Reg. No. RNP/GOA/32/2021-2023
Panaji, 4th August, 2023 (Sravana 13, 1945)
RNI No. GOAENG/2002/6410
SERIES II No. 18
PUBLISHED BY AUTHORITY
EXTRAORDINARY
GOVERNMENT OF GOA
Department of Finance
Office of the Commissioner of Commercial Taxes __
No. CCT/26-4/2023-24/G/1374
Subject: 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.
Ref.: Circular No. 199/11/2023-GST dated 17th July, 2023 issued under Central Goods and Services Tax Act, 2017 by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry of Finance, GOI, New Delhi.
Circular
(No. 08/2023-24-GST)
The Central Board of Indirect Taxes and Customs (CBIC) has issued the above referred circular. For the uniformity and in exercise of the powers conferred under Section 168 of the Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular issued by the CBIC shall be applicable, mutatis mutandis, in implementation of the Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017). Copy of the referred CBIC Circular is attached herewith as Annexure.
This Trade Circular is clarificatory in nature. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the undersigned.
S. S. Gill, IAS, Commissioner of State Taxes, Goa.
Panaji, 4th August, 2023.
Circular No. 199/11/2023-GST
F. No. CBIC-20001/5/2023-GST Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes and Customs GST Policy Wing
New Delhi, Dated the 17th July, 2023.
To,
The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/Commissioners of Central Tax (All).
The Principal Directors General/Directors
General (All).
Madam/Sir,
Subiect: 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.
Various representations have been received seeking clarification on the taxability of activities performed by an office of an organisation in one State to the office of that organisation in another State, which are regarded as distinct persons under Section 25 of Central Goods and Services Tax Act, 2017 (hereinafter referred to as 'the CGST Act'). The issues raised in the said representations have been examined and to ensure uniformity in the implementation of the law across the field formations, the Board, in exercise of its powers conferred under Section 168 (1) of the CGST Act hereby clarifies the issue in succeeding paras.
2. Let us consider a business entity which has Head Office (HO) located in State-I and a Branch Offices (BOs) located in other States. The HO
Suggestions are welcomed on e-mail: [email protected] 429OFFICIAL GAZETTE — GOVT. OF GOA SERIES II No. 18 (EXTRAORDINARY) 4TH AUGUST, 2023 procures some input services e.g. security service for the entire organisation from a security agency (third party). HO also provides some other services on their own to branch offices (internally generated services).
3. The issues that may arise with regard to taxability of supply of services between distinct persons in terms of sub-section (4) of Section 25 of the CGST Act are being clarified in the Table below: -
Issues
Sr. No.
1 2
1. Whether HO can avail the input tax credit (hereinafter referred to as 'ITC') in respect of common input services procured from a third party but attributable to both HO and BOs or exclusively to one or more BOs, issue tax invoices under Section 31 to the said BOs for the said input services and the BOs can then avail the ITC for the same or whether it is mandatory for the HO to follow the Input Service Distributor (hereinafter referred to as 'ISD') mechanism for distribution of ITC in respect of common input services procured by them from a third party but attributable to both HO and BOs or exclusively to one or more BOs?
2. In respect of internally generated services, there may be cases where HO is providing certain services to the BOs for which full input tax credit is available to the concerned BOs. However, HO may not be issuing tax invoice to the concerned BOs with respect to such services, or the HO Clarification
3
It is clarified that in respect of common input services procured by the HO from a third party but attributable to both HO and BOs or exclusively to one or more BOs, HO has an option 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 Central Goods and Services Tax Rules, 2017 (hereinafter referred to as 'the CGST Rules'). However, as per the present provisions of the CGST Act and CGST Rules, it is not mandatory for the HO to distribute such input tax credit by ISD mechanism. 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 than avail ITC on the same subject to the provisions of Section 16 and 17 of CGST Act.
In case, the HO distributes or wishes to distribute ITC to BOs in respect of such common input services through the ISD mechanism as per the provisions of Section 20 of CGST Act read with Rule 39 of the CGST Rules, 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. Similarly, the HO can issue tax invoices under Section 31 of CGST Act to the concerned BOs, in respect of any input services, procured by HO from a third party for on or behalf of a BO, only if the said services have actually been provided to the concerned BOs.
OFFICIAL GAZETTE — GOVT. OF GOA SERIES II No. 18 (EXTRAORDINARY) 4TH AUGUST, 20231
may not be including the cost of a particular component such as salary cost of employees involved in providing said services while issuing tax invoice to BOs for the services provided by HO to BOs. Whether the HO is mandatorily required to issue invoice to BOs under Section 31 of CGST Act for such internally generated services, and/or 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 BOs.
3. In respect of internally generated services provided by the HO to BOs, in cases where full input tax credit is not available to the concerned BOs, whether the cost of salary of employees of the HO involved in providing said services to the BOs is mandatorily required to be included while computing the taxable value of the said supply of services provided by HO to BOs.
2
The value of supply of services made by a registered person to a distinct person needs to be determined as per Rules 28 of CGST Rules, read with sub-section(4) of Section 15 of CGST Act. As per Clause (a) of Rule 28, the value of supply of goods or services or both between distinct persons shall be the open market value of such supply. The second proviso to Rule 28 of CGST Rules provides that where the recipient is eligible for full input tax credit, the value declared in the invoice shall be deemed to be the open market value of the goods or services. Accordingly, in respect of supply of services by HO to BOs, the value of the said supply of services declared in the invoice by HO shall be deemed to be open market value of such services, if the recipient BO is eligible for full input tax credit.
Accordingly, in cases w here full input tax credit is available to a BO, the value declared on the invoice by HO to the said BO in respect of a supply of services shall be deemed to be t he open market value of such services, irrespective of the fact whether cost of any particular component of such services, like employee cost etc., has been included or not in the value of the services in the invoice.
Further, in such cases where full input tax credit is available to the recipient, if HO has not issued a tax invoice to the BO in respect of any particular services being rendered by HO to the said BO, the value of such services may be deemed to be declared as Nil by HO to BO, and may be deemed as open market value in terms of second proviso to Rule 28 of CGST Rules.
In respect of internally generated services provided by the HO to 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, even in cases where full input tax credit is
not available to the concerned BO.
4. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.
5. Difficulty, if any, in the implementation of this circular may be brought to the notice of the Board.
Hindi version would follow.
(Sanjay Mangal), Principal Commissioner (GST).
OFFICIAL GAZETTE — GOVT. OF GOA SERIES II No. 18 (EXTRAORDINARY) 4TH AUGUST, 2023No. CCT/26-2023-24/G/1375
Subject: Clarification on issue pertaining to e-invoice.
Ref.: Circular No. 198/10/2023-GST dated 17th July,
2023 issued under Central Goods and Services
Tax Act, 2017 by the GST Policy Wing, Central
Board of Indirect Taxes and Customs,
Department of Revenue, Ministry of Finance,
GOI, New Delhi.
Circular
(No. 07/2023-24-GST)
The Central Board of Indirect Taxes and Customs
(CBIC) has issued the above referred circular. For
the uniformity and in exercise of the powers
conferred under Section 168 of the Goa Goods and
Services Tax Act, 2017 (Goa Act 4 of 2017) it is
hereby directed that the Said Circular issued by
the CBIC shall be applicable, mutatis mutandis, in
implementation of the Goa Goods and Services Tax
Act, 2017 (Goa Act 4 of 2017). Copy of the referred
CBIC Circular is attached herewith as Annexure.
