By G.G. Goyal | Chartered Accountant
C.B. Thakar | Advocate
NOTIFICATIONS
1. Effective date of amendment to section 50 – Notification No. 16/2021-Central Tax dated 1st June, 2021
As reported in the March, 2021 issue of the BCAJ (paragraph 5 in the Budget Proposals), a proviso is added to make the amended position in section 50(1) effective from 1st July, 2017. Section 50(1) relates to the levy of interest and the amendment has been carried out to clarify that the interest will be applicable on the cash portion involved in the discharge of the liability as per the return. The proviso was added in Budget 2021 to make the amended position effective from 1st July, 2017. By the issue of the above Notification, the said proviso is made operational from 1st June, 2021. The effect is that after 1st June, 2021 the authorities can levy interest only on the cash portion involved in the discharge of the liability, as per the return, starting the period from 1st July, 2017.
2. Extension of due date for filing GSTR1 – Notification No. 17/2021-Central Tax dated 1st June, 2021
By the above Notification the Government has extended the date of furnishing details of outward supplies in form GSTR1 for the period May, 2021 till 26th June, 2021.
3. Relaxation in interest / late fees – Notification No. 18/2021-Central Tax dated 1st June, 2021 and No. 19/2021-Central Tax dated 1st June, 2021
The Government has issued these Notifications under the powers conferred upon it under sections 50(1) and 128 of the CGST Act, respectively. Earlier, the relaxation in interest and late fees was granted for the months of March and April, 2021 in view of the pandemic situation. The earlier Notifications are substituted and the relaxation is extended to the month of May, 2021; apart from this, some further relaxation in interest is also provided.
The effect of the above Notifications is summarised in the following table:
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Sr. No.
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Class of registered person
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Returns for tax periods
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Concession in rate of interest
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Concession in late fees
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1.
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Regular taxpayers having an aggregate turnover of more than Rs.
5 crores in the preceding financial year
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March, April and May, 2021
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Delay of first 15 days from due date – 9%;
after 15 days – 18%
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No late fees for delay of 15 days from due date
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2.
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Regular taxpayers having an aggregate turnover up to Rs. 5
crores in the preceding financial year who are liable to furnish the return
as specified u/s 39(1), i.e., taxpayers other than ISD / non-resident
taxpayers / Composition taxpayers and taxpayers liable to TDS / TCS
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March, 2021
April, 2021
May, 2021
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Delay of first 15 days from due date – Nil;
next 45 days – 9%;
afterwards
– 18%
Delay of first 15 days from due date – Nil;
next 30 days – 9%;
afterwards
– 18%
Delay of first 15 days from due date – Nil;
next 15 days – 9%;
afterwards – 18%
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No
late fees for delay of 60 days from due date
No late fees for delay of 45 days from due date
No late fees for delay of 30 days from due date
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3.
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Taxpayers covered by proviso to section 39(1), i.e.,
covered by QRMP Scheme
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March, 2021
April, 2021
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Delay of first 15 days from due date – Nil;
next 45 days – 9%;
afterwards – 18%
Delay of first 15 days from due date – Nil;
next 30 days – 9%;
afterwards – 18%
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No late fees for delay of 60 days from due date of return for
the quarter January-March, 2021
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3.
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(Continued)
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May, 2021
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Delay of first 15 days from due date – Nil;
next 15 days – 9%;
afterwards –18%
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4.
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Payment of tax by taxpayers under the Composition scheme
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Quarter ending March, 2021
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Delay of first 15 days from due date – Nil;
next 45 days – 9%;
afterwards –18%
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Similar relief is extended on payment of IGST or UTGST by Notifications bearing Nos. 02/2021-Integrated Tax and 02/2021-Union Territory Tax, both dated 1st June, 2021.
Further waiver of late fees for past and subsequent periods by Notification No. 19/2021
By insertion of provisos in the above Notification, the following waiver scheme is provided in relation to late fees:
i. For returns in form GSTR3B for period up to April, 2021
For defaulting registered persons furnishing returns in form GSTR3B for the months / quarter of July, 2017 to April, 2021 and furnishing returns during the period 1st day of June, 2021 to the 31st day of August, 2021, the total late fees will be Rs. 500 and if the total Central Tax payable is Nil in the said returns, then the total late fees will be Rs. 250 instead of Rs. 500.
ii. For returns in form GSTR3B for period from June, 2021 onwardsFor defaulting registered persons furnishing returns in form GSTR3B for tax period June, 2021 or quarter ending June, 2021 and onwards, the total late fees will be as under:
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Sr. No.
