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GSTR-9, GSTR-9C gets simplified further, submission dates extended

GSTR-9, GSTR-9C gets simplified further, submission dates extended

The Government has to extend the due dates of filing of Form GSTR-9 (Annual Return) and Form GSTR-9C (Reconciliation Statement) for Financial Year 2017-18 to December 31, 2019 and for Financial Year 2018-19 to March 31, 2020.

It has also decided to simplify these forms by making various fields of these forms as optional.

The Central Board of Indirect Taxes & Customs (CBIC) on Thursday notified the amendments regarding the simplification of GSTR-9 (Annual Return) and GSTR-9C (Reconciliation Statement) which inter-alia allow the taxpayers to not to provide split of input tax credit availed on inputs, input services and capital goods and to not to provide HSN level information of outputs or inputs, etc. for the financial year 2017-18 and 2018-19.

CBIC expects that with these changes and the extension of deadlines, all the GST taxpayers would be able to file their Annual Returns along with Reconciliation Statement for the financial years 2017-18 and 2018-19 in time.

“Since the returns were not simplified, the extension is not a surprise. However, frequent extensions and delay in non-simplification has been a let down for businesses. Our sense is that businesses are ready to comply with GSTR-9 so they can move on and prepare for the new simplified return filing system,” said Archit Gupta .

Earlier the last date for filing of GSTR-9 and GSTR-9C for Financial Year 2017-18 was November 30, while that for Financial Year 2018-19 was December 31.

Source: Economic-Times

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Latest GST circular puts an end to confusion over new input tax credit rules

Latest GST circular puts an end to confusion over new input tax credit rules

In a big relief for GST taxpayers, the Union government on Monday clarified the new rules related to availing input tax credit under the GST. It said that a certain category of Input Tax Credit claims such as ITC in respect of the IGST paid on imports and GST paid under the reverse charge mechanism have been kept out of the scope of the new rules introduced last month. The new rules implemented by the CBIC limited input tax credit claims to 20% of the eligible amount where invoice matching has been done. However, the notification issued by the CBIC on October 9 caused a lot of confusion over the method of calculating this 20% amount, the cut-off date and also whether it was to be calculated supplier-wise or on a consolidated basis. These concerns prompted the CBIC’s GST policy wing to issue a new circular today clarifying all these aspects.

“This circular clarifies a few points and will be of help to GST payers,” said Pritam Mahure, a Pune based chartered accountant.

The circular issued by the Central Board of Indirect Taxes (CBIC) also clarified that this 20% cap on the eligible Input Tax Credit will not be calculated supplier-wise and GST payers can avail the input tax credit on a consolidated basis.

The Modi government had received complaints that some businesses were availing input tax credit by using fake GST invoices. In order to check the problem of misuse of input tax credit system, the CBEC, the nodal body to implement indirect taxes in the country, had last month made it compulsory to match the invoices uploaded by the suppliers in their GSTR1 forms before buyers can avail Input Tax Credit in their GSTR-3 returns. However, it also allowed the buyers to claim 20% more input tax credit over and above the eligible amount where invoice matching was done but the lack of clarity over the method of calculation created confusion among GST payers.

The CBIC’s latest circular is intended at clarifying all these aspects. For example, if a buyer is entitled to avail input tax credit of Rs 10 lakh on inward supplies (purchases) in a month but if his suppliers have only uploaded the correct invoices in respect of supplies of Rs 6 lakh only in the GSTR1 forms uploaded by them, then the buyer can avail ITC of Rs 6 lakh plus 20% of the eligible amount that is Rs 1.2 lakh. Therefore the buyer could claim a total ITC of Rs 7.2 lakh in the month.

It also clarified that the total amount of ITC, even after the addition of 20% input tax credit over and above the eligible amount where invoice matching has been done, cannot exceed the total amount of input tax credit that can be claimed.

For example, if a buyer is entitled to ITC of Rs 10 lakh on inward supplies and invoice matching is done in case of Rs 9 lakh then as per the 20% cap rule, he is also entitled to avail 20% over and above the eligible amount of Rs 9 lakh, which is 1.8 lakh in this case. However, this can take the total amount of ITC to be availed by him in the month to Rs 10.8 lakh, Rs 80,000 more than the total ITC amount that can be claimed. The new circular has clarified that in any case ITC claims will be restricted to the total amount due.

