Newsletter

The CBIC vide Notification No. 18/2022 - Central Tax dated 28 September 2022 has notified various provisions of the Finance Act 2022 to be effective from 01 October 2022. However, none of the provisions bear more importance than Section 16 of the CGST Act, which provides for the time-limit for availment of ITC for a particular F.Y. As per Section 16(4) of the CGST Act, as it stands today, the last date to avail ITC for a F.Y. is the due date of Form GSTR-3B for the month of September of the subsequent F.Y. With effect from 01 October 2022, the due date will be extended to 30th Day of November of the subsequent F.Y. The key amendments to come into effect from 01 October 2022 have been tabulated hereunder:

GLS Comments:

The above-mentioned amendments had been recommended in the Finance Bill in February 2022. However, the same are being notified after a period of 6 months. Nonethless, as they say... better late than never. These amendments are welcome by the Trade and Industry. Especially the amendment to Section 16(4) of the CGST Act. Further, in lines with the said amendment, various due dates such as the last day for issuane of credit notes and reporting in GSTR-1, rectifications in GSTR-1, GSTR-3B, etc.

It would further be pertinent to note that generally the Financial Statements of any Company are closed in the month of September. Thus, any missed-out credit, transactions, credit notes, etc. which are identified during the finalizing and closing of the Financials Statements in the month of September, can now be availed by virtue of the amendment in Section 16(4) of the CGST Act. 

It shall also be borne in mind that the due date for availing credit u/s. 16(4) has been extended till 30th November of the following F.Y. and not the due date of filing the return for the month of November. Thus, effectively the credit for a particular F.Y. can be availed in GSTR-3B for the month of October of the following F.Y., provided that the same is filed on or before 30th November.

The Government has further extended the Foreign Trade Policy 2015-20 by six months w.e.f. 1^st October, 2022 due to the global economic uncertainties.

The DGFT has issued Notification No.33/2015-2020 dated 16 September, 2022 permitting invoicing, payment and settlement of exports and imports in INR to sync with the RBI Circular dated 11 July 2022. This notification has been made effective immediately.

Further, the settlement of trade transactions is also permitted through Special Rupee Vostro Account in India in terms of the prescribed procedure under the relevant regulations of Foreign Exchange Management (Deposit) Regulations, 2016.

The Applicant had sought an advance ruling before the Karnataka AAR to ascertain whether ITC would be available on vouchers and subscription packages procured from third party vendors that are made available to the eligible customers, participating in the loyalty program against the loyalty points earned by such customers.

The Applicant contended that the procurement of the vouchers and the subscription packages on payment of the GST from third party vendors are exclusively for the purpose of business as an e-commerce platform leading to increase in earning commission. The Applicant had further submitted that the vouchers and subscription packages are classified as a services and not goods.

The AAR while referring the definition of voucher u/s. 2(118) of the CGST Act, observed that the subscription packages procured is also voucher as it plays an obligation on the potential supplier to accept it as consideration for supply of goods or services to the customer. It was further observed that that the vouchers are a movable property capable of being transmitted electronically or supplied physically, and thus qualify as goods.

The AAR further observed that the participation of a customer in the loyalty program will be dependent on meeting the pre-defined eligibility criteria plus by agreeing to the terms and conditions associated with the program. It was also observed that the Applicant recovers the full amount from the customer and gives the loyalty points free of cost, and the said loyalty points do not have any monetary value and are non-transferable and cannot be converted to cash. Hence, it implies that the vouchers are issued free of cost to the customers. In view of the above, the AAR held that the Applicant is not eligible to avail the ITC on the vouchers in terms of section 17(5)(h) of the CGST Act.

Myntra Designs Private Limited [KAR ADRG 33/2022 dated 14 September 2022]

CBIC vide Notification No. 79/2022-Customs (N.T.) dated 15 September 2022 has amended the Electronic Duty Credit Ledger Regulations, 2021 which specifies the manner of issuance of duty credit. Pursuant to the amendment, the validity of e-scrip has been extended to 2 years from the date of its creation in the ledger.

