GST News and Updates – July 2021 

 

Central Tax Notifications

 

Notification 29/2021 – Sections 110 and 111 of the Finance Act 2011 coming into force from Aug 1, 2021

Section 110 – Omission of Section 35(5) of CGST Act,2017. Annual Accounts not required to be audited by CA/CWA

Section 111 – Amendment of Section 44 of CGST Act,2017. Commissioner may, on the recommendations of the Council, by notification, exempt any class of registered persons from filing annual return

Notification 30/2021 – Amending Rule 80 of CGST Rules and notifying Form 9 and 9C for 2020-21

Rule 80 – Provides for exemption from GSTR-9C to taxpayers having AATO upto Rs. 5 crores

Form 9 and 9C – Financial year 2020-21 added in the instructions.

Notification 31/2021 – Exempting taxpayers having AATO upto Rs. 2 crores from the requirement of furnishing annual return for FY 2020-21.

Under proviso to Section 44 of CGST Act,2017, the Commissioner on the recommendations of the Council, by notification has exempted registered person whose aggregate turnover in the financial year 2020-21 is upto two crore rupees, from filing annual return for the financial year.


Important changes related to QRMP Scheme implemented on the GST Portal for the taxpayers

 

Few important changes related to QRMP Scheme implemented on the GST Portal for the taxpayers are as given below:

  • Auto population of GSTR-3B liability from IFF and Form GSTR 1 : A taxpayer under QRMP Scheme can declare their liability through optional IFF for Month 1 and Month 2 of a quarter & GSTR-1 for Month 3 of that quarter. Declaration of liability in these forms would now be auto-populated in their GSTR-3B (Quarterly) for that quarter, based on their filed Form GSTR-1 and IFF. These fields are editable and in case their values are revised upwards or downwards.
  • Nil filing of Form GSTR-1 (Quarterly) through SMS : Nil filing of Form GSTR-1 (Qtrly) through SMS has been enabled for taxpayers under QRMP Scheme. However, NIL filing through SMS can’t be done in following scenarios: •If IFF for Month 1 or 2 of a quarter is in Submitted stage, but not Filed. •If invoices are Saved in IFF for Month 1 or 2 of a quarter, which was not submitted or filed by due date.
  • Impact of cancellation of registration on liability to file Form GSTR-1 : In case registration of a taxpayer under QRMP Scheme is cancelled, with effective date of cancellation being any date after 1st day of Month 1 of a quarter, they would be required to file Form GSTR-1 for the complete quarter, as the last applicable return.

Filing of Annual returns by composition taxpayers. – Negative Liability in GSTR-4

 

Reason of Negative Liability in GSTR4: The liability of the complete year is required to be declared in GSTR-4 under applicable tax rates. Taxpayers should fill up table 6 of GSTR-4 mandatorily. In case, there is no liability, the said table may be filled up with ‘0’ value. If no liability is declared in table 6, it is presumed that no liability is required to be paid, even though, taxpayer may have paid the liability through Form GST CMP-08. In such cases, liability paid through GST CMP-08 becomes excess tax paid and moves to Negative Liability Statement for utilization of same for subsequent tax period’s liability.

What the taxpayer did wrongly: Liability paid through Form GST CMP-08 is auto-populated in table 5 of the GSTR-4 for convenience of the taxpayers. Taxpayers who do not fill up table 6 of GSTR-4 i.e. no liability is declared, even though, taxpayer may have paid the liability through Form GST CMP-08; since the ‘Tax payable’ in GSTR-4 is computed after reducing the liability declared in GST CMP-08 and then auto-populated in table 5. Thus, if nothing is declared in table 6, then the negative liability entry appears in GSTR-4.

How to proceed in case of negative liability: If table 6 of GSTR-4 has not been filled due to oversight, a ticket may be raised to nullify the amount available in negative liability statement. If there is no liability to be paid during the year, the liability paid through Form GST CMP-08 shall move to negative liability statement and the same excess amount can be utilised to pay the liability of future tax periods.


The central government has transferred ₹75,000 crores to states as GST compensation to support economic recovery.

 

  • The central government transferred ₹75,000 crore it borrowed from the market to states in goods and services tax (GST) compensation, helping states to spend early in the financial year to support economic recovery. Union territories with a legislature will also receive the funds.
  • The Union finance ministry said in a statement that this is almost half of ₹1.59 trillion the Centre had agreed to transfer to states as part of GST compensation financed through borrowing, and is in addition to another ₹1 trillion being transferred in instalments from GST Cess collection.
  • The amount is expected to help states preparing for a possible third wave of Covid. States with large economies such as Karnataka, Maharashtra and Gujarat received ₹8,542 crore, ₹6,501 crore and ₹6,151 crore, respectively

Functionalities deployed on GST Portal for the Taxpayers in the month of July, 2021

 

