RECENT DEVELOPMENTS IN GST

[Dr. Sanjiv Agarwal]

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.

IMF has now lowered the India’s growth forecast for financial year 2023 to 8.2% from 9%. Other global forecasts such as Japan have also been lowered, owing to Russia – Ukraine ongoing war. World Bank, Reserve Bank of India and Rating Agency ‘Fitch’ have also lowered the projections recently. India will remain the fastest-growing major economy despite the 0.8 percentage point cut. The global economy is seen growing at 3.6% in 2022, slower than the 4.4% as forecast earlier.

There are talks about GST rates on various goods and services being reviewed as also rationalization of tax rate slabs. While this could be attempted, what is more necessary is tax reforms including administrative ones such as on areas like detention, inspection, search cases, audit , input tax credit etc. Litigation is one area where lot of work needs to be done. Same applies to advance rulings. Advance rulings are as good and clear as the mind and mindset of concerned officials. India is still to setup tribunals even after almost five years of GST in India. Besides, most important reform is needed in the form of mindset of people in the tax department. Same people from erstwhile excise and service tax continue to deal with taxes and taxpayers in GST regime which require both, counseling and stringent action following a ‘carrot & stick’ approach. They need not be hard masters in all cases.

The provisions of Finance Bill, 2022 have since been legislated but shall come into force from the date from which the same are notified.

SCN for recovery of refund granted by duly adjudicated order

• The Apex Court has held that a show cause notice under section 74(1) of CGST Act, 2017 can be issued against a refund order granted as per duly adjudicated order.
• The petitioner in SLP before Supreme Court and High Court contended that it was not open to the Revenue Authorities to reopen refund granted pursuant to an adjudication on refund application but it can only file an appeal.
• High Court held that the provisions of section 74 does not make any distinction between refund orders passed with or without adjudication and that the said provision does not provide that an order of refund after adjudication cannot be reopened.
• Supreme Court declined to interfere and held that petitioner may urge before the Authorities that the show cause notice travels beyond the reasons stipulated in section 74 of the CGST Act, 2017.

[Source: GANESH ORES PVT. LTD. VERSUS THE STATE OF ODISHA & ORS. - 2022 (4) TMI 755 - SC ORDER]

Approval for physical verification of place of business – Rajasthan

• In the State of Rajasthan, Commercial Taxes Department has authorized –
  • Joint Commissioner /
  • Deputy Commissioner

of Central Registration unit State Tax, Jaipur for giving approval for physical verification of place of business to proper officers.

• Such authorization will allow Joint or Deputy Commissioner to grant approval to proper officers so as to undertake physical verification of place of business for the purpose of registration.

[Source: Order No. F.17(131-Pt-II) ACCT/GST/2017/7746 dated 13.04.2022 issued by Chief Commissioner of State Tax, Rajasthan, Commercial Taxes Department, Government of Rajasthan]

E-way Bill not required in certain cases

• No E-way bill is required to be generated for the movement of the goods in following cases:

S.No.	Area and purpose	Description of Goods	Consignment Value of goods
(1)	(2)	(3)	(4)
1	Intra- district movement	All Goods	Any value
2	Inter- district movement	All Goods except Goods mentioned in column (3) of serial no 3 and 4.	Not exceeding Rs. One Lakh
3	Inter- district movement	All types of Tobacco and its Products i.e. Chewing Tobacco, Khaini, Cigarettes, Bidi etc. (All goods of Chapter 24) and Pan Masala (Tariff heading 2106)	Not exceeding Rs. Fifty Thousand
4	Inter- district movement	Medicine, Surgical goods and Active Pharmaceutical Ingredients of medicine having HSN code 3003, 3004 and 3006.	Any value

• Therefore, E-way bill is required to be generated in case of intra-state movement of all goods other than above.
• However, all the provisions and the procedures laid down in rules 138, I38A, 138B, 138C, 138 D and 138E shall apply mutatis mutandis for the intra-state movement in the State. 
• This shall come into force from 15.04.2022.

[Source: Notification No. FA3-08/2018/1/V/(18) dated 23.03.2022 issued by Government of Madhya Pradesh]

Restoration of Cancelled Registration – Development and deployment of ‘Restoration of Cancelled Registration’ functionality

1. Noticing that the taxpayers in certain cases, had obtained orders from High Courts / appellate authorities to restore registrations cancelled on their own request, the Principal Additional Director General of System & Data Management, Chennai has issued an advisory that a functionality ‘Restoration of Cancelled Registration’ has been developed and deployed w.e.f. 23.03.2022, to facilitate the jurisdictional Range officers to restore the registrations in pursuance of judicial / appellate orders.

2. Informing that this functionality, which is being enabled for the jurisdictional Range Officers, would cover both the cancellations viz. ordered suo motu by Range officers and cancelled on the request from the taxpayers, a step by step guide along with indicative screens has also been provided for guidance of the officers.

(Source: Principal Additional Director General of System & Data Management, Chennai, Registration Advisory No. 7/2022, dated 23.03.2022)

E-invoice for Taxpayers having annual turnover exceeding ₹ 20 crores - Important Advisory

1. Informing the Taxpayers that as per Rule 48(4) of the CGST /SGST Rules they are required to generate e-Invoices from 1-4-2022, if their Aggregate Annual Turnover exceeded ₹ 20 Crores in any of the preceding year(s) and in terms of Rule 48(5) invoices issued in any other manner shall not be treated as an invoice which would create difficulties for their business partners in future and may attract penalty, the Commissioner, Commercial Tax, (Mobile Squad Section), U.P. has advised the Taxpayers that they may register immediately in the GST e-Invoice portal and start registering their invoices and generate Invoice Registration Number.

2. To facilitate the taxpayers to register their invoices in Invoice Registration Portal, simple online and offline tools have also been made available and a presentation on features and usability of these tools are provided at the link ­ https://docs.ewaybillgst.gov.inlDocuments/e-Invoice System.

(Source: Commissioner, Commercial Tax, (Mobile Squad Section), U.P. Letter No. 1171/Commercial Tax, dated 25-3-2022)