This Trade Circular is clarificatory in nature.
Difficulty, if any, in implementation of this Circular
may please be brought to the notice of the
undersigned.
S. S. Gill, IAS, Commissioner of State Taxes, Goa.
Panaji, 4th August 2023.
Issue
Sr. No.
1 2
1. Whether e-invoicing is applicable for supplies made by a registered person, whose turnover exceeds the prescribed threshold for generation of e-invoicing, to Government Departments or establishments/Government agencies/local authorities/PSUs which are registered solely for the purpose of deduction of tax at source as per provisions of Section 51 of the CGST Act?
Circular No. 198/10/2023-GST
F. No. CBIC-20001/5/2023-GST Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes and Customs GST Policy Wing
New Delhi, Dated the 17th July, 2023.
To,
The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/Commissioners of Central Tax (All).
The Principal Directors General/Directors
General (All).
Madam/Sir,
Subject: Clarification on issue pertaining to e-invoice.
Representations have been received seeking clarification with respect to applicability of e-invoice under Rule 48(4) of Central Goods and Services Tax Rules, 2017 (hereinafter referred to as "CGST Rules") w.r.t. supplies made by a registered person, whose turnover exceeds the prescribed threshold for generation of e-invoicing, to Government Departments or establishments/ /Government agencies/local authorities/PSUs registered solely for the purpose of deduction of tax at source as per provisions of Section 51 of the Central Goods and Ser vices Tax Act, 2017 (hereinafter referred to as "CGST Act").
2. In order to clarify the issue and to ensure
uniformity in the implementation of the provisions
of law across the field formations, the Board, in
exercise of its powers conferred by Section 168 (1)
of the CGST Act, hereby clarifies the issue as under:
Clarification
3
Government Departments or establishments/ /Government agencies/local authorities/PSUs, which are required to deduct tax at source as per provisions of Section 51 of the CGST/SGST Act, are liable for compulsory registration in accordance with Section 24(vi) of the CGST Act. Therefore, Government Departments or establishments/Government agencies/local authorities/PSUs, registered solely for the purpose of deduction of tax at source as per provisions of Section 51 of the CGST Act, are to be treated as registered persons under the GST law as per provisions of Clause (94) of Section 2 of CGST Act. Accordingly, the registered person, whose turnover exceeds the prescribed threshold for generation of OFFICIAL GAZETTE — GOVT. OF GOA SERIES II No. 18 (EXTRAORDINARY) 4TH AUGUST, 2023 1
2
e-invoicing, is required to issue e-invoices for the supplies made to such Government Departments or establishments/Government agencies/local authorities/PSUs, etc. under Rule 48(4) of CGST Rules.
3. It is requested that suitable trade notices may be issued to publicise the contents of this Circular.
4. Difficulty, if any, in the implementation of this circular may please be brought to the notice of the
Board. Hindi version would follow.
(Sanjay Mangal), Principal Commissioner (GST).
————
No. CCT/26-4/2023-24/G/1376
Subject: Clarification on refund-related issues.
Ref.: Circular No. 197/09/2023-GST dated 17th July,
2023 issued under Central goods and Services Tax
Act, 2017 by the GST Policy Wing, Central Board of
Indirect Taxes and Customs, Department of Revenue,
Ministry of Finance, GOI, New Delhi.
Circular
(No. 06/2023-24-GST)
The Central Board of Indirect Taxes and Customs
(CBIC) has issued the above referred circular. For the
uniformity and in exercise of the powers conferred
under Section 168 of the Goa Goods and Services Tax
Act, 2017 (Goa Act 4 of 2017) it is hereby directed
that the Said Circular issued by the CBIC shall be
applicable, mutatis mutandis, in implementation of
the Goa Goods and Services Tax Act, 2017 (Goa Act 4
of 2017). Copy of the referred CBIC Circular is attached
herewith as Annexure.
This Trade Circular is clarificatory in nature.
Difficulty, if any, in implementation of this Circular
may please be brought to the notice of the
undersigned.
S. S. Gill, IAS, Commissioner of State Taxes, Goa.
Panaji, 4th August, 2023.
———— Circular No. 197/09/2023-GST
F. No. CBIC-20001/5/2023
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
New Delhi, Dated the 17th July, 2023.
To,
The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/Commissioners of Central Tax (All).
The Principal Directors General/Directors
General (All).
Madam/Sir,
Subject: Clarification on refund related issues.
References have been received from the field formations seeking clarification on various issues relating to GST refunds. In order to clarify these issues and to ensure uniformity in the implementation of the provisions of law in this regard across the field formations, the Board, in exercise of its powers conferred by Section 168 (1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as "CGST Act"), hereby clarifies the issues detailed hereunder:
1. Refund of accumulated input tax credit under Section 54(3) on the basis of that available as per FORM GSTR 2B:-
1.1 In terms of Para 5 of Circular No. 135/05/2020- GST dated 31-03-2020, refund of accumulated input tax credit (ITC) is restricted to the inputtax credit as per those invoices, the details of which are uploaded by the supplier in FORM GSTR-1 and are reflected in the FORM GSTR-2A of the applicant. Para 5 of the said circular is reproduced below:
"5. Guidelines for refunds of Input Tax Credit
under Section 54(3):
5.1 In terms of para 36 of Circular No. 125/44/ /2019-GST dated 18-11-2019, the refund of ITC availed in respect of invoices not reflected in FORM GSTR- 2A was also admissible and copies of such invoices were required to be uploaded. However, in wake of insertion of sub-rule (4) to Rule 36 of the CGST Rules, 2017 vide notification No. 49/2019-GST dated 09-10-2019, various references have been received OFFICIAL GAZETTE — GOVT. OF GOA SERIES II No. 18 (EXTRAORDINARY) 4TH AUGUST, 2023 from the field formations regarding admissibility of refund of the ITC availed on the invoices which are not reflecting in the FORM GSTR-2A of the applicant.
5.2 The matter has been examined and it has been decided that the refund of accumulated ITC shall be restricted to the ITC as per those invoices, the details of which are uploaded by the supplier in FORM GSTR-1 and are reflected in the FORM GSTR-2A of the applicant. Accordingly, para 36 of the circular No. 125/44/2019-GST, dated 18-11-2019 stands modified to that extent."
1.2 However, in view of the insertion of Clause (aa) in sub-section (2) of Section 16 of the CGST Act, 2017 w.e.f. 1st January, 2022 vide Notification No. 39/2021-Central Tax dated 21-12-2021, and the amendment in Rule 36(4) of the Central Goods and Services Tax Rules, 1997 (hereinafter referred to as "CGST Rules") w.e.f. 1st January, 2022 vide Notification No. 40/2021-Central Tax dated 29-12-2021, doubts are being raised as to whether the refund of the accumulated input tax credit under Section 54(3) of CGST Act shall be admissible on the basis of the input tax credit as reflected in FORM GSTR-2A or on the basis of that available as per FORM GSTR-2B of the applicant.
