In view of the ongoing and continuous inflation, Reserve Bank of India in a surprise move, raised repo rate by 40 basis points and Cash Reserve Ratio (CRR) by 50 basis points to check rising inflation. Repo ratio has been enhanced after a gap of 45 months, for the first time post Covid. This will result in lending rates going up including for auto and housing loans, besides commercial loans. This will also lead to hike in interest rates of deposits and bond yields. Inflation is expected to continue above 6%. In March, 2022, it was 6.9%. The hike in CRR shall take out excessive liquidity in the system and thus will help in checking higher inflation.
For the financial year 2022-23, the GDP growth forecasts by various agencies have been in the range of 7 to 8.2%. According to India’s Chief Economic Advisor (CEA), such prediction as of now seem to be reasonable. The recent predictions by some of these agencies are- Fitch 8.5%, IMF 8.2 %, World Bank 8%, Morgan Stanley 7.9% and RBI 7.2%. CEA opines that in the present ever changing scenario, policy-makers will have to work with imperfect, incomplete and inadequate set of forecasts. Further, inflation is likely to impact Indian economy. More recently, Morgan Stanley has cut India’s GDP forecast for financial year 2023 to 7.6% from 7.9% on the grounds of slowdown in economic growth, inflation and risk aversion in global capital market which expose India to downside risks. Further, ICRA has suggested economy growth to be around 12 -13% in first quarter of current financial year.
GSTC appointed Group of Ministers who met on 2nd May, 2022 to discuss, inter alia, GST on casinos, online gaming, race courses etc. has recommended a GST rate of 28%. GoM has suggested for 28% GST rate on online gaming, casinos and house races. However, it has not discussed the valuation part of it (gross or net value) on which GST @ 28% will be made applicable. These recommendations shall be further deliberated in next GST Council meeting.
GST collections have been over rupees one lakh crore plus since last nine months. In whole of financial year 2022, GST collection stood at Rs. 14.83 lakh crore as against Rs. 11.37 lakh crore in financial year 2021, a straight growth of 30%. With robust collections favoring government, the much talked about GST rates rationalization in also under consideration and it is expected that this may be one of the major agenda in next GST Council meeting. A Group of Ministers is already seized of this matter who is to submit its recommendation in due course.
Gross GST collection in April 2022 is all time high, Rs 25,000 crore more than the next highest collection of Rs. 1,42,095 crore, last month in March, 2022. The gross GST revenue collected in the month of April, 2022 is Rs 1,67,540 crore of which CGST is Rs. 33,159 crore, SGST is Rs. 41,793 crore, IGST is Rs 81,939 crore (including Rs 36,705 crore collected on import of goods) and cess is Rs. 10,649 crore (including Rs. 857 crore collected on import of goods). The revenues for the month of April 2022 are 20% higher than the GST revenues in the same month last year. During the month, revenues from import of goods was 30% higher and the revenues from domestic transaction (including import of services) are 17% higher than the revenues from these sources during the same month last year.
The collections have improved due to technology driven compliances, economic recovery and further lifting of pandemic curbs. The gradual push to mandatory e-invoicing is also one of the factors by which unreported turnover is also coming down and businesses shifting to mainstream.
This shows clear improvement in the compliance behaviour, which has been a result of various measures taken by the tax administration to nudge taxpayers to file returns timely, to making compliance easier and smoother and strict enforcement action taken against errant taxpayers identified based on data analytics and artificial intelligence. Some people attribute the higher collection due to ongoing inflation also.
CBIC believes that there is a bounce –back in the economy, and the inflation and boil in oil prices have helped. Revenues will be under pressure on the Customs side because of rising commodity prices. Excise will take a hit because of the duty cut. New Cestat members recruitment may take place soon now.
Recently Gujarat High Court has ruled that one-third abatement in valuation of composite supply of commercial properties is ultra vires the provisions of GST law and it can not be made mandatory.
