Welcome to the June 20 Edition of Monthly GST Bulletin where we bring you all the updates, gst notifications and GST events regarding GST that occurred during previous month i.e. May 2020
Another month of Lockdown and struggle continues during Covid 19 pandemic. Government has brought certain relaxations to taxpayers and return filing dates has been extended. Some important decisions were taken which are listed as follows:
Proviso to Rule 26(1) inserted allowing EVC facility for verification of GSTR 3B to Companies
Central Government vide N No. 38/2020 CT dated 05.05.2020 has inserted a proviso to Rule 26(1) of CGST Rules 2017 by way of CGST (Fifth Amendment Rules) 2020, which has allowed that now taxpayers registered under Companies Act 2013 i.e. Ltd Companies, OPC to get their GSTR 3B returns verified through EVC during the period from 21st April 20 to 30th June 20. Earlier this facility of EVC verification was only available to individuals, HUF and partnership firms.
Rule 67A inserted allowing SMS facility for NIL GSTR 3B return submission
Further Vide N No. 38/2020 CT dt 05.05.2020 Rule 67A has also been inserted to CGST Rules 2017 which states that NIL return of GSTR 3B may now be submitted through SMS from registered mobile number and return would be verified using the OTP sent on registered mobile number. NIL return shall mean return with nil or no entry in all the tables of GSTR 3B.
Special procedure ameneded for Corporate Debtors undergoing the corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016
Background
Earlier Notification No. 11/2020 CT issued on 21st March 2020 prescribed special procedures to be followed by corporate debtors undergoing CIRP i.e. Corporate Insolvency Resolution Process where Interim Resolution Professionals or Resolution Professionals (IRP/RPs) are appointed who takes control of the activities of corporate debtor.
These Interim Resolution Professionals or Resolution Professionals are to be considered distinct form corporate debtor and as per this previous notification were requried to obtain separate GST registration.
Notification No. 39/2020 (CT) dt 05.05.2020
This has been amended by the introduction of current month N No. 39/2020(CT) dt 05.05.2020. Now onwards IRP/RP shall not be required to take separate registration if Corporate debtors have filed their GSTR 1 (u/s 37) and GSTR 3B (u/s 39) for all the tax periods prior to the appointment of IRP/RP.
Further as per earlier notification, IRP/RP had to get registration within 30 days from their appointment or issuance of the notification whichever is later. Representation were made to government for increase in this registration time limit since problem is being faced due to lockdown period of corona virus. Now this registration time limit has also been relaxed due to lockdown by Central Government vide the current month Notification. They shall get themselves registered within 30 days of their appointment or by 30th June 2020 whichever is later
Extension of E-way bills validity which expire between 20.03.2020 to 15.04.2020 and generated till 24.03.2020.
Central Government vide N No. 40/2020 (CT) dt 05.05.2020 has specified if the E-way bill is generated on or before 24th March 2020 and its validity expires between 20th March 2020 to 15th April 2020 then the validity of such E way bill has been extended till 31st May 2020.
GSTR 9/9C for FY 2018-19 extended
Central Government vide N No. 41/2020 (CT) dt 05.05.2020 has once again extended GST Annual Return GSTR 9/9C for FY 2018-19 to 30th September 2020
Return GSTR 3B due date extension for Jan-Mar 20 for J&K and Ladakh taxpayers
As per N No. 42/2020 (CT) dt 05.05.2020, GSTR 3B date for taxpayers of Jammu and Kashmir UT for period Nov 19 to Feb 20 has been extended to 24th March 20. Union Territory of Ladakh has been given an extra timeline. GSTR 3B date for taxpayers registered in Ladaakh UT for Nov 19 and Dec 19 has been extended to 24th March 2020 while for month of Jan 20 to March 20 GSTR 3B date has been extended to 20th May 20.
Retrospective Amendment to Sec 140 of CGST Act prescribing time limit for transfer of transitional credit
Before understanding the N No. 43/2020 (CT) dt 16.05.20 we have to understand the Important Judgement given by Delhi High Court on 05th May 2020 in the case of Brand Equity Treaties Limited Vs Union of India.
Transfer of transitional input credit from pre-GST regime to GST regime on 1st July 2017 was to be done through form GST TRAN 1 and as per Rule 117 of CGST Rules 2017 there was a time limit of 90 days from the appointed date of 01.07.2017 up to which TRAN-1 could be filed.
Though various time extensions were provided for filing this form TRAN 1 from time to time and the last extension was up to 31st March 2020.
Brand Equity Treaties Limited Vs Union of India (Delhi High Court)
In the landmark judgement of Brand Equity Treaties Limited, Delhi High Court held that 90 day time limit for claiming transitional credit was only directory in nature and not mandatory. Therefore as per provisions of Limitation Act, period of limitation of 3 years would be applicable. As per this judgement transitional input credit vide Form TRAN-1 can be claimed upto 3 years from appointed date .i.e. upto 30.06.2020.
Delhi High Court also stated that this judgement would be applicable for all assesses even to the taxpayers who haven’t approached to court. The court has directed the department to publicize this judgement so that anyone who has not filed TRAN-1 till now can file the TRAN 1 up to 30.06.2020 and claim transitional input credit.
Notification No. 43/2020 (CT) dt 16.05.2020
As per this notification Government has specified that provisions of Section 128 of Finance Act 2020 shall come into force from 18.05.20.
Through this notification Central Government has made retrospective amendments to section 140 (Transfer of transitional credit) of CGST Act granting it power to prescribe a time limit for availing transitional credit.
Actually, for transfer of transitional input credit from pre GST regime to GST regime on 1st July 2017, time limit of 90 days was specified only in Rules (Rule 117). While there was no time limit specified in the Act which was passed by Parliament.
Now after this retrospective amendment to section 140, now even the CGST Act prescribes the time limit specified in Rules.
Impact:
This would negate the effect of Delhi High Court judgement in case of Brand Equity Treaties Limited vs Union of India. Now Except the petitioner in this case, other business won’t be able to claim transitional input credit extension provided up to 30th June 2020.
CA Kalpak Kaplash
