1. GST DEADLINES
1.1. Deadlines | Nov 21
● GST Compliance Calendar – Nov 2021
● GST Annual Return and Reconciliation Statement (GSTR9 and GSTR9C)
Due date 31st Dec 2021 for FY 20-21.
2. Circulars or Clarifications
2.1. De-Activation of IECs not updated on the DGFT: Trade Notice
(Trade Notice 18/2021-2022; Dated 20th Sep 2021)
All IEC holders have to ensure that the details in their IEC are updated electronically every year during the period April-June. Now, the DGFT has issued notice to provide that IECs which are not yet updated shall be de-activated with effect from 6th October,2021.
The de-activation activity is being initiated in a phased manner. However, IEC holders are provided one final opportunity to update their IEC till 5th October 2021. It is also provided that any IEC which shall be de-activated would have the opportunity for automatic re-activation without any manual intervention or a physical visit to the DGFT RA.
2.2 Advisory for E-scrip to avail Export Incentive Schemes (RoSCTL, RoDTEP)
(Advisory No: 06/2021 Issued by: ICEGATE; 1 Oct 2021)
Escrip module is developed by ICEGATE, CBIC to provide a digital service to exporters to avail benefits defined under various incentive schemes like RoDTEP (Remission of Duties and Taxes on Exported Products) and RoSCTL (Rebate of State and Central Taxes and Levies). The scheme provides for rebate of Central, State and Local duties/taxes/ levies which are not refunded under any other duty remission schemes. This advisory is a complete step-by-step guide for the user to create an escrip account, generate scrips and transfer the scrips to any other IEC to avail the benefit of the scheme.
2.3 CBIC issues Clarifications on applicable GST Rates & Exemptions on certain Services
(Circular No. 164 /20 /2021-GST)
Representations have been received seeking clarification in respect of applicable GST rates on the following activities:
1. Services by cloud kitchens/central kitchens,
2. Supply of ice cream by ice cream parlors,
3. Coaching services to students provided by coaching institutions and NGOs under the central sector scheme of “Scholarships for students with Disabilities”,
4. Satellite launch services provided by NSIL.
5. Overloading charges at toll plaza,
6. Renting of vehicles by State Transport Undertakings and Local Authorities,
7. Services by way of grant of mineral exploration and mining rights attracted GST,
8. Admission to amusement parks having rides etc. ,
9. Services supplied by contract manufacture to brand owners or others for manufacture of alcoholic liquor for human consumption.
The issues have been examined by GST Council in the 45rd meeting of the Council held on 17th September, 2021. Please refer circular for issue wise clarification.
2.4 12% GST on Hitherto, Corrugated Boxes and Cartons, clarifies CBIC
(Circular No. 163/19/2021-GST)
Based on the recommendations of the GST Council in its 45th meeting held on 17th September, 2021, at Lucknow, clarification, with reference to GST levy, related to the following are being issued through this circular:
i. Fresh vs dried fruits and nuts;
ii. Classification and applicable GST rates on Tamarind seeds;
iii. Coconut vs Copra;
iv. Classification and applicable GST rate on Pure henna powder and leaves, having no additives;
v. Scented sweet supari and flavored and coated illaichi;
vi. Classification of Brewers' Spent Grain (BSG), Dried Distillers’ Grains with Soluble [DDGS;
vii. GST rates on miscellaneous pharmaceutical products falling under heading 3006;
viii. Applicability of GST rate of 12% on all laboratory reagents and other goods falling under heading 3822;
ix. Requirement of Original/ import Essentiality certificate, issued by the Directorate General of Hydrocarbons (DGH) on each inter-State stock transfer of goods imported at concessional GST rate for petroleum operations;
x. External batteries sold along with UPS Systems/ Inverter;
xi. Specified Renewable Energy Projects;
xii. Fiber Drums, whether corrugated or non-corrugated.
The issues have been examined by GST Council in the 45rd meeting of the Council held on 17th September, 2021. Please refer circular for issue wise clarification.
3. GST PORTAL UPDATES
3.1 Availability of Input Tax Credit (ITC) for FY 2020-21
(GST Portal Advisory Dated: 17/10/2021)
1. As per Section 16(4) of CGST Act, 2017, no taxpayer shall take the input tax credit in respect to records (invoices and debit notes) for the supply of goods or services (or both) for Financial Year 2020-21 after the due date of furnishing the return for the month of September 2021. The due date for the GSTR-3B for September 2021 is either 20th October 2021 for monthly filers and 22nd or 24th October 2021 depending on the State/UT of registration of the taxpayer. In view of the same, the following may kindly be noted:
i.) Records (invoice or debit notes) pertaining to Financial Year 2020-21 reported in GSTR-1 after due date of GSTR-3B of September 2021 will not reflect as “ITC Available” in GSTR-2B of the recipients. Such records will reflect in “ITC Not Available” section of GSTR-2B and such ITC shall in turn not be auto-populated in GSTR-3B.
ii.) Records (invoice or debit notes) pertaining to Financial Year 2020-21 reported in GSTR-1 after due date of GSTR-3B of September 2021 will also not reflect as “ITC as per GSTR-2A” in Table-8A of GSTR-9 of the recipients.
3.2 Resumption of Blocking of E-Way Bill (EWB) generation facility.
(GST Portal Advisory Dated: 04/10/2021)
1. The blocking of E way bill generation facility had been temporarily suspended by Government on account of Covid pandemic. In terms of Rule 138 E (a) and (b) of the CGST Rules, 2017, the E Way Bill generation facility of a person is liable to be restricted, in case the person fails to file their return in Form GSTR-3B / statement in CMP-08, for consecutive two tax periods or more, whether Monthly or Quarterly.
