Tag: GST law

Nirmala Sitharaman announced nine legislative changes in the GST law

In the Union Budget 2023, Finance Minister Nirmala Sitharama n announce d nine legislative changes in the GST Law 

Decriminalisation 

The compounding amount is reduced from the present range of 50 per cent to 150 per cent of tax amount to the range of 25 per cent to 100 per cent. This was done to raise the minimum threshold of tax amount for launching prosecution under GST from Rs 1 crore to Rs 2 crore. Except for the offence of issuance of invoices without supply of goods or services or both. 

obstruction or preventing any officer in discharge of his duties; deliberate tempering of material evidence; failure to supply the information are some of the offences that have been decriminalised. 

Facilitate e-commerce for micro enterprises 

Amendments are being made to enable unregistered suppliers and composition taxpayers to make intrastate supply of goods through E-Commerce Operators (ECOs), subject to certain conditions.

Amendment to Schedule III of CGST Act, 2017 Activities or transactions which shall be treated neither as a supply of goods nor a supply of services

The changes made in Schedule III of CGST Act, 2017 with effect from February 1, 2019 kept certain transactions/activities, such as supplies of goods from a place outside the taxable territory to another place outside the taxable territory, high sea sales and supply of warehoused goods before their home clearance, outside the purview of GST. 

In order to remove the doubts and ambiguities regarding taxability of such transactions/ activities during the period July 1, 2017 to January 31, 2019, the provisions are being incorporated to make the said changes effective from July 1, 2017. 

However, no refund of tax paid shall be available in cases where any tax has already been paid in respect of such transactions/ activities during the period July 1, 2017 to January 31, 2019. 

Return filing under GST 

Amendment is made to restrict filing of returns/statement to a maximum period of three years from the due date of filing of the relevant return/statement. 

Input Tax Credit for expenditure related to CSR 

CGST Act is being amended to provide that input tax credit shall not be available in respect of goods or services or both received by a taxable person, which are used or intended to be used for activities relating to their obligations under corporate social responsibility. 

Sharing of information 

A new section in CGST Act is being inserted to enable sharing of the information furnished by the registered person in their return or application of registration or statement of outward supplies, or the details uploaded by them for generation of electronic invoice or E-way bill or any other details on the common portal, with other systems in a manner to be prescribed. 

Amendments in section 2 clause (16) of IGST Act, 2017

Clause (16) of section 2 of IGST Act is amended to revise the definition of “non-taxable online recipient”. This will be done by removing the condition of receipt of online information and database access or retrieval services for purposes other than commerce, industry or any other business or profession so as to provide for taxability of OIDAR service provided by any person located in nontaxable territory to an unregistered person receiving the said services and located in the taxable territory. 

Further, it also seeks to clarify that the persons registered solely in terms of clause (vi) of Section 24 of CGST Act shall be treated as unregistered person for the purpose of the said clause.

Online information and database access or retrieval services 

IGST Act is being amended to revise the definition of “online information and database access or retrieval services” to remove the condition of rendering of the said supply being essentially automated and involving minimal human intervention. 

Place of supply in certain cases 

Under IGST Act (Proviso to sub-section (8) of section 12 of the IGST Act) is being omitted so as to specify the place of supply, irrespective of destination of the goods, in cases where the supplier of services and recipient.

PROCEDURE FOR DELIVERY OF SCN TO BE FOLLOWED (MANDATORY to be followed)

 HIGH COURT JUDGEMENT

PROCEDURE FOR DELIVERY OF SCN TO BE FOLLOWED (MANDATORY to be followed) 

(Madhya Pradesh HC – Ram Prasad Sharma Vs Chief Commissioner)

Facts – The Petitioner had received Show Cause Notice (SCN) to their e-mail address which was not uploaded on the GST portal [Rule 142(1) of CGST Rules].

Contention – The Petitioner contended Violation of Principle of Natural Justice.

Observation – The Court observed that it is trite principle of law that when a particular procedure is prescribed, then all other procedures/modes except the one prescribed are excluded.

Conclusion – Thus, it was held that since the Statutory Procedure for communicating SCN was not followed, the Demand raised shall be STRUCK DOWN.

FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT

Shri Pankaj Ghiya, learned counsel for the petitioner.

Shri Ankur Mody, learned AAG for the respondent No.3/State.

Learned counsel for the rival parties are heard through video conferencing.

1. Instant petition invoking writ and supervisory jurisdiction of this Court under Articles 226 and 227 of Constitution prays for following reliefs:-

“(i) This Hon’ble Court may kindly be pleased to call for the record from the office of respondents for its kind perusal.

(ii) That, a writ of certiorari or any other writ or writs may kindly be issued quashing the impugned order in Form GST DRC-07 dated 18.09.2020 and orders as referred in the said order i.e. order under section 74 dated 10.06.2020 passed by the respondents.

(iii) That, a writ of mandamus or any other writ or writs may kindly be issued quashing the impugned order in Form GST DRC-07 dated 18.09.2020 and orders as referred in the said order i.e. order under section 74 dated 10.06.2020 passed by the respondents.

(iv) Direct the respondents to comply with the provisions of GST Act and upload notices and orders only on the GSTN Portal as mandated under law.

(v) Any other relief considered expedient and just under the facts of the case by the Hon’ble Court may kindly be allowed to the petitioner.”

