BLOGS

CBIC extends time limit for issuance of Orders u/s 73(9) for recovery of tax not paid or short paid or of ITC wrongly availed or utilized for the FY 2018-19 to April 30, 2024 and FY 2019-20 to August 31, 2024 Note: Notice time limit is now extended for FY 2018-19 from Dec 31st 2023 to January 31st 2024 and for FY 2019-20 notice has to be issued before March 31st 2024.

The GSTN has introduced the much-awaited feature to file Annexure-V online on the GST Portal. This option is specifically designed for newly registered Goods Transport Agencies (GTAs) opting for Forward Charge. The new facility allows users to upload manual Annexure-V, which might have been submitted to the jurisdictional office before the commencement of the online filing option. If you are a GTA providing services and wish to pay tax under Forward Charge for the current financial year and beyond, filing your declaration Annexure V Form by January 28, 2024, is essential. By selecting “YES,” you will be directed to the Annexure V Form. If you are not involved in providing GTA services or prefer to pay tax under Reverse Charge, you can choose “NO.” It’s important to note that the…

SC dismisses Revenue’s SLP against  Calcutta HC decision which quashed demand of ITC against service recipient for mismatch in GSTR 2A and GSTR 3B in absence of any investigation done at the end of the supplier whose invoices are not reflecting in GSTR 2A; HC cited lack of exceptional case like missing dealer, closure of business by supplier or supplier not having adequate assets etc. and concluded that, straight away Revenue “was not justified” in directing the assessee to reverse the ITC availed by it. Order copy awaited

Judgment of the Hon’ble Supreme Court in the case of Northern Operating Systems Private Limited (NOS). Attention is invited to the Hon’ble Supreme Court’s judgment dated 19.5.2022 in the case of CC, CE & ST, Bangalore (Adj.) etc. Vs. Northern Operating Systems Private Limited (NOS) in Civil Appeal No. 2289-2293 of 2021 on the issue of nature of secondment of employees by overseas entities to Indian firms and its Service Tax implications. Representations have been received in the Board that, subsequent to the aforesaid judgment, many field formations have initiated proceedings for the alleged evasion of GST on the issue of secondment under section 74(1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the ‘CGST Act’).  The matter has been examined by the Board. It…

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GSTN issues advisory for online compliance pertaining to ITC mismatch, explains that, a new functionality has been developed to generate automated intimation in Form GST DRC-01C which enables a taxpayer to explain the difference in ITC available in GSTR-2B statement & ITC claimed in GSTR-3B return online as directed by GST Council; Notifies that, the functionality compares the ITC declared in GSTR-3B/3BQ with ITC available in GSTR-2B/2BQ for each return period and if the percentage difference exceeds the configurable threshold, taxpayer will receive an intimation in the form of DRC-01C; On such intimation, the taxpayer shall file a response using Form DRC-01C and has the option to either provide details of the payment made to settle the difference using Form DRC-03, or provide an explanation for the difference, or even choose a combination of both…

CBIC in a relief to taxpayers, introduces amnesty scheme which allows appeal filing till January 31, 2024 for taxable persons who could not file an appeal against the order passed by the proper officer on or before March 31, 2023, u/s 73 or 74 of CGST Act within the time period specified in section 107; States that it shall also apply to the taxable persons whose appeal against the said order was rejected solely on the grounds that the said appeal was not filed within the time period specified in section 107 and prescribes special procedure for the same; Appeals to be filed in FORM GST APL-01 in accordance with subsection (1) of Section 107; Specifies that no appeal shall be filed under this notification, unless the appellant has paid…

Kerala HC rules on GST implementation challenges during initial stages faced by small dealers and consequently, sets aside order disallowing input tax credit (ITC) for GSTR 2A -3B mismatch; Discrepancies were noticed in assessee’s GSTR-3B and so considering the difference between GSTR-2A and 3B, Assessing Authority passed DRC-01 disallowing ITC as well as levied interest of Rs. 1 lakh approximately under CGST and SGST with penalty; Assessee contends that due to the initial period of the implementation of the GST regime, assessee and other small dealers were facing a lot of difficulty; Court concurs to this submission noting that “period involved is 2017-18 when the GST regime was rolled out…. petitioner faced enormous difficulty in understanding the provisions of the GST Act”; In this context, Court also notes that Government is not at a loss since tax has…

