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♦ 6% Composition Scheme dealers – Tax payment & GST Return Filing Procedure
♦ Interest under GST Act to be paid on Gross Amount Payable and not on amount net of inputs.
♦ New single GST Returns form to be rolled out in July
♦ GST B2B (Business to Business) invoices will have to be generated on Govt portal by Sept
Seeks to notify procedure for quarterly tax payment and annual filing of return for taxpayers availing the benefit of Notification No. 02/2019– Central Tax (Rate), dated 7th March, 2019 i.e. for dealers who opted 6% Composition Scheme vide Notification No. 21/2019 – Central Tax Dated 23rd April, 2019.
Special Procedure for Return filing by Composition Taxpayers
• Notifies the registered persons paying tax under the provisions of section 10 of the CGST Act or by availing the benefit of notification No. 02/2019– Central Tax (Rate), dated the 7th March, 2019, as the class of registered persons who shall follow the special procedure for furnishing of return and payment of tax
• Quarterly Statement in form GST CMP-08 by 18thof the month succeeding such quarter, for payment of self assessed tax
• Annual Return in GSTR-4 by 30thApril following the end of such financial year
From the FY-2019-2020 and onward all taxpayers under composition scheme (Traders, Manufacturers, Restaurant Owners, Service Providers etc.) need to file two GST returns as below:-
|GST Return||Frequency||Due date||Late Fees|
|CMP-8-Payment of self assessed tax||Quarterly||Within 18th of next month ending the quarter||Rs.20.00 per day (10+10) for Nil return Rs.50.00 per day (25+25)for taxable|
|GSTR-4||Annually||Within 30 April after ending the FY||Rs.20.00 per day (10+10) for Nil return Rs.50.00 per day (25+25)for taxable|
Government of India
Ministry of Finance
(Department of Revenue)
Central Board of Indirect Taxes and Customs
1. G.S.R. 322(E).— In exercise of the powers conferred by section 148 of the Central Goods and Services Tax Act, 2017(12 of 2017) (hereafter in this notification referred to as the said Act), the Central Government, on the recommendations of the Council, hereby notifies the registered persons paying tax under the provisions of section 10 of the said Act or by availing the benefit of notification of the Government of India, Ministry of Finance, Department of Revenue No. 02/2019– Central Tax (Rate), dated the 7th March, 2019, published in the Gazette of India, Extraordinary, Part II, Section 3, Subsection (i) vide number G.S.R. 189 , dated the 7th March, 2019, (hereinafter referred to as “the said notification”) as the class of registered persons who shall follow the special procedure as mentioned below for furnishing of return and payment of tax.
2. The said persons shall furnish a statement, every quarter or, as the case may be, part thereof containing the details of payment of self-assessed tax in FORM GST CMP-08 of the Central Goods and Service Tax Rules, 2017, till the 18th day of the month succeeding such quarter.
3. The said persons shall furnish a return for every financial year or, as the case may be, part thereof in FORM GSTR-4 of theCentral Goods and Services Tax Rules, 2017, on or before the 30th day of April following the end of such financial year.
4. The registered persons paying tax by availing the benefit of the said notification, in respect of the period for which he has availed the said benefit, shall be deemed to have complied with the provisions of section 37 and section 39 of the said Act if they have furnished FORM GST C P-08 and FORM GSTR-4 as provided in para 2 and para 3 above.
M/s. Megha Engineering & Infrastructures Ltd. Vs The Commissioner of Central Tax,
WRIT PETITION No.44517 OF 2018 ORDER: (Per Hon’ble Sri Justice V. Ramasubramanian) Telangana High court Hyderabad.
1. Aggrieved by a demand made by the respondent for payment of interest on the ITC portion of the tax paid for the months of July, 2017 to May, 2018, the petitioner has come up with the above writ petition.
