GST WEEKLY UPDATE : 16/2023-24 (16.07.2023) By CA Vipul Khandhar

-By CA Vipul Khandhar,

1. 2 Factor Authentication for all the taxpayers with AATO above 100cr extended till July 31, 2023:

• To enhance the security of e-Way Bill/e-Invoice System, NIC is introducing 2- Factor Authentication for logging in to e-Way Bill/e-Invoice system. In addition to username and password, OTP will also be authenticated for login.
• The GST E-way bill system issued an Update dated July 14, 2023related to extended 2 Factor Authentication for all taxpayers with AATO above 100 crore till July 31, 2023.

2      Recommendations of 50^th GST Council Meeting:

• Transporters will not be required to file declaration for paying GST under forward charge every year. Such GTA can opt for RCM in any subsequent FY before 31st March of FY.
• No RCM on services supplied by a director of a company to the company in his private or personal capacity such as supplying services by way of renting of immovable property to the company
• Relief for taxpayer, Govt extended the special procedure regarding mismatch in ITC availed in GSTR-3B and 2A for two more years i.e 2019-20, 2020-21 & upto 31.12.2021.

In line with the recommendations made by the GST Council during its 48th meeting, Circular No. 183/15/2022-GST dated December 27, 2022. This circular outlined the procedure for verifying input tax credit discrepancies between the Input Tax Credit claimed in FORM GSTR-3B and the available credit as per FORM GSTR-2A for the financial years 2017-18 and 2018-19.

To provide further relief to taxpayers, the Council has recommended the issuance of another circular. This circular will establish a similar procedure for verifying input tax credit discrepancies between the credit availed in FORM GSTR-3B and the available credit as per FORM GSTR-2A during the period from 01.04.2019 to 31.12.2021.

• Amnesty schemes notified vide notifications dated 31.03.2023 regarding non-filers of FORM GSTR-4, FORM GSTR-9 & FORM GSTR-10 returns, revocation of cancellation of registration extended till 31.08.2023

The GST Council has recommended an extension of the previously notified amnesty schemes, as outlined in the notifications dated 31.03.2023. These schemes pertain to non-filers of FORM GSTR-4, FORM GSTR-9, and FORM GSTR-10 returns, as well as revocation of cancellation of registration and deemed withdrawal of assessment orders issued under Section 62 of the CGST Act, 2017. The new deadline for availing the benefits of these amnesty schemes is now set as 31.08.2023.

• To do away with the requirement that the physical verification of business premises is to be conducted in the presence of the applicant
• To provide for physical verification in high risk cases even where Aadhaar has been authenticated.

• System-based intimation to the taxpayers in respect of the excess availment of ITC in FORM GSTR-3B vis a vis that made available in FORM GSTR-2B

• Supply of food and beverages in cinema halls is taxable at 5%:

– Supply of food and beverages in cinema halls is taxable at 5% without ITC when supplied independently

– If sale of cinema ticket and supply of food and beverages clubbed together then gst rate of cinema ticket will apply being a composite supply

• 28% GST on the value of the chips purchased in casinos

• 28% GST on the full value of the bets placed in Online Gaming.

• GST Appellate tribunal will be started in a phased manner.

• Relaxations provided in FY 2021-22 in respect of various tables of FORM GSTR-9 and FORM GSTR-9C be continued for FY 2022-23.

The Council has recommended that the relaxations provided in FY 2021-22 in respect of various tables of FORM GSTR-9 and FORM GSTR-9C be continued for FY 2022-23. Further, for easing compliance burden on smaller taxpayers, exemption from filing of annual return (in FORM GSTR-9/9A) for taxpayers having aggregate annual turnover upto two crore rupees, to be continued for FY 2022-23 also.

• No GSTR-9 for turnover upto 2 crores for the financial year 2022-2023.

• Input Services Distributor (ISD) mechanism is not mandatory for distribution of input tax credit of common input services procured from third parties to the distinct persons as per the present provisions of GST law. Amendment may be made in GST law to make ISD mechanism mandatory prospectively.

The Council has recommended to clarify through a circular that Input Services Distributor (ISD) mechanism is not mandatory for distribution of input tax credit of common input services procured from third parties to the distinct persons as per the present provisions of GST law, and also to clarify issues regarding taxability of internally generated services provided by one distinct person to another distinct person. The Council has also recommended that amendment may be made in GST law to make ISD mechanism mandatory prospectively for distribution of input tax credit of such common input services procured from third parties.

• Detailed Circular to be issued to provide clarity on liability to reverse input tax credit in cases involving warranty replacement of parts and repair services during warranty period

Circular to be issued to provide clarity on various issues pertaining to the GST liability as well as the liability to reverse input tax credit in cases involving warranty replacement of parts and repair services during warranty period without any consideration from the customers, clarifying inter alia that no GST is chargeable by the manufacturer on such replacement of parts and/ or repair service and also, no reversal of input tax credit is required to be made by the manufacturer.

• Refund of accumulated input tax credit (ITC) to be restricted to ITC appearing in FORM GSTR-2B.

• Only Name of state on tax invoice, not the name and full address of the recipient, in cases of supply of taxable services by or through an ECO.
• To ease the compliance burden of the taxpayers, clause (f) of rule 46 of CGST Rules, 2017 to amended to provide for the requirement of only the name of the State of the recipient, and not the name and full address of the recipient, on the tax invoice in cases of supply of taxable services by or through an ECO or by a supplier of OIDAR services to an unregistered recipient.

• Special Procedure for Manual Filing of Appeal for TRAN-1/TRAN-2 Claims

A special procedure is proposed under Section 148 of the CGST Act, 2017, enabling the manual filing of appeals against orders issued by proper officers concerning the TRAN-1/TRAN-2 claims of registered individuals. This procedure is being implemented in compliance with the directives of the Hon’ble Supreme Court in the case of the Union of India v/s Filco Trade Centre Pvt. Ltd.

• Proposed Amendments in GST Law:
• Section 123 of Finance Act, 2021 which amends section 16 of IGST Act, 2017 to be notified w.e.f. October 01, 2023

• Amendment in CGST Rules to strengthen the registration process:

Amendment in rule 10A to provide that the details of the bank account and PAN of the registered person, within 30 days of grant of registration or before filing GSTR-1/ IFF, whichever is earlier 

Amendment in rule 21A(2A) to provide for system-based suspension of the registration in respect of such registered persons who do not furnish the details of valid bank account under rule 10A with the time period prescribed under the said rule.

Insertion of 3rd proviso in rule 21A(4) to provide for automatic revocation of such system-based suspension upon compliance with provisions of rule 10A. 

Amendment in rule 59(6) to provide that where a registered person has not furnished details of a valid bank account under rule 10A, the said registered person may not be allowed to file GSTR-1/ IFF. 

Amendment in rule 9 and rule 25 to do away with the requirement that the physical verification of business premises is to be conducted in the presence of the applicant and also to provide for physical verification in high risk cases even where Aadhaar has been authenticated.

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 Charterd Accountant practicing at Ahmedabad)