GST WEEKLY UPDATE :34/2024-25 (24.11.2024) BY CA VIPUL KHANDHAR

BY CA VIPUL KHANDHAR

• Advisory for Reporting TDS Deducted by scrap Dealers in October 2024:

1. As per Notification No. 25/2024-Central Tax, effective from 10.10.2024, any registered person receiving supplies of metal scrap classified under Chapters 72 to 81 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), from another registered person, is required to deduct TDS under Section 51 of the CGST Act, 2017.
2. In this regard various tickets have been received on the issue that taxpayers are unable to report TDS deducted in the month October 2024 as they are not able to file return for the month of October 2024. This issue has occurred because while the taxpayers applied for GST registration in October 2024 pursuant to the above notification, their GST registrations were approved only in November 2024. Hence, in the return dropdown the month October 2024 is not visible to such taxpayers. This is as per the existing GSTN system design where returns for tax period prior to registration month is not enabled for taxpayers.
3. However, to resolve the issue, taxpayers who were granted registration in November 2024, but deducted TDS in October 2024, are hereby advised to report the consolidated amount of TDS deducted for the period from 10.10.2024 to 30.11.2024 in the GSTR-7 return to be filed for the month November 2024.

Advisory for Biometric-Based Aadhaar Authentication and Document Verification for GST Registration Applicants of Madhya Pradesh:

This is to inform taxpayers about recent developments concerning the application process for GST registration. It is advised to keep the following key points in mind during the registration process.

1.   Rule 8 of the CGST Rules, 2017 has been amended to provide that an applicant can be identified on the common portal, based on data analysis and risk parameters for Biometric-based Aadhaar Authentication and taking a photograph of the applicant along with the verification of the original copy of the documents uploaded with the application.
2.   The above-said functionality has been developed by GSTN. It has been rolled out in Madhya Pradesh on 27th November 2024.
3.   The said functionality also provides for the document verification and appointment booking process. After the submission of the application in Form GST REG-01, the applicant will receive either of the following links in the e-mail,

(a)   A Link for OTP-based Aadhaar Authentication OR

(b)   A link for booking an appointment with a message to visit a GST Suvidha Kendra (GSK) along with the details of the GSK and jurisdiction, for Biometric-based Aadhaar Authentication and document verification (the intimation e-mail)

4.   If the applicant receives the link for OTP-based Aadhaar Authentication as mentioned in point 3(a), she/he can proceed with the application as per the existing process.
5.   However, if the applicant receives the link as mentioned in point 3(b), she/he will be required to book the appointment to visit the designated GSK, using the link provided in the e-mail.
6.   The feature of booking an appointment to visit a designated GSK is now available for the applicants of Madhya Pradesh.
7.   After booking the appointment, the applicant gets the confirmation of appointment through e-mail (the appointment confirmation e-mail), she/he will be able to visit the designated GSK as per the chosen schedule.
8.   At the time of the visit of GSK, the applicant is required to carry the following details/documents

(a)   a copy (hard/soft) of the appointment confirmation e-mail

(b)   the details of jurisdiction as mentioned in the intimation e-mail

(c)   Aadhaar Card and PAN Card (Original Copies)

(d)   the original documents that were uploaded with the application, as communicated by the intimation e-mail.

9.   The biometric authentication and document verification will be done at the GSK, for all the required individuals as per the GST application Form REG-01.
10.   The applicant is required to choose an appointment for the biometric verification during the maximum permissible period for the application as indicated in the intimation e-mail. In such cases, ARNs will be generated once the Biometric-based Aadhaar Authentication process and document verification are completed.
11.   The operation days and hours of GSKs will be as per the guidelines provided by the administration in your state.

3. Advisory: Authorised e-Invoice Verification Apps:

1. GSTN has prepared a consolidated document on authorized B2B e-Invoice verification apps available for download. The said document would serve as a reference to ensure that taxpayers have the most up-to-date information regarding approved B2B e-Invoice verification apps.
2. Taxpayers could access and download the PDF document by clicking on the link below:

https://tutorial.gst.gov.in/downloads/news/authosied_e_invoice_verification_apps.pdf

Glossary on e-Invoicing

‘e-Invoicing’ means reporting details of specified GST documents to a Government-notified portal i.e., Invoice Registration Portal (IRP) and obtaining an Invoice Reference Number (IRN). It doesn’t mean the generation of invoices by a Government portal.

