CBIC’s GST Milestones in 2023: Record-breaking Collections, Enhanced Compliance through AI, and Streamlined Processes
The Central Board of Indirect Taxes and Customs (CBIC), Department of Revenue, Ministry of Finance, has achieved significant milestones in enhancing the efficiency and integrity of the Goods and Services Tax (GST) system. Goods and Services Tax (GST) not only completed six successful years of implementation but also broke all records of previous collections and achieved the highest ever tax revenue collection for April 2023 at Rs 1.87 lakh crore.
Leveraging data analytics and artificial intelligence, the CBIC has strengthened the registration process by implementing a risk rating system for applicants, ensuring thorough verification to prevent fraudulent entries. Additionally, geo-tagging of business locations, system-based suspension of registrations for non-filers, and risk-based processing of refund applications showcase CBIC’s commitment to curbing malpractices.
To streamline the filing process, sequential filing of GSTR-1 and GSTR-3B has been mandated, promoting timely returns and smooth availability of input tax credit. Special drives against fake registrations, system-based mechanisms for intimation of mismatches, and a new functionality for unregistered persons to apply for temporary registration demonstrate CBIC’s dedication to compliance.
Moreover, measures like transfer of balance in electronic cash ledgers, exemptions for small taxpayers, and facilitation of intra-state supply through e-commerce operators underscore the CBIC’s efforts to support businesses and improve cash flows. Noteworthy is the extension of GST exemptions for satellite launch services and simplification of late fee structures.
Following are some of the major achievements of the Department of Revenue, Ministry of Finance, in 2023:
CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS (CBIC):
GOODS AND SERVICES TAX (GST)
RISK RATING OF REGISTRATION APPLICATIONS: To ensure that fraudulent elements are prevented from entering into GST system, registration process has been strengthened by use of data analytics and artificial intelligence to identify risky applicants so that their detailed verification, including physical verification can be conducted by the field officers before taking a decision on their application for registration.
THE FACILITY OF GEO TAGGING of the place of business of the applicant for the registration as well as existing registered persons has been provided on the portal.
SYSTEM BASED SUSPENSION OF REGISTRATION is done in cases where returns are not filed for continuous period of 6 months.
RISK RATING OF REFUND APPLICATIONS: GST refund applications are being assigned risk rating based on data analytics and risk parameters, so that detailed verification can be conducted by the tax officers while processing such risky refund applications so as to ensure that undue/ineligible refunds are not sanctioned to the fraudulent taxpayers.
SEQUENTIAL FILING OF GSTR-1 AND GSTR-3B: Filing of GSTR-l has been made mandatory before filing of GSTR-3B for a tax period with effect from 01.10.2022. Also, sequential filing of GSTR-1 has been mandated w.e.f. 01.10.2022. Thus, GSTR-l as well as GSTR-3B have been made totally sequential tax period wise. This would ensure timely furnishing of returns and will smoothen the availability of the input tax credit to the recipient.
A SPECIAL ALL INDIA DRIVE LAUNCHED AGAINST FAKE REGISTRATIONS during the period 16.05.2023 to 15.07.2023, jointly by Central and State tax authorities in close coordination. Detailed guidelines issued for the implementation of the said drive vide Instruction no. 01/2023-GST dated 04.05.2023.
SYSTEM BASED MECHANISM OF INTIMATION OF MISMATCHES in liability between GSTR-1 and GSTR-3B above a certain threshold (Rs 25 Lakh and 20% at present) has been provided for enabling the taxpayer to either pay the differential liability or explain the difference. This will help in self-regulation and reconciliation on part of the taxpayers themselves, without intervention of tax officers. Similar System based mechanism has been provided for excess availment of ITC in FORM GSTR-3B vis-a-vis that made available in FORM GSTR-2B above a certain threshold (Rs 25 Lakh and 20% at present).
A NEW FUNCTIONALITY HAS BEEN MADE AVAILABLE on the common portal which allows unregistered persons to take a temporary registration and apply for refund. Also, the manner and procedure for filing of refund applications by unregistered persons in certain circumstances has been prescribed vide Circular no. 188/20/2022-GST dated 27.12.2022.
MEASURE FOR IMPROVING CASH FLOW: Provision has been made to provide for transfer of balance in electronic cash ledger of a registered person to electronic cash ledger of a distinct person. This provision would help taxpayer in easily transferring unutilized balance in cash ledger between the registered persons having same PAN, without need for filing refund claim with tax officers. This would provide case of doing business and would improve liquidity and cash flows of such taxpayers.
