In a significant leap forward in the Goods and Services Tax (GST) ecosystem, the GST Common Portal has unveiled a ground breaking new facility, the Invoice Management System (IMS), revolutionizing the way recipient taxpayers interact with invoices. This innovative feature empowers taxpayers to seamlessly accept, reject, or keep invoices pending in the system to avail later as and when required, streamlining the reconciliation process, and ensuring greater accuracy and efficiency in GST compliance.

The new system shall facilitate taxpayers in matching their records/invoices vis a vis issued by their suppliers for availing the correct Input Tax Credit (ITC). This facility is set to transform the way businesses manage their GST obligations, reducing errors, and saving time and resources.

1. Vide Notification No. 14/2022 – Central Tax dated 05th July, 2022 (read with circular 170/02/2022-GST, Dated 6th July,2022), the Government introduced certain changes in Table 4 of Form GSTR-3B regarding availment & reversal of ITC along-with reporting of re-claimed and ineligible ITC. Accordingly, the re-claimable ITC earlier reversed in Table 4(B)2 may be subsequently claimed in Table 4(A)5 on fulfilment of necessary conditions and such reclaimed ITC also needs to be reported in Table 4D(1).

2. To facilitate the taxpayers in correct and accurate reporting of ITC reversal and reclaim thereof and to avoid clerical mistakes, a new ledger namely Electronic Credit Reversal and Re-claimed Statement was introduced on the GST portal from August 2023 return period for monthly taxpayers and from July-September 2023 quarter for quarterly taxpayers. The taxpayers were also given an opportunity to report their cumulative ITC reversal as an opening balance in the newly introduced Electronic Credit Reversal and Re-claimed Statement.

Extension of due dates for reporting opening balance:

3. Now, the Taxpayers are being provided with one final opportunity to report their cumulative ITC reversal (ITC that has been reversed earlier and has not yet been reclaimed) as opening balance for "Electronic Credit Reversal and Re-claimed Statement", if any, before hard locking the reversal and reclaim ledger. Please note the important dates to report opening balance are mentioned below.

(i) The functionality to reporting the opening balance will be available from 15th September 2024 to 31st October 2024.

(ii) The amendments in declared opening balance will be available till 30th November, 2024.

(iii) Taxpayers having monthly filing frequency are required to report their opening balance considering the ITC reversal done till the return period of July 2023 only. As after this period balance is already available in ledger.

The Directorate General of GST Intelligence (DGGI), the central investigation and anti-evasion arm under the finance ministry, has detected the highest-ever goods and services tax (GST) evasion by the online money gaming industry, amounting to Rs 81,875 crore in FY24 across 78 cases.
In its latest annual report, the DGGI said it detected a record 6,084 cases of tax evasion in 2023-24, involving Rs 2.01 trillion in GST, which is double the Rs 1.01 trillion identified in FY23 across 4,872 cases.

According to the report, 46 per cent of the evasion cases were related to non-payment of taxes through clandestine supply and undervaluation, 20 per cent involved fraudulent Input Tax Credit (ITC) claims, and 19 per cent pertained to improper ITC claims or failure to reverse them.

After online money gaming, the BFSI sector ranked second, which saw Rs 18,961 crore evaded across 171 cases. Other sectors included works contract services (343 cases, Rs 2,846 crore) and pharmaceuticals (22 cases, Rs 40 crore).
Additionally, 1,976 cases of GST evasion were detected in the iron, copper, scrap, and alloys sectors, involving Rs 16,806 crore in FY24. The pan masala, tobacco, cigarettes, and bidi industries ranked second in evasion, with 212 cases amounting to Rs 5,794 crore. Other sectors included plywood, timber, and paper (238 cases, Rs 1,196 crore), electronic items (23 cases, Rs 1,165 crore), and marble, granite, and tiles (235 cases, Rs 315 crore).

The GST Council on Sunday constituted a 13-member Group of Ministers (GoM) to suggest GST rate on premiums of various health and life insurance products and submit its report by October 30. Bihar Deputy Chief Minister Samrat Choudhary is the convenor of the GoM. The members of the panel include members from Uttar Pradesh, Rajasthan, West Bengal, Karnataka, Kerala, Andhra Pradesh, Goa, Gujarat, Meghalaya, Punjab, Tamil Nadu and Telangana.

The 54th GST Council meeting on September 9 decided to set up a GoM to examine and review the present tax structure of GST on life and medical insurance. A final call by the Council on the taxation of insurance premiums is likely to be taken in the next meeting in November based on the GoM report.

Currently, 18 per cent of Goods and Services Tax (GST) is levied on insurance premiums.