For example, if a buyer is entitled to ITC of Rs 10 lakh on inward supplies and invoice matching is done in case of Rs 9 lakh then as per the 20% cap rule, he is also entitled to avail 20% over and above the eligible amount of Rs 9 lakh, which is 1.8 lakh in this case. However, this can take the total amount of ITC to be availed by him in the month to Rs 10.8 lakh, Rs 80,000 more than the total ITC amount that can be claimed. The new circular has clarified that in any case ITC claims will be restricted to the total amount due.

The latest GST circular also clarified three distinct cases where the newly introduced rule to cap ITC to 20% over and above the eligible amount will not be applicable.

Where new GST Input Tax Credit rule will not be applicable
The cap of 20% on availing input tax credit under the GST rule 36, sub-rule (4) introduced on October 9 will not be applicable on three cases:

1. ITC in respect of the IGST paid on imports and these importers can directly avail the input tax credit;

2. The cap of 20% will also not apply to those cases where GST has been paid under the Reverse Charge Mechanism (RCM) and;

3. The ceiling of 20% on availing ITC will also not apply on Input Service Distributors (ISD), these are those businesses that receive invoices on behalf of the services used by their branches and subordinate offices.

Source: Financial-Express.

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GST taxpayers alert! CBIC is going to use this unique number from Friday, here’s how it will benefit you

GST taxpayers alert! CBIC is going to use this unique number from Friday, here’s how it will benefit you

In order to protect GST taxpayers from any harassment at the hands of errant tax officials, the Central Board of Excise and Customs (CBEC), is going to use a unique number in every communication with taxpayers from Friday. Initially, the department will use this unique document identification number (DIN) mostly for investigation related communications such as arrest warrants and search authorizations and it will be later expanded to cover all the communication issued by the officers of the board. All the communication issued on or after November 8 without a computer-generated document identification number will be invalid and deemed to have never been issued, said the CBIC in a letter issued to all the top officers on Tuesday.

The new document identification number to be used by the CBIC is similar to the one used by the CBDT since October 1 this year. GST taxpayers and recipients of summons, search warrants will be able to verify the genuineness of the document by visiting the CBIC’s website.

“The board in exercise of its powers under section 168(1) of the CGST Act, 2017 and Section 37B of the Central Excise Act, 1944 directs that no search authorization, summons, arrest memo, inspection notices and letters issued in the course of any inquiry shall be issued by any officer under the Board to a taxpayer or any other person, on or after the 8th day of November, 2019 without a computer generated Document Identification Number (DIN) being duly quoted prominently in the body of such communication,” said the CBIC in a letter issued on November 5, which was reviewed by the Financial Express Online.

The letter which was issued by the GST Investigation wing under the department of revenue, ministry of finance also made it clear that no communication issued on or after November 8 will be valid without a system-generated DIN number.

“The board also directs that any specified communication which does not bear the electronically generated DIN and is not covered by the exceptions mentioned in para 3 shall be treated as invalid and shall be deemed to have never been issued,” said the CBIC.

What is Document Identification Number (CBIC-DIN) in GST
1. In order to prevent the harassment of genuine taxpayers at the hands of tax officials, the government has decided to create a proper audit trail of all the communications issued by the Central Board of Indirect Taxes and Customs.

2. The 20 digit unique Document Identification Number (DIN or CBIC-DIN) will be computer generated and it will be prominently displayed in the body of the document issued by the officers under the board.

3. Only authorised officers will be entitled to generate CBIC-DIN from the utility developed by the Directorate of Data Management (DDM) hosted on the online portal of the CBIC.

4. Use of CBIC-DIN will be compulsory from November 8, 2019 and no communication without it will be valid.

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Source: Financial Express.
Now, officers to exclusively handle GST, Customs complaints

Now, officers to exclusively handle GST, Customs complaints

In line with Prime Minister Narendra Modi’s assurance that honest taxpayers would not be harassed and wealth creators would be respected, the indirect tax body – Central Board of Indirect Taxes and Customs (CBIC) has directed to appoint a nodal officer in each CGST and Customs Commissionerate to sort out taxpayer grievances.

