GST WEEKLY UPDATE : 42/2023-24 (14.01.2024) By CA Vipul Khandhar

By CA Vipul Khandhar

1. GSTN Team Reaches Out via Email to Rectify GSTR-1 Errors : Know Recommended Solution:

The Goods and Services Tax Network (GSTN) team has now reached out to the tax filers regarding the rectification in the GSTR-1 errors. The team has emailed the error resolution through the emails.

The email resolutions states as follows:

 “Dear Taxpayer If you get error message while filing GSTR I, such as ‘Error Preparing data for filing Please try again later,’ then please follow the steps below: Kindly save your form again by adding or updating invoices in table 7, Then click on generate summary followed by proceed to file button, Post validating the data, kindly file your returns.”

The tax filers, who get these errors shall try the resolution recommended above by the GSTN team. It is also advised to check your mail inboxes.

GSTR – 1 Form GSTR-1 is a monthly/quarterly Statement of Outward Supplies to be furnished by all normal and casual registered taxpayers making outward supplies of goods and services or both and contains details of outward supplies of goods and services.

2. E-Way Bill Changes: Mandatory e-Invoice Link from March 2024 – Advisory Withdrawn:

Advisory on Blocking the generation of E-Way Bill without e-Invoice/IRN has been withdrawn.

Blocking the generation of E-Way Bill without e-Invoice/IRN details for B2B and B2E transactions for e-invoice enabled tax payers will be done from 1st March 2024.

3. AAR & Important Judgements:

(i) Kerala Highcourt Decision Regarding Rectification in GSTR-3B in ITC column: CGST and SGST instead of IGST:

(Applicant – Chukkath Krishnan Praveen vs. State of Kerala]

The present writ petition is disposed of with a direction to the respondent to permit the petitioner to rectify the mistake in Form GSTR-3B by accounting input tax credit as IGST instead of SGST and CGST credit.

The Counsel for the petitioner submitted that the petitioner committed some errors in submitting the returns in GSTR-3B, on the basis of which the assessment order has been passed. The petitioner has made a representation on 21.10.2023 for rectifying the mistakes.

The High Court directed the 3rd respondent to consider representation as a rectification application and pass necessary orders in accordance with the law, within a period of two months.

(ii) Hon’ble Orissa HC decision regarding Assessee allowed to rectify its GSTR-1 after the deadline wherein B2C was erroneously mentioned, instead of B2B:

(Applicant – M/s. Shiva Jyoti Construction)

Facts:

M/s Shiva Jyoti Construction (“the Petitioner”) has filed this petition seeking to permit them to rectify the GST Return filed for the months of September 2017 and March 2018, wherein the Petitioner had wrongly mentioned B2C instead of B2B while filing Form GSTR-1 due to which the recipient was unable to avail the ITC. The Petitioner was unaware of such error until January 21, 2020.

Thereafter, the Petitioner had made requests to the Revenue Department (“the Respondent”) to allow it to rectify the Form GSTR-1. The Respondent rejected the request of the Petitioner vide letters of rejection dated June 19, 2020 and September 23, 2020 (“the Impugned Letters”), on the ground that the last date of filing the return was March 31, 2019 and the last date of carrying out such rectification was April 13, 2019. Thus, the deadline for the rectification of errors in Form GSTR-1 had crossed.

Issue:

Whether the Petitioner can be allowed to make rectifications in its Form GSTR-1 after the deadline for rectification of errors had crossed?

Held:

The Hon’ble Orissa High Court in W.P. (C) No. 18216 of 2017:

• Observed that, no loss would be caused to the Respondent by allowing the Petitioner to make the rectifications and that, the Petitioner will be unnecessarily prejudiced if it is not allowed to avail the benefits of ITC.
• Relied on the judgment of the Hon’ble Madras High Court in the matter of M/s. Sun Dye Chem v. the Assistant Commissioner (ST) [Writ Petition No.29676 of 2019 dated October 6, 2020] wherein, the Court allowed the assessee to rectify and correct its Form GSTR-1for the Period August 2017 to December 2017 and redistribute the ITC available and directed the Revenue Department to enable amendment in Form GSTR-1.
• Set aside the Impugned Letters.
• Permitted the Petitioner to resubmit the corrected Form GSTR-1.

Directed the Respondents to receive the forms manually and facilitate the uploading of details in the web portal within a period of four weeks.

(iii) AAR On Eligibility of Input Tax Credit on Roof-Top Solar System Installation & Commissioning:

(Applicant – Unique Welding Products Pvt Ltd)

1. Business Operations: Unique Welding Products Pvt. Ltd. is engaged in the manufacturing and sale of welding wires. The company has a GST registration number and conducts its business by discharging GST at 18%.
2. Roof-Top Solar System Installation: The company entered into an interconnection agreement with Madhya Gujarat Vij Company Ltd (MGVCL) for the captive use of power generated by the roof-top solar system. The solar system has a capacity of 440 KW and is used exclusively for manufacturing welding wires on the company premises.

iii. ITC Claim: The company asserts its eligibility for ITC under sections 16 and 17 of the CGST Act. Sections 2(63), 2(59), 16, and 17 are referenced to support the claim for ITC on inputs, input services, and capital goods used in the installation of the roof-top solar power plant.

iv. Advance Ruling Questions: The applicant seeks clarification on two main questions:

– Whether the company is eligible for ITC on the purchased roof-top solar system with installation & commissioning.

– Whether the roof-top solar system, with installation and commissioning, constitutes plant and machinery, making it eligible for ITC under section 17(5) of the CGST Act.

v. Personal Hearings: The company represented by Shri Kamal Mulchandani and Shri Rohit Mulchandani participated in personal hearings on 29.8.2023 and 9.11.2023. Additional submissions, including relevant documents and photographs, were provided on 20.11.2023.

1. Additional Submissions: Copies of rulings, annual reports, invoices, and the interconnection agreement were submitted. Photographs of the roof-top solar plant were provided, highlighting its installation on the factory roof.

Ruling Outcome:

1. Eligibility for ITC:  The applicant, Unique Welding Products Pvt. Ltd., is deemed eligible to avail ITC on the roof-top solar system with installation & commissioning under the CGST/GGST Act.
2. Plant and Machinery Status: The roof-top solar system, with installation and commissioning, constitutes plant and machinery for the applicant, making it eligible for ITC under section 17(5) of the CGST/GGST Act.

Conclusion: The ruling in the matter of Unique Welding Products Pvt. Ltd. provides clarity on the eligibility of ITC for businesses investing in roof-top solar systems. The distinction between immovable property and plant and machinery, as well as reference to relevant sections and previous rulings, contributes to a comprehensive understanding of the tax implications for such sustainable energy installations.

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 at Ahmedabad)