1.3 The matter has been examined and it has been decided that since availment of input tax credit has been linked with FORM GSTR-2B w.e.f. 01-01-2022, availability of refund of the accumulated input tax credit under Section 54(3) of CGST Act for a tax period shall be restricted to input tax credit as per those invoices, the details of which are reflected in FORM GSTR-2B of the applicant for the said tax period or for any of the previous tax periods and on which the input tax credit is available to the applicant. Accordingly, para 36 of Circular No. 125/ /44/2019-GST dated 18-11-2019, which was earlier modified vide Para 5 of Circular No. 135/ /05/2020-GST dated 31-03-2020,stands modified to this extent. Consequently, Circular No. 139/09/ /2020-GST dated 10-06-2020, which provides for restriction on refund of accumulated input tax credit on those invoices, the details of which are uploaded by the supplier in FORM GSTR-1 and are reflected in the FORM GSTR-2A of the applicant, also stands modified accordingly.
1.4 It is further clarified that as the said amendments in Section 16(2) (aa) of CGST Act and Rule 36(4) of CGST Rules have been brought into effect from 01-01-2022, therefore, the said restriction on availability of refund of accumulated input tax credit for a tax period on the basis of the credit available as per FORM GSTR-2B for the said tax period or for any of the previous tax periods, shall be applicable for the refund claims for the tax period ofJanuary, 2022 onwards. However, in cases where refund claims for a tax period from January, 2022 onwards has already been disposed of by the proper officer before the issuance of this circular, in accordance with the extant guidelines in force, the same shall not be reopened because of the clarification being issued by this circular.
2. Requirement of the undertaking in FORM RFD 01 inserted vide Circular No. 125/44/2019-GST dated 18-11-2019.
2.1 Para 7 of Circular No. 125/44/2019-GST dated 18-11-2019 provides for an undertaking to be provided by the applicant electronically along with the refund claim in FORM RFD-01 in accordance with the Rule 89(1) of CGST Rules. Para 7 of Circular No. 125/44/ /2019-GST dated 18-11-2019 is reproduced below:
"7. Since the functionality of furnishing of FORM GSTR-2 and FORM GSTR-3 remains unimplemented, it has been decided by the GST Council to sanction refund of provisionally accepted input tax credit. However, the applicants applying for refund must give an undertaking to the effect that the amount of refund sanctioned would be paid back to the Government with interest in case it is found subsequently that the requirement of Clause (c) of sub-section (2) of Section 16 read with sub-section (2) of Section 42 of the CGST Act have not been complied with in respect of the amount refunded. This undertaking should be submitted electronically along with there fund claim."
2.2 In accordance with the same, the following
undertaking was inserted in FORM GST RFD-01:
"I hereby undertake to pay back to the Government the amount of refund sanctioned along with interest in case it is found subsequently that the requirements of Clause (c) of sub-section (2) of Section 16 read with sub- -section (2) of Section 42 of the CGST/SGST Act have not been complied with in respect of the amount refunded."
2.3 However, Section 42 of CGST Act has been omitted w.e.f. 1st October, 2022 vide Notification No. 18/ 2022-CT dated 28-09-2022. Further, an amendment has also been made in Section 41 of the CGST Act, wherein the concept of provisionally accepted input tax credit has been done away with. Besides, FORM GSTR-2 and FORM GSTR-3 have also been omitted from CGST Rules. In view of this, reference to Section 42, FORM GSTR-2 and FORM GSTR-3 is being deleted from the said OFFICIAL GAZETTE — GOVT. OF GOA SERIES II No. 18 (EXTRAORDINARY) 4TH AUGUST, 2023 para in the Circular as well as from the said under taking. Para 7 of Circular No. 125/ /44/2019-GST dated 18-11-2019 & the undertaking in FORM GST RFD-01 may, therefore, be read as follows:
Para 7: "The applicants applying for refund must give an undertaking to the effect that the amount of refund sanctioned would be paid back to the Government with interest in case it is found subsequently that the requirements of Clause (c) of sub-section (2) of Section 16 of the CGST Act have not been complied with in respect of the amount refunded. This undertaking should be submitted electronically along with the refund claim."
Undertaking in FORM GST RFD 01:- "I hereby undertake to pay back to the Government the amount of refund sanctioned along with interest in case it is found subsequently that the requirements of Clause (c) of sub-section (2) of Section 16 of the CGST/SGST Act have not been complied with in respect of the amount refunded."
2.4. Consequentially, Annexure-A to the Circular No. 125/44/2019-GST dated 18-11-2019 also stands amended to the following extent:
i. "Undertaking in relation to Sections 16(2)(c) and Section 42(2)" wherever mentioned in the column "Declaration/Statement/Undertaking/ /Certificates to be filled online" may be read as "Undertaking in relation to Sections 16(2)(c)".
ii. "Copy of GSTR-2A of the relevant period" wherever required as supporting documents to be additionally uploaded stands removed/ /deleted.
iii. "Self-certified copies of invoices entered in Annexure-B whose details are not found in GSTR-2A of the relevant period" wherever, required as supporting documents to be additionally uploaded stands removed/ /deleted.
3. 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.
3.1 Doubts have been raised as regarding calculation of "adjusted total turnover" under sub-rule (4) of Rule 89 of CGST Rules, in view of insertion of Explanation in sub-rule (4) of Rule 89 of CGST Rules vide Notification No. 14 2022-Central Tax dated 05-07-0222. Clarification is being sought as to whether value of goods exported out of India has to be considered as per Explanation under sub-rule (4) of Rule 89 of CGST Rules for the purpose of calculation of "adjusted total turnover" in the formula under the said sub-rule.
3.2 In this regard, it is mentioned that consequent to amendment in definition of the "Turnover of zero-rated supply of goods" vide Notification No. 16/2020-Central Tax dated 23-03-2020, Circular 147/03/2021-GST dated 12-03-2021 was issued which interalia clarified that the same value of zero-rated/export supply of goods, as calculated as per amended definition of "Turnover of zero-rated supply of goods", needs to be taken into consideration while calculating "turnover in a state or a union territory ", and accordingly, in "adjusted total turnover" for the purpose of sub-rule (4) of Rule 89.
3.3 On similar lines, it is clarified that consequent to Explanation having been inserted in sub-rule (4) of Rule 89 of CGST Rules vide Notification No. 14/2022-CT dated 05-07-2022, the value of goods exported out of India to be included while calculating"adjusted total turnover" will be same as being determined as per the Explanation inserted in the said sub-rule.
4. 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:
4.1 References have been received citing the instances where exporters have voluntarily
made payment of due integrated tax, along
with applicable interest, in cases where goods could
not be exported or payment for export of services could
not be received within time frame as prescribed in
Clause (a) or (b), as the case may be, of sub-rule (1) of
Rule 96A of CGST Rules. Clarification is being sought
as to whether subsequent to export of the said goods
or as the case may be, realization of payment in case
of export of services, the said exporters are entitled to
claim not only refund of unutilized input tax credit on
account of export but also refund of the integrated
tax and interest so paid in compliance of the provisions
of sub-rule (1) of Rule 96A of CGST Rules.
4.2 It is mentioned that in terms of sub-rule (1) of
Rule 96A of the CGST Rules, a registered person availing of the option to export without payment of integrated tax is required to furnish a bond or a Letter of Undertaking (LUT), prior to export, binding himself to pay the tax due along with applicable interest within a period of —
OFFICIAL GAZETTE — GOVT. OF GOA SERIES II No. 18 (EXTRAORDINARY) 4TH AUGUST, 2023(a) fifteen days after the expiry of three months, or such further period as may be allowed by the Commissioner, from the date of issue of the invoice for export, if the goods are not exported out of India;or
(b) fifteen days after the expiry of one year, or such further period as may be allowed by the Commissioner, from the date of issue of the invoice for export, if the payment of such services is not received by the exporter in convertible foreign exchange or in Indian rupees, wherever permitted by the Reserve Bank of India.