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Registered persons
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Total amount of late fees
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1.
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Registered persons whose total amount of Central Tax payable in
the said return is Nil
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Rs. 250
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2.
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Registered persons having an aggregate turnover up to Rs. 1.5
crores in the preceding financial year, other than those covered under S. No.
1
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Rs. 1,000
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3.
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Taxpayers having an aggregate turnover of more than Rs. 1.5
crores and up to Rs. 5 crores in the preceding financial year, other than
those covered under S. No. 1
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Rs. 2,500
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4. Rationalisation of late fees for delay in filing GSTR1 – Notification No. 20/2021-Central Tax dated 1st June, 2021
Like the concession given in relation to GSTR3B, similar concession is also provided in relation to GSTR1. For defaulting registered persons furnishing returns in form GSTR1 for tax period/s June, 2021 or quarter ending June, 2021 and onwards, the total late fees will be as under:
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Sr. No.
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Registered persons
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Total amount of late fees
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1.
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Registered persons who have nil outward supplies in the tax
period
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Rs. 250
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2.
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Registered persons having an aggregate turnover of up to Rs. 1.5
crores in the preceding financial year, other than those covered under S. No.
1
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Rs. 1,000
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3.
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Registered persons having an aggregate turnover of more than
Rs. 1.5 crores and up to Rs. 5 crores in the preceding financial year, other
than those covered under S. No. 1
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Rs. 2,500
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5. Rationalisation of late fees for delay in filing GSTR4 – Notification No. 21/2021-Central Tax dated 1st June, 2021
The Government has also rationalised the late fees for delay in filing return in form GSTR4. From F.Y. 2021-22 and onwards, defaulting registered persons furnishing return in form GSTR4 will be liable for total late fees of Rs. 250 where the total Central Tax payable is Nil and Rs. 1,000 in other cases.
6. Rationalisation of late fees for delay in filing GSTR7 – Notification No. 22/2021-Central Tax dated 1st June, 2021
The Government has rationalised the late fees for delay in filing return in form GSTR7. From the tax period June, 2021 and onwards, the late fees will be Rs. 25 per day, subject to a maximum of Rs. 1,000.
7. Exclusion from E-invoicing – Notification No. 23/2021-Central Tax dated 1st June, 2021
The Government has issued the above Notification by which Government Departments and local authorities are excluded from the requirement of issuing E-invoice.
8. Extension of time for compliance – Notification No. 24/2021-Central Tax dated 1st June, 2021
The Government has power to issue instructions and directions u/s 168A of the CGST Act. Using such power, it has issued a Notification to extend the time limits for different compliances considering the present pandemic situation. The extension was already granted vide Notification No. 14/2021 dated 1st May, 2021, details of which have been given in the
BCAJ issue of May, 2021. By the above Notification, in general, the dates are extended up to 30th June, 2021 where they were expiring on 31st May, 2021 as per the earlier Notification. Where they were expiring on 15th June, 2021 as per the earlier Notification, the date is extended up to 15th July, 2021.
9. Extension of due date for filing GSTR4 – Notification No. 25/2021-Central Tax dated 1st June, 2021
By the above Notification, the Government has extended the due date of filing returns for the year ended 31st March, 2021 in form GSTR4 from 31st May, 2021 to 31st July, 2021.
10. Extension of due date for filing ITC-04 – Notification No. 26/2021-Central Tax dated 1st June, 2021
By this Notification, the Government has extended the date of filing declaration in form GST ITC-04 for the period from 1st January, 2021 to 31st March, 2021 till 30th June, 2021, which was earlier 31st May, 2021.
11. Cumulative calculation under Rule 36(4) and other amendments in Rules – Notification No. 27/2021-Central Tax dated 1st June, 2021
(i) Filing of returns through EVC
This Notification has amended the fourth proviso in Rule 26(1) of the CGST Rules, 2017 whereby the companies registered under the Companies Act, 2013 are allowed to file return in form GSTR3B and details of outward supplies in form GSTR1 through electronic verification code (EVC) during the period from 27th April, 2021 to 31st August, 2021. This is an extension of the facility originally given up to May, 2021.
