RECENT DEVELOPMENTS IN GST

[Dr. Sanjiv Agarwal]

Government is expecting a growth of more than 6.5% in GDP for FY 2024 on the back of continued growth momentum in second half of the fiscal –tax buoyancy is close to two. Indian economy grew faster in manufacturing sector @ 13.9% in July- September, 2023. It was 7.7% in first half of 2023-24 due to slowing global economy. GDP rose 7.6% in July- September 2023, thus beating the estimates. Not only this, India’s core sector output rose to 12.1% in October, 23. All this is going to translate in higher tax revenues- both direct and indirect.

It has been reported that collections from major central taxes corporation, central goods and services tax (CGST), excise duty and customs duty before devolution to the states declined in October this financial year, leading to the total tax receipts dropping by 1.2 percent at Rs. 2.15 trillion compared to Rs. 2.18 trillion in the corresponding month of 2022-2023.

Parliament’s winter session may have a bill to make changes in CGST Act based on recommendations of GST Council’s 52^nd meeting held in October, 2023.

Madras High Court in a case (Parle Agro) has held that GST Council can not decide upon classification of goods with reference to flavoured milk. It also held that classification adopted under erstwhile central excise regime is not relevant for determining correct classification under the present GST regime.

CBIC has issued instructions in relation to serving of notice in Form GST – DRC -01 and uploading of summary of order in Form GST DRC-07 electronically as the portal by the proper officer. GSTN has enabled a mechanism to file appeal under Amnesty Scheme on its portal. This is likely to facilitate those taxpayers to file appeal within stipulated time till 31^st January, 2024 who could not file the appeal in past till 31^st March, 2023. Also, faceless assessment under GST scrutiny may take place after some time and not immediately.

The exit polls for recently held elections in five states show a change and a mixed bag for political scene ahead. We have to wait and watch till 03.12.2023.

GST collection in November, 2023 has surged by 15% on YoY basis to Rs. 1.68 lakh crore (Rs. 1.68 trillion) which is the steepest growth rate so far. The gross GST revenue collected in November, 2023 is Rs.1,67,929 crore out of which CGST is Rs.30,420 crore, SGST is Rs.38,226 crore, IGST is Rs.87,009 crore (including Rs.39,198 crore collected on import of goods) and cess is Rs.12,274 crore (including Rs. 1,036 crore collected on import of goods). This growth could be attributed to strong festive sentiment, rise in consumption, import of services, cricket world cup event, automobile sector etc.

SOP for IBC cases before NCLT- Kerala

• GST Department of Kerala Government has issued a Standard Operating Procedure (SOP) for dealing with cases under Insolvency & Bankruptcy Code (IBC) before National Company Law Tribunal (NCLT).
• In the interest of revenue and facilitate a seamless and effective process, the Deputy Commissioner- Legal Cell, Office of the Commissioner of State GST, Kerala, has been appointed as the State Nodal Officer for the SGST Department.
• To ensure a robust communication mechanism between the Nodal Officer at the Commissionerate and the district field officers, as well as subsequent monitoring of actions taken by the field formations in response to such communication, District Nodal Officers are appointed on ex-officio basis.
• The State Nodal Officer will receive information regarding the initiation of the insolvency resolution process for a unit/company from the IBBI through a dedicated email ID: cstlglibbi.sgst@kerala.gov.in.
• The State Nodal Officer will promptly distribute the received information, via the aforementioned official email, to all Joint Commissioners (Taxpayer Services) within three working days.
• District Joint Commissioner (Taxpayer Services) shall in turn communicate the same to the respective Taxpayer Services Circle/ Division.
• District Nodal Officer shall collaborate with the officer of the respective Taxpayer Services Circle/Division, along with the Joint Commissioner, to ensure the timely filing of claims before the Resolution Professional.
• District Nodal Officer shall promptly check the official website of the IBBI at www.ibbi.gov.in on a daily basis to verify whether any new Company / Units is going into insolvency proceedings.
• District Nodal Officer shall communicate these details to the Joint Commissioner (Taxpayer Services) and to the respective Taxpayer Services Circle/ Division.
• It shall be the responsibility of each officers belonging to the Tax Payer Services Circles/ Divisions to daily check the public announcement for any new parties going in to insolvency at the website www.ibbi.gov.in.
• The Taxpayer Services Circle/Division concerned, in cases where there are pending arrears against the unit/ company mentioned in the list, shall appropriately submit their claims using Form B along with all relevant documents to the Interim Resolution Professionals/Resolution Professionals.
• Correspondences with the Resolution Professional (RP)should be made by all Taxpayer Services Circles/ Divisions regarding finalisation of the Resolution Plan.
• Timely verification should also be done in the websitewww.ibbi.gov.in to check if any orders were issued by NCLT with respect to resolution, liquidation, and / or withdrawal of application.
• District Nodal officers are required to provide a monthly report detailing their activities, which includes verifying public announcements, submitting claims, if any, noting orders issued by IBBI / NCLT, and coordinating with the Resolution Professional to offer case updates.
• Monthly report should be communicated to the Joint Commissioner (TPS-HQ) by the 10th day of the subsequent month, using the prescribed proforma.
• The Joint Commissioner (TPS- HQ) will be responsible for submitting a consolidated monthly report to the Commissioner.
• Additional Commissioner (TPS- HQ) will conduct a monthly review of the IBBI claims. The Joint Commissioner (TPS- HQ), the Joint Commissioners of Taxpayer Service, the State Nodal Officer, the District Nodal Officers, and any other officer instructed by the ADC (TPS) are required to attend.

