RECENT DEVELOPMENTS IN GST

[Dr. Sanjiv Agarwal]

Indian inflation trajectory in the coming months will be influenced more by the geopolitical situation due to the war in Europe and its impact on supply chains and commodity prices. However, the country is better placed than most to ‘weather the storm’ and achieve growth of close to 8 percent in the current fiscal year as per the Finance Ministry.

More recently, Morgan Stanley has cut India’s GDP forecast for financial year 2023 to 7.6% from 7.9% on the grounds of slowdown in economic growth, inflation and risk aversion in global capital market which expose India to downside risks.

Group of Ministers setup by GST Council has reportedly finalized recommendations on taxability of e-gaming, casinos, race-courses etc @ 28 percent. Presently, these services are taxed @ 18% GST levy. It is expected that online gaming is may grow well in India in next few years. This rate increase will contribute to increase in tax revenue.

Supreme Court on 19 May, 2022 has dismissed the Union of India petition on ocean freight in Mohit Minerals case. The Apex Court has held that recommendations of GST Council are only recommendations and not binding on Union and States. It held that GST shall not be leviable on ocean freight. It observed that Union and States have simultaneous powers to legislate on GST and that GST Council to work in harmonious manner to achieve workable solution between the two. All the recommendations of GST Council cannot be binding on legislature. It also commented on Indian federalism and said that Indian federalism is a dialogue between cooperative and non-cooperative federations. It is a dialogue in which states and centre always engages in a dialogue. GSTC recommendations are only recommendations and not binding on Union of Sates. This is a landmark judgment which may have deep and wide repercussions on very basis of GST structure in the country.

CBIC believes that there is a bounce –back in the economy, and the inflation and boil in oil prices have helped. Revenues will be under pressure on the Customs side because of rising commodity prices. Excise will take a hit because of the duty cut. New Cestat members recruitment may take place soon now.

CBIC has also extended the last date for filing form GSTR-3B and GST PMT-06 to 24^th and 27^th May, 2022 respectively due to technical glitches.

April, 2022 GSTR-3B due date extended

• CBIC has  extended the due date for filing of GSTR-3B return for April, 2022 on account of technical glitch on the portal.
• Technical glitch is on account of generation of April, 2022 GSTR-2B and auto population of GSTR 3B on the portal.
• The last date shall be now upto 24^th May, 2022.

(Source: Notification No. 5/2022-Central Tax dated 17.05.2022)

Late date for tax payment under QRMP for April, 2022 extended

• CBIC has extended the due date of payment of GST for the month of April, 2022 for the taxpayers under Quarterly Return Monthly Payment Scheme (QRMP).
• The last date for taxable in Form GST PMT-06 has been extended till 27 May, 2022.

(Source: Notification No. 6/2022-Central Tax dated 17.05.2022)

GSTN advisory on incomplete GSTR-2B in some cases

• GSTN has noticed that in a few cases, certain records are not reflected in the GSTR-2B statement for the period of April 2022. However, such records are visible in GSTR-2A of such recipients.
• GSTN has issued an Advisory that the technical team is working to resolve this issue for the impacted taxpayers and generate fresh GSTR-2B at the earliest.
• In the interim, affected taxpayers interested in filing GSTR-3B have been requested to file the return on self-assessment basis using GSTR-2A.

[Source: GSTN dated 15.05.2022]

GSTN Advisory on GSTR-2B for April, 2022

• It may be noted that the Input Tax Credit (ITC) gets auto populated in GSTR 3B from GSTR 2B only if the taxpayer has not saved any data in GSTR-3B for that tax period.
• The auto population of ITC in GSTR-3B will not happen for those taxpayers who have already saved data in GSTR-3B. In such cases, the taxpayer has to input the ITC data in Table 4 of GSTR-3B.
• These taxpayers have been advised to view the system generated pdf of GSTR-3B where ITC figures would be available in Table 4. ITC can also be seen on mouse hover of the respective fields of GSTR-3B.

[Source: GSTN]

Supreme Court on Legislative Powers v. GST Council’s Powers

Supreme court of India held as follows in land mark judgment dated 18.05.2022 in Union of India v. Mohit Minerals:

• GST Council’s recommendations are only recommendatory and are not binding on centre and states.
• Both centre and states can legislate on GST
• According to article 246A of Constitution of India, both Parliament and state legislature have simultaneous or equal power to legislate on matters of taxation.
• Constitution does not envisage a repugnancy provisions and GST Council must work in a harmonious manner to achieve a workable solution
• Indian federalism is a dialogue in which state and centre always engages in a dialogue.
• GST Council is an area of political contestations. It impacts federalism. Article 246 treats states and centre as equal. Article 279 provides that state and centre cannot act independent of each other. This also points towards competitive federalism.
• GST is not leviable on ocean freight
• Union SLP against Gujarat High Court order which stuck-down levy of GST on dismissed and SLP decided in favour of assessee.

[Source: Supreme Court Judgment dated 19.05.2022 in UNION OF INDIA & ANR. VERSUS M/S MOHIT MINERALS PVT. LTD. THROUGH DIRECTOR - 2022 (5) TMI 968 - SUPREME COURT ]