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The following decisions, inter alia, were taken by GST Council in the 42th meeting chaired by the Hon’ble Finance Minister of India through video conferencing:
a. Due date of furnishing quarterly GSTR-1 by quarterly taxpayers to be revised to 13th of the month succeeding the quarter w.e.f. 1 January 2021.b. Auto-population of liability from own GSTR-1 and input tax credit from suppliers’ GSTR-1s through the newly developed facility in FORM GSTR-2B for monthly filers w.e.f. 1 January 2021 and for quarterly filers w.e.f. 1 April 2021.c. In order to ensure auto population of ITC and liability in GSTR 3B, FORM GSTR 1 would be mandatorily required to be filed before FORM GSTR3B w.e.f 1 April 2021.d. The present GSTR-1/3B return filing system to be extended till 31 March 2021 and the GST laws to be amended to make the GSTR-1/3B return filing system as the default return filing system.
a. Due date of furnishing quarterly GSTR-1 by quarterly taxpayers to be revised to 13th of the month succeeding the quarter w.e.f. 1 January 2021.
b. Auto-population of liability from own GSTR-1 and input tax credit from suppliers’ GSTR-1s through the newly developed facility in FORM GSTR-2B for monthly filers w.e.f. 1 January 2021 and for quarterly filers w.e.f. 1 April 2021.
c. In order to ensure auto population of ITC and liability in GSTR 3B, FORM GSTR 1 would be mandatorily required to be filed before FORM GSTR3B w.e.f 1 April 2021.
d. The present GSTR-1/3B return filing system to be extended till 31 March 2021 and the GST laws to be amended to make the GSTR-1/3B return filing system as the default return filing system.
Requirement of declaring HSN for goods and SAC for services in invoices and in FORM GSTR-1 w.e.f. 1 April 2021 has been revised where HSN/SAC at 6 digits for supplies of both goods and services for taxpayers with aggregate annual turnover above INR 50 Million and HSN/SAC at 4 digits for B2B supplies of both goods and services for taxpayers with aggregate annual turnover upto INR 50 Million is supposed to be declared in the invoices and GSTR-1. This change would again entail a requirement to alter the IT systems of suppliers for including the HSN Code/SAC codes at the required digit levels on the invoices/returns.
The Constitutional validity of the levy of GST on such Intermediary Services was challenged before the Hon’ble Gujarat High Court in case of Material Recycling Association of India Vs UoI (2020-TIOL-1274-HC-AHM-GST) wherein the Hon’ble High Court has upheld the levy of GST on intermediary services provided from India to a customer outside India.
However, considering the wider implication on business, it has directed the revenue authorities to consider the representation received from the taxpayers in respect of the levy.
Whether the refund of input tax credit in respect of input services shall be considered or not for the purpose of calculating the refund entitlement of a taxpayer filing refund of GST on account of inverted duty structure was the question raised before the Hon’ble High Court.
The Hon’ble Gujarat High Court in case of VKC Footsteps India Pvt. Ltd. [TS-585-HC-2020(GUJ)-NT] has held that the restrictions introduced in Rule 89(5) of the CGST Rules are not contemplated under Section 54 of the CGST Act and hence the restrictions under Rule 89(5) are ultra vires to the Section 54. Thus, it was held that ITC on input services shall be included for the purpose of calculating the refund claim under inverted duty structure.
However, the Hon’ble Madras High Court in case of Transtonnelstroy Afcons Joint Venture [TS-800-HC-2020(MAD)-NT] did not agree with the findings of Hon’ble Gujarat High Court and held that the restrictions under Rule 89(5) of CGST Rules are not ultra vires and held that ITC on input services shall not be considered for the purpose of calculating the refund of inverted duty structure.
The above conflicting cases would result in continuation of the said dispute further and may get clarified only at the level of the Apex Court.
Vide Notification No. 69/2020-Central Tax dated 30 September 2020, the Government has further extended the due date for conducting GST audit and for submission of Form GSTR 9 and Form GSTR 9C (Annual Return and Reconciliation Statement) for FY 2018-2019 till 31 October 2020. It should be noted that the trade chambers and other associations have been representing to the Government for an extension up to 31 December 2020 for carrying out the said compliances.
Vide Notification No. 04/2020-Central Tax (Rate) dated 30 September 2020, the Government has extended the exemption from payment of GST available on transportation of goods by either aircraft or vessel from customs station of clearance in India to a place outside India (that is, transport cost for export of goods from India) from September 2020 to September 2021.
Vide Notification 61/2020–Central Tax dated 30 July 2020, the liability to mandatorily generate E-Invoice would be applicable to taxpayers having turnover above INR 5 Billion in the last financial year (instead of INR 1 Billion). Further, considering the initial phase of implementation during the period from 1 October 2020 to 31 October 2020 shall follow a special procedure wherein the Invoice Reference Number can be obtained by uploading specified particulars in Form GST INV-01 within 30 days from date of issuance of invoice.
