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Category Archives: Latest GST Updates

Union Budget-2023-24 – Amendments in GST

GST

Here is a summary of amendments proposed by the Union Budget in GST :

1. ITC Denied on goods or services procured for Corporate Social Responsibility (CSR)

  • ⦁ Union budget, 2023-24 has proposed to restrict the ITC on goods and services procured for Corporate Social Responsibility.
  • ⦁ However, so far, companies are entitled to take such ITC unless the same is restricted under any other clause.

2. Amendments on offenses and Compounding provisions

  • ⦁ Following offenses has been decriminalized under section 132 of CGST Act:
    • ⦁ obstructs or prevents any officer in the discharge of his duties under this Act;
    • ⦁ tampers with or destroys any material evidence or documents;
    • ⦁ fails to supply any information which he is required to supply under this Act
  • ⦁ The minimum and maximum amounts for compounding of offences reduced to 25 per cent and 100 per cent of tax involved, respectively.

3. Penalties on e-commerce operators (Section 122 of CGST Act)

  • ⦁ Specific penalty provisions has been incorporated for e-commerce operator if it:
    • ⦁ Allows supply of goods or services by unregistered person through it, other than persons who are specially exempted, or
    • ⦁ Allows inter-State supply of goods or services or both by a person who is not eligible to make such supply; or
    • ⦁ Fails to furnish correct information in TCS return
  • Defaulting e-commerce operator shall be liable to pay penalty of higher of following amounts:
    • ⦁ INR 10,000; or
    • ⦁ Amount of tax involved

4. Maximum time limit specified to file GST Returns

  • ⦁ Till date, a registered person is allowed to file pending GST returns (GSTR-1, GSTR-3B, GSTR-9, GSTR-9C or any other GST returns) with applicable interest and penalties without any limit of period.
  • ⦁ Union budget has proposed to impose time limit of 3 years from due date for filing of following returns:
    • ⦁ GSTR-1: Return of outward supplies
    • ⦁ GSTR-3B: Return of summary of outward and inward supplies and corresponding tax payable
    • ⦁ GSTR-9: Annual return
    • ⦁ GSTR-9C: ITC Reconciliation
    • ⦁ GSTR-8: TCS Return
  • ⦁ Such a period of 3 years can be further extended by the government.

5. Extension of Composition Scheme to taxpayer selling through e-commerce operator

  • ⦁ As per Section 10(2) and (2A) of CGST Act, a registered person engaged in making supply of goods through e-commerce operators is not entitled to opt for composition scheme.
  • ⦁ Union budget has proposed to extend the facility of composition scheme to such dealers as well.

6. Other Amendments:

  1. 1. It has been clarified that Entry No. 7, High seas sales, and Entry No. 8, supply of goods from bonded warehouses before clearance for home consumption, are effective from 01.07. 2017 itself. Further, no refund shall be granted of tax collected in pursuance of such entries so far.
  2. 2. In definition of “online information and database access or retrieval services’ (‘OIDAR’), condition of “essentially automated and involving minimal human intervention” has been removed.
  3. 3. Where both supplier and recipients are located in India, place of supply In case of transportation of goods to outside India was “designation of goods”. Such provision has been omitted and now in such case, place of supply will be:
    1. a. B2B Supplies: Location of Recipient of service
    2. b. B2C Supplies: Place where goods are handed over for transportation
  1. 4. Power granted to prescribe the manner and conditions for computation of interest in case of delayed refunds.
  2. 5. Power is granted to the GST portal to share information provided by taxpayers with other systems notified by the Government. Such details to be shared post obtaining consent of supplier/recipient as applicable. 

The contents of this article are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.

Overview of GST Returns in India

Goods and Services Tax (GST) is a tax reform that has transformed the Indian taxation system. It was introduced in India on July 1, 2017, with the aim of bringing a uniform tax structure across the country. GST replaced multiple indirect taxes levied by the state and central government, such as value-added tax (VAT), service tax, excise duty, and others.

Under the GST regime, taxpayers are required to file periodic returns with the GST authorities. GST returns are documents that contain details of all transactions made by a taxpayer during a specific period, including sales, purchases, and taxes paid and collected.

In this blog, we will discuss the different types of GST returns, their due dates, and the process of filing GST returns in India.

