GST WEEKLY UPDATE : 37/2023-24 (DATED : 10.12.2023) BY CA Vipul Khandhar

By CA Vipul Khandhar 

1. Atleast 6 digit HSN will be mandatory in e-Invoices, for taxpayers whose AATO is 5Cr and above, from 15th of December 2023:

• GSTN integrated in Account Aggregators (AA) Ecosystem as a Financial Information Provider (FIP) :
• GSTN has been seamlessly integrated into the Account Aggregators (AA) Ecosystem as a Financial Information Provider (FIP). The said integration will enable taxpayers to access a holistic view of their financial data through the comprehensive services offered by Account Aggregators. Completed Returns Filed in the last 18 months for the following return types can be accessed:
• GSTR 1 (Table 4): Monthly or quarterly statement of all Outward Supplies to be furnished by all registered taxpayers
• GSTR 3B: Monthly or quarterly Self-declared summary GST Returns Data will be made available for a period of 18 months.
• GSTN’s role as an FIP to account aggregators is a significant development that enhances the availability and accessibility of financial data for individuals and businesses.

2. GSTN functionality on Address and Contacts of Promoters:

• GSTN portal has made available a new functionality on ‘Address and Contacts’ of pro-moters and authorized signatories of taxpayers. This has been made available under ‘my profile’ tab on the portal. Stakeholders can now take a look of names of all Promoters & Authorized signatories and their mobile / email / even address mentioned on the Goods and Services Tax Portal.
• Earlier, only Authorized person’s name / mobile / email were shown in the Portal. This enables knowing all information / details at one place.

3. Cabinet Approves Rs.2,500 Crore for Extension of Interest Equalisation Scheme on Export Credit:

Benefit shall be continued till June 30, 2024 to manufacturer and merchant exporters of the identified 410 tariff lines and to all manufacturer exporters from MSME sectors at rates as specified below:

• Availability of pre and post shipment packing credit at competitive rates is important for the exports sector in order to compete internationally. The effect of Interest Equalisation Scheme has been beneficial for the exports growth of the country as per the study conducted by IIM Kashipur. MSME sector is vital for employment generation. The scheme is primarily meant for the labour intensive sectors. The present proposal is meant for exports by merchants and manufacturer exporters of identified tariff lines and MSME Sector manufacturer exporters. Increase in exports from these employment intensive sectors and MSMEs would lead to generation of employment in the country.
• Benefits: The intended target beneficiaries include all MSME manufacturer exporters and non-MSME exporters of certain identified sectors belonging to 410 tariff lines at four digit level.
• The Scheme has now been made fund limited, and benefit to individual exporters has been capped at Rs 10 Cr per annum per IEC (Import Export Code). In addition, the banks that lend to exporters at an average rate of more than Repo + 4% would be debarred under the Scheme.

4. AAR & Important Judgements:

(i) AAR On Airbus supply, support services by Tata to draw 5% GST:

The Gujarat Authority for Advance Ruling (AAR) has ruled that the contract between Airbus and Tata Group’s company for the supply of aircraft to the defence ministry is a “composite supply”, and would attract 5 per cent goods and services tax (GST).

Under the terms of the contract, 16 of the 56 aircraft will be supplied by Airbus from Spain to the defence ministry in a fly-away condition.

For the remaining 40 aircraft, it entered into a contract with Tata Consultancy Services (TCS) for the manufacture and supply.

In turn, TCS entered into a contract with group company Tata Advanced Systems, which was also responsible for the support services, including maintenance services of the aircraft.

Tata Advanced Systems approached the AAR to know if GST is applicable on the supply of the aircraft.

The company contended that the supply of aircraft and support services are bundled together and hence it should draw 5 per cent GST.

The AAR ruled in favour of the company, saying it would come under the “composite supply” and draw five per cent GST.

 The AAR held that supply of aircraft and provision of support services “are naturally bundled and supplied in conjunction with each other in ordinary course of business”.

(ii) AAR On GST not leviable on sale of unbranded/non packaged broken rice:

      (Applicant – Mr. Tamal Kundu)

In a significant ruling, the Authority for Advance Ruling (AAR) in West Bengal, responding to an application by Mr. Tamal Kundu, has clarified the GST status of unbranded and non-packaged Broken Rice. The decision, dated September 13, 2023, brings clarity to the taxation of Broken Rice under the provisions of Notification No. 07/2022-Central Tax (Rate) and related guidelines.

The AAR, West Bengal, in the case of In Re: Tamal Kundu[WBAAR 18 of 2023 dated September 13, 2023],  held that as per Notification No.  07/2022-Central Tax (Rate) dated July 13, 2022, (Notification) and Press Release dated July 18, 2022 (Press Release) on subject matter “FAQ on GST applicability on pre-packaged and labelled goods” (“FAQ”); GST is not leviable on sale of unbranded/non packaged Broken Rice.

(iii) AAR On No GST Exemption if Monthly Society Maintenance Charges exceeds INR   7500:

 (Applicant – Prinsep Association Of Apartment Owners)

The order of the Authority for Advance Ruling (AAR) in the case of Prinsep Association of Apartment Owners in West Bengal addresses three key questions related to Goods and Services Tax (GST) implications on the maintenance charges and other collections by an Association of Persons (AOP) registered under the West Bengal Act XVI of 1972:

Question 1: Where monthly contribution charged to a member exceeds INR 7500 per month, whether the applicant can avail the benefit of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 (Sl. No. 77) read with Notification No. 02/2018 dated 25.01.2018, which provides for exempting from tax, the value of supply up to an amount of Rs. 7,500/- per month per member? In other words, whether tax would be charged over and above INR 7500 or the total amount collected from members.

Answer: The AAR ruled that the exemption is not available when the maintenance charges exceed Rs. 7,500/- per month per member. In such cases, where the charges exceed Rs. 7500/- per month per member, the entire amount is taxable.

Question 2: Whether the applicant is liable to pay CGST/SGST on amounts which it collects from its members for setting up a corpus fund for future contingencies/ major CAPEX. Whether such fund from members will come under the definition of supply and liable to be taxed?

Answer: The AAR ruled that the amount collected by the applicant from its members for setting up a sinking fund is considered an advance payment towards future supply of services, and therefore, the applicant is liable to pay tax on such supply.

Question 3: Whether the applicant is liable to pay CGST/SGST on collection of common area electricity charges paid by the members and the same is recovered on the actual electricity charges?

Answer: The AAR ruled that the amount collected on account of common area electricity charges, being a part of composite supply, is taxable in cases where the supply of common area maintenance services fails to qualify for exemption under serial number 77 of the Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017, as amended.

In summary, the ruling clarifies the GST implications on various charges collected by the Association of Apartment Owners, emphasizing that the exemption is subject to the condition that maintenance charges do not exceed Rs. 7,500/- per month per member. The ruling also addresses the taxability of amounts collected for corpus funds and common area electricity charges under specific circumstances.

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.

THANKING YOU.

( The author is a well known chartered accountant practicing at Ahmedabad )