4.3 In this context, it has been clarified inter alia in para 45 of Circular No. 125/44/2019-GST dated 18-11-2019 that:
"..... exports have been zero rated under the IGST Act and as long as goods have actually been exported even after a period of three months,
payment of Integrated tax first and claiming refund
at a subsequent date should not be insisted upon.
In such cases, the jurisdictional Commission may consider granting extension of time limit for export as provided in the said sub-rule on post facto basis keeping in view the facts and circumstances of each case. The same principle should be followed in case of export of services" .
4.4 Further, in Para 44 of the aforesaid Circular, it has been emphasized that the substantive benefits of zero rating may not be denied where it has been established that exports in terms of the relevant provisions have been made.
4.5 The above clarifications imply that as long as goods are actually exported or as the case may be, payment is realized in case of export of services, even if it is beyond the time frames as prescribed in sub-rule (1) of Rule 96A, the benefit of zero-rated
supplies cannot be denied to the concerned exporters. Accordingly, it is clarified that in such cases, on
actual export of the goods or as the case may be, on realization of payment in case of export of
services, the said exporters would be entitled to refund of unutilized input tax credit in terms of sub-
-section(3) of Section 54 of the CGST Act, if otherwise admissible.
4.6 It is also clarified that in such cases subsequent to export of the goods or realization of payment in case of export of services, as the case may be, the said exporters would be entitled to claim refund of the integrated tax so paid earlier on account of goods not being exported, or as the case be, the payment not being realized for export of services, within the time frame prescribed in Clause (a) or (b), as the case may be, of sub-rule (1) of Rule 96A. It is further being clarified that no refund of the interest paid in compliance of sub-rule (1) of Rule 96A shall be admissible.
4.7 It may further be noted that the refund application in the said scenario may be made under the category "Excess payment of tax". However, till the time the refund application cannot be filed under the category "Excess payment of tax" due to non-availability of the facility on the portal to file refund of IGST paid in compliance with the provisions of sub-rule (1) of Rule 96A of CGST Rules as "Excess payment of tax", the applicant may file the refund application under the category "Any Other" on the portal.
5. It is requested that suitable trade notices may
be issued to publicize the contents of this circular.
6. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the Board. Hindi version would follow.
(Sanjay Mangal), Principal Commissioner (GST).
————
No. CCT/26-4/2023-24/G/1377
Subject: Clarification of taxability of share capital
held in subsidiary company by the parent company.
Ref.: Circular No. 196/08/2023-GST dated 17th
July, 2023 issued under Central Goods and Services
Tax Act, 2017 by the GST Policy Wing, Central Board
of Indirect Taxes and Customs, Department of
Revenue, Ministry of Finance, GOI, New Delhi.
Circ ular
(No. 05/2023-24-GST)
The Central Board of Indirect Taxes and Customs (CBIC) has issued the above referred circular. For the uniformity and in exercise of the powers conferred under Section 168 of the Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular issued by the CBIC shall be applicable, mutatis mutandis, in implementation of the Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017). Copy of the referred CBIC Circular is attached herewith as Annexure.
This Trade Circular is clarificatory in nature. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the undersigned.
S. S. Gill, IAS, Commissioner of State Taxes, Goa.
Panaji, 4th August, 2023.
OFFICIAL GAZETTE — GOVT. OF GOA SERIES II No. 18 (EXTRAORDINARY) 4TH AUGUST, 2023Circular No. 196/08/2023-GST
F. No. CBIC-20001/5/2023-GST Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes and Customs GST Policy Wing
New Delhi, Dated the 17th July, 2023.
To,
The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/Commissioners of Central Tax (All).
The Principal Directors General/Directors General (All).
Madam/Sir,
Subject: Clarification on taxability of shares held in subsidiary company by the holding company.
Representations have been received from the trade and field formations seeking clarification on certain issues 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.
2. In order to clarify the issue and to ensure uniformity in the implementation of the provisions of law across the field formations, the Board, in exercise of its powers conferred by Section 168 (1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as "CGST Act"), hereby clarifies the issues as under:
Sr. No. Issue
Clarification
Taxability of share capital held in subsidiary company by the parent company
1. Whether the activity of holding shares by a holding company of the subsidiary company will be treated as a supply of service or not and whether the same will attract GST or not.
Securities are considered neither goods nor services in terms of definition of goods under Clause (52) of Section 2 of CGST Act and the definition of services under Clause (102) of the said Section. Further, securities include 'shares' as per definition of securities under Clause (h) of Section 2 of Securities Contracts (Regulation) Act, 1956.
This implies that the securities held by the holding company in the subsidiary company are neither goods nor services. Further, purchase or sale of shares or securities, in itself is neither a supply of goods nor a supply of services. 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' in the scheme of classification of services 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. Therefore, the activity of holding of shares of subsidiary company by the holding company per se cannot be treated as a supply of services by a holding company to the said subsidiary company and cannot be taxed under GST.
OFFICIAL GAZETTE — GOVT. OF GOA SERIES II No. 18 (EXTRAORDINARY) 4TH AUGUST, 20233. It is requested that suitable trade notices may
be issued to publicize the contents of this Circular.
4. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the Board. Hindi version would follow.
(Sanjay Mangal), Principal Commissioner (GST).
————
No. CCT/26-4/2023-24/G/1378
Subject: Clarification on availability of ITC in respect of warranty replacement of parts and repair services during warranty period.
Ref.: Circular No. 195/07/2023-GST dated 17th July,
2023 issued under Central Goods and Services
Tax Act, 2017 by the GST Policy Wing, Central
Board of Indirect Taxes and Customs,
Department of Revenue, Ministry of Finance,
GOI, New Delhi.
Circular
(No. 04/2023-24-GST)
The Central Board of Indirect Taxes and Customs
(CBIC) has issued the above referred circular. For the
uniformity and in exercise of the powers conferred
under Section 168 of the Goa Goods and Services Tax
Act, 2017 (Goa Act 4 of 2017) it is hereby directed
that the Said Circular issued by the CBIC shall be
applicable, mutatis mutandis, in implementation of
the Goa Goods and Services Tax Act, 2017 (Goa Act 4
of 2017). Copy of the referred CBIC Circular is attached
herewith as Annexure.
This Trade Circular is clarificatory in nature.
Difficulty, if any, in implementation of this Circular
may please be brought to the notice of the
undersigned.
S. S. Gill, IAS, Commissioner of State Taxes, Goa.
Panaji, 4th August, 2023.
Sr. No.
Issue
1 2
1. There are cases where the original equipment
manufacturer offers warranty for the goods
supplied by him to the customer and provides
replacement of parts and/or repair services to
the customer during the warranty period,
without separately charging any consideration
at the time of such replacement/repair services.
Circular No. 195/07/2023-GST
F. No. CBIC-20001/5/2023-GST Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes and Customs GST Policy Wing
New Delhi, Dated the 17th July, 2023.
To,
The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/Commissioners of Central Tax (All).
The Principal Directors General/Directors
General (All).
