RECENT DEVELOPMENTS IN GST

[Dr. Sanjiv Agarwal]

Indian economy has started picking up, if GST revenue for October, 2020 is any indication. Finance Minister has also signaled that economy has started growing and India may be among the fastest growing ones by text year. Government has already prioritized spending in infrastructure sector. Revival of demand and consumption; focus on sectors like infrastructure, agriculture; support to financial sectors and pension and sovereign funds in particular are likely to spur growth.  However, few sectors like real estate, specific infra related areas, core industrial sectors (except agriculture, health care) may not perform that well. This fiscal, GDP growth rate, according to FM, is likely to be near zero.

However, Reserve Bank of India has cautioned last week only that there are difficult times ahead for states and federalism. Fiscal deficit may surge beyond 4% of GDP, due to Covid 2019 impact. According to RBI, tax revenues are likely to fall in near future. With states in the vanguard of the fight against the pandemic, fiscal pressures are expected to intensify with surging expenditure and loss of revenues owing to demand slowdown.

Advance rulings continue to create ripples in the world of interpretation, adding to litigation and confusion. It is high time that Authority for Advance Rulings are more professional and independent in their approach with people of atleast Commissioner rank running the show. Then only some credibility would be brought in to the rulings pronounced.

On Compensation Cess, Union has now transferred ₹ 6000 crore to various 16 states as a first tranche of borrowing to meet GST compensation shortfall. This borrowing has been done @ interest rate of 5.19 percent with tenor of 3-5 years.

CBIC has extended the last date for filing IT and GST returns. In GST, date for annual return and GST reconciliation statements (Form 9 and 9C) have been extended upto 31^st December, 2020.

October was the last date for filing returns in which more than 7.5 million returns were filed till 25 October. This indicates substantial economic revival and increased revenue in near future. Also, GST e-invoices have also shown good response in its first month of introduction. About 2.4 million invoices were being generated daily.

GST collections cross ₹ 1 lakh crore for the first time on in current financial year (i.e. in Covid era). The gross GST revenue collected in the month of October, 2020 is ₹ 1,05,155 crore of which CGST is ₹ 19,193 crore, SGST is ₹ 25,411 crore, IGST is ₹ 52,540 crore (including ₹ 23375crore collected on import of goods) and Cess is ₹ 8,011crore (including ₹ 932 crore collected on import of goods). The total number of GSTR-3B Returns filed for the month of October upto 31st October, 2020 is 80 lakh. The revenues for the month are 10% higher than the GST revenues in the same month last year. During the month, revenues from import of goods was 9% higher and the revenues from domestic transaction (including import of services) are11% higher that the revenues from these sources during the same month last year. The growth in GST revenue as compared to that in months of July, August and September, 2020 of -14%, -8% and 5% respectively clearly shows the trajectory of recovery of the economy and, correspondingly, of the revenues.

The revenue growth on YoY basis of more than 25% was seen in states of Arunachal Pradesh, Mizoram, Dadar & Nagar Haveli and Chhattisgarh. However, States like Andaman Nicobar, Lakshadweep, Goa, Meghalaya, Sikkim, UT of Chandigarh and Delhi showed negative growth.

It is hoped that GST collections will grow further in coming months owing to surge in demand & consumption and festive months.

EVC facility extended for filing GSTR-1 and GSTR-3B

Withdrawal of EVC facility extended to companies for filing GSTR-1 and GSTR-3B 

The facility to file GSTR 3B and GSTR-1 with the EVC in lieu of DSC extended to the registered person, whoare also registered under the Companies Act, 2013, shall be withdrawn w.e.f. 1st Nov. 2020. However, facility to file NIL returns through OTP verification, shall be continued for all types of registered persons in view of Notification No. 58/2020- dated 1^st July, 2020.

[Source: gst.gov.in dated 23.10.2020]

Further extension of due dates to file GSTR-9 & GSTR-9C for F.Y. 2018-19

• Central Government has extended the due date to file annual return in Form GSTR-9 and reconciliation statement in Form GSTR-9C for the F.Y. 2018-19 from 31 October, 2020 to 31 December, 2020.
• Notification No. 41/2020-Central Tax dated 05.05.2020 has been amended accordingly.
• The extension is attributed to difficulties arising out of Covid pandemic.

