NITYA’s Insight | Issue 24 | Recent Notifications and Circulars issued under GST

A. Clarification regarding order of utilisation of ITC of IGST to set-off output tax liability

Rule 88A of the Central Goods and Services Tax Rules, 2017 (‘CGST Rules’) was inserted and relaxed the order of setting off IGST credit against CGST and SGST liability (in any order). The CBIC has now clarified that the taxpayers can utilise excess credit of IGST towards payment of CGST or SGST in any sequence and proportion provided that IGST liability is fully discharged first.

NITYA Comments: The Government introduced Rule 88A of the CGST Rules to ensure there is no accumulation of CGST credit at taxpayers’ end. This clarification will ensure that there is no accumulation of CGST or SGST credit due to set-off provisions. We have analysed the impact of Rule 88A in our Issue 21 to NITYA’s Insight.

[Refer Circular No. 98/2019 dated April 23, 2019]

B. Changes related to e-way bill

1.         Non-filing of GST Returns to debar generation of e-way bill

Rule 138E of the CGST Rules was introduced on December 31, 2018 to provide that taxpayers who have not furnished their GST returns for consecutive two tax periods, will not be able to generate e-way bill. This provision was not notified till date and has been made effective from June 21, 2019. Rule 138E allows Commissioner to relax this provision on sufficient causes.

NITYA Comments: It is advisable that the taxpayers file their GST returns on time to avoid any obstruction in business due to non-generation of e-way bill. The taxpayers who could not file returns for genuine reasons (including IT issues), should approach their jurisdictional Commissioner for relaxing applicability of this provision.

[Refer Notification No. 22/2019 dated April 23, 2019]

2.         Changes in e-way bill portal

To improve operational efficiencies in e-way bill system, following changes have been integrated in the e-way bill portal:

• Auto calculation of route distance: The portal has been designed to auto-compute the distance basis the PIN code of source and destination locations. The user also has an option to enter actual distance, with maximum 10 percent variation of auto calculated distance.

• Single e-way bill for single invoice: Until now, where consignee or transporter originally generated an e-way bill, the consignor had an option to generate e-way bill for the same invoice. This option will no longer be available with consignor.

• Extension of e-way bill can now be sought for goods in transit or in movement.

For availing the extension, the taxpayer is required to choose one of the following reasons and add remarks thereon:

o    Natural calamity,
o    Law and order,
o    Transhipment
o    Accident,
o    Others

On selection of the reason, the taxpayer needs to fill details of mode of transportation, location of goods and vehicle details for which the extension is required. Extended date is auto-calculated basis the reason and the distance between location of goods and final destination of goods.

• Report on expiry date of e-way bills: Taxpayers can now view list of e-way bills that are about to expire in next four days from the date of view.

• Non- generation of e-way bill for composition dealers: Composition dealers have been barred from generating e-way bill for inter-state supplies as such dealers are prohibited from making inter-state supplies.