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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.

What’s the solution shared by GSTN to help you claim correct amount of input tax credit

GSTN said in the advisory: “..During this initial phase of implementation of IMS, the taxpayers are advised that in such cases, where due to any inadvertent mistake in the action taken on the IMS, if incorrect details of ITC/ liability are auto-populated in GSTR-3B on the portal, the taxpayer before filing their GSTR-3B return, may edit such wrongly populated ITC/liability in their GSTR-3B, to correctly avail ITC or pay correct tax liability based on the factual position as per the documents/records available with him.”

Who needs to file GST annual return by December 31, 2024.

Experts urge GST-registered taxpayers to take prompt action on the data displayed on the IMS. “While taxpayers have the option to accept or reject the invoices, it is recommended that they review the information displayed on the IMS and take prompt action, as failure to do so may be considered as deemed acceptance of the invoices,” says Brijesh Kothary, Partner at Khaitan & Co, a law firm.

“Done right, this could mean near-perfect accuracy for your Input Tax Credit (ITC) claims, but one wrong click, and your financial landscape might start resembling a minefield of incorrect ITC figures. Errors during the initial phase of IMS could lead to unwelcome surprises, like the wrong ITC being auto-populated in your GSTR-3B. So, while IMS aims to simplify processes and improve transparency, it also demands precision and vigilance,” says Siddharth Chandrashekhar, Advocate (Bombay High Court) & Panel Counsel for CBIC & CBDT.

Claiming input tax credit involves a connected series of steps, so it’s important to review the process carefully

In its advisory, GSTN underscored the interconnected nature of the input tax credit claims process. It further stressed that the IMS system shouldn’t be viewed as an additional compliance requirement; rather, it aims to assist taxpayers in accurately claiming their ITC. This system is designed to minimize instances of invoice data mismatches and to foster increased transparency.

No input tax credit if e-invoice not uploaded in GST portal within 30 days: New rule soon.

GSTN said: “Invoice Management System (IMS) is an optional facility introduced from October 2024 on GST Portal, on which the invoices/records saved/furnished by the supplier in GSTR-1/1A/IFF, can be accepted, rejected or kept pending by recipients .Based on the action taken by the recipient on the IMS, system will generate the GSTR 2B of the recipient on 14th of subsequent month. The Taxpayer can accept/reject/keep pending the invoice/record on IMS after due verification from his accounts. The ITC for the rejected record will not be available to the recipient in the GSTR 2B. Further, the liability and input tax credit is being auto -populated in GSTR 3B of the taxpayer on the portal based on his liability declared in GSTR 1/1A and input tax credit made available in his GSTR 2B. However, the taxpayer can presently edit the said auto-populated details in GSTR 3B before filing the same.”

Experts say IMS has a much broader impact than the e-invoicing feature. “IMS is designed as a taxpayer-friendly tool aimed at reducing disputes related to ITC mismatches. Unlike e-invoicing, this feature is being rolled out for all taxpayers simultaneously, regardless of their turnover, and is expected to have a broad impact across the taxpayer community,” says Kothary.

GSTN said in a tutorial available on its website: “Once the suppliers save any invoice in GSTR 1 / IFF / 1A /the same invoice would be reflected in the IMS dashboard of the recipient. A sample screenshot of the same is provided below:

How a user error can derail the process of claiming input tax credit

GSTN, in its advisory, emphasised that the GSTR-2B data for recipients is generated based on the actions carried out within the IMS system,, “any mistake in the action taken by the recipient on the IMS could result in incorrect details of available/eligible input tax credit to the recipient being shown in his GSTR-2B, which will also be auto-populated in his GSTR-3B on the portal.”

GSTN said that in such cases the recipient can change the action on the IMS in respect of an invoice/record (for example, from rejected to accepted or vice versa) and can recompute his GSTR-2B at any time till the filing of GSTR-3B for the corresponding tax period, so that correct ITC is auto-populated in his GSTR-3B.

“The advisory dated 12th November 2024 acknowledges that IMS is a new feature, and recipients may make errors during its initial phase of implementation. These errors can be corrected when filing Form GSTR-3B. However, the advisory issued by GSTN is intended solely to raise awareness about the functionality and may not have a legal backing. As such, it remains to be seen whether this advisory can help taxpayers who make genuine mistakes in accepting or rejecting invoices, debit notes, or credit notes issued by suppliers, in defending themselves against any notices from tax authorities,” says Kothary from Khaitan & Co.

