39th GST Council Meeting – Recommendations of GST Council related on IT Roadmap

Posted On: 14 MAR 2020 7:40PM by PIB Delhi
The 39 GST Council met under the Chairmanship of Union Finance & Corporate Affairs Minister Smt Nirmala Sitharaman here today. The meeting was also attended by Union Minister of State for Finance & Corporate Affairs Shri Anurag Thakur besides Finance Ministers of States & UTs and seniors officers of the Ministry of Finance.
In the GST Council meeting, Shri Nandan Nilekani, on behalf of Infosys, made a presentation addressing the system related issues that are being faced by the taxpayers in the GST system. He first gave the summary of the recently observed IT issues and the way forward to resolve them.
He suggested that in order to smoothen the rollout of the new return system, and to ensure a better uptake of the new return, the transition to the new return system may be made in an incremental manner. He suggested that the process may be initiated by addressing the compliance related issues first so that the problem of tax evasion and gaming of the system due to non-linking of FORM
GSTR-1 and FORM GSTR-3B is addressed immediately. The journey could start with linking of the details of the statement of outward supplies in FORM GSTR-1 to the liability in FORM GSTR-3B. This would be followed by the linking of the input tax credit in FORM GSTR-3B to the details of the supplies reflected in the FORM GSTR-2A. In order to tackle evasion and preventing the gaming of the system, implementation of Aadhaar authentication and spike rules would also be initiated.
He informed the Council that to augment the capacity of the IT system to concurrently handle 3 lakh taxpayers from the present level of 1.5 lakh taxpayers, hardware procurement process has been initiated which is slightly impacted by the Covid-19 pandemic.
The GST Council further made the following suggestions after due discussionsa.
Shri Nandan Nilekani would attend the next 3 meetings of the GST Council and update the council of the status of implementation of the decisions taken by the Council and assist the Council in taking appropriate decisions on technology related issues,
b. To support the timely implementation of various initiatives, the Council gave a go ahead for deployment of additional manpower (60 in number) on T&M basis and assured that both on procurement of additional hardware and hiring of manpower, expeditious approvals would be given however the return filing experience of the taxpayers and removal of technical glitches needs to be carried out urgently.
Shri Nandan Nilekani assured that he would personally monitor the progress of the GSTN project and also agreed to attend the IT-GoM for the next 6 months or till such time the initiatives are implemented. The GST Council expects these initiatives to be implemented by the 31 of July, 2020.
RM/KMN

39th GST Council Recommendations of GST council related to law & procedure

The 39 GST Council met under the Chairmanship of Union Finance & Corporate Affairs Minister Smt Nirmala Sitharaman here today . The meeting was also attended by Union Minister of State for Finance & Corporate Affairs Shri Anurag Thakur besides Finance Ministers of States & UTs and seniors officers of the Ministry of Finance.
The GST Council has made the following recommendations on Law & Procedures changes.
1. Measures for Trade facilitation:
a. Interest for delay in payment of GST to be charged on the net cash tax liability w.e.f.
01.07.2017 (Law to be amended retrospectively).
b. Where registrations have been cancelled till 14.03.2020, application for revocation of
cancellation of registration can be filled up to 30.06.2020 (extension of period of
application as one-time measure to facilitate those who want to conduct business).
c. Annual Return:
i. Relaxation to MSMEs from furnishing of Reconciliation Statement in FORM
GSTR-9C, for the financial year 2018-19, for taxpayers having aggregate
turnover below Rs. 5 crores;
ii. Due date for filing the Annual return and the Reconciliation Statement for
financial year 2018-19 to be extended to 30.06.2020; and
iii. Late fees not to be levied for delayed filing of the Annual return and the
Reconciliation Statement for financial year 2017-18 and 2018-19 for taxpayers
with aggregate turnover less than Rs. 2 crores.
d. A new facility called ‘Know Your Supplier’ to be introduced so as to enable every
registered person to have some basic information about the suppliers with whom they
conduct or propose to conduct business.
e. The requirement of furnishing FORM GSTR-1 for 2019-20 to be waived for taxpayers
who could not opt for availing the option of special composition scheme under
notification No. 2/2019-Central Tax (Rate) dated 07.03.2019 by filing FORM CMP-02.
f. A special procedure is being prescribed for registered persons who are corporate debtors under the provisions of the Insolvency and Bankruptcy Code, 2016 and are undergoing the corporate insolvency resolution process, so as to enable them to comply with the provisions of GST Laws during the CIRP period.
g. Extension of due dates for FORM GSTR-3B for the month of July, 2019 to January,
2020 till 24 March, 2020 for registered persons having principal place of business in
the Union territory of Ladakh. Similar extension is also recommended for FORM
GSTR-1 & FORM GSTR-7.

