According to economic data released by National Statistical Organizations (NSO) yesterday, our economy has expanded at its fastest pace @ 13.5% in Q1 of 2022-23, backed by positive base effect and robust growth in agriculture, services, construction and consumption. This growth of 13.5% is lower than what Reserve Bank of India had projected i.e., 16.2%. Investment continued to rise with Government spending on capital expenditure. Growth in agriculture is 4.5 while as services grew by over 17 percent in Q1 of current year.

The recovery in double digits is seen in public administration, defence, utilities, construction etc. Robust tax revenues along with enhanced consumption has also helped in present fiscal situation.

Overall, the growth of three sectors of economy is impressive as compared to last four quarters, i.e., agriculture grew by 4.5%, manufacture by 4.8% and service by 17.6%. This growth of 13.5% is slightly lower by estimates by various agencies which was in the range of 15.2 – 16.2 percent. However, Government claims that Indian real gross domestic product (GDP) growth will exceed 7% in 2022-23 leading to fastest growing major economy is the world.  To put it in one sentence, it can be said that the GDP growth is slower than the forecast but yet the fastest in a year.

The gross GST revenue collected in the month of August 2022 is Rs. 1,43,612 crore of which CGST is Rs. 24,710 crore, SGST is Rs. 30,951 crore, IGST is Rs. 77,782 crore (including Rs. 42,067 crore collected on import of goods) and cess is Rs. 10,168 crore (including Rs. 1,018 crore collected on import of goods). The revenues for the month of August 2022 are 28% higher than the GST revenues in the same month last year of Rs. 1,12,020 crore. During the month, revenues from import of goods was 57% higher and the revenues from domestic transaction (including import of services) are 19% higher than the revenues from these sources during the same month last year.

With rise in GDP growth estimates, it can be said that tax collection will be in tandem, i.e. on growth trajectory only. The GST collections also are indicative of this. With festive season ahead, tax collections are going to be buoyant only.

In one of the important judgments, Supreme Court has held that providing HSN code and proper GST rate is the responsibility of the bidder and not the tenderer, quashing the Allahabad High Court order which ruled that it is mandatory for the tendering authority to mention the relevant HSN code in tenders so that the bidders can ascertain the correct classification and GST code. In yet another case, it has been ruled that IBC proceedings shall override Customs Act, 1962 for effecting recoveries of indirect taxes.

With recent changes in GST rate, the National Anti-profiteering Authority is concerned about profiteering by retailers, particularly of pre-packed items and has already undertaken investigation in few complaints. Even CBIC Chairman has said that though price revision is a commercial decision, but if businesses state that the price hike is because of GST and it is more than the GST rate hike, the issue requires examination.

According to Revenue Secretary, Government is working on a scheme for decriminalization of offences under the GST law. The thinking is that if there has been a mistake on the part of a corporation or a person, let them pay the money with penalty and move on or compound the offence and move on.

CBIC issued detailed guidelines for launching of prosecution under section 132 of the CGST Act, 2017 vide Instruction No. 4/2022-23 (GST – Investigation) on 1st September 2022 the background of such guidelines lies in the observation of Supreme Court in the case of Radheshyam Kejriwal (2021) 266 ELT 294 (SC). This was followed by guidelines for filing and / or revising TRAN-1 / TRAN-2 returns as per directions given by the Apex Court in Union of India v. Filco Trade Centre Pvt. Ltd. case recently. These guidelines issued vide Circular No. 180/12/2022-GST dated 09.09.2022 have been discussed inside alongwith Filco case itself. It may be noted that the option of filing or revising TRAN-1/TRAN-2 on the common portal during the period from 01.10.2022 to 30.11.2022 is a one-time opportunity for the applicant to either file the said forms, if not filed earlier, or to revise the forms earlier filed. The applicant is required to take utmost care and precaution while filing or revising TRAN-1/TRAN-2 and thoroughly check the details before filing his claim on the common portal.

Supreme Court has ruled that larger bench judgment shall prevail irrespective of number of judges on majority, i.e., 4-3 majority judgment of 7 member bench would prevail over a decision by 5-0 majority of a five member bench.

