Newsletter

Highlights of the 35th GST Council Meeting held on 21 June 2019:

• Taking cognizance of the difficulties faced by the taxpayers, the due date for furnishing annual returns in Form GSTR-9, Form GSTR-9A and reconciliation statement in Form GSTR-9C has been extended to 31 August 2019; 
• Due date for furnishing Form GST ITC-04 for the period July 2017 to June 2019 extended till 31 August 2019;
• Roadmap issued by the MoF dated 11 June 2019 in repsect of transition to new GST return system approved by the GST Council;
• Introduces electronic invoicing system for B2B transactions in phased manner to combat tax evasion; Phase 1 is proposed to be voluntary and shall be rolled out from Jan 2020
• Decision for reduction of rate on Electric Vehicle (EV) is given to Fitment committee – decision is expected in next council GST meeting. Current rate on EV is 12% and proposal is to reduce the same to 5%;
• The tenure of the National Anti-Profiteering Authority has been extended for another 2 years till 2021;
• Penalty of 10% of profiteered amount shall be levied on erring companies for non-deposit of the same within 30 days;
• Due date for furnishing intimation in Form GST CMP-02 extended from 30 April 2019 to 31 July 2019.

Relevant notifications giving effect to above amendments shall be notified in due course.

Bombay High Court sets aside the order of Maharashtra Appellate Authority of Advanced Ruling (AAAR) in the case of JSW Energy Limited  on the grounds of violation of principle of natural justice. Maharashtra AAAR had earlier ruled that the proposed arrangement which involved conversion of coal and other inputs to electricity would not amount to job work but amount to manufacture.

However, the Bombay High Court has not gone into the merits of the case. Further, the matter is remanded back to Maharashtra AAAR for disposal within six months from the date of the order.

A Writ Petition has been filed before the Karnataka HC against the Karnataka AAAR Order upholding the levy of GST on ‘Cross Charge' towards support services provided by Head Office to its branches.

The petitioner argued that Section 7(2) of the CGST Act, 2017 read with Schedule III to the CGST Act, provides that the services of employees rendered in course of or in relation to his employment should not be treated as supply to attract GST. It was further argued that the Section 7(2) of CGST Act begins with an ‘non obstante’ clause and accordingly, it shall override the provisions of Section 7(1) of the CGST Act read with Schedule I to the CGST Act.

Taking cognizance of the above arguments made by the Petitioner, the Karnataka HC on 12 June 2019 issued a notice to the Government against the order of Karnataka AAAR in the case of Columbia Asia Hospitals Private Limited which in turn had upheld Karnataka AAR’s ruling of levying GST on cross charge.

A Writ Petition was filed against AAAR Order which upheld levy of GST on cross charge towards support services provided by Head Office to its branches.

The petitioner argued that Section 7(2) of the CGST Act, 2017 read with Schedule III to the Act, provides that the services of employees in the course of or in relation to his employment are not treated as supply to attract GST. It was further argued that Section 7(2) begins with the term ‘non obstante’ and accordingly, it shall override the provisions of Section 7(1) of the Act read with Schedule I to the Act.

Taking cognizance of the above arguments made by the Petitioner, the Karnataka HC on 12 June 2019 issued a notice to the Government against the order of Karnataka AAAR in the case of Columbia Asia Hospitals Private Limited which upheld Karnataka AAR’s ruling of levying GST on cross charge.

In line with the decisions of the GST Council in its 31st meeting, new return system under GST is proposed to be introduced and accordingly, a transitional plan has been worked out. It should be noted that a prototype of the offline tool for the new returns has already been shared on the GST Portal.

Highlights of this transitional plan are as follows:

