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GST: CBIC notifies due date of Form GSTR-3B for October 2020 to March 2021

GST: CBIC notifies due date of Form GSTR-3B for October 2020 to March 2021

The Central Board of Indirect Taxes and Customs (CBIC) notified that the return in Form GSTR-3B of the Central Goods and Services Tax Rules, 2017 for each of the months from October 2020 to March 2021, which shall be furnished electronically through the common portal, on or before the 20th day of the month succeeding such month.

However, the Board notified 22nd day of the succeeding month to file the return in Form GSTR-3B if the taxpayers having an aggregate turnover of up to Rs. 5 crore in the previous financial year, whose principal place of business is in the States of Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh, the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands or Lakshadweep.

Further, the Board notified 24th day of the succeeding month to file the return in Form GSTR-3B if the taxpayers having an aggregate turnover of up to Rs. 5 crore in the previous financial year, whose principal place of business is in the States of of Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or Odisha, the Union territories of Jammu and Kashmir, Ladakh, Chandigarh or Delhi.

“Every registered person furnishing the return in FORM GSTR-3B of the said rules shall, subject to the provisions of section 49 of the said Act, discharge his liability towards tax by debiting the electronic cash ledger or electronic credit ledger, as the case may be and his liability towards interest, penalty, fees or any other amount payable under the said Act by debiting the electronic cash ledger, not later than the last date, as specified in the first paragraph, on which he is required to furnish the said return, the CBIC notified.

Source: TaxScan.

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GST compensation deadlock: Centre allows 20 states to mobilise Rs 68,825 crore

GST compensation deadlock: Centre allows 20 states to mobilise Rs 68,825 crore

The Centre on October 13 granted permission to 20 states to raise an additional Rs 68,825 crore through open market borrowings.

“Additional borrowing permission has been granted at 0.5 percent of the Gross State Domestic Product (GSDP) to those states who have opted for option 1 out of the two options suggested by the Ministry of Finance to meet the shortfall arising out of the Goods & Services Tax (GST) implementation,” the government said in a press release.

In the GST Council meeting held in August, two options were put forward. The 20 states that opted for option 1 are Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Goa, Gujarat, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Sikkim, Tripura, Uttar Pradesh and Uttarakhand.

Eight states are yet to exercise an option, the statement said.

Out of the total Rs 68,825 crore, Andhra Pradesh has been allowed to borrow Rs 5,051 crore, Arunachal Pradesh Rs 143 crore, Assam Rs 1,869 crore, Bihar Rs 3,231 crore, Goa Rs 446 crore, Gujarat Rs 8,704 crore, Haryana Rs 4,293 crore, Himachal Pradesh Rs 877 crore, Karnataka Rs 9,018 crore, Madhya Pradesh Rs 4,746 crore, Maharashtra Rs 15,394 crore, Manipur Rs 151 crore, Meghalaya Rs 194 crore, Mizoram Rs 132 crore, Nagaland Rs 157 crore, Odisha Rs 2,858 crore, Sikkim Rs 156 crore, Tripura Rs 297 crore, Uttar Pradesh Rs 9,703 crore, and Uttarakhand Rs 1,405 crore.

The facilities made available to the states, who have submitted their choice, include a special borrowing window, coordinated by the Ministry of Finance, to borrow the shortfall in revenue through issue of debt. The total shortfall in the revenue of the states on this account has been estimated at around Rs 1.1 lakh crore.

The government has also included permission to borrow the final instalment of 0.5 percent of GSDP out of the 2 percent additional borrowings permitted by the government in view of the COVID pandemic, waiving the reforms condition.
The government had provided additional borrowing limit of up to 2 percent of GSDP to states. The final instalment of 0.5 percent out of this 2 percent limit was linked to carrying out at least three out of four reforms stipulated by the Centre.

“However, in case of states who have exercised Option-1, to meet the shortfall arising out of GST implementation, the condition of carrying out the reforms to avail the final instalment of 0.5 percent of GSDP has been waived,” the government statement said.

The 20 states, who have exercised Option-1, are eligible to raise an amount of Rs 68,825 crore through open market borrowings. Action on the special borrowing window is being taken separately, the statement said.

