CBIC issues Guidelines for disallowing Debit of Electronic Credit Ledger under GST
- The CBIC vide CBEC-20/16/05/2021-GST/1552 dated November 02, 2021 issued guidelines for disallowing debit of electronic credit ledger under Rule 86A of the Central Goods & Services Tax Rules, 2017 (“CGST Rules”).
- The reasons for such belief must be based only on one or more of the following grounds:
- The credit is availed by the registered person on the invoices or debit notes issued by a supplier, who is found to be non-existent or is found not to be conducting any business from the place declared in registration.
- The credit is availed by the registered person on invoices or debit notes, without actually receiving any goods or services or both.
- The credit is availed by the registered person on invoices or debit notes, the tax in respect of which has not been paid to the government.
- The registered person claiming the credit is found to be non-existent or is found not to be conducting, any business from the place declared in registration.
- The credit is availed by the registered person without having any invoice or debit note or any other valid document for it.
The Commissioner, or an officer authorised by him, not below the rank of Assistant Commissioner must form an opinion for disallowing debit of an amount from electronic credit ledger in respect of a registered person, only after proper application of mind considering all the facts of the case. including the nature of prima facie fraudulently availed or ineligible input tax credit and whether the same is covered under the grounds mentioned in sub-rule (1) of rule 86A and whether disallowing such debit of electronic credit ledger of a person is necessary for restricting him from utilizing/ passing on fraudulently availed or ineligible input tax credit to protect the interests of revenue.
Proper authority for the purpose of Rule 86A
It is advised that Commissioner/Principal Commissioner may authorize exercise of powers under rule 86A based on the following monetary limits as mentioned below:
|Total amount of ineligible or fraudulently availed input tax credit||Officer to disallow debit of amount from electronic credit ledger under rule 86A|
|Not exceeding Rupees 1 crore||Deputy Commissioner/ Assistant Commissioner|
|Above Rupees 1 crore but not exceeding Rs 5 crore||Additional Commissioner/ Joint Commissioner|
|Above Rs 5 crore||Principal Commissioner/ Commissioner|
The Additional Director General /Principal Additional Director General of DGGI can also exercise the powers assigned to the Commissioner under rule 86A.
- Procedure for disallowing debit of electronic credit ledger/blocking credit under Rule 86(A):
The action by the Commissioner or the authorized officer, as the case may be, to disallow debit from electronic credit ledger of a registered person, is informed on the portal to the concerned registered person, along with the details of the officer who has disallowed such debit.
- Allowing debit of disallowed/restricted credit under sub–rule (2) of Rule 86A:
The Commissioner or the authorized officer, as the case may be, either on his own or based on the submissions made by the taxpayer with material evidence thereof, may examine the matter afresh and on being satisfied that the input tax credit, initially considered to be fraudulently availed or ineligible as per conditions of sub-rule (1) of rule 86A, is no more ineligible or wrongly availed, either partially or fully, may allow the use of the credit, so disallowed/restricted up to the extent of eligibility, as per powers granted under sub-rule (2) of rule 86A. Reasons for allowing the debit of electronic credit ledger, which had been earlier disallowed, shall be duly recorded on file in writing, before allowing such debit of electronic credit ledger.
The restriction imposed as per sub-rule (1) of rule 86,Acease to have effect after the expiry of a period of one yearfrom the date of imposing such restriction.
Now e way bill details & SMS update through Sandes app only
- Sandes is an indigenous instant messaging platform developed by National Informatics Centre (NIC), to facilitate instant messaging communication. It is hosted exclusively at Government infrastructure.. It supports end to end encrypted messaging and encrypted backup and OTP services. This app can be downloaded by anyone to Android or iOS mobile from Playstore and Appstore respectively and can be used for sending and receiving messages.
- Henceforth, e-waybill and e-invoice systems will send daily e-way bill and e-invoice statistics, alerts and notifications to the tax payers through Sandes and SMS to their registered mobile numbers. After few weeks, the messages through SMS will be stopped. Hence, all the users of the e-way bill and e-invoice systems are requested to install Sandes app on their registered mobile numbers.
