RECENT DEVELOPMENTS IN GST

[Dr. Sanjiv Agarwal]

Central Government has extended the due date for filing GST annual return in Forms 9 and 9C from 28.02.2021 to 31.03.2021 at the fag end of last date (6 PM of  28.02.2021, Sunday) amid lost hopes. This extension is second extension, earlier one granted from 31.12.2020 to 28.02.2021. The main reason attributed for this extension has been cited as ‘difficulties faced by the taxpayers’.

Notification No. 3/2021-CT dated 23.02.2021 exempts certain class of persons from requirements of section 25 (6B, 6C) for the purpose of GST registration. Notification No.4/2021-CT dated 28.02.2021 has extended the last date for filing annual returns to 31^st March, 2021.

CBIC has issued clarifications for applicability of Dynamic Quick Response (QR) Code on B2C invoices. CBIC has also issued Guidelines for provisional attachment of property u/s 83 of CGST law and rule 159 of CGST Rules. These contains guidelines related to grounds, procedure, cases fit for provisional attachment of property, types of property that can be attached, attachment period, investigation and adjudication, share in property and property exempt from attachment.

Exemption from Aadhaar Authentication for Registration

• Section 25 of CGST Act, 2017 deals with procedure for registration. Sub-sections 6B and 6C provide for Aadhaar Authentication as prescribed by Notification No. 17/2020-CT dated 23.03.2020.

• These provisions shall not apply to a person who is-

1. not a citizen of India; or
2. a Department or establishment of the Central Government or State Government; or
3. a local authority; or
4. a statutory body; or
5. a Public Sector Undertaking; or
6. a person applying for registration under the provisions of sub-section (9) of section 25 of the said Act.

• In other words, aforementioned persons shall be exempt from Aadhaar Authentication.

(Source: Notification No. 03/2021-CT dated 23.02.2021)

GST Annual Returns – Due dates Extended

• The due date for furnishing of the Annual returns (GSTR-9 and GSTR-9C) specified under section 44 of the CGST Act read with Rule 80 of the CGST Rules for the financial year 2019-20 was earlier extended from 31.12.2020 to 28.02.2021 vide Notification No. 95/2020- Central Tax dated 30.12.2020.

• Central Government (MOF) has further extended the due date for furnishing of GSTR-9 and GSTR-9C for the financial year 2019-20 to 31.03.2021 with the approval of Election Commission of India.

• This is the second extension of due dates for financial year 2019-20.

(Source: Notification No. 04/2021-CT dated 28.02.2021 read with Press Note dated 28.02.2021)

Applicability of Dynamic Q R Code on B2C invoices

• CBIC has issued clarifications for applicability of Dynamic Quick Response (QR) Code on B2C invoices and compliance of Notification No. 14/2020-CT dated 21.03.2020 which requires Dynamic QR Code on B2C invoice issued by taxpayers having aggregate turnover more than 500 crore rupees, w.e.f. 01.12.2020.

• Vide Notification No. 89/2020-Central Tax, dated 29th November 2020, penalty has been waived for non-compliance of the provisions of Notification No.14/2020 – Central Tax for the period from 01st December, 2020 to 31st March, 2021, subject to the condition that the said person complies with the provisions of the said Notification from 01st April, 2021.

• Notification No. 14/2020-CT dated 21.03.2020 is applicable to a tax invoice issued to an unregistered person by a registered person (B2C invoice) whose annual aggregate turnover exceeds 500 Cr rupees in any of the financial years from 2017-18 onwards.

• In case of export invoices, though such supplies are made by a registered person to an unregistered person, however, as e-invoices are required to be issued in respect of supplies for exports, as per Notification No. 13/2020-Central Tax, dated 21st March, 2020 treating them as Business to Business (B2B) supplies, Notification No. 14/2020-Central Tax, dated 21st March, 2020 will not be applicable to export invoices.

• Dynamic QR Code should contain the following information :

1. Supplier GSTIN number
2. Supplier UPI ID
3. Payee’s Bank A/C number and IFSC
4. Invoice number & invoice date,
5. Total Invoice Value and
6. GST amount along with breakup i.e. CGST, SGST, IGST, CESS, etc.

• Dynamic QR Code should be such that it can be scanned to make a digital payment.

