Key Features – File Validation Utility (FVU) version 7.2

New File Validation Utility has been released by NSDL for filing of 26Q, 27Q and 27EQ and the same is effective from 1st October 2021. Following are the changes

A. Addition of new Section code 194P for Form 24Q
194P: Deduction of tax in case of specified senior citizens
This section will be applicable for regular and correction statements pertaining to FY 2021-22 onwards.

B. Addition of new Section code 196D(1A) for Form 27Q
196D(1A): Income of specified fund from securities referred to in clause (a) of subsection (1) of section 115AD (other than interest income referred to in section 194LD).
This section will be applicable for regular and correction statements pertaining to FY 2020-21 Q3 onwards where date of payment is on or after 01/11/2020.

C. Addition of new Section code 194Q Form 26Q
194Q: Payment of certain sums for purchase of goods
This section will be applicable for regular and correction statements pertaining to FY 2021-22 Q2 onwards.

D. Addition of new remark values for Form 27Q

1. Remark I: In case of no deduction is in view of sub-section (2) of section 196D in respect
   of income of the nature of capital gains on transfer of securities referred to in section
   115AD paid or payable to a Foreign Institutional Investor
   This remark will be applicable for section codes 196D & 196D(1A) only.
2. Remark H: If no deduction is in view of proviso to sub-section (1A) of section 196D in
   respect of an income paid to a specified fund which is exempt under clause (4D) of
   section 10
   This remark will be applicable only for section 196D(1A)
3. Remark J: If deduction is at higher rate in view of section 206AB for non-filing of return
   of income by the non-resident having a permanent establishment in India
   This remark will be applicable to all section codes except 192A, 194LBC, 194N and
   194NF

E. Addition of new remark values for Form 26Q

1. Remark P: In case of No deduction is on account of payment of dividend made to a
   business trust referred to in clause (d) of second proviso to section 194 or in view of any
   notification issued under clause (e) of the second proviso to section 194
   This remark will be applicable only for section 194
2. Remark Q: In case of No deduction in view of payment made to an entity referred to in
   clause (x) of sub-section (3) of section 194A
   This remark will be applicable only for section 194A
3. Remark U: If the deduction is on higher rate in view of section 206AB for non-filing of
   return of income
   This remark will be applicable to all section codes except 192A, 194B, 194BB, 194LBC,
   194N and 194N

F. Addition of remark value in Form 27EQ
Remark I: If collection is at a higher rate in view of section 206CCA
This remark will be applicable to all applicable to all collection codes
These changes will be applicable for regular and correction statements pertaining to FY 2021-22 Q2 onwards

G. Change in validation related to section code 196D in Form 27Q
Existing remark value “C” will be applicable for this section with their existing validations in case of non-availability of PAN.
Newly added remark “I” and existing remark “G” will also be applicable to this section code for no deduction.
Remark “I” will be applicable in case of nil challan return.
These changes will be applicable for regular and correction statements pertaining to FY 2021-22 onwards

H. Changes in validations of Section 194K of Form 26Q
Existing Remark “B” (In case of no deduction on account of declaration under section
197A) will also be applicable to section for this section
These changes will be applicable for regular and correction statements pertaining to FY 2021-22 onwards.

This version of FVU is applicable with effect from October 01, 2021 onwards.

Advisory on Annual Aggregate Turnover Functionality

Aggerate Annual Turnover for the Financial Year is being displayed on the GST portal when the user clicks on Navigate to Returns Dashboard at the time of login.

The values for AATO displayed is based on return filing data filed by taxpayers and computation done as on 26/06/2021. Turnover value is updated dynamically as per filing of Returns. Aggregate Turnover is updated dynamically based upon the filings done by all GSTINs under the PAN. Final Turnover & Aggregate Turnover will be made available post tax-officer’s verification 11/10/2021.

On the page user can see the values based on the returns filed and if there not filled up to date, the AATO  is estimated and shown. In case if the returns are filed, then the actual AATO based on the returns is displayed.

If the value for AATO is wrong, the taxpayers can file a ticket  https://selfservice.gstsystem.in. and get the same rectified.

An Advisory has been issued in this context and it is highly recommended for all the professional to go through the same.

• This facility shows to the taxpayer AATO (Annual Aggregate Turnover) based on the returns filed by him/her in the last financial year.
• The facility of turnover update has also been provided to the taxpayer in this functionality, if the said taxpayer feels that the system calculated turnover varies from the turnover as per his/her records.
• As stated, the calculation is based on the returns filed in the last financial year. For details of the calculation see Turnover calculation logic.
• This facility of turnover update shall be provided to all the GSTINs registered on a common PAN. All the changes by any of the GSTINs in his turnover shall be summed up for computation of Annual Aggregate Turnover for each of the GSTINs.
• The taxpayer can amend the turnover twice within a period of one month from the date of roll out of this functionality.
• Thereafter, the updated value shall be frozen with no further attempts provided to the taxpayers to amend their turnover(s) and this turnover figure will be sent to the Jurisdictional Tax Officer for review.
• In case the jurisdictional Officer finds any discrepancy in the updated/amended values furnished by the taxpayer, the said officer can amend the turnover.
• Tax officers are expected to consult and/or communicate with the taxpayer before amending the turnover declared by the taxpayer.
• The turnover finalized by the tax officer after such consultation shall be considered final.
• In case no action is taken by the officer within 30 days on the turnover reported by the taxpayer, the same shall then be considered final (which will be displayed to the taxpayer accordingly) and will be considered as such for the entire previous financial year.
• In case of any grievances pertaining to the said functionality, the aggrieved taxpayer can raise a ticket at https://selfservice.gstsystem.in.
• All such tickets shall be investigated by the technical team and shall be resolved on a case by case basis and when needed they shall be forwarded to the jurisdictional officer.

