Traders as MSMEs proposed, with expanded payment-protection timelines and enhanced interest for delayed payments.
Proposals include permitting traders to register as MSMEs via Udyog Aadhaar, including medium enterprises within the payment-timeline regime for MSMEs, and applying enhanced interest on delayed payments calculated as a multiple of the bank rate notified by the central bank; additional recommendations cover adoption of digital KYC by NBFCs and use of contact-list KYC, sectoral inclusion for interest subvention, and policy measures to support domestic industry. (AI Summary)

Reverse charge on directors' remuneration: non executive directors' fees treated as taxable while whole time directors' pay may be employment income.
Whether directors' remuneration falls under the Reverse Charge Mechanism depends on the nature of the engagement: remuneration paid to whole time/executive directors that is declared as employment income (and disclosed in MR 1) is excluded from GST as employment consideration under Schedule III, whereas remuneration paid to non executive directors constitutes taxable director services and is liable to tax under RCM; divergent advance rulings have produced uncertainty, prompting a call for a clarificatory circular or amendment to ensure uniform treatment. (AI Summary)

Unutilized input tax credit portal restrictions can curtail refund claims, urging correction and facilitation by authorities
The statutory right to claim refund of unutilized input tax credit exists for zero rated and inverted rate supplies and may be claimed at the end of any tax period; neither statute nor rules limit filing to a single application per category per period. The online portal's restriction on repeat filings and its internal curtailment of refundable amounts diverge from the prescribed calculation and declaration framework, impairing vested refund rights. Administrative guidance recognised portal calculation issues but did not reopen deficient filings, so affected claimants should seek facilitation or non statutory and other remedies. (AI Summary)

Input tax credit on COVID 19 preventive expenses may be available when used in business and mandated by law.
Registered persons may claim Input Tax Credit for supplies procured to prevent COVID 19-such as masks, sanitisers, sanitisation services, social distancing apps and hired transport-where those supplies are used or intended to be used in the course or furtherance of business, subject to statutory exclusions and provisos that permit credit when the supply is used for making an outward taxable supply of the same category or when provision is obligatory under law; proper invoicing in the registered entity's name and separate ledger entries are recommended. (AI Summary)

Transitional input tax credit: retrospective insertion of time limits into Section 140 challenges judicial grants of belated TRAN-1 claims.
The note analyses conflict between judicial rulings treating accumulated CENVAT/ITC as a vested property interest and Rule 117 time limits for filing TRAN-1 under Section 140, and the Finance Act, 2020 retrospective insertion of "within such time and" into Section 140 to validate rule-prescribed time bars. It highlights broad judicial definitions of "technical difficulty" that permitted extensions and manual filings, surveys constitutional limits on retrospective amendments, and sets out implications for taxpayers to preserve claims and pursue remedies given the amendment's potential to negate earlier favorable orders. (AI Summary)

GST annual return optional tables ease filing requirements and allow deferred detailed disclosures for affected taxpayers.
Specified tables in GSTR-9 and GSTR-9C for the initial GST years have been made optional, allowing taxpayers to furnish consolidated or net figures instead of detailed itemised disclosures (including HSN summaries and segmented ITC across inputs, capital goods and services); some entries remain mandatorily reportable in designated sub tables. Filing deadlines were extended, and taxpayers are advised to reconcile returns with books, review GSTR 2A and expense ledgers, and ensure reverse charge liabilities are correctly discharged despite the optional table reporting. (AI Summary)

Mandatory electronic payment acceptance for large businesses requires specified digital modes; penalties apply unless