[Source: File No. SGST/973/2023-LEGAL3 dated 21.11.2023]

Instructions for serving DRC-01 and uploading DRC-07 on GSTN portal

• CBIC has issued Instructions for serving of the summary of notice in FORM GST DRC-01 and uploading of the summary of order in FORM GST DRC-07 electronically on the portal by the proper officer.
• Along with the notices issued under section 52 or section 73 or section 74 or section 122 or section 123 or section 124 or section 125 or section 127 or section 129 or section 130 of CGST Act, a summary of such notice is also required to be served by the proper officer electronically on the portal in FORM GST DRC-01.
• Where any order is issued by the proper officer under section 52 or section 62 or section 63 or section 64 or section 73 or section 74 or section 75 or section 76 or section 122 or section 123 or section 124 or section 125 or section 127 or section 129 or section 130 of CGST Act, summary of such order is also required to be uploaded electronically on the portal by the proper officer in FORM GST DRC-07, specifying the amount of tax, interest and penalty, as the case may be, payable by the person concerned.
• Non-issuance of the summary of such notices/ orders electronically on the portal is in clear violation of the explicit provisions of CGST Rules.
•  Serving/ uploading the summary of notices/ orders electronically on the portal not only makes the said notices/ orders available electronically to the taxpayers on the portal, but also helps in keeping a track of such proceedings and consequential action in respect of recovery, appeal etc, subsequent to issuance of such notices.
•  Any deviation from this requirement under CGST Rules may adversely impact record keeping under GST. Further, such an action may also impact further proceedings of appeal and/ or recovery to be done seamlessly on the portal.
• The proper officers have been directed to ensure that summary of the notices issued under section 52 or section 73 or section 74 or section 122 or section 123 or section 124 or section 125 or section 127 or section 129 or section 130 of CGST Act are served, electronically on the portal in FORM GST DRC-01.
• Proper officers should ensure that summary of the order issued under section 52 or section 62 or section 63 or section 64 or section 73 or section 74 or section 75 or section 76 or section 122 or section 123 or section 124 or section 125 or section 127 or section 129 or section 130 of CGST Act is uploaded electronically on the portal in FORM GST DRC-07.
• Principal Chief Commissioners/ Chief Commissioners of the CGST Zones and Principal Director General of DGGI shall closely supervise the officers under their Zones/ Directorate to ensure strict compliance of the above provisions of rule 142 of CGST Rules by the officers within their Zones.

