RECENT DEVELOPMENTS IN GST

[Dr. Sanjiv Agarwal]

OECD has raised India’s GDP forecast to 8% in financial year 2023-24. In contrast, China is 5.4%, US 1.6% and world average @ 2.7%. Chief Economic Advisor of India is of the view and Indian economy can grow for prolonged period (8-10 years) without running into overheating problem. He also expects growth rate to be over 7 percent in current financial year 2023-24.

According to media reports, MoF may soon decide a new Convener for Group of Ministers on GST rate rationalization, post new government in Karnataka State. Also, CBIC is considering to have pre-filled consolidated GST return forms on the lines of annual information statement in income tax and to allow taxpayers to view transaction details & e- invoices to arrive at correct tax liability. This may be launched in the current fiscal itself.

Bombay high court has recently upheld the constitutional validity of IGST provision 13(8)(b) by 2.1 majority in relation to intermediary services and place of supply.

GST Council is likely to meet later this month for its 50^th meeting in which constitution of GST Tribunals may be on top agenda.

GSTN has issued few updates and advisories, viz, on 2 factor  authentication, on E-invoice Verifier App, e-invoice system etc.

Cases pending before Hon'ble Supreme Court and CESTAT – Streamlining the system of briefing of cases to Law Officers, Advocates, Counsels and DRs – Guidelines 

Consequent upon concerns having been raised by some policy sections/field formations that they do not get a proper chance to brief the Law officers (AG/ ASG), panel advocates etc. in important court cases, the CB.I. & C has, inter alia, laid down following guidelines to streamline the system of briefing both for the Apex Court and the CEST AT:

1. Field formations should access the CB.I. & C/Directorate of Legal Affairs (DLA) website regularly and checklisting of their cases and should be ready to brief the Law Officers/Counsels at short notice from DLA.
2. Field formations should follow their cases uploaded on C.B.I. & C. as well as DLA website to ensure compliance as may be required.
3. Field officers should track their cases listed in the monthly summary /bulletin of the proceedings in the Supreme Court issued by DLA and take follow up action as may be required swiftly.
4. Field officers should verify pendency from the Quarterly list of cases uploaded on the CB.I. & C/DLA website.
5. Where briefing of Law Officers (AG/SG/ ASG) or other Government Panel Advocates is required, communications from DLA  should be attended with utmost seriousness and promptness and a well versed officer should be deputed for briefing.
6. The DLA should be kept informed regularly regarding the briefing having been done.
7. In case, the field formations or any other wing e.g. Policy section of Board, TRU etc. want to brief the Law Officer/panel advocate, they should send a communication to DLA who will arrange the conference through Central Agency Section.
8. As regards Cases in the CESTAT, field formations should access the cause list available on the Tribunal website as well as the LIMBS and communicate with the Office of CC (AR) and request for briefing should be made to the DR under intimation to the office of CC (AR) and JS Review for effective defence of the case.

(Source: - CBIC, Directorate of Legal Affairs Circular No. 1/2023, dated 16.05.2023)

Document Reference Number – Karnataka State

• Karnataka State has introduced generation and quoting of Document Reference Number (RFN) on search and inspection documents/ communication issued by the officers of the Karnataka GST Department.       
• To generate RFN on the BO Portal,

1. The Tax officer has to navigate to Services > RFN Generation, the RFN Generation page is displayed.
2. RFN can be generated by entering appropriate details in the fields and clicking on Generate RFN button. This RFN shall be mentioned in the communication to the taxpayer.

• The taxpayers can verify the RFN of the physically generated document/offline communication made by the Tax Officer on the GST common portal, both pre- and post-login, by navigating to Services > User Services Verify RFN option.

(Source: Circular No. GST-02/2023-24 dated 23.05.2023

issued by Department of Commercial Taxes , Government of Karnataka)

E-Invoice System

• The e-Invoice System is for GST registered person for uploading all the B2B invoices to the Invoice Registration Portal (IRP).
• The IRP generates and returns a unique Invoice Reference Number (IRN), digitally signed e-invoice and QR Code to the user.
• Taxpayers with Aggregate Annual Turnover (AATO) between Rs. 5 Crore to Rs. 10 Crore are enabled for e-invoicing.

