GST News Roundup: Top Developments from 12th-18th November 2024

From 12th November 2024 to 18th November 2024, the GST system saw significant changes, bringing new updates, notifications, and clarifications that could impact businesses, tax professionals, and other stakeholders across the country. These developments are essential for compliance and to help businesses stay ahead in this ever-changing regulatory environment. The government introduced several updates this week across sectors, ranging from e-commerce to traditional industries. Some of the significant changes include clarifications on tax rates, changes in existing rules, and updates about the e-way bill system, which is critically important for businesses that transport products. 

These updates may have far-reaching impacts on how a business manages its daily lives, how it files GST returns, and overall compliance practices. If you are a business owner or a tax professional, keeping abreast of these new changes is important to avoid penalties and to ensure a smooth operation. In this roundup, we will break down the key developments that have occurred in the last week, offering an in-depth look into what these changes mean for you. From understanding new procedural requirements to the most recent adjustments to tax rates, this guide will help you understand the recent GST landscape and make informed decisions for your business.

Let’s talk about the top GST announcements, notifications, and changes that occurred from 12th to 18th November 2024, and look at their impact on your business’s tax compliance and strategic planning ahead.

1.New Advisory on Invoice Management System (IMS)

Starting from October 2024, the GST Portal has implemented a voluntary Invoice Management System (IMS) which is geared towards enabling the taxpayers to either accept, reject, or even keep pending invoices that have been uploaded by the suppliers in their GSTRs- 1/1A/IFF. The actions which the recipients take will have a direct influence on their GSTR-2B, which is generated on the 14th date of the next month after the filing of the returns.

Why It Matters

• The system fills in taxes payable and input tax credit (ITC) claims against purchases and sales made in GSTR-3B.
• An error made during the former stage may be useful in leading to wrong ITC or wrong tax liability figures.
• In order to ensure that consistency and correctness are maintained, the taxpayers can even adjust the actions and recalculate GSTR-2B and do not have to file GSTR-3B.

The Invoice Management System has been functioning on the GST portal from October 2024. 

Below are the relevant aspects you should understand:

The Function of IMS: 

It enables recipients to either accept, reject, or hold the invoice filed by the suppliers in GSTR-1/1A/IFF. The actions made by the recipients have a direct effect on their GSTR-2B, which is usually raised on the 14th of the next month.

Data That Can be Edited: 

Taxpayers may also modify the figures of the Input Tax Credit (ITC) and liability that have been auto-populated in GSTR-3B prior to the submission of the document.

Some Initial Mistakes perhaps? Do not be concerned. We all appreciate that such situations could arise during the initial stages. In case of wrong ITC or liability values being filled in, you may recompute your GSTR-2B and correct the information prior to submission of GSTR-3B for that period.

2. Supplier View on IMS Introduced

In order to facilitate processes for suppliers:

• What’s New? 

Thanks to the new feature of ‘Supplier View’ in the system, Suppliers can now track the activities done by their recipients regarding the invoices.

• No Action on Certain Records: 

Many of the invoices which fall under E-Commerce laws i.e. Reverse Charge Mechanism (RCM) and those classified under Ineligible ITC as per the law shall be depicted as No Action Taken.

• Recompute GSTR-2B: 

Invoice modification may be done by the recipients up until the GSTR-3B submission. However, in such a case, GSTR-2B needs to be adjusted so that the correct facts are represented.

3. Issues with GSTR-2B for October 2024

A few taxpayers encountered difficulties in the GSTR-2B generation. 

The reasons behind it were as follows: 

• QRMP Scheme Filers:

 If you are a quarterly bidder, GSTR-2B will not be created during the initial two months of the quarter.

• Previous Returns Pending: 

Have you submitted your GSTR-3B for the past months? There will be no generation of GSTR-2B until you file those.

In case you fall under any of such categories, make sure to maintain the compliance to avoid any hindrances.

4. EWB System and Indian Railways Integration

Great news for all taxpayers who use the Indian Railways. The online E-Way Bill (EWB) system has now been linked with the Parcel Management System (PMS) of Indian Railways.

• Correct Entry Is Critical: 

Make certain that the correct Parcel Way Bill (PWB) number is entered to prevent any discrepancies. The format is as follows: PXXXRRNo (for example, PNZM2020-307306, where NZM is the station code).

