GST May 2020 Updates

GST May 2020 Updates l Notifications l Case Laws l Council Meetings l

GST (Goods and Service Tax)

GST Compliance Calendar – Returns for the M/O May 2020 to be filed in June 2020

ReturnReturnsOriginal  DateRevised Date
GSTR-1Outward supply for the month of May  202011thJune 202030th June 2020
GSTR-5Non-resident foreign taxpayers return for the month of May   202020thJune 202030th June 2020
GSTR-6Input service distributor for the month of May   202013thJune 202030th June 2020
GSTR-7Tax Deducted at Source for May  202010thJune 202030th June 2020
GSTR-8Tax Collected at Source by e-commerce operator for May   202010thJune 202030th June 2020
GSTR-3B Summary return tax payment for the month of May    202020thJune 202030th June 2020
Annual ReturnFor the F.Y. 2018-19  30th September 2020 notified vide notification 41/2020 CGST

Concession in filing GSTR 3B (Tax deposit) returns for the months of Feb to April 2020 in June 2020

gst update may

GST May 2020 Updates l Notifications l Case Laws l Council Meetings l

GSTR-3BforMay2020–Lastdateextended: GSTR-3BforthemonthofMay2020canbefiled by27-06-2020bytaxpayershavingan aggregateturnoverofmorethanRupees5crore in      theprevious       financial            year.     However, taxpayershavingaggregateturnoverlessthan Rupees5crorecanfilethisreturnby12thor14thofJuly,dependingupontheStateinwhichthey havetheirprincipalplaceofbusiness.Broadly thesetaxpayersinsouthernandwesternStates mustfilethisreturnby12-07-2020whilesuch taxpayersinNorthernandEasternpartofIndia havetofileGSTR-3Bby14-07-2020.(Notification No.36/2020-CentralTax,dated03-04-2020)

TRAN-1–Timelimitforfiling–CGSTSection 140amendedwitheffectfrom01-07-2017: Section128ofFinanceAct,2020hadproposed toamendSection140oftheCentralGoodsand ServicesTaxAct,2017witheffectfrom01-07-2017.Thesaidamendmentwhichwasnot broughtintoforceimmediatelyontheenactment oftheFinanceAct,hasnowbeennotified.Asper Notification,18-05-2020isthedatefromwhich provisions of      Section 128,      making  such retrospectiveamendments, havecomeinto force. (Notification No.43/2020-CentralTax,dated16- 05-2020)

EwayBill–Extensionofvalidity:Validity periodofE-WayBillgeneratedonorbefore24-03-2020whereitsvalidityexpiredduringthe periodfrom20-03-2020to15-04-2020,hasbeen extended (deemed extension)till31-05-2020. ((Notification No.40/2020-CentralTax,dated05- 05-2020)

COVID-19relatedrelaxationsinvarioustimelines:CBIChasclarifiedthattherequirementof exportingthegoodsbythemerchantexporter within90daysfromthedateofissueoftax invoicebytheregisteredsupplier,asprescribed underNotificationNo.40/2017-CentralTax ,will getextendedto30-06-2020,providedthe completionofsuch90daysperiodfallswithin20- 03-2020to29-06-2020.  DuedateoffurnishingofFORMGSTITC-04for the quarter ending March 2020 also stands extended to 30th June 2020 (Circular No. 138/08/2020-GSTdated06- 05-2020)

GSTR3B can furnish through EVC during period from 21st April to 30th June 2020–CGST(FifthAmendment)Rules,2020notified:Central GoodsandServicesTaxRules,2017havebeen amendedtoinsertaprovisoinRule26(1)ofthe CGSTRules, 2017 and,froma date to be notified later,anewRule67A.Asperthenewprovisoin Rule26(1),aRegisteredPersonregisteredunder theCompaniesAct,2013canfurnishGSTR-3B, verifiedthroughanelectronicverificationcode (“EVC”)duringtheperiodfrom21-04-2020to30-06-2020.Further,aspernew Rule 67A,Nilreturn GSTR-3Bcanbefiledthroughashortmessaging service(“SMS”)usingtheregisteredmobile numberandthesaidreturnshallbeverifiedbya registeredmobilenumberbasedOneTime Passwordfacility.MeaningofNilreturnhasalso been provided in the newRule.(Notification no.  38/2020- CT dated05- 05-2020)