Maharashtra Customs issued procedure for utilising the MEIS Scrip for payment of customs duty
- Office of the Commissioner of Customs (NS-I), Maharashtra issued Public Notice No. 92/2021 dated November 01, 2021 w.r.t. the following procedure is prescribed for an importer intending to utilize the MEIS Scrip for payment of customs duty.
- The importer (the present owner/holder of MEIS scrip) shall submit the document evidencing the transfer of the scrip by the previous holder/owner along with all the previous transfer documents starting from the original owner of the scrip. The transfer document shall bear the name and signature of the transferor/his authorized signatory and these details shall be certified by the bank in which the transferor is having account.
- He shall also submit the payment transaction details of purchase of the scrip as recorded in the books of account, duly certified by an independent Chartered Accountant. In case the payment is made through a bank transaction, the said transaction details certified by him/his authorised signatory will be submitted.
- Indemnity letter from the present holder (Importer)and his seller indemnifying the Customs from any liability arising on account of misuse/ fraudulent use of the MEIS scrip or use of fraudulently obtained MEIS scrip, in the prescribed format given in Annexure A to this Public +Notice.
- The importer/ customs broker will upload these documents in E – Sanchit.
- The concerned Customs officers shall check the ownership of the MEIS duty credit scrip as per the documents specified above.
- It is the responsibility of the Importer to ensure to submit valid MEIS Scrip, obtained through genuine transactions and any ownership dispute arising out of the transactions will be the sole responsibility of the importer and seller(s) of the scrip.
Recent AAR & Judicial Decisions
(i) AAR OnNo Separate GST Registration required for Selling Goods before clearing it for Home Consumption from Port of Import:
(Applicant M/s KamdhenuAgrochem Industries)
The Maharashtra Authority of Advance Ruling (AAR) held that no Separate GST Registration is required for selling goods before clearing them for home consumption from the port of import. The Applicant is an importer and reseller of chemicals, having the main place of business in the State of Maharashtra and further having warehouses in the State of Gujarat and State of Kerala. The Applicant is registered under the GST law in the State of Maharashtra.
The applicant has sought the advance ruling on the issue of Whether the Applicant is required to obtain the registration in importing States other than Maharashtra if goods are imported, sold, and delivered directly from CFS (Container Freight Station)/DPD (Direct Port Delivery) which is under the Customs Boundaries to customers from those States. The coram of Rajiv Magoo and T.R. Ramnani ruled that consumption from the port of import, the place of supply shall be the place from where the applicant makes a taxable supply of goods which, in this case, will be the Maharashtra Office. Hence, the applicant can supply the goods on the basis of invoices issued by the Maharashtra Office, and therefore they need not take separate registration in importing States other than Maharashtra.
(ii) AAR On TDS under GST applicable if services not exempt from GST:
(Applicant – TukaramPundalikBorade)
The applicant has submitted that the SamajkalyanVibhag of the Government of Maharashtra has taken the immovable property on rent from the applicant to house the girls from the backward class communities which can be considered as a welfare measure undertaken by the Government for the under-privileged section of the society. Other than making this statement, the applicant has not submitted any evidence or submissions to state as to how his activities are covered under Article 243G/243W of the Constitution. There are no submissions made to show that the impugned services are supplied by the applicant by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution.
Given the aforesaid, we find that even though the applicant as per his submission is supplying Pure Services, in light of insufficient material on record, it is not possible for us to find whether the said services are supplied by the applicant by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution.
Hence, in view of the above, the renting of immovable property services by the applicant is not liable for exemption under the provisions of Entry No. (3) Of Notification No. 12/2017-CT(R) dated 28.06.2017 .
The second question raised by the applicant is whether TDS provisions will be applicable in case where the supply of services are exempt.
We have already held above that the impugned services supplied by the applicant are liable to tax and therefore not exempt. Thus the TDS provisions under the relevant section 51 of the GST Act are applicable in the subject case.
“HAPPY DIWALI & HAPPY NEW YEAR”
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