01. GOODS AND SERVICES TAX
NOTIFICATIONS AND CIRCULARS
Key GST Notifications pursuant to 43rd GST Council Meeting
|Notification No. and date||Particulars|
|Notification No. 16/2021-CT dated 01 June 2021||Appoints 01.06.2021 as the day from which amendment of section 50 of the CGST Act, 2017 vide of section 112 of Finance Act 2021, shall come into force.|
|Notification No. 23/2021-CT dated 01 June 2021||Amends Notification No. 13/2020-Central Tax to exclude government departments and local authorities from the requirement of issuing of e-invoices.|
|Ad Hoc Exemption Order No. 05/2021 dated 31 May 2021||Ad hoc Exemption Order No. 4/2021-Customs is amended to extend the exemption from IGST on imports of specified COVID-19 relief material donated from abroad, up to 31 August 2021.|
Notification No. 32/2021-Cus dated 31 May 2021
Corresponding instructions issued under Instruction No. 09/2021-Customs dated 3 May 2021.
|Exempts IGST on import of COVID-19 relief materials specified under Notification No. 27/2021-Cus dated 20 April 2021 and Notification No. 28/2021-Cus dated 24 April 2021, when imported for donation to Central or State Government or to any relief agency entity or statutory body (on recommendation of State authority), for free distribution, subject to specified conditions. Exemption is granted for imports up to 31 August 2021.|
|Notification No. 01/2021-Central Tax (Rate) and No. 01/2021- Integrated Tax (Rate) both dated 02 June 2021.||
Changes CGST and IGST rates for Diethylcarbamazine from 6% and 12% to 2.5% and 5% respectively.
Rate for Toy Baloons made of natural rubber latex classifiable under CTH 9530 will be taxable at 2.5% and 5% respectively.
|Notification No. 02/2021- Integrated Tax (Rate) and No. 02/2021- Central Tax (Rate) both dated 02 June 2021||
Amends notification No. 08/2017- Integrated Tax (Rate) and Notification No. 08/2017-CT (Rate) to notify CGST rates of services such as MRO in respect of ships, vessels, their engines, components or parts (2.5% CGST and 5% IGST).
Landowner/ promoter can utilize credit of tax charged to him by developer / promoter for payment of tax on apartments supplied by land-owner promoter in respect of the project.
|Notification No. 03/2021- Integrated Tax (Rate) and No. 03/2021- Central Tax (Rate) both dated 02 June 2021||Amendments made about payment liability and modalities of payment for promoters receiving developments rights or FSI or long- term lease for construction of residential apartments.|
Amnesty Scheme to provide relief to tax-payers regarding late fee,
compliance relaxations, reduced interest rates and simplification
of Annual return for FY 2020-21
|Notification No. and date||Particulars|
|Notification No. 17/2021-CT dated 1 June 2021||Extends the due date for FORM GSTR-1 for May 2021 by 15 days.|
|Notification No. 18/2021-CT dated 1 June 2021||Lowers interest rate for tax periods between March 2021 to May 2021.|
|Notification No. 19/2021-CT dated 1 June 2021||
|Notification No. 20/2021-CT dated 1 June 2021||Rationalizes late fee for delayed filing of FORM GSTR-1.|
|Notification No. 21/2021-CT dated 1 June 2021||Rationalizes late fee for delayed filing of FORM GSTR-4.|
|Notification No. 22/2021-CT dated 1 June 2021||Rationalizes late fee for delayed filing of FORM GSTR-7.|
|Notification No. 24/2021-CT dated 1 June 2021||Extends due date of compliances which fall during 15 April 2021 to 29 June 2021 till 30 June 2021.|
|Notification No. 25/2021-CT dated 1 June 2021||Extends due date for filing FORM GSTR-4 for financial year 2020-21 to 31 July 2021.|
|Notification No. 26/2021-CT dated 1 June 2021||Extend the due date for furnishing of FORM ITC-04 for Quarter ended March 2021 to 30 June 2021.|
|Notification No. 03/2021- Integrated Tax dated 02 June 2021||Amends Notification No.4/2019- Integrated Tax to change the place of supply for B2B MRO services in case of Shipping industry, to the location of the recipient.|
|Notification No. 02/2021- Integrated Tax dated 01 June 2021||Amends Notification No. 6/2017 – Integrated Tax, dated the 28 June 2017 to lower interest rate for the tax periods between March 2021 to May 2021.|
Amendments with respect to refund related provisions
- Proviso has been added to Rule 90(3) of the CGST Rules to exclude time period between filing of claim in GST RFD 01 and date of communication of deficiencies in GST RFD 03 from the limitation period of 2 years prescribed under Section 54(1) of the CGST Act, in respect of fresh refund claim filed after rectification of deficiencies.
