India's GST regime is very complicated and there is a need to simplify this biggest indirect tax reform introduced in 2017, former Chief Economic Adviser Arvind Subramanian said on Friday.

"GST regime is very complicated. There are 50 (different) cess rates and if I look at other things... it might go up to 100 rates," he said at the event organised by the Centre for Policy Research here.

Talking about other challenges, he said, some people have pointed out to me that the goods and services tax (GST) has encouraged excessive tax demands.

Observing tax terrorism and excessive demands were always features in the Indian system, he said, these have gone up under the GST.

Tax terrorism that GST has introduced is something that needs to be focussed on, he added.

Former Chief Economic Adviser (CEA) Arvind Subramanian, who authored an official report on the ideal 15.5% revenue-neutral rate for the Goods and Services Tax (GST) regime, said he is not very hopeful of a simplification of the complex, multiple-rate structure of the indirect tax, and lamented that the GST era has unleashed a fresh reign of “tax terrorism” across the country.

“We don’t just need rationalization, which we do need, but we need an increase in the rate. We brought the rate down from 15.5% to 11% but the GST Council has become a Council that only discusses rate cuts. It has become a rate cutting committee and an exemption granting committee, and part of it is because of the of the compensation [to States] that happened, they became very lax but that phase is over,” he noted on Friday (November 29, 2024).

Speaking at a session on ‘The GST Story: Whither Next?’, hosted by the Centre for Policy Research, Mr. Subramanian said unless tax rates are raised on some items, revenue growth will be a challenge.

Dear Taxpayers,

GSTN has prepared an informative resource in the form of an e-invoice glossary and a step-by-step guide for your reference.

You can access and download the PDF document by clicking on the link below:

The Union finance ministry has received a proposal from the petroleum ministry for inclusion of natural gas under the ambit of the Goods and Services Tax (GST), and will likely take it to the GST Council as it meets in Rajasthan’s Jaisalmer on December 21.

The GST Council includes the state governments too, and it typically takes decisions via consensus.

The petroleum ministry is pushing for the inclusion of natural gas in GST, as it feels it will be beneficial for the petrochemical value chain. The current structure of paying multiple taxes on gas, the incidence of which differs across the states, is seen to have a cascading nature.

Natural gas is a major industrial feedstock, besides its use as fuel. It is used to produce urea, a common fertiliser, and fed into capital-intensive crackers to produce olefins (ethylene/propylene), inputs for a wide range of industries.

Separately, the finance ministry is also reviewing the windfall tax, currently levied on petroleum products. It’s analyzing the tax collections so far, and the crude price trend, before taking a final call on whether to scrap the impost, the sources said.

This is to inform taxpayers about recent developments concerning the application process for GST registration. It is advised to keep the following key points in mind during the registration process.

1. Rule 8 of the CGST Rules, 2017 has been amended to provide that an applicant can be identified on the common portal, based on data analysis and risk parameters for Biometric-based Aadhaar Authentication and taking a photograph of the applicant along with the verification of the original copy of the documents uploaded with the application.

2. The above-said functionality has been developed by GSTN. It has been rolled out in Madhya Pradesh on 27th November 2024.

3. The said functionality also provides for the document verification and appointment booking process. After the submission of the application in Form GST REG-01, the applicant will receive either of the following links in the e-mail,

(a) A Link for OTP-based Aadhaar Authentication OR
(b) A link for booking an appointment with a message to visit a GST Suvidha Kendra (GSK) along with the details of the GSK and jurisdiction, for Biometric-based Aadhaar Authentication and document verification (the intimation e-mail)
4. If the applicant receives the link for OTP-based Aadhaar Authentication as mentioned in point 3(a), she/he can proceed with the application as per the existing process.

5. However, if the applicant receives the link as mentioned in point 3(b), she/he will be required to book the appointment to visit the designated GSK, using the link provided in the e-mail.

1.GSTN has prepared a consolidated document on authorized B2B e-Invoice verification apps available for download. The said document would serve as a reference to ensure that taxpayers have the most up-to-date information regarding approved B2B e-Invoice verification apps.

This is to inform taxpayers about recent developments concerning the application process for GST registration. It is advised to keep the following key points in mind during the registration process.

1. Rule 8 of the CGST Rules, 2017 has been amended to provide that an applicant can be identified on the common portal, based on data analysis and risk parameters for Biometric-based Aadhaar Authentication and taking a photograph of the applicant along with the verification of the original copy of the documents uploaded with the application.

2. The above-said functionality has been developed by GSTN. It has been rolled out in Madhya Pradesh on 27th November 2024.