It is understood that Group of Ministers set up for studying and recommending the GST rates on sports betting, casinos and horse trading may prefer different rates for different activities All these activities are different and have different methodology, risks as well as earnings.

The 48th meeting of GST Council which was expected to meet on September, 2022 may now meet in October, 2022. It may discuss the recommendations of GoM on levy of GST on Casinos and Online Games as well as constitution of GST Tribunals in the country. GoM on rate rationalization is also to submit its report. 

Guidelines for Launching of Prosecution under the CGST Act, 2017

These guidelines cover, inter alia, the following:

  • Sanction of prosecution under section 132 of CGST Act, 2017
  • Authority to sanction prosecution
  • Procedure for sanction of prosecution
  • Monetary limits under section 132(1), i.e. over Rs. 5 crore except in case of habitual offenders and arrest cases
  • Appeal against court order in case of inadequate punishment or acquittal
  • Procedure for withdrawal of prosecution
  • Publication of names of convicted persons
  • Monitoring of prosecution
  • Compounding of offence
  • Inspection of prosecution work by DGPM

[Source: Instruction No. 04/2022-23 [GST – Investigation] dated 01.09.2022]

GoM Recommendations on GST Appellate Tribunals

Considering the proposals of the GST Council, following are the recommendations made by GoM on Appellate Tribunals :

  • Amendment in Section 110 of CGST Act, 2017 to be made to replace Government with State Government, to enable state governments to relax the experience condition in the appointment of members which currently only the Centre is empowered to do.
  • Relaxation in the experience criterion for appointment of state technical members.
  • States to have more than one bench, based on population, or number of registered and active GST users.
  • A four-member search and Selection Committee suggested to be set up for the appointment of members to the benches.
  • GST Council shall consider these recommendations in the next Council meeting likely to take place in September, 2022.

 [Source: Media Reports] 

Changes in Table 4 of GSTR 3B – Reporting of ITC availment, reversal and Ineligible ITC on GSTN portal

  • GSTN has made certain changes in Table 4 of GSTR 3B in relation to eligible input tax credit (ITC) of GSTR-3B return.
  • It may be noted that the Government vide Notification No. 14/2022 – Central Tax dated 05th July, 2022 has notified few changes in Table 4 of Form GSTR-3B for enabling taxpayers to correctly report information regarding ITC availed, ITC reversal and ineligible ITC in Table 4 of GSTR-3B. Taxpayers may also refer to CBIC Circular No. 170/02/2022-GST dated 06th July, 2022 for clarification on reporting of ITC availment, ITC reversal and Ineligible ITC in GSTR-3B.
  • Accordingly,

a) All non-reclaimable reversal of ITC needs to be reported in table 4(B)(1)

b) All reclaimable ITC reversals may be reported in table 4(B)(2). It should be noted that ITC reversed under 4(B)(2) can be reclaimed in table 4(A)(5) at appropriate time and the break-up detail of such reclaimed ITC should be provided in 4(D)(1) in the same return.

c) The ITC not-available mentioned in GSTR-2B of the taxpayer has to be reported in 4(D)(2) of table 4.

d) Any ITC availed inadvertently in Table 4(A) in previous tax periods due to clerical mistakes or some other inadvertent mistake maybe reversed in Table 4(B)2.

  • The Notified changes of Table 4 of GSTR-3B have been incorporated in GSTR-3B and are available on GST Portal since 01.09.2022.
  • The taxpayers are advised to report their ITC availment, reversal of ITC and ineligible ITC correctly as per new format of Table 4 of GSTR-3B at GST Portal for the GSTR-3B to be filed for the period August 2022 onwards.

