RECENT DEVELOPMENTS IN GST

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RECENT DEVELOPMENTS IN GST

				By: Dr. Sanjiv Agarwal
				November 23, 2023
All Articles by: Dr. Sanjiv Agarwal View Profile

Contents

While RBI has estimated FY 2024-Q2 economic growth at 6.5%, various economists and agencies expect a lower GDP growth in the range of 6.2 – 6.3%. Further, as per RBI, economy is likely to expand faster in Q3 on capex and consumption demand. According to S & P, economic growth momentum is likely to continue and remain strong over the medium term with GDP expanding at 6 to 7.1 annually during 2024-26.

It is learnt that Government is considering the increase in threshold for arrests in GST cases from Rs. 2 crore to 3 crore. This may help reduce harassment and help in improving ease of doing business.

Madras High Court has recently ruled that GST Council is not empowered to determine classification of goods in Parle Agro case. Determination of classification does not fall within the preserve of GST Council. It may be noted that Council’s recommendations have been held to be non-binding on centres / states as held by Apex Court in Mohit Mineral Case.

CBIC has issued Notification No. 54 dated 17.11.2023 to include Andhra Pradesh for biometric based authentication. Gujarat and Pundicherry are already notified. GSTN too issued new advisories and functionalities.

GST collection in November, 2023 is likely to set a new record in the back drop of festive season and world cup cricket tournament. Certain sectors of Indian economy are expected to show good results.

While no new date is announced for next GST Council meeting, it is expected that in next meeting, issues like review of tax on online gaming, relaxation in penal provisions and some other taxpayer friendly measures may find place in agenda.

Gujarat included for Biometric based verification

CBIC has amended Notification No. 27/2022-CT dated 26.12.2022
Earlier, it was notified that Rule 8(4A) for verification for completion of GST registration through biometric based Aadhar authentication and photograph will not apply to all the States and Union Territories except Gujarat. Rule 8(4A) was applicable to the State of Gujarat w.e.f. 26.12.2022.
Then, Puducherry was added vide Notification No. 31/2023-CT dated 31.07.2023.
Now, w.e.f. 17.11.2023, State of Andhra Pradesh has also been included for this purpose.
For other states and Union Territories, it shall be notified later.

(Source: Notification No. 54/2023-CT dated 17.11.2023)

Online compliance for Input Tax Credit (ITC) mismatch

GSTN has issued an Advisory for Online Compliance Pertaining to ITC mismatch -GST DRC-01C i.e., Difference in Input Tax Credit (ITC) available in GSTR-2B & ITC claimed in the GSTR-3B.
GSTN has developed a functionality to generate automated intimation in Form GST DRC-01C which enables the taxpayer to explain the difference in Input tax credit available in GSTR-2B statement & ITC claimed in GSTR-3B return online as directed by the GST Council.
It compares the ITC declared in GSTR-3B/3BQ with the ITC available in GSTR-2B/2BQ for each return period.
If the claimed ITC in GSTR-3B exceeds the available ITC in GSTR-2B by a predefined limit or the percentage difference exceeds the configurable threshold, taxpayer will receive an intimation in the form of DRC-01C.
Upon receiving an intimation, the taxpayer is advised to file a response using Form DRC-01C Part B. The taxpayer has the option to either provide details of the payment made to settle the difference using Form DRC-03, or provide an explanation for the difference, or even choose a combination of both options.
In case, no response is filed by the impacted taxpayers in Form DRC-01C Part B, such taxpayers will not be able to file their subsequent period GSTR-1/IFF.

(Source: GSTN Advisory dated 14.11.2023)

Advisory on Input Tax Credit (ITC) Reversal under Rule 37(A)

GSTN has issued an advisory on ITC Reversal on account of Rule 37(A) of CGST Rules, 2017.
As per Rule 37(A) of CGST Rules, 2017 the taxpayers have to reverse the Input Tax Credit (ITC) availed on such invoice or debit note, the details of which have been furnished by their supplier in their GSTR-1/IFF but the return in FORM GSTR-3B for the said period has not been furnished by their supplier till the 30th day of September following the end of financial year in which the Input Tax Credit in respect of such invoice or debit note had been availed.
Such amount of ITC is required to be reversed by such taxpayers, while furnishing a return in FORM GSTR-3B on or before the 30th day of November following the end of such financial year, as part of this legal obligation.
To facilitate the taxpayers, such amount of ITC required to be reversed on account of Rule 37(A) of CGST Rules, 2017 for the financial year 2022-23 has been computed from system and has been communicated to the concerned recipient. The email communication to this effect has been sent on the registered email id of the taxpayer.
- The taxpayers have been advised to take note of it and to ensure that such ITC, if availed by them, is reversed as per Rule 37(A) of CGST Rules, 2017 before 30th of November, 2023 in Table 4(B)(2) of GSTR-3B while filing the concerned GSTR-3B.

(Source: GSTN Advisory dated 14.11.2023)

Instructions for Direct API Integration with IRPs

GSTN has issued Comprehensive Guidelines and Instructions for Direct API Integration with any of the 6 IRPs for E-Invoice Reporting.
These pertain to all six IRP’s as on 14.11.2023.
The instructions pertains to :