Chartered Accountant Hardik Kakadiya, President, Chartered Accountants Association Surat (CAAS) says, “It is great that GSTN thinks of the word “mistake” in Invoice Management System (IMS), especially the one which is auto-populated in GSTR-3B. This gives us hope that some day the wisdom will prevail, and judgments of High Courts will be honoured to allow rectification of GSTR-3B.”

When asked whether taxpayers should use IMS or not Chandrashekhar said, “If you’re ready to embrace technology and perform real-time reconciliations with aplomb, IMS could be your ally. It promises better visibility and control over your ITC claims, which, in a perfect world, translates to lower chances of tax disputes and ITC disallowances. However, if you’re not quite ready to handle the responsibility of clicking ‘accept’ or ‘reject’ with unwavering certainty-or if your suppliers have a penchant for frequent amendments-opting in might feel more like a walk on a tightrope.”

The Allahabad High Court has set aside the demand and penalty order passed under Section 129 of the Central Goods and Services Tax Act 2017 against a trader whose GST registration came to be suspended, after it found that the goods in transit were accompanied with proper tax invoice and e-way bill.

A division bench of Chief Justice Arun Bhansali and Justice Vikas Budhwar relied on M/s Sahil Traders v. State of U.P. and another, 2023 wherein a coordinate bench had held that once the goods were found with proper tax invoice and E-way bill, the consignee will be deemed owner and goods will have to be released in terms of Section 129(1)(a) of the CGST Act.

Section 129 provides for detention and seizure of goods and conveyances and their release on the payment of requisite tax and penalty in cases where such goods are transported in contravention of the provisions of the CGST Act or rules.

Petitioner’s goods were being transported from Patna to Gurugram. It was aggrieved by demand of penalty in Form GST MOV-09. It claimed no discrepancy was found upon physical verification of the goods however, the same were detained by indicating movement of goods without proper documents.

Significant to note that the tax invoice and E-way bill accompanying the goods were dated 01.10.2024 whereas suspension of Petitioner’s registration by the jurisdictional authority was dated 03.10.2024. The vehicle came to be intercepted on 04.10.2024 and a demand was raised against the Petitioner on 16.10.2024.

Counsel for the petitioner submitted that it is not the case of the respondent that the vehicle was not accompanied by the requisite documents. The show cause notice simply indicated that the registration of the petitioner was suspended based on which the demand was raised, which is not justified.

Standing counsel for the Department on the other hand claimed that the registration was obtained by the Petitioner based on fake documents and, therefore, as the documents which were accompanying the goods in question were obtained based on a fake registration, the passing of the order was justified.

At the outset, the High Court referred to Halder Enterprises v. State of U.P. and others (2023) wherein the goods were intercepted on 03.10.2023 and the suspension took place w.e.f. 18.09.2023.

It was held therein that once the goods were found with proper tax invoice and E-way bill, the circular dated 31.12.2018 issued by the Central Board of Indirect Taxes and Customs, GST Policy Wing would apply.

The Circular provides that if the invoice or any other specified document is accompanying the consignment of goods, then either the consignor or the consignee should be deemed to be the owner.

In this backdrop the High Court observed,

“This is not the case of the respondents that the goods were not accompanied with proper tax invoice and E-way bill and only on account of the fact that the registration was suspended on 03.10.2024 that the action has been initiated and the order impugned has been passed as such the issue stands covered. Consequently, the writ petition is allowed.”

Appearance: Advocate Aditya Pandey for Petitioner; Standing counsel Ankur Agarwal for Respondent

Case title: M/S Lakhdatar Traders v. State Of Up And 2 Others

Case no.: WRIT TAX No. – 1852 of 2024

The Goods and Services Tax Network (GSTN) has introduced a new feature where suppliers can see whether the buyer has accepted or rejected the invoice saved by the supplier on the GST portal. This feature is implemented inside the newly introduced Invoice Management System (IMS) on the GST portal from October 14, 2024. GST registered sellers or suppliers should note that since the introduction of IMS portal, GST registered buyers can accept or reject (or take no action) against invoices saved by sellers on the GST portal.

