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03-03-2020
Seven Important changes/ applicable provisions/ challenges under new Gst regime
1. E-Invoicing will be introduced w.e.f. 1st April 2020 for taxpayers whose aggregate turnover (PAN India basis) is Rs. 100 Cr. Or more and trials have been already started on https://einvoice1-trial.nic.in/ & https://einv-apisandbox.nic.in/ for the taxpayers whose aggregate turnover (PAN India basis) is Rs. 500 Cr. Or more and sooner window for taxpayer whose aggregate turnover (PAN India basis) is Rs. 100 Cr. Or more will be started.
2. New Gst returns applicable from 1st April 2020
After introduction of E-invoicing most of the transactions in Annexure 1 will be auto-populated and only the details of imports and transactions on which tax paid on RCM has to be uploaded. Similarly, almost each transaction in Annexure-II will be auto-populated and this will have to be accepted or rejected. Modification will not be possible until supplier amends the same. However, the taxpayer having turnover less than Rs. 100 Cr will have to upload all the transactions in Annexure-I (Outward Supply, imports and transactions on which tax paid on RCM). Suitable system needs to be developed.
3. No Restricted ITC
After introduction of new tax return, earlier methodology of availing the ITC i.e. based on the invoice received or 120% of matched credit or 110% matched credit will not be in existence and there will not be credit availment by recipient, but it will be auto-credit in electronic credit ledger of the taxpayer based on accepted transactions appearing in Annexure-II of GST RET-1.
Therefore, it will be utmost importance for all the taxpayers to ensure regular matching of inward supplies with suppliers, uploading of returns (in other words, matching with GSTR-2A). It will be utmost additional work for all taxpayers to follow-up with the supplier either to amend the transactions, which are not been accepted by recipient or supplier have not uploaded such supply or there are errors in uploading.
Further, those suppliers who are opting GST “SUGAM” then, they will be filing the quarterly return and therefore, these transactions will appear only on quarterly basis and ITC will be locked for 2 months, which will have immediate liquidity issue. Every taxpayer will have to re-visit the supply chain strategy and strategy for selection of suppliers considering above aspects.
4. Number of Departmental Notices
It is important to note:
a. Centre sending out lakhs of GST recovery notices to 2.62 lakh taxpayers pan-India
b. Centre to assess taxpayers with mismatch of declared & paid liability; centre identifies Rs 36,000 Cr worth due to Centre on account of mismatch
c. Centre to ask taxpayers to refund Rs 37000 Cr where credits were taken on invoices for FY 18 & FY 19 but were time-barred
d. Centre To reach out the taxpayers for claiming more than 10% of credit due in GSTR 2A; estimates Rs 46,000 Cr of extra credit already availed by taxpayers
There are the cases, where there is a mismatch of the credit, department have issued number of notices in Form ASMT-10 asking the reason for mismatch and reverse the ITC in case of mismatch, but in accordance with provisions of Section 16(4) of CGST Act, 2017, ITC credit can be availed meeting the following conditions :
1. Goods and Services Receipts
2. Tax invoices in possession
3. Tax has been paid
4. GST Returns are filed
Provisions of Section 41 relating to matching was never been implemented till date and hence such notices not to have been issued.
Further, number of taxpayers have received the notices for claiming more than 20% / 10% credit i.e. matched transactions in GSTR-2A. Such notices are also unwarranted and circular / notifications restricted to such credit in contradiction with GST Law.
5. Interest on gross vs net tax liability on delayed filing of Gst returns
Department sending notices for interest on delayed filing of Gst returns
Madras Hight court didn't place reliance on the judgement of Telangana High court and ordered that interest be levied on net liability only
Today, however, the amendment stands incorporated into the Statute and comes to the aid of the assessee.
Consequentially, the Writ Petitions were allowed, and the Impugned Notices were set aside.
6. Letters issued for Departmental GST Audit
Number of taxpayers have received the letters in accordance with provisions of Section 65 of CGST Act 2017 for conducting the audit for the period July 2017 to March 2018 and in some cases, even till March 2019 even though annual return has not been still filed.
7. Gst audit for 2018-19
Utility released for GSTR-9 & GSTR-9C for FY 2018-19 has following errors:
Summary of GSTR-2A, 3B & GSTR 1 not coming properly
only Table 4, 5, 6 and 9 have data and rest all are showing errors
Trans 1/2 credit reappearing
No effect of table 10 11 12 13 14 of 17-18 in 18-19.
no separate rows given in 18-19 Form.
There is no row/ table where we deduct ITC of 17-18 but claimed in 18-19, To arrive correct ITC of 18-19 because GSTR 3B ITC of 18-19 might contains ITC of 17-18 as well
Also same logic for outward supplies, because we might have tax paid in 18-19 Which is of 17-18 liability.
Table 8 Data of GSTR 2A figure not appearing.
Trans 1 credit is reappearing in table 6.
No clarity on tables, which was optional in GSTR9 and GSTR 9C. Whether such option will continue or not?
Similarly, utility for filing GSTR-9C is yet to be ready.
Therefore, how to meet the deadline, will be the challenge for each taxpayer and Chartered Accountant OR Cost Accountant. |
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