GOODS & SERVICE TAX (GST): RECENT CLARIFICATIONS

[Dr. Sanjiv Agarwal]

This piece captures some of the latest developments on GST front ranging from e-way bills, manual application for seeking advance ruling, steps in anti-profiteering, refund claims to issues like supply by artist etc.

E-Way Bills

Every registered person has to generate an e-way bill, when all of the following conditions satisfied-

• There is a movement of taxable goods (mentioned in annexure to the notification).
• The consignment value exceeds ₹ 50,000/-
• Such movement is

• in relation to a supply
• for reasons other than supply
• due to inward supply from un registered person.

Information relating to said goods shall be furnished in Part A of e-way bill electronically on common portal. Any person or firm registered under GST can generate the e-way bill - including the transporter. Where the goods are supplied by an unregistered person to registered person then, the movement shall said to be caused by such recipient if it is known at the time of commencement of movement. Upon generation, a unique E-way Bill No (EBN) shall be made available to parties related to such movement by Portal.

The e-way bill needs to be generated before the good is moved, and it has a limited validity period based on the distance covered. For up to 100 kms, an e-way bill is valid for 1 day (can be extended by Commissioner). If the good fails to be shipped on the date of generation, the e-way bill can be cancelled within 24 hours but if it is verified in transit then, no cancellation can be made. If a mode of transport is changed, a fresh e-way bill needs to be generated. If some goods are sent back by the receiver, another e-way bill needs to be generated. In case of movement of multiple consignments in single conveyance then, a consolidate e-way bill can be generated.

No e-way bill is required in following cases-

• where the goods being transported are other than those specified in Annexure;
• where the goods are being transported by a non-motorised conveyance
• where the goods are being transported from the port, airport, air cargo complex and land customs station to an inland container depot or a container freight station for clearance by Customs.

Important dates for E-way Bills

DATE	WHY IMPORTANT?
16.01.2018	The nationwide e-way Bill system will be ready to be rolled out on a trial basis latest by 16th January, 2018 Trade and transporters can start using this system on a voluntary basis from 16th January, 2018.
01.02.2018	The rules for implementation of nationwide e-way Bill system for inter-state movement of goods compulsorily will be notified.
01.06.2018	System for both inter-state and intra-state e-way bill generation will be ready by 16th January, 2018 The States may choose their own timings for implementation of e-way Bill for intra-state movement of goods on any date before 1st  June, 2018.

Advance Rulings

Since online utility for advance rulings is still not there and GST is six months old now, tax payers are finding it difficult to get a legal advice from the Government itself. As such, CBEC has allowed for manual filing of applications for advance ruling and appellate proceedings for advance rulings.

Accordingly, an application for obtaining an advance ruling shall be made in quadruplicate, in FORM GST ARA-01. The application shall clearly state the question on which the advance ruling is sought. The application shall be accompanied by a fee of five thousand rupees which is to be deposited online by the applicant, in the manner specified under section 49 of the CGST Act. Though the application shall be filed manually till the advance ruling module is made available on the common portal, the fee is required to be deposited online in terms of section 49 of the CGST Act.

The application, the verification contained therein and all the relevant documents accompanying such application shall be signed by applicant.

An appeal against the advance ruling issued be made by an applicant in quadruplicate, in FORM GST ARA-02 and shall be accompanied by a fee of ten thousand rupees to be deposited online, in the manner specified in section 49 of the CGST Act. It is reiterated that though the application shall be filed manually till the advance ruling module is made available on the common portal, the fee is required to be deposited online.  The application for advance ruling or the appeal before the Appellate Authority shall be filed in the jurisdictional office of the respective State Authority for Advance Ruling or the State Appellate Authority for Advance Ruling respectively.