Accepting the invoice saved by sellers on the GST portal will enable the buyers (recipients) to claim input tax credit and at the same time help the seller file a correct GST return. Only when the invoice is accepted then the seller’s GST return can be filed in accordance with the law and the correct amount of output tax liability can be calculated.

“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,” said GSTN in an advisory dated November 13, 2024.

New GSTN feature to correct mistakes in GST invoice matching process for claiming input tax credit; Know how it works

How the new supplier view feature of invoice management system (IMS) may help buyers in claiming input tax credit faster

Back in the old days when a supplier or seller made any error in the invoice and filed a GST return based on this wrong invoice it caused issues with the buyer namely in regard to claiming input tax credit and other issues. This is because the invoice has to reflect the true and correct view of the transaction between the buyer and seller otherwise the GST return cannot be filed without errors.

“In this situation the error could only be solved by filing an amended GST return either in the next month or next to next month depending upon when the error was caught. This months’ time or more depending upon when the error in invoice was detected was a time lag during which period the buyer could not have claimed his input tax credit for this particular wrong invoice. However now with the introduction of this new feature (supplier view) on the IMS system, a supplier can know the error in real time if the buyer detects it and rejects the invoice on the IMS portal. This will help in faster rectification of errors in invoice and hence the invoice can now be accepted faster by the buyer resulting in the buyer claiming ITC faster,” says Chartered Accountant Bimal Jain, founder, A2Z Taxcorp LLP.

According to Divya Momaya, founder, MentorMyBoard, “The IMS feature could facilitate faster ITC claims by buyers. Here’s how:

• Enhanced Communication: With IMS, buyers can now view and provide feedback directly on the supplier’s invoices if there are any discrepancies, such as incorrect values or missing invoices.
• Quick Rectification: Suppliers receive prompt notifications regarding buyer feedback, allowing them to correct errors in real-time. This means fewer delays due to mismatches and errors that previously went unnoticed until the filing period.
• Improved ITC Matching: Since ITC claims depend on accurate data alignment between buyers and suppliers, IMS helps ensure faster matching, reducing the chances of errors during GSTR-2B reconciliation and leading to quicker ITC processing.

“The IMS feature is likely to support more efficient ITC claims as it streamlines and speeds up the invoice verification and correction process,” she says.

The first GSTR 2B on the basis of buyer’s action on the IMS will be generated on November 14, 2024

According to the advisory by GSTN, “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.”

Chartered Accountant Aniket Kulkarni says, “The recipient taxpayer (buyer) would be rejecting the invoices, where supply has either been not received by them or where Input tax credit is not available to the recipient. If a supplier has made mistakes while uploading the invoice details, it can be pointed out to him online itself. Moreover this advisory by GSTN has advantages for suppliers or sellers as well. Since the mistakes can be pointed out the supplier can make necessary amendments in GSTR 1 and so correct the invoice details and thereby comply with the law.”

New process to pay tax demand under GST amnesty scheme clarified by GSTN

These invoices are not available in IMS for taking any kind of action by the buyer

GSTN said: “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’:

• Documents where ITC is not eligible either due to POS rule or Section 16(4) of the CGST Act,
• Records attracting RCM Supplies.”

“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,” sain GSTN on the advisory.

Impact of this feature for GST registered suppliers

According to Momaya, “The IMS feature brings several implications for GST-registered suppliers:

• Increased Accountability: Suppliers will be under greater pressure to ensure timely and accurate invoicing, as buyers now have visibility into invoice details and can request changes directly.
• Prompt Action on Feedback: Suppliers must stay vigilant to respond to buyer feedback in a timely manner. This will require improved internal processes and regular monitoring of the IMS notifications to avoid unnecessary delays in rectifications.
• Strengthened Buyer-Supplier Relationship: By enhancing communication and transparency, IMS can lead to better trust and collaboration with buyers, fostering long-term business relationships.
• Streamlined Operations: While initially, suppliers may need to adapt to this new feature, IMS could eventually reduce the administrative burden caused by invoice discrepancies and ITC-related issues, saving time and resources.

“Overall, the IMS feature could improve transparency and compliance for suppliers but requires them to be proactive and responsive to buyer feedback,” she says.

