Summary of CGST (Fourth Amendment) Rules, 2021

The CBIC has published Notification No. 15/2021 – Central Tax, which notifies the CGST(Central Goods and Services Tax) (Fourth Amendment) Rules, 2021. Here’s a quick rundown of what it’s all about:

1. Rule 23(1) is revised to provide for the filing of an application for revocation of cancellation of registration within 30 days of the date of serving of the order of cancellation, or within such time as the Additional Commissioner, Joint Commissioner, or Commissioner, as the case may be, extends. This change is made to align the rules with the changes made to Section 30 of the CGST Act, which allows for the extension of the time limit for filing a revocation application.

2. A proviso has been added to Rule 90(3) to exclude the time period from the date of filing the refund claim in FORM GST RFD-01 till the date of communication of the deficiencies in FORM GST RFD-03 by the proper officer from the two-year period specified under Section 54, sub-section (1), in respect of any such fresh refund claim filed by the applicant after rectification of the deficiency. This is a welcome relief, as it was previously noticed that deficiency notes were frequently given after the required two-year deadline had expired.

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3. Rule 90 has been amended to add sub-rule (5), which states that an applicant may withdraw his refund application at any time prior to the issuing of a provisional refund, final refund, payment order, refund withhold order, or notification by filing a new FORM. RFD-01W is a type of RFD.

4. Rule 90 has been amended to add sub-rule (6), which states that any amount debited by the applicant from an electronic credit ledger or an electronic cash ledger, as the case may be, while filing a refund application in FORM GST RFD-01 would be credited back to the ledger from which the debit was made upon submission of FORM RFD-01W.

5. Rule 92, sub-rule (1), pertaining to PART A of FORM RFD-07, has been removed.

6. The former PART B of the RFD-07 form has been redesignated PART-A.

7. A proviso to Rule 92(2) has been added to allow the proper officer or the Commissioner to issue an order for the release of a withheld refund in PART B of FORM RFD-07 if the refund is no longer liable to be withheld.

Notified Amendments in declaring HSN/SAC in Tax Invoice & GSTR-1

8. Modifications to the instructions for FORM REG-21 in accordance with Rule 23.

9. The above-mentioned adjustments have been incorporated into FORM RFD-07.

Homestays to go under GST, service providers upset

The state goods and service tax office on Monday issued notification to around 50 homestays in Fort Kochi zone, expressing that they should go under the domain of Goods and Service Tax (GST). There are 250 homestay service providers in the West.

Kochi and every one of them will be issued notices in the coming days by the sales tax office.

Then, the homestay administrators said this move would adversely influence their organizations and lead to the conclusion of homestays which were the occupation of around 1,000 people in Fort Kochi region alone. “According to the GST standards, those running services beneath Rs 20 lakh a year are exempted from registration. But, the notice issued by state GST office plainly expresses that we are liable for paying GST,” said Antony Kureethra, president, Tourism Promoters’ Association, an umbrella association which has 140 individuals in Fort Kochi.

The state GST office has additionally asked homestay administrators to come to its office in Kochi on July 17 for a hearing. The homestay owners should also create the documents like the register of clients, bank statement for 2018-19 period, cash book and receipt book for 2018-19, ledgers and other books kept up by them and the permit issued by the local authority.

Then, authorities with the state GST office said that they just directed a survey for exploring the potential outcomes of bringing more establishments under GST. “We led the survey according to the direction of the state finance department. We haven’t offered notification to the homestay owners looking for GST,” an official with state GST office said. In the meantime, the notice issued by state GST office, a duplicate of which has been secured by TOI, obviously expressed that the homestays are at risk for paying GST. “It is discovered that you are at risk to get enlisted under Section 22 of the CGST/SGST Act, 2017. So as to settle the enquiry relating with your registration liability, you are asked to furnish the accompanying documents for confirmation within 7 days,” notice issued to one of the homestay owners stated.

“A large number of the operators think that the GST department would come thumping their entryways if there is a homestay board at their offices. Along these lines, they have begun to remove the boards on Monday night itself,” said one of the homestay owners.

The Tourism Promoters’ Association has chosen to approach the top officials of the GST department. They clarified that the association would move the court if necessary.

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Relief for exporters as Center to pay ITC discount for State GST

In a big relief to exporters, the Center will presently make the input tax credit (ITC) discounts of state taxes, subsequently decreasing transaction time and expenses, and manual interface in claim preparing.

According to industry, there is an immense distinction in the amount claimed, state goods and services tax (SGST) sanctioned amount received from central tax expert and the amount really disbursed.

“The central government has been approved to pay the measure of refund towards state taxes to the tax payers,” as indicated by the 2019-20 budget plan. At present, the tax payers file discount claims with the central tax officer, who clears a large portion of the claims, and the rest are cleared by the state tax experts, prompting higher time taken in claim handling and refund sanctioning.

Exporters also state that ITC discount is halfway electronic and partly manual. The exporter files discount application at the portal, takes a printout alongside affirmation and conveys it to GST experts in printed version alongside required reports, which also change from specialists to specialists. The physical interface adds to the transaction time and cost.

“The states and Center did their very own particular approval of ITC refund however at this point one will approve both. This is an relief for exporters as it would diminish transaction time and expenses,” said Ajay Sahai, chief general at Federation of Indian Export Organizations.

The breather comes as exporters think about tight credit standards in the midst of slowing global trade development. Absolute payment of export credit was Rs 7.38 lakh crore in December 2018, a decline of 20% on year.

Share of PSU banks in complete disbursement of export credit declined from 65% in FY16 to 45% in FY18.

Exporters have said the no. of refund applications filed on the portal are higher than those gotten in the state tax office.

“The capacity for Center to give the refund for both the CGST and SGST will ease the issues being confronted at present specially by the exporters and evacuate the delay in getting the whole money post the approval of  refunds,” said Bipin Sapra, partner at EY

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