GST WEEKLY UPDATE : 27/2021-22 (02.10.2021) by CA Vipul Khandhar

CA Vipul Khandhar

1. Precaution to be taken before filling of the September-2021 GSTR-1 monthly & quarterly returns & GSTR-3B return:

·       Avail pending ITC

It is the last chance for availing the pending ITC for the financial year 2020-21 as the taxpayers file GSTR-3B for the Sep’21 return period in October 2021. The entire reconciliation process for the year 2020-21, matching the invoices between GSTR-2A and your purchase book must be completed.

·       ITC claim on earlier reversal

If GST credit has been reversed during the year on account of payment not made to suppliers within 180 days. The taxpayer can again claim the ITC after payment to the supplier which has been already reversed on non-payment. It is important to check the books of accounts for any such entry on which ITC can be claimed.

·       Checking credit for Reverse Charge

It is important to cross-check your books of account to confirm if you have paid GST under RCM for proper transactions at the appropriate rate and claimed the ITC for the same in the Financial Year 2020-21.

·       Cross-checking purchase bills with GSTR-2A

During the course of the year, there are multiple missed purchases or no invoice purchases, lost invoices etc. It is important to cross-check the purchases with the available GSTR 2A in order to get the audit right.

·       Sale reversed after GST Paid

If the goods are rejected after a few days of the sale and the taxpayer has already paid the GST due on the sale, such differences also need to be pointed out. Reconciliation of GSTR-2A with the taxpayer’s books of accounts is necessary to claim ITC on the basis of Debit Note issued by the party.

·       GST reversal on purchases

If a taxpayer has rejected a part of goods purchased to the supplier and has issued a debit note, such entries are also important to take into account while reviewing the yearly books of account. If the supplier has not accepted the debit note, the taxpayer can reverse the entry to claim the GST ITC paid.

·       Collect ITC on Bank charges & claim of ITC on small expenses:

Bank charges like processing fees and unit inspection charges also need to be claimed timely. Cash Credit accounts with banks have to pay ‘processing charges’ for renewal of C/C limits and also have to pay unit inspection charges which are directly debited to their C/C accounts by banks. Taxpayers can collect ITC on such transactions.

Purchase of small expenses If the bills are in the name of your business and have the business address mentioned then you can claim ITC on the same.

·       ITC on Job-work charges

If a taxpayer has taken any job work done via out-sourcing it to small vendors and they have provided GST invoices, then the taxpayer must claim the relevant ITC.

Also, the taxpayers must check up on all the changes introduced in the new GST Return – GSTR 2B also. Thus there are a lot of things to take care of before filing September 2021 GST returns.

·       ITC reversal proportionate to exempted supply:

If a taxpayer has claimed any ITC common service or specific service pertain to exempted supply. As per formula given in the gst rule for that, so accordingly tax payer has to be reversed the ITC  as applicable.

2. Dynamic QR Code is mandatory on B2C invoices for turnover above 500 crores:

Dynamic QR Code is mandatory on B2C invoices for turnover above 500 crores. Otherwise penalty would be levied from 01st December 2020. The exemption from this compliance was extended from 01.12.2020 till 30.09.2021 which has expired now. So now company having turnover in excess Rs.500 crore is mandatory dynamic QR code for the B2C invoices.

3. New Tool for E-invoice Preparation: GePP On Line Application Available in Beta Version:

“GST e-Invoice Preparing and Printing” is an online application for GST Invoice Entry, generation of IRN and printing of invoice. The application can be used on a mobile device and also in offline mode. The application is designed to enable the users to enter invoice details using simple forms and generate IRN on click of a button. The seamless integration of GePP-On with e-Invoice portal will help the taxpayers having few invoices to register, in generating IRN without API Integration or using bulk upload option in the portal.

Features of “GePP-On”

• NIC-GePP On is a web application.
• Application can be used on the mobile also
• Simple user friendly forms for entering the invoice details.
• Built-in validations to check the correctness of the data entered.
• Generation of IRN on click of a button.
• Cancellation of IRN.
• Generation of E-Way Bill based on IRN.
• Print e-Invoice with QR code.
• Creation of masters for recipient GSTINs and HSN details.
• Backup and Restore facility of the data entered.

