RECENT DEVELOPMENTS IN GST

[Dr. Sanjiv Agarwal]

Due to buoyant domestic demand, improvement on services, higher capex by Government etc, Indian economy may show a trend of 6.2% to 7.2% growth in September, 2022 quarter, as indicted by forecast given by few economists. However, Goldman Sachs has lowered the growth forecast to 5.9% in financial year 2023. CRISIL has also lowered it to 7%, ICRA to 6.5%.

In one of the research paper, RBI has expressed that Indian economy is resilient despite uncertain volatile global enrichment. India has recently surpassed UK to become fifth largest economy in the world.

Ministry of Finance shall commence pre-budget talks with trade bodies from third week of November, 2022. Eight such meetings may take place. The meeting with state Finance Ministers may take place at Madurai, which is also the venue of next GST Council meeting. Apex Chamber CII has suggested to MoF to reduce 28% GST rate on select consumer durables.

CBIC Chairman has asked tax offices to be vigilant on revenue growth and ensure no slippages. Total indirect tax collections are estimated at Rs. 13.30 lakh crore in 2022-23, which include Rs. 7.80 lakh crore from GST, Rs. 2.13 lakh crore from customs and Rs. 3.35 lakh crore from central excise.

Input tax credit (ITC) on expenditure made to meet corporate social responsibility (CSR) is still attracting contradictory rulings from Authority for Advance Ruling (AAR). Latest one is from Telangana AAR which has favoured ITC on CSR related purchases. Earlier, in the case of Dwarikesh Sugar Industries, the Uttar Pradesh AAR has ruled that ITC shall be available on expenses incurred to comply with the requirements of CSR. However, Kerala AAR, in the matter of Polycab Wires Ltd held that ITC shall not be available on free distribution of electrical items like switches, fans, cables, etc., to flood affected people under CSR.

GST Council meeting is due for being held. Last meeting was held on 29^th June, 2022 and over four months have since passed. West Bengal Finance Minister has already asked to convene GST Council meeting at the earliest and decade on group of minister’s recommendation since 2021. As per law, GST council is supposed to meet once in every quarter.

Extended time for allowing ITC claims and amend Invoices

• CBIC has amended CGST Rules, 2017 so as to allow ITC claims and amendment in invoices upto 30th November, 2022.
• Accordingly, effect has been given in GSTR-9 form to extend the date of ITC claims and amendment in invoices till 30th November, 2022.
• Now, one can amend the details of taxable outward supplies made to the registered person that is already reported in table 4A, 4B, 6B, 6C – B2B invoices.
• The taxpayers will have to provide the financial year and invoice number and click on ‘Amend Record’ to search for the invoice.

(Source: Notification No. 22/2022-Central Tax dated 15.11.2022)

No Review Petition is Ocean Freight case

• CBIC has decided not to file a review petition in the matter of UNION OF INDIA & ANR. VERSUS M/S MOHIT MINERALS PVT. LTD. THROUGH DIRECTOR - 2022 (5) TMI 968 - SUPREME COURT.
• Apex court had dismissed the Government’s appeal on the imposition of Goods and Services Tax (IGST) on Ocean Freight holding that IGST is not leviable on Ocean Freight.
• Thus the order dated 19.05.2022 of Supreme Court now becomes final and the confusion over review petition stands cleared.

(Source: CBIC (Legal Cell) (F.No. 275/11/2022-CX.8A) dated 04.11.2022)