- Rule 90(5) of the CGST Rules has been introduced which gives the application an option to withdraw refund application by filing FORM GST RFD 01W before issuance of provisional/final refund sanction order/ payment order or refund withhold order/ notice in respect of any refund application.
- Rule 90(6) of the CGST Rules has been introduced which provides for withdrawal of refund of any amount debited from electronic credit ledger or electronic cash ledger while filing the application shall be credited back to the ledger from which such debit was made.
- Rule 92 of the CGST Rules has been amended to bring about procedural changes in Part A and Part B of Form RFD07 to be used by Revenue Authorities for withholding / adjustments / release of funds. Similar amendments have been made in Rule 96 of the CGST Rules as well.
- Rule 23(1) of the CGST Rules has been amended to align it to Section 30(1) wherein the Commissioner or Joint Commissioner or Additional Commissioner will now have powers to allow registered persons extension beyond 30 days to apply for revocation of cancellation. Corresponding changes have also been made in FORM GST REG 21. Large companies will have a waiting period of 90 days before such companies can respond to revocation.
[Notification No. 15/2021-CT dated 18 May 2021]
Relaxation in GST compliances
- Fourth proviso of Rule 26 of CGST Rules has been amended to extend time for companies to furnish FORM GSTR-3B and FORM GSTR-1 or invoice details using Invoice furnishing facility verified through e-verification code, up to 31 August 2021.
- Second Proviso to Rule 36(4) of the CGST Rules has been amended whereby FORM GSTR-3B can be furnished for quarter ending June 2021 with cumulative adjustment of ITC for the months April, May and June 2021 complying with the capping of 5%.
- For quarterly return filers, second Proviso to rule 59(2) has been amended to extend timelines for furnishing details of monthly invoices for moth of May 2021 using Invoice Furnishing Facility (IFF), electronically till 28 of June 2021.
[Notification No. 27/2021-CT dated 1 June 2021]
Key Circulars, orders and instructions
|Circular No. and date||Particulars|
|FIN/REV-3/GST/1/08 (Pt-1) (Vol.1) dated 27 May 2021||Nagaland announced relaxations for procurement of oxygen cylinders and related items from suppliers / manufacturers possessing valid GSTIN issued by any State or Union Territory, subject to certain conditions.|
|Circular No. 148/04/2021-GST dated 18 May 2021||Prescribes Standard Operating Procedure (SOP) for extension of time limit to apply for revocation of cancellation of registration under section 30 of the CGST Act 2017 and rule 23 of the CGST Rules 2017. The circular provides guidelines for implementation of the provision for extension of time limit for applying for revocation of cancellation of registration under the said section and rule.|
|F.NO.FIN/REV/GST/MISC/23/2017 dated 11 May 2021||Nagaland announced Appointment of State Nodal Authority for grant of Ad hoc Exemption as per Order No. 4/2021-Customs, dated 03 May 2021.|
|F.NO.FIN/REV/GST/MISC/23/2017 dated 11 May 2021||Nagaland announced Appointment of State Nodal Authority for grant of Ad hoc Exemption as per Order No.4/2021-Customs, dated 03 May 2021.|
|Clarifications regarding Ad hoc Exemption Order No. 4/2021-Customs dated 3 May, 2021 (said Order) exempting IGST on imports of specified COVID-19 relief material subject to conditions last updated on 7 May 2021||
The FAQs provides the following clarifications:
|Government Order No. 155-FD of 2021 dated 5 May 2021||The Government of Jammu & Kashmir announced a Liberalized Policy on International Assistance during Covid-19 elaborating upon the Role of States/ UTs. The Order provides for certification of exemptions claimed on custom duty / IGST in respect of items Imported for Covid-19 related urgencies and Coordinates for all activities related to above with Ministry of Finance, Government of India.|
|Circular No. 6146/CT dated 5 May 2021 issued by Odisha Government||Encourages and facilitates import of COVID-19 related relief materials like drugs/ medicines/ vaccines/ oxygen concentrators/ equipment's etc. donated from aboard for free distribution in Odisha. This includes setting up of help desks, appointment of Nodal officers and ensuring that the goods mentioned above are distributed free of cost with the help of appointed functionaries.|
|Ad hoc Exemption Order No. 4/2021-Customs dated 03 May 2021||Exempts IGST on imports of specified COVID-19 relief material donated from abroad as specified in the Notification No. 27/2021-Customs, dated the 20 April 2021 and Notification No. 28/2021-Customs, dated the 24 April 2021 up to 30 June 2021|
