1st July, 2022 is a unique day in the history of India when entire nation celebrates  CA day, the financial doctors of the economy and the Doctor’s day, the health keepers of the nation. As an icing on the cake, India also celebrate today the 5th GST day. On the same day today five years back on the midnight of 30th June / 1st July, 2017, India ushered into the biggest tax reforms of independent India when GST was introduced.

Over last five years, too much water has flown over and GST law, as originally legislated has undergone substantial metamorphosis in law, rules, scheme and procedures. We can also say that GST has been a dynamic tax law so far. Hundreds of Notifications, Circulars, Legislative and Procedural changes, 47th GST Council meetings, over seven hundreds writs and thousands of advance rulings are witness to this dynamism, which could very well have been avoided.

Indirect Taxation in India

Then Now
Multiple taxation – levies and cesses GST – one nation, one tax
Cascading of taxes Seamless input tax credit for all taxes
Fragmented VAT principles Holistic application under GST
Regional imbalances Equitable distribution of revenue
Barrier to inter-state trade Seamless flow of goods

GST @ 5 Years

5 Gains

  • Integration of indirect taxes
  • Online compliances
  • No tax cascading
  • Reduced physical interface with tax department
  • Increased transparency

 5 Pains

  • Distorted input tax credit
  • Too much compliances
  • Old mindset of officers
  • Lack of trust between tax collectors and tax payers
  • No appellate tribunal yet

 5 Challenges

  • Interpretational issues
  • Setting up independent full fledged appellate form
  • Compensation to states
  • Fake invoices menace and Rampant tax evasion
  • Corruption

 5 Opportunities

  • Further comprehensive tax reforms
  • Integration of economy
  • Ease of doing business
  • Buoyant tax collection
  • Transparent, accountable and fair & just tax administration

5 Suggestions

  • Change in attitude, mindset to be more taxpayer friendly
  • Consider taxpayers as important pillar of economy
  • Make input tax credit smooth and seamless
  • Offer fair tax grievance redressal mechanism
  • Trust tax payers; don’t spare evaders

GST Council 47th meeting

GST Council, the apex governing body under GST law met for 47 times in last five years. It could have held more meetings but for Covid pandemic. The last meeting, 47th meeting held on 28-29 June, 2022 was an eventful meeting with many crucial agenda items being discussed and decided. The most controversial issue of continuity of compensating the states for GST revenue shortfall beyond 30th June, 2022, i.e., w.e.f. 01.07.2022 is yet to be finalized, through the levy of compensation cess has been extended upto 31st March, 2022.

The 48th Council meeting of GST Council is likely to be held in August, 2022 and hosted by Tamil Nadu.

GST Collections

GST collections in June, 2022 have once again been buoyant. The gross GST revenue collected in the month of June 2022 is Rs.144,616 crore of which CGST is Rs.25,306 crore, SGST is Rs.32,406 crore, IGST is Rs.75887 crore.  The revenues for the month of June 2022 are 56% higher than the GST revenues in the same month last year of Rs.92,800 crore. During the month, revenues from import of goods was 55% higher and the revenues from domestic transaction (including import of services) are 56% higher than the revenues from these sources during the same month last year.

Recent updates

Extension of Levy of GST Compensation Cess

  • Central Government has extended levy of GST Compensation upto March, 2026.
  • The Notification has notified GST (Period of Levy and Collection of Cess) Rules, 2022 and Rule(2) provides for period for levy and collection of cess.
  • The period for levy and collection of cess under section 8(1) of the  Goods and Services Tax (Compensation to States) Act, 2017 shall now be upto the  31st March, 2026.
  • The said rules shall come into force w.e.f. 01.07.2022

(Source: Notification No. 1/2022-Compensation Cess dated 24.06.2022) 

47th GST Council Meeting @ 28 & 29 June, 2022

GST Council has decided for the following :

