GST WEEKLY UPDATE :10/2024-25 (09.06.2024) By CA Vipul Khandhar

-BY CA Vipul Khandhar

1. Filing of information by manufacturers of Pan Masala and Tobacco taxpayers dt. Jun 7th, 2024:

• Please refer to the notification Notification No. 04/2024 – Central Tax dated 05-01-2024 to seek information from taxpayers dealing in the goods mentioned therein. Two forms have been notified vide this notification namely GST SRM-I and GST SRM-II. The former pertains to the registration and disposal of machines while the latter asks for information on inputs and outputs during a month. Form GST SRM-I meant for registration of machines has already been made available on the portal w.e.f. 15-05-2024. Concerned taxpayers are using the same for the registration of machines and other information asked therein.

• Now, the second form namely, Form GST SRM-II is also available on the portal. Taxpayers dealing in the manufacture of Pan Masala and Tobacco products can now report the details of inputs and outputs procured and consumed for the relevant month.

According to an update from GSTN on June 7, “The second form, Form GST SRM-II, is now available on the portal. Taxpayers involved in the manufacture of Pan Masala and Tobacco products can report the details of inputs procured and outputs consumed for the relevant month.”

An expert highlighted that Form GST SRM-II mandates detailed monthly reporting of inputs and outputs. “This form aims to improve transparency and accountability in the manufacturing processes of Pan Masala and Tobacco products. Taxpayers must carefully document their procurement and consumption to prevent discrepancies and ensure accurate tax filings,” the expert explained. Taxpayers are encouraged to familiarize themselves with the instructions and details in these forms to ensure smooth compliance and avoid potential penalties.

The new procedures apply to manufacturers of pan-masala, unmanufactured tobacco (without lime tube) with or without a brand name, ‘Hookah’ or ‘gudaku’ tobacco, smoking mixtures for pipes and cigarettes, chewing tobacco (without lime tube), filter khaini, jarda scented tobacco, snuff, and branded or unbranded ‘Gutkha’. These manufacturers must electronically furnish the details of their packing machines in Form GST SRM-I within 30 days of the notification’s effective date, i.e., April 1, 2024. The input and output statement, GST SRM-II, must be filed by the 10th of the succeeding month.

2. Goa GST Department Issues Guidelines for Early Recovery Proceedings Before 3 Months from Demand Order Service Date:

The Goa GST Department issued Instructions vide No. CCT/26-2/GST Instructions/2024-25/849 dated June 03, 2024, prescribing guidelines for the initiation of recovery proceedings before 3 months from the date of service of the demand order. This is in reference to Instruction F. No. CBIC-20016/9/2024-GST/583 dated May 30, 2024, issued by the GST Policy Wing, Central Board of Indirect Taxes & Customs, Ministry of Finance, Department of Revenue, Government of India, New Delhi.

For the uniformity in implementation and in exercise of the powers conferred under Section 168 of the Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the said instructions No. CBIC-20016/9/2024-GST/583 dated May 30, 2024 issued by the GST Policy Wing, Central Board of Indirect Taxes & Customs, Ministry of Finance, Department of Revenue, Government of India shall be applicable, mutatis mutandis, in implementation of the Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) with following modifications.

1) In para 3.1, instead of Circular No. 3/3/2017-GST dated July 05, 2017, an Order No. CCT/ /26-2/2021-22/234 dated April 29, 2022 issued by Commissioner of State Tax, Goa published in Official Gazette, Series II No. 4, Extraordinary dated 29-04-2022 as amended from time to time shall be referred;

2) In para 3.2, instead of Jurisdictional Principal Commissioner/Commissioner of Central Tax the competent authority to examine the reasons/justification for initiating recovery before expiry of period of three months and to issue directions to the concerned taxable person to pay the demanded amount within period specified in the direction shall be the Commissioner of State Tax, Goa.

3. Important Update: GSTN Introduces Option to Choose Personal Hearing in GST DRC-01 Responses:

The GSTN has enabled a new feature allowing taxpayers to select ‘Yes’ or ‘No’ for a personal hearing while replying to GST DRC-01 on the GST Portal. Previously, the portal automatically selected the ‘No’ option for a personal hearing in GST DRC-01.

4. AAR & Important Judgements:

(i) The Hon’ble Calcutta High Court Decision Regarding No need of reversal of IGST credit wrongly claimed instead of cgst and sgst:

(Applicant – Cosyn Limited)

• Observed that, as per Section 18(a) of the IGST Act, on utilization of credit of integrated tax availed under IGST Act for payment Central Tax in accordance with Section 49(5) of CGST Act, the amount collected as integrated tax stands reduced by the amount equal to the credit utilized and the Central Government shall transfer an amount equal to the amount so reduced from integrated tax account to the central tax account.
• Directed that, the Respondent to refund the 10% pre-deposit made by the Petitioner pursuant to the Interim Order within 8 weeks from the date of receipt of the order.

Held that, the Impugned Order which was the subject matter of challenge in the writ petition no longer survives and was set aside. Hence, the appeal was allowed, the Order passed in the writ petition was set aside and the writ petition was allowed.

(ii) AAR On Whether SEZ UNIT is REQUIRED TO PAY GST UNDER RCM:

(Applicant – Waaree Energies Limited)

No liability on SEZ unit to pay Tax under RCM on the services of Goods Transport Agency, legal services, security services, and bus hiring services from DTA. – Gujarat AAR in case of Waaree Energies Limited

Applicant Arguments:

Section 7 of CGST Act read with Rule 5(5)(a) of the SEZ Act provides for exemption to all services procured by SEZ Unit / Developer from a DTA Unit. The applicant contended that the provisions of the SEZ Act would have overriding effect on provisions of any other act including taxation laws.

The applicant has also raised an alternative plea that even we assume that RCM notification is applicable to them then also option to furnish the LUT for the supplies made from DTA to SEZ.

Findings: AAR referred to the relevant provisions of the

SEZ Act and FAQ as provided in the 3rd Edition which states SEZ unit being considered as the deemed supplier liable to pay GST under RCM. Moreover, Notification No. 37/2017-CT states DTA can supply services to SEZ without payment of Tax subject to furnishing of LUT.

Ruling: The Authority relied on the facts as stated therein and similar judgement pronounced in the case of M/s. Portescap India Pvt. Ltd.; held that the applicant being an SEZ unit, is not required to pay GST under RCM on specified services in accordance with Notification No. 10/2017-IT subject to furnishing a LUT or bond as specified in Notification No. 37/2017.

(iii) The Hon’ble Highcourt Decision Regarding Maximum time limit to avail Input Tax Credit (ITC) for financial year2021-22 [ i.e. 30th November, 2022]

(Applicant – M. Trade Links)

In a recent landmark judgment, the Kerala High Court’s ruling in the case of M.Trade Links Vs Union Of India has significantly influenced the procedural aspects of Input Tax Credit (ITC) claims under the Goods and Services Tax (GST) regime in India. The court’s decision has far-reaching implications, particularly in streamlining the process of availing ITC and resolving bona fide claims and errors encountered during the initial rollout of GST.

Crux of the verdict:

The time limit for furnishing the return for the month of September is to be treated as 30th November in each financial year with retrospective effect from 01.07.2017, in respect of the petitioners who had filed their returns for the month of September on or before 30th November, and their claim for ITC should be processed, if they are otherwise eligible for ITC.

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 tax)