GST WEEKLY UPDATE : 36/2021-22 (05.12.2021) By CA Vipul Khandhar

By CA Vipul Khandhar, Ahmedabad. (Author is a well known Chartered Accountant practicing at Ahmedabad)

1. Amended FORM GST DRC-03 by inserting specific option to make payments w.r.t. DRC-01A:

The CBIC vide Notification No. 37/2021 – Central Tax, dated December 1, 2021, has issued the Central Goods and Services Tax (Ninth Amendment) Rules, 2021, to further amend the format of FORM GST DRC-03 i.e. intimation of payment made voluntarily or made against the Show Cause Notice (“SCN”) or statement, in a following manner:

• Amended heading of the FORM GST DRC-03 i.e., “Intimation of payment made voluntarily or made against the show cause notice (SCN) or statement” added the words “intimation of tax ascertained through FORM GST DRC-01A”, in order to specify the payments made by the registered person through intimation of tax ascertained under FORM GST DRC-01A, communicated before issuance of SCN by the Revenue Department for mismatches between GST returns.
• In column 3 of the FORM GST DRC-03 which specifies the cause of the payment, for the words and letters “Audit, investigation, voluntary, SCN, annual return, reconciliation statement, others (specify)”the words, letters, figures and brackets “Audit, inspection or investigation, voluntary, SCN, annual return, reconciliation statement, scrutiny, intimation of tax ascertained through FORM GST DRC- 01A, Mismatch (Form GSTR-1 and Form GSTR-3B), Mismatch (Form GSTR-2B and Form GSTR-3B), others (specify)” have been substituted;
• In column 3 of the FORM GST DRC-03 which reads as “Details of show cause notice, if payment is made within 30 days of its issue” inserted “, scrutiny, intimation of tax ascertained through Form GST DRC-01A, audit, inspection or investigation, others (specify)”. Substituted table under serial no. 7 to add column for “Fee”. Thus, now taxpayers can pay Fee using FORM GST DRC-03.

2. CBIC increases Tenure of Anti-Profiteering Authority by 1 year:

The Central Board of Indirect Taxes and Customs (CBIC) has increased the tenure of the Anti-Profiteering Authority from 4 years to 5 years. The Board has notified the Central Goods and Services Tax (Ninth Amendment) Rules, 2021, which seeks to amend the Central Goods and Services Tax Rules, 2017.

3. Guidelines w.r.t. sale of seized/confiscated gold (other than gold ornaments/jewellery/articles):

• The CBIC vide Instruction No. 27/2021-Customs dated December 03, 2021 has issued guidelines for sale of seized/confiscated gold (other than gold ornaments/jewellery/articles).
• With the approval of competent authority, it has now been decided that henceforth seized/confiscated gold will be sold (other than gold ornaments/jewellery/articles) to Reserve Bank of India (RBI) only.
• Accordingly, the following guidelines are issued for disposal of seized/confiscated gold (other than gold ornaments/jewellery/articles).As soon as the seized/confiscated gold is ready for disposal, the Deputy/Assistant Commissioner of Customs in-charge of the disposal, shall intimate SPMCIL on the availability of gold for collection.

4. Govt Rationalise User Charges for SEZ-Online Services:

The Ministry of Commerce and Industries has notified the revised user charges for SEZ-Online services will be as under and would be effective from November 15, 2021. The government in the circular said. The government has notified that the transaction of Rs. 50 excluding the taxes is payable on Bill of Entry / Shipping Bill / DTA Sale / Deemed Export / DTA Procurement with Export Benefit / Zone to Zone Transfer / DTA Procurement / Temporary Removal / Sub-contracting. In the case of Softex Forms, the charges of 15/- per invoice are applicable. The charges of Rs.5000/- per annum is payable on AMC Fee for Unit and AMC Fee for Developer/Co-developer is Rs.10000/- per annum. The Registration Fee for Unit (one time) is Rs. 25000/- and Registration fee for Developer/Co-developer (one time) is Rs. 50000/-.

5. CBIC issues Instruction on Import of Sajji Khar / Papad Khar :

The import of Sajji Khar/ Papad Khar. The CBIC said that the import of Sajji Khar/ Papad Khar does not require product approval under FSS (Approval of non-specified food and food ingredients) Regulations, 2017 and these may be considered as “food not specified” till standards are notified by FSSAI. It is stated that imported consignments of Sajji Khar/Papad Khar do not require product approval under FSS (Approval of non-specified food and food ingredients) Regulations, 2017 and these may be considered as “food not specified” till standards are notified by FSSAI. The imported consignments shall be tested as per the standards for “food not specified” including the standards for heavy metals prescribed under FSS (Contaminants, Toxins, and residues) Regulations, 2011.