Madam/Sir,
Subject: Clarification on availability of ITC in respect of warranty replacement of parts and repair services during warranty period.
Representations have been received from trade and industry that as a common trade practice, the original equipment manufacturers/suppliers offer warranty for the goods/services supplied by them. During the warranty period, replacement goods/ services are supplied to customers free of charge and as such no separate consideration is charged and received at the time of replacement. It has been represented that suitable clarification may be issued in the matter as unnecessary litigation is being caused due to contrary interpretations by the investigation wings and field formations in respect of GST liability as well as liability to reverse ITC against such supplies of replacement of parts and repair services during the warranty period without any consideration from the customers.
2. The matter has been examined. In order to ensure uniformity in the implementation of the provisions of the law across the field formations, the Board, in exercise of its powers conferred under Section 168(1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the CGST Act), hereby clarifies as follows:
Clarification
3
The 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.
As such, where the manufacturer provides replacement of parts and/or repair services to the customer during the warranty period, without separately charging any consideration at the time of OFFICIAL GAZETTE — GOVT. OF GOA SERIES II No. 18 (EXTRAORDINARY) 4TH AUGUST, 2023 1 2
Whether GST would be payable on such
replacement of parts or supply of repair
services, without any consideration from the
customer, as part of warranty?
2. Whether in such cases, the manufacturer is
required to reverse the input tax credit in
respect of such replacement of parts or supply
of repair services as part of warranty, in respect
of which no additional consideration is charged from the customer?
3. Whether GST would be payable on replacement of parts and/or repair services provided by a distributor without any consideration from the customer, as part of warranty on behalf of the manufacturer?
4. In the above scenario where the distributor provides replacement of parts to the customer as part of warranty on behalf of the manufacturer, whether any supply is involved between the distributor and the manufacturer and whether the distributor would be required to reverse the input tax credit in respect of such replacement of parts?
3
such replacement/repair services, no further GST is chargeable on such replacement of parts and/or repair service during warranty period. However, if any additional consideration is charged by the manufacturer from the customer, either for replacement of any part or for any service, then GST will be payable on such supply with respect to such
additional consideration.
In such cases, the 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.
Therefore, these supplies cannot be considered as exempt supply and accordingly, the manufacturer, who provides replacement of parts and/or repair services to the customer during the warranty period, is not required to reverse the input tax credit in respect of the said replacement parts or on the repair services provided.
There may be instances where a distributor of a company provides replacement of parts and/or repair services to the customer as part of warranty on behalf of the manufacturer and no separate consideration is charged by such distributor in respect of the said replacement and/or repair services from the customer.
In such cases, as no consideration is being charged by the distributor from the customer, no GST would be payable by the distributor on the said activity of providing replacement of parts and/or repair services to the customer.
However, if any additional consideration is charged by the distributor from the customer, either for replacement of any part or for any service, then GST will be payable on such supply with respect to such additional consideration.
(a) There may be cases where the distributor replaces the part(s) to the customer under warranty either by using his stock or by purchasing from a third party and charges the consideration for the part(s) so replaced from the manufacturer, by issuance of a tax invoice, for the said supply made by him to the manufacturer. In such a case, GST would be payable by the distributor on the said supply by him to the manufacturer and the manufacturer would be entitled to avail the input tax credit of the same, subject to other conditions of CGST Act. In such case, no reversal of input tax credit by the distributor is required in respect of the same.
OFFICIAL GAZETTE — GOVT. OF GOA SERIES II No. 18 (EXTRAORDINARY) 4TH AUGUST, 20231 2
5. Where the distributor provides repair service, in addition to replacement of parts or otherwise, to the customer without any consideration, as part of warranty, on behalf of themanufacturer but charges the manufacturer for such repair services either by way of issue of tax invoice or a debit note, whether GST would be payable on such activity by the distributor?
6. Sometimes companies provide offers of extended warranty to the customers which can be availed at the time of original supply or just before the expiry of the standard warranty period. Whether GST would be payable in both the cases?
3
(b) There may be cases where the distributor raises a requisition to the manufacturer for the part(s) to be replaced by him under warranty and the manufacturer then provides the said part(s) to the distributor for the purpose of such replacement to the customer as part of warranty.
In such a case, where the manufacturer is providing such part(s) to the distributor for replacement to the customer during the warranty period, without separately charging any consideration at the time of such replacement, no GST is payable on such replacement of parts by the manufacturer. Further, no reversal of ITC is required to be made by the manufacturer in respect of the parts so replaced by the distributor under warranty.
(c) There may be cases where the distributor replaces the part(s) to the customer under warranty out of the supply already received by him from the manufacturer and the manufacturer issues a credit note in respect of the parts so replaced subject to provisions of sub-section (2) of Section 34 of the CGST Act. Accordingly, the tax liability may be adjusted by the manufacturer, subject to the condition that the said distributor has reversed the ITC availed against the parts so replaced.
In such scenario, there is a supply of service by the distributor and the manufacturer is the recipient of such supply of repair services in accordance with the provisions of sub-clause (a) of Clause (93) to Section 2 of the CGST Act, 2017.
(a) If a customer enters in to an agreement of extended warranty with the manufacturer at the time of original supply, then the consideration for such extended warranty becomes part of the value of the composite supply, the principal supply being the supply of goods, and GST would be payable accordingly.
(b) However, in case where a consumer enters into an agreement of extended warranty at any time after the original supply, then the same is a separate contract and GST would be payable by the service provider, whether manufacturer or the distributor or any third party, depending on the nature of the contract (i.e. whether the extended warranty is only for goods or for services or for composite supply involving goods and services).
3. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.
4. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the Board.
Hindi version would follow.
(Sanjay Mangal), Principal Commissioner (GST).
OFFICIAL GAZETTE — GOVT. OF GOA SERIES II No. 18 (EXTRAORDINARY) 4TH AUGUST, 2023No. CCT/26-4/2023-24/G/1379
Subject: Clarification on TCS liability under Sec. 52 of the Goa GST Act, 2017 in case of multiple E-commerce Operators in one transaction.
Ref.: Circular No. 194/06/2023-GST dated 17th July, 2023 issued under Central Goods and Services Tax Act, 2017 by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry of Finance, GOI, New Delhi.
Circular
(No. 03/2023-24-GST)
The Central Board of Indirect Taxes and Customs (CBIC) has issued the above referred circular. For the uniformity and in exercise of the powers conferred under Section 168 of the Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular issued by the CBIC shall be applicable, mutatis mutandis, in implementation of the Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017). Copy of the referred CBIC Circular is attached herewith as Annexure.
This Trade Circular is clarificatory in nature. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the undersigned.
S. S. Gill, IAS, Commissioner of State Taxes, Goa.
Panaji, 4th August, 2023.
————
Circular No. 194/06/2023-GST
File. No. CBIC-20001/5/2023-GST Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes and Customs GST Policy Wing
New Delhi, Dated the 17th July, 2023.
To,
The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/Commissioners of Central Tax (All).
The Principal Directors General/Directors
General (All).
Madam/Sir,
Subject: Clarification on TCS liability under Sec 52 of the CGST Act, 2017 in case of multiple E-commerce Operators in one transaction.
Reference has been received seeking clarification regarding TCS liability under Section 52 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as "CGST Act"), in case of multiple E-commerce Operators (ECOs) in one transaction, in the context of Open Network for Digital Commerce (ONDC).