2. The petitioner is engaged in the manufacture of MS Pipes and in the execution of infrastructure projects.
3. There was a delay on the part of the petitioner in filing the returns in GSTR – 3B Forms, for the period from October, 2017 to May, 2018. This was due to the shortage of ITC, available to off-set the entire tax liability. According to the petitioner, the delay in filing the returns was also not huge. The returns for the months of October and November, 2017 and February and May, 2018 were filed with a delay of only one day. The return for December, 2017 was filed with a delay of three days. The return for January, 2018 was filed with a delay of seventeen days, the return for April, 2018 was filed with a delay of nineteen days and the return for March, 2018 was filed with a delay of twenty nine days.
4. According to the petitioner, the total tax liability of the petitioner for the period from July, 2017 to May, 2018 was Rs.1014,02,89,385/- and the ITC available to the credit of the petitioner during this period was Rs.968,58,86,133/-. Thus, there was a short fall to the extent of 45,44,03,252/-, which the petitioner was obliged to pay by way of cash. According to the petitioner, they could not make payment and file the return within time due to certain constraints. However, the entire liability was wiped out in May, 2018.
5. After the petitioner discharged the entire tax liability, the Superintendent of Central Tax issued letters dated 29.06.2018 and 06.07.2018 demanding interest at 18%, in terms of Section 50 of the CGST Act, 2017. The Assistant Commissioner also issued a letter dated 04.10.2018 demanding payment of interest. VRS,J & PKR,J W.P.No.44517/2018 4
6. In response, the petitioner sent a letter dated 15.10.2018, pointing out that interest is to be calculated only on the net tax liability after deducting ITC from the total tax liability. The petitioner also paid an amount of Rs.30,92,522/- towards interest on their net tax liability.
7. However, the Department demanded interest on the total tax liability and hence the petitioner has come up with the above writ petition.
8. The respondents have filed a counter affidavit contending inter alia that under Section 39(7), every registered person, who is required to furnish a return, should have paid to the Government, the tax due as per such return, not later than the last date on which he is required to furnish such return; that Section 50 of the Act imposes a burden in the form of interest, upon every person who is liable to pay tax, but failed to pay the same; that the liability to pay interest under Section 50 (1), is a statutory obligation which the registered persons are obliged to comply on their own accord; that Section 50 (1) is not confined only to the cash component of the tax payable; that the claim of the petitioner is based upon the wrong presumption as though ITC amount was lying with the Government Treasury; and that since the liability under Section 50 is not penal in nature, the petitioner cannot escape liability.
9. From the pleadings, the only issue that arises for consideration is as to whether the liability to pay interest under Section 50 of the CGST Act, 2017 is confined only to the net tax liability or whether interest is payable on the total tax liability including a portion of which is liable to be set-off against ITC?
Until a return is filed as self-assessed, no entitlement to credit and no actual entry of credit in the electronic credit ledger takes place. As a consequence, no payment can be made from out of such a credit entry. It is true that the tax paid on the inputs charged on any supply of goods and/services, is always available. But, it is available in the air or cloud. Just as information is available in the server and it gets displayed on the screens of our computers only after connectivity is established, the tax already paid on the inputs, is available in the cloud. Such tax becomes an in-put tax credit only when a claim is made in the returns filed as self-assessed. It is only after a claim is made in the return that the same gets credited in the electronic credit ledger. It is only after a credit is entered in the electronic credit ledger that payment could be made, even though the payment is only by way of paper entries.
Admittedly, the petitioner filed returns belatedly, for whatever reasons. As a consequence, the payment of the tax liability, partly in cash and partly in the form of claim for ITC was made beyond the period prescribed. Therefore, the liability to pay interest under Section 50 (1) arose automatically. The petitioner cannot, therefore, escape from this liability.
Conclusion: Assessee needs to pay interest on total amount payable and not on amount net of GST input.