Amnesty scheme for filing appeals Amnesty scheme for taxable persons who could not file appeal under section 107 of CGST Act. Against demand order under section 73 or 74 of the CGST Act, 2017. Order should be passed before 31st March 2023 or Appeal against such order was rejected solely on the grounds that such appeal was not filed within specified period. Appeal in such cases to be filed before 31st January 2024 Pre-deposit of 12.5% of the disputed tax to be paid in that 2.5% should be paid through electronic cash ledger. Clarifications regarding taxability of personal guarantee offered by directors to banks. Circular to be issued clarifying that when no consideration is paid by the Company to the director in any form, directly or indirectly, for providing personal…

The CBIC has amended IGST Rate notifications in order to provide that IGST will not be levied on importer under RCM on supply of ocean freight services by foreign shipping line to foreign exporter. In this regard, three notifications have been issued and these notifications shall be effective from October 1st, 2023. Notably, these changes are incorporated to give effect to decision of Apex Court in case of Mohit Minerals since the Government has already amended place of supply provisions for services of transportation of goods by vessel.

In the matter of Muniyasamy Abinaya Tamil Nadu AAR transport services provided to students and staff of specific schools will not be subject to GST and consequently, the fees collected by service provider directly from parents for these services will also not be subject to GST; Applicant has sought advance ruling whether collection of transportation charges from parents will be taxed or exempted under GST, since only school students are picked up and dropped and school staff which will be covered in the agreement with school; In examining whether activity proposed to be undertaken by way of transport of staff and students of school as school bus operator, by school bus/ van service is applicable to GST or is exempted from GST and if GST applicable then what percentage is to be charged…

HC remarks, “tax authority should also act as a facilitator of business and economy and not merely as an extortionist, always looking to have the pound of flesh, to satisfy his hierarchical superiors to push his/her personal agendas. We have no doubt that the action complained of, was high handed and arbitrary”; Imposes a cost of Rs.5000 on the officer

PeriodDue dateFormDescriptionAugust 202310.09.2023GSTR 7Summary of Tax Deducted at Source (TDS) and deposited under GST lawsAugust 202310.09.2023GSTR 8Summary of Tax Collected at Source (TCS) and deposited by e-commerce operators under GST lawsAugust 202311.09.2023GSTR 1GST Filing of returns by a registered person with aggregate turnover exceeding INR 5 Crores during the preceding financial year or any registered person have opted to file monthly returnAugust 202313.09.2023GSTR 1 / IFFDetails of B2B Supply of a registered person with turnover upto INR 5 Crores during the preceding year and who has opted for quarterly filing of return under QRMPAugust 202313.09.2023GSTR 6Details of Input Tax Credit (ITC) received and distributed by an Input Service Distributors (ISD)August 202313.09.2023GSTR 5Summary of outward taxable supplies and tax payable by a non-resident taxable personAugust 202320.09.2023GSTR 5ASummary of outward taxable supplies…

The Goods and Services Tax Network (“GSTN”) has issued an Advisory on Reporting of ITC Reversal Opening Balance. Please read the following advisory carefully before proceeding ahead for reporting the ITC Reversal opening balance: Taxpayers are permitted to use this facility to report their ITC Reversal Balance that has not been re-claimed. The taxpayer is advised to report solely those reclaimable ITC reversal balances that meet the legal criteria for re-claim and have not been previously claimed by the taxpayers. Taxpayers may report their opening balance until 30th November 2023. After November 30, 2023, the option to report the opening balance will be removed, and it will be assumed that the taxpayer has no ITC Reversal Balance to report. Taxpayers may amend their opening balance until December 31, 2023. Any…

Patna HC upholds denial of ITC benefit to purchasing dealer (assessee) where the supplying/selling dealer has not paid up the amounts to the Government, despite collection of tax from the purchasing dealer; Referring to the case of Ecom Gill Coffee Trading Pvt Ltd, HC adds that, even if assessee produces not only the invoices but also account details and documents evidencing transportation of goods, “this does not absolve the assessee from the rigor provided under sub-clause (c) of Section 16(2)” and therefore, “unless the credit is available in the ledger account of the purchasing dealer ….” , ITC would not be available; Inviting attention to the nomenclature of ITC, HC explains that it itself contemplates a credit being available for the purchasing dealer in its credit ledger by way of payment of tax by the supplier to the Government; As a corrollary, envisages…