Anti-profiteering Measures

CBEC has issued procedure for filing applications to invoke anti-profiteering measures under GST law. CBEC has informed all stakeholders that if this is not done, the consumer's interest is protected by the National Anti-profiteering Authority which may order: (a) reduction in prices; (b) return of the amount not passed on with interest @18% to the recipient; (c) imposition of penalty; and (d) cancellation of registration of the supplier.

Further consumers may file an application, in the prescribed format, before the Standing Committee on Anti-profiteering if the profiteering has all-India character or before the State Screening Committees if the profiteering is of local nature.

Refund Claims due to Inverted Duty Structure

As the refund module is not available on GSTN portal, CBEC has allowed for manual filing and processing of refund claims on account of inverted duty structure, deemed exports and excess balance in electronic cash ledgers. Such claims shall be filed and processed manually for time being. This will apply to the following type of refunds:

(i)   refund of unutilized input tax credit where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies) of goods or services or both except those supplies which are notified by the Government;

(ii)   refund of tax on the supply of goods regarded as deemed exports; and

(iii)  refund of balance in the electronic cash ledger.

Refund claims in respect of zero-rated supplies and on account of inverted duty structure, deemed exports and excess balance in electronic cash ledger shall be filed for a tax period on a monthly basis in FORM GST RFD-01A.However, in case registered persons having aggregate turnover of up to ₹ 1.5 crore in the preceding financial year or the current financial year are opting to file FORM GSTR-1 quarterly (notification No. 57/2017-Central Tax dated 15.11.2017 refers), such persons shall apply for refund on a quarterly basis. Further, it is stated that the refund claim for a tax period may be filed only after filing the details in FORM GSTR-1 for the said tax period. It is also to be ensured that a valid return in FORM GSTR-3B has been filed for the last tax period before the one in which the refund application is being filed. Since the date of furnishing of FORM GSTR 1 from July, 2017 onwards has been extended while the dates of furnishing of FORM GSTR 2 and FORM GSTR 3 for such period are yet to be notified, it has been decided by the competent authority to sanction refund of provisionally accepted input tax credit at this juncture. However, the registered persons applying for refund must give an undertaking to the effect that the amount of refund sanctioned would be paid back to the Government with interest in case it is found subsequently that the requirements of clause (c) of sub-section (2) of section 16 read with sub-section (2) of sections 42 of the CGST Act have not been complied with in respect of the amount refunded. This undertaking should be submitted manually along with the refund claim till the same is available in FORM RFD-01A on the common portal.

In case of refund claim arising due to inverted duty structure, the statements - Statement 1 and Statement 1A of FORM GST RFD-01A have to be filled. Statement 5B of FORM GST RFD-01A is required to be furnished for claiming refund on supplies declared as deemed exports.

In case of refund claim for the balance amount in the electronic cash ledger, upon filing of FORM GST RFD-01A, the amount of refund claimed shall get debited in the electronic cash ledger.

However, the drawback of all taxes under GST (Central Tax, Integrated Tax, State/Union Territory Tax) should not have been availed while claiming refund of accumulated ITC under section 54(3)(ii) of the CGST Act.

Supply of Artist

The artists give their work of art to galleries where it is exhibited for supply. There is a confusion regarding the treatment of this activity whether it is taxable in the hands of the artist when the same is given to the art gallery or at the time of actual supply by the gallery. The art work for supply on approval basis can be moved from the place of business of the registered person (artist) to another place within the same State or to a place outside the State on a delivery challan along with the e-way bill wherever applicable and the invoice may be issued at the time of actual supply of art work.

The supplies of the art work from one State to another State will be inter-State supplies and attract integrated tax in terms of section 5 of the Integrated Goods and Services Tax Act, 2017. In case of supply by artists through galleries, there is no consideration flowing from the gallery to the artist when the art works are sent to the gallery for exhibition and therefore, the same is not a supply. It is only when the buyer selects a particular art work displayed at the gallery, that the actual supply takes place and applicable GST would be payable at the time of such supply.

Readers may also refer to CBEC website, www.cbec.gov in for details.