RECENT DEVELOPMENTS IN GST

[Dr. Sanjiv Agarwal]

The output of eight crore industries has dropped by 8.5% in August, 2020 due to decline in production of steel, cement and refinery products. Also, fiscal deficit is on a rise, divestment targets are likely to be missed and any additional borrowing may be discouraged. Economic troubles continue despite opening up of the economy now to a large extent.

On GST compensation option to states, about 20 states have reverted and all these states want Option-1 to borrow ₹ 97,000 crore without the obligation paying interest and principal back. Next GST Council meeting on 5^th October shall take this forward. It is expected that dissenting states may ask for a model incorporated in the Constitution Amendment Act of 2011 for setting up a dispute resolution authority.

CAG report recently disclosed that for 2018-19, out of the ₹ 2.7 lakh crore received from such levies (of which ₹ 95,081 crore is from GST Compensation Cess), only ₹ 1.64 lakh crore had been transferred to specific reserves and funds, the rest remaining with the Consolidated Fund of India .

Revenue collections have started improving since Covid period was unlocked further from August, 2020 onwards as seen in GST collections. However, there do not seem to be signals of an early recovery which calls for a yet another stimulus package. The gross GST revenue collected in the month of September, 2020 is ₹ 95,480 crore of which CGST is ₹ 17,741 crore, SGST is ₹ 23,131 crore, IGST is ₹ 47,484 crore (including ₹ 22,442 crore collected on import of goods) and Cess is ₹ 7,124 crore (including ₹ 788 crore collected on import of goods). GST Collections have crossed ₹ 95000 crore for the first time in current financial year.

CBDT has authorized the Principal Director General of Income Tax (System) or the Director General of Income Tax (Systems) to upload information relating to GST returns in the Annual Information Statement in Form 26AS on a quarterly basis. CBDT has also notified TCS w.e.f. from 01.10.2020. For the purpose of TCS, no adjustment on account of GST is required to be made for collection of tax u/s 206c (1H) since the collection is made with reference to receipt of amount of consideration. CBIC has notified implementation of invoices from 01.10.2020. CBIC has also extended the last date for annual return and audit from 30.09.2020 by one month to 31.10.2020.

Time limit for issuance of invoice

Time limit for issuance of invoice in case of goods being sent or taken out of India on approval basis for sale or return which falls during the period from 20.03.2020 to 30.10.2020 has been extended up to 31.10.2020.

(Source:  Notification No. 66/2020-Central Tax dated 21.09.2020)

Late fees payable in case of delayed filing of GSTR-4

Late fees payable in case of delayed filing of GSTR-4 (for composition dealers) for the period July 2017 to March 2020 has been waived fully in case of Nil Return, and restricted to ₹ 500 per return in other cases if such GSTR-4 is furnished from 22th September, 2020 to 31st October, 2020.

(Source: Notification No. 67/2020- Central Tax dated 21.09.2020)

Late fees payable for delayed filing of Final Return (GSTR-10)

Late fees payable for delayed filing of Final Return (GSTR-10) has been restricted to ₹ 500 if such GSTR-10 is furnished from 22th September, 2020 to 31st December, 2020.

(Source:  Notification No. 68/2020-Central Tax dated 21.09.2020)

Extension of due date for filing GST Annual Returns and Audit from September 30, 2020 to October 31, 2020

CBIC vide Notification No. 69/2020-Central Tax dated 30.09.2020 has extended the due date for filing of GSTR-9 and 9C for the year 2018-2019 from September 30, 2020 to October 31, 2020.

(Source:  Notification No. 69/2020-Central Tax dated 30.09.2020)

Amendment in Notification No. 13/2020-Central Tax dated 21.03.2020

Notification No. 13/2020-Central Tax dated 21.03.2020 notifies registered person whose aggregate turnover in a financial year exceeds one hundred crore rupees, as a class of registered person who shall prepare invoice and other prescribed documents as per Rule 48(4) in respect of supply of goods / services to a registered person.

Now, financial year has been substituted by ‘any preceding financial year from 2017-18 on words’ and exports has also been included in supply.

(Source:  Notification No. 70/2020-Central Tax dated 30.09.2020)

Due date extension for Quick Response Code

Provision Invoice should contain a Quick Response(QR) Code (supplies made to unregistered person i.e. B2C invoice)

Applicable to Registered person having aggregate turnover in any preceding financial year from 2017-18 onwards exceeding ₹ 500 crores

 If a Dynamic QR code is made available to the recipient through a digital display, then such B2C invoice issued containing the cross reference of payment using Dynamic QR code, shall be deemed to be having QR code. This provision shall be applicable w.e.f. 01.12.2020 

(Source:  Notification No. 71/2020-Central Tax dated 30.09.2020)

Change in CGST Rules in relation to tax invoice and E-way Bills

CGST Rules, 2017 have been amended in relation to :

1. Rule 46, tax invoice

It should also contain QR Code, having embedded invoice number (IRN) in it, in case invoice has been issued as per rule 48(4).

