disclaimer: although due care and diligence have been ......disclaimer: although due care and...

Disclaimer: Although due care and diligence have been taken in preparation of this Newsletter, the Institute shall not be responsible for any loss or damage, resulting from any action taken on the basis of the contents of this Newsletter. Any one wishing to act on the basis of the material contained herein should do so after cross checking with the original source.

[ 3 ] ICSI-GST Newsletter

MESSAGE FROMPRESIDENT

Dear Professional Colleagues,

India is leading as one of the fastest growing economies of the world. The country aiming at the inclusive development is moving forward under the Mantra of Prop People Pro Active Good Governance. Further, in a recent

boost to our economy when India has jumped 23 spots in the new World Bank Ease of Doing Business (EODB) 2019 rankings to take up the 77th spot, with a score of 67.23, India is improving parameters on ease of doing business. It is a remarkable accomplishment that from Rank 142 in 2014, we have made a successful attainment at Rank 100 in 2017 and Rank 77 in 2018.

This time, key reforms initiatives like implementation of the Goods and Services Tax (GST) in July, 2017, e-way bills, relaxed construction permit, ease in starting a business and trading across borders, fortified compliances and good governance helped India to improve its ranking.

Out of several reforms taking place in India, the successful implementation of Goods and Services Tax (GST) is certainly creating new horizons for the Indirect Tax Structure in India.

Government of India is taking every possible step to streamline the indirect taxes. GST Pavilion was put-up to guide and assist taxpayers at the Indian International Trade Fair, 2018 organized at Pragati Maidan, New Delhi from November 14-27, 2018. Government regularly comes-up with various notifications, press releases, guidelines & circulars to clarify the doubts being raised by various stakeholders latest includes Circular clarifying scope of principal and agent relationship under Schedule I of CGST Act, 2017 in the context of del-credre agent, collection of tax at source by Tea Board of India, procedure in respect of return of time expired drugs or medicines, issues related to refund, etc.

The Institute as a partner in Nation Building is having a golden history of fifty years to support Government in all its growth initiatives, and GST is not an exception to this. With a view to equip Company Secretaries with the germane skills and develop competency in the area of GST, the Institute has joined hands with BSE Institute Limited (BIL) a wholly owned subsidiary of BSE Limited, to offer a Certificate Course in GST for its Members and Students of Professional Programme. The first batch is going to start from December 8, 2018. The course gives a comprehensive insight about principles of GST as well as other nuances of the new indirect tax regime. It also encourages the participants to gain deeper understanding about the relevance of GST inclusively as well as of the preparations and challenges that lie ahead.

In a step forward of our initiatives to advance the clear understanding of the professionals and to assist them with updates on GST, the Institute publishes a monthly ICSI-GST Newsletter. With this, we are happy to release the December 2018 issue of GST Newsletter (20th Edition) for augmenting the contemporary understanding of our professionals and public at large.

Looking forward for your treasured feedback for the GST Newsletter.

With Best Wishes CS Makarand Lele, President, ICSI


CERTIFICATE COURSE IN GOODS & SERVICES TAXWith a view to equip Company Secretaries with the skills and to develop their competencies in the area of GST, ICSI has signed an MoU with BSE Institute Limited (BIL) a wholly owned subsidiary of BSE Limited (formerly known as Bombay Stock Exchange), to offer a Certificate Course in GST to its Members and Professional Programme Students. The course provides a comprehensive insight about principles of GST as well as other nuances of the new indirect tax regime. It encourages the candidate to gain an understanding about the relevance of GST as well as of the preparations and challenges that lie ahead. Course Structure & AssessmentThe Certificate course in GST is an advanced level course and shall test a candidate’s knowledge of various concepts of GST. In order to give sufficient practical knowledge of GST, the course has been modeled with web based classes followed by an online examination.Course Duration

• Duration of the course is 60 hours • Web based classes of 6 hours each will be conducted every Saturday and Sunday• The date for launch of First batch of Certificate Course in GST is December 8, 2018. Study Material• Soft copy of the study material will be provided to the participantsAssessment• An online examination will be conducted at the end of the course comprising of multiple

choice or short questions• Attendance of atleast 60% is compulsory in order to appear in the online examination Award of Certificate• On successful completion of the course, a Certificate will be awarded by ICSI jointly with

BSE Institute Limited.Course Fee

• Rs. 7,500/- inclusive of GST (To be submitted online)

Interested participants may kindly go through the detailed brochure of the course uploaded on the link:https://www.icsi.edu/certificate-course-in-gst/.

