GST WEEKLY UPDATE : 41/2023-24 (DATED : 07.01.2024) By CA Vipul Khandhar

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By CA Vipul Khandhar

New HSN Code Requirements for E-Way Bills effective Feb 1, 2024: 6 Digits for AATO > Rs. 5 Crores, 4 Digits for AATO < Rs. 5 Crores:

As per the notification No. 78/2020 –Central Tax, dated October 15, 2020, it is necessary to provide at least 6 digit HSN code for all the B2B and Export transactions by the taxpayers whose Annual Aggregate Turnover (AATO) is more than Rs. 5 Crores. The taxpayers, with AATO less than Rs. 5 Crores, need to provide at least 4 digit HSN code.

This validation will be implemented in e-way bill System from February 01, 2024. Hence, the taxpayers are advised to make necessary changes in their systems and enter 4 / 6 digit HSN codes while generating the e-way bills through web and API systems from February 01, 2024.

2 . E-Waybill generation will not be allowed without e-Invoice details from March 01, 2024:

W.e.f. March 1, 2024, the generation of e-Waybills will not be permitted unless accompanied by e-Invoice details. This restriction applies specifically to B2B and B2E transactions for taxpayers who have adopted e-invoicing, requiring the inclusion of e-Invoice or Invoice Reference Number (IRN) details to facilitate e-Waybill generation.

Background:

e-Invoice has been operationalised since October 2020 for the taxpayers with Annual Aggregate Turn Over (AATO) above Rs. 500 Crores and eventually in a phased manner, e-Invoice generation is made mandatory for taxpayers with AATO above Rs. 5 Crores. From day-one, E-Invoice is seamlessly integrated with e-Way bill system and accordingly e-Way bills are generated along with e-Invoice. That is, during e-Invoice generation, if the transportation details are sent, the e-Waybill is automatically generated. Most of the tax payers are generating the e-invoice along with the e-way bill.

However, on analysis it is found that some of the taxpayers, who are eligible for e-Invoicing, are generating e-Waybills without linking with e-Invoice for B2B and B2E transactions. In some of these cases, the invoice details entered separately under e-Waybill and e-Invoice are not matching with respect to the certain parameters. This is leading in mismatch in the eWaybill and e-Invoice statements.

Hence, to avoid such situations, e-Waybill generation will not be allowed without e-Invoice details from 1st March 2024. This is applicable for einvoice enabled tax payers and for the transactions related to Supplies under B2B and Exports. However, EWBs for other transactions such as B2C and non-supplies will function as usual without any change.

Check and Balances

e-Waybill generation process will be incorporated with appropriate checks for taxpayers (Suppliers) eligible for e-Invoicing. In case of B2B and B2E (Exports), direct e-Waybill generation without e-Invoice will not be allowed for Suppliers eligible for e-Invoicing. This applies to the E-Waybill categories of Supply/Exports/SKD/CKD/Lots.

However, e-Waybill generation for transactions related to B2C and other non-Supplies will be allowed as usual. Similarly, for the E-Way Bills generated by transporter, similar check would be enforced on the Supplier GSTIN. Other operations such as Part-B updating, transporter Id updating, etc. will continue as usual without any change.

All taxpayers and transporters are requested to make necessary changes in their system so that they can adapt to the changes from 1st March 2024.

3. New Special Procedure for Registration and Special Monthly Returns by Manufacturers of Tobacco, Pan Masala, and Similar Items

To be followed by a registered person engaged in manufacturing of certain goods stated in SCHEDULE –

Details of Packing Machines.–

(1) All the registered persons engaged in manufacturing of the goods mentioned in Schedule to this notification shall furnish the details of packing machines being used for filling and packing of packages in FORM GST SRM-I, electronically on the common portal, within thirty days of coming into effect of this notification.

(2) Any person intending to manufacture goods as mentioned in the Schedule to this notification, and who has been granted registration after the issuance of this notification, shall furnish the details of packing machines being used for filling and packing of packages in FORM GST SRM-I on the common portal, within fifteen days of grant of such registration.

