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Corporate News *  Service tax penalty can’t survive when assessee acted on dept.’s own view of non-taxability: Delhi High Court. *  GST section 74 extended limitation questionable when form 26AS mismatch was already known: Karnataka High Court grants interim relief. *  CGST demand prima facie impermissible after state GST settlement under section 128A: Bombay High Court. *  Supreme Court asks GSTAT to sympathetically consider delay as taxpayers pursued remedy before wrong forum. *  Supreme Court stays Tripura High Court ruling protecting genuine buyers from ITC denial over supplier’s GST default. *  Diary entries alone can’t prove clandestine removal of goods: CESTAT quashes excise penalty on steel trader. *  Customs could investigate preferential tariff claims even before sec. 28DA: Delhi High Court. *  Customs dept. relied on fake AI generated case laws: supreme court quashes Rs. 425.28 crore penalty. *  No GST exemption in affiliation and annual registration charges for admission or conduct Of examinations: GSTAT. *  Mere invoices, cheque payments insufficient to establish genuine movement of goods: GSTAT restores Rs. 43.44 lakh ITC demand. *  Consolidated GST show cause notice covering multiple financial years is not without jurisdiction: Delhi High Court. *  Construction of independent houses on separate plots not taxable as ‘Residential Complex’ without common facilities: CESTAT. *  GST penalty exceeding statutory maximum unsustainable; Allahabad High Court quashes ? 50,000/- penalty after taxpayer filed return and paid late fee. *  GST order against standard chartered bank passed without hearing set aside by Bombay High Court. *  Retracted statements can’t be relied upon without cross-examination: CESTAT quashes gold confiscation. *  Burden to prove misclassification lies on customs department: CESTAT. *  CESTAT quashes Rs. 98 lakh excise demand on clearance of used refractory brick scrap. *  Service tax demand on irrigation works quashed: Karnataka High Court rules sale of goods component not taxable as service. *  GSTAT restores tax and penalty for transporting iron scrap without E-way bill citing intent to evade tax. *  Madras High Court stays GST recovery from directors without opportunity to show cause under section 89. *  Madras high court stays GST recovery notice against directors; finds prima facie case on applicability of section 79(1)(c). *  Procedural lapses can’t justify harsh punishment without serious customs breach: CESTAT quashes customs broker licence revocation. *  Service tax payable on land leasing and sports complex charges: CESTAT. *  Settled customs dispute can’t be reopened through Article 226 challenge to interest liability: Delhi High Court. *  Mere facilitation of customs clearance can’t establish knowledge of smuggling: Madras High Court. *  GST registration cancellation stayed: Allahabad High Court questions 99% ITC utilisation cap under rule 86B. *  Composition scheme lapses automatically on crossing Rs. 1.5 crore turnover: GSTAT. *  Gujarat High Court quashes GST cancellation orders after officer relied on non-existent AI-generated case laws. *  Importers liable for customs duty benefits availed through manipulated scrips: Delhi High Court. *  Procedural E-way bill lapse alone can’t justify penalty where genuine transaction and absence of tax evasion are established: GSTAT.
Subject News *  Documentary evidence dominates probe, further custody unwarranted: mumbai court grants bail in Rs. 22.44 crore customs duty evasion case. *  Business premises can’t remain sealed for non-participation in GST search: Allahabad High Court. *  GST pre-deposit must be refunded proportionately when taxpayer partly succeeds in appeal: Bombay High Court. *  Supreme Court grants 30 days to file GST appeal; keeps pre-deposit issue open due to deposit in parallel CGST proceedings. *  GST demand can’t exceed amount proposed in SCN: Allahabad High Court quashes Rs. 20.47 Crore order. *  Hundreds-of-crores GST demand and heavy 10% pre-deposit no ground to bypass statutory appeal: Punjab & Haryana High Court. *  Delhi High Court refuses to entertain challenge to gold confiscation due to statutory appeal remedy and unexplained delay. *  Procedural error in customs broker licence inquiry can be rectified through remand: Delhi High Court. *  GSTR-2A mismatch alone can’t justify ITC denial without invoice-wise verification; personal hearing mandatory: GSTAT. *  GST order passed without uploading personal hearing notices violates sec. 75(4): Allahabad High Court. *  TAX EVASION - Sec. 74 GST SCN quashed for not spelling out fraud, wilful misstatement or suppression: Allahabad High Court. *  STPI’s SOFTEX certification and NoC charges taxable as business support services: CESTAT. *  Suspicion can’t replace proof: CESTAT quashes penalty in alleged gold-smuggling operation. *   Limitation runs from communication of order: Madras High Court upholds rejection of delayed GST Appeals. *  Rajasthan High Court quashes GST demand over unsigned show cause notice. *  ITC recovery upheld where supplier failed to deposit GST: Rajasthan High Court. *  Customs commissioner’s empowered to make port trust liable for duty on pilfered goods: Supreme Court. *  Rectification proceedings can’t be used to challenge an uncontested GST assessment through a writ petition: Andhra Pradesh HC. *  GST proceedings against deceased proprietor unsustainable without notice to legal heir: GSTAT. *  Mere availment of ineligible self-assessed ITC doesn’t amount to suppression without evidence of fraud or wilful misstatement: GSTAT. *  Disposal of mining overburden by entity authorised by mining lease holder constitutes taxable service: CESTAT. *  Toll plaza data not mandatory for ITC refund: GSTAT. *  Disputed GST fraud allegations require investigation: Punjab and Haryana High Court makes interim bail absolute in alleged fraud and GST fraud case. *  Non-manufacturer contractor liable to deposit excess excise duty collected from buyer: CESTAT. *  GST order can’t reject taxpayer’s reply as “not satisfactory” without reasons: Madhya Pradesh High Court. *  Uncorroborated statements can’t establish alleged diversion of duty-free goods: CESTAT. *  Erection services were not liable to service tax prior to 10th september 2004: CESTAT. *  Sec. 74 GST notice must spell out statutory ingredients for invoking extended tax demand proceedings: Allahabad High Court. *  No jurisdictional bar under section 6(2)(b) in parallel CGST SGST proceedings: Delhi High Court refuses to bypass GST appeal remedy. *  Madras High Court remits GST demand for fresh adjudication after taxpayer claims it was unaware of SCN following business closure.  

