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By: Dr. Sanjiv Agarwal
July 30, 2020
All Articles by: Dr. Sanjiv Agarwal       View Profile
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GST network has come out with GST report on completion of three years. It’s a reading on developments of and journey of three years of GST in India.  Total number of active taxpayers are 1.23 crore on 30th June, 2020. E-way bills have been quite successful. More than 70 crore e-way bills have been generated so far. About 80% of registered tax payers file their 3B returns.

CBIC has claimed that removal of pendency of registration applications filed during Covid period shall be over by 31st July, 2020. Since lockdown is over in most parts of the country, deemed approvals have been granted for all applications as on 30th June, 2020. Further, all applications which remain pending as on 28.07.2020 shall be deemed approved as on 31.07.2020.

As an interim measure, CBIC has also allowed filing revocation of cancellation order in Appeal channel to avail benefit of Removal of Difficulty Order No. 1/2020 dated 25.06.2020.

Government has clarified its stand on GST rate of 18% on alcohol based sanitizers. It was recently reported that sanitizers producers are evading GST by charging lesser percentage of GST @ 12% by way of mis-classification. Anti-evasion wing has already started issuing notices in this regard.

There is no GST on liquor licenses. It has been clarified that this exemption is specific to liquor and can not be generalized for all licenses on which fee is payable to State Governments.

Jharkhand State has levied Covid Cess on mineral bearing lands, a cess of its kind first time levied in India.

Central Government has released ₹ 1.6 trillion GST compensation to States in financial year 2020. ₹ 14000 crores has been released for their losses due to GST for March, 2020. However, total cess collection has been ₹ 95444 crore.

Covid -19 continues to surge in India with daily new cases now crossing 40k in numbers. However, mortality rate continues to be much better then other countries. It is unlikely that economy will turn to normal soon and so will be the tax revenue.

GST Rate on Hand sanitizers: Govt’s View Point

  • The GST rates on various items are decided by the GST Council where the Central Government and all the state governments jointly decisions.
  • Sanitizers are disinfectants like soaps, anti-bacterial liquids, dettol etc which all attract duty standard rate of 18% under the GST regime.
  • Inputs for manufacture of hand sanitizers are chemicals packing material, input services, which also attract a GST rate of 18%.
  • Reducing the GST rate on sanitizers and other similar items would lead to an inverted duty structure and put the domestic manufacturers at disadvantage vis-a-vis importers.
  • Lower GST rates help imports by making them cheaper which is against the nation’s policy on Atmanirbhar Bharat.
  • Consumers would also eventually not benefit from the lower GST rate if domestic manufacturing suffers on account of inverted duty structure.
  • Therefore, hand sanitizers attract GST at the rate of 18%.

[Source : Ministry of Finance Press Release dated 15.07.2020]

GST on Grant of Licenses

  • No GST is applicable on license fee charged by the States for grant of liquor license to vendors, both in pre-GST era as well as in GST era.
  • GST Council  in its 26th meeting held on 10.03.2018 and 37th meeting held on 20.09.2019 decided that services by way of grant of alcoholic liquor license, against consideration in the form of license fee or application fee, by whatever name called, by State Government is neither a supply of goods nor supply of services.
  • GST Council further decided in the 37th meeting held on 20.09.2019 to clarify that this special dispensation applies only to supply of service by way of grant of liquor license by the State Governments as an agreement between the Centre and States and has no applicability or precedence value in relation to grant of other licenses and privileges for a fee in other situations where GST is payable.
  • Thus, fees payable on other licenses shall be liable to levy of GST.

[Source : GST Council decisions and State Circulars]

Deemed Approval of Registration Application

  • Section 10(25) of CGST Act, 2017 read with rule 9 of CGST Rules provide for deemed approval of registration application after 3 working days
  • Because of national lockdown w.e.f. 25.03.2020, approval could not be done within 3 working days.
  • CBIC has decided that the deemed approval of application of registration would not be granted on the portal with effect from 25.03.2020.
  • Since the lockdown is over in most of the areas and offices are open since 1st June, 2020, deemed approvals have been granted for all  those applications pending as on 30.06.2020, which had not been processed till 15th July, 2020.
  • The application received thereafter which remain pending as on 28.07.2020 shall be deemed approved on 31.07.2020 and the 3 days deemed approval of application of registration would be resumed from 1st August, 2020.

