A one point stop for everything GST. Find all the notifications, circulars and orders here explained by GST experts in easier terms.

 

In certain cases/instances, questions have been raised regarding taxability of an activity or transaction as the supply of service of agreeing to the obligation to refrain from an act or to tolerate an act or a situation, or to do an act.

Applicability of GST on payments in the nature of liquidated damage, compensation, penalty, cancellation charges, late payment surcharge etc. arising out of breach of contract or otherwise and scope of the entry at para 5 (e) of Schedule II of Central Goods and Services Tax Act, 2017.

Circular 106/25/2019 dated 29.06.2019 wherein certain clarifications were given w.r.t rule 95A, inserted w.e.f. 01.07.2019, for refund of taxes paid on inward supply of indigenous goods by retail outlets established at departure area of the international airport beyond immigration counters when supplied to outgoing international tourist against foreign exchange.

The said rule 95A has been omitted, retrospectively w.e.f. 01.07.2019, vide notification No. 14/2022-Central Tax, dated 05.07.2022. Accordingly, the Board hereby withdraws, ab-initio, Circular No 106/25/2019-GST dated 29th June, 2019.

GSTN has recently developed a new functionality of PMT03A which allows proper officer to re-credit the amount in the electronic credit ledger of the taxpayer. Further, sub-rule (4B) in rule 86 of the CGST Rules, 2017 has been inserted to provide for re-credit in the electronic credit ledger where the taxpayer deposits the erroneous refund sanctioned to him

Following categories of refund sanctioned erroneously, re-credit of amount in the electronic credit ledger can be done through PMT-03A

a. Refund of IGST obtained in contravention of sub-rule (10) of rule 96.
b. Refund of unutilised ITC on account of export of goods/services without payment of tax.
c. Refund of unutilised ITC on account of zero-rated supply of goods/services to SEZ developer/Unit without payment of tax.
d. Refund of unutilised ITC due to inverted tax structure

Circular 173/05/2022 substitutes para 3.2 of the Circular No. 135/05/2020-GST

“3.2 Refund of accumulated ITC in terms of clause (ii) of first proviso to sub-section (3) of section 54 of the CGST Act is available where the credit has accumulated on account of rate of tax on inputs being higher than that on output. Since the input and output being the same in such cases, though attracting different tax rates at different points in time, do not get covered under the provisions of clause (ii) of the first proviso to sub-section (3) of section 54 of the CGST Act.

3.3 There may however, be cases where though inputs and output goods are same but the output supplies are made under a concessional notification due to which the rate of tax on output supplies is less than the rate of tax on inputs. In such cases, as the rate of tax of output supply is less than the rate of tax on inputs at the same point of time under concessional notification, the credit accumulated on account of the same is admissible for refund under the provisions
of clause (ii) of the first proviso to sub-section (3) of section 54 of the CGST Act, other than the cases where output supply is either Nil rated or fully exemptedor are notified by the Government for their exclusion from refund of accumulated ITC under the said clause.”

New GSTINs with UT Code 26 were created for the taxpayers of erstwhile UT of Daman and Diu w.e.f 1stAugust, 2020 on merger of the UT of Dadra & Nagar Haveli and UT of Daman &Diu. During the transition, the taxpayers have transferred their ITC balance from their electronic credit ledger of the old GSTIN (by reversing the balance amount available in electronic credit ledger through the last return in GSTR 3B filed for the old GSTIN prior to merger) to the new GSTIN (by availing the ITC for the said amount in the first return in GSTR 3B filed for the new GSTIN) as per procedure specified under Notification No. 10/2020-CT dated 21.03.2020

Representations have been received that due to transfer of ITC from old GSTIN to new GSTIN, the taxpayers are unable to apply for refund on account of zero-rated supplies and inverted rated structure for the period prior to merger in respect of old GSTIN as they have no ITC available in the electronic credit ledger of the old GSTIN for debiting the amount from electronic credit ledger for claiming refund of unutilised ITC. Such taxpayers are also unable to apply for such refund claim from the new GSTIN because all the invoices bear the old GSTIN and the system has certain validations which do not allow the refund application to be filed from the new GSTIN for the period prior to the merger

Central Goods and Services Tax Act, 2017, hereby prescribes the following procedure for such taxpayers

The application for refund shall be filed under ‘Any other’ category on the GST portal using their new GSTIN. In the Remarks column of the application, the applicant needs to enter the category in which the refund application otherwise would have been filed. For example, if the applicant wants to claim refund of unutilised ITC on account of export of goods/services, in remarks column, he shall enter ‘Refund of unutilised ITC on account of export of goods/services without payment of tax for the period prior to merger of Daman & Diu with Dadra & Nagar Haveli’. The application shall be accompanied by all the supporting documents which otherwise are required to be submitted with the refund claim.