• IRP (Invoice Registration Portal): It is a government approved platform where notified persons upload or report Currently, six portals are authorised to generate IRN on reporting of invoices as per Rule 48(4) of the CGST Rules. Reporting invoices and generating Invoice Reference Numbers (IRN) on any of these portals is free of charge.
• IRN (Invoice Reference Number): The unique identifier for every invoice reported on an It is based on the computation of a hash of the supplier’s GSTIN, the financial year, the document type, and the document number.
• AATO (Annual Aggregate Turnover): AATO (Annual Aggregate Turnover) for e-Invoicing is calculated based on the PAN of a taxpayer and the information provided in their GSTR-3B It represents the total turnover of the taxpayer during a financial year and is used to determine the applicability of e-Invoice reporting requirements.
• Enablement: The process of registering and enabling a taxpayer for e-Invoicing on the GST portal, allowing them to report e-Invoices on any of the six Taxpayers are automatically enabled for e-Invoicing based on AATO but if not enabled they need to be self-enabled on the portal (https://einvoice.gst.gov.in).
• GSTIN (Goods and Services Tax Identification Number): A unique identification number assigned to each registered taxpayer under the GST
• GSTR-1: A monthly or quarterly return that taxpayers need to file, which contains details of outward supplies, including e-Invoice
• Debit Note: A debit note is a document issued by a seller to notify the buyer of an increase in the quantity and/or value/taxes of a previously issued invoice. It serves as an instrument to adjust for errors, sales returns or any other similar
• Credit Note: A credit note, on the other hand, is issued by a seller to inform the buyer about a reduction in the quantity and / or value/taxes of a previously issued This decrease can occur due to factors like discounts, rebates, or overpayments etc.
• e-Invoice QR Code: A type of two-dimensional barcode that can be read by a digital device and provides information about the invoice. The QR code generated for e-Invoicing includes parameters such as the supplier’s GSTIN, the recipient’s GSTIN, invoice number, date of generation of the invoice, invoice value, IRN, .
• GSTN e-Services App: The mobile application designed to enhance the verification process for B2B e-invoices. It allows users to easily verify e-Invoices by scanning the QR code, providing key details of the invoice and the live status of the IRN, whether active or cancelled. The app also enables users to search for registered business details using GSTIN or PAN and view their return filing history, and the return filing status of the
• e-Invoice FO (Front Office) Portal: The official web portal provided by GSTN where taxpayers can access various e-Invoice-related functionalities, including enablement status, e-Invoice generation, and searching for IRNs. It also provides links to all six IRPs, e-Invoice schema, master codes, enablement status, search IRN functionality, (Link https://einvoice.gst.gov.in )
• JSON Format: JSON (JavaScript Object Notation) is a standard data interchange For e-Invoicing, the invoice data must be uploaded in a predefined schema INV- 01 in JSON format.
• API for e-Invoice Reporting: IRPs offer API-based functionality for reporting e-Invoices. API (Application Programming Interface) is a set of protocols for building and integrating software
• B2B Invoices: These are invoices issued in a business-to- business e-Invoicing requirements in India currently apply to B2B invoices for certain taxpayers, based on their annual turnover.
• ERP System: Enterprise Resource Planning (ERP) system is a type of software used by companies to manage their day- to-day business Taxpayers can continue to generate invoices from their current ERP system, but details of all such B2B invoices need to be uploaded or reported on an Invoice Registration Portal (IRP) in a notified format.
• OTP: One-Time Password (OTP) is a password that is valid for only one login session or During the registration process on an IRP, an OTP is sent to the registered mobile number for verification.
• Auto-population: This refers to the automatic filling in of data in a In the context of e-Invoicing, once an e-Invoice has been validated and has received an IRN, the data from the e-Invoice is auto-populated into the supplier’s GSTR-1 form in the GST system.
• e-Invoice schema: (INV-1 – Version 1) The e-Invoice schema is a predefined and standardised framework that defines the structure of the e-Invoice, including mandatory and optional fields, their format and rules for the generation of an e-Invoice.
• Master codes: Master codes refer to a set of pre-defined codes used in the e-Invoicing system, such as HSN codes, country codes, currency codes, state codes, and others.
• Signed e-Invoice: This refers to an e-Invoice that has been digitally signed by the Invoice Registration Portal (IRP) after The signed e-invoice is provided with a unique IRN and QR code.

