GST WEEKLY UPDATE : 1/2023-24 (02.04.2023) By CA Vipul Khandhar – Tax Today

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By CA Vipul Khandhar

1. Reduction in late filling for the GSTR-4 non-filers (Notification No. 02/2023-Central Tax 31-Mar-2023):

Tax payers fails to file GSTR-4 for the period FY 2017-18 to 2021-22 but furnish in 01-04-2023 to 30-06- 2023 late fees max to Rs.250/- CGST and Rs.250/- SGST.

2. Cancelled GSTN allowed for the revocation:

Extension of time limit for application for revocation of cancellation of registration Notification No. 03/2023-Central Tax 31-Mar-2023 Tax payers, whose registration has been cancelled on or before 31-12-2022 and failed to apply for revocation of cancellation within time period may apply for revocation up to 30-06-2023 after filing of all returns.

Person who has filed an Appeal u/s 107 against order of Cancellation or order rejecting application for revocation and such appeal has been rejected on the ground of failure to adhere time u/s 30.

3.Withdrawal of demand of assessment orders issued under Section 62:

Taxpayers, who failed to furnish return within 30 days of order u/s 62. The order shall be withdrawn if furnish the return by 30-06-2023 and taxes and interest paid Notification No. 07/2023-Central Tax 31-Mar-2023.

4. Amnesty provided for withdrawal of Assessment order for Non- Filers of Form GSTR-3B or Form GSTR-10:

Amnesty provided for withdrawal of Assessment order for Non- Filers of Form GSTR-3B or Form GSTR-10 Register person who failed to furnish a valid return within a period of thirty days from the service of the assessment order issued on or before the 28th February, 2023 u/s 62(1). The said assessment order shall be deemed to have been withdrawn, if such registered persons registered persons shall furnish the said return on or before the 30th June 2023 along with payment of interest due u/s 50(1) and the late fee payable u/s 47. Irrespective of whether or not an appeal had been filed against such assessment order under section 107 of the CGST Act or whether or not the appeal has been decided. Notification      No. 06/2023 – Central Tax

5. Reduction of late fee for GSTR-9:

Taxpayers fails to file GSTR-9 for the period FY 2017-18 to 2021-22 but furnish in 01-04-2023 to 30-06-2023  late fees max to Rs.10,000/- per act. Notification No. 08/2023-Central Tax 31-Mar-2023.

Further, amnesty to GSTR-10 non-filers – Late fee for filling of Final Return GSTR 10 is capped at Rs1,000/- if filled before 30/06/2023.

The maximum late fee is calculated at 0.04% (0.02% CGST+0.02% SGST) of Turnover in the State or Union Territory.

For Registered Persons having an Aggregate Turnover of More than Rs.20 Crores no reduction in amount of Late Fees.

6. Gujarat based GSTN has to be updated Compulsory biometric-based Adhaar authentication and risk-based physical verification of GST Registration in Gujrat State. Notification No. 05/2023 – Central Tax:

The GST Council in its 48th meeting dated December 17, 2022, has recommended to commence a pilot trail in the state of Gujarat for biometric-based Aadhaar authentication and risk-based physical verification of applicant for registration, which would help in tackling the menace of fake and fraudulent registrations.

New registration in Gujarat also liable for the biometric basis aadhar authentication: Substitute sab rule 4A of rule 8 of CGST Rule 2017 New sub rule (4A) Where an applicant, other than a person notified under sub-section (6D) of section 25, opts for authentication of Aadhaar number, he     shall, while submitting the application under sub- rule(4),undergo authentication of Aadhaar  number and the date of submission of the  application in such cases shall be the date of authentication of the Aadhaar number, or fifteen days from the submission of the application in Part B of FORM GST REG-01 under sub-rule (4), whichever is earlier. Provided that every application made under sub-rule (4) by a person, other than a person notified under sub-section (6D) of section 25, who has opted for authentication of Aadhaar  number and is identified on the common portal, based on data analysis and risk parameters, shall be followed by biometric-based Aadhaar authentication and taking  photograph of the  applicant where the applicant is an individual or of such individuals in relation to the applicant as notified under sub-section (6C) of section 25 where the  applicant is not an individual, along with the verification of the original copy of the documents uploaded with the application in FORM GST REG-01 at one of the Facilitation Centers notified by the Commissioner for the purpose of this sub-rule and the application shall be deemed to be complete only after completion of the process laid down under this  proviso.

7. Date of scrutiny or investigation order issuance has been extended:

Extended time limit for Order u/s 73(9) The CBIC vide Notification No. 09/2023 – Central Tax dated 31st March 2023 once again has extended the Time Limit u/s 73(10) for issuance of Order u/s 73(9) for recovery tax short paid or not paid or ITC wrongly availed or utilised. Notification No. 09/2023 – Central Tax

        AAR & Judicial Decisions:

(i) Decision of Hon’ble Karnataka Highcourt Regarding Rule 89(4)(c) is ‘ultra-vires’ to the provisions of GST law and held ‘unconstitutional’:

(Applicant – M/s. Tonbo Imaging India Pvt Ltd)

• The Hon’ble Karnataka High Court in M/s. Tonbo Imaging India Pvt Ltd v. Union of India [W.P.C No. 13185 of 2020] (T-RES) dated February 16, 2023]has held that, Rule 89 (4)(c) of the Central Goods and Service Tax Rules, 2017 (“the CGST Rules”) which restricts the exports made without payment of tax (i.e., under Letter of Undertaking model (“LUT Model”)) to 1.5 times value of like goods supplied domestically is unconstitutional and ultra vires of the provisions of the GST law.
• Noted that, on a combined reading of Section 54 of the CGST Act and Section 16 of the IGST Act, it can be said that intention of making exports zero-rated is to make the entire supply chain of exports tax-free. However, Rule 89(4)(c) restricts the refund in case of export made through the LUT model to 1.5 times the value of like goods domestically supplied, which is ultra vires in view of the well-settled principle of law that rules cannot override the parent legislation.
• Further noted that, Rule 89(4)(c) of the CGST Rules is violative of Articles 14 and 19(1)(g) of the Constitution being restricting the quantum of refund of unutilized Input Tax Credit (“ITC”) in case of export made under LUT model. In contrast, in the case of refund sought under payment of the IGST model, there is no such limit.
• Observed that, Rule 89(4)(c) of the CGST Rules contains words “like goods” and “similarly placed supplier,” which are not defined anywhere in the CGST Act or IGST Act or rules made thereunder.
• Further observed that, in case where the domestic turnover is nil for a particular period or very less, the quantum of refund becomes nil or negligible where the exports were made under LUT model, thereby clearly cutting down the principle of zero-rating as specified in Section 16 of the IGST Act, 2017 which would mean that the taxes on exports do not get refunded adequately.
• Held that, Rule 89(4)(c) is ultra vires the provision of the IGST Act and CGST Act, including being violative of Articles 14 and 19 of the Constitution and the provision is arbitrary, unreasonable and vague.

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.

Author is a well known Chartered Accountant practicing at Ahmedabad