GST WEEKLY UPDATE : 44/2022-23 (29.01.2023) By CA Vipul Khandhar – Tax Today
Reading Time: 7 minutes
1. Advisory on facility of ‘Initiating Drop Proceedings’ of Suspended GSTINs due to Non-filing of Returns (24/01/2023):
Recently, a functionality of “Automated Drop Proceedings” of GSTINs suspended due to non-filing of returns has been implemented on the GST Portal. This functionality is available for the taxpayers who have filed their pending returns i.e. 6 monthly or 2 Quarterly returns.
- If such taxpayers have filed all their pending returns, the system will automatically drop the proceedings and revoke suspension.
- If the status of the GSTIN does not automatically turn ‘ACTIVE’, then taxpayers are advised to revoke the suspension once the due returns have been filed, by clicking on ‘Initiate Drop Proceeding’ for which navigation is as follows:
“Log on to GST Portal > Services > User Services > View Notices and Orders > Initiate Drop Proceeding”
- In case the system does not automatically drop the proceedings or taxpayer is unable to revoke the suspension by clicking on ‘Initiate Drop Proceeding’, then taxpayer is advised to contact Jurisdictional Officer.
Note: This functionality is applicable to the taxpayers whose GSTINs have been suspended after 1st December, 2022.
2. GST tweets updated on CBIC:
| Exports | ||
| Present Procedures have Service Tax on Nepal, But no Goods Tax on Nepal. But, With GST, what tax will apply? | The export procedure for Nepal would be same as that to other Countries. | |
| Are there exemptions for SEZ? How will a SEZ transaction happen in GST regime? | Supplies to SEZs are zero-rated supplies as defined in Section 16 of IGST Act. | |
| How would the sale and purchase of goods to and from SEZ will be treated? Will it be export / input? | Supply to SEZs is zero rated supplies and supplies by SEZs are treated as imports. | |
| Please clarify status of international export freight under GST as the same was exempt under POPS rules. It is zero rated in most countries. | POS for transport of goods determinable in terms of sec 12(8) or sect 13(8) of IGST Act, 2017, depending upon location of service provider/service receiver. Exports are treated as zero rated supplies. | |
| When goods are being imported from SEZ who will pay IGST? | Such supply is treated as import and present procedure of payment of duty continues with the variation that IGST is levied in place of CVD. | |
| Who will pay IGST when goods are procured from SEZ? Today importer is paying both BCD and CVD. | Such supply is treated as import and present procedure of payment continues with the variation that IGST is levied in place of CVD. | |
| Input Tax Credit | ||
| Is SGST of Rajasthan charged by supplier on purchase from Rajasthan can be utilize for payment of SGST in Madhya Pradesh? | SGST of one State cannot be utilized for discharging of output tax liability of another State. | |
| How one can use SGST credit for the payment of IGST on another state? | SGST Credit can be used for payment of IGST liability under the same GSTIN only. | |
| Can one State CGST be used to pay another state CGST? | The CGST and SGST Credit for a State can be utilized for payment of their respective CGST/SGST liabilities within that State for the same GSTIN only. | |
| In case of service supplied, should the credit be given to the state where it is billed or the state it is rendered? | Tax will be collected in the State from which the supply is made. The supplier will collect IGST and the recipient will take IGST credit. | |
| Company is engaged in manufacturing of cement & power. Which rule to be referred for reversal of credit related to power business? | Detailed rules for reversal of ITC when the supplier is providing exempted and non-exempted supplies have been provided in ITC Rules. | |
| How will the credit / debit note from unregistered supplier be reported to GSTN and ITC claimed in the same? | Like invoice, credit/debit notes on behalf of unregistered person will be given by registered person only.
Further, GSTR2 provides for reporting of same by the recipient. |
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| Invoice | ||
| A shop sells taxable & exempt products to the same person (B2C), is it required to issue tax invoice and bill of supply separately? | In such a case the person can issue one tax invoice for the taxable invoice and also declare exempted supply in the same invoice. | |
| Do registered dealers have to record Aadhaar/PAN while selling goods to unregistered dealers? | There is no requirement to take Aadhaar / PAN details of the customer under the GST Act. | |
| All expenses like freight / transport / packing which are charged in Sales Invoice are taxable in GST? How to charge in bill? | All expenses will have to be included in the value and invoice needs to be issued accordingly. Please refer to Section 15 of CGST Act and Invoice Rules. | |||
| Can we move construction material to builders on delivery challan and issue tax invoice post completion of activity? | If the goods are meant to be supplied in the course of construction an invoice is necessary. If the goods are tools which are to be used for construction then delivery challan should be issued. | |||
| How to treat following transaction in GST (i) Delivered supply shortages in Transit. (ii) Customer gets less quantity and pays less. | The supplier may issue credit note to the customers and adjust his liability. | |||
| Should we issue Self Invoice for GST liability discharge on RCM or GST can be discharge through expenses booking voucher? | For RCM liabilities tax invoice has to be issued on self. | |||
| Supply | ||||
| Should we discharge GST liability for all reverse charge having small amounts of Transaction or any amount limit is there? | It has been decided that Rs. 5000/- per day exemption will be given in respect of supplies received from unregistered person. For supplies above this amount, a monthly consolidated bill can be raised. | |||
| What is treatment of promotional item given free to end consumers by FMCG companies? | Tax will be charged only on the total
consideration charged for such supply. |
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| How to comply with 9(4) of CGST Act if POS is in another State of the unregistered supplier | Any person making inter-state supply has to compulsorily obtain registration and therefore in such cases, section
9(4) will not come into play. |
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| Under supply from unregistered dealer the purchaser have to pay GST on RCM basis.so whether stipend paid to intern will also come under RCM? | Stipend paid to interns will be employer-employee transactions.
