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The 43rd GST Council Meeting held on 12 October 2020 under the chairmanship of Smt. Nirmala Sitharaman concluded. Following are the key highlights of the Meeting:
The GST Council in its last meeting had decided to make the provision u/r. 138E(b) applicable, which provides for restriction of E-Way bill generation, if the taxpayer has failed to file his GSTR-3B for a consecutive period of 2 months or more.
In respect thereto, it has been informed that GSTIN associated with the respective PAN, having Aggregate Annual Turnover of over Rs. 5 crores, who has failed to file their GSTR-3B Return for 2 or more tax periods, up to the month of tax period of August, 2020, their E-Way Bill generation facility will be blocked on the EWB Portal.
It has been further informed that the EWB generation facility for such GSTINs, whether as consignor or consignee or by transporter, will be blocked on EWB Portal after 15 October 2020.
We are pleased to present to you the second edition of our Vision 360 Newsletter in association with TIOL, covering all the judicial and legislative developments in the fields of taxation. True to the title, this edition of the newsletter brings you key tax and regulatory updates and also insightful articles on ITC of GST on employees’ transportation charges and De-criminalization of Off¬ences under the Companies Act.
In the Sparkle Zone of our Newsletter, we have covered the recent development in the international arbitration case of Vodafone under the India-Netherlands BIPA.
For the Industry Speaks section, we have discussed the umpteen tax issues with a well-renowned name in the Hotelier industry.
Further, in the International Desk section, we have discussed the amendments made by the UAE in its Economic Substance Regulations retrospectively for FY 2019. We have also covered developments of the erstwhile indirect tax laws, which can be helpful precedents for disposing the pending litigations.
We hope that reading of the newsletter would bring an enriching experience to you! Your valuable feedback is always welcome at <email@example.com>
The CBIC vide Notification No. 30/2020 – C.T. dated 03 April 2020 had prescribed that the condition u/r. 36(4) shall apply cumulatively for the tax period February to August, 2020 and that the return in GSTR-3B for the tax period September 2020 shall be furnished with the cumulative adjustment of ITC for the said months.
In respect thereto, the CBIC vide Circular No. 142/12/2020 – GST dated 09 October 2020 has advised the taxpayers to ascertain the details of invoices uploaded by their suppliers for the periods of February, to August 2020, till the due date of furnishing of the statement in GSTR-1 for the month of September 2020 as reflected in GSTR-2As.
It has been clarified that shall reconcile the ITC availed in their GSTR-3Bs for the period February to August 2020 with the details of invoices uploaded by their suppliers of the said months, till the due date of furnishing GSTR-1 for the month of September 2020. The cumulative amount of ITC availed for the said months in GSTR-3B should not exceed 110% of the cumulative value of the eligible credit available in respect of invoices or debit notes the details of which have been uploaded by the suppliers till the due date of furnishing of the statements in GSTR-1 for the month of September 2020.
It has further been clarified that the excess ITC availed arising out of reconciliation during the said period, if any, shall be required to be reversed in GSTR-3B, for the month of September 2020 and failure to do so would be treated as availement of ineligible ITC during the month of September 2020.
Lastly, the CBIC has illustrated the manner of cumulative reconciliation for the said months in terms of proviso to Rule 36(4) of the CGST Rules.
CBIC vide their flyer on Customs (Administration of Rules of Origin under Rules of Origin under Trade Agreements) Rules, 2020 (‘CAROTAR’) have inter alia explained the background of foreign trade and the requirement to impose the said Rules. In the recent trends of Foreign Trade, there has been a staggered reduction in preferential duties under existing Foreign Trade Agreements (‘FTAs’) along with resultant increase in the preferential trade volumes. Further, frequent instances of misuse have come to notice of the Government in which fraudulent traders have mis-declared country of origin in order to avail undue duty concessions.
Owing to the above-mentioned fraudulent mis-use of the FTAs, the Government had inserted Chapter VAA and section 28DA in the Customs Act. The new section inter alia provided for a basic level of due diligence on the part of an importer to satisfy himself that the claimed originating criteria have been met, and that mere submission of a Certificate of Origin may not be sufficient.