Industry and tax experts have hailed the decision saying that the move would ensure an escalation point for taxpayers in case their grievances are not addressed at designated level.

“In order to institutionalize the taxpayers’ services in the field formations, it is necessary to designate officers who are to act as the nodal officers assigned with the job of taxpayer service,” CBIC Chairman P. K. Das has written to senior officers.

Accordingly, each CGST and Customs Commissionerate would have a nodal officer in the rank of Joint/Additional Commissioner. These officers would draw up plans for reaching out to the stakeholders in their jurisdictions.

“The Directorate of Taxpayer Service would regularly monitor the work done by the nodal officers who would be extended arm of the CBIC for rendering taxpayer services.

“Any move which identifies a certain person as someone who could act as central point for escalation of cases is good move. It is a good move but one has to see how effective it is. In order to ensure that it works, a transparent monitoring mechanism has to be there,” said Amit Bhagat, Partner, Dhruva Advisors.

The CBIC Chief in his letter to senior field officers noted that PM Modi had emphasized the urgent need to prioritize taxpayer service.

He noted that taxpayers committing minor or procedural violations should not be subjected to disproportionate or excessive action and that wealth creators are respected.

Rajat Mohan, Senior Partner, AMRG & Associates said that taxpayers presently have to chase various officers for resolving issues and hence the move to appoint a nodal officer would be a big relief.

Source: Economic-Times.

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Hotels, travel aggregators start refunding GST

Hotels, travel aggregators start refunding GST

Sridhar (name changed) got a pleasant surprise on Monday morning when he got a message from an online travel aggregator regarding a booking for Varanasi hotel made in September for stay in November.

“This is an important update regarding your upcoming hotel stay at XXX Hotel. The amount of tax applicable on this hotel booking has now been reduced in keeping with the new GST (Goods & Services Tax) reduction mandated by the GST department. We have therefore initiated a refund of ₹XXXX.X which will reflect in your account in 7-12 working days. Wallet and UPI refunds will take only 1-2 days,” the message read. Sridhar’s friend Arnab too got a similar message for a hotel booking in Shimla.

There could be many Sridhars and Arnabs who are pleasantly surprised by this move as a refund has been initiated, probably for the first time, after GST rate lowered for hotel sector.

In its 37th meeting, held in Goa on September 20, the GST Council rejiged the slabs from four to three and reduced the highest tax from 28 per cent to 18 per cent. To make this effective, the Central Board of Indirect Taxes and Custom (CBIC) and States’ Tax authorities notified the new rates by September 30.

“With the increasing awareness of the need to charge only the applicable GST and refund any excess charged to the end consumer accompanied by the evolution of stable IT processes enabling such refunds, consumers can look forward to fairer business practices from B2C businesses,” said MS.Mani, Partner with Deloitte India.

Normally, many hotels and travel aggregators announce special packages for vacations and long weekends and offer special rates if booking is made in advance. Since, old rates were applicable till September 30, nyone booking by that date for stay in October onwards had to pay higher tax. Technically speaking, if rates have been lowered, then goods/service providers need to pass on the benefit, otherwise the matter could go to the Anti-profiteering Authority.

There have been such instances with goods providers, when many companies were asked to reduce the prices, return the profiteered amount along with interest at the rate of 18 per cent or deposit profiteered amount along with penalty.

Same rules apply to the services also. Now, to avoid action by National Anti-profiteering Authority (NAA), companies can suo motu initiate the process of lowering the price or refund the difference in case of advance booking.

Rajat Mohan, Senior Partner with AMRG said that taxes in the hospitality sector have been rationalised from October 1 resulting in savings of 6-10 per cent in consumers’ budget for hotel accommodation services prospectively.

“In case of advance bookings made in a pre-change tax period, higher taxes were collected by the sector including online aggregators which now needs to be returned. There are reports that some multi-national chain of hotels and some leading online aggregators have suo motu started refunding the excess collection of taxes, as retention of any amount by businesses would make them guilty under anti-profiteering provisions,” he said.