At this stage, the applicant is not required to make any debit from the electronic credit ledger.

On receipt of the claim, the proper officer shall calculate the admissible refund amount as per law. Further, upon scrutiny of the application for completeness and eligibility, if the proper officer is satisfied that the whole or any part of the amount claimed is payable as refund, he shall request the applicant, in writing, if required, to debit the said amount from the electronic credit ledger through DRC-03. Once the proof of such debit is received by the proper officer, he shall proceed to issue the refund order in RFD-06 and the payment order in RFD-05

For the categories of refund where debit of ITC is not required, the applicant may apply for refund under the category “Any other” mentioning the reasons in the Remarks column. Such application shall also be accompanied by all the supporting documents which are otherwise required to be submitted along with the refund claim.

No refund claim, requiring debit from the electronic credit ledger or where the refund would result in re-credit of the amount sanctioned in the electronic credit ledger, shall be filed using old GSTIN.

Clarification regarding tax on supplies of restaurant service supplied through ecommerce operators (ECOs) under section 9(5) of the CGST Act, 2017

1. No longer be required to collect TCS
2. No mandatory requirement of taking separate registration if already registered
3. If services provided to unregistered person then also GST needs to be paid
4. Not to be recorded as inward supply (liable to reverse charge) in GSTR 3B of ECOs
5. ECO cannot utilize its Input Tax Credit to pay tax
6. If ‘restaurant service’ and other than restaurant service sold by a restaurant to a customer under the same order, advisable to ECOs raise a seprate bill in such case for resturant service.
7. Invoice will be issued by ECO for resturant service
8. In GSTR 3B of ECOs restaurant service reporting as outward taxable supplies for the time being.
Besides, ECO may also, for the time being report as restaurant service – Table
7A(1) for unregistered or Table 4A for registered recipient of GSTR-1, as the case
maybe, for accounting purpose.
9. Registered persons supplying restaurant services through ECOs under section 9(5) will report such supplies of restaurant services made through ECOs in Table of GSTR-1 and Table 3.1 (c) of GSTR-3B, for the time being.

Clarification on refund related issues

Q. 1
Whether the provisions of sub section (1) of section 54 of the CGST Act regarding time period, ( refund application may make before the expiry of two years from the relevant date) within which an application for refund can be filed,would be applicable in cases of refund of excess balance in electronic cash Ledger?

A:- No, in cases of refund of excess balance in electronic cash ledger , refund application cab be filled anytime.

Q. 2
Whether certification/ declaration under Rule 89(2)(l) or 89(2)(m) of CGST Rules, 2017 is required to be furnished along with the application for refund of excess balance in electronic cash ledger?

A:- No, furnishing of certification/ declaration for not passing the incidence of Tax to any other person is not required in cases of refund of excess balance in electronic cash ledger as unjust enrichment clause is not applicable in such cases.
Rule 89(2)(1) required a declaration to the effect that the incidence of tax, interest or any other amount claimed as refund has not been passed on to any other person, in a case where the amount of refund claimed does not exceed two lakh rupees.
Rule 89(2)(m) required a Certificate in issued by a chartered accountant or a cost accountant to the effect that the incidence of tax, interest or any other amount claimed as refund has not been passed on to any other person, in a case where the amount of refund claimed exceeds two lakh rupees:

Q. 3
Whether refund of TDS/TCS deposited in electronic cash ledger under the provisions of section 51/52 of the CGST Act can be
refunded as excess balance in cash ledger?

A:- Yes,
Any amount, which remains unutilized in electronic cash ledger, after discharge of tax dues and other dues payable under CGST Act and rules made thereunder, can be refunded to the registered person as excess balance in electronic cash ledger in
accordance with the proviso to sub-section (1) of section 54, read with sub-section (6) of section 49 of CGST Act.