On October 12, the GST Council could not reach a consensus on borrowing options in lieu of compensation cess shortfall and Finance Minister Nirmala Sitharaman had said that some states questioned whether the Council has any authority to disallow those states that have already opted for one of the borrowing options from going ahead with their borrowing plans.

Source: Money-Control.

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GST: E-Way Bill generation facility to be blocked for Taxpayers who failed to file GSTR-3B for 2 or more Tax period from Oct 15

GST: E-Way Bill generation facility to be blocked for Taxpayers who failed to file GSTR-3B for 2 or more Tax period from Oct 15

The Central Board of Indirect Taxes and Customs ( CBIC ) has clarified that, E-Way Bill generation facility to be blocked for Taxpayers who failed to file GSTR-3B for 2 or more Tax period from Oct 15, 2020.

In terms of Rule 138 E (b) of the CGST Rules, 2017, the E Way Bill generation facility of a person is liable to be restricted, in case the person fails to file their GSTR-3B returns, for a consecutive period of two months or more.

The GST Council in its last meeting has decided that this provision will be made applicable for the taxpayers whose Aggregate Annual Turn Over (AATO, PAN based) is more than Rs 5 Crores.

Thus, if the GSTIN associated with the respective PAN (with AATO over Rs 5 Cr.) has failed to file their GSTR-3B Return for 02 or more tax periods, up to the month of tax period of August, 2020, their EWB generation facility will be blocked on the EWB Portal. Please note that the EWB generation facility for such GSTINs (whether as consignor or consignee or by transporter) will be blocked on EWB Portal after 15th October, 2020.

The CBIC also said that, To avail continuous EWB generation facility on EWB Portal, you are therefore advised to file your pending GSTR 3B returns immediately.

Source: TaxScan.

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GST e-invoicing for all B2B transactions from April 1, 2021: Finance Secretary

GST e-invoicing for all B2B transactions from April 1, 2021: Finance Secretary

The government will roll out the electronic invoicing (e-invoicing) system for all business-to-business (B2B) transactions under the Goods and Services Tax (GST) regime from April 1 next year that will replace physical invoices, finance secretary Ajay Bhushan Pandey said.

The government introduced the e-invoicing system on October 1, 2020 for businesses with an annual turnover over Rs 500 crore. “By January 1, 2021, it will be available to taxpayers with an annual turnover over Rs 100 crore,” he said.

“It is a great step forward as e-invoicing has many advantages both for the business and the tax administration. Buyers and sellers will be able to have realtime information of the invoices. It replaces the physical invoice and will soon replace the existing e-way bill system and taxpayers will not have to generate separate e-way bills,” he said.

Pandey said the e-invoicing system may eventually dispense with the present system of filing GST returns for smaller businesses and micro, small and medium enterprises (MSMEs) because e-invoice will pre-populate returns for such businesses and they will be required to simply pay the taxes.

“The returns will be automatically generated for all supplies for which e-invoices have been issued,” he said after reviewing the progress of the e-invoicing system that was introduced on October 1 for businesses with an annual turnover of over Rs 500 crore. The meeting was attended by senior officials from the Central Board of Indirect Taxes and Customs (CBIC), the National Informatics Centre (NIC) and the GST Network (GSTN).

After review of the progress in the last seven days, Pandey said the implementation of e-invoicing is getting progressively robust. “This is the beginning of a new chapter of the ease of doing business and paying taxes in India. From the first to the seventh day Invoice Reference Number (IRN) generation has grown by 163% and have touched the count of 13.69 lakh IRNs on the seventh day, i.e., on October 7,” he said.

“As e-invoicing is an exceedingly progressive system, we expect that it will also have other major advantages of improving the payment cycle for the industry and give boost to invoice based lending to MSMEs,” he said.
India has been able to build and develop this massive e-invoice system in GST in just seven to eight months, he said. According to a note prepared by GSTN, between October 1 and October 7 more than 69.5 lakh IRNs were generated by over 71 thousand users.

