1. GST DEADLINES
1.1. Deadlines | September 23
● GST Compliance Calendar – September 2023
● GST Annual Return and Reconciliation Statement (GSTR9 and GSTR9C)
Due date 31st Dec 2023 for FY 22-23.
2. Notifications
2.1 Central Govt notifies New GST Rule 138F for E-Way Bill for Intra-State Movement of Gold and Precious Stones above 2 Lakhs worth
(Notification No: 38/2023; Dated: 4th August, 2023)
New Rule 138F was inserted as per the recommendation of the 50th Goods and Services Tax (GST) Council meeting held on July 11th, 2023. With effect from 5th Aug 2023 where Commissioner of State mandates every Registered Taxable Person shall generate an E-way bill for the intra-State movement of Gold and Precious Stones above 2 Lakhs. Rule 138F in this regard is as under:
Every registered person who causes intra-State movement of such goods, -
(i) in relation to a supply; or
(ii) for reasons other than supply; or
(iii) due to inward supply from an unregistered person,
shall, before the commencement of such movement within that State or Union territory, furnish information relating to such goods electronically, as specified in Part A of FORM GST EWB-01, against which a unique number shall be generated
The changes in functionalities with respect to e-Waybill for Gold are as follows:
No Part-B details can be updated
Transporter update is not allowed
Consolidated EWB cannot be generated
Extension of e-waybill is allowed without updating Part-B details
Multivehicle facility is not allowed
However, there is no change in cancellation and rejection of e-waybill.
2.2 Central Govt introduces New Form GST DRC-01C for Intimation of difference in ITC available in GSTR-2B and GSTR-3B
(Notification No: 38/2023; Dated: 4thAugust, 2023)
The government has introduced a new Form GST DRC-01C, a system-generated form for the Intimation of difference in input tax credit available in auto-generated statements as per GSTR2B and that availed in return GSTR3B with respect to newly inserted Rule 88D.
Newly inserted Rule 88D provides manner of dealing with difference in ITC as per GSTR 2B and GSTR3B. It provides an Intimation to be sent electronically in PART A of FORM DRC01C were ITC as per GSTR3B exceeds ITC available as per GSTR2B and a reply to be submitted for the same in PART B of FORM DRC 01C. In case of no explanation or unsatisfactory reply demand shall be initiated under Section 73 or 74 by the proper officer.
3. GST PORTAL UPDATES
3.1. Introduction of Electronic Credit Reversal and Reclaimed Statement
(Advisory Dated: 31/08/2023)
“Vide Notification No. 14/2022 – Central Tax dated 05th July, 2022 (read with circular 170/02/2022-GST, Dated 6th July,2022), the Government introduced certain changes in Table 4 of Form GSTR-3B so as to enable the taxpayers in reporting correct information regarding ITC availed, ITC reversal, ITC re-claimed and ineligible ITC. The re-claimable ITC earlier reversed in Table 4(B) 2 may be subsequently claimed in Table 4(A) 5 on fulfillment of necessary conditions. Such reclaimed ITC in Table 4(A) 5 also needs to be explicitly reported in Table 4D (1).
In order to facilitate the taxpayers in correct and accurate reporting of ITC reversal and reclaim thereof and to avoid clerical mistakes, a new ledger namely Electronic Credit and Re-claimed Statement is being introduced on the GST portal. This statement will help the taxpayers in tracking of their ITC that has been reversed in Table 4B (2) and thereafter re-claimed in Table 4D (1) and 4A (5) for each return period, starting from August return period.
3.2 Reporting of ITC Reversal Opening Balance
(Advisory dated:- 31-08-2023)
Taxpayers are permitted to use this facility to report their ITC Reversal Balance that has not been re-claimed.
The taxpayer is advised to report solely those reclaimable ITC reversal balances that meet the legal criteria for re-claim and have not been previously claimed by the taxpayers.
Taxpayers may report their opening balance until 30th November 2023. After 30th November 2023, the option to report the opening balance will be removed, and it will be assumed that the taxpayer has no ITC Reversal Balance to report.
Taxpayers may amend their opening balance until 31st December 2023. Any reported balance after this date will be considered final and cannot be further amended.
After 31st December 2023, the updated value shall be frozen with no further attempts provided to the taxpayers to amend their ITC Reversal Balance and this ITC Reversal value will be sent to the Jurisdictional Tax Officer for review.
Due diligence should be done while reporting/amending the ITC reversal opening balance, because only 3 time amendment is allowed.
The opening balance that has been reported or amended by the taxpayers shall be credited to the "Electronic Credit Reversal and Re-claimed Statement". This statement will be used to validate the taxpayer's ITC Re-claimed amount in Table 4A (5) & 4D(1) of form GSTR-3B.
4. Judicial Pronouncements
4.1. Pre-deposit under GST Appeal can be made through Electronic Credit Ledger
(Kiran Motors vs Addl. Commissioner of CT & GST)
In a recent judgement, the Orissa High Court held that a pre-deposit under Goods and Service Tax (GST) appeal can be made through Electronic Credit Ledger (ECL).
It was seen that by circular dated 6th July 2022 issued by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry of Finance, Government of India, it has been clarified that payment of pre-deposit can be made by using the Electronic Cash Ledger. However, same has been now over ruled by the Honourable Orissa High Court.
