SERIES II No. 18
PUBLISHED BY AUTHORITY
RNI No. GOAENG/2002/6410
Reg. No. RNP/GOA/32/2021-2023
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.
Panaji, 4th August, 2023 (Sravana 13, 1945)
EXTRAORDINARY
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]
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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: -
Sr.
Issues
Clarification
No.
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?
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.
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
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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.
1
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 where 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
the 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).
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No. 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.
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 Services 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:
Sr.
Issue
Clarification
No.
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
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?
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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
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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
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para in the Circular as well as from the said
undertaking. 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 —
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(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 applicationcannot 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.
Circular
(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.
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Circular 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.
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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).
————
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.
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:
Sr. No.
Issue
Clarification
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.
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
1
2
3
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1
2
3
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?
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.
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?
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.
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?
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.
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?
(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.
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1
2
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.
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?
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.
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?
(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
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No. 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?
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
Buyer-
side ECO
Supplier-
side ECO
Buyer
Supplier
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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?
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.
Circular
(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.
Buyer-
side
ECO
Supplier (also
an ECO)
Buyer
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Attention 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
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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.
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9. 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
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 Services 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:
Sr. No.
Issue
Clarification
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.
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
1
2
3
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1
2
3
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.
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.
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).
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No. 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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