Mismatch of ITC available in GSTR-2B statement & ITC claimed in GSTR-3B return online

Compliance advisory for  GST DRC-01C - Difference in Input Tax Credit (ITC) available in GSTR-2B & ITC claimed in the GSTR-3B Return.

GSTN has developed a functionality to generate automated intimation in Form GST DRC-01C which enables the taxpayer to explain the difference in Input tax credit available in GSTR-2B statement & ITC claimed in GSTR-3B return online as directed by the GST Council. 

This feature is  live on the GST portal. This functionality compares the ITC declared in GSTR-3B/3BQ with the ITC available in GSTR-2B/2BQ for each return period. If the claimed ITC in GSTR 3B exceeds the available ITC in GSTR-2B by a predefined limit or the percentage difference exceeds the configurable threshold, taxpayer will receive an intimation in the form of DRC-01C.

Upon receiving an intimation, the taxpayer must file a response using Form DRC-01C Part B. The taxpayer has the option to either provide details of the payment made to settle the difference using Form DRC-03, or provide an explanation for the difference, or even choose a combination of both options.

In case, no response is filed by the impacted taxpayers in Form DRC-01C Part B, such taxpayers will not be able to file their subsequent period GSTR-1/IFF.

source: taxation library

GST Update:- E- Invoice

E-INVOICES APPLICABLE LIMIT HAS BEEN  REDUCED TO RUPEES 5 CRORES WITH EFFECT FROM FIRST AGUST, 2023.

Source: Notification No. 10/23 Central Tax, dated 10.05.2023

GST CHANGES EFFECTIVE FROM 01.NOV. 2022

 Four-digit HSN code mandatory for GST return: From November 1, it will be mandatory for taxpayers  to provide a four-digit HSN code in the GST return with a turnover of less than Rs 5 crore.

Rule 46(s) – Declaration in tax invoice under GST

Registered persons whose Annual Aggregate Turnover (AATO) exceeds the notified limit but were exempted by CGST Notification No. 13/2020 & No. 61/2020 & No. 70/2020; eg. as below:

·       Special Economic Zone Units

·       Insurers

·       Banking companies or financial institutions, including a non-banking financial company (NBFC)

·       Goods Transport Agency (GTA) supplying services in relation to transportation of goods by road in a goods carriage

·       Suppliers of passenger transportation service

·       Suppliers of services by way of admission to an exhibition of cinematograph films in multiplex screens

·       Persons registered in terms of Rule 14 of CGST Rules [Online Information Database Access and Retrieval services](OIDAR)

[Declaration under Rule 46(s)] that needs to be fulfilled while generating a tax invoice by the registered person to whom by virtue of AATO, e-invoicing would have been applicable as per rule 48(4) but is not generating e-invoices due to certain exemptions notified by Govt.

Rule 46(s) was inserted by First Amendment, 2022 to the CGST Rules, 2017 vide a CGST Notification no. 14/2022 dated 5th July 2022 and will come in force on 5th July 2022.

The following declaration shall be added to the tax invoice for cases where the e-invoice is not being generated

” I/We hereby declare that though our aggregate turnover in any preceding financial year from 2017-18 onwards is more than the aggregate turnover notified under sub-rule (4) of rule 48, we are not required to prepare an invoice in terms of the provisions of the said sub-rule.”

Tax invoice which is required to contain the declaration under rule 46(s)?

Taxpayers whose AATO exceeds the notified limit will be required to add the declaration in the tax invoices in the following cases

Taxable Supplies	Whether an e-invoice is being generated	Declaration under rule 46(s) to be added in e-invoice
B2B	Yes	No
B2C	No	Yes
B2B or B2C supplies of an exempted category of taxpayers. eg. GTA, NBFC etc.	No	Yes

GST Amnesty Scheme

 As per the proposals made in  43rd GST Council meeting  on 28th May, 2021 via video conferencing, the Finance Ministry has notified the  GST Amnesty Scheme. 

As per the Amnesty Scheme, the taxpayers having an aggregate turnover of more than rupees 5 crores in the preceding financial year for the tax period March, 2021, April, 2021 and May, 2021, the period for which the late fee waived will be 15 days from the due date of furnishing return. 