2.1 In the current platform-centric model of e-commerce, the buyer interface and seller interface are operated by the same ECO. This ECO collects the consideration from the buyer, deducts the TCS under Sec. 52 of the CGST Act, credits the deducted TCS amount to the GST cash ledger of the seller and passes on the balance of the consideration to the seller after deducting their service charges.
2.2 In the case of the ONDC Network or similar other arrangements, 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. In this setup, buyer-side ECO could collect consideration, deduct their commission and pass on the consideration to the seller-side ECO. In this context, clarity has been sought as to which ECO should deduct TCS and make other compliances under Section 52 of CGST Act in such situations, as in such models having multiple ECOs in a single transaction, both the Buyer-side ECO and the Seller-side ECO qualify as ECOs as per Section 2(45) of the CGST Act.
3. In order to clarify the issue and to ensure uniformity in the implementation of the provisions of law across the field formations, the Board, in exercise of its powers conferred by Section 168 (1) of the CGST Act, hereby clarifies the issues as under:
Issue 1: In a situation where multiple ECOs are involved in a single transaction of supply of goods or services or both through ECO platform and where the supplier-side ECO himself is not the supplier in the said supply, who is liable for compliances under Section 52 including collection of TCS?
Supplier-
Supplier Buyer- side ECO
side ECO Buyer
Clarification: In such a situation where multiple ECOs are involved in a single transaction of supply of goods or services or both through ECO platform and where the supplier-side ECO himself is not the supplier of the said goods or services, the compliances under Section 52 of CGST Act, including OFFICIAL GAZETTE — GOVT. OF GOA SERIES II No. 18 (EXTRAORDINARY) 4TH AUGUST, 2023 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.
e.g.: Buyer-side ECO collects payment from the
buyer, deducts its fees/commissions and remits the
balance to Seller-side ECO. Here, the Seller-side ECO
will release the payment to the supplier after
deduction of his fees/commissions and therefore will
also be required to collect TCS, as applicable and
pay the same to the Government in accordance with
Section 52 of CGST Act and also make other
compliances under Section 52 of CGST Act.
In this case, 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.
Issue 2: In a situation where multiple ECOs are
involved in a single transaction of supply of goods or
services or both through ECO platform and the
Supplier-side ECO is himself the supplier of the said
supply, who is liable for compliances under Section
52 including collection of TCS?
Supplier (also
an ECO) Buyer
Buyer- side ECO
Clarification: In such a situation, TCS is to be
collected by the Buyer-side ECO while making
payment to the supplier for the particular supply
being made through it.
e.g. Buyer-side ECO collects payment from the
buyer, deducts its fees and remits the balance to the
supplier (who is itself an ECO as per the definition in
Sec. 2(45) of the CGST Act). In this scenario, the Buyer-
side ECO will also be required to collect TCS, as
applicable, pay the same to the Government in
accordance with Section 52 of CGST Act and also
make other compliances under Section 52 of CGST
Act.
4. It is requested that suitable trade notices may
be issued to publicize the contents of this Circular.
5. Difficulty, if any, in implementation of this
Circular may please be brought to the notice of the
Board. Hindi version would follow.
(Sanjay Mangal), Principal Commissioner (GST).
No. CCT/26-4/2023-24/G/1380
Subject: 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.
Ref.: Circular No. 193/05/2023-GST dated 17th July, 2023 issued under Central Goods and Services Tax Act, 2017 by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry of Finance, GOI, New Delhi.
Circ ular
(No. 02/2023-24-GST)
The Central Board of Indirect Taxes and Customs (CBIC) has issued the above referred circular. For the uniformity and in exercise of the powers conferred under Section 168 of the Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular issued by the CBIC shall be applicable, mutatis mutandis, in implementation of the Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017). Copy of the referred CBIC Circular is attached herewith as Annexure.
This Trade Circular is clarificatory in nature. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the undersigned.
S. S. Gill, IAS, Commissioner of State Taxes, Goa.
Panaji, August, 2023.
__
Circular No. 193/05/2023-GST
File. No. CBIC-20001/5/2023-GST Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes and Customs GST Policy Wing New Delhi, Dated the 17th July, 2023.
To,
The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/Commissioners of Central Tax (All).
The Principal Directors General/Directors
General (All).
Madam/Sir,
Subject: 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.
OFFICIAL GAZETTE — GOVT. OF GOA SERIES II No. 18 (EXTRAORDINARY) 4TH AUGUST, 2023Attention is invited to Circular No. 183/15/ /2022-GST dated 27th December, 2022, vide which clarification was issued for dealing with the difference in Input Tax Credit (ITC) availed in FORM GSTR-3B as compared to that detailed in FORM GSTR-2A for FY 2017-18 and 2018-19, subject to certain terms and conditions.
2. Even though the availability of ITC was subjected to restrictions and conditions specified in Section 16 of Central Goods and Services Tax Act, 2017 (hereinafter referred to as "CGST Act") from 1st July, 2017 itself, restrictions regarding availment of ITC by the registered persons up to certain specified limit beyond the ITC available as per FORM GSTR-2A were provided under Rule 36(4) of Central Goods and Services Tax Rules, 2017 (hereinafter referred to as "CGST Rules") only with effect from 9th October, 2019. W.e.f. 09-10-2019, the said rule allowed availment of Input tax credit by a registered person in respect of invoices or debit notes, the details of which have not been furnished by the suppliers under sub-section (1) of Section 37, in FORM GSTR-1 or using the Invoice Furnishing Facility (IFF), to the extent not exceeding 20 per cent. of the eligible credit available in respect of invoices or debit notes the details of which have been furnished by the suppliers under sub-section (1) of Section 37 of CGST Act in FORM GSTR-1 or using the IFF. The said limit was brought down to 10% w.e.f. 01-01-2020 and further reduced to 5% w.e.f. 01-01-2021. The said rule was intended to allow availment of due credit in cases where the suppliers may have delayed in furnishing the details of outward supplies. Further, w.e.f. 01-01-2022, consequent to insertion of Clause (aa) to sub-section (2) of Section 16 of the CGST Act, ITC can be availed only up to the extent communicated in FORM GSTR-2B.
3.1 As discussed above, Rule 36(4) of CGST Rules allowed additional credit to the tune of 20%, 10% and 5%, as the case may be, during the period from 09-10-2019 to 31-12-2019, 01-01-2020 to 31-12-2020 and 01-01-2021 to 31-12-2021 respectively, subject to certain terms and conditions, in respect of invoices/supplies that were not reported by the concerned suppliers in their FORM GSTR-1 or IFF, leading to discrepancies between the amount of ITC availed by theregistered persons in their returns in FORM GSTR-3B and the amount as available in their FORM GSTR-2A. It may, however, be noted that such availment of input tax credit was subject to the provisions of Clause (c) of sub- section (2) of Section 16 of the CGST Act which provides that ITC cannot be availed unless tax on the said supply has been paid by the supplier. In this context, it is mentioned that Rule 36(4) of CGST Rules was a facilitative measure and availment of ITC in accordance with Rule 36(4) was subject to fulfilment of conditions of Section 16 of CGST Act including those of Clause (c) of sub- -section (2) thereof regarding payment of tax by the supplier on the said supply.