• Validation Process: 

The system verifies your input against the PMS data. Did you enter something incorrect? You will receive a notification.

5. Bombay High Court Ruling: ITC on Advance Receipts Allowed

A revolution. As stated in a ruling by the Bombay High Court, the L&T IHI Consortium is entitled to the Input Tax Credit on the Goods and Services Tax in respect of any advance payment made to government projects.

• What It Means: 

Advance payments are considered ‘consideration’, as per the statutes governing GST supplies, thus facilitating the ITC claims.

• Court’s Stance: 

It is outrageous and illogical to pay GST and still deny the right to claim ITC. This ruling ensures a level playing field for all businesses in such situations.

6. GST Audit Requirements for FY 2023-24: Key Deadlines and Details

The process of GST audit is underway for the financial year 2023-24. In This case, all the taxpayers who have an aggregate turnover of more than ₹5 crores are required to undertake a self audit and file the reconciliation statement in the specified manner in Form GSTR-9C.

Key Deadlines

• Last date for filing GSTR-9 and GSTR-9C: 31st December 2024
• Taxpayers are informed that they should start the reconciliation of their accounts with the GST returns well in advance to avoid rush at the end and discrepancies.

Tips for Compliance

• Be diligent in declaring input tax credit (ITC) and turnover to avoid weakness.
• Revisit the amendments carried out during the year because they can affect the accuracy of the annual returns filed.

7. Auto-Blocking of ITC for Non-Filers: A Crucial Update

The GST administration has stepped up its monitoring of ITC claims. Blocking of ITC is now done automatically for those taxpayers who persist in not filing GSTR-3B for two or more successive periods.

How It Works

• Non-filing of GSTR-3B results in the suspension of ITC claims in subsequent periods.
• Taxpayers must file pending returns to reactivate ITC eligibility

8. E-Invoicing Mandates for Medium-Sized Businesses

Invoicing through electronic means will be a requirement for all businesses with an aggregate turnover of 5 crores and above, effective 1 December 2024.

What This Means for Businesses

• E-invoices need to be created and submitted to the Invoice Registration Portal (IRP). 
• In order to ensure effective compliance, all companies must merge their invoicing applications with the IRP.

Benefits of E-Invoicing

• Reduces mistakes in filing GST returns. 
• Facilitates ITC reimbursement and matching of invoices.

9. Penalty Provisions for Incorrect HSN Code Reporting

The GST authorities have issued guidelines that are more stringent when it comes to the reporting of HSN codes.

Key Points

• Reporting of HSN codes in a wrong or incomplete manner may result in penalties in the range of ₹5,000 to ₹25,000 per return.
• Taxpayers are advised to consult the updated list of HSN codes published by the GST Council to avoid errors.

10. GST Amnesty Scheme: Relief for Late Filers

To assist taxpayers in rectifying their previous tax failures, the government has opted to prolong the GST Amnesty Scheme for another year. The new cut-off date for the amnesty will be 31st December 2024.

Benefits

• Lowered late fines for the submission of the outstanding GSTR-3B and GSTR-1.
• Exemption of interest on overdue payments for qualified assessees.

Eligibility

• Only those returns for the periods up to March 2023 are still permitted for taxpayers with unfiled returns. 
• Deadline availed is the last date for filing all overdue returns in order for taxpayers to benefit from the scheme.

11. GST Refund Updates: Faster Processing for Exporters

The Council of the Goods and Services Tax has taken steps to facilitate the rapid disbursal of GST refunds to exporters.

Key Highlights

• A refund request will henceforth be processed within a duration of 7 working days from the date of its submission. 
• Exporters are required to report export invoices in GSTR-1 and GSTR-3B correctly.

12. GST Compliance Calendar for November-December 2024

Stay updated with important GST deadlines:

Action Points

• Be sure to attend to deadlines and plan accordingly as there are late fees and penalties for postponements. 
• It is advisable to review ITC claims and their amendments carefully prior to the lodgment of returns.

13. GST Tribunal Updates: Dispute Redressal Simplified

The GST Appellate Tribunal (GSTAT) has recommenced its activities along with the new directives on how to facilitate the appeal.

What’s New?

• Easier and faster procedures have been provided for filing and following up on appeals made online.
• Dispute resolution is expected to be done within a given time frame in order to clear the myriad of disputes by March 2025.

