RECENT DEVELOPMENTS IN GST

[Dr. Sanjiv Agarwal]

It is reported that Indian economy has fared better in December 2019 quarter. The economy has started showing signals of recovery due to more Government spending and external factors. The GDP growth rate for Q1 was 5.6% followed by 5.1% in Q2.  Now Q3 growth is further down with projections at 4.7%. For whole year 2020-21, it is estimated by NSO at 5%. Globally, world economy is also facing slow down and only a growth of 2.8% is expected this year, weakest in last decade. However, the corona-virus impact may make a dent in global economy including our.

MCA has notified new CARO Order 2020 w.e.f. 25.02.2020 and is applicable to financial years 2019-20. The auditors will also be required to comment on details under GST law and cesses.

The gross GST revenue collected in the month of February, 2020is ₹ 1,05,366 crore of which CGST is ₹ 20,569 crore, SGST is ₹ 27,348 crore, IGST is ₹ 48,503 crore (including ₹ 20,745 crore collected on imports) and Cess is ₹ 8,947 crore (including ₹ 1,040 crore collected on imports). The total number of GSTR 3B Returns filed for the month of January up to 29th February, 2020 is 83.53 lakh.

A major controversy these days is on payment of interest for delayed GST on gross or net amount (net of ITC). Department is now demanding interest on gross amount and has sent numerous recovery notices throughout the country. However, there are few high court judgments to the contrary.

Also, blocking of ITC credit under CGST Rule 86A is also a new weapon in department’s hands which is being aggressively resorted to even in undeserving cases. CBIC has issued an advisory for opting for composition scheme  for existing registered assessees for financial year 2020-21. A set of few FAQs have been issued for verification of vehicle number in EWB portal.

3^rd National GST Conference held on 06.03.2020 discussed various issues including tax evasion performance of GST portal, compliance management and revenue augmentation. The next GST Council meeting is slated for 14 March, 2020 at Delhi where in issues of tax rates and cess to states may come up, along with other issues.

Advisory for opting in for Composition (Form GST CMP-02)

The GST web portal www.gst.gov.in has issued an advisory for the eli­gible existing Registered taxpayers can opt in for composition, for financial year 2020-21, by filling up Form GST CMP-02.

[Source: http://www.gst.gov.in dated 18-2-2020]

Advisory for opting in for Composition (Form GST CMP-02) 

• The GST web portal www.gst.gov.in has issued an advisory for the eligible existing registered taxpayers can opt in for composition, for financial year 2020-21, by filling up Form GST CMP-02.
• Taxpayers opting in for composition need to file stock intimation details.
• All composition taxpayers are required to file form GST CMP-08 quarterly.
• Composition scheme shall be effective from 1.04.2020.

Eligible taxpayers for opting in for Composition (Form GST CMP-02)  

Taxpayers who can opt for composition scheme w.e.f. 01.04.2020 who are regular taxpayer with an aggregate annual domestic PAN-based turnover less than as specified from time to time:

• ₹ 1.5 Crore for normal taxpayers
• ₹ 75 lakh in the case of an eligible registered person, registered  States, namely:
  • (i) Arunachal Pradesh,
  • (ii) Manipur,
  • (ill) Meghalaya, 
  • (iv) Mizoram,
  • (v) Nagaland,
  • (vi) Sikkim,
  • (vii) Tripura,
  • (viii) Uttarakhand
• For taxpayers dealing in only services or mixed supplies, this quantum is ₹ 50 Lakh.

Taxpayers not eligible for opting in for Composition (Form GST CMP-02)

Following taxpayers cannot opt for the Composition, if they are involved in or making :

• any supply of goods which are not liable to be taxed under this Act
• inter-state outward supplies of goods
• supplies through electronic commerce operators who are required to collect tax under section 52.

• a manufacturer of notified goods i.e. Ice cream and other edible ice, whether or not containing cocoa, all goods i.e. Tobacco and manufactured tobacco substitutes, Aerated Water and Pan Masala
• a casual dealer
• a Non-Resident Foreign Taxpayer
• a person registered as Input Service Distributor (ISD)
• a person registered as TDS Deductor /Tax Collector

[Source: http://www.gst.gov.in dated 18-2-2020]

Deemed value of supply of lottery tickets

• In order to streamline the valuation rule for the lottery with the uniform rate, rules for value of supply of lottery (Rule 31A of CGST Rules, 2017) under GST has been modified.
• From 1^st of March, 2020, the value of lottery shall be 100/128 of the face value of the ticket or the price as notified in the Official Gazette by the Organizing State, whichever is higher.
• The expression “Organising State” has the same meaning as assigned to it in clause (f) of sub-rule (1) of Rule 2 of the Lottery (Regulation) Rules, 2010.

[Source: Notification No. 08/2020 – Central Tax dated 02.03.2020]

Outcome of 3rd National GST Conference held on 6th March, 2020

• Discussion on:
  •  Various measures for streamlining the GST return filing process, enhancing revenue and focused compliance management as well as to create synergy among Central and State tax administrations.
  • Increased compliance management and for revenue augmentation as well as on Consumer Incentivization Scheme for promoting behavior of seeking invoices.
• Proposed measures :
• Immediate steps to curb passing on ITC by new taxpayers
• Measures to check export valuation including capping of value for calculating export benefits/incentives
• Standard Operating Procedure (SoP) for physical spot verification of risky taxpayers
• Standard Operating Procedure (SoP) for blocking and unblocking of ITC

[Source:  GST Council Press Release dated 06.03.2020 ]

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Discussions to this article

[Shyam Naik]

Dear Sir,

Whether the GST collection figures are calculated on the basis of Challan or on the basis of filing of GSTR3B?

Department argues that Government receives the payment only on filing GSTR 3B. Hence interest is charged even on advance remittance

Regards

Shyam