1. GST DEADLINES
1.1.Deadlines | August 23
● GST Compliance Calendar – August 2023
● GST Annual Return and Reconciliation Statement (GSTR9 and GSTR9C)
Due date 31 st Dec 2023 for FY 22-23.
2. Circulars or Clarifications
2.1. Interest to be paid only if wrongly availed ITC is utilised
(Circular No.- 192/04/2023-GST; Dated: 17th July, 2023)
In the circular it was stated that taxpayers who wrongly avail Input Tax Credit (ITC) are not liable for interest until they utilise the same for the payment of GST liability. Also mentioned that a decision from retrospective date 1.07.2017 has been taken to provide the relief to the taxpayers where interest has to be paid from the day when it has been wrongly availed.
Also, the rate of interest on wrongly availed and utilised ITC has been reduced to 18% from 24% with effect from 1.07.2017.
2.2. ITC Difference due to Mismatch in GSTR-3B and GSTR-2A
(Circular No.- 193/05/2023-GST; Dated: 17th July, 2023)
The Board, in exercise of its powers conferred under section 168(1) of the CGST Act, hereby clarifies as follows:
Since rule 36(4) came into effect from 09.10.2019 only, the guidelines provided by Circular No. 183/15/2022-GST dated 27th December, 2022 shall be applicable, in toto, for the period from 01.04.2019 to 08.10.2019.
In respect of period from 09.10.2019 to 31.12.2019, rule 36(4) of CGST Rules permitted availment of Input tax credit by a registered person in respect of invoices or debit notes, the details of which are not appearing in GSTR2A to the extent not exceeding 20 per cent. of the eligible credit available. Accordingly, the guidelines provided by Circular No. 183/15/2022-GST dated 27th December, 2022 shall be applicable for verification of such invoices or debit notes.
Similarly, for the period from 01.01.2020 to 31.12.2020, when rule 36(4) of CGST Rules allowed additional credit to the tune of 10% in excess of the ITC available in GSTR2A, the guidelines provided by Circular No. 183/15/2022-GST dated 27th December, 2022 shall be applicable, for verification of Input tax credit by the registered person in respect of invoices or debit notes, not appearing in GSTR2A.
Similarly, for the period from 01.01.2021 to 31.12.2021, when rule 36(4) of CGST Rules allowed additional credit to the tune of 5% in excess of the ITC available in GSTR2A, the guidelines provided by Circular No. 183/15/2022-GST dated 27th December, 2022 shall be applicable, for verification of Input tax credit by the registered person in respect of invoices or debit notes, not appearing in GSTR2A.
2.3. Holding of shares of subsidiary company by Holding company is Not Supply, No GST
The securities held by the holding company in the subsidiary company are neither goods nor services. Further, purchase or sale of shares or securities, in itself is neither a supply of goods nor a supply of services. Therefore, the activity of holding of shares of a subsidiary company by the holding company per se cannot be treated as a supply of services by a holding company to the said subsidiary company and cannot be taxed under GST.
2.4.CBIC Clarifies Refund Related Issues
(Circular No.-197/09/2023-GST; Dated:-17th July,2023)
The issues which has been clarified by the board are:
Refund of accumulated input tax credit under Section 54(3) on the basis of that available as per FORM GSTR 2B
Requirement of the undertaking in FORM RFD 01 inserted vide Circular No. 125/44/2019-GST dated 18.11.2019.
Manner of calculation of Adjusted Total Turnover under sub-rule (4) of Rule 89 of CGST Rules consequent to Explanation inserted in sub-rule (4) of Rule 89 vide Notification No. 14/2022- CT, dated 05.07.2022.
Clarification in respect of admissibility of refund where an exporter applies for refund subsequent to compliance of the provisions of sub-rule (1) of rule 96A under the category ‘Excess payment of Tax’.
