Newsletter

The CBIC vide a series of Notifications dated 01 June 2021, has implemented the decisions of the 43rd GST Council meeting held on 28 May 2021 at New Delhi. Notably, the CBIC has waived the interest and late fees for certain periods and relaxed certain procedural provisions. A summary of the Notifications has been provided hereunder:

NN. 16/2021-Central Tax dated 01 June 2021 – Retrospective amendment of Interest provision

• Appoints 01 June 2021 as the date of amendment of Section 50 of the CGST Act, which inter alia provides for payment of interest on net cash basis

NN. 17/2021-Central Tax dated 01 June 2021 – Extension – GSTR-1

• Extends the due date for furnishing Form GSTR-1 for the month of May 2021 by 15 days 

NN. 18/2021-Central Tax dated 01 June 2021 - Interest Rate

• Prescribes interest rate of 9% for the first 15 days from the due date and 18% thereafter on late filing of GSTR-3B for the months of March, April and May 2021 for taxpayers having an aggregate turnover of more than Rs. 5 crores in the preceding F.Y.
• For taxpayers having an aggregate turnover up to Rs. 5 crores in the preceding F.Y.:
  • Prescribes NIL interest for the first 15 days from the due date and 9% for the next 45 days and 18% thereafter on late filing of GSTR-3B for the months of March 2021;
  • Prescribes NIL interest for the first 15 days from the due date and 9% for the next 30 days and 18% thereafter on late filing of GSTR-3B for the months of April 2021;
  • Prescribes NIL interest for the first 15 days from the due date and 9% for the next 15 days and 18% thereafter on late filing of GSTR-3B for the months of May 2021.
• For taxpayers having an aggregate turnover up to Rs. 5 crores in the preceding F.Y liable to file quarterly return.:
  • Prescribes NIL interest for the first 15 days from the due date and 9% for the next 45 days and 18% thereafter on late filing of GSTR-3B for the months of March 2021;
  • Prescribes NIL interest for the first 15 days from the due date and 9% for the next 30 days and 18% thereafter on late filing of GSTR-3B for the months of April 2021;
  • Prescribes NIL interest for the first 15 days from the due date and 9% for the next 15 days and 18% thereafter on late filing of GSTR-3B for the months of May 2021.
• Prescribes NIL interest for the first 15 days from the due date and 9% for the next 45 days and 18% thereafter on late filing return for the quarter ending March 2021 for taxpayers having an aggregate turnover up to Rs. 5 crores in the preceding F.Y. who have opted for composition levy

Notification No. 19/2021-Central Tax dated 01 June 2021 – Late Fee waiver

• Waives off late fee payable for taxpayers having an aggregate turnover of more than Rs. 5 crores in the preceding F.Y. for the period of 15 days from the furnishing of GSTR-3B for the months of March, April and May 2021;
• For taxpayers having an aggregate turnover up to Rs. 5 crores in the preceding F.Y.:
  • Waives off late fee payable for the period of 60 days from the furnishing of GSTR-3B for the months of March 2021;
  • Waives off late fee payable for the period of 45 days from the furnishing of GSTR-3B for the months of April 2021;
  • Waives off late fee payable for the period of 30 days from the furnishing of GSTR-3B for the months of May 2021;
• For taxpayers having an aggregate turnover up to Rs. 5 crores in the preceding F.Y. waives off late fee payable for the period of 60 days from the furnishing quarterly return for the quarter ending March 2021;
• Waives off late fee in excess of Rs. 500/- for taxpayers who failed to furnish the GSTR-3B return monthly/quarterly for period July 2017 to April 2021 by due date but furnishes the same between 01 June 2021 to 31 August 2021;
• Waives off late fee in excess of Rs. 250/- for taxpayers whose tax payable is NIL and who failed to furnish the GSTR-3B return monthly/quarterly for period July 2017 to April 2021 by due date but furnishes the same between 01 June 2021 to 31 August 2021;
• Waives off late fee in excess of Rs. 250/- for taxpayers whose tax payable is NIL and who failed to furnish the GSTR-3B return monthly/quarterly by due date for the period June 2021 onwards;
• Waives off late fee in excess of Rs. 1000/- for taxpayers having an aggregate turnover of up to rupees 1.5 crores in the preceding F.Y. who failed to furnish the GSTR-3B return monthly/quarterly by due date for the period June 2021 onwards;
• Waives off late fee in excess of Rs. 2500/- for taxpayers having an aggregate turnover more than 1.5 crores but of up to rupees 5 crores in the preceding F.Y. who failed to furnish the GSTR-3B return monthly/quarterly by due date for the period June 2021 onwards;

