Clearly, GST is still 'work in progress'

The advent of a new year energised the department of revenue in the Union finance ministry to issue a number of notifications and clarifications under the Customs and Goods and Services Tax (GST) laws. 

The government issued 13 Central GST (CGST) notifications, one on Integrated GST (IGST), seven regarding CGST rates and seven more regarding IGST rates. All on the last day of December, mostly giving effect to decisions taken at the 31st meeting of the GST Council on December 22. 

On its part, the Central Board of Indirect Taxes and Customs (CBIC) issued seven circulars towards the end of December and six more in the first two days of January, clarifying various issues under the GST laws. Under the Customs laws, the finance ministry issued five tariff and two non-tariff notifications on the last day of December and another non-tariff one at the beginning of January. Its Customs wing issued two circulars in the last week of December and one more in the first week of January. Together, 36 notifications and 16 circulars. 

CBIC Circular 01/2019-Customs, dated January 2, relates to resolution of errors in claims on IGST paid on export goods, mostly for those from Inland Container Depots via gateway ports. It deals with issues arising out of online filing of both local and gateway Export General Manifests (EGMs) not being done on time by stakeholders. Also, mismatch in local and gateway EGM details wherever both are filed online and non-filing of reports by the preventive officers at gateway ports for LCL (less than container load) cargo being consolidated at a gateway ports or container freight station in the system.

Another refund-related circular (79/53/2018-GST dated December 31, 2018) deals with physical submission of refund claims with the jurisdictional officer and calculation of the refund amount for claims of accumulated Input Tax Credit (ITC) on account of an inverted duty structure. Also, disbursal of refund amounts after sanction, refund applications that have been generated on the portal but not physically received in the jurisdictional tax offices and issues related to refund of accumulated ITC of Compensation Cess. Plus, non-consideration of ITC for GST paid on invoices of an earlier tax period, availed of in the subsequent one, misinterpretation of the meaning of ‘inputs’ and refund of accumulated ITC on input services and capital goods arising on account of an inverted duty structure.  

The other circulars include clarifications on export of services under GST, classification of certain goods, the GST rate for sprinkler and drip irrigation systems, denial of composition option by the tax authorities and effective date thereof, GST rate applicable on supply of food and beverage services by educational institutions, applicability of GST on various programmes conducted by the Indian Institutes of Managements, GST on services of a business facilitator or  business correspondent to a banking company, applicability of GST on the Asian Development Bank and International Finance Corporation,  procedures for manufacturing in a bonded warehouse under Section 65 of the Customs Act and more.

The avalanche of notifications and circulars show the GST regime is yet to stabilise. Having rushed in without adequate preparation, the government is still muddling along, reacting to developments as these unfold. Even 18 months since its introduction, GST is still ‘work in progress’.

Email: tncrajagopalan@gmail.com