RECENT DEVELOPMENTS IN GST

[Dr. Sanjiv Agarwal]

The customary Economic Survey preceding the Union Budget shall be presented before the full budget after elections only and on 1^st February, 2024, only an interim Budget will be presented in Parliament.

According to recent MOF economic review, India is likely to grow @ 7% in Financial Year 2024-25. It has identified education, health and energy security, reducing compliance burden for small businesses, and improving labour market gender balance as priority concerns for future reforms. However, it has raised the flag for geopolitical risks.

Also, the economic review suggests that India may emerge as world’s third largest economy by 2030 with $ 7 trillion. For the year 2024, agencies like RBI, S & P, Kotak etc have opined for a 7% growth. For 2025, the growth projections are in the range of 6.3 to 7%. It also states that the structural reforms implemented since 2014 have strengthened the macroeconomic fundamentals.

The International Monetary Fund (IMF) has raised India’s growth projections of GDP to 6.5% for FY 2025 and 6.7 for FY 2024, a little lower than Government’s own projections. However, India is likely to continue to be the world’s fastest growing economy. All this talks of buoyant tax revenues and overall economic growth sustainably.

The Budget session of the Parliament has commenced on 31.01.2024 and the interim Budget has been presented on 1^st February, 2024. The Union Finance Minister has presented the interim Budget or vote on account on 1^st February, 2024 in the Parliament, ahead of general election in May / June 2024. The full Budget shall be presented by the new Government.

In one of the recent judgments, Delhi High Court has upheld the constitutional validity of section 171 of the CGST Act, 2017 which deals with anti-profiteering measures under the GST law to provide that any tax benefit accruing to businesses in GST regime due to tax reduction or input tax credit shall be passed on to the customers. The court upheld the validity of section 171 as well as related Rules in CGST Rules, 2017 while disposing of as much as 107 petitions filed by various companies. The gist of judgment finds place in this issue of GSTC.

CBIC has issued Notification No. 5/2024-CT dated 30.01.2024 to amend territorial jurisdiction of Commissioner / Commissioner for Pune II. GSTN   has issued few advisories recently to revamp and smoothen the GST filings and procedures. The amnesty scheme for filing belated GST appeals ended on 31^st January 2024, thought its success is not yet known.

It is desirable that Government should come out with a general and broader simple amnesty or disclosure scheme as GST would be completing seven years in June, 2024 and lot of disputes / litigation on procedural non-compliances and input tax credit are hampering the efficient tax administration.

MOF has issued a document “MOF E order 2023 Department of Revenue” wherein achievements of CBIC and GST have been captured.

Once again, GST collections in January, 2024 have been buoyant.  Rs.1,72,129 crore is the gross GST revenue collected during January, 2024 and it records 10.4% Year-on-Year growth at Rs.1,72,129 crore. This GST collection is 2nd highest ever and has crossed Rs.1.70 lakh crore mark for the third time in FY 2023-24.

GSTN Advisory on Bank Details

• GSTN has issued an Advisory for furnishing bank account details by registered taxpayers under Rule 10A of the Central Goods and Services Tax Rules, 2017.
• All registered taxpayers are required to furnish details of their bank account/s within 30 days of the grant of registration or before the due date of filing GSTR-1/IFF, whichever is earlier.
• Taxpayers have been advised to promptly furnish their bank account details, who have not provided it so far if 30 Days period is shortly going to expire to avoid disruption in business activities and the subsequent suspension of GSTIN.
• GSTN is also developing a new functionality with following features:

• Failure to furnish bank account in stipulated time
• Revocation of suspension
• Cancellation of registration

• Taxpayers should take immediate action to provide the necessary information and avoid any adverse consequences.

(Source: GSTN Advisor dated 23.01.2024)

ICES Guidance on IGST Refunds

• CBIC (Directorate General of Systems) has issued a ‘Guide on IGST Refunds in ICES’ (3.0 version)
• This contains a refund module for exports with step by step procedure.
• As per Rule 96 of the CGST Rules 2017, dealing with refund of IGST paid on goods exported out of India, the shipping bill filed by an exporter shall be deemed to be an application for refund of integrated tax paid on the goods exported out of India, once both the export general manifest (EGM) and valid return in Form GSTR-3 or Form GSTR- 3B, as the case may be, has been filed.
• The information on GSTR 1 shall then be transmitted electronically to Customs and the System designated by Customs shall process the refund claim.
• The IGST refund module has an in built mechanism to automatically grant refund after validating the Shipping Bill data with available in ICES against the GST Returns data transmitted by GSTN.

(Source: CBIC Directorate General of Systems –

Guide on IGST Refunds in ICES – Version 3.0)

Advisory on GST Notices

CBIC Chairman has recently advised officers on issuance of show cause notices (SCN’s) in view of increase in issuance of SCN’s. Accordingly,

• Proper officers to keep in mind that the issuance of show cause notices should be done after due consideration of facts and circumstances of the case and after examining the relevant documents submitted by the taxpayers.
• The Chief Commissioners of the Zones have been advised to keep a close watch on the number of pending investigations, scrutiny, etc., to ensure that the officers under their supervision are working in a methodical manner.
• Further, with the promotion of 2,398 officers from Group ‘B’ to Group ‘A’ level, there has been a substantial increase in manpower at the level of adjudicating officers. The increase strength to translate into faster liquidation of pendency.
• Reckless issuance of SCNs may be avoided as it would lead to unnecessary litigation in future.

(Source: Business Line dated 26.01.2024)

Special drive for IGST Refunds

• A large number of IGST refunds are pending for disbursement as the Shipping Bills are having error code waiting for rectification from the exporter.
• There will be a special drive from 05.02.2024 to 07.02.2024 for disposal of IGST refund cases pending as on 31.12.2023, as a trade facilitation measure.
• Exporters / Custom brokers are advised to submit the necessary documents in respect to their Shipping Bills on the scheduled date of the Special drive.

[Source: Public Notice No. 01/2024 dated 30.01.2024

issued by office of the Commissioner of Customs (Export), New Delhi]

GST collection in January, 2024

• The gross GST revenue collected in the month of January, 2024  is Rs.1,72,129 crore, which shows a 10.4% Year-o-Year (Y-oY) growth over the revenue of Rs.155,922 crore collected in January 2023 (till 05:00 PM on 31.01.2023).
• This is the second highest monthly collection ever and marks the third month in this financial year with collection of Rs.1.70 lakh crore or more. The government has settled Rs.43,552 crore to CGST and Rs.37,257 crore to SGST from the IGST collection.
• With overall collection reaching Rs.16.69 lakh crore, GST collections have registered 11.6% Y-o-Y growth in 10-month period.
• These figures are provisional for upto 5 PM on 31.01.2024.

(Source: Press Release ID: 2000957 dated 31.01.2023)