(ii) Cumulative calculation under Rule 36(4)
As per Rule 36(4), the taxpayer can take ITC for matched amount further enhanced by 5%. By the earlier Notification No. 13/2021 dated 1st May, 2021, the above adjustment under Rule 36(4) was allowed to be done cumulatively for April and May, 2021. But through this Notification, the said facility of cumulative adjustment is widened and along with the months of April and May, 2021, June, 2021 is also included for cumulative adjustment.
(iii) Extension for IFFBy the above Notification, Rule 59(2) is amended and the person furnishing details using IFF for the month of May, 2021 can furnish the same up to 28th June, 2021.
12. Changes in Rate of Tax
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Sr. No.
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Notification No.
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Reference of entry in which change is made
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Particulars of change in Rate or other changes
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1.
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01/2021-Central Tax (Rate) dated 2nd June, 2021; and
01/2021 – Integrated Tax (Rate) dated 2nd June, 2021
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(a)
In Entry 259A in Schedule-I (2.5%) under CGST Act and (5%) under IGST Act,
the mention of two headings, namely, 4016 and 9503, is substituted by one
heading, i.e., 9503, effective from 2nd June, 2021.
(b)
In List 1 for drugs in Schedule 1 (2.5%) under CGST Act and (5%) under IGST
Act, new item ‘Diethylcarbamazine’ is added at Serial No. 231 from 2nd
June, 2021
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No change in rate.
Rate becomes 2.5% for given item under CGST Act and 5% under
IGST Act
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2.
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02/2021-Central Tax (Rate) dated 2nd June, 2021; and
02/2021 – Integrated Tax (Rate) dated 2nd June, 2021
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(a) In Entry 3 in
Notification No. 11/2017-Central Tax (Rate) and Notification No.
08/2017-Inegrated Tax (Rate) relating to developers, in Explanation under
fourth proviso in conditions, clause (iii) is inserted, effective from
2nd June, 2021
(b)
Entry (ib) is inserted in Entry at Serial No. 25 in above Notification No.
11/2017-Central Tax (Rate) and Notification No. 08/2017- Integrated Tax
(Rate), effective from 2nd June, 2021
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By
the above clause, the landowner-promoter is made eligible to utilise the
credit of tax charged by the developer-promoter, for payment of tax on
apartments supplied by him in such project both under CGST and IGST Act
By the above Entry the rate of 2.5% (CGST Act)
and 5% (IGST Act) is provided for maintenance, repair or overhaul services in
respect of ships and other vessels, their engines and other components or
parts
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3.
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03/2021-Central Tax (Rate) dated 2nd June, 2021; and
03/2021- Integrated Tax (Rate) dated 2nd June, 2021
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In Notification No.
06/2019-Central Tax (Rate) and 06/2019-Integrated Tax (Rate), both dated 29th
March, 2019, two changes are made, effective from 2nd June, 2021
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(a)
The above Notification is about developers. The promoters are required to pay
tax on FSI, etc. As per original Notification, such liability was to arise
upon issuance of completion certificate or first occupation, whichever is
earlier. Now, by the amendment, the provision is made that promoters shall
pay tax on the occurrence of the above event of completion certification or
first occupation, whichever is earlier.
(b)
Further, the timing of payment of tax on FSI, etc., is also modified.
Originally, it was to be payable on the date of issuance of completion
certificate or first occupation, whichever was earlier. Now, by the
amendment, the tax on FSI, etc., can also be paid earlier – but latest by the
tax period in which date of issuance of completion certificate or first occupation
falls. By this change, the recipient can utilise his credit as and when tax
is paid by the promoter. The promoter can pay tax earlier to completion certificate or first occupation
and as per the tax paid by him, tax credit will be available to the recipient
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4.
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04/2021-Central Tax (Rate) dated 14th June, 2021; and
04/2021- Integrated Tax
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In Notification No. 11/2017 – Central Tax (Rate) and 08/2017-
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The above Entry (f) is relating to tax on structure meant for
funeral, burial or cremation of
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4.
