GST WEEKLY UPDATE :16/2024-25 (21.07.2024) By CA Vipul Khandhar

-By CA Vipul Khandhar

1. Integrated Services from NIC-IRP e-invoice-1 and e-invoice-2 Portals Jul 16th, 2024: GSTNwish to inform that NIC is releasing the integrated services from e-invoice-1 and e-invoice-2 portals on 18th July 2024 on sandbox portals and 1st Aug 2024 on the production portals. These portals run in parallel and now allow for seamlessly inter-operations. The highlights of the portal are as follows:

(https://einvoice1.gst.gov.in and https://einvoice2.gst.gov.in)

1. Both the portals (NIC-IRP 1 & 2) provide the web and API modes for e-invoice related services.
2. The taxpayers can use the same login credentials to operate e-invoice1 and e-invoice-2 portals.

iii. In case of API, the same token can be used for the services of e-invoices and e-waybills on both the portals.

1. The taxpayers can use the e-invoice-2 portal during technical glitches in e-invoice main portal or any other exigencies.

1. The Criss-Cross operations of printing, downloading and cancelling can be carried out on these portals. That is, printing, downloading and cancelling of e-invoices of the portal 1 can be done at portal 2 and vice versa.

1. In case e-invoice-1 is non-operational because of technical reasons, then the e-invoice-2 portal can be used for all the services of the e-invoices.

vii. Please visit the sandbox portal (einv-apisandbox.nic.in) for URLs of APIs and other details.

viii. Please test all the APIs in sandbox environment before rolling on the production environment.

1. In addition to NIC-IRP, four other e-invoice portals are operated for the convenience of the taxpayer. The users can avail similar e-invoicing services on IRP-3/IRP-4/IRP-5 and IRP-6 portals also

2. Refund of additional IGST paid on account of upward revision in prices of goods subsequent to exports Jul 14th, 2024:

1. GST Council has approved that application of refund of additional IGST paid on account of upward revision in prices of goods subsequent to exports may also be processed by Tax Administration. Accordingly, Notification No. 12/2024-Central Tax dt. 10th July, 2024 has also been issued. GSTN is in the process of development of a separate category of refund application in FORM GST RFD-01, for filing an application of refund of additional IGST paid on account of upward revision in prices of goods subsequent to exports.
2. However, till the time such separate category for claiming refund of additional amount of IGST paid is developed on the common portal, such exporter(s) may claim refund of the additional IGST by filing an application of refund in FORM GST RFD-01 under the category “Any other” with remarks “Refund of additional IGST paid on account of increase in price subsequent to export of goods” and uploading of Statement 9A & 9B (Refer to Notification No. 12/2024-Central Tax dt. 10th July, 2024) along with the relevant documents as specified in the Circular 226/20/2024-GST dated. 11.07.2024.
3. The Refund application filed under this category will be processed by the officer based on the documentary proof submitted by the refund applicant. The list of documents which are required to be accompanied with the refund claim are also mentioned in Para 6 of the said Circular.
4. Issues (if any) faced by the taxpayers in filing refund application may be reported on Grievance redressal portal :https://selfservice.gstsystem.in

3. Now GST Registration allowed after either biometric verification or Identified Taxpayers Without Biometric Aadhaar Authentication and In-Person Verification:

The Central Board of Indirect Taxes and Customs (CBIC) announced via social media on July 19, 2024, that a biometric-based Aadhaar authentication process for Goods and Services Tax (GST) registration is now mandatory for taxpayers identified through data analytics and risk parameters. Those who choose not to undergo biometric Aadhaar authentication must visit a GST Suvidha Kendra for photo capturing and document verification. This new rule applies to all states and Union Territories.

4. CBIC issued clarification regarding GST rates & classification (goods) based on the recommendations of the GST Council in its 53rd meetingCircular No. 229/23/2024-GST dated July 15, 2024:

Clarification regarding GST rate on Solar Cookers:

On the recommendations of GST Council, it is hereby clarified that solar cookers that work on dual energy of solar energy and grid electricity are appropriately classifiable under heading 8516 and already attract a GST rate of 12% vide SI. No. 201A of Schedule II of notification No. 1/2017-Central Tax (Rate) dated the 28th June, 2017.

Clarification regarding GST rate on Fire Water Sprinklers:

On the recommendations of the Council, it is hereby clarified that all types of sprinklers, including fire water sprinklers attract GST at the rate of 12% vide SI. No. 195 B of Schedule II of notification No. 1/2017-Central Tax (Rate) dated the 28th June, 2017.