For any queries kindly contact at 0120-4082137 or email at [email protected]


TDS UNDER GST*

Introduction of TDS mechanism w.e.f 1.10.2018 is another step towards completing the wholesome implementation of GST legislation(s). The mechanism as understood by the Industry is on the lines of Income Tax TDS provisions with a flavour of erstwhile VAT TDS. In this article, an effort has been made to talk on various limbs of the relevant provision i.e. Section 51 CGST Act, 2017 read with few circulars issued by the CBIC.

A. Who shall deduct?

Initially, the government has mandated the following entities to deduct TDS;

- Department or establishment of Central Government or State Government. - Local authority- Governmental agencies- Any authority or board or any other body set up by an act of Parliament or a State legislature or

established by any Government with 51% or more participation by way of equity or control, to carry out any function.

- Society established by the Central Government or the State Government or a Local Authority under the Societies Registration Act, 1860

- Public Sector Undertakings

B. Incidence of deduction

- The concept of GST TDS is similar to deduction of tax under Income Tax law. The specified entities are liable to deduct tax on payments made or credited against the taxable supplies.

- GST TDS is to be deducted only where the contract value [excluding taxes] exceeds INR 2,50,000/-.

C. Calculation methodology

- Value on which TDS is liable to be deducted is the gross bill value payable less taxes, if any. Thus, TDS shall be deducted on the total value excluding the taxes [CGST, SGST, IGST and Compensation Cess] charged in the invoice.

________________________________________________________________________________ * Contributed by Mr. Gurinder Pal Singh, Head Indirect Taxes, L&T Power and Member, ICSI GST Core Advisory Group


- It is also to be deducted on advance payments.

- At the time of adjustment of advance, TDS shall not be deducted again on the advance amount.

- It shall be deducted on debit notes as well.

- Where credit note is issued before the processing of original invoice, customer shall deduct TDS on the net amount i.e. after giving effect to the credit note.

- Where credit note is issued after the original invoice is processed/ paid, TDS already deducted against the amount of credit note shall not be refunded by the customer [on the premise that TDS certificate against such amount must already have been issued by the customer and credit thereon availed by the recipient].

- TDS shall not be deducted on supplies which are exempted from tax. In short, where no tax is charged on any supply, TDS is not deductable by the customer.

D. Rate of TDS

- GST TDS shall be deducted at the rate of 2% [IGST] in case of interstate supply and 1% [CGST] and 1% [SGST] in case of intra-state supply.

E. Effective date and Scope

- GST TDS has come into effect from 1.10.2018.

- Thus, specified customers will deduct TDS on all invoices issued on or after 1.10.2018 towards taxable supplies.

- TDS shall not be deducted on invoices dated prior to 1.10.2018.

- Where any advance was received prior to 1.10.2018 but invoice [with advance adjustment] is issued on or after 1.10.2018, TDS shall be deducted on the amount net of advance.

F. Compliances and customer interaction

- GST TDS so deducted by the customer is required to be paid/deposited to the government [by the customer] within ten days after the end of the month in which such deduction is made i.e. by 10th of the following month.


- Customer shall also be required to file monthly return showing the amount of tax so deducted by 10th of the following month.

- Customer shall have to issue a certificate in Form GSTR - 7A within five days after depositing the tax amount i.e. latest by 15th of subsequent month. This certificate shall be made available to the recipient electronically on GST Portal.

- Based on the certificate and due reconciliation as to its sufficiency, the recipient will get credit in its cash ledger.

- In case the customer fails to provide TDS certificate with the prescribed timeline, it shall be liable to pay penalty of Rs. 100 per day subject to a maximum of Rs. 5000 per month.

- Planning measure - Considering that TDS certificates are in the nature of cash equivalents, it is important to ensure receipt / uploading of certificates on portal for a particular month by 15th of the following [as per timelines given in the provision].

GST


PROCEDURE FOR INTERCEPTION, INSPECTION, DETENTION, CONFISCATION AND RELEASE OF

GOODS AND CONVEYANCE*

I. INTRODUCTION

In the month of Aug’17 when the major indirect tax reform viz. GST has already been launched in our country, the Government has prepared rules for introduction of E-Way Bill (EWB, in short) but due to various online issues addressed in filing returns during the initial phase of this new tax regime, the introduction of EWB was deferred for months and Government had thereon decided to gradually introduce this road transit form.

Failing to execute in the month of Feberuary’2018, the same is duly made applicable in FY2018-19 through-out the country vide making necessary amendments in the Central Goods and Service Tax Act’2017 (“CGST Act”, in short), the Central Goods and Service Tax Rules’2017 (“CGST Rules”, in short) and the various State GST Act.

II. PURPOSE OF E-WAY BILL

Primarily, the purpose of transit form is to curb the unaccounted supply, if any made by any person, vide creating such a modus operandi of preparing EWB that a triangle is made between consignor, consignee and transporter and if anyone mentions particular of any of them, then rest of the party would get alert about this fact.