GST COUNCIL IN ITS 47th MEETING recommended for allowing unregistered suppliers and composition taxpayers to make intra-state supply of goods through E-Commerce Operators (ECOS), subject to certain conditions. The requisite amendments in the GST Act have been made by Finance Act, 2023 and the it has been notified w.e.f. 01.10.2023 vide Notification No. 34/2023-CT dated 31.07.2023 as per the recommendation made by the GST Council. Lakhs of small taxpayers would be benefited from the waiver of requirement of mandatory registration. This would open the huge e-commerce market for them to sell their goods without getting mandatory registration upto threshold turnover of registration. Extension of the benefit of making intra-state supply of goods through an E-commerce Operator (ECO) to the composition taxpayers shows government’s commitment to support small businesses.
VIDE NOTIFICATION NO. 18/2022- CENTRAL TAX dated 28.09.2022, w.e.f. 01.10.2022, amendments have been brought in the CGST Act to extend the time period for rectification/amendment of returns/ issuance of credit notes and for availment of input tax credit unto 30th day of November following the end of the financial year to which such details pertain. Earlier it was allowed up to the due date for furnishing of return for the month of September. This provides additional time to the taxpayers for rectification/amendment of returns. Issuance of credit notes and for availment of input tax credit.
LATE FEES FOR DELAYED FILING of FORM GSTR-9/ GSTR-9C by registered persons having turnover upto Rs. 20 crore has been rationalised by linking it to the taxpayers’ aggregate turnover in the relevant Financial Year.
E- INVOICING SYSTEM WAS INTRODUCED IN INDIA with effect from O1.10.2020 for B2B transactions as well as exports, for taxpayers with annual aggregate turnover of Rs. 500 crore and above. This threshold has been reduced progressively over a period of time and was reduced to Rs 10 crores from 01.10.2022. This threshold limit has been further reduced to Rs 5 crore with effect from 01.08.2023 vide notification no. 10/2023-Central Tax dated 10.05.2023.
AS A RELIEF TO THE TAXPAYERS FROM HIGH LATE FEES, vide Notification No. 07/23-CT dated 31.03.2023, late fee payable for delayed filing of FORM GSTR-9 / GSTR-9C for FY 2017-18 to FY 2021-22 was capped to maximum of Rs. 20,000/- (Rs. 10,000/- + Rs. 10,000/-) if filed between 01.04.23 to 30.06.23 and the due date was further extended till 31.08.2023 vide Notification No. 25/2023-CT dated 17.07.2023. Further, vide Notification No. 08/23-CT dated 31.03.2023, late fee payable for delayed furnishing of final return in FORM GSTR-10 was capped to maximum of Rs. 1,000/- (Rs. 500/- + Rs. 500/-) if filed between 01.04.23 to 30.06.23 and the due date was further extended till 31.08.2023 vide Notification No. 26/2023-CT dated 17.07.2023.
VIDE NOTIFICATION NO. 06/2023-CT dated 31.03.2023, a conditional amnesty scheme was provided for deemed withdrawal of best judgement assessment orders issued under Section 62, in the cases where a valid return was not furnished within 30 days from the date of service of such assessment order issued on or before 28.02.2023, if the pending return is filed on or before 30.06.2023. Further, such date for filing of pending return was extended till 31.08.2023 vide Notification No. 24/2023-CT dated 17.07.2023.
VIDE NOTIFICATION NO. 03/2023-CT dated 31.03.2023, for such registrations which were cancelled for non-filing of returns on or before 31.12.2022 and application for revocation was not filed or appeal has been rejected or appeal is pending within the specified time, the time limit for filing of application for revocation of cancellation of registration, was extended till 30.06.2023. Further, vide Notification No. 23/2023-CT dated 17.07.2023, the time limit for filing of application for revocation of such cancellation of registration, was extended till 31.08.2023.
VIDE NOTIFICATION NO. 32/2023-CT dated 31.07.2023 the registered person, whose aggregate turnover in the financial year 2022-23 is up to two crore rupees, has been exempted from filing annual return for the said financial year.
VIDE NOTIFICATION NO. 33/2023-CT dated 31.07.2023, ‘Account Aggregator’ has been notified as the systems with which information may be shared by the common portal based on consent provided by the registered person/taxpayer. This will help MSMES in getting credit/business loan based on their GST registration.
IN ORDER TO SIMPLIFY AND DECRIMINALISE certain provisions of the GST Act, based on the recommendation of GST Council, amendments have been made in provisions of the CGST Act, 2017.
