Dr. Sanjiv Agarwal, FCA, FCS
In one of the latest moves, it has now been decided (officially) to share income tax data with GSTN in order to curb tax evasion. CBDT has notified a designated authority, Principal Director General of Income Tax (System) or Director General of Income Tax (System) to furnish information to GSTN. This will be done under a MOU which will cover aspects like modalities of exchange of data, confidentiality, mechanism for safe preservation, etc. Data/information will include request-based exchange of data wherein important financial fields captured in return of income like turnover/gross total income, status of filing ITR, turnover ratio, GTI range, turnover range etc., spontaneous exchange of data and automatic exchange of data. However, nobody stopped the Government from sharing this data otherwise too. Are we moving towards one tax, one return ! It appears to be a dream for now.
The National Anti-profiteering Authority will complete 2 years in November, 2019 after which it shall lease to exist, unless the law / rules are amended. With more and more cases pouring in, its closure seems difficult. Now companies like P & G, J & J, Patanjali, Samsung, Starbucks etc are under the scanner and facing charges of profiteering.
According to one report, government tax revenue has reduced by 20% across top ten service sectors due to higher utilization if input tax credit which has helped companies due to reduced tax outgo in cash. These sectors are engineering, telecom, air transport, construction etc. CBIC has started enquires for input tax credit claimed under GST by sending notices to check possible revenue leakage. Currently, there is no mechanism to verify if vendors have paid GST as only return filing can be viewed on GSTN but not the payment of tax.
CBIC has issued two more Circulars, viz, Circular No. 100 dated 30.4.2019 on applicability of GST on seed certification tags and Circular No. 101 dated 30.4.2019 on GST exemption on upfront amount payable in installments for long term lease of plots. Earlier 3 Notifications, 2 Circulars and one Order were issued on 23.04.2019. Circular No. 98 dated 23.04.2019 was on manner of utilization of input tax credit as per new rule 88A. Circular No. 99 provides clarification on revocation of cancellation of registration under GST.
♦ Revocation of Registration- Due Returns to be furnished within 30 days
> As per Rule 23 of the Central Goods and Services Tax Rules, 2017, a registered person, whose registration is cancelled by the proper officer on his own motion, may submit an application for revocation of cancellation of registration, in FORM GST REG-21 within a period of thirty days from the date of the service of the order of cancellation of registration.
> By amendment in such rule w.e.f. 23.04.2019, in case, registration has been revoked, all returns due for the period from the date of order of cancellation (in case registration has been cancelled from retrospective effect, then from effective date of cancellation of registration) till the date of order of revocation of cancellation of registration shall have to be furnished within a period of thirty days from the date of the order of revocation of cancellation of registration.
♦ Special procedure under Composition Scheme
> The registered persons paying tax under the provisions of section 10 of the Central Goods and Services Tax Act, 2017 or by availing the benefit of Notification No. 02/2019– Central Tax (Rate), dated the 7th March, 2019 i.e., the option of composition scheme for supplier of services with a tax rate of 6% having annual turnover in preceding year upto Rs 50 lakhs shall follow the special procedure as mentioned below for furnishing of return and payment of tax :
|Return||Purpose||Period||To be filed by|
|FORM GST CMP 08
|Details of payment of self assessed tax||Quarterly||18th day of the month succeeding such quater|
|Return for every financial year||Yearly||On or before the 30th day of April following the end of such financial year|
♦ Non-filers of GST returns to be barred from generating E-way Bills
> According to Rule 138E of CGST Rules, 2018 (as amended), no person (including a consignor, consignee, transporter, an e-commerce operator or a courier agency) shall be allowed to furnish the information in PART A of FORM GST EWB-01 in respect of a registered person, whether as a supplier or a recipient, who,—
√ being a person paying tax under section 10, has not furnished the returns for two consecutive tax periods; or
√ being a person other than a person specified above, has not furnished the returns for a consecutive period of two months
> However, Commissioner being satisfied, may allow furnishing of the said information in E-way Bills subject to such conditions and restrictions as may be specified by him on case to case basis.
> The above rule shall be effective from 21st day of June, 2019.
> Any non compliances shall, thus, adversely affect the taxpayer’s business.
♦ Manner of utilization of Input Tax Credit w.e.f. 29.03.2019
> The application of new Rule 88A of CGST Rules (which was inserted vide Notification No. 16/2019-CT dated 29.03.2019) has clarified the following points to ensure its uniform implementation:
√ ITC on IGST has to be first fully utilized completely towards IGST and balance towards CGST / SGST / UTGST in any order and in any proportion (i.e., without any order of set off).
√ Set off ITC of CGST / SGST / UTGST can be utilized towards IGST, CGST, SGST or UTGST but only after fully exhausting the ITC of IGST.
