RECENT DEVELOPMENTS IN GST

[Dr. Sanjiv Agarwal]

India @ 75 has one distinct feature. India has transformed from an agrarian economy to service oriented economy since independence. Also it is now the fastest growing economy. Morgan Stanley expects India’s GDP growth to be @ 7% in financial year 2022-23. It is expected to contribute 28% and 22% to Asian and global economic growth. 

The GST Council’s next meeting is expected in September, 2022. It is expected to take up two important issues arising out of recent Supreme Court judgments – Circular for non-imposition of IGST on ocean freight and re-opening of window for transitional credit. It may also discuss reports of Group on Ministers. Another important issue of correcting inverted duty structure is also on the cards. States may also push further their demand for compensation towards GST short fall. GoM on GST Appellate Tribunal may submit its report soon. It is learnt that it has finalized the basic framework for setting up of Tribunals. After GST Council’s approvals, Tribunals can be set up in States. So far as GST on gaming and casinos is concerned, no consensus has been arrived out yet.

CBIC (Investigation Wing) last week issued two important instructions / guidelines in relation to arrest & bail in GST law and issuance and handling of summons. While these will provide guidance to field formations, it will also act as a breather to taxpayers to avoid harassment, if any. Looking to the rising number of cases, these instructions were the need of hour.

The Government has clarified that GST would not be applicable on residential units if they are rented out to private person for personal use.

GST collection of food businesses license / registration fee / penalty

• W.e.f. 18.07.2022, applicable GST rate on application fee, registration fee, penalty in relation to food businesses / FSSAI license etc shall be @ 18 percent as follows :

S. No.	Types of Fee / Penalty	Mode of Payment / Portal
	Application fee towards Central License Central Registration Railways - License Railways -Registration Airport/ Seaport - License	Online - FoSCoS https://foscos.fssai.gov.in
	Penalty for renewal of license/ registration after expiry date - Central License	Online - FoSCoS https://foscos.fssai.gov.in
	Penalty for late filing of annual return towards Central License [wef FY 2020-21] as per clause no 2.1.13 (3) of Food Safety and Standards (Licensing and Registration of Food Businesses) Regulation, 2011.	Online - FoSCoS https://foscos.fssai.gov.in
	Penalty for late filing of annual return towards Central License [upto FY 2019-20] as per clause no 2.1.13 (3) of Food Safety and Standards (Licensing and Registration of FoOd Businesses) Regulation, 2011.	Online - FSSAI E-pay portal https://epay.fssai.gov.in/fps/loadindex
	Registration fee by -FSM candidates for online examination	Online - Food Safety Mitra Portal https://mitra.fssai.gov.in/loadIndexData
	Permissions for using Pre-printed packaging material	Online FSSAI E-pay portal https://epay.fssai.gov.in/fps/loadindex

• Such GST shall be discharged on reverse charge basis.

• Therefore, No GST is being charged through FoSCoS portal on State License and Registration fee and the Penalties belonging to States/UTs. The same is also printed on the receipt generated through FoSCoS.

(Source: Order F.No. RCD-01001/7/2021-Regulatory-FSSAI-Part (1),  dated 27.07.2022 issued by Director, RCD, FSSAI)

GST on Renting of Residential Property

•  GST on rent in relation residential property to registered persons is leviable  w.e.f. 18.07.2022 under reverse charge mechanism.
• CBIC has further clarified by way of tweet that:
  • Renting of residential unit is taxable only when it is rented to a business entity.
  • No GST is leviable when residential unit is rented to a private person for personal use.
  • No GST is levaible even if a proprietor or partner of firm rents residential property for personal use.

 (Source: CBIC tweets / MoF tweets dated 12.08.2022)

Transfer of Appeals filed after 30.06.2017- Power delegated to Chief Commissioner

The Central Government has delegated the powers of CBIC for the purpose of transfer of appeals filed after the 30.06.2017 to the Principal Chief Commissioner / Chief Commissioner of Central Excise and Service Tax under Rule 3 of the Central Excise Rules 2017 and Rule 3 of the Service Tax Rules, 1994.

(Source: Notification No. 3/2022-CT (NT) dated 20.07.2022)

Use of DIN by States

• Supreme Court has directed the Union of India and GST Council to issue an advisory to all the States for implementation of Document Identification Number (DIN) in respect of all the notices and communications being sent or issued by State GST offices.
• It has also directed that use of DIN in all GST related documents be implemented at the earliest possible.
• Electronic generation DIN is already in use by the CGST officers which provides authenticity to the documents / communications issued by the Department.

States like Kerala and Karnataka already use DIN.

[Source: PRADEEP GOYAL VERSUS UNION OF INDIA & ORS. - 2022 (8) TMI 216 - SUPREME COURT]