2. Grievance of the petitioner is that while raising the demand of tax vide summary of order dated 18.09.2020 vide Annexure P/2 (at page 17 of the writ petition), the foundational show-cause notice/order No.10 dated 10.06.2020 qua financial year 2019-2020 and tax period April, 2019 to July, 2019, was never communicated to the petitioner who is an individual registered under GST Act.

3. As such on the question of violation of principle of natural justice on the anvil of Rule 142 of Central Goods and Services Tax Act, 2017 (for brevity “CGST Act”), this Court requisitioned reply of the State.

4. State has filed reply on 11.11.2020 disclosing that show-cause notice/order No.10 dated 10.06.2020 was communicated to petitioner on his E-mail address and despite receiving the same the petitioner failed to file any response. Copy of show-cause notice/order No.10 dated 10.06.2020 is Annexure R/1 filed alongwith the reply.

5. Learned counsel for the petitioner has drawn the attention of this Court to the provision of Rule 142(1) of CGST Act to contend that the said provision statutarily obliges the revenue department to communicate show-cause notice/order by uploading the same on the website of revenue so that the aggrieved person can have access to the same and be aware of reasons behind the demand to enable the aggrieved person to avail alternative remedy before the higher forum under CGST Act.

6. For ready reference and convenience, Rule 142 of CGST Act is reproduced below:-

“142. Notice and order for demand of amounts payable under the Act.-(1) The proper officer shall serve, along with the

(a) notice issued under section 52 or section 73 or section 74 or section 76 or section 122 or section 123 or section 124 or section 125 or section 127 or section 129 or section 130, a summary thereof electronically in FORM GST DRC-01,

(b) statement under sub-section (3) of section 73 or sub-section (3) of section 74, a summary thereof electronically in FORM GST DRC-02, specifying therein the details of the amount payable.

(1A) The proper officer shall, before service of notice to the person chargeable with tax, interest and penalty, under subsection (1) of Section 73 or sub-section (1) of Section 74, as the case may be, shall communicate the details of any tax, interest and penalty as ascertained by the said officer, in Part A of FORM GST DRC-01A.] 274;

(2) Where, before the service of notice or statement, the person chargeable with tax makes payment of the tax and interest in accordance with the provisions of sub-section (5) of section 73 or, as the case may be, tax, interest and penalty in accordance with the provisions of sub-section (5) of section 74, or where any person makes payment of tax, interest, penalty or any other amount due in accordance with the provisions of the Act [whether on his own ascertainment or, as communicated by the proper officer under subrule (1A),]275he shall inform the proper officer of such payment in FORM GST DRC-03 and the proper officer shall issue an acknowledgement, accepting the payment made by the said person in FORM GST DRC–04.

(2A) Where the person referred to in sub-rule (1A) has made partial payment of the amount communicated to him or desires to file any submissions against the proposed liability, he may make such submission in Part B of FORM GST DRC01A.] 276

(3) Where the person chargeable with tax makes payment of tax and interest under subsection (8) of section 73 or, as the case may be, tax, interest and penalty under sub-section (8) of section 74 within thirty days of the service of a notice under sub-rule (1), or where the person concerned makes payment of the amount referred to in sub-section (1) of section 129 within fourteen days of detention or seizure of the goods and conveyance, he shall intimate the proper officer of such payment in FORM GST DRC-03 and the proper officer shall issue an order in FORM GST DRC-05 concluding the proceedings in respect of the said notice.

(4) The representation referred to in sub-section (9) of section 73 or sub-section (9) of section 74 or sub-section (3) of section 76 or the reply to any notice issued under any section whose summary has been uploaded electronically in FORM GST DRC-01 under sub-rule (1) shall be furnished in FORM GST DRC-06.

(5) A summary of the order issued under section 52 or section 62 or section 63 or section 64 or section 73 or section 74 or section 75 or section 76 or section 122 or section 123 or section 124 or section 125 or section 127 or section 129 or section 130 shall be uploaded electronically in FORM GST DRC-07, specifying therein the amount of tax, interest and penalty payable by the person chargeable with tax.

(6) The order referred to in sub-rule (5) shall be treated as the notice for recovery.

(7) Where a rectification of the order has been passed in accordance with the provisions of section 161 or where an order uploaded on the system has been withdrawn, a summary of the rectification order or of the withdrawal order shall be uploaded electronically by the proper officer in FORM GST DRC-08.]”

6.1 A bare perusal of the aforesaid provision reveals that the only mode prescribed for communicating the show-cause notice/order is by way of uploading the same on website of the revenue.

7. The State in its reply has provided no material to show that show-cause notice/order No.10 dated 10.06.2020 was uploaded on website of revenue. In fact, learned AAG, Shri Mody, fairly concedes that the show-cause notice/order was communicated to petitioner by Email and was not uploaded on website of the revenue.

8. It is trite principle of law that when a particular procedure is prescribed to perform a particular act then all other procedures/modes except the one prescribed are excluded. This principle becomes all the more stringent when statutarily prescribed as is the case herein.

9. In view of above discussion, this Court has no manner of doubt that statutory procedure prescribed for communicating show-cause notice/order under Rule 142(1) of CGST Act having not been followed by the revenue, the impugned demand dated 18.09.2020 vide Annexure P/2 pertaining to financial year 2019-2020 and tax period April, 2019 to July, 2019 deserves to be and is struck down.

10. Accordingly, instant petition stands allowed with liberty to the revenue to follow the procedure prescribed under Rule 142 of CGST Act by communicating the show-cause notice to the petitioner by appropriate mode thereafter to proceed in accordance with law.