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EXTENSION OF DUE DATES AND SOME PRECAUTIONS TO BE TAKEN IN THE AMID OF CORONA IN GST

EXTENSION OF DUE DATES AND SOME PRECAUTIONS TO BE TAKEN IN THE AMID OF CORONA IN GST

Union Finance Minister Nirmala Sitharaman yesterday announced various statutory and regulatory compliance relief measures amid a complete shutdown almost all over the country to control the spread of the highly contagious coronavirus or Covid-19 infection. All the due date for issue of notice, notification, approval order, sanction order, filing of appeal, furnishing of return, statements, applications, reports, any other documents, time limit for any compliance under the GST laws where the time limit is expiring between 20th March 2020 to 29th June 2020 shall be extended to 30th June 2020.

 Let’s discuss the compliances that need mandatorily to be done by 30th June, 2020.

1.      Application of LUT for export of goods or services without payment of IGST for the FY 2020-21-In terms of rule 96A of CGST Rules, 2017 , any registered person availing the option to supply goods or services for export without payment of IGST shall furnish, prior to export, a bond or a LUT in Form GST RFD-11. Such LUT shall be valid for the whole financial year. For the Financial Year 2020-21 facility to upload the same has been enabled on GSTN portal as well. But from above, it is not clear whether its date is also extended till 30.6.2020.

2.      Opting for Composition Scheme for FY 2020-21-In terms of rule 3(3) of CGST Rules any normal registered taxpayer who is opting to pay tax under sec 10 of CGST Act shall electronically file intimation in Form GST CMP-02, duly signed or verified through electronic verification code, on the common portal, either directly or through a Facilitation Centre notified by the Commissioner, prior to the commencement of the financial year. In terms of sec 18(4) of the CGST Act, the registered person opting to pay tax under composition scheme is required to pay an amount equal to the input tax credit in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date of exercise of option. Hence, the extension of date of option to composition scheme is welcome step. There are certain points to be remembered. Firstly, those who had opted last year for composition scheme need not to opt again for this scheme. But the person coming from normal levy can opt upto 30.6.2020 but they should start issuing under this scheme from 1.4.2020. Hence, the reversal can be done upto 30.6.2020. The person who is opting out of composition scheme has to claim the credit on stock.