Secondly, the treasury of the Government post implementation of GST faces downfall month by month and it is appearing to Government that there are various parties which are making supply but the same is not being reflected in their monthly return due to lack of infrastructure support in matching GSTR-1 and GSTR-2.

III. INTERCEPTION OF GOODS AND VERFICATION OF DOCUMENTS

The proper officer, for conducting interception and inspection of conveyance and goods in its area, shall be authorized by the jurisdictional Commissioner to do so.

Such authorized proper officer, de jure, shall have the right to intercept any vehicle and parallelly deriving power from Section-68 of the CGST Act, such proper office may require the person in charge of the conveyance to produce the documents relevant to be kept during movement of goods.

_____________________________________________________________________________ *Contributed by CA Harsh Garg, Partner H N V & Associates. (Views expressed in this article are the personal views of the author)


As per Circular No. 41/15/2018-GST CBEC-20/16/03/2017-GST dated 13-04-2018, an e-way bill number may be available with the person in charge of the conveyance in any of the following form:

a. Print out of the e-way bill

b. SMS of e-way bill

c. E-way bill number mentioned in invoice.

This vital circular also confirmed that all these forms of having e-way bill are valid in the eyes of law and facility exists to verify e-way bill electronically.

Lucidity, this circular further mentions that person in charge shall carry invoice or bill of supply or delivery challan, as the case may be, and for transportation of goods, e-way bill in any of the form mentioned supra.

IV. INSPECTION OF GOODS AND CONVEYANCE

If proper officer find the documents are sound then the conveyance may be permitted to move further else next course of action would be the inspection of goods.

This inspection of goods could be undertaken by the proper officer never except when:

a. Person in charge of the conveyance fails to produce prescribed documents or

b. Proper officer intends to undertake an inspection.

Firstly, statement of person in charge of conveyance would be tendered in FORM GST MOV-01 and in addition, an order in FORM GST MOV-02 would be issued by the proper officer for physical inspection of goods and conveyance and within 24 hours from this order, Part-A of FORM GST EWB-03 need to be uploaded on common portal.

Such order would inter-alia specifies the requirement to station the conveyance at specified place for further inspection.

To culminate this inspection proceeding, the proper officer has been allotted a stipulated time period of three (3) days and in case, extension is required to finalize the open proceeding, a written permission in FORM GST MOV-03 is required to be obtained from Commissioner.

Once, inspection proceeding reaches its culmination, two formalities need to be done from the end of proper officer:

a. Firstly, preparing a report of physical verification in FORM GST MOV-4 and serving the copy to person in charge and

b. Secondly, recording the final report of inspection in Part-B of FORM GST EWB-03.

V. DETENTION OF GOODS AND CONVEYANCE

During inspection, if no discrepancy has been noted, then goods under inspection would get its release via FORM GST MOV-05 and if contrary happens, then person in charge would be awarded with detention order in FORM GST MOV-06 in tandem with notice in FORM GST MOV-07 wherein the amount of tax and penalty payable would get triggered.


Now, owner of the goods has the following three options to act upon within seven (7) days:

a. Come forward to make payment of tax and penalty as mentioned in FORM GST MOV-07 and discharged the goods with releasing order.

Final order would be issued by FORM GST MOV-09 on common portal.

b. Come forward to furnish bond in FORM GST MOV-08 in tandem with security in the form of bank guarantee to cover the amount payable and discharged the goods with releasing order.


c. File objection against notice mentioning the payable amount and submits its contention about wrong allegations made to detain the goods.


To release said goods following payment need to be done:

VI. CONFISCATION OF GOODS AND CONVEYANCE

If contrary happens and the proposed tax and penalty amount are not paid within seven days from the date of issuing detention order, the matter goes to the next level of confiscation of goods and consequently, action u/s 130 of CGST Act shall be initiated vide serving notice in FORM GST MOV-10 proposing confiscation of goods and conveyance and imposition of penalty.

Principle of Audi Alteram Partem would be made applicable and even after serving this opportunity of being heard, the proper officer is of the option that malafide intention to evade payment of GST prevails then final order, to take title of goods from owner, would be passed in FORM GST MOV-11.

By virtue of this order, earlier order issued in MOV-09 stands withdrawn and final due liability to be paid finds its mentioned in this final order and three (3) months’ time period is given to make this compliance.

Default in making this compliance within the stipulated time period would culminate the proceeding in auction of goods, the receipt of which would be in the pocket of Government.