The Terms of Reference (ToR) of the panel also include suggesting tax rate of health/medical insurance including individual, group, family floater and other medical insurance for various categories like senior citizens, middle class, persons with mental illness. Also, suggest tax rates on life insurance, including term insurance, life insurance with investment plans whether individual or group and re-insurance.

The Union finance ministry on Wednesday issued a set of circulars giving relief to the automotive industry, advertising agencies providing services to foreign clients, data hosting services providers and exporters of goods.
“As demo vehicles are used by authorised dealers to provide trial runs and to demonstrate features of the vehicle to potential buyers, it helps the potential buyers to make a decision to purchase a particular kind of motor vehicle. Therefore, as demo vehicles promote sale of similar types of motor vehicles, they can be considered to be used by the dealer for making further supply of such motor vehicles,” said a circular issued by the Central Board of Indirect Taxes and Customs (CBIC).

The circular said even if vehicles are capitalised in the book of account, availability of goods and services tax (GST) deductions should not get impacted. “The circular has rightly analysed the concept of ‘goods being used for making taxable supplies’ and concluded that as demo vehicles are used for test drives, display of features, they enhance the sales and hence are eligible for credit,” said Harpreet Singh, Partner, Indirect Tax, Deloitte India.

The Union finance ministry on Wednesday issued a set of circulars giving relief to the automotive industry, advertising agencies providing services to foreign clients, data hosting services providers and exporters of goods.
“As demo vehicles are used by authorised dealers to provide trial runs and to demonstrate features of the vehicle to potential buyers, it helps the potential buyers to make a decision to purchase a particular kind of motor vehicle. Therefore, as demo vehicles promote sale of similar types of motor vehicles, they can be considered to be used by the dealer for making further supply of such motor vehicles,” said a circular issued by the Central Board of Indirect Taxes and Customs (CBIC).

The circular further said that even if vehicles are capitalised in the book of account, availability of Goods and Services Tax (GST) deductions should not get impacted.
“The circular has rightly analysed the concept of ‘goods being used for making taxable supplies’ and concluded that as demo vehicles are used for test drives, display of features, they enhance the sales and hence are eligible for credit,” said Harpreet Singh, Partner, Indirect Tax, Deloitte India.

Another circular on supply of data hosting services was issued where such services are provided by companies in India to cloud computing service providers located outside India. Such services were not being treated as exports by tax authorities, thus resulting in GST liabilities.

As GST Council concluded it 54th Council meeting, it was clear that the council had once again quickly reacted to certain industry pain points and rectified them and also simultaneously put in place GOMs for long-term policy corrections.. Its tax policy administration at its best and the spirit of cooperative federalism shown is the icing on that cake.

The Council's recommendations encompass a wide array of initiatives, starting from rationalization of GST rates on various goods and services and regularizing the past period on ‘as-is where-is basis’ to avoid any future litigation like in case of film distribution service, provide exemptions on research and development services and reducing tax rates on cancer drugs.

The GST council also brought about changes in the law and rates to rectify unintended levies and demands starting with exempting import of services by an establishment of a foreign airlines company from a related person outside India, when made without consideration and regularizing past cases on an ‘as is where is’ basis thereby putting to rest the huge demands that were raised on foreign airlines in the recent past. Further, clarifying the place of supply in case of advertising services and data-hosting services when provided to foreign entity to be the location of recipient thereby to be treated as export of services, are all decisions that will help resolve multiple ongoing litigations and provide the much-needed relief to the respective industries.

Businesses across the country may soon be required to issue electronic invoices, or e-invoices, directly to consumers for the sale of goods and services.

The Goods and Services Tax (GST) Council, in its forthcoming meeting on Monday, is expected to discuss extending the e-invoicing mandate to cover business-to-consumer (B2C) transactions.

Currently, e-invoicing is compulsory for businesses with a turnover of Rs 5 crore and above, but only for their business-to-business (B2B) transactions.

“A pilot project may be proposed to introduce voluntary e-invoicing in selected sectors, in collaboration with states willing to participate,” a government official familiar with the plan told Business Standard.

The move aims to curb tax evasion and enhance compliance in consumer transactions.

The GST Council’s law committee is learnt to be working on bringing enabling provisions in the GST law.

Upon approval, the GST Network (GSTN) will need to be upgraded to accommodate this change, including the development and finalisation of the required commercial model.

The pilot programme is expected to provide the tax department with insights into the feasibility and potential impact of implementing B2C e-invoicing within the Indian context.

According to sources, the tax department believes that extending e-invoicing to B2C transactions could yield multiple benefits for taxpayers, consumers, and tax administrators alike.