Clarification regarding GST rate on parts of Poultry-keeping machinery:

Parts of Poultry-keeping machinery are classifiable under tariff item 8436 91 00 and attract GST at the rate of 12% vide SI. No. 199 of Schedule II of notification No. 1/2017-Central Tax (Rate), dated the 28th June, 2017. On the recommendations of the Council, to bring clarity on the issue, the relevant entry at SI. No. 199 of Schedule II of notification No. 1/2017-Central Tax (Rate) dated the 28th June, 2017, has been amended vide notification No. 2/2024-Central Tax (Rate), dated the 12th July, 2024 to specifically include ‘parts’ of Poultry-keeping machinery.

Clarification regarding the scope of expression ‘pre-packaged and labelled’ for supply of agricultural farm produce:

On the basis of the recommendation of the GST Council, the definition of ‘pre-packaged and labelled’ in notification No. 1/2017-Central Tax (Rate) and notification No. 2/2017-Central Tax (Rate), both dated the 28th June, 2017, has been amended vide notification No. 2/2024-Central Tax (Rate) dated 12th July 2024 and notification No. 3/2024-Central Tax (Rate) dated 12th July, 2024, respectively, to exclude the supply of agricultural farm produce in package(s) of commodities containing quantity of more than 25 kilogram or 25 litre from the scope of ‘pre-packaged and labelled’. Consequently, supply of agricultural farm produce in package (s) containing quantity of more than 25 kilogram or 25 litre will not attract GST levy of 5%.

5. Clarification regarding supplies of goods made to or by agency engaged by Government

On the basis of the recommendation of the GST Council, in view of the genuine interpretational issues, the issues for the past period from 01.07.2017 up to 17.07.2022 are hereby regularized on “as is where is” basis for supplies made to or by any agency engaged by Union Government or State Government/Union Territory for procurement and sale of such goods under any program/scheme duly approved by the Central Government or any State Government intended to distribute such goods at free of cost or at subsidized rate to the eligible beneficiaries like economically weaker sections of the society subject to following conditions, namely:-

1. the concerned supplier furnishes a certificate from an officer not below the rank of the Deputy Secretary to the Government of India or the Deputy Secretary to the State Government or the Deputy Secretary in the Union Territory concerned recommending that supplies have been made to or by an agency engaged by Union Government or State Government/Union Territory for procurement and sale of such goods under any programme/scheme duly approved by the Central Government or any State Government intended to distribute such goods at free of cost or at subsidized rate to the eligible beneficiaries like economically weaker sections of the society, within a period of 180 days from the date of issuance of this Circular to the jurisdictional commissioner of the Central Tax or jurisdictional commissioner of the State Tax, or jurisdictional officer of the Union Territory Tax, as the case maybe; and
2. Input Tax Credit shall not be allowed on such inputs and, if availed on such inputs, it shall be reversed within a period of 180 days from the date of issuance of this Circular, if the supplier intends to take the benefit under the proposed regularisation.

CBIC issued clarifications regarding applicability of GST on certain services Circular No. 228/22/2024-GSTdated July 15, 2024:

GST exemption on the outward supplies made by Ministry of Railways (Indian Railways).

GST Council has recommended to exempt the services provided by Ministry of Railways (Indian Railways) to general public viz., sale of platform tickets, facility of retiring rooms/waiting rooms, cloak room services and battery-operated car services. GST council has also recommended to exempt the supply of services made between various zones/ divisions under Ministry of Railways (Indian Railways). Notification No. 04/2024-CT(R) dated 12.07.2024 has been issued in this regard and effective date of implementation of the said notification is 15.07.2024.

GST exemption on the transactions between Special Purpose Vehicles (SPVs) and Ministry of Railways (Indian Railways).

GST Council has recommended to exempt the supply of service by SPVs to Ministry of Railways (Indian Railways) by way of allowing Indian Railways to use the infrastructure built and owned by SPVs during the concession period against consideration and maintenance services supplied by Ministry of Railways (Indian Railways) to SPVs from GST. Notification No. 4/2024-CT(R) dated 12.07.2024 has been issued in this regard. 

Applicability of GST on the statutory collections made by the Real Estate Regulatory Authority (RERA) in accordance with the Real Estate (Regulation and Development) Act, 2016.

RERA is constituted under the Real Estate (Regulation and Development) Act, 2016. RERA performs function of regulating the real estate development and construction of the building entrusted to them which fall under Entry No.1 and 2 of the Twelfth Schedule of the Indian Constitution.