3.2. Though the matter of dealing with difference in Input Tax Credit (ITC) availed in FORM GSTR-3B as compared to that detailed in FORM GSTR-2A has been clarified for FY 2017-18 and 2018-19 vide Circular No. 183/15/2022-GST dated 27th December, 2022, various representations have been received seeking clarification regarding the manner of dealing with such discrepancies between the amount of ITC availed by the registered persons in their FORM GSTR-3B and the amount as available in their FORM GSTR-2A during the period from 01-04-2019 to 31-12-2021.
4. In order to ensure uniformity in the implementation of the provisions of the law across the field formations, the Board, in exercise of its powers conferred under Section 168(1) of the CGST Act, hereby clarifies as follows:
(i) Since Rule 36(4) came into effect from 09-10-2019 only, the guidelines provided by Circular No. 183/15/2022-GST dated 27th December, 2022 shall be applicable, in toto, for the period from 01-04-2019 to 08-10-2019.
(ii) In respect of period from 09-10-2019 to 31-12-2019, Rule 36(4) of CGST Rules permitted availment of Input tax credit by a registered person in respect of invoices or debit notes, the details of which have not been furnished by the suppliers under sub-section (1) of Section 37, in FORM GSTR-1 or using IFF to the extent not exceeding 20 per cent of the eligible credit available in respect of invoices or debit notes, the details of which have been furnished by the suppliers under sub-section (1) of Section 37 in FORM GSTR-1 or using IFF. Accordingly, the guidelines provided by Circular No. 183/15/2022-GST dated 27th December, 2022 shall be applicable for verification of the condition of Clause (c) of sub-section (2) of Section 16 of CGST Act for the said period, subject to the condition that availment of Input tax credit by the registered person in respect of invoices or debit notes, the details of which have not been furnished by the suppliers under sub- section (1) of Section 37, in FORM GSTR-1 or using IFF shall not exceed 20 per cent. of the eligible credit available in respect of invoices or debit notes the details of which have been OFFICIAL GAZETTE — GOVT. OF GOA SERIES II No. 18 (EXTRAORDINARY) 4TH AUGUST, 2023 furnished by the suppliers under sub-section (1) of Section 37 in FORM GSTR-1 or using IFF. This is clarified through an illustration below:
Illustration:
Consider a case where the total amount of ITC available as per FORM GSTR-2A of the registered person was Rs. 3,00,000, whereas, the amount of ITC availed in FORM GSTR-3B by the said registered person during the corresponding tax period was Rs. 5,00,000. However, as per Rule 36(4) of CGST Rules as applicable during the said period, the said registered person was not allowed to avail ITC in excess of an amount of Rs. 3,00,000*1.2 =Rs. 3,60,000.
In the above case, the ITC of Rs. 1,40,000 which has been availed in excess of Rs. 3,60,000 shall not be admissible as per Rule 36(4) of CGST Rules as applicable during the said period even if the requisite certificate as prescribed in Circular No. 183/15/2022-GST dated 27-12-2022 is submitted by the registered person. Therefore, ITC availed in FORM GSTR-3B in excess of that available in FORM GSTR-2A up to an amount of Rs. 60,000 only (i.e. 3,60,000-3,00,000) can be allowed subject to production of the requisite certificates as per Circular No. 183/15/2022-GST dated 27-12-2022.
(iii) Similarly, for the period from 01-01-2020 to 31-12-2020, when Rule 36(4) of CGST Rules allowed additional credit to the tune of 10% in excess of the that reported by the suppliers in their FORM GSTR-1 or IFF, the guidelines provided by Circular No. 183/15/ /2022-GST dated 27th December, 2022 shall be applicable, for verification of the condition of Clause (c) of sub-section (2) of Section 16 of CGST Act for the said period, subject to the condition that availment of Input tax credit by the registered person in respect of invoices or debit notes, the details of which have not been furnished by the suppliers under sub-section (1) of Section 37, in FORM GSTR-1 or using the IFF shall not exceed 10 per cent. of the eligible credit available in respect of invoices or debit notes the details of which have been furnished by the suppliers under sub- -section (1) of Section 37 in FORM GSTR-1 or using the IFF.
(iv) Further, for the period from 01-01-2021 to 31-12-2021, when Rule 36(4) of CGST Rules allowed additional credit to the tune of 5% in excess of that reported by the suppliers in their FORM GSTR-1 or IFF, the guidelines provided by Circular No. 183/15/2022-GST dated 27th December, 2022 shall be applicable, for verification of the condition of Clause (c) of sub-section (2) of Section 16 of CGST Act for the said period, subject to the condition that availment of Input tax credit by the registered person in respect of invoices or debit notes, the details of which have not been furnished by the suppliers under sub-section (1) of Section 37, in FORM GSTR-1 or using the IFF shall not exceed 5 per cent. of the eligible credit available in respect of invoices or debit notes the details of which have been furnished by the suppliers under sub-section (1) of Section 37 in FORM GSTR-1 or using the IFF.
5. It is further clarified that consequent to insertion of Clause (aa) to sub-section (2) of Section 16 of the CGST Act and amendment of Rule 36(4) of CGST Rules w.e.f. 01-01-2022, no ITC shall be allowed for the period 01-01-2022 onwards in respect of a supply unless the same is reported by his suppliers in their FORM GSTR-1 or using IFF and is communicated to the said registered person in FORM GSTR-2B.
6. Further, it may be noted that proviso to Rule 36(4) of CGST Rules was inserted vide Notification No. 30/2020-CT dated 03-04-2020 to provide that the condition of Rule 36(4) shall be applicable
cumulatively for the period February to August,
2020 and ITC shall be adjusted on cumulative basis
for the said months in the return for the tax period
of September 2020. Similarly, second proviso to Rule 36(4)
of CGST Rules was substituted vide Notification
No. 27/2021-CT dated 01-06-2021 to provide that
the condition of Rule 36(4) shall be applicable
cumulatively for the period April to June, 2021 and ITC shall be adjusted on cumulative basis for the said months in the return for the tax period of June 2021. The same may be taken into consideration while determining the amount of ITC eligibility for the said tax periods.
7. It may also be noted that these guidelines are clarificatory in nature and may be applied as per the actual facts and circumstances of each case and shall not be used in the interpretation of the provisions of law.
8. These instructions will apply only to the ongoing proceedings in scrutiny/audit/ /investigation, etc. for the period 01-04-2019 to 31-12-2021 and not to the completed proceedings. However, these instructions will apply in those cases during the period 01-04-2019 to 31-12-2021 where any adjudication or appeal proceedings are still pending.
OFFICIAL GAZETTE — GOVT. OF GOA SERIES II No. 18 (EXTRAORDINARY) 4TH AUGUST, 20239. Difficulty, if any, in the implementation of the above instructions may please be brought to the notice of the Board. Hindi version would follow.
(Sanjay Mangal), Principal Commissioner (GST).
————
No. CCT/26-4/2023-24/G/1381
Subject: Clarification on charging of interest under Section 50(3) of the Goa GST Act, 2017, in cases of wrong availment of IGST credit and reversal thereof.
Ref.: Circular No. 192/04/2023-GST dated 17th July, 2023 issued under Central Goods and Services Tax Act, 2017 by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry of Finance,
GOI, New Delhi.
