Here are 7 crucial GST Circulars which were issued by the government which you must know:
- Amendment in Circular no. 1/1//2017 in respect of Proper officer for provisions relating to Registration and Composition levy under the Central Goods and Services Tax Act, 2017
Circular no. 1/1/2017-CT dated 26.06.2017 initially assigned the functions of the proper officer under various sections of the CGST Act, related to Registration and Composition levy, to different Central Tax officers. Due to the transfer of GST back office operations from ACES-GST to GSTN BO, the Central Board of Indirect Taxes & Customs has decided to reassign the duties related to section 30, the proviso to section 27(1) of the CGST Act, and Rules 6, 23, and 25 of the CGST Rules. These functions will now be managed by the Superintendent of Central Tax instead of the previously assigned Assistant or Deputy Commissioners of Central Tax or Assistant or Deputy Directors of Central Tax.
- Circular No. 224/18/2024 –GST dated 11.07.2024 regarding Guidelines for recovery of outstanding dues, in cases where first appeal has been disposed of, till Appellate Tribunal comes into operation
Due to the non-constitution of the GST Appellate Tribunal, taxpayers currently cannot appeal against orders from the first appellate authority as per Section 112 of the CGST Act. This has led to confusion about the recovery of outstanding dues and the adjustment of pre-deposits. The Central Government vide this circular has clarified the issue of payment of amount of pre-deposit for the appeal against the order of the appellate authority under section 112 of the CGST, Act, 2017.
The proper process regarding the filing of the appeals in the Tribunal has also been clarified in the same circular. Taxpayers who have made or wish to make pre-deposit payments through FORM GST DRC-03 can adjust these payments against the required pre-deposit for filing an appeal once the Tribunal is operational. The payment should be made through the Electronic Liability Register (ELL) Part-II, and the taxpayer must select the relevant order.
Taxpayers should file an undertaking with the jurisdictional proper officer, committing to file an appeal when the Tribunal is operational. Upon making the pre-deposit payment and providing the undertaking, the recovery of the remaining demand will be stayed. Notification No. 12/2024-CT dated 10.07.2024 introduces sub-rule (2B) of Rule 142 and FORM GST DRC-03A. This allows taxpayers who have mistakenly paid amounts through FORM GST DRC-03, instead of the correct demand, to adjust these payments by filing FORM GST DRC03A.
The adjustment will be treated as if the payment was made toward the demand on the date of the original FORM GST DRC-03. Further, payments made through FORM GST DRC-03 and adjusted using FORM GST DRC-03A can be applied towards the pre-deposit required for appeals under Sections 107 and 112 of the CGST Act. This will also result in a stay of the remaining demand amount, provided the taxpayer files the appeal within the prescribed timelines. If the appeal is not filed in time, the remaining amount will be recovered according to the law.
- Circular No. 225/19/2024-GST dated 11th July 2024 regarding clarification on various issues pertaining to taxability and valuation of supply of services of providing corporate guarantee between related persons
Based on the recommendations made in the 53rd Meeting of the GST Council the Central Government has clarified that Rule 28(2) of CGST Rules is only for determination of the value of the taxable supply of providing corporate guarantee to any banking company or financial institution by a supplier to a related recipient on behalf of the said recipient and not regarding the taxability of the said supply itself. In the said clarification it is also clarified that before 26th October 2023, the valuation of service of providing corporate guarantee to any banking company or financial institution by a supplier to a related recipient, on behalf of the said recipient, was to be done as per the provisions of Rule 28 of CGST Rules, as it existed then. The valuation of the Corporate guarantee scheme issued or renewed on or after 26th October, 2023 the will be required to be done as per Rule 28(2) of CGST Rules. The corporate guarantee will be calculated based on the amount guaranteed and will not be based on the amount of loan actually disbursed to the recipient of the corporate guarantee. ITC is available for the corporate guarantee scheme based on certain conditions, rules, specified in the Act.
