In accordance with the motto of FAM, Team FAM under the leadership of President Shri Jitendra Shah and Director General Pritesh K Shah have met on Hon’ble finance minister Smt. Nirmala Sitaraman in July 2023. In the meeting have raised very important demand for the changes in the favour of Vyapari under GST laws w.r.t ITC and Litigation therein. Thereafter in the month of September 2023 held Advocates conference the expert of the GST field from across Mumbai for recommendation on GST at FAM Hall as a brain storming session. Again on the basis of the brain storming session recommendation for amendment under the laws were made. Have made recommendations for continuous improvisation in GST and for ease of business doing.
The demand with respect to section 16 of GST Act wherein most importantly we have highlighted section 16(4) And 16(2) (C) along with orders being passed by the officers for levying of heavy penalties and interest for the initial yours of GST i.e., for FY 17-18, FY 18-19 and FY 19-20 invoking the section 73 and 74 of the GST.
The 53rd GST Council met under the Chairpersonship of Union Minister for Finance &Corporate Affairs Smt. Nirmala Sitharaman in New Delhi on Saturday. The meeting was also attended by Union Minister of State for Finance Shri Pankaj Chaudhary, Chief Ministers of Goa and Meghalaya; Deputy Chief Ministers of Bihar, Haryana, Madhya Pradesh, and Odisha; besides Finance Ministers of States & UTs (with legislature) and senior officers of the Ministry of Finance & States/ UTs.
In above meeting council have considered many of our continuous demands and has suggested for improvisation. In the press release having brief of the meeting have highlighted many of the issued for which FAM was continuously raising voice, send many communications and indeed personally met honourable minister and secretary.
We Team FAM humbly Thank ’s Hon’ble Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman minister and team for granting time and considering the demands of the FAM.
Below are the breakdown and explanation of important points of the recommendation the of the council meeting. Further team FAM with will release the detailed explanation on the recommendation after release of circulars and notification by CBIC.
1. Relief from Interest and Penalties:
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Section 128A a new insertion provide for conditional; waiver of Interest and penalty both.
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This applies to demand notices issued under Section 73 of the CGST Act. This section deals with situations where the tax department detects tax liability that wasn’t declared by the taxpayer.
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Good news: The council recommends waiving interest and penalty charges on these demand notices for the financial years 2017-18, 2018-19, and 2019-20.
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Conditions apply: This benefit is only available if the full tax amount demanded is paid by March 31, 2025. It’s also important to note that this doesn’t apply to cases involving fraud, willful misstatement, or suppression of facts.
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2. Extended Deadline for Input Tax Credit:
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This recommendation deals with input tax credit (ITC), which is a mechanism for businesses to claim tax paid on purchases against their output tax liability.
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The council recommends extending the time limit for claiming ITC related to invoices or debit notes filed through the GSTR 3B return (a return for reporting tax liability) up to November 30, 2021.
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This applies specifically to the financial years 2017-18, 2018-19, 2019- 20, and 2020-21. Essentially, businesses that missed claiming ITC earlier for these years can now do so by the extended deadline.
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3. Limiting Frivolous Appeals (Departmental Appeal):
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The council proposes a monetary limit for filing appeals by the tax department. This aims to reduce unnecessary litigation.
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The proposed limits are: –
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-Rs.20 Lakh for appeals filed with the GST Appellate Tribunal
-Rs.1 Crore for appeals filed with the High Court
-Rs.2 Crore for appeals filed with the Supreme Court
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This means the department wouldn’t be able to appeal cases involving tax amounts below these limits.
4. Time for filing appeals in GST Appellate Tribunal:
The GST Council recommended amending Section 112 of the CGST Act, 2017 to allow the three-month period for filing appeals before the Appellate Tribunal to start from a date to be notified by the Government in respect of appeal/ revision orders passed before the date of said notification. This will give sufficient time to the taxpayers to file appeal before the Appellate Tribunal in the pending cases.
5. Relaxation in condition of section 16(4) of the CGST Act:
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In respect of initial years of implementation of GST, i.e., financial years 2017-18, 2018-19, 2019-20 and 2020-21:
The GST Council recommended that the time limit to avail input tax credit in respect of any invoice or debit note under Section 16(4) of CGST Act, through any return in FORM GSTR 3B filed upto 30.11.2021 for the financial years 2017- 18, 2018-19, 2019-20 and 2020-21, may be deemed to be 30.11.2021. For the same, requisite amendment in section 16(4) of CGST Act, retrospectively, w.e.f 01.07.2017, has been recommended by the Council.
