Goods and Services Tax Act is still at the evolving stage after three complete years of implementation .This article aims at spreading awareness with respect to latest GST updates to concerned taxpayers and other stakeholders.
ENABLING GSTR-2B ON PORTAL
GSTN enables GSTR-2B on the portal. The statement will show detail
s of eligible/ineligible credits and reversals required thereof based on GSTR- 5, GSTR- 6 furnished by vendors/ Input service distributor (ISD) and from ICEGATE, however the same is only recommendatory and not necessarily binding on taxpayers.
GSTR-2A will reflect return filing status (GSTR-1 and GSTR-3B) of vendors, GSTR-2B referred to as auto-drafted ITC statement to provide advice on credit that can be availed, credit to be reversed etc. will be introduced soon. Different Cut-off dates have been considered for GSTR-2B.
VIEW IMPORT FACILITY ON GSTR-2A
GSTN has enabled the facility in GSTR-2A for importers to view Bill of Entry and details of tax paid at the time of import of goods from overseas and SEZ units/developers.
BUNCHING OF REFUND APPLICATIONS
GSTN has enabled filing of single refund application for multiple financial years. The restriction on clubbing of the refund claims across financial years was provided in Circular 125/44/2019 but the same was stayed by Delhi High Court in the writ filed by Pitambra Books Pvt Ltd
41ST GST COUNCIL MEETING
Centre shares fine print on GST Compensation options. Option 1: borrow 97,000 cr and get RBI special window coordinated by centre + no debt servicing by the State Option 2: borrow 2.35 lakh cr via the issue of market debt + pay interest from State resources.
E-INVOICING UNDER GST
IRP/NIC has released changes in validations for e-invoicing considering the challenges faced by the industry: - Document number can contain small case - Validation restricting generation of e-invoice only upto previous day has been withdrawn - Round off in range of -99.99 - 99.99.
Government is set to introduce e-invoicing from October 2020.
GST INTEREST ON NET LIABILITY
Government notifies 1st September as the date on which amendment to Section 50 so as to charge interest only on net tax liability i.e. on portion of the tax that is paid by debiting the electronic cash ledger shall come into effect.
E-PROCEEDINGS IN GST
CBIC has made virtual hearing mandatory for proceedings under GST by various authorities including Commissioner (Appeals), adjudicating and compounding authorities.
JUDICIAL PRONOUNCEMENT ON DISTINCT PERSON UNDER GST
Subsidiary providing services to its parent/group company outside India cannot be treated as providing services to establishment of a ‘distinct person’ to deny the benefit of exports:
Gujarat High Court in a writ application filed by Linde Engineering India Private Limited.
The HC has held that a subsidiary company in India providing services to its parent or group entities outside India would not be treated as the establishment of a ‘distinct person’ and therefore the benefit of export of service cannot be denied to them under service tax. Though rendered in the context of the erstwhile Service Tax provisions, the conditions for treating the service as an export, particularly the condition relating to distinct persons, remain the same under GST and hence the same would be relevant in the current context. The Petitioner submitted that tax authorities were seeking to bring within the ambit of Service Tax, all services provided by any Indian company to its holding/group companies outside India in an arbitrary manner, despite the fact that the same would qualify as an ‘export'.
The High Court, while allowing the writ petition, held that the services rendered by the petitioner to its parent company outside India cannot be considered as service rendered to its other establishment so as to deny the benefit of ‘export of service’ under Rule 6A.
TRANSITIONAL CREDIT UNDER GST WITHOUT CTD
Credit Transfer Documents are not required for claiming transition credits in case of excisable goods procured from other dealers:
Gujarat High Court in a writ application filed by Downtown Auto Private Limited
The Petitioner was asked to produce excise invoices or Credit Transfer Documents in their name for the cars and spare parts purchased from other authorised dealers to claim the transition credit.
Petitioner contended that provisions of Section 140(3) entitle them to claim credit of the excise duty paid on vehicles held in stock, and insistence on part of tax officers to provide such documents in their name was not possible in case of vehicle purchased from dealers.
The High Court observed that the provisions of Section 140(3) nowhere provide for the Petitioners to submit any Credit Transfer Documents to claim the transitional credit.
RULE 36(4) RESTRICTION OF ITC TO 10% - CASE IN DISPUTE
The provisions of Rule 36(4) which restricts availment of ITC to the extent of additional 10 per cent, in spite of having additional tax invoice, has been challenged before the Rajasthan High Court for being ultra vires Section 38(1) and 42(3) of the CGST Act.
REFUND OF INPUT SERVICES IN INVERTED DUTY TAX STRUCTURE
Gujarat High Court allows refund of tax in input services under inverted duty structure, reads down Explanation (a) to the Rule 89(5) in a writ application filed by VKC Footsteps India Private Limited.
EXTENSION OF GSTR-4 FOR F.Y. 19-20
Last date of GSTR-4 for F.Y. 2019-20 has been extended to 31.10.2020.
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