S. No. Particulars Payment to be Made1. Owner of the goods comes forward to make

payment of tax and penaltyTaxable GoodsApplicable Tax (+) Penalty (100% of Tax)Exempted Goods2% of Value of Goods (Max. Rs. 25,000/-)

2. Owner of the goods does not come forward to make payment of tax and penalty

Taxable GoodsApplicable Tax (+) Penalty (50% of Value reduce by tax amount)Exempted Goods5% of Value of Goods (Max.Rs. 25,000/-)


I. CaseName:KunMotorCompanyVs.Asstt.SalesTaxOfficer(KeralaHC) (Non Generation of E-Way Bills – Applicability of Section 129 of GST)Facts

• A person from Trivandrum goes to Pondicherry, purchases a car, and entrusts it to the car dealer to transport it to Trivandrum. On the way, in Kerala, the officials under the GST Act, intercept the vehicle and detain the goods, for no e-way bill accompanies the consignment. After responding to the statutory notice and after suffering a penalty order under section 129 of the GST Act, both the dealer and the purchaser file this writ petition.

• Should the transport at the behest of an individual, an unregistered person, suffer the same statutory limitations as does the transport by a registered person or transporter? Does the second proviso to sub-rule (3) of Rule 138 of the KSGST Rules save the transaction? And can we treat the car, sought to be transported without an e way bill, as an item of “used personal and household effects”?

_______________________________________________________________________________

*Compiled on the basis of information available

IMPORTANT JUDGEMENTS*


Decision of the High Court

• Law, at times, can be harsh, and the Courts, usually, defer to the legislative wisdom - if the conditions under the CGST Act and Rules are not complied with, definitely Section 129 operates and confiscation would be attracted - Respondents are entitled to adjudication, but they would have to prove that the goods being transported stand exempted from the rigours of the GST regime - either of the petitioners can get the goods released by complying with section 129 and the relevant rules, and seek an early adjudication of the dispute.

• The High Court while delivering the above judgment followed the precedent laid down by the Kerala High Court in the case of Indus Towers reported in 2018-TIOL-67-HC-Kerala-GST

II. CaseName:SajiSVsCommissioner,StateTaxDepartment(KeralaHC) (GST paid under one Head can be adjusted under another head)

Facts

• Petitioner, a registered dealer, had purchased goods from Chennai - While transporting the goods to Kerala, the same were detained while in transit by the Assistant State Tax Officer - based on the demand made, the consignor paid tax and penalty but the remittance was made under the head ‘SGST’. Since the remittance should have been made under the head IGST, the authorities refused to release the goods, hence this writ petition came to be filed.


• Section 77 of the GST Act, 2017 provides for the refund of the tax paid mistakenly under one head instead of another, however, Rule 4 of the GST Refund Rules speaks of adjustment. Where the amount of refund is completely adjusted against any outstanding demand under the Act, an order giving details of the adjustment is to be issued in Part A of FORM GST RFD-07.

• Under these circumstances, High Court does not find any difficulty for the respondent officials to allow the petitioner’s request and get the amount transferred from the head ‘SGST’ to ‘IGST’. It is inequitable for the authorities to let the petitioner suffer on the count that such transfer may take some time.

• Second respondent directed to release the goods forthwith along with the vehicle and, then, ensure that the tax and penalty which already stood remitted under the ‘SGST’ is transferred to the head ‘IGST’ - Petition disposed of.


III. CaseName:KashiBartanBhandarVs.StateofUP(AllahabadHighCourt)

(Service of Notice under GST & Validity of notice by affixation)

Facts

• The petitioner has invoked the writ jurisdiction of this Court under Article 226 of the Constitution of India so as to challenge the order dated 27.01.2018 passed by the Assistant Commissioner, Commercial Tax, Sector-18, Varanasi, by which the registration of the petitioner as a dealer under the U.P. G.S.T. Act has been cancelled.

• The main thrust of the argument of learned counsel for the petitioner is that the aforesaid order is in violation of principles of natural justice in as much as the show-cause notice alleged to have been issued to the petitioner on 18.01.2018 was never sent in any proper mode as prescribed under the Act and was not served upon the petitioner.

• Secondly, it has been contended that only on prima-facie satisfaction that the petitioner is not carrying any business without coming to any final conclusion thereof, the registration of the petitioner has been cancelled.

• Sri C.B. Tripathi, learned Special Counsel, in response to the above argument has submitted that the show-cause notice was sent to the petitioner at its e-mail address as provided by it. It was also sent by messenger and affixed at some conspicuous place of business of the petitioner.

• On being specifically asked as to the basis on which the Assistant Commissioner has drawn the conclusion that the petitioner is not carrying any business and that its business is lying closed, he is unable to point out any such basis or material except to submit that as no one was found at the place of business when the messenger had gone there, it was presumed that the business is lying closed.