2.5. GST Liveable on Services by Head Office to Branch Offices in Other States, Branch Offices Eligible for ITC
(Circular No.-199/11/2023-GST; Dated:-17th July,2023)
It was clarified that in respect of common input services procured by the HO from a third party but attributable to both HO and BOs or exclusively to one or more BOs, HO has an option to distribute ITC in respect of such common input services by following ISD mechanism laid down in Section 20 of CGST Act read with rule 39 of the Central Goods and Services Tax Rules, 2017. However, as per the present provisions of the CGST Act and CGST Rules, it is not mandatory for the HO to distribute such input tax credit by ISD mechanism. HO can also issue tax invoices under section 31 of CGST Act to the concerned BOs in respect of common input services procured from a third party by HO but attributable to the said BOs and the BOs can then avail ITC on the same subject to the provisions of section 16 and 17 of CGST Act.
Regarding the full input tax credit is available to the concerned BOs, the CBIC has clarified that the value of supply of services made by a registered person to a distinct person needs to be determined as per rule 28 of CGST Rules, read with sub-section (4) of section 15 of CGST Act.
Accordingly, in respect of supply of services by HO to BOs, the value of the said supply of services declared in the invoice by HO shall be deemed to be the open market value of such services, if the recipient BO is eligible for full input tax credit.
Further, in such cases where full input tax credit is available to the recipient, if HO has not issued a tax invoice to the BO in respect of any particular services being rendered by HO to the said BO, the value of such services may be deemed to be declared as Nil by HO to BO, and may be deemed as open market value in terms of second proviso to rule 28 of CGST Rules.
3. The CBIC also clarified that in respect of internally generated services provided by the HO to BOs, the cost of salary of employees of the HO, involved in providing the said services to the BOs, is not mandatorily required to be included while computing the taxable value of the supply of such services, even in cases where full input tax credit is not available to the concerned BO.
3. GST PORTAL UPDATES
3.1.Online Compliance Pertaining to Liability / Difference Appearing in R1 – R3B (DRC-01B)
1. It is informed that GSTN has developed a functionality to enable the taxpayer to explain the difference in GSTR-1 & 3B return online as directed by the GST Council. This feature is now live on the GST portal.
2. The functionality compares the liability declared in GSTR-1/IFF with the liability paid in GSTR-3B/3BQ for each return period. If the declared liability exceeds the paid liability by a predefined limit or the percentage difference exceeds the configurable threshold, taxpayer will receive an intimation in the form of DRC-01B.
3. Upon receiving the intimation, the taxpayer must file a response using Form DRC-01B Part B. The taxpayer has the option to either provide details of the payment made to settle the difference using Form DRC-03.
3.2.Geocoding Functionality now Live for All States and UTS
(Advisory Dated: 07/07/2023)
GSTN is pleased to inform that the functionality for geocoding the principal place of business address is now live for all States and Union territories. This feature, which converts an address or description of a location into geographic coordinates, has been introduced to ensure the accuracy of address details in GSTN records and streamline the address location and verification process.
3.3. List of Additional Place of Business Within Search Tax Payer Option
(Advisory Dated: 07/07/2023)
A new enhancement has been made to the Goods and Services portal, introducing a valuable feature. The portal now includes a list of “Additional Place of Businesses” within the Search Tax Payer Option.
3.4. E-Invoice Exemption Declaration Functionality Now Available
(Advisory Dated: 24/07/2023)
Salient features of this functionality are:
a. The e-Invoice Exemption Declaration functionality is voluntary and can be accessed at the e-Invoice portal ( www.einvoice.gst.gov.in ).
b. This functionality is applicable to taxpayers who are exempted from e-Invoicing as per the provisions of the CGST Rules.
3.5. GSTN Introduces New Tab Rule-86B Restricting Use of ITC in ECL
(Advisory Dated: 24/07/2023)
The Goods and Services Tax Network (GSTN) has introduced a new tab ‘Rule-86B’ in the GST Portal restricting the use of Input Tax Credit (ITC) amount in the Electronic Cash Ledger (ECL). You can access the new tab under the Services.