Notification No. 20/2021-Central Tax dated 01 June 2021 – Late Fee waiver

• Waives off late fee in excess of Rs. 250/- for taxpayers having NIL outward supplies in the period June 2021 and failed to furnish the GSTR-1 return monthly/quarterly by due date for the period;
• Waives off late fee in excess of Rs. 1000/- for taxpayers having aggregate turnover up to Rs. 1.5 crores in the preceding F.Y. and failed to furnish the GSTR-1 return monthly/quarterly by due date for the period June 2021 onwards;
• Waives off late fee in excess of Rs. 2500/- for taxpayers having aggregate turnover more than 1.5 crores and up to 5 crores in the preceding F.Y. and failed to furnish the GSTR-1 return monthly/quarterly by due date for the period June 2021 onwards.

Notification No. 21/2021-Central Tax dated 01 June 2021 – Late Fee waiver – GSTR-4

• Waives off late fee in excess of Rs. 250/- for taxpayers whose tax payable is NIL and who failed to furnish the Form GSTR-4 return by due date for F.Y. 2021-22 onwards;
• Waives off late fee in excess of Rs. 1000/- for taxpayers other than whose tax payable is NIL who failed to furnish the Form GSTR-4 return by due date for F.Y. 2021-22 onwards.

Notification No. 22/2021-Central Tax dated 01 June 2021 – Late Fee waiver – GSTR-7

• Waives off late fee in excess of Rs. 25/- for every day, for any taxpayer who fails to furnish the Form GSTR-7 by due date for the period June 2021 onwards;
• Waived off late fee in excess of Rs. 1000/- for any taxpayer who fails to furnish the Form GSTR-7 by due date for the period June 2021 onwards.

Notification No. 23/2021-Central Tax dated 01 June 2021 – E-Invoicing Requirement

• Excludes a Government Department, a local authority from the requirement of issuance of e-invoice

Notification No. 24/2021-Central Tax dated 01 June 2021 – Time Limit of Compliances

• Time limit for completion or compliance of any action, during the period from the 15 April 2021 to 29 June 2021, has been extended up to the 30 June 2021 including for the purposes of:
  • Completion of any proceeding or passing of any order or issuance of any notice, intimation, notification, sanction or approval;
  • Filing of any appeal, reply or application or furnishing of any report, document, return, statement or such other record.
• For the purpose of verification of the registration application and where the approval falls during the period of from 01 May 2021 to 30 June 2021, then, the time limit for the same has been extended up to 15 July 2021;
• Where the notice has been issued for rejection of refund claim and the time limit for issuance of order falls during the period of from 15 April 2021 to 29 June 2021 then the time limit for issuance of order shall be extended to the later of:
  • 15 days after the receipt of reply to the notice from the registered person or
  • 30 June 2021

Notification No. 25/2021-Central Tax dated 01 June 2021 – Extension GSTR-4

• Extends the due date for filing of Form GSTR-4 i.e., Annual Return for the FY 2020-21 for taxpayers who have opted for the composition scheme from 30 April 2021 to 31 July 2021. The notification shall be deemed to have come into force with effect from 31 May 2021.

Notification No. 26/2021-Central Tax dated 01 June 2021 – Extension ITC-04

• Extends the time period for furnishing declaration in Form ITC-04 i.e., details of goods/capital goods sent to job worker and received back to 30 June 2021 for quarter January to March 2021. The notification shall be deemed to have come into force with effect from 31 May 2021.