Types of GST Returns There are different types of GST returns that taxpayers are required to file, depending on their category and turnover. The following are the main types of GST returns:

  1. 1. GSTR-1: GSTR-1 is a monthly or quarterly return filed by registered taxpayers that contain details of all outward supplies or sales made during the period. The due date for filing GSTR-1 is the 11th day of the following month, for monthly filers, and the 13th day of the month following the end of the quarter, for quarterly filers.
  3. 2. GSTR-2A: GSTR-2A is an auto-generated return that contains details of all purchases made by a taxpayer from a registered supplier, as uploaded by the supplier in their GSTR-1. It is a read-only return, which means that taxpayers cannot make any changes to it.
  5. 3. GSTR-3B: GSTR-3B is a monthly return filed by registered taxpayers that contains details of all outward supplies, inward supplies, and input tax credit claimed during the period. The due date for filing GSTR-3B is the 20th day of the following month.
  7. 4. GSTR-4: GSTR-4 is a quarterly return filed by taxpayers who have opted for the Composition Scheme. It contains details of all outward supplies made during the period, including tax collected. The due date for filing GSTR-4 is the 18th day of the month following the end of the quarter.
  9. 5. GSTR-5: GSTR-5 is a monthly return filed by non-resident taxpayers who are registered under GST. It contains details of all outward supplies made during the period, including tax collected. The due date for filing GSTR-5 is the 20th day of the following month.
  11. 6. GSTR-6: GSTR-6 is a monthly return filed by Input Service Distributors (ISDs) that contains details of all input tax credit received and distributed during the period. The due date for filing GSTR-6 is the 13th day of the following month.
  13. 7. GSTR-7: GSTR-7 is a monthly return filed by taxpayers who are required to deduct tax at source (TDS) under GST. It contains details of all TDS deducted during the period, as well as the details of the deductee. The due date for filing GSTR-7 is the 10th day of the following month.
  15. 8. GSTR-8: GSTR-8 is a monthly return filed by e-commerce operators who are required to collect tax at source (TCS) under GST. It contains details of all supplies made through the e-commerce platform, including tax collected. The due date for filing GSTR-8 is the 10th day of the following month.

Due Dates of Filing GST Return

The due dates for filing GST (Goods and Services Tax) returns depend on the type of return and the turnover of the taxpayer. Here are the due dates for filing GST returns in India for regular taxpayers:

  1. 1. GSTR-1: This return contains details of outward supplies and is filed monthly. The due date for GSTR-1 is the 11th of the following month.
  3. 2. GSTR-3B: This return contains details of both inward and outward supplies and is filed monthly. The due date for GSTR-3B is the 20th of the following month.
  5. 3. GSTR-4: This return is filed by composition scheme taxpayers and contains details of quarterly returns. The due date for GSTR-4 is the 18th of the month following the quarter.
  7. 4. GSTR-5: This return is filed by non-resident taxpayers and contains details of inward supplies. The due date for GSTR-5 is the 20th of the following month.
  9. 5. GSTR-6: This return is filed by Input Service Distributors (ISDs) and contains details of input tax credit received and distributed. The due date for GSTR-6 is the 13th of the following month.
  11. 6. GSTR-7: This return is filed by taxpayers who are required to deduct tax at source (TDS) and contains details of TDS deducted. The due date for GSTR-7 is the 10th of the following month.
  13. 7. GSTR-8: This return is filed by e-commerce operators who are required to collect tax at source (TCS) and contains details of TCS collected. The due date for GSTR-8 is the 10th of the following month.

It is important to note that the due dates may change from time to time, and taxpayers are advised to check the official GST portal for the latest updates. Additionally, late filing of GST returns may attract penalties and interest, and taxpayers should ensure timely compliance.

Late Fees Under GST

Under GST (Goods and Services Tax), late fees are charged for delay in filing of returns. The late fees for GST return filing depend on the type of return and the duration of the delay.

  1. 1. For GSTR-3B, the late fee is Rs. 50 per day for each day of delay (Rs. 20 per day for taxpayers having nil tax liability). The maximum late fee is capped at Rs. 5,000.
  3. 2. For GSTR-1, GSTR-5, and GSTR-5A, the late fee is Rs. 100 per day for each day of delay (Rs. 25 per day for taxpayers having nil tax liability). The maximum late fee is also capped at Rs. 5,000.
  5. 3. For GSTR-6, the late fee is Rs. 50 per day for each day of delay (Rs. 20 per day for taxpayers having nil tax liability). The maximum late fee is capped at Rs. 5,000.

It is important to note that the late fees for GST return filing are subject to change by the GST council. It is also important to file GST returns on time to avoid late fees and penalties.

