RNM: Indirect Tax Alert June 2024
GST Calendar –Compliances for the month of June’2024
| Nature of Compliances | Due Date |
| GSTR-7 (Tax Deducted at Source ‘TDS’) | July 10, 2024 |
| GSTR-8 (Tax Collected at Source ‘TCS’) | July 10, 2024 |
| GSTR-1 | July 11, 2024 |
| IFF- Invoice furnishing facility (Availing QRMP) | July 13, 2024 |
| GSTR-6 Input Service Distributor | July 13, 2024 |
| GSTR-2B (Auto-Generated Statement) | July 14, 2024 |
| GSTR-3B | July 20, 2024 |
| GSTR-5 (Non-Resident Taxable Person) | July 20, 2024 |
| GSTR-5A (OIDAR Service Provider) | July 20, 2024 |
| PMT-06 (who have opted for the QRMP scheme) | July 25, 2024 |
The Council advises revising the GST law and providing clarifications to achieve
rate rationalization, enhance trade facilitation, and decrease ongoing
litigation.
This Tax Alert provides an overview of the recent press release issued by the Ministry of Finance, detailing the various recommendations made by the Goods and Services Tax (GST) Council during its 53rd meeting on June 22, 2024. The key recommendations include: To ensure the consistent application of this provision, the Central Board of Indirect Taxes and Customs (CBIC) has issued the following clarifications:
The value of a corporate guarantee, as specified in Rule 28(2) of the Central Goods and Services Tax Rules, 2017 (CGST Rules), will not apply in the case of exporting such services or where the recipient is eligible for full input tax credit (ITC).
Section 11A will be added to the Central Goods and Services Tax Act, 2017 (CGST Act) to grant authority regarding the non-recovery of duties not levied or under-levied due to general practice.
There will be a waiver of interest and penalty for demand notices issued under Section 73 for the fiscal years 2017-18 to 2019-20, provided the entire tax demand is paid by March 31, 2025.
The time limit to avail ITC for the fiscal years 2017-18 to 2020-21 is extended to November 30, 2021, provided the relevant GSTR-3B is filed by that date.
Interest will not be levied if the balance is available in the Electronic Cash Ledger on the due date of filing GSTR-3B and is utilized while filing the return.
The three-month period for filing an appeal before the GST Appellate Tribunal (GSTAT) will commence from a date to be notified.
The required quantum of pre-deposit for filing appeals has been reduced.
The time limit to avail ITC based on a self-invoice raised by the recipient will be calculated from the date of the self-invoice.
The recommendations made in the 53rd GST Council meeting:
1. Amendment in Section 73 and 74 of the CGST ACT 2017
The GST Council has proposed amendments to Sections 73 and 74 of the CGST Act, 2017, and the introduction of a new Section 74A. These changes aim to establish a common time limit for issuing demand notices and orders, regardless of whether the case involves fraud, suppression, or willful misstatement, starting from the fiscal year 2024-25 onwards. Additionally, the Council recommends increasing the time limit for taxpayers to avail the reduced penalty by paying the tax demanded along with interest, extending it from 30 days to 60 days.
2. Reduction Of Monetary Limits And Amendment in Time Limit For Filing Appeal to Appellate Tribunal
The Council has recommended monetary limits for filing appeals before the GST Appellate Tribunal, High Court, and Supreme Court. The proposed limits include:
- GST Appellate Tribunal (GSTAT): Rs. 20 Lakhs
- High Court: Rs. 1 Crore
- Supreme Court: Rs. 2 Crores
The GST Council has also proposed amending Section 112 of the CGST Act, 2017, to allow a three-month period for filing appeals in the Appellate Tribunal. This period will start from a date to be notified for appeal/revision orders passed before that date.
3. A new section will be inserted to provide relief from interest and penalties under specified conditions.
The GST Council has recommended the inclusion of a new Section 128A in the CGST Act, 2017, to allow a conditional waiver of interest or penalty for demands under Section 73 for FY 2017-18 to FY 2019-20, applicable to taxpayers who pay the full amount of tax demanded by 31.03.2025, excluding erroneous refund demands.
The GST Council also recommended introducing Section 11A in the CGST Act to grant the government the power to regularize non-levy or short levy of GST, where tax is short-paid or not paid due to common trade practices.
4. Section 107 And 112 Of CGST Act Pre-deposit Amount Paid For Filing Of Appeals
The GST Council has proposed amendments to Section 107 and Section 112 of the CGST Act to decrease the pre-deposit required for filing GST appeals. The maximum amount for filing with the appellate authority has been reduced from Rs. 25 crores CGST and Rs. 25 crores SGST to Rs. 20 crores CGST and Rs. 20 crores SGST. Additionally, the pre-deposit amount for filing with the Appellate Tribunal has been reduced from 20% to 10%.