• The notice under the Act is required to be served in accordance with the provisions of Section 169 of the Act which provides that it can be served by giving or tendering it directly or by messenger to the person concerned or to a person regularly employed by him in connection with his business or to an adult member of the family residing with him; or by registered or speed post or courier with acknowledgement due by sending at the last known place of business or residence of the person concerned; or by sending a communication at its email address provided at the time of registration and amended from time to time; or by making it available on the common portal; or by publication in a newspaper circulating in the locality in which the person concerned has last resided or carried business; or if none of the modes aforesaid is practicable, by affixing it at some conspicuous place, of his last known place of business or residence.


• It is only if the mode of service as provided in the earlier parts of Section 169 are not practicable that the authorities can resort to service of notice by affixation. In this regard the words “if none of the modes is practicable” are relevant and important. The use of the aforesaid words clearly indicates that it is only after the authorities are satisfied that all earlier methods are not practicable for service of notice that resort can be taken for service of notice by affixation.

• In the present case, we do not find that the Assistant Commissioner had come to any conclusion that all previous modes as prescribed under Section 169 are not practicable for the service of notice and has directly resorted to service by affixation. In such a situation, service if any by affixation cannot be regarded as a proper service. Moreover, nothing on record has been brought to establish the time, date and place and the manner in which service by affixation was resorted to.

• Similarly, there is no averment as to through whom the notice was sent for service. The name of the messenger or the time and date when he went to serve the notice has not been disclosed.

• Lastly, it has been stated that the show-cause notice was sent at the e-mail address of the petitioner on 18.01.2018 but again there is no material to support the said contention and the sending and receiving of any such e-mail has been categorically denied by the petitioner. The petitioner has even annexed the printout of its e-mail inbox to show that no mail from the office of the Assistant Commissioner, Commercial Tax was sent to the petitioner on 18.01.2018.

• In view of the above, we are of the definite opinion that the petitioner was not served with any show-cause notice before passing of the impugned order and service through affixation could not have been resorted to in the facts and circumstances of the case. The order impugned, therefore, is in violation of the principles of natural justice.

• Apart from the above, a bare reading of the impugned order dated 27.01.2018 discloses that it has been passed only on the basis of prima-facie opinion and the material on which such a prima-facie opinion was formed has not been indicated.

• The Assistant Commissioner could not have passed the order on the basis of prima-facie opinion until and unless he was of a definite opinion that the petitioner has closed down the business.

• A feeble attempt was made by the Special Counsel to sabotage the hearing of the petition on merits on the ground that against the order of cancellation of the registration, the petitioner has a remedy of appeal. Notwithstanding the remedy of appeal, we do not propose to relegate the petitioner to it for the simple reason that the petition was entertained and the parties have completed the pleadings to enable the Court to hear the matter on merits. Moreover, it is a case of clear violation of principles of natural justice and it is well accepted norm of exercising extraordinary jurisdiction that alternate remedy would not be a bar where the order is ex-facie, illegal and has been passed violating the principles of natural justice.


• In view of the aforesaid facts and circumstances, the impugned order dated 27.01.2018 is not at all sustainable and is accordingly quashed.

• The writ petition is allowed with no order as to costs with liberty to the respondent No.2 to pass a fresh order in accordance with law.

IV. PioneerPolyleathersLtdVsAssistantStateTaxOfficer(KeralaHC) (Insistence on manual payments discouraged by High Court)

Facts

• Goods belonging to the Petitioner, a registered dealer, were detained u/s 129(3) and tax demanded of Rs.5,28,834/-

• Petitioner paid the amount through the portal and obtained payment receipt but the State Tax officer refused to release the goods and he insists that the tax and penalty ought to have been paid through cash or demand draft.

• Therefore, the present petition is filed.

• Counsel for Revenue submitted that the amount must be apportioned between the Centre and state as the liability is under the head IGST. That it is not within the State’s purview to effect the apportionment and that if the Court could have before it the GST Network, the problem would be solved. Counsel for GST Network submitted that they are only an infrastructure provider and have no statutory role to play in apportionment of taxes between Centre and State.


• The Court observed that Government both at the Centre and in the State, have ushered in the GST Tax regime to ensure that everything is made online with minimum manual interventions. Yet strangely, the authorities still insist that the payment should be by physical means i.e. either in cash or through Demand Draft.

• Such insistence seems to be archaic and out of tune with the very spirit of the GST regime.

• In apportionment, there may be delays and difficulties, but the taxpayer cannot be made to suffer, on that count. Applying the ratio of the judgment in Fashion Marbles and Granites Pvt. Ltd. Vs. Assistant State Tax Officer, Assistant State Tax Officer is directed to release the goods and the vehicle forthwith.


