New Year 2020, along with new hopes and aspirations, also introduces some new changes under the GST, which are important for taxpayers to consider.
Restriction on claim of ITC:In order for decisions made in the GST Council meeting to be effective in the light of the video Notification No. 75/2019-Central Tax of 26 December 2019, Central Board of Indirect Taxes & Customs (CBIC) announced a special amendment to the Central Goods and Services Tax Rules 2017 (CGST Rules) which reduces the percentage of ITC eligible available for Availment which is not specified by the suplier.
The CBIC had previously, in video, Notification No. 49/2019 — Central Tax dated 9 October 2019, among other items, introduced a new sub-rule (4) to Rule 36 of the CGST Rules stating that a registered person is permissible to claim ITC on invoices or debit notes which the suppliers did not download in GSTR-01 (that is, not reflected in form GSTR-2A) to a maximum of 20 percent.
In Rule 36(4) of the CGST Rules, however, the percentages & words “10%” are replaced by the original numbers & words “20%” (i.e. 1 January 2020).
Accordingly, the supply of ITC in respect of invoices or debit notes, which vendors have not sent to GSTR-1, has now been limited to only 10 per cent of the total qualified credit.
Powers of Commissioner to block ITC under new Rule 86A: New Rule 86A of the CGST Regulations, Video Notification No. 75/2019- Central Tax from 26 December 2019, grants the Commissioner powers to determine or change the terms of use of the ITC available in the electronic credit list. Credit log. When amended, a commissioner may not authorize a debit of the total for waiver of tax liabilities or a demand of a refund of any accrued sums to be made in the tax register in the form of an electronic cash register if he has reason to believe that:
Availed fraudulently based on invoices from a non-existing person or from a person not conducting any business from any place for which registration has been obtained.
Availed without receipt of goods or services.
Availed on the strength of tax invoices etc., the tax charged in respect of which has not been paid to the Government.
Blocking of generation of E-way Bill, if GSTR-1not filed:Vide Notice No. 75/2019 “The central tax dated 26 December 2019, Rules 138E of the CGST Act, is updated to provide that, e.g. 11 January 2020, a two-month / quarter non-filing of the GSTR-1 would also obstruct e-way bill. The GSTR-1 and GSTR-3B should therefore be regularly released in 2020.
Mandatory E-Invoicing under GST:Under the terms of Notice No. 70/2019″Central tax of 13 December 2019, i.e. 1 April 2019, all registered persons with aggregate turnover of more than Rs. 100 crores on the basis of PAN India in a financial year shall generate e-invoices for B2B supplies and report on the GST common portals notified. Notice Notice No. 70/2019 ”
(i) www.einvoice1.gst.gov.in;
(ii) www.einvoice2.gst.gov.in;
(iii)www.einvoice3.gst.gov.in;
(iv) www.einvoice4.gst.gov.in;
(v) www.einvoice5.gst.gov.in;
(vi) www.einvoice6.gst.gov.in;
(vii) www.einvoice7.gst.gov.in;
(viii) www.einvoice8.gst.gov.in;
(ix) www.einvoice9.gst.gov.in;
(x) www.einvoice10.gst.gov.in.
These websites will be activated on January 01, 2020, with the aim of taxpayers ‘ adaptivity and of integrating their common portal with ASP & GSP. Thus, taxpayers should make the necessary changes in their system and IT infrastructure to enable them to produce e-invoices and to transition to the new system of e-invoicing smoothly.
Creating QR codes for B2C supplies: Within the framework of Notice No. 71/2019 – Central Tax and Notification No.72/2019 – Core Tax, both dated 13 December 2019, e.g. April 01, 2020, Quick Response Code (“QR Code”) become mandatory for non-registered individuals (B2C Invoice) if the invoice is issued by a registered individual, who in the financial year has a nominal turnover greater than Rs. 500 crore. However, if the Dynamic QR code is made available to the registered person via a digital display, the B2C invoice provided by the registered person with a cross-reference payment using a Dynamic QR Code is called a QR code.
New GST Returns system: At its 31st meeting, the GST Council decided to introduce a revised GST return system for taxpayers. Modern streamlined electronic GST refunds would be introduced by all taxpayers from 1 April 2020. This new system of returns will increase compliance and further reduce tax evasion. A transition plan was approved by the Council to smooth the transition to the new return system, and a press release dated 11 June 2019 was issued for information purposes.
This New Return System introduced two new forms, GST FORM ANX-1 and GST FORM ANX-2, effective April 1, 2020. Both elements are the annexes to the GSTRET-1/ RET-2/ RET-3 key return where appropriate. GST ANX-1 (Annexation of supplies) shall contain details of outward supplies, import of goods, services and inward supplies which may be reversed, i.e. where you execute tax liability. GST ANX-2 (Inward Supply Annex) will contain inward supply details from persons registered, imported and supplied by the SEZ unit / developer.
Quoting of DIN Mandatory by the Department in all Communications: In keeping with the government’s objectives of transparency and accountability in indirect taxation, the CBIC has put in place a Document Identification Number (DIN) Electronic (digital) generation system.
