The CBIC has issued various notifications and circulars on 17th July, 2023 to give effect to the recommendation as discussed by the GST Council in its 50th GST Council meeting held on 11th July, 2023. However, the notifications to give effect the decisions taken in the meeting in respect to the GST exemptions, changes in GST rates, CGST Rules and are yet to be issued.
The Notifications are as under:
A. Extension of due dates of GST returns in the State of Manipur:
The CBIC various notifications for extension of due date of filing of returns in FORM GSTR-1, FORM GSTR-3B and FORM GSTR-7 for the tax period April 2023, May 2023 and June 2023 for the registered persons of State of Manipur till 31.07.2023.
Earlier, the CBIC has extended the due dates of furnishing GST returns for the tax period of April, 2023 and May, 2023 till 3oth June, 2023 for the tax payers whose principal place of business is in the State of Manipur.
The various Notifications are as under:
| Particulars | Notification No. |
| Due date for filing GSTR-7 for tax period April 23, May 23, June 23 | 21/2023-Central Tax |
| Due date for filing GSTR-3B for quarter ending June, 23 | 20/2023-Central Tax |
| Due date for filing GSTR-3B for tax period April 23, May 23 and June 23 | 19/2023-Central Tax |
| Due date for filing GSTR-1 for tax period April 23, May 23, June 23 | 18/2023-Central Tax |
B. Extension of various Amnesty Schemes
The CBIC vide issuing various notifications has extended the last date for availing the benefit of Amnesty scheme introduced on recommendations of 49th GST Council Meeting and notified on 31.03.2023, from 30th June, 2023 to 31st August, 2023.
i. Amnesty schemes provided by way of conditional late fees waiver for non-filers of return in FORM GSTR-4, FORM GSTR-10 and Annual return in FORM GSTR-9.: The last date of filing the returns under Amnesty Schemes extended from 30th June, 2023 to 31st August, 2023
Earlier, it was provided that where the registered persons required to furnish the aforesaid returns fails to furnish returns pertaining to period from Financial year 2017-18 to 2021-22, then the late fees shall be waived provided the said returns are furnished between the period from 1st April, 2023 to 30th June, 2023.
ii. Amnesty scheme for Filing of valid return under Section 62, of the CGST Act, 2017 i.e. Best Judgment Order: The date for furnishing valid return for the assessment orders under Best judgment Order issued on or before 28th February, 2023 extended till 31st August, 2023.
Earlier, amnesty scheme was provided for conditional deemed withdrawal of assessment orders issued under Section 62(1) of the CGST Act, 2017 (i.e. Best Judgment Assessment Order) in past cases where the valid return could not be filed within 30 days from the service of the assessment order issued on or before 28th February, 2023, if such registered person furnishes the such return on or before 30th June, 2023, along with interest under Section 50(1) and late fee under Section 47 of the CGST Act, 2017.
iii. Amnesty scheme for filing application for revocation of cancellation of registration:The last date to file application for revocation of cancellation of registration which was cancelled on or before 31.12.2022 due to non-filing the returns, extended till 31st August, 2023.
Earlier, the amnesty scheme is provided in case where registration has been cancelled on or before 31st December, 2022 on account of non-filing of the returns, and application for revocation of cancellation of registration could not be filed within the time specified in section 30 of CGST Act. Such person may file application for revocation of cancellation of such registration upto 30th June, 2023, subject to the condition that returns due upto the effective date of cancellation of registration has been furnished and amount of tax due has been paid, in terms of such returns, along with any amount payable towards interest, penalty and late fee.
