return for taxpayers having

• In the case of delayed filing of return in Form GSTR-9, the GST law provides13 that the late fee of Rs. 200 per day (i.e. Rs 100 CGST and Rs 100 SGST) would be payable subject to a maximum of 0.5% (i.e. 0.25% CGST and 0.25% SGST) of the turnover for the relevant Financial Year (‘FY’) in the State or Union Territory. The GST Council has recommended to rationalize the late fee for the taxpayers having a turnover of upto Rs. 20 Crores. However, the reduced late fee is applicable for FY 2022-23 onwards.

TAXMANN’s Comments:

The registered persons having aggregate annual turnover exceeding Rs. 2 Crores in a FY are required to file an annual return in Form GSTR-9 under GST. The due date of the same, as provided14 in the GST law, is 31st December of the FY following the relevant FY which may be extended by the Government. The filing of the return beyond the due date attracts a late fee of Rs. 200 per day (i.e. Rs. 100 CGST and Rs. 100 SGST) subject to a maximum of 0.5% (i.e. 0.25% CGST and 0.25% SGST) of the turnover for the relevant FY in the State or Union Territory.

Hence, the GST Council has recommended that the late fee for taxpayers is to be reduced. This has been done to provide relief to the MSME sector. However, the said rationalization of the late fee is applicable from the FY 2022-23 onwards.

The applicable late fee for all the FYs under GST is summarized in the table below where the annual return is filed beyond the due date.

2022-23 31-12-2023 (as of now)

0.25% CGST and 0.25% SGST) of the turnover for the relevant FY in the State or Union Territory

Rs. 50 per day (i.e. Rs 25 CGST and Rs 25 SGST) subject to a maximum of 0.04% (i.e. 0.02% CGST and 0.02% SGST) of the turnover for the relevant FY in the State or Union Territory

(

Rs. 100 per day (i.e. Rs 50 CGST and Rs 50 SGST) subject to a maximum of 0.04% (i.e. 0.02% CGST and 0.02% SGST) of the turnover for the relevant FY in the State or Union Territory

Rs. 200 per day (i.e. Rs 100 CGST and Rs 100 SGST) subject to a maximum of 0.5% (i.e. 0.25% CGST and 0.25% SGST) of the turnover for the relevant FY in the State or Union Territory

11. Amnesty by way of waiver/reduction of late fee for pending Form GSTR-4, GSTR-9 and GSTR-10

• To provide relief to a large number of taxpayers, the Council recommended amnesty schemes in respect of pending returns in Form GSTR-4, Form GSTR-9 and Form GSTR-10 by way of conditional waiver/ reduction of late fee.

TAXMANN’s Comments:

Where various returns and statements that are required to be filed under the GST law are not filed within the specified due date, the taxpayer is required to pay a late fee where such a return/statement is filed belatedly. The Council has recommended to come up with an amnesty scheme for late filing of Form GSTR-4, GSTR-9 and GSTR-10. Notable, Form GSTR-4 is to be filed by the composition dealer, GSTR-9 is the annual return and Form GSTR-10 is the final return.

Such amnesty may contain a conditional waiver of late fee or reduction in late fee. This would focus on providing relief to a large number of taxpayers.

Notably, in the Finance Bill 2023, it has been proposed that the filing of return under GST is to be restricted to a maximum time of 3 years from the due date of filing of such return. Hence, the said recommendation, if notified would restrict many returns under GST from being filed. Hence, this amnesty would be a last chance to file the pending composition dealer’s returns, annual return, and final return that too at a reduced/ no late fee.

12. Rationalization of provision of place of supply of services of transportation of goods

• Recommendation has been made to rationalize the provision of place of supply for services of transportation of goods by deletion of section 13(9) of IGST Act, 2017 so as to provide that the place of supply of services of transportation of goods, in cases where location of supplier of services or location of recipient of services is outside India, shall be the location of the recipient of services.

TAXMANN’s Comments:

Currently, the GST law15 provides that the place of supply of services of transportation of goods, in cases where location of supplier of services or location of recipient of services is outside India, shall be the place of destination of such goods.

Now, it has been recommended to delete this provision and therefore the place of supply shall be determined as per residuary provision16 and it will be the location of the recipient of services.

Notably, the Finance Bill, 2023 also proposed an amendment in Section 12 of the IGST Act, wherein it is proposed to delete the proviso to Section 12(8). Proviso to Section 12(8) currently provides that in case where the supplier of transportation services of goods is located in India and supplying goods to outside India for a recipient who is also located in India, the place of supply is destination where the goods are transported.

The impact of the above two proposals is summarized in the table below:

6 CIFImport through Foreign Shipping company

7 CIFImport through Indian Shipping company

8 FOBImport through Foreign Shipping company

9 FOBImport through Indian shipping Company

Outside India India Outside India India (As per Mohit Minerals17Refer to Note 2)

Outside India India India India (As per Mohit Minerals18Refer to Note 2)

13(9) i.e. Destination of goodsIndia

12(8) i.e Location of Recipient – India

Outside India India Outside India India 13(9) i.e. Destination of goodsIndia

Outside India India India India Proviso to 12(8) i.e. Destination of goodsIndia

13(2) i.e location of recipient

Refer to Note 3

12(8) i.e. Location of Recipient - India

13(2) i.e location of recipientIndia

12(8) i.e location of recipientIn India

Reverse Charge

Forward charge

Note 1: The move will bring a parity between the Indian Shipping Lines and Foreign Shipping Lines.

Note 2: The recipient of services has been treated as importer on the basis of Mohit Minerals decision19

Note 3: In the above decision, the Supreme Court while concluding relied on the provisions of Section 13(9) and concluded that the importer will be the recipient (i.e. ultimate beneficiary of CIF Contract). Since the GST Council has recommended to delete provisions of Section 13(9), it will be interesting to see how it would impact the decision of Supreme Court and impact the location of the recipient.

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