Ministry of Finance (MoF) in its monthly economic review (October, 2022) has stated that India is set to grow at a moderately brisk rate against fears of global recession. It may dampen India’s export outlook. Structural reforms will provide impetus to economic growth. All this would give boost to tax revenues too. The inflation is also expected to ease with pass through of lower input costs to consumers.
According to latest data released by Ministry of Commerce & Industry, growth in key four infra sectors had slowed down in October, 2022, i.e., crude oil, natural gas, refinery products and cement.
GDP growth in Q2 of current fiscal has been 6.3% on YoY basis. Service sector grew by 9% but agriculture rose by 4.6% and industry @ -3.1%. According to CEA, Indian economy may grow @ over 6.8% in current fiscal.
Many agencies and credit raters have recently lowered the forecast of India’s GDP growth then the earlier once for the financial years 2023 e.g. S & P has lowered it from 7.3% to 7.0%, Crisil from 7.3% to 7.0%, India Ratings from 7% to 6.9%, Goldman Sachs from 6.9% to 5.9% RBI from 7.2% to 7.0 %, OECD from 6.9% to 6.6% and World Bank from 7.5% to 6.5%. However, there will be domestic demand recovery despite global slowdown, RBI support against inflationary trend, relaxation in Covid restrictions, credit growth and so on.
In one of the research paper, RBI has expressed that Indian economy is resilient despite uncertain volatile global enrichment. India has recently surpassed UK to become fifth largest economy in the world.
In a recent statement, Revenue Secretary, MoF, has hinted at further tax reforms, more particularly on direct taxes side. He also said on need to reduce number of GST slabs, rationalization of GST rates, pruning exemptions etc. Moreover, tax collection is expected to be higher than budget estimates.
CBIC Chairman has asked tax offices to be vigilant on revenue growth and ensure no slippages. Total indirect tax collections are estimated at Rs. 13.30 lakh crore in 2022-23, which include Rs. 7.80 lakh crore from GST, Rs. 2.13 lakh crore from customs and Rs. 3.35 lakh crore from central excise.
Input tax credit (ITC) on expenditure made to meet corporate social responsibility (CSR) is still attracting contradictory rulings from Authority for Advance Ruling (AAR). Latest one is from Telangana AAR which has favoured ITC on CSR related purchases. Earlier, in the case of Dwarikesh Sugar Industries, the Uttar Pradesh AAR has ruled that ITC shall be available on expenses incurred to comply with the requirements of CSR. However, Kerala AAR, in the matter of Polycab Wires Ltd held that ITC shall not be available on free distribution of electrical items like switches, fans, cables, etc., to flood affected people under CSR.
Central Government has appointed Competition Commission of India (CCI) as Authority for Anti-Profiteering under section 171 of the CGST Act, 2017 w.e.f. 01.12.2022. Thus, w.e.f. December 2022. National Anti-Profiteering Authority (NAA) shall lease to exist.
48th meeting of GST Council will be held on 17th December, 2022 on virtual basis i.e., video conferencing. The meeting may discuss issues like decriminalization of GST provisions, Appellate Tribunal, GST on casinos, online gaming etc. GoM may submit report before the meeting.
The new Chief Justice of India has announced four special benches for tax matters, land acquisition, accident claims and crime.
The centre has released Rs. 17000 crore to States and Union Territories towards April – June, 2022 of Compensation Cess. Till now, over Rs. 115600 crores of Compensation Cess has been disbursed.
Rs.1,45,867 crore gross GST revenue collected for November 2022, records increase of 11% Year-on-Year. The gross GST revenue collected in the month of November 2022 is Rs.1,45,867 crore of which CGST is Rs.25,681 crore, SGST is Rs.32,651 crore, IGST is Rs.77,103 crore (including Rs.38,635 crore collected on import of goods) and Cess is Rs.10,433 crore (including Rs.817 crore collected on import of goods).
CBIC has made it clear that Union of India will not file any review petition before Supreme Court against its decision on non-levy of CGST on ocean freight.
The last date to file or revise transitional credit returns (TRAN1, TRAN 2) in terms of apex court order ended on 30th November, 2022, once for all.
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 upto 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)
Competition Commission of India to replace NAA
- Central Government has notified that Competition Commission of India (CCI) established under section 7(1) of Competition Act, 2002 shall be empowered to examine whether input tax credits availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him.
- Relevant changes have been made in CGST Rules, 2017 vide Notification No. 24/2022-CT dated 23.11.2022.
- e.f. 01.12.2022, National Anti-profiteering Authority shall cease to exist and Competition Commission of India (CCI) shall be new authority for the purpose of section 171.
- This shall be applicable w.e.f. 01.12.2022.
(Source: Notification No. 23/2022-Central Tax dated 23.11.2022)
Amendments in CGST Rules, 2017 relating to Anti-Profiteering
- CBIC has amended following CGST Rules pertaining to anti-profiteering w.e.f. 01.12.2022.
- Following rules have been omitted :
| Rule | Relating to |
| 122 | Constitution of the Authority |
| 124 | Appointment, salary, allowances and other terms and conditions of service of the Chairman and Members of the Authority |
| 125 | Secretary to the Authority |
| 134 | Decision to be taken by the majority |
| 137 | Tenure of Authority |
- In Rule 127, ‘Duties’ of the Authority will now be referred to as ‘functions’ of the Authority.
