1. GST DEADLINES
1.1. Deadlines | November 23
● GST Compliance Calendar – November 2023
● GST Annual Return and Reconciliation Statement (GSTR9 and GSTR9C)
Due date 31st Dec 2023 for FY 22-23.
2. Circulars and Clarifications
2.1. Kerala GST Department issues Instructions for issuing Separate Notices to Taxpayers under Sections 73 & 74 of the KGST Act
(Circular No. 17/2023; Dated:- 9 October 2023)
In accordance with its authority under Section 168 of the Kerala State Goods and Services Tax (KSGT) Act 2017, the KGST Department has released circular no. 16/2023 to standardize the issuance of notices under Sections 73 and 74. These sections pertain to the determination of tax liabilities, with Section 73 addressing non-fraudulent cases and Section 74 addressing cases involving fraud or wilful misstatements.
To maintain a subject-based litigation system, where each subject matter is treated independently, separate notices will be issued to taxpayers when multiple matters require tax determinations under both Sections 73 and 74.
The circular also clarified that in compliance with existing instructions and the provisions of Sections 73 and 74, the adjudication and closure of each notice or proceeding under these sections will remain independent of one another.
2.2.Clarification on issues pertaining to taxability of personal guarantee and corporate guarantee in GST
(Circular No. 204/16/2023; Dated:- 27 October 2023)
Whether the activity of providing personal guarantee by the Director of a company to the bank/ financial institutions for sanctioning of credit facilities to the said company without any consideration will be treated as a supply of service or not and whether the same will attract GST or not.
Personal Guarantee of Directors will be treated as supply of service however, the open market value of the said transaction/ supply shall be treated as zero and therefore, taxable value of such supply may be treated as zero. In such a scenario, no tax is payable on such supply of service by the director to the company.
2.3 Clarification Regarding Applicability of Services on certain services
(Circular No. 206/18/2023; Dated :- 31 October 2023)
1. Whether ‘same line of business’ in case of passenger transport service and renting of motor vehicles includes leasing of motor vehicles without operators.
Same line of business as stated in notification No. 11/2017- Central Tax (Rate) means “service procured from another service provider of transporting passengers in a motor vehicle or renting of a motor vehicle”.
It is hereby clarified that input services in the same line of business include transport of passengers (SAC 9964) or renting of motor vehicle with operator (SAC 9966) and not leasing of motor vehicles without operator (SAC 9973) which attracts GST and/or compensation cess at the same rate as supply of motor vehicles by way of sale.
2. Whether GST is applicable on reimbursement of electricity charges received by real estate companies, malls, airport operators etc. from their lessees/occupants.
It is clarified that whenever electricity is being supplied bundled with renting of immovable property and/or maintenance of premises, as the case may be, it forms a part of composite supply and shall be taxed accordingly. However, where the electricity is supplied by the Real Estate Owners, Resident Welfare Associations (RWAs), Real Estate Developers etc., as a pure agent, it will not form part of value of their supply.
3. Whether job work for processing of “Barley” into “Malted Barley” attracts GST @ 5% as applicable to "job work in relation to food and food products” or 18% as applicable on “job work in relation to manufacture of alcoholic liquor for human consumption”.
Malt being a food product can be directly consumed as part of food preparations or can be used as an ingredient in food products and also used for manufacture of beer and alcoholic liquor for human consumption. However, irrespective of end-use, the conversion of barley into malt amounts to job work in relation to food products.
It is hereby clarified that job work services in relation to manufacture of malt are covered by the entry at Sl. No. 26 (i) (f) which covers “job work in relation to all food and food products falling under chapters 1 to 22 of the customs tariff” irrespective of the end use of that malt and attracts 5% GST.
3. Notifications
3.1. ‘Proper Officer Shall issue Intimation’ Instead of ‘Order’ for Concluding Proceedings of GST Demand Notice; CBIC notifies Amendment
(Notification No.- 52/2023; Dated: - 26 Oct 2023)
According to the notification, the proper shall issue ‘intimation’ instead of ‘order’ for concluding the proceedings of the GST demand notice. The Rule 142 states about the Notice and order for demand of amounts payable under the CGST Act.
3.2. CBIC notifies Amendment in CGST Rules for Valuation of Corporate Guarantees between Related Parties
(Notification No.- 52/2023; Dated: - 26 Oct 2023)
The Central Board of Indirect Taxes and Customs (CBIC) has issued a notification, amending the Goods and Services Tax Rules, 2017 to facilitate valuation of corporate guarantees between related parties in furtherance of the Goods and Services Tax (GST) Council recommendations.