The Goods and Services Tax Network (GSTN) has introduced a new feature where suppliers can see whether the buyer has accepted or rejected the invoice saved by the supplier on the GST portal. This feature is implemented inside the newly introduced Invoice Management System (IMS) on the GST portal from October 14, 2024. GST registered sellers or suppliers should note that since the introduction of IMS portal, GST registered buyers can accept or reject (or take no action) against invoices saved by sellers on the GST portal.

Accepting the invoice saved by sellers on the GST portal will enable the buyers (recipients) to claim input tax credit and at the same time help the seller file a correct GST return. Only when the invoice is accepted then the seller’s GST return can be filed in accordance with the law and the correct amount of output tax liability can be calculated.

“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,” said GSTN in an advisory dated November 13, 2024.

New GSTN feature to correct mistakes in GST invoice matching process for claiming input tax credit; Know how it works

How the new supplier view feature of invoice management system (IMS) may help buyers in claiming input tax credit faster

Back in the old days when a supplier or seller made any error in the invoice and filed a GST return based on this wrong invoice it caused issues with the buyer namely in regard to claiming input tax credit and other issues. This is because the invoice has to reflect the true and correct view of the transaction between the buyer and seller otherwise the GST return cannot be filed without errors.

“In this situation the error could only be solved by filing an amended GST return either in the next month or next to next month depending upon when the error was caught. This months’ time or more depending upon when the error in invoice was detected was a time lag during which period the buyer could not have claimed his input tax credit for this particular wrong invoice. However now with the introduction of this new feature (supplier view) on the IMS system, a supplier can know the error in real time if the buyer detects it and rejects the invoice on the IMS portal. This will help in faster rectification of errors in invoice and hence the invoice can now be accepted faster by the buyer resulting in the buyer claiming ITC faster,” says Chartered Accountant Bimal Jain, founder, A2Z Taxcorp LLP.

According to Divya Momaya, founder, MentorMyBoard, “The IMS feature could facilitate faster ITC claims by buyers. Here’s how:

• Enhanced Communication: With IMS, buyers can now view and provide feedback directly on the supplier’s invoices if there are any discrepancies, such as incorrect values or missing invoices.
• Quick Rectification: Suppliers receive prompt notifications regarding buyer feedback, allowing them to correct errors in real-time. This means fewer delays due to mismatches and errors that previously went unnoticed until the filing period.
• Improved ITC Matching: Since ITC claims depend on accurate data alignment between buyers and suppliers, IMS helps ensure faster matching, reducing the chances of errors during GSTR-2B reconciliation and leading to quicker ITC processing.

“The IMS feature is likely to support more efficient ITC claims as it streamlines and speeds up the invoice verification and correction process,” she says.

The first GSTR 2B on the basis of buyer’s action on the IMS will be generated on November 14, 2024

According to the advisory by GSTN, “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.”

Chartered Accountant Aniket Kulkarni says, “The recipient taxpayer (buyer) would be rejecting the invoices, where supply has either been not received by them or where Input tax credit is not available to the recipient. If a supplier has made mistakes while uploading the invoice details, it can be pointed out to him online itself. Moreover this advisory by GSTN has advantages for suppliers or sellers as well. Since the mistakes can be pointed out the supplier can make necessary amendments in GSTR 1 and so correct the invoice details and thereby comply with the law.”

New process to pay tax demand under GST amnesty scheme clarified by GSTN

These invoices are not available in IMS for taking any kind of action by the buyer

GSTN said: “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’:

• Documents where ITC is not eligible either due to POS rule or Section 16(4) of the CGST Act,
• Records attracting RCM Supplies.”

“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,” sain GSTN on the advisory.

Impact of this feature for GST registered suppliers

According to Momaya, “The IMS feature brings several implications for GST-registered suppliers:

• Increased Accountability: Suppliers will be under greater pressure to ensure timely and accurate invoicing, as buyers now have visibility into invoice details and can request changes directly.
• Prompt Action on Feedback: Suppliers must stay vigilant to respond to buyer feedback in a timely manner. This will require improved internal processes and regular monitoring of the IMS notifications to avoid unnecessary delays in rectifications.
• Strengthened Buyer-Supplier Relationship: By enhancing communication and transparency, IMS can lead to better trust and collaboration with buyers, fostering long-term business relationships.
• Streamlined Operations: While initially, suppliers may need to adapt to this new feature, IMS could eventually reduce the administrative burden caused by invoice discrepancies and ITC-related issues, saving time and resources.

