RECENT DEVELOPMENTS IN GST

[Dr. Sanjiv Agarwal]

The total GST collections in January, 2020is ₹ 1,10,828 crores out of which CGST is ₹ 20,944 crores and IGST is ₹ 53,013 crores. The compensation cess amount to ₹ 8637 crores.

Tax evasion and related arrests on tax offences have increased in last few weeks and the amounts involved are huge running into few thousand crores. Is it tax terrorism ! not for evaders. However, compliances continue to be troublesome. ‘We evolve and mature as we grow’ seems to be the Government’s stance.

CBIC appears to be now taking a stand on compensation cess that GST compensation to states will be made only if available. According to one report, Goods and Services Tax (GST) revenue of 23 states till December, 2019 stands at ₹ 15,100 crore lower than last year, a 3.9 per cent decline. The assumption of 14 per cent assured growth rate aggravates the revenue stress. Key states are in the red, with Punjab’s collection at (-)16%, Uttar Pradesh (-) 11%, Andhra Pradesh (-) 16%, Kerala (-) 12%, Gujarat (-) 6% and Telangana (-) 8%. The data for five states, including Goa, Bihar, and Delhi, could not be accessed.

The centre has estimated a compensation cess shortage of ₹ 63,200 crore in financial year 2019-20 (FY20). In the first 10 months of FY 20, GST collection grew 4.6 percent. The Central Government will transfer a surplus from the previous two years of ₹ 35,000 crore in two installments to the compensation fund. This still leaves a gap of around ₹ 28,000 crore.

Government now feels that periodic rate changes in GST should be avoided and any rate correction may be undertaken once a year. Since there are at times political or social compulsions, how far it will be practical will be interesting to witness.

The Goods and Services Tax Network (GSTN) has announced setting up of a Consultative Committee to suggest ways to improve the functioning of its info-tech system. The Committee will provide feedback and suggestions on new functionalities in the GST system and adoption of new IT tools. Members will include representatives of industry chambers such as CII and Assocham, traders body such as Confederation of All India Traders (CAIT) and professional bodies such as Institute of Chartered Accountants of India, besides others.

To incentivize tax payers, Government is working on a lottery scheme for goods and services (GST) taxpayers, where the winning amount may range from ₹ 10 lakh to ₹ 1 crore. This is being done to improve compliance and boost collections that have been lagging in the current fiscal year on account of the economic slowdown and fake invoices. Every GST bill of a taxpayer will be a price winning lottery ticket. The lottery scheme will be on the lines of what the Delhi government had under the value-added tax (VAT) regime for consumers.

MoF has issued a press release on 10^th February, 2020 stating that out of total number of 144556 pending cases of litigation / adjudication involving ₹ 4.15 lakh crore of taxes, total number of settlements done under the scheme SVLDRS, as on 5^th February, 2020 are 49534 cases involving taxes of ₹ 24970 crores.

Looking to the trends and developments taking place in GST arena, it is increasingly becoming clear that Central Government is now serious and keen on GST reforms and see that the pain points are at least minimized. The sooner it is done, better it will be for all stakeholders. In fact GST requires at least two commitments from tax administration – actual one nation, one tax and ease of compliance which means total revamp of GSTN network / portal. 

New Standard Operating Procedure (SOP) for exporters

• The objective of new SOP is to mitigate the risk of wrong input tax credit taken by exporters on fake invoices and non-existent exporters.
• For verification of refunds, exporters shall file information in prescribed format as per circular, which will be verified within fourteen working days.
• Any delays shall be informed to nodal cell. Further, assessee may escalate the matter to Principal Chief Commissioner / Chief Commissioner by email.
• Principal Chief Commissioner / Chief Commissioner to get verification completed within next seven working days.
• Refunds pending for more than one month to be intimated at www.cbic.gov.in/issue by giving relevant details. Such grievances to be examined by Committee headed by Member GST, CBIC.

[Source: Circular No. 131/1/2020-GST dated 23.01.2020]

Due dates for filing form GSTR-3B for January – March, 2020

Category	Period	Last Due Date
Taxpayers having an aggregate turnover of up to rupees Five Crore in the previous financial year, whose principal place of business is in the States of Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana or Andhra Pradesh or the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands and Lakshadweep	January 2020 February 2020 March 2020	22 February 2020 22 March, 2020 22 April, 2020
Taxpayers having an aggregate turnover of up to rupees Five Crore in the previous financial year, whose principal place of business is in the States of Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or Odisha or the Union territories of Jammu and Kashmir, Ladakh, Chandigarh and Delhi	January 2020 February 2020 March 2020	24 February 2020 24 March, 2020 24 April, 2020
Taxpayers not covered in above categories	January 2020 February 2020 March 2020	20 February 2020 20 March, 2020 20 April, 2020

(Source : N. No. 44/2019-CT dated 09.10.2019 as amended by N. No.07/2020–CT dated 03.02.2020)

GST database notified as a protected system under  Information Technology Act

• MOF has notified GST data base as a ‘protected system’  under  Information Technology Act, 2000 [Section 70(1)].
• This data includes all associated infrastructure dependencies at GST Network (GSTN).
• The following are authorized to access the protected system:

1. designated GSTN employees authorised by Head of GSTN;
2. designated Tax officers of the Central Government, State Government, Union territories, Auditing agencies and Accounting Authorities;
3. authorised members or employees of Contractual Managed Service Provider or third-party vendor(s) or its partner(s); and
4. GSTN authorized business partner(s).

[Source: Notification  reference GSR 84 (E); F. No. S-31011/01/2012-SO (ST-1)(Pt.-8) dated 04.02.2020]

Extension of time limit for submitting the declaration in Form GST TRAN-1

CBIC has notified the extension of due date  for submitting the declaration in Form GST TRAN-1 till 31.03.2020 for the class of registered persons who could not submit the declaration in Form GST TRAN-1 under rule 117(1A) of CGST Rules, 2017 by the due date on account of technical difficulties on the common portal and whose cases have been recommended by the GST Council.

This order is issued in supersession of Order No. 1/2019-GST dated 31.01.2019.

[Source : Order No. 01/2020-GST dated 07.02.2020]

Targeted enforcement action against GST evasion

• The Central Board of Indirect Taxes and Customs (CBIC) has launched an application that facilitates central and state tax officers to share information about taxpayers for enforcement action as the Government looks to tighten enforcement measures to check goods and services tax (GST) evasion.
• Currently, state tax officials administer and control 90 per cent of the assessees below ₹ 15 million annual turnover and the remaining 10 per cent is with the central tax officers. For those assessees with an annual turnover of more than ₹ 15 million, the Centre and states share control in 50:50 ratio.
• Following delay in payment of GST compensation to states by the Centre due to lower-than-expected revenue collection,  it has been decided to step up enforcement actions and data exchange.
• This development is being looked at as a big leap in intelligence sharing and cooperative federalism.

[Source :CBIC website]

Sabka Vishwas – Legacy Dispute Resolution Scheme

The total number of settlements done under the Sabka Vishwas (Legacy Dispute Resolution Scheme, 2019) as on dated 05.02.2020 are 49,534 and amount involved in these cases is 24,970 crores.

(SOURCE: MoF PRESS RELEASE DATED 10.02.2020)