GST WEEKLY UPDATE :6/2022-23 (08.05.2022) By Vipul Khandhar

-By CA Vipul Khandhar

1. GSTN enabled new functionality for filing of application of advance ruling, appeal, etc. by unregistered persons:

 The Goods and Services Tax Network (“GSTN”) has enabled new functionality to facilitate the filing of application of advance ruling, appeal, etc. by unregistered persons on the GST portal.                  

2. GSTN enabled the functionality of Annual Aggregate Turnover (AATO) computation for the F.Y. 2021-22 on the taxpayers’ dashboard. However, the taxpayer has been provided with the facility of updating of their turnover.:

GSTN has enabled the functionality of Annual Aggregate Turnover (AATO) for the FY 2021-22 on taxpayers’ dashboards. Taxpayers may now check the precise Annual Aggregate Turnover (AATO) for the previous fiscal year. As per a recent advisory from the GSTN, the taxpayers can also view the Aggregate Turnover of the current FY based on the returns filed till date.

The taxpayers have also been given the option of updating their turnover if they believe that the system estimated turnover presented on their dashboard differs from the turnover on their records. The facility of turnover update shall be provided to all the GSTINs registered on a common PAN. All the changes by any of the GSTINs in their turnover shall be summed up for computation of Annual Aggregate Turnover for each of the GSTINs. All GSTINs registered under a single PAN would be able to update their turnover. All changes in turnover by any of the GSTINs will be added together for the purpose of calculating Annual Aggregate Turnover for each of the GSTINs. The taxpayer has the option to change the turnover twice during the month of May 2022.

3. GSTN issued advisory on auto-population of e-invoice details into GSTR-1.

Supplies reported in the e-invoices are auto-populated in the following tables of GSTR-1 :

GST System aggregates the item-level details reported in the e-invoices at Rate-level for the purpose of auto population into GSTR-1.

Outward supplies details other than those reported in on the IRP have to be manually entered in GSTR-1, as earlier. Before filing GSTR-1, taxpayers are advised to review the details of e-invoices auto-populated in specified tables.

This can be done by :

1. Viewing online on GST Portal, or
2. Downloading the JSON from GST Portal, or
3. Using APIs through GST Suvidha Providers (GSPs)

It may to be noted that the auto-populated details in the Excel file available on GSTR-1 dashboard are as per the data reported on Invoice Registration Portal (IRP). Any subsequent modifications made by the taxpayer to the auto-populated details in the GSTR-1 tables would not be reflected in this Excel file.

Some common error occurred due to that reason E invoice has not reflected in GSTR-1:

1. Document Date: Document date is earlier to reporting date but GSTR 1 already filed by that date.

2. Wrong Supplier Type: E-Invoicing mandate is applicable to B2B supplies and Exports only. Hence, if in e-invoice data any supplier type reported apart from these two like – ISD/NRTP/TCS/TDS will result in non-auto-population of e-invoice data 

3. Supplier is a Composition Taxpayer: 

4. Document date is prior to Supplier’s/Recipient’s effective date of registration: 

5. Document date is after Supplier’s/Recipient’s effective date of cancellation of registration: 

6. Invoices reported as attracting “IGST on Intra-state supply” but without reverse charge: 

7. Buyer GSTIN and Invoice Type not in Sync: 

8. Export Without Payment and SEZ without Payment reported with Tax amounts: 

9. Serial No is 0:

Apart from the above, some of the invoices were inadvertently missed in auto-population. GSTN released advisory confirming that same was an inadvertent gap and would be rectified and details will be pushed in the GSTR 1 manually before filling of the GSTR-1.