• If the supplier has issued invoice having Dynamic QR Code for payment, the said invoice shall be deemed to have complied with Dynamic QR Code requirements. In cases where the supplier, has digitally displayed the Dynamic QR Code and the customer pays for the invoice:

1. Using any mode like UPI, credit/ debit card or online banking or cash or combination of various modes of payment, with or without using Dynamic QR Code, and the supplier provides a cross reference of the payment (transaction id along with date, time and amount of payment, mode of payment like UPI, Credit card, Debit card, online banking etc.) on the invoice ; or
2. In cash, without using Dynamic QR Code and the supplier provides a cross reference of the amount paid in cash , along with date of such payment on the invoice,

the said invoice shall be deemed to have complied with the requirement of having Dynamic QR Code.

•  In case where the supplier makes available to customers an electronic mode of payment like UPI Collect, UPI Intent or similar other modes of payment, through mobile applications or computer based applications, where though Dynamic QR Code is not displayed, but the details of merchant as well as transaction are displayed/ captured otherwise, in such cases, if the cross reference of the payment made using such electronic modes of payment is made on the invoice, the invoice shall be deemed to comply with the requirement of Dynamic QR Code. However, if payment is made after generation / issuance of invoice, the supplier shall provide Dynamic QR Code on the invoice.

• If cross reference of the payment received either through electronic mode or through cash or combination thereof is made on the invoice, then the  invoice would be deemed to have complied with the requirement of Dynamic QR Code. In cases other than pre-paid supply i.e. where payment is made after generation / issuance of invoice, the supplier shall provide Dynamic QR Code on the invoice.

• The provisions of the Notification No. 14/2020-CT shall apply to each supplier/registered person separately, if such person is liable to issue invoices with Dynamic QR Code for B2C supplies as per the said notification. In case, the supplier is making supply through the Ecommerce portal or application, and the said supplier gives cross references of the payment received in respect of the said supply on the invoice, then such invoices would be deemed to have complied with the requirements of Dynamic QR Code. In cases other than pre-paid supply i.e. where payment is made after generation / issuance of invoice, the supplier shall provide Dynamic QR Code on the invoice.

(Source: Circular No. 146/02/2021-GST dated 23.02.2021)

Guidelines for provisional attachment of property u/s 83 of CGST law

CBIC has issued Guidelines for provisional attachment of property u/s 83 of CGST law and rule 159 of CGST Rules. These contains guidelines related to grounds, procedure, cases fit for provisional attachment of property, types of property that can be attached, attachment period, investigation and adjudication, share in property and property exempt from attachment.

• Commissioner must exercise due diligence and duly consider as well as carefully examine all the facts of the case, including the nature of offence, amount of revenue involved, established nature of business and extent of investment in capital assets and reasons to believe that the taxable person, against whom the proceedings referred in section 83 are pending, may dispose of or remove the property, if not attached provisionally.
• The basis, on which, Commissioner has formed such an opinion, should be duly recorded on file.
• The power of provisional attachment must not be exercised in a routine/mechanical manner and careful examination of all the facts of the case is important to determine whether the case(s) is fit for exercising power under section 83.
• The collective evidence, based on the proceedings/ enquiry conducted in the case, must indicate that prima-facie a case has been made out against the taxpayer, before going ahead with any provisional attachment.
• The remedy of attachment being, by its very nature, extraordinary, has to be resorted to with utmost circumspection and with maximum care and caution.

(Source: CBEC guidelines No. 20/16/05/2021-GST/359 dated 23.02.2021  issued by CBIC (GST Policy Wing)

GST Collections in February, 2021

• The gross GST revenue collected in the month of February 2021 is Rs.  1,13,143 crore of which CGST is Rs.  21,092 crore, SGST is Rs.  27,273 crore, IGST is Rs.  55,253 crore (including Rs.  24,382 crore collected on import of goods) and Cess is Rs.  9,525 crore (including Rs.  660 crore collected on import of goods).

• GST collection on a monthly basis in 2021-21 has been stable, more so after the economy opened up after initial lock down due to Covid, so much so that in last five months, it has been over Rs. one lakh, viz,

Month	GST Collections (Rs. in crores)
April, 2020	32,294 lakh
May, 2020	62,009 lakh
June, 2020	90,917 lakh
July, 2020	87,422 lakh
August, 2020	86,449 lakh
September, 2020	95,480 lakh
October, 2020	1.051 lakh
November, 2020	1.049 lakh
December, 2020	1.151 lakh
January, 2021	1.198 lakh
February, 2021	1.13 lakh

 

(Source: MOF Press Release ID: 1701723 dated 01.03.2021)