 

[Source: CBIC Instruction No. 04/2023-GST dated 23.11.2023]

Generation and quoting of DIN & RFN – Delhi

• Government of NCT of Delhi has issued a Circular for Generation and quoting of Document Identification Number (DIN)/Reference Number (RFN) on any communication issued by the officers of the Delhi Goods and Services Tax Department to tax payers and other persons concerned.
• The DIN/ RFN would he used for search authorization, summons, arrest memo, inspection notices and letters issued in the course of any enquiry.
• Generation of DIN/ RFN is meant for digitalizing the offline communications sent from the department to taxpayers/other concerned persons. It would provide the recipients of such communication a digital facility to ascertain their genuineness. The DIN/RFN details shall be attached to all the communications sent from the offices.
• No search authorization, summons, arrest memo, inspection notices and letters issued in the course of any enquiry shall be issued by any officer or by any persons employed in the implementation of the Act without a computer generated Document Identification Number (DIN)/ Reference Number (RFN) being duly quoted prominently in the body of such communication. The facility to generate DIN/RFN is provided in the officer login page of the GST BO portal.
• Even though DIN/RFN is a mandatory requirement, in exceptional circumstances communications may be issued without an auto generated DIN/RFN. However, this option has to be exercised only after recording the reasons in writing in the concerned file.
• The exigent situations in which a communication may be issued without the electronically generated DIN/RFN are-

1. When there are technical difficulties in generating the electronic DIN/RFN, or
2. When communication regarding investigation /enquiry, verification etc is required to be issued at short notice or in urgent situations and the authorized officer if outside the office in the discharge of his official duties.

• With regard to notices orders and communication  statutorily issued through the GST backend system by the SGST officers and which is intended to be communicated to the taxpayer through the GSIN Portal, generation of DIN/RFN is exempted.
• Such exemption shall not be available to any such communication issued manually, under any circumstances.
• Any specified communication which does not bear the electronically generated DIN/RFN is not covered by the exceptions, shall be treated as invalid and shall be deemed to have never been issued.
• Any communication issued without an electronically generated DIN/RFN shall be regularized within 15 working days of its issuance.

1. Obtaining the post facto approval of the immediate superior officer as regards the justification of issuing the communication without the electronically generated DIN / RFN;
2. Mandatorily electronically generating the DIN/RFN after post facto approval; and
3. Printing the electronically generated pro-forma bearing the DIN/RFN and filing it in the concerned file.

[Source:  F.6(4)/GST/Policy/2022/1122-23 dated 29.11.2023 – Circular No. 128/47/2019-GST and 122/41/2019-GST -issued by Government of National Capital Territory of Delhi]

GSTN Advisory on Amnesty Scheme for Appeals

• GSTN has issued on Advisory for the procedures and provisions related to the amnesty for taxpayers who missed the appeal filing deadline for the orders passed on or before March 31, 2023.
• Taxpayers can file an appeal in FORM GST APL-01 on the GST portal on or before January 31, 2024, for the order passed by the proper officer on or before March 31, 2023.
• The taxpayers should make payments for entertaining the appeal by the Appellate officer as per the provisions of Notification No. 53/2023. The GST Portal allows taxpayers to choose the mode of payment (electronic Credit/Cash ledger), and it is the responsibility of the taxpayer to select the appropriate ledgers and make the correct payments.
• The office of the Appellate Authority shall check the correctness of the payment before entertaining the appeal and any appeal filed without proper payment may be dealt with as per the legal provisions.
• If a taxpayer has already filed an appeal and wants it to be covered by the benefit of the amnesty scheme would need to make differential payments to comply with Notification No. 53/2023 which should be made against the demand order using the "Payment towards demand" facility available on the GST portal. The navigation step for making this payment is provided: Login >> Services >> Ledgers >> Payment towards Demand.
• Taxpayers who have previously filed an appeal but it was rejected as time barred in APL-02 by the Appellate authority, then the taxpayer would be able to refile the appeal.
• In case, the taxpayers face any issue while re-filing APL-01, a ticket shall be raised on the Grievance redressal portal: https://selfservice.gstsystem.in. The taxpayer shall select the Category “Amnesty Scheme” and the sub-category “Amnesty scheme- Issue in appeal filing” while raising a ticket.
• If the Appellate authority has issued a rejection order in APL-04 due to the appeal application being time-barred, then the taxpayer has to approach the respective Appellate authority office well in advance to comply with the dates in the said notification. The Appellate authority after checking the eligibility of the taxpayer for the amnesty scheme will forward the case to GSTN through the State Nodal officer.
• For the APL 04 issued cases no direct representations will be entertained by GSTN or through the Grievance redressal portal. APL 04-issued cases have to be compulsorily forwarded through the State Nodal officer.
• Post receiving the case from the State nodal officer, GSTN will enable the taxpayer to file an appeal against the concerned order.

