GST WEEKLY UPDATE : 32/2022-23 (06.11.2022) By CA Vipul Khandhar

By CA Vipul Khandhar

1. GST refund issue & its resolution on GSTN portal:

2. Filling of the GSTR-1 allowed after filling of the previous GSTR-3B only & GSTR-3B allowed to filling after filling of previous GSTR-1 return on portal, vice versa:

• The Central Government has amended Section 37 & Section 39 of Central Goods & Service Tax Act (CGST), 2017 vide Notification No. 18/2022–Central Tax dated 28th September, 2022 with effect from 01 October, 2022. According to section 37(4) of CGST, Act, taxpayers shall not be allowed to file GSTR-1 if previous GSTR-1 is not filed and as per sec 39(10) a taxpayer shall not be allowed to file GSTR-3B if GSTR-1 for the same tax period is not filed.
• Section 37(4) & 39(10) of Central Goods & Service Tax Act, 2017 are reproduced below:

– These changes are being implemented prospectively and will be operational on GST Portal from 01st November, 2022. Accordingly, from October-2022 tax period onwards, the filing of previous period GSTR-1 will be mandatory before filing current period GSTR-1.

– Further, from October, 2022 tax period onwards, filing of GSTR-1 will also be mandatory before filing GSTR-3B.

• The GST Common Portal is not allowing the taxpayers to open GSTR-3B of October, if GSTR-1 for the same tax period i.e. October has not been filed. Amended section 39(10) restricts the filing of GSTR-3B for the current tax period if any of the GSTR-1 for the previous period including the current period has not been furnished by the taxpayer.

3. E-Invoice and e-Waybill Single sign-on (SSO) functionality has been enabled.:

• The Single sign-on (“SSO”) functionality has been enabled for e-Invoice and e-Waybill.
• The SSO is a facility by which the user can log in to the e-Way bill system using his/her credentials and click on the e-Invoice link to access the e-Invoice system directly without logging in again and vice versa.

4. Bill of entries import grievance has been made through through Anonymized Escalation Mechanism.

The ICEGATE registered users can Log and Track Grievances for delayed Bill of Entry clearance under Faceless Assessment through Anonymized Escalation Mechanism (“AEM”):

         1. Log a Grievance

In case of delay in the assessment of the Bill of Entry beyond 24 hours subject to the condition that the Bill of Entry is integrated with IGM, ICEGATE users can raise a grievance on AEM Portal. The grievance would be escalated to the supervisory officer for early resolution. 

2. Track the Grievance Status

Track the grievance status on ICEGATE Portal through Grievance details or Bill of Entry details till resolution. 

3. Faster Clearance of BE

Bill of Entry assessment is expedited for faster clearance.

5. AAR & Judicial Decisions:

(i) AAR On Recovery from employee for the Notice Pay, Bond Forfeiture, Canteen Charges, ID Cards replacement Liquidated Damages etc not liable for the GST:

(Applicant – M/s Rites Ltd.)

The AAR, Haryana has passed a ruling on the taxability of amount collected or received or forfeited as Notice Pay Recovery, Bond forfeiture of contractual employees, canteen charges, recovery on account of loss or replacement of ID Cards, Liquidated damages due to delay in completion, Forfeiture of earnest money and security deposit and bank guarantee by applicant, and Amount written off as creditors balance in the books of accounts of the applicant.

Held:

• Notice Pay Recovery- the CBIC vide Circular No. 178/10/2022-GST dated August 3, 2022 has clarified the issue regarding Notice pay recovery and surety bond forfeiture. further, the charges paid by an employee when he/she leaves without serving the mandatory notice period cannot be understood as consideration for any supply or services. It is in fact compensation in case either party frustrates the employment contract.
• Surety bond forfeiture- Surety Bond Forfeiture by the Applicant of the employee, who leaves the company without serving minimum contract period as per the employment contract is not consideration. These are outside the scope of supply because the amount collected is covered under the ambit of Schedule III of the CGST Act, 2017.
• Canteen charges- The nominal deduction from salary of the employee at fixed rate is outside the purview of GST as the third party vendor is charging GST on the said supply and also because the principal supply of the Applicant is that of transport, infrastructure and related technology.
• Charges for re-issuance of ID Card- The Applicant uses in-house printing facility and therefore the same falls under the ambit of Schedule III appended with the CGST Act, 2017.
• Liquidated damages due to delay in completion, earnest money, bank guarantee and security deposit- Non-taxable in light of CBIC Circular No. 178/10/2022-GST dated August 3, 2022.
• Taxability of amount written off in the books of accounts of the Applicant of the Applicant as creditors balance- The same is not taxable as no services were being provided or received in the said transactions, and the unclaimed amount in a way is an income and not a supply and therefore would be outside the scope of supply.

On factual and legal aspects mentioned above, it was found that none of the above mentioned amounts were chargeable to 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.

(Author is well known Chartered Accountant practicing in field of Direct and Indirect Taxation.)