GST WEEKLY UPDATE : 20/2023-24 (13.08.2023) By CA Vipul Khandhar

-By CA Vipul Khandhar

1. Now sub-users can access e-Invoices generated by the main user and perform View/Cancel/Generate EWB:

• The GST, e-Invoice System updated that, now sub-users can access e-Invoices generated by the main user and perform View/Cancel/Generate EWB. The main user can select the Update Sub-user option as shown in the below screen. Select the sub-user from the list.

• A new option ‘Access to the IRNs of the Main User’ is provided. In case, the main user wants to give access to IRNs generated by him to the sub-user then he can select ‘Yes’ to this option. Note that along with this, one or all options such as Cancel, View report and e-Waybill generation need to be provided. For example, if Enable Access to IRNs of main user is selected as ‘Yes’ and Enable e-Invoice Cancellation is selected as Yes then sub-user can cancel the IRNs generated by Main user also.

• The 4 new IRPs are:

1. Cygnet-IRP – (https://einvoice3.gst.gov.in)

       2.Clear-IRP – (https://einvoice4.gst.gov.in)

       3.EY-IRP – (https://einvoice5.gst.gov.in)

       4.IRIS-IRP -(https://einvoice6.gst.gov.in)

2. Mismatch in GSTR-3B & GSTR2B compliance procedure & timeline:

• Rule 88D got introduced regarding input tax credit (ITC) reconciliation to address differences between ITC claimed in GSTR 3B and eligible ITC available in GSTR 2B.
• If the ITC claimed exceeds a specified amount and percentage over eligible ITC from GSTR 2B, differences will be intimated to the taxpayer in Form DRC 01C.

• Form GST DRC-01C:

Part A: The differences will be intimated in Part A of this form.

Part B: Taxpayer must provide a reply or clarification in Part B.

• When intimation regarding the differential input tax credit is received, then one of the following actions is required:

Option 1:  Pay the outstanding amount, along with the interest as per Section 50 of the GST Act via DRC 03.

Option 2: Partial payment for the difference, along with interest under Section 50, via DRC 03, along with reasons for the remaining amount

Option 3: Provide reasons for the entire excessively availed Input Tax Credit (ITC).

• Consequences:

74. Failure to respond within 7 days or if unsatisfactory reasons are given, may result in a demand under Section 73/74.
75. Failure to file Form GSTR-1 for the subsequent tax period (as per Rule 59(5)) will result in the following consequences:
76. Inability to file GSTR-3B for the subsequent tax period.
77. Inability to generate an e-way bill if GSTR-1 remains unfiled for two consecutive tax periods. 

3. E-way bill for intra-state movement of gold and precious stone:

• The Government of India, through notification No. 38/2023 dated 4th August 2023, has introduced *New Rule 138F, by allowing State governments to mandate e-way bills for intra-state movement of gold and precious stone.
• Key points

✔️ Minimum threshold: Rs 2lakhs

✔️ Part A is only required; Part B not required

✔️ Where the goods to be transported are supplied through an e-commerce operator or a courier agency, the information in Part A of FORM GST EWB-01 may be furnished by such e-commerce operator or courier agency

✔️ Where an e-way bill has been generated but goods are either not transported or are not transported as per the details furnished in the E-waybill, the e-way bill may be cancelled within twenty-four hours of generation of the e-way bill.

✔️ E-way bill cannot be cancelled if it has been verified in transit in accordance with the provisions of rule 138B.

4. CBIC notifies special procedure for E-commerce operators in respect of supply of goods by unregistered person vide not No. 37/2023 – Central Tax dated August 04, 2023, specifies special procedure for E-commerce operator – The Notification is effective from October 01, 2023):

• The unregistered person shall be allowed to supply goods only after allotment of enrolment number by common portal;

• E-commerce operator shall not allow inter-state supply of goods to unregistered person ;

• The E-commerce operator shall not collect any Tax at source (TCS) under Section 52 of CGST Act in relation to the supply of goods made through the unregistered person; and

• The E-commerce operator shall furnish all the details of supplies made through unregistered person in the statement in FORM GSTR-8 electronically on common portal.
• Further, it has been notified that where multiple E-commerce operators are involved in a single supply of goods through electronic commerce operator platform, “the electronic commerce operator” shall mean the electronic commerce operator who finally releases the payment to the unregistered supplier.

