1. GST DEADLINES

1.1 Deadlines | February 25

Ø GST Compliance Calendar – February 2025

Due Date	Return/ Compliance	Remarks
10 Feb 25	GSTR7 (Jan 25)	Return of TDS- Monthly Return
11 Feb 25	GSTR1 (Jan 25)	Return of Outward Supplies- Monthly Return
13 Feb 25	GSTR1 (Jan 25)-IFF	Return of Outward Supplies- QRMP
14 Feb 25	GSTR2B (Jan 25)	Auto Drafted ITC Statement available for download
20 Feb 25	GSTR3B (Jan 25)	Last Date for Payment of Tax and Return for Normal Taxpayers (Monthly GTSR3B)
25 Feb 25	PMT-06 (Jan 25)	Last Date for Payment of Tax and Return for Taxpayers under QRMP Scheme

2. 55th GST Council Meeting

The GST Council inter-alia made the following recommendations relating to changes in GST tax rates:-

A. Changes in GST rates of goods:

i. To reduce the GST rate on Fortified Rice Kernel (FRK), classifiable under 1904, to 5%.

ii. To exempt GST on gene therapy.

iii. To reduce the rate of Compensation Cess to 0.1% on supplies to merchant exporters

at par with GST rate on such supplies.

iv. To extend the concessional 5% GST rate on food inputs of food preparations under

HSN 19 or 21 that are supplied for food preparations intended for free distribution to

economically weaker sections under a government program subject to the existing

conditions.

B. Services

i. Sponsorship services by body corporate to be brought under forward charge

mechanism

ii. GST Regulations For Hotel/Restaurant Services –

Amend the definition of “declared tariff” and “specified premises” to link them with the actual value of supply of any unit of accommodation provided by the hotel.

Make the GST rate on restaurant services in hotels dependent on the value of supply of units of accommodation in the preceding financial year i.e. 18% with ITC if the value of supply exceeded Rs. 7,500 for any unit of accommodation 5% without ITC otherwise

Provide an option for hotels to pay tax on restaurant services at 18% with ITC by giving a declaration at the beginning of the financial year or upon obtaining registration

Effective date shall be 01.04.2025.

iii. Modification To Levy Of GST Under Reverse Charge Mechanism Related To Renting Of Commercial/Immovable Property

Exclude taxpayers registered under the composition levy scheme from the reverse charge mechanism introduced at Sr. No. 5AB vide Notification No. 09/2024-CTR Dt. 08.10.2024

Regularize the period from the effective date of Notification No. 09/2024-CTR i.e. 10.10.2024 until the date of issuance of the proposed notification on an “as is where is” basis.

C. Other Changes in Goods and Services

i. Proposed Changes To GST Rate On The Sale Of Old And Used Vehicles:-

GST on the sale of all old and used vehicles, including EVs, increased from 12% to 18%.

GST applies only to the supplier’s margin.

ii. Amendment in Schedule III of CGST Act, 2017

New Clause (aa): To be inserted in paragraph 8 of Schedule III of the CGST Act, 2017

Effective Date: Retrospectively from 01.07.2017.

The supply of goods warehoused in a Special Economic Zone (SEZ) or Free Trade Warehousing Zone (FTWZ) to any person before clearance for exports or to the Domestic Tariff Area (DTA) will be treated neither supply of goods nor as supply of services.

To align transactions involving goods warehoused in SEZ/FTWZ with the existing GST provisions for transactions in Customs bonded warehouses.

iii. Taxability of Vouchers

Transactions in vouchers: Treated neither as a supply of goods nor as a supply of

services.

Distribution of vouchers: Principal-to-principal basis: Not subject to GST.

Principal-to-agent basis: The commission/fee or any

other amount charged by the agent for such

distribution is taxable under GST

Services such as advertisement, co-branding, marketing, promotion, customization, technology support, customer support, etc., would be liable to GST on the amount paid for these services.
Unredeemed Vouchers are not considered as supply under GST.

iv. Amendments to the CGST Act, 2017 and CGST Rules, 2017 regarding the functionality of the Invoice Management System (IMS):

Amendment to Section 38 and Rule 60: Provide a legal framework for the generation of FORM GSTR-2B based on the actions taken by taxpayers on the Invoice Management System (IMS). Amendment to Section 34(2): Specifically provide for the requirement of reversal of input tax credit attributable to a credit note by the recipient, enabling the reduction of the supplier’s output tax liability.