Now, if someone has not received any refund intimation for the hotel booking in India made prior September 30 for stay in October onwards, he/she should ask the hotel or aggregator to do so.

Source: The-Hindu-Business-Line.

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GST: CBIC extends Last date for filing of CMP-08 for Composition Taxpayers to 22nd Oct, 2019

GST: CBIC extends Last date for filing of CMP-08 for Composition Taxpayers to 22nd Oct, 2019

The Central Board of Indirect Taxes and Customs ( CBIC ) has extended the filing returns by the composition dealers in Form CMP-08 to October 22nd, 2019.

The composition taxpayers shall furnish a statement, every quarter or, as the case may be, part thereof containing the details of payment of self-assessed tax in FORM GST CMP-08 of the Central Goods and Services Tax Rules, 2017, till the 18th day of the month succeeding such quarter.

Under the GST regime rolled out from 1st July 2017, the composition scheme is an alternative method of tax levy under GST designed to simplify compliance and reduce compliance costs for small taxpayers. The main feature of this scheme is that the business or person who has opted to pay tax under this scheme can pay tax at a flat percentage of turnover every quarter, instead of paying tax at a normal rate every month.

Source: Taxscan.

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Input tax credit under GST regime restricted to 20% of claims: CBIC

Input tax credit under GST regime restricted to 20% of claims: CBIC

Businesses will have to pursue their vendors on a monthly basis to upload their invoices to enable them to take the entire input tax credit (ITC) after the indirect tax board came out with a notification to restrict these credits to 20 per cent of the claims.

Concerned at dwindling revenues, the Central Board of Indirect Taxes and Customs (CBIC) put this condition on the claims where vendors have not uploaded their invoices within a month.

Experts said it would block cash flow of businesses and increase their compliance burden.

Though theoretically, businesses have to reconcile their ITC within 60 days, this clause was never implemented since the auto-populated form of purchases by suppliers — GSTR2 — has been suspended.

As such, businesses are supposed to reconcile their input tax credit at the time of annual returns. However, the deadline of annual returns even for the first year of the GST rollout — 2017-18 — have been deferred a number of times. This means that there was no restriction on the businesses to claim their input tax credit, provided they have the invoices to support their claims.

Now, businesses have to follow-up with non-compliant vendors on a monthly basis to upload their invoices in the form GSTR 2A.
Harpreet Singh, partner at KPMG, said, “Restriction of mismatched ITC by 20 per cent would necessitate undertaking monthly reconciliation of purchase, credit register with GSTR 2A, and hence may increase the monthly compliance burden.”

He said the move would also restrict credit, which was rightly availed of but did not get reflected in the GSTR 2A form, on account of default by vendors may result in adverse cash flow impact.

The GST collections fell to a 19-month low of Rs 91,916 crore in September, pointing towards deepening economic slowdown. It was the second straight month of revenue collections falling below the Rs 1-trillion mark, compounding the government’s revenue woes amid steep collection target for the fiscal. The target is over Rs 1.1 trillion a month.

In the first six months till September, GST grew by 4.9 per cent year-on-year.

The government in August had extended the date for filing annual GST returns for 2017-18 and 20018-19 by three months to November 30, as taxpayers were facing technical problems in furnishing returns. In fact, the government postponed the deadline a number of times. The original deadline of filing these returns were December 31, 2018.

GSTR-9 is an annual return to be filed yearly by taxpayers registered under the GST. It consists of details regarding the outward and inward supplies made or received under different tax heads.

The form GSTR-9C is filed by those with an annual turnover of above Rs 2 crore. It is a statement of reconciliation between GSTR-9 and the audited annual financial statement, while GSTR-9A is the annual return to be filed those who have opted for the Composition Scheme under GST.

The deadlines were extended after the businesses and experts complained about the complex nature of filing these returns and reconciliation of audited accounts with these returns. For instance, tax and legal consultants had said hundreds of amendments, notifications and circulars have made the GST Act very complex.