Circular
(No. 01/2023-24-GST)
The Central Board of Indirect Taxes and Customs (CBIC) has issued the above referred circular. For the uniformity and in exercise of the powers conferred under Section 168 of the Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular issued by the CBIC shall be applicable, mutatis mutandis, in implementation of the Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017). Copy of the referred CBIC Circular is attached herewith as Annexure.
This Trade Circular is clarificatory in nature. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the undersigned.
S. S. Gill, IAS, Commissioner of State Taxes, Goa.
Panaji, August, 2023.
——
Circular No. 192/04/2023-GST
File. No. CBIC-20001/5/2023-GST Government of India Ministry of Finance
Sr. No.
Issue
1 2
1. In the cases of wrong availment of IGST credit by a registered person and reversal thereof, for the calculation of interest under rule 88B of CGST Rules, whether the balance of input tax credit available in electronic credit ledger under the head of CGST only needs to be considered or total input tax credit available in electronic credit ledger, under the heads of IGST, CGST and SGST taken together, has to be considered.
Department of Revenue Central Board of Indirect Taxes and Customs GST Policy Wing
New Delhi, Dated the 17th July, 2023.
To,
The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/Commissioners of Central Tax (All).
The Principal Directors General/Directors
General (All).
Madam/Sir,
Subject: 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.
References have been received from trade requesting for clarification regarding charging of interest under sub-section (3) of Section 50 of the Central Goods and Ser vices Tax Act, 2017 (hereinafter referred to as the "CGST Act") in the cases where IGST credit has been wrongly availed by a registered person. Clarification is being sought as to whether such wrongly availed IGST credit would be considered to have been utilized for the purpose of charging of interest under sub-section (3) of Section 50 of CGST Act, read with Rule 88B of Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the "CGST Rules"), in cases where though the available balance of IGST credit in the electronic credit ledger of the said registered person falls below the amount of such wrongly availed IGST credit, the total balance of input tax credit in the electronic credit ledger of the registered person under the heads of IGST, CGST and SGST taken together remains more than such wrongly availed IGST credit, at all times, till the time of reversal of the said wrongly availed IGST credit.
2. Issue has been examined and to ensure uniformity in the implementation of the provisions of law across the field formations, the Board, in exercise of its powers conferred by Section 168 (1) of the CGST Act, hereby clarifies the issues as under:
Clarification
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Since the amount of input tax credit available in electronic credit ledger, under any of the heads of IGST, CGST or SGST, can be utilized for payment of liability of IGST, it is the total input tax credit available in electronic credit ledger, under the heads of IGST, CGST and SGST taken together, that has to be considered for calculation of interest under rule 88B of CGST Rules and for determining as to whether the balance in the electronic credit ledger has fallen OFFICIAL GAZETTE — GOVT. OF GOA SERIES II No. 18 (EXTRAORDINARY) 4TH AUGUST, 2023 1 2
2. Whether the credit of compensation cess available in electronic credit ledger shall be taken into account while considering the balance of electronic credit ledger for the purpose of calculation of interest under sub- rule (3) of Rule 88B of CGST Rules in respect of wrongly availed and utilized IGST, CGST or SGST credit.
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below the amount of wrongly availed input tax credit of IGST, and to what extent the balance in electronic credit ledger has fallen below the said amount of wrongly availed credit.
Thus, in the cases where IGST credit has been wrongly availed and subsequently reversed on a certain date, there will not be any interest liability under sub-section (3) of Section 50 of CGST Act if, during the time period starting from such availment and up to such reversal, the balance of input tax credit (ITC) in the electronic credit ledger, under the heads of IGST, CGST and SGST taken together, has never fallen below the amount of such wrongly availed ITC, even if available balance of IGST credit in electronic credit ledger individually falls below the amount of such wrongly availed IGST credit. However, when the balance of ITC, under the heads of IGST, CGST and SGST of electronic credit ledger taken together, 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 under heads of IGST,· CGST and SGST taken together falls below such amount of wrongly availed IGST credit, and will attract interest as per sub-section (3) of Section 50 of CGST Act, read with Section 20 of Integrated Goods and Services Tax Act, 2017 and sub-rule (3) of Rule 88B of CGST Rules.
As per proviso to Section 11 of Goods and Services Tax (Compensation to States) Act, 2017, input tax credit in respect of compensation cess on supply of goods and services leviable under Section 8 of the said Act can be utilised only towards payment of compensation cess leviable on supply of goods and services. Thus, credit of compensation cess cannot be utilized for payment of any tax under CGST or SGST or IGST heads and/or reversals of credit under the said heads.
Accordingly, credit of 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 under sub-rule (3) of Rule 88B of CGST Rules in respect of wrongly availed and utilized IGST, CGST or SGST credit.
3. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.
4. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the Board.
Hindi version would follow.
(Sanjay Mangal), Principal Commissioner (GST).
OFFICIAL GAZETTE — GOVT. OF GOA SERIES II No. 18 (EXTRAORDINARY) 4TH AUGUST, 2023No. CCT/26-4/2022-23/F/1382
Subject: Clarification regarding GST rate and
classification of 'Rab' based on the
recommendation of the GST Council in its
49th meeting held on 18th February, 2023 -reg.
Ref.: Circular No. 191/03/2023-GST dated 27th
March, 2023 issued under Central Goods and
Services Tax Act, 2017 by the Tax Research
Unit-I, Central Board of Indirect Taxes and
Customs, Department of Revenue, Ministry of
Finance, GOI, New Delhi.
Circular
(No. 22/2023-24-GST)
The Central Board of Indirect Taxes and Customs
(CBIC) has issued the above referred circular. For
the uniformity and in exercise of the powers
conferred under Section 168 of the Goa Goods and
Services Tax Act, 2017 (Goa Act 4 of 2017), it is
hereby directed that the Said Circular issued by
the CBIC shall be applicable, mutatis mutandis, in
implementation of the Goa Goods and Services Tax
Act, 2017 (Goa Act 4 of 2017). Copy of the referred
CBIC Circular is attached herewith as Annexure.
This Trade Circular is clarificatory in nature.
Difficulty, if any, in implementation of this Circular
may please be brought to the notice of the
undersigned.
S. S. Gill, IAS, Commissioner of State Taxes, Goa.
Panaji, 4th August, 2023.
Circular No. 191/03/2023-GST
F. No. CBIC-190354/21/2023-TO(TRU-II)-CBEC
Government of India Ministry of Finance Department of Revenue (Tax Research Unit)
North Block, New Delhi, Date: 27th March, 2023.
To,
The Principal Chief Commissioners/Principal
Directors General,
The Chief Commissioners/Directors General,
The Principal Commissioners/Commissioners of
Central Excise & Central Tax.
Madam/Sir,
Subiect: Clarification regarding GST rate and classification of 'Rab' based on the recommendation of the GST Council in its 49th meeting held on 18th February, 2023-reg.
Based on the recommendation of the GST Council in its 49th meeting, held on 18th February, 2023, with effect from the 1st March, 2023, 5% GST rate has been notified on Rab, when sold in pre- packaged and labelled, and Nil GST, when sold in other than pre-packaged and labelled.
2. Further, as per the recommendation of the GST Council in the above-said meeting, in view of the prevailing divergent interpretations and genuine doubts regarding the applicability of GST rate on Rab, the issue for past period is hereby regularized on "as is" basis.
3. Difficulty if any, in the implementation of this circular may be brought to the notice of the Board.
(Amreeta Titus), Deputy Secretary, TRU-I.
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