[Source: GSTN dated 02.09.2022] 

Guidelines for filing / revising TRAN -1 & TRAN -2 returns

In terms of directions dated 22.07.2022 and 02.09.2022 of Supreme Court in Union of India v. Filco Trade Centre Pvt. Ltd. case [SLP (C) No. 32709-32710/2018] , CBIC has issued Circular No. 180/12/2022-GST dated 09.09.2022 prescribing guidelines for applicant for filing TRAN-1 /TRAN-2 or revising the TRAN-1 / TRAN -2 or revising the TRAN -1 / TRAN-2 filed earlier. Accordingly,

  • The option of filing or revising TRAN-1/TRAN-2on the common portal during the period from 01.10.2022 to 30.11.2022 is a one-time opportunity for the applicant to either file the said forms, if not filed earlier, or to revise the forms earlier filed. The applicant is required to take utmost care and precaution while filing or revising TRAN-1/TRAN-2 and thoroughly check the details before filing his claim on the common portal.
  • Once the applicant files TRAN-1/TRAN-2 or revises the said forms filed earlier on the common portal, no further opportunity to again file or revise TRAN-1/TRAN-2, either during this period or subsequently, will be available to him.
  • The applicant may file declaration in FORM GST TRAN-1/TRAN-2 or revise earlier filed TRAN-1/TRAN-2 duly signed or verified through electronic verification code on the common portal.
  • The applicant shall at the time of filing or revising the declaration in FORM GST TRAN-1/TRAN-2, also upload on the common portal the pdf copy of a declaration in the prescribed format.
  • Where the applicant files a claim in FORM GST TRAN-2, he shall file the entire claim in one consolidated FORM GST TRAN-2, instead of filing the claim tax period wise as referred to in sub-clause (iii) of clause (b) of sub-rule (4) of rule 117 of the Central Goods and Services Tax Rules, 2017.
  • The applicant shall download a copy of the TRAN-1/TRAN-2 filed on the common portal and submit a self-certified copy of the same, along with declaration in Annexure ‘A’ and copy of TRANS-3, where ever applicable, to the jurisdictional tax officer within 7 days of filing of declaration in FORM TRAN-1/TRAN-2 on the common portal.
  • The applicant can edit the details in FORM TRAN-1/TRAN-2 on the common portal only before clicking the “Submit‖ button on the portal.
  • Those registered persons, who had successfully filed TRAN-1/TRAN-2 earlier, and who do not require to make any revision in the same, are not required to file/ revise TRAN-1/TRAN-2 during this period from 01.10.2022 to 30.11.2022.
  • The declaration in FORM GST TRAN-1/TRAN-2 filed/revised by the applicant will be subjected to necessary verification by the concerned tax officers.

 (Source: Circular No. 180/12/2022-GST dated 09.09.2022) 

Changes in E-scrips & Electronic Duty Credit Ledger

  • CBIC has extended the validity of e-scrips from 1 year to 2 years.
  • CBIC has also amended Electronic Duty Credit Regulations, 2021 as notified vide Notification No. 75/2021-Customs (NT) dated 23.09.2021
  • The e-scrip shall be valid for a period of two years from the date of its creation in the ledger and any duty credit in the said e-scrip remaining unutilized at the end of this period shall lapse.
  • The period of validity of the e-scrip (two years from its creation) shall not change on account of transfer of the e-scrip.
  • Any bill of export under section 50 of the Customs Act, 1962 on or after the January 1, 2021 and having a claim of duty credit under the Scheme shall be processed in the customs automated system.
  • The claim shall be allowed by Customs according to the conditions and restrictions notified for the Scheme. Once the claim is allowed, a scroll for duty credit will be generated separately for each Scheme.

(Source: Notification No. 79/2022-Customs (NT) dated 15.09.2022) 

GoM for boosting Real Estate Sector under GST regime

  • Central Government has re-constituted Group of Ministers (GoM) for suggesting steps to boost real estate sector under the present GST regime.
  • The GoM shall be headed by Mr. Devendra Fadnavis and has representatives from the States of Punjab, Gujarat, Kerala, Goa, Uttar Pradesh and Bihar.
  • This constitution superseded earlier office memorandum dated 10.02.2022.

[Source: Office Memorandum No. S-31011/12/2021-DIR(NC)-DOR  dated 22.09.2022]

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February 2024