Officials of the Tax Bar Association, a body of over 400 members of chartered accountants, company secretaries, cost advocates and tax consultants, had said that the government has made the entire GST procedure and filing of returns very “confusing with hundreds of changes in the rules and taxes”.

Source: Business-Standard.

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GST refunds denied to MNC back offices

GST refunds denied to MNC back offices

A host of back offices of multinational companies in the financial sector face a tax whammy, with Goods and Services Tax authorities denying them refunds of amounts paid on inputs, saying the work done for parent companies can’t be considered as exports and will be counted as a service for the same entity.

GST authorities have rejected refunds on these grounds across states, including Haryana, Maharashtra, Tamil Nadu and Karnataka. The denial of refunds running into hundreds of crores of rupees to these outfits can derail their business model and may impact India’s attractiveness as the world’s back-office hub, especially with the emergence of low-cost sites in the Philippines and East Europe.

“Rejection orders are based on the premise that the services are provided by the local entity to its overseas affiliate company, which is the ‘same entity’ and therefore, the said services do not qualify as exports,” said an industry official privy to the development. Industry has approached the government for expeditious resolution of the issue. Individual companies will approach appellate bodies to seek relief.

Typically, tax paid on inputs that are used for exports is refunded. According to a clarification provided by the Central Board of Indirect Taxes and Customs in the form of frequently asked questions, where the Indian arm is set up as a liaison office or a branch, they would be treated as establishments of the same entity and hence, supplies between them will not qualify as export of services. “However, if the Indian arm is set up as a wholly owned subsidiary company incorporated under the Indian laws, the foreign company and the Indian subsidiary would not be governed by the provisions of distinct person or related person as both are separate legal entities,” it said.

Experts said the law is very clear on this aspect and this principle was followed even under the previous service tax regime. “It is essential to clarify without any ambiguity that global delivery centres operating in India for foreign customers are not liable for GST on services provided by them and are fully entitled to claim input tax refunds,” said MS Mani, a partner at Deloitte India. “From the law, it’s very clear that services provided to a separate legal entity would qualify as export of services.

Only services by one office to another of the same legal entity doesn’t qualify as export. It’s unfortunate that such fundamental issues are still being raised even after more than two years of GST implementation,” said Pratik Jain, national leader, indirect taxes, at PwC. Bipin Sapra, a partner at EY, agreed. “There is no ambiguity in law that a subsidiary of an overseas company can supply services to their overseas parent and qualify as export. Any challenge to this will be increasing the cost of delivery of such services from India,” he said.

The issue appears to have been raised largely by state tax authorities. “Hope the government takes urgent notice of this and comes up with a clarification so that the issue can be put to rest. This also means that state authorities need comprehensive training on taxation of service sectors, which was earlier administered by central government authorities,” Jain added.

Source: Economic-Times

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CBIC issues Clarifications to allow Re-Filing of Refund Claim where NIL Refund Claim was filed inadvertently under GST

CBIC issues Clarifications to allow Re-Filing of Refund Claim where NIL Refund Claim was filed inadvertently under GST

The Central Board of Indirect Taxes ( CBIC ) has issued Clarifications to allow Re-Filing of Refund Claim where NIL Refund Claim was filed inadvertently under Goods and Services Tax ( GST ).

In a Circular issued by CBIC said that, “Whenever a registered person proceeds to claim a refund in FORM GST RFD-01A/RFD-01 under a category for a particular period on the common portal, the system pops up a message box asking whether he wants to apply for ‘NIL’ refund for the selected period. This is to ensure that all refund applications under a particular category are filed chronologically. However, certain registered persons may have inadvertently opted for filing of ‘NIL’ refund. Once a ‘NIL’ refund claim has been filed for a period under a particular category, the common portal does not allow the registered person to re-file the refund claim for that period under the said category”.