  • To ease compliance for taxpayers.
  • Allows amendments in GSTR-3B return.
  • To empower both – state and central tax officers to issue show cause notices.
  • 6 new e-invoice portals shall become functional soon.
  • Agrees to withdraw new GST return filing system as no longer relevant
  • Allows for amount in e-credit and e-cash ledgers to be used to pay output tax dues in returns.
  • Amount available in e-credit & e-cash ledgers not to be used to pay penalty / interest / fees.
  • Allows auto population of GSTR-3B.
  • Allows e-commerce operators to register under composition scheme.
  • Unbranded packaged food items to attract 5% GST
  • Hotel rooms with tariff of below Rs. 1000 per day to attract tax @ 12% with ITC
  • Stricter scrutiny and verification of high-risk taxpayers
  • Inverted duty structure to be revised for items such as e-waste, link, solar water heater, finished leather etc
  • Services by RBI, GSTN, SEBI, FSSAI etc to be made taxable
  • Specified postal services to be taxed
  • E-way bill made mandatory for gold and precious metal / stones
  • Rate rationalization to remove inverted duty structure
  • Changes in certain GST rates – to be effective from 18.07.2022
  • Withdrawal of certain exemptions
  • Approval of waiver of mandatory registration for ECO’s (E-commerce)
  • Amendment in formula prescribed in rule 89(5) of CGST Rules, 2017 for calculation of refund of unutilized Input Tax Credit on account of inverted rated structure
  • Amendment in CGST Rules for handling of pending IGST refund claims
  • Waiver of late fee for delay in filing FORM GSTR-4 for FY 2021-22 and extension of due date for filing FORM GST CMP-08 for Q1 of FY 2022-23
  • Present exemption of IGST on import of goods under AA/EPCG/EOU scheme to be continued and E-wallet scheme not to be pursued further.
  • Amendment in CGST Rules to provide for refund of unutilized Input Tax Credit on account of export of electricity.

(Source: Press Release dated 29.06.2022)

GST Revenue Collection for June, 2022

  • The gross GST revenue collected in the month of June 2022 is 144,616 crore of which CGST is Rs.25,306 crore, SGST is Rs.32,406 crore, IGST is Rs.75887 crore (including Rs.40102 crore collected on import of goods) and cess is Rs.11,018 crore (including Rs. 1197 crore collected on import of goods). The gross GST collection in June 2022 is the second highest collection next to the April 2022 collection of Rs.1,67,540 crore.
  • The revenues for the month of June 2022 are 56% higher than the GST revenues in the same month last year of Rs.92,800 crore. During the month, revenues from import of goods was 55% higher and the revenues from domestic transaction (including import of services) are 56% higher than the revenues from these sources during the same month last year.
  • Gross GST collection in June 2022 is the second highest collection next to the April 2022 collection.
  • GST collection crosses Rs.1.40 lakh crore mark 5th time since inception of GST; 4th month at a stretch since March 2022.

(Source: GST Collection PIB Release ID 1838523 dated 01.07.2022) 

Five Years of GST and Recent Updates

Return Filing Frequency on GST Portal

  • GSTN has enabled a new feature on GSTN Portal, i.e., to show return filing frequency for the taxpayers.
  • Taxpayers can check the return filling frequency of any GST registered person.
  • To identify the Quarterly Returns Monthly Payment (QRMP) and Non-QRMP dealers.
  • This can be done for current year and previous financial year
  • Following steps are involved

1. Go to https://services.gst.gov.in/services/searchtp

2. Enter the GSTIN for which you want to check the frequency and enter the captcha

3. Go to the bottom of the page and click on ‘Show Return Filling Frequency’

(Source: GSTN)

New Functionality for withdrawal of refund application

  • GSTN has enabled a new functionality on its portal relating to withdrawal of refund application.
  • The users can now withdraw the applications in case of mistakes while claiming the refund.
  • The new facility will reduce the chances of rejection of refund applications by the GST department on the ground of clerical errors/defects.
  • In case of noticing any mistakes in the application, the users can now withdraw the application simply by filing Form RFD-01W on the portal and thereafter file the corrected refund application immediately for quick processing.

(Source: GSTN)

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