Why It Matters

Taxing litigations will become shorter meaning that the business will become more efficient since there are no costs incurred during the taxing litigations.

14. State-Level GST Updates: Focus on Small Businesses

Some states have come up with various GST initiatives with the aim of helping small and medium enterprises (SMEs).

Highpoints of the Study

Maharashtra: 

Extended registration amnesty for SMEs until 31st December 2024.

Tamil Nadu: 

Special camps for GST filing assistance in rural areas.

Karnataka: 

Additional rebates for timely GST payments.

The Effect on SMEs

These measures are intended to make it easier for small enterprises to comply and ensure that they register on time.

15. GST for the Future: Proposed Changes in 2025

The following are the changes suggested by the GST Council for 2025:

• Proposed implementation of one tax slab to replace the current 5 percent, 12 percent, 18 percent and 28 percent tax slabs.
• Improvements to the GSTN portals for integration with ERP systems.
• Emphasis on artificial intelligence-driven development for monitoring compliance to curb tax fraud.

Read More – Key Changes in the Income Tax Return Forms AY 2024-25

Conclusion 

The period from November 12 to November 18 in the year 2024 was comparatively busier when it comes to GST related movements. The weakening of barriers to entry into new growth sectors for the majority of the domestic players, changes in policies of the GST Council related to digital goods, expansion of e-way bill applicability, and management of these changes require the constant vigilance and anticipation of businesses. Be it dealing with the management of the GST refunds for the exporters, dealing with the tax compliance measures in place for GST or even the new taxes introduced for restaurants, in every aspect of work keeping abreast of the changes is very important to enable operations run smoothly without incurring any regrets.

FAQ

What are the updated GST return filing timelines for the Financial year 2023-24?

The last date for submission of GSTR-9 (Annual Return) & GSTR-9C (Reconciliation Statement) is 31st December 2024.

Who is mandated to comply with the e-invoicing prescript from December 2024?

E-invoicing shall be applicable to all business entities whose aggregate turnover is ₹5 crores and above effective from December 01, 2024.

What will happen if I do not file my GSTR-3B by the due date?

Failure to furnish GSTR-3B may result in an automatic suspension of your Input Tax Credit (ITC) which would be restored only upon the filing of the overdue returns.

Explain GST Amnesty. Who is eligible for it?

The GST Amnesty Scheme is a scheme which reduces the late fees and waivers on interest for the taxpayers who have not filed returns till March 2023. Taxpayers should submit all such returns by 31st December 2024 in order to benefit from this provision.

What are the consequences of reporting wrong HSN code?

Failure in reporting correct or adequate HSN code can attract fines from Rs 5000 to Rs 25000 per return, based on the degree of violation committed.

How is the process of GST refunds to exporters carried out in FY 2023-24?

Exporters shall be entitled to quicker refunds, to be processed within 7 banking days upon submission of correct refund application through the GST portal.

Is there any assistance provided to small businesses under the State GST?

Yes, in states such as Maharashtra, Tamil Nadu, and Karnataka, measures such as enhanced registration amnesty, conducting filing assistance camps, and offering discounts for early payments to encourage SMEs have been implemented.

What are the noteworthy changes expected in compliances related to GST in the year 2025?

The proposed changes are to introduce a one slab tax system, the enhancement of the GST portal, and the introduction of power monitoring to taxpayers using AI to minimize tax avoidance.

Is it true that GST exemption changes have been made for the Financial Year 2023-2024?

The answer is yes, for various medicines, health care devices, green energy devices, and certain agricultural machines, the government has widened the scope of GST concession. These modifications seek to enhance the availability and environmentally friendly considerations.

What would be the effect of an increased late fee cap for delayed returns on taxpayers?

For the financial year 2023-24, the government proposed a cap on the late fee structure depending on the turnover. For the taxpayers with an annual turnover varying to ₹5 crore, there is a late fee of ₹25 per day which helps ease the burden on small businesses and at the same time promotes adherence to compliance.

Rutuja Khedekar Freelance Copywriter

Rutuja is a finance content writer with a post-graduate degree in M.Com., specializing in the field of finance. She possesses a comprehensive understanding of financial matters and is well-equipped to create high-quality financial content.

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