GST WEEKLY UPDATE : 47/2024-25 (23.02.2025) By CA Vipul Khandhar

-By CA Vipul Khandhar

1. Taxpayers can opt for the Composition Scheme for FY 2025-26 via GST Portal (‘Services -> Registration -> Application to Opt for Composition Levy’) from February 4 to March 31, 2025, by filing Form CMP-02:

Mandatory E-Way Bill for Scrap Supply Taxpayers in UT of Dadra & Nagar Haveli and Daman Diu

The VAT & GST Department of UT of Dadra & Nagar Haveli and Daman Diu issued a Circular vide File No. DC (UTGST)/DNH/Circular/2025/163 dated February 19, 2025, mandating taxpayers dealing in scrap supply to generate e-way bills for shipments exceeding Rs 50,000 in consignment value. This requirement aligns with legal provisions, and non-compliance will lead to actions, including proceedings under relevant laws. The circular, approved by the Competent Authority, aims to enforce tax compliance in the scrap supply sector. Taxpayers must ensure adherence to avoid penalties or legal consequences.

It is to inform that the taxpayers who are dealing in scraps supply are required to generate e-way bills, mandatorily if the consignment value of the scrap exceeds Rs 50,000/- for movement of every shipment as per the Law.

In case of any non-compliance with regards to these provisions, necessary action shall be taken including initiating proceedings under the relevant law. 

2. SEZ Grievance Redressal: Weekly ‘Jan Sunwai’ via Video Conferencing Mandated:

The Department of Commerce’s SEZ-Admin Section has issued Instruction No. 118 dated February 19, 2025, directing all Development Commissioners of Special Economic Zones to schedule weekly ‘Jan Sunwai’ sessions via video conferencing for at least two hours to address grievances of stakeholders, including unit holders and developers. The schedule must be publicly displayed on respective websites. Competent officers are to be designated to hear grievances and provide timely resolutions. Monthly compliance reports detailing grievances heard and resolutions offered must be submitted by the 5th of the following month.

I am directed to state that in order to provide an institutional mechanism for the redressal of grievances of unit holders and other stakeholders, all Development Commissioners of Special Economic Zone should schedule ‘Jan Sunwai’ through Video Conferencing (VC) for at least two hours in a week on working days.

The Development Commissioners are advised to fix a time schedule of VC which may be notified for public information to all stakeholders including developers, unit holders, etc. and prominently displayed on the respective website also. It is also requested that competent officers from the SEZ may be designated to hear the grievances and provide resolutions in a time-bound manner.

3. Kerala GST Department Issues Instructions on Rectification of Errors under Section 161 of the Kerala State GST ActCircular No. 06/2024 dated February 13, 2025.

The following instructions are being issued for strict compliance:

1. The power of rectification is confined only to mistakes apparent on the face of records.
2. The application for rectification can be considered only if the mistake is ex-facie and the matter does not involve the presentation of further arguments or replies or submissions by either of the parties. In simple terms, the decision to be made on the debatable point of law or disputed question of facts is not an error apparent on the record.
3. The proper officer should ensure that the error is an obvious mistake, such as clerical, arithmetical, or any other error that is evident without detailed examination. In other words, the resultant order or notice consequent to rectification should not be a modified one after re-evaluation or reconsideration of facts and pieces of evidence produced subsequently.
4. Rectification under Section 161 may be done within three months from the date of issuance of the decision, order, notice, certificate, or any other document. However, no such rectification shall be done after a period of six months from the date of issue of such decision or order or notice or certificate or any other document, except in situations wherein the rectification is purely in the nature of correction of a clerical or arithmetical error, arising from any accidental slip or omission.
5. If the rectification adversely affects any person (such as increasing the liability of the taxpayer), the principles of natural justice shall be ensured.
6. A separate register shall be maintained in every office to record the details of rectification made under section 161 of the Act (the format of the Register is Annexed).
7. In cases where rectification has been initiated, prior intimation shall be given to the concerned Joint Commissioner regarding the rectification under section 161. The Joint Commissioners shall ensure that the subject matter to be rectified falls within the scope of rectification provisions, and, where necessary, appropriate internal directions shall also be issued.

