GST WEEKLY UPDATE :38/2024-25 (22.12.2024) By CA Vipul Khandhar
-By CA Vipul Khandhar
- Advisory on Updates to E-Way Bill and E-Invoice Systems:
- GSTN is pleased to announce that NIC will be rolling out updated versions of the E-Way Bill and E-Invoice Systems effective from 1st January 2025. These updates are aimed at enhancing the security of the portals, in line with best practices and government guidelines.
- Multi-Factor Authentication (MFA):
One of the key changes involves the implementation of Multi-Factor Authentication (MFA). Currently, MFA, which requires login using a username, password, and OTP (sent to the registered mobile number, Sandes app, or similar platforms), is mandatory for taxpayers with an Annual Aggregate Turnover (AATO) exceeding Rs 100 Crores since 20th August 2023 and optional for those with AATO exceeding Rs 20 Crores since 11th September 2023.
- a) Starting 1st January 2025, MFA will become mandatory for taxpayers with AATO exceeding Rs 20 Crores, from 1st February 2025for those with AATO exceeding Rs 5 Crores, and from 1st April 2025for all other taxpayers and users.
- b) Taxpayers are encouraged to activate and start using MFA immediately, and detailed instructions are available on the E-Invoice and E-Way Bill portals. It is advised to ensure that the registered mobile number is updated with your GSTIN.
- Restricting the period of EWB generation from the date of base document:
The generation of E-Way Bills will be restricted to documents dated within 180 days from the date of generation. For instance, documents dated earlier than 5th July 2024 will not be eligible for E-Way Bill generation starting 1st January 2025.
- Restricting the extension of EWB for specific time/period from the eWB generation date:
Furthermore, the extension of E-Way Bills will be limited to 360 days from their original date of generation. For example, an E-Way Bill generated on 1st January 2025 can only be extended up to 25th December 2025.
Taxpayers are requested to familiarize themselves with these updates and incorporate the necessary adjustments into their compliance processes. For additional details, please visit the respective portals.
- Advisory for Entry of RR No./eT-RRs in EWB system Post EWB-FOIS Integration:
Subject: Guidance for Accurate Entry of RR No./eT-RRs following the Integration of E-Way Bill (EWB) with Freight Operation Information System (FOIS) system of Indian Railways.
This advisory is being issued to inform you that the FOIS of Indian Railways has now been integrated with the E-Way Bill (EWB) system via Application Programming Interfaces (APIs).
In light of this, it is important that taxpayers follow the correct process for entering RR no (Railway Receipt Number)/eT-RRs. into the EWB system. Adherence to the guidelines below will help avoid any potential discrepancies or mismatches.
- Applicability of RR No./eT-RRs Entry in the EWB System
Taxpayers transporting goods via the Indian Railways FOIS must ensure the correct entry of the number or RR No./eT-RRs in the EWB system. The format for entering RR No./eT-RRs has been standardized to ensure consistency and accuracy.
- Updating Part-B of EWB for Rail Transportation
- a) Suppliers with a pre-existing E-Way Bill (EWB) for goods transported from the factory to the railway station, and who are subsequently transporting goods by rail under the FOIS, must follow these steps:
- Update Part-Bof the E-Way Bill using the “Multi-Transport Mode” option on the EWB portal.
- In the updated section, select Railas the mode of transport..
After selecting this option, the system will prompt you to enter the corresponding RR No./eT-RRs
- RR Number/eT-RRs for FOIS
For goods transported via the Freight Operations Information System (FOIS) the RR number shall be entered in the following format in the EWB system.
Format: F<FromStationCode><RR No>
For eg: If the goods are dispatched from the station SJWT and RR no. is 123456789 then the same needs to be entered as FSJWT123456789
- EWB and RR No./eT-RRs Validation
After entering the RR No./eT-RRs into the EWB system:
- a) The EWB system will validate the RR No./eT-RRsagainst the data received from the FOIS.
