Girish Kulkarni [CA, CPA, LL.B]’s Post

Where a registered person fails to furnish monthly or quarterly returns under Section 39 or the final return under Section 45, a notice in Form GSTR-3A shall be issued by the proper officer requiring him to furnish such returns within 15 days under Section 46. According to Section 62, when the registered person fails to furnish the return within the prescribed time limit even after the service of a notice under Section 46, the proper officer may proceed to assess the tax liability of the said person to the best of his judgment, taking into account all the relevant material that is available or that he has gathered, and issue an assessment order in Form GST ASMT-13 and summary thereof shall be uploaded electronically in Form GST DRC-07 within a period of 5 years from the due date for furnishing the annual return for the financial year to which the tax not paid relates, under Section 44. Where the registered person furnishes a valid return within 30 days of the service of the assessment order issued under section 62, the said order shall be deemed to have been withdrawn, but the liability for payment of interest under sub-section (1) of section 50 or for payment of late fees under section 47 shall continue. Accordingly, the registered person can file the return within a period of 30 days from the date of the assessment order issued under section 62 with applicable interest and late fees and the assessment order issued based on best judgement will be withdrawn. #GST

In order to assist taxpayers in filing their returns and minimizing human errors, GSTN has continuouslyimproved the GST return filing process and in this endeavor the GST Portal now provides a pre-filled GSTR-3B form, where the tax liability is auto-populated from the declared supplies in GSTR-1/ GSTR-1A/ IFF,while the Input Tax Credit (ITC) is auto-populated from GSTR-2B. A detailed system generated pdf of theauto populated GSTR-3B is also provided to all the taxpayers. Now, taxpayers also have a facility to amend their incorrectly declared outward supplies in GSTR-1/IFFthrough GSTR-1A, allowing them an opportunity to correct their liabilities before filing their GSTR-3B. Additionally, to manage inward supplies and ensure accurate ITC claims in GSTR-3B, taxpayers have theoption to take informed actions of accept/reject/pending on inward supplies via the Invoice ManagementSystem (IMS) which is now available to the taxpayers. It may be noted that tentatively from January 2025 tax period, the GST Portal is going to restrict makingchanges in auto-populated values in pre-filled GSTR-3B from GSTR-1/1A/IFF or GSTR-2B to furtherenhance accuracy in return filing system. It is once again suggested hereby that in case any change isrequired in auto-populated values, the same may please be handled through GSTR-1A or IMS.

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Key Provisions for Payment through DRC-03 (as of October 2024) Purpose of DRC-03: Voluntary Tax Payment: A taxpayer may discover that an additional tax liability exists during a self-assessment, audit, or scrutiny. Settlement of Demand Notices: When a notice (such as SCN under section 73 or 74 of the CGST Act) is issued Mandatory Disclosure in Annual Returns (GSTR-9): Any payment made through DRC-03 must now be disclosed in the annual return (GSTR-9). Electronic Cash and Credit Ledger Adjustments: Payments through DRC-03 can be made from both the electronic cash ledger and the electronic credit ledger, except for interest and penalty, which must be paid in cash. Rectification for Clerical Mistakes: If any clerical error occurs while filling out DRC-03 (such as the wrong period or minor calculation error), a rectification window is available. This has been emphasized in recent circulars. Post-payment Representation: Taxpayers have the option to submit a representation if they realize, post-payment, that the tax was paid erroneously. Applicability of Interest and Penalty: Interest: As per Section 50 of the CGST Act, interest is calculated on any delayed payment of tax, including self-assessed tax. If using DRC-03 to pay for liabilities discovered later, interest must be paid on the liability from the due date to the actual payment date in CASH. Penalty: If the payment is made before the issuance of a notice under Section 73 (non-fraudulent cases), no penalty is levied. However, a reduced penalty is applicable for fraudulent cases under Section 74 if payment is made before notice issuance or within 30 days of the order. Refer to section 73, 74 of GST Act, 2017 and rule 142 and 143 for more updates and reference.