Hence, not liable for GST. |
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| Salary by partnership firm to Partners as per Income Tax Act liable to GST? | Salary will not be liable for GST. | |||
| Sec 9(4) of CGST Act 2017. Do I need to pay under RCM if I purchase stationary worth Rs.100 from an unregistered stationery shop? | It has been decided that Rs. 5000/- per day exemption will be given in respect of supplies received from unregistered
person. |
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| What is the treatment of promotional item given free to end consumers by FMCG companies? If taxable, whether ITC is allowed? | Tax is payable on consideration received for the supply. | |
| Whether GST will be leviable in case of returnable packing material like drums supplied with finished goods? | GST will be levied on the value charged
for the supply only. |
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| How will disposal of scrap be treated in GST? | If the disposal is in the course or furtherance of business purposes, it will be considered as a supply. | |
| I am from MP and providing service to a customer in Maharashtra. I outsource the work to a service provider in Maharashtra, what tax i need to charge? | Generally these will be two supplies where the supplier from MP will charge IGST from the recipient in Maharashtra. Whereas, the service provider in Maharashtra will charge
IGST from the recipient in MP. |
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| If address of buyer is Punjab and place of supply is same state of supplier (Rajasthan), then IGST will apply or CGST/SGST? | If the place of supply and the location of the supplier are in the same State then it will be intra-State supply and CGST / SGST will be applicable. | |
| Why is bifurcation of cash deposit as CGST-SGST-IGST required? Is cash held against a GSTIN, to be adjusted via return u/s 39 | Three levies are under three different statutes and are required to be separately accounted for. | |
| What is the difference in between ‘Nil rated’, ‘taxable at 0%’ and exempted goods and services? Especially in relation with ITC | Exempt supply includes Nil rated (taxable at 0%) and non-Taxable supplies and no ITC is available for such supplies. | |
| Will professional tax will be abolished in Maharashtra after introducing of GST? | Professional tax is not a tax on supply of goods or services but on being in a profession. Professional tax not subsumed in GST. | |
| Employer provides bus service, meal coupon, telephone at residence, gives vehicle for official and personal use, uniform and shoes, any GST? | Where the value of such supplies is in the nature of gifts, no GST will apply till value of such gifts exceeds Rs. 50000/- in a financial year. | |
| The definition of composite supply and the description of same under Section 8 differ. Please explain consequences. | Section 2(30) defines what will be considered as a composite supply. Whereas, Section 8 provides that in case of a composite supply, the treatment for tax rate etc. will be that of principal supply. | |
| Whether slump sale will attract GST.
If yes then under which Section? |
It will have the same treatment as normal supply. | |
| Salary by Partnership firm to Partners as per Income Tax Act liable to GST? Partners are not employees of the firm. | Salary will not be leviable of GST. |
4. No Late fees to be charged if returns not filed due to cancellation of GST registration, which was restored subsequently in the case of M/s. Modicum Enterprise (OPC) Private Limited v. Deputy Commissioner of State Tax/Assistant Commissioner of State Tax Calcutta High Court:
Analyzed Section 47 of the CGST Act and noted that, the provision deals with a person, who fails to furnish the returns either under Section 39 or Section 45 or Section 44.
- Observed that, the Respondent did not state that the Appellant had failed to furnish its return within due date however, the reason for non-furnishing of returns was the cancellation of GST Registration on the ground that the Appellant is a non-existing dealer.
- Noted that, the cancellation of Appellant’s GST Registration was restored by the Appellate Authority on the grounds that order was passed on a factually incorrect premise. Hence, the Appellant cannot be penalised by demanding late fee and Section 47 of the CGST Act cannot be attracted.
- Held that, the demand of late fee of INR 5,000/- per return from the Appellant is without jurisdiction and not tenable in the eye of law.
- Restrained the Respondent from demanding any late fee from the Appellant in respect of the returns, which the Appellant intend to file.
- Directed the Respondent to render necessary assistance to the Appellant to facilitate the process of filing of return, so that the Appellant will be able to file the return without the payment of late fee within the period of three weeks.
- Further directed the Respondent not to initiate any fresh proceeding for cancellation of the GST Registration on the ground of non-filing of the return.
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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 endeavor 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.