- Circular No. 226/20/2024-GST dated-11.07.2024 regarding mechanism for refund of additional Integrated Tax (IGST) paid on account of upward revision in price of the goods subsequent to exports
The Central Government vide this circular has clarified about the mechanism for availing refund of additional Integrated Tax (IGST) paid on account of upward revision in price of the goods subsequent to exports. Until a specific category for refunding additional IGST in FORM GST RFD-01 is developed, exporters can claim refunds for extra IGST paid due to price revisions by using the “Any other” category in FORM GST RFD-01.
They should include remarks “Refund of additional IGST paid on account of increase in price subsequent to export of goods” and provide relevant documents as outlined in Rule 89 of the CGST Rules. Refunds under Section 54 of the CGST Act will not be paid if less than ₹1,000.
As per Sub-rule (1B) of Rule 89, introduced by Notification No. 12/2024- CT, applications for refund of additional IGST paid can be filed within two years from the relevant date specified in Clause (a) of Explanation (2) of Section 54 of the CGST Act. For cases where the relevant date under Clause (a) of Explanation (2) of Section 54 of the CGST Act falls before the introduction of Sub-rule (1B), the refund application can be filed within two years from the date the sub-rule came into effect.
- Circular No. 227/21/2024-GST dated-11.07.2024 regarding processing of refund applications filed by Canteen Stores Department
The Central Government vide the said circular has laid down the revised procedure for electronic submission and processing of refund application by CSD, in accordance with section 55 of CGST Act, in supersession of Circular No. 60/34/2018-GST dated 04.09.2018. The Central Government has specified that the Canteen Stores Department (CSD) is entitled to claim a refund of fifty percent of the applicable central tax, integrated tax, and Union territory tax paid on inward supplies of goods received by the CSD for the purposes of subsequent supply of such goods to their Unit Run Canteens or to their authorized customers. Further, vide Circular No. 60/34/2018-GST dated 04.09.2018, the manner and procedure for filing and processing of such refund claims was specified so as to ensure that the CSD shall apply for refund by filing an application manually to the jurisdictional tax office till the time the online utility for filing such refund claim is made available on the common portal. To enable such CSD to file application for refund electronically, a new functionality has been made available on the common portal.
A new functionality has been introduced allowing CSD to file refund applications electronically using FORM GST RFD-10A on the common portal. This change follows amendments to the Central Goods and Services Tax Rules, 2017 and a new rule 95B has been inserted vide Notification No.12/2024-Central Tax dated 10.07.2024. The revised procedure for electronic submission and processing of refund application by CSD includes:
Procedure for Filing Refund Claims:
The CSD, who wants to file an application for refund under section 55 of CGST Act in such cases shall file an application for refund in FORM GST RFD-10Aelectronically on the common portal and the same shall be processed electronically. The refund to be granted to the CSD shall be based on the invoices of the inward supplies of goods received by it for the purposes of subsequent supply of such goods to its Unit Run Canteens or to its authorized customers. The CSD may apply for refund with the jurisdictional Central tax/State tax authority to whom the CSD has been assigned and is required to apply for refund once in every quarter. The CSD will also be allowed to file the refund application for multiple quarters, clubbing multiple FYs, as per their option. Claims must be based on invoices from registered suppliers who have submitted their GSTR-1 and GSTR-3B returns.
Required Documents: The said refund application form shall be accompanied with an undertaking confirming that the goods were received for subsequent supply to Unit Run Canteens or authorized customers and a declaration stating that no previous refund claims have been made on the same invoices.
Relevant Dates:
Applications for refunds can be filed within two years from the end of the quarter in which the inward supply was received.
Processing and Sanctioning:
Refund claims will be processed electronically. The system ensures refunds do not exceed fifty percent of the tax paid. The invoices uploaded by the CSD while filing will be validated on the portal with FORM GSTR 2B of the applicant and only the validated invoices will be allowed in the application. The invoices for which refund has already been availed by the CSD will be flagged in the system and will not be allowed for the refund. Manual Applications: Refund claims submitted manually before the introduction of the new electronic functionality will continue to be processed according to the Circular No. 60/34/2018-GST dated 04.09.2018.
