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by B. Venakteswaran
July 16, 2021 in GST Compliances
Rule 36(4) restricts the availment of input tax credit beyond 5% of the ITC reflected in Form GSTR 2A/2B. However, as per Notification No. 13/2021-CT dated 1st May 2021 as amended by Notification No: 27/2021 dated 01/06/2021the said restriction will not apply in individual months of April & May 2021 but will apply cumulatively for the period April & May 2021 and the return in FORM GSTR-3B for the month of June 2021 is to be furnished with the cumulative adjustment of input tax credit for those months.
For the month of April-21 and May-2021 and June-2021 the GSTR-2B was generated on 29/05/2021 and 29/06/2021 and 14/07/2021 respectively and is available for download from the GSTN portal.
Illustration for the availment of ITC for June-2021 as per the said legal provisions.
GSTN system the ITC for the Month of June 2021 as per the system generated GSTR3B if the amount is entered more than Maximum amount is entered alert in the red font will appear. In the above maximum eligibility, the GSTN System bas eligibility of ITC as per Section 16 and 17(5) has not been considered.
Don’t follow the System generated ITC, it is only a facilitation measure.
A taxable person has to ensure that his ailment of ITC reported in GSTR-3B is as per legal provisions of GST Act/Rules governing availment of ITC.
For those who wish to avail as per the legal provisions after due verification, the calculation is as under:
in June-21 –(E=C-D)
In the above situation, as you are availing credit only as per the legal provisions, you can ignore the alert, if any is indicated.
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February 10, 2021 in GST Compliances
―As a trade facilitation measure and in order to ease the process of doing business, the GST Council in its 42nd meeting held on 05.10.2020, had recommended that registered person having aggregate turnover up to five (5) crore rupees be allowed to furnish return on a quarterly basis along with monthly payment of tax, with effect from 01.01.2021.
― Towards fulfilling the recommendation, the Government has issued notifications and Circular to implement the Scheme of quarterly return filing along with monthly payment of taxes (hereinafter referred to as “QRMP Scheme”):
―1. Notification No. 81/2020 – Central Tax, dated 10.11.2020.
▪ Notifies amendment carried out in sub-section (1), (2), and (7) of section 39 of the CGST Act vide Finance (No.2) Act, 2019.
―2. Notification No. 82/2020 – Central Tax, dated 10.11.2020.
▪ Makes the Thirteenth amendment (2020) to the CGST Rules 2017.
―3. Notification No. 84/2020 – Central Tax, dated 10.11.2020.
▪ Notifies class of persons under proviso to section 39(1) of the CGST Act.
―4. Notification No. 85/2020 –Central Tax dated 10.11.2020.
▪ Notifies special procedure for making payment of tax liability in the first two months of a quarter
―Circular No. 143/13/2020- GST dated 10.11.2020
• For the first quarter of the Scheme i.e. for January 2021 to March 2021, all the registered persons, whose aggregate turnover for the FY 2019-20 is up to 5 crore rupees and who have furnished the return in FORM GSTR3B for the month of October 2020 by 30th November 2020 and who have not opted have been migrated to QRMP Scheme and their GSTR1/GSTR -3B filing has been modified in the portal.
• Now it has happened to many without awareness of options available. This option can not be modified till April 2021
Dash board >Return >Option in for quarterly return
―The registered persons opting for the Scheme would be required to furnish FORM GSTR-1 quarterly.
―A facilitation measure registered person will have the facility (Invoice Furnishing Facility- IFF) to furnish the details of outward supplies to a registered person, as he may consider necessary, between the 1st day of the succeeding month till the 13th day of the succeeding month, for each of the first and second months of a quarter,
―The details of outward supplies shall not exceed the value of fifty lakh rupees each month.
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December 25, 2020 in GST Compliances
The registration Time limit for approval of GST Registration increased
⎯ The time for system-based registration has been modified from 3 days to 7 days. Now the grant registration would be within 7 days against 3 days as provided earlier from the date of filing of the registration application.
⎯ In cases, the applicant does not do Aadhaar authentication or where the department feels fit to carry out physical verification the time limit for grant of registration shall be 30 days instead of 7 days.
Powers for cancellation of GSTIN to Department increased
⎯ The officer can proceed for cancellation of GSTIN where a taxpayer avails Input Tax Credit (ITC) exceeding than that permissible in Section 16. Clause (e) has been inserted in Rule 21 of CGST Rules 2017. Cancellation without the opportunity of being heard Now, no opportunity of being heard shall be given to a taxpayer for suspension of GSTIN, where the proper officer (PO) has reasons to believe that the registration of person is liable to be cancelled. The words “opportunity of being heard has been omitted from clause (2) of Rule 21A.
