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gst audit
GST Audit is not an avoidable Compliance, Chartered Accountant ensures checks and balances: ICAI President

GST Audit is not an avoidable Compliance, Chartered Accountant ensures checks and balances: ICAI President

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GST Audit is not an avoidable compliance. GST Audit by a Chartered Accountant ensures maker checker concept thereby detecting inconsistencies, lapses, errors and ambiguities, if any, in complying with the provisions of GST law, said the ICAI President CA. Nihar N. Jambusaria.

The ICAI President said that, he met key Government functionaries to discuss matters related to contribution of accounting profession and its increasing role in economy. Our meeting with Smt. Nirmala Sitharaman, Hon’ble Union Finance and Corporate Affairs Minister was held to discuss our representation regarding the removal of requirement of audit and certification of reconciliation statement by a Chartered Accountant under CGST Act. We, besides other points, apprised that GST Audit is not an avoidable compliance. GST Audit by a Chartered Accountant ensures maker checker concept thereby detecting inconsistencies, lapses, errors and ambiguities, if any, in complying with the provisions of GST law.

The ICAI also submitted that Audit should not be seen as a cost to the taxpayer, rather it is an investment for him, the benefits of which are reaped over a period of time. The taxpayer is able to take corrective actions for irregularities/lapses detected during the audit thereby saving avoidable costs in terms of interest and penalties.

Further, audit also helps the taxpayers in saving on litigation expenses as errors are noticed and addressed in time. In this meeting, CA. Rajendra Kumar P., Chairman, GST and Indirect Taxes Committee also joined us. In this direction, CA. Babu Abraham Kallivayalil, Chairman, Professional Development Committee also met Finance Minister and Members in Parliament CA. Thomas Chazhikadan, CA. Suresh Prabhu, CA. Narain Dass Gupta.

He also added that, These meetings provided us the opportunity to discuss our professional matters with the dignitaries and reinstate our position as a partner in nation building. Two virtual meetings with the Secretary MCA and Jt. Secretary MCA were also held to apprise them about the networking guidelines and the proposed amendments in Industrial Training framework.

Source: TaxScan.

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GST
New GST rule is not applicable for MSMEs

New GST rule is not applicable for MSMEs

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Micro, small and medium enterprises (MSMEs) do not require to pay minimum 1% Goods and Services Tax (GST) liabilities in cash as businesses with annual turnover of less than Rs 6 crore are exempted from the new rule, a finance ministry official said.

The Central Board of Indirect Taxes and Customs (CBIC) last week introduced a change in the GST rules that restricted the use of input tax credit (ITC) for discharging GST liability to 99%, the official said requesting anonymity. The move was aimed at curbing the misappropriation of ITC through fake invoicing, he said.

“In order to protect small businesses and genuine taxpayers there are some exemptions to this rule,” he said. The new rule is not applicable in such cases where registered entities have already deposited more than Rs 1 lakh as income-tax in last two years.

It is also not applicable to registered entities who have received a refund of more than Rs 1 lakh in the preceding financial year on account of export, he said adding that government departments and local authorities are also exempted from the rule.

“A legitimate business runs for profit and a minimum value addition is expected from them. It is only where a lot of fake credit is used that no tax payment in cash is made,” he said giving the reason behind implementing the new rule.

This rule will help to control fake invoices fraudsters who avail and pass on ITC by dummy, fake and dormant entities which show high turnovers, but have no financial credibility and flee after issuing fake invoices and misusing ITC, he added.

The new rule is the outcome of a through deliberation by the GST Law Committee to check the menace of fake invoices and misappropriation of ITC, he said. The government in November launched a nationwide drive to nab such fraudsters. “So far, 175 people have been arrested under the ongoing drive and more than 1,800 cases have been booked against over 8,000 fake entities,” he said.