Interest Under GST

In the context of the Goods and Services Tax (GST) system in India, interest is charged under certain circumstances. Here are some of the key points related to interest under GST:

  1. 1. Interest on late payment of tax: If a registered taxpayer fails to pay the GST liability within the due date, interest will be charged at a prescribed rate. The interest is calculated from the day after the due date till the date of actual payment.
  3. 2. Interest on claim of excess input tax credit: If a registered taxpayer claims excess input tax credit (ITC) in their GST returns, interest will be charged on the amount of excess credit claimed. The interest is calculated from the date of claiming excess ITC till the date of its reversal.
  5. 3. Interest on refund of excess tax paid: If a registered taxpayer has paid excess tax and claims a refund of the same, interest will be paid by the government on the amount of excess tax paid. The interest is calculated from the date of payment of excess tax till the date of its refund.
  7. 4. Interest on delayed refunds: If the government delays the refund of excess tax paid to a registered taxpayer beyond a prescribed time limit, interest will be paid by the government on the amount of delayed refund. The interest is calculated from the date after the expiry of the prescribed time limit till the date of refund.

The rate of interest for each of these scenarios is prescribed by the government and is subject to change from time to time. It is important for taxpayers to comply with the GST regulations and pay their taxes on time to avoid interest charges.

Note – This is an educational content and should not be treated as legal advice, kindly contact our team so that they can help you with exact solution.

What is due date for claiming ITC for FY 2021-22 ?

Vide Finance Act 2022 Government has amended Sec 16(4) of CGST Act 2017 and extended due date for claiming ITC to 30th November of next year.

⦁ However it is to be noted that, yet this amendment is not made effective by government.

⦁ Therefore as of now , kindly claim pending ITC of FY 2021-22 before due date of Sep 2022 return.

#gst #itc #gstreturn #gstitc #inputtaxcredit

Due to recent changes in ITC Table of GSTR 3B, additional details to be checked for the purpose of GSTR 3B –

1.    Details of Ineligible Credit – Ineligible ITC is now required to reversed from the gross ITC availed in GSTR 3B and therefore, the complete details of Ineligible ITC is required to be reported in GST return. Such Ineligible ITC should include the following details:
 
·      ITC not allowed as per section 17(5) of CGST Act
·      ITC not allowed on account of POS rules
·      ITC pertaining to the invoices which are pending for payment for more than 180 days to be counted from the date of invoice
 
2.    Details of ITC which was claimed inadvertently in the previous periods – It may include the following:
 
·      Ineligible ITC wrongly claimed earlier
·      ITC claimed twice and to be reversed now
·      ITC to be reversed due to other reasons

#gstreturn #gstindia #gstregistration #gst #gstlitigation #gstupdates

Penalty cannot be imposed for incorrect address in e-way bill

e-way bill

Penalty cannot be imposed for incorrect address mentioned in the e-way bill, unless an inquiry is made to ascertain whether there was any intent to evade tax in mentioning the wrong address: Madras High Court

Petitioner’s transporter, on being intercepted, was found to carry GST paid goods to the petitioner’s office at Jabalpur whereas e-way bill generated showed destination as Indore. The State Tax Officer invoking its power under sec. 68 r/w sec. 129 of CGST Act, levied tax as well as penalty. Petitioner challenged the order by way of appeal but the same was rejected. Being aggrieved, petitioner moved the High Court by way of Writ Petition.

Petitioner argued that due to inadvertence during generation of the e-way bill, a clerical error took place due to which the registered address of the petitioner at Indore was mentioned in the e-way bill instead of the address at Jabalpur.

Revenue argued that exemption from the rigour of sec. 129 can only be availed on arising of contingencies as enumerated in Clause 5 of Circular No. 64/38/2018-GST, dated 14-09-2018. One of the contingencies which may extend immunity from sec. 129 relates to error in address of the consignee to the extent of locality, provided that the other details of consignee are mentioned correctly. As such, the benefit of clause 5 of the said Circular is not available to the petitioner.

The HC observed that strictly going by the terminology used in the immunity provision under Clause 5 of the circular, the benefit flowing therefrom may not be available to the petitioner, but in penal provision such as sec. 129, the element of intention to evade tax must be present to sustain an order of penalty. To gather the intention of the petitioner an inquiry must be undertaken to ascertain whether the mistake was inadvertent with no element of malice or intention to evade tax. It does not appear that either the Taxing Authority or the appellate authority has undertaken the said exercise of to ascertain the real intent behind the act of petitioner to mention wrong address.

The HC, therefore, quashed the appellate order and directed the appellate authority to reconsider the appeal solely on the question of presence or absence of any malafide intention to evade tax on the part of the petitioner and pass appropriate orders within three months.

