Recent Updates In GST till 02nd December 2020

Indian economy is now on a recovery drive. The figures suggest that it has fared well as against predictions. A GDP contraction of 7.5% is a better picture after witnessing a 23.9% negative growth in June, 2020 quarter. For March 21, people now predict a contraction of 7-9% only. Economists and other agencies have now started upgrading India’s growth contraction for 2020-21 to even a single digit. Although the private consumption is shrinking, manufacturing sector is showing a recovery. It is in fact the time for real stimulus to spur growth in real terms. The Q3 figures may also be optimistic due to festive season, with agriculture showing positive signs. Corporates have also shown signs of recovery.

 CBIC has issued a notification for waiving penalty for non-compliance with dynamic quick response code till 31^st March, 2021 which is mandatory for companies having turnover of over Rs. 500 crore for digital payments. Mentioning of 8 digit HSN Code for specified chemical and plastic items has also been mandated. CBIC has also issue SOP for tax officials to deals with fake invoice menace, in the wake of rising fake invoice cases (about cases 1000 cases and 100 arrests so far). This will involve physical  verification of entities in case of deemed registration. This is aimed to counter fake invoice frauds, availing fraudulent ITC and curb malpractices. It is estimated that GST fraud in last three years is to the tune of Rs. 1.20 lakh crore. It is high time that government cracks down mercilessly on fraudsters and also ensure the plugging of GST leakage. CBIC has also decided to send reminders to defaulters who have not filed GSTR-3B by way of emails and SMS.

GSTN has been updating its procedures on the GSTN portal, latest ones being on auto population of e-invoices details on GSTR-1 form, online filing of application (Form GST EWB-5 by taxpayer for un-blocking of E-way bill generation facility etc.

The gross GST revenue collected in the month of November, 2020 is Rs. 1,04,963 crore of which CGST is Rs. 19,189 crore, SGST is Rs. 25,540 crore, IGST is Rs. 51,992 crore (including Rs. 22,078 crore collected on import of goods) and Cess is Rs. 8,242crore (including Rs. 809 crore collected on import of goods). The total number of GSTR-3B Returns filed for the month of November up to 30th November 2020 is 82 lakhs.

It is hoped that going forward, India economy will show brighter signs of recovery with investment, consumption and agricultural production going up. Better covid management will also add to medium to long term advantages. GST procedures and GSTN interface still leave a room for improvement.

 Waiver of penalty for non-compliance to QR code provisions

• CBIC has notified the waiver of penalty for non-compliance to QR code provisions if compiled by April 01, 2021 for default during the period December 1, 2020 to March 31, 2021.
• The Board waived the amount of penalty payable by any registered person under section 125 of the CGST Act for non-compliance of the provisions of Notification No.14/2020–Central Tax dated 21.03.2020.
• The penalty will be waived on the condition if the person complies with the provisions of the Notification No.14/2020–Central Tax dated 21.03.2020 from 01.04.2021.

(Source: Notification No. 89/2020-CT dated 29.11.2020)

 SOP for verification of taxpayers having deemed registration

• CBIC has issued Standard Operating Procedure (SOP) for verification of taxpayers who have been granted deemed registration.
• As per rule 9 of CGST Rules, 2020 w.e.f. 21.08.2020, in cases where Aadhaar authentication has either not been opted for by the applicant or where such authentication has failed, the proper officer has to mandatorily initiate physical verification of the premises, or in cases where the physical verification is difficult, certain additional documents may be called for by the proper officer (upon approval of an officer not below the rank of Joint Commissioner) for verification before deciding upon grant of registration.
• Deemed registration is allowed on completion of 21 days of applying where proper office has not issued any notice within 21 days
• Deemed registrations would be subjected to compulsory post registration verification. On completion of verification, if the proper officer has reasons to believe that the registration is liable for cancellation, he shall initiate the proceedings under rule 22 of the CGST Rules.
• Pending physical verification, notice in FORM REG-17 may be issued in specific cases based on following risk parameters seeking explanation from the registered person regarding the differences and anomalies noticed:

(i) Where FORM GSTR-1 is filed and FORM GSTR-3B is not filed either forAugust or September, 2020 tax period;

(ii) The difference in tax amount, as reported in FORM GSTR-1 and FORM GSTR-3B is more than Rs. 1 lakh (R1>R3B)

• On receipt of the reply to the notice, the proper officer would complete the proceedings under rule 22 of the CGST Rules.
• The Standard Operating Procedure (SOP) to be followed by the proper officer for carrying out the physical verification of the persons who have been granted a deemed GST registration has also been prescribed.
• In cases where the applicant has not opted for Aadhaar authentication or where such authentication has failed, there should not be any case where registration is granted on deemed approval basis.

