GST WEEKLY UPDATE : 19/2021-22 (08.08.2021) by CA Vipul Khandar

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By CA Vipul Khandhar

  1. CBIC to resume Blocking of E-Way Bill generation facility from 15th Aug, 2021:
  • The Central Board of Indirect Taxes and Customs (CBIC) will resume the blocking of EWB generation facility on the EWB portal, for all the taxpayers from 15th August onwards.
  • The CBIC said that, As you might be aware that the facility of blocking E way bill generation had been temporarily suspended due to pandemic, in terms of Rule 138 E (a) and (b) of the CGST Rules, 2017, the E Way Bill generation facility of a person is liable to be restricted, in case the person fails to file their return in Form GSTR-3B / statement in CMP-08, for a consecutive period of two months / Quarters or more.
  • The CBIC has decided to resume the blocking of EWB generation facility on the EWB portal, for all the taxpayers in terms of Rule 138 E (a) and (b) of the CGST Rules, 2017, from 15th August onwards.
  • Thus, after 15th August 2021, the System will check the status of returns filed in Form GSTR-3B or the statements filed in Form GST CMP-08, and restrict the generation of EWB in case of :
  • Non filing of two or more returns in Form GSTR-3B for the months up to June, 2021 and
  • Non filing of 02 or more statements in Form GST CMP-08 for the quarters up to April to June, 2021
  • To avail continuous EWB generation facility on EWB Portal, you are therefore advised to file your pending GSTR 3B returns/ CMP-08 Statement immediately.
  1. CBIC enables functionality in GST Portal to modify Annual Aggregate Turnover where calculated wrongly:
  • The Central Board of Indirect Taxes and Customs (CBIC) has enabled the functionality in GST Portal to modify Annual Aggregate Turnover where taxpayers have calculated wrongly.
  • The Annual Aggregate Turnover (AATO) has been calculated based on the returns filed by the taxpayers. The detailed advisory on calculation methodology of AATO has been specified under the ‘Advisory’ hosted at Taxpayers’ Dashboard.
  • A functionality has been provided at the Common Portal to modify the AATO where taxpayers have reason to believe that the AATO has been calculated wrongly. In such cases, taxpayers may modify the Annual Aggregate Turnover (AATO).
  • In case such modification is made beyond a certain limit (as specified in the ‘Advisory’), the same shall be sent to the jurisdictional officer’s Dashboard for appropriate action, if required.

3.      GSTR-9 for FY 2020-21 now available on GST Portal:

The Goods and Services Tax Network (GSTN) has enabled annual return (GSTR-9) for the FY 2020-21 on the GST Portal for filing.

Important Points Relating to GSTR-9:

  1. GSTR-9 once filed cannot be revised.
  2. Computation of ITC has been made based on GSTR-1/IFF/GSTR-5 filed by your corresponding suppliers up to July 15, 2021.
  3. GSTR-1/IFF/GSTR-5 filed after the updation date will be covered in the next updation.
  4. Returns GSTR-1/IFF & GSTR-3B of the financial year should have been filed before filing GSTR-9.
  5. GSTR-9C shall be enabled on the dashboard post filing of GSTR-9
  6. No. of records either in Table-17 or Table-18 are more than 500 records per table, then offline tool shall be used for filing GSTR-9
  7. For FY 2020-21, Due Date for filing GSTR-9 & GSTR-9C is December 31, 2021
  1. CBIC Launches Compliance Information Portal (CIP):                                
  • CBIC launches Compliance Information Portal to provide free access to information on customs procedures, regulatory compliance
  • CBIC launches Compliance Information Portal to provide free access to information on customs procedures, regulatory compliance.
  • CIP is yet another facilitation tool developed by CBIC to empower our business as well as any interested person with up-to-date information on the legal and procedural requirements of Customs and Partner Government Agencies (FSSAI, AQIS, PQIS, Drug Controller etc.) for carrying out imports and exports.  The portal would provide at the click of a button complete knowledge of all import and export related requirements for all items covered under the Customs Tariff thereby improving the ease of doing cross border trade.
  1. Extension In the last date of exports/replenishment/imports/drawal of precious metal expiring between 01.02.2021 and 30.06.2021 by 6 months under HBP 2015-2020.                            

