RECENT DEVELOPMENTS IN GST

[Dr. Sanjiv Agarwal]

Rating agencies are downgrading GDP growth forecasts amid strong second wave of COVID - 2019 pandemic . Now, CARE, an Indian rating agency has predicted India's GDP growth to be below 9 percent for the current FY 2021-22. Indian economic recovery has begin to lose steam with infection rates scaling highs and that current lockdown may continue till May 2021 end . It appears to be so as of today. 

According to rating agency, CRISIL, economic growth may be down to 9.8 percent if second wave is over by May- end but it may slip to 8.2 percent in a situation of second wave peaking by June- end . Also, second wave is likely to result in consumption negatively, demand destruction or expenditure cuts. Experts believe that this year's recovery could be U shaped instead of V shaped as it happened last year.

The next GST Council meeting (43rd) shall be held on 28 May, 2021 in virtual mode. The last Council meeting was held more than seven months ago on 5th October, 2020 to discuss on Compensation Cess due to states on account of GST revenue shortfall. it is likely to discuss issues of Compensation Cess arising due to shortfall of revenue in FY 2020-21 and tax exemption on goods and services related to COVID care and treatment, in the wake of ongoing COVID -19 second wave. GST Council may also discuss revenue shortfall for the current financial year in the backdrop of ongoing lockdown in many states. Ministry of Finance has asked the department to compile data for the revised estimates.

Though the Council is supposed to meet once in a calendar quarter, this time, it is being convened after a gap of over 230 days. Various states have been demanding the convening of Council meeting for quite some time now.  

CBIC has issued SOP for implementation of the rule relating to extension of time limit to apply for revocation of cancellation of registration u/s 30 of the CGST a Rules, 2017. Notification No.15/ 2021- CT dated 18.5.2021 has once again amended CGST Rules, 2017 for amending GST refund and e-way bills related rules. GSTN has clarified on generation of GSTR- 2B form for April,2021 which will be generated after the due date, i.e., on 29th May, 2021, in terms of Rule 60 (7) .

On e-way bills, CBIC has merged e way bills with FasTag to enable officers to have access to real time data of commercial vehicle movement on road. This will enhance vigilance and checks on tax evasion . GST officers can now track real time movement of vehicles and e-way Bill related compliances. Also, vehicles carrying critical or essential commodities can be tracked online along with passing of vehicles from a particular toll plaza. CBIC's  e-way Bill and Vehicle Tracking Module' explains this .

Amendments in CGST Rules

CBIC vide N. No. 15/2021 dated 18.05.2021 has notified Central Goods and Services Tax (Fourth Amendment) Rules, 2021. These rules introduced several amendments under the Central Goods and Services Tax (CGST) Rules, 2017 to provide amendment in provisions relating to refund, registration and E way Bill (EWB), briefly enumerated below:

• Time limit for filing application for revocation of cancellation of registration

1. in rule 23, in sub-rule (1), after the words “date of the service of the order of cancellation of registration”, the words and figures “or within such time period as extended by the Additional Commissioner or the Joint Commissioner or the Commissioner, as the case may be, in exercise of the powers provided under the proviso to sub-section (1) of section 30’ shall be inserted.
2. The below officers may allow filing such applications even after 30 days on sufficient cause being shown to them:

Officer Rank	Extension
Additional/Joint Commissioner	30 days
Commissioner	30 days (after the above period)

Thus, revocation application is also allowed to be filed after 30 days but up to 90 days (if approved by the above officers)

• Amendments in relation to Refund provisions [Rule 90(3) of CGST Rules , 2017]

The following proviso shall be inserted in rule 90(3) of CGST Rules , 2017 :

“Provided that the time period, from the date of filing of the refund claim in FORM GST RFD-01 till the date of communication of the deficiencies in FORM GST RFD-03 by the proper officer, shall be excluded from the period of two years as specified under sub-section (1) of Section 54, in respect of any such fresh refund claim filed by the applicant after rectification of the deficiencies. “

Hence, the limitation period of 2 years shall exclude period from date of filing of refund application to date of deficiency memo under Rule 90(3) of CGST Rules, 2017.

• Introduction of facility for withdrawal of the refund application [Rule 90 (5) and (6) of CGST Rules, 2017]

1. New provisions are introduced to allow applicants to withdraw their refund application. The application can be withdrawn at any time before the issuance of provisional sanction order, refund sanction order, withhold order, etc.

2. In this regard, applicant can file Form GST RFD-01W. The applicant may, at any time before issuance of provisional refund sanction order in FORM GST RFD-04 or final refund sanction order in FORM GST RFD-06 or payment order in FORM GST RFD-05 or refund withhold order in FORM GST RFD-07 or notice in FORM GST RFD-08, in respect of any refund application filed in FORM GST RFD-01, withdraw the said application for refund by filing an application in FORM GST RFD-01W.

3. Once the said application for withdrawal is submitted, the amount which was debited from electronic credit/cash ledger at the time of filing refund application shall be credited back to electronic Credit/cash ledger from which such debit was made.

• Changes in format of Form GST RFD-07 and procedural changes for withheld of claim of refund [Rule 92 and 96 of CGST Rules , 2017]
  • • Amendment has been made in the CGST Rules and Form GST RFD-07 to make few procedural changes relating to adjustment and withholding of refund amount.

• Amendments relating to E-way Bill (EWB) [Rule 138E of CGST Rules , 2017]
  • CGST Rules imposes a restriction on generation of EWB where the registered person (either supplier or recipient) fails to furnish Form GSTR 3B/GSTR 1/ GST CMP -08 for two months/quarters.

• • Amendment in the CGST Rules has been made to provide that EWB shall not be allowed to be generated in respect of outward movement of goods of registered person who has not furnished the said returns.

• Extension of due date for filing application for revocation of cancellation of registration.

• • The Goods and Services Tax Network (GSTN) states that, the timeline for filing the 'Application for revocation of cancellation' has been extended for those applicants, for whom the due date to file the same falls between April 15, 2021 to May 30, 2021.

• • Now, they can file the said application till May 31, 2021.                                                                            

(Source: N. No. 15/2021 -CT dated 18.05.2021)

 

Generation of GSTR 2B for April 2021

• • As per Rule-60(8) of CGST Rules-2017, FORM GSTR-2B shall be made available to the recipients after the Due date of filing GSTR-1/IFF by the suppliers.

• • However, Notification No. 12/2021-CT and 13/2021-CT, both dated 1st May 2021 extend the Due date of GSTR-1 and IFF for April 2021, to 26th and 28th May 2021, respectively.

• • Consequently, GSTR-2B for April 2021 will be generated after the Due dates, on 29th May 2021.

(Source: GSTN)

E-way bill and Vehicle Tracking Module

• • e-Way Bill system is integrated with FasTag and RFID, and details of commercial vehicle movements through the state and national highway tolls are received into e-Waybill system on a near real time basis.

• • The following reports are made available in the MIS System and also on the Officer’s mobile App.
    • Live Vigilance: This report can be used by the Vigilance officers to know the vehicles that have passed the selected tolls without e-Way Bills in the past few minutes.
    • RFID related report for e-Way Bill: This report can be used to know the tolls that have passed by the vehicles of a given e-Way bill number.
    • RFID related report for Vehicle: This report can be used to know the last tolls that have been passed by any vehicle.
    • RFID related report for Vehicle between two dates: This report can be used to know the tolls that have passed by any vehicle between any two dates.

(Source: E-way bill and Vehicle Tracking Module issued by National Informatics Centre, Bangalore)