> It may be noted that presently, the common portal supports the order of utilization of input tax credit in accordance with the provisions before implementation of the provisions of the CGST (Amendment) Act i.e. pre-insertion of Section 49A and Section 49B of the CGST Act (01.02.2019).
> It has been clarified that till the new order of utilization as per newly inserted Rule 88A of the CGST Rules is implemented on the common portal, taxpayers may continue to utilize their input tax credit as per the functionality available on the common portal.
♦ Clarification regarding filing of application for revocation of cancellation of registration
> Where the registration has been cancelled with effect from the date of order of cancellation of registration, all returns due till the date of such cancellation are required to be furnished before the application for revocation can be filed.
> All returns required to be furnished in respect of the period from the date of order of cancellation till the date of order of revocation of cancellation of registration have to be furnished within a period of thirty days from the date of the order of revocation.
> Where the registration has been cancelled with retrospective effectall returns relating to the period from the effective date of cancellation of registration till the date of order of revocation of cancellation of registration shall be filed within a period of thirty days from the date of order of such revocation of cancellation of registration
♦ GST applicability on Seed Certification Tags
> Seed testing and certification is a multi-stage process, the charges for which are collected from the seed producers at different stages. Supply of seed tags to the seed producer is nothing but an element of the one integrated supply of seed testing and certification.
> Supply of seed tags to the seed producer is nothing but an element of the one integrated supply of seed testing and certification. All the charges, including those for issue of seed certificates/tags by the Seed Certification Agency of Tamil Nadu and Uttarakhand to the seed producing organization/ companies are collected for the composite supply of seed testing and certification, which is exempt under Notification No. 12/2017-Central Tax (Rate) Sl. No. 47
> However, supply of seed tags by the other departments/manufacturers to the State Government/Seed Certification Agencies is a supply of goods liable to tax.
♦ Exemption on the upfront amount payable in installments for long term lease of plots
> GST exemption on the upfront amount (called as premium, salami, cost, price, development charges or by any other name) payable for long term lease (of thirty years, or more) of industrial plots or plots for development of infrastructure for financial business under Entry No. 41 of Exemption Notification 12/2017 – Central Tax (R) dated 28.06.2017 is admissible irrespective of whether such upfront amount is payable or paid in one or more instalments, provided the amount is determined upfront.
♦ Extended time limit for filing application for Revocation of Cancellation of Registration
> Section 29 (2) of CGST Act, 2017 provides for cancellation of registration by proper officer under various situations from such date as he may deem fit, including any retrospective date.
> Further, section 30 (1) of CGST Act, 2017 provides for revocation of cancellation of the registration within thirty days from the date of service of the cancellation order.
> Many registered persons could not reply to the notices served under section 29(2) of Central Goods and Services Tax Act, 2017 resulting in cancellation of registration and were unable to file application for revocation of cancellation of registration under sub-section (1) of section 30 of Central Goods and Services Tax Act, 2017.
> Such registered persons, against Order passed up to 31.03.2019 for cancellation of registration, are now allowed to file application for revocation of cancellation of the registration but not later than 22.07.2019.
[Source: Removal of Difficulty Order No. 5/2019-GST dated 23.04.2019]
♦ GST collection in April, 2019
> The total gross GST revenue collected in April 2019 is Rs 1,13,865 crore of which Central GST is Rs 21,163 crore, State GST (SGST) is Rs 28,801 crore, Integrated GST is Rs 54,733 crore and cess is Rs 9,168 crore
> Total number of GSTR-3B filed for the month of March, 2019 up to April 30th, 2019 stood at 72.13 lakh. The collection last month has been the highest since introduction of GST and also reflects 10.05 per cent growth over April 2018 when the collection was Rs 1,03,459 crore.
> The government has settled Rs 20,370 crore to CGST and Rs 15,975 crore to SGST from IGST as regular settlement Further, Rs 12,000 crore has been settled from the balance IGST available with the Centre on provisional basis in the ratio of 50:50 between Centre and States
> The total revenue earned by the central government and state governments after regular and provisional settlement in April 2019 is Rs 47,533 crore for CGST and Rs 50,776 crore for SGST.
> For 2019-20, the government proposes to collect Rs 6.10 lakh crore from CGST and Rs 1.01 lakh crore as compensation cess. The IGST balance has been pegged at Rs 50,000 crore.
> The CGST collection in 2018-19 was Rs 4.25 lakh crore, while compensation cess was over Rs 97,000 crore.
> The Goods and Services Tax (GST) revenue last month is 16.05 per cent higher than the monthly average of Rs 98,114 crore GST revenue in 2018-19.
[Source: CBIC Press Release dated 01.05.2019]