(3) The details of any additional filling and packing machine being installed at the registered place of business shall be furnished, electronically on the common portal, by the said registered person within twenty four hours of such installation in PART (B) of Table 6 of FORM GST SRM-I.

(4) If any change is to be made in the declared capacity of the machines, the same shall be furnished, electronically on the common portal, by the said registered person within twenty four hours of such change in Table 6A of FORM GST SRM-I.

(5) Upon furnishing of such details in FORM GST SRM-I, a unique registration number shall be generated for each machine, the details of which have been furnished by the registered person, on the common portal.

(6) In case, the said registered person has submitted or declared the production capacity of his manufacturing unit or his machines, to any other government department or any other agency or organisation, the same shall be furnished by the said registered person in Table 7 of FORM GST SRM-I on the common portal, within fifteen days of filing such declaration or submission: Provided that where the said registered person has submitted or declared the production capacity of his manufacturing unit or his machines, to any other government department or any other agency or organisation, before the issuance of this notification, the latest such certificate in respect of the manufacturing unit or the machines, as the case may be, shall be furnished by the said registered person in Table 7 of FORM GST SRM-I on the common portal, within thirty days of issuance of this notification.

(7) The details of any existing filling and packing machine disposed of from the registered place of business shall be furnished, electronically on the common portal, by the said registered person within twenty four hours of such disposal in Table 8 of FORM GST SRM-I.

2. Special Monthly Statement.–

The registered person shall submit a special statement for each month in FORM GST SRM-II, electronically on the common portal, on or before the tenth day of the month succeeding such month.

3. Certificate of Chartered Engineer.–

(1) The taxpayer shall upload a certificate of Chartered Engineer FORM GST SRM-III in respect of machines declared by him, as per para 1 of this notification, in Table 6 of FORM GST SRM-I.

(2) If details of any machine are amended subsequently, then fresh certificate in respect of such machine shall be uploaded.

SCHEDULE

S. No.	Chapter / Head ing/Sub heading/Tariff item	Description of Goods
(1)	(2)	(3)
1.	2106 90 20	Pan-masala
2.	2401	Unmanufactured tobacco (without lime tube) – bearing a brand name
3.	2401	Unmanufactured tobacco (with lime tube) – bearing a brand name
4.	2401 30 00	Tobacco refuse, bearing a brand name
5.	2403 11 10	‘Hookah’ or ‘gudaku’ tobacco bearing a brand name
6.	2403 11 10	Tobacco used for smoking ‘hookah’ or ‘chilam’ commonly known as ‘hookah’ tobacco or ‘gudaku’ not bearing a brand name
7.	2403 11 90	Other water pipe smoking tobacco not bearing a brand name.
8.	2403 19 10	Smoking mixtures for pipes and cigarettes
9.	2403 19 90	Other smoking tobacco bearing a brand name
10.	2403 19 90	Other smoking tobacco not bearing a brand name
11.	2403 91 00	“Homogenised” or “reconstituted” tobacco, bearing a brand name
12	2403 99 10	Chewing tobacco (without lime tube)
13.	2403 99 10	Chewing tobacco (with lime tube)
14.	2403 99 10	Filter khaini
15.	2403 99 20	Preparations containing chewing tobacco
16.	2403 99 30	Jarda scented tobacco
17.	2403 99 40	Snuff
18.	2403 99 50	Preparations containing snuff
19.	2403 99 60	Tobacco extracts and essence bearing a brand name
20.	2403 99 60	Tobacco extracts and essence not bearing a brand Name
21.	2403 99 70	Cut tobacco
22.	2403 99 90	Pan masala containing tobacco ‘Gutkha’
23.	2403 99 90	All goods, other than pan masala containing tobacco ‘gutkha’, bearing a brand name
24.	2403 99 90	All goods, other than pan masala containing tobacco ‘gutkha’, not bearing a brand name

Explanation.–

(1) In this Schedule, “tariff item”, “heading”, “sub-heading” and “Chapter” shall mean respectively, a tariff item, heading, sub-heading and Chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).