The Taxpayers having an aggregate turnover of up to rupees 5 crores in the preceding financial year who are liable to furnish the return as specified under sub-section (1) of section 39 in case of the tax period of March, 2021 the period for which the late fee waived will be 60 days from the due date of furnishing return; in case of the tax period of April, 2021 the period for which the late fee waived will be 45 days from the due date of furnishing return and  in case of the tax period of May, 2021 the period for which the late fee waived will be 30 from the due date of furnishing return. 

Taxpayers having an aggregate turnover of up to rupees 5 crores in the preceding financial year who are liable to furnish the return as specified under proviso to sub-section (1) of section 39 for the quarter January-March, 2021 the late fee waived will be for 60 days from the due date of furnishing return. 

The government has notified that the registered persons who failed to furnish the return in FORM GSTR-3B for the months /quarter of July, 2017 to April, 2021, by the due date but furnish the said return between the period from the 1June, 2021 to the 31August, 2021, the total amount of late fee under section 47 of the said Act, shall stand waived which is in excess of five hundred rupees. 

The Board has further notified that where the total amount of central tax payable in the said return is nil, the total amount of late fee under section 47 of the said Act shall stand waived which is in excess of two hundred and fifty rupees for the registered persons who failed to furnish the return in FORM GSTR-3B for the months / quarter of July, 2017 to April, 2021, by the due date but furnish the said return between the period from the 1 June, 2021 to the 31 August, 2021. 

The total amount of late fee payable under section 47 of the said Act for the tax period June, 2021 onwards or quarter ending June, 2021 onwards, as the case may be, shall stand waived which is in excess of Rs. 250/- for the registered persons whose total amount of central tax payable in the said return is nil, who fail to furnish the returns in FORM GSTR-3B by the due date. 

The Government has further waived the late fee for the tax period June, 2021 onwards or quarter ending June, 2021 which is in excess of Rs.1000 for Registered persons having an aggregate turnover of up to Rs.1.5 crores in the preceding financial year. 

Lastly, the late fee has been waived for the tax period June, 2021 onwards or quarter ending June, 2021 which is in excess of Rs.2500/- for taxpayers having an aggregate turnover of more than rupees 1.5 crores and up to rupees 5 crores in the preceding financial year. 

Notifications: Amendments as per recommendations of GST Council

Real-time tracking details of e-way bill and vehicle

With effect from January 1, 2021, the government has integrated RFID/Fastag with the e-way bill system and a transporter is required to have a RFID tag in his vehicle and details of the e-way bill generated for goods being carried by the vehicle is uploaded into the RFID. When the vehicle passes the RFID Tag reader on the highway, the details fed into the device gets uploaded on the government portal. 

The information is later used by the revenue officials to validate the supplies made by a GST registered person. To improve tax compliance, the government has also started blocking of EWB bill generation if a GST registered taxpayer has not filed GSTR- 3B return for the last two successive months. Also, the government has blocked the generation of multiple EWBs on one invoice. If the EWB is once generated using an invoice number or document number, then none of the other parties can generate another EWB using the same invoice number.

Besides, the e-way bills system has enabled auto calculation of distance based on PIN codes. The system will auto calculate the distance between the source and destination, based on PIN codes.

GST officers have been armed with real-time data of commercial vehicle movement on highways with integration of the e-way bill (EWB) system with Fastag and RFID, a move which will help in live vigilance of such vehicles and check GST evasion. Additional features have been added to the e-way bill mobile application of tax officers, which will provide them real-time tracking details of e-way bill and vehicle to help them nab tax evaders who are misusing the e-way bill system.

Taxmen can now access reports on vehicles that have passed the selected tolls without e-way bills in the past few minutes. Also, the vehicles carrying critical commodities specific to the state and have passed the selected toll can be viewed. Any suspicious vehicles and vehicles of EWBs generated by suspicious taxpayer GSTINs , that have passed the selected toll on a near real time basis, can also be viewed in this report. The officers can use of these reports while conducting vigilance and make the vigilance activity more effective. Also, the officers of audit and enforcement wing can use these reports to identify the fraudulent transactions like bill trading, recycling of EWBs.

Source: EWB Vehicle Tracking Module

Budget 2021 Indirect Tax Proposals

The Union Budget 2021-22 was presented by the Hon’ble Finance Minister Nirmala Sitharaman on 1st February 2021 in the Parliament. Highlights of Indirect Tax Proposals: Bugget 2021- Highlights of Indirect Tax Proposals