6. Recent AAR & Judicial Decisions:

(i) AAR On GST not payable on supply of services of lifting/ removing of garbage accumulated from vats, dumping yards, containers to Howrah Municipal Corporation:

(Applicant – Mr. Vinayak Singh)

In the case of Mr. Vinayak Singh Order No. 14/WBAAR/2021-22 dated October 8, 2021: has issued an advance ruling that the Applicant engaged in providing conservancy/solid waste management services as well as garbage collection and dumping services to the Conservancy Department of the Howrah Municipal Corporation (“HMC”) is exempt from payment of tax vide entry serial number 3 of the Notification No. 12/2017 – Central Tax (Rate) dated June 28, 2017 (“Service Exemption Notification”):

The AAR, West Bengal has observed that the Applicant has received payment against removing of garbage, road bumps, drain slits, rubbish by dumper with labour, fuel & payloader and further observed that the Applicant does not supply any goods and receives consideration only in respect of the quantity of garbage lifted and removed, thus held that the Applicant  provides pure service.

Further held, that the Applicant’s services to HMC is exempt under entry serial number 3 of the Services Exemption Notification because said services are in relation to functions entrusted to a municipality under Article 243W of the Constitution of India.

Held, as the applicant is making an exempt supply to the HMC, the provisions of Section 51 of the Central Goods and Services Act, 2017 (“CGST Act”) and, for that matter, the TDS Notifications will not apply to Applicant’s supply.

(ii) AAR on Services provided to JWDS not qualify for any exemption under GST:

(Applicant – Bal Raksha Bharat alias Save the Children)

JWDS is not a State Government and hence the services provided to JWDS would not qualify for any exemption as envisaged under Sr. No. 72 of the Notification No. 12/2017-Central Tax (Rate) dtd. 28.06.2017, issued by the Central Government under CGST Act, 2017.

To cap it all, we hold that the exemption under Sr.No.72 of the Notification No. 12/2017-CT(R) shall be available only if the service is provided to the Central Government, State Government or Union Territory Administration under any training program for which total expenditure is borne by the Government. We thus hold that the said exemption shall not be applicable/available to the applicant.

The Applicant shall not be entitled to avail benefit of exemption as envisaged under SI.No.72 of Notification No. 12/2017-Central Tax (Rate) dtd. 28.06.2017 and Sl.No.72 of Notification No.FA-3-42/2017/1/ V(53) dtd.30.06.2017, in respect of the services of training provided to JWDS.

(iii) AAR On GST on transportation service for temporary period till extension of railway siding to mine location:

(Applicant – Pachhwara Coal Mining Private Limited)

The transportation service supplied by the applicant to The West Bengal Power Development Corporation Ltd (WBPDCL) will fall under the other supporting transport services (Heading 996793) and covered under Entry ll(ii) of the Notification No. 11/2017-C.T. (Rate), dated 28.06.2017 & would be chargeable to GST at 18% (CGST 9% + SGST 9%) as provided under the Notification No. 11/2017-C.T. (Rate), dated 28.06.2017 (as amended).

(iv) AAR On GST on royalty/dead rent paid/payable to Government for transfer of right to use minerals:

(Applicant – Dhirajlal Velji Atha (HUF)

The services for the right to use minerals including its exploration and evaluation, as per Sr. No. 257 of the annexure appended to notification no. 11/2017-CT (Rate), dated 28.06.2017 is included in group 99733 under heading 9973. The royalty/dead rent paid/payable to the Government by the applicant is consideration against the transfer of right to use minerals including its exploration and evaluation as per the lease granted by the Government to the applicant.

The services for the right to use minerals including its exploration and evaluation, as per Sr. No. 257 of the annexure appended to notification no. 11/2017-CT (Rate), dated 28.06.2017 is included in group 99733 under heading 9973. Hence it attracts the same rate of tax as on supply of the like goods involving transfer of title in goods. As per notification no. 11/2017-CT (Rate), dated 28.06.2017 under the CGST Act, 2017 and the corresponding State Tax notification no.- 01/2017 dt. 29-06-2017 under JGST Act, 2017, Schedule -l the iron ore and manganese ore extracted by the applicant attract 5% GST (2.5 CGST+ 2.5% JGST) as covered under HSN 2601 and 2602 (At Sr. No. 139 and 140 of the notification).

(v) AAR On GST on Lease amount payable to RIADA after getting allotment letter:

(Applicant – Matrix Horizons Private Limited)

The amount payable in installment to the Ranchi Industrial Development Authority (RIADA) on lease in respect of the scheduled land/ shed for a period of 30 years from the date of allotment after getting the allotment letter does not come under the category of upfront payment. Hence, it is not exempted from the GST vide serial no 41 of notification 12/2017 under heading 9927 of 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.