- Circular No.228/22/2024 dated-15.07.2024 regarding clarification of applicability of GST on certain services
GST exemption on the outward supplies made by Ministry of Railways (Indian Railways): All supplies of goods and services made by Ministry of Railways (Indian Railways) were brought under Forward Charge Mechanism and consequently exemptions available to Ministry of Railways were withdrawn vide notification No.13/2023-CT(R) dated 19.10.2023 w.e.f. 20.10.2023. However, subsequently the services provided by Ministry of Railways to general public viz., sale of platform tickets, facility of retiring rooms/waiting rooms, cloak room services and battery-operated car services and the supply of services made between various zones/ divisions under Ministry of Railways were exempted vide Notification No. 04/2024- CT(R) dated 12.07.2024 w.e.f 15.07.2024. Vide the said circular the GST liability for the intervening period i.e. from 20.10.2023 to 14.07.2024 is regularized on ‘as is where is’ basis.
GST exemption on the transactions between Special Purpose Vehicles (SPVs) and Ministry of Railways (Indian Railways) Based on the recommendations of the 48th GST Council, it was clarified that supply of services by SPVs to Ministry of Railways by way of allowing Indian Railways to use infrastructure built and owned by them during the concession period against consideration and maintenance services supplied by Ministry of Railways to SPVs are taxable. However, in view of the difficulties faced in implementation of the abovesaid recommendation GST Council in its 53rd meeting has recommended to exempt the said supply vide Notification No. 4/2024CT(R) dated 12.07.2024. Vide the said circular the GST liability for the past period from 01.07.2017 to 14.07.2024 has been regularised on ‘as is where is’ basis.
Applicability of GST on the statutory collections made by the Real Estate Regulatory Authority (RERA) in accordance with the Real Estate (Regulation and Development) Act, 2016 Vide the said circular it is clarified that RERA is a ‘governmental authority’ as per the definition in the exemption Notification No.12/2017- CT(R) dated 28.06.2017 and therefore, statutory collections made by RERA are covered under the Sl. No. 4 of notification No. 12/2017-CT(R) dated 28.06.2017.
Applicability of GST on the incentive amount shared by acquiring banks with other stakeholders in the digital payment ecosystem under the notified Incentive Scheme for promotion of Ru Pay Debit Cards and low value BHIM-UPI transactions. Under the notified Incentive Scheme for promotion of RuPay Debit Cards and low value BHIM-UPI transactions, the Ministry of Electronics and Information Technology (MeitY) pays the acquiring banks an incentive as a percentage of the value of the transactions up to two thousand rupees. Based on the recommendations of the 48th GST Council meeting, it was clarified vide Circular No. 190/02/2023- GST dated 13.01.2023, that incentives paid by MeitY to acquiring banks under the said scheme are in the nature of subsidy and thus, not taxable. The said Circular has clarified that further sharing of the incentive amount by the acquiring bank with other stakeholders, up to the point where the incentive is distributed in the proportion and manner as decided by NPCI in consultation with the participating banks under the notified Incentive Scheme for promotion of RuPay Debit Cards and low value BHIM-UPI transactions, is in the also nature of a subsidy and is thus, not taxable. 5. GST liability on the reinsurance of specified general and life insurance schemes Certain specified general insurance and life insurance schemes are exempt from GST under Sl. Nos. 35 and 36 of notification No. 12/2017- CT(R) dated 28.06.2017. Vide entry at Sl. No. 36A of the said notification, reinsurance of the aforesaid exempted insurance schemes has also been exempted w.e.f. 25.01.2018.
The Circular regularizes the GST liability on the services by way of reinsurance of the insurance schemes specified in SI. Nos. 35 and 36 of notification No. 12/2017- CT(R) dated 28.06.2017 for the period from 01.07.2017 to 24.01.2018 on ‘as is where is’ basis.