Source: Hindustan-Times

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GSTN
Good news for Taxpayers: Delinking of Credit Note/Debit Note with Original Invoice has been implemented on the GSTN portal

Good news for Taxpayers: Delinking of Credit Note/Debit Note with Original Invoice has been implemented on the GSTN portal

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The De-linking of original invoices and credit and debit notes are incorporated on the GSTN portal. The same was amended vide CGST amendment Act, 2018 with the effect of February 1, 2019. However, the same is incorporated on September 14, 2020, on the portal.

After more than one and a half years of the amendment in Section 34 of the Central Goods and Services Act, 2017, Goods and Service Tax Network (GSTN) has finally enabled the facility to report consolidated credit or debit notes under GST in GSTR-1.

Section 34 of the Central Goods and Services Act, 2017, which deals with Credit/Debit notes under GST law, wherein a registered person has to issue two or more different credit or debit notes in respect of the multiple tax invoices raised in a financial year under GST.

For instance, Mr. X has issued five tax invoices in the month of September 2020, there are sale returns against these invoices for which he has to issue a credit note under GST.

The issue is whether Mr. X has to issue five different credit notes or he can issue a consolidated credit note for these 5 tax invoices.
Before the amendment under Section 34 Mr. X has to issue 5 credit notes, however, after the amendment, he may issue one consolidated credit note for 5 tax invoices in that particular financial year.

Before the coming up of this facility on the GSTN portal, a registered person needs to furnish the “Original date and number of the tax invoice” in order to report credit or debit note issued under GST in his GSTR-1.

The taxpayers especially selling through online platforms such as Amazon, Flipkart, Paytm, etc. claim this task to issue different credit or debit notes for different tax invoices under GST law a cumbersome compliance as they need to spend more time, money, and effort to maintain the records of credit or debit notes with meagre amounts.

After the facility to issue a consolidated/single credit note, against one or more tax invoices raised in a financial year, implemented on the GST portal, one can easily interpret that the GST portal does not ask for “original date and number of the tax invoice” as credit or debit note is delinked from original invoice on the common portal which in turn helps the taxpayers to report single credit or debit note in respect of the multiple tax invoices raised in one financial year in their GSTR-1.

However, despite the above amendment in the CGST Act, 2017, the GSTN portal did not have a functionality to link multiple invoices with a single credit note/debit note.

In this regard, the much-awaited de-linking of original invoices and credit/debit notes has now been allowed on the GSTN portal.

Source: TaxScan.

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gst council
GST Council to meet on Aug 27 to discuss compensation payout to states

GST Council to meet on Aug 27 to discuss compensation payout to states

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The GST Council is likely to meet on August 27 to discuss the compensation payout to states and the opinion of the Attorney General on the legality of market borrowing to meet revenue shortfall.

Sources said the 41st meeting of the Goods and Services Tax (GST) Council would be a single agenda meeting on states’ compensation to be held via video conferencing.

Besides, a full-fledged meeting of the Council would be held on September 19, agenda for which is to be decided in due course, they added.

The Attorney General- who is the chief legal officer of the government – has opined that the Centre has no statutory obligation to make up for any shortfall in GST revenues of states from its coffers , sources had said.

They had earlier indicated that following the AG’s opinion, states may now have to look at market borrowings to meet the revenue shortfall and the GST Council will take a final call.

The Centre had in March sought views from Attorney General K K Venugopal on the legality of market borrowing by the GST Council to make up for any shortfall in compensation fund – a corpus created from levy of additional tax on luxury and sin goods to compensate states for revenue shortfall arising from their taxes being subsumed into GST.

The AG had also opined that the Council has to decide on meeting the shortfall in the GST compensation fund by providing the sufficient amount to be credited to the fund.

Sources said the options before the Council for meeting the shortfall could be to rationalize GST rates, cover more items under the compensation cess or increase the compensation cess, or recommend higher borrowing by states to be repaid by the future collection into the compensation fund.

Since raising tax or cess rates might not be feasible in the current pandemic situation, the option that remains is each state borrowing from market against the consolidated fund of the state.