“Overall, the IMS feature could improve transparency and compliance for suppliers but requires them to be proactive and responsive to buyer feedback,” she says.

The Himachal Pradesh High Court has dismissed a writ petition challenging notifications issued by the Central government for levy of GST on Royalty paid by a Mineral Concession Holder for mining concession granted by the State.

The Petitioner, a firm engaged in stone crushing, was issued notices and summons under Section 70 of Central Goods and Services Tax Act, demanding GST on royalty.

Petitioner’s challenge in the year 2023 was based on a seven-Judge Bench decision of the Supreme Court in India Cement Ltd. and ors. vs. State of Tamil Nadu and ors. wherein it was declared that royalty itself is a tax.

Petitioner had argued that any demand for GST on royalty by the respondents would prima-facie amount to levying a tax on tax, which should be beyond the legislative competence of the respondent-authority.

A division bench of Acting Chief Justice Tarlok Singh Chauhan and Justice Satyen Vaidya observed that India Cement Ltd. (supra) was overruled by a nine-Judge Bench of the Supreme Court in Mineral Area Development Authority & anr. vs. M/s Steel Authority of India & anr. (2024).

In Mineral Area Development (supra) the Top Court by an 8:1 majority held that States have the power to levy tax on mineral rights. It was further held that Royalty is not within the nature of a tax as it is a contractual consideration paid by the lesssee to the lessor under the mining lease.

The Top Court said there is no specific provision in the Mines and Minerals (Development and Regulation) Act 1957 imposing limitations on the taxing powers of the State. Royalty under Section 9 of the MMDR Act is not in the nature of a tax. Section 9 MMDR Act does not impose any limitation on the power of States to tax minerals. The limitations imposed by Section 9 on royalties do not amount to limitations on the State’s powers.

“Therefore, the respondents are well within their rights to levy GST on the royalty paid by the mineral concession holder for any mining concession granted by the State,” the High Court held and dismissed the plea.

Appearance: Advocate Arvind Sharma for Petitioner; Dy SGI Balram Sharma with Advocate Rajeev Sharma for Respondents No. 1, 3 and 4; AG Anup Rattan with Addl. AGs Rakesh Dhaulta, Pranay Pratap Singh and Sushant Kaprate, Dy AGs Arsh Rattan and Priyanka Chauhan for Respondent No.2

Case title: M/s Lakhwinder Singh Stone Crusher v. Union of India & ors.

Citation: 2024 LiveLaw (JKL) 72

Case no.: CWP No. 8637/2023

The bench held that the issue of whether a product falls within a particular class or category falls within the province of the judicial and quasi-judicial authorities created under the provisions of the Central Goods and Services Tax Act.

The Bombay High Court on Monday quashed the Centre’s 2020 press release classifying hand sanitisers as disinfectants attracting 18 per cent GST, noting that the issue of classification lies with the judicial and quasi-judicial adjudicatory authorities.

NEW DELHI: The GST Council, which is set to meet in Rajasthan on Dec 21-22, will decide on slashing the levy on term insurance plans from 18% to zero, along with creating a similar dispensation for health covers for senior citizens as well as those purchasing insurance up to Rs 5 lakh.

A decision on rate rationalisation for other goods and services is, however, unlikely in the meeting in the desert as states are yet to firm up their proposal amid concerns of revenue loss among several of them, especially Kerala and West Bengal, which are otherwise critical of the “high levies”.

Most of the non-NDA governed states have opposed a reduction in the number of slabs from four to three. Currently, goods and services are taxed at 5%, 12%, 18% and 28% with the top two accounting for three-fourths of the revenue.

In fact, concerns over revenue loss have also come in the way of an across-the-board reduction in GST on health insurance as it generates around Rs 2,500 crore revenue and states are wary of losing any money now as the Centre is no longer there to compensate them. A group of ministers headed by Bihar deputy CM Samrat Chaudhary has already firmed up the proposal on health insurance, the least contentious of the three issues on the table. A third ministerial panel led by minister of state for finance Pankaj Chaudhary is looking at the future of compensation cess but a decision on that will be taken only towards the end of 2025 since the levy on luxury and sin goods is applicable until March 2026.

