GST WEEKLY UPDATE : 17/2022-23 (24.07.2022) By Vipul Khandhar

By CA Vipul Khandhar

1. GSTN issued advisory on Upcoming Changes in Table 4 of Form GSTR-3B:

• The taxpayers to report information on ITC correctly availed, reversal thereof and declaring ineligible ITC in Table 4 of GSTR-3B:
• The notified changes in Table 4 of GSTR-3B are being implemented on the GST Portal and will be available shortly. Until these changes are implemented on the GST Portal, taxpayers are advised to continue to report their ITC availment, reversal of ITC and ineligible ITC as per the current practice.

2.    Directorate General of Analytics and Risk Management authorised to withheld the IGST refund for verification purposes:

The CBIC vide Order No. 01/2022-GST dated July 21, 2022 has authorised the Principal Director General/ Director General of Directorate General of Analytics and  Risk Management (“DGARM”), to withheld the refund of Integrated tax paid on goods or services exported out of India under Rule  96(4)(c) of the Central Goods and Services Tax Rules, 2017 (“the CGST Rules”), where on the basis of data analysis and risk parameters, they are of the opinion that verification of credentials of the exporter, including the availment of Input Tax Credit by the exporter, is considered essential before grant of refund, in order to safeguard the interest of revenue. 

3. GSTN portal update 3.1.1 in GSTR-3B for reporting supplies u/s 9(5):

According to section 9(5) of CGST Act, 2017, Electronic Commerce Operator (ECO) is required to pay tax on supply of certain services:

• Passenger Transport Service,
• Accommodation services,
• Housekeeping Services & Restaurant Services,

if such services are supplied through ECO. For reporting of such supplies a new Table 3.1.1 is being added in GSTR-3B, wherein both ECOs and registered persons can report their supplies made under section 9(5) respectively.

4. GST System Update: GSTN Implements Mandatory mentioning of HSN codes in GSTR-1:

• The GSTN has updated its system to implement mandatory mentioning of HSN codes in GSTR-1. it is mandatory for the taxpayers to report minimum 4 digits or 6 digits of HSN Code in Table-12 of GSTR-1 on the basis of their Aggregate Annual Turnover (AATO) in the preceding Financial Year.
• The taxpayers with AATO of up-to 5 crores are required to mandatorily report 2-digit HSN codes for goods & services. Manual user entry is allowed for entering HSN or description and warning or alert message shall be shown in case of manual HSN. However, taxpayers will be able to file GSTR-1 after manual entry.
• For taxpayers with AATO more than 5 crores, it was stated that the taxpayers are required to mandatorily report 4-digit HSN codes for goods & services. Manual user entry is allowed for entering HSN or description and warning or alert message shall be shown in case of incorrect HSN code. However, taxpayers will be able to file GSTR-1 after manual entry.

5. CBIC Notifies Fly ash bricks to attract same concessional rate irrespective of Fly ash content

• The Central Board of Indirect Taxes and Custom(CBIC) vide Notification No. 10/2022-Central Tax (Rate) dated 13th July 2022 Notifies Fly ash bricks to attract same concessional rate irrespective of Fly ash content.
• In the said notification, in Table, against Sl. No. 1, for the entry in column (3), the entry “Fly ash bricks; Fly ash aggregates; Fly ash blocks” shall be substituted.
• This notification shall come into force on the 18th July, 2022.

6. AAR & Judicial Decisions:

(i) Supreme Court Orders to Open GST portal to Claim Transitional Credit for Two Months in the case of Brand Equity Treaties Limited:

The Supreme Court has ordered to open the GST system, enabling taxpayers under the GST regime to claim transitional credit for two months.

Those registered taxpayers who are qualified to receive a credit in the Electronic Cash Ledger for eligible duties and taxes previously paid on inputs under the pre-GST regime must file the Transition Form 2, or TRAN-2.

1. From 1 September 2022 to 30 October 2022, the GST portal will be available for all assesses to claim transitional credit. The benefit must be made available to all assesses in order for them to receive it, whether or not they have petitioned for it.
2. The GSTN shall ensure that there are no technical difficulties during this period, as the majority of petitions and taxpayers missed the deadline owing to delays in filing returns as a result of technical difficulties.

After the filing is complete, the officers will have 90 days to review the credit claim’s merits and issue the necessary orders. This must be done in accordance with the principles of natural justice and the assessee’s right to a hearing. Credit will then appear in the electronic credit ledger.

(ii) AAR On ‘Ber Berry’ classifiable under chapter heading 2008:

(Applicant – Italian Edibles Pvt. Ltd)

We observe that the chapter 8 is covered either fresh fruit or fruit cooked by steaming/boiling in water only whereas the process of the applicant is more than the process covered under chapter 0811. In the applicants case, after the product soaked in hot water, transferred to steamed jacketed tank where it is cooked with steam and at this stage other ingredients i..e. sugar salt, preservative and some spices are added. The process of manufacture of product of the Applicant is not simple to cover in the chapter 0811. The process of the applicant is preparation of fruit which contained preservative and other ingredients i.e. sugar, salt and some spices also. We find that as per the ingredients and process for manufacture of product in question given by the Applicant, the said product is not covered under the chapter 0811 and rightly classified/covered under the chapter heading number 2008 of the tariff.

We observe that the order No.01/AAAR/17/19/2018 passed by the Appellate Authority for Advance ruling, UP in case of Harith Budhraja (M/s Bharat Agro) is not applicable as in the instant case, the process of manufacture and ingredient of product i.e.”Bery Berry” is entirely different. The other referred judicial decisions is also not applicable in this case.

In view of above, we find that the product “Ber Berry”, is rightly classifiable under the chapter heading 2008.

(iii) AAR On 5% GST payable on administering of COVID-19 vaccination by hospitals

(Applicant – Krishna Institute of Medical Sciences Limited)

AAR held that administering of COVID-19 vaccination by hospitals is a Composite supply, wherein the principal supply is the ‘sale of vaccine’ and the auxiliary supply is the service of ‘administering the vaccine’ and the total transaction is taxable at the rate of principal supply i.e, 5%.

It is a Composite supply, wherein the principal supply is the ‘sale of vaccine’ and the auxiliary supply is the service of ‘administering the vaccine’ and the total transaction is taxable at the rate of principal supply i.e, 5%.

Administering of COVID-19 Vaccine by clinical establishments (Hospitals) is not qualified as “Health care services” as per Notification No. 12/2017 Central Tax Rate dated 28.06.2017
Administering of COVID-19 vaccination by clinical establishment is not exempt under GST 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.

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