1. CBIC Clarifies Regarding Amount of CGST, SGST, or IGST wrongly paid for Intra-State or Inter-State shall be Refunded within 2 years:
- CBIC has clarified that the term “subsequently held” in section 77 of CGST Act, 2017 or under section 19 of IGST Act, 2017 covers both the cases where the inter-State or intra-State supply made by a taxpayer, is either subsequently found by the taxpayer himself as intra-State or inter-State respectively or where the inter-State or intra-State supply made by a taxpayer is subsequently found/ held as intra-State or inter-State respectively by the tax officer in any proceeding.
- Accordingly, refund claims under the said sections can be claimed by the taxpayer in both the above-mentioned situations, provided the taxpayer pays the required amount of tax in the correct head. The refund under section 77 of CGST Act/ Section 19 of IGST Act, 2017 can be claimed before the expiry of two years from the date of payment of tax under the correct head, i.e. integrated tax paid in respect of subsequently held inter-State supply, or central and state tax in respect of subsequently held intra-State supply, as the case may be.
- Refund application can be filed within 2 years from the date of notification: However, in cases, where the taxpayer has made the payment in the correct head before the date of issuance of notification No.35/2021-Central Tax dated 24.09.2021, the refund application under section 77 of the CGST Act/ section 19 of the IGST Act can be filed before the expiry of two years from the date of issuance of the said notification. i.e. from 24.09.2021. Rule 89 (1A) of the CGST Rules would be applicable for section 19 of the IGST Act also, where the taxpayer has initially paid IGST on a specific transaction which later on is held as intra-State supply and the taxpayer accordingly pays CGST and SGST on the said transaction. It is also clarified that any refund applications filed, whether pending or disposed of off, before issuance of notification No.35/2021-Central Tax, dated 24.09.2021, would also be dealt with in accordance with the provisions of rule 89 (1A) of the CGST Rules, 2017
2. Relaxation In Filing Of ITC-04:
Currently, CGST Rules requires filing of Form GST ITC -04 by the principal on quarterly basis. In order to ease the compliance the said form would be required to be filed in the following manner:
|Aggregate turnover in preceding financial year||Periodicity of filing Form GST ITC-04|
|Above Rs. 5 crores||Half yearly basis|
|Up to Rs. 5 Crores||Annually|
3. CBIC mandates Aadhaar Authentication for Registered Person for Filing of Application for Revocation of Cancellation of GST Registration And Refund Application:
The CBIC has notified the mandates Aadhaar authentication for Registered Person for filing of an application for revocation of cancellation of registration, refund application. Authentication of the Aadhaar number of the proprietor, in the case of proprietorship firm, or of any partner, in the case of a partnership firm, or of the karta, in the case of a Hindu undivided family, or of the Managing Director or any whole time Director, in the case of a company, or of any of the Members of the Managing Committee of an Association of persons or body of individuals or a Society, or of the Trustee in the Board of Trustees, in the case of a Trust and of the authorized signatory, in order to be eligible for filing of application for revocation of cancellation of registration, filing of refund application, and refund under rule.
4. CBIC issues clarification on Cut-off date for availing Input Tax Credit in Debit Notes
(Circular No. 160/16/2021-GST)
(A) Debit note issued after 01.01.2021
Debit note shall determine the relevant FY
e.g. Debit note issued dated 07.07.2021 for Invoice 16.03.2021.Relevant FY for ITC for invoice is 2020-21 whereas for debit note shall be 2021-22
(B) Debit note prior to 01.01.2021 however availed ITC after 01.01.2021
Debit note shall determine the relevant FY
e.g. Debit note issued dated 10.11.2020 for Invoice 15.07.2019 and availed ITC after 01.01.2021.
ITC with respect to Invoice is FY 2019-20. However, FY of debit note is 2020-21 and thus last date September 2021.
5. Tax invoice not to be carried in respect of E-Invoices during transportation :
It is recommended that physical copy of tax invoice is not required in cases where invoice has been generated by the supplier in the manner prescribed under rule 48(4) of the CGST Rules, 2017.