In light of the above background, the CBIC has provided the following clarifications in respect of CAROTAR 2020 vide the FAQs in the flyer:
The summary of the provisions of CAROTAR 2020 may be accessed at https://www.gstlegal.co.in/newsletter-detail.html?id=425
Earlier in June 2020, the Ministry of Textiles had provided that the DGFT would be issuing the Duty Credit Scrips for RoSTL over and above the budget provision for the shipments made prior to 07 March 2019 only. The allocation of RoSTL over and above budget provision for issuing scrips, would be provided by the Department of Revenue for such old cases which could not be disbursed due to budget limitation.
In respect thereto, the DGFT vide Notification No. 37/2015-2020 dated 06 October 2020 has enabled issuance of duty credit scrips under the RoSCTL, for which the procedure will be laid down separately.
The Government of India, vide Notification No. 36/2020 – dated 05 October 2020 has extended the validity period of Rebate of State and Central Taxes and Levies scheme (‘RoSCTL’) till 31 March 2021 or until such date that the RoSCTL is merged with the RoDTEP Scheme, whichever is earlier.
The 42nd GST Council meeting concluded under the Chairmanship of Union Finance and Corporate Affairs Minister Smt. Nirmala Sitharaman through video conferencing today. Following are the key recommendations of the Meeting:
CBIC vide Notification No. 12/2017 - CT (Rate) dated 28 June 2020 had exempted services by way of transportation of goods by air / sea from Customs Station in India to outside India for a period up till 30 September 2020. In respect thereto, the CBIC vide Notification No. 04/2020 - CT (Rate) dated 30 September 2020 has further extended the said exemption till 30 September 2021
During the introduction of the concept of e-invoicing in the month of December 2019, the Government had prescribed that GST taxpayers having aggregate turnover of more than Rs. 100 crores in any preceding financial year, would be subject to e-invoice for all the B2B supplies, in the manner prescribed under rule 48(4) of the CGST Rules, w.e.f. 01 April 2020. However, on account of the COVID-19 pandemic, the Government had deferred the date of implementation 01 October 2020.
Further on account of continued hardships faced by the taxpayers, the Government had raised the threshold limit for taxpayers subject to e-invoicing to Rs. 500 crores. However, even after more than 9 months of the first notification in respect of e-invoicing, some of the taxpayers having aggregate turnover of Rs. 500 Cr. and above are still not ready.
In order to facilitate the taxpayers, as a last chance, in the initial phase of implementation of e-invoice, the CBIC vide Press Release dated 30 September 2020 has clarified the invoices issued by such taxpayers during October 2020 without following the manner prescribed u/r. 48(4), shall be deemed to be valid. Further, the penalty leviable under section 122 of the CGST Act, for such non-adherence to provisions, shall stand waived if the Invoice Reference Number (IRN) for such invoices is obtained from the Invoice Reference Portal (IRP) within 30 days of date of invoice.
The CBIC has further clarified that no such relaxation would be extended for the invoices issued from 01 November 2020 and such invoices issued in violation of rule 48(4) of the CGST Rules would not be valid and all the applicable provisions of CGST Act and Rules would apply for the violation
In light of the instant press release, it would be pertinent to note that out of 9 months of delay in implementation of e-invoicing provisions, more than 6 months have been impacted by the COVID-19 pandemic. As the pandemic is still very prelevant to this day, the taxpayers are only now getting back onto their feet and regularising their business operations. Further, most of the taxpayers are not yet operating at full capacity, thereby limiting their ability to become 'e-invoice ready'.
It would further be pertinent to note that the Government has extended the due date for filing of GST annual return and reconciliation statement to 31 October 2020. Co-incidently, the due date for income tax audit also falls on 31 October 2020. Therefore, it can be seen that the coming month would be rather busy for taxpayers and professionals. On account of the above-mentioned difficulties, it would be difficult for taxpayers to be 'e-invoice ready' on 01 November 2020. The Government could have been more considerate than merely providing a 30 day relief from penal provisions.
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