Vide Notification 71/2020–Central Tax dated 30 September 2020, the date for implementation of E-invoicing for the specified registered persons supplying to end customer directly has been extended from 1 October 2020 to 1 December 2020.
Additionally, vide Notification 60/2020–Central Tax dated 30 July 2020, the CGST Rules, 2017 were amended to incorporate Form GST INV-01 along with the specifications of the said form which would be utilised for generation of E-Invoice by the registered taxpayers.
Vide Notification 58/2020–Central Tax dated 1 July 2020, a facility to upload GSTR 3B and GSTR 1 through a short messaging service using the registered mobile number is provided to the tax payers for filing of NIL returns.
Vide Notification 59/2020–Central Tax dated 13 July 2020 and Notification 64/2020–Central Tax dated 31 August 2020, the date for filing of GSTR -4 by composition tax payers was further extended to 31 October 2020.
Vide Notification 62/2020–Central Tax dated 20 August 2020, Aadhaar authentication has been made mandatory while obtaining a new registration under Section 25 of the CGST Act. Further, in case the person trying to obtain a registration is not able to authenticate Aadhaar, then the registration would be provided subject to physical verification of the place of business.
Vide Notification 63/2020–Central Tax dated 25 August 2020, Section 100 of the Finance (No. 2) Act, 2019 has been made effective from 1 September 2020. The said section, amends Section 50 of the CGST Act, where the interest would be levied on the net tax liability which would be debited from the electronic cash ledger in place of the gross tax liability. Further vide administrative instruction dated 18 September 2020 has clarified that such amendment would effective from 1 July 2017.
Vide Notification 65/2020–Central Tax dated 1 September 2020, the time limit for completion of any proceeding, passing of order, issuance of any notice/intimation etc. by an authority or filing of any appeal, reply or application or furnishing any report, document, statement which falls between 20 March 2020 to 29 November 2020 has been extended till 30 November 2020.
The Central Board of Indirect Taxes and Customs (CBIC) on 21 August 2020 notified under Notification No. 81/2020-Customs(NT) that the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (‘CAROTAR 2020’) requiring detail disclosures by importers to claim concessional duty benefits under trade pacts such as Foreign Trade Agreements would come into force on 21 September 2020.
Accordingly, in order to claim preferential rate of duty under a trade agreement, the importer or his agent would, at the time of filing the bill of entry:
Vide Circular No. 42/2020-Customs dated 29 September 2020, it was further clarified that all importers including Authorized Economic Operator are required to submit 100 per cent of differential customs duty as a security for provisional assessment if inquiry is initiated in terms of Rule 5 of CAROTAR 2020.
Vide Notification No. 33/2015-2020, dated 28 September 2020, all imports under the Chapter 72, 73 and 86 of ITC (HS), 2017 would be required to be registered under SIMS. Further, vide Public Notice No. 19/2015-2020 dated 28 September 2020, the Bill of Entries filed for goods covered by the above notification after 16 October 2020 would compulsorily require a registration under SIMS.
Vide Notification No. 30/2015-2020 dated 1 September 2020, the benefit under MEIS for the exports made in the period 1 September 2020 to 31 December 2020 would be limited to INR 20 Million per existing IEC. Further, the existing IEC holder who has not exported goods during the period from 1 September 2019 to 31 August 2020 or new IEC obtained on or after 1 September 2020 would not be eligible to claim benefit under the MEIS Scheme. Further, from 1 January 2021, the MEIS scheme would be withdrawn.
The ceiling limit of INR 20 million may be subject to further downward revision to ensure that the total claim does not exceed allocation prescribed by Government of INR 50 billion.
Vide Circular No. 32/2020-Customs dated 6 July 2020, it is clarified that the registration of Authorized Dealer Code and bank account can be updated through ICEGATE portal.
The importer was required to visit physically for debit of bond after bill of entry is returned to the importer for payment of customs duty. However, now such debit in the bond will be done automatically in ICES and same will be reflected in first copy of bill of entry.
Vide Circular No. 34/2020-Customs dated 30 July 2020, 2nd Phase of Faceless Assessment was implemented w.e.f. 3 August 2020 at notified ports for import of goods falling under prescribed Chapter Headings.
Additionally, vide Circular No. 41/2020-Customs dated 7 September 2020, Auto Let Export Order under Express Cargo Clearance System (ECCS) is allowed for Courier Shipping Bills filed for clearance of export goods under ECCS which will be subjected to scrutiny under Risk Management System.
Vide Notification 90/2020-Customs(NT) dated 17 September 2020, Bill of Entry (Forms) (Amend-ment) Regulations, 2020 has been made applic-able from 21 September 2020 where the Form I, II and III as per Bill of Entry (Forms) Regulations,1976 has been amended.
Vide Notification 75/2020-Customs(NT) dated 17 August 2020, Manufacture and Other Operations in Special Warehouse Regulations, 2020 has been notified. These regulations would be applicable to all the units that operate under Section 65 or apply for permission to operate under Section 65, with a license for special warehouse under Section 58 of the Customs Act.
Martin Wörlein
Partner, Head of India practice
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