4.2 Mere Bald Statement that Registration was Obtained by Fraud, Wilful Misstatement or Suppression of Facts not Sufficient for Cancellation of GST Registration
(M/S Cuthbert Oceans Llp Vs. The Superintendent Of CGST)
In a recent decision the Delhi High Court observed that mere bald statement that registration was obtained by fraud, wilful misstatement or suppression of facts not sufficient for cancellation of GST Registration.
4.3 Silver Bars or Cash not liable to be Seized u/s 67(2) of CGST Act: Delhi HC Directs to Release Seized Cash and Silver Bars
(Deepak Khandelwal Proprietor M/S Shri Shyam Metal Vs Commissioner Of CGST, Delhi West & Anr)
In a recent ruling, the Delhi High Court held that silver bars or cash are not liable to be seized under section 67(2) of the Central Goods and Service Tax Act, 2017 (CGST) and directed to release the seized cash and silver bars.
4.4 No Intention to Evade GST since E-Way Bill Expired due to Break Down of Vehicle: Allahabad HC Quashes Seizure Memo
(M/S Rateria Laminators Pvt.Ltd vs. Additional Commissioner Grade 2 And Another)
A Single Bench of the Allahabad High Court quashed seizure memo as there was no intention on the side of the petitioner, to evade Goods and Service Tax (GST) since E-Way Bill expired due to the breakdown of the vehicle.
4.5 Burden of Purchaser is Limited to verify GST registration on GST Portal and not expected to Speak about Suppliers’ manner of Obtaining Registration
(M/S. Arhaan Ferrous and Non-Ferrous Solutions Pvt.Ltd Vs. The Deputy Assistant Commissioner)
In a recent ruling, the Andhra Pradesh High Court (HC) has stated that the obligation or duty of the buyer is confined to proving that they genuinely acquired goods from the seller in exchange for valuable payment. This can be accomplished by confirming the Goods and Services Tax (GST) Registration through the GST portal. Purchaser need not to be aware of credentials and business activities of seller or about fact that seller obtained GST registration by producing fake documents.
4.6 Bank’s “Secured Debts” Prevail Over Revenue’s “First Charge” in Property Recovery, SARFAESI and RDB Acts Override KGST and KVAT Act Claims
(State Bank of India Vs State Of Kerala Rep)
The High Court of Kerala has held that banks and financial institutions hold priority over revenue authorities’ “First Charge” when recovering debts through property sales.
4.7 Buyer Complying with Sec 16(2) Conditions Eligible for ITC & Not Liable for GSTR 2A and 3B Mismatch on Seller’s Default, Recovery Targeted at Seller and Not Buyer
(Sun craft Energy Private Limited and another Vs. The Assistant Commissioner)
The High Court of Calcutta has held that the Buyers who comply with the conditions contemplated under Section 16(2) of the Central Goods and Services Tax (CGST) Act and State Goods and Services Tax (SGST) Act, 2017 are eligible to avail Input Tax Credit (ITC) and are not liable for the mismatch or discrepancies in the Goods and Services Tax Return (GSTR) 2A and GSTR 3B due to the default of the seller. It was also held that the recovery procedures initiated by the proper officer shall be directed against the seller and not the buyer.
4.8 GST appeal cannot be Rejected on Non-Supply of Certified Copies: Orissa HC
(M/s. Ashish Kumar Kar vs Central Board of Indirect Taxes and Customs Dept of Revenue)
If an appellant files an appeal in ignorance of position that he has to file certified copies of adjudication order and filing of appeal is defective one, then appellate authority has to intimate appellant with regard to defect by giving him opportunity to rectify same within time stipulated; otherwise, rejection of appeal on non-supply of certified copy of adjudication order would be violative of principle of natural justice.
4.9 Time Limit on ITC Claim u/s 16(4) of CGST Act Deemed Constitutional, Articles 14, 19(1)(g) and 300A Remain Intact
(Thirumalakonda Plywoods vs The Assistant Commissioner)
The High Court of Andhra Pradesh has held that the time limit imposed on the claim of Input Tax Credit (ITC) under Section 16(4) of the Central Goods and Services Tax (CGST) Act, 2017 is not in violation of constitutional provisions.
5. Press Release
5.1 Key Highlights of 51st GST Council Meeting
(Advisory dated 02 Aug 2023)
On the 2nd of August 2023, the 51st meeting of the Goods and Services Tax (GST) Council was conducted through video conferencing in New Delhi.
No Change for 28% GST on Online Gaming, Casinos, Horse Racing
Amendments in CGST and SGST Act regarding online gaming taxes
Council to review GST implementation of online gaming after its 6 months implementation period for online gaming
Approves clear definition of actionable claims
Approves inclusion of Online Money Gaming in definition of Online Gaming
Approves definition of online money gaming includes games based on both skill & chance
Approves definition of online gaming as those ‘offered on internet or e-network including online money gaming’
Approves to insert definition of ‘virtual digital asset’ in GST law as defined in IT Act Council approves in bringing online money gaming supplied by entity located outside taxable territory under IGST ambit
Approval of proposal to block all online gaming apps/platforms not complying with tax rules
Offshore Gaming companies’ registration and liable to action under IT act if not complied with provisions.
Council to differentiate Online gaming and online money gaming
Notifications will be provided on ‘Place of supply’ if required.
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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