2. Rule 48, manner of issuing invoice

Commission may exempt a person or class of persons form issuance of invoice for a specified period on conditions or restrictions as may be notified.

3. Rule 138A documents / devices

Documents / devices to be carried by a person-in-charge of conveyance QR code may be produced electronically for verification by proper officer in lieu of physical copy of tax invoice.

(Source:  Notification No. 72/2020-Central Tax dated 30.09.2020)

One time relaxation in E-invoices for the month of October, 2020

1. The Government had in December 2019 prescribed that the GST Taxpayers having aggregate annual turnover more than ₹ 100 crores in any preceding Financial Year will be required to issue e-invoice for all the Business to Business (B2B) supplies, in the manner prescribed under rule 48(4) of the CGST Rules, 2017 w.e.f. 1st April 2020. Further, it was also mandated under rule 48(5) of the CGST Rules, 2017 that a B2B invoice or an export invoice issued by such a taxpayer, in any other manner, shall not be treated as an invoice. In March 2020, the date of implementation of e-invoice was extended to 1st October 2020. Thus, the taxpayers having aggregate turnover of ₹ 500 Crore and above only would be required to issue e-invoice w.e.f. 1st October 2020.
2. CBIC has now decided that to have smooth transition w.e.f. 01.10.2020, the invoices issued by such taxpayers during October 2020 without following the manner prescribed under rule 48(4), shall be deemed to be valid and the penalty leviable under section 122 of the CGST Act, 2017, for such non-adherence to provisions, shall stand waived if the Invoice Reference Number (IRN) for such invoices is obtained from the Invoice Reference Portal (IRP) within 30 days of date of invoice.
3. CBIC has accordingly notified that the registered persons required to prepare the tax invoice in the manner specified rule 48(4) of the CGST  Rules, 2017, who have prepared tax invoice in a manner other than the said manner, as the class of persons who shall, during the period from the 1st October, 2020 to the 31st October, 2020, follow the special procedure such that the said persons shall obtain an Invoice Reference Number (IRN) for such invoice by uploading specified particulars in FORM GST INV-01 on the Common Goods and Services Tax Electronic Portal, within thirty days from the date of such invoice, failing which the same shall not be treated as an invoice.
4. No such relaxation would be available for the invoices issued from 1st November 2020 and such invoices issued in violation of rule 48(4) of the CGST Rules, 2017 would not be valid and all the applicable provisions of CGST Act and Rules would apply for the said violation.

(Source:  Notification No. 73/2020-Central Tax dated 01.10.2020;

Press Release dated 01.10.2020)

Ocean/Air Freight exemption for export of goods extended till 30 September, 2021: Notification   

Notification No. 04/2020 – Central Tax (Rate), dated 30-9-2020, Notification No. 04/2020 –Integrated Tax (Rate), dated 30-9-2020, Notification No. 04/2020 –UTGST (Rate), dated 30-9-2020.

The Govt. has extended the exemption provided on services by way of transportation of goods by a vessel/aircraft from customs station of clearance in India to a place outside India upto 1 year, i.e., 30-9-2021. Earlier the exemption was available only till 30-9-2020.

(Source:  Notification No. 4/2020-UTGST (Rate) dated 30.09.2020)

New GST information in Income Tax 26 AS Form :

• Central Board of Direct Taxes has now authorised Principal Director General of Income Tax (Systems) or Director General of Income Tax (Systems) to upload information related to GST Returns in the Annual Information Systems in Form 26AS within 3 months from the end of the month in which information is received by him.
• Thus GST Returns related information would now be available in Form 26AS on the Income Tax site making comparison between Income Tax filings and GST filings easy for the Income Tax authorities.
• The necessary  procedures, formats and standards for the same, shall be specified by Principal Director General of Income Tax (Systems) or Director General of Income Tax (Systems).

(Source:  CBDT Order dated 29.09.2020)

Relaxation granted in case of non-issuance of E-invoice during October, 2020

Relaxation has been given to taxpayers from the requirement to generate IRN in respect of invoices issued during the month of October, 2020. In these cases, Invoice Reference Number ('IRN') for such invoices from Invoice Reference Portal ('IRP') can be generated within 30 days from the date of invoice.

(Source: Press Release dated 30.09.2020)

As we enter October, 2020 now, we start H2 of the current year. This is crucial for economic recovery, GST compliances, tax revenues, reforms on account of e-invoices, settlement of compensation and rate rationalization in due course. It is hoped that like other nations, India would aim at winning over Covid, put economy on track again and emerge as a vibrant country with an effective and efficient GST tax system.