|Circular No.150/06/2021-GST Dated 17 June 2021||Services by way of construction of road inter alia covers general construction services of highways, streets, roads railways, airfield runways, bridges and tunnels. Consideration for construction of road service may be paid partially upfront and partially in deferred annual payments (and may be called annuities). Entry 23A of Exemption Notification No 12/2017 does not apply to construction services.|
|Circular No.152/06/2021-GST Dated 17 June 2021||Works contract service provided by way of construction such as of rope way would fall under entry at Sl. No. 3(xii) of notification 11/2017-(CTR) and attract GST at the rate of 18%.|
|Circular No.151/06/2021-GST Dated 17 June 2021||
CBEC has issued clarification stating that GST on examination fee, entrance fee, online examination, etc. charged by Central or State Board (such as NBE/ DNB/ FNB) would be exempted under Notification No 12/2017-CT(R).
However, services such as accreditation to an institution or to a profession (accreditation fee or registration fee such as fee for FMGE screening test) would be subject to GST at the rate of 18%.
CASE LAWS | SUPREME COURT & HIGH COURTS
GST on import of oxygen concentrators and oxygen cylinders
Supreme Court admitted revenue's appeal against order of Delhi High Court which struck down levy of IGST on oxygen concentrators, imported for personal use as unconstitutional. The apex court noted that arguable questions are raised which merit stay of the operation of the impugned judgment and order of the Delhi High Court. Union of India argued that the judgment of the High Court impedes with public policy. Issues concerning classification of concentrators were also highlighted.
[Ministry of Finance (Department of Revenue), Government of India vs Gurcharan Singh – Special Leave to Appeal (C) No.7226/2021]
Delhi High Court, while allowing the writ petition held that IGST on import of Oxygen Concentrators, as gift, for personal use is unconstitutional
[Gurcharan Singh vs Ministry of Finance – WP(C) 5149/2021].
Khaitan & Co. is arguing an identical matter before the Bombay High Court where notice has been issued to the Respondents
[Monica Daryanani vs UOI & Ors. WP (L) No. 11549 of 2021].
Khaitan & Co. is also arguing a similar matter in respect of import of oxygen cylinders, for distribution to State Governments, free of Cost. Complying with the directions issued by Hon'ble Delhi High Court, GST Council and the Central Government exempted IGST on import of such oxygen cylinders when imported for distribution to the State Governments free of Cost. Delhi Government, in the present case is contemplating granting refund / reimbursement of IGST paid on procurement of oxygen cylinders prior to institution of the petition.
[Order dated 31 May 2021 issued in the case of International Cargo Terminals and Rail Infrastructure Pvt Ltd vs Union of India and Ors. [WP(C) 5568/2021]
DGAP prevented from enforcing coercive measures
The Delhi Court while entertaining a writ petition against order confirming profiteering amount under Section 171 of the CGST Act, instructed Directorate General of Antiprofiteering (DGAP) and the National Antiprofiteering Authority (NAA) not to subject petitioner to any coercive action in the interim. High Court observed that two out of the three entities against whom DGAP and NAA alleged/confirmed profiteering have passed on a substantial profiteered amount to their customers and one remaining entity will pass on profiteered amount before next hearing.
[Nirala Projects Pvt Ltd vs Union of India & Ors. – WP(C) 9931/2020 & CM APPL 31620/2020]
Ruling on attachment proceedings
The Madras High Court allowed the writ petition challenging attachment order issued under Section 83 of the CGST Act. The Court held that attachment proceedings cannot be at the cost of rights protected under Article 19(1)(g) of the Constitution to practise any profession, or to carry on any occupation, trade or business. The Court observed that petitioner discharged 27% of the proposed and estimated tax dues and a mechanism is available under Sections 73 and 74 of the Act for proper adjudication, determination of the tax liability. Accordingly, the Court held that there is no need to attach bank accounts of the petitioner. The Court also directed the DGGI to complete the investigation and issue appropriate show cause notice as expeditiously as possible, to protect the interest of the Revenue.