3. The said functionality also provides for the document verification and appointment booking process. After the submission of the application in Form GST REG-01, the applicant will receive either of the following links in the e-mail,

(a) A Link for OTP-based Aadhaar Authentication OR
(b) A link for booking an appointment with a message to visit a GST Suvidha Kendra (GSK) along with the details of the GSK and jurisdiction, for Biometric-based Aadhaar Authentication and document verification (the intimation e-mail)
4. If the applicant receives the link for OTP-based Aadhaar Authentication as mentioned in point 3(a), she/he can proceed with the application as per the existing process.

5. However, if the applicant receives the link as mentioned in point 3(b), she/he will be required to book the appointment to visit the designated GSK, using the link provided in the e-mail.

Liquidity in the banking system slipped into deficit on Monday after two months, primarily because of outflows due to goods and services tax (GST) payments. Market participants said the Reserve Bank of India (RBI)’s active intervention in the forex market to defend the falling rupee also weighed on liquidity conditions.

On Monday, the liquidity was in a deficit of Rs 6,956.24 crore, compared with a surplus of Rs 28,203.76 crore on Friday, according to the money market operations data of the RBI. In the last couple of months, there has been a surplus in liquidity to the tune of Rs 1.5-2 lakh crore.

Industry players said around Rs 1.6-1.8 lakh crore went out of the banking system on account of GST payments, pushing banking liquidity into deficit. Additionally, RBI’s active intervention in the forex market has also weighed on the liquidity, said market participants.

“Combination of GST outflows, G-Sec payments (securities that were auctioned on Friday) and selling from the RBI absorbed the surplus liquidity. Deficit will be moderated once the government month-end spending starts,” said a call dealer with a private bank.

As per Notification No. 25/2024-Central Tax, effective from 10.10.2024, any registered person receiving supplies of metal scrap classified under Chapters 72 to 81 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), from another registered person, is required to deduct TDS under Section 51 of the CGST Act, 2017.

2.In this regard various tickets have been received on the issue that taxpayers are unable to report TDS deducted in the month October 2024 as they are not able to file return for the month of October 2024. This issue has occurred because while the taxpayers applied for GST registration in October 2024 pursuant to the above notification, their GST registrations were approved only in November 2024. Hence, in the return dropdown the month October 2024 is not visible to such taxpayers. This is as per the existing GSTN system design where returns for tax period prior to registration month is not enabled for taxpayers.

3.However, to resolve the issue, taxpayers who were granted registration in November 2024, but deducted TDS in October 2024, are hereby advised to report the consolidated amount of TDS deducted for the period from 10.10.2024 to 30.11.2024 in the GSTR-7 return to be filed for the month November 2024.

GST annual return has to be mandatorily filed for FY 2023-24 by every GST registered taxpayer with a few exceptions by on or before December 31, 2024. However, before you file the annual return make sure to file all the monthly returns first or quarterly returns if you are registered under the QRMP scheme. This is because the GST annual return is mostly auto populated using data from all the monthly or quarterly returns (as applicable).

What changes were made to the GST annual return form for FY 2023-24
Chartered Accountant Amit Bansal, Partner, Singhania & Co., explains the most significant change in GSTR-9 (annual return) for FY 2023-24. Bansal explains:

Sourcing of input tax credit (ITC) details in table 8A of GSTR-9 (annual return)
The most significant change in the GST Annual Return (GSTR-9) for FY 2023-24 lies in the sourcing of input tax credit (ITC) details. Previously, Table 8A of GSTR-9 was populated based on the information provided in GSTR-2A (a statement of inward supplies). However, from FY 2023-24 onwards, Table 8A will now be populated based on the information available in GSTR-2B. GSTR-2B is a statement of inward supplies that is auto-populated based on the invoices uploaded by suppliers.

The deadline for filing GSTR-3B was November 20, 2024, for all GST registered taxpayers except in the state of Maharashtra and Jharkhand where the deadline is November 21, 2024. GSTR-3B is a simplified return that is essentially a summary of outward supplies, inward supplies subject to reverse charge mechanism (RCM), calculation of eligible input tax credit (ITC) and others. It serves as a self-declaration for registered GST taxpayers and complements the GSTR-1 and GSTR-2 forms by summarising GST liabilities for a specific tax period.

What can happen if you fail to file GSTR-3B by the deadline
Missing the GSTR-3B return filing deadline results in penalties and interest being levied on (Goods and Services Tax) GST registered taxpayers. The maximum amount of late fee can vary based on the type of return and the taxpayer's turnover.