The Notifications are as under:
| Particulars | Notification No. |
| Extension of due date for filing GSTR-10 under Amnesty scheme | 26/2023-Central Tax |
| Extension of due date for filing GSTR-9 under Amnesty scheme | 25/2023-Central Tax |
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Extension of filing valid return under Section 62, of the CGST Act, 2017 i.e. Best Judgment Order covered under Amnesty scheme |
24/2023-Central Tax |
|
Extension for filing application for revocation of cancellation of registration under Amnesty Scheme |
23/2023-Central Tax |
| Extension of due date for filing GSTR-4 under Amnesty scheme | 22/2023-Central Tax |
The Circulars are as under:
A. Taxability of supply of services between distinct persons:
The CBIC vide Circular no. 199/11/2023-GST dated 17.07.2023, issued clarification regarding taxability of services provided by an office of an organisation in one State to the office of that organisation in another State, both being distinct persons. The issues are clarified as under:
| Issues | Clarification
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Availment of ITC by Head Office (HO) for common services procured from third party. Manner of distributing ITC for such services received between Head office and Branch office/s (BO). Whether HO has to mandatorily follow the Input Service Distributor (ISD) mechanism for distribution of ITC in respect of such common input services |
i. HO has an option (not mandatory) to distribute ITC in respect of such common input services by following ISD mechanism laid down in Section 20 of CGST Act read with rule 39 of the CGST Rules, 2017. Further, HO can also issue tax invoices under section 31 of CGST Act to the concerned BOs in respect of common input services procured from a third party by HO but attributable to the said BOs, and the BOs can then avail ITC on the same subject to the provisions of section 16 and 17 of CGST Act. The HO can issue tax invoice to the concerned Bos, only if the said services have actually been provided to the concerned BOs. ii. Alternatively, where the HO distributes or wishes to distribute ITC to BOs in respect of such common input services through the ISD mechanism, HO is required to get itself registered mandatorily as an ISD in accordance with Section 24(viii) of the CGST Act. Further, such distribution of the ITC in respect a common input services procured from a third party can be made by the HO to a BO through ISD mechanism only if the said input services are attributable to the said BO or have actually been provided to the said BO. |
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In respect of internally generated services provided by HO to BOs, whether the HO is mandatorily required to issue invoice to BOs under section 31 of CGST Act. Also, whether the cost of all components including salary cost of HO employees involved in providing the said services has to be included in the computation of value of services provided by HO to BOs when full input tax credit is available to the concerned BO. |
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In respect of internally generated services provided by HO to BOs, whether the cost of all components including salary cost of HO employees involved in providing the said services has to be included in the computation of value of services provided by HO to Bos, where full input tax credit is not available to the concerned BOs. |
The cost of salary of employees of the HO, involved in providing the said services to the BOs, is not mandatorily required to be included while computing the taxable value of the supply of such services. |
The Circular can be accessed at https://taxo.online/wp-content/uploads/2023/07/circular-cgst-199.pdf
B. Issuance of E-invoices:
The CBIC vide Circular no. 198/10/2023-GST dated 17.07.2023, issued clarification on issue relating to issuance of e-invoices.
It is clarified that the registered person, whose turnover exceeds the prescribed threshold for generation of e-invoicing, is required to issue e-invoices under Rule 48(4) of the CGST Rules, 2017, for the supplies made to the Government Departments or establishments/ Government agencies/ local authorities/ PSUs who are registered solely for the purpose of deducting TDS u/s 51.
The Circular can be accessed at https://taxo.online/wp-content/uploads/2023/07/circular-cgst-198.pdf
C. Refund related
The CBIC vide Circular No. 197/09/2023- GST dated 17.07.2023, issued clarifications on various refund related issues. Vide this circular, following clarifications are made:
- Refund of accumulated input tax credit under Section 54(3) on the basis of that available as per FORM GSTR 2B.
- Requirement of the undertaking in FORM RFD 01 inserted vide Circular No. 125/44/2019-GST dated 18.11.2019.
- Manner of calculation of Adjusted Total Turnover under sub-rule (4) of Rule 89 of CGST Rules consequent to Explanation inserted in sub-rule (4) of Rule 89 vide Notification No. 14/2022- CT, dated 05.07.2022.
- Clarification in respect of admissibility of refund where an exporter applies for refund subsequent to compliance of the provisions of sub-rule (1) of rule 96A.
The Circular can be accessed at https://taxo.online/wp-content/uploads/2023/07/circular-cgst-197.pdf
D. Taxability of shares held in a subsidiary company by the holding company
The CBIC vide Circular No. 196/08/2023-GST, issued clarification on whether the holding of shares in a subsidiary company by the holding company will be treated as ‘supply of service’ under GST and will be taxed accordingly or whether such transaction is not a supply.
It is clarified that for a transaction/activity to be treated as supply of services, there must be a supply as defined under section 7 of CGST Act. It cannot be said that a service is being provided by the holding company to the subsidiary company, solely on the basis that there is a SAC entry ‘997171’ mentioning; “the services provided by holding companies, i.e. holding securities of (or other equity interests in) companies and enterprises for the purpose of owning a controlling interest.”, unless there is a supply of services by the holding company to the subsidiary company in accordance with section 7 of CGST Act.
Further, in accordance with the GST law, Securities (including shares) are considered neither goods nor services. Accordingly, the activity of holding of shares of subsidiary company by the holding company cannot be treated as a supply of services by a holding company to the said subsidiary company and cannot be taxed under GST.