(Source: CBIC Instruction No. 4/3/2020-GST dated 27.11.2020)

 Online filing of application (Form GST EWB 05) by the taxpayer for un-blocking of E-Way Bill (EWB) generation facility

• A facility has been provided to the taxpayers on the GST Portal, from 28th November, 2020 onwards, to file an application online for unblocking of their EWB generation facility (in Form EWB-05), in case their EWB generation facility has been blocked on the EWB Portal.
• To file an online application for unblocking EWB generation facility on GST Portal, a taxpayer need to:

1. Login to the portal and navigate to Services> User services> My Applications

2. Select application type as “Application for unblocking of E-way bill”and click New Application

3. Submit application in Form EWB-05,with upload of up to 04 documents

• The application so filed is populated to dashboard of jurisdictional tax official. The tax official can issue a Notice for personal hearing to the taxpayer. Then the taxpayer can file their reply to the notice online, along with supporting documents.
• On conclusion of the proceedings, the Tax Officer can issue an order (in Form EWB-06) approving the taxpayer application for unblocking the EWB generation facility, after which their EWB generation facility will be restored for the duration specified in the order.
• If the Tax Officer rejects the taxpayer’s application vide order in Form EWB-06, the EWB generation facility will remain blocked and the taxpayer shall be required to file their pending returns (in Form GSTR-3B / Statement in FORM CMP-08, so as to reduce the pendency to less than two tax periods), for restoration of the EWB generation facility.

(Source: GSTN Update 28.11.2020)

Auto population of e-invoices into GSTR-1

Since there has been some delay in auto population of e-invoices details in GSTR-1, it has been advised that:

• Such taxpayers who had reported e-invoices should not wait for auto-populated data and they are advised to proceed with preparation and filing of GSTR-1 for the months of November, 2020 (before the due date) and for October, 2020 (in case not yet filed, as on date).
• The auto-population of e-invoice details pertaining to the period December, 2020 intoGSTR-1 (in incremental manner on T+2 day basis) will start in the first week of December.
• The details of e-invoices pertaining to periods of October and November, 2020, would be processed and made available in incremental manner from 13 December 2020 on wards. The processing and availability of complete data for the months of October and November, 2020 may take upto 2 weeks.
• The detailed advisory with methodology of auto-population etc. is available on the GSTR-1 dashboard (‘e-invoice advisory’) and also e-mailed to relevant taxpayers.
• Once the auto-population into GSTR-1 gets started, the taxpayers may verify the documents present in the excel and may share feedback on GST Self Service Portal (https://selfservice.gstsystem.in/) , on below aspects:
  • All documents reported to IRP are present in excel
  • Status of each e-invoice/IRN is correct
  • All the details of document are populated correctly

 The auto-population of details from e-invoices into GSTR-1 is only a facility for the taxpayers. After viewing the auto-populated data, the taxpayer shall verify the propriety and accuracy of the amounts and other data in each field, especially from the perspective of GSTR-1 and file the same, in the light of relevant legal provisions.

(Source: GSTN Updated 30.11.2020)

 8 digit HSN code on specified goods w.e.f. 01.12.2020

• CBIC has notified that tax invoices shall be required to have a 8 digit HSN Code on specified 49 goods or products classifiable under tariff items under Chemical Nos. 28, 29, 38 and 39 of Customs Tariff Act, 1975.
• 8 digit HSN Code is required to be mentioned by registered person in a tax invoice issued by him.
• These specified goods broadly fall under the categories of chemicals and plastics.
• Notification 12/2017-CT dated 28.06.2017 has been amended accordingly.

(Source: Notification No. 90/2020-Central Tax dated 01.12.2020)

 Gross GST Revenue collected in November, 2020

• The gross GST revenue collected in the month of November, 2020 is Rs. 1,04,963 crore of which CGST is Rs. 19,189 crore, SGST is Rs. 25,540 crore, IGST is Rs. 51,992 crore (including Rs. 22,078 crore collected on import of goods) and Cess is Rs. 8,242crore (including Rs. 809 crore collected on import of goods). The total number of GSTR-3B Returns filed for the month of November up to 30^thNovember 2020 is 82 lakhs.
• The revenues for the month of November 2020 are 1.4% higher than the GST revenues in the same month last year. During the month, revenues from import of goods was 4.9% higher and the revenues from domestic transaction (including import of services) are 0.5% higher that the revenues from these sources during the same month last year.

 (Source: Ministry of Finance PIB dated 01.12.2020)

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