5. AAR & Judicial Decisions:

(i) Decision of Hon’ble Gujarat High Court Regarding Deduction of one-third of value of land towards construction services is Unconstitutional:

(Applicant – MUNJAAL MANISHBHAI BHATT)

GST on Construction Services – Deduction of a one-third of value of land towards construction services is not proper and Unconstitutional in Construction Services-

Hon’ble Gujarat HC The Honorable Gujarat High Court delivering an impact making judgement in the case of MUNJAAL MANISHBHAI BHATT vs UOI in R/SPECIAL CIVIL APPLICATION NO. 1350 of 2021 of has held that a portion of a GST notification mandating the deduction of a one-third of the value of land towards construction services, deeming it “arbitrary”.

The issue involved is that the ad hoc notional deduction of one-third towards value of land in construction services.

Gujarat High Court unequivocally spells out that even without going to Schedule III, the only service which is supplied to home buyers is the construction service and it is such supply alone can be taxed. However, it can also be seen that Sale of land is included in the Entry No. 5 of the Schedule III to the GST Acts.

Thus, the sale of land is neither supply of goods nor services.  The imposition of tax on consideration received towards the sale of land by virtue of delegated legislation is therefore ultra-vires Sections 7 and 9 respectively of the GST Acts. Hence, that the land is not a plain parcel, but developed, cannot be grounds for imposing tax on the sale of such land.

Allowing the petition, the Court observed that “the prescription under Section 15(5) of the CGST Act has to be by rules and not by notification. Be that as it may, wherever a delegated legislation is challenged as being ultra-vires the provisions of the CGST Act as well as violating Article 14 of the Constitution of India, the same cannot be defended merely on the ground that the Government had competence to issue such delegated piece of legislation. Even if it is presumed that the Government had the competence to fix a deemed value for supplies, if the deeming fiction is found to be arbitrary and contrary to the scheme of the statute, then it can be definitely held to be ultra-vires.”

(ii) Decision of Hon’ble Gujarat High Court Regarding Detention of goods along with the vehicle:

(Applicant – Dhabriya Polywood)

Selection of the ODC vehicle type while generating e-Way Bill : CBEC/20/16/03/2017-GST Circular dated 14-08-2018 makes it clear that in case a consignment of goods is accompanied with an invoice or any other specified document and also an e-way bill, the proceedings under Section 129 of the CGST Act may not be ordinarily initiated.

Having regard to the fact that the writ applicant admitted its mistake, the impugned notice issued and order of detention passed by the respondent is hereby quashed and set aside.

(iii) AAR On GST on Composite Supply of hospital construction works for Govt Entity

(Applicant – KPC Projects Ltd)

From the submissions made by the applicant, we find that in the instant case there is Composite supply of works contract provided to UPRNN, a Government Entity by way of construction of a clinical establishment i.e. a hospital.

However we also find that, the above mentioned Rate Notification No 11/2017 has been further amended by Notification No. 15/2021 – CTR dated 18.11.2021 (with effect from 01.01.2022) and in Sr. No 3, in column (3), in the heading “Description of Services”, in item (vi), for the words “Union territory, a local authority, a Governmental Authority or a Government Entity” the words “Union territory or a local authority” have been substituted and that means the words “or a Governmental authority or a Government Entity” are omitted. Therefore, with effect from 01.01.2022, the impugned services supplied by the applicant will not be covered under Sr. No. 3 (vi) of Notification No. 11/2021 – CTR dated 28.06.2017 as amended from time to time.

In view of the above discussion made in para nos 5.3.1 to 5.3.4, we hold that the applicant is not eligible to avail the concessional rate of GST at 12% as prescribed in of S. No. 3 (vi) of the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 for the impugned construction services provided by them to UPRNN.

The second question raised by the applicant is if the impugned service is not covered under Sr. No. 3(vi) of the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, then what is the appropriate classification and rate of GST to be charged by the applicant.

Since the impugned service is expected to commence only at a future date, in view of the amended Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, the impugned activity is not covered under Sr. No. 3 (vi) mentioned above and therefore the said activity will be covered under the residuary clause (xii) of Sr. No. 3 of Notification No. 11/2017- mentioned above and the rate of GST to be paid by the applicant will be 18% of the taxable value.

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.

(Author is a well known Chartered Accountant practicing at Ahmedabad)