The government is expected to propose a formula to bring ATF under GST.

  • 23 Feb 2022
  • GST
  • Comments Off on The government is expected to propose a formula to bring ATF under GST.

The government is expected to propose a formula to bring ATF under GST.

According to CNBC TV18 on February 21, the government is set to propose a formula to bring aviation turbine fuel (ATF) under the Goods and Services Tax (GST).

According to insiders, the government’s likely proposal will be to enable 18 percent GST in addition to VAT or excise rate, with the formula being implemented only if it is agreeable to all states.

According to the research, the VAT or excise rate could differ from state to state under the algorithm.

“ATF has been calculated using a formula of GST rate + VAT/excise in various nations,” a senior government official told CNBC TV18.

According to the news station, the idea will be presented to the states and union territories at the next GST Council meeting.

Read More…

[pt_view id=”baa39696xe”]

According to the government official, the Central Board of Indirect Taxes and Customs (CBIC) has “examined” the concept for ATF inclusion under GST, and “the GST Council would be appraised with this worldwide best practise model for them to take a final call.”

The news came just days after ATF prices hit new highs across the country. On February 16, the rates were raised by 5.2 percent in response to a surge in international oil costs.

Following an increase in global oil prices, this is the fourth raise in jet fuel or ATF prices in less than two months, although petrol and diesel prices have remained steady for a record 103rd day, coinciding with electioneering in areas such as Uttar Pradesh and Punjab.

Crypto assets are subject to a tax in the budget.

According to a price statement from state-owned gasoline dealers, the price of ATF was raised by Rs 4,481.63 per kilolitre, or 5.2 percent, to Rs 90,519.79 per kilolitre in the national capital. This is the highest price at which ATF has ever traded.

The tariff is higher than the previous peak of Rs 71,028.26 per kilo in August 2008, when international crude oil prices hit USD 147 per barrel. Brent crude oil was selling at USD 93.87 per barrel on Tuesday.

This is the highest price at which ATF has ever traded. The price hike will put additional burden on airline financial sheets that have yet to restart full operations owing to pandemic-related constraints.

Union Budget 2022 and GST

Union Budget 2022 and GST

For taxpayers, it’s been a mixed bag.

The Budget’s GST provisions should be dissected in two parts: the Finance Minister’s speech and the proposed revisions to GST laws.

The contrast between the two is striking: the Budget speech waxes poetic about how GST has been a success, yet the amendments continue to place new constraints on taking use of input tax credits and filing returns. In an unusual event, the Finance Minister strayed from the script and revealed extempore that GST returns for January 2022 totaled $140,000 crore, a new high.

When you consider that a large percentage of taxpayers were either sick or recovering from Omicron in January 2022, the figure appears to be excessive. Artificial limits on input tax credit (requiring taxpayers to claim credit only for input invoices that appear in GSTR 2B) and aggressive tax collection by the Department (pay now, pay later) have undoubtedly contributed to the Department’s record revenue collections.

These figures are likely to have encouraged the Finance Minister to predict a nearly 16 percent increase in GST in the Budget Estimates for 2022-23, bringing the total to $660,000 crore. Budget projections for 2022-23 should be confronted with an even heavier dose of the same medicine: limits and severe assessments. Many taxpayers and their advisers who contact the Department on a regular basis would disagree with the fact that GST regulations have now become progressive and totally IT-driven, as stated in the Budget address.

Related Article…

[pt_view id=”baa39696xe”]

The Modifications

The proposed GST modifications are a mixed bag of good and unfavourable measures. If taxpayers do not file their returns for three months, they risk losing their registration (Section 29).

The expansion of the time limit for issuing credit notes from September to November of the financial year is one of the advantageous clauses. While taxpayers would have applauded this provision, their sole query would have been, “Why not December?” Similarly, the deadlines for correcting errors in return filing have been extended until November.

When GST was first established, the “matching concept” was offered, but it never really took off. By altering the parts that required a two-way dialogue procedure, Budget 2023 nips this in the bud. In other words, taxpayers can only claim input tax credit on invoices that are both in their books of account and automatically populate GSTR 2B. Budgets have virtually become accustomed to include measures that have retroactive effect.

How much does it cost to file an amended income tax return?

The Tax Department has been displaying and attempting to explain Section 50(3) of the CGST Act, which imposes a 24 percent interest penalty for any unreasonable or excessive claim of input tax credit. The Section has also generated some substantial revenue. The Budget, hoping for a windfall, makes the Section effective on July 1, 2017. They also ensured that the SGST and UTGST Acts were amended in the same way. Late fees will be charged if returns are not filed on time.

In terms of GST modifications, annual budgets are not intended to make substantial announcements – that is the work of the GST Council. With Council sessions becoming increasingly rare, annual budgets might be utilised to introduce urgent revisions.

Budget 2023 lost a trick by not taking a page from the Direct Taxes provisions in the same Budget in terms of decreasing litigation and applying it to GST. Different jurisdictional authorities for Advance Rulings (AARs) on the same GST query have offered opposing opinions. Budget 2023 may have included a mechanism to address this problem. Taking more and giving less could become a common theme in annual budgets.

