RECENT DEVELOPMENTS IN GST

[Dr. Sanjiv Agarwal]

Indian economy is still struggling with corona affected slowdown in economy. In fact all economies in the world are facing slowdown due to Covid -19. In the same back drop, India’s fiscal deficit is at 83.2% of full year budget estimate, highest since 2000. GST took the highest hit for June quarter of 2020-21 which suggests consumer distress or cautions.

W.e.f. August 1, 2020, unlockdown-3 has commenced with some more relaxations to one and all. However, still few sectors remain under lockdown. Further, sectors like tourism, travel, hospitality etc are likely to continue to take the hit for some more time. However, MOF is hopeful that growth may revive sooner as the recovery signals are encouraging.

CBIC has issued a GST Ready Reckoner-2020 for CBIC filed officers comprising of detailed documentation of duties, functions and responsibilities of proper officer. It contains best practices for revenue monitoring and augmentation under GST. It is hoped that it will bring in the desired change and enhance taxpayer’s services and satisfaction.

CBIC has notified new scheme for e-invoicing to be effective from 1st October, 2020 for taxpayers having turnover of over ₹ 500 crores. SEZs units have been excluded from this requirement.

Compensation cess has become a bone of contention. While centre says, it does not have money to pay to states, states are left with no option. Next council meeting may see some fireworks on this account.

Centre has released a total compensation of ₹ 1.65 trillion to slabs in financial year 2019-20. States are now demanding that to meet the short fall in compensation cess, centre must provide the same, even if it requires borrowing from the market. GST Council will have to act on this and decide future course. Bringing some move items including petroleum products could be one solution. There could be some incentive for states where GST is growing. Centre –States can also resort to borrowings.

Refund to exporters continue to be a grey area. Government now proposes to take stern action against risky exporters who have claimed IGST refund and are now not traceable. It is only hoped that genuine taxpayers do not suffer because of this and due refunds ought to be refunded fast as well as automatically.

As we enter into August, 2020 and are in midst of Covid-20 pandemic, we need to follow a cautious approach in personal, processional and business life. Eventually, everything will fall in place, patience is the key.

GST Returns : Changes in the Offing

• The GST Network Portal which is the IT support of the GST regime, is working on modifying and improving the current returns filing.
• New form GSTR-2B to be introduced, will have details of purchases of the company or business with details of input tax credits.
• Form GSTR-3B, providing the tax computation, may be auto-populated.
• The process of linking GSTR-1 with GSTR-3B and GSTR-2A data with GSTR-3B for the flow of ITC to be improved.

[Source: GST Policy Wing ]

E-invoicing w.e.f. October, 2020

• E-invoicing (electronic invoicing) is generation of electronic document containing the particulars of transactions between seller and buyer and each such invoice shall have a Invoice Reference Number (IRN).
• CBIC has notified revised form GST INV-1 (Format or Schema for e-invoice) (Refer rule 48 of CGST Rules, 2017)
• The threshold limit for raising e-invoicing has been enhanced to aggregate turnover exceeding ₹ 500 crore in financial year
• SEZ units have been exempted from e-invoicing
• New e-invoice is applicable to dealers having turnover above ₹ 500 crore and is effective w.e.f. 01.10.2020.
• QR Code shall be mandatory for B2C transactions where supplier’s aggregate turnover in a financial year is more than ₹ 500 crore.
• New format contains several mandatory and optional fields.

[Source: Notification No. 60 & 61/2020-Central Tax dated 30.07.2020]

Suspension of all benches due to Covid-19 pandemic

• The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) vide order has suspended sitting of all Tribunals including the regional benches from the period August 4, 2020 to August 14, 2020 on account of COVID-19 pandemic. However, urgent stay applications will be heard through video conferencing.
• Further, last date of pronouncement of order reserved cases and release of detailed orders has been extended up to August 19, 2020 which will be done after obtaining prior permission from the President of CESTAT.

(Source:  CESTAT Office Order dated 03.08.2020)