Cancellation if there are anomalies in GSTR3B and GSTR-1
⎯ Significant deviation/anomalies between details of outward supply between GSTR 3B and GSTR1 or inward supplies (ITC) between GSTR 3B and GSTR 2B which indicate contravention of Act, the department shall now serve a notice in FORM GST REG 31 to call explanation and Taxpayer shall be required to submit his reply within 30 days of such notice being served to him.
GSTIN has suspended no refund
⎯ Where a GSTIN has suspended no refund u/s 54 of CGST Act 2017 can be availed by the taxpayer. First GSTIN Suspension proceedings have to be closed before applying for a refund.
Restriction on a claim of ITC as per Rule 36(4)
The claim of ITC in respect of invoices not furnished by the corresponding vendors have now been restricted to 5% of the credit available in GSTR 2B. Any claim exceeding the specified limit shall result in a violation of CGST Act read with rules which may result in the suspension of GSTIN. The provision shall come into effect from 1st January 2021.
Restriction to avail ITC as per rule 86B
⎯ New Rule 86B is inserted w.e.f. 1st January 2021 wherein restriction has been placed on utilising more than 99% of tax liability from Input tax credit where the value of taxable supplies other than exempt supply and zero-rated supply exceeds Rs. 50 lakhs in a month.
⎯ Few exceptions have been provided to this rule which is as follows:
(i) Where the taxpayer has paid Income Tax exceeding Rs. 1 lakh in two preceding financial year.
(ii) Where a taxpayer has received refund exceeding Rs. 1 lakhs u/s 54 of CGST Act 2017.
(iii) Where a taxpayer has used electronic cash ledger to pay off liability on outward supplies which cumulatively makes 1% of the total liability up to the said month
(iv) Where a person is a Government Department, Public Sector Undertaking (PSU), local authority or a statutory body.
⎯ Taxpayer whose is restricted to avail ITC as per rule 86B shall also not be permitted to file GSTR 1 where he has not filed GSTR 3b for the preceding tax period.
GSTR 1 to be blocked in case of non-filing of two GSTR 3B
⎯ Where a taxpayer fails to file GSTR 3B for two subsequent months, his GSTR 1 shall now be blocked.
⎯ Similarly, for quarterly return filers, the taxpayer fails to file GSTR 3B for the preceding quarter shall not be permitted to file GSTR 1 of the subsequent quarter.
Taxable value and tax both should be in a match between GSTR 1 and GSTR 3B.
⎯ The liability declared in GSTR 3B is less than that declared in GSTR 1 in a particular month, the department may now proceed with the cancellation of GSTIN.
The validity of the E-way bill reduced for 100 Km distance;
⎯ Earlier one day was permitted for a distance up to 100 km under e way bill provision. Now one day was permitted for a distance up to 200 km. This means that two-day validity granted to cover a distance up to 200 km, is reduced to one day.
CBIC today issued a clarification titled “MYTHS VS FACTS” in regard to GST registration cancellations and other steps taken for plugging tax evasion Myth 1 No opportunity of being heard will be given if the proper officer believes that registration is liable to be cancelled.
GST registration is liable to be cancelled for those who have not filed 6 or more returns. It is, therefore, wrong to say that the cancellation will be done without reasons. To protect the interest of revenue, this provision has been put in the law so that fraudsters do not runway with GST collected from their customers.
No cancellation of registration would be done without giving the proper opportunity of hearing to the taxpayer.
Immediate action for suspension is necessary in cases where unscrupulous operators seek to pass on huge fake credit by gaming the system. Such action will not affect genuine taxpayers and will provide them with a level playing field.
Moreover, the suspension may be revoked by the officer based on the taxpayer’s representation.
Even if there is a clerical error in filing returns, GSTIN will be cancelled. No option to correct your mistakes.
This is absolutely not true. Only in fraudulent cases where there are significant discrepancies based on data analytics and sound risk parameters, and not mere clerical errors, the action of suspension and cancellation will be taken up.
An example of a fraudulent case and serious discrepancy is where one has passed on Crores of Rupees of Input Tax Credit and not filed GSTR3B returns, nor has he filed Income Tax returns or disclosed very little liability in Income Tax returns etc,
The proposed change will impact the ease of doing business.
Not True. Fraudsters are misusing the system to the detriment of the interest of genuine taxpayers.
Consequently, data-driven targeting of the fraudsters is the need of the hour. The data is being collected from Income Tax, Banks, Customs and necessary matching are being done to identify fraudsters and take action of suspension and cancellation after following due process of law.
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December 2, 2020 in GST Compliances
As a trade facilitation measure and in order to ease the process of doing business, the GST Council in its 42nd meeting held on 05.10.2020, had recommended that registered person having aggregate turnover up to five (5) crore rupees be allowed to furnish return on a quarterly basis along with monthly payment of tax, with effect from 01.01.2021.
