Recent Updates In GST till 26.05.2022

The growth outlook in India and globally look to be slow amid longevity of Russia – Ukraine war and high inflation. All major agencies including IMF, S & P etc have lowered the projection for financial year 2022. However, GDP growth projection for financial year 2023 look better, though inflation is worrisome, there may not be a case of negative growth. More recently, Morgan Stanley has cut India’s GDP forecast for financial year 2023 to 7.6% from 7.9% on the grounds of slowdown in economic growth, inflation and risk aversion in global capital market which expose India to downside risks.

Indian inflation trajectory in the coming months will be influenced more by the geopolitical situation due to the war in Europe and its impact on supply chains and commodity prices. However, the country is better placed than most to ‘weather the storm’ and achieve growth of close to 8 percent in the current fiscal year as per the Finance Ministry.

Group of Ministers setup by GST Council has reportedly finalized recommendations on taxability of e-gaming, casinos, race-courses etc @ 28 percent. Presently, these services are taxed @ 18% GST levy. It is expected that online gaming is may grow well in India in next few years. This rate increase will contribute to increase in tax revenue.

Supreme Court on 19 May, 2022 has dismissed the Union of India petition on ocean freight in Mohit Minerals case. The Apex Court has held that recommendations of GST Council are only recommendations and not binding on Union and States. It held that GST shall not be leviable on ocean freight. It observed that Union and States have simultaneous powers to legislate on GST and that GST Council to work in harmonious manner to achieve workable solution between the two. All the recommendations of GST Council cannot be binding on legislature. It also commented on Indian federalism and said that Indian federalism is a dialogue between cooperative and non-cooperative federations. It is a dialogue in which states and centre always engages in a dialogue. GSTC recommendations are only recommendations and not binding on Union of Sates. This is a landmark judgment which may have deep and wide repercussions on very basis of GST structure in the country.

CBIC believes that there is a bounce –back in the economy, and the inflation and boil in oil prices have helped. Revenues will be under pressure on the Customs side because of rising commodity prices. Excise will take a hit because of the duty cut. New Cestat members recruitment may take place soon now.

CBIC has also extended the last date for filing form GSTR-3B and GST PMT-06 to 24^th and 27^th May, 2022 respectively due to technical glitches. Also, late fees has been waived for GSTR-4. A new SOP on NCLT cases has been issued by CBIC so that revenue claims are not rejected.

Waiver of late fee under section 47 in filing FORM GSTR-4

• CBIC has waived the late fee payable for delay in furnishing Form GSTR-4
• The late fee payable for delay in furnishing of FORM GSTR-4 for the Financial Year 2021-22 under section 47 of the said Act shall stand waived for the period from the 1st day of May, 2022 till the 30th day of June, 2022.
• This period of waiver shall operate from 1^st May, 2022 to 30^th June, 2022 only (i.e. 2 months)

(Source: Notification No. 07/2022-Central Tax dated 26.05.2022)

SOP for IBC cases- Role of GST officers

• CBIC has issued a ‘Standard Operating Procedure’ (SOP) in relation to NCLT cases (before National Company Law Tribunal) in matters under Insolvency & Bankruptcy Code, 2016 (IBC).
• GST and Customs Authorities have been classified as operational Creditors and are required to submit their claims against corporate debtors when the Corporate Insolvency and Resolution Process (CIRP) is initiated and public announcement inviting claims is made by the insolvency professional.
• The delay in filing the claims by GST / custom authorities as operational creditors leads to their claims hot being admitted and extinguished once a resolution plan is approved.
• CBIC shall appoint a Nodal Officer to ensure filing of the claims with the IBBI in a timely manner and within the period of 90 days from the insolvency commencement date.
• Nodal officer nominated by CBIC shall be Additional Director General, DGPM as the Nodal Officer for the CBIC for the receipt of information regarding initiation of the insolvency resolution process and dissemination of the same to the field formations for necessary action.
• The Nodal Officer will disseminate the information received by him, through official email, to all Zonal Principal / Chief Commissioners with a copy to the concerned Principal Commissioner/ Commissioner within 02 (Two) working days.
• The concerned office/ Commissionerate which has arrears pending against the unit/ company shall file its claims timely for safeguarding and realisation of the government dues and inform the fact of having filed its claim to the Nodal Officer through the ADC/ JC in the Chief Commissioner’s Office (CCO).
• Correspondences with the Resolution Professional (RP) should be made regarding finalisation of the Resolution Plan. Timely verification should also be done from the website ibbi.gov.in to check if any orders were issued by NCLT with respect to resolution, liquidation, and/or withdrawal of application.

(Source: CBIC Instruction No. 1083/04/2022-CX9  dated 23.05.2022) 

CBIC Clarification on Tax Deposited during Search / Investigation

• CBIC has clarified on recovery of tax / deposit of tax during the course of search, inspection or investigation through Form DRC-03 as the taxpayers subsequently have made allegation of use of force and coercion for such recovery in few cases.
• It has been clarified that as per law, a taxpayer has an option to deposit the tax voluntarily by way of submitting DRC-03 on GST portal. Such voluntary payments are initiated only by the taxpayer by logging into the GST portal using its login id and password. Voluntary payment of tax before issuance of show cause notice is permissible in terms of provisions of Section 73(5) and Section 74 (5) of the CGST Act, 2017.
• Recovery of taxes not paid or short paid, can be made under the provisions of Section 79 of CGST Act, 2017 only after following due legal process of issuance of notice and subsequent confirmation of demand by issuance of adjudication order. No recovery can be made unless the amount becomes payable in pursuance of an order passed by the adjudicating authority or otherwise becomes payable under the provisions of CGST Act and rules made therein.
• It has been clarified that there may not be any circumstance necessitating `recovery’ of tax dues during the course of search or inspection or investigation proceedings. However, there is also no bar on the taxpayers for voluntarily making the payments on the basis of ascertainment of their liability on non-payment/ short payment of taxes before or at any stage of such proceedings. The tax officer should however, inform the taxpayers regarding the provisions of voluntary tax payments through DRC-03.
• Further, cases of complaints should be enquired at the earliest and in case of any wrongdoing on the part of any tax officer, strict disciplinary action as per law may be taken against the defaulting officers.

[Source: CBIC Instruction No. 01/2022-23 (GST-Investigation) dated 25.05.2022] 

Taxpayer friendly measures in GST – Haryana State

Government of Haryana has decided to re-engineer internal processes to implement inter alia, following measures:

• No officer / official shall enter the premises of any taxpayer without display of proper Identity card.
• Tax inspectors shall not visit any premise except when they are conducting physical inspection under Rule 25 of the HGST Rules, 2017 or if they are part of a search, inspection or an audit operation.
• While conducting any enquiry, suitable opportunity of being heard should be given to the complainant.
• Repeated summons and calling for records should be discouraged.
• In case the system does not provide for specific functions such as summons etc. then the ID can be generated using Enforcement / Enquiry ID module of the BO web system.
• 1st April, 2022 GSTN has initiated automatic un-blocking of ITC, blocked for period of more than 1 year.

(Source: Memo No. 362/GST dated 19.05.2022 by Excise Taxation Department, Government of Haryana) 

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