GST Compendium - September 2020

The e-invoicing requirement has been made mandatory for businesses with turnover of more than INR 500 crore w.e.f. 1 October 2020. This will help track invoices on real-time basis and ensure better monitoring and put a curb on fake invoices.

It is expected that this threshold will gradually be lowered over time. Therefore, businesses which do not fall under the above threshold should also prepare their systems and processes to align with the likely change in future.

On the judicial front, the Gujarat HC has pronounced a welcome ruling, allowing the refund of input tax credit on input services under inverted duty structure. It held that the denial of refund for input services is violative of GST provisions. A similar writ petition was also filed before the Madras HC and final verdict is awaited. It will be interesting to observe the position taken by the government on this subject.

The Delhi HC has taken up a batch of 37 writ petitions collectively on constitutional validity and legality of GST anti-profiteering provisions and has posted the matter for final hearing on 3 November 2020. This is a keenly watched event and will set tone for further course of action for both the taxpayers and tax administration.

Further, NAA has recently set aside penalty proceedings, stating that relevant provisions were inserted subsequently and in absence of any penal provisions during the period of dispute, no penalty can be imposed.

This edition also discusses importance of operationalising GST Appellate Tribunals on priority. At present, taxpayers can file writ petition in HCs against order of appellate authorities. GST being a relatively new law, a robust appellate mechanism is need of the hour.

We hope you will find this issue informative and interesting.