Recent Updates In GST till 17th November 2022

GDP growth in India for the financial year 2023 may not exceed 7%, if Chief Economic Advisor is to be believed. It may remain in the range of 6.5%-7%. According to various other agencies, banks etc, GDP forecast may remain range bound between 6.5% to 7.8%.

Chairperson of PMEAC recently quoted that Indian politics should decide on having one or single GST rate, regardless of the product. He also advocated for exemption less system.

Ministry of Finance shall commence pre-budget talks with trade bodies from third week of November, 2022. Eight such meetings may take place. The meeting with state Finance Ministers may take place at Madurai, which is also the venue of next GST Council meeting.

CBIC has issued two important Circulars on 10.11.2022, viz, on refunds arising out of inverted duty structure and guidelines on verification of TRAN-1 and TRAN-2 returns being filed by taxpayers from window created by CBIC / GSTN based on Filco Trade case. 

Extended time for allowing ITC claims and amend Invoices

• CBIC has amended CGST Rules, 2017 so as to allow ITC claims and amendment in invoices up to 30th November, 2022.
• Accordingly, effect has been given in GSTR-9 form to extend the date of ITC claims and amendment in invoices till 30th November, 2022.
• Now, one can amend the details of taxable outward supplies made to the registered person that is already reported in table 4A, 4B, 6B, 6C – B2B invoices.
• The taxpayers will have to provide the financial year and invoice number and click on ‘Amend Record’ to search for the invoice.

(Source: Notification No. 22/2022-Central Tax dated 15.11.2022)

CBIC clarification on refunds

CBIC has issued following clarification on refunds under GST subsequent to amendment in formula under Rule 89(5) of CGST Rules, 2017:

• Application of amended formula under Rule 89(5) for refund of unutilized ITC of inverted duty structure:
  • The said amendment is not clarificatory in nature and is applicable prospectively with effect from 05.07.2022.
  • Amended formula would be applicable in respect of refund applications filed on or after 05.07.2022.
  • The refund applications filed before 05.07.2022 will be dealt as per the formula as it existed before the amendment made vide Notification No. 14/2022-Central Tax dated 05.07.2022.
• Restriction on refund of unutilized ITC in certain cases:
  • The restriction imposed vide Notification No. 09/2022-Central Tax (Rate) dated 13.07.2022 on refund of un utilised input tax credit on account of inverted duty structure in case of specified goods falling under chapter 15 and 27 would apply prospectively only.
    • The restriction imposed by the said notification would be applicable in respect of all refund applications filed on or after 18.07.2022, and would not apply to the refund applications filed before 18.07.2022.  

(Source: Circular No. 181/13/2022-GST dated 10.11.2022)

Verification of Transitional credit Guidelines

• Further to Circular No. 180 dated 09.09.2022, CBIC has issued detailed guidelines for verification of transitional credit in terms of Apex Court order in Filco Trade Case.
• CBIC Circular No. 180/12/2022 dated 09.09.2022 was issued for guidelines for the applicants for filing new TRAN-1/TRAN-2 or revising the already filed TRAN-1/TRAN-2 on the common portal.
• Guidelines have now been issued for verification of transitional credit which inter alia, include verification of TRAN-1 and TRAN-2 by jurisdictional officers on their back-office system.
• The verification of the transitional credit shall be conducted by the jurisdictional tax officer who will pass an appropriate order regarding the veracity of the claim filed by the applicant, based on all the facts and the provisions of the law.
• The jurisdictional tax officer shall, on the basis of declaration made by the applicant in the format specified in Annexure A to Circular No. 180/12/2022 dated 09.09.2022, and on the basis of data available on the back office system, shall check whether the applicant had earlier filed TRAN-1/ TRAN-2 or not.
• In cases where TRAN-1/ TRAN-2 had already been filed by the applicant earlier, the tax officer shall check whether there is any change from the earlier filed TRAN-1/TRAN-2 or not.
• In case, there is no change from the earlier filed TRAN-1/ TRAN-2, then such claim of transitional credit is liable for rejection by the tax officer, through a reasoned order, after providing due reasonable opportunity to the applicant.
• In other cases, the jurisdictional tax officer shall proceed for verification of claim of transitional credit made by the applicant in FORM TRAN-1/TRAN-2.
• The jurisdictional tax officer shall proceed to pass a reasoned order, preferably within a period of fifteen days from the date of personal hearing, specifying the amount of transitional credit allowed to be transferred to the electronic credit ledger of the applicant and upload a pdf copy of the said order, on the common portal for crediting the amount of allowed transitional credit to the electronic credit ledger of the applicant. In any case, such order shall be passed within a period of 90 days from 01.12.2022 i.e. up to 28.02.2023.
• Guidelines also include modalities of coordination between central tax authorities and state tax authorities.
• For detailed guidelines, Circular may be referred to. 