Q. 4
Whether relevant date for the refund of tax paid on supplies regarded as deemed export by recipient is to be determined as per clause (b) of Explanation (2) under section 54 of CGST Act and if so, whether the date of return filed by the supplier or date of return filed by the recipient will be relevant for the purpose of determining relevant date for such refunds?

A:- Relevant date for purpose of filing of refund claim for refund of tax paid on deemed export would be the date of filing of return, related to such supplies, by the supplier.

Clause (b) of Explanation (2) under Section
54 of CGST Act reads as under:

“(b) in the case of supply of goods regarded as deemed exports where a refund of tax paid is available in respect of the goods, the date on which the return relating to such deemed exports is furnished;”

On perusal of the above, it is clear that clause (b) of Explanation (2) under section 54 of the CGST Act is applicable for determining relevant date in respect of refund of amount of tax paid on the supply of goods regarded as deemed exports, irrespective of the fact whether the refund claim is filed by the supplier or by the recipient.

Further, as the tax on the supply of goods, regarded as deemed export, would be paid by the supplier in his return, therefore, the relevant date for purpose of filing of refund claim for refund of tax paid on such supplies would be the date of filing of return, related to such supplies, by the supplier.

Clarification in respect of applicability of Dynamic Quick Response (QR) Code on B2C invoices and compliance of notification 14/2020- Central Tax dated 21st March, 2020 –

Issue:- In cases, where receiver of services is located outside India, and payment is being received by the supplier of services ,through RBI approved modes of payment, but as per provisions of the IGST Act 2017, the place of supply of such services is in India, then such supply of services is not considered as export of services as per the IGST Act 2017;
whether in such cases, the Dynamic QR Code is required on the invoice issued, for such supply of services, to such recipient located outside India?

Answer:- No,Wherever an invoice is issued to a recipient located outside India, for supply of services, for which the place of supply is in India, as per the provisions of IGST Act 2017, and the payment is received by the supplier, in convertible foreign exchange or in Indian Rupees wherever permitted by the RBI, such invoice may be issued without having a Dynamic QR Code, as such dynamic QR code cannot be used by the recipient located outside India for making payment to the supplier.”

The issues have been examined by GST Council in the 45rd meeting of the Council held on 17th September, 2021. The issue-wise clarifications are given below:

1. Services by cloud kitchens/central kitchens:
Service provided by way of cooking and supply of food, by cloud kitchens/central kitchens are covered under „restaurant service‟, as defined in notification No. 11/2017- Central Tax (Rate) and attract 5% GST [without ITC].

2. Supply of ice cream by ice cream parlors
ice cream parlors sell already manufactured ice- cream and do not cook/prepare ice-cream for consumption like a restaurant, it is supply of ice cream as goods and not as a service, even if the supply has certain ingredients of service. Accordingly, it is clarified that ice cream sold by a parlor or any similar outlet would attract GST at the rate of 18%.

3. Coaching services supplied by coaching institutions and NGOs under the central sector scheme of ‘Scholarships for students with Disabilities”
Where total expenditure is borne by the Government is covered under entry 72 of notification No. 12/2017-Central Tax (Rate) dated 28th June, 2017 and hence exempt from GST.

4. Satellite launch services provided by M/s New Space India Limited (NSIL).
It has been clarified vide Circular No. 2/1/2017-IGST dated 27.09.2017 that Place of Supply (PoS) of satellite launch services supplied by ANTRIX Corporation Ltd to customers located outside India is outside India and such supply which meets the requirements of section 2(6) of IGST Act, constitutes export of service and shall be zero rated. If the service recipient is located in India, the satellite launch services would be taxable.
As the satellite launch services supplied by NSIL are similar to those supplied by ANTRIX Corporation Ltd, the said circular No. 2/1/2017-IGST dated 27.09.2017, is applicable to them.

5. GST on overloading charges at toll plaza.
Overloading charges at toll plazas would get the same treatment as given to toll charges.
Entry 23 of notification No. 12/2017-Central Tax (Rate) dated 28th June, 2017, exempts Service by way of access to a road or a bridge on payment of toll charges.