According to the notification sub rule 2 to rule 28 of Central Goods and Service Tax is inserted which states as follows:-
Notwithstanding anything contained in sub-rule (1), the value of supply of services by a supplier to a recipient who is a related person, by way of providing corporate guarantee to any banking company or financial institution on behalf of the said recipient, shall be deemed to be one per cent of the amount of such guarantee offered, or the actual consideration, whichever is higher.”
4. GST PORTAL UPDATES
4.1. E-Invoice JSON download functionality Live on the GST e-Invoice Portal
(Advisory Dated: 03 Oct 2023)
The e-Invoice JSON download functionality is now live on the GST Portal. Additionally, this functionality allows to download all e-invoices reported across all six IRPs (Invoice Registration Portals), i.e. complete data. Regarding accessibility, you can download e-Invoice JSON files for up to 6 months from the date of IRN generation.
4.2. Facility of enrolment for supply of goods through e- commerce operators by unregistered suppliers
(Advisory dated: - 12 Oct 2023)
1. In terms of the recent amendments to the Act and the rules and notification number 34/2023 dated 31.07.2023, persons supplying goods through e-commerce operators shall be exempt from mandatory registration under the CGST Act even if they supply goods through e-commerce operators (ECO) if they satisfy the following conditions:
(a) such person is engaged in the supply of goods through the ECO and such supplies are made only in one State/UT,
(b) such person does not make any inter-state supply,
(c) the said person has a Permanent Account Number (PAN) under the Income Tax Act, 1961,
(d) such persons shall declare his PAN (which shall be validated) on the common portal (i.e. GST Portal) along with the address of his place of business and the name of the State/UT or Union territory before making such supplies,
(e) such person has been granted an enrolment number on the common portal upon validation of his PAN before which he shall not make any such supply through any ECO.
2. GSTN has developed the necessary functionality for enrolment of unregistered persons and the same is available on the portal.
4.3. Registration Requirement for person supplying Online Money Gaming Services or OIDAR or Both
(Advisory dated :- 17 Oct 2023)
In terms of the recent amendments made in the CGST/SGST Act, the IGST Act and the CGST/SGST Rules, any person located outside taxable territory making supply of online money gaming to a person in taxable territory, is liable to get registered in GST and is required to pay tax on such supply.
In this context, every person located outside taxable territory making such supplies of online money gaming to a person in India is now mandated to take registration/amend his existing registration in accordance with the proposed Row (iia) in FORM GST REG-10 and also required to furnish information regarding the supplies in the proposed Tables in FORM GSTR-5A.
4.4.Changes in GSTR-5A
(Advisory dated: - 27 Oct 2023)
Notification 51/2023 dated 29.09.2023 has introduced Table 5B in GSTR 5A w. e. f 01.10.2023. In this notification, Table 5B has been introduced to report supplies made to Registered GSTINs (B2B supplies). This would be implemented shortly at GSTN and till such time, OIDARs are advised to file the return in the existing GSTR 5A itself.
5. PRESS RELEASE
5.1. ICAI Points out Numerous Flaws in Mass GST Dept SCN: Representation Details
(Advisory Dated: 21 Oct 2023)
The Institute of Chartered Accountants of India (ICAI) has raised concerns over the recent mass issuance of Show Cause Notices (SCNs) by the Goods and Services Tax (GST) Department in Assam. These notices, dated September 2023, have been a point of contention due to their apparent rushed issuance and failure to consider individual case specifics.
The ICAI’s representation has highlighted several issues with these notices regarding defective notices, dropping of demand, not considering the replies filed earlier, and various other issues.
The ICAI has made several recommendations to address those issues:
Prioritizing the disposal of cases with defective notices, dropping the demand, and withdrawing the notices if the highlighted defects are found. Taxpayers should be informed of these actions to avoid unnecessary litigation
Developing a standard operating procedure for dealing with such notices and creating a specialized cell to scrutinize them before further action.
Implementing a special procedure for closing businesses or handling cases of deceased individuals with surrendered registrations and final returns.
Ensuring sufficient time for personal hearings, following principles of natural justice, and providing relied-upon documents to taxpayers.
Recommending to the GST Council the waiving of interest and penalties on demands arising from these notices for the FY 2017-18 period as an amnesty measure, given earlier assurances by the government.
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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