When it comes to rate rationalization, the plan discussed was to focus on reduction in mass consumption items while increasing the levy on “luxury products” such as high-end shoes.

Times Of India

Precooked and specially packed of ready to eat food products such as puli-inji, sambar curry, avial curry, kadala curry, kappa puzuhukku, thenga varutharachatu, etc, will attract 18 per cent GST, Kerala’s Authority for Advance Ruling (KAAR) has ruled. Same rate will be applicable for tomato rice, coconut rice, masala rice etc.

“These items are not, as such vegetables or mixtures of vegetables, but are food preparations made using vegetables and can be subject to direct use, or may be, after heating,” AAR held while disposing application by Alappuzha (Kerala) based HIC-ABG Special Foods Private Limited.

The applicant approached AAR to seek advance rulings on 26 types of ready to eat and one ready to cook food. He argued that ready to eat food items are prepared without addition of preservatives and using RETORT technology from Japan which ensures a shelf life of 18 months.

• Also read: Kerala AAR: Packed halwa is ‘sweetmeats’ not Namkeens when sold under brand name

In the process, food and containers are made commercially sterile, precooked food items are packed in a special multilayer pouch, vacuum sealed and made bacteria free by retort processing. Such products are ready to eat once the pouch is opened and no further cooking is required. However, in case they are to be served hot, these required to be heated.

After going through all the arguments and facts presented, AAR observed that items such as Kerala Chicken Curry, Chettinadu Chicken Curry, Chicken Biryani, Mutton Curry, Mutton Roast, Beef Fry, Beef Roast, etc. constitutes ‘ready to eat packaged food’ more specifically than ‘prepared or preserved meat.’ Talking about Soya Coconut Fry, Masala Rice, Coconut Rice, Vegetable Pulao and Tomato Rice, AAR said that these can be placed under the category ‘food preparations not elsewhere specified or included, other,’

• Also read: GST leviable on AAI-Adani concessionaire pact for Thiruvananthapuram airport: Kerala AAR

According to Harpreet Singh, Partner (Indirect Tax) with Deloitte, this ruling analysed various products of the applicant and concluded them to be ready for consumption liable to tax at 18 per cent. The conclusion arrived based on the fact that the products were ready to eat once the pouch is opened and products are heated.

It was also observed that no further cooking was required on these products. “The classification of products as ready for consumption requires analysis on case-to-case basis depending on the nature of products and the subsequent activities involved prior to its consumption,” he added.

• Also read: GST on counter sales: Kerala AAR defines 5% rate, 18% for hotel premises

Correct categorization of food products always been a contentions and advance rulings have been sought. In one such matter, it was said that papad and frymes are not same, while former will not attar GST, but latter will. In another matter, it was said that food & beverages prepared in a restaurant will attract GST at the rate of 5 per cent whether consumed inside the restaurant or part of takeaway.

Another interest matter was related with Malabar Parotta where AAR and AAAR ruled 18 per cent. However, these rulings were turned down by the Kerla High Court which said that this popular flatbread will attract GST at 5 per cent.

It may be noted that AAR rulings are applicable only on applicant and jurisdictional tax officer. However, they can be relied upon in similar matter. Also, many such rulings have become base for policy change.

If you want to apply for the Goods and Services Tax (GST) amnesty scheme which waives off interest and penalty from specified period GST tax demand notices, then make a note of this new process. This new process has been shared by GSTN today i.e. November 8, 2024. According to the advisory from Goods and Services Tax Network (GSTN), the forms specified for the purpose – GST SPL-01 and GST SPL-02 are still under development and are likely to be available only by the first week of January 2025.

Therefore, those persons wanting to pay tax demand under the scheme now can pay it via a different form using the new process.

“In this regard it is informed that Form GST SPL-01 and Form GST SPL-02 are under development and the same will be made available on the common portal tentatively from the first week of January 2025. In the meantime, taxpayers are advised to pay the tax amount demanded in the notice, statement, or order issued under Section 73 on or before March 31st, 2025, to ensure that they receive the waiver benefits by paying their taxes before the deadline,” said GSTN in the advisory dated November 8, 2024.

