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FM reply to CM Mamata Banerjee for GST rate cuts

Copy of Letter of Request to PM from CM Mamata Banerjee

Respected Prime Minister,

I am writing to you regarding a critical issue on facilitating’ augmentation of medical system including infrastructure, equipment, medicine and oxygen, necessitated due to sudden spike in the number of COVID cases in the country in general and also in West Bengal.

We all are trying our best to face new challenges and making all efforts to channelize resources from different sources, inducting ensuring availability of, life saving drugs and oxygen for COVID treatment.

A large number of organizations, individual and benevolent agencies have come forward to donate oxygen concentrators, cylinders, cryogenic storage tanks, tankers and tank containers and COVID related drugs. Donations from these organizations will greatly supplement the efforts of the State Government in meeting the huge gap in demand and supply.

However, many of the donors and agencies have approached the State Government to consider exemption of these items from customs duty/SGST/CGST/IGST.

As the rate structure falls under the purview of the Central Government, I would request that these items may be exempted from GST/customs duty and other such duties and taxes, to help remove supply constraints of the above-mentioned life-saving drugs and equipment and contribute towards effective management of COVID pandemic.

I look forward to your kind consideration and cooperation in this critical matter

With regards,

Your sincerely

(Mamata Banerjee)

Shri Narendra Modi, Hon’ble Prime Minister of India

South Block, Raisina Hill,

New Delhi – 110 011

FM reply to CM Mamata Banerjee 16 tweets

1. Hon. CM of West Bengal @MamataOfficial has written to the Hon @PMOIndia seeking exemption from GST/Customs duty and other duties and taxes on some items and COVID related drugs.

2. A list of items for COVID relief granted exemption from IGST for imports was issued on 3rd May’21. These were given exemption from Customs Duty/health cess even earlier.

3. Full exemption from Customs duties, including IGST, is already available to ALL COVID relief material (not confined to a list) imported by @IndianRedCross for free distribution in the country.

4. With effect from 3 May, 2021, full exemption from all duties has been provided to Remdesivir injections, Remdesivir API, and for a chemical for the manufacture of this drug.

5. Also to Medical Oxygen, equipment used for the manufacture, storage and transportation of oxygen, equipment used for providing oxygen therapy to COVID patients such as Oxygen Concentrators, Ventilators, Non-invasive oxygen masks etc.

6. Also to Inflammatory diagnostic kits and reagents for COVID testing and COVID vaccines.

7. This exemption applies to all above mentioned goods when imported free of cost for free distribution in the country by any entity, State Govt, relief agency or autonomous body on the basis of a certificate issued by a State Government.

8. In order to augment the availability of these items, Government has also provided full exemption from basic customs duty and health cess to their commercial imports.

9. GST at rates varying from 5% (on vaccines), 12% (COVID drugs, oxygen concentrators) is applicable to domestic supplies and commercial import of these items.

10. If IGST Rs. 100 is collected on an item, Rs. 50 accrues to the Centre and the States each as CGST and SGST respectively. Further 41% of the CGST revenue is devolved to States. So out of a collection of Rs. 100, as much as Rs. 70.50 is the States’ share.

11. If full exemption from GST were given, the domestic producers of these items would be unable to offset taxes paid on their inputs and input services and would pass these on to the end consumers by increasing their price.

12. COVID vaccines are being provided free of cost by the GoI to those who are 45 yrs of age & above and to all frontline workers. On Government supplies, GST is also paid by the Government.

13. From the GST collected on vaccine, half is earned by the Centre and the other half by the States. Further, 41% of Centre’s collections also get devolved to the States.

14. So States end up receiving almost 70% of the total revenue collected from vaccines. In fact, a nominal 5% GST is in the interest of the domestic manufacturer of vaccine and in the interest of the citizens.

15. If full exemption from GST is given, vaccine manufacturers would not be able to offset their input taxes and would pass them on to the end consumer/citizen by increasing the price.

16. A 5% GST rate ensures that the manufacturer is able to utilise ITC and in case of overflow of ITC, claim refund. Hence exemption to vaccine from GST would be counterproductive without benefiting the consumer.

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May, 9
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Is there any late fee if GSTR 3B is filed after the due date?

The COVID 19 pandemic has been largely disruptive to the growth of India. With an ever-increasing corona virus cases, lockdown was considered as an only solution to flatten the curve. However, the measures which were implemented to avoid a human disaster, have in turn led to the birth of several issues such as unemployment, recession, hindrance to economic growth, financial instability and so on.