3.      Banking company to opt for 50% straight forward credit- As per section 17(4) of the CGST Act, banking companies or financial institutions including a non-banking financial companies, engaged in supplying services by way of accepting deposits, extending loans or advances shall have the option to either: (i) comply with the provisions of section 17(2) i.e. amount of credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies including zero-rated supplies; or (ii) avail of, every month, an amount equal to fifty per cent of the eligible input tax credit on inputs, capital goods and input services in that month and the rest shall lapse However, this option is to be availed at the beginning of the financial year and once either of the option is exercised, it shall not be withdrawn during the remaining part of the financial year. The option can be opted till 30th June, 2020 now.

4.      Option to a supplier of service in relation to the purchase or sale of foreign currency, including money changing-For the purpose of valuation, a supplier of services in relation to the purchase or sale of foreign currency, including money changing, has two options of valuation of their services and it needs to be taken at the beginning of the financial year, The option can be opted till 30th June, 2020 now.

5.    Extending the due dates for filing of TRAN-1 & 2
- The due dates have been extended to March 31, 2020, to April 30, 2020, for furnishing Form TRAN-1 & TRAN-2 by the registered taxpayers via Notification No. 02/2020 – Central Tax dated January 1, 2020. Now the taxpayers can file TRAN 1 and TRAN  2 before 30th June,2020 whose cases are recommended by GST council or not able to file these returns due to technical glitches on portal. But the demand of assessee to allow filing to those assessee who have not filed TRAN-1 and TRAN-2 has not accepted by the department inspite of number of favourable decisions from High Courts.

6.      Payment under Sabka Vishwas scheme- Payment date under Sabka Vishwas Scheme shall be extended to 30th June, 2020. No interest for this period shall be charged if paid by 30th June, 2020. The option for the scheme ended on 15.1.2020. Though the Finance minister message in Media gave an impression that date is extended to 30.6.2020. But this is not the case. The payment date under the scheme was one month from the date of issue of SVLDRS-3 but it was unofficially extended to 31.3.2020. This is confirmed from the fact that those who have not paid the amount, the extended date of 31.3.2020 was shown on portal. Now this date of payment is extended to 30.6.2020 without any interest or penalty.

7.      Extension of issuance of Advance Authorisation license – An authorization is valid for 12 months for procurement of inputs, i.e. goods must be procured within 12 months from the date of issue of authorization. Further the export of finished goods must be completed within 18 months from date of issue of Authorisation. If the EPCG license or advance authorisation license validity is expiring between the period from 20th March 2020 to 29th June 2020, then the time for extension for validity shall be started from 30th June 2020. But it is told that this will be extended on case to case basis. But it will give rise to corruption. Hence, it is requested that it should be extended in each case.
 
8.      Extension of limitation period:Supreme Court passes order extending period of limitation under all Central and State Acts with effect from 15th March, 2020 to till further orders. Supreme Court exercises its power under Article 142 to declare it as law. To obviate difficulties caused by CoronaVirus in filing petitions/ applications/ suits/ appeals/ all other proceedings within the period of limitation prescribed under the general law of limitation or under Special Laws (both Central and/or State) , it is ordered that the period of limitation in all such proceedings, irrespective of the limitation prescribed under the general law or Special Laws, whether condonable or not, shall stand extended w.e.f. 15th March 2020 till further order/s to be passed by this Court in present proceedings. Order is being forwarded separately.
   
9.      In a further development, cases of very urgent nature is being heard by Apex Court as well as High Courts through video confercing.In the same manner, it is requested, important issues like hearing in cases where bank accounts are attached or goods are seized or submission of statement in case audit of risky exporters should be done by digital mode. The priority can be fixed but it can be done authorities through video conferencing or through digital mode. Even the hearing in CESTAT and other appellate authority in cases of urgent nature or having high stake can be heard online.
 
10.Extension of hearing of appeals, deposition of documents against any appeal , notice etc, reply to all the orders- Due date for issue of notice, notification, approval order, sanction order, filing of appeal, furnishing of return, statements, applications, reports, any other documents, time limit for any compliance under the GST laws where the time limit is expiring between 20th March 2020 to 29th June 2020 shall be extended to 30th June 2020. Eg, If the reply of appeal to CESTAT has to be filed till 20th May,2020, then the same reply can be filed now till 30th June,2020.

 
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