Under the GST law, states were guaranteed to be compensated bi-monthly for any loss of revenue in the first five years of the GST implementation from July 1, 2017. The shortfall is calculated assuming a 14 per cent annual growth in GST collections by states over the base year of 2015-16.

Under the GST structure, taxes are levied under 5, 12, 18 and 28 per cent slabs. On top of the highest tax slab, a cess is levied on luxury, sin and demerit goods and the proceeds from the same are used to compensate states for any revenue loss.

The GST Council has to decide how to meet the shortfall in such circumstances and not the central government, sources added.

Any borrowing of the central government is upon the security of the Consolidated Fund of India. Similarly, borrowing by a state government is upon the security of the consolidated fund of the state.

In either case, it would lead to increased general government debt burden and also a higher fiscal deficit.

The payment of GST compensation to states became an issue after revenues from the imposition of cess started dwindling since August 2019 and the Centre had to dive into the excess cess amount collected during 2017-18 and 2018-19.

The Centre had released over ₹1.65 lakh crore in 2019-20 as GST compensation. However, the amount of cess collected during the year 2019-20 was ₹95,444 crore.

The compensation payout amount was ₹69,275 crore in 2018-19 and ₹41,146 crore in 2017-18.

Sourece: Live-Mint.

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gst-compensation
Centre releases Rs 36,400-cr GST compensation to states for 3 months till February

Centre releases Rs 36,400-cr GST compensation to states for 3 months till February

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The Centre has released Rs 36,400 crore as GST compensation to the states and union territories for three months till February 2020.

For the April-November 2019 period, the Centre had already released Rs 1,15,096 crore to compensate states and UTs on account of revenue loss due to implementation of the Goods and Services Tax (GST).

“Taking stock of the current situation due to COVID-19 where state governments need to undertake expenditure while their resources are adversely hit, the central government has released the GST compensation of Rs 36,400 crore to the states/UTs with legislature for the period from December 2019 to February 2020,” an official statement said.

The Centre had released Rs 69,275 crore in 2018-19 and Rs 41,146 crore in 2017-18 as compensation for GST which was rolled out on July 1, 2017.

The cess collection in 2019-20, 2018-19 and 2017-18 fiscal was Rs 95,000 crore, Rs 95,081 crore and Rs 62,611 crore, respectively.

As the compensation requirement of the states was less than collection in the first two years (2017-18 and 2018-19) of GST rollout, Rs 47,271 crore GST compensation cess collected had remained unutilised in the compensation kitty.

Under the GST law, states were guaranteed to be paid for any loss of revenue in the first five years of the GST implementation from July 1, 2017. The shortfall is calculated assuming a 14 per cent annual growth in GST collections by states over the base year of 2015-16.

Under the GST structure, taxes are levied under 5, 12, 18 and 28 per cent slabs. On top of the highest tax slab, a cess is levied on luxury, sin and demerit goods and the proceeds from the same are used to compensate states for any revenue loss.

There were no differences between the Centre and states with regard to compensation payment in 2017-18, 2018-19, and in the first four months (April-July) of previous current fiscal (2019-20).

However, with revenue mop-up from compensation cess falling inadequate, the Centre held back fund transfer to states for revenue shortage beginning August 2019, following which states raised the issue.

Source: Economic-Times.

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GST Refund
CBIC clears Rs 11,052 cr GST refund claims since April 8

CBIC clears Rs 11,052 cr GST refund claims since April 8

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The Central Board of Indirect Taxes ( CBIC) on Monday said it has sanctioned GST refund claims worth Rs 11,052 crore in 47 days.

In a tweet, the CBIC said it is “committed to ensuring liquidity to GST taxpayers especially MSME sectors during the lockdown”.

The tweet added that 29,230 refund claims amounting to Rs 11,052 crore disposed of between April 8-May 24, the CBIC added.

Refunds have been sanctioned while ensuring work from home, it added. The finance ministry had on April 8 said that to provide relief during COVID-19 it has been decided to issue all pending GST and custom refunds which would benefit around 1 lakh business entities, including MSME.

