RECENT DEVELOPMENTS IN GST

[Dr. Sanjiv Agarwal]

RECENT DEVELOPMENTS IN GST

Dr. Sanjiv Agarwal

FCA, FCS, D.Litt.

According to CEA, India’s 8.4% growth in last quarter is due to base effect of subsides and not just one off factors. This boosted the indirect taxes collection. There is an underlying and intrinsic momentum in the economy. Reserve Bank of India’s research has projected the economy to grow faster @7.4% instead of 7% in financial year 2025, as projected earlier by RBI in its monetary policy. As per CEA, Indian economy may grow over 7% in FY 2025.

In a meeting of Inter-Ministerial Committee of Coal Ministry, it has been recommended that imposition of GST Compensation Cess should be made on an ad valorem basis directly linked to price and quantity of coal instead of a fixed amount which is presently Rs. 400 per ton.

The next general elections in the country may be announced any time now. As such, the timing of next (53^rd) GST Council meeting looks uncertain. The 52^nd meeting was held on 7^th October, 2023. Also, major policy decision and rate rationalization may happen post elections only by the new Government.

The first ever conference of Enforcement Chiefs was held recently and addressed by our FM wherein she advocated for sharing of emerging best practices, emphasizing the need for seamless coordination across states in the larger national interest. She asked the tax authorities to engage with stakeholders to understand their concern, enhance compliance and streamline processes, besides clarity on classification under GST.

Union of India has moved Supreme Court to transfer all pending GST writ petitions by online money gaming companies before various high courts.

The Central Board of Indirect Taxes and Customs (CBIC) is planning to prepare is list of products which end up in litigation purely due to classification issues. The Central Board of Indirect Taxes has asked its field formations to set up an internal mechanism to weed out duplicate notices to businesses and individuals for offences already being investigated by state goods and services tax authorities.

Conference of Enforcement Chiefs of GST

• First ever National Conference of Enforcement Chiefs of Central and State GST Formations has been held on 4^th March, 2024 at New Delhi, inaugurated by the Union Finance Minister.
• The Conference deliberated on Combating GST Evasion, Combating Fake Invoicing, Sharing Best Practices, Fostering Synergy, Leveraging Technology and Data and Balancing Ease of Doing Business.
• GST officials asked to engage with stakeholders to understand their concerns, enhance compliance, streamline processes, and work collaboratively towards making the tax system more transparent and efficient.
• The Conference provided one more step towards facilitating understanding and streamlining operations of the tax authorities in enforcement actions undertaken by different indirect tax authorities.
• Emphasis to leverage technology to plug the loopholes as well provide better taxpayer services and sharing of emerging best practices, emphasising the need for seamless coordination across States in the larger national interest.
• Stress on classification related issues to be looked into at the earliest through appropriate channels.
• GST officials to engage with stakeholders to understand their concerns, enhance compliance, streamline processes, and work collaboratively towards making the tax system more transparent and efficient.
• Emphasis on priorities like targeting high risk areas, combating tax evaders, balancing enforcement with taxpayer rights, strengthening collaboration between central and state authorities, and gathering feedback for improvement in policy and technological interventions.
• Need to have more taxpayer-friendly approach to GST enforcement, focusing on avoiding unnecessary audits on issues involving prevalent trade practices, prioritising evidence-based inquiries and considering location convenience and requesting information formally through letters instead of using summons.

(Source: PIB Press Release ID 2011371 dated 04.03.2024)

Rectification of Assessment Orders under section 161-Delhi State

• Government of NCT of Delhi has issued Instruction regarding rectification of assessment orders to correct the errors apparent on the face of record u/s 161 of DGST Act, 2017.
• Section 161 provides for rectification of errors apparent on the face of record read with Rule 142(7) of DGST Rules, 2017.
• The reasons for initiating suo-moto rectifications are recorded in writing before such proceedings are initiated.
• Where such powers are invoked on the application filed by the registered person, the application should be made within three months of the date of the order.
• The rectification order in FORM GST DRC-08 should be passed within the period of six period of six months of the date of original order.
• Power of rectification in the order is confined only to mistake apparent on the face of record.
• If there are interpretation points on facts of the case or from the law perspective, then it cannot be processed through rectification procedure.
• Rectification may not be done where an appeal is preferred by the registered person to higher appellate forums.

(Source: Instruction F.No. 3(543)/GST/POLICY/2024/1312-18 dated 01.03.2024 issued by Department of Trade and Taxes, Govt. of NCT of Delhi)

Appeal Amnesty Scheme 2024- Rajasthan State

• Government of Rajasthan has notified the Procedure for Amnesty Scheme 2024 for disposal of outstanding demand or disputed amount.
• The procedure provides for:

• Applying for willingness
• Data entry
• Communication of outstanding demand(s)/disputed amount by assessing authority to the applicant
• Generation of Form AS-II
• Withdrawal of litigation
• Revert option by the applicant

• If the applicant does not want to avail the benefit for any of the outstanding demand communicated to him, then he shall select the ‘Not Interested’ option from the dropdown and submit AS-I, AS-II shall be generated only for those cases where applicant has accepted and made the required payment.
• This procedure shall not be applicable to outstanding demand / disputed amount pertaining to goods not subsumed is GST.