The new simplified returns filing format, approved by the GST Council last July, is finally ready to be rolled-out after being deferred twice. Under the new format, taxpayers will be required to file one monthly return, except small taxpayers and a few exceptions. Those with no purchases, no output tax liability and no input tax credit in any quarter of the financial year will have to file one ‘Nil’ return for the entire quarter while taxpayers with turnover of up to Rs 5 crore in the last fiscal can file quarterly return with monthly payment of taxes on self declaration basis.
Government officials familiar with the matter told the Hindustan Times that the simplified form is now ready and could be launched by July, soon after the new government takes over. The format was first expected to be implemented by January 2019 and then on a pilot basis in April 2019 but the switch reportedly got delayed because the back-end, the GST network (GSTN), was not yet ready for it. It was also speculated that the new format was actually deferred on the Centre’s concerns that any glitches in the rollout close to the general elections could disproportionately amplify public disgruntlement and fan anti-incumbency sentiments.
But with the election juggernaut coming to a stop next week, the stage seems set for the launch of the single monthly return system, which addresses complaints about the difficulties in filing multiple returns as well as the higher cost of compliance.
The three-stage plan reportedly envisages a six-month transition phase where businesses would continue to file two returns, GSTR 1 (for sales) and GSTR 3B, a summarised return form. Thereafter, they would move to a single filing on a new form. Sources told the daily that July will see a trial run of this second phase. For consumer-facing businesses, the simplified form would be about total sales while for B2B businesses, the form would incorporate invoice details. The third phase will involve invoice matching.
They added that the introduction of the new forms will reduce the annual compliance burden of traders from 24 GST returns (GSTRs) to just 12, apart from one return for the entire financial year. This is expected to benefit small and medium enterprises to be GST compliant. Actually, traders technically have to file 36 returns currently but the second form, GSTR 2, is not filed by the majority.
Experts also point out that the single return would not only allow the trader to verify, before filing the returns, whether the vendor has uploaded the invoices but also address the issue of mismatch in the data reported to the authorities. Significantly, the new format would ensure that very large part of the return is automatically filled based on the invoices uploaded by the buyer and the seller, thereby making the entire process less cumbersome. The single return format furthermore is expected to bolster the tax authorities’ efforts to curb evasion and detect false claims.
All invoices for business-to-business sales by entities beyond a specified turnover threshold will be generated on a centralised government portal by September, a move aimed at curbing the menace of fake invoices and evasion of GST, officials said. The revenue secretary is monitoring the progress of implementation of electronic or e-invoice project for which an officers’ committee has already been set up, they added.
“E-invoice for B2B transactions will be rolled out in next three-four months in a phased manner. The entire invoice would have to be generated on a government portal,” an official told.
The move will help in curbing Goods and Services Tax (GST) evasion through issue of fake invoices. Besides, it would make the returns filing process simpler for businesses as invoice data would already be captured by a centralised portal.
“Once rolled out, the e-invoice project will allow businesses to simultaneously generate e-way bill, if needed,” the official added. E-way bill is required for moving goods exceeding Rs 50,000.
Depending on the success of the project in the B2B segment, the revenue department would be looking at extending it to business-to-consumer (B2C) sales, especially in sectors where the probability of tax evasion is high.
Businesses beyond the specified turnover threshold, to be decided later, would be provided a software which will be linked to the GST Network (GSTN) or a government portal for generating e-invoice. The threshold can also be fixed on the basis of the value of invoice.
The e-invoice generation method will be similar to the one being followed for e-way bill on the ‘ewaybill.nic.in’ portal or payment of GST on the GSTN portal.
A 13-member officers’ committee, comprising central and state tax officials as well as the GST Network Chief Executive, has been set up to look into the feasibility of introducing e-invoice system to streamline generation of invoices and easing compliance burden. The committee will finalise its interim report this month.
The proposed ‘e-invoice’ is part of the exercise to check GST evasion. With almost two years into GST implementation, the government is now focusing on anti-evasion measures to shore up revenue and increase compliance.
There are over 1.21 crore registered businesses under the GST, of which 20 lakh are under the composition scheme.
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