(Source: E-invoice 1 Portal dated 02.06.2023)

Pre-import conditions & IGST

CBIC has issued a clarificatory Circular to implement Supreme Court judgment in UNION OF INDIA & ORS. VERSUS COSMO FILMS LIMITED - 2023 (5) TMI 42 - SUPREME COURT

• As per Apex Court, the relevant imports that do not meet the pre-import condition requirements, are to pay IGST and Compensation Cess to that extent.
• Supreme Court had directed the Revenue to permit claim of refund or input credit (whichever applicable and/or wherever customs duty was paid). For the sake of convenience, the revenue shall direct the appropriate procedure to be followed, conveniently, through a circular in this regard.
• Under GST law, the Bill of Entry (BE) for the assessment of integrated tax/ compensation cess on imports is one of the documents based on which the input tax credit may be availed by a registered person. A TR-6 challan is not a prescribed document for the purpose.
• For purpose of carrying forward the Court's directions, the following procedure can be adopted at the port of import (POI):-

1. for the relevant imports that could not meet the said pre-import condition and are hence required to pay IGST and Compensation Cess to that extent, the importer (not limited to the respondents) may approach the concerned assessment group at the POI with relevant details for purposes of payment of the tax and cess along with applicable interest.
2. the assessment group at POI shall cancel the OOC and indicate the reason in remarks. The BE shall be assessed again so as to charge the tax and cess, in accordance with the above judgment.
3. the payment of tax and cess, along with applicable interest, shall be made against the electronic challan generated in the Customs EDI System.
4. on completion of above payment, the port of import shall make a notional OOC for the BE on the Customs EDI System [so as to enable transmission to GSTN portal of, inter alia, the IGST and Compensation Cess amounts with their date of payment (relevant date) for eligibility as per GST provisions].
5. the procedure specified at (a) to (d) above can be applied once to a BE.

• Accordingly, the input credit with respect to such assessed BE shall be enabled to be available subject to the eligibility and conditions for taking input tax credit under Section 16, Section 17 and Section 18 of the CGST Act, 2017 and rules made thereunder.
• In case such input tax credit is utilized for payment of IGST on outward zero-rated supplies, then the benefit of refund of such IGST paid may be available to the said registered person as per the relevant provisions of the CGST Act, 2017 and the rules made thereunder, subject to the conditions and restrictions provided therein.

(Source: Circular No. 16/2023-Customs dated 07.06.2023)

GSTN Advisory on E-invoice Verifier App

• GSTN has introduced E-invoice Verifier App to offer a convenient solution for verifying e-invoice and other related details.
• It provides a process of seamless e-invoice verification
• This App provides for:

• QR code verification
• User friendly interface
• Support verification of e-invoices reported across all IRPs
• Operates on a non-login basis / does not require any authentication process.

How to use E-invoice verification App of GSTN

• GSTN’s e-invoice verification App operates as follows:

1. Download the App: Visit the Google Play Store and search for "E-Invoice QR Code Verifier." Download and install the app on your mobile device free of charge. The iOS version will be available shortly.
2. QR Code Scanning: Utilise the app to scan the QR codes on your e-Invoices. The app will authenticate the information embedded in the code and one can compare it with information printed on the invoice.
3. GSTN emphasizes that the e-Invoice Verifier App does not require any user login or authentication process. Anyone can freely scan QR codes and view the available information.

[Source: GSTN Advisory dated 08.06.2023 (www.gst.gov.in)]

2 Factor Authentication under GST

• 2 Factor Authentication shall be made mandatory for all taxpayers with Average Annual Turnover (AATO) above Rs. 100 crore w.e.f. 15.07.2023.
• 2 Factor Authentication for logging into e-way bills / e-invoice system is aimed at enhancing security of e-way bills / e-invoice system.
• OTP can be generated through three modes – SMS on ‘sandes’ app and by using NIC –GST-Shield app.
• Registration will be required on e-way bill system.
• The OTP authentication is based on individual user accounts. The sub users of GSTIN will have separate authentication depending on their registered mobile number in the e-Way Bill/ e- Invoice System.
• Once registered for 2 Factor authentication, the same will be applicable for both e-Way bill and e-Invoice system.

[Source: GSTN Advisory dated 12.06.2023]