GST liability on the reinsurance of insurance schemes for which total premium is paid by the Government Services provided to the Central Government, State Government, or Union Territory under any insurance scheme for which total premium is paid by the Central Government, State Government, or Union Territory are exempt from GST under Sl. No. 40 of notification No. 12/2017- CT(R) dated 28.06.2017. Vide entry at Sl. No. 36A of the said notification, re-insurance of the aforesaid insurance schemes has been prospectively exempted w.e.f. 27.07.2018. The said Circular regularizes the GST liability on the services by way of reinsurance of insurance services covered under Sl. No. 40 of notification No. 12/2017- CT(R) dated 28.06.2017 for the period from 01.07.2017 to 26.07.2018 on ‘as is where is’ basis.
Applicability of GST on retrocession services The said Circular clarified that the term ‘reinsurance’ as mentioned in Sl. No. 36A of Notification No. 12/2017-CT(R) dated 28.06.2017 includes ‘retrocession’ services. 8. GST liability on certain accommodation services The supply of accommodation services having value of supply less than or equal to twenty thousand rupees per person per month provided that the accommodation service is supplied for a minimum continuous period of ninety days has been exempted w.e.f. 15.07.2024 vide Notification No. 4/2024-CT(R) dated 12.07.2024.
The Circular has clarified that GST liability on the supply of such accommodation services is regularized on ‘as is where is’ basis for the period from 01.07.2017 to 14.07.2024.
- Circular No.229/23/2024 dated 15-07-2024 regarding clarification regarding GST rates and classification (Goods) based on the recommendations made in the 53rd Meeting of the GST Council
Based on the recommendations of the GST Council in its 53rd meeting, the Central Government vide the said Circular has clarified the following: 1. Clarification regarding GST rate on Solar Cookers: It has been clarified that solar cookers that work on dual energy of solar energy and grid electricity are appropriately classifiable under heading 8516 and already attract a GST rate of 12% vide Sl. No. 201A of Schedule II of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017.
Clarification regarding GST rate on Fire Water Sprinklers: It has been clarified that all types of sprinklers, including fire water sprinklers will attract GST at the rate of 12% vide Sl. No. 195 B of Schedule II of notification No. 1/2017-Central Tax (Rate) dated the 28.06.2017. The issues for the past period are regularized on “as is where is basis”.
Clarification regarding GST rate on parts of Poultry-keeping machinery: Parts of Poultry-keeping machinery are classifiable under tariff item 8436 91 00 and attract GST at the rate of 12% vide Sl. No. 199 of Schedule II of Notification No. 1/2017-Central Tax (Rate), dated the 28.06.2017. On the recommendations of the Council, to bring clarity on the issue, the relevant entry at Sl. No. 199 of Schedule II of Notification No. 1/2017-Central Tax (Rate) dated the 28.06.2017, has been amended vide Notification No. 2/2024-Central Tax (Rate), dated the 12.07.2024 to specifically include ‘parts’ of Poultry-keeping machinery. The said Circular regularizes the issues for the past period on “as is where is basis”.
Clarification regarding the scope of expression ‘pre-packaged and labelled’ for supply of agricultural farm produce: The definition of ‘pre-packaged and labelled’ in Notification No. 1/2017- Central Tax (Rate) and Notification No. 2/2017-Central Tax (Rate), both dated the 28.06.2017, has been amended vide Notification No. 2/2024- Central Tax (Rate) dated 12.07.2024 and Notification No. 3/2024-Central Tax (Rate) dated 12.07.2024, respectively, to exclude the supply of agricultural farm produce in package(s) of commodities containing quantity of more than 25 kilogram or 25 litre from the scope of ‘prepackaged and labelled’. Consequently, supply of agricultural farm produce in package(s) containing quantity of more than 25 kilogram or 25 litre will not attract GST levy of 5%. The said Circular regularizes the issues for the past period on “as is where is basis”.
Clarification regarding supplies of goods made to or by agency engaged by Government: In view of the genuine interpretational issues, the issues for the past period from 01.07.2017 up to 17.07.2022 have been regularized on “as is where is” basis for supplies made to or by any agency engaged by Union Government or State Government/Union Territory for procurement and sale of such goods under any programme/scheme duly approved by the Central Government or any State Government intended to distribute such goods at free of cost or at subsidized rate to the eligible beneficiaries like economically weaker sections of the society subject to certain specific conditions.
