Update on GST effective from October 2024

• Services such as metering equipment rental, testing, and electricity connections provided by utilities – being considered ancillary to electricity supply 

• Research and development services, against consideration in the form of grants, supplied by a Government Entity, research association, university etc 

• Affiliation services to Government schools by Central/State Board • Services provided by organizations like National Skill Development Corporation for approved training and vocational programs 

• Import of services from related parties, on FOC basis by Foreign airline establishments in India, provided they pay applicable GST on transport services and obtain necessary certifications from the Ministry of Civil Aviation

Rule 36(3), which addresses the non-availability of ITC in cases of fraud, applies to orders issued under Section 74 of the CGST Act

Removal of option for registered person to issue a consolidated self-invoice at month-end for inward supplies from unregistered persons, in reverse charge cases

Time limit prescribed for issuing tax invoice by a registered person who is liable to pay tax reverse charge in case of procurements from unregistered persons. The same is thirty days from the date of receipt of the said supply of goods or services, or both

Due-date for furnishing the TDS Return in FORM GSTR-7, to be on or before 10th of the succeeding month.

Vide Notification No. 20/2024-Central Tax dated 8th October 2024, Rule 89(4A) and Rule 89(4B) have been omitted from the CGST Rules. The said sub-rules 4(A) and 4(B) imposed restriction on the refund claims for the Advance Authorization Holders, Export Oriented Units and Merchant Exporters.

Corresponding changes made in rest of Rule (like formula for refund computation etc). 

This is extremely critical, since now the ongoing litigation in case of GST refunds for Advance Authorization holders, etc should be put to rest going forward. The same needs to be analyzed for past.

Omission of rule that provided for a bar on availment of the refund IGST paid on export of goods or services, if benefits of certain concessional/exemption notifications, as specified in the said sub-rule.

Table 8A of GSTR-9 to contain words “ITC as per GSTR2B” instead of the existing words “ITC as per GSTR-2A”

The updated monetary limits for pre-deposit for appeals shall reflect in the Appeal forms

−Rule 88(B)- (Interest on delayed tax payment) has been amended to include the Section 74(A). Now, delayed return filing after commencement of proceedings u/s 74(A), shall not attract interest implications 

− Rule 88(D)- (Difference in ITC in GSTR-3B and GSTR2B provides that proper officer can initiate proceedings u/s 74(A) where the taxpayer does not respond to DRC01C within time limit 

− Rule 96(B)- (Recovery of IGST refund where exports proceeds are not realized)- Officer can invoke recovery of refund alongside interest u/s 74(A) − Rule 121- (Recovery of ITC wrongly availed) Officer can invoke recovery of wrongly availed ITC for TRAN1 − Rule 142- (Notice for demand orders) – All the existing FORMS being DRC-01, DRC-01A and DRC-02, DRC03, DRC-06 and DRC-07 are applicable for proceedings under Section 74(A) as well.

Procedure is summarized below- 

• Rectification application to be filed online on GSTN portal within 6 months from the date of the notification along with Annexure A of such notification 

• Officer must issue a rectified order within 3 months from the date of the application. 

• Post rectification, the authority will upload a summary of the rectified order online in FORM DRC-08 (in case of rectification order under section 73 or 74) and FORM GST APL-04 (in case of rectification order under section 107 or 108)

• Reverse charge mechanism (RCM) will be applied to the supply of metal scrap from unregistered to registered persons; 

• GST registration to be obtained mandatorily in case of any person engaged in the supply of metal scrap, falling under 10 October 2024 4 | P a g e Chapters 72 to 81 in the first schedule to the Customs Tariff Act, 1975 (51 of 1975). 

• Applicability of TDS at the rate of 2% on the supply of metal scrap in B2B transactions, i.e. where any registered person is receiving supplies of metal scrap (Chapter 72 to 81)

• Where order passed (either against SCN or appeal filed) – Form SPL-02 is required to be filed and payment of tax demand has to be made through the electronic liability ledger.

• Withdrawal of appeal –The SPL-01 and SPL-02 should be accompanied with document evidencing withdrawal of appeal or writ petition if any, filed before appellate authority, tribunal or court. 

• Notice for rejection of application – If Proper officer is of the view that applicant is not eligible for waiver benefit, he may reject the application in Form SPL-03 within 3 months of SPL-01 or SPL 02 filed by applicant. 

• Issuance of order u/s 128A – Order for concluding the proceedings shall be passed by the officer in SPL-05 and there is no requirement for DRC-7 in such 5 | P a g e case. For cases where order passed (either against SCN or appeal filed) – Liability created in the electronic liability ledger shall be modified accordingly 

Time limit for issuance of order u/s 128A – 

•  3 months from the date of receipt of application in SPL-01/02 if no objection by officer. 

•  Otherwise, 3 months from the date of receipt of reply in SPL-04 or where no reply furnished, 4 months from the date of issuance of notice in SPL-03 

If order not passed under aforesaid timelines, the application shall be deemed to be approved and the proceedings shall be deemed to be concluded 

• Appeal against adverse order – Where order is passed in SPL-07 rejecting the application under Section 128A – Appeal can be filed against such order. 

• No Appeal if Tax Payment made – Where taxpayer has paid the tax u/s 128A and the proceedings are deemed to be concluded, no appeal can be preferred u/s 107 or 112 against such order. Note: This may imply that the deemed acceptance of demand by the taxpayer by paying tax is considered as final acceptance of demand. Thus, not allowing the taxpayer to contest against the validity of demand in future