CBIC video Circular No. 122/41/2019-GST dated 5 November 2019, compulsory generation and quotation of DIN on documents stated w.r.t. for search authorisation, warrants, memoranda of detention, inspection notices, etc .. CBIC video However, Circular No. 128/47/2019- GST dated 23 December 2019 indicates that all messages (including e-mails) sent to taxpayers and other affected individuals by any CBIC office across the country are to be electronically generated and citing DIN and would take effect as of 24 December 2019.
Messages published without DIN not covered by the exceptional cases referred to in paragraph 3 of Circular 122/41/2019-GST of 5 November 2019 shall be considered null and never posted.
SOP for Non-Filers of GST Return:SOP for Non-Filers of GST Return:In the case of non-refunding by a registered individual (“defector”) in compliance with Sections 39 or 44 or 45 of the CGST Act 2017 (“CGST Act”), tax officers pursued divergent procedures as to the correct protocol for follow-up. Consequently, the following guidelines for ensuring uniformity in the application of provisions of the law across sector structures were issued in Circular No. 129/48/2019 –GST of 24 December 2019.
1-Three days before a return is filed due to enable them to file their returns by the due date for the tax year, a system-generated message will be sent to registered individuals.
2-A mail / message list is automatically forwarded to all defaulters, which indicates that the refund for the relevant tax period is not given once the furnishing return due date has expired pursuant to Section 39 CGST Act.
3-A GSTR-3A notification shall be given electronically 5 days after the due date on which the return was submitted to any person who has failed to return the return in compliance with CGST Act Section 39 requiring the individual to furnish it within 15 days.
4-If the return does not still arrive within 15 days of that date, the responsible officer may proceed in compliance with Section 62 of the CGST Act to assess the liability of such an individual, taking into account the relevant material available, or which he has gathered and issued an order under Rule 100 of the CGST Rules, FORM GST ASMT-13. The required officer should then file the review in FORM GST DRC-07.
5-The appropriate officer can consider for the purpose of determining liability under Article 62 of the CGST Act:
The details of the outward supplies available in a statement furnished under Section 37 of the CGST Act (FORM GSTR-1), The details of supplies auto-populated in FORM GSTR-2A, The information available from E-way bills, Or any other information available from any other source, including from inspection under Section 71 of the CGST Act.
6-If the defaulter returns a valid assessment order within 30 days of the FORM GST ASMT-13 service, the valid return shall be deemed to be withdrawn in accordance with section 62(2) of the CGST Act. Moreover, in cases where such return remains unfurnished within 30 days of order issuance in FORM GST ASMT-13 the responsible official may initiate a proceeding in accordance with Section 78 and the recovery of the order in accordance with Section 79 of the CGST Act.
The Commissioner may, in eligible situations, resort to the temporary attachment to protect revenue in compliance with Section 83 of the CGST Act prior to issuance of FORM GST ASMT-13.
In addition, in cases where return has not been provided for the period specified in Section 29, the appropriate officer would initiate action for cancelation of registration pursuant to sub-section (2) of Section 29 of the CGST Act.
Reverse Charge (RCM) on Renting of Motor Vehicles: Serial No. 15 of Notification No. 13/2017-Central Tax (Rate) of 28 June 2017 (“RCM Notification”) was amended to provide, on 31 December 2019, that RCM shall apply to operation by hiring any motor vehicle expected to be used to transport passengers, where the fuel cost is included in the fuel charging fees for the service.
(a) is other than a body corporate;
(b) does not issue an invoice charging GST@12% from the service recipient;
(c) supplies the service to a body corporate located in the taxable territory.
It is noted that the above addition to the RCM Notification is clearly of clarifying nature and, thus, also extends for the period from 1, October 2019 to 31 December 2019. Vide F. No. 354/189/2019-TRU is not clear.
In addition to the above changes and new systems coming into operation in the New Year 2020, this new year is important also for the following events, which will be continued from 2019.
Extension of last date for filing of TRAN-1 & TRAN-2:To enrolled taxpayers, the due dates to furnishing TRAN-1 Form and TRAN-2 Form have been extended until 31 March 2020 and 30, 2020, respectively, in the video Notice No. 02/2020 “Central Tax of 1 January 2020.
Waiver of late fees for Non-filing of GSTR-1:As per notification No. 74/2019 “Central tax dated 26 December 2019, if taxpayers who failed to submit the GSTR-1 form, i.e. the external supply of the goods and services, can file certain returns before 10 January 2020 from July 2017 to November 2019 and the late charge has been waived for that reason.
GST Audit and Annual Return for F.Y 17-18 & F.Y 18-19:The date on which GST’s annual return is due, i.e. GSTR-9 Audit report, Statement of Reconciliation i.e. GSTR “for the F.Y.9C. Also extended from 2017-18 to 31 January 2020.
In turn, the filing date for GSTR-9 and GSTR-9C for the 2018-19 FY was extended to 31 March 2020.
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