[Source : Letter dated 17.07.2020 issue by CBIC 20/06/11/2020-GST /1137 (GST Policy Wing) ]

Filing revocation of cancellation order in appeal channel

  • In case any application for revocation of cancellation of registration was rejected by the tax authorities before 12/6/2020 and assessee wishes to avail benefit of RoD* order 01/2020 dated 25.06.2020, as an interim measure, assessee can request the appellate authority /higher authority to pass a simple offline order on it for restoration of the application.
  • Based on such order, jurisdictional authority can restore the application for revocation of cancellation. One needs to apply post login:- Registration- Restore Registration- Restore Revocation. You have to enter ARN of the order and would require to upload scanned copy of the order passed after clicking “Appeal in favour”.
  • The above suggested solution is an interim measure.

               (*RoD = Removal of Difficulty)

[Source: GSTN]

Data Exchange between CBIC and CBDT

CBIC and CBDT have signed a Memorandum of Understanding on 22.07.2020 for data exchange :

  • This will facilitate the sharing of data and information between CBDT and CBIC on an automatic and regular basis.
  • CBDT and CBIC will also exchange with each other, on request and spontaneous basis, any information available in their respective databases which may have utility for the other organization.
  • A Data Exchange Steering Group has also been constituted for the initiative, which will meet periodically to review the data exchange status and take steps to further improve the effectiveness of the data sharing mechanism.
  • MOU is significant in view of recent changes including introduction of GST, incorporation of GSTN and change in the nomenclature of Central Board of Excise and Customs (CBEC) to Central Board of Indirect Taxes and Customs (CBIC) and changed circumstances, including advancements in technology.

[Source: Ministry of Finance Press Release  ID 1640147 dated 21.07.2020]

GSTR-4 Annual Return for Composition Dealers on GSTN Portal

  • GSTR-4 is a return to be filed annually by composition dealers w.e.f. 1st April, 2019.
  • Due dated for financial year 2019-20 is now 31st August, 2020.
  • GSTR-4 can now be filed on GSTN common portal.
  • For filing Form GSTR-4 Annual return, Logon to your dashboard, click on Services > Returns > Annual Return >Select FY>Search>GSTR 4> FILE THE RETURN.
  •  After successfully filing, ARN will be generated and intimated through email and SMS
  • Currently only the online filing has been enabled on the portal. Shortly, offline tool to file Form GSTR-4 Annual Return will also be made available.


GST e-invoicing to be mandatory from 1 October, 2020  for select businesses

  • The GST implementation Committee has recommended that it will go ahead with October 1 deadline (for e-invoice)... To begin with, it will not be for ₹ 100 crore and above, as earlier notified.
  • The government will notify a new GST e-invoice scheme under which businesses with turnover of ₹ 500 crore and above will generate all invoices on a centralized government portal starting October 1, 2020.
  • CBIC will soon come out with a notification to make it ₹ 500 crore from October 1 and as they stabilize, it will bring a date for ₹ 100 crore turnover assessees.

[Source:  Per Principal Commissioner (GST)  - PTI dated 23.07.2020]

GST data in income tax return

  • Income tax data on IT portal now also shows GSTR-2A data of taxpayers.
  • Information required in Income Tax Returns (ITR)
    • Tax payers are required to furnish the GST Registration number
    • Details of taxes levied on sale (CGST , SGST , IGST and UTGST) and these matched with the electronic liability register on the GST portal
    • Details of CGST, SGST , IGST and UTGST paid on purchases and the credit taken thereof should be matched with the electronic credit ledger available on the portal.
    • If any GST refund is receivable from the Government and not credited to Profit and loss account , then details of the same are required to be given.


By: Dr. Sanjiv Agarwal - July 30, 2020



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