5. Amendments Related To Provisions Of Refund under CGST And IGST Act
The GST Council has recommended a mechanism for claiming refunds of additional Integrated Tax (IGST) paid due to upward revisions in the price of goods post-export, applicable to taxpayers who must pay additional IGST because of these price changes.
Additionally, the Council has proposed amendments to Section 16 and Section 54 of the IGST Act and CGST Act to restrict refunds for goods subject to export duty, regardless of whether they are exported without or with taxes. These restrictions will also apply to goods supplied to a Special Economic Zone (SEZ) developer or unit for authorized operations.
6. Amendments And New Sections Related to All The Returns
- Introduction of FORM GSTR-1A, allowing taxpayers to amend details in FORM GSTR-1 for a specific tax period before filing a return in FORM GSTR-3B. This enables taxpayers to add missing supply details or amend existing ones, ensuring accurate liability is auto-populated in FORM GSTR-3B, including those declared in IFF for quarterly taxpayers.
- Proposal to exempt taxpayers with an annual turnover of up to two crore rupees from filing their annual return in FORM GSTR-9/9A for FY 2023-24.
- Recommendation to reduce the threshold for reporting B2C inter-State supplies invoice-wise in Table 5 of FORM GSTR-1 from Rs. 2.5 lakh to Rs. 1 lakh.
- Suggestion that registered persons filing FORM GSTR-7 monthly, regardless of whether any tax has been deducted, should file a non-filing FORM GSTR-7 return. No late fee will be charged for delayed filings, and invoice-wise details may be required for the return.
- Proposal to amend the CGST Rules, 2017 and FORM GSTR-4 to extend the due date for filing returns for composition taxpayers from 30th April to 30th June following the end of the financial year, for the 2024-25 financial year, providing more time for those paying tax under composition levy.
7. Amendments in others provisions of GST Act
- Reduction of the Tax Collected at Source (TCS) rate for Electronic Commerce Operators (ECOs) to 0.5% from the current 1% (0.5% CGST + 0.5% SGST/UTGST or 1% IGST) to ease the financial burden on suppliers making supplies through ECOs.
- Amendment to Rule 88B of the CGST Rules, 2017 regarding interest under Section 50 of the CGST Act on delayed filing of returns, excluding the amount available in the Electronic Cash Ledger on the due date of filing a return in FORM GSTR-3B, which is debited during filing.
- Retrospective amendment to section 140(7) of the CGST Act to allow transitional credit for invoices received by Input Service Distributors before the appointed date.
- Proposed retrospective amendment to section 122(1B) of the CGST Act, effective from 01.10.2023, clarifying that penal provisions apply only to e-commerce operators under section 52.
- Amendment in Rule 142 of CGST Rules and issuance of a circular to prescribe a mechanism for adjustment of an amount paid in respect of a demand through FORM GST DRC-03 against the amount to be paid as pre-deposit for filing appeal.
- Roll-out of biometric-based Aadhaar authentication nationwide for registration applicants in a phased manner to strengthen the GST registration process and combat fraudulent Input Tax Credit (ITC) claims through fake invoices.
- Amendments to section 171 and 109 of the CGST Act, 2017 to include a sunset clause for anti-profiteering under GST and set a sunset date for new anti-profiteering applications.
The Kerala High Court ruled that the time limit of 30 November for claiming Input Tax Credit (ITC) applies retroactively from 1 July 2017.
This Tax Alert summarizes a recent judgment by the Kerala High Court (HC)1 concerning the constitutional validity of Section 16(2)(c) and Section 16(4) of the Central Goods and Services Tax Act, 2017 (CGST Act).
Section 16(2)(c) limits input tax credit (ITC) for the recipient when the supplier has not paid the tax to the Government, while Section 16(4) specifies the time limit for claiming ITC.
The Kerala High Court’s key observations are as follows:
ITC is a conditional entitlement subject to specific conditions and restrictions provided in Sections 16(2) to 16(4). Several High Courts have upheld the constitutional validity of these provisions. Recognizing the challenges during the initial GST rollout,
The Government issued Circulars to address genuine ITC claims. Petitioners who missed these benefits can approach the appropriate GST authority within 30 days of the order.
With the Finance Act, 2022, amending Section 16(4) to extend the time limit for claiming ITC until 30 November of the following financial year, this procedural change aims to alleviate taxpayer challenges and thus applies retrospectively. Consequently, for the period from 1 July 2017 to 30 November 2022, individuals who filed returns for September by 30 November should have their claims considered.
Accordingly, the High Court upheld the constitutional validity of Sections 16(2)(c) and 16(4) of the CGST Act and affirmed that the retrospective application of the amendment to Section 16(4) is appropriate.