GST WEEKLY UPDATE : 41/2022-23 (08.01.2023)

-By CA Vipul Khandhar, Ahmedabad

1. GST portal update:

• The suspended taxpayers can themselves initiate the process of drop proceedings after having filed all pending returns/statements

A new functionality has been deployed on the portal where the suspended taxpayers can themselves initiate the process of drop proceedings after having filed all pending returns/statements by clicking “Initiate Drop Proceeding” button by navigating Notices/Order after login on their dashboard, if required.

Form GST RFD-01 for withheld refunds of export of goods with payment of IGST. 

This form GST RFD-01 is made available on the portal to the jurisdictional tax officer for processing and an intimation of the same will be communicated to the taxpayer.

· Inverted tax structure refund claim with goods & service has been updated online.

“Tax payable on such inverted rated supply of goods and services * (Net ITC/ITC availed on inputs and input services)” in statement 1 of Form GST RFD- 01 filed for refund on account of ITC accumulated due to Inverted Tax Structure.

·     The composite taxpayer can apply for the refund of excess payment:

·     The Composition taxpayers can apply for the refund on account of Excess payment of tax in cases where they had defaulted in filing statement in Form GST CMP-08 and/or return in Form GSTR-4. This validation has now beenRe-compute Interest button in Table 5.1 of Form GSTR-3B

• A RE-COMPUTE INTEREST button has been provided in Table 5.1 of Form GTR 3B which enables the taxpayers to recompute interest in case they feel there is any discrepancy in the system computed interest.

·     Validation to check duplicate entries in Form GSTR-2B

·     From the period Sep 2021, onwards, an option was provided to the taxpayers to pull the BoE details in Form GSTR-2B in case it was not populated automatically from ICEGATE using ‘Fetch Bill of Entry’A validation has now been implemented on the portal so as to ensure that BoE details do not get populated twice in Form GSTR-2B.

·     Now dealer can apply adjournment online in summon proceeding:

• A functionality has been provided on the Portal for taxpayers to file Request for Adjournment while replying to a Notice to Summon in Enforcement cases. After login, the taxpayers can navigate Services > User Services > View Additional Notices and orders > click here (hyperlinked) > Notices folder > select Reply for Notice to Summon.

·     Unregistered persons can now file Advance Ruling Application online.

• A new functionality has been deployed on the portal to allow the unregistered persons also for filing advance ruling on GST The users can submit an Advance Ruling application by creating a Temp ID on GST portal.

2. No reduction in e invoice threshold from 10 crore to 5 crore. CBIC clarified w.e.f January 01, 2023:

CBIC has clarified that presently, e-invoicing has been made mandatory for registered persons having aggregate turnover more than Rs.10 crore in any preceding financial year from 2017-18 onwards (Refer Notification no. 17/2022-Central Tax dated August 01, 2022).

There is no proposal before the Government, at present, to reduce this threshold limit to Rs.5 Crore with effect from January 01, 2023, as no such recommendation has been made by GST Council as yet.

3. GST registration PAN-linked mobile number and e-mail address:

 GST registration PAN-linked mobile number and e-mail address to be captured in FORM GST REG-01 automatically and OTP-based verification to be conducted at the time of registration

4. AAR & Judicial Decisions:

(i) AAR On IGST under RCM on deemed Ocean freight on import of goods on CIF basis:

(Applicant – Khaitan Chemicals and Fertilizer)

In terms of prevailing provisions of the IGST Act, 2017 and the Rules made there under as discussed above, the applicant in addition to IGST on import of goods levied under the Customs Act, 1962 read with the Custom Tariff Act, 1975 would also be liable to pay IGST on deemed ocean freight under reverse charge mechanism as stipulated under Notification No.10/2017-I.T.(Rate) read with Notification No.8/2017-I.T.(Rate).

(ii) AAR On GST on Waterproof tells support for climbing plants manufactured by using bamboo & high density polythlene:

(Applicant – Bhavya Srishti Udhyog Private Limited)

Applicant’s product named “Waterproof Trellis support for climbing. plants using bamboo and High-Density Polyethylene” are not eligible for exemption provided under sr. no. 137 of Notification No. 2/2017-Central Tax (Rate), dated 28-6­2017. The said product merits classification under Custom Tariff Heading 14011000.

(iii) AAR On GST on Man power services provided to Central & State Govt departments:

     (Applicant – Chhattisgarh Anusandhan & Vikas Firm)

Man power services provided by the applicant to the various Central and State Government departments is liable for GST at the applicable rate and is not eligible to ‘Nil’ rate of tax provided under sr. no. 3 of the Notification No 12/2017-Central (Rate), dated 28-6-2017 on the grounds put forth by the applicant being not covered under the functions envisaged under article 243G and 243W of the Constitution of India. The said service falls under the SAC 998513 attracting 18% GST (9% CGST and 9% CGST)

(iv) AAR On Installation services for illumination of roads cannot be construed as Construction Services:

(Applicant – HPL Electric and power limited)

GST on installation of highway lighting system The AAR, Chhattisgarh in the matter of M/s HPL Electric and Power Ltd. [Order No. STC/AAR/02/2022 dated May 2, 2022] has ruled that installation services for highway lighting systems cannot be considered as “Construction services” under SI. No. 3(iv)(a) of Notification No. 11/2017 – Central Tax (Rate) dated June 28, 2017 (“the Services Rate Notification”) thus, ineligible to the benefit of 12% GST.

(v) AAR On No change in GST rate wef 1.1.2022 on composite supply of works contracts:

      (Applicant – Agrawal Buildcon)

1. The benefit of entry at Sl.no. 3(v)(a) of Notification No. 11/2017 Central Tax(Rate) dated 28.06.2017 as amended, vide Notification 01/2018 Central Tax(Rate) dated 25.01.2018 and various other amendments from time to time, lastly amended vide Notification no. 22/2021-Central Tax (Rate) dated 31.12.2021 would be eligible to M/s Agrawal Buildcon, C/o Agrawal Traders, Main Road, Korba, Chhattisgarh, 495677 (GSTIN-22ASSPA1067D1Z7), the applicant, provided that the works undertaken by them qualifies as “Composite supply” as stipulated under Section 2 (30) of CGST Act, 2017 as also the said work undertaken satisfies the condition of being ‘Works Contract’ as per Section 2 (119) of the Act, and if so the applicable rate of GST would be @ 12% effective from 25.01.2018. In cases other than above the said work would attract GST @ 18% under the residual entry at Sr. no. 3(xii) of Notification No. 11/2017 Central Tax iRate) dated 28.06.2017 as amended. This authority on the basis of records furnished and available on record, is not in a position to conclusively hold that the works, as is forthcoming from the “letter of acceptance” issued by RITES LIMITED supra, intended to be undertaken by the applicant qualifies being treated as ‘Composite supply’ as per Section 2 (30) of CGST Act, 2017 or are ‘Works Contract’ as defined under Section 2 (119) of CGST Act, 2017, as discussed herein above.
2. There is no change in the rate of GST with effect from 1.1.2022 on such composite supply of works contracts as defined in Section 2(119) of the Central Goods and Services Tax Act, 2017 supplied by way of construction, erection, commissioning, or installation of original works pertaining to railways.

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.