Newsletter

Tamil Nadu AAR holds that the supply of duty credit scrips along with the supply of data management, consultancy services provided by consultant does not amount to composite supply, but is a mixed supply. It was noted by the Authority that supply of duty credit scrips and business consultancy services are independent of each other, capable of being supplied separately. It has been held that supply of duty scripts is exempt from payment of GST whereas the consultancy services are taxable under respective SAC

Recently, the CBIC had notified that the effective date of e-invoicing to be 01 April 2020. Accordingly, to ensure smooth transition into the e-invoicing system, the Government releases FAQs for various stakeholders.

• Foreign service providers would be able to integrate with Invoice Registration Portal (‘IRP’) only from within the shores of India;
• GST Suvidha Provider (‘GSP’) would not be the only entities to provide the Application Program Interface (‘API’) access, (which would be used for various functionalities such as information on payment, filing of returns, GST registration, etc.). API will be widely made available to businesses of their software service providers;
• Application Service Provider (‘ASP’) are software service providers who route their GST traffic through GSPs. Any software provider of financial services in the indirect tax domain can push data to GST system through GSPs. Further, IRP access will be provided over internet;
• Bulk submission of e-invoices would be allowed through JSON payloads;
• IRP will issue a signed IRN along with a QR code indicative of approval for the e-invoice;
• IRP will validate GSTIN existence and check for duplicate invoice if so, the invoice will be returned with error codes;
• The supplier shall be allowed to distribute the e-invoice to the buyer, it should be shared in JSON format so that it can be read by the ERP of the buyer;
• IRN will also be required on ISD invoice and ISD credit note issued by input service distributors;
• From January 2020, companies with annual turnover greater than 500 crores can began using e-invoice;
• QR code returned by the IRP will be printed by the business, if invoice is being printed;
• Large taxpayers can convert the signed e-invoice from the IRP into pdf and send the same to their small buyers;
• E-invoice reported to IRP will be pushed to the GST system, any amendments to be made will be done on the GST system only;
• The IRP will push the data to the GST system, which will be mapped to the ANX 1 & ANX 2 of the seller and buyer respectively;
• IRP will have the existing and valid GSTINs for validation. Wrong, deleted & cancelled GSTINs will be rejected by the IRP

CBIC vide their tweet dated 31 December 2019 issued a press note extending the due date for filing application under the Sabka Vishwas Legacy Dispute Resolution Scheme, 2019 till 15 January 2020. The Scheme was introduced in the last budget with the objectives of liquidating the legacy disputes under the erstwhile Central Excise and Service Tax laws and for encouraging the non-compliant taxpayers to come under the tax net voluntarily.

The Scheme enjoyed a huge response from the taxpayers. Further, noting the huge interest amongst the taxpayers for the scheme and to ensure that eligible taxpayers who have not yet applied to avail the benefit of the scheme, do not miss out, the extension is provided as a one-time relief.

CBIC issues a series of notifications and an order on 26 December 2019 to implement the decisions of the 38th GST Council meeting held on 18 December 2019 at New Delhi

• Notification No. 74/2019 – Central Tax dated 26 December 2019
  • Waiver of late fee in respect to filing of GSTR-1 for the tax periods between July 2017 and November 2019, if filed between 19 December 2019 and 10 January 2020;
• Notification No. 75/2019 – Central Tax dated 26 December 2019
  • Reduces the restriction for ITC availment u/r 36(4) of the CGST Rules to 10% from earlier rate of 20%, where invoices or debit notes are not reflected in GSTR-2A;
  • Notifies Rule 86A for conditions of use of amount available in electronic credit ledger. Under the said Rule, the proper officer may not allow the setting off the liability with the credit available with any taxpayer if it is found to be fraudulently availed
• Notification No. 76/2019 – Central Tax dated 26 December 2019
  • Extends the due date for furnishing Form GSTR-1 for registered persons in Assam, Manipur or Tripura, having aggregate turnover more than 1.5 crore rupees for the month of November 2019 till 31 December 2019
• Notification No. 77/2019 – Central Tax dated 26 December 2019
  • Extends the due date for furnishing Form GSTR-3B for registered persons in Assam, Manipur, Tripura or Meghalaya, for the month of November 2019 till 31 December 2019
• Notification No. 78/2019 – Central Tax dated 26 December 2019
  • Extends the due date for furnishing Form GSTR-7 for registered persons in Assam, Manipur or Tripura, for the month of November 2019 till 25 December 2019
• Removal of Difficulty Order No. 10/2019 – Central Tax dated 26 December 2019
  • Extends the due date for furnishing Annual Return and Reconciliation Statement for the F.Y. 2017-18 till 31 January 2020

Circular No. 129/48/2019 – GST dated 24 December 2019

In order to clarify the appropriate procedure to be followed in case of non-furnishing of GST returns, CBIC issues a Standard Operating Procedure (‘SoP’) which contains clarifications and guidelines for the Department as well as the taxpayers.

