Kindly find below updates of the decisions taken on the 38th meeting of the GST Council. (Notifications /Orders /Circulars for respective decisions have also been issued recently)
The Council has taken below major decisions in its meeting;
- Further Blockage on generation of E-way bills on non-filing of GSTR 1
- Late fee waiver for GSTR – 1, if filed up to 10th January 2020
- Reducing the limit of 20% to 10% on availment of ITC with respect to invoices not reflected in GSTR 2A
- Extension of due date for filing of Annual Return / reconciliation statement for F Y 17-18
- Standard operating procedure in case of non-filer of returns
- Restrictions on utilization of ITC
- Extension of time limits for those tax payers whose principal place of business is in the State of Assam, Manipur, Meghalaya or Tripura
The detailed analysis of each subject is as below:
1. Further Blockage on generation of E-way bills on non-filing of GSTR 1:
Earlier, Rule 138E had been amended to provide blockage of generation of E Way bills in case of non-filing of the two consecutive returns i.e. GSTR 3B – for regular tax payers and CMP 08 – for composition tax payers)
In consideration of the decision taken at 38th GST Council Meeting, Rule 138E has been further amended to provide blockage of generation of E Way bills in case of non-filing of GSTR 1 for two consecutive period i.e. monthly / quarterly as applicable to the taxpayer. However, it would be effective from 11th January 2020.
Therefore, taxpayers should remember that at any point of time, none of his two consecutive GSTR 1, GSTR 3B or CMP 08 are pending for filing.
2. Late fee waiver for GSTR – 1, if filed up to 10th January 2020
Vide Notification No. 74/2019 dated 26.12.2019, late fees with respect to GSTR – 1 for the period from July, 2017 to November, 2019 which are filed between the periods from 19th December, 2019 to 10th January, 2020 have been waived.
Therefore, if any GSTR 1 is pending for filing then it should be filed on or before 10th January 2020 to avoid late fees.
3. Reducing the limit of 20% to 10% on availment of ITC with respect to invoices not reflected in GSTR 2A
Vide notification No. 49/2019-Central Tax, dated 09.10.2019, sub-rule (4) of rule 36 of CGST Rules, 2017 has been inserted to provide that the total unmatched credit cannot exceed 20% of ITC available in GSTR 2A while filing of GSTR 3B.
The said restriction of 20% has further been reduced to 10% only.
Therefore, as per amended notification, total unmatched credit cannot exceed 10% of ITC available in GSTR 2A while filing of GSTR 3B.
4. Extension of due date for filing of Annual Return / reconciliation statement for F Y 17-18
It was announced by GST Council that Forms GSTR 9 and GSTR 9C will be further simplified. However, the utility for simplified version of the forms were not made available in time.
Therefore, Vide Removal of difficulty Order No. 10/2019-Central Tax dated 26.12.2019, due date for filing of annual return/reconciliation statement for FY 17-18 has been extended till 31.01.2020.
5. Standard operating procedure in case of non-filer of returns
Circular No. 129/48/2019 – GST dated 24.12.2019 has been issued detailing the Standard operating procedure to be followed by the department in case of non-filers of the returns.
The said process is summarized as below:
- Preferably, a system generated message would be sent to all the registered persons 3 days before the due date to nudge them about filing of the return for the tax period by the due date.
- After expiration of the due date for furnishing the return under section 39, a system generated mail / message would be sent to all the defaulters immediately that the said registered person has not furnished his return for the said tax period; the said mail/message is to be sent to the authorized signatory as well as the proprietor/partner/director/karta, etc.
- Five days after the due date of furnishing the return, a notice in FORM GSTR 3A shall be issued electronically to all the non fillers.
- In case the said return is still not filed by the defaulter within 15 days of the said notice, the proper officer may proceed to assess the tax liability to the best of his judgement (after considering the details of GSTR 1 and 2A) and would issue order in FORM GST ASMT-13. The proper officer would then be required to upload the summary thereof in FORM GST DRC-07.
- In case the defaulter furnishes a valid return within 30 days of the service of assessment order in FORM GST ASMT-13, the said assessment order shall be deemed to have been withdrawn.
However, if the said return remains unfurnished within the statutory period of 30 days from issuance of order in FORM ASMT-13, then proper officer may initiate proceedings under section 78 and recovery under section 79 of the CGST Act.
- In deserving cases, based on the facts of the case, the Commissioner may resort to provisional attachment to protect revenue under section 83 of the CGST Act before issuance of FORM GST ASMT-13.
- Also the actions for cancellation of registration in cases where the return has not been furnished for the period specified in section 29 would be initiated.
6. Restrictions on utilization of ITC:
New Rule 86A has been inserted in the CGST Rules, 2017 to grant power to the Commissioner or an officer authorized by him in this behalf to restrict the tax payer from utilizing the ITC in the following cases:
- The credit of input tax on the basis of tax invoice or debit note is issued by a registered person who has been found non-existent or not to be conducting any business from any place for which registration has been obtained or
- Credit of such tax invoice or debit note has been claimed without receipt of goods or services or both.
- The tax charged in respect any tax invoice or debit note has not been paid to the Government by the issuer.
- the registered person availing the credit of input tax has been found non-existent or not to be conducting any business from any place for which registration has been obtained; or
- the registered person availing any credit of input tax is not in possession of a tax invoice or debit note or any other document prescribed under rule 36.
Said restriction can be removed by the concerned officer if the conditions which initiated the imposition of the restriction no longer exists. Also said restriction shall cease to have effect after the expiry of a period of one year from the date of imposing such restriction.
7. Extension of time limits for those tax payers whose principal place of business is in the State of Assam, Manipur, Meghalaya or Tripura:
Vide Notification No. 76/2019 – Central Tax, Notification No. 77/2019 – Central Tax & Notification No. 78/2019 – Central Tax time limits for filing GSTR – 1 / GSTR 3B / GSTR – 7 have been extended in the referred States.