Important Updates and Due Date Compliances under GST for Feb 2023

Important clarifications/ amendments issued by the Government on GST in January/ February 2023 along with compliance timelines in February 2023

Compliance timelines

Updates in the month of January/ February 2023

LUT for 2023-24 enabled on GST portal

Filing of Letter of Undertaking (LUT) for the FY 2023-24 has now been enabled on the GST website. LUT is required to be filed on a yearly basis for every FY in case one wants to make zero-rated supplies (exports) without payment of GST.

Module-wise new functionalities deployed on the GST Portal for taxpayers

Various new functionalities are implemented on the GST Portal, from time to time, for GST stakeholders. These functionalities pertain to different modules such as Registration, Returns, Advance Ruling, Payment, Refund and other miscellaneous topics. These relate to Registration, Returns, Refund, Advance Ruling and Enforcement. The important ones are as follows:

• Registration - Automation of Drop Proceedings for taxpayers suspended upon issuance of SCN in Form GST REG-17.
• Advance Ruling - Filing Advance Ruling Application by Unregistered persons.
• Enforcement - Taxpayers can file Request for Adjournment while replying to a Notice to Summon in Enforcement cases.

Advisory on facility of 'Initiating Drop Proceedings' of Suspended GSTINs due to Non-filing of Returns

As per an update on GSTN, recently, a functionality of "Automated Drop Proceedings" of GSTINs suspended due to non-filing of returns has been implemented on the GST Portal. This functionality is available for the taxpayers who have filed their pending returns i.e. 6 monthly or 2 Quarterly returns. 1. If such taxpayers have filed all their pending returns, the system will automatically drop the proceedings and revoke suspension. 2. If the status of the GSTIN does not automatically turn 'ACTIVE', then taxpayers are advised to revoke the suspension once the due returns have been filed, by clicking on 'Initiate Drop Proceeding' for which navigation is as follows: "Log on to GST Portal > Services > User Services > View Notices and Orders > Initiate Drop Proceeding" 3. In case the system does not automatically drop the proceedings or taxpayer is unable to revoke the suspension by clicking on 'Initiate Drop Proceeding', then taxpayer is advised to contact Jurisdictional Officer. Note: This functionality is applicable to the taxpayers whose GSTINs have been suspended after 1st December, 2022. 

CBIC issues clarification regarding GST rates and classification of certain goods

CBIC has issued a clarification regarding GST rates and classification of certain goods based on the recommendations of the GST Council in its 48th meeting held on 17th December, 2022. The key clarifications issued are w.r.t. Rab, by-products of milling of Dal/ Pulses such as Chilka, Khanda and Churi/Chuni, 'Carbonated Beverages of Fruit Drink' or 'Carbonated Beverages with Fruit Juice', snack pellets (such as 'fryums') and Compensation Cess on Motor vehicles popularly known as SUVs. (Circular No. 189/01/2023-GST dated 13th January, 2023)

Clarifications regarding applicability of GST on certain services

CBIC has issued a circular to clarify that accommodation services provided by Air Force Mess and other similar messes, such as, Army mess, Navy mess, Paramilitary and Police forces mess to their personnel or any person other than a business entity are covered by Sl. No. 6 of notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017. It has also been clarified that incentives paid by Ministry of Electronics and Information Technology to acquiring banks under the Incentive scheme for promotion of RuPay Debit Cards and low value BHIM-UPI transactions are in the nature of subsidy and thus not taxable under GST. (Circular No. 190/02/2023-GST dated 13th January, 2023)

Advisory on taxpayers facing issue in filing GSTR-3B who submitted TRAN 1 form but did not file it

As per an update from GSTN, it has been observed that, according to Hon'ble Supreme Court's directive filing of TRAN forms which was made available for aggrieved taxpayers during 01.10.2022 to 30.11.2022, in the process of filing TRAN forms, few taxpayers have submitted their forms on the portal but did not finally File it within the specified time. After submitting the Tran Forms, only filing was to be done with e-sign. Further, it is seen that such taxpayers have not raised any ticket for difficulty faced by them in filing Tran Forms. Some taxpayers were also contacted by GSTN and they informed that they do not intend to file TRAN forms. As the TRAN forms of these taxpayers are submitted but not filed, these taxpayers are not able to file their GSTR-3B. The TRAN filing window has already been closed. Hence, such taxpayers are advised to raise a ticket on GST Grievance Portal giving consent that their TRAN filing status may be reset by GSTN. Once the consent for resetting their unfiled TRAN forms is received, the TRAN forms will be reset and the taxpayer will be able to file their GSTR-3B. 

Important amendments proposed in Budget 2023 w.r.t. GST

1. Supplier of goods through Electronic Commerce operators will now be eligible to opt for composition Scheme
2. Payment of tax along with interest u/s 50 in respect of ITC availed and payment not made to supplier within 180 days. Further third proviso to above sub-section also amended to specifically provide that upon payment made to supplier ITC can be availed.
3. Value of exempt supply for purposes of apportionment of credits shall include sale of warehoused goods to any person before clearance for home consumption
4. ITC on CSR Expenses has now been specifically blocked u/s 17(5)
5. Persons exempt from registration u/s 23(1) i.e. persons engaged exclusively in the business of exempt supply of goods or services or an agriculturist, to the extent of supply of produce out of cultivation of land, need not take GST Registration u/s 22(1)/24 i.e. persons for compulsory registration
6. Filing of belated GSTR-1/ 3B/ 9/ 9A/ 8 not beyond three years of due date
7. Provisional refund eligible for provisionally accepted ITC so as to remove the reference to the provisionally accepted ITC to align the same with the present scheme of availment of ITC
8. Manner will be prescribed for computing Interest on delayed refunds
9. Penalty on Electronic Commerce Operators so as to provide for penal provisions applicable to Electronic Commerce Operators in case of contravention of provisions relating to supplies of goods made through them by unregistered persons or composition taxpayers
10. Decriminalization of certain offences and increase in monetary threshold for launching prosecution
11. Amendment in compounding of offences so as to simplify the language and procedure
12. Consent based sharing of information furnished by taxable person
13. Amendment in Schedule III to give retrospective applicability to Para 7, 8(a) and 8(b) of the said Schedule viz High seas Sale, Supply of warehoused goods before clearance and Supply by endorsement of documents of title before clearance for home consumption, with effect from 01st July, 2017, so as to treat the activities/ transactions mentioned in the said paragraphs as neither supply of goods nor supply of services.
14. Amendment in definition of non-taxable online recipient and online information and database access or retrieval services
15. Amendment in Place of Supply of services by way of transportation of goods.

Directorate General of GST Intelligence (DGGI) and the National Forensic Sciences University (NFSU) signed a Memorandum of Understanding (MoU) for setting up of digital forensic laboratories

The Directorate General of GST Intelligence (DGGI) and the National Forensic Sciences University (NFSU) signed a Memorandum of Understanding (MoU) for setting up of digital forensic laboratories along with exchange of information and knowledge, technological advancement and skill development in the field of digital forensics. This MoU will be a force multiplier for the DGGI in the field of investigation and digital forensics and will assist the agency for launching effective prosecutions and securing convictions of the guilty. This will be a significant step for DGGI towards having requisite physical infrastructure, skills sets and know how in the field digital forensic. 

Opting for Composition Scheme for Financial Year 2023-24

Regular taxpayers can opt for Composition Scheme for Financial Year 2023-24 by navigating as 'Services-> Registration-> Application to opt for composition Levy' and filing Form CMP-02. This facility is available on GST Portal till 31st March, 2023.