3.6 GSTN releases Offline Utility for GSTR-9 and GTR-9C for Financial Year 2022-23
The Goods and Services Tax Network (GSTN) has released the offline utility for form GSTR-9 and form GSTR-9C for the Financial Year 2022-23.
4. Notification
4.1. Central Govt Extends due date of Amnesty Schemes for non-filers of GSTR-4, GSTR-9 & GSTR-10 till August 31, 2023
(Notification No: 22 /2023-GST, dated June 2023)
The Central Government has extended the due date of the amnesty schemes for the non-filers of the GSTR-4, GSTR-9 and GSTR-10. The 50th Meeting of the GST Council took place in New Delhi on July 11, 2023. During the meeting, a suggestion was made to prolong the amnesty scheme, which had previously ended on June 30, 2023, until August 31, 2023.
4.2 New Amnesty Scheme for deemed withdrawal of BJA Order extended
(Notification No-24/2023-Central Tax; dated 31 March, 2023)
Best judgment assessment order u/s 62 shall be deemed to be withdrawn, if such registered persons files returns as specified below, namely,-
i. the registered persons shall furnish the said return on or before the 31st day of Aug 2023;
ii. the return shall be accompanied by payment of interest due under section 50 and the late fee payable under section 47,
irrespective of whether or not an appeal had been filed against such assessment order under section 107 of the said Act or whether or not the appeal, if any, filed against the said assessment order has been decided.
4.3 Time limit for application for revocation of cancellation of registration extended
(Notification No-23/2023-Central Tax; dated 31 March, 2023)
Special procedure in respect of revocation of cancellation of registration where registration is cancelled on or before the 31st Day Dec 20022, namely:–
(a) the registered person may apply for revocation of cancellation of such registration upto the 31st day of August, 2023;
(b) the application for revocation shall be filed only after furnishing the returns due upto the effective date of cancellation of registration and after payment of any amount due as tax, in terms of such returns, along with any amount payable towards interest, penalty and late fee in respect of the such returns;
4.4 CBIC inserts new Form for GTA intending to revert under RCM
(Notification No-06/2023-Central Tax (R); dated 26 July, 2023)
The Central Board of Indirect Taxes and Customs (CBIC) issued new form for exercising option by a Goods Transport Agency (GTA) intending to revert under reverse charge mechanism to be filed before the commencement of any financial year to be submitted before the jurisdictional GST Authority.
The Form for exercising option by a Goods Transport Agency intending to revert under reverse charge mechanism to be filed before the commencement of any financial year to be submitted before the jurisdictional GST Authority.
4.5 Govt notifies Reduction of GST Rate of Goods
(Notification No-09/2023-Central Tax (R); dated 26 July, 2023)
In schedule 5%
New entries have been inserted:
i) 99B – Un-fried or un-cooked snack pellets, by whatever name called, manufactured through process of extrusion
ii) 108A – Fish soluble paste
iii) 156B – Linz-Donawitz (LD) Slag
iv) 218AA- Imitation zari thread or yarn known by any name in trade parlance
In Schedule II–12%,
against S. No. 137, for the entry in column (3), the entry “Metallised yarn, whether or not gimped, being textile yarn, or strip or the like of heading 5404 or 5405, combined with metal in the form of thread, strip or powder or covered with metal, other than- (i) real zari thread (gold) and silver thread combined with textile thread (ii) imitation zari thread or yarn known by any name in trade parlance” shall be substituted;
In Schedule III–18%,
(i) against S. No. 16, in column (3), for the words “toasted bread and similar toasted products”, the words “toasted bread and similar toasted products, un-fried or un-cooked snack pellets, by whatever name called, manufactured through process of extrusion” shall be substituted;
(ii) against S. No. 28, for the entry in column (3), the entry “Slag, dross (other than granulated slag), scalings and other waste from the manufacture of iron or steel, other than Linz-Donawitz (LD) slag” The notification shall come into force on 27th July 2023.
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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