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:
GoM Recommendations on GST Appellate Tribunals
Considering the proposals of the GST Council, following are the recommendations made by GoM on Appellate Tribunals :
[Source: Media Reports]
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.
[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,
Changes in E-scrips & Electronic Duty Credit Ledger
GoM for boosting Real Estate Sector under GST regime