The DGFT issued Public Notice No. 20/2015-2020 dated August 06, 2021 for extension of the last date of exports/replenishment/imports/drawal of precious metal expiring between February 01, 2021 and June 30, 2021 by six months under Hand Book of Procedure ( “HBP” ) 2015-2020.

  1. Online Procedure for transfer of Advance/EPCG Authorisation from the earlier entity to the new entity:

The DGFT issued Trade Notice No. 14/2021-22 dated August 04, 2021 regarding online procedure for transfer of Advance Authorisation/EPCG Authorisation in case of amalgamation/de-merger/acquisition etc.

  1. No Ban On Import Of Toys:
  • Government is providing all round support to domestic toy industry by promoting Made in India toys; monitoring quality of toys; restricting imports of sub-standard and unsafe toys; promoting indigenous toy clusters; designing of toys based on Indian values, culture, and history; using toys as a learning resource and organizing hackathons and grand challenges for toy designing and manufacturing.
  • Under Scheme of Funds for Regeneration of Traditional Industries (SFURTI) of Ministry of Micro Small and Medium Enterprises, 14 clusters in different sectors like khadi, coir, handicraft, handloom, honey, agro and food processing, bamboo etc. have been set up with an outlay of Rs.4160.46 lakh benefitting 8839 artisans.
  • Government is supporting new models of innovation and financing through a number of schemes. Details of some specific schemes are as follows-

Details of Schemes of Ministry of Micro, Small & Medium Enterprises

(i) A Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship   (ASPIRE) for creating new jobs, promoting entrepreneurships, boost grassroots  economic development, facilitating innovative business solutions and promoting innovation to further   strengthen the competitiveness of the MSME sector.

(ii)    Micro and Small Enterprises- Cluster Development Programme (MSE- CDP) for  supporting the sustainability and growth of MSEs and building capacity of MSEs, creating/upgrading infrastructural facilities in the new/existing industrial areas   /clusters of MSEs and setting up of common facility centers.

(iii) Scheme of Fund for Regeneration of Traditional Industries (SFURTI) for facilitating infrastructure creation for artisans and enterprises and thus creating a conducive   ecosystem for entrepreneurship.

(iv) Prime Minister Employment Generation Programme (PMEGP) scheme for generating employment opportunities in rural as well as urban areas of the country through setting up of new self-employment ventures/projects micro enterprises.

(v) Credit Linked Capital Subsidy and Technology Upgradation Scheme (CLCS- TUS) for promoting adoption of latest technologies in manufacturing as well as knowledge based innovation.

  1. Recent AAR & Judicial Decisions:-

(i) Decision Of Supreme Court Regarding Sanction Of IGST Refund:

A two-judge bench of the Supreme Court has upheld the decision of the Gujarat High Court where the High Court directed the Goods and Service Tax Authorities to immediately sanction refund towards IGST paid in respect to goods exported made via shipping bills. Earlier, the claim of the petitioners was rejected by the department rejected under Section­ 54 of the Central Goods and Service Tax Act, 2017 read with Section­16 of the Integrated Goods and Service Tax Act, 2017 on the ground that they claimed higher duty drawback. Aggrieved, the petitioners approached the High Court to sanction the refund of Integrated Goods and Service Tax (IGST) paid in respect of the goods exported i.e. ‘Zero Rated Supplies’ vide the shipping Bill. As provided in Rule­96 of the CGST Rules, 2017, the shipping bill filed by an exporter of goods shall be deemed to be an application for refund of the Integrated Tax paid on the goods exported out of India and such application shall be deemed to have been filed only when the person in charge of conveyance carrying the export goods duly files an export manifest or an export report covering the number and the date of shipping bills or bills of export and the applicant has furnished a valid return in the Form – GSTR­3 or Form GSTR­3B. The division bench of the High Court while allowing the refunds said that if the refund of the principal amount is not sanctioned and actually paid to the writ applicant within the period of six weeks from the date of the receipt of this order, then interest would start accumulating at the rate of 9% and the amount shall be paid. Upholding the High Court order, Justice D Y Chandrachud and Justice M R Shah held that “there is a clear finding of fact which has been recorded by the Division Bench of the High Court of Gujarat in its order dated 15 December 2020 that the respondent had claimed an IGST export refund only to the extent of the customs component. We see no error in the finding of the High Court.”

