RECENT DEVELOPMENTS IN GST

[Dr. Sanjiv Agarwal]

In Indian economy, core sector has shown robust growth @ 7.9% in eight sectors. India, presently the fifth largest economy of the world, may beat Germany, 4^th largest economy by 2025-2026. Banks may play a critical role in the economic growth. These views have been expressed by RBI Dy. Governor.

Fiscal defect for first half of current year 2022-23 has touched 37% of full year target. Fiscal defect may remain at 6.4% of GDP in Financial Year 2023. Centre’s gross tax collections have shown healthy growth so far and are expected to surpass the full year budgeted target despite the Customs and excise duty cuts. While the scenario is optimistic on the tax collections front, the non-tax revenue could see some shortfall primarily due to lower dividend transfer from the RBI in the current fiscal year.

October, 2022 GST collection has once again crossed Rs. 1.50 lakh crore with Rs. 1,51,718 crore GST collection. This is the second highest collection so far and the collection has breached Rs. 1.40 lakh for eight times in a row.  The gross GST revenue collected in the month of October, 2022 is Rs. 1,51,718 crore of which CGST is Rs. 26,039 crore, SGST is Rs. 33,396 crore, IGST is Rs. 81,778 crore (including Rs. 37,297 crore collected on import of goods) and Cess is Rs. 10,505 crore (including Rs. 825 crore collected on import of goods), which is second highest till date.

In an interesting decision, it has been held by a Delhi Court that an accused cannot be forced to provide the pass word of the electronic gadgets seized during investigation. However, help can be taken from specialized agencies or persons to crack the pass word to access the data of computer etc. An accused has a fundamental right to maintain silence as per Article 20(3) of the Constitution and forcing him to reveal password would be violative of the right. Will the investigating agencies including taxation laws be able to digest this ? What next ?

According to India’s Finance Minister, amid all global volatility,  India looks to be stable. India seems to be an oasis of stability and calm and that the challenges are being carefully fire walled.

Mandatory mentioning of HSN codes in GSTR-1

• As per Notification No. 78/2020 – Central Tax dated 15th October, 2020, it is mandatory for the taxpayers to report minimum 4 digit or 6 digit of HSN Code in table-12 of GSTR-1 on the basis of their Aggregate Annual Turnover (AATO) in the preceding Financial Year. To facilitate the taxpayers, these changes are being implemented in a phase-wise manner on GST Portal.
• Part I & Part II of Phase 1 has already been implemented from 01st April 2022 & 01^st August 2022 respectively and is currently live on GST Portal. From 01st November, 2022, Phase-2 would be implemented on GST Portal and the taxpayers with up to Rs 5 crore turnover would be required to report 4-digit HSN codes in their GSTR-1.

[Source: GSTN dated 22.10.2022 (//www.gst.gov.in)]

Filing TRAN forms for Taxpayers from Daman and Diu & Ladakh

• Due to reorganization of the state of Jammu & Kashmir and merger of the Union territories of Dadra and Nagar Haveli and Daman and Diu, the taxpayers of Ladakh and earlier ‘Daman and Diu’ region have been allotted new GSTINs. There is therefore a doubt as to how to file the TRAN-1 and whether it would be linked with the old TRAN-1 or not.
• The aggrieved taxpayers of both the above-mentioned regions are hereby informed that they can file or revise their TRAN-1 or TRAN-2 Forms only through their newly allotted GSTINs. Kindly do not use the old GSTIN for filing of TRAN forms.
• The respective tax administrations of both the regions are also advised to accordingly facilitate the taxpayers and keep the above information in mind while processing the TRAN claims under the new GSTINs by linking both the old and revised TRAN-1 forms filed by such taxpayers.

[Source: GSTN dated 25.10.2022 (//www.gst.gov.in)]

Payment of Pre-deposit for pre-GST cases in GST era

• CBIC has clarified on manner of payment of Pre-deposit for cases pertaining to Central Excise and Service Tax in GST regime.
• Payment of Pre-deposit as a pre-condition for filing appeal is neither in the nature of duty on or can be treated as arrear under the erstwhile Service Tax / Excise laws and hence cannot be considered to be covered under the transitional provisions of CGST law.
• GST law provides an option to pay admitted tax dues and pre-deposit through electronic cash or credit ledgers.
• Form GST DRC-03 is prescribed for payment of tax, interest, penalty under sub-section (5) and (8) of both section 73 and 74, and section 129 (1) of the CGST Act, 2017 or any other payment due in accordance with the provisions of the CGST Act, 2017 as specified in rule 142(2) and 143(3) of CGST Rules, 2017
• In GST regime for appeal mechanism under section 107 of the CGST Act. 2017, Rule 108 (1) of the CGST Rules, 2017 provides Form GST APL-01 for filing an appeal with option of payment of admitted amount and pre-deposit through electronic cash/credit ledger. Thus, under GST Act also, Form GST DRC - 03 is not a prescribed mode for payment of pre-deposit.
• It has been clarified that payments through DRC-03 under CGST regime is not a valid mode of payment for making pre-deposit under section 35F the Central Excise Act, 1944 and Section 83 of Finance Act, 1994 read with section 35F of the CEA.
• Further, there exists a dedicated CBIC-GST Integrated portal, https://cbic-gst.gov.in [Board's Circular No. 1070/3/2019-CX dated 24^th June, 2019 refers in this regard], which should only be utilized for making pre-deposit under the Central Excise Act, 1944 and the Finance Act, 1994.

[Source: Instruction - CBIC-240137/14/2022-Service Tax Section-CBEC  issued by CX & ST Wing, Ministry of Finance, dated 28.10.2022]

GST Collection for October, 2022

• The gross GST revenue collected in the month of October 2022 is Rs. 1,51,718 crore of which CGST is Rs. 26,039 crore, SGST is Rs. 33,396 crore, IGST is Rs. 81,778 crore (including Rs. 37,297 crore collected on import of goods) and Cess is Rs. 10,505 crore (including Rs. 825 crore collected on import of goods), which is second highest till date.
• The revenue for October, 2022 is second highest monthly collection, next only to the collection in April, 2022 and it is for the second time the gross GST collection has crossed Rs. 1.50 lakh crore mark.
• This is the ninth month and for eight months in a row now, that the monthly GST revenues have been more than the Rs. 1.4 lakh crore mark.
• The highest collection has been in States of Maharashtra, Tamilnadu, Gujarat, UP and Haryana.

(Source: PIB Press Release ID1872591 dated 01.10.2022)