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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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GST Update on recommendations of gst council with respect to filing of annual return part-12

GST Update on recommendations of gst council with respect to filing of annual return part-12


This Epistle is about the recommendations made during the 31st Meeting of the GST Council and communicated through the Press Release dated 22nd December,
2018. The present update encompasses the Amendments/Changes/Clarifications related to the Annual Returns and related forms including Form GSTR-9, Form
GSTR-9A and Form GSTR-9C.

The important points pertaining to amendments proposed with respect to annual return and related forms are as follows:
 Recently, there was extension in the due date of filing the Annual Return for the Financial Year 2017-2018 vide Order No. 01/2018-Central Tax dated 11.12.2018 wherein the due date was extended from 31.12.2018 to 31.03.2019. However, the Press Release re-schedules the due date of filing annual return for the period 01.07.2017 to 31.03.2018 to 30.06.2019. This is primarily due to the fact that a number of changes have been anticipated in the format of annual return and even the utility for filing the annual return is not operational. This announcement was truly desired as assessees are facing many issues in the first year of GST implementation.

 An important alteration has been done as regards the supplies to be reported in the annual return. It was stated that while filing the details of the Supplies etc in the forms of the Annual Return, “supplies as declared in returns filed during the year” was to be considered irrespective of the fact that wrong reporting was done in the monthly/quarterly returns filed during the financial year. This would lead to nothing but a true example of the famous idiom Garbage in, Garbage out. The assessee was under obligation to simply use the data reflected in the filed GSTR-1 and GSTR 3B returns irrespective of the actual position of supplies. However, the GST Council has proposed to amend the heading to “supplies made during the 
Year” implying that the information about supplies that were submitted in the returns GSTR-1 and GSTR-3B are not the sole basis of filing annual return and the figures of the annual return should incorporate the actual
position of supplies rather than that reported in the monthly/quarterly returns filed by assessee. This would really help the assessees in depicting true picture of their transactions if due to some reason, the rectifications
could not be made in the monthly/quarterly returns filed by them.

For example, while reflecting supplies for the month of March, 2018, the figure was wrongly reported as 70,00,000/- instead of Rs. 7,00,000 in GSTR-3B but
the tax was correctly paid on supplies of Rs. 7,00,000/-. If the assessee could not correct the value of supplies in the subsequent GSTR-3B returns filed upto September, 2018, the assessee was supposed to reflect the value of supplies as Rs. 70,00,000/- in annual return. However, with the proposal of the GST Council, the assessee would be required to correctly report the supplies as Rs. 7,00,000/- irrespective of what was reported in the monthly/quarterly returns filed by them.

 Moreover it is to be noted that all Returns in Form GSTR-1 and Form GSTR3B have to be filed before filing of Form GSTR-9 and Form GSTR-9C. Similarly, Form GSTR-4 (Composition Scheme) must be filed before filing Form GSTR-9A. It is to be noted that the returns for the period July, 2017 to September, 2018 have been permitted to be filed by 31.03.2019 without any late fees. Consequently, one more chance is being given to assessees to file the monthly/quarterly returns and thereafter file correct annual return.

 The reporting requirement at serial no. 18 of the annual return entailed assessee to report HSN wise summary of inward supplies which was cause of concern for entire trade and industry. This reporting was a tedious task particularly with respect of all inward supplies. For example in case of purchase of hardware items, a number of items can be part of invoice such as braces, brackets, door knobs, screws etc. and finding HSN codes of all such different items is a mind blogging task. Similar may be the case with a stationary bill involving number of items like pens, calculator, notebooks etc. having different HSN codes. Consequently, the trade and Industry represented the government to provide relaxation as regards this reporting requirement in annual return. It appears that the request has been partly considered and now, the HSN wise summary is required to be given only for principal inputs whose value independently amounts for 10% or more of the total value of the Inward supplies. This amendment is appreciated and welcomed by the trade and industry.

 It is also stated in the Press Release that additional payments if required to be made by the assessee via annual return are to be paid in cash through Form GST DRC-03. Hence, there will be cash outflow even if the assessee has sufficient balance of input tax credit. Furthermore, in contrast, it is also specified that ITC cannot be availed through annual return and reconciliation statement thereby indicating that assessee is liable to
discharge any additional liability in cash whereas assessee is not allowed to avail any ITC through annual return.

 All invoices pertaining to previous financial year (irrespective of the month in which such invoice is reported in Form GSTR-1) would be auto-populated in Table 8A of Form GSTR-9. It appears that there is some mistake in this
point as mentioned in the press release issued by the government because Table 8A of the GSTR-9 pertain to ITC as per GSTR-2A which would be auto populated. The press release talks about invoices reported in GSTR-1
whereas table 8A of GSTR-9 pertains to ITC on inward supplies which is totally different.

 At the time when the Annual Return was first introduced, there was confusion amongst the assessees about the term “No Supply” as there was no meaning of the said term in the CGST Act, 2017 or the rules made
thereunder. However, many experts opine that ‘no supply’ includes the activities mentioned in Schedule III of the CGST Act, 2017. It is clarified that value of ‘non-GST supply’ includes ‘no supply’.

 Last but not the least, as represented by the trade and industry that the last date of availment of input tax credit for the financial year 2017-18 should be extended, the said request has received approval of the GST council. The
last date of availment of Input tax Credit for the financial year 2017-18 as per provision of section 16(4) of the CGST Act, 2017 was 30th September 2018. However, ITC in relation to invoices issued by the supplier during FY 2017-18 can now be availed till the due date for furnishing of Form GSTR3B for the month of March, 2019 (i.e., 20th April, 2019). This was much awaited decision which is highly applauded by the assessees. However, the power of the government to extend the last date of availment of input tax credit needs to be examined as it requires amendment in provisions of CGST Act, 2017 that need to be passed by both houses of the Parliament, needs Presidential assent and also need to be passed by all the State Assemblies. The time needed to implement the extension of the last date to avail input tax credit appears to be too short as it usually takes 7-8 months for an amendment in CGST Act to materialize and the last date of
filing annual return as of now is 30.06.2019.

This is solely for the educational purpose.

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