“On the very first day of e-invoicing system, more than 8.40 lakh IRNs were generated by 8,453 users while on October 7 about 13.69 lakh IRNs were generated by 14,100 users, it said.

To be sure, the introduction of e-invoicing system was initially scheduled from April 1, 2020, but it was postponed to October 1 because of the suddent outbreak of Covid-19 pandemic. In order to make the system gradually adjust to the e- invoicing system, it was prescribed that the taxpayers having aggregate turnover of Rs. 500 crore and above only would be required to issue e-invoice from October 1.

Source: Hindustan-Times.

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GST Council may set up GoM on compensation shortfall

GST Council may set up GoM on compensation shortfall

The Goods and Services Tax (GST) Council could consider setting up a group of ministers (GoM) to resolve the row over states having to borrow from the market in order to meet the shortfall in compensation. Apart from the two options that the Centre has offered to the states, a third has emerged, which proposes that they make such borrowings jointly, rather than states taking on the entire burden. Punjab has written to the Centre, asking for a GoM to resolve the issue. Kerala and Chhattisgarh have backed the demand.

“Why not set up a GoM to decide?” said Kerala finance minister Thomas Isaac. The issue of borrowing in lieu of GST compensation can be resolved within the GoM, as in the past, he said, adding that the council can also discuss the option of the Centre offering something additional to states, such as agreeing to take on some part of the total borrowing.

The council is scheduled to meet next on October 12 to deliberate on the matter. The government has offered two options to the states to meet the GST compensation deficit – borrow Rs 1.1 lakh crore to partially meet shortfall or borrow the entire Rs 2.35 crore deficit. The GST Council meeting on October 5 could not decide on these options, with 10 states and UTs strongly opposing them. A top official from an opposition-ruled state also backed the third option, with both Centre and states sharing some burden of the borrowing. “This (borrowing) could be in proportion to the vote share of states and the Centre (in the council),” the official said.

Chhattisgarh commercial taxes minister TS Singh Deo asked why a GoM couldn’t be set up, rather than forcing states to choose. “These suggestions could be looked at,” he said. Deo also dismissed the view that the council is not mandated to vote on borrowing proposals. If the proposal has been put to the council by the Centre in lieu of compensation due to states, how can it not be decided by that forum, he asked. Some states such as Uttar Pradesh have suggested revenue augmentation measures, including raising cess on gutka, he said.

Source: Economic-Times.

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GST Council approves increased borrowing limit of Rs 1.1 lakh crore under option 1

GST Council approves increased borrowing limit of Rs 1.1 lakh crore under option 1

The GST Council has approved an increased borrowing limit of Rs 1.1 lakh crore instead of Rs 97,000 crore in the first borrowing option provided to the states.

The Centre had proposed an increased borrowing limit in the ongoing 42nd goods and services tax (GST) Council meeting headed by finance minister Nirmala Sitharaman, assuming a 7% growth rate instead of the earlier assumption of 10% over the previous financial year. States had said the increase should be based on the actual rate of 2-3% witnessed last year.

The decision is the second such after the Council unanimously to extend the GST compensation cess levy beyond 2022.

Sources aware of the development said that levy will continue till the time the principal and interest are paid off, and be reviewed and decided from time to time. The initial proposal was to extend the levy by two years till 2024.

The rift between BJP ruled and opposition led states may widen with the former set to seek faster disbursement of funds through the special borrowing window proposed by the Centre.

But opposition led states will dig in their heels, demanding that Centre borrows and provides to states, as opposed to states borrowing, since it is the statutory obligation of the government to make up for revenue loss to states.
At the GST Council meeting on August 27, the Centre proposed that the states could borrow Rs 97,000 crore, equivalent to the revenue loss due to the GST transition, or Rs 2.35 lakh crore, equivalent to the revenue loss due to the GST transition and Covid-19. In the first option, the principal and interest would be paid from the cess fund, while in the second option, the states would bear the interest.

About 20 states have opted for the first borrowing option, but others have rejected both, which may prompt voting on the matter. States may also seek for a dispute resolution mechanism.