Insertion of New Rule 67B: Prescribe the manner in which the output tax liability of the supplier shall be adjusted against the credit note issued by them.

Amendment to Section 39(1) and Rule 61: Ensure that FORM GSTR-3B of a tax period can only be filed after FORM GSTR-2B of the same tax period is made available on the portal.

v. Mechanism for granting a Temporary Identification Number (TIN) to individuals not liable for registration under the CGST Act, 2017, but required to make payments.

3. GST PORTAL UPDATES

3.1 Advisory for enabling filing of Application for Rectification as per Notn. 22/2024-CT, dtd. 08/10/24, 2024

(Advisory dated 07/01/2025)

The Central Government, on the recommendations of the 54th GST Council, had issued Notification No. 22/2024 – CT dated 08.10.2024 and notified that any registered person against whom any order confirming demand for wrong availment of ITC, on account of contravention of provisions of sub-section (4) of section 16 of the said Act had been issued, but where such ITC is now available as per the recently inserted sub-sections (5) and/or (6) of section 16 of the Act, would now be able to file an application for rectification of such demand orders.

Functionality has now been made available on the Portal for taxpayers to file an application for rectification of such orders issued under section 73/74.

3.2 Advisory for Waiver Scheme under Section 128A

(Advisory dated 14/01/2025)

It is to inform that both Forms GST SPL 01 and GST SPL 02 are available in the GST portal and the taxpayers are advised to file applications under waiver scheme.

One of the eligible conditions for filing application under waiver scheme is to withdraw the appeal applications filed against the demand order/notice/statement for which waiver application is to be submitted.

In this regard, it is to inform that for the appeal applications (APL 01) filed before First Appellate authority, withdrawal option is already available in the GST portal. However, for the appeal applications (APL 01) filed before 21.03.2023, withdrawal option is not available in GST portal. For such cases, the taxpayers are advised to submit their request for withdrawal of appeal applications to the concerned Appellate Authority. The Appellate authority will forward such requests to GSTN through State Nodal officer for withdrawal of such appeal applications (i.e. filed before 21.03.2023 and not disposed off) from backend.

3.3 Advisory for implementation of mandatory mentioning of HSN codes in

GSTR-1 & GSTR 1A

(Advisory dated 22/01/2025)

After successful implementation of Phase-I & Phase-II now Phase-III regarding Table 12 of GSTR-1 & 1A is being implemented, from return period February 2025. In this phase manual entry of HSN has been replaced by choosing correct HSN from given Drop down. Also, Table-12 has been bifurcated into two tabs namely B2B and B2C, to report these supplies separately. Further, validation regarding values of the supplies and tax amounts involved in the same, have also been introduced for both the tabs of Table-12. However in initial period these validations have been kept in warning mode only, which means failing the validation will not be a blocker for filling of GSTR-1& 1A.

3.4 Hard - Locking of auto-populated liability in GSTR-3B

(Advisory dated 27/01/2025)

1. Please refer to the advisory dated October 17, 2024, regarding the restricting the editing of auto- populated liability in GSTR-3B from the January 2025 tax period.

2. However, various requests have been received from the trade seeking time for the same. Therefore, the decision of making non-editable of auto-populated liability in GSTR-3B is currently not being implemented from January tax period, on the GST Portal.

3. It may be noted that the above change will be introduced soon and trade will be informed accordingly. Taxpayers are encouraged to prepare for the said change.

Judicial Pronouncements

4.1 Where assesse could not file appeal within time and sought login credentials for filing appeal within extended period under amnesty, however due to technical glitch same could not be filed and period extended under amnesty had expired, assesse was to be granted liberty to file appeal within 15 days

(Career Kashmir Consultancy vs. Union Territory of J and K; 01/01/2025)

Case of assesse was that assessment order was never communicated to assesse and assesse came to know about same when a notice from respondents for recovery process was served on assesse - Assesse submitted to have approached respondents for filing appeal through lawyer and assesse was told that appeal period was over - Assesse taking advantage of amnesty scheme, granted to those who had not filed appeal within limitation period, requested for issuance of credentials required for login into website of respondents for filing appeal and same was provided - However when assesse tried to login on filing appeal, there was technical glitch as such assesse could not login into site and also could not submit pre-deposit - Assesse vide instant petition sought direction to respondents to tender explanation of assesse or to permit assesse to file appeal by extending 15 days over period granted in amnesty scheme.