Chartered Accountant Abhishek Soni, co-founder, Tax2Win explains the penalty and interest which needs to be paid if GSTR-3B is filed after the deadline:

1. Late Filing Penalty
Nil Return: Rs 20 per day (Rs 10 under CGST and Rs 10 under SGST).

Usually, Goods and Services Tax (GST) department orders a GST audit when any discrepancy or suspicious activities like inconsistent GST return filing, significant mismatch between input tax credit claimed and output tax credit declared, etc. It follows it up with a report. Based on the findings of the audit it also issues a notice to the taxpayer.

However, for FY 2020-21 for which the deadline to issue a GST notice under section 73 is November 30, 2024, a change was made in the process by Maharashtra GST department. This change is related to the GST audit report and the notice for discrepancy, both of which will now be sent offline. The reason citied for this change was technical difficulties with information technology (IT).

"It is decided that for completing the audit procedure for the period 2020-21, the GST proper officers are allowed to issue communications like Notice for Discrepancy under regulation 101(4) and Final Audit Report (GST-ADT-02) under offline mode. Such notices shall not be served on portal, but by any alternate mode prescribed in section 169 of GST Act(s)," as per the circular dated November 8, 2024, of Maharashtra GST.

Central Board of Indirect Taxes and Customs (CBIC) on Monday extended by a day till November 21 the last date for GST taxpayers in Maharashtra and Jharkhand to file GSTR-3B and pay taxes for October.

The polling for the legislative assembly elections in Maharashtra and Jharkhand is scheduled for November 20.

In an X post, CBIC said November 20 is also the due date for filing the GSTR-3B return for October 2024, and this may cause difficulty to the taxpayers of these states in finding time to exercise their right to vote for the election.

"The Government, with the approval of GST Implementation Committee (GIC), has decided to extend the due date of filing of Form GSTR-3B for the month of October 2024 for the registered persons having their principal place of business in the said states from 2O.11.2024 to 21.11.2024," CBIC said.

Revenue Secretary Sanjay Malhotra on Monday said the Goods and Services Tax Appellate Tribunal (GSTAT) is in the final stages of operationalisation and should start functioning by the end of this financial year. GSTAT is a body set up for resolving GST-related disputes.


“On the GST side, there have been questions about the operationalisation of the GST Appellate Tribunal. I would like to assure you that we are now at the final stages of operationalising the GSTAT. Hopefully, it should start functioning and hearing cases by the end of this financial year,” Malhotra said during the State Bank of India’s (SBI’s) annual business and economic conclave.

In May 2023, Union Finance Minister Nirmala Sitharaman appointed Justice (Retd) Sanjaya Kumar Mishra as the President of the GST Appellate Tribunal (GSTAT).

According to a response to a parliamentary panel, over 14,000 GST appeals were pending as of August 2023. GSTAT will hear appeals against decisions made by the first appellate authority. It will consist of a Principal Bench in New Delhi and multiple state benches.

It has been reported by few taxpayers that their GSTR-2B for October-2024 period has not been generated on 14th November, 2024. In this regard it to be informed that as per the design of IMS, GSTR-2B will not be generated by the system in below scenarios:

i. In case the taxpayer has opted for QRMP scheme (Quarterly filers), GSTR-2B will not be generated for first and second month of the quarter. Ex. For quarter Oct-Dec, 2024, the quarterly taxpayer will get GSTR-2B for December-2024 period only and not for October-2024 & November-2024.

ii. In case the taxpayer has not filed their previous period GSTR-3B, GSTR-2B will not be generated by the system. Such taxpayers need to file their pending GSTR-3B in order to generate GSTR-2B on demand. For example, if the taxpayer has not filed GSTR-3B for September-2024, their GSTR-2B for October-2024 will not be generated. Once the taxpayer files their GSTR-3B for September-2024, they will be able to generate their GSTR-2B for October-2024 by clicking the "Compute GSTR-2B (OCT 2024)" button on the IMS dashboard.

The Goods and Services Tax (GST) Council is likely to discuss the relief on GST on health and life insurance items, as well as rejigging of rates on over 100 items as it is scheduled to meet at Jaisalmer in Rajasthan on December 21, sources said.

The meeting was earlier scheduled to be held in November, but was delayed due to assembly elections in Jharkhand and Maharashtra. The winter session of Parliament is set to begin on November 25 and end on December 20.

In the previous meeting, held on September 9, the Council has set up two Group of Ministers’ (GoM) panels: one to review GST rates on several items, and other to decide on the tax levied on health and life insurance premiums. The two GoM panels are expected to submit their reports to the Council for perusal, based on which the latter will take a final call on the issues.