Towards fulfilling the recommendation, the Government has issued notifications and Circular to implement the Scheme of Quarterly Return filing and Monthly Payment of taxes (hereinafter referred to as “QRMP Scheme”) as below
⎯ Notification No. 81/2020 – Central Tax, dated 10.11.2020. (Notifies amendment carried out in sub-section (1), (2), and (7) of section 39 of the CGST Act vide Finance (No.2) Act, 2019.)
⎯ Notification No. 82/2020 – Central Tax, dated 10.11.2020. ( Makes the Thirteenth amendment (2020) to the CGST Rules 2017.)
⎯ Notification No. 84/2020 – Central Tax, dated 10.11.2020. (Notifies class of persons under proviso to section 39(1) of the CGST Act.)
⎯ Notification No. 85/2020 –Central Tax dated 10.11.2020. (Notifies special procedure for making payment of tax liability in the first two months of a quarter)
⎯ Circular No. 143/13/2020- GST dated 10.11.2020
This new Scheme QRMP will be effective from 01.01.2021 and a registered person who is required to furnish a return in FORM GSTR-3B, and who has an aggregate turnover of up to 5 crore rupees in the preceding financial year, is eligible for the QRMP Scheme.
The facility to opt for the QRMP Scheme on the common portal would be available throughout the year. A registered person can opt-in for any quarter from the first day of the second month of the preceding quarter to the last day of the first month of the quarter. Registered persons are not required to exercise the option every quarter. Where option has been exercised once, they shall continue to furnish the return as per the selected option for future tax periods, unless they revise the option.
As per the Circular supra, for the first quarter of the Scheme i.e. for January 2021 to March 2021, all the registered persons, whose aggregate turnover for the FY 2019-20 is up to 5 crore rupees and who have furnished the return in FORM GSTR-3B for the month of October 2020 by 30th November 2020, would be migrated on the common portal as per the default migration plan for the convenience of registered persons based on their anticipated behavior. However, registered persons are free to change the option as above, if they so desire, from 5th of December, 2020 to 31st of January, 2021.
Payment of Tax By Fixed Sum Method Under QRMP Scheme
Some salient feature with reference to opting for the scheme are as under:
⎯ In case the aggregate turnover exceeds 5 crore rupees during any quarter in the current financial year, the registered person shall not be eligible for the Scheme from the next quarter
⎯ All persons who have obtained registration during any quarter or the registered persons opting out from paying tax under Section 10 of the CGST Act during any quarter shall be able to opt for the Scheme for the quarter for which the opting facility is available on the date of exercising the option
⎯ The option to avail of the QRMP Scheme is GSTIN wise and therefore, distinct persons as defined in Section 25 of the CGST Act (different GSTINs on the same PAN) have the option to avail the QRMP Scheme for one or more GSTINs. In other words, some GSTINs for that PAN can opt for the QRMP Scheme, and remaining GSTINs may not opt for the Scheme.
The registered persons opting for the Scheme would be required to furnish FORM GSTR-1 and GSTR-3B quarterly. However, they have to make monthly payments using PMT-06 as per the Fixed sum payment or self-assessment based on the availably of sufficient balance in the Electronic credit/cash ledger. Further, as a facilitation measure registered person will have the facility (Invoice Furnishing Facility- IFF) to furnish the details of outward supplies to a registered person, as he may consider necessary, between the 1st day of the succeeding month till the 13th day of the succeeding month, for each of the first and second months of a quarter, and the details of outward supplies shall not exceed the value of fifty lakh rupees in each month.
It is understood that the QRMP scheme is aimed at the MSME sector and expected to reduce furnishing numbers GSTR-1 and GSTR-3B Returns. It is said that the QRMP will reduce the total number of GSTR-1/GSTR-3B filing from 24 to 8 or 16 to 8 if GSTR-1 is filed quarterly. Though it appears to be reduced to compliance, the fact is otherwise and there are lots of issues to be addressed and clarified by the CBIC and State Tax Authorities.
This article wishes to highlight such issues:
1. As per the scheme GSTR-1 and GSTR-3B have to be filed Quarterly only. In view of this, the availment of ITC by the recipient, refund claims on the export of goods/service, zero-rated supply to SEZ, and Deemed export is delayed considerably.
2. It is stated that in order to avail input tax credit, optional Invoice Furnishing Facility (IFF) has been provided, wherein the Registered person can upload the B2B invoices, Debit and Credit notes as per his requirements either all invoice issued or certain invoices only and such uploaded invoices will be made available in GSTR-2A and GSTR-2B for the recipient. Here the issue invoices up to the value of Rs.50 Lakhs’ can only be uploaded. Please also note that the IFF Scheme is optional and if the Outward supplier chose to upload only after the Quarter End. The recipient has to wait for more than 3 months to get the ITC credit to be reflected in GSTR-2A and GSTR-2B. Large taxpayer may try to avoid supplies from QRMP optee’s.