The Goods and Services Tax Network (‘GSTN’) has issued an update on new functionalities made available for taxpayers on GST Portal in the month of August 2022. These functionalities pertain to different modules such as Registration, Returns, Advance Ruling, Payment, Refund and other miscellaneous topics. As per the update the follows changes have been made;

1. Registration 

1.1. Enabling CORE Amendment Link for Taxpayers who fail To Update Bank account 

• If taxpayers didn't update their bank account details on the GST Portal within a specified period after registration, they couldn't file a core amendment application. Further updating bank account details through a non-core amendment would fail if their name was modified in CBDT database post-registration. To address such scenarios, newly registered taxpayers can now file core amendment applications, pending bank account updation through the Portal.

2.Returns 

2.1. Changes implemented in Form GSTR-3B

• As per Section 9(5) of the CGST Act, 2017, Electronic Commerce Operators (ECOs) must pay tax on specified services notified by the government, such as Passenger Transport, Accommodation, Housekeeping, and Restaurant Services. Therefore, vide NN 14/2022 – Central Tax, dated 05th July, 2022, new Table 3.1.1 has been added to Form GSTR-3B for reporting such deliveries ECOs and registered individuals making such supplies must report them per the notification.

2.2. Late fee waiver up to 28th July, 2022, for delayed filing of return in Form GSTR-4 (Annual) for the FY 2021-22

• In accordance with Notification No. 12/2022-CT, issued 5th July 2022, if a taxpayer had previously filed Form GSTR-4 with a late fee payment, the same has been returned by the system and credited to the taxpayer's ECL.

2.3. Generation of GSTR-11 based on GSTR-1 / 5 for UIN holders

• UIN holders file Form GSTR-11 with details of inward supplies every quarter and seek refund using Form GST RFD-10. To help UIN holders and authenticate refund claims, the Portal allowed auto-population of Form GSTR-11 based on filed GSTR-1/5. Further the portal has disabled auto-population of inward supplies received on RCM basis from Form GSTR-1/5 furnished by suppliers in Form GSTR-11 of UIN.

2.4. HSN based validation implemented in Form GSTR-9

• It had been mandatory for the taxpayers to report HSN at least of 4-digit for taxpayers having turnover up to Rs 5 Crore and 6-digit HSN for taxpayers with more than Rs 5 Crore turnover. Consequently, a validation has been implemented on the portal for taxpayers with AATO up to Rs 5 Crore and for taxpayers with AATO of Rs 5 Crore or above to disclose HSN at 4 digit or 6 digits accordingly in Table -17 of Form GSTR-9 for FY 2021-22.

2.5. Changes in HSN length validation in Form GSTR-1

• In Phase-1, AATO-based validation was introduced on the portal to verify taxpayers with AATO up to Rs 5 Crore had to reported minimum 2-digit HSN and 4-digit HSN for AATO more than 5crore in Table 12 of GSTR-1. In Phase-2, the minimum length of HSN that must be submitted in Table 12 of Form GSTR-1 has been increased from 4 to 6 digits, both online and offline, on the portal.

3. Refund

3.1. Filing for Refund in Form RFD-01 for exports without payment of tax

• Taxpayers must provide invoice details in Statement 3 while filing the refund application in Form RFD-01 under Category "Refund of unutilized ITC on account of Exports (Without payment of Tax)" According to para 47 of Circular No. 125/44/2019-GST, dated 18 November 2019, if the export value reported on the shipping bill is different than the amount declared in the tax invoice, the lowest of the two values will be used for processing unutilized input tax credit on account of export of goods made without payment of tax. Therefore, a column “FOB value” has been added in Statement 3 format for the taxpayers to declare the value while filing for refund.

4. Front Office

4.1. Updation of Statistics on GST Portal

• A five-year GST statistical report is available on the portal under Downloads > GST Statistic.