The GST Council’s clarification on the taxing process of Preferential Location Charges (PLC) may have brought relief to homebuyers, but questions of its retrospective applicability still remains, as past cases involving Rs 7,000-8000 crore are stuck under litigation in courts, say industry sources.

On Monday, the Council issued a clarification on the tax treatment of PLCs. It said that the PLC – a charge which the developer takes from the buyer for allocating a preferred location for a particular unit – paid along with the price for property construction forms a part of the same supply, i.e, construction services and thus, should be liable at the same rate at which construction services are taxed.

Earlier, GST authorities viewed PLC as a separate service chargeable to an 18% GST rate. With the recent clarification, a lower GST rate of 5% or 12% will now apply to PLC, along with abatement benefits. This change is expected to reduce costs for homebuyers and developers by 6% to 13% and provide greater certainty to developers and builders, ensuring that they are not unfairly taxed on components of the supply that should be considered part of the overall service, say tax experts.

The latest change announced by the Goods and Services Tax (GST) Council regarding taxing rental income from commercial property is likely to improve the government’s tax revenue. But, this may prove costly for tenants, according to industry experts. Renting commercial property owned by a person not registered with the GST Authority has been brought under the reverse charge mechanism (RCM), according to an announcement made on September 9 after the Council's 54th meeting. This would mean that the commercial tenant will have to deposit the GST.
Earlier, no GST was applicable in such cases. If the landlord was a registered entity, they were liable to pay GST at 18 per cent. It was also the case when a residential property was being used for commercial purposes.“This significant policy shift places the GST payment responsibility on tenants, enhancing government GST collection and marking a notable advancement in commercial property rental regulations,” said Ankit Kansal, managing director at 360 Realtors.

The 54th meeting of the Goods and Services Tax (GST) Council, chaired by union Finance Minister Nirmala Sitharaman, concluded at the Sushma Swaraj Bhawan, New Delhi on Monday.


Key decisions taken by the Finance Minister-led council included new GoM for GST rate reduction on medical health insurance, exemption for import of services by foreign airline companies, rates on cancer drug and namkeen slashed among others.

The meeting was attended by key officials from the finance ministry, along with finance ministers from various states.
Key takeaways
1. Status of GST on Online Gaming and Casinos
Finance Minister Nirmala Sitharaman announced that following the announcement of GST on online gaming, there has been a 412 per cent jump in revenue, as per a status report submitted to the fitment committee.

The much-anticipated announcement regarding a potential reduction in the Goods and Services Tax (GST) on health insurance premiums has been postponed to November meeting. In its 54th meeting on Monday, the GST Council decided to form Group of Ministers (GoM) to look into the issues pertaining to GST on the life insurance and health insurance.

GoM members are Bihar, UP, West Bengal, Karnataka, Kerala, Rajasthan, Andhra Pradesh, Meghalaya, Goa, Telangana, Tamil Nadu, Punjab, and Gujarat.

It has been asked submit the report by end of October 2024.

The Fitment Committee, comprising the Centre and state tax officials, on Monday presented a report giving data and analysis and implications of GST reduction on life, health and reinsurance premiums.

The Goods and Services Tax (GST) Council at its 54th meeting in New Delhi on Monday decided to exempt import of services by foreign airline companies.

“Another important decision was taken to exempt import of services by an establishment of a foreign airlines company, there were some notices which were also reported in the media earlier from a related person or any of its establishments outside India when made without consideration,” said Revenue Secretary Sanjay Malhotra while apprising the press on key decisions taken in the meet.

The move will provide a significant relief to foreign airlines that had received notices from the Directorate General of Goods and Services Tax Intelligence (DGGI).

The Goods and Services Tax (GST) Council in its meeting on Monday is likely to decide on four options regarding tax treatment of health insurance, with the cost to the exchequer potentially ranging from nearly Rs 650 crore to Rs 3,500 crore.

These four options have emerged from a detailed analysis by the Council’s fitment panel, which includes revenue officials from both central and state governments, and follow a request from the Department of Financial Services (DFS) to reduce taxes on health insurance products to make them more affordable and accessible.

The fitment panel is expected to submit before the Council a detailed report outlining these options, which include a full exemption for all health insurance premiums and reinsurance, or a reduction in the GST rate from 18 per cent to 5 per cent on health insurance services, according to officials in the know.

Other possibilities include exempting premiums paid by senior citizens and premiums with coverage up to Rs 5 lakh, or alternatively, only exempting premiums paid by senior citizens from GST ambit.

Each of these four proposals carries different financial implications: Rs 3,495 crore, Rs 1,730 crore, Rs 2,110 crore, and Rs 645 crore, respectively.