The total refund granted will be approximately Rs 18,000 crore, it had said.

The CBIC had earlier asked its field officers to avoid asking for physical submission of documents from entities who are claiming GST and Customs refunds and instead use official email for all communication.

The CBIC had said that the decision to process pending refund claims has been taken with a view to provide immediate relief to the taxpayers in these difficult times even though the GST Law provides 15 days for issuing acknowledgement or deficiency memo and total 60 days for disposing off refund claims without any liability to pay interest.

Source: Economic-Times

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GST compensation
GST compensation to states pending for Dec-March FY20

GST compensation to states pending for Dec-March FY20

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Finance Minister Nirmala Sitharaman on Sunday said GST compensation is due to all the states for the four-month period of December-March. “We are periodically talking about it. GST dues are very clearly explained in the GST Council. It is not for selective states… All states’ GST dues which we recognise for December, January, February, March have not been paid,” Sitharaman told reporters here.

Under GST law, states are guaranteed to be paid for any loss of revenue in the first five years of the GST implementation from July 1, 2017. The shortfall is calculated assuming a 14 per cent annual growth in GST collections by states over the base year of 2015-16.

Under the GST structure, taxes are levied under 5, 12, 18 and 28 per cent slabs. On top of the highest tax slab, a cess is levied on luxury, sin and demerit goods and the proceeds from the same are used to compensate states for any revenue loss. There were no differences between the Centre and states with regard to compensation payment in 2017-18, 2018-19 and in the first four months (April-July) of the previous fiscal (2019-20).

However, with revenue mop-up from compensation cess falling, the Centre held back fund transfer to states beginning August. Following this, states raised the issue with the Centre and in December 2019, Rs 35,298 crore was released as compensation for August-September, while Rs 34,053 crore was released in two instalments in February and April as compensation for October-November.

The Centre has, so far, released over Rs 2.45 lakh crore as GST compensation to states since the implementation of the new indirect tax regime on July 1, 2017. During July 2017-March 2018, Rs 48,785 crore was released, while between April 2018-March 2019, Rs 81,141 crore was paid to states.

For April-May and June-July last year, Rs 17,789 crore and Rs 27,956 crore were released. Further, Rs 35,298 crore was paid to states as compensation for August-September and Rs 34,053 crore for October-November 2019.

Source: Times-now-news

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gst erp
CBIC issues clarification on GST Compliance Requirements

CBIC issues clarification on GST Compliance Requirements

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The Central Board of Indirect Taxes and Customs (CBIC), on Wednesday, issued the clarification in respect of certain challenges faced by the registered persons in the implementation of provisions of Goods and Service Tax (GST) Laws.

The circular was issued addressing the Principal Chief Commissioners of Central Tax and the Principal Director Generals / Director Generals while issuing clarification on various challenges.

As per the circular, Interim Resolution Professional (IRP) or Resolution Professional (RP) is now required to obtain registration within thirty days of the appointment of the IRP/RP or by June 30, 2020, whichever is later.

“IRP/RP would not be required to take a fresh registration in those cases where statements in FORM GSTR-1 under section 37 and returns in FORM GSTR-3B under section 39 of the CGST Act, for all the tax periods prior to the appointment of IRP/RP, have been furnished under the registration of Corporate Debtor (earlier GSTIN),” the circular further clarified.

The clarification pertaining to an amendment in the registration form provides that such a change would need and only change of authorized signatory which can be done by the authorized signatory of the Company who can add IRP /RP as a new authorized signatory or failing that it can be added by the concerned jurisdictional officer on request by IRP/RP.

“The requirement of exporting the goods by the merchant exporter within 90 days from the date of issue of tax invoice by the registered supplier gets extended to 30th June, 2020, provided the completion of such 90 days period falls within 20.03.2020 to 29.06.2020,” the circular stated while addressing other COVID-19 related representations.

Source: TaxScan.