- In explanation after Rule 137, ‘national anti profiteering authority’ will be substituted by ‘Authority notified u/s 171 (2) of CGST Act, 2017’ (i.e., Competition Constitution of India)
(Source: Notification No. 24/2022-Central Tax dated 23.11.2022)
GSTN as Financial Information Provider
- Reserve Bank of India has included Goods and Service Tax Network (GSTN) as a Financial Information Provider under Account Aggregator Framework, i.e., Master Direction – Non-Banking Financial Company – Account Aggregator (Reserve Bank) Directions, 2016 dated September 02, 2016.
- With a view to facilitate cash flow-based lending to MSMEs, RBI has decided to include Goods and Services Tax Network (GSTN) as a Financial Information Provider (FIP) under the Account Aggregator (AA) framework.
- Department of Revenue shall be the regulator of GSTN for this specific purpose and Goods and Services Tax (GST) Returns, viz. Form GSTR-1 and Form GSTR-3B, shall be the Financial Information.
(Source: RBI Circular No. DoR.FIN.REC 82/03.10.123/2022-23 dated 23.11.2022)
Processing of IGST Refunds
CBIC has issued instructions in relation to manner of processing and sanction of IGST refunds which have been with held in terms of Rule 96 (4 and 5A) of CGST Rules, 2017. Accordingly,
- Rule 96 of the Central Goods and Service Tax Rules, 2017 (hereinafter referred to as ‘CGST Rules’) has been amended retrospectively w.e.f. 01.07.2017 to provide for withholding of IGST refund in cases where the verification of credentials of the exporter, identified on the basis of data analytic including the availment of ITC by the exporter is considered essential before grant of refund.
- Principal Director General/ Director General of Directorate General of Analytics and Risk Management (DGARM), CBIC, New Delhi has been authorised by the Board to exercise the functions under clause (c) of sub-rule (4) of rule 96 of the CGST Rules vide Order No. 01/2022-GST dated 21.07.2022 issued vide CBIC-20023/04/2021-GST.
- Rule 96 (5A) has been inserted in rule 96 to provide for transmission of IGST refunds, withheld in terms of provisions of clause (c) of sub-rule (4) of rule 96 of the CGST Rules, as system generated refund in Form GST RFD-01 and to provide that the said system generated form shall be deemed to be the application for refund in such cases and such application for refund shall be deemed to have been filed on the date of such transmission on the portal.
- Rule 96(5C) has also been inserted in rule 96 to provide that such system generated refund in FORM GST RFD-01 have to be dealt with in accordance with rule 89 i.e. in a manner similar to other GST RFD-01 refund claims.
- DGARM on the basis of data analysis and risk parameters, would identify the exporters where verification of credentials of the exporter, including the availment of ITC by the exporter, is considered essential before grant of refund.
- Such refund claims will be made available to the jurisdictional proper officer on back-office system under the category “Any other (GST paid on export of goods)” with the remarks “Refund of IGST paid on export of goods (Refund not processed by ICEGATE)”.
- The jurisdictional proper officer shall immediately process such refund claims in a manner similar to other RFD-01 refunds filed under the provisions of rule 89 of the CGST Rules, 2017.
- These claims would be auto-acknowledged by the system and no Deficiency Memo in Form GS T RFD-03 can be issued against such system generated Form GST RFD-01 refund claims.
- The proper officer shall ascertain the genuineness of the exporter & verify the correctness of availment and utilisation of ITC by the exporter and exercise due diligence in processing the said refund claims to safeguard interest of revenue.
- He may conduct the physical verification of places of business of the exporter, if required, to ensure that the exporter is existing at his declared place of business and is functional/active.
- The proper officer shall pass a detailed speaking order in respect of the refund claim and shall duly upload the same along with the refund sanction order in Form GST RFD-06 on the portal.
- The officer will also follow the timelines for processing of the refund claim in terms of provisions of section 54(7) of the CGST Act.
- The procedure of review and post-audit will also be applicable to such refund claims.
- The SOPs dated 23.01.2020 and 20.05.2020 prescribing the procedure to be followed for verification of the risky exporters and their suppliers, are hereby superseded.
[Source: Instruction No. 04/2022-GST dated 28.11.2022 (F.No. CBEC-20/08/02/2020-GST/1377-78) issued by CBIC, GST Policy Wing, Ministry of Finance]
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)]
GST collection for November, 2022
- 1,45,867 crore gross GST revenue collected for November 2022, records increase of 11% Year-on-Year
- The gross GST revenue collected in the month of November 2022 is Rs.1,45,867 crore of which CGST is Rs.25,681 crore, SGST is Rs.32,651 crore, IGST is Rs.77,103 crore (including Rs.38,635 crore collected on import of goods) and Cess is Rs.10,433 crore (including Rs.817 crore collected on import of goods)
- Monthly GST revenues is more than Rs.1.4 lakh crore for nine straight months in a row
- The revenues for the month of November 2022 are 11% higher than the GST revenues in the same month last year, which itself was Rs. 1.31,526 crore. During the month, revenues from import of goods was 20% higher and the revenues from domestic transaction (including import of services) are 8% higher than the revenues from these sources during the same month last year.
(Source: PIB Release ID 1880243 dated 01.12.2022)
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Excellent data nicely presented for quick updating of GST for all financial consultants.