6. Renting of vehicles to State Transport Undertakings and Local Authorities
Services where the said vehicles are rented or given on hire to State Transport Undertakings or Local Authorities are eligible for the exemption irrespective of whether such vehicles are run on routes, timings as decided by the State Transport Undertakings or Local Authorities and under effective control of State Transport Undertakings or Local Authorities which determines the rules of operation or plying of vehicles.

7. Services by way of grant of mineral exploration and mining rights
The service by way of grant of mining rights, during the period 1.7.2017 to 31.12.2018, it was taxable at 18% in view of principle laid down in the 14th meeting of the Council for residuary GST rate. Post, 1st January, 2019 no dispute remains as stated above.

8. Admission to indoor amusement parks having rides etc.
28% rate [entry 34 (iiia)] applies on admission to a place having casino or race club [even if it provides certain other activities] or admission to a sporting event like IPL. On the other hand, Entry 34 (iii), having a rate of 18%, covers all other cases of admission to amusement parks, or theme park etc or any place having joy rides, merry- go rounds, go- carting etc, whether indoor or outdoor, so long as no access is provided to a casino or race club. This clarification will also apply to Entries 34(iii) and 34(iiia) as they existed prior to their amendment w.e.f 01.10.2021.

9. Services supplied by contract manufacturers to brand owners for manufacture of alcoholic liquor for human consumption
The expression “food and food products” excludes alcoholic beverages for human consumption. As such, in common parlance also alcoholic liquor is not considered as food. Accordingly, services by way of job work in relation to manufacture of alcoholic liquor for human consumption are not eligible for the GST rate of 5% prescribed under the said entry. GST Council recommended that such job work would attract GST at the rate of 18%.

Circular 162 – Clarification in respect of refund of tax specified in section 77(1) of the CGST Act and section 19(1) of the IGST Act.

Section 77(1) CGST Act and Section 19 of IGST act speaks about tax wrongfully collected and paid to Central Government or State
Government
In these section one term is used as “subsequently held” and for this term this circular clarifies that in both cases where taxpayer himself or tax officer in any proceedings subsequently found that wrong tax collection and tax payment happen then both cases accordingly, refund claim under the said sections can be claimed by the taxpayer, provided the taxpayer pays the required amount of tax in the correct head.

Clarification related to relevate date for claiming for refund under section 77 of CGST Act and section 19 of IGST Act is also provided based on new nitification issued 35/2021 dated 24-09-2021
Now the refund can be claimed within 2 years from date of payment of tax in correct head. If this application for claim is made before of this new notification 35/2021 then 2 yeays will be calculated from date of notification. And if this claim made after this notification date then 2 years will counted from date of payment of tax in correct head

Also note that refund under section 77 of the CGST Act / section 19 of the IGST Act would not be available where the taxpayer has made tax adjustment through issuance of credit note under section 34 of the CGST Act in respect of the said transaction.

Circular 159 focuses on resolving the issue of confusion in the definitions of an intermediary with the help of examples.

Definition of intermediary
“Intermediary means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account.”
Primary requirements for intermediate service –
1. Minimum three parties
2.Two distinct supplies: There should be two distinct supplies in case of
provision of intermediary services;
(1) Main supply, between the two principals, which can be a supply of goods or
services or securities.
(2)An Ancillary supply, which is the service of facilitating or arranging the main supply
between the two principals. This ancillary supply is the supply of intermediary service,
and is clearly identifiable, and distinguished from the main supply.
A person involved in supply of main supply on principal to principal basis to another
person cannot be considered as a supplier of intermediary service.
3.Intermediary service provider to have the character of an agent, broker or any
other similar person.
4.Does not include a person who supplies such goods or services or both or
securities on his own account.
5 Sub-contracting for a service is not an intermediary service.
6 The specific provision of place of supply of ‘intermediary services’ under section 13
of the IGST Act shall be invoked only when either the location of supplier of intermediary
services or location of the recipient of intermediary services is outside India.