• From July 2019 to September 2019, outward supply details (Form GST ANX-1) and inward supply details (Form GST ANX-2) can be uploaded/downloaded on trial basis on GSTN portal. Users will be able to view and download inward supplies of invoices under trial program. Further, they can also import their purchase register and match them with downloaded inward suply invoices and identify mismatches from August 2019;
• From October 2019, outward supply details to be mandatorily provided in Form GST ANX-1, which will replace present Form GSTR-1 for large taxpayers (turnover in the preceding F.Y. more than Rs. 5 crores). Further, the small taxpayers (turnover in the preceding F.Y. less than Rs. 5 crores) shall file their first return in the new format (GST ANX-1) for the quarter October 2019 to December 2019 in January 2020;
• For the month of October 2019 and November 2019, large taxpayers will be required to file GSTR-3B. They would file Form GST RET-01 for the month of December in January 2020;
• Small taxpayers will be required to file Form GST PMT-08 in lieu of Form GSTR-3B from the month of October 2019. They will file their first Form GST RET-01 for the quarter October 2019 to December 2019 in January 2020.
• GSTR-3B will be phased out from January 2020 in the following manner:
  • GSTR-3B shall continue till September 2019 for all taxpayers;
  • For small taxpayers, GSTR-3B shall be discontinued from October 2019;
  • For large taxpayers, taxpayers would continue to file GSTR-3B on monthly basis for October 2019 and November 2019. They would file their first Form GST RET-01 from December 2019 onwards.

Petitioner has filed writ challenging pre-condition for payment of GST and has  contented as below:

• There is no provision under the law for making payment of tax a pre-condition for filing of returns, namely, Form GSTR – 3B;
• It is only the online portal which restricts the Assessee to file returns without payment of tax;
• Such restriction from the portal is contrary to the provisions of law in as much as it is not expressly provided in the Act or any legislative document;
• If the petitioner is not able to file GSTR – 3B returns before 20 April 2019, he would be deprieved of substantial amount of ITC.

Gujarat HC considered the submission made by the petitioner, having regards to the fact that there was no response from revenue. Therefore interim relief was granted to the petitioner by allowing him to file manual returns in Form GSTR – 3B from the month of November 2017 onwards.

Many Indian exporters approached the Delhi High Court last week to navigate the government’s failure in extending the benefits of EPCG (Export Promotion Capital Goods) scheme to Goods and Services Tax (GST) regime. The exporters claimed that some of the services that were earlier allowed under the EPCG scheme were discontinued under the GST regime.

According to the exporters, the government has set some conditions if exporters were to claim benefits of the scheme. These amendments meant that some exporters were unable to meet export obligations resulting in losing out on the benefits of the EPCG scheme under which an exporter can import certain amount of capital goods without paying any duty for upgrading technology related with exports.

The CBIC issued a press release on 05 June 2019 to provide clarification in Form GSTR-9

Highlights:

• Irrespective of  when the supply was declared in FORM GSTR-1, the principle of declaring a supply in Pt. II or Pt. V shall be as per FORM GSTR-3B;
  • If tax on such supplies was made through GSTR-3B for the period between July 2017 to March 2018, it shall be declared under Pt. II of GSTR-9;
  • If tax on such supplies was made through GSTR-3B for the period between April 2018 to March 2019, it shall be declared under Pt. V of GSTR-9;
• Any outward supply missed by the taxpayer to be declared under Form GSTR-1 and Form GSTR-3B shall be declared under Pt. II of GSTR-9. Such additional liability shall be calculated in Pt. IV of GSTR-9 shall be paid through DRC-03;
• Auto-population functionality is provided merely for facilitaion purposes, therefore, taxpayers shall report as per their books of accounts or returns filed;
• For IGST paid at the time of import of goods but availed in the return of April 2018 to March 2019, the taxpayers shall fill their entire credit availed from July 2017 to March 2019 in table 6(E) of GSTR-9
• Payments made through DRC-03 for July 2017 to March 2018 shall be reported in GSTR-9C

CBDT vide F. No. 275/38/2017-IT(B) dated 04 June 2019 has extended the due date for filing the statutory forms as follows:

• Form 24Q (TDS Statement) - Extends due date for F.Y. 2018-19 from 31 May 2019 to 30 June 2019
• Form 16   (TDS Certificate)  - Extends due date for F.Y. 2018-19 from 15 June 2019 to 10 July 2019

CBDT vide Order under section 119 of the Income Tax Act 1961, extends the due date of filing Form 24Q (quarterly TDS statement in respect of salaries) for F.Y. 2018-19 from 31.05.2019 to 30.06.2019. 

CBDT has extended such due date, in order to redress the genuine harship faced by the deductors for timely filing of TDS statement in Form 24Q, on account of revision of Form 16 and consequent updating of the File Validation Utility for its online filing.