Notification No. 27/2021-Central Tax dated 01 June 2021 – CGST Rules Amendment

• Notifies CGST (Fifth Amendment) Rules, 2021 in the following manner:
  • Amends Rule 36(4) of the CGST Rules to provide that the condition of availement of 105% of eligible visible ITC from Form GSTR-2B, is to be seen cumulatively for the period April, May and June 2021;
  • Amends Rule 59(2) of the CGST Rules to provide that for dealers who have opted for quarterly filing of Form GSTR-1 and were eligible to file monthly B2B sales till 13th of succeeding month to pass on the ITC to the recipient using Invoice Furnishing Facility (‘IFF’) can now furnish details using IFF for the month of May 2021 till 28 June 2021.

Considering the difficulties faced by the AEO entities in renewing their existing certificates in the current pandemic situation, the CBIC vide Circular No. 10/2021 – Customs dated 24 May 2021 has extended the validity of all AEO certificates, expired / expiring between 01 April 2021 and 31 May 2021, till 30 June 2021. However, it has been clarified that the extension is not applicable to entities who are ineligible for continuation under the AEO Programme. 

In view of the COVID-19 pandemic, the Supreme Court vide its suo moto order dated 27 April 2021 had directed that periods of limitation for all judicial/quasi-judicial proceedings were extended until further orders. Similarly, the CBDT vide Circular No. 08/2021 dated 30 April 2021 had extended the due date for filing of Appeals before the Commissioner (A) till 31 May 2021 where the original due date stood as 01 April 2021 or thereafter.

In view of the above, the CBDT vide Circular No. 10/2021 dated 25 May 2021 has clarified that where difference relaxations are available to the taxpayers for a particular compliance, the taxpayers shall be entitled to the relaxation which is more beneficial. Accordingly, for the purpose of counting the period(s) of limitation for filing of appeals before the CIT (A), the taxpayers are entitled to a relaxation which is more beneficial to him and hence the limitation stands extended till further orders. 

The CBDT vide Circular No 9 of 2021 dated 20 May 2021 extended the time limits of certain compliances under the Income Tax to provide relief to taxpayers in view of the severe pandemic. The relaxation provided by the CBDT have been summarized hereunder:

It has been clarified that in case of an individual resident in India, the tax paid by him under section 140A of the Act within the due date (without extension under this Circular) provided in that Act, shall be deemed to be the advance tax.

The CBIC vide Circular No. 10/2021 – Customs dated 17 May 2021 has clarified certain aspects in relation to amendments in the Customs (Import of Goods at Concessional Rate of Duty) Amendment Rules, 2021 (‘IGCR Rules’). It has been clarified that these Rules have been amended inter alia as an effort towards creating an enabling environment for the promoting manufacturing by domestic industry to make them competitive globally and also make them self-reliant in furtherance of the goal of Atmanirbhar Bharat. 

Following are the key amendments of the IGCR Rules:

• Job Work
  • Facility of carrying out job work under the IGCR has been introduced;
  • The scope of the job work facility has been extended to an importer who is a manufacturer but without complete manufacturing facility;
  • 100% outsourcing for manufacture of goods on job-work basis has been permitted for importers who do not have any manufacturing facility at all;
  • However, sensitive sectors such as gold, articles of jewellery and other precious metals or stones have been excluded from the facility of job work.
• Import and clearance of capital goods
  • An option has been given to the importers to import capital goods for a specified purpose at a concessional rate of duty and after having put such capital goods to use for the said purpose, clear the same after payment of the differential duty and interest, at a depreciated value, with permission from the jurisdictional Customs Officer;
  • End-use based exemptions under the ambit of IGCR Rules
  • The condition of compliance of the IGCR Rules, is being provided for certain entries;

The Circular has also clarified the procedure under the IGCR Rules, which has been summarized hereunder:

• One time - Prior Intimation of intent to avail IGCR Benefit
  • Importers shall give a one-time prior information of such goods being imported to the Customs Officer under whose jurisdiction, his premises fall. He shall also furnish the details of the goods and the details of the job worker.
  • The importer shall submit a one-time continuity bond, to cover all the imports undertaken under this procedure;
  • Importers can store goods temporarily at any premises not owned by the importer, prior to their utilisation at the premises where manufacturing takes place, provided that the details of such premises are included in the prior information to be furnished. Also at all such times, the goods must remain under the control of the importer.
• Intimation before import
  • As and when the details are available, the importer shall provide information to the jurisdictional Customs Officer regarding the estimated quantity and value of goods to be imported, the exemption notification and serial number, the estimated duty forgone and the port of import with respect to a consignment.
  • The information may be provided by email on a consolidated basis for a period not exceeding one year rather than in a transactional manner for every import.
• Clearance of goods from the port of import
  • The importer shall provide a copy of the intimation provided to the jurisdictional Customs Officer to the port of import.
  • The intimation may be uploaded on eSanchit and link the same along with the other documents when filing the bill of entry. On this basis, the goods shall be allowed clearance at a concessional rate of duty.
• Receipt of goods at premises of importer / Job Worker
  • The receipt of the imported goods is to be intimated to the jurisdictional Customs Officer;
  • The goods may also be sent directly to the premises of a job worker and in such cases, importer shall intimate by email such receipt of goods to the jurisdictional Customs Officer (of the jobworker) along with the copy provided to the jurisdictional customs officer.
• Goods sent for job work from importer’s premises
  • Where the goods are first received at the premises of the importer and are then to be sent for job work therefrom, the importer shall send the goods after giving an email intimation to the jurisdictional Customs Officer.
  • The importer shall send such goods to the premises of the job worker under a challan, specifying the description and quantity of the goods. The challan number and date shall also be specified in the intimation given to the jurisdictional customs officer;
  • The maximum period for which the goods can remain with the job worker shall be 6 months from the date of issue of challan.
• Receipt of goods from the job worker
  • After the completion of job work, there can be three instances-
    • The goods are received back in the premises of the importer, or,
    • The goods are cleared directly from the premises of the job worker, or
    • The goods are sent by the job worker to another job worker.
  • In the first two instances, the same may be updated in the account maintained by the importer and subsequently shown in the quarterly returns;
  • In the third instance, the goods may be sent to another job worker against a challan;
  • As against the challan number with which the goods were sent to the job worker, the job worker shall also send the goods back to the importer or to another job worker.
• Re-Export or clearance for home consumption
  • An importer shall utilise the imported goods for the intended purpose or re-export the same, within a period of 6 months from the date of import, failing which the importer is liable to payment of duty with interest, as per the procedure laid out in the said IGCR Rules;
  • In the case the importer intends to clear the unutilised or defective goods on payment of requisite duty and interest, the import duty payable would be equal to the difference between the duty leviable on such goods but for the exemption availed and that already paid, if any, at the time of importation, along with interest.
• Quarterly return and maintenance of account
  • The importers shall submit a quarterly return by the 10th day of the following quarter, in the form prescribed, to the jurisdictional Customs Officer.
  • Any importer or the job worker who contravenes the provisions of the IGCR, shall be liable to prescribed penalty. It is clarified that, this is in addition to any other action taken under the Customs Act, 1962 for recovery of duties.

Lastly, it has also been clarified that the Directorate General of Systems, is in the process of automating and facilitating online submission of compliances prescribed in the rules through the ICEGATE portal, thereby obviating the need for furnishing paper-based documents to the Customs Officer. 