(2) The rules for the interpretation of the First Schedule to the said Customs Tariff Act,1975, including the section and chapter notes and the General Explanatory notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.

(3) For the purposes of this notification, the phrase “brand name” means brand name or trade name, whether registered or not, that is to say, a name or a mark, such as symbol, monogram, label, signature or invented word or writing which is used in relation to such specified goods for the purpose of indicating, or so as to indicate a connection in the course of trade between such specified goods and some person using such name or mark with or without any indication of the identity of that person.

The effective date for the implementation of this notification is April 01, 2024.

AAR & Important Judgements:

(i) Refund allowed of any payment made vide DRC 03 if no DRC 04 or SCN or Order issued P & H highcourt:

(Applicant – M/s. Samyak Metals Pvt. Ltd. v. Union of India and Others [CWP No.26529 of 2022 dated May 24, 2023]

In the case of M/s. Samyak Metals Pvt. Ltd. v. Union of India and Others [CWP No.26529 of 2022 dated May 24, 2023] directed the Revenue Department to return the amount paid by the assessee during the search proceeding where neither DRC-04 nor notice under Section 74(1) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) was issued.

Issue:

Whether the proper officer is liable to issue acknowledgement in case the Petitioner made voluntary payment vide DRC-03?

Held:

The Punjab and Haryana High Court in CWP No.26529 of 2022 held as under:

Observed that, the Instruction no. 01/2022-23 issued by the CBIC dated May 25, 2022 (“the Instruction”) in respect to the GST investigation wherein it was clarified that no recovery of tax should be made during search, inspection or investigation unless, it is voluntary.
Further observed, the case of M/s. Vallabh Textiles vs. Senior Intelligence Officer and others, 2022 SCC OnLine Del 4508 wherein the Hon’ble Delhi High Court held that deposit of tax by the assessee during search was not voluntary and the amount cannot be retained, if no summons had been issued under Section 74 (1) of the CGST Act.
Noted that, the proper officer is bound to issue acknowledgment, accepting the payment made by the said person in DRC-04. However, till date, neither they have issued DRC-04 nor issued any notice under Section 74 (1) of the CGST Act and the Revenue Department have not followed the Instruction which states that it is the duty of the officer to inform the taxpayers regarding the provisions of voluntary tax payment through DRC- 03. Neither the Department has followed the provisions of Rule 142 (2) of the Central Goods and Services Tax Rules, 2017 nor has issued any notice under Section 74 (1) of the CGST Act.
Directed the Revenue Department to return the amount to the Petitioner along with simple interest @ 6% p.a. from the date of deposit till the payment is made.

(ii) HC decision regarding Demand for interest on delayed payments during period of GSTIN cancellation was inequitable and liable to be set aside: HC in the case of

(Applicant – Hilton Garden INN v. Commissioner of Kerala Goods & Service tax – [2024] 158 taxmann.com 93 (Kerala)

The petitioner remitted the GST for the month of July, 2017 on 21-8-2017 but on account of technical problem in the GST network, the tax remitted by the petitioner could not get reflected in the cash ledger appearing in the return module and the GSTIN was cancelled without notice.

It filed application for restoration of GSTIN and the same was restored after following interim order by Kerala High court. After restoration, portal remained unavailable so there was further delay in filing of returns and payment of taxes. The department levied demand for interest on delayed tax payment. It filed writ petition against the demand of interest and contended that delay was solely due to technical glitch and unjustifiable cancellation of their GSTIN.

The Honorable High Court noted that the petitioner’s GSTIN was cancelled without notice and it had to approach High Court for restoration of GSTIN. The Court also recognized petitioner’s hardships caused by technical glitch and wrongful cancellation of GSTIN. Therefore, the Court held that the demand for interest on delayed payment was inequitable and liable to be set aside. However, the Court also held that the petitioner would be liable for interest on any delay in remitting tax after 20 days from restoration of GSTIN.

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.