GST Council has worked on consensus among all stakeholders since inception, with the exception of one meeting where voting took place in December last year on the issue of state level lotteries.

The GST Council will also take up procedural issues aimed at simplification besides rate rationalisation on non-alcohol based sanitizers.

Source: Times-of-India

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GST compensation cess to stay beyond June 2022 to help states

GST compensation cess to stay beyond June 2022 to help states

After joining hands with the states at the GST Council to extend the applicability of compensation cess on cars, coal and soft drinks beyond June 2022, the Centre on Monday closed the room for further negotiation, arguing that the modalities of borrowing funds can’t be finalised by the panel comprising Union and state finance ministers.

The latest move can further strain relations between the Centre and opposition-governed states. The change in stance came after finance minister Nirmala Sitharaman said at a press conference the Council agreed to meet again on October 12 to resolve the borrowing issue with the states. The issue has strained ties between the opposition states and the Centre as revenues have dried up due to the impact of lockdown. The latest development came after the finance ministry conceded some ground in helping states raise more funds to bridge the “revenue loss”.

While the government had assured to compensate states in case GST collections did not grow 14% annually, the compensation requirement has shot up to an estimated Rs 3 lakh crore this year due to Covid-19.

With a projected deficit of Rs 2.3 lakh crore, the Centre has come up with two options, involving market borrowings, to bridge the gap with repayment funded through the compensation cess. On Monday, as part of the first option, the Centre tweaked the formula in a way that the deficit due to GST implementation was pegged at Rs 1.1 lakh crore instead of Rs 97,000 crore estimated earlier.

The Centre has offered to help states access this money via a special RBI window to ensure competitive rates and also help them use the compensation cess to repay the interest and principal — an offer that has been accepted by 20 states. The other option is for states to borrow Rs 2.3 lakh crore directly from the market, which means at a higher cost.

Ten states and UTs including Kerala, West Bengal, Punjab, Chattisgarh, Delhi and Tamil Nadu have refused to accept the two options on the table and protested at Monday’s meeting. They want the Centre to borrow funds and allocate it to states.

Sitharaman, who heads the GST Council, suggested that states will need to make a distinction between Covid-related impact and those related to implementation issues as the law has not factored in the possibility a crisis like the Coronavirus pandemic. “Nobody will be denied compensation, arising out of implementing of GST and Covid impact. Borrowing has to be done. Decision is how much you want to borrow,” she told reporters after the marathon GST Council meeting, adding states will not have to bear the burden as the compensation cess will be used to clear the dues.

While she said further discussion on the issue will take place on October 12, Union government sources argued that the ball was not in the states’ court as borrowing was not a matter to be decided by the GST Council. “States have to give their preference to the expenditure department as it is an issue under Article 293 of the Constitution. The choice has to be exercised by states,” said a source, adding that the issue of voting in the GST Council meeting does not arise. The Council has jurisdiction to extend the levy of cess and it exercised its authority on Monday, an official explained.

Source: Timesof-India.

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GST Council allows Quarterly filing of GSTR-3B for less than 5cr Turnover

GST Council allows Quarterly filing of GSTR-3B for less than 5cr Turnover

The 42nd GST Council Meeting held today has decided to allow the quarterly filing GSTR-3B returns having less than five crores turnover.

This facility will be available from January 1st, 2021. From Jan 2021, the number of returns for small taxpayers will be reduced from 24 to 8. However, since states require money every month, payments can be made through challan every month, even though returns can be filed every quarter.

GSTR-2B has been provided to help Taxpayers calculate input tax credit; it will give taxpayers a complete idea of the ITC they are entitled to, said Finance Secretary.

Filing GSTR-3B is mandatory even for Nil returns. GSTR-3B is a monthly return. All regular taxpayers need to file this return till June 2018. Taxpayers can file their return on GST Portal. Taxpayers have to file this return by 20th of the subsequent month.

As a further step towards reducing the compliance burden particularly on the small taxpayers having aggregate annual turnover < Rs. 5 cr., the Council’s earlier recommendation of allowing filing of returns on a quarterly basis with monthly payments by such taxpayers to be implemented w.e.f. 01.01.2021. Such quarterly taxpayers would, for the first two months of the quarter, have an option to pay 35% of the net cash tax liability of the last quarter using an auto generated challan.

