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RECENT DEVELOPMENTS IN GST

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RECENT DEVELOPMENTS IN GST
By: Dr. Sanjiv Agarwal
October 22, 2020
All Articles by: Dr. Sanjiv Agarwal       View Profile
  • Contents

According to IMF’s latest World economic outlook report, India’s post – Covid losses are the biggest in South Asia. India’s GDP is likely to contract by 10.3% this fiscal year followed by countries like Afghanistan, Pakistan and Sri Lanka. India will also not be able to regain its 2019 GDP level even in 2021. With all other rating agencies following this trend, tax collections will also take a hit and Central and State Governments should factor this in all future plans / targets / budgets including revenue receipts.

While 23 states including 2 Union Territories and Tamil Nadu agreed to option-I on GST compensation to states, and 8 other states looking for other legal options, Central Government has later agreed to meet the revenue gap on account of compensation. It is expected that opposition ruled states may take a common stand on compensation. However, opposition is seeking clarification on balance amount of gap in compensation amount including how the debt will be serviced and repaid. Ultimately, Union of India will have to honour its commitment towards compensation to states.

Ministry of Finance has begun its annual budget exercise for the year 2021-22 which is going to be crucial for the country as it will be dealing with Covid impacted economy and its revival.

The tax evasion arising out of fake invoices and wrong input tax credit is on a rise resulting in increased cases of arrest of businessmen. Companies may file petitions challenging constitutional validity of jail provisions. According to one report, 1620 cases of fraudulent claims of input tax credit involving a sum of ₹ 11,251 crore were registered during 2018-19 and 535 cases involving a sum of ₹ 2565 crore in 2019-20 till June, 2019.

CBIC has issued  a series of new notifications on 15.10.2020 on extension of dates of few returns, requirement of HSN Code on invoices, relaxing the requirement for annual return, amendment in rules relating to tax invoices, GST audit, furnishing of returns, e-way bills etc.

The country faces the challenge of filing returns by this month end which also includes last date for filing GST audit and tax audit returns on 31st October, 2020. No date is sacrosanct. In a vast nation like India which is hit by Covid 2020 presently and situation not likely to improve in near future, having last date of 30.10.2020 is neither desirable nor practical to be adhered to. Businesses and professionals, both are equally impacted in terms of business, revenue, health care, staff shortage, liquidity and so on including GSTN glitches as usual, while there does not seem to be significant improvement on GSTN portal. Besides we have an annual festive season before us. Though Government may have shifted to faceless assessment, audits are still not faceless as liability of professionals are onerous. It will be in fitness of things that CBIC announces postponement of all due dates in October, 2020 to atleast 31st December, 2020 to relive avoidable pressure on professionals and businessmen and rather allow them to do business GSTC strongly advocates for extension of due dates of GST audit, tax audit and other and others.

New due dates for quarterly GSTR-1

  • CBIC has notified due dates for filing GSTR-1 on quarterly basis for next two quarters, viz,

Quarter under Reporting

Due Date

October, 2020 to December,  2020

Up to 13th  January, 2021

January, 2021 to March, 2021

Up to 13th  April, 2021

  • Quarterly return may be filed by the registered persons having aggregate turnover of up to 1.5 crore rupees in the preceding financial year or the current financial year.
  • Details of outward supply of goods or services or both have to be furnished in Form GSTR-1 effected during the quarter.

[Source: Notification No. 74/2020-Central Tax dated 15.10.2020]

Due dates for filing form GSTR-1

CBIC has notified the due dates for furnishing FORM GSTR-1 for next six months from October, 2020 to March, 2021 for registered persons having aggregate turnover of more than 1.5 crore rupees in the preceding financial year or the current financial year as per following due dates:

Month

Due Date

October 2020

11.11.2020

November 2020

11.12.2020

December 2020

11.01.2021

January 2021

11.02.2021

February 2021

11.03.2021

March 2021

11.04.2021

[Source: Notification No. 75/2020-Central Tax dated 15.10.2020]

Furnishing of Form GSTR-3B for next six months

CBIC has prescribed staggered filing due dates for Form No. GSTR-3B for next six months, i.e. October, 2020 to March, 2021 alongwith mode of payment and last date for discharge of tax liability as follows:

Month

 

 

 

Aggregate Turnover more than ₹ 5 crore in the preceding FY

Aggregate Turnover <= ₹ 5 crore in the preceding FY

 

 

   

For  taxpayers in State A category

For taxpayers in  state B Category

October 2020

20.11.2020

22.11.2020

24.11.2020

November 2020

20.12.2020

22.12.2020

24.12.2020

December 2020

20.01.2021

22.01.2021

24.01.2021

January 2021

20.02.2021

22.02.2021

24.02.2021

February 2021

20.03.2021

22.03.2021

24.03.2021

March 2021

20.04.2021

22.04.2021

24.04.2021

State A category include

State A: Taxpayers whose principal place of business is in the States of Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh, the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands or Lakshadweep.

State B category include

State B: Taxpayers 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, the Union territories of Jammu and Kashmir, Ladakh, Chandigarh or Delhi.

Mode of payment shall be as follows:

Nature of Discharge

Debited from

Tax Liability

Electronic cash ledger or Electronic credit ledger

Interest, penalty, fees, and any other amount payable

Electronic cash ledger

[Source: Notification No. 76/2020-Central Tax dated 15.10.2020]

Filing of GST annual return made optional for FY 2019-20

Based on GST Council’s recommendation, Central Government has notified the filing of Annual Return u/s 44(1) of CGST Act, 2017 to be optional  for those registered persons whose turnover is less than Rs. two crore for the financial  years  2017-18, 2018-19 and 2019-20.

[Source: Notification No. 77/2020-Central Tax dated 15.10.2020]

HSN CODE

Aggregate Turnover in the preceding F. Y.

No. of Digits of HSN Code

Up to ₹ 5 crores

4*

More than ₹ 5 crores

6

  • The requirement for mentioning the HSN code on invoices, with effect from 1st day of April 2021, shall be as follows:
  •  A registered person having aggregate turnover up to 5 crores rupees in the previous financial year may not mention the number of digits of HSN Code in a tax invoice issued by him under the CGST rules in respect of supplies made to an unregistered person.*

[Source: Notification No. 78/2020-Central Tax dated 15.10.2020]

Amendment in CGST Rules, 2017

Amendments in following have been made in the CGST Rules, 2017 and GST forms:

Rule 46

Tax invoice

Rule 67A

Manner of furnishing of returns for details of outward supply of SMS facility in case of Nil return of Form GST CMP-08

Rule 80

Annual return – threshold limit increased to ₹ 5 crore for FY 2019-20 also

Rule 138E

Restriction on furnishing of information in Part A of Form GST EWB-1 not to apply during 20.03.2020 to 15.03.2020

GST Forms

Change in various forms including GSTR-2A, 9, 9C etc.

[Source: Notification No. 79/2020-Central Tax dated 15.10.2020]

 

By: Dr. Sanjiv Agarwal - October 22, 2020

 

 

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