GST WEEKLY UPDATE :08/2024-25 (26.05.2024) By CA Vipul Khandhar

-By CA Vipul Khandhar

1. Chhattisgarh GST Department issued Instructions dated April 16, 2024 regarding ASMT 10 and other GST related issues:

In various representations received by this office and in the meetings held with GST stakeholders, the following facts have been brought to light regarding scrutiny of returns under GST: –

1. Information letters (ASMT-10) are being issued by the appropriate authorities in almost all the cases of scrutiny.
2. Officials are issuing information sheets without scrutinizing the statements.
3. Too much and inconsistent information is being sought in the information letter issued (ASMT-10).
4. Demand letter (DRC-07) is being issued without considering the facts/information given in the reply (ASMT-11) submitted by the taxpayer.
5. More than one newsletter is being issued for the same period and on the same topic/issue.

It has been stated that as per scrutiny provisions that while scrutinizing the returns, the officers should examine the reports received from various sources like GST BO Portal, GST Prime, etc. and the information available in GSTR-9C (Reconciliation Statement). Notice ASMT-10 is to be issued only when discrepancy is found and not in all cases. Instructions to this effect have also been given in paragraph 6.3 of the instruction number 81/2022 dated November 30, 2022 issued by this office.

Therefore, officers are expected to issue ASMT-10 only in those cases in which they have sufficient grounds for discrepancies and revenue is involved and should also avoid asking unnecessary information or documents from the taxpayer in ASMT-10 and ask only such documents or information. Go, which is relevant to the case. Before issuing the order in the sequence of scrutiny of returns, the response submitted by the taxpayer (ASMT-11) should be taken into consideration and the fact must be mentioned in the order on which grounds the ASMT-11 is being rejected by him. That is, there should be order speaking. Issuing unilateral orders is expected to be avoided as much as possible.

Issue of more than one notice on the same subject and for the same period the cases should be brought to the notice of the Joint Commissioner of State Tax and after legal notice apart from this, all other notices should be canceled and informed to the concerned taxpayer.

Special Commissioners/Joint Commissioners of State Tax in charge of Divisions are required to regularly examine the orders passed by their subordinate officers and ensure compliance with the provisions laid down in the Act and Rules.

If there is any difficulty in following these instructions or any legal error is noticed, this office should be informed. Besides, feedback on following the instructions should also be taken in the meetings organized in coordination with EODB. These instructions cannot be used in interpreting the Act and rules under any circumstances.

2. The Tamil Nadu GST Department issued SOP for the new dealer registration welcome process (vide Circular No. 4/2024 (PP2/GST-15/29/2024) dated May 20, 2024):

Under the erstwhile TNGST Act, 1959, and TNVAT Act, 2006, the registration certificate of newly registered dealers was sent by Registered Post with Acknowledgement Due (RPAD). This communication served as a welcome bondage between the department and dealer. The acknowledgement received from Postal Department was also a proof of existence of business. However, with the introduction of online facility for registration under Total Solution Project (TSP) and TNGST Act, 2017, the communication of hard copy is not in practice and the proof of existence of place of business is available through physical verification only.

Further, the importance of eradicating the non-existent taxpayers and bill traders is emphasized in various forums and review meetings. It is felt that, the RPAD services could be effectively used for such verification in the initial stage. In order to welcome the newly registered taxpayer as a goodwill measure and also to prevent the proliferation of bill traders and nipping them in bud, the following Standard Operating Procedure, is prescribed to be followed by the field formations.

Action to be initiated by the Joint Commissioners

2. Once the registration task is approved by the Registering authority, a task will be created in the login of the jurisdictional Territorial Joint Commissioner in the TSP 2.0 Portal. The Joint Commissioners can download the draft ‘Welcome letter’ from the Portal. The bilingual format of ‘Welcome letter’ is enclosed in Annexure.
3. The Joint Commissioners shall send the signed bilingual ‘Welcome letter’ to all the newly registered taxpayers through Registered Post with Acknowledgement Due (RPAD). The Reference number (RFN) and date of dispatch shall be entered in the TSP Portal.

iii. Once the ‘Welcome letter’ is delivered, the date of delivery as per Acknowledgement shall be entered by the Joint Commissioners in the Portal and action is deemed to be completed. If the letter is undelivered, the date of return by post shall be entered by the Joint Commissioners in the Portal and the task shall be forwarded immediately to the Registering authority for further action.

Follow-up action by the Registering authority

1. A task shall be created in the login of the Registering authority in respect of those cases in which the ‘Welcome letter’ was not delivered/returned by post.
2. Based on the above preliminary verification, the registering authorities shall issue a Show Cause Notice (SCN) to the taxpayer in GSTN backoffice system. The ARN, date and SCN shall be uploaded in the TSP 2.0 Portal. The Registering authority shall conduct immediate physical verification of place of business for existence of taxpayer and upload the physical verification report in FORM GST REG-30.

iii. Based on the reply received from the taxpayer for the SCN issued and physical verification report, the Registering authority may either drop or cancel the registration of taxpayer in the GST Portal.

The workflow in the system for above procedure and MIS report including the action taken on the cancellation initiated cases will be provided by Additional Commissioner (System) to all the Joint Commissioners.

All Joint Commissioners are instructed to implement the above ‘Welcome letter’ procedure seamlessly to create a meaningful relationship with taxpayer and monitor the follow up action by Registering authorities closely to prevent the non-existent registered taxpayers from misusing the GST system.

3. The new registration application between 25/05/2024 to 31/05/2024 has been assigned to State GST office for process vide letter F. No. GSTN/PMO/CBIC/ 2023 dated May 22, 2024 due to the Migration of CBIC to GSTN Back Office.

GSTN is happy to inform you that from 1 of June 2024, CBIC will also be moving to GSTN Back Office.

As we all are aware that during migration process, new registration applications are either marked for ‘deemed approval’ or are assigned to counterpart tax administration. In CBIC’s case, it has been chosen that all new registration application during the period 25th of May to 31st of May 2024 will be assigned to concerned States. Thus, State tax administration would feel surge of applications in fresh registration cases by way of extra registration application coming to them during the said period.

These taxpayers will remain assigned to States in future too and hence the preparations needed, if any to handle the extra load may be made at your State level. This is for information and necessary action please.

4. AAR & Important Judgements:

(i) AAR On Ancillary services viz., packing, loading, unloading and unpacking provided by the assessee along with the main supply of Goods transportation would be covered under the ambit of GTA service:

(Applicant – DRS Dilip Road lines Limited)

The Telangana, AAR in TSAAR Order No.07/2024, held as under:

Observed that, Entry No. 9(iii) of Notification No. 11/2017-Central Tax (Rate), dated June 28, 2017 enumerates GTA as: “(iii) (a) Services of goods transport agency (GTA) in relation to transportation of goods (including used household goods for personal use) supplied by a GTA…”.

Explanation.- for the purpose of this notification,- “goods transport agency” means ,-any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called.

Noted that, the entry in the notification enumerates ‘Services in relation’ to transport of goods by road. Thus all services rendered in relation to transportation of goods fall under this entry provided that such services have a direct and immediate link with the agreement for transport of goods i.e., the contract shall be for transport, packing, loading, unloading and unpacking of the same goods.

Ruled that, the ancillary services provided by the Applicant viz., transport, packing, loading, unloading of the same goods to their customers are covered under the category of GTA services.

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 endeavor 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.

(The author is well known Chartered Accountant practicing at Ahmedabad)