Source: TaxScan.

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GST revenues cross ₹95,000 crores in September

GST revenues cross ₹95,000 crores in September

Revenue collections from the Goods and Services Tax (GST) in September hit ₹95,480 crore, the highest in this financial year so far, indicating that economic activity is picking up steam in tandem with the gradual easing of lockdown restrictions necessitated by the COVID-19 pandemic.

September’s indirect tax collections were over 10% higher than August, 4% higher than the GST kitty in the same month a year ago and marked only the second time that the ₹90,000 crore mark was crossed this financial year.

GST collections had been sliding after January 2020 when nearly ₹1.11 lakh crore came in. March 2020, by the end of which the national lockdown was imposed, recorded GST inflows of ₹97,597 crore. April and May saw the worst hit, bringing in little over ₹32,000 crore and ₹62,000 crore, respectively.

“The gross GST revenue collected in the month of September, 2020 is ₹95,480 crore, of which Central GST is ₹17,741 crore, State GST is ₹23,131 crore, Integrated GST is ₹47,484 crore [including ₹22,442 crore collected on import of goods] and cess is ₹7,124 crore [including ₹788 crore collected on import of goods],” the Finance Ministry said in a statement on Thursday.

Economists were cautious about reading the healthier numbers as a sign of a sustainable rebound from the sharp 23.9% contraction in the country’s gross domestic product in the first quarter of 2020-21.

Principal economist at rating agency ICRA Aditi Nayar said the uptick in GST collections had come as a relief, although it had likely been driven by ‘a combination of pent up demand and inventory restocking, and thus its sustainability remains unclear.’

“Overall, the high frequency data available for the month of September 2020 confirms that a fragmented recovery is under way. We continue to expect the GDP contraction to narrow appreciably to 12.4% in the second quarter,” Ms. Nayar said.

“With a significant part of the economy resuming operations and international trade as well resuming pace, the collections have shown decent growth,” said Abhishek Jain, EY tax partner. Revenues from import of goods were at 102% and revenues from domestic transactions which include import of services were at 105% of the revenues from these sources during September 2019.

Among the larger States, Rajasthan and Tamil Nadu saw the highest growth in GST inflows at 17% and 15%, respectively, compared to September 2019. Andhra Pradesh saw a 8% growth, Gujarat 6%, while Maharashtra and Uttar Pradesh saw a flat trend and collections in Karnataka dropped 5%, from a year ago.

Source:The-Hindu.

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CBIC gives 30-day grace period for those not yet ready for GST e-invoice

CBIC gives 30-day grace period for those not yet ready for GST e-invoice

Businesses not yet prepared for generating Goods and Services Tax (GST) e-invoices despite having got about nine months to prepare for, have been given “one last chance” to avoid penalty and regularise their invoices, the government said late on Wednesday.

The compulsory e-invoicing of business-to-business transactions of companies with more than ₹500 crore sales kicks in from Thursday.

The Central Board of Indirect Taxes and Customs (CBIC) said in a statement that the announcement of this compliance requirement was first made last December and was to be effective from April but was extended to 1 October keeping in mind the hardships faced by businesses. Despite this long notice, some businesses are reportedly still not ready, the tax authority noted. They are now given a chance to ward of penalty if they comply within 30 days.

“As a last chance in the initial phase of implementation of e-invoice,” the invoices issued by such taxpayers during October without e-invoicing “shall be deemed to be valid and the penalty leviable for such non-adherence to provisions, shall stand waived off if the invoice reference number (IRN) for such invoices is obtained from the designated portal within 30 days of the date of invoice,” CBIC said in the statement.

“It may be noted that no such relaxation would be available for the invoices issued from 1 November,” said the statement.

This relief is a ‘win-win’ for the government and businesses with neither the implementation/anti-evasion objective being deferred nor businesses facing penalties for non-compliance, said Abhishek Jain, Tax Partner.

Source: Live-Mint.

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