[Sri Marg Human Resources Pvt Ltd vs The Principal Additional Director General, DGGI, Chennai Zonal Unit – WP No 11284 of 2021 and WMP No 11936 of 2021]
Parliament alone can make laws for levying GST on inter-state trade or commerce
The High Court of Tripura held that the State legislature cannot frame laws taxing inter-State sale of electricity in light of Entry 54 of the State List in 7th Schedule of the Constitution. The High Court took a view that Entry 54 of the State List confines the powers of the State legislature to only six specified items. A central legislation in the form of the IGST Act levies tax on supply of goods in course of inter-State trade or commerce and would bring within its sweep supply of electricity. The State Legislature providing for duty on inter-State sale of electricity would thus encroach an occupied field. The Court further observed that levy of tax on interstate sale of electricity is beyond the state legislature. Accordingly, section 4(4)(d) of the Tripura Electricity Duty Act 2019 was held unconstitutional and ultra vires the Constitution. It was further ordered that duty collected on inter-state sale of electricity an effectively is illegal and liable to be refunded.
[ONGC Tripura Power Company Ltd vs State of Tripura – WP(C) No.14/2021]
Interest on delayed refund
The Madras High Court ordered payment of interest at 9% on delayed refund payable till date of remission of refund amount. Court concluded that petitioner has complied with the requirements of sub-clauses (a) and (b) of Sub-Rule (1) of rule 96 of CGST Rules, 2017. Hence, it is incumbent on the respondents to refund the IGST as claimed by the petitioner.
[Modern India Products vs Assistant Commissioner of Customs WP (MD)No 9796 of 2020]
Ad-interim bail fake input tax credit case
The Supreme Court granted ad-interim bail to the petitioners in a case involving alleged availment of Input Tax Credit on fake invoices. Bail was granted on the condition of furnishing security of four crores within four months. It was clarified that in case the above conditions are not complied with, the order granting facility of ad-interim bail shall stand recalled and the petitioner will have to surrender himself before the concerned authorities.
[Mohit Bathla vs Commissioner of Central Goods and Service Tax – Special Leave to Appeal (Crl.) No(s) 3668/2021]
Ad Hoc method of assessment in absence of GSTR-3B is arbitrary
The Telangana High Court set aside assessment order confirming liability by multiplying the average monthly SGST tax paid by three times to determine liability in the absence of FORM GSTR-3B returns. The court held the assessment to be arbitrary and contrary to the provisions of the TGST Act. The Court also held that the levying of 100% penalty in such a case is not justified in law. The assessment was remanded back to the respondent for fresh consideration.
[Golden Mesh Industries vs Assistant Commissioner (State Tax) - WP No. 7789 of 2021]
Applicant cannot be made liable for an error in the GSTN
The Madras High Court held that the petitioner cannot be allowed to suffer denial of refund due to error in the software of GSTN when he is otherwise eligible for refund. Refund was denied on account of a technical glitch. Error having occurred due to auto-population, the Court held refund rejection to be unfair. Refund claims got auto populated under the head of SGST when refund was claimed for CGST and IGST. Court held that the petitioner is eligible for refunds under the other two heads basis manual application filed.
[Mehar Tex vs Commissioner of Central GST And Central Excise, Madurai – WP (MD) Nos 22996, 22999 & 23001 of 2019 and WMP (MD) Nos 19733, 19736 & 19739 of 2019]
Violation of Natural Justice when adverse order passed despite request for hearing
The Court set aside adverse order in the presence of written objections filed by the petitioner even when specific objection to show cause notice was absent. Court held that an opportunity of hearing must be granted where a request is received in writing from the person chargeable with tax or penalty or where any adverse decision is contemplated against such person as per sub-section (4) of section 75 of the CGST Act.
[Ocean Sparkle Limited vs Assistant Commissioner (ST) – WP No. 9162 of 2021]
Violation of Natural Justice when order and SCN issued on the same day
The High Court of Tripura held that final demand order suffers from the from grossest possible violation of principles of natural justice since the order was passed on the same date on which the show cause notice required the petitioner to appear before the authority. Court concluded that order was issued before an opportunity could be afforded to the assessee to respond to the notice. Demand order was quashed and set aside by the Court.
[Rimi Sales Agency vs Union Of India – WP(C) No.1185 of 2018]
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