5. AAR & Important Judgements:

(i) Hon’ble Highcourt Decision Regarding Amount deposited through DRC-03 may not be treated as voluntary payment under section 74(5). Refund allowed on such deposit with interest:

(Applicant – Parshwanath Traders)

The respondents even did not issue any show cause notice and no order determining its tax liability had been passed by them. The petitioner made request in writing to the respondents to refund the amount of Rs.50,70,216/- (Rs.20.00,000+Rs.30,70,216) got deposited from it but the prayer made by the petitioner was rejected by order dated 18.05.2021.

The writ filed and prayer made by the petitioner for setting aside the order rejecting the request made by it for refund of the amount of Rs.50.70 lacs and also for further directing the respondents No.1 to refund the above said amount.

Relevant para of the judgement

Further, it is also the well-established that no collection of tax from an assessee can be insisted upon prior to final determination of liability being made. According to the revenue, with the inception of Section 74(5), the collection of amounts in advance has attained statutory sanction, provided the same are voluntary in form GST DRC-03. Now it is to be considered as to whether the deposit of sum Rs.50.70 lacs which was made by the petitioner during the course of investigation, is to be considered as voluntary deposit of amount which had allegedly been claimed by it by way of ITC on the basis of purchases made by it from M/S Royal which are alleged to be false purchases? According to the petitioner, since there was no assessment and even demand by way of issuance of show cause notice, the amount deposited by it could not be appropriated especially when it was not voluntary deposit. Interestingly, this petition is pending since the year 2021, admittedly no-show cause notice has been issued against the petitioner in accordance with Section 74(1) of the Act till date. As asserted by the revenue, the payments of Rs.50.70 lacs (Rs.20 lacs+Rs.30.70 lacs) as made by the petitioner on two different dates constituted ‘self ascertainment’ and triggered the provisions of Section 74(5) of the Act and were voluntary deposits. However, we are unable to accept this contention for the reasons that if that would have been actually the position, then the respondents must have contained material on record to show that the petitioner had in fact, accepted the ascertainment made by it and the revenue had applied its mind and arrived at the conclusion that ‘self ascertainment’ by the assessee was adequate/inadequate. The petitioner on the contrary is shown to have consistently contested its liability to make payment of the tax. The deposit of the aforementioned amount on the day of search and shortly thereof, when the proprietor of the petitioner was naturally under the stress of search/investigation does not amount to lead to ‘self assessment’ or ‘self ascertainment’. The ‘self ascertainment’ which is contemplated under Section 74(5) of the Act, 2017 is in the nature of ‘self assessment’ and amounts to a determination by it which is unconditional and not as in the present case when shortly after depositing the amount Rs.50.70 lacs, the petitioner approached the revenue for refund of the same. Such recovery is not permissible. In this regard, reliance can be placed upon in M/s Bhumi associate’s case (supra) wherein, it was observed that at the time of search/inspection proceedings under the provisions of Central/Gujarat Goods and Services Tax Act, 2017, no recovery in any mode by cheque, cash, e-payments or adjustment of ITC should be made.

The direction was given to refund amount 50.70 lakh with interest @ 6% per annum within a period 6 weeks of the date of order (judgement’s date).

(ii) AAR On Input Tax Credit On Inward Supply Of Motor Vehicle Used For Demonstration Purpose:

(Applicant – Sai Service Pvt Ltd)

If the applicant is making further supply of such vehicle is eligible for the ITC claimed.

If the applicant is retaining the vehicle for his workshop as replacement vehicle as mentioned in the sales policy of MSIL, he shall not be eligible for ITC as there is no further supply at his hands. Therefore, the ITC claimed by him has to be repaid in cash in view of the amended section 16(4) notified vide notification No. 18/2022, Central Tax dt.28.09.2022 w.e.f: 01.10.2022.

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 on taxation)