6. Clarification Regarding Scope of Intermediary:-
(Circular No. 159/15/2021-GST)
- Intermediary’ has been defined in the sub-section (13) of section 2 of the Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as “IGST” Act) as under–
- “Intermediary means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account.”
Primary Requirement For Intermediary Services:
1. Minimum of Three Parties:
2. Two distinct supplies
3. Intermediary service provider to have the character of an agent, broker or any other similar person
4. Does not include a person who supplies such goods or services or both or securities on his own account
5. Sub-contracting for a service is not an intermediary service
6. Place of Supply as per section 13 of the IGST Act shall be invoked only when either the location of the supplier or the recipient of intermediary services is outside India.
7. DGFT notifies list of eligible services and rates under SEIS for services rendered in FY 2019-20; maximum claim capped at 5 Crore
- The Directorate General of Foreign Trade vide Notification No. 29/2015-20 dated September 23, 2021 has inter alia notified list of eligible services and rates under Service Export from India Scheme (“SEIS”) for services rendered in the FY 2019-20.
Following amendments have been carried out:
- Insertion of para 3.08(aa) in Chapter 3 of Foreign Trade Policy 2015-20 For SEIS claims for services rendered in the FY 2019-20 notified list of eligible services and rates are listed in Appendix 3X.
- Amendment in para 3.08(c) in Chapter 3 of Foreign Trade Policy 2015-20 Facility to claim benefits under SEIS on payments in Indian Rupee for service charges earned on specified services, shall not be available for services rendered in FY 2019-20.
- Insertion of para 3.10A in Chapter 3 of Foreign Trade Policy 2015-20 A limit on total entitlement under SEIS has been imposed for service exports rendered in FY 2019-20 and capped at Rs. 5 crore.
- Insertion of para 3.10B in Chapter 3 of Foreign Trade Policy 2015-20 For SEIS claim for FY 2019-20, the deadline for filing the online application as per ANF 3B shall be December 31, 2021 and late cut provision shall not apply i.e. SEIS applications for FY 2019-20 will become time barred after December 31, 2021.
8. DGFT extends Export Obligation period of specified Advance and EPCG Authorisations
- The Directorate General of Foreign Trade vide Notification No. 28/2015-20 dated September 23, 2021 has extended the Export Obligation period of specified Advance Authorisations (“AA”) and Export Promotion Capital Goods (“EPCG”) Authorisations.
- Para 4.42(j) and Para 5.17(f) has been inserted in Chapter 4 and Chapter 5 respectively in Foreign Trade Procedure 2015-2020, to extend the period of AA and EPCG Authorisations till December 31, 2021 for original or extended Export Obligation which is expiring during August 01, 2020 to July 31, 2021 without payment of composition fee. However, this extension is subject to 5% additional Export Obligation on the balance of original or extended Export Obligation.
- The option to avail Export Obligation extension with payment of composition fees would remain available.
- Where AA Holder or EPCG Holder has already obtained Export Obligation extension upon payment of composition fee, the refund of composition fee will not be permitted.
9. Recent AAR & Judicial Decisions
(i) AAR On Regarding No GST Registration required if Supplies Exempted from GST:
(Applicant – Mekorot Development & Enterprise Ltd.)
The Maharashtra Authority of Advance Ruling (AAR) ruled that no GST Registration was required if supplies were exempted from GST.
The applicant has sought the advance ruling on the issue if it is concluded that the supplies made or proposed to be made byhim qualifies for an exemption then the consequent question is whether applicant requires to obtain registration under GST law. The AAR ruled that if the impugned supplies made or proposed to be made by the applicant to GOVT are the only supplies undertaken by the applicant, in such a case, the applicant is not required to obtain registration under GST law, since the impugned supply is held to be exempt under the provisions of Notification No. 12/2017-C.T.(Rate) dated 28.06.2017.. However, if the applicant is undertaking or proposes to undertake any taxable supply of goods or services or both, then in such a scenario the applicant will be required to obtain GST registration under section 22 of the GST Act, on crossing the threshold turnover limit.