Dr. Sanjiv Agarwal, FCA, FCS 

Global ratings agency Moody’s has lowered its outlook for India’s credit ratings to ‘negative’ from ‘stable’, citing the ongoing economic slowdown, financial stress among rural households, weak job creation, and the liquidity crunch in non-banking financial companies. Just two years ago, in November 2017, it had upgraded India’s ratings a notch to Baa2 from Baa3. This reflects increasing risks that economic growth will remain materially lower than in the past, partly reflecting lower government and policy effectiveness at addressing long-standing economic and institutional weaknesses than Moody’s had previously estimated, leading to a gradual rise in the debt burden from already high levels.

One needs to look at the decline in tax revenue in right perspective and we can not draw a conclusion that despite festive season, tax collection is down. No, that explanation may prove be wrong. The tax collection for October, 2019 will get reflected in November, 2019 when tax for October is payable. Moreover, input tax credit is being taken by assessees (we can assume that it is genuinely availed) and rate of GST has been reduced on many goods and services in past 6 months owing to trade demands and political compulsions.

Government has made Document Identification Number (DIN) mandatory to be mentioned an all communications issued by officers of CBIC to taxpayers and other concerned persons. The Punjab and Haryana High Court vide order dated 04.11.2019 has directed Goods and Services (GST) Department to allow filing or revising Form TRAN-1 either electronically or manually. It may therefore, be advisable for the taxpayers to take benefit of this opportunity provided by courts and approach the respective adjudicating authorities.

1. Refund : Processing Applications

Listed below are the various tabs available to the applicant after filing online the refund application:

  • Applications: To view filed refund application details.
  • Notice / Acknowledgement : To view acknowledgment and notices issued by the Tax Official and file reply to those notices .
  • Replies: To view filed replies .
  • Orders: To view orders issued by the Tax Official.
  • Audit History : To view the history details or action taken on refund application filed by applicant.

              [Source : GSTN]  

2.  Quoting of DIN on all communications to taxpayers

  • CBIC has made Document Identification Number (DIN) mandatory to be mentioned an all communications issued by officers of CBIC to taxpayers and other concerned persons.
  • Such communications may be search authorization, arrest memos, summons, inspection notices, notices of show cause, enquiry etc.
  • A communication without availed DIN may be issued in exceptional circumstances but will have to be regularized within 15 days.
  • Quoting DIN will be effective from 08.11.2019
  • Quoting DIN will enhance transparency and accountability.

[Source : Circular No. 122/41/2019-GST dated 05.11.2019]

3. Landmark judgment on Transitional Credit

  • The Punjab and Haryana High Court vide order dated 04.11.2019 in CWP No.30949 of 2018 (O&M) has directed Goods and Services (GST) Department to allow filing or revising Form TRAN-1 either electronically or manually.
  • It held that, “the due date contemplated under Rule 117 of the CGST Rules for the purposes of claiming transitional credit is procedural in nature and thus should not be construed as a mandatory provision”.
  • The Court also directed the Government / GST Department to permit the Petitioners to file or revise where already filed incorrect TRAN-1 either electronically or manually statutory Form(s) TRAN-1 on or before 30th November, 2019.
  • Further, the Department will be at liberty to verify the genuineness of claim of Petitioners but nobody shall be denied to carry forward the legitimate claim of CENVAT / ITC on the ground of non-filing of TRAN-I by 27.12.2017.
  • By this Order, 102 Petitions have been disposed off.

[Source : Adfert Technologies Pvt. Ltd. v. Union of India  (2019) (Punjab & Haryana)]  

4. Amendment of Registration in Core and Non- Core fields through a GST Practitioner

  • TDS / TCS / NRTP / OIDAR / UN Body / Embassy / ONP : Taxpayers can now select a GST Practitioner (GSTP) for filling the amendment of registration of Core and Non- Core fields.
  • The GSTP can amend details and save the draft. The taxpayer would be able to work on the saved drafts of the application and file it.
  • Core fields include name of the business, (Legal Name) if there is no change in PAN, principal place of business (other than change in State) or additional place of business (other than change in State) etc.

[Source : GSTN]  

5. Filing of application for cancellation of registration & filing clarifications by GSTPs

  • Normal/Composition/ SEZ Developer/ SEZ Unit/ Casual Taxable Person/ ISD/ NRTP users can now select a GST Practitioner for Filing of Application for Cancellation of Registration.
  • UN Body/Embassy/ONP users can now select a GST Practitioner for filing clarifications on issues raised by a tax official on their registration application.
  • The GSTP can save draft of the application. The taxpayer/ users and GSTP would be able to work on the drafts of the application, saved by either of them.

