1. GST DEADLINES
1.1. Deadlines | October 23
a. GST Compliance Calendar – October 2023
b. GST Annual Return and Reconciliation Statement (GSTR9 and GSTR9C)
Due date 31st Dec 2023 for FY 22-23.
2. Notifications
2.1. Central Govt Exempts 5% GST on Ocean Freight Imports w.e.f. October 1st
(Notification No.- 11/2023; Dated: - 26 Sep 2023)
The GST legislation explicitly mandates that importers must fulfil their obligation to pay 5% IGST on ocean freight charges through the reverse charge mechanism. Concurrently, importers also incur customs duties on the Cost, Insurance, and Freight (CIF) value, which encompasses the freight component, when importing goods into India. Consequently, there exists a situation of dual taxation on ocean freight as per the GST law, causing an obstacle and inflating the overall cost of imports.
It is worth noting here that in the matter of Mohit Minerals Honorable SC of India has held that- Levy of GST on supply of transportation service by foreign shipping line to foreign exporter to import goods into India is not extra-territorial as services are rendered for benefit of Indian importer and transaction has nexus with territory of India. Thus, it has left to peculiar condition wherein RCM on Ocean Freight was applicable only on Indian Shipping agencies.
The Central Government has introduced a significant change in the tax regulations by exempting 5% integrated Goods and Services Tax (GST) on RCM basis on Ocean freight starting from October 1. Thus, there is no GST on Ocean Freight.
3. GST PORTAL UPDATES
3.1. Time limit for Reporting Invoices on the IRP Portal
(Advisory Dated: 13/09/2023)
It has been decided by the Government to impose a time limit on reporting old invoices on the e-invoice IRP portals for taxpayers with Aggregate Annual Turnover (AATO) greater than 100 crores. To ensure timely compliance, taxpayers in this category will not be allowed to report invoices older than 30 days on the date of reporting.
In order to provide sufficient time for taxpayers to comply with this requirement, which may require changes to your systems, it is proposed to implement it from 1st November 2023 onwards.
3.2. Geocoding Functionality for the Additional Place of Business
(Advisory dated: - 19-09-2023)
GSTN is pleased to inform that the geocoding functionality for the "Additional Place of Business" address is now active across all States and Union Territories. This builds upon the geocoding functionality earlier implemented for the principal place of business, operational since February 2023.
3.3. Two-Factor Authentication Mandatory for all taxpayers with AATO above Rs 20 Cr w.e.f. Nov 1st 2023
(Advisory dated: - 11-09-2023)
The Goods and Services Tax (GST) e-invoice system has updated that the two-factor authentication is mandatory for all the taxpayers with the Annual Aggregate Turnover (AATO) above Rs. 20 crores with effect from November 1st, 2023.
4. Judicial Pronouncement
4.1. Patna HC directs Refund of recovered GST Dues
(Sita Pandey vs The State of Bihar)
A Division Bench of the Patna High Court has imposed a penalty of Rs. 5,000 on officials for arbitrarily conducting a tax recovery in gross violation of Goods and Services Tax regulations.
The assessee argued that the recovery was carried out in an unjust and capricious manner, particularly in the absence of a constituted Appellate Tribunal. Notifications from both the Central and State Governments had extended the limitation period for commencement, starting from the Tribunal’s constitution.
4.2. GST Audit u/s 65 of CGST Act Cannot be Conducted after Closure of Business, can be Conducted only on Registered Firm: Madras HC
(Tvl.Raja Stores vs Assistant Commissioner)
The Madras High Court in a significant ruling observed that the GST Audit under Section 65 of the Central Goods and Service Tax (CGST) Act, 2017 cannot be conducted after closure of business, can be conducted only on registered entities.
4.3. Assessee is Responsible to Monitor GST portal on GST Registration Cancellation: Kerala HC upholds Cancellation of Registration
(Koduvayur Constructions Vs the Assistant Commissioner-Works Contract)
In a significant ruling the Kerala High Court upheld the cancellation of Goods and Service Tax (GST) Registration and ruled that the assessee is responsible to monitor GST portal on GST registration cancellation.
4.4. ITC Cannot Be Denied Solely Based on GSTR 2A and 3B Discrepancy: Kerala HC Remits Matter Back for Evidence Examination
(Mina Bazar Railway Station Road Vs State Tax Office)
In a recent ruling, the Kerala High Court ruled that Input Tax Credit (ITC) cannot be denied solely based on the discrepancy between GSTR 2A and GSTR 3B. The High Court remitted the matter back for the evidence examination. The bench of Dinesh Kumar Singh relied on the decision pronounced by the same court in the case of Diya Agencies v. The State Tax Officer has held that the “input tax credit of the assessee under the GST regime cannot be denied merely on the difference of GSTR 2A and 3B.” “Merely on the ground that in Form GSTR-2A the said tax is not reflected should not be a sufficient ground to deny the assessee the claim of the input tax credit” stated the Kerala High Court in the Diya Agencies v. The State Tax Officer.
4.5. ITC Cannot Be Denied Solely Based on GSTR 2A and 3B Discrepancy
(Makhan Lal Sarkar Vs. Assistant Commissioner of Revenue, State Tax)
The reconciliation process which the respondent has failed to do on the grounds of documentary evidence not being available is prima facie not tenable. Any mismatch ought to have been attempted to be ascertained from the records of the respondent authorities and their online portal.
Moreover, the respondent authorities have not even adverted to the Circular No. 183/15/2022 dated 27 December, 2022 which inter alia clarify the approach to be followed by the Department in cases where the supplier had wrongly reported the said supply as B2C instead of B2B in FORM GSTR-1 due to which the relevant supply was not get reflected. Similarly, the declaration of the wrong GSTIN of the recipient in the FORM GSTR-1 ought to have been dealt with in terms of the said Circular. There is also absence of reasons in the impugned order in rejecting the contentions raised by the appellant.
5. Press Release
5.1. 52nd GST Council Meeting Scheduled for October 7 at New Delhi
(Advisory dated 02 Aug 2023)
The 52nd Goods and Services Tax (GST) Council is to be held on October 7, 2023, Saturday at Vigyan Bhavan, New Delhi. The meeting will be presided by the Union Finance Minister Smt. Nirmala Sitharaman along with Revenue Secretary, State Finance Minister, etc.
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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