GST Council to Decide on Waiving Disputed Tax Liabilities Under New Provision. The GST Council has proposed the addition of Section 128A to the CGST Act, aiming to grant conditional waivers on interest and penalties for demand notices issued under Section 73 for FY 2017-18, 2018-19, and 2019-20. Taxpayers can avail of these benefits by fully paying the tax amount by March 31, 2025. The new section 11A of the CGST Act lets the government decide not to collect some dues and settle disputes based on their current state. The GST Council has introduced this measure to minimize legal disputes and enhance clarity in tax assessments. By simplifying compliance procedures and reducing unnecessary complications, the Council aims to streamline the process for GST payers and make it more user-friendly. 𝐒𝐞𝐜𝐭𝐢𝐨𝐧 𝟏𝟏𝐀 𝐨𝐟 𝐭𝐡𝐞 𝐂𝐆𝐒𝐓 𝐀𝐜𝐭 𝐜𝐨𝐮𝐥𝐝: ➤ Benefits for Small Businesses: It helps correct common GST mistakes through established practices. ➤ Simplified Compliance: Makes understanding tax duties easier and reduces operational strain. ➤ Refunds Not Addressed: This does not cover refunds for overpaid GST, which may still affect cash flow. 𝐂𝐞𝐫𝐭𝐚𝐢𝐧 𝐢𝐧𝐝𝐮𝐬𝐭𝐫𝐢𝐞𝐬 𝐚𝐫𝐞 𝐞𝐱𝐩𝐞𝐜𝐭𝐞𝐝 𝐭𝐨 𝐛𝐞𝐧𝐞𝐟𝐢𝐭 𝐬𝐢𝐠𝐧𝐢𝐟𝐢𝐜𝐚𝐧𝐭𝐥𝐲 𝐟𝐫𝐨𝐦 𝐭𝐡𝐞 𝐩𝐫𝐨𝐩𝐨𝐬𝐞𝐝 𝐒𝐞𝐜𝐭𝐢𝐨𝐧 𝟏𝟏𝐀 𝐨𝐟 𝐭𝐡𝐞 𝐂𝐆𝐒𝐓 𝐀𝐜𝐭: [1] Online Gaming: The online gaming industry could help resolve over ₹1 lakh crore undisputed tax notices. [2] Airlines and Shipping: New regulations could help address and simplify disputes for foreign airlines and shipping companies. [3] Insurance and NBFCs: Changes or new approaches could assist in reducing the significant tax demands faced by the insurance sector and Non-Banking Financial Companies (NBFCs). Overall, Section 11A aims to reduce disputes and clarify tax assessments. Abhijith Preman & Co. LLP Chartered Accountants CA. Abhijith Preman, FCA | Rakesh O S | Dinesh K | CA VISHNUDATH M | CA Anagha Sajeevan P #tax #gst #newprovision #section128A #section11A

#Understanding Rule 37A of the CGST Rules, 2017: Implications for FY 2023-24 Rule 37A of the Central Goods and Services Tax (CGST) Rules, 2017, mandates the reversal of Input Tax Credit (ITC) by recipients when their suppliers fail to remit the corresponding tax to the government.This provision ensures that ITC claims are legitimate and that tax revenues are duly collected. #Key Provisions of Rule 37A: - Applicability: This rule applies when a registered person (recipient) avails ITC on invoices or debit notes furnished by the supplier in their GSTR-1 or using the Invoice Furnishing Facility (IFF).If the supplier does not file their GSTR-3B for the relevant tax period by September 30th following the end of the financial year in which the ITC was availed, the recipient is required to reverse the ITC. - Reversal Deadline: The ITC must be reversed by the recipient in their GSTR-3B return on or before November 30th following the end of the financial year. - Re-availment of ITC: If the supplier subsequently files their GSTR-3B and pays the tax, the recipient may re-avail the reversed ITC in a subsequent GSTR-3B return. #Implications of Non-Compliance for FY 2023-24: - Interest Liability: Failure to reverse the ITC by November 30th, 2024, will result in the amount becoming payable along with interest under Section 50 of the CGST Act. #Comments: - Regular Monitoring: Taxpayers should consistently monitor their suppliers' GSTR-3B filings and promptly remind suppliers to file returns to prevent the reversal of Input Tax Credit (ITC) - Timely Reversal: Ensure that any required ITC reversals are made in the GSTR-3B return filed on or before November 30th, 2024, to avoid interest liabilities. - Re-availment Post Compliance: If the supplier complies after the reversal, promptly re-avail the ITC in a subsequent GSTR-3B return #GST #CGST #Rule37A #InputTaxCredit #ITCReversal #TaxCompliance #GSTNAdvisory #TaxLiability #FinancialYear2023-24 #GSTUpdates

*Update on section 128A* To reduce tax disputes and provide significant relief to taxpayers, the GST Council, in its 53rd meeting on June 22, 2024, recommended waiving interest and penalties on demand notices or orders issued under Section 73 of the CGST Act, 2017 (for cases not involving fraud, suppression, or willful misstatement) for the financial years 2017-18, 2018-19, and 2019-20. To benefit from this waiver, taxpayers must pay the full tax amount demanded by March 31, 2025. In view of the above, Rule 164 of CGST rules, 2017 was notified through Notification No. 20/2024 dated. 8th October 2024, effective from 1st November 2024. This rule provides procedural guidelines for the said waiver scheme. As per the waiver scheme, if a notice or order is issued under Section 73 for the financial years 2017-18, 2018-19 and 2019-20, the taxpayers are required to file an application in FORM GST SPL-01 or FORM GST SPL-02, respectively on the common portal within three months from notified date, which is 31.03.2025. Form GST SPL-01 and Form GST SPL-02 are under development and same will be made available on the common portal tentatively from the first week of January 2025. Taxpayer can pay the demanded tax amount through the “payment towards demand” facility in case of demand orders and through Form GST DRC-03 in case of notices. However, if payment has already been done through Form GST DRC-03 for any demand order then taxpayer need to link the said Form GST DRC 03 with such demand order through Form GST DRC-03A, which is now available on the common portal. For detailed information and assistance, feel free to reach out 📧☎️💼 #GSTUpdates #GST #Taxupdates MAAK AND ASSOCIATES Archit Shah

