Recent updates in GST till 12th March 2020

The economy has started showing signals of recovery due to more Government spending and external factors. The GDP growth rate for Q1 was 5.6% followed by 5.1% in Q2.  Now Q3 growth is further down with projections at 4.7%. For whole year 2020-21, it is estimated by NSO at 5%. Globally, world economy is also facing slow down and only a growth of 2.8% is expected this year, weakest in last decade. However, the corona-virus impact may make a dent in global economy including our.

MCA has notified new CARO Order 2020 w.e.f. 25.02.2020 and is applicable to financial years 2019-20. The auditors will also be required to comment on details under GST law and cesses.

A major controversy these days is on payment of interest for delayed GST on gross or net amount (net of ITC). Department is now demanding interest on gross amount and has sent numerous recovery notices throughout the country. However, there are few high court judgments to the contrary.

Also, blocking of ITC credit under CGST Rule 86A is also a new weapon in department’s hands which is being aggressively resorted to even in undeserving cases. CBIC has issued an advisory for opting for composition scheme  for existing registered assessees for financial year 2020-21. A set of few FAQs have been issued for verification of vehicle number in EWB portal. The Government is considering deferring the implementation of e-invoicing under goods and services tax (GST) by three months to July 1 as the same would give the industry much needed time, as recent changes in the schema and alterations in mandatory fields needs time to be implemented. The schema for the invoice is not yet final and the new returns are also being simultaneously introduced, making the trade anxious about the impact on their already sluggish businesses. The B2C requirement of the dynamic QR code also needs to be relooked as the current compliances do not require separate invoice-wise reporting for B2C transactions.

The gross GST revenue collected in the month of February, 2020 is Rs.1,05,366 crore of which CGST is  Rs. 20,569 crore, SGST is  Rs. 27,348 crore, IGST is Rs. 48,503 crore (including Rs. 20,745 crore collected on imports) and Cess is Rs.8,947 crore (including Rs.1,040 crore collected on imports). The total number of GSTR 3B Returns filed for the month of January up to 29^th February, 2020 is 83.53lakh.

In order to streamline the valuation rule for the lottery with the uniform rate, rules for value of supply of lottery under GST has been modified. Further, the Kerala High Court has paved the way for the Authority for Advance Rulings (AARs) to decide the place of supply under the goods and services tax (GST) regime. This is an important settlement of a legal issue in GST since AARs have not been going into this matter, saying it is beyond their jurisdiction.

The next GST Council meeting is slated for 14 March, 2020 at Delhi where in issues of tax rates and cess to states may come up, along with other issues.

Auditor’s Opinion on GST in new CARO, 2020

• MCA has notified new companies (Auditor’s Report) Order, 2020 (in short, CARO 2020) applicable for financial year 2019-20 on companies as required u/s 143 of Companies Act, 2013.
• Statutory Auditor is required to report on following (as per clause vii) :
  • Whether the company is regular in depositing undisputed statutory dues including Goods and Services Tax, provident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues to the appropriate authorities and if not, the extent of the arrears of outstanding statutory dues as on the last day of the financial year concerned for a period of more than six months from the date they became payable, shall be indicated.
  • Where statutory dues referred to in sub-clause (a) have not been deposited on account of any dispute, then the amounts involved and the forum where dispute is pending shall be mentioned (a mere representation to the concerned Department shall not be treated as a dispute).

[Source: MCA N.No. F.No. 17/45/2015-CL-V Part-I dated 25.02.2020]

New Toll Free Number of GST Portal

As per the recent Tweet of GST Tech, the New (Toll-Free) number of GST Portal Help Desk is: 1800-103-4786 from February 26, 2020.

The existing number 0120-4888999 will be discontinued.

[Source : https://twitter .com/askGSTech/status/1232296]

GST Revenue collection for February, 2020

• The gross GST revenue collected in the month of February, 2020 is 1,05,366 crore of which CGST is Rs. 20,569 crore, SGST is Rs. 27,348 crore, IGST is Rs. 48,503 crore (including Rs.20,745 crore collected on imports) and Cess is Rs.8,947 crore (including Rs.1,040 crore collected on imports). The total number of GSTR 3B Returns filed for the month of January up to 29^th February, 2020 is 83.53 lakh.
• The government has settled 22,586 crore to CGST and Rs.16,553 crore to SGST from IGST as regular settlement. The total revenue earned by Central Government and the State Governments after regular settlement in the month of February, 2020 is Rs.43,155 crore for CGST and Rs.43,901 crore for the SGST.
• The GST revenues during the month of February, 2020 from domestic transactions has shown a growth of 12% over the revenue during the month of February, 2019. Taking into account the GST collected from import of goods, the total revenue during February, 2020 has increased by 8% in comparison to the revenue during February, 2019. During this month, the GST on import of goods has shown a negative growth of (-) 2% as compared to February, 2019.

[Source: Press Release dated 01.03.2020]

Deemed value of supply of lottery tickets

• In order to streamline the valuation rule for the lottery with the uniform rate, rules for value of supply of lottery (Rule 31A of CGST Rules , 2017) under GST has been modified.
• From 1^st of March, 2020, the value of lottery shall be 100/128 of the face value of the ticket or the price as notified in the Official Gazette by the Organizing State, whichever is higher.
• The expression “Organising State” has the same meaning as assigned to it in clause (f) of sub-rule (1) of Rule 2 of the Lottery (Regulation) Rules, 2010.

[Source: Notification No. 08/2020 – Central Tax dated 02.03.2020]

Outcome of 3^rd National GST Conference held on 6th March, 2020

• Discussion on:
  • Various measures for streamlining the GST return filing process, enhancing revenue and focused compliance management as well as to create synergy among Central and State tax administrations.
  • Increased compliance management and for revenue augmentation as well as on Consumer Incentivization Scheme for promoting behavior of seeking invoices.

• Proposed measures :
  • Immediate steps to curb passing on ITC by new taxpayers
  • Measures to check export valuation including capping of value for calculating export benefits/incentives
  • Standard Operating Procedure (SoP) for physical spot verification of risky taxpayers
  • Standard Operating Procedure (SoP) for blocking and unblocking of ITC

[Source:  GST Council Press Release dated 06.03.2020]