[Source: Notification No. 80 /2020 – Central Tax dated 28-10-2020]

Press Release on Extension of due dates for Annual Return and Reconciliation Statement for F Y 2018-19 (Form GSTR-9/GSTR-9A)

1. Government of India (CBIC) has decided to extend the due date for filing Annual Return (FORM GSTR-9/GSTR-9A) and Reconciliation Statement (FORM GSTR-9C) for Financial Year 2018-19 from 31st October 2020 to 31st December, 2020. 
2. Assessees may note  that filing of Annual Return (FORM GSTR-9/ GSTR-9A) for 2018-19 is optional for taxpayers who had aggregate turnover below ₹ 2 crore. The filing of reconciliation Statement in FORM 9C for 2018-19 is also optional for the taxpayers having aggregate turnover upto ₹ 5 crore.
3. This extension has been granted on the grounds that on account of the COVID-19 pandemic related lockdown and restrictions, normal operation of businesses have still not been possible in several parts of the country. 

 [Source: MoF (CBIC)  Press Release ID: 1667289 dated 24.10.2020

Advisory on Filing NIL Form CMP-08

GSTN has issued advisory on filing Nil CMP -08 statement through SMS on GST portal :

• A Composition taxpayer may now file NIL statement in Form GST CMP-08 for a quarter, through an SMS, apart from filing it through online mode, on GST Portal.
• To file NIL Form GST CMP-08 through SMS, the taxpayer must fulfil following conditions:

• Taxpayer must be registered as composition taxable person (by filing Form GST REG-01) or the taxpayer might have opted for composition levy (by filing Form GST CMP-02).
• Taxpayer must have filed all the applicable statement(s) in Form GST CMP-08 for the previous quarter(s).
• Authorized signatory and his/ her phone number must be registered on the GST Portal.
• There must not be any data in save stage, in online version of Form GST CMP-08, on the GST Portal.

• NIL Form CMP-08 for a tax period must be filed by the taxpayer, if there is no:
  • outward supplies;
  • liability due to reverse charge (including import of services); and
  • other tax liability for the quarter, for which the statement is being filed.
• Steps to File Nil Form GST CMP-08 through SMS are as below:
  • Send SMS to 14409 number to file Nil Form CMP-08 ie NIL space Return Type space GSTIN space Return Period

(For example for NIL Filing for Tax Period Apr-Jun 2020: NIL C8 07AQDPP8277H8Z6 062020)

• • Send SMS again on the same number 14409 with Verification Code to confirm filing of Nil Form CMP-08

(For Example: If Verification Code received here is 324961: CNF space Return Type space Code - CNF C8 324961)

• • After successful validation of “Verification Code", GST Portal will send back ARN to same mobile number and on registered e-mail ID of the taxpayer to intimate successful Nil filing of Form GST CMP-08.
• All the authorized representatives for a particular GSTIN, with unique mobile number can file NIL Form GST CMP-08 through SMS.
• The due date for filing of Form GST CMP-08 is 18th of the month following the quarter.
• For more details on filing Nil Form GST CMP-08 on the GST Portal Click this link:

                     https://tutorial.gst.gov.in/userguide/returns/index.htm#t=FAQs_SMS.htm

[Source: GSTN update dated 26.10.2020 (www.gst.gov.in)]

Action by CGST Authorities against adverse court orders

• CBIC has issued instructions to all Commissionerates for action to be taken in respect of adverse court orders wherein taxpayer is assigned to respective state tax administration.
• Whenever GST related petitions are filed before respective High Court, Union of India is usually made one of the Respondents. In such cases, even if the jurisdiction of the Petitioner lies with the State Government, Central GST Commissionerate are authorized to defend the issue before respective High Court and also in terms of DoR Master Instructions dated 14.08.2019, as amended from time to time.
• This authorization does not cease to exist at the disposal of the Petition by the High Court. Rather, remedial judicial action, for protection of the interests of Revenue continue to rest with the authorized Commissionerate.
• In case, where an appeal is proposed to be filed, it shall be desirable that the Zone concerned interacts with the officials of the State GST so that there is no divergence of views while filing the appeal.
• Respective States/UTs to take necessary steps, including filing of Review Petition/Writ Appeal/ SLP, as the case may be, to safeguard the interests of Revenue.

[Source: MoF (CBIC) Instruction dated 27.10.2020 (F.No. 276/262/2015-CX.8A(Pt.III))]