2. The blocking of EWB generation facility has now resumed on the EWB portal for all the taxpayers. Going forward, from the tax period August, 2021 onwards, the System will periodically check the status of returns filed in Form GSTR-3B or the statements filed in Form GST CMP-08 as per the regular procedure followed before pandemic, and block the generation of EWBs as per rule.
3.3 GSTN displays Error for Preparation of E-Way Bill if IRN is generated 2 days prior in absence of Specific Provision in GST Act
It is noteworthy that the restriction which is in the form of error shown on the GST portal imposed by the GSTN is not backed by any provision under the GST Law. The restriction imposed by GSTN is without the authority of law and no GST amendment or notification expressly or impliedly elaborates on such restriction. Consequently, many taxpayers are facing acute difficulty in preparing the E-Way bills if the IRN has been generated 2 days prior.
4. NOTIFICATION
4.1. Basic Customs Duty on Crude Palm Oil, Crude Soyabean oil and Crude Sunflower Oil reduced to 2.5%
(Notification No. 42/2021-Customs; Dated 10th Sep, 2021)
In order to ensure the availability of edible oil to consumers at fair prices, the Government of India has reduced the customs duty on Crude Palm Oil, Crude Soyabean oil, and Crude Sunflower Oil to 2.5%. Also, the customs duty on Refined Palm Oil, Refined Soyabean oil, and Refined Sunflower Oil is reduced to 32.5%.
4.2. Last date of submitting applications under MEIS, SEIS, ROSCTL & ROSL schemes is notified to be 31st December 2021
(Notification No. 26/2015-20, Dated 16th Sep, 2021)
The Government has issued notification to provide that the last date of submitting applications under various schemes such as MEIS, SEIS, ROSCTL, ROSL etc. is revised to 31st December 2021. This notification is issued in supersession of the existing provisions in the Hand Book of Procedures, 2015-20 with regard to last date for submitting online applications for scrip-based claims.
5. JUDICIAL PRONOUNCEMENTS
5.1 ITC of inputs used in manufacturing cakes & pastries which were expired has to be reversed : AAR Guj
The Authority for Advance Ruling observed that the applicant would throw away the expired Cakes & Pastry. As per Section 17(5)(h) of CGST Act,2017, input tax credit shall not be available in respect of goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples. Moreover, as per Circular No. 72/46/2018- GST , dated 26-10-2018, it was clarified that if time expired goods would be destroyed then the taxable person would be required to reverse the ITC attributable to the manufacture of such goods. Therefore, it was held that ITC on inputs used in manufacturing expired cakes & pastries was not admissible and required to be reversed.
Kanayalal Pahilajrai Balwani, In re[2021] 130 taxmann.com209 (AAR – Gujarat)
5.2 ITC not allowed if supplier furnishes invoices for FY 2019-20 in GSTR-1 of November 2020: AAR WB
The Authority for Advance Ruling observed that the supplier had paid the GST amount involved in the invoices issued during the month of January 2020, February 2020 and March 2020 in November, 2020 and it was beyond the due date of furnishing of FORM GSTR-3B under section 39 of the CGST Act for the month of September 2020. Since, the credit which was availed by the applicant was in violation of restrictions as prescribed in sub- rule (4) of rule 36, it would be treated as availment of ineligible input tax credit. Therefore, it was held that the applicant would be required to reverse the said input tax credit.
Eastern Coalfields Ltd., In re [2021] 130 taxmann.com 232(AAR- West Bengal)
5.3 Search u/s 67 held unlawful on account of ‘Reason to believe’ not formed by the Proper Officer: Delhi High Court
Where search and seizure was conducted at premises of applicant company pursuant to an inspection carried out under section 67(1) by Inspector of CGST without authority of a proper jurisdictional officer i.e. Additional commissioner and without any clue that any goods of applicant were liable to confiscated or any books or things which would be useful for or relevant for proceedings under CGST Act had been secreted to any place which were a prerequisite for formation of belief for exercise of powers concerning search and seizure, impugned search and seizure and subsequent confiscation of books of assesse were unlawful.
R.J.Trading Co. v. Commissioner of CGST, Delhi(High Court)
5.4 Mere suspicion is not sufficient to invoke the provision of confiscation: UK HC
The Hon'ble High Court observed that the department failed to prove that the opportunity of being heard was given to the assessment before passing the orders of the confiscation in Form GST MOV-11. Moreover, before invoking the provisions of Section 130 for confiscation, there should be a very strong base to proceed for confiscation. Mere suspicion is not sufficient to invoke the provision of the confiscation. Therefore, it was found that the order under Section 130 was not passed in accordance with law and was liable to be set aside. The court also directed to release the vehicles and goods upon execution of a bond for the value of the goods in Form GST INS-04 and furnishing of a security in form of a bank guarantee.
A.P. Refinery (P.) Ltd. V. State of Uttarakhand [2021] 130 taxmann.com 307 (Uttarakhand)
Disclaimer: “This material is intended to provide general information on particular subject(s) and is not an exhaustive treatment of such subject(s) or a substitute to obtaining professional service or advice. It is strongly recommended to seek professional advice before implementation of any of the aspects covered in the presentation.”)
Author can be reached at ca.hsinghal@gmail.com; +91 99172 11511
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