GST IN NEWS1. Kerala GST revenue at new high of Rs 18.56 billion in Oct against Rs 11.7 billion in September

• Kerala’s goods and services tax (GST) revenue during October this year was at its peak of Rs 18.56 billion against Rs 11.7 billion during September because of various reasons, including the state’s efforts to stop revenue evasion on e-way bills.

• The state, which expects around 20 per cent growth in tax revenue per month once GST is fully implemented, has so far only seen 8.75 per cent growth this year.

2. RobustGSTcollectionsinOctoberraisefiscaldeficitconcerns

• Robust goods and services tax (GST) collections in October notwithstanding, the government is likely to miss its budgeted GST target for the current financial year, which will make it difficult to rein in the fiscal deficit at 3.3 per cent of gross domestic product (GDP). The fiscal deficit is likely to touch 3.5 per cent of GDP, notes a report by Kotak Institutional Equities.

3. Goods and services tax (GST) collection crossed the trillionmark for the second time in2018-19.

• The mop-up touched Rs 1.01 trillion in October, up 6.6 per cent from September’s collection of Rs 944 billion.

• Experts attributed this to pick-up in demand in the run-up to the festival season, and the closing of input tax claims for 2017-18. In April, Rs 1.03 trillion was collected.

• According to the April-September data from the Controller General of Accounts, Central GST (CGST) collection in the first seven months (April-October) stands at Rs 2.64 trillion, which is just 44 per cent of the budgeted CGST revenue of Rs 6.04 trillion.

_____________________________________________________________________________

Sources: www.economictimes.indiatimes.com, www.bloombergquint.com, www.business-standard.com


• Tax collected as CGST stood at Rs 165 billion, SGST at Rs 228 billion, while Integrated GST (IGST) at Rs 534 billion in October, all of them showing an increase over the September collection.

4. Centre, States divide Rs 320 billion IGST in Oct; States to get over Rs 150 billion

• As much as Rs 320 billion lying in the integrated goods and services tax (IGST) pool has been apportioned between the centre and states in the month of October.

• This is the fifth time that IGST funds have been divided between the centre and states.

• As much as Rs 290 billion was settled in September, Rs 120 billion in August, Rs 500 billion in June and Rs 350 billion in February this year.

• When some substantial amount accrues to IGST pool it is apportioned between the centre and states so that it does not lie idle with the centre, the official said, adding Rs 320 billion had been apportioned this month.

5. DirectorateGeneralofAudittoscrutiniseServicefirms’accountingsoftware

• In order to prevent incorrect allocation of Goods and Services Tax revenue among states, the Directorate General of Audit has been asked to scrutinize the accounting software of large service providers like banks and telecom companies, an official said.


• The issue concerning allocation of revenue in case of inter-state supply of services was raised by some states during high-level meetings between the central and state tax officers to analyse reasons for GST revenue shortfall, the official added.

• Some states have expressed apprehension that service providers might not be depositing the taxes collected from customers to the state exchequer where they are rightfully due. Instead, they are depositing in some other states where they are not due as per the GST rules and regulations of Place of Supply.

6. SmallBusinesses’GrievancesonGSTtobemonitoreddaily

• The Central Board of Indirect Taxes and Customs (CBIC) will daily monitor the grievances of the Ministry of Micro, Small and Medium Enterprises relating to Goods and Service Tax as a part of its efforts to resolve issues being faced by small businesses in the tax regime.

• The move comes at a time when the government initiated a major support and outreach programme for MSMEs to ensure growth and expansion of the sector.

• The GST help desks have already been set up in 80 districts where a 100-day support and outreach programme for the MSMEs have been launched by the government on November 2.

7. CBIC to focus on Behavioural Patterns of Taxpayers to improve GST compliance

• Soon, GST officers will study the behavioural pattern of certain taxpayers to nudge them to comply with tax laws, in a departure from the current practice of focusing only on deterrent action to check evasion.

• The Central Board of Indirect Taxes and Customs has set up a “Nudge Team” to formulate a strategy on studying behavioural patterns of taxpayers and use segmented approach to encourage them to pay taxes, an official said.

• The plan is based on “behavioural interventions” or “non-deterrence approach” adopted by countries like the U.K., Australia and Mexico to frame policies and increase tax collections.

8. After GST, pharma sector grew 6% to Rs 1.31 trn till May-end: Mandavaiya

• After the implementation of GST, the pharmaceutical sector grew 6 per cent to Rs 1.31 trillion on a year-on-year basis till May 31, Minister of State for Chemicals and Fertilisers Mansukh Mandaviya said.

• “Before GST, annual turnover of the pharma sector (as on May 31, 2017) was Rs 1.14 trillion,” Mandaviya said in a statement.


• Elaborating on the reasons for the growth, he said that under the ‘One Nation, One Tax’ regime, the removal of the complexity of multiple taxes has reduced their cascading effect on the final product.