Madras quashes the GST assessment order where the Assessee was unaware of the intimation, show cause notice, and order. He became aware of the impugned order only upon receipt of phone calls from the Bank informing him about notice of recovery from the GST Department. The petitioner contested an order from 31.05.2023 and a subsequent recovery notice dated 20.12.2023, issued under the State GST. The dispute centered around the reversal of Input Tax Credit #ITC on purchases made in 2020, citing the supplier's absence from the registered business location in 2021. The petitioner claimed regular tax payments and returns filings, learning of the order only through a bank. Issue: The primary issue was the challenge against the assessment order's validity, specifically the application of Section 74, which deals with fraud or willful misstatement to evade tax. The contention was whether the petitioner was provided adequate notice and opportunity to establish the genuineness of the transactions and the ITC claim. HELD: The High Court quashed the impugned assessment order and remanded the case for reconsideration, subject to petitioner depositing 10% of the disputed tax demand. The court directed that upon this payment and a satisfactory response to the show cause notice #SCN, the assessing officer must provide a reasonable hearing opportunity before issuing a new assessment order. Title: Yashwin Enterprises vs The Deputy Commissioner (ST), Chennal Court: Madras High Court Citation: Writ Petition No. 4655 of 2024 And W.M.P. Nos. 5085 And 5086 of 2024 Dated: 26-Feb-2024 Impact Analysis: This judgment underscores the necessity of procedural fairness in tax assessments, particularly in cases involving alleged tax evasion. It highlights the importance of allowing taxpayers to substantiate their claims before finalizing adverse orders. Court balanced taxpayer's rights with revenue protection by requiring a deposit for reconsideration. Decision may prompt better investigations and communication by tax authorities before alleging fraud or evasion.

*Govt issued Notification No 17/2024- CT dtd.27.09.2024 to notify effective date of most imp GST amendments* *Amendment effective from 27.09.2024* Section 16(4) of the CGST Act, including a retrospective amendment allowing taxpayers to claim input tax credit (ITC) on invoices or debit notes for the financial years 2017-18 to 2020-21 in GSTR-3B returns filed by November 30, 2021 *Amendments effective from 1st November 2024* (a) Insertion of a *new Section 128A to provide for a amnesty Scheme ( i.e. *waiver of interest and penalty*) in case of demands raised u/s 73 for the period *01.07.2017 to 31.03.2020* and pending at the adjudication/appellate stage, subject to the payment of the entire amount of tax demanded (b) Section 70 amended to provide for the appearance by an authorised representative of the person summoned. (c) *Applicability of Section 73* for the determination of tax *restricted upto FY 2023-24* (d) Applicability of Section 74 for the determination of tax restricted up to FY 2023-24 (e) *Insertion of new Section 74A, providing for common time limit for the issue of the show cause notice*, whether or not involving the allegations of fraud or willful suppression or misstatement of facts with the intent to evade tax. (f) Section 107 amended to reduce the maximum quantum of pre-deposit. (g) *Section 112 amended* to relax the time limit for filing the appeal before the yet-to-be-set-up GST Tribunal and *to reduce the quantum of pre-deposit*

 GST Network on Tuesday said beginning early next year, GST taxpayers will not be able to file monthly and annual GST returns after three years of the original filing due date. In an advisory, Goods and Services Tax Network (GSTN) said GST outward supply returns, besides returns related to payment of liability, annual returns and tax collected at source, will become time-barred after the expiry of a period of three years from the due date of furnishing the said return. "The said changes are going to be implemented in the GST portal from early next year (2025). Hence, the taxpayers are advised to reconcile their records and file their GST returns as soon as possible if not filed till now," GSTN said.  AMRG & Associates Senior Partner Rajat Mohan said the recent GSTN update concerning the barring of GST return filings post a three-year deadline introduces a significant compliance shift. "This move aligns with a broader intent to ensure timely compliance, enhance data reliability, and potentially reduce the backlog of unfiled returns within the GST system. By capping the period for delayed filings, taxpayers are motivated to reconcile and rectify their records promptly. "However, it may also create challenges for taxpayers with historically unfiled returns, especially those facing administrative or logistical constraints in consolidating older records," Mohan said. Businesses are advised to proactively audit their filing history and address any outstanding returns within the remaining window, he said, adding that the action will prevent future compliance issues and penalties that may arise once the portal enforces this three-year limit. #GST #GSTUPDATES #GSTCOUNCIL #GST #CASELAW #TAXPAYER #CBIC #GSTRETURNS #GSTCOUNCILMEET.