With an objective to process and dispose all pending refund and drawback claims pending till 14 May 2021, the CBIC vide Instruction No. 10/2021 – Customs dated 13 May 2021, has implemented a special drive ‘Special Refund and Drawback Disposal Drive’ w.e.f. 15 May 2021 to 31 May 2021. This drive has been specially implemented in order to provide immediate relief to the business entities, especially MSMEs, in these difficult times of the COVID-19 pandemic. However, the CBIC has clarified that the following points shall be duly followed during the Special Drive:

• Due diligence shall be followed before granting the refunds and drawback. All the relevant legal provisions, notifications, circulars and instructions must be followed while processing these claims;
• All communication should be done over email, wherever email id of the applicant is available;
• All deficiency memos may be reviewed and refund / drawback may be considered on merit;
• The Special Drive should be widely publicized.

While filing Form TRAN-1, the Petitioner had inadvertently claimed a lower amount of credit vis-à-vis what was available to them. The Petitioner had made another error by updating the difference in table 7d instead of the prescribed form 7b. In order to rectify the said errors, the Petitioner had made a request for extension, which had been rejected by the Revenue on the ground that several opportunities were extended to taxpayers for rectification of errors.

Aggrieved, the Petitioner challenged the rectification rejection order before the Madras HC. The HC observed that the error was inadvertent in nature. It was further observed that the era of GST is nascent and therefore, a rigid view should not be taken in procedural matters. It was further observed that the consequence of such transition is only the availment of the credit and not the utilization itself.

In view of the above, the HC allowed the Petition and consequently directed the Revenue to enable the modification and transition.

Carlstahl Craftsman Enterprises Private Limited [W.P. No.11119 of 2020]

What seems to be a rewind of the previous year, the COVID-19 pandemic has brought similar situations in the country, such as travel restrictions and the phenomena of Work From Home. However, the situation this time around is hopeful with the advent of the vaccination drive, which has resulted in rather smooth functioning of the economy. Similar to the previous year, the Tax and Customs authorities have extended a number of reliefs. Further, the Judicial authorities have also given a number of judgements, having a far-reaching impact!

Compiling all such developments, we are glad to bring you the 9th Edition of our ‘Vision 360’ Newsletter in association with TIOL. We have covered all the judicial and legislative developments in Direct, Indirect Tax other regulatory areas. 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.

CBIC vide Circular No. 09/2021 – Customs dated 08 May 2021 has extended the facility of acceptance of an undertaking in lieu of bond by Customs formations from 08 May 2021 till 30 June 2021. It has been clarified that the Importers / Exporters availing this facility shall ensure that the undertaking furnished in lieu of bond is duly replaced with a proper bond by 15 July 2021.

On account of the second wave of the COVID-19 pandemic and the consequent travel restrictions around the Country, the CBIC has provided certain relaxations. The same have been summarized hereunder:

Notification No. 08/2021 – Central Tax dated 01 May 2021 - Interest Waiver

• Prescribes interest rate of 9% for the first 15 days from the due date and 18% thereafter on late filing of GSTR-3B for the months of March and April 2021 for taxpayers having an aggregate turnover of more than Rs. 5 crores in the preceding F.Y.;
• Prescribes NIL interest for the first 15 days from the due date and 9% for the next 15 days and 18% thereafter on late filing of GSTR-3B for the months of March and April 2021 for taxpayers having an aggregate turnover up to Rs. 5 crores in the preceding F.Y.;
• Prescribes NIL interest for the first 15 days from the due date and 9% for the next 15 days and 18% thereafter on late filing return under proviso Section 39(1) of the CGST Act for the months of March and April 2021 for taxpayers having an aggregate turnover up to Rs. 5 crores in the preceding F.Y.;
• Prescribes NIL interest for the first 15 days from the due date and 9% for the next 15 days and 18% thereafter on late filing return under proviso Section 39(1) of the CGST Act for the quarter ending March 2021 for taxpayers having an aggregate turnover up to Rs. 5 crores in the preceding F.Y.

