The Supreme Court on Thursday refused to direct the finance ministry to extend the goods and services tax (GST) amnesty scheme till the Covid -19 pandemic exists in India, saying it was “a policy decision exclusively within the domain of the government”.

A Bench led by justice DY Chadrachud rejected one Bilaspur-based trader Satyakam Arya’s plea to direct the central government and the GST Council to extend the amnesty scheme and give more time to small businesses and MSMEs to file their returns.
“In our view, these reliefs…pertain in the realm of policy decisions. It would be inappropriate for this court to entertain a petition of this nature, such as extension of the amnesty scheme; a cap on the late fee to be collected; exemption of late fee paid for a period between March 25, 2020, and June 30, 2020, and refund of the amount already collected towards late fee.”

he Goods and Services Tax (GST) Council, the apex federal body on indirect taxation, will consider removing anomalies in the duty structure in several sectors such as textiles, fertilizers and footwear this month, two people aware of the development said.

Terming it a long-pending issue, the two people who spoke on condition of anonymity, added that it requires urgent attention now because the businesses involved are unable to claim input-tax credit (ITC) because of higher levies on raw materials compared to the finished goods. This is referred to as an inverted duty structure—a situation in which inputs are taxed at a higher rate than finished goods.

The government’s decision to do away with the mandatory Goods and Services Tax (GST) annual audit requirement by professionals such as chartered accountants will help over 10 million firms save audit fees worth about RS. 30,000 crore annually, besides reducing compliance burden, two officials with direct knowledge of the matter said. The Budget proposes removing the mandatory requirement of getting the accounts audited and the reconciliation statement submitted by specified professionals, such as chartered accountants, in the GST regime, they said requesting anonymity.

“The Finance Bill, 2021 will amend the law, which will be notified soon after. The basic purpose of this move is to expand the GST base by reducing compliance burden and save businesses, particularly small firms, from paying auditing fees to professionals,” one official said.

The government on Sunday extended the deadline for filing GST annual returns for 2019-20 fiscal by a month till March 31.

This is the second extension given by the government. The deadline was earlier extended from December 31, 2020, to February 28.

“In view of the difficulties expressed by the taxpayers in meeting this time limit, Government has decided to further extend the due date for furnishing of GSTR-9 and GSTR-9C for the financial year 2019-20 to March 31, 2021, with the approval of the Election Commission of India,” the Finance Ministry said in a statement.

GSTR 9 is an annual return to be filed yearly by taxpayers registered under the Goods and Services Tax (GST). It consists of details regarding the outward and inward supplies made or received under different tax heads.

GSTR-9C is a statement of reconciliation between GSTR-9 and the audited annual financial statement.

Experts divided over the interpretation
Large resident welfare associations (RWAs) may have to face GST liability retrospectively subject to certain conditions. One particular provision related to the amendment to the CGST law in the Finance Bill with effect from July 1, 2017 intends to ensure levy of tax on activities or transactions involving supply of goods or services by any person, other than an individual, to its members or constituents or vice-versa, for cash, deferred payment or other valuable consideration.

“It is also proposed to insert an explanation therein, to clarify that the person or its members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one person to another,” the provision said.
Experts are divided over the impact of this new provision.

The existing rule says a RWA collecting more than ?7,500 as maintenance fee and who se annual turnover is more than ?20 lakhs, need to pay GST.

This provision is in line with the rulings given in yjr Apsara Co-operative Housing Society (2020) matter by Maharashtra’s AAAR (Appellate Authority for Advance Rulings) and in the matter of the Association of Inner Wheel Clubs of India by West Bengal’s AAAR which stated societies/clubs activities constitute supply and are liable to GST, and threfore the mutuality principle is inapplicable to them.

GSTR-9C
Reconciliation statement to be filed in Form GSTR-9C requires the tax rate wise declaration of transactions for the concerned financial year. In the said form, tax amount pertaining to tax rates 1%, 1.5% and 7.5% in section III (table 9 and 11) and section V may be made in row/ under label ‘Others’ of the said tables, wherever applicable.

