In India, many economic indicators are signaling a robust recovery but Covid and few state’s investments may pose a challenges as 60% of infra spends comes from states. While vaccination programme will help boost economy, V-shaped recovery may also be possible. Our vaccine management is one of the best. GST collections, investment sentiment, capital market performance, higher capital expenditure are some positive indicators. Our FM says, India’s growth is definitely on the higher growth bench mark and also a sustained one.

So far as GSTs contribution is concerned, indirect tax often narrates the story of the economy better. Unlike direct tax, for which one need to wait till the end of the year, indirect tax is based on consumption and thus one can see the outcome immediately. GST collection is at a historic high. The numbers in the recent months are better then those in the pre-covid days. A good part of the present GST growth comes from our economic recovery. Another reason for the growth is better compliances.

Finance Bill, 2021 is being debated in Parliament – today in Lok Sabha and tomorrow in Rajya Sabha. It is likely to be enacted soon thereafter.

CBIC has issued clarifications in respect of refund claim of tax paid by recipient of deemed export supply since the system is not allowing them to file refund claim under the aforesaid category unless the claimed amount is debited in the electronic credit ledger. It is clarified that for the purpose of Rule 89(4), the value of export/ zero-rated supply of goods to be included while calculating “adjusted total turnover” will be same as being determined as per the amended definition of “Turnover of zero-rated supply of goods” in the said sub-rule.

CBIC has issued an advisory dated 20.03.2021 for taxpayers. It has alerted taxpayers against unauthorized means of communication such as phone calls, messages, whatsapp etc from tax officers to discharge ‘maximum tax liability’ in ‘cash’ so that targets for GST revenue collection for the financial year are achieved.

Clarifications on refund related issues

• CBIC has issued clarifications in respect of refund claim of tax paid by recipient of deemed export supply since the system is not allowing them to file refund claim under the aforesaid category unless the claimed amount is debited in the electronic credit ledger.
• Rule 89(1) of CGST Rules, 2017 allows for refund of tax paid in case of a deemed export supply to the recipient or the supplier of deemed export supplies. There is no restriction on recipient of deemed export supplies in availing ITC of the tax paid on such supplies when the recipient files for refund claim. However, said restriction has been placed by the Circular No. 125/44/2019-GST dated 18.11.2019. Therefore, para 41 of Circular No. 125/44/2019-GST dated 18.11.2019 is now modified to remove the restriction of non-availment of ITC by the recipient of deemed export supplies on the invoices, for which refund has been claimed by such recipient.
• It has been decided to extend the relaxation provided for filing refund claims where the taxpayer inadvertently entered the details of export of services or zero-rated supplies to a Special Economic Zone Unit/Developer in table 3.1(a) instead of table 3.1(b) of FORM GSTR-3B till 31.03.2021. Accordingly, para 26 of Circular No. 125/44/2019-GST dated 18.11.2019 stands modified.
• It is clarified that for the purpose of Rule 89(4), the value of export/ zero-rated supply of goods to be included while calculating “adjusted total turnover” will be same as being determined as per the amended definition of “Turnover of zero-rated supply of goods” in the said sub-rule.

(Source: Circular No. 147/03/2021-GST dated 12.03.2021)

GST on E-commerce Transactions

• It has come to notice of Revenue Department that some tax payers are not discharging complete tax liability on the supplies made through e-commerce companies.
• It has been revealed through TCS (tax collected at source) data analysis that there is gap between taxable value declared by taxpayers in Form GSTR-3B and net value on which TCS has been collected by e-commerce companies.
• It is advised that suppliers who are selling goods through e-commerce companies such as Amazon, Flipkart etc or services through e-commerce platforms deducting TCS such as Swiggy, Zomato etc. shall pay their tax dues as their actual turnover to avoid interest, penalty and other penal action under the GST Act, 2017.

(Source: Press Release dated 16.03.2021 issued by Excise & Taxation Department, Haryana)

CBIC Advisory on Tax payments

• CBIC has issued an advisory dated 20.03.2021 for taxpayers
• It has alerted taxpayers against unauthorized means of communication such as phone calls, messages, whatsapp etc from tax officers to discharge ‘maximum tax liability’ in ‘cash’ so that targets for GST revenue collection for the financial year are achieved.
• It has been clarified that Government /CBIC has not issued any such instructions
• Tax payers are free to utilize the Input Tax Credit available in their credit ledger, as permissible in law, to discharge their GST dues for the month of March, 2021 - the last month of this financial year.

(Source: CBIC Press Note dated 20.03.2021)