GST WEEKLY UPDATE : 37/2022-23 (11.12.2022) By CA Vipul Khandhar

By CA Vipul Khandhar

1.         GST Update Regarding GSTNs suspended after 01.12.2022:

• A recent tweet by the GST Tech stated that the facility of automated drop proceedings is now available on the GST portal for the Goods and services Taxpayer Identification Number (GSTNs) suspended after December 01, 2022.
• This functionality is for taxpayers who have filed their pending:

– 6 monthly returns or

– 2 quarterly returns

·     Such taxpayers who have filed all their pending returns, the system will automatically drop the proceedings and resolve suspension.

·     If the status of the GSTN does not automatically turn “ACTIVE”, then the taxpayer can revoke suspension with a single click on “Initiate Drop Proceeding”.

2.    RoDTEP Scheme gets extended to Chemicals, Pharmaceuticals and Articles of Iron & Steel from December 15, 2022:

• Taking a major step to boost exports, Centre on December 07, 2022 further expanded the scope of the RoDTEP Scheme (Remission of Duties and Taxes on Exported Products) by including the exports made from the Chemical sector, Pharmaceuticals sector and exports of articles of iron & steel under chapters 28, 29, 30 and 73 of ITC(HS) schedule of items.
• The expanded list of items will be applicable for exports made from December 15, 2022. This was a long-standing demand of the industry which has been accepted and will go a long way in boosting our exports and competitiveness in the global markets, generate employment and contribute to the overall economy. The expanded list of eligible export items under Appendix 4R will increase from current 8,731 export items (8 digit tariff lines) to 10,342 export items (8 digit tariff lines).
• RoDTEP is based on the globally accepted principle that taxes and duties should not be exported, and taxes and levies borne on the exported products should be either exempted or remitted to exporters. The RoDTEP scheme rebates/refunds the embedded Central, State and local duties/taxes to the exporters that were so far not being rebated/refunded. The scheme is being implemented from January 01, 2021 and the rebate is issued as a transferable electronic scrip by the Central Board of Indirect Taxes & Customs (CBIC) in an end to end IT environment.
• It may be noted that Government is leaving no stone unturned to support domestic industry and make it more competitive in the international markets. Export centric industries are being reformed and introduced to better mechanisms so as to increase their competitiveness, boost exports, generate employment and contribute to the overall economy. This will go a long way in achieving our vision of building an Aatmanirbhar Bharat.
• In the present times, when exports are facing headwinds on account of signs of recession in some of the developed markets & supply chain disruptions on account of Russia-Ukraine conflict, extension of RoDTEP to uncovered sectors like Chemicals, Pharmaceuticals & Articles of Iron & Steel is likely to enhance the export competitiveness of these sectors.

 3.    Govt allows 100% of IT units in Special Economic Zones to work from home until December 31, 2023 by amending the SEZ Rules, 2006:

The Department of Commerce under the Ministry of Commerce and Industry vide Notification No. F. No. K-43013(12)/1/2021-SEZ dated December 8, 2022 amended the Special Economic Zones Rules, 2006 (“the SEZ Rules”), by substituting Rule 43A. The Rule 43A states the conditions for allowing the Information Technology and Information Technology enabled services units under Special Economic Zone (“SEZ”) to permit their employees to work from home (“WFH”). The conditions under Rule 43A are states as under:

2. A Unit may permit its employees, specified in sub-rule (2) of Rule 43A to WFH or from any place outside the SEZ in accordance with this rule.
3. The following employees are covered under this Rule

(i) employees of Units which provide Information Technology and Information Technology enabled services;

(ii) employees, who are temporarily incapacitated;

(iii) employees, who are travelling; and

(iv) employees, who are working offsite.