SC: Dismisses Revenue's SLP against HC order allowing release of cash seized during search SC dismisses Revenue’s SLP filed against Kerala High Court’s order directing the Department to release the cash seized during the search since, such cash does not form part of stock in trade or business Earlier the Kerala HC held that the seizure of cash from the premises of the Assessee at the time of investigation by GST authorities as wholly uncalled for and unwarranted, directs release of the same without any delay and at any rate within a week; Note that writ appeal was filed against the learned Single Judge’s order rejecting  the Assessee’s contention that the seizure of cash was unwarranted especially when the investigation itself was for alleged evasion of tax due; Determines that during the…

Delhi HC: Quashes communication placing debit freeze on bank account, ladles Revenue with cost Delhi HC sets-aside communication by Revenue officer of Anti-evasion group, to the extent that it seeks to place a debit freeze on assessee’s cash credit account; At the outset, Court observes “impugned communication is without authority of law…” reasoning that, same disregards provisions of CGST Act and its adverse effect; Citing well settled principle that, orders of provisional attachment of bank accounts or other assets of a tax payer has serious adverse effect on the business of the tax payer, as also SC dicta in Radha Krishan Industries.

Vide Notification no. 28/2023 dated 31st July 2023 Sub section 1B inserted in Section 122 of the CGST Act to levy penalty on the following: “(1B) Any electronic commerce operator who–– allows a supply of goods or services or both through it by an unregistered person other than a person exempted from registration by a notification issued under this Act to make such supply; allows an inter-State supply of goods or services or both through it by a person who is not eligible to make such inter-State supply; or fails to furnish the correct details in the statement to be furnished under sub-section (4) of section 52 of any outward supply of goods effected through it by a person exempted from obtaining registration under this Act, shall be liable to…

Calcutta HC sets aside demand on recipient of service on account of mismatch in GSTR 2A and GSTR 3B in absence of any investigation done at the end of the supplier whose invoices are not reflecting in GSTR 2A; As regards the allegation of non-payment of tax by supplier and denial of ITC u/s 16(2)(c), while disapproving action of the Assistant Commissioner, State Tax ‘straight away’ directing assessee to reverse ITC without first bringing out the exceptional case where there has been collusion between assessee and selling dealer/supplier or where supplier is missing or the supplier has closed down its business or the it does not have any assets and such other contingencies; Court pointing out that section 16 (2) begins with a non-obstante clause, discusses the effect and purpose…

Andhra Pradesh HC holds that (i) time-limit prescribed for claiming ITC as prescribed u/s 16(4) of APGST Act/CGST Act, 2017 is not violative of Articles 14, 19(1)(g) and 300-A of Constitution of India and (ii) Section 16(4) will not be overridden by non-obstante provision u/s 16(2) as both are not contradictory with each other but operate independently; Notes that, assessee, a sole proprietorship doing business in hardware and plywood commenced during Covid-19 pandemic, and could not file its  return within the prescribed time nor file the return on or before time prescribed for filing the return relating to month of September of succeeding year; Revenue observed that assessee can claim ITC subject to fulfillment of conditions stipulated u/s 16 of SGST/CGST Act r/w Section 20 of IGST Act and the claim made through GSTR 3B return filed…

Waiver of 100% of arrears of penalty and interest payable by a dealer under the Karnataka Sales Tax Act, 1957 (hereinafter referred to as the KST Act) and Central Sales Tax Act, 1956 (hereinafter referred to as the CST Act) relating to the assessments / re-assessments/ rectification/ revision/ appeal orders already completed and as the case may be, to be completed on or before 31-10-2023 under the KST regime. Waiver of 100% of arrears of penalty excluding those specifically mentioned and interest payable by a dealer under the Karnataka Value Added Tax Act, 2003 (hereinafter referred to as the KVAT Act) and CST Act relating to the assessments / re-assessments / rectification/ revision / appeal orders already completed and to be completed on or before 31-10-2023. Waiver of - penalty…

Karnataka AAR rules that the education sought to be provided by Isha Foundation (registered u/s 12AA of Income Tax Act, 1961), through its “Gurukul” kind of residential school ‘Isha Samskriti’ is not exempt as per Entry no. 69 of Notification no. 9/2017 dated June 28, 2017 or any other Notification; Expounds that the entry clearly states that to claim exemption, the Applicant should be an educational institution however, the Applicant’s organization is neither providing pre-school education nor education upto higher secondary school, but is following its own curriculum in line with Bhartiya tradition of Gurukulas, and thus, is not covered under the definition of ‘educational institution’ as per the Notification; As regards Applicant's claim for exemption as an entity undertaking charitable activities as prescribed under entry 1 of Notification 9/2017- Integrated Tax (Rate),…

