GST WEEKLY UPDATE : 47/2022-23 (19.02.2023) By CA Vipul Khandhar – Tax Today

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By CA Vipul Khandhar

1. Recommendations By 49^th GST Council Meeting:

(1) Exports of pan masala, gutka, chewing tobaccos to be allowed against LUT only: Exports of such commodities to be allowed only against LUT with consequential refund of accumulated ITC.

(2) No capacity-based taxation for Pan-masala, Gutkha and other tobacco related items as such levy is against constitutional provision because under GST ‘supply’ is the taxable event not capacity of the machines

(3) Compensation cess levied on pan masala, gutkha, chewing tobacco to be changed from transaction value to MRP based levy

Compensation cess levied on such commodities to be changed from ad valorem to specific tax based levy to boost the first stage collection of the revenue.

(4) Extension of time limit for application for revocation of cancellation of registration from 30 days to 90 days

(5) One time amnesty scheme for past cases of GST cancellation on account of non-filing of the returns, but application for revocation of cancellation of registration could not be filed within the time

(6) Late fee for filing GSTR-9 for FY 2022-23 reduced from Rs 200 per day to Rs 50 per day (Rs 100 per day if turnover exceeds 5 crores) subject to maximum of 0.04% of turnover

Rationalization of Late fee for Annual Return: Presently, late fee of Rs 200 per day (Rs 100 CGST + Rs 100 SGST), subject to a maximum of 0.5% of the turnover in the State or UT (0.25% CGST + 0.25% SGST), is payable in case of delayed filing of annual return in FORM GSTR-9. The Council recommended to rationalise this late fee for delayed filing of annual return in FORM GSTR-9 for FY 2022-23 onwards, for registered persons having aggregate turnover in a financial year upto Rs 20 crore, as below:

(7) Amnesty in respect of pending returns in FORM GSTR-4, FORM GSTR-9 and FORM GSTR-10: To provide relief to a large number of taxpayers, the Council recommended amnesty schemes in respect of pending returns in FORM GSTR-4, FORM GSTR-9 and FORM GSTR-10 by way of conditional waiver/ reduction of late fee.

• Registered persons having an aggregate turnover of up to Rs. 5 crores in the said financial year: Rs 50 per day (Rs 25 CGST + Rs 25 SGST), subject to a maximum of an amount calculated at 0.04 per cent. of his turnover in the State or Union territory (0.02% CGST + 0.02% SGST).
• Registered persons having an aggregate turnover of more than Rs. 5 crores and up to Rs. 20 crores in the said financial year: Rs 100 per day (Rs 50 CGST + Rs 50 SGST), subject to a maximum of an amount calculated at 0.04 per cent. of his turnover in the State or Union territory (0.02% CGST + 0.02% SGST).

(8) Rationalization of provision of place of supply of services of transportation of goods

Rationalization of provision of place of supply of services of transportation of goods: Council recommended to rationalize the provision of place of supply for services of transportation of goods by deletion of section 13(9) of IGST Act, 2017 so as to provide that the place of supply of services of transportation of goods, in cases where location of supplier of services or location of recipient of services is outside India, shall be the location of the recipient of services.

(9) It has been decided that no separate IGST shall be levied on tag-tracking or data logger devices in case where such devices are already affixed on the container.

(10) It has been decided to amend the entry at Sl. No. 41A of Notification No. 1/2017-Compensation Cess (Rate) so that the exemption benefit covers both

1. a) coal rejects supplied to and
2. b) by a coal washery,

arising out of coal on which compensation cess has been paid and no input tax credit thereof has been availed by any person.

(11) It has been decided to extend the exemption available to educational institutions and Central and State educational boards for the conduct of entrance examination to any authority, board or a body set up by the Central Government or State Government including the National Testing Agency for the conduct of entrance examination for admission to educational institutions.

(12) The GST Council has inter-alia made the following recommendations to clarify the GST rates:

2.    Registered person now can show negative Values in Table 4 (ITC) of GSTR-3B are now LIVE on GST portal:

• The Goods and Services Tax Network (“GSTN”) has issued an Advisory dated February 17, 2023 regarding the Introduction of Negative Values in Table 4 of GSTR-3B.

• The GST Portal from January-2023 period onwards and shall be applicable from tax period – January 2023’ onwards.

1. The impact of credit note & their amendments will now be auto-populated in Table 4(A) instead of Table 4(B) of GSTR-3B. In case the value of credit notes becomes higher than sum of invoices and debit notes put together, then the net ITC would become negative and the taxpayers will be allowed to report negative values in Table-4A. Also, taxpayers can now enter negative values in Table 4D(2) of GSTR-3B.

1. Consequent updates/ modification in the advisory, messages, instructions, and help-text in form GSTR-2B, without any structural changes in form GSTR-2B summary or tables have also been done in GSTR-2B.

1. The calculation logic of Comparison Report has now been changed accordingly.

• The taxpayers are advised to go through instructions/help text carefully in GSTR-2B & System GeneratedGSTR-3B pdf before filing GSTR-3B.

3. AAR & Judicial Decisions:

(i) AAR On Unbranded namkeen products to attract 12% GST, not 5%:

(Applicant – Prajapati Keval Dineshbhai)

The GST rate for various products is set on the basis of the harmonised system nomenclature (HSN) code. The applicant said that namkeens fall under the code 210690 and hence would draw the five per cent GST.

The AAR observed that the term “namkeen” isn’t defined under the CGST Act. Further, the applicant intends to supply the food products in packages, so they would be considered as pre-packaged and labelled.

The notification had amended the rates on July 18 last year and excluded pre-packaged and labelled products from the levy of five per cent GST, following a decision to this effect by the GST Council. The said products would attract a 12 per cent rate since.

The AAR, Gujarat has held that:

• The supply of un-branded packaged namkeens and potato products such as chips/sev etc., according to pre-determined weights, will attract GST at 12%.
• Further held that, the supply of dry potato starch powder as a bye product has a specific entry, attracting GST rate of 12%.
• Because the applicant’s food supply is pre-packaged and labelled, it is ineligible for the 5% GST tax rate.

The Gujarat Authority for Advance Ruling (AAR) has observed that 12% GST is applicable on salted and flavouring potato chips, chevdo, sev, and hing bhujiya.

Disclaimer:

This publication contains information for general guidance only. It is not intended to address the circumstances of any particular individual or entity. Although the best of endeavour has been made to provide the provisions in a simpler and accurate form, there is no substitute to detailed research with regard to the specific situation of a particular individual or entity. We do not accept any responsibility for loss incurred by any person for acting or refraining to act as a result of any matter in this publication.