The Modi government could be gearing up to bring petroleum under the Goods and Services Tax (GST) regime, at a time when petrol prices have broken all past records and breached the Rs. 100 mark in several parts of the country.
When it was rolled out in 2017, the GST regime brought a wide range of products and almost all services under its purview, and the latest to join this list could be petroleum – this is an issue that seems simple on the outset but is a lot more complicated than that.
However, the Modi government could be aiming to put this issue behind it if Finance Minister Nirmala Sitharaman’s recent comments are anything to go by.

The Central Board of Indirect Taxes and Customs (CBIC) has extended the time limit for sanction of pending integrated goods and service tax (IGST) refunds, in cases where records have not been transmitted on the portal due to mismatch in outward supplies returns and input tax credit.

"It is seen that a considerable number of exporters have been facing difficulties in getting their IGST refund sanctioned either due to lack of facility to amend GST 3B return or bona-fide clerical/human errors while filing the documents," the Board said Monday.

With more than three years into GST, the Maharashtra Goods and Services Tax Department (MGSTD) on December 22, issued a trade circular informing that the department is going to initiate audits for selected registered persons under Section 65 of the Maharashtra Goods and Services Tax Act, 2017 (MGST Act).

Since it is the first time that the GST Department would be conducting audits, the Department in the aforesaid circular has mentioned the objectives, procedure and scope of GST Audit. It also specifies the rights and duties of the registered person. Further, it provides for an indicative list of documents that are required to be kept ready or submitted by the assessee for the purpose of GST Audit.

The objective of GST Audit is to ensure and promote the correctness of turnover declared, taxes paid, refund claimed & input tax credit availed, and to assess the compliance of Registered Taxpayers (RTP) with the provisions of the GST Act and rules made thereunder.

GST related proposals made in the Union Budget pivot around enhanced enforcement to safeguard the interest of revenue by removing anomalies and plugging the loopholes in the law leading to tax evasion or wrongful availment and/or utilization of ITC. Further, some of the changes aimed at helping businesses by reducing the compliance burden etc.

Most of the proposed amendments find their roots in the agenda notes of the 39th GST council meeting held on March 14, 2020, just before the outbreak of the Covid-19 pandemic.

The key changes that were announced –

ENHANCED ENFORCEMENT

Safeguarding the levy of GST on supplies by an association or body of persons to its members

GST on supplies of goods or services by an unincorporated or incorporated entity to its members has always been a subject matter of litigation. There are a bunch of conflicting rulings by AARs and AAARs on the subject matter. Now the controversy on this issue has been put to rest by amending the scope of “supply” under GST law retrospectively by introducing a deeming fiction considering club and its members as separate persons. This was specifically introduced to over the Supreme Court decision in the case of Calcultta Club Ltd.

The central government is in favour of merging the goods and services tax (GST) rates of 12% and 18% into a single slab, a top finance ministry official said, acceding to a demand first made by some states and endorsed by the Fifteenth Finance Commission (FFC).

GST Council, India’s federal indirect taxes body, may discuss the matter at its meeting in March, the official added.

Apart from special rates of 0.25% and 3% on precious stones and metals, India currently has four primary GST rates of 5%, 12%, 18% and 28%. There is also a cess on luxury and demerit goods such as automobiles, tobacco and aerated drinks.

“There have been discussions regarding the merger of the two tax slabs. It could be taken up for consideration in the next (GST) Council meeting in March. States also need to agree,” the official cited above said on condition of anonymity.

The National Informatics Centre (NIC) has issued a list of GSTINs dated January 27, 2021, for whom e-invoicing shall be mandatory. There are 73308 GSTNs who are enlisted by the NIC for whom it is mandatory for the taxpayer to upload the invoice details and register supply transaction on the Government Invoice Registration Portal. ‘E-invoicing’ or ‘electronic invoicing’ is a system where the taxpayer will upload his invoice details and register his supply transaction on the Government Invoice Registration Portal (IRP) and get the Invoice Reference Number (IRN) generated by the IRP system. The taxpayer will first prepare and generate his invoice using his ERP/accounting system or manually and then upload these invoice details to IRP and get the unique reference number, known as IRN. It is noteworthy that the e-invoice does not mean preparation or generation of taxpayer’s invoice on the government portal. It is only intimating the government portal that invoice has been issued to the buyer, by registering that invoice on the government portal.