Budget 2022’s GST adjustments foreshadow harsher laws to come.

Budget 2022’s GST adjustments foreshadow harsher laws to come.

Nirmala Sitharaman, the Finance Minister, has announced her second budget since the COVID-19 pandemic began. She opened her address by praising India’s 9.2% GDP growth rate, which is the highest among global economies. She also stated that this year’s Union Budget will create the groundwork and blueprint for the economy for the next 25 years.

There was a significant focus on digital reforms across education, health, taxation of digital assets, and the launch of e-services, in addition to the fact that it was a digital budget. Agriculture, startups, e-vehicles and energy, defence, healthcare, infrastructure, and housing were among the sectors that experienced a wave of recovery measures.

In terms of GST, the FM stated that despite the pandemic, income has been strong, with a record receipt of Rs.1,38,394 crore gross GST revenues in January 2022. Since the commencement of GST, this has been the largest ever collection.

GST Law

The Central Goods and Services Tax (CGST) Act was intended to be amended in the Union Budget 2022. The deadline for amending, correcting, or uploading missed sales invoices or notes, as well as claiming missed input tax credit, has been moved from September to November of the following year.

Read More…

[pt_view id=”baa39696xe”]

Section 29 of the CGST Act was changed to allow an officer to cancel a GSTIN. A composition taxpayer’s registration may be revoked if they fail to file an annual return for three months after the 30th April deadline the following year. For other taxpayers, a six-month consecutive return filing default has been replaced by a consecutive tax period default, if applicable.

A new sub-section in Section 37 stipulates that taxpayers will be barred from providing details of outward supplies for a tax period if the same information is pending for any preceding tax period. In keeping with this logic, Section 39 has been changed to prevent taxpayers from filing a Section 39 return if their Section 37 return is still pending.

Section 38, which governs the provision of inward supplies, has been altered to eliminate the reference to the former GSTR-2 and replace it with GSTR-2A and 2B. ‘Communication of details of inward supply and input tax credit’ has been added to the section.

The deadline to file GSTR-5 for non-resident taxpayers under GST has been moved from the 20th to the 13th of the next month.

Sections 42, 43, and 43A, which deal with the matching and reversal of tax credits, are also gone. Once the CBIC has notified the modifications to the GST law, they will take effect.

Duties on Customs

Faceless Customs is now completely operational in terms of customs duties. Furthermore, it is planned that over 350 exemption entries be phased away over time. Exemptions on some agricultural products, fabrics, chemicals, pharmaceuticals, and medical gadgets that have sufficient domestic capacity are included.

In order to reduce disputes, the budget proposes simplifying the customs rate and tariff structure for industries such as chemicals, textiles, and metals. Exemptions on things that are manufactured or can be manufactured in India will be removed, in line with the goals of ‘Make in India’ and ‘Atmanirbhar Bharat.’ Concessional duties will also be applied to the raw materials used in the production of intermediary products.

By September 30, 2022, the customs administration of Special Economic Zones (SEZs) will be totally IT-driven and run through the Customs National Portal.

Imports of capital goods and project materials


The Union Budget for 2022 proposes phasing out concessional rates for capital goods and project imports and replacing them with a 7.5 percent mild tariff. This will help the home economy flourish and the ‘Make in India’ strategy succeed. Exemptions for modern machinery that isn’t made in India, on the other hand, will continue.

The effect on businesses

The GST adjustments announced in this budget foreshadow stricter restrictions to come, particularly in the areas of return filing and input tax credit. The GST law has already been amended twice in the new year of 2022, with both changes taking effect on January 1, 2022. Section 16(2)(aa) was added to allow taxpayers to claim input tax credits only if their vendors upload a specific invoice or debit note to their GSTR-1 or Invoice Furnishing Facility (IFF). The beneficiary taxpayer’s GSTR-2B must then reflect this information.

The Banking Sector Wants GST Relaxation in Budget 2022

This change was bolstered by Rule 36(4), which was also changed to eliminate the concept of a provisional input tax credit limit. In order to receive input tax credit, taxpayers must must transmit invoices from their suppliers.

The GST law governing outward supplies has also been strengthened by the government. It is now critical that the GSTR-1 and GSTR-3B outward supplies coincide. The GST portal is already sending out error warnings suggesting that if the liability recorded in the GSTR-1 versus the GSTR-3B differs by more than 10%, the GST registration can be suspended. This message also appears if the input tax credit claimed in the GSTR-3B differs by more than 10% from the values auto-populated from the GSTR-2B.

Businesses are under greater pressure than ever to reconcile purchase and sales data more often and in real time. Furthermore, there is an unprecedented reliance on vendors, necessitating more frequent follow-up to pressure them into uploading bills on time. Excessive input tax credit claims may result in demand notices and penalties, while under-claimed input tax credits may have a negative impact on working capital and profitability.