The Union Finance Minister Nirmala Sitharaman presided over the 50th meeting of the GST Council on 11th July 2023 at Vigyan Bhawan in New Delhi including Revenue Secretary, CBIC chairman.
Read more: 50th GST Council Meeting: Key Highlights
In a move aimed at providing much-needed clarity and resolving ambiguities surrounding the Goods and Services Tax (GST) liability and Input Tax Credit (ITC) reversal, the GST Council is set to issue a comprehensive circular.
The circular, which is expected to be released soon, will address various refund-related issues and provide clarification on Tax Collected at Source (TCS) liability, easing compliance burdens for taxpayers.
One of the key highlights of the circular is the clarification on the refund of accumulated ITC.
The amended Rule 36(4) of the CGST Rules, 2017 will restrict the refund of accumulated ITC to only the inward supplies reflected in FORM GSTR-2B of the respective tax period or any previous tax period. This amendment, effective from January 1, 2022, ensures that refunds are limited to eligible ITC claims based on documented transactions.
Additionally, the circular will address the inclusion of export goods’ value in calculating the “adjusted total turnover.”
Following the insertion of an explanation in Rule 89(4) of the CGST Rules, the circular will specify the method for determining the value of export goods, as per the said explanation. This clarification will facilitate accurate calculations for determining eligibility for various provisions.
Further, the circular will clarify the admissibility of refunds in cases where the export of goods or realisation of payment for export of services occurs after the time limit prescribed under Rule 96A of the CGST Rules, 2017.
This clarification aims to provide guidance to taxpayers who face delays in export-related activities, ensuring they can still claim eligible refunds even if timelines are exceeded.
In order to simplify compliance procedures, the circular will introduce amendments to Rule 46 of the CGST Rules, 2017.
The revised Rule will only require the name of the state of the recipient and not the recipient’s full address on tax invoices for the supply of taxable services through an E-commerce Operator (ECO) or by a supplier of OIDAR services to an unregistered recipient. This change will alleviate the compliance burden on taxpayers.
Furthermore, the circular will address other issues, such as the requirement for e-invoicing for supplies made to certain government entities, the calculation of interest liability for wrongly availed and utilised IGST credit, and the treatment of holding company’s securities as a supply of services.
In conclusion, the forthcoming circular from the GST Council aims to provide much-needed clarity on several GST-related matters, benefiting taxpayers at large. By addressing ambiguities and legal disputes, it aims to streamline compliance procedures, enhance transparency, and foster a more efficient and taxpayer-friendly GST regime.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