This month’s due filing data for GSTR-3B return has been extended due to technical glitch in generation of April, 2022 GSTR-2B and auto population of GSTR 3B on GSTN portal as reported in CBIC tweets. Also, date for payment under QRMP Scheme has also been extended to 27.05.2022.
GSTN has eased submission of GSTR-1 return on GST portal with introduction of new functionalities. All eyes are now on next GST Council meeting where lot of discussions and decisions are expected on compensation to states, rate rationalization etc.
April, 2022 GSTR-3B due date extended
(Source: Notification No. 5/2022-Central Tax dated 17.05.2022)
Late date for tax payment under QRMP for April, 2022 extended
(Source: Notification No. 6/2022-Central Tax dated 17.05.2022)
GSTN Advisory for Composition Taxpayers
GSTN has issued following advisory on negative liability in GSTR-4:
[Source: GSTN dated 30.04.2022]
GSTN functionality for Annual Aggregate Turnover
GSTN has released a new functionality on computation of Annual Aggregate Turnover (AATO) for the Financial Year 2021-2022:
(Source: GSTN dated 02.05.2022)
Reporting 6% rate in GSTR-1
[Source: GSTN dated 10.05.2022]
GSTN advisory on incomplete GSTR-2B in some cases
[Source: GSTN dated 15.05.2022]
GSTN Advisory on GSTR-2B for April, 2022
GST issues in Corporate Insolvency resolution process (CIRP)
i) Substantiating default in admitting applications by Operational Creditors (OCs)
ii) Facilitating information availability for preparation of information memorandum and preparation of avoidance applications
iii) Dealing with avoidance applications after closure of a CIRP
iv) Significant difference in valuation during a CIRP and appointment of a third valuer.
(Source: www.ibbi.gov.in dated 13.04.2022)
SOP for Reimbursement of SGST on films (Haryana State)
Haryana Government has issued a uniform procedure to apply for reimbursements of SGST on specific films, which provides for as under:
(i) The reimbursement is allowed as per independent executive orders passed after approval of the Chief Minister’s in concurrence with the Finance Department.
(ii) The reimbursement shall not be allowed for B2B supplies.
(iii) Only registered person under GST who is issuing the invoice shall be eligible to apply for such reimbursement.
(iv) The applicant can only apply for reimbursement after filing FORM GSTR-l and FORM GSTR-3B for the tax period in which he has declared and paid for the invoices for which the reimbursement has been claimed for.
(v) The taxpayer shall apply to the jurisdictional proper officer in the prescribed FORM AR-l.
(vi) In cases where multiple cinema halls are running on a single GSTIN, the proper officer of the ward in which the principal place of business lies shall process the application.
(vii) The proper officer shall check that the said taxpayer was active during the tax period for which the reimbursement is being applied for.
The proper officer shall check that the taxpayer has filed all his returns for the tax period for which the reimbursement is being applied for.
(ix) Minimum 10 sample tickets shall be verified by the proper officer.
(x) All taxpayers while applying for reimbursement shall also enclose a CA certificate in FORM AR-2 certifying the correctness of the reimbursement application.
(xi) The reimbursement processing authority for such reimbursement shall be the Joint Commissioner (Range).
(xii) A report in FORM AR-3 shall be send to the Head Office every month only by the Joint Commissioner (Range).
[Source: Circular F. No. ETD-070001/42/2022-GST CELL-ETD, dated 20-4-2022 issued by Excise and Taxation Department, Government of Haryana]
Mandatory abatement of land held Ultra Vires
[Source: Munjaal Manishbhai Bhatt v. Union of India (2022) 138 taxmann.com 117 (Gujarat) Order dated 06.05.2022]
SCN can be issued against refund
[Source: Ganesh Ores (P.) Ltd. v. State of Orissa (2022) 137 taxmann.com 164 (SC)]
The due date for Form 3B for the month of April 2022 has been extended to 24 May 2022 vide N.No 5 CGST dated 17.5.22.
The article mentions April instead of May. This typo error is regretted