“Taxpayers who don’t want to wait for the GST SPL-01 and SPL-02 form to be made available in order to apply for GST Amnesty Scheme can now either use DRC-03 form (DRC-03A for specified cases) or pay the tax demand through the electronic liability register which can be accessed in the post-login mode on the GST portal using the path: Services > Ledgers > Electronic Liability Register > Part-I: Return related liabilities. By using this method, the taxpayer can apply for the GST amnesty scheme now,” says chartered accountant Bimal Jain, founder, A2Z Taxcorp LLP.

“This Advisory , has successfully removed the cloud of uncertainty surrounding the availability of Forms SPL-01 and SPL-02 by tentatively confirming their release by January 2025. While the timeline remains indicative, it provides taxpayers with a clear direction, allowing them to shift from speculation to preparation. This assurance enables taxpayers to focus on their priorities without the constant concern of checking the portal, ensuring a smoother and more organized approach to leveraging the Amnesty Scheme,” says Adv. (CA) Utkarsh Singhal, Proprietor, Utkarsh Singhal Law Offices Prayagraj.

“It seems like the advisory presents a bit of a paradox—on one hand, it encourages taxpayers to pay the tax by the due date to avail the waiver scheme, but on the other, it acknowledges that the forms needed to formally apply for the benefit are still under development,” says Kamal Aggarwal, Senior Advisor, Singhania & Co.

Which form to use to apply for GST amnesty scheme now

According to the advisory by GSTN, taxpayers can pay the tax demand amount through the “payment towards demand” facility in case of demand orders and through Form GST DRC-03 in case of notices. “However, if payment has already been done through Form GST DRC-03 for any demand order then taxpayers need to link the said Form GST DRC 03 with such demand order through Form GST DRC-03A, which is now available on the common portal.”

Jain explains which taxpayers need to file DRC-03 Form and which ones need to pay the tax demand through electronic liability register. He says:

DRC-03 (DRC-03A in specified cases) is to be used by: Taxpayers who have been given a show cause notice (SCN), but the adjudicating order has not been passed. If a taxpayer paid Rs 150 for a tax demand of Rs 200, the adjustment of this part payment can be made by filing DRC-03A form.

Electronic liability ledger: Taxpayers against whom the order in original (adjudicating order) has been passed but order in appeal has not been passed, need to pay the tax demand amount through the electronic liability ledger.

“If taxpayers want, then they can wait for the SPL-01 and SPL-02 form to be made available, which GSTN said would be tentatively by the first week of January 2025. If they don’t want to wait for applying to the GST amnesty Scheme then they  can follow the process mentioned above,” says chartered accountant Aniket Kulkarni.

GSTN said in the advisory that the GST council had recommended waiver of interest and penalties in the demand notices or orders issued under Section 73 of the CGST Act, 2017 (i.e. the cases not involving fraud, suppression or willful misstatement, etc.) for the financial years 2017-18, 2018-19 and 2019-20. This was done to reduce tax disputes and to provide relief to taxpayers.

“To avail this waiver, the condition is that the full tax demanded is paid on or before 31.03.2025,” said GSTN.

Shashank Shekhar, Partner, DMD Advocates, says, “The Amnesty scheme provisions in certain situations, such as tax demand on account of multiple issues, erroneous refund and demand beyond Financial Years 2017- 20, require the taxpayers to pay the entire tax amount to get waiver of interest and penalty for the Financial Years 2017-20.

In such a case, the taxpayers may still be required to pay interest and penalty for the period beyond Financial Years 2017- 20. Accordingly, it is worthwhile for the taxpayers to evaluate and weigh the benefit of waiver of interest and penalty against any additional tax, interest and penalty liability that they may have to suffer on account of opting for the amnesty scheme. Further, while the thrust behind the extension of waiver of interest and penalty for the subject period to the taxpayers was to reduce litigation, in the past the amnesty schemes introduced in the service tax and VAT regime themselves resulted in surge in litigation on account of denial of benefit thereunder to the taxpayers for more reasons than one. Thus, the taxpayers should carefully examine the requirements of the present scheme and act accordingly.”