• “GST is expected to decrease the manufacturing cost in view of merging of different taxes levied earlier and promote ease of doing business. It will create one single market for all stakeholders with equal chance towards development,” Mandaviya said.

• Pharmaceutical companies can now consolidate their warehouses at strategic locations, effecting a reduction in the cost of distribution. As a result, it will benefit the warehouse strategy and improve supply chain efficiency in the sector, he added.

• There has also been a significant jump in the number of drug approvals after GST, Mandaviya said.

9. Goods can be impounded for lapses under GST, says Kerala High Court

• Authorities impounded a car being sent by a dealer from Puducherry to Thiruvananthapuram for personal use of his customer without an e-way bill. It has to be generated if goods worth more than Rs 50,000 are transported, but is not applicable on goods for personal consumption. The matter went to the Kerala high court.

• The court said the vehicle could be impounded for lapses under the GST laws. But, the litigant is free to press for his arguments that it was for personal use through adjudication. However, he will have to prove the car being transported stand exempted from the rigours of the GST regime.

• If the person wants, the adjudication can happen at the commissioner appeals level now. The court did not comment on whether such a vehicle was used for personal and household effects and accordingly, the e-way bill would not apply. It held that these questions would be decided by adjudicating authorities.

• The court made observations on larger and harsh outcomes originating from minor lapses. It stated the law, at times, can be harsh, and the courts, usually, needs to respect the legislative wisdom.

• Experts say the ruling has lessons for those buying vehicle in one state and getting it transported to the other.

• “As a thumb rule, carrying e-way bill for movement of goods with value more than Rs 50,000 is mandatory. One should be aware of the exemptions available to this rule, in case no e-way bill is being carried along with the goods,” said Harpreet Singh, partner, KPMG.


10. CAG conducting Performance Audit of GST

• The Comptroller and Auditor General (CAG) of India is conducting a performance audit of the Goods and Services Tax and is likely to finalise its report soon.

• The performance audit report on implementation of GST could be tabled in Parliament as early as in the forthcoming winter session beginning December 11, according to sources.

• The audit aspect would include registration, refund, input tax credit, transition credit mechanism, ease of payment of taxes and the impact on the economic activity, the sources told PTI.

• The performance audit will not take into account revenue collections. Its focus would primarily be on the implementation aspect of GST, which has subsumed 17 local taxes.

• Tagged as the biggest tax reform since Independence, GST has faced some teething problems in the initial months of its implementation with the GST Network unable to take load of last minute monthly return filing rush.

• Also, there were hiccups with respect to refunds to be claimed by exporters as well as excessive transitional credit claims.

11. Revenue Department plans linking E-Way Bill with FASTag, Logistics Data Bank to check GST Evasion

• The revenue department is planning to integrate e-way bill with The National Highways Authority of India’s FASTag mechanism and Delhi-Mumbai Industrial Corridor’s Logistics Data Bank services, to facilitate faster movement of goods and check the Goods and Service Tax evasion.

• The proposal, according to officials, will improve operational efficiencies across the country’s logistic landscape.

• Currently, lack of harmonisation under the “track and trace” mechanism in terms of sharing information among different agencies is affecting the ease of doing business in the country. Besides, it is also impacting the logistic costs of the companies.

• The proposal, being worked out by the revenue department, will also help in preventing GST evasion by unscrupulous traders who take advantage of the loopholes in the supply chain.

• Touted as an anti-evasion measure, e-way bill system was rolled out on April 1, for moving goods worth over Rs 50,000 from one state to another. The same for intra or within the state movement was rolled out in a phased manner from April 15.


• Transporters of goods worth over Rs 50,000 would be required to present e-way bill during transit to a GST inspector, if asked.

• “The integration of the e-way bill system with FASTag and Logistics Data Bank is expected to help boost tax collections by clamping down on trade that currently happens on cash basis,” the official said.

• NHAI has put in place the FASTag system for collection of toll electronically on national highways. FASTag also offers non-stop movement of vehicles through toll plazas.

• Integration of e-way bill with FASTag will help revenue authorities track the movement of vehicles and ensure that they are travelling to the same destination as the transporter or the trader had specified while generating the e-way bill.

• It will also help the suppliers locate goods through the e-way bill system. Transporters, too, would be able to track their vehicles through SMS alerts that would be generated at each toll plaza.

• Similarly, Delhi-Mumbai Industrial Corridor’s container tracking services, also called LDB programme, would be integrated with the e-way bill to improve the logistics ecosystem.

• The official said that the implementation of the proposal would require inter-ministerial coordination as integration would have several operational and technical challenges.

• The new indirect tax regime GST was rolled out on July 1, 2017. With GST systems now stabilising, the focus of the Central Board of Indirect Taxes and Customs is now on increasing compliance and checking evasion.