J & K HC held that “Assesse was to be permitted to apply afresh with respondents within period of 15 days for issuance of login ID and password and thereafter assesse was at liberty to file appeal.”

4.2 Section 129 is not merely a provision that seeks to levy a statutory penalty; it is principally concerned with release of goods and conveyances which may have been detained or seized; section 129 penalties could not be levied where goods were transported under an incomplete e-way bill with missing Part-B, but tax leviable had been duly paid showing absent of mens rea to avoid tax payment: Delhi HC

(Kamal Envirotech (P.) Ltd. vs. Commissioner of GST;17/01/2025)

It was held that, “Section 129 is not merely a provision that seeks to levy a statutory penalty; it is primarily concerned with release of seized and detained goods - Provisions of section 129 is clearly not a subject which is regulated or controlled by any of other provisions contained in Chapter XIX of Act - Use of non-obstante clause in section 129 is, thus, liable to be appreciated and construed in aforesaid light - Section 126 represents an embodiment of a statutory mandate requiring officer to desist from imposing a penalty in respect of either a minor breach, contravention of a procedural requirement, an omission or a mistake in documentation which may be rectifiable and all of which may have occurred without any underlying fraudulent intent or be outcome of gross negligence - As levy of penalties under Act must be guided by salutary principles which stand embodied in section 126, section 129 cannot be said to be an intendment of Legislature to either override or completely supersede and obliterate section 126 - Section 129 penalties could not be levied merely because goods were transported under an incomplete e-way bill with missing Part-B but tax leviable had been duly paid showing absent of mens rea to avoid tax payment.”

4.3 Section 16(4) of CGST Act, 2017 is arbitrary and capricious as it disallows ITC when returns are not filed within time limit prescribed under said sub-section; late fees and interest under other provisions being sufficient deterrents; saddling with double payment of tax by way of section 16(4) is arbitrary and capricious: HC of MP

(Anand Steel Vs. Union of India;22/11/2024)

It was held that, “Right on ITC is created when a taxpayer fulfils all conditions specified in section 16(2) of CGST Act which has been drafted as a non obstante provision and this right can be earned by beneficiary only as per scheme of that statute - However, imposition of a time limit through section 16(4) would supersede or override this scheme of statute as operation of section 16(4) makes non obstante section 16(2) meaningless - Section 16(2) has overriding effect on section 16(4) and section 16(2) has been drafted in a manner which shows clear legislative intent that it is not subject to section 16(4) - GST laws do not have any provision and scope for filing a revised return; taxpayers are extremely cautious to file monthly return for March may like to wait for a longer time to reconcile entries and ensure that there is no unnecessary mismatch between GST returns and financial records - This exercise is generally taken when financial audit goes on - Allowing a taxpayer to file returns with payment of late fees and then disallow him ITC because return was filed belatedly, is punishing him twice for a single default so committed - Moreover, with payment of late fee under section 47 as well as payment of interest under section 50, treasury has been suitably compensated for postponement of tax - Payment of late fees and interest are already there as deterrent for taxpayers forcing them to be disciplined - Under such circumstances, saddling with double payment of tax by way of section 16(4) is arbitrary and capricious.”

4.4 Where reminder notices for personal hearing were only uploaded on GST portal without physical service, assessment order set aside with directions to verify payment claims and allow objections subject to deposit of balance 25% tax: Madras High Court

(Tvl. Jayam Sai Concrete Works Vs. State Tax Officer Investigation Gr-I)

Demands and recovery– Tax or input tax credit involving fraud or misstatement or suppression - Assessment Year 2019- 2020 - Assesse cement distributor faced GST audit discrepancies including non-filing of returns, non-payment of RCM on freight and non-generation of e-way bills - Revenue issued assessment order after assesse failed to appear for hearing despite reminder notices - Assesse contended reminder notices were only uploaded on GST portal without physical service and tax/penalty was already paid except for one defect.

It was held that, “Mere uploading of notices on GST portal without proper service by tender/RPAD rendered assesse unaware of proceedings - Order set aside with directions to verify payment claims and allow objections after 25% tax deposit - Impugned order to revive if conditions not met - Writ petition disposed of.”

GST UPDATE | February 25 Dated: 01 February 2025