The Circular can be accessed at https://taxo.online/wp-content/uploads/2023/07/circular-cgst-196.pdf
E. Availabilty of ITC in respect of warranty replacement of parts and repair services during warranty period:
The CBIC vide Circular No. 195/07/2023-GST, issued Clarification on availability of ITC in respect of warranty replacement of parts and repair services during warranty period. The issues are addressed as under:
- No GST is chargeable on replacement of parts and/ or repair service during warranty period, where no separate charges charged – As value of original supply of goods (provided along with warranty) by the manufacturer to the customer includes the likely cost of replacement of parts and / or repair services to be incurred during the warranty period, on which tax would have already been paid at the time of original supply of goods.
- GST would be charged on supply, where additional consideration is charged by the manufacturer from the customer with respect to such additional consideration.
- No reversal of ITC in respect of the replacement parts or on the repair services – The cost of replacement of parts and/ or repair services to be incurred during the warranty period, is included in the value of original supply of goods. Therefore, these supplies cannot be considered as exempt supply and no reversal of ITC required thereon.
The Circular can be accessed at https://taxo.online/wp-content/uploads/2023/07/circular-cgst-195.pdf
F. TCS liability, in case of multiple e-commerce operators in one transaction:
The CBIC vide Circular No. 194/06/2023-GST, issued clarification on TCS liability under Sec 52 of the CGST Act, 2017 in case of multiple E-commerce Operators in one transaction. This is in context of Open Network for Digital Commerce (ONDC) or similar arrangements, where there can be multiple ECOs in a single transaction – one providing an interface to the buyer and the other providing an interface to the seller. It is clarified as under:
Scenario 1: Multiple ECOs are involved in a single transaction, and where the supplier-side ECO himself is not the supplier in the said supply – The compliances under section 52 of CGST Act, including collection of TCS, is to be done by the supplier-side ECO who finally releases the payment to the supplier for a particular supply made by the said supplier through him. The Buyer-side ECO will neither be required to collect TCS nor will be required to make other compliances in accordance with section 52 of CGST Act with respect to this particular supply.
Scenario 1: Multiple ECOs are involved in a single transaction, and Supplier-side ECO is himself the supplier of the said supply – Here, TCS is to be collected by the Buyer-side ECO while making payment to the supplier for the particular supply being made through it.
The Circular can be accessed at https://taxo.online/wp-content/uploads/2023/07/circular-cgst-194.pdf
G. Procedure for verification Input Tax Credit discrepancies:
The CBIC vide Circular No. 193/05/2023-GST, issued clarification to deal with difference in Input Tax Credit (ITC) availed in FORM GSTR-3B as compared to that detailed in FORM GSTR-2A for the period 01.04.2019 to 31.12.2021.
Earlier, vide Circular No. 183/15/2022-GST dated 27.12.2022, procedures were provided for verifying input tax credit discrepancies between the Input Tax Credit claimed in FORM GSTR-3B and the available credit as per FORM GSTR-2A for the financial years 2017-18 and 2018-19.
The Circular can be accessed at https://taxo.online/wp-content/uploads/2023/07/circular-cgst-193.pdf
H. Manner of calculation of interest amount u/s 50 of the CGST Act, 2017
The CBIC vide Circular No. 192/04/2023-GST, issued clarification on charging of interest under section 50(3) of the CGST Act, 2017, in cases of wrong availment of IGST credit and reversal thereof. It is clarified as under:
- The total input tax credit available in electronic credit ledger, under the heads of IGST, CGST and SGST taken together has to be considered for calculation of interest under rule 88B of CGST Rules.
- In case where IGST credit has been wrongly availed and subsequently reversed on a certain date, if during the time period starting from such availment and up to such reversal, the combined balance of ITC in the electronic credit ledger, under the heads of IGST, CGST and SGST, has never fallen below the amount of such wrongly availed ITC – No interest liability u/s 50(3) of the CGST Act, 2017 (even if available balance of IGST credit in electronic credit ledger individually falls below the amount of such wrongly availed IGST credit).
- In case where combined balance of ITC under heads IGST, CGST and SGST falls below such wrongly availed amount of IGST credit, then it will amount to the utilization of such wrongly availed IGST credit and the extent of utilization will be the extent to which the total balance in electronic credit ledger falls below – Interest liability u/s 50(3) would be attracted.
- ITC in respect to compensation cess available in electronic credit ledger cannot be taken into account while considering the balance of electronic credit ledger for the purpose of calculation of interest liability in respect of wrongly availed and utilized IGST, CGST or SGST credit.
The Circular can be accessed at https://taxo.online/wp-content/uploads/2023/07/circular-cgst-192.pdf
