Implementation of 47th GST Council Meeting Recommendations – Notifications and Circulars

In the 47th GST council meeting, certain recommendations were given for

• Refunds of accumulated ITC are not to be allowed in certain cases
• rate changes on certain goods & services
• Clarifications on GST rates on certain goods & services
• Certain trade facilitation measures by way of amendment in CGST Rules like change in the formula for calculation of refund in inverted duty cases
• further waiver of late fees for delay in filing of GSTR4
• Additional modes for payment of tax
• Clarifications on certain procedural issues and certain measures for streamlining compliances in GST have also been recommended in council meetings.

Many of the above recommendations have been notified vide Notifications no. 9 to 14 and Clarification given in circulars no. 170 to 176. A summary of the same is given hereunder :

• A registered person can now transfer the balance in the electronic cash ledger under this Act, to the ECL for IGST, CGST, SGST/UGST, Cess etc. and IGST & CGST of a distinct person. Note: Balance can only be transferred to the distinct person if the person has not any unpaid liability in the electronic liability register.
• Retrospective amendment u/s 50(3) w.e.f. 1 July 2017, in respect of interest, the same shall be payable not more than 24%, on the wrongly availed input availed & utilized.
• Taxpayers having Annual aggregate turnover up to Rs. 2 crores shall exempt from filing annual return in Form GSTR-9/9A for the financial year 2021-22.

Changes applicable to Composition Taxpayer :(Notification 11/2022 & 12/2022)

• Late fee waiver for delayed filing of GSTR-4 for FY 2021-22 extended from 18th July,2022 to 28th July 2022
• Composition taxpayers’ self-assessment tax statement (Form CMP-08) deadline for Apr-Jun’22 extended from 30th June to 31st July 2022.

Extend dates of recovery and notices/Orders :(Notification 13/2022)

• Time limit to issue notice for recovery of tax not paid, short paid or of ITC wrongly utilized for FY 2017-18 shall be allowed till 30th September 2023.
• Time period between 1st March 2020 to 28th February 2022 excluded for the computation of period of limitation u/s 73(9) (issuance of orders for recovery of erroneous refunds).
• Time period between 01-03-2020 to 28-02-2022 excluded for the computation of period for filing of refund application u/s 54 & 55.

Other Changes

• Revocation of GST registration Suspension: If the registration has been suspended due to non-filing of GST return but not cancelled by proper officer, shall be deemed to be revoked upon filing of all pending returns.
• Duty Credit Scrip: The value of duty credit scripts shall be not included in the aggregate value of exempt supplies for the reversal of common credits under Rule 42 and 43.
• Declaration on the invoice: The taxpayers having aggregate turnover exceeding ₹20 crores in any of the FY from 2017-18 and onwards, but not mandated to generate e-invoice shall be required to provide a declaration to that effect in the invoices issued by them.
• Erroneous refund: If the registered person deposited the erroneous refund amount along with interest & penalty through cash ledger, then an amount equivalent to the deposit by taxpayers through DRC-03, shall be re-credited to electronic credit ledger by proper officer by an order made in FORM GST PMT-03A.
• UPI and IMPS shall be allowed as modes of payment towards tax, interest, penalty, fees, or any other amount.
• FORM GST PMT-09 shall be used for the transfer of Cash ledger amount of CGST to the ECL for CGST or IGST of distinct person.
• Levy of interest on Net Cash liability and ITC wrongly utilized: Changes has been incorporated in Rule 88B regarding interest calculation only on the Net liability after utilizing the input for the delay in filing of GST return and in case of ITC wrongly availed, interest shall be calculated on the amount of ITC availed & utilized.
• Refund of accumulated ITC on the export of electricity: The documentary evidence for claiming a refund on accumulated credits on the export of electricity has been notified to ease the process of claiming refunds.
• Value of exports for claiming refund of accumulated ITC: For claiming refund of accumulated ITC on the export of goods, the value of goods shall be taken as lesser of the Declared FOB value in the Shipping bill or Bill of Export or value declared in the tax invoice/bill of supply Refund of accumulated credits due to inverted duty structure. The Formula has been amended to consider utilization of ITC on account of inputs and input services in the same ratio in which ITC had been availed during the said tax period. Advertisement Rule 95A providing differential treatment for a refund on supplies from Duty-Free Shops at international terminals has been withdrawn retrospectively from 1st July 2019.
• Refund of IGST paid on export of goods: Rule 96 has been retrospectively amended from July 2017 to make refund claims for exports of goods contingent on the matching of shipping details with GSTR-1 and, to provide for withholding of refunds where additional verification may be required.
• GSTR-3B: The format of GSTR-3B has been revised for reporting the supply of services through aggregators/e-commerce operators, the tax on which shall be paid by such operators. Table 4 for the ITC claims has also been revised.
• GSTR-9/9C: The format for GSTR-9 and 9C for FY 2021-22 and other forms have been amended/inserted in line with the changes in relevant provisions.

Various procedural aspects has been clarified by issuing circulars

• Correct disclosure aspects in respect of reporting of supply and Input tax credit reversals in Gstr3B has been clarified.
• Various case scenarios have been provided to clarify the matter of demand of tax and penalty in cases involving fake invoicing. However, it has also been mentioned that Actual action to be taken against a person will depend upon the specific facts and circumstances of the case which may involve a complex mixture of the above scenarios or even may not be covered by any of the above scenarios.
• The ITC availed by the recipient of deemed export supplies would not be subjected to provisions of Section 17 of the CGST Act, 2017.
• Availment of ITC is not barred in case of leasing of other item only barred for other than leasing of motor vehicles, vessels and aircrafts.(under sub-clause (i) of clause (b) of sub-section (5) of section 17 of the CGST Act)
• The perquisites provided by the employer to the employee in terms of contractual agreement entered into between the employer and the employee, will not be subjected to GST when the same are provided in terms of the contract between the employer and employee.
• Any payment towards output tax, whether self-assessed in the return or payable as a consequence of any proceeding instituted under the provisions of GST Laws, can be made by utilization of the amount available in the electronic credit ledger of a registered person.
• Refund of accumulated input tax credit on account of inverted structure as per clause (ii) of sub-section (3) of section 54 of the CGST Act, 2017 would be allowed in cases where accumulation of input tax credit is on account of rate of tax on outward supply being less than the rate of tax on inputs (same goods) at the same point of time, as per some concessional notification issued by the Government providing for lower rate of tax for some specified supplies subject to fulfilment of other conditions.
• The taxpayer shall deposit the amount of erroneous refund along with applicable interest and penalty, wherever applicable, through FORM GST DRC-03 by debit of amount from electronic cash ledger.
• The applicant would be required to file the application for refund under “Any Other” category electronically in FORM GST RFD-01, on the portal. Detail documents required for refund application is given in the circular.
• Earlier circular in respect of refund of tax paid on Inward supply of goods at outlets in international airports has been withdrawn.

Disclaimer:  This article is only a knowledge-sharing initiative and is based on the Relevant Provisions as applicable and as per the information existing at the time of the preparation. In no event, RMPS & Co. or the Author or any other persons be liable for any direct and indirect result from this Article or any inadvertent omission of the provisions, update, etc if any.

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