3. In the IFF, there is no provision to upload the invoices relating to Zero rated supply. Zero-rated supply can only be uploaded only after the end of the quarter. Now, IGST refunds are available within 15 days after filing GSTR-1 and GSTR-3B. In the QRMP scenario, this IGST refund would be possible only after 120 days. A big blow for the QRMP optee’s/MSME Exporters!
4. As per the Circular, the details furnished in IFF need not be shown again in GSTR-1. However, what about the amendments if any required? Such as incorrect GSTN date and other details and changes in the Tax category ie CGST/SGST to IGST vice versa. The amendment if any required, can be possible only after 6 months. To that extent, there will be a delay in availing of ITC also.
As per Notification no: 85/2020 CT dated 10/11/2020 and CBIC Circular on the QRMP, the Taxpayer opting for QRMP can opt deposit a fixed amount, 35% tax paid in cash in the preceding quarter where the return was furnished quarterly or equal to the tax paid in the preceding month where the return was furnished monthly or based on assessment -based payment in cash through PMT-06. This notification is w.e.f. 18/01/2021.
1. As of now there is no provision to make quarterly payment as GST-3B is monthly even if the GSTR-1 is filed quarterly. Hence for quarters Jan-2021 to March-2021, there is no way to opt for 35% tax paid in cash in the preceding quarter. So, the fixed payment if opted the Registered person has to make 100% of the amount paid in Cash.
2. Assuming that in the preceding month only CGST/SGST is paid in cash and for the QRMP first month the payment is required in IGST. What would be auto-generation of Challan by the portal if it generated for IGST or vice-versa and supply is otherwise? It is pertinent to note that ITC can be cross utilized but not Cash payment? Thus, it is seen that opting for the fixed payment mode lack clarity. Hope the CBIC issues necessary clarification immediately.
3. As the fixed mode needs clarity, is opting for self-assessment mode solves the issue. Unfortunately, it is not. As per the Rules if a sufficient balance is available in electron cash or electronic credit ledger no need to make payment using PMT-06. The ITC credit is credited in the Electronic credit ledger only after filing of GSTR-3B. GSTR-3B is filed Quarterly. Then how can a Register person ensure that sufficient balance is available in the Electronic credit ledger for the first month of the Quarter and the second month?
The scheme does not reduce the compliance burden but increased it by one more filing of information in Form PMT 06. The MSME has to reconcile the monthly GSTR 1 reporting and quarterly GSTR 3B to work out the liability.
This apart, now the Department has to monitor non-payment of PMT-06. More litigations.
Now, a new GSTR-2B is made available to avail ITC based on GSTR-1, and in order to avoid errors is in filing Auto-generated GSTR-3B has been provided. By and large many of the issues wrt GSTR-1 and GST-3B are settled.
In view of the foregoing, registered persons below Rs. 5 crores turnover are advised very cautiously to opt for the QMRP Scheme.
Please note GSTN has enabled opting-in for quarterly filing of GST returns under QRMP scheme.
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August 14, 2019 in GST Compliances
As per provision of GST Registered Taxpayer is required to File Annual Return (GSTR 9) once in a financial year on or before the 31st December following the end of the financial year and shall furnish in electronically through the common portal either directly or through a Facilitation Centre notified by the commissioner.
Before filing GSTR-9 please read
Download the full ppt on Guide to File GSTR 9, by clicking the below image:
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July 24, 2019 in GST Compliances
Here I have compiled a list of all circulars issued by CBIC related to refunds. You can download all of them. All circulars on refund by CBIC till date in one PDF. Refund in GST has seen a long journey. Initially, there was a lack of clarity. Provisions related to LUT have changed many times. CBIC tried to make it easy and simple every time. Issues of taxpayers are clarified by CBIC.
Issues related to furnishing of Bond/ Letter of Undertaking for Exports–Reg.,
Regarding issues related to Bond/Letter of Undertaking for exports without payment of integrated tax – Reg.
Circular on Bond/LUT in case of exports without payment of integrated tax
Clarification on issues related to furnishing of Bond/LUT for exports
Manual filing and processing of refund claims in respect of zero-rated supplies.
Refund of unutilized input tax credit of GST paid on inputs in respect of exporters of fabrics.
Manual filing and processing of refund claims on account of inverted duty structure, deemed exports and excess balance in electronic cash ledger
Processing of refund application for UIN entities
Clarifications on exports related refund issues
Clarifying the issues arising in refund to UIN.
Clarification on refund related issues
Clarification on certain issues related to refund
Refund of taxes paid on inward supply of indigenous goods by retail outlets established at departure area of the international airport beyond immigration counters when supplied to outgoing international tourist against foreign exchange – reg.
Practical aspects related to SBO ID
Download the pdf here.
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