(ii) AAR On IIM, Tiruchirappalli is a Government Entity Under GST Law:

(Applicant – Indian Institute of Management, Tiruchirapalli)

The Indian Institute of Management, Tiruchirappalli (IIM) is a Government Entity Under GST Law.

The applicant is liable to deduct tax at source (TDS) under Section 51 of the CGST Act, 2017 read with Notification No.50/2018 dt. 13.09.2018.

The applicant is required to discharge Liability on reverse charge basis on supply of services as per Section 9(3) of the CGST Act, 2017, in respect of Legal services received by them for which documentary evidence was submitted.

(iii) AAR On GST on Drilling of Borewells for supply of water for agricultural operations:

(Applicant – Tvl. Vallalar Borewells)

The Tamil Nadu Appellate Authority of Advance Ruling (AAAR) ruled that the Drilling of Borewells for the Supply of Water in Agriculture Land is not a ‘Support Service for Agriculture’. The Appellant, Tvl. Vallalar Borewells has stated that they are engaged in the activity of drilling borewell service to agriculturists. Water is a prime source for the agriculture of crops. Likewise, compressors which are let out by them to agriculturists enable the motor to function and discharge water as required for cultivation and allied agricultural uses. They also obtain a confirmation letter from the agriculturist that the borewell drilled in their land is used only for agricultural purposes. The appellant sought the advance ruling on the issue of whether the supply of service provided by the appellant is in relation to agricultural operations directly in connection with raising of agricultural produce Drilling of Borewells for the supply of water for agricultural operations like cultivation including seeding, planting and ploughing, and Letting out compressors for pumping of water from the borewells to the agricultural fields. The AAR ruled that a compressor is not agricultural machinery and is a General-Purpose Machinery. Also, the only provision of agricultural machinery with crew and operators is stated as ‘Support service for agriculture. Therefore, letting out of the same is also not a ‘Support service for agriculture’ classifiable under SAC 9986 and the applicant is not eligible for exemption. The main argument of the appellant regarding the activity undertaken is by way of agricultural operations relating to the production of any agricultural produce, etc., prima facie, in the scheme of things of GST, no two classifications can be adopted for a single activity based on end-use or where it is rendered, etc. The appellant himself has already classified his supply of services of borewell drilling under 9954 for the purpose of paying the tax; it defies logic as well as the law that the same activity if done on agricultural land will be classifiable under a different heading 9986. The two members consisting of M.A. Siddique and G.V. Krishna Rao said “we do not find any reason to interfere with the order of the Advance Ruling Authority in this matter.”

 

(iv) Hon’ble Madras High Court Decision Regarding No interest on reversal of wrongful availment of credit:

(Applicant – M/s F1 Components Pvt. Ltd.)

The Hon’ble Madras High Court in the case of M/s F1 Components Pvt. Ltd. v. The State Tax Officer, Chennai [W.P. No.6631 of 2021 And WMP No. 7188 of 2021, dated July 09, 2021] partly set aside the order passed by the Revenue Department to the extent that interest on remittances by way of adjustment of electronic credit register is not leviable, in a matter challenging levy of interest under Section 50 of the Central Goods and Services Tax Act, 2017 ( “the CGST Act” ) on reversal of wrongly availed Input Tax Credit ( “ITC” ) and upheld the levy of interest on the belated cash remittance. Held that, the interest on cash remittances is compulsory and mandatory. Further held that, in a case where the claim of ITC by an assessee is erroneous, then the question of Section 42 of the CGST Act does not arise at all, since it is not the case of mismatch, one of wrongful claim of 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 an eminent Chartered Accountant practicing at Ahmedabad)

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