GST May 2020 Updates l Notifications l Case Laws l Council Meetings l

Cases Law

Departmentcouldnotoperationalizethestatutory forms(GSTR-2A)envisagedundertheCGST Act, RectificationofpreviouslyfiledFormGSTR-3B,intheperiodtowhichitrelates,permissible:TheDelhiHighCourthas alloweda writpetitionforrectificationofpreviouslyfiled FormGSTR-3Bintheperiodtowhichitwas related.ItheldthatPara4oftheCircularNo. 26/26/2017-GST,           dated       29-12-2017,which statedthatFormGSTR-3Bcanbecorrectedonly inthemonthinwhichtheerrorswerenoticed(by filingreturnforthatsubsequentmonth),wasnot inconsonancewiththeprovisionsoftheCGST Act.TheCourt wasalsooftheview thatsince the Departmentcouldnotoperationalizethestatutory forms(GSTR-2A)envisagedundertheCGST Act,resultingindeprivingthePetitionerto accuratelyreconcileitsinputtaxcredit,the DepartmentcannotdeprivethePetitionerofthe benefitsthatwouldhaveaccruedinfavourofthe Petitioner,ifsuchformswouldhavebeen enforced.Thepetitionerinitsmonthlyreturns GSTR-3BfromJulytillSeptember2017recorded the ITCbased on estimate and the exact ITC was discoveredonlyinOctober2018whenGSTR-2A wasoperationalised.(BhartiAirtelLimitedv. UnionofIndia– 2020 VIL197 DEL)

Transportationbyownvehicle–Issuanceornotofconsignmentnote,notmaterialforGSTliability:Rejectinganappeal  againstan advancerulingholdingthatnon-issueofa consignmentnotefortransportationbyown vehiclesonthebasisofinvoice(s)ande-waybill willnotbeanexemptsupply,theRajasthan AppellateAARhasheldthatifthelienofthe goodsistransferredandtheappellantbecomes responsibleforthegoodstillitssafedeliveryto theconsignee,theserviceswillbeclassifiableas goodstransportagencyservicesandissuanceof consignmentnoteornotdoesnotmakeany difference.Itwasruled,however,thatifthe vehiclesareprovidedtotheclientonrentalfor useaspertheirrequirement,theserviceswillbe classifiableas‘rentalservicesoftransport vehicles’.Theservicestobeprovidedbythe appellantwasheldliabletoGSTunder NotificationNo.11/2017-CentralTax(Rate), undertheservicesrelatingtotransportationof goodsorrentalservicesoftransportvehicle includingsupportingservice,dependinguponthe exactnatureoftheactivitytobecarriedoutby them.(KMTransLogisticsPrivateLimited – 2020VIL 22 AAAR)

Valuation–Inclusion/exclusionofvarious typesofincomeinaggregateturnover:AAR Karnatakahasheldthattheincomereceived towardssalary/remunerationasaNon-Executive Directorofaprivatelimitedcompany;rentingof commercialpropertyandthevaluesofamounts extendedasdeposits/loans/advancesoutof whichinterestisbeingreceived,aretobe included in the aggregate turnover, for registration.Italsoheldthattheincomereceived fromrentingofresidentialpropertyistobe includedintheaggregateturnover,thoughitis anexemptedsupply.TheAuthority,however, wasoftheviewthatPartner’ssalaryorshareof profit,receivedaspartner,fromapplicant’s partnershipfirm;maturityproceedsoflife insurancepolicyanddividendIncomeonshares andcapitalgain/lossonsaleofshares,werenot includible.(AnilKumarAgrawal-2020- VIL 118 AAR)