𝗜𝗺𝗽𝗼𝗿𝘁𝗮𝗻𝘁 𝘁𝗮𝗸𝗲𝗮𝘄𝗮𝘆𝘀:
1. Element of intention to evade tax must be present in order to sustain order of penalty.

2. An inquiry must be undertaken to ascertain intention of the taxpayer as to whether the mistake was inadvertent or with intent to evade tax.

3. Penalty is not automatic and should not ordinarily be imposed unless the party obligated either acted deliberately in defiance of law or is found to be guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not be imposed merely because it is lawful to do so as held by the Hon’ble Supreme Court in Hindustan Steel Ltd. 25 STC 211.

Maharashtra AAR – 18% GST payable on PV DC cables

GST

The Maharashtra Authority of Advance Ruling (AAR), consisting of Rajiv Magoo and T.R. Ramnani, has ruled that 18% GST is payable on PV DC cables.

The applicant is in the business of manufacturing and supplying solar cables, commonly known as photo-voltaic DC cables (PVDC cables) under various brand names. The cables are made from copper conductors with cross-linked polyolefin (XLPO) insulation and are used between solar modules and inverters in a photovoltaic system.

The applicant supplies cables to its customers for the commissioning and stationing of solar power generating systems (SPGS). The cables connect a solar panel or array with inverters only for the purpose of carrying electricity between solar panels and inverters. The cables are exclusively used by manufacturers of SPGS, Procurement, Construction Company (EPC Company), for setting up a solar power plant as inputs for transmitting direct current from a PV module in SPGS. The cables are specifically designed and tailor-made for solar power projects. Thus, the cables have restricted applications and are used in a photovoltaic system only for the generation and transmission of solar energy.

The applicant has sought an advance ruling on the issue in respect of GST rates on PV DC Cables manufactured and supplied by Leoni Cable Solutions (India) Pvt Ltd to its customers who are into the business of manufacturing solar power generating systems or EPC companies setting up a solar power plant.

The AAR noted that the PV DC cables manufactured and supplied by the applicant to its customers would be classified under Entry number 395 of Schedule III of Notification No. 1/2017-Central Tax (Rate) (as amended) dated June 28, 2017, and liable to GST at 18%.

Applicant’s Name: Leoni Cable Solutions (India) Pvt Ltd

Chartered Accountant in Pimpri Chinchwad

Contact us for Filing Income Tax Returns, GST Registration, GST Return, GST Annual Return, GST Litigation, Company Incorporation, ROC Returns, Tax Audit, Statutory Audit, Forensic Audit, etc.

No GST payable on fees collected towards the training of football, basketball, athletics, cricket, swimming, Karate, and dance: AAR

GST Update

The Maharashtra Authority of Advance Ruling (AAR) consisting of Rajib Magoo and T.R. Ramnani, has ruled that GST is not payable on fees collected towards training in respect of football, basketball, athletics, cricket, swimming, karate, and dance.

The association, M/s Navi Mumbai Sports Association, has constructed an international sports complex on land allotted by M/s CIDCO to it. The main aim and object of the association are to encourage and foster sports, and cultural and social activities. It also provides health and sports education.

The applicant association is regulated and managed by an elected body, i.e., the managing committee, which looks into the affairs of the association and makes policy decisions that aim at the promotion of sports, fellowship, and fitness for individuals, families, schools, institutions, and corporate bodies.

For the promotion of sports, annual camps are held to select talents and rigorous workouts are given to make them champions. Schools and colleges provide the association’s infrastructure for sports and competitions. For fellowship, it has affiliations with prestigious clubs across India and abroad for the benefit of its members. The sports complex is equipped with various facilities for achieving its objectives, which include indoor badminton, squash, table tennis courts, gym and health club, retiring rooms, football and cricket grounds, swimming pools, restaurants, conference halls, etc.

The applicant has sought an advance ruling on the issue of whether the amount collected by the applicant in respect of entrance/admission fees, which forms part of the corpus fund, annual subscription fees, and annual maintenance fees from its members is liable to GST.

Yet another issue raised was whether the amount/fees collected towards rendering training/coaching in recreational and sports activities are exempt from payment of GST under entry no.80 of notification 12/2017-CTR dated June 28, 2017.

As per Entry 80 of the notification 12/2017-CTR dated June 28, 2017, no GST is payable on the Services by way of training or coaching in recreational activities relating to arts or culture, or sports by charitable entities registered under section 12AA of the Income-tax Act.

