Finance Act, 2022 has since been enacted but GST related notification shall come into force after these are notified by way of notification after states also enact / amend respective state GST laws.
Tax collections in India have crossed ₹ 27 lakh crore in just closed fiscal of 2021-22 which is 34% more than in financial year 2020-21. Direct taxes grew by 49% where as indirect taxes rose by 20%. This could be attributed to both –economic recovery and improved compliance / tax administration. As a result tax – GDP ratio has grow to record 11.7% from 10.3% in financial year 2020-21, which is the highest in last two decades. This tax buoyancy in direct taxes is more than indirect taxes which trend may not change in view of higher growth in direct taxes. Average gross monthly GST collection was ₹ 1.23 lakh crore in financial year 2022 as against ₹ 94734 crore in 2021 and ₹ 1.01 lakh crore in 2019-20.
In its latest monetary policy review, Reserve Bank of India has not touched upon rates but has shown concerns on rising inflation. It expects inflation to be 5.7% in financial year 2023 and has also lowered the projection for economic growth to 7.2% in the backdrop of current geopolitical tensions. RBI shall now be focusing on curbing inflation. RBI has thus taken a stand that inflation comes before growth and is a cause of concern. This is for the first time since Covid 19 pandemic that RBI has shifted its focus from growth to inflation. Actually, inflation is now projected to be higher and growth lower than the previous assessments.
National Informatics Centre has issued few frequently asked questions on e-invoicing. It may be noted that e-invoicing has been made mandatory w.e.f. 01.04.2022 for taxpayers with turnover of more than ₹ 20 crores in previous years. Various state Government have issued standard operating procedure or internal circulars, e.g. on detention of goods or vehicle, provisional attachment or returns etc.
It is learnt that CBIC has rolled out computer assisted automated selection of returns under GST which is going to be based on certain risk parameters such as input tax credit, refunds etc. The scrutiny of returns shall be done in a time bound manner. There will be prescribed standard operating procedure (SOP) for this. Scrutiny of returns has been announced as a focus area for the current fiscal.
Correct Submission of Returns under GST
Rajasthan State GST Administration has clarified on correct submission of returns as follows:
- Section 53 of CGST Act / Section 17 & 18 of IGST Act provides for manner of cross utilization of IGST / SGST and apportionment of IGST between centre, states for the purpose of settlement or transfer of funds.
- Correct disclosure of input tax credit (ITC) of IGST is necessary on account of inter-state inward supplies or import supplies because the wrong disclosure of the same may result in short transfer of funds to the State.
- The fund transfer and apportionment is mainly based on the information provided by the taxpayer in GSTR-3B returns on the GSTN Portal and therefore, the importance of correctness of information/data of GSTR-3B cannot be undermined.
- The taxpayers are required to declare the ITC correctly in the monthly return GSTR-3B. The eligible ITC is auto populated in Table 4 of GSTR-3B which can be edited by the taxpayer.
- The ineligible ITC as per the provisions of Section 17(5) has to be reported in Table 4(D)(1) whereas the Table 4(D)(2) shall include the ineligible/blocked credit as per the provisions of Section 17(4) of the CGST/RGST Act read with Rule 38 and shall also include other ineligible ITC like ITC availed wrongly in the previous period etc.
- It has been thus advised that all the taxpayers who have not furnished details of ineligible ITC or have furnished the details of ineligible ITC partially or have not reported the reversal of ITC fully or partially in the returns filed for the F.Y 2021-22 shall report it in the annual return to be filed in GSTR-9 whereas for the F.Y 2022-23 onwards, the details of ineligible ITC or partial details of ineligible ITC or reversal of ITC which has not been reported fully or partially shall be reported in the subsequent GSTR-3B to be filed by giving net effect in that return.
[Source: GST Circular No. 1/2022 dated 05.04.2022 issued by Rajasthan State Tax Department (www.rajtax.gov.in)]
Provisional Attachment
- Maharashtra State Government has clarified on issuance of orders of provisional attachment and restoration thereof on BO system.
- W.e.f. 01.04.2022, it has been made mandatory that the provisional attachment orders in GST –DRC-22 under section 83 of GST law shall be issued only on specified BO system.
- Similarly, restoration order in Form GST –DRC 23 shall also be issued only on specified BO system.
- In this regard, the internal circular 12A of 2021 dated 17.08.2021 laid down certain guidelines on the procedure of provisional attachment. The para 7 of the said circular explained in detail the procedure for issuance of DRC-22 on BO system. Para 7.1 clearly states that the provisional attachment orders shall be passed on BO system only.
- In addition to this, passing the orders and decisions on BO system will ensure accuracy in MIS reports –ASMT 5.1 and ASMT 5.2 and enable proper & effective monitoring of this function.
(Source: Internal Circular No. 7A of 2022 dated 29.03.2022 issued by Commissioner of State Tax, Maharashtra - Mumbai)
Detention of Goods in Transit Due to undervaluation
- There is no provision under the GST Act that mandates that the goods shall not be sold at prices below the MRP declared thereon.
- The respondents cannot resort to arbitrary and statutorily unwarranted detention of goods in the course of transportation.
- The goods were ordered to be released to the petitioner forthwith.
- In compliance of High Court judgment, Circular has directed that :
- Not to detain or issue any Show Cause Notice to the goods under transport or stored in parcel agencies, raising the sole reason for undervaluation of the goods compared to the Maximum Retail Price (MRP).
- If any undervaluation cases are suspected in such cases, the officers are directed to upload the details of such invoices using the option provided in the Mobile App and send a report to the jurisdictional Officer, marking a copy to the jurisdictional district Joint Commissioner.
- The intelligence squads shall gather evidence to establish the case by collecting documents about the actual value of the supply.
- The jurisdictional officer concerned shall verify the same with the help of the report and the uploaded details. Thereafter, the jurisdictional officer of the taxpayer vertical or the Intelligence formation can take further action as provided in the law.
(Source: Circular No. 6/2022 dated 06.04.2022 issued by Kerala State Commissioner of GST, Government of Kerala)
New functionalities in GST portal in March, 2022
Following new functionalities have been added for taxpayers on GSTN portal :
- Home page
- Creation of link for Manipur
- Enhancements made in the Search Taxpayer functionality
- Registration
- Aadhaar authentication/ Aadhaar enrolment ID mandatory for Form GST REG-21
- Form GST CMP-02 enabled on the Portal
- Changes made on the portal for composition taxpayers engaged in supply of Hotel and Restaurant Services.
- Integration of MMI (Map my India) in address field for Registration applications
- Returns
- Changes in Table 4 (A) of Form GSTR-3B
- Displaying payment liability ratio & its calculation and providing Form GST DRC-03 link
- Facility for submitting consent for availing loan by MSME Taxpayers
- Changes implemented in Form GSTR-5
- Offline utility for TDS/TCS credit received
- Changes made in “QUERY ICEGATE” functionality
- Refund
- Updating the message in track application status
(Source: GST Portal)
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