The National Informatics Centre (NIC) had earlier released an update on the generation of E-Way Bills for the movement of gold, gold jewellery, and precious stones. Accordingly, the ‘EWB for Gold’ option has been currently removed from the E-Way Bill portal. Consequently, the E-Way bill for Gold option will be accessible once notified.

In pursuance of the Government recommendations, a facility for the generation of E-Way Bills for the transportation of gold has been incorporated to the E-Way Bill portal. The National Informatics Centre ('NIC') has published an update dated 12 September 2022, apprising the details of the E-Way Bill for gold. E-Waybill for Gold will be mandatory when all the items belong to HSN Chapter 71 only. Moreover, if other items which do not belong to HSN Chapter 71 exists along with HSN Chapter 71, then it will be treated like a normal E-Way Bill and the details of Part-B shall be required. If the respective  state has notified the requirement for the generation of an E-Way Bill in which taxpayer is registered, the taxpayer should review the notices and exemptions issued by their respective states. The E-Way Bill for gold consists primarily of two parts, as follows:

Part-A of E-way Bill for gold

• The E-Way Bill for Gold has all the same parameters as that of normal e-waybill except that such E-Way Bills will not be updated with Part-B details;
• Cancellations and rejection of E-Way Bill of gold will be similar to E-Way Bill of goods consignment; and
• The validity of the E-Way Bill will be calculated based on the pin-to-pin distance of origin and destination and have the same parameters as that of a normal E-Way Bill.

Part-B of E-way Bill for gold

• The generation of an E-Way Bill for gold will not require updating of part B i.e. details of vehicle number and details of transporter shall not be provided;
• Extension of E-Way Bill is permitted but without updating the Part-B details (Responsibility of extension of E-Way Bill will be with the consignor/consignee and not the transporter);
• Consolidated E-Way Bill cannot be generated; and
• The multi-vehicle facility will not be available for the E-Way Bill of gold.

We are glad to bring you the 24th Edition of our ‘Vision 360’ Newsletter in association with TIOL. In this edition, we have covered the key judicial and legislative developments in Direct, Indirect Tax other regulatory areas in the month of August 2022. Following are some key highlights of this Newsletter:

• An Isometric view into Alternate Efficacious Remedy and Powers of NCLT;
• Recent developments in the GST in relation to assignment of leasehold rights;
• SC’s decision in relation to obligation of the State in relation to quoting of HSN in the tender;
• International Tax Bulletin released by CBDT’s FT&TR Division covering comparative revenue effect of Amount A vis-à-vis Article 12B
• Judicial and Regulatory updates in the Direct Tax, Indirect Tax and Regulatory fronts!

We hope that reading of the newsletter would bring an enriching experience to you! Your valuable feedback is always welcome at consult@gstlegal.co.in or updates@gstlegal.co.in 

The CBIC vide Circular No.180/12/2022-GST dated 09 September 2022 has issued guidelines for filing/revising TRAN-1/TRAN-2 in terms of order passed by Hon’ble Supreme Court in the case of Union of India vs. Filco Trade Centre Private Limited. 

The Apex Court on 22 July 2022 vide the landmark judgment had directed re-opening of GSTN portal for filing Form TRAN-1 and TRAN-2 for a period of 2 months. Further, the Apex Court also directed the GST Council to issue appropriate guidelines in scrutinizing the claims. Subsequently in Miscellaneous Application No. 1545-1546/2022, the Apex Court vide order dated 02 September 2022 has extended the time for opening the GST Common portal for further period of 4 weeks i.e. from 01 October 2022 to 30 November 2022.

In pursuance to the aforementioned order, the CBIC vide the captioned Circular had issued various guidelines for filing TRAN-1/TRAN-2 or revising earlier filed TRAN-1/TRAN-2 as tabulated hereunder:

The CBIC vide the captioned Circular also clarified that, once the Applicant files TRAN-1/TRAN-2 or revises the said form filed earlier, no further opportunity will be given to the Applicant to again file or revise the form either during this period or subsequently.