[Source: Notification (F.No. 16(752)VAT/Tax/CCT/2023-24/944 dated 29.02.2024 issued by Commercial Taxes Deptt., Govt. of Rajasthan]

GSTN Advisory on E-way Bill System with new IRP Portals

• GSTN has announced integration of E-Way bill services with four new IRP portals via NIC, enabling taxpayers to generate E-Way bills alongside E-Invoicing on these four IRPs.
• The websites for all six IRP portals are:

•      https://einvoice1.gst.gov.in     https://einvoice4.gst.gov.in
•      https://einvoice2.gst.gov.in     https://einvoice5.gst.gov.in
•      https://einvoice3.gst.gov.in     https://einvoice6.gst.gov.in

• This new facility complements the existing services available on the NIC-IRP portal, making E-Way bill services, along with E-Invoicing, available across all six IRPs.

(Source: GSTN Advisory dated 08.03.2024)

GSTN Advisory on GSTR-1/IFF

• GSTN has issued an advisory on GSTR-1 and IFF on introduction of new Tables 14A and 15A in GSTR-1 to capture the amendment details of the supplies made through e-commerce operators (ECO) on which e-commerce operators are liable to collect tax under section 52 or liable to pay tax u/s 9(5) of the CGST Act, 2017.
• These Tables will be available in GSTR-1/IFF from February 2024 tax period onwards and amendment tables are relevant for those taxpayers who have reported the supplies in Table 14 or Table 15 in earlier tax periods.
• Table 14A is on Amended supplies made through E-commerce operator in GSTR-1.  The supplier can amend the detail of original supplies that he has already reported in original table 14 under below two sections in earlier return periods:
  • 14(a) Liable to collect tax u/s 52(TCS)
  • 14(b) Liable to pay tax u/s 9(5)
• Table 15A is for Amended supplies under section 9(5) in GSTR-1 and IFF. The E-commerce operator can amend the detail of original supplies that he has already reported in table 15 originally under following four sections in earlier return periods.

• Registered Supplier and Registered Recipient (B2B)
• Registered Supplier and Unregistered Recipient (B2C)
• Unregistered Supplier and Registered Recipient (URP2B)
• Unregistered Supplier and Unregistered Recipient (URP2C)

• To view the table 14A/15A, taxpayer can navigate to Returns Dashboard > Selection of Period > Details of outward supplies of goods or services GSTR-1 > Prepare Online.
  • Impact on Form GSTR-2B
• For the ease of registered recipient who are making supplies through E-commerce operator, a new table “ECO – Documents (Amendment)” is being added in GSTR-2B.
• The registered recipient can view the amended document details of the supplies made through e-commerce operator on which ecommerce operator is liable to pay tax under section 9(5) of the CGST Act.
• The values will be auto populated from Registered Supplier and Registered Recipient (B2B) and Unregistered Supplier and Registered Recipient (URP2B) section of table 15A to this new ECO - Documents table of GSTR-2B.
• To view the ECO-Documents (Amendment) table, taxpayer can navigate to Returns Dashboard > Selection of Period > Auto- drafted ITC Statement for the month GSTR 2B > View.

(Source: GSTN Advisory dated 12.03.2024)

Financial Support on GST on specified purchases

• Ministry of Home Affairs has announced financial support of 50% on Goods and Services Tax (GST) on purchase of goods from Kendriya Police Kalyan Bhandar as a welfare measure.
• The Indian government has approved a subsidy that covers 50% of the GST for CAPF members when they make purchases at any of the central police canteens across the nation, according to an announcement by an ex-paramilitary forces welfare association.
• This is a welfare measure by the Central Armed Police Forces (CAPFs), which fall under the Ministry of Home Affairs (MHA), include the CRPF, BSF, CISF, ITBP, and SSB. Additionally, personnel from other central police organizations such as the BPRD and NCRB, among others, can also benefit from these canteens.
• This shall be effective from 1st April, 2024.

(Source: MHA Press Release dated 12.03.2024)

E-way Bills Tracking During Election Period

• Next General Election in India for 18th Lok Sabha shall be held in April- June, 2024 in seven phases
• Under the goods and services tax (GST) regime, e-way bills are required to be generated for inter-state transportation of goods valued over Rs 50,000.
• The government and Election Commission shall be tracking the GST e-way bills real time due to an unusual spike in demand for some goods and services.
• It has been advised that taxpayers should generate e-way bills for all their supplies as per law diligently and honestly, and not engage in bogus billing.
• GST taxpayers generating under e-way bills shall be under scrutiny and surveillance during and till election period is completed in June, 2024.

(Source: CEC Press Conference dated 16.03.2024)

 

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