GST May 2020 Updates l Notifications l Case Laws l Council Meetings l

Customs

ValidityofexistingExportPerformance CertificatesforFY2019-20extendedup to30-09-2020:CBIC hasmadeamendmentsin various conditionsunderNotificationNo.50/2017-Cus. -(Jumboexemptionnotification)toextendthe validity        of         existing            Export   Performance Certificatesforthefinancialyear2019-20,upto 30-09-2020.Notification amends ConditionNos.10,21,28,32,33,36and101of the       basic    notification.    Accordingly, Export PerformanceCertificatesissuedfortheFY2019-20andvalidtill31-03-2020willnowbeeligible forimportofunutilisedvalueandquantityof goods specifiedinthecertificate, till30-09-2020 (NotificationNo.23/2020-Cus.,dated 14-05-2020)

Masks            Export       policy       revised:        DGFT NotificationNo.44,dated31-01-2020and NotificationNo.52dated19-03-2020havebeen amendedbytheDGFTvidetoallowtheexport ofnon-surgicalandnon-medicalmasksofall types(cotton,skill,woolandknitted)fallingunder ITC(HS)Codes392690,621790,630790, 901890and9020.Itmaybenotedthatexportof allothermasks,fallingunderanyITC(HS)Code includingtheabovementioned,continuesto remain prohibited  (NotificationNo. 6/2015-20,dated16-05-2020)

Sanitizers-Exportpolicyofsanitizers,other thanalcohol-basedhandsanitizers,relaxed: VideNotificationNo.53/2015-20,dated24-03-2020exportofsanitizers[Sr.No.207Dof Schedule2ofITC(HS)]withHSCodes3401, 3402,30049087and380894wasprohibited. However,saidnotificationhasnowbeen amendedbyDGFTtoprohibitexportofonly alcohol-basedhandsanitizersfallingunderHS codes3004,3401,3402 and 380894. (NotificationNo.4/2015-20, dated06-05-2020)

Metallicscrapandwaste-SubmissionofscannedcopyofPre-shipmentInspectionCertificate:ScannedcopyofPre-shipment InspectionCertificate(PSIC)alongwithan undertakinginaspecifiedformatisnow acceptabletill30-06-2020,inplaceofaphysical copy,forCustomsclearanceofmetallicscrap andwaste. AccordingtoTradeNoticeissued in this context,which also specifiestheundertaking,theoriginalPSIC needstobesubmittedtotheCustomswithin60 days of the clearance. (TradeNoticeNo. 9/2020-21,    dated 06-05-2020)

GST May 2020 Updates l Notifications l Case Laws l Council Meetings l

Cases Law

Valuation–Turnkeycontracts–Valueofdrawingsanddesignsforpostimportationactivitieswhennotincludible without specificfindingonexistenceof“condition”as contemplatedinRule9(1)(e),valueofallthese componentscouldnotbeaddedtoarriveatthe assessablevalueofequipment:SupremeCourt hasupheldtheCESTATdecisionacceptingthe importer’spleaforsegregatingthevalueof equipmentsandtheotherfeesonservices coveredbythesamecontracts,wherethelatter chargesweremeantforpost-importationphase ofthearrangementbetweenthecontracting parties.Revenue’scontentionthatthesewere turnkeycontractsandhenceimportofdesigns anddrawings,etc.,evenforpost-importation activitiesshouldbetreatedasconditionofimport oftheequipmentsasthoseintangibleitems formedanintegralpartofthearrangement,was thusrejected.TheCourtobservedthatan importerofequipmentsofaplantcouldalways choosetoobtaindrawingsanddesignsfor undertakingpostimportationactivitiesfroman overseassupplieroftheequipmentsanditmay conferonsucharrangementsattributesofa turnkeycontract,butthatfactbyitselfwouldnot automaticallyattractthe“condition”clause containedinRule9(1)(e)oftheValuationRules, 1988.TheApexCourtalsonotedthatthe Revenuehadnotmadeoutacasethatthe disputeditemsofcontractdidnotrelatetopost-importationactivities.TheCourtwasoftheview thatjustbecausedifferentcomponentsofa contractormultiplecontractsgavetheshapeof turnkeyprojecttotheimporteditems,without specificfindingonexistenceof“condition”as contemplatedinRule9(1)(e),valueofallthese componentscouldnotbeaddedtoarriveatthe assessablevalueofequipment.(Commissionerv.SteelAuthorityofIndiaLtd.–Judgement dated 27-04-2020inCivilAppealNo.6398of2009, Supreme Court)