 

[Source: GSTN Advisory dated 28.11.2023]

GSTN Advisory on Pilot Project for Biometric based Aadhaar Authentication in Andhra Pradesh

• GSTN has issued an Advisory for Pilot Project of Biometric-Based Aadhaar Authentication and Document Verification for GST Registration Applicants of Andhra Pradesh
• This functionality has been developed by GSTN which will be rolled out in Andhra Pradesh on 4th December, 2023.
• The functionality provides for the document verification and appointment booking process. After the submission of the application in Form GST REG-01, the applicant will receive either of the following links in the e-mail,

(a)   A Link for OTP-based Aadhaar Authentication OR

(b)    A link for booking an appointment with a message to visit a GST Suvidha Kendra (GSK) along with the details of the GSK and jurisdiction, for Biometric-based Aadhaar Authentication and document verification (the intimation e-mail)

• If the applicant receives the link for OTP-based Aadhaar Authentication as mentioned in point (a), she/he can proceed with the application as per the existing process.
• If the applicant receives the link as mentioned in point  (b), she/he will be required to book the appointment to visit the designated GSK, using the link provided in the e-mail. Once the applicant gets the confirmation of appointment through e-mail (the appointment confirmation e-mail), she/he will be able to visit the designated GSK as per the chosen schedule.
• At the time of the visit of GSK, the applicant is required to carry the following details.

(a)    a copy (hard/soft) of the appointment confirmation e-mail

(b)    the details of jurisdiction as mentioned in the intimation e-mail

(c)    Aadhaar Number

(d)    the original documents that were uploaded with the application, as communicated by the intimation e-mail.

• The biometric authentication and document verification will be done at the GSK, for all the required individuals as per the GST application Form REG-01.
• The applicant is required to choose an appointment for the biometric verification during the maximum permissible period for the application as indicated in the intimation e-mail. In such cases, ARNs will be generated once the Biometric-based Aadhaar Authentication process and document verification are completed.
• The feature of booking an appointment to visit a designated GSK is currently available for the applicants of the Andhra Pradesh.

 

(Source: GSTN Advisory dated 01.12.2023)

GSTN Advisory on Two-factor Authentication (2FA)

• GSTN has issued an advisory on two factor authentication for taxpayers.
• Two-factor Authentication (2FA) is for taxpayers to strengthen the login security in GST portal.
• Taxpayers would need to provide one-time password (OTP) post entering user id and password, the OTP will be delivered to their Primary Authorized Signatory “Mobile number and E-mail id”.
•  Tax-payers have been advised to keep their email and mobile number of authorized signatory updated on the GST Portal for receiving the OTP communication. This OTP would only be asked, in case the tax-payer changes the system (desktop or laptop or browser) and location.
• Currently, 2FA will be rolled out for Punjab, Chandigarh, Uttarakhand, Rajasthan and Delhi in 1st phase. In 2nd phase, it is planned to be rolled out all states across India. It is already on in Haryana State.

(Source: GSTN Advisory dated 01.12.2023)

GSTN Collection in November, 2023

• GST Revenue collection for November, 2023 is at Rs. 1,67,929 lakh crore recording highest growth rate of 15% Y-o-Y.
• The gross GST revenue collected in the month of November, 2023 is Rs. 1,67,929 crore out of which CGST is Rs. 30,420 crore, SGST is Rs. 38,226 crore, IGST is Rs.87,009 crore (including Rs. 39,198 crore collected on import of goods) and cess is Rs.12,274 crore (including Rs. 1,036 crore collected on import of goods).
• Gross GST collection has crossed Rs. 1.60 lakh crore mark for the sixth time in FY 2023-24.
• GST collection higher by 11.9% Y-o-Y for FY2023-24 upto November, 2023.
• The gross GST collection for the FY 2023-24 ending November, 2023 [Rs. 13,32,440 crore, averaging Rs. 1.66 lakh per month] is 11.9 % higher than the gross GST collection for the FY 2022-23 ending November, 2022 [Rs.11,90,920 crore, averaging Rs.1.49 lakh crore per month].
• The top five states in terms of GST collection during November, 2023 are Maharashtra, Karnataka, Tamil Nadu, Gujarat and Uttar Pradesh. The bottom five states / UTs include NE states, Chandigarh, J & K, Ladakh and Puducherry.

(Source: PIB Press Release ID 1981642 dated 01.12.2023)