GST WEEKLY UPDATE : 45/2022-23 (05.02.2023) By CA Vipul Khandhar

1. Option For The Composition Scheme On GST Portal:

GST update: Window to opt in for composition scheme for the financial year 2023-24 is now available at GST Portal. The eligible taxpayers, who wish to avail the composition scheme may opt in for composition before 31st March 2023.

To opt in for the scheme, please navigate to:

GST Login > Services > Registration > Application to opt for composition levy.

2.  Budget Proposals In CGST & IGST Act:

CGST Act.

• Sec 10 – Composition dealers of goods in 10(2) & 10(2(A) are allowed to sell through E-commerce operator.
• Sec 16 – Where the payment has not been made to the supplier within 180 days the ITC is to be paid along with interest u/s 50. in the event of an ITC reversal when the recipient fails to pay the supplier along with GST within a period of 180 days from the date of supplier’s invoice.

In order to reverse the ITC with interest in accordance with section 50 of the CGST Act, it is currently proposed to amend section 16(2) of the CGST Act. Therefore, if ITC availed remains unutilised, then no interest is applicable following said change.

• Sec 17(3) – In – Bond transfer is added to the scope of exempt supply for Rule 42/43 ITC proportionate reversal. Now through the amendment it is proposed to include supply of warehoused goods before clearance for home consumption as exempt supply.
• Schedule III – Explanation with regard to High Sea sales, bond sales, Merchant Trading Transactions has been made effective from 01.07.2017. No refund can be claimed on account of this change.
• Sec 17(5)(fa) added – Goods or services or both used for mandatory CSR activities are not eligible for ITC prospectively. GST ITC on CSR expenses has been restricted:An amendment has been proposed under Finance Bill, 2023 under sub section (5) of Section 17 which provides for the blocked ITC.
• Sec 23 – Retrospective amendment has been made to provide that sec 23 shall pevail over sec 22 and sec 24. GST registration is not mandatory for persons engaged in supply of exempted goods and/or services.
• Sec 37 – No GSTR1 can be filed after 3 years from its due date.
• Sec 39 – No GSTR3B can be filed after 3 years from its due date.
• Sec 44 – No GSTR 9 can be filed after 3 years from its due date.
• Sec 52 – No TCS return can be filed after 3 years from its due date.
• Sec 54(6)– 90% provisional refund may be given without reducing the amount of ITC provisionally accepted.
• Sec 56 – Interest on delayed refund – manner and conditions and restrictions shall be provided by way of rules.
• Sec 122 – sub section (1B) has been inserted to make ECO liable for penalties for 3 defaults pertaining allowing certain transaction through him and pertaining incorrect data in return
• Sec 132 – Changes are made to remove certain activities liable for prosecution. Minimum Threshhold raised to Rs. 2 crores from 1 crore for launching prosecution except Issuance of invoices without supply.
• Sec 138 – Changes are made with regard to compounding of offence also compounding fees reduced. Reduce the compounding amount from the present range of 50 per cent to 150 per cent of tax amount to the range of 25 per cent to 100 per cent.
• Sec 158A– Consent Based Sharing of information by common portal with other systems. A new section 158A in CGST Act is being inserted to enable sharing of the information furnished by the registered person in his return or application of registration or statement of outward supplies, or the details uploaded by him for generation of electronic invoice or E-way bill or any other details on the common portal, with other systems in a manner to be prescribed.

-IGST Act:

• Sec 2(16) – Definition of non taxable online recipient has been changed.
• Sec 2(17) – in the definition of OIDR has been amended wherein “essentially automated and involving a minimal human intervention and” has been omitted.
• Section 12(8) Proviso omitted related to POS as Destination of Goods for Transportation of Goods outside India due to ITC issues. It is proposed to omit the proviso contained to section 12 (8) of IGST Act which determined the place of supply of services by way of transportation of goods.
• In respect of place of supply of services by way of transportation of goods, where supplier of services and recipient of services are located in India notwithstanding that the destination of such goods is outside India.

3.   Gujarat Govt. has come up with “Model GST Audit Manual” for the officers to conduct GST audit:

The same is also beneficial for the taxpayers to understand the intent behind modus operandi of audit officer.

Some of important coverage in the said document are:

1. Examination of Books of Accounts and records;
2. Registration/Migration analysis;
3. Return Analysis
4. Trend Analysis
5. Areas of concern during examination;
6. Ratio Analysis & Trend Analysis;
7. Study of Profit and Loss Account and Balance sheet;
8. Indian Accounting Standard in the perspective of GST

4. AAR & Judicial Decisions:

(i) AAR On GST on pre-packaged and labeled jaggery:

(Applicant – Prakash And Company)

All types of jaggery, pre-packaged and labeled are covered under S. No. 91A of Notification No. 1/2017 Central Tax (Rate) dated: 28.06.2017 as amended vide Notification No. 6/2022-Central Tax (Rate) dated 13-07-2022

All types of jaggery, pre-packaged and labeled are exigible to GST at 5% (CGST at 2.5% and SGST at 2.5%).

(ii) AAR On GST on construction of Railway under Bridge /Tunnels executed to Indian Railways:

(Applicant – S K Swamy And Company)

(i) AAR held that Works contract services like

1. a) construction of Railway under Bridge executed to Indian Railways by the Applicant is exigible to GST at 18% (SGST @ 9% and CGST @ 9%) if the Applicant is providing the services either as a main contractor or as a sub-contractor to main contractor.
2. b) construction of Tunnels executed to Indian Railways by the Applicant is exigible to GST at 18% (SGST @ 9% and CGST @ 9%) if the Applicant is providing the services either as a main contractor or as a sub-contractor to main contractor.
3. Works contract services involving predominantly earth work (that is, constituting more than 75per cent, of the value of the works contract) executed to Indian Railways (Central Government) by the Applicant is exigible to GST at 12%(SGST @ 6% and CGST @ 6%) if the Applicant is providing the services either as a main contractor or as a sub-contractor to main contractor.

   iii. Supply of ballast to railways is exigible to GST at 5%(CGST @ 2.5% and SGST @2.5%) (HSN 2517) as per entry No. 126 of Schedule I of Notification No. 1/2017-Central Tax (Rate), dated: 28.06.2017.

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.