GST WEEKLY UPDATE :28/2024-25 (13.10.2024) By CA Vipul Khandhar

-By CA Vipul Khandhar

1. GST Portal Breaking News:

Amendment in Rule 61(5) – Adjustment of negative liability of previous tax period has been now implemented into Form GSTR-3B with effective from September 2024 (was notified vide N. No.: 12/2024–Central Tax dated 10 July 2024)

2. New GST amnesty scheme notified: Waiver of interest and penalty on GST tax demand for eligible taxpayers to be effective from November 1, 2024:

Waiver of GST tax demand interest and penalty:

The Ministry of Finance has notified the rules and conditions to follow if you need to use 128A for waiver of your GST tax demand notice’s interest and penalty component. Do note that this new section 128A will only apply on section 73 non-fraud GST demand notices.

ELIGIBLE TAX PAYER SCHEME:

Who has been in receipt of demand notices under section 73 relating to FY 2017-19 to 2019-20 & agreed to pay the tax demand amount.

Condition:

The eligible assesesee have to make the payments vide Form DRC 03 until March 31, 2025 and upload the stipulated Forms until June 30, 2025.

Eligibility and application process

Taxpayers eligible for this waiver must apply through specific forms by the required deadlines:

• Form GST SPL-01: For notices or statements under section 128A, providing details of the notice and tax payments made.
• Form GST SPL-02: For orders under the same section, again detailing payments and relevant orders.

Applications must be submitted online, and taxpayers should ensure that payments are made via the electronic liability register before submitting these forms. Proper filing is essential to avoid further complications or rejections. Tax payments should be completed by March 31, 2025, with forms uploaded by June 30, 2025.

Steps and compliance

1. Ensure full tax payment before submitting the waiver forms.
2. Submit the correct form depending on whether you received a notice or an order.
3. If an appeal or writ has been filed, proof of withdrawal must accompany the application.
4. The assigned officer will review the application and approve or reject it within a set period.

Waiver coverage

• The scheme waives off interest and penalties for specified GST demand notices, but tax liabilities must still be paid in full.
• The waiver only applies to non-fraudulent cases where GST demand was raised for mistakes or discrepancies in returns for the mentioned fiscal years.

Eligibility

• Taxpayers who have been assessed under Section 73 (pertaining to non-fraudulent cases) and are issued demand notices for the periods FY 2017-18 to 2019-20.
• The scheme covers the waiver of interest and penalties arising between July 1, 2017, and March 31, 2020.
• The scheme is not applicable to taxpayers involved in fraudulent activities or those issued notices under Section 74 (related to fraud cases).

Forms and deadlines

• Form GST SPL-01 is used to apply for the waiver in cases where a notice has been issued.
• Form GST SPL-02 is for cases where an order has been passed.
• The tax payments related to these demands must be made by March 31, 2025, and the corresponding forms must be submitted by June 30, 2025.

Officer review 

• The GST officer will review the application and, if satisfied, approve the waiver.

In case of any discrepancies or missing information, the application can be rejected, and the taxpayer may need to provide additional documentation or corrections.

3. Summary of notification changes:

Notification No. 21/2024-Central Tax: Notification specifies deadlines by which tax payments must be made in order to avail of the waiver of interest, penalty, or both u/s 128A: 

For waiving of interest penalties on demand notices issued under Section 73 of the GST Act for fiscal years 2017-18, 2018-19, and 2019-20.

Vide this Notification CBIC notifies dates up to which tax should be paid for waiver of interest/penalties under section 128A of CGST Act 2017. The Notification shall be effective from 01.11.2024.

• Registered persons who have received notices or statements or orders referred to in clause (a), (b), or (c) of Section 128A of the CGST Act – Last date is 31.03.2025.
• Registered persons who have received a notice u/s 74 in respect of the period mentioned in Section 128A(1) (For some specific cases) – 6 months from the date of redetermination order.

Notification No. 22/2024-Central Tax: Special procedure for rectification of certain specified orders issued under sections 73, 74, 107 or 108 of CGST Act: The procedure applies to registered persons against whom an order has been issued confirming a demand for wrongful availment of input tax credit (ITC) in violation of Section 16(4). In other words, case where ITC initially disallowed, is now available under Section 16(5) or Section 16(6), and the person has not filed an appeal against the original order.