Thousands of GST non-filers, or those who did not file returns, have received an auto-generated letter from the authorities, asking them to file their returns returns or face the prospect of the tax department assessing their liability and asking them to pay.
Although the GST law provided for use of “best judgment” assessment, it’s a provision that is only being used now to coax those who have not filed their returns, and paid up GST, to clear dues to the government. Sources said GST authorities have stepped up their drive to maximise collections weeks ahead of close of the financial year. This has been a particularly difficult year for the tax department as lockdown resulted in a massive drop in collections and forced officials to go slow on acting against non-filers and wrong doers. Since October, authorities have swung back into action, launching an offensive against those issuing or dealing in fake invoices and prodding others to file returns, resulting in a record 90 lakh filings in January, when collections also touched an all-time high of nearly Rs 1.2 lakh crore.

Thousands of GST non-filers, or those who did not file returns, have received an auto-generated letter from the authorities, asking them to file their returns or face the prospect of the tax department assessing their liability and asking them to pay.

Although the GST law provided for use of “best judgment” assessment, it’s a provision that is only being used now to coax those who have not filed returns, and paid up GST, to clear dues to the government.

Sources said GST authorities have stepped up their drive to maximise collections weeks ahead of close of the financial year. This has been a particularly difficult year for the tax department as lockdown resulted in a massive drop in collections and forced officials to go slow on acting against non-filers and wrong doers.

Noting that "the facts of the case are very gross and shocking", the Gujarat High Court on Friday (05th February) pulled up the GST officials for allegedly "coercing and pressurizing" a person to transfer an amount of almost Rs.9 Crore to the account of the department.
The Bench of Justice J. B. Pardiwala and Justice Ilesh J. Vora called the alleged coercive recovery tactics as "Shocking" while hearing the plea of one Kanubhai Manilal (Proprietor, Bharat Acid And Chemicals) who alleged before the Court that he was summoned and under the guise of interrogation, he was kept under detention for almost a period of 33 hours.

Exporters are concerned about the proposed amendments in the integrated goods and services tax (IGST) in the Finance Bill that have taken away the flexibility of exporting on the payment of the integrated tax.

Earlier, exports could be made either on payment of the integrated tax or under bond. Citing liquidity crunch and higher transaction time and costs, exporters have sought restoration of the option of payment of IGST as more than half of the exporters use this route.

Certain notified taxpayers have been issuing invoices after obtaining Invoice Reference Number (IRN) from Invoice Registration Portal (IRP) (commonly referred as ‘e-invoices’). Details from the reported e-invoices are being auto-populated in respective tables of GSTR-1. Update on the same was last published on last published on 11/1/2021.

In the above update, it was informed that while pulling the e-invoice data into GST System, details of some invoices were not getting populated into GSTR-1. Troubleshooting has been done and efforts to correct this inadvertent gap are still on. Complete data pull is likely to take some more time.

The Union Finance Minister Nirmala Sitharaman while presenting the Budget 2021 today before the Parliament, proposed to omit the requirement of furnishing the GSTR audit report in the form GSTR-9C. The GSTR-9C is a reconciliation statement required to be furnished by a taxpayer whose turnover exceeds Rs.2 crore in a financial year while filing his annual return in form GSTR-9. As per the Finance Bill 2021, “In section 35 of the Central Goods and Services Tax Act,sub-section (5) shall be omitted.”

The 15th Finance Commission, headed by N K Singh, has suggested that the 12 per cent and 18 per cent slabs under the Goods and Services Tax (GST) be merged into one standard rate, and GST be rationalised to a three-rate structure, complemented by the 5 per cent merit rate and 28-30 per cent de-merit rate.

This has been a long-standing demand from economists and the Opposition, and has found a way in the Commission’s recommendations.

Various new functionalities are implemented on the GST Portal, from time to time, for GST stakeholders. These functionalities pertain to different modules such as Registration, Returns, Advance Ruling, Payment, Refund and other miscellaneous topics. Various webinars are also conducted as well informational videos prepared on these functionalities and posted on GSTNs dedicated YouTube channel for the benefit of the stakeholders.