Due to the emerging financial distress faced by most people on account of the large-scale economic distress caused by COVID 19, the Government of India had extended the due dates of various provisions to provide relief in the current pandemic situation. The Union Finance and Corporate Affairs Minister Smt. Nirmala Sitharaman announced several important relief measures taken by the Government of India in view of COVID-19 outbreak, especially on statutory and regulatory compliance matters related to several areas of Income Tax, GST, Customs and Corporate Affairs.

The Central Board of Indirect Taxes and Customs (CBIC) is a part of the Department of Revenue under the Ministry of Finance, Government of India. It deals with the tasks of formulation of policy concerning levy and collection of Customs, Central Excise duties, Central Goods & Services Tax and IGST, prevention of smuggling and administration of matters relating to Customs, Central Excise, Central Goods & Services Tax, IGST and Narcotics to the extent under CBIC’s purview. On 15th October, CBIC came up with the various notifications for prescribing the due dates for filing GSTR 3B.

What is GSTR 3B?

The GSTR-3B is a consolidated summary return of inward and outward supplies that the Government of India has introduced as a way to relax the requirements for businesses that have recently transitioned to GST.
In other words, it is a simplified method that helps to declare the summary of GST liabilities for a given tax period.
One cannot amend GSTR-3B and dealers must file separate GSTR-3B for each of their GSTIN.
All GST registrants must file GST return 3B including ‘NIL’ returns.

Who is required to file GSTR 3B?

All the registered taxpayers are required to file GSTR 3B, except:

Input Service Distributors
Composition Dealers
Non-resident Taxable Person
Small taxpayers
Suppliers of OIDAR (Online Information and Database Access or Retrieval)

What is the due date for furnishing GSTR 3B as prescribed by CBIC?

The CBIC prescribed the due dates of filing GSTR 3B vide Notification No. 76/2020 – Central Tax dated 15th October, 2020 as follows:

Taxpayers having an aggregate turnover of more than Rs 5 crores in the previous financial year

Month for which details in GSTR-3B are furnished	Time period for furnishing details in GSTR-3B
October 2020	20th November 2020
November 2020	20th December 2020
December 2020	20th January 2021
January 2021	20th February 2021
February 2021	20th March 2021
March 2021	20th April 2021

Taxpayers having an aggregate turnover of up to Rs 5 crore in the previous financial year, whose principal place of business is in Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh, the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands or Lakshadweep

Month for which details in GSTR-3B are furnished	Time period for furnishing details in GSTR-3B
October 2020	22th November 2020
November 2020	22th December 2020
December 2020	22th January 2021
January 2021	22th February 2021
February 2021	22th March 2021
March 2021	22th April 2021

Taxpayers having an aggregate turnover of up to Rs 5 crore in the previous financial year, whose principal place of business is in Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or Odisha, the Union territories of Jammu and Kashmir, Ladakh, Chandigarh or Delhi

Month for which details in GSTR-3B are furnished	Time period for furnishing details in GSTR-3B
October 2020	24th November 2020
November 2020	24th December 2020
December 2020	24th January 2021
January 2021	24th February 2021
February 2021	24th March 2021
March 2021	24th April 2021

Is interest payable on not filing GSTR 3B?

Interest is applicable on Late Payment of GST Due Interest has to be paid by every taxpayer who:

Makes a delayed GST payment i.e. pays GST after the due date.
Claims excess Input Tax Credit
Reduces excess Output Tax Liability

Currently, GST has to be paid at the time of filing GSTR-3B and GSTR-4.If GST is not paid within the due dates of filing return Interest at following rates has to be paid:

Particulars	Interest
Tax paid after due date	18%
Excess ITC Claimed or excess reduction in Output Tax	24%

The Interest has to be calculated from the next day on which tax was due.

What do you mean by late fees under GST?

Every registered person under GST is required to file monthly or quarterly return and annual return within the due date depending upon the type of the taxpayer status.
However, if such a taxpayer fails to pay tax or file returns within the prescribed due date, he shall have to pay late fee along with interest on the late payment of GST.
Such a fee is charged for each day during which such a failure continues on the part of the registered taxpayer after the due date to file returns.
Late fees are also applicable on NIL Returns.

Is any late fee leviable if GSTR 3B is not filed within the due dates mentioned above?