[Source : GSTN]  

6. Restriction in availment of input tax credit in terms of sub-rule (4) of rule 36 of CGST Rules, 2017

  • Various issues relating to implementation of the sub-rule (4) to rule 36 of the Central Goods and Services Tax Rules, 2017 (inserted vide notification No. 49/2019-Central Tax, dated 09.10.2019) have been examined and the clarification on each of these points had been provided vide Circular No. 123/42/2019- GST dated 11.11.2019.
  • The Central Board of Indirect Taxes and Customs (CBIC) has issued a clarification on restriction in availing of the input tax credit in terms of sub-rule (4) of rule 36 of CGST Rules, 2017.
  • The said sub-rule provides a restriction in availing of input tax credit (ITC) in respect of invoices or debit notes, the details of which have not been uploaded by the suppliers under sub-section (1) of section 37 of the Central Goods and Services Tax Act, 2017.
  • Various issues relating to implementation of the said sub-rule have been examined and the clarification on each of these points is as under:

Invoices / debit notes on which the restriction under rule 36(4) of the CGST Rules shall apply

  • Restriction of availment of ITC is imposed only in respect of those invoices / debit notes, details of which are required to be uploaded by the suppliers under sub-section (1) of section 37 and which have not been uploaded.
  • Therefore, taxpayers may avail full ITC in respect of IGST paid on import, documents issued under RCM, credit received from ISD etc. which are outside the ambit of sub-section (1) of section 37, provided that eligibility conditions for availment of ITC are met in respect of the same.
  • The restriction of 36(4) will be applicable only on the invoices / debit notes on which credit is availed after 09.10.2019.

Restriction to be calculated on consolidated basis

  • The restriction imposed is not supplier wise. The credit available under sub-rule (4) of rule 36 is linked to total eligible credit from all suppliers against all supplies whose details have been uploaded by the suppliers.
  • Further, the calculation would be based on only those invoices which are otherwise eligible for ITC. Accordingly, those invoices on which ITC is not available under any of the provision (say under sub-section (5) of section 17) would not be considered for calculating 20 per cent of the eligible credit available.

Amount of input tax credit that is admissible to the taxpayers for a particular tax period in respect of invoices / debit notes whose details have not been uploaded by the suppliers

  • It shall not exceed 20% of the eligible input tax credit available to the recipient in respect of invoices or debit notes the details of which have been uploaded by the suppliers under sub-section (1) of section 37 as on the due date of filing of the returns in FORM GSTR-1 of the suppliers for the said tax period.
  • The taxpayer may have to ascertain the same from his auto populated FORM GSTR 2A as available on the due date of filing of FORM GSTR-1 under sub-section (1) of section 37.

ITC availability in FORM GSTR-3B in a month in case the details of some of the invoices have not been uploaded by the suppliers under sub-section (1) of section 37.

  • ITC to be availed by a registered person in respect of invoices or debit notes, the details of which have not been uploaded by the suppliers under sub-section (1) of section 37, shall not exceed 20 per cent of the eligible credit available in respect of invoices or debit notes the details of which have been uploaded by the suppliers.

Balance ITC to be claimed in subsequent months

  • The balance ITC may be claimed by the taxpayer in any of the succeeding months provided details of requisite invoices are uploaded by the suppliers.
  • He can claim proportionate ITC as and when details of some invoices are uploaded by the suppliers provided that credit on invoices, the details of which are not uploaded (under sub-section (1) of section 37) remains under 20 per cent of the eligible input tax credit, the details of which are uploaded by the suppliers.
  • Full ITC of balance amount may be availed, in present illustration by “R”, in case total ITC pertaining to invoices the details of which have been uploaded reaches Rs. 8.3 lakhs (Rs 10 lakhs /1.20).
  • In other words, taxpayer may avail full ITC in respect of a tax period, as and when the invoices are uploaded by the suppliers to the extent Eligible ITC/ 1.2.

 [Source :Circular No. 123/42/2019- GST dated 11.11.2019]

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2 Comments

  1. CA SURESH Jain says:

    Good post.
    Very informative
    Any notification or clarification regarding GSTP for amendment in core & non core fields and cancellation of registration.

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