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GST Refund
CBIC clears Rs 10,700 cr GST, customs duty refund in 16 days

CBIC clears Rs 10,700 cr GST, customs duty refund in 16 days

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The Central Board of Indirect Taxes (CBIC) has cleared over Rs 10,700 crore worth refunds in GST and customs duty between April 8-23.

In the ‘Special Refund and Drawback Disposal Drive’, the CBIC officers have cleared over 1.07 lakh Goods and Services Tax and IGST refund claims worth Rs 9,818.12 crore.

Over 1.86 lakh customs and duty drawback refund was processed totalling Rs 915.56 crore, the CBIC said in a tweet.

“CBIC is committed to help GST Taxpayers/Exim Trade during #COVID19. Expeditious sanction of refunds during Special Refund Drive provide relief to trade, especially MSMEs,” it said.

The Finance Ministry had on April 8 said that to provide relief during COVID-19, it has been decided to issue all pending GST and custom refunds which would benefit around 1 lakh business entities, including MSME.

The total refund granted will be approximately Rs 18,000 crore, it had said.

The CBIC had earlier asked its field officers to avoid asking for physical submission of documents from entities who are claiming GST and customs refunds and instead use official email for all communication.

The CBIC had said that the decision to process pending refund claims has been taken with a view to provide immediate relief to taxpayers in these difficult times even though the GST Law provides 15 days for issuing acknowledgement or deficiency memo and total 60 days for disposing off refund claims without any liability to pay interest.

Source: Economic-Times

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GST
CBIC clarifies on issues under GST Law for Companies under IBC

CBIC clarifies on issues under GST Law for Companies under IBC

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The Central Board of Indirect Taxes and Customs ( CBIC ) has issued clarifications in respect of issues under GST law for companies under the Insolvency and Bankruptcy Code, 2016 (IBC) in connection with the notification issued on  Saturday.

As per the Code, no coercive action can be taken against the corporate debtor for dues of the period prior to insolvency commencement date and such dues shall be treated as ‘operational debt’ for which claims may be filed by the PO before the NCLT in accordance with the provisions of IBC.

“The tax officers shall seek the details of supplies made/received and total tax dues pending from the corporate debtor to file the claim before the NCLT. Moreover, section 14 of the IBC mandates the imposition of a moratorium period, wherein the institution of suits or continuation of pending suits or proceedings against the corporate debtor is prohibited,” the CBIC Circular said.

Regarding the cancellation of GST registration of corporate debtor, the circular clarified that registration of an entity for which CIRP has been initiated should not be cancelled. However, the Proper Officer may suspend the registration. In case of cancellation of registration of an entity undergoing CIRP within the permitted time, the Circular advises that appropriate steps should be taken.

According to the circular, IRP/RP are not bound to file returns for the pre-CIRP period as the Code does not impose an obligation on them to comply with all legal requirements for period after the Insolvency Commencement Date.

For the purpose of the notification issued on Saturday, the corporate debtor who is undergoing CIRP is to be treated as a distinct person of the corporate debtor and shall be liable to take a new registration in the appropriate State/UT, the circular said.

“Further, IRP/RP appointed prior to the said notification shall take GST registration within thirty days of issuance of the said notification, with effect from date of his appointment as IRP/RP,” it added.

As specified in the Notification, it is mandatory for the IRP/RP to file returns under section 40 of the GST Act for the period it takes registration till the date on which registration has been granted.

With regard to the procedure for availing input tax credit for invoices issued to registered persons where IRP/RP has been appointed before issuance of NN 11/2020, the circular further clarified that the exception to the procedure stated under R. 36(4) as has been provided under Notification No. 11/2020 C.T. dated 21.03.2020 shall apply only for filing the first return. 

It was further clarified that the claim of refund of deposit in the cash ledger deposited by IRP/RP of erstwhile registration of the corporate debtor from the date of notification specifying the special procedure for corporate debtors undergoing CIRP, shall be available for refund to the erstwhile registration under the head refund of cash ledger, even though the relevant FORM GSTR-3B/GSTR-1 is not filed for the said period.

Source: TaxScan.

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