URL of GePP-On (Beta Version): https://einv-apisandbox.nic.in/gepp

Use the credentials (username /password) as registered in e-Invoice portal (https://einvoice1.gst.gov.in)

4. CBIC issues Advisory on Implementation of RoDTEP rates
   for the period 01.01.2021 to 01.10.2021

• For the RoDTEP claims captured in the shipping bills filed between 01.01.2021 to 00 Hrs of 01.10.2021, the notified ad valorem rates and per unit rate caps would be updated in the System.
• The benefits would be calculated in System as per the calculation logic as notified in the above Board Notification i.e., on value equal to declared export FOB value of the said goods or up to 1.5 times the market price of the said goods, whichever is less.
• The RoDTEP claims which have already been processed by the Customs officer or as per RMS facilitation for grant of drawback, such cases will not be sent to officer for processing of RoDTEP again.
• The CBIC while emphasising on the benefit calculation and processing for prospective cases said, “For the shipping bills filed on or after 01.10.2021, the benefit will be calculated in the shipping bill with the actual ad valorem rates but not exceeding per unit value caps if any, on value equal to declared export FOB value of the said goods or up to 1.5 times the market price of the said goods, whichever is less.
• Once the RoDTEP scroll is generated, the duty credit amount will be available within the ledger created for the IEC holder (or exporter) in their ICEGATE login to claim and convert it into duty credit scrip.
• A detailed Advisory has been published on the ICEGATE website outlining the process of claiming the duty credit scrips in ledger, transfer thereof to other IEC holder and utilization for the purpose of duty payment.
• The owner of the scrip (either the original exporter beneficiary or any other IEC to whom the scrip was transferred on ICEGATE portal) can use these duty scrips in the Bill of Entry for the payment of the duty of customs leviable under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) i.e., Basic Customs Duty (BCD) only by giving the details of the scrips in the license table of the Bill of Entry.

5. The DGFT vide Notification No. 33/2015-2020, dated September 28, 2021 has further extended the duration of Foreign Trade Policy, 2015-2020 (“FTP”) upto 31.03.2022 as under:-

• Imports against Advance Authorisations shall remain exempted from Integrated Goods and Services Tax (“IGST”) and Compensation Cess till March 31, 2022.
• Capital goods imported under Export Promotion Capital Goods Authorisation for physical exports shall remain exempted from IGST and Compensation Cess till March 31, 2022.
• Imports and/ or procurement from bonded warehouse in DTA or from the international exhibition held in India, by an Export Oriented Unit, Electronics Hardware Technology Park, Software Technology Park or Bio-Technology Park on would remain exempted till March 31, 2022.

6. Recent AAR & Judicial Decisions

(i) AAR On Builder/developer not allowed to deduct ‘actual land-value’ from ‘transaction-value’:

(Applicant – Karma Buildcon)

In para 2 of Not No. 11/2017-CT (Rate), as amended vide Not. No. 01/2018-CT (Rate), there is deemed provisions that the value of transfer of land or undivided share of land, as the case may be, and the value of such transfer of land or undivided share of land, as the case may be, in such supply shall be deemed to be one third of the total amount charged for such supply. Accordingly, the appellant contention to allow the deduction of actual value of land from the sale value on the grounds that their land value is ascertainable and other grounds is not legal in terms of para 2 of Not No. 11/2017-CT (Rate) as amended vide Not. No. 01/2018-CT (Rate).

We find that the reliance of Rule 18(A)(A) of the erstwhile Gujarat Value Added Tax Rules, 2006 is unjustified in the instant case since the Value Added Tax Act has been subsumed with GST Act. The Value Added Tax Act does not have any legal value in determination of GST liability since the value of supply is to be arrived in terms of the provisions of the GST Act.

In view thereof, we confirm the Advance Ruling No. GUJ/GAAR/R/33/2020 dated 02.07.2020 of the Gujarat Authority for Advance Ruling and reject the appeal filed by M/s. Karma Buildcon.

(ii) AAR On amount forfeited on account of breach of sale of land agreement taxable under GST:

(Applicant – M/s. Fastrack Deal Comm Pvt. Ltd.)

The Applicant after entering into a sale agreement to sell a factory land to a “Mr.B” for a consideration didn’t receive 80% of the value of consideration due to which has filed the current application seeking clarification of whether 20% the amount forfeited on account of breach of agreement of sale of land is liable to Goods and Services Tax (“GST”) or not.

The Hon’ble Gujarat Authority of Advance Ruling (“GAAR”) noted that the Applicant has not received the said amount on account of sale of land but received the same on account of non-fulfillment of conditions of agreement of purchase of factory land by the customer. The current case is covered under Clause 5(e) of Schedule-II of the CGST Act which provides “(e) agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act” to be construed as a taxable supply under Section 7(1) of the CGST Act.

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)