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with respect to cases where returns have been filed after revocation: The GST Council recommended retrospective amendment in Section 16(4) of CGST Act, to be made effective from July 1 , 2017, to conditionally relax the provisions of section 16(4) of CGST Act in cases where returns for the period from the date of cancellation of registration/ effective date of cancellation of registration till the date of revocation of cancellation of the registration, are filed by the registered person within thirty days of the order of revocation
Easy analysis of 5 a and b
| Relief Type | Applicability | Conditions | |
| Extended Deadline for Initial Years of GST Implementation (2017-18 to 2020- 21) | Businesses that missed claiming ITC on purchases can claim it now. | The extended deadline for claiming ITC through GSTR 3B return is November 30, 2021. This applies to invoices or debit notes from the mentioned financial years. | |
| Relief for Revived Registrations | Businesses whose registrations were cancelled and then revived can claim ITC. | They must file GSTR 3B returns for the cancelled period within 30 days of revival. | |
6. Amendment to Rule 88B of CGST:
The amendment to Rule 88B of CGST Rules aims to offer some relief to taxpayers who file their GSTR-3B returns late but have sufficient funds in their Electronic Cash Ledger (ECL) to cover the tax liability. Here’s a breakdown of the change:
Scenario: A taxpayer delays filing their GSTR-3B return. Traditionally, interest would be calculated on the entire tax liability for the delayed period under Section 50 of the CGST Act.
Amendment Impact: With the amendment, if the taxpayer has enough credit in their ECL to cover the tax due on the return filing date, the interest will only be calculated on the portion of the tax liability not settled using ECL funds. This provides some leniency for situations where the delay might be unintentional, but the taxpayer has the resources to pay the tax.
Key Points:
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This applies only to delayed GSTR-3B filings.
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Interest is still applicable on the delayed filing, but only for the part not covered by ECL credit.
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This is a recommendation by the GST Council and might be subject to further notification for implementation.
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7. Refund of additional Integrated Tax (IGST) paid on account of upward revision in price of the goods subsequent to export:
The GST Council recommended to prescribe a mechanism for claiming refund of additional IGST paid on account of upward revision in price of the goods subsequent to their export. This will facilitate a large number of taxpayers, who are required to pay additional IGST on account of upward revision in price of the goods subsequent to export, in claiming refund of such additional IGST.
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Changes in GST Tax Rates:
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Recommendations relating to GST rates on Goods
A. Changes in GST rates of goods
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All milk cans (of steel, iron and aluminium) irrespective of their use will attract 12% GST.
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A uniform rate of 5% IGST will apply to imports of ‘Parts, components, testing equipment, tools and tool-kits of aircrafts, irrespective of their HS classification to provide a fillip to MRO activities subject to specified conditions.
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GST rate on ‘carton, boxes and cases of both corrugated and non-corrugated paper or paper-board’ (HS 4819 10; 4819 20) to be reduced from 18% to
12%.
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All solar cookers whether single or dual energy source, will attract 12% GST.
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To amend existing entry covering Poultry keeping Machinery attracting 12% GST to specifically incorporate “parts of Poultry keeping Machinery” and to regularise past practice on ‘as is where is’ basis in view of genuine interpretational issues.
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To clarify that all types of sprinklers including fire water sprinklers will attract 12% GST and to regularise the past practice on ‘as is where is’ basis in view of genuine interpretational issues.
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To extend IGST exemption on imports of specified items for defence forces for a further period of five years till 30th June, 2029.
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To extend IGST exemption on imports of research equipment/buoys imported under the Research Moored Array for African-Asian-Australian Monsoon Analysis and Prediction (RAMA) programme subject to specified conditions.
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To exempt Compensation Cess on the imports in SEZ by SEZ Unit/developers for authorised operations w.e.f. 01.07.2017.
Other Miscellaneous Changes
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To exempt Compensation cess on supply of aerated beverages and energy drinks to authorised customers by Unit Run Canteens under Ministry of Defence.
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To provide Adhoc IGST exemption on imports of technical documentation for AK-203 rifle kits imported for Indian Defence forces.
II. Recommendations relating to GST rates on services
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To exempt the services provided by Indian Railways to general public, namely, sale of platform tickets, facility of retiring rooms/waiting rooms, cloak room services and battery-operated car services and to also exempt the Intra-Railway transactions. The issue for the past period will be regularized from 20.10.2023 to the date of issue of exemption notification in this regard.
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To exempt GST on the services provided by Special Purpose Vehicles (SPV) to Indian Railway by way of allowing Indian Railway to use infrastructure built & owned by SPV during the concession period and maintenance services supplied by Indian Railways to SPV. The issue for the past will be regularized on ‘as is where is’ basis for the period from 01.07.2017 till the date of issue of exemption notification in this regard.
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To create a separate entry in notification No. 12/2017- CTR 28.06.2017 under heading 9963 to exempt accommodation services having value of supply of accommodation up to Rs. 20,000/- per month per person subject to the condition that the accommodation service is supplied for a minimum continuous period of 90 days. To extend similar benefit for past cases.
-Compiled by Shr. Devendra B. Harnesha (CA, LLB, M.com) Advisor to FAM for all the TAX matter