Large payment aggregators like BillDesk and CCAvenue have received notices from the goods and services tax authorities, demanding GST on the fee they charged merchants for processing digital transactions of under Rs 2,000, three people in the know told ET.

“Yes, we have received a show-cause-cum-demand notice,” said Vishwas Patel, joint managing director of Infibeam Avenues which runs payments processor CCAvenue, responding to ET’s queries. “Our teams have responded to the notice,” he said.

BillDesk did not respond to an email seeking comment.

More than 80% of the total digital payments in India are of less than Rs 2,000 in value. The payments aggregators have not been charging tax on the service they provided to merchants on such transactions, following a government notification issued during demonetisation in 2016.

The authorities are now seeking tax from fiscal 2017-18, when the GST regime was introduced. This also comes at a time when there is a buzz around the GST Council likely issuing a clarification on taxing such transactions after its meeting next week.

Humongous task

“Some of the players have already received the notice. We are anticipating notices too, since the entire industry did not charge merchants and pay GST on sub-Rs 2,000 digital payments transactions abiding by government norms,” the chief executive of another payments firm said on the condition of anonymity.

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 Bihar, Delhi, Karnataka, and Punjab on 6th September 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.

6. The feature of booking an appointment to visit a designated GSK is now available for the applicants of Bihar, Delhi, Karnataka and Punjab.

7. After booking the appointment, the applicant gets the confirmation of appointment through e-mail (the appointment confirmation e-mail), she/he will be able to visit the designated GSK as per the chosen schedule.

The three changes announced in the GST return filing rules, per the recent notification, will help streamline the tax filing process for taxpayers, increase transparency and also better traceability for the government, said experts. The new rules include adjustments to the reporting of high-value transactions, validation of bank accounts in GST registration, and allowing the reporting of negative liability which will be carried forward to next month’s return.

Taxpayers will need to adjust to the GST return filing practices starting September. Saurabh Agarwal, Tax Partner, EY, said, “The recent GST return reforms are a positive development that can streamline the tax filing process. The revised thresholds, bank account validation, and negative liability reporting will improve accuracy and efficiency. However, businesses should carefully review the specific implications of these changes and take necessary actions, such as updating their bank account details before filing the August GST return, to ensure compliance and avoid any disruptions.”

Shravan Shetty, Managing Director at Primus Partners, said, “The new rules simplify reporting and automate certain processes, which will help provide smoother reporting for taxpayers and better traceability for the government.”

Vide Notification No. 12/2024 – Central Tax dated 10th July, 2024, the Government has reduced the threshold limit for reporting of invoice wise details of inter-state taxable outward supplies made to unregistered dealers from 2.5 Lakh to 1 Lakh which needs to be reported in Table 5 of Form GSTR-1 and Table 6 of GSTR-5. In accordance with the new legal provisions, this change is currently under development on the portal and would be available to the taxpayers shortly.

Further, till the time the functionality is made available on portal, it is advised to continue reporting the invoice wise details of taxable outward supplies to unregistered dealers which are more than 2.5 Lakhs in the Table 5 of Form GSTR-1 and Table 6 of GSTR-5.

To enable taxpayers to efficiently address invoice corrections/amendments with their suppliers through the portal, a new communication process called the Invoice Management System (IMS) is being brought up at portal. This will also facilitate taxpayer in matching of their records/invoices vis a vis issued by their suppliers for availing the correct Input Tax Credit (ITC) and shall allow the recipient taxpayers to either accept or reject an invoice or to keep it pending in the system, which can be availed later

This facility shall be available to the taxpayer from 1st October onwards on the GST portal. Please click here to read the complete advisory on IMS.

GST Network will launch the Invoice Management System (IMS) from October 1 which will facilitate taxpayers in matching their records/invoices vis-a-vis issued by their suppliers for availing the correct Input Tax Credit (ITC).
In an advisory to Goods and Services Tax (GST) payers, GSTN said to enable taxpayers to efficiently address invoice corrections/amendments with their suppliers through the portal, a new communication process called the IMS is being launched.

"This will also facilitate taxpayer in matching of their records/ invoices vis-a-vis issued by their suppliers for availing the correct ITC," GSTN said.

IMS will allow the recipient taxpayers to either accept or reject an invoice or to keep it pending in the system, which can be availed later.
This facility shall be available to the taxpayer from October 1 onwards on the GST portal.
Moore Singhi Executive Director Rajat Mohan said by maintaining a detailed record of all actions taken on each invoice, the IMS creates a robust audit trail that is invaluable during GST audits. This feature provides tax authorities with clear evidence of the recipient's due diligence in managing ITC claims, potentially simplifying the scrutiny process.