GST WEEKLY UPDATE :22/2024-25 (01.09.2024) By CA Vipul Khandhar

-By CA Vipul Khandhar

1. From 1st September, many changes in the GST Act will take place that will impact your GST Returns filing!:

• Notification No. 12/2024 (10 July 2024): From September 2024, if a supply’s value is above Rs. 1 lakh, it must be reported in GSTR-1’s Table B2CL.

• Notification No. 12/2024 (10 July 2024): Taxpayers can now report negative liability in GSTR-3B’s Table No. 3. The negative liability will be automatically adjusted in the next month’s return, making the reconciliation process smoother.

• Blocking of GSTR-1 for Non-Furnishing of Bank Account Details: From 1st September 2024: If you haven’t added and validated your bank account details in your GST registration, your GSTR-1 /IFF will be blocked.

• GSTR-9 and GSTR-9C: Forms GSTR-9 (Annual Return) and GSTR-9C (Reconciliation Statement) will be active on the GST portal.

2. CBIC clarify that amended provision will notified after upcoming GST Council approval:

The Central Board of Indirect Taxes and Customs (CBIC) has clarified that the notification to bring into force the provisions of the Finance (No.2) Act, 2024 related to GST (including GST Amnesty and Section 16(4) Relief) will be issued only after the 54th GST Council Meeting.

The CBIC further explained that the notification will be issued by the Central Government based on the recommendations of the GST Council. This is necessary to ensure coordination with the states, as they are also required to make similar amendments to their respective SGST Acts. The GST Council is tentatively scheduled to meet on 9th September 2024, where this issue will be placed before the Council for its recommendations.

“The notification to bring into force the provisions of Finance Act in respect of GST is to be issued by the Central government  on the recommendations of the GST Council, as it would need to be done in coordination with the states, who are required to make similar amendments in their SGST Acts. GST Council is meeting tentatively on 9th September 2024, where the issue will be placed before the Council for its recommendations.”

3.    Implementation of automation in the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022 in respect of EOUs with effect from 01.09.2024:

The CBIC issued Circular No. 11/2024-Customs dated August 25, 2024 regarding the implementation of automation in the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022 in respect of EOUs with effect from 01.09.2024.

Reference is drawn to the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022 (hereinafter referred to as IGCRS Rules, 2022) notified vide Notification No.74/2022-Customs (N.T.) dated 09.09.2022.

Further, in terms of Notification No.52/2003-Customs dated 31.03.2003, as amended, EOUs shall follow the procedure prescribed under rule 5 of the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017, for import of goods. Accordingly, existing customs clearance processes for EOUs are to be replaced by IGCR procedures.

In this regard, reference is also drawn to the para 6.4 of the Circular No.04/2022-Customs dated 27.02.2022, wherein, it was stated that the system architecture with respect to above rule in respect of EOUs is under development. The same shall be implemented in due course. Till such date, EOUs may follow the existing procedure for import of goods in lieu of generating IGCR Identification Number (IIN) in the system.

Now, that, necessary developments have since been completed on the System to allow clearances to EOUs under IGCR, all EOUs would be required to obtain IGCR Identification Number (IIN) at ICEGATE portal, and also register their IGCR bond for filing a bill of entry with IGCR benefit. Once this module is activated, the same process would be used for clearances from SEZ to EOUs, as well.

It is decided to implement the automation in the IGCRS Rules, 2022, in respect of EOUs with effect from 01.09.2024. Accordingly, all EOUs may obtain IGCR Identification Number (IIN) at ICEGATE portal by registering immediately as the SEZ Unit becomes ICEGATE enabled.

Suitable Public Notices may please be issued to guide the trade/industry. The trade should be proactively assisted during the transition period keeping in view the resolve to provide an enabling environment for manufacturing. Standing Orders may be issued for the officers and staff. Difficulty, if any, faced in the implementation may be brought to the notice of Board immediately to the email of dircus@nic.in.

4. AAR & Important Judgements:

           (i) AAR On ITC can be claimed on contract staffing services for providing Information Technology Enabled Services:

           (Applicant – Access Healthcare Services Private Limited)

The Tamil Nadu Authority for Advance Rulings (AAR) in the case of Access Healthcare Services Private Limited (Advance Ruling No. 10/ARA/2024, dated May 30, 2024) ruled that Input Tax Credit (ITC) can be claimed on contract staffing services, provided the conditions under Section 16(1) of the Central Goods and Services Tax Act (CGST Act) are met. The applicant, engaged in providing Information Technology (IT) and IT-enabled services (ITeS) to the healthcare sector, faced challenges in sourcing and retaining suitable human resources due to a volatile job market. To address this, they considered hiring professional contract-staffing firms that would issue tax invoices with applicable GST. The AAR confirmed that the applicant fulfilled the requirements of Section 16(1) and Section 16(2) of the CGST Act, including possession of tax invoices, receipt of services, tax payment to the government, and filing of returns. Additionally, the AAR noted that ITC on contract staffing services is not restricted under Section 17(5) of the CGST Act, which specifies categories where ITC is unavailable. Since the services do not fall under any of the conditions in Section 17(5), the ITC on these services is not blocked. Thus, the applicant is eligible to avail ITC on contract staffing services as per Section 16(1) 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 at Ahmedabad on direct and indirect taxes)