CONSTITUTION OF GOODS AND SERVICES TAX APPELLATE TRIBUNAL: The requisite amendment in CGST Act, 2017, as recommended by the GST Council, for constitution of GST Appellate Tribunal has been made. Further action for functioning of the Tribunal is being taken.
WITH A VIEW TO FURTHER ENHANCE EASE OF DOING BUSINESS, GTAS who pay duty on RCM basis have been given an option to pay GST under forward charge mechanism. As a trade friendly measure, GTAS are not required to file declaration for paying GST under forward charge every year. If they have exercised this option for a particular financial year, they shall be deemed to have exercised it for the next and future financial years unless they file a declaration that they want to revert to reverse charge mechanism (RCM).
GST EXEMPTION ON SATELLITE LAUNCH SERVICES supplied by ISRO, Antrix Corporation Limited and New Space India Limited (NSIL) has been extended to such services supplied by organisations in private sector also to encourage Start-Ups.
THE ISSUE OF GST ON ONLINE GAMING decided by the GST Council in its 51st GST Council meeting giving finality to long pending issue.
THE 52ND GST COUNCIL HAS RECOMMENDED TO EXEMPT SERVICES of water supply, public health, sanitation conservancy, solid waste management and slum improvement and upgradation supplied to Governmental Authorities.
MERA BILL MERA ADHIKAAR SCHEME has been launched as a pilot project in select States/ UTs providing for rewards to the persons uploading B2C invoices on the Mera Bill Mera Adhikaar Application to encourage consumers to demand GST invoices for their purchases, fostering transparency and accountability in commercial transactions.
VIDE CIRCULAR NO. 199/11/2023-GST dated 17.07.2023, it has been clarified that Input Services Distributor (1SD) mechanism is not mandatory for distribution of input tax credit of common input services procured from third parties to the distinct persons as per the present provisions of GST law, and also to clarify issues regarding taxability of internally generated services provided by one distinct person to another distinct person.
AMENDMENT HAS BEEN MADE IN RULE 9 AND RULE 25 of CGST Rules, 2017 to do away with the requirement of the presence of the applicant for the physical verification of business premises and also to provide for physical verification in high risk cases even where Aadhaar has been authenticated.
ON RECOMMENDATION OF GST COUNCIL, certain amendments have been made in the CGST Act 2017 and IGST Act 2017 vide Central Goods and Services Tax (Amendment) Act, 2023 and the Integrated Goods and Services Tax (Amendment) Act, 2023 with effect from 01.10.2023 to provide clarity on the taxation of supplies in casinos, horse racing and online gaming. These amendments inter alia provide level playing field to the suppliers of online money gaming based in India vis-à-vis the suppliers of online money gaming located outside India supplying online money gaming to the recipients in India. Registration has been made mandatory for such overseas suppliers of online money gaming and provisions have been made for punitive action against such suppliers, including blocking of their websites, in case of contravention of provisions under GST law. Further, the Council inter alia decided that a review of effect of these amendments on trade & industry and other stake holders would be undertaken by the Council after six months of the implementation, based on the status report encompassing revenue data and stakeholders’ feedback.
AMNESTY SCHEME FOR FILING OF APPEALS AGAINST DEMAND ORDERS IN CASES WHERE APPEAL COULD NOT BE FILED WITHIN THE ALLOWABLE TIME PERIOD: The Council has recommended providing an amnesty scheme for taxable persons, who could not file an appeal under section 107 of the CGST Act, 2017 against the demand order passed on or before the 31st day of March, 2023, or whose appeal against the said order was rejected solely on the grounds that the said appeal was not filed within the time period specified in sub-section (1) of section 107. In all such cases, filing of appeal by the taxpayers will be allowed against such orders upto 31st January 2024, subject to the condition of payment of an amount of pre-deposit of 12.5% of the tax under dispute, out of which at least 20% (i.e. 2.5% of the tax under dispute) should be debited from Electronic Cash Ledger. This will facilitate a large number of taxpayers, who could not file appeal in the past within the specified time period.
PROVISION FOR AUTOMATIC RESTORATION OF PROVISIONALLY ATTACHED PROPERTY AFTER COMPLETION OF ONE YEAR: The Council has recommended an amendment in sub-rule (2) of Rule 159 of CGST Rules, 2017 and FORM GST DRC-22 to provide that the order for provisional attachment in FORM GST DRC-22 shall not be valid after expiry of one year from the date of the said order. This will facilitate release of provisionally attached properties after expiry of period of one year, without need for separate specific written order from the Commissioner.
The Press Release can be accessed at: https://pib.gov.in/PressReleasePage.aspx?PRID=1990977