h. Bunching of refund claims allowed across financial years to facilitate exporters.
2. Deferment of E-invoice and QR Code:
a. Certain class of registered persons (insurance company, banking company, financial institution, non-banking financial institution, GTA, passenger transportation service etc.) to be exempted from issuing e-invoices or capturing dynamic QR code; and
b. The dates for implementation of e-invoicing and QR Code to be extended to 01.10.2020.
3. Deferment of e-wallet Scheme:
a. Extension of the time to finalize e-Wallet scheme up to 31.03.2021; and
b. Extension of the present exemptions from IGST and Cess on the imports made
under the AA/EPCG/EOU schemes up to 31.03.2021.
4. Continuation of existing system of furnishing FORM GSTR-1 & FORM GSTR-3B till
September, 2020;
5. Other new initiatives:
a. Seeking information return from Banks;
b. To curb fake invoicing and fraudulent passing of ITC, restrictions to be imposed on passing of the ITC in case of new GST registrations, before physical verification of premises and Financial KYC of the registered person.
6. Issuance of circulars in respect of:
a. Clarification in apportionment of ITC in cases of business reorganization under section
18 (3) of CGST Act read with rule 41(1) of CGST Rules;
b. Appeals during non-constitution of the Appellate Tribunal;
c. Clarification on refund related issues; and
d. Clarification on special procedure for registered persons who are corporate debtors under the provisions of the Insolvency and Bankruptcy Code, 2016, undergoing the corporate insolvency resolution process.
7. Amendments to the CGST Rules: Key amendments are as below:
a. Procedure for reversal of input tax credit in respect of capital goods partly used for affecting taxable supplies and partly for exempt supplies under rule 43 (1) (c);
b. ceiling to be fixed for the value of the export supply for the purpose of calculation of refund on zero rated supplies;
c. to allow for refund to be sanctioned in both cash and credit in case of excess payment of tax;
d. to provide for recovery of refund on export of goods where export proceeds are not realized within the time prescribed under FEMA; and
e. to operationalize Aadhaar authentication for new taxpayers.
8. Certain amendments to be carried out in the GST laws.
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Note: The recommendations of the GST Council have been presented in this release in simple
language for information of all stakeholders. The same would be given effect through relevant
Circulars/Notifications or amendment in GST laws which alone shall have the force of law.
RM/KMN

 

38th GST Council’s decisions regarding Law and Procedure related changes

The 38th meeting of the GST Council met under the Chairmanship of the Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman here today. The meeting was also attended by the Union Minister of State for Finance & Corporate Affairs Shri Anurag Thakur  besides Finance Ministers of States & UTs and senior officers of Ministry of Finance.  The GSTCouncil recommended the following:

  1. Grievance Redressal Committees (GRC) will be constituted at Zonal/State level with both CGST and SGST officers and including representatives of trade and industry and other GST stakeholders (GST practitioners and GSTN etc.). These committees will address grievances of specific/ general nature of taxpayers at the Zonal/ State level.
  2. Due date for annual return in FORM GSTR-9 and reconciliation statement in FORM GSTR-9C for FY 2017-18 to be extended to 31.01.2020.
  3. Following measures would be taken to improve filing of FORM GSTR-1:
    1. waiver of late fee to be given to all taxpayers in respect of all pending FORM GSTR-1from July 2017 to November 2019, if the same are filed by 10.01.2020.
    2. E-way Bill for taxpayers who have not filed their FORM GSTR-1 for two tax periods shall be blocked.
  4. Input tax credit to the recipient in respect of invoices or debit notes that are not reflected in his FORM GSTR-2A shall be restricted to 10 per cent of the eligible credit available in respect of invoices or debit notes reflected in his FORM GSTR-2A.
  5. To check the menace of fake invoices, suitable action to be taken for blocking of fraudulently availed input tax credit in certain situations.
  6. A Standard Operating Procedure for tax officers would be issued in respect of action to be taken in cases of non-filing of FORM GSTR 3B returns.
  7. Due date of filing GST returns for the month of November, 2019 to be extended in respect of a few North Eastern States.
  8. The Council also approved various law amendments which will be introduced in Budget 2020.

[This note presents the decision of the GST Council in simple language for easy understanding which would be given effect through Gazette notifications/ circulars which alone shall have force of law. The same will be made effective from the date as specified in such notifications / circulars.]

 

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RM/KMN

360° analysis of Circular No. 123/42/2019 – GST

Restrictions on Input Tax Credit is notified on 9th Oct 2019 wide Notification No 49/Central Tax, dated 9th Oct 2019. There is a lot of confusion and the process of availing the restricted input tax credit by the trade and industry and along with the professional. Keeping in view of all these, CBIC has issued Circular No. 123/42/2019– GST dated 11th Nov 2019. Though the circular clarifies most of the points, there are still a couple of points on which clarity is required.

Points clarified in the Circular No. 123/42/2019– GST are

  1. Restrictions on 20% input tax credit is applicable for availing input tax credit after 9th Oct 2019, thereby meaning it is applicable for the filing of the return for Sep 2019 also.
  2. Restriction of 20% is applicable only for the invoices, debit notes and credit notes reflected in GSTR – 2A
  3. Restriction of 20% is not applicable on the IGST paid on imports, ISD transfer, etc., which are not part of the GSTR – 2A
  4. Restriction is not applicable supplier wise but on the total eligible credit. Ineligible credits have to be deducted from the available credit from GSTR – 2A
  5. If the total amount of restricted credit of 20% is more than the eligible credit, then it is restricted to the eligible amount only.
  6. The taxpayer can take the differential amount of input tax credit where the suppliers have filed the returns in the subsequent tax periods

Points which require clarification are

  1. The amount of restricted credit claimed during the month is for which tax? Is it to be considered separately for CGST, SGST, and IGST or the sum of all the taxes?
  2. What would be the treatment if the taxpayer has claimed for IGST only, and the suppliers have filed returns on which CGST +SGST is available?
  3. Ineligible credit in case of the same supplies used for the taxable and exempted supplies will be known at a later period, in such a case who to determine the eligible credit?

As per the author’s interpretation, it is based on each tax and not the total input tax credit available in GSTR – 2A as the said notification is issued concerning CGST Rules. The third point definitely needs some clarification based on the wording used in the circular “The credit available under sub-rule (4) of rule 36 is linked to total eligible credit from all suppliers against all supplies whose details have been uploaded by the suppliers. Further, the calculation would be based on only those invoices which are otherwise eligible for ITC. Accordingly, those invoices on which ITC is not available under any of the provision (say under sub-section (5) of section 17) would not be considered for calculating 20 per cent. of the eligible credit available.”