The CBIC also clarified that a registered person who has filed a NIL refund claim in FORM GST RFD-01A/RFD-01 for a given period under a particular category, may again apply for refund for the said period under the same category only if he satisfies the following two conditions:

  • The registered person must have filed a NIL refund claim in FORM GST RFD-01A/RFD-01 for a certain period under a particular category; and
  • No refund claims in FORM GST RFD-01A/RFD-01 must have been filed by the registered person under the same category for any subsequent period.
    It may be noted that condition (b) shall apply only for refund claims falling under the following categories:

1.Refund of unutilized input tax credit (ITC) on account of exports without payment of tax;

2.Refund of unutilized ITC on account of supplies made to SEZ Unit/SEZ Developer without payment of tax;

  • Refund of unutilized ITC on account of accumulation due to inverted tax structure;

In all other cases, registered persons shall be allowed to re-apply even if the condition (b) is not satisfied

While concluding the Circular, the CBIC also said that, “Registered persons satisfying the above conditions may file the refund claim under “Any Other” category instead of the category under which the NIL refund claim has already been filed. However, the refund claim should pertain to the same period for which the NIL application was filed. The application under the “Any Other” category shall also be accompanied by all the supporting documents which would be required to be otherwise submitted with the refund claim”.

“On receipt of the claim, the proper officer shall calculate the admissible refund amount as per the applicable rules and in the manner detailed in para 3 of Circular, No.59/33/2018-GST dated 04.09.2018, wherever applicable. Further, upon scrutiny of the application for completeness and eligibility, if the proper officer is satisfied that the whole or any part of the amount claimed is payable as the refund, he shall request the taxpayer in writing, if required, to debit the said amount from his electronic credit ledger through FORM GST DRC-03. Once the proof of such debit is received by the proper officer, he shall proceed to issue the refund order in FORM GST RFD-06 and the payment order in FORM GST RFD-05”, the department also added.

Click Here for Circular

Source: TaxScan.

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Indirect tax board removes circular on GST, but confusion remains.

Indirect tax board removes circular on GST, but confusion remains.

The indirect tax board had removed a “controversial” circular that imposed goods and services tax (GST) on post-sale discounts by dealers, but it has done little to clear the confusion around the many issues that arose with the circular.

In June, the Central Board of Indirect Taxes and Customs (CBIC) had issued a circular which said that dealers will have to pay 18 per cent GST on the post-sale discount that they get from the suppliers of goods, if the supplier asks them to pass on the concessions to the end consumer.

The circular came out with different situations where GST should be paid and where it should not.

For instance, imagine that a company sells a car to a dealer for Rs 10 lakh and later gives a discount of Rs 50,000. In doing so, the firm did not put any obligation on the dealer to pass on the benefit. So, the dealer need not pay any GST on Rs 50,000. However, if the company asks the dealer to pass on the benefit to the customer, then the dealer has to pay GST on the entire amount, including Rs 50,000.

The Confederation of Indian Industry (CII) had said This had irked industry, particularly the auto sector, which has already been reeling under the pressure of subdued demand.

this circular violated the cardinal principle of GST that the tax cost is to be borne by the ultimate consumer.

“This principle means that the supply of goods or service should suffer the tax only to the extent of consideration paid by the ultimate consumer,” the CII had said, demanding that this provision in the circular be changed.

It said additional discounts are generally given to liquidate the old inventories or push products under weak market conditions.

Following the hue and cry, the CBIC recently said: “Numerous representations were received expressing apprehensions on the implementation of the said circular. In view of these apprehensions… the Board… hereby withdraws, ab initio, the circular.”

But even after the withdrawal of the circular, the controversy over it has not ended. Experts demanded that a clarification be issued that there would be no GST on post-sale discounts as field officers continue to harass dealers.

Abhishek Jain, partner at EY, said industry expects that with the withdrawal of the circular, the government has accepted the industry’s position and this would put an end to the investigations and litigation at the field level.

Also, there is the issue of input tax credit.

ClearTax chief executive officer Archit Gupta said now there is confusion over how the situation of post-sale discounts should be dealt with.

The tax on the original invoice could have still been claimed as input tax credit and be adjusted using the credit note. This is now not perceived so by the withdrawal of the circular, he said.

“The festive season is here, and hence, there is a dire need for the CBIC to come back with a clear message for the businesses and the dealers in the supply chain to deal with the circular,” he said.

Source: Business-Standard.

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