CAcertificatenotconclusivetoovercomeunjustenrichment:CESTATAhmedabadhas heldthataCACertificatealonecannotbea conclusivedocumenttoovercometheaspectof unjustenrichment,wheretheassesseecouldnot submitthebooksofaccounts.TheTribunalin thisregardnotedthateventhoughtheCA certificate   can       be taken as       support for establishingunjust-enrichment,butinthepresent caseboththeCAcertificateswereofveryold period.Itheldthatforthepurposeofunjust- enrichmentthepresentpositionisrelevantfor whichneitheranyCAcertificatenoranybooksof accountwereproduced.(VarshaPlasticsPvt.Ltd.v.Commissioner-2020(1)TMI360 CESTATAhmedabad)

GST May 2020 Updates l Notifications l Case Laws l Council Meetings l

Excise & Service Tax

SabkaVishwasLegacyDisputeResolutionScheme                   Non-mention    ofpenalty inapplicationformnotfatal – It was by mistake and allowed to make necessary corrections :GuwahatiHighCourt hasallowedthepetitioner-assesseetomake necessarycorrectionsintheirapplicationearlier filedinrespectofSabkaVishwasLegacyDispute Resolution   Scheme      2019.   The            Revenue departmenthadearlierrejected the application as assesseehadnotmentionedaboutthepenalty imposed.TheCourtwasoftheviewthatthe mistakemadebythepetitionerbynotstating aboutthepenalty,inFormSVLDRS-1,cannotbe saidtobeamistakebywhichthepetitioner claimedanunduebenefitwhichtheyotherwise werenotentitledunderthelaw,andhencewasa curablemistake.Itobservedthattheassesseemay bemore benefitedandwouldbe entitledto a greaterexemptioniftheamountofpenaltywas mentioned.(AssamCricketAssociationv.UnionofIndia –2020 VIL219 GAU ST)

Manufacture–Fixinghologram/barcodeandplacingoutercoveronbottlesofmedicinesisnotmanufacture:Fixingthehologramandthe barcode to avoid duplicityand placing outer cover toensuresafetransportationdoesnotamountto ‘manufacture’.DismissingRevenue’sappeal,the MadhyaPradeshHighCourtinthisregard observedthatitisthesameprocesswhichis beingcarriedoutbythecompanieslikeFlipkart, Amazon,etc.,astheyarealsojustputtinga coveroverthegoodsreceivedfromvarious companieswhohavepaidthedutyandare deliveringtotheconsumers.TheCourtalso notedthatthegoodsreceivedbytheassesseewerealreadyinapre-packedform,bore necessarydeclarationincludingMRPandthatit wasnobody’scasethatthegoodsweresold abovetheMRPtotheconsumer.CBICCircular dated    08-12-2011        was      relied    upon.    The departmenthadrelieduponChapterNote6to Chapter30andChapterNote5toChapter33of theCentral Excise Tariff            to contend ‘manufacture’.(Commissionerv.ManishSinghal – 2020 VIL 211 MP CE)

GST May 2020 Updates l Notifications l Case Laws l Council Meetings l

With Warm Regards & Jai Hind

CMA Rakesh Bhalla

Information Source – M/s LKS, CBIC.gov.in., various internet websites including Income tax website, Dailyhunt, Deloitte, livemint.com,  related links and various notifications, circulars, orders, press releases and other sources-many thanks to all.

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