• The government has also set up the Directorate General of GST Intelligence to investigate cases of tax evasion and conduct search and seizure operations under the GST Act, and erstwhile the Excise and Service Tax Act.


GST Statistical Updates

GST Collections

GST collections in October crossed the Rs 1 lakh crore (1 trillion) mark, after a gap of 5 months, on the back of festive demand, anti-evasion measures.

“GST collections for October 2018 have crossed Rs 1 lakh crore. The success of GST is lower rates, lesser evasion, higher compliance, only one tax and negligible interference by taxation authorities,”

Finance Minister Arun Jaitley tweeted.

Compiled on the basis of information available at:www.economictimes.indiatimes.com, www.bloombergquint.com, www.business-standard.com


IGST Settlement between Centre and StatesThe government has settled Rs 17,490 crore to CGST and Rs 15,107 crore to SGST from IGST as regular settlement.Further, Rs 30,000 crore has been settled from the balance IGST available with the centre on provisional basis in the ratio of 50:50 between centre and states. The total revenue earned by central government and the state governments after regular and provisional settlement in the month of October, 2018, is Rs 48,954 crore for CGST and Rs 52,934 crore for the SGST.

Total Revenue earned by Central Government and State Government in the month of October

(after regular and provisional IGST Settlement)

Central Govt.: Rs. 48,954 Crore CGST

State Govt.: Rs. 52,934 Crore SGST

Break-up of GST Collections

Of the Rs 1 lakh crore total gross GST revenue collected in October, Central GST is Rs 16,464 crore, State GST is Rs 22,826 crore, IGST is Rs 53,419 crore (including Rs 26,908 crore collected on imports) and Cess is Rs. 8,000 crore.

October GST Collections (in Crores)


Tax Evasion and the RecoveryThe Finance Ministry investigation arm detected tax evasion worth Rs 29,088 crore in 1,835 cases during the April-October period of the ongoing financial year.Of this, the Directorate General of the Goods and Service Tax Intelligence, the enforcement agency for checking indirect tax evasion, detected evasion of GST worth Rs 4,562 crore in 571 cases.The bulk of the evasion was detected in case of service tax. The total number of cases where service tax was evaded stood at 1,145 involving Rs 22,973 crore.In case of central excise duty, the DGGI detected 119 cases where tax worth Rs 1,553 crore was evaded.

GST evasion = Rs. 4,562 crore in 571 cases

Total tax evasion= Rs. 29,088 crore in

1835 cases

Service tax evasion = Rs. 22,973 crore in 1145

cases

Central excise duty evasion = Rs. 1,553 crore in 119 cases

The total amount of detection was likely to be more as the data does not include detection by field offices of the Central Board of Indirect Taxes and Customs.On the recovery of evaded taxes, a total amount of Rs 5,427 crore was realised during the seven-month period till October. These, includes recovery from previous cases and those detected during the current financial year.Of the total recovery, Rs 3,124 crore was from GST evaders, followed by Rs 2,174 crore in case of service tax, and Rs 128 crore from those who had evaded central excise.

The larger chunk of recovery during April-October in GST can be attributed to the decision of the CBIC to tighten evaders.Disposal of GST Refunds

As on 31st October, 2018, total GST refunds to the tune of Rs 82,775 crore have been disposed by CBIC and State authorities out of the total refund claims of Rs 88,175 crore received so far. Thus, the disposal rate of 93.8 % has been achieved as on 31.10.2018. Refundclaimswithoutanydeficiencyarebeingclearedexpeditiously.

Total recovery = Rs. 5,427 crore Service Tax recovery =

Rs. 2,174 crore

GST recovery = Rs. 3,124 crore

Central Excise recovery = Rs. 128 crore


GST QUIZ

1 The annual return shall be filed by the registered taxable person (other than dealers paying tax un-der Section 10) in form_____________.

A. GSTR 9B. GSTR 9AC. GSTR 9CD. GSTR 10

2. Annual return shall be filed by the person registered under the composition levy scheme (Section 10) in form________________.


3. Due date of furnishing GSTR-9 is___________ A. 30th of September following the end of the financial year

B. 31st of December following the end of the financial year

C. 31st of May following the end of the financial year

D. 31st of October following the end of the financial year

4. Who all of the following are not required to file GSTR-9_____________?

A. Input Service Distributor B. Non-resident taxable personsC. Persons paying tax under Section

10, 51, 52 and a casual taxable person

D. All of the above

5. _________ should be filed by the taxpayers whose annual turnover exceeds Rs 2 crores during the financial year.


Ans

wer

: Q1-

A, Q

2- B

, Q3-

A, Q

4- D

, Q5-

C

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