According to MoF, Indian economy is poised for facing external stocks. Our external sector indicates robust growth in exports and signs of resilience. However, inflation remains a cause of concern. In a recent review, rating agency CRISIL has retained its forecast for GDP growth @ 7.8 % for FY 2023 as risks shift from Covid to geopolitics, crude oil, interest rates etc. Morgan & Stanley have also lowered GDP forecast by 50 basis posts to 7.9 for FY 2023. According to S & P, growth for FY 2023 is projected at 7.8%, which is higher than China, US & Indonesia. India’s present concerns come from inflation, interest rates, oil crises and impact of Russia – Ukraine war. Morgan Stanly has also cut FY 2023 GDP growth forecast to 7.9% from 8.4% due to ongoing geopolitical scenario and stagflation risks.
We are now in the last leg of current fiscal 2021-22 with just 7 days to go. While a hectic schedule of events to take place in next few days for yearly closing, it is also the time to review compliances, invoicing, availment of input tax credits and completion of transactions. We should also do due diligence of all compliances for the current year.
Tax buoyancy in India is likely to touch a new high of 3 in current fiscal. This will be crucial for tax policy formulation also. GST collections till February, 2022 are Rs. 13.33 lakh crore against Rs. 10.13 lakh crore in last year, i.e., growth of over 31%.
CBIC has issued Circular No. 169 on 12.03.2022 clarifying on the jurisdiction of proper officer for the purpose of adjudication. This follows Notification No. 02/2022-Central Tax dated 11th March, 2022 issued earlier on the same issue notifying the proper officers for adjudication in different states. Now GST audit and investigation officers will not be able to adjudicate the notices. They can only issue notices.
On GST compensation, Center is yet to release compensation of over Rs. 53000 crore in current year. It has so far paid Rs. 2.55 lakh crore to states and UT’s. While the period of compensation cess as agreed comes to an end on 30th June, 2022, it is likely to be extended by 2-3 years.
According to media reports, GST Council may consider hiking of GST rates by merging first three rates, i.e., 5, 12 and 18 percent. However, looking at present inflationary conditions, change in rates may wait for some time as it will otherwise be like a double edged sword for taxpayers. GST Council’s next meeting is yet to be scheduled.
On crypto transactions, revenue may treat it like lottery and tax it @ 28% on entire value. The classification as a ‘good’ or ‘service’ would decide the tax. Services in relation to cryptos are to be taxed at 18% treating them as financial / intermediary services. Another view is that cryptos are just like lottery, betting, gambling etc and as such, revenue may like to tax it at full value.
Power to Adjudicate Notices issued by DGGSTI
- CBIC has notified that specified Additional Commissioner (AC) of Central Tax or Joint Commissioner (JC) of Central Tax shall be vested with powers for passing an order or decision in respect of notices issued by the officers of Director General of Goods and Services Tax Intelligence (DGGSTI).
- This amends Notification No. 2/2017-Central Tax dated 19.06.2017.
- The officers (AC or JC), as the case may be, who are subordinate to the specified Principal Commissioner /Commissioner of Central Tax have been given this power to adjudicate and such power shall be exercisable throughout the territory of India.
- The specified ten Commissonerates are Ahmedabad South, Bhopal, Chandigarh, Chennai South, Delhi North, Guwahati, Rangareddy, Kolkata North, Lucknow and Thane.
(Source: Notification No. 2/2022-Central Tax dated 11.03.2022)
Proper Officer u/s 73 & 74 of CGST Act, 2017 and IGST Act, 2017
- Vide Notification No. 2/2022-Central Tax dated 11.03.2022, para 3A has been inserted in the Notification No. 2/2017-Central Tax dated 19.06.2017, to empower Additional Commissioners of Central Tax/ Joint Commissioners of Central Tax of some of the specified Central Tax Commissionerates, with All India Jurisdiction for the purpose of adjudication of the show cause notices issued by the officers of the Directorate General of Goods and Services Tax Intelligence.