Note: Taxpayers are expected to use this functionality only if there is a discrepancy observed by them in the system calculated turnover as per the calculation logic mentioned above.

42nd GST Council Meeting Updates

Recommendations of the 42nd GST Council Meeting

The 42nd GST Council met under the Chairmanship of Union Finance & Corporate Affairs Minister Smt Nirmala Sitharaman through video conferencing 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 senior officers of the Ministry of Finance& States/ UTs.

The GST Council has made the following recommendations:

1. Levy of Compensation Cess to be extended beyond the transition period of five years i.e. beyondJune, 2022, for such period as may be required to meet the revenue gap. Further details to be worked out.

• Centre is releasing compensation of ₹ 20,000 crore to States today towards loss of revenue during 2020-21 and an amount of about ₹ 25,000 crore towards IGST of 2017-18 by next week.

• Enhancement in features of return filing:In its 39^th Meeting held in March 2020, the Council hadrecommendedan incremental approach to incorporate features of the new return system in the present familiar GSTR-1/3B scheme. Various enhancements have since been made available on the GST Common Portal. With a view to further enhance Ease of Doing Business and improve the compliance experience, the Council has approved the future roadmap for return filing under GST. The approved frameworkaims to simplify return filing and further reduce the taxpayer’s compliance burden in this regard significantly, such that the timely furnishing of details of outward supplies (GSTR-1) by ataxpayer and his suppliers would –(i) allow him to view the ITC available in his electronic credit ledger from all sources i.e. domestic supplies, imports and payments on reverse charge etc. prior to the due date for payment of tax, and (ii) enable the system to auto-populate return (GSTR-3B)through the data filed by the taxpayer and all his suppliers. In other words, the timely filing of GSTR-1 statement alone would be sufficient as the return in FORM GSTR-3B would get auto prepared on the common portal.To this end the Council recommended / decided the following:

1. Due date of furnishing quarterly GSTR-1 by quarterly taxpayers to be revised to 13^th of the month succeeding the quarterw.e.f. 01.1.2021;

• Roadmap for auto-generation of GSTR-3B from GSTR-1s by:

1. Auto-population of liability from own GSTR-1 w.e.f. 01.01.2021; and

1. Auto-population of input tax credit from suppliers’ GSTR-1s through the newly developed facility in FORM GSTR-2B for monthly filers w.e.f. 01.01.2021 and for quarterly filers w.e.f. 01.04.2021;

• In order to ensure auto population of ITC and liability in GSTR 3B as detailed above, FORM GSTR 1would be mandatorily required to be filed before FORM GSTR3Bw.e.f. 01.04.2021.

• The present GSTR-1/3B return filing system to be extended till 31.03.2021 and the GST laws to be amended to make the GSTR-1/3B return filing system as the default return filing system.

• As a further step towards reducing the compliance burden particularly on the small taxpayers having aggregate annual turnover < Rs. 5 cr., the Council’s earlier recommendation of allowing filing of returns on a quarterly basis with monthly payments by such taxpayers to be implemented w.e.f. 01.01.2021. Such quarterly taxpayers would, for the first two months of the quarter, have an option to pay

35% of the net cash tax liability of the last quarter using an auto generated challan.

• Revised Requirement of declaring HSN for goods and SAC for services in invoices and in FORM GSTR-1w.e.f. 01.04.2021 as under:

1. HSN/SAC at 6 digits for supplies of both goods and services for taxpayers with aggregate annual turnover above Rs. 5 crores;

• HSN/SAC at 4 digits for B2B supplies of both goods and services for taxpayers with aggregate annual turnover upto Rs. 5 crores;

• Government to have power to notify 8 digit HSN on notified class of supplies by all taxpayers.

• Amendment to the CGST Rules: Variousamendments in the CGST Rules and FORMS have beenrecommended which includes provision for furnishing of Nil FORM CMP-08 through SMS.

• Refund to be paid/disbursed in a validated bank account linked with the PAN &Aadhaar of the registrant w.e.f. 01.01.2021.

• To encourage domestic launching of satellites particularly by young start-ups, the satellite launch services supplied by ISRO, Antrix Corporation Ltd. and NSIL would be exempted.

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Note:- The decisions of the GST Council have been presented in this note in simple language for easy understanding. The same would be given effect to through Gazette notifications/ circulars which alone shall have force of law.

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RM/KMN

(Release ID: 1661827)