GST Revenue collection for September 2021

GST Revenue collection for September 2021

The gross GST revenue collected in the month of September 2021 is
₹ 1,17,010 crore of which CGST is ₹ 20,578 crore, SGST is ₹ 26,767 crore, IGST is ₹ 60,911 crore (including ₹ 29,555 crore collected on import of goods) and Cess is
₹ 8,754 crore (including ₹ 623 crore collected on import of goods).

The government has settled ₹ 28,812 crore to CGST and ₹ 24,140 crore to SGST from IGST as regular settlement. The total revenue of Centre and the States after regular settlements in the month of September 2021 is ₹ 49,390 crore for CGST and ₹ 50,907 crore for the SGST.

The revenues for the month of September 2021 are 23% higher than the GST revenues in the same month last year. During the month, revenues from import of goods was 30% higher and the revenues from domestic transaction (including import of services) are 20% higher than the revenues from these sources during the same month last year. The revenue for September 2020 was, in itself at a growth of 4% over the revenue of September 2019 of ₹ 91,916 crore.

The average monthly gross GST collection for the second quarter of the current year has been ₹ 1.15 lakh crore, which is 5% higher than the average monthly collection of ₹ 1.10 lakh crore in the first quarter of the year. This clearly indicates that the economy is recovering at a fast pace. Coupled with economic growth, anti-evasion activities, especially action against fake billers have also been contributing to the enhanced GST collections. It is expected that the positive trend in the revenues will continue and the second half of the year will post higher revenues

Centre had also released GST compensation of Rs. 22,000 crore to States to meet their GST revenue gap.

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

Restrictions on Input Tax Credit is notified on 9^th Oct 2019 wide Notification No 49/Central Tax, dated 9^th 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 11^th 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 9^th 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.

GST Tip – 145

GSTR – 9A is an annual return to be filed by the Compounding Taxable Person. In Section 5 of the return details relating to the inward supply of goods and service without reverse charge, with reverse charge, import of goods and services along with the expenses for each ledger account has to be provided.

GST Tip – 136

In Annex 4 of GSTR – 9B, reconciliation statement for the Input Tax Credit availed has to be shown between the GST Return and the financial statements for inputs tax availed on interstate supplies, intrastate supplies, imports and purchase returns