Monthly GST Journal for the month of March 2023

Stay updated with recent GST changes in March 2023. Learn about GST portal enhancements, e-invoicing updates, and recent case laws affecting taxpayers. Plus, don’t miss the compliance calendar for March 2023.

RECENT UPDATES IN GST

-GST Portal to show details of State and Center Jurisdiction in the Status of ARN (Acknowledgement Receipt Number) after filing application for New GST Registration.

-GSTN issued advisory on opting for payment of tax under the forward charge mechanism by a Goods Transport Agency. The taxpayer can navigate on GST portal after login –

To exercise option for F.Y. 2023-24, Annexure-V has been made available till March 15, 2023.

-GSTN issued advisory on the new e-invoicing Portal. The GSTN has onboarded 4 new IRPs (Invoice Reporting Portals) for reporting e-invoices in addition to NIC-IRP. The beta launch of new e-invoice portal (www.einvoice.gst.gov.in), has been done where taxpayers can find comprehensive information such as check your enablement status, self-enable themselves for invoicing, search for IRNs, web links to all IRP portals etc.

-However, for registering e-invoices and to access APIs, you still need to go to <einvoiceX.gst.gov.in> sites. Please note that the taxpayers can continue to report e-invoices on the NIC IRP portal <einvoice1.gst.gov.in> as previously.

–  GSTN issued advisory on Geocoding of Address of Principal Place of Business.

RECENT CASE LAW

A. APEX FORMULATIONS PVT. LTD. v. UNION OF INDIA [2023 TAXSCAN (HC) 409]

Facts of the case:

The petitioner M/s. Apex Formulations Pvt. Ltd. is a Private Limited Company engaged in the manufacture and sale of medicines. The petitioner company purchases raw material such as Ibrufen IP, Ciprofloxacin HCL IP, etc. on which the applicable tax rate under the GST Acts is 18%. The finished goods sold by the petitioner attracts tax rate of 12%. Further, the petitioner also sells goods to exporters for which concessional rate of tax of 0.1% is applicable under Notification No. 40/2017-CGST (Rate) and Notification No. 41/2017-IGST (Rate) dated 23.10.2017. Thus, the output tax rate of the petitioner is lower than the tax rate on inputs and the petitioner falls under inverted duty structure.

The petitioner exported certain goods through valid exporter and, therefore, applied for refund under Rule 89(5) of the Central / Gujarat Goods and Services Tax Rules, 2017 in the prescribed format. The petitioner also submitted documents in support of the refund claim. The said application was sanctioned by an order sanctioning the refund of the petitioner. However, the CGST department being dissatisfied with the said refund order preferred an appeal against the said order on the ground that the Exporter had not mentioned the name and GSTIN of the present petitioner in the shipping bill which was an essential condition of the aforesaid notification. Hence, the present petition filed.

Observations by the Court:

The Hon’ble court held that initially, the Exporter to whom the petitioner has sold the goods had not mentioned the name and GSTIN of the petitioner. However, the authority granted refund considering the factual aspect of the matter i.e. details about the goods sold to the exporter and further transferred by the exporter to the third party. Subsequently, at the request of petitioner, correct form was submitted by the exporter to the authority and, therefore, this aspect was required to be considered by the Appellate Authority which is essentially not done in the present case.

In view of the above, the high court is of the opinion that the impugned order is required to be quashed and set aside.

Ruling:

The present petition stands allowed. The matter was thus remanded back to the appellate authority. It would be open for the petitioner to file additional documents, if any, along with an affidavit in support of its claim of refund before the Appellate Authority.

B. M/s. Devi Products vs. State of Gujarat [2023 TAXSCAN (HC) 397-Gujarat HC]

Fact of the Case:

The petitioner, M/s. Devi Products, is a sole proprietor engaged in the business of trading of article brass and was registered with the Gujarat Value Added Tax under the Gujarat VAT Act, 2003 and The CST Act, 1956. He got his registration w.e.f. 01.07.2017 by virtue of section 139 of the GST Act. According to the petitioner, till June 2020, he had filed his return of income under the GST Act. However, because of the prevalent conditions at that time, he had no business subsequent to June 2020, and therefore he was of the bonafide belief that there was no requirement to file a return under the GST Act.

A SCN was issued on 15.03.2021 under Rule 22(1) of the GST Rules read with section 29 of the GST Act whereby the petitioner was informed that his registration was liable to be cancelled because he had not filed the return for a continuous period of 6 months and he was called upon to file his reply to the notice. The petitioner’s GST registration has been suspended with immediate effect on 15.03.2021 itself under Rule 21A of the said rules and this has been done without recording any reasons. Thereafter, the registration was cancelled w.e.f. 01.07.2017 without recording any reasons or the grounds of cancellation. The order was cryptic and no tax has been demanded in the said order. Hence, the petitioner preferred this appeal.

Observation of the Court:

The Court observed that in the instant case, what one finds is that it was a case of non-filing of returns for six months. Assuming that requirement of filing of the return and the consequences for non-filing of the return for six months is apparent in the statutory provision, the very nature of notice has been held by this court in the decision of Aggrawal Dyeing as cryptic and unsustainable under law.

Assuming that the notice which merely speaks of “any tax payer other than Composition tax payer has not filed returns for a continuous period of six months” would be comprehensible for the assessee to respond as he was also given opportunity to appear on 23.03.2021, this non-appearance on the part of the assessee has resulted into the cancellation of registration that too from first date i.e. 01.07.2017 much prior to 2020 when he had defaulted in filing the returns, what is completely incomprehensible is that cancellation of registration without any determination of amount which is to be paid by the petitioner is hardly sustainable and such action can hardly be ratified in any manner.

Ruling:

Therefore, the high court ruled that the writ application is allowed quashing the show cause notice and the consequential order cancelling registration with liberty to the respondent to issue fresh notice with particular reasons incorporating the details and a reasonable opportunity of being heard to be given to the appellant and to pass speaking order. The petitioner is also permitted to respond to the same by filing an objection and reply with necessary documents.

Hence, the petitioner would be allowed the refund of the tax paid to the government exchequer.

GST Monthly Compliance Calendar- March 2023