-payment of GST by the supplier.
  • GST credit will now be dependent on compliant status of supplier of goods or services, so KYC of suppliers become important.
  • Stricter conditions prescribed for availing input tax credit.
  • Non-filing of GST returns to attract cancellation of registration for a specified period.
  • Refund to be allowed for any balance lying in electronic cash ledger of the assessee.
  • Sequential filing of GST returns shall now be mandatory.
  • Time limit to avail input tax credit will now be allowed upto 30th November of next financial year.

(Source: Notification No. 19/2022-Central Tax dated 28.09.2022)

Refund to specialized agencies

  • Section 55 read with section 54 of CGST Act, 2017 provide for refund in certain cases (i.e. specialized agencies of UNO and other notified ones).
  • Notification No. 20/2018-Central Tax dated 28.03.20218 provided for extension in time for refund claim under section 55 upto 18 months from the last date of quarter in which such supply was made instead of 6 months. This was done as the GSTN portal was not ready to provide much functionality then.
  • The said notification of 2018 has since been withdrawn now as it is no longer required with the consequence that time allowed shall now be 6 months only w.e.f. 01.10.2022.

(Source: Notification No. 20/20222-Central Tax dated 28.09.2022)

Classification of Cranes

  • CBIC has issued a clarification on classification of goods that undertake lifting and handling functions and have mobility as a function (i.e. truck cranes / all terrain cranes) in view of different opinions.
  • These goods come in various types and sizes, depending on the requirement of the users and factors such as load to be handled, the terrain where it is put to use etc. A simple generic description such as All Terrain Cranes would thus represent a large category of similar goods.
  • Important aspects for classification include:
    • Movement under load
    • Location of propelling and control elements
    • Number of engines
    • Integration of working machine with the chasis
  • The following classification  has been advised:
    • When the work machine is merely mounted  (not integrated mechanically) on the chassis- under 8705.
    • When chassis and working machine are specially designed for each other and form an integral mechanical unit and the chassis cannot be used for any other purpose- under 8426.
    • If the outriggers are connected to and are a part of the sub structure i.e. the chassis and are controlled from the engine fitted with the chassis. In such a scenario, the superstructure i.e. the crane and the sub structure i.e. the chassis, can be said to be working in tandem and can thus be considered to be mechanically and electrically integrated- under heading 8426.
    • In the absence of such integration of the chassis and working machine- under 8705.

(Source: CBIC Circular No. 20/2022-Customs dated 22.09.2022)

GoM for boosting Real Estate Sector under GST regime

  • Central Government has re-constituted Group of Ministers (GoM) for suggesting steps to boost real estate sector under the present GST regime.
  • The GoM shall be headed by Mr. Devendra Fadnavis and has representatives from the States of Punjab, Gujarat, Kerala, Goa, Uttar Pradesh and Bihar.
  • This constitution superseded earlier office memorandum dated 10.02.2022.

[Source: Office Memorandum No. S-31011/12/2021-DIR(NC)-DOR dated 22.09.2022]

GST collection for September, 2022

  • Rs. 1,47,686 crore gross GST revenue collected in the month of September 2022.
  • Monthly GST revenues are more than Rs.  1.4 lakh crore for seven months in a row.
  • Revenues for the month of September, 2022 are 26% higher than the GST revenues in the same month in 2021.
  • The gross GST revenue collected in the month of September 2022 is Rs.  1,47,686 crore of which CGST is Rs.  25,271 crore, SGST is Rs.  31,813 crore, IGST is Rs.  80,464 crore (including Rs.  41,215 crore collected on import of goods) and Cess is Rs.  10,137 crore (including Rs.  856 crore collected on import of goods).
  • More than 1.1 crore e-way bills and e-invoices, combined (72.94 lakh e-invoices and 37.74 lakh e-way bills)  have been generated without any glitch on the GST Portal portal run by NIC on 30th September 2022

(Source: Press Release ID 1864082  dated 01.10.2022)

GSTN Advisory on TRAN Forms

  • GSTN has reopened filing of TRAN-1 and TRAN-2 in compliance of Supreme Court order is Filco Trade case.
  • GSTN has released an Advisory on the same, Accordingly,
  • The transitional credit availed by the taxpayer in TRAN-1 or 2 forms shall be verified by the jurisdictional tax officer before the credit entry is made in the respective ledgers.
  • TRAN-2 form shall be made available only if the taxpayer has filed TRAN-1 and have made declaration in table 7 of TRAN-1.
  • Those registered persons, who had successfully filed TRAN-1/TRAN-2 earlier, and who do not require to make any revision in the same, are not required to file/ revise TRAN-1/TRAN-2 again during this period from 01.10.2022 to 30.11.2022.
  • The option of filing or revising TRAN-1/TRAN-2 on the common portal during the period from 01.10.2022 to 30.11.2022 is a one-time opportunity for the applicant to either file the said forms, if not filed earlier, or to revise the forms filed earlier.
  • Input Tax Credit shall reflect in the Credit ledger of the taxpayer post verification by the jurisdictional tax-officer.
  • The guidelines relate to:
  •  For detailed step by step and frame by frame guidance to Upload Documents, please refer to the Help manual:

https://tutorial.gst.gov.in/downloads/news/tranmanual uploaddoc 30 09 2022.pdf

(Source: GSTN)

 

By: Dr. Sanjiv Agarwal - October 7, 2022

 

 

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