• The permission to WFH is granted upto December 31, 2023
• The facility for WFH or from any place outside the SEZ cover all the employees of the Unit.
• Units permitting WFH have to intimate the Development Commissioner through an email on or before date on which the facility of WFH is permitted.
• There is no need for any Unit to provide list of employees permitted WFH, however, Unit need to prepare a list of such employees and provide the same whenever asked at time of verification.
• The facility for WFH or from any place outside the SEZ would be admissible if the Unit continues to operate from the premises as per their Letter of Approval, as amended from time to time.
• The work done by the employee should be related to the services provided by Units.
• The Unit have to ensure export revenue of the resultant products or services to be accounted for by the Unit to which the employee is tagged.
• When an employee is no longer the part of the project of the Unit, such employee should be un-tagged from the Unit and Unit must surrender the identity card as per Rule 70(2) of the SEZ Rules.
• The Unit may provide to an employee duty-free goods, including laptop, desktop, and other electronic equipment needed by the employee for WFH or from any place outside the SEZ and the same would be allowed to be taken outside the SEZ without payment of duty or Integrated Goods and Services Tax (“IGST”) on temporary basis. However, the Units while opting for the facility of WFH or from any place outside the SEZ have to ensure that such duty-free goods are duly accounted for in the appropriate records as per the extant rules and are available for verification, if necessary.
• Notwithstanding anything contained in Rule 50 (1) of the SEZ Rules, the removal of duty free goods would be allowed for a period commensurate with the validity of the facility for WFH or anywhere outside the SEZ. However, if a Unit fails to bring back the duty-free goods into the SEZ within the period specified in the sub-rule, the duty applicable on such goods shall be paid by the Unit.
• The word “employees” shall include all persons employed:

(i) on the rolls of the Unitor

(ii) under a direct contract or

(iii) where the Unit is the principal employer under a contract with another organization where such persons are expected to report on a day-to-day basis for work to the Unit and the Unit administers the control on their attendance’.

Through the amendment, IT/IES units in SEZ have been allowed to permit 100% of their workforce to WFH or outside the SEZ provided all the conditions are being satisfied. The amendment will give an additional option to IT/ITES units to redefine their working culture.

• AAR & Judicial Decisions:

(i) Kerala Highcourt Decision Regarding GST registration restored which was cancelled without due service of Show Cause Notice

(Applicant – M/s Western Offshore & Marine Projects Pvt. Ltd.)

M/s Western Offshore & Marine Projects Pvt. Ltd. (“the Petitioner”) challenged the Order of cancelling the GST registration of the Petitioner, issued by the State Tax Officer (“Respondent No. 1”), Petitioner contended that in terms of Section 29 read with Rule 22 of the Central Goods and Services Tax Act, 2017 (“the CGST Act”)/State Goods and Services Tax Act, 2017 (“the SGST Act”), the Petitioner was entitled to a SCN in form REG-17 which was not issued.

The Revenue department (“the Respondent”) admitted that the SCN was not issued to the Petitioner regarding the suspension of registration.

The High Court admitted the writ petition agreeing with the contention of the Petitioner and remitted back to the Respondent No. 1 to complete the proceedings in accordance with the law. As a result of which, the GST registration of the Petitioner was restored.

(ii) Gujarat Highcourt Decision Regarding Intimation of tax liability is to be issued in Form GST DRC-01A and not in Form GST DRC-01 which pertains to show cause notice; DRC-01 issued informing assessee about initiation of recovery action on non-payment of tax, was to be quashed:

(Applicant – Agrometal Vendibles (P.) Ltd.)

Subsection (5) makes it very abundantly clear that before service of a show cause notice under subsection (1) referred to above, such person may pay the amount of tax along with interest payable under section 50 and a penalty equivalent to 50% of such tax on the basis of his own ascertainment of such tax or the tax as may be ascertained by the proper officer and inform the proper officer in writing about such payment.

the scheme of the Act is that a person may be given one opportunity to make the payment towards tax. If he makes the payment under sub-section (5), then he gets

the benefit of sub-section (6). Sub-section (6) provides that the proper officer, on receipt of the information from the dealer about payment of the tax, would, thereafter, not proceed to serve any notice under sub-section (1) in respect of the tax so paid or any penalty payable under the provisions of the Act or the Rules made thereunder.

(iii) AAR On GST on building construction works contract service provided to TSTDCL:

(Applicant – Shree Construction)

The rate applicable for the works contract service provided to the Telangana State Tourism Development Corporation Limited by way of construction of building on their land. Whether it is 12% as the Telangana State Tourism Development Corporation Limited is wholly owned by the Government of Telangana or 18% as the Telangana State Tourism Development Corporation Limited is a business entity and collecting fee from its customers.

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.