Circular No. 198/10/2023-GST dated 17th July 2023 Representations have been received seeking clarification with respect to applicability of e-invoice under rule 48(4) of Central Goods and Services Tax Rules, 2017 (hereinafter referred to as “CGST Rules”) w.r.t supplies made by a registered person, whose turnover exceeds the prescribed threshold for generation of e-invoicing, to Government Departments or establishments/ Government agencies/ local authorities/ PSUs registered solely for the purpose of deduction of tax at source as per provisions of section 51 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST Act”). In order to clarify the issue and to ensure uniformity in the implementation of the provisions of law across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of…

Circular No. 197/09/2023- GST dated 17th July 2023 References have been received from the field formations seeking clarification on various issues relating to GST refunds. In order to clarify these issues and to ensure uniformity in the implementation of the provisions of law in this regard across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST Act”), hereby clarifies the issues detailed hereunder: 1. Refund of accumulated input tax credit under Section 54(3) on the basis of that available as per FORM GSTR 2B: - 1.1 In terms of Para 5 of Circular No. 135/05/2020-GST dated 31.03.2020, refund of accumulated input tax credit (ITC) is restricted to the input tax…

Circular No. 196/08/2023-GST dated 17th July 2023 Representations have been received from the trade and field formations seeking clarification on certain issues whether the holding of shares in a subsidiary company by the holding company will be treated as ‘supply of service’ under GST and will be taxed accordingly or whether such transaction is not a supply. In order to clarify the issue and to ensure uniformity in the implementation of the provisions of law across the field formations, the Board, in exercise of its powers conferred bysection 168 (1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST Act”), hereby clarifies the issues as under: Taxability of share capital held in subsidiary company by the parent company Si NoIssueClarification1Whether the activity of holding shares…

Circular No. 195/07/2023-GST dated 17th July 2023 Representations have been received from trade and industry that as a common trade practice, the original equipment manufacturers /suppliers offer warranty for the goods / services supplied by them. During the warranty period, replacement goods /services are supplied to customers free of charge and as such no separate consideration is charged and received at the time of replacement. It has been represented that suitable clarification may be issued in the matter as unnecessary litigation is being caused due to contrary interpretations by the investigation wings and field formations in respect of GST liability as well as liability to reverse ITC against such supplies of replacement of parts and repair services during the warranty period without any consideration from the customers. The matter has…

Circular No. 194/06/2023-GST dated 17th July 2023 Reference has been received seeking clarification regarding TCS liability under section 52 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST Act”), in case of multiple E-commerce Operators (ECOs) in one transaction, in the context of Open Network for Digital Commerce (ONDC). In the current platform-centric model of e-commerce, the buyer interface and seller interface are operated by the same ECO. This ECO collects the consideration from the buyer, deducts the TCS under Sec 52 of the CGST Act, credits the deducted TCS amount to the GST cash ledger of the seller and passes on the balance of the consideration to the seller after deducting their service charges. In the case of the ONDC Network or similar other…

Circular No. 193/05/2023-GST dated 17th July 2023 Attention is invited to Circular No. 183/15/2022-GST dated 27th December, 2022, vide which clarification was issued for dealing with the difference in Input Tax Credit (ITC) availed in FORM GSTR-3B as compared to that detailed in FORM GSTR-2A for FY 2017-18 and 2018-19, subject to certain terms and conditions. Even though the availability of ITC was subjected to restrictions and   conditions specified in Section 16 of Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST Act”) from 1st July, 2017 itself, restrictions regarding availment of ITC by the registered persons up to certain specified limit beyond the ITC available as per FORM GSTR- 2A were provided under rule 36(4) of Central Goods and Services Tax Rules, 2017 (hereinafter referred to…

Circular No. 199/11/2023-GST dated 17th July 2023 Various representations have been received seeking clarification on the taxability of activities performed by an office of an organisation in one State to the office of that organisation in another State, which are regarded as distinct persons under section 25 of Central Goods and Services Tax Act, 2017 (hereinafter referred to as ‘the CGST Act’). The issues raised in the said representations have been examined and to ensure uniformity in the implementation of the law across the field formations, the Board, in exercise of its powers conferred under section 168(1) of the CGST Act hereby clarifies the issue in succeeding paras. Let us consider a business entity which has Head Office (HO) located in State-1 and a branch offices (BOs) located in other…