(Source: Circular No. 182/14/2022-GST dated 10.11.2022)

Verification on new GST Registration in Rajasthan State

• Government of Rajasthan has issued guidelines for verification of application for grant of new registration. Accordingly,
  • Rule 25 of the RGST Rules, 2017 provide for physical verification of business premises in certain cases and include such verification after grant of registration.
  • The present provisions allow for grant of registration within 30 days of the submission of application aft r physical verification of the place of business in the manner provided under Rule 25 and verification of such documents as the proper officer may deem fit.
  • On the completion of verification, if the proper officer has reasons to believe that the registration is liable for cancellation, he shall initiate the proceedings under Rule 22 of the RGST Rules, 2017.
  • The CRU shall generate a list of taxpayers whose physical verification has to be carried out from the system centrally and forward it to the proper officers having territorial jurisdiction.
  • The physical enquiry should be conducted to ascertain the veracity of the information furnished in the application and also in the accompanying documents and it shall be sufficiently exhaustive to arrive at the conclusion that the a applicant is genuine in all respects.

• It contains the check list of uploaded documents to be verified and other details.

[Source: GST Circular No. R1/2022 dated 05.08.2022

issued by GST Commissioner, State Tax, Rajasthan Jaipur]

Advisory on HSN Codes in GSTR-1

• It is mandatory for the taxpayers to report minimum 4 digit or 6 digit of HSN Code in Table-12 of GSTR-1 on the basis of their Aggregate Annual Turnover (AATO) in the preceding financial year.
• Implementation of this is being done in phased manner.
• Taxpayers with AA TO of up-to 5 crore.

(i) In Phase 1, Part 1 and Part 2 (Already implemented from 1-4-2022 and 1-8-2022 respectively), mandatorily reporting of 2-digit HSN codes for goods & services is required. Manual user entry is allowed for entering HSN or description and taxpayers will be able to file GSTR-1 after manual entry.

(ii) In Phase 2 (To be implemented from 1-11-2022), mandatory reporting of HSN at 4-digits is required .

• Taxpayers with AATO of more than 5 crore.

(i) In Phase 1, Part I, mandatorily reporting of 4-digit HSN codes for goods & services is required. Manual user entry is allowed for entering HSN or description and taxpayers will be able to file GSTR-1 after manual entry.

(ii) In Phase 1, Part 2 and Phase 2, mandatory reporting of 6-digit HSN Code is required. 

Source: Notification No. 78/2020-CT dated 15.10.2020 read with https://tutorial.gst.gov.in dated 22.10.2022]

GST changes in filing return

Following important changes have been made in Return Filing Process:

• Taxpayers need to file previous tax periods GSTR-1 before filing current period GSTR-1.
• GSTR-1 for the current period need to be filed before filing GSTR-3B for the said tax period.
• QRMP taxpayers, have to file quarterly FORM GSTR-1 by the 13th of the month following the relevant quarter.
• Late filing of GSTR-1 will attract late fee.
• This is as per amended section 37 and 39 of CGST Act, 2017 applicable for returns to be filed in November, 2022 and onwards.

(Source: CBIC)

Compendium of Brochures on GST

• CBIC has released Compendium of GST Brochures on 24 topics, viz, Compendium of GST Brochures (updated as of November, 2022), Overview of GST, GST Benefits, Latest Updates in GST, Composition Levy Scheme, QRMP Scheme, Policy Initiatives for MSME Sector, Casual Taxable Person, Non-Resident Taxable Person (NRTP), e-lnvoice Under GST, e-Way Bill, Registration in GST, Job Work under GST, Return filing procedure and relief, GST Annual Return, Cancellation of registration in GST, Revocation  of cancellation  of GST Registration, Audit in GST Regime, Refund in GST, Refund of unutilised ITC, Margin Scheme under GST, Inspection,  Search  &  Seizures and Arrest under GST regime,  Reward Scheme for Informers and Career Opportunities in CBIC.

• This will help taxpayers and all stakeholders to understand nuances and latest updates in GST.

• These can be accessed at www.cbic.gov.in 

[Source: Directorate General of Taxpayer Services -CBIC (www.cbic.gov.in)]

Maintainability of Writ when alternate Remedy is available

• The appellant preferred a writ appeal before Apex Court by way of Special leave petition against dismissal of writ in BM Construction, Coochbehar v. Additional Commissioner of CGST- C.O. No. 72 of 2021 decided on 14.12.2021 by Calcutta High Court.
• In view of the fact that appellate remedy was available under section 107 of CGST Act, 2017, the apex court held that the writ jurisdiction was not maintainable against the High Court order and that High Court was right in not entertaining the writ petition.
• The appeal was therefore, dismissed.

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[Source: B.M. Construction v. Additional Commissioner of CGST  & Central Excise  (2022) 65 GSTL 129; (2022) 142 taxmann.com 555 (Supreme Court) dated 12.09.2022]