On October 19, the GoM tasked with reviewing tax on health/life insurance, took a view that no GST should be levied on term life insurance, health insurance cover up to Rs 5 lakh, and premiums paid by ‘senior citizens’ above 60 years. It, however, decided against a complete tax waiver for health insurance, where the GST is levied at 18% at present.

The Goods and Services Tax Network (GSTN) has introduced an invoice management system (IMS) on its portal, seeking to help taxpayers claim input tax credit (ITC) and reduce disputes. Invoice data entered by sellers in a specific form on the GST portal will automatically be reflected in the buyer's IMS.

IMS has been introduced under GST as a progressive step toward reconciliation and verification of input tax credit (ITC), said S R Patnaik, partner (head - taxation), Cyril Amarchand Mangaldas.

“The majority of notices being issued by the GST authorities nowadays pertain to mismatches in ITC,” said Manish Dubey, Partner at CorpAcumen Advisors.

“…the Invoice Management System facility has been introduced on the GSTN platform, where the invoices filed by the suppliers in the forms GSTR-1/1A/IFF are visible to the recipient and can be accepted, rejected or kept pending at their end in order to correctly avail the input tax credit,” he said.

If you are a goods and services tax (GST) registered taxpayer and want to claim any pending input tax credit (ITC) for FY 2023-24 or amend any errors or omissions under GST then note the last date to do so is November 30, 2024, by filing a specified GST form. If you miss this opportunity, then you may lose out on claiming input tax credit (ITC) if any remains to be claimed for FY 2023-24. Needless to say, if you do not get the benefit of claiming input tax credit then it will result in loss as you can't offset your output tax liability with input tax credit.

How to claim pending GST input tax credit or amend any error or omissions for FY 2023-24
Experts say that the law is very clear about how to claim pending input tax credit (by filing GSTR 3B form) or amend any errors or omissions under GST (through GSTR 1 form).

"Any reporting error while filing GSTR 1 can be amended by the taxpayers by way of an amendment while filing GSTR 1 for subsequent tax periods. Input tax credit can only be availed in GSTR 3B return," says Smita Singh, Partner, S&A Law Offices.

The Goods and Services Tax Network has introduced the Invoice Management System (IMS) on the GST portal, effective October 1, 2024. This new feature is designed to assist GST-registered taxpayers in claiming input tax credit (ITC) with fewer disputes. With IMS, invoice data entered by sellers in a designated form on the GST portal will automatically appear in the buyer's IMS. Using this information, buyers can choose to accept, reject, or leave the invoice pending. Once a buyer accepts an invoice, it will then be included in their GSTR-2B as an eligible input tax credit.

Despite its good intentions, this system faced several challenges. In an advisory dated November 12, 2024, GSTN recognized that, since the Invoice Management System (IMS) was a new feature on the GST portal, there might be instances during the initial rollout where the recipient (buyer) could mistakenly act on the IMS-be it by accepting, rejecting, or leaving pending-regarding an invoice or record. In such situations, taxpayers would be unable to claim the correct amount of Input Tax Credit (ITC) until the error was resolved. To address this issue and assist GST-registered taxpayers in claiming their ITC smoothly and accurately, GSTN has proposed a solution.

1. Invoice Management System (IMS) has been made available on the GST Portal from 14th October, 2024 wherein the recipient taxpayer can accept, reject or keep the invoices pending which are saved/filed by their suppliers in their respective GSTR-1/1A/IFF. This is to further inform you that the first GSTR-2B on the basis of such actions taken in IMS by the recipient taxpayers will be generated on 14th November, 2024 for October-2024 period.

2. To further facilitate the taxpayers, the Supplier View of IMS has also been made available where the action taken by their recipients on the records/invoices reported in GSTR-1/1A/IFF, will be visible to the suppliers in ‘Supplier View’ functionality. This will help a supplier taxpayer to see the action taken on their reported outwards supplies and will help to avoid any wrong action taken by the recipient taxpayer.

3. Also, kindly note that the below mentioned records/invoices are not available in IMS for taking any kind of actions by the recipient but are visible in supplier view with the status as ‘No Action Taken’:

1. Documents where ITC is not eligible either due to POS rule or Section 16(4) of the CGST Act,

2. Records attracting RCM Supplies

4. Further, this is to be reiterated again that any action taken on records can be changed by the recipient taxpayer till the filing of GSTR-3B of the return period. In case the taxpayer changes any action after the generation of GSTR-2B, they need to click the GSTR-2B recompute button to recompute their GSTR-2B based on the new actions taken.