Notice is to be issued in Form GSTR-3A to registered persons who fail to furnish their returns u/s 39 / 44 / 45 of the CGST Act, requiring them to furnish their returns within 15 days of issuance of the notice. Accordingly, no separate notice is required to be issued for best judgment assessment;

Guidelines:

• In case of failure on part of the taxpayer to file their return within 15 days of issuance of FORM GSTR-3A, the best judgment assessment in FORM ASMT-13 can be issued without any further communication;
• Preferably, a system generated message, which would serve as a reminder, would be sent to the registered persons 3days before the due date about filing of the return for the tax period by the due date;
• After the due date, a system generated message would be sent to defaulters stating that they have not filed their returns for the relevant tax period;
• In case of failure to furnish the returns within 15 days of issuance of Form GSTR-3A, the proper officer may proceed to assess the tax liability of the defaulter on best judgment basis and issue an assessment order in Form GST ASMT-13;
• For the above said assessment, the proper officer may take into account the details of outward supply available in Form GSTR-1, details of supply in Form GSTR-2A, information from e-way bill and other sources of information;
• In case the defaulter furnishes their return within 30 days of service of Form GST ASMT-13, the said assessment order shall be deemed to be withdrawn. Further, in case of non-furnishing of return within 30 days of service of Form GST ASMT-13, the proper officer may initiate proceedings for recovery of the defaulted amount u/s 79 of the CGST Act;
• The proper officer may resort to provisional attachment including bank account of the taxpayer u/s 83 of the CGST Act for the default of non-furnishing of return and subsequently, proceed to cancel registration in cases where return has not been furnished for specified period.

CBIC extends the due date for furnishing return in Form GSTR-3B for the month of November 2019 till 23 December 2019

Circular no. 31/2019 dated 19 December 2019

Since the utility for payment of TDS under the newly inserted Section 194M was deployed only on 17 December 2019, the CBDT has decided to extend the due dates for payment of TDS and furnishing return & certificate;

Due date for TDS payment for the months of September 2019 and October 2019 and the due date for furnishing Form 26QD for the same period have been extended to 31 December 2019;

Consequently, due date for furnishing of certificate of deduction of tax in Form 16D pertaining to the months of September 2019 and October 2019 is also extended to 15 January 2020.

The 38th GST Council Meeting held on 18 December 2019 held in New Delhi concludes with some relieving decisions for taxpayers

Highlights of Procedural related changes:

• Due dates for filing GSTR-9 and GSTR-9C for the FY 2017-18 extended till 31 January 2020;
• Waiver of late fee in respect to GSTR-1 for tax periods between July 2017 and November 2019, if filed by 10 January 2020;
• The amount of ITC availed on a provisional basis restricted to 10% from earlier 20%, where invoices or debit notes are not reflected in GSTR-2A.

Highlights of Rate changes:

• Exemption in respect of upfront amount payable for long term lease of industrial / financial infrastructure plots by an entity having 20% or more ownership of Central or State Government. To be effective from 01 January 2020;
• Uniform GST Rate of 28% for both Central and State authorised lottery from 01 March 2020;
• Uniform GST rate of 18% to be imposed from earlier 12% on bags belonging to HSN code 3923 / 6305 from 01 January 2020 which will effectively removes the inverted tax structure.

HCL Learning Limited vs. Commissioner of CGST, Noida [ST Appeal No. 70580 of 2018]

• In the instant case, HCL Learning Limited (‘the Appellant’), the employer, had been served with a Show Cause Notice demanding service tax from that part of the amount which he recovers out of the salary paid to the employee if the employee breaches the contract of total term of employment;
• As per the terms of contract between the Appellant and his employee, the employee shall be paid salary and the term of employment is a fixed term. In case the employee leaves the job before the term is over then certain amount already paid as salary is recovered by the Appellant from his employee;
• Such recovery by the Appellant from its employees, as per the terms of the contract, was being treated by the Department, as consideration for charging Service Tax;
• The Hon’ble CESTAT held that such recovery was out of the salary already paid and salary was not covered by the provisions of Service Tax. Basis such observation, the Hon’ble CESTAT quashed the demand raised by the Department and set aside the order passed by the Commissioner (A).

CBIC notifies that registered persons having aggregate turnover of more than Rs. 100 crores in a financial year, shall prepare e-invoice in respect of supply of goods or services or both to a registered person w.e.f. 01 April 2020.

Vide Notification No. 68/2019 – Central Tax dated 13 December 2019, sub-rule (4) to Rule 48 of the CGST Rules has been inserted to make provision for e-invoicing. The said sub-rule provides that e-invoice shall be prepared by such class of registered persons as may be notified, by including such particulars contained in FORM GST INV-01 after obtaining an Invoice Reference Number by uploading information contained therein on the Common GST Electronic Portal;

It has also been notified that an invoice issued by a registered person, whose aggregate turnover in a financial year exceeds Rs. 500 crores, to an unregistered person (B2C invoice), shall have Quick Response (QR) code. It has been further provided that where such person makes a Dynamic QR code available to the recipient through a digital display, such B2C invoice containing cross-reference of the payment using a Dynamic QR code, shall be deemed to be having QR code.

The said provisions of the e-invoicing system shall come into force on 01 April 2020