- The Central Tax officers of DGGSTI shall exercise the powers only to issue show cause notices.
- A show cause notice issued by them shall be adjudicated by the competent Central Tax officer of the executive Commissionerate in whose jurisdiction the noticee is registered when such cases pertain to jurisdiction of one executive Commissionerate of Central Tax only.
- Such show cause notices may be adjudicated, irrespective of the amount involved in the show cause notice(s), by one of the Additional/Joint Commissioners of Central Tax empowered with All India jurisdiction vide Notification No. 2/2022-Central Tax dated 11.03.2022.
- Principal Commissioners/ Commissioners of the Central Tax Commissionerates specified in the notification will allocate charge of Adjudication (DGGI cases) to one of the Additional Commissioners/ Joint Commissioners posted in their Commissionerates (As per Table in Circular).
- Such show cause notice(s) may, accordingly, be made answerable by the officers of DGGSTI to the concerned Additional/ Joint Commissioners of Central Tax.
- In respect of a show cause notice issued by the Central Tax officers of Audit Commissionerate, where the principal place of business of noticees fall under the jurisdiction of multiple Central Tax Commissionerates, a proposal for appointment of common adjudicating authority may be sent to the Board.
(Source: Circular No. 169/01/2022-GST dated 12.03.2022 read with Notification No. 02/2022-Central Tax dated 11.03.2022
Introduction of Restoration of Cancelled Registration based on Appellate order
- A new functionality has been introduced and deployed with field formation to restore cancelled registration arising out of appellate orders.
- Jurisdictional range officers have been granted permission to operate this restoration functionality, i.e., ‘Restoration of cancelled registration’ e.f. 23.03.2022.
- This functionality would cover both the cancellations viz.. ordered suo motu by Range officers against which appeal orders were obtained without applying for revocation through form REG-21, and cancelled on the request from the taxpayers.
- As per the contractual obligations, the vendor (Wipro) is required to rectify the defects/ errors/ bugs noticed, if any, in the functionality within 30days of its deployment to production.
(Source: Registration Advisory No. 07/2022 dated 23.03.2022 issued by Office of the Principal Additional Director General of System & Data Management, Chennai)
Guidelines for Scrutiny of GST Returns
- CBIC has issued detailed instructions [Standard Operating Procedure (SOP)] for scrutiny of GST returns u/s 61 of CGST Act, 2017 read with rule 99 of CGST Rules, 2017 for the period, financial year 2017-18 and financial year 2018-19. This will serve as guidelines for GST officials.
- This SOP contains the methodology for scrutiny and inter alia covers :
- Statutory provisions (Section 61 / Rule 99)
- Selection of returns for scrutiny
- Proper officer for scrutiny of returns
- Scrutiny Schedule
- Process of scrutiny by the Proper Officer
- Timelines for scrutiny of returns
- Reporting and Monitoring
- Annexures covering –
a) Scrutiny schedule
b) Indicative list of parameters for scrutiny
c) Scrutiny register to be maintained by proper officer
d) Monthly scrutiny progress report
- This SOP is aimed to ensure uniformity in selection / identification of returns for scrutiny, methodology of scrutiny of returns and related procedures.
(Source: CBIC Instruction No. 02/2022-GST dated 22.03.2022)
Kerala Flood Cess Return dates extended
- Kerala Flood Cess (KFC) was levied by Kerala Government w.e.f. 01.08.2019.
- There is a requirement of filing KFC return and reconciliation statement on an annual basis but there have been technical glitches in filing the same.
- The due date for filing annual returns of Kerala Flood Cess in Form KFC-A1 for the Financial Year 2019-20 and 2020-2021 has been extended upto 15th March, 2022 as the electronic system now stands developed.
[Source: Notification No. 1/2022-State Tax dated 25.02.2022 (Kerala State)]
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