Notification No. 09/2021 – Central Tax dated 01 May 2021 - Late Fees Waiver

• Waives off late fee payable for the period of 15 days from the furnishing of GSTR-3B for the months of March and April 2021 for taxpayers having an aggregate turnover of more than Rs. 5 crores in the preceding F.Y.;
• Waives off late fee payable for the period of 30 days from the furnishing of GSTR-3B for the months of March and April 2021 for taxpayers having an aggregate turnover up to Rs. 5 crores in the preceding F.Y.;
• Waives off late fee payable for the period of 30 days from the furnishing quarterly return for the quarter ending March 2021 for taxpayers having an aggregate turnover up to Rs. 5 crores in the preceding F.Y.

Notification No. 10/2021 – Central Tax dated 01 May 2021 - GSTR-4 Due Date Extension

• Extends the due date for filing of Form GSTR-4 i.e., Annual Return for the FY 2020-21 for taxpayers who have opted for the composition scheme from 30 April 2021 to 31 May 2021. The notification shall be deemed to have come into force with effect from 30 April 2021.

Notification No. 11/2021 – Central Tax dated 01 May 2021 - ITC-04 Due Date Extension

• Extends the time period for furnishing declaration in Form ITC-04 i.e., details of goods / capital goods sent to job worker and received back to 31 May 2021 for quarter January to March 2021.

Notification No. 12/2021 – Central Tax dated 01 May 2021 - GSTR-1 Due Date Extension

• Extends the time limit for furnishing the details of outward supplies in Form GSTR-1 for the month of April, 2021 to 26 May 2021.

Notification No. 13/2021 – Central Tax dated 01 May 2021 - Notifies Amendment Rules

• Notifies Central Goods and Services Tax (Third Amendment) Rules, 2021 to amend the CGST Act in the following manner:
  • Inserts second proviso in Rule 36(4) of the CGST Rules to provide that the condition in Rule 36(4) ibid i.e., 105% of eligible visible ITC from Form GSTR-2B, is to be seen cumulatively for the period April and May 2021.
  • Inserted proviso in Rule 59(2) of the CGST Rules to provide that for dealers who have opted for quarterly filing of Form GSTR-1 and were eligible to file monthly B2B sales till 13th of succeeding month to pass on the ITC to the recipient using Invoice Furnishing Facility (‘IFF’) can now furnish details using IFF for the month of April 2021 till 28 May 2021.

Notification No. 14/2021 – Central Tax dated 01 May 2021 - COVID-19 Reliefs

• In view of the second wave of COVID 19 pandemic, it has been notified as under:
  • Where any time limit for completion or compliance of any action, by any authority or by any person, falls during the period from the 15 April 2021 to 30 May 2021, the time limit for completion or compliance of such action, shall be extended up to the 31 May 2021, including for the purposes of:
    • completion of any proceeding or passing of any order or issuance of any notice, intimation, notification, sanction or approval;
    • Filing of any appeal, reply or application or furnishing of any report, document, return, statement or such other record.
  • However, such extension of time shall not be applicable for the compliances of the provisions of the CGST Act, as mentioned below –
    • Chapter IV– Time and Value of supply
    • Procedure for Registration, Special provisions relating to casual taxable person and non-resident taxable person, Tax Invoice, Furnishing of details of Outward Supplies, Levy of Late Fees, Interest on delayed payment of Tax, Power to Arrest, Liability of partner of firm to pay tax, Penalty of certain offences, Detention, seizure and release of goods and conveyances in transit
    • Furnishing of Returns, except those prescribed
    • Inspection of goods in movement, in so far as e-way bill is concerned; and
    • Rules made under the provisions specified at clause (a) to (d) above;
  • However, for the purpose of verification of the registration application and where the approval falls during the period of from 01 May 2021 to 31 May 2021, then, the time limit for the same has been extended up to 15 June 2021.
• Where the notice has been issued for rejection of refund claim and the time limit for issuance of order falls during the period of from 15 April 2021 to 30 May 2021 then the time limit for issuance of order shall be extended to the later of:
  • 15 days after the receipt of reply to the notice from the registered person or
  • 31 May 2021
• The Notification shall come into force with effect from 15 April 2021.