RERA is a ‘governmental authority’ as per the definition in the exemption notification No. 12/2017-CT(R) dated 28.06.2017 and is covered under the scope of entry at SI. No. 4 of notification No. 12/2017-CT(R) dated 28.06.2017.

GST Council in its 53rd meeting has recommended to clarify that statutory collections made by RERA are covered under the SI. No. 4 of notification No. 12/2017-CT(R) dated 28.06.2017.

Applicability of GST on the incentive amount shared by acquiring banks with other stakeholders in the digital payment ecosystem under the notified Incentive Scheme for promotion of RuPay Debit Cards and low value BHIM-UPI transactions.

Under the notified Incentive Scheme for promotion of RuPay Debit Cards and low value BHIM-UPI transactions, the Ministry of Electronics and Information Technology (MeitY) pays the acquiring banks an incentive as a percentage of the value of the transactions up to two thousand rupees. Applicability of GST on the incentive paid by the MeitY to acquiring banks under the notified Incentive Scheme for promotion of RuPay Debit Cards and low value BHIM-UPI transactions was examined in the 48th GST Council meeting held on 17th December, 2022 and based on the recommendations of the GST Council meeting, it was clarified by Circular No. 190/02/2023-GST dated 13th January, 2023, that incentives paid by MeitY to acquiring banks under the said scheme are in the nature of subsidy and thus, not taxable.

The Gazette Notifications dated 17th December, 2021 and 14th January, 2023 issued by MeitY state that the incentives will be shared by the acquiring banks with other payment system participants and the payment system operator, in the proportion and manner decided by the National Payments Corporation of India (NPCI) in consultation with the participating banks. MeitY pays the incentive to the acquiring bank and it is further shared by the acquiring bank with the issuer bank. Issuer bank further shares the incentive with the Payer Payment Service Provider (PSP), which are typically banks, and the UPI app.

The share of incentive paid by the acquiring bank to the issuer bank and further shared by the issuer bank to the Payer PSPs and the UPI app are decided by the NPCI in consultation with participating banks. Payer PSPs may choose to further share this incentive with Third Party App Providers (TPAP). However, the proportion of the incentive shared by Payer PSPs with TPAPs is not being decided by NPCI in consultation with the participating banks for Financial Years 2021-22 and 2022-23 and was determined by the business agreement between the Payer PSPs and TPAP.

GST liability on the reinsurance of specified general and life insurance schemes.

Certain specified general insurance and life insurance schemes are exempt from GST under SI. Nos. 35 and 36 of notification No. 12/2017-CT(R) dated 28.06.2017. Vide entry at SI. No. 36A of the said notification, reinsurance of the aforesaid exempted insurance schemes has also been exempted w.e.f. 25.01.2018.

GST liability on the reinsurance of insurance schemes for which total premium is paid by the Government.

Services provided to the Central Government, State Government, or Union Territory under any insurance scheme for which total premium is paid by the Central Government, State Government, or Union Territory are exempt from GST under SI. No. 40 of notification No. 12/2017-CT(R) dated 28.06.2017. Vide entry at SI. No. 36A of the said notification, re-insurance of the aforesaid insurance schemes has been prospectively exempted w.e.f. 27.07.2018.

Applicability of GST on retrocession services.

The matter was placed before the GST Council in its 53rd meeting held on 22nd June, 2024. As per the IRDAI (Re-insurance) Regulations, 2018, ‘Retrocession’ means a re-insurance transaction whereby a part of assumed reinsured risk is further ceded to another Indian Insurer or a CBR (Cross Border Re-insurer). Accordingly, the GST Council has recommended to clarify that reinsurance includes retrocession services.

GST liability on certain accommodation services.

The matter was placed before the GST Council in its 53rd meeting held on 22nd June, 2024 and the GST Council recommended to exempt the supply of accommodation services having value of supply less than or equal to twenty thousand rupees per person per month provided that the accommodation service is supplied for a minimum continuous period of ninety days. The same has been exempted w.e.f. 15.07.2024 vide notification No. 4/2024-CT(R) dated 12.07.2024.

Thus, as recommended by the GST Council, GST liability on the supply of accommodation services is regularized on ‘as is where is’ basis for the period from 01.07.2017 to 14.07.2024 where value of supply of the accommodation service is less than or equal to twenty thousand rupees per person per month and the said accommodation service was supplied for a minimum continuous period of ninety days.

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 endeavor 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 in the field of direct and indirect tax)