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(Continued)
(Rate) dated
14th June, 2021
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Integrated Tax (Rate), both dated 28th June, 2017,
changes are made in Entry 3(iv)(f)
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deceased. The original
rate is 6% CGST. By the above Notification, the rate is reduced to 2.5% CGST
for the period from 14th June, 2021 to 30th September,
2021
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5.
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05/2021 Central Tax (Rate) dated 14th June, 2021; and
05/2021- Integrated Tax (Rate) dated 14th June, 2021 read with
corrigenda dated 15th June, 2021
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A new Notification giving exemption of whole of tax or partial
tax
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By this Notification, concessional rate of CGST / IGST on
Covid-19 relief supplies is provided. There are 18 items. The list is not
reproduced here for sake of brevity
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Similar changes in Entries are also effected in the Union Territory Goods and Services Tax Act, 2017.
CIRCULARS AND PRESS RELEASES
1. Guidelines regarding cancellation of registration under rule 22(3) of the CGST Act – Instruction No. CBEC-20/16/34/2019-GST/802 dated 24th May, 2021
By the above guidelines the CBEC has reiterated to follow the guidelines given in Board Circular No. 69/43 2018 GST dated 26th October, 2018 about the time limit for cancellation of registration where an application for cancellation is filed by the registered person. In other words, the CBEC has instructed that the proper officer should act as per legal process and accordingly pass the cancellation order within 30 days from the date of application.
2. Press release dated 28th May, 2021
The GST department has issued the above press release whereby the modified scheme about mandatory mentioning of HSN code on invoices is explained.
3. Press release relating to 43rd GST Council meeting dated 28th May, 2021
By this press release, the GST department has given information about decisions taken at the 43rd GST Council meeting held on 28th May, 2021. The decisions are mainly relating to GST Rates on goods and services, and more particularly about Covid-19-related supplies.
4. Press note relating to relief in late fees dated 5th June, 2021
The GST department has, through the above press release, explained the effect of the recent Notifications on the relief in late fees.
5. GST on supply of food in Anganwadis and schools: Circular No. 149/05/2021-GST dated 17th June 2021
It is clarified that the supply of food in Anganwadis and schools is exempt vide clause (b)(ii) of Entry 66 Notification No. 12/2017-Central Tax (Rate) dated 28th June, 2017. It is also clarified that Anganwadis are educational institutions (pre-school).
6. GST on activity of construction of road (annuity): Circular No. 150/05/2021-GST dated 17th June, 2021
It is clarified by this Circular that the annuity received in respect of road construction is not exempt under Entry 23A of Notification No. 12/2017-CT(R).
7. GST on supply of services by Boards: Circular No. 151/05/2021-GST dated 17th June, 2021
This Circular has given Clarifications about exempt services by various Central and State Boards (such as National Board of Examination). Specific services are described which will be exempt.
8. GST on construction services provided to Government entity: Circular No. 152/05/2021-GST dated 17th June, 2021
By the above Circular, a clarification is given about GST liability on works contract service provided by way of construction, such as of ropeway, to a Government entity. It is clarified that the service will fall under Entry at Sl. No. 3(xii) of Notification No. 11/2017-(CTR) and attract GST at the rate of 18% and it will not fall under 12% category.
9. GST on supplies to Government under PDS: Circular No. 153/05/2021-GST dated 17th June, 2021
In this Circular, a clarification is given about the applicable rate of tax for various supplies to Government, such as milling of wheat into flour or paddy into rice for distribution under PDS. The clarification is given about different services involved in the above activity.
10. GST on supplies to PSUs by Government: Circular No. 154/05/2021-GST dated 17th June, 2021
By the above Circular, a clarification is given about GST on services supplied by State Governments to their undertakings or PSUs by way of guaranteeing loans taken by them. It is clarified that such services are exempt under specific Entry 34A of Notification No. 12/2017-Central Tax (Rate) dated 28th June, 2017.
11. GST on drip irrigation items: Circular No. 155/05/2021-GST dated 17th June, 2021
By this Circular, clarification is given about the Rate of Tax on laterals (pipes to be used solely with sprinklers / drip irrigation system) and parts. It is clarified that if such items are to be used solely or principally with sprinklers or a drip irrigation system, which are classifiable under heading 8424, they would attract GST @ 12%. But on all other items the applicable Rate for such items will apply.