Late fees for GSTR-3B is Rs. 20 (Rs. 10 for CGST and Rs. 10 for SGST) per day for NIL returns.
In other cases, it is Rs. 50 (Rs. 25 for CGST and Rs. 25 for SGST).
A return in which there is no sales but has purchases is also considered as NIL return. Maximum amount of penalty will be Rs. 10,000 (Rs. 5,000 for CGST and Rs. 5,000 for SGST) for every return.
Late fees for GSTR-3B for a month is required to be paid in the next month. You cannot file a month’s return before making payment of late fees of previous month.

It is also important to remember that the GSTR amnesty scheme for GSTR 3B ended on 30^th of September, where there was a cap on the payment of late fees. Now late fees are calculated as per the original rules from date of default as provided above.

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November, 6
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How Business and Services will get GST ITC Credit if goods are returned by customer during COVID-19

Introduction

Covid- 19 has certainly brought life to standstill. The spread and outbreak of this pandemic has effected the entire world with both life and economic hit. The supply chains, trade and commerce are all effected around the entire globe. The business are no exception to this hit. In all this situations few extensions of compliance have although proven to be some relief but some areas need some clarity. One of which we will be dealing in this article. How will business and services deal and get GST ITC credit in case if goods are returned by customers during the current Covid-19 scenario.

What is meant by ITC under GST law?

ITC or Input Tax Credit means reducing the taxes paid on inputs from the taxes paid on output. It is claiming of credit of the GST paid on purchases used for furtherance of business.

E.g. If a person output or sales is Rs. 200 on which he has paid GST of 18% say CGST 18 and SGST 18 and his purchase is of Rs 100 on which he has paid GST of 18% say CGST 9 and SGST 9. The concept of Input Tax Credit is applied by reducing the purchase GST amount paid from the sales GST amount thereby the effective taxable amount of GST payable is CGST as Rs. 9 and SGST as Rs 9.

How can a Business get GST ITC credit if goods are returned by the customer under current circumstances?

If the goods are returned by the recipient, credit notes can be raised and issued by the supplier in order to adjust the GST liability which is already paid.

Further, If there is a cancellation or a downward revision in the prices of any existing contracts, there will be a need to adjust the liability already discharged, for this situation for services as well you are required to issued a credit note. This credit note can be issued only when taxable value of tax charged in the tax invoice exceeds the taxable value or tax payable value in respect of such supply or in case where the service so supplied are found to be deficient.

Conditions:

The burden and onus of proof lies of the supplier where there is issuance of credit note.
Also the supplier will have to prove that the ITC pertaining to credit note has been paid back by the recipient to the government.

What is a credit Note under GST?

Section 34 of the Act gives clarity about Credit Note :

Where a tax invoice has been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply, or where the goods supplied are returned by the recipient, or where goods or services or both supplied are found to be deficient, the registered person, who has supplied such goods or services or both, may issue to the recipient what is called as a credit note containing the prescribed particulars.
Any registered person who issues a credit note in relation to a supply of goods or services or both shall declare the details of such credit note in the return for the month during which such credit note has been issued but not later than September following the end of the financial year in which such supply was made, or the date of furnishing of the relevant annual return, whichever is earlier, and the tax liability shall be adjusted in such manner as may be prescribed:

Provided that no reduction in output tax liability of the supplier shall be permitted, if the incidence of tax and interest on such supply has been passed on to any other person.

Format of Credit Note:

There is no specific format although few things are to be considered while issuing a credit note.

Name, address and Goods and Services Tax Identification Number of the supplier;
date of issue;
a consecutive serial number;
nature of the document;
name, address and Goods and Services Tax Identification Number or Unique Identity Number, if registered, of the recipient;
serial number and date of the corresponding tax invoice or, as the case may be, bill of supply;
value of taxable supply of goods or services, rate of tax and the amount of the tax credited to the recipient;
signature or digital signature of the supplier or his authorized representative.

What is the Time Limit to Issue a Credit Note?

As dealt earlier in Section 34 (2) the time limit to issue a credit note is:

On or before the 30^th day of September following the end of the financial year in which such supply was made, or
The date of filing of the relevant annual return for the financial year,

whichever is earlier.

Cautions and measures to be taken into consideration

You are required to consider that this period of COVID -19 is where the Department may in the years ahead focus on assessments and scrutinizes and is certainly a risk area for high tax demands. Also the credit notes issued during this period of Covid- 19 during March 2020 and the FY- 2020-21 will not be missed in the Departments’ assessment and monitoring. So you are advised to take this area into consideration and maintain your workings, invoices and the entailment of ITC and credit notes raised during this period for evidences to be furnished during assessments in near future.

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