It shall be ensured that all the rectified demand orders along with the order in original are forwarded to the Review Cell for verification. 

4. Implementation of ICEGATE for SEZ Units: Key Updates and Exceptions

It has been decided that filing of Shipping Bills (SBs) and Bills of Entry for import (BEs) in respect of SEZ Units shall not be allowed on SEZ-Online with effect from 18.02.2025. Filing of such documents shall be done mandatorily on ICEGATE. However, in view of persisting difficulties being faced by units in ICEGATE, the following modules/functionalities shall be operated on SEZ-Online also:

1. Courier transactions;
2. Hand carriage transactions;
3. FTWZ transactions;
4. DTA supply for B2C transactions including e-commerce;
5. Temporary removal from SEZ units for job work, exhibition, testing, etc.;
6. DTA procurement;
7. SEZ supplies from/to warehouse including from/to MOOWR units as well as EOUS.

Further, Development Commissioners are empowered to allow, on an exceptional basis, such specific units, which have not yet been able to onboard ICEGATE despite persistent efforts of SEZ and ICEGATE authorities, to continue filing SB/BE on SEZ Online upto 31.03.2025 under intimation to Department of Commerce and DG (Systems).

Accordingly, you are requested to take necessary action and inform all stakeholders. All appropriate measures may also be taken to resolve various issues pertaining to migration to ICEGATE and any outstanding matter may be communicated to this Department regularly for further discussion with CBIC.

5. CBIC clarifies GST rates on popcorn – plain, salted or caramelized:

Rate disputes on specific category of popcorn till February 14 will be regularized, Central Board of Indirect Taxes & Customs (CBIC) has said. The board has also come out with a detailed circular on the three tier structure for different types of popcorn.

“In view of the prevailing genuine doubts regarding the applicability of GST rate on ready to eat popcorn mixed with salt and spices, as recommended by the (GST) Council, issues for past period up to February 14, is hereby regularized on ‘as is where is’ basis,” a circular by CBIC said. Based on request from Uttar Pradesh, the council, in its meeting on December 21, 2024, decided to issue a circular.

Further, the circular clarified that that ready to eat popcorn which is mixed with salt and spices attracts 5 per cent GST if supplied loose. The rate is 12 per cent if ready to eat popcorn which is mixed with salt and spices is supplied as pre-packaged and labelled. “It has the essential character of namkeens,” the board said while justifying 12 per cent rate. However, when popcorn is mixed with sugar and thus changing its character to sugar confectionary (e.g. caramel popcorn), it will attract 18 per cent GST.

No new imposition of any tax

CBIC has already clarified that there is no new imposition of any tax in this regard and is merely a clarification as certain field units were demanding different tax rates on the same. Therefore, it is a clarification being recommended by the GST Council to settle the disputes arising out of interpretation, the board said.

Earlier, experts said that consuming loose and salted popcorn in a movie theatre can attract GST up to 18 per cent. GST rate on popcorn bought together with movie tickets will be 12 per cent or 18 per cent based on the ticket price if the bundled supply satisfies the test of composite supply.

Later, government sources said that generally, popcorn is served to customers in theatres in loose form and hence will continue to attract rate of 5 per cent as applicable to ‘restaurant service’ as long as “supplied independent of the cinema exhibition service.” Application of the last section of the sentence can raise the GST to 12 or 18 per cent for loose and salted popcorn.

Many theatres, especially multiplexes, provide online ticket booking to their patrons. Online ticket purchase accompanies an option buying popcorn, snacks and beverages. Normally the offer comes with discount, making the whole deal attractive. Such a supply, from taxation point of view, could be ‘composite supply’ or even ‘mixed supply’. It may be noted that cinema ticket below ₹100 attracts GST at 12 per cent and above ₹100, attracts 18 per cent GST. 

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 at Ahmedabad on Direct and Indirect taxes)