Circular No. 192/04/2023-GST dated 17th July 2023 References have been received from trade requesting for clarification regarding charging of interest under sub-section (3) of section 50 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the “CGST Act”) in the cases where IGST credit has been wrongly availed by a registered person. Clarification is being sought as to whether such wrongly availed IGST credit would be considered to have been utilized for the purpose of charging of interest under sub-section (3) of section 50 of CGST Act, read with rule 88B of Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the “CGST Rules”), in cases where though the available balance of IGST credit in the electronic credit ledger of the said registered person…

Important decisions: GTAs will not be required to file declaration for paying GST under forward charge every year. If they have exercised this option for a particular financial year, they shall be deemed to have exercised it for the next and future financial years unless they file a declaration that they want to revert to reverse charge mechanism (RCM). The last date of exercising the option by GTAs to pay GST under forward charge shall be 31st March of preceding Financial Year instead of 15th March. 1st January of preceding Financial Year shall be the start date for exercise of option. Services supplied by the director to the company in his personal capacity like renting of immovable property etc will not covered under RCM Supply of food and beverages in…

Government notifies Goods and Services Tax Network (GSTN) under the Prevention of Money-laundering Act, 2002; Amends Prevention of Money-laundering Act Notification G.S.R. 152 (E) dated the March 01, 2021

CBIC clarifies on the aspect of interest payable on late payment of tax and wrongly availed ITC; On the occasion of 6 years of GST, apprise that taxpayers are liable to pay interest only if they utilized the wrongly availed ITC for payment of GST liability; States that a decision has been taken to provide relief to the taxpayers retrospectively; Also, informs about reduction in the interest rate on wrongly availed and utilised ITC from 24% to 18% (from July 1, 2017): CBIC

CBIC reduces compliance burden for small taxpayers, waives requirement of filing Annual Return in Form GSTR-9 for taxpayers with annual turnover up to Rs. 2 Crores; Also, waives requirement of filing reconciliation statement in Form GSTR-9C by taxpayers with annual turnover up to Rs. 5 crores: CBIC 

In the previous article about LRS and new TCS Regime, we had discussed about the following: New TCS Regime and its postponement of implementation to 1st October 2023. (Ie. Increasing TCS Rates from 5% to 20%, removal of threshold of ₹700,000) E gazette notification on 16th May 2023 to remove differential treatment of credit card and to streamline it through LRS. Please do refer to the previous write up to decipher and appreciate this article better. The above changes were postponed, providing more time for the banking channels and credit card network to equip themselves to change. Various comments about practical difficulties that arise from the above changes were received. As a measure to address these issues, the Ministry of Finance has issued a press release dated 28th June 2023…

GSTN in pursuance of lowering of threshold for e-Invoicing for B2B transactions (from Rs. 10 crores to Rs. 5 crores) applicable from August 01, 2023 introduces enablement status on the e-Invoice portal; Advisory states that enablement status indicated on the e-Invoice portal does not indicate a legal obligation on taxpayers to use e-Invoicing, but reflects actual liability to generate IRN with respect to applicable notification in the light of facts pertaining to them; Urges taxpayers to familiarize with e-Invoicing requirements and e-invoicing system as also self-enable for e-Invoicing using the functionality provided on the portal: GSTN Advisory Find below the copy of the advisory eInvoice-AdvisoryDownload

Guidelines issued by CBIC for processing of applications for registration on 14th June 2023 Instruction No. 03/2023 Instances have come to notice regarding unscrupulous elements obtaining fake/ bogus registration under GST and defrauding the Government exchequer. Such fake/ non-genuine registrations are being used to fraudulently pass on input tax credit to unscrupulous recipients by issuing invoices without any underlying supply of goods or services or both. This menace of fake registrations and issuance of bogus invoices for passing of fake ITC has become a serious problem, wherein fraudulent people engage in dubious and complex transactions, causing revenue loss to the government. Various modus operandi of obtaining such fake registrations have been detected by Central and State Tax administrations. In some cases, identities of other persons like PAN, Aadhaar, etc. have…

Advisory on Filing of Declaration In Annexure V by Goods Transport Agency (GTA) opting to pay tax under forward charge mechanism30/05/2023• The GTAs, who commence business or cross registration threshold on or after 1st April, 2023, and wish to opt for payment of tax under forward charge mechanism are required to file their declaration in Annexure V for the FY 2023-24 physically before the concerned jurisdictional authority.• The declaration may be filed within the specified time limits, as prescribed in the Notification. No. 05/2023-Central Tax (Rate), dated. 09.05.2023.