The taxpayers have to do a cost-benefit analysis after considering all the scenarios, the amount of additional investment involved for claiming the restricted input tax credit as it involves changes in the accounting systems and keeping track of the same. Even if the taxpayers decide not to go for the availing restricted 20% credit, still they have to change the accounting practice for availing input tax credit. Embracing technology will help the taxpayers to overcome the challenges of maintaining the reconciliations manually and also keeping track of it from time to time and update it. The changes in accounting required for availing the 20% restricted input tax credit, the details of the changes in the accounting can be referred here

Whatever the decision the taxpayers have to take, they have to take it at the earliest as the clock is ticking, and the due date for filing of GSTR – 3B for Oct 2019 is approaching fast.

Disclaimer

Any views or opinions represented above are personal and belong solely to the author and do not represent those of people, institutions or organizations that the author may or may not be associated with in professional or personal capacity, unless explicitly stated. Any views or opinions are not intended to malign any religion, ethnic group, club, organization, company, or individual.

Extension of Due Dates for filing of FORM GSTR-1 and FORM GSTR-3B in certain cases

It has been observed that the number of taxpayers who have filed FORM GSTR-3B is substantially higher than the number of taxpayers who have furnished FORM GSTR-1. Non-furnishing of FORM GSTR-1 is liable to late fee and penalty as per the provisions of the GST law. In order to encourage taxpayers to furnish FORM GSTR-1, a one-time scheme to waive off late fee payable for delayed furnishing of FORM GSTR-1 for the period from July, 2017 to September, 2018 till 31.10.2018 has been launched.

In this regard, the due date for furnishing FORM GSTR-1 for the period from July, 2017 to September, 2018 has been extended till 31st October, 2018 for all registered persons having aggregate turnover above Rs 1.5 crores including the registered persons in Kerala, or whose principal place of business is in Kodagu (Karnataka) and Mahe (Puducherry). For taxpayers having aggregate turnover up to Rs 1.5 crores, the due date for furnishing FORM GSTR-1 for the quarters from July, 2017 to September, 2018 has been extended till 31st October, 2018. Notification Nos. 43 and 44/2018 – Central Tax dated 10th September, 2018 have been issued in this regard. For registered persons having aggregate turnover up to Rs 1.5 crores in Kerala, or whose principal place of business is in Kodagu (Karnataka) and Mahe (Puducherry), the due date for furnishing FORM GSTR-1 for the quarter July, 2018 to September, 2018 would continue to remain as 15th November, 2018 as notified vide notification No. 38/2018-Central Tax dated 24th August, 2018.

Further, for those taxpayers who will now be migrating to GST as per the procedure specified in notification No. 31/2018-Central Tax, dated 06.08.2018, the last date for furnishing the details of outward supplies of goods or services or both in FORM GSTR-1 and for filing the return in FORM GSTR-3B for the months of July, 2017 to November, 2018 has been extended till 31.12.2018. Notification Nos. 45, 46 and 47/2018 – Central Tax dated 10th September, 2018 have thus been issued for extension of dates for filing FORM GSTR-3B.

It is hereby clarified that as per the provisions of section 16 (4) of the Central Goods and Services Tax Act, 2017, the registered person shall not be entitled to take input tax credit in respect of any invoice after the due date of furnishing of the return for the month of September following the end of financial year to which such invoice pertains; or furnishing of the relevant annual return, whichever is earlier. The taxpayers are thus, advised to furnish their returns on time to ensure that input tax credit does not become time barred.

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43/2018-Central Tax ,dt. 10-09-2018

44/2018-Central Tax ,dt. 10-09-2018

45/2018-Central Tax ,dt. 10-09-2018

46/2018-Central Tax ,dt. 10-09-2018

47/2018-Central Tax ,dt. 10-09-2018

48/2018-Central Tax ,dt. 10-09-2018

 

 

Error! Summary for Filing is not Generated or is not available at this time. Please try again later

Many of them are getting the “Error! Summary for Filing is not Generated or is not available at this time. Please try again later” while filing the GSTR – 1.  The error may be caused due to the database refresh issue.

This error can be removed by trying the following ways

  1. Go back to the return dashboard and then try to file the return again.
  2. Logout and log in once
  3. Try filing after some time

I have tried the first two options and it was working.