Detention / Seizure / Release of Goods under Section 129 of GST law

• Kerala State Government has issued following instructions for release of goods / conveyance and right to appeal under section 107 of GST law.
• These instructions are outcome of Kerala High Court Order in HINDUSTAN STEEL AND CEMENT, B.M. STEEL AGENCIES VERSUS ASSISTANT STATE TAX OFFICER, KOZHIKODE, JOINT COMMISSIONER OF STATE TAX KOZHIKODE, JOINT COMMISSIONER (APPEALS, STATE GOODS AND SERVICE TAX KOZHIKODE - 2022 (8) TMI 393 - KERALA HIGH COURT.
• Issuance of manual forms for detention, seizure and release of goods and conveyances under section 129 of the KSGST/CGST Act, 2017, may be avoided as far as possible.
• In all cases of detention, seizure, and release of goods and conveyances in transit under Section 129 of the KSGST/CGST Act, 2017, final orders in FORM GST MOV -09 shall invariably be provided online, regardless of whether the party has made a voluntary payment of tax and penalty in FORM GST DRC-03.
• In all previous instances where no final orders in FORM GST MOV -09 have been provided online and the taxpayer/party intends to file an appeal, FORM GST MOV-09 order shall be electronically issued immediately.

(Soure: Circular No. 10/2022 dated 10.11.2022 issued by Commissioner State GST Department, Kerala)

Compendium of Brochures on GST

• CBIC has released Compendium of GST Brochures on 24 topics, viz,

Compendium of GST Brochures (updated as of November, 2022), Overview of GST, GST Benefits, Latest Updates in GST, Composition Levy Scheme, QRMP Scheme, Policy Initiatives for MSME Sector, Casual Taxable Person, Non-Resident Taxable Person (NRTP), e-lnvoice Under GST, e-Way Bill, Registration in GST, Job Work under GST, Return filing procedure and relief, GST Annual Return, Cancellation of registration in GST, Revocation  of cancellation  of GST Registration, Audit in GST Regime, Refund in GST, Refund of unutilised ITC, Margin Scheme under GST, Inspection,  Search  &  Seizures and Arrest under GST regime,  Reward Scheme for Informers and Career Opportunities in CBIC.

• This will help taxpayers and all stakeholders to understand nuances and latest updates in GST.
• These can be accessed at www.cbic.gov.in

[Source: Directorate General of Taxpayer Services -CBIC (www.cbic.gov.in)]

Advisory on HSN Codes in GSTR-1

• It is mandatory for the taxpayers to report minimum 4 digit or 6 digit of HSN Code in Table-12 of GSTR-1 on the basis of their Aggregate Annual Turnover (AATO) in the preceding financial year.
• Implementation of this is being done in phased manner.
• Taxpayers with AA TO of up-to 5 crore.
  1. In Phase 1, Part 1 and Part 2 (Already implemented from 1-4-2022 and 1-8-2022 respectively), mandatorily reporting of 2-digit HSN codes for goods & services is required. Manual user entry is allowed for entering HSN or description and taxpayers will be able to file GSTR-1 after manual entry.
  2. In Phase 2 (To be implemented from 1-11-2022), mandatory  reporting of HSN at 4-digits is required
• Taxpayers with AATO of more than 5 crore.
  1. In Phase 1, Part I, mandatorily reporting of 4-digit HSN codes for goods & services is required. Manual user entry is allowed for entering HSN or description and taxpayers will be able to file GSTR-1 after manual entry.
  2. In Phase 1, Part 2 and Phase 2, mandatory reporting of 6-digit HSN Code is required.

[Source: Notification No. 78/2020-CT dated 15.10.2020 read with https://tutorial.gst.gov.in dated 22.10.2022]

Web application ‘GST Doctor’

• GST department’s staff has developed a Web-Application named as ‘GST Doctor’ which is useful for efficient and holistic analysis of GST-Returns, Invoice-wise data etc. for the purpose of Audit, scrutiny of GST returns, and processing of GST Refunds.
• The Web-Application has been  developed in such a way that the users just need to feed in the returns downloaded from AIO viz. GSTR 1, GSTR 3B, GSTR 2A and GSTR 9 and the software throws the reconciled data flagging discrepancies, if any, in a collated manner.
• With this, reconciliation is easy.
• Omissions possible due to manual verification could be eliminated by this freely down-loadable Web-Application, available on Microsoft Store.

[Source: Letter No. ADMIN/MISC/10/2022-DAC-office of Pr CC-CGST-Zone-Chennai dated 22.11.2022 issued by Principal Chief Commissioner, Chennai]