4. AAR & Important Judgements:

(i) Hon’ble Kerala Highcourt Decision Regarding Proceedings U/S 73 Can’t Be Initiated For Splitting IGST Amount Towards CGST And SGST Through GSTR 3B:

The court has observed that there has been no wrong availment of credit, and that the only mistake committed by the appellant was an inadvertent and technical one, where he had omitted to mention the IGST figures separately in Form GSTR 3A. The mistake was also insignificant because it is not in dispute that there was no outward supply attracting IGST that was effected by him.

The bench while addressing the insecurity of the department that the State might be deprived of its legitimate share of the IGST paid by the suppliers outside the State, stated that on the respondent State producing a copy of the judgment, along with a representation before the GST Council, the GST Council shall issue necessary directions to resolve the issue by taking note of the declaration in this judgment.

The appellant runs a proprietorship concern with the name and style ‘Padiken Silks’, and is a registered dealer on the rolls of the 5th respondent for the purposes of payment of GST. During the assessment year 2017-2018, and in particular, during the period from July 2017 to March 2018, the appellant received various inward supplies of goods, both inter-state and intrastate.

For the inter-state inward supplies, on which IGST (Integrated Goods and Services Tax) was paid by the supplier, the appellant had to avail input tax credit by resorting to a procedure whereby he had to show the IGST amount paid by the supplier, as the IGST paid by him in the Form GSTR 2A generated by him.

If there was no outward supply on which IGST had to be paid by him he had to show the same IGST amount as Credit available in the Form GSTR 3A and then split the IGST amount into the CGST (Central Goods and Services Tax) and SGST (State Goods and Services Tax) components in the said Form 3A before utilising the same for the purposes of payment of outward taxes.

However, on receipt of the IGST paid inward supplies from outside the State, the appellant, instead of showing the IGST component in the eligible credit details in Form GSTR-3B, inadvertently showed the IGST component as nil and added the bifurcated CGST and SGST components of IGST to the existing figures showing eligible CGST and SGST credit.

This resulted in a mismatch between Form GSTR 2A and Form GSTR 3B maintained in relation to the assessee. What is significant, however, is that it is undisputed that it was the amount shown as IGST in Form GSTR 2A that was split into the components of CGST and SGST and added to the corresponding columns in Form GSTR 3B.

The Assessing Authority noticed this mismatch and opined that this mismatch had resulted in the appellant utilising ‘unavailable credit’ towards payment of CGST and SGST on outward supplies. He therefore proceeded to issue a notice to the appellant demanding the return of the CGST/SGST amounts allegedly utilised in excess by the appellant.

The proceedings initiated through the notice culminated in order confirming the demand against the appellant.

It was order that was in the Writ Petition, on the contention that there had been no revenue loss involved in the exercise carried on by the appellant, and that there was no excess credit availed by the appellant.

The Single Judge, who considered the matter, noticed that the appellant had, by way of abundant caution, also sought a refund of the amounts demanded from him, from the credit that was available with the department consequent to the payment of IGST by the supplier outside the State. The Judge, therefore, merely directed the respondent to consider and pass orders on the refund application without actually pronouncing on the legality of the actions of the respondent.

The demand in order that was impugned in the Writ Petition was wholly unsustainable since there was admittedly no excess utilisation of credit since the appellant was entitled to take credit on the IGST paid on inter-state inward supplies.

The only mistake that was occasioned by the appellant was that he had not shown the IGST amounts separately in Form GSTR 3B against available credit and had resorted to an exercise of splitting the IGST amount towards CGST and SGST since he did not have any outward supply that attracted IGST.

The court held that the notice issued to the appellant, and the demand confirmed against him, were in proceedings initiated under Section 73 of the GST Act. The provisions are attracted only when it appears to a proper officer that any tax has not been paid or short paid or erroneously refunded, or where input tax has been wrongly availed or utilised for any reason. The case before us clearly reveals that there has been no wrong availment of credit, and that the only mistake committed by the appellant was an inadvertent and technical one, where he had omitted to mention the IGST figures separately in Form GSTR 3A.

The court held that the mistake was also insignificant because it is not in dispute that there was no outward supply attracting IGST that was effected by him. We therefore set aside the impugned judgment of the learned Single Judge and allow the Writ Petition by quashing order and declaring that the appellant shall not be seen as having availed excess credit for the purposes of initiating proceedings under Section 73 of the 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 in the fields of Direct and Indirect Tax)