Notification No. 23/2024-Central Tax: Waiver of late fees for FORM GSTR-7 (TDS return) u/s 51 from June 2021 onwards: The Notification shall be effective from 01.11.2024.: CBIC provides for the waiver of late fees under Section 47 of the CGST Act for registered persons required to deduct TDS for delays in filing FORM GSTR-7 returns, for the month of June 2021 onwards if they exceed twenty-five rupees for every day of delay. The total late fee payable under Section 47 for failure to file FORM GSTR-7 by the due date is capped at one thousand rupees.

1. Notification No.25/2024-Central Tax

The Government has issued notification no.25/2024 – Central Tax on 9^th October, 2024 wherein under section 51 of CGST Act, 2017 mandating compliance by the businesses dealing with metal scrap. The GST portal will soon be updated to enable compliance of registration through Form GST REG-07 by these category of registered persons. 

1. Notifications relating to Rate of Goods and Services 
2. Notification No. 05/2024-Central Tax (Rate): To notify change in rate of Goods 
3. Cancer drugs such as Trastuzumab Deruxtecan, Osimertinib, and Durvalumab providing relief to patients – 5% (2.5% CGST + 5% SGST) (Earlier rate 12%)
4. Extruded or expanded savoury snacks, classified under HS 1905 90 30 – 12% (6% CGST + 6% SGST) (Earlier rate 18%).
5. Car and Motorcycle Seats: The GST rate for car seats, classified under HS 9401 – 28% (14% CGST + 14% SGST) (Earlier rate 18%).

The Notification shall be effective from 10.10.2024.

1. Notification No. 07/2024-Central Tax (Rate): To notify change in rate of services – Transport of passengers by helicopters

Vide this Notification CBIC notified GST rate for transportation of passengers by helicopters services on sharing basis to be 5% (2.5% CGST + 2.5% SGST) 

Provided input tax charged on goods used in supplying the service has not been taken. The Notification shall be effective from 10.10.2024.

III. Notification No. 08/2024-Central Tax (Rate): To notify services exempted from GST

1. Application fees/ Connection rental charges for electricity connection: Supply of services such as application fees for providing electricity connection, rental charges against electricity meter, testing fees for meters/ transformers/capacitors, labour charges from customers for shifting of meters/service lines, charges for duplicate bills etc. which are incidental, ancillary or integral to the supply of transmission and distribution of electricity by transmission and distribution utilities to their consumers, when  provided as a composite supply.
2. Research and development grants from private or public sector to recognised educational institutions: R&D grant to three categories of research institution, college or university will be exempted from GST. These include recognition under State laws, Central Laws or one which has got exemption under Income Tax. The exemption will be available to both government as well as private institutions and there will be no threshold. Now, “past demands to be regularised on ‘as is where is’ basis.

The Notification shall be effective from 10.10.2024.

1. Import of services by foreign airline companies: Vide Notification No. 08/2024- Integrated Tax (Rate), CBIC exempted Import of services by an establishment of a foreign airlines company from a related person or any of its establishment outside India, when made without consideration.

This GST exemption is applicable provided that:

• Indian establishment of the foreign airline company is required to pay GST at the applicable rates on the transport of goods and passengers, as per the GST law
• Certification is obtained from the Ministry of Civil Aviation
• Reciprocal treatment is confirmed, ensuring that Indian airlines are not subject to similar taxes by the foreign country for identical services

1. Notification relating to Reverse Charge Mechanism (RCM)

Notification No. 06/2024- Central Tax (Rate): Supply of metal scrap by an unregistered person to a registered person 

CBIC amended the earlier notification No. 4/2017-Central Tax (Rate) from June 28, 2017 by adding a new entry No.8 to the table in the original notification, after S. No. 7. This brings the metal scraps of the Chapters 72, 73, 74, 75, 76, 77, 78, 79, 80 or 81 under its ambit. CBIC has notified effective date to be 10.10.2024.

Notification No. 09/2024- Central Tax (Rate): Service related to renting of any property other than residential dwelling

CBIC notified the effective date as 10.10.2024, to be date from which Supply of Service related to renting of any property other than residential dwelling by any unregistered person to any registered person, brought under Reverse Charge Mechanism 

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 on direct and Indirect Taxes)