- b) If a mismatch is detected or the RR No./eT-RRsis not found in the database, an alert will be generated. Thus it is strongly advised that taxpayers ensure the correct entry of RR No./eT-RRsto avoid future discrepancies
- Importance of Accurate Entry
It is crucial for taxpayers to ensure that the RR number/eT-RRs is entered correctly in the EWB system to allow smooth tracking and verification of goods being transported via Indian Railways. Accurate entry will also facilitate the validation process and avoid unnecessary delays or complications.
- Assistance and Clarifications
For further assistance or if there are any discrepancies in entering RR No./eT-RRs taxpayers are encouraged to raise a ticket with the support team, clearly mentioning the RR No./eT-RRs.
The customers who are transporting goods using Railway FOIS system shall adhere to the guidelines issued by Indian Railways for e-Demand customers.
Recommendations of 55th GST Council Meeting:
Sponsorship Services provided by Body Corporates will come under Forward Charge Mechanism (instead of RCM).
Composition taxpayers are not required to pay GST under RCM in case of taking commercial property on rent from Unregistered Persons.
All Sale of Old Motor Vehicles (any cc/length/fuel type) will now be charged @ 18% on the ‘margin’ amount.
GST will not be applicable on ‘penal charges’ levied by Banks/NBFCs for non-compliance of loan terms.
Goods warehoused at SEZ, supplied directly to other person before clearance, will not be treated as Supply (like in High Seas Sales).
ITC will be available and allowed to the recipient on the goods delivered/ Installed by Supplier at ‘Supplier’s Premises’ (e.g. Tools in Automobile Industry).
Late fees in case of Delay in filing of GSTR-9C from 17-18 to 22-23 is capped upto the amount of late fees payable till delayed filing of GSTR-9. If late fees has been paid at the time of delayed filing of GSTR-9 or else GSTR-9 is filed within the due date, no Late Fees will be levied on filing of GSTR-9C provided same is filed upto 31.03.2025.
Under Blocked Credit Section 17(5), the phrase ‘Plant or Machinery’ will be replaced to ‘Plant and Machinery’ to deny ITC in respect of ‘Building’ which was considered as ‘Plant’ by a Supreme Court Judgement. It will be a retrospective amendment from 01.07.2017.
Pre-Deposit to file an appeal with Appellate Authority/ Tribunal (where case involves only Penalty) has been reduced to 10%.
ISD mechanism to include Inter-State RCM supplies and the same will also be governed by ISD distribution mechanism.
Legal Framework will be given for generation of GSTR-2B based on Taxpayer’s action in IMS.
Amendment will be made in law to specifically require the reversal of ITC by recipient if a ‘Credit Note’ is issued by the Supplier. This will enable the supplier in reduction of Outward tax liability validated with IMS mechanism.
Amendment will be made in law to provide that GSTR-3B can be filed ONLY AFTER generation of GSTR-2B for the relevant period.
Tax Rate Changes:
GST rate increased to 28% on luxury items like:
– Wristwatches (above ₹25,000)
– Shoes (above ₹15,000)
– Premium garments (above ₹10,000)
GST rate changes on:
– Unpackaged popcorn: 5%
– Pre-packaged popcorn: 12%
– Caramel-coated popcorn: 18%
– Fortified Rice Kernels: 5% (reduced from 18%)
– ACC Blocks: 12% (reduced from 18%)
– Used Cars and EVs: 18% (increased from 12%)
Exemptions and Reliefs:
GST exemptions granted on:
– Gene Therapy
– Surface-to-Air Missiles
– Compensation cess reduced to 0.1% for Merchant Exporters
– GST exemption approved for Skilled Training Partners
– Payment Aggregators: transactions below ₹2,000 eligible for GST exemptions
Deferred Decisions:
Decisions on GST for Health Insurance and Aviation Turbine Fuel (ATF) deferred
Decision on imposing GST on Quick Commerce and Food Delivery Apps deferred
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 taxation