GST WEEKLY UPDATE : 21/2022-23 (21.08.2022) By CA Vipul Khandhar

By CA Vipul Khandhar

1. Govt issued Guidelines on issuance of summons by GST department:
   • Prior written permission from officer not below rank of DC/AC where summons issued by Superintendent.

• Reasons for issuance of summons to be recorded in writing
• Summons should be avoided to call statutory documents which are available at GST portal

• CMD/MD/CEO/CFO of a company/PSU should not be summoned in a first instance

• Officer should record appearance/non-appearance in file

• Summons should contain the name of offender against whom case is being investigated so that recipient has understanding whether he has been summoned as an accused, co-accused or as witness

• Summon should not contain the name of offender if it is detrimental to cause of investigation

• Repeated summons without ensuring service of previous summons must be avoided

• If person does not join investigation after repeated summons (3 summons) then a complaint should be filed before the magistrate u/s 172 & 174 of IPC 

2. GST Portal Update:

(A) Enabling CORE Amendment Link For Taxpayers who fail To Update Bank account:

If the taxpayers failed to update their bank account details on the GST Portal, within specified period, post grant of registration, they were previously barred from filing an application for core amendment in their Registration details. There could be scenarios, such as, updating bank account details through a non-core amendment, which would fail if their name were to be updated in CBDT database post grant of registration.

(B) Changes in HSN length validation in Form GSTR-1:

(i)           AATO based validation was implemented on the Portal to ensure that taxpayers with AATO of up to Rs 5 Crore had to report minimum 2 digit HSN and with more than Rs 5 Crore had to report minimum 4 digit HSN in Table 12 of GSTR-1.

(ii)         The minimum length of HSN to be entered in Table 12 of Form GSTR-1, for Taxpayers having AATO greater than Rs 5 Crore has been raised from 4 to 6 digits, for both online and offline mode, on the portal.

(C) HSN based validation implemented in Form GSTR-9:

It mandatory to report HSN at minimum of 4-digit level for taxpayers having turnover up to Rs 5 Crore and at 6-digit level for taxpayers having turnover more than Rs 5 Crore. Accordingly, a validation has been implemented on the Portal for taxpayers with AATO up to Rs 5 Crore and for taxpayers with AATO of Rs 5 Crore or more, to declare HSN at 4 digit or 6 digits respectively, in Table -17 of Form GSTR-9, for FY 2021-22.

(D) Generation of GSTR-11 based on GSTR-1 / 5 for UIN holders:

UIN holders file details of inward supplies in Form GSTR-11 on quarterly basis and subsequently claim refund for the relevant quarter through Form GST RFD-10. To facilitate UIN holder and to authenticate their refund claims, auto-population of Form GSTR-11, on basis of filed GSTR-1 / 5, had been enabled on the Portal earlier. In these fields, details of inward supplies received on RCM basis, from Form GSTR1/5 filed by suppliers, auto-populated in Form GSTR-11 of UIN, has been disabled on the Portal.

(E) Updation of Statistics on GST Portal

A statistical report on five years of GST has been made available on the GST Portal under Downloads > GST Statistics section

3. Electronic bill of lading to aid shippers, ease of doing business

India will be one of the first countries to use the paperless International Federation of Freight Forwarders Association (FIATA) multimodal bill of lading (eFBL), which is expected to promote ease of doing business by saving shippers time and money.

4. The Central Board of Indirect Taxes and Customs (CBIC) has streamlined monetary limits for arrest, prosecution and bail in respect of offenses committed under the Customs Act.

• Outright smuggling of high-value goods such as precious metals like gold and unauthorized import of goods – where the market value exceeds Rs 50 lakh – can trigger prosecution and arrest.
• Meanwhile, cases involving duty evasion and mis-declaration of goods worth Rs 2 crore or more will also face similar action.
• Similarly, if the amount of fraud or exemption from duty of drawback in respect of export of goods exceeds Rs 2 crore, it will also trigger arrest.

“While the Act (Customs) does not specify any value limit for exercising the powers of arrest, it is clarified that arrest in respect of an offense should be effective only in exceptional circumstances,” the CBIC spelled out the scenarios.

However, this limit of value will not apply to certain items, including ammunition and explosives, antiques, art treasures, wildlife and endangered species. “In such cases, if necessary, arrest may be contemplated on the basis of the facts and circumstances of the case, irrespective of the value of the incriminating material involved,” the CBIC note said.

Further, for cases involving non-declaration of foreign exchange of more than Rs 50 lakh by foreign nationals and Non-Resident Indians (NRIs) at the time of departure, prosecution should not be considered routinely. i.e. if it is claimed that it is legally acquired but not declared inadvertently.

5. AAR & Judicial Decisions:

(i) AAR On Income earned from providing guest lectures liable to 18% GST
(Applicant – Sairam Gopalkrishna Bhat)

Income earned from providing guest lectures will attract 18 per cent GST has ruled. The applicant, Sairam Gopalkrishna Bhat, had approached the Authority for Advance Ruling seeking clarity on whether the income earned from conducting guest lectures, amounts to or results to as supply of taxable services. While passing the ruling, the AAR said the said service falls under the category of other professional, technical and business services and does not fall under the exempted category of services. Hence, the said services provided by the applicant attract GST of 18 per cent, it said. The AAR ruling would mean that service professionals whose turnover exceeds Rs 20 lakh will have to pay 18 per cent goods and services tax (GST) on income earned from providing guest lectures.

(ii) No ITC on invoices raised for the past period as hit by Period of Limitation:

(Applicant – M/s. Vishnu Chemicals Limited)

The Applicant submitted that, for the period April 2018 to March 2019, issued a single tax invoice mentioning in the description as “Rental charges” for the month from April 2018 to March 2019 by showing rent month-wise for 12 months tax invoice dated April 1, 2020, the Applicant is entitled to claim ITC on or before filing the GSTR 3B for September 2021 or the date of filing of Annual Return for the year 2020-2021, whichever is earlier.

Issue:

• Whether the tax invoice dated April 1, 2020 issued by M/s UTPL for rental service for the year 2018-19 is hit by the limitation for claiming ITC under Section 16(4) of the CGST Act.

• Whether the tax invoice dated April 1, 2020 is eligible for ITC if claimed before filing GSTR 3B return for September 2021 or Annual return for the year 2020-21 in terms of Section 16(4) of the CGST Act.

Held:

The AAR Andhra Pradesh, in the matter of AAR No.21lAP/GST/ 2O21 dated July 20, 2021, held as under:

• Observed that, for any transaction, the tax invoice is the primary document evidencing the supply and vital for availing ITC. The tax invoice is issued by the Applicant on April 1, 2020 for the services supplied in the year 2018-2019.

• In the present case, it is evident that, the tax invoice has not been issued by the Applicant within a period of thirty days from the date of the supply of service.

Held that, the Applicant is not entitled to take ITC Under Section 16(4) of the CGST Act.

Disclaimer:

This publication contains information for general guidance only. It is not intended to address the circumstances of any particular individual or entity. Although the best of endeavour has been made to provide the provisions in a simpler and accurate form, there is no substitute to detailed research with regard to the specific situation of a particular individual or entity. We do not accept any responsibility for loss incurred by any person for acting or refraining to act as a result of any matter in this publication.

(Author is a well known Chartered Accountant practicing in the field of Direct and Indirect Taxes at Ahmedabad)