CBIC proposes mandatory GST scrutiny on quarterly basis

The Central Board of Indirect Taxes and Customs (CBIC) has proposed mandatory Goods and Service Tax (GST) scrutiny on a quarterly basis to enhance compliance through effective and standardised scrutiny of returns.

“CBIC to soon introduce mandatory quarterly scrutiny of GST returns. Scrutiny exercise is aimed at better compliance and enhancement of GST collections,” reported CNBC-TV18, citing sources.

The CBIC would use business intelligence and other enterprise data available to run the quarterly scrutiny, the report said.

According to the news channel’s sources, tax evasion to the tune of Rs 52,000 crore was detected in the period between July 2017 and April 1, 2021.

“Fake invoices noted as biggest tax evasion practice by taxpayers,” the report stated.

It was reported on April 11, 2022 that the CBIC began an inspection of the first tranche of about 50,000 taxpayers for alleged lapses in the financial year 2018.

The examination of GST returns is initiated to bring transparency and plug tax leakages that remain undetected in the system.

Post the first tranche, another tranche of scrutiny will be opened for FY19, followed by FY20, FY21 and FY22 so that several leakages are plugged.

On March 22, 2022, the CBIC issued a standard operating procedure for the scrutiny of GST returns for financial years 2017-18 and 2018-19, the first two years of the roll-out of the new taxation regime.

The Directorate General of Analytics and Risk Management (DGARM) has been assigned the task to select the GST identification numbers (GSTINs) registered, whose returns are to be scrutinised, and to communicate the same to the field officers from time to time.

Field formations have been authorised to open scrutiny of  GSTINs based on artificial intelligence inputs and risk assessment parameters finalised by the department.

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Goods and Services Tax: Extension of Due Dates of and Waiver / Reduction in Interest and Late Fees

The Central Board of Indirect Tax and Customs (CBIC) on 24th June, 2020 vide Notification No. 51/2020, 52/2020, 53/2020 and 54/2020, notified various relaxation for due date of returns and waiver / reduction in Interest and Late Fees of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “The Act”).

The key extracts of various relaxation are as follows:

1. Notification No. 51/2020 and 52/2020:

Seeks to Waive off / reduce the rate of Interest and late fees for delay in filing of GSTR-3B if return is filed within due date as mentioned below:

i. For Taxpayers having aggregate turnover > 5 Cr in the preceding financial year:

Tax PeriodOriginal Due DateNIL Rate of Interest till
9% Interest from date
in Column (3) till
February, 202020/03/202004/04/202024/06/2020
March, 202020/04/202005/05/202024/06/2020
April, 202020/05/202004/06/202024/06/2020

ii. For Taxpayers having aggregate turnover < 5 Cr in the preceding financial year:

Tax PeriodNIL Rate of Interest
and NIL Fees for
Category 1 States / UT  till
NIL Rate of Interest
and NIL Fees for
Category 2 States / UT  till
9% Interest from
date in Column
(2) and (3)
respectively till
February, 202030/06/202030/06/202030/09/2020
March, 202003/07/202005/07/202030/09/2020
April, 202006/07/202009/07/202030/09/2020
May, 202012/09/202015/09/202030/09/2020
June, 202023/09/202025/09/202030/09/2020
July, 202027/09/202029/09/202030/09/2020

iii. Moreover, a benefit in form of Reduced / Late Fees has been prescribed for failure of filing of GSTR-3B for the period July, 2017 to January, 2020 as follows:

Tax PeriodTax LiabilityMaximum Late Fees
u/s 47 of the Act
Condition of Return
to be filed within
July, 2017 to January, 2020NILNIL01/07/2020 to 30/09/2020
July, 2017 to January, 2020Other than NILRs. 25001/07/2020 to 30/09/2020

2. Notification No. 53/2020:

Seeks to Waive off late fees for delay in furnishing GSTR-1 if return is filed within due date as mentioned below:

Month / QuarterDates
March, 202010/07/2020
April, 202024/07/2020
May, 202028/07/2020
June, 202005/08/2020
January to March, 202017/07/2020
April to June, 202003/08/2020

3. Notification No. 54/2020:

Prescribes the due dates of GSTR-3B for the month of August, 2020 for Taxpayers having aggregate turnover < 5 Cr in the preceding financial year.

Category 1 States / UT01/10/2020
Category 2 States / UT03/10/2020

Category 1 States / UT:

Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana or Andhra Pradesh or the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands and Lakshadweep.

Category 2 States / UT:

Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or Odisha or the Union territories of Jammu and Kashmir, Ladakh, Chandigarh and Delhi.

Similar Notifications have been notified under the Integrated Goods and Services Tax Act, 2017 and Union Territories Goods and Services Tax Act, 2017.

To View the Notification: CLICK HERE

Recommendations of the 40th GST Council Meeting related to Law and Procedure

The 40th GST Council was help under the Chairmanship of Union Finance & Corporate Affairs Minister Smt Nirmala Sitharaman through video conferencing Today i.e. 12th June, 2020.

The GST Council has made the following recommendations on Law & Procedures changes:

1. Reduction in Late Fee for past Returns:

To bring in line pending return filing, late fee for non-furnishing FORM GSTR-3B for the tax period from July, 2017 to January, 2020 has been reduced / waived as under:

i. If there is no Liability               : NIL

ii. If there is any Tax Liability      : Maximum Rs. 500/- per return.

(Note: The reduced rate of late fee would apply for all the GSTR-3B returns furnished between 01/07/2020 to 30/09/2020.)

2. Further relief for small taxpayers for late filing of returns (February, March & April 2020):

For small taxpayers (Aggregate Turnover upto Rs. 5 Crore), for the supplies effected in the month of February, March and April, 2020, the rate of interest for late furnishing of return for the said months beyond specified dates (staggered upto 6th July 2020) is reduced from 18% p.a. to 9% p.a. till 30.09.2020 i.e. For these months, small taxpayers will not be charged any interest till the notified dates for relief (staggered upto 6th July 2020) and thereafter 9% interest will be charged till 30.09.2020.

3. Relief for small taxpayers for subsequent tax periods (May, June & July 2020):

In wake of COVID-19 pandemic, for taxpayers having aggregate turnover upto Rs. 5 Crore, further relief provided by waiver of late fees and interest if the returns in FORM GSTR-3B for the supplies effected in the months of May, June and July, 2020 are furnished by September, 2020 (staggered dates to be notified).

4. One time extension in period for seeking revocation of cancellation of registration:

To facilitate taxpayers who could not get their cancelled GST registrations restored in time, an opportunity is being provided for filing of application for revocation of cancellation of registration up to 30/09/2020, in all cases where registrations have been cancelled till 12/06/2020.

Note: The recommendations of the GST Council have been presented in this release in simple language for information of all stakeholders. The same would be given effect through relevant Circulars/Notifications which alone shall have the force of law.

To read the Press Release : CLICK HERE