The AAR observed that football, basketball, athletics, cricket, swimming, and karate are sports, and “dance” would be covered under the arts. However, physical fitness can not be considered a sport, art, or culture. Further, the term “summer coaching” is a general term that cannot cover sports, arts, or culture.

“We find that training and coaching in football, basketball, athletics, cricket, swimming, karate, and dance by the applicant would be covered under Entry No. 80 of notification 12/2017-CTR dated June 28, 2017, as amended, and “physical fitness” training and “summer coaching” are not covered under the said Entry No. 80 mentioned above.

Therefore, the benefit as per Entry No. 80 of notification 12/2017-CTR dated June 28, 2017, as amended will be available to the applicant only in respect of training and coaching in respect of football, basketball, athletics, cricket, swimming, karate, and Dance,” the AAR said.

Chartered Accountant In Pimpri Chinchwad

No sight of GST Appellate Tribunal after 5 years of Inception of GST

GST Appellate Tribunal

GST is in force for the last 5 years. Due to ambiguity in the law, various interpretation issues, and frequent amendments/circulars, there has been a substantial increase in litigation. Unfortunately, today after 5 years also there is no sight of the GST Appellate Tribunal. As we understand, the reason for non-constitution is the writ petition challenging the qualification and appointment of Members before High Courts. Even after various courts directed the GST Council and CBIC to form the same at the earliest except for some paper clarifications and instructions, the formation of the GST appellate Tribunal is in limbo.

So where does this leave an assessee?

Today, after an adverse adjudication and First Appellate order, the assessee has no option but to wait for the formation of the bench to file an appeal or file a writ petition in the High Court. This impacts his decision-making on the said issue. Further, as per the practice followed in erstwhile laws, if periodic SCN is issued there will be similar notices/demands for subsequent years as well. The worst scenario is where refunds are being rejected at both levels. In such a scenario, all subsequent refunds also stand rejected by the authorities, leading to a huge working capital blockage.

Further, in spite of full clarity that an appeal may be filed with GST appellate Tribunal within 3 months of its formation, there are state circulars that specify that “Recovery of dues after disposal of appeal After disposal of pending appeal u/s 107, if any demand is confirmed or appellate authority has created the additional demand then in such cases taxpayer shall submit a declaration in Annexure-I before the jurisdictional tax officer stating that he is proposing to file an appeal u/s 112(1) against the appeal order. If such declaration is not submitted within fifteen days from the communication of the said order, then it will be presumed that taxpayer is not willing to file an appeal against the order and recovery proceedings may be initiated as per the provisions of law.”

Is submission of such a declaration mandatory? Are we heading for a huge pile-up of cases like the erstwhile acts when CESTAT was fully operational?

Undue delay in setting up the GST appellate Tribunal is frustrating for the trade, and one must remember “Justice Delayed is Delayed Denied”

Hope the Appellate Tribunals are formed soon.

Chartered Accountant in Pimpri Chinchwad

GST on member’s contribution to Clubs/Associations

Finance Act, 2021, has introduced GST on all activities or transactions between members and respective clubs and associations. The said amendment is retrospective in nature and will be applicable from July 2017 (i.e. from the introduction of GST). The said amendment has arisen due to the judgment of the Honorable Supreme Court in the case of Calcutta Club Limited wherein it had been held that no service tax/VAT will be applicable on supplies made by club/associations to its members due to the principles of mutuality. Even under GST, there have been many Advance Rulings decisions wherein it has been held that transactions between members and clubs/associations will not be liable to GST. This amendment, therefore, nullifies all the judgments passed to date.

Is the said levy ultra vires and unsustainable as there is no provision in the Constitution to support the concept of deemed service? The legislative competence of Parliament to enact the said levy is derived from Article 246A of the Constitution of India. The substance of the said Article in respect of chargeability of goods and services tax is trade and commerce. It is also evident from the provision of Section 7(1)(a) which requires a supply of goods and services to be in the course of or in furtherance of business. However, by the impugned provision, the legislature has done away with the fundamental requirement of the supply of goods and services being in furtherance of or in the course of business. The impugned provision, therefore, appears inconsistent with the substratum of the CGST Act.

The amendment has far-reaching consequences on all associations which are formed to pool the receipts and incur common expenses. There is no element of service by such associations. Take, for example, a housing society or a club wherein members based on estimated expenditure contribute a sum periodically to incur common expenditure. Can it be said that the housing society is rendering services to members in the course of business? 

These associations/clubs are not-for-profit institutions and neither do they render commercial services to their members nor do they render services to outsiders for a fee. 

However, as of date–have to live with it.

Chartered Accountant in Pimpri Chinchwad.