Sl.No
Module
Form/ Functionality
Functionality released/ to be released for Taxpayers
Current status of deployment
1
RegistrationTimelines for filing of Application for Revocation of Cancellation of Registration in Form GST REG-21
  • In view of the spread of pandemic COVID-19 across many parts of India, vide Notification No 14/2021-CT, dated 1st May, 2021, read with vide Notification No 24/2021-CT, dated 1st June, 2021, the Government had extended the date for filing of various applications falling during the period from the 15th April, 2021 to 29th June, 2021, till 30th June, 2021.
  • In addition to this, timeline for filing of Application for Revocation of Cancellation of Registration, which were due on 15th of April 2021, had also been extended till 30th June 2021 on the GST Portal.
  • Accordingly, these extensions have now ceased to be effective w.e.f. 1st July, 2021, and timelines for filing of application for revocation of cancellation is now changed to 90 days (as was earlier) on the GST Portal, from date of Order of Cancellation of Registration in Form GST REG-19.
Deployed on 1st July, 2021
2
ReturnsInformation regarding late fee payable provided in Form GSTR-10
  • Taxpayers whose registration is cancelled, at the time of filing of last return in Form GSTR-10, will now be provided with details of late fee payable by them, for the delayed filing of any of the previous returns/ statements in a table, for their assistance in filing of said return by them.
  • This information can be viewed by clicking on a hyperlink provided under the column “Late Fee Payable” in the online Form GSTR- 10.
3
ReturnsAuto-population of data in Form GSTR-11 on basis of Forms GSTR-1 / 5 filed by their suppliers
  • The UIN holders file details of their inward supplies in Form GSTR-11 on a quarterly basis. They can subsequently file for refund (if required) in Form GST RFD- 10, for the quarter, in which summary of the documents is auto-populated from their Form GSTR-11, in an editable mode
  • Form GSTR-11 of the UIN holder would be generated with details of their inward supplies, on basis of Forms GSTR-1 / 5 filed by their suppliers, which will subsequently help them in filing their refund claims

 


Delhi HC says Search and Seizure Power of GST Authority is intrusive power and needs to be wielded with utmost care

 

The Delhi High Court while quashing the seizure Order said that the Search and Seizure power of GST Authority is intrusive power and needs to be wielded with utmost care.

The petitioner, M/S. R.J. Trading CO. (RJT) has been engaged in the business of trading in cigarettes. It is also averred by RJT that since the time it commenced business, it has complied with the provisions of not only the CGST Act but also the Delhi Goods and Services Tax Act, 2017. It is claimed by RJT that it has deposited tax from time to time as required under the said statutes.

Given the statutory compliances said to have been made by RJT, it claims it was surprised, when on 13.02.2021 the officers of Directorate General of Goods and Services Tax Intelligence (DGGI), Ahmedabad Zonal Unit, (AZU) visited its premises located in Delhi backed by an authorization issued by Joint Director, DGGI (AZU) under Section 67(2) of the CGST Act.

There was no investigation pending before CGST Commissionerate, Delhi North concerning RJT and therefore, the search, seizure, and authorization issued by the respondent were unlawful.

“The officers concerned should bear in mind that the search and seizure power conferred upon them, is an intrusive power, which needs to be wielded with utmost care and caution. The legislature has, therefore, consciously ring-fenced this power by inserting the controlling provision, i.e., “reasons to believe,” the court while declaring search and seizure conducted by CGST Delhi North Commissionerate unlawful, said.


Delhi HC: Service Tax Authority empowered to initiate fresh proceedings despite coming into force of GST Act

 

The Delhi High Court held that the Service Tax Authority was empowered to initiate fresh proceedings despite the coming into force of the GST Act, however, directed to hold final orders till the disposal of the Writ Petition.

The petitioner, Tuli Motors received the show cause notices in the year 2021 which were related to the old assessments for the period 2015 to 2017. It filed a writ petition and submitted that the old assessments for the period 2015 to 2017 cannot be reopened in the year 2021 and emphasized that after the repeal of Chapter V of the Finance Act, 1994 by the Goods and Services Tax Act, 2017, there is no power to initiate any fresh proceeding under the repealed Act i.e. Chapter V of the Finance Act, 1994.

The Department contended that Delhi High Court in Vianaar Homes Private Limited Vs. Assistant Commissioner (Circle-12), Central Goods & Services Tax, Audit-II, Delhi & Ors. has held that there is the power to initiate fresh proceedings under Chapter V of the Finance Act, 1994 despite coming into force of the Goods and Services Tax Act, 2017.

The division bench of Justice Manmohan and Justice Naveen Chawla directed that proceedings pursuant to the impugned Show Cause Notices and summons shall continue but the final orders shall not be given effect to till disposal of the writ petition.


GST collection for June 2021 below Rs 1 lakh crore

 

The gross Goods and Services Tax (GST) collected in the month of June 2021 is Rs 92,849 crore, a government press statement said July 6, 2021. The Rs 92,849 crore amount includes a Central GST of ₹16,424 crore, State GST of Rs 20,397, Integrated GST of Rs 49,079 crore and cess of Rs 6,949 crore. The collection hasn’t slipped to this level since the countrywide COIVD-19 lockdown last year. The fall in GST collection is being linked to the prevailing novel coronavirus disease (COVID-19) situation during the month preceding June 2021.

During May 2021, most Indian states and Union territories were under either complete or partial lockdown due to the second wave of COVID-19. The second wave reached its peak May 7, 2021. Some 3.99 crore electronic way invoice (e-way) bills were generated in May 2021, as compared to 5.88 crore in the month of April 2021, down by more than 30 per cent, according to the press statement.

Still, the revenues for the month of June 2021 are two per cent higher than the GST revenues in the same month last year.

The statement however noted that with the number of COVID-19 cases reducing in June and lockdowns easing, more e-way bills would be generated. In fact, the number of e-way bills for June 2021 was 5.5 crore. This, it said, indicated the recovery of trade and business. It further noted that the daily average generation of e-way bills for the first two weeks of April 2021 was 20 lakh. This came down to 16 lakh in the last week of April 2021 and further to 12 lakh in the two weeks between May 9 and May 22. From June 20, the average generation of e-way bills has again reached 20 lakh.