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Amnesty under sec 128A read with rule 164 and circular 238/2024- Demystified

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Based on the recommendations of the GST Council made in its 53rd meeting, Section 128A has been inserted in the CGST Act, 2017 with effect from 01.11.2024 to provide for waiver of interest or penalty or both, relating to demands under section 73 of the CGST Act pertaining to Financial Years 2017-18, 2018-19 and 2019-20, subject to certain conditions. Subsequently, based on the recommendations of the GST Council made in its 54th meeting, Rule 164 has been inserted in CGST Rules, 2017 with effect from 01.11.2024 vide notification No.20/2024-Central tax dated 8th October 2024 , providing for procedure and conditions for closure of proceedings under section 128A of CGST Act. Further, on top of this CBIC issued a  Circular No. 238/32/2024-GST dated 15th October 2024 to demystify these new provision and rule, yet there are overlaps unavoidable in this circular as it traces underlying provision and rule as necessary. The FAQs is good value addition though.  Over this blog, the proce...
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Surge of recovery notices for erroneous refunds under rule 96(10)- What should you know as an exporter

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  In the recent days, we might have experienced surge of recovery notices citing rule 96(10) for erroneous refunds deposited under sec 54 read with rule 89 for zero rated supplies with the payment of IGST.  The context and relevant provisions and rules: Rule 86(4B)- Re-credit in electronic credit ledger if erroneous refund deposited - Where a registered person deposits the amount of erroneous refund sanctioned to him -  (a) under section 54(3) of the CGST Act, or  (b) under rule 96(3), in contravention of rule 96(10) of CGST Rules  along with interest and penalty, wherever applicable, through Form GST DRC-03, by debiting the electronic cash ledger, on his own or on being pointed out, an amount equivalent to the amount of erroneous refund deposited by the registered person shall be re-credited to the electronic credit ledger by the proper officer by an order made in form GST PMT-03A - rule 86(4B) of CGST Rules inserted w.e.f. 5-7-2022. Sec 54(3) : Subject to the...
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Mismatches between GSTR 2A vs 3B- Things to be considered before you respond to GST Notices

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  Among the discrepancies for which notices are issued by department, mismatches between GSTR 2A vs 3B tops it all. Objective of this blog is to highlight aspects that are relevant while responding to the GST Notices especially for FY 2017-18 & 2018-19. Deadline to issue the order under sec 73(10) for FY 2018-19 is 30th April 2024, thus department is rushing orders in their favor, if you fail to highlight appropriate aspects in your reply to notices issued under sec 73/74. Introduction and relevance of GSTR 2A:   The FORM GSTR 2A was not established with a defined purpose for financial years 2017-18 and 2018-19.  Provision in respect of limit of ITC on basis of GSTR-2A was introduced only on 9-10-2019, but system was not fully established for some time.   Hence, for the financial years 2017-18 and 2018-19, insistence of matching of GSTR-2A and Input Tax Credit availed by recipient was not legitimized.  Provisions applicable from 9-10-2019 till 1-1-2022:...
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Streamlining Investigations under GST without conflict of interest

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The Ministry of Finance, Government of India, on 30th March 2024 has issued comprehensive guidelines vide Instruction No. 01/2023-24-GST (Inv. ) for CGST field formations.  The 6 important key takeaways from the circular are:- 1.Responsibilities of (Pr.) Commissioner: Under the purview of their allocated jurisdiction, Principal Commissioners are entrusted with the task of overseeing the development, approval, and execution of intelligence, searches, and investigations. Additionally, they are responsible for coordinating with divisional formations and ensuring timely action on investigative matters. 2. Approval Process for Investigation Initiation: Investigations must receive explicit approval from the (Pr.) Commissioner before initiation, except in specific scenarios outlined by the CBIC. Situations necessitating prior written approval from the zonal Chief Commissioner include a. matters involving novel interpretations, b. large industrial houses,  c. sensitive issues, or...
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Taxpayers encouraged to quote these references against delay in processing of refunds under GST

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Over the past year, there has been an upscale in exports & the business entities are in active participation to boost the exports. The momentum of such entities is trickled by a delay in the refund under GST law. A specific reference is drawn towards the taxpayers under the state government ( TNGST) either not received their refund on time or it is paid after endless delay. Even automatic refunds under export of goods are withheld in few cases.   Refund from the goods or services exported act as a working capital for the businesses & it is the encouragement to provide to the global markets at competitive prices. Working capital is the backbone of the business & when the same is repressed for unknown factors the livelihood of the businessmen is affected which directly violates the right to life. The principle of zero rating is also defeated by loitering approval of refunds. The officer not acknowledging refund application on Form RFD 02 is evident that they sloth over th...
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Analysis of GST order served to Biocon Ltd

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Biocon Ltd. has been imposed a penalty of around ₹ 3 crores for non-compliance with GST laws. The company has received an order of adjudication imposing a penalty of Rs 3,03,78,465 dated February 22, 2024, from the office of Deputy Commissioner of Commercial Taxes, Divisional GST Office, Bangalore, Biocon Ltd said in a regulatory filing. The demand is related to input tax credit reporting error in GST monthly returns, denial of input tax credit on sales and promotional expenditures, valuation of Corporate Guarantee & denial of exemption on export of services.  Play of provisions of GST law:  Denial of ITC on Sales:  It is to be noted that the ITC on sales can be denied only upon non-compliance with the conditions prescribed in Section 16(2) of the CGST Act, 2017 & if the sale is in the form of Gift, free samples or personal consumption.  Biocon being a bio-pharmaceutical company, supply of sample medicines to the doctors/ physicians is a common practice in in...
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Last day to freeze your balance in Reversal and Reclaim Ledger- Things not to miss

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 As per GSTN advisory dated 29th Dec 2023, today is the last day to to amend declared opening balance for ITC reversal.  As per circular No.170/02/2022 para 4, credits that needs permanent reversals such as under Section 17 (5), rule 42 & 43 etc shall also be included in Table 4A. They have to be separately reversed under Table 4B (1). Earlier, blocked credit under Section 17 (5) would not form part of Table 4A and would be shown only in Table 4D (1). Now, even such blocked credits under Section 17 (5) shall be included in Table 4A and reversed through Table 4B (1). In other words, the practice of excluding blocked credit and claiming only eligible ITC in Table 4A can no longer be followed. Similarly, the Banking companies and Financial Institutions, who opt to avail 50 % ITC under Rule 38, shall show the entire ITC in Table 4A and show the 50 % reversal in Table 4B (1). In Table 4 B (2), all other temporary reversals, other than what is covered in 4B (1) have to be shown....
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