GST: Submission requesting for clarity on amendment to S. 39(5) of CGST Act

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GST: Submission requesting for clarity on amendment to S. 39(5) of CGST Act

Tejasvi

@tejasvi

April 28, 2022

Public Policy

223

Background

As per S. 39(5) of Central Goods and Services Tax Act, 2017 (CGST Act), every registered Non-Resident Taxable Person (NRTP) is required to furnish a return electronically (for every calendar month or part thereof) in such form and manner as may be prescribed within 20 days after end of calendar month or within 7 days after last day of the period of registration specified under S. 27(1), whichever is earlier.

The Finance Act 2022 has proposed to substitute 20 days with 13 days. Effectively, the return to be filed by NRTP would be due on 13^th of the succeeding month once the provision is notified.

The 43^rd GST council meeting agenda (page 192) provides that the rationale for the said amendment is for the credit of GST paid to get reflected in GSTR-2B of the customers. The extract of the same is provided below:

Sub-section 5: The due date for furnishing return for NRTP is proposed to be made 13th of the month. This is in line with the proposed dates on which GSTR-2B picks up data in the System.

NRTP vs Non-resident OIDAR Service provider:

The term ‘non-resident taxable person’ means any person who occasionally undertakes transactions involving supply of goods/services/both, whether as principal or agent or in any other capacity, but who has no fixed place of business or residence in India. The said NRTP is required to obtain compulsory registration under S. 24(v) of CGST Act. Further, every registered NRTP is required to furnish return in FORM GSTR-5.

On the other hand, a non-resident OIDAR service provider is required to obtain compulsory registration under S. 24(xi) of CGST Act. The said OIDAR service provider is required to obtain registration under the simplified registration scheme notified. Further, non-resident OIDAR service provider is required to file return in Form GSTR-5A.

63. Form and manner of submission of return by non-resident taxable person.-Every registered non-resident taxable person shall furnish a return in FORM GSTR-5 electronically through the common portal, either directly or through a Facilitation Centre notified by the Commissioner, including therein the details of outward supplies and inward supplies and shall pay the tax, interest, penalty, fees or any other amount payable under the Act or the provisions of this Chapter within 20 days after the end of a tax period or within 7 days after the last day of the validity period of registration, whichever is earlier.

64. Form and manner of submission of return by persons providing online information and database access or retrieval services.-Every registered person providing online information and data base access or retrieval services from a place outside India to a person in India other than a registered person shall file return in FORM GSTR-5A on or before the twentieth day of the month succeeding the calendar month or part thereof.

The scope of NRTP as defined in GST is very restricted and only includes a person outside India, who is occasionally engaged in supply of goods or services in India.

Our understanding:

As against NRTP, we understand that the concept of non-resident OIDAR services provider is different, both in terms of registration and returns to be filled. Thereby, going by the specific provision for ‘non-resident taxable person’, any change in the due date of furnishing returns of NRTP would have no effect on the due date of furnishing returns by Non-resident OIDAR services provider.

Further, the rationale of amending due date for furnishing return is for the credit to be reflected in GSTR-2B of the customers. However, as the non-resident OIDAR services provider only provides services to non-taxable online recipient (unregistered buyer), there is no concept of credit for the recipient.

Our request:

With this background, we have requested GST Policy Wing to confirm our understanding that the change is proposed only for the return filing by NRTP, i.e. for GSTR-5 and has no impact on the return filing due date for a non-resident OIDAR service provider, i.e., For GSTR-5A.

We will keep you posted on further developments in this regard.

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Tejasvi