“It is mandatory for companies having turnover above Rs. 500 Cr. to comply with dynamic B2C QR code from 1st Dec 2020. However no penal provisions if same is not complied till 30th Jun 2021, subject to conditions

Clarification with respect of applicability of dynamic Quick Response Code on B2C invoices and compliance of notification 14/2020

1) Invoices issued to UIN holders shall be considered as invoice issued to unregistered user and shall comply with dynamic QR Code requirement
2) Separate details of bank account & IFSC details are not required since UPI ID is linked to a bank account of the payee/person collecting money.
3) Where the payment is collected by some person, authorized by the supplier, the UPI ID of such person may be provided in the Dynamic QR Code, instead of UPI ID of the supplier
4) In case of supply of services to recipient located outside India but payment is received in foreign currency and place of supply is within India (i.e. services not considered as an export), QR code is not required since same cannot be used for payment
5) Where the invoice number is not available at the time of digital display of dynamic QR code say in case of over the counter sales and the invoice number and invoices are generated after receipt of payment, the unique order ID/ unique sales reference number, which is uniquely linked to the invoice issued for the said transaction, may be provided in the Dynamic QR Code for digital display, as long as the details of such unique order ID/ sales reference number linkage with the invoice are available on the processing system of the merchant/ supplier and the cross reference of such payment along with unique order ID/ sales reference number are also provided on the invoice.
6) In case of receipt of part payments by way of advance or adjustment using voucher or discount coupon before QR Code generation, the code may provide only the balance amount payable and details of total invoice value, cross reference of advance adjustment and remaining amount shall be provided in invoice”

(i) GST is exempt on services provided by Central or State Boards ( including the boards such as NBE) by way of conduct of examination for the students, including conduct of entrance examination for admission to educational institution [under S. No. 66 (aa) of notif No. 12/2017-CT(R)].

(ii) GST is also exempt on input services relating to admission to, or conduct of examination, such as online testing service, result publication, printing of notification for examination, admit card and questions papers etc, when provided to such Boards [under S. No. 66 (b) (iv) of notif No. 12/2017- CT(R)].

(iii) GST at the rate of 18% applies to other services provided by such Boards,namely of providing accreditation to an institution or to a professional (accreditation fee or registration fee such as fee for FMGE screening test ) so as to authorise them to provide their respective services.

GST is exempt on service, falling under heading 9967 (service code), by way of access to a road or a bridge on payment of annuity [entry 23A of notification No. 12/2017-Central Tax].

Entry 23A of notification No. 12/2017-CT(R) does not exempt GST on the annuity (deferred payments) paid for construction of roads

It is clarified that services provided to an educational institution by way of serving of food ( catering including mid- day meals) is exempt from levy of GST irrespective of its funding from government grants or corporate donations [under said entry 66 (b)(ii)].

Educational institutions as defined in the notification include aganwadi. Hence, serving of food to anganwadi shall also be covered by said exemption, whether sponsored by government or through donation from corporates.

1) In order to ensure uniformity in the implementation of the provisions of section 30 & rule 23, till the time an independent functionality for extension of time limit for applying in GST REG-21 is developed on the GSTN portal, the Board, hereby provides the following guidelines for implementation of the provision for extension of time limit for applying for revocation of cancellation of registration under the said section and rule.

2) Any registered person whose registration is cancelled by the proper officer on his own motion, may apply to such officer in REG-21, for revocation of cancellation of registration within 30 days from the date of service of the cancellation order

3) Where a person applies for revocation of cancellation of registration beyond a period of 30 days from the date of service of the order of cancellation of registration but within 90 days of such date, the said person may request, through letter or e-mail, for extension of time limit to apply for revocation of cancellation of registration to the proper officer by providing the grounds on which such extension is sought.

4) The Joint/Additional Commissioner, on sufficient cause being shown and for reasons to be recorded in writing, may extend the time limit to apply for revocation of cancellation of registration. However, in case the concerned Joint/Additional Commissioner, is not satisfied with the grounds on which such extension is sought, an opportunity of personal hearing may be granted to the person before taking decision in the matter. In case of rejection of the request for the extension of time limit, the grounds for such rejection may be communicated to the person concerned, through the proper officer.

5) On receipt of the decision of the Joint/Additional Commissioner on request for extension of time limit for applying for revocation of cancellation of registration, the proper officer shall process the application for revocation of cancellation of registration according to the law and procedure laid down in this regard.

6) The circular shall cease to have effect once the independent functionality for extension of time limit for applying in FORM GST REG-21 is developed on the GSTN portal.

Clarification 1

Certain supplies of goods have been notified as deemed exports vide notification No. 48/2017-Central Tax. Further, the third proviso to rule 89(1) of the CGST Rules allows either the recipient or the supplier to apply for a refund of tax paid on such deemed export supplies.

Clarification 2 :
Para 26 of Circular No. 125/44/2019-GST dated 18th November 2019 gave a clarification in relation to cases where taxpayers had inadvertently entered the details of export of services or zero-rated supplies to a Special Economic Zone Unit/Developer in table 3.1(a)
instead of table 3.1(b) of FORM GSTR-3B of the 01.07.2017 to 30.06.2019 and were unable to claim
refund of the integrated tax paid on the same through FORM GST RFD-01A. This was
because of a validation check placed on the common portal which prevented the value of refund
of integrated tax/cess in FORM GST RFD-01A from being more than the amount of integrated
tax/cess declared in table 3.1(b) of FORM GSTR-3B. The said Circular clarified that for the
tax periods from 01.07.2017 to 30.06.2019, such registered persons shall be allowed to file the
refund application in FORM GST RFD-01A on the common portal subject to the condition
that the amount of refund of integrated tax/cess claimed shall not be more than the aggregate
amount of integrated tax/cess mentioned in the tables 3.1(a), 3.1(b) and 3.1(c) of FORM
GSTR-3B filed for the corresponding tax period.

A – Requirement of adding QR code is not applicable to an invoice where supplier of taxable service is

B – Following parameters shall be part of QR Code added on B2C Invoice
Further, Dynamic QR Code should be such that it can be scanned to make a digital payment

C. Where the QR Code is not added on the invoice but the supplier makes available to customers an electronic mode of payment like UPI Collect, UPI Intent, or similar other modes of payment, through mobile applications or computer-based applications and the details of the merchant and the transaction are displayed/ captured.

Dynamic QR Code on B2C invoices are not mandatory for pre-paid invoices

D. The provisions of the notification shall apply to each supplier/registered person separately, if such person is liable to issue invoices with Dynamic QR Code for B2C supplies as per the said notification. In case, the supplier is making supply through the Ecommerce portal or application, and the said supplier gives cross references of the payment received in respect of the said supply on the invoice, then such
invoices would be deemed to have complied with the requirements of Dynamic QR Code. In cases other than pre-paid supply i.e. where payment is made after generation / issuance of invoice, the supplier shall provide Dynamic QR Code on the invoice.

Standard Operating Procedure issued for implementation of Notification 94/2020.

Notification 94/2020 authorizes immediate suspension of GST registration where significant deviation/anomalies are noticed between GSTR 3B and 1 or GSTR 3B and 2B, indicating contravention of the provisions of the Act or the rules.

Intimation of suspension is provided in FORM REG 31 Electronically.

Clarification on treatment of RCM on renting of motor vehicles to body corporates by non body corporates

It clarifies that RCM shall be
applicable on the service by way of renting of any motor vehicle designed to carry passengers
where the cost of fuel is included in the consideration charged from the service recipient only if
the supplier fulfils all the following conditions:–
(a) is other than a body-corporate;
(b) does not issue an invoice charging GST @12% (6% CGST + 6% SGST) from the service
recipient; and
(c) supplies the service to a body corporate. “

As per SOP, a tax official needs to issue a notice to a registered individual who fails to file the return u/s 39 or u/s 44 or u/s 45. This notice is to be issued u/s 46 of the CGST Act with rule 68 of the Central Goods and Services Tax Rules, 2017 and in form GSTR-3A to intimate the non-filers to file the return within fifteen days of notice. Besides, section 62 demands the assessment of non-filers of return of registered individual who fails to file return u/s 39 or u/s 45 even when the notice is issued u/s 46. A format of FORM GSTR-3A has also been released by CBIC.

The CBIC has also notified that there is no need to issue a separate notice for the best judgement assessment u/s 62 and the same can be issued in form ASMT-13, when the non-filer again fails to file the return within 15 days of issuance of notice in form GSTR 3A, without any additional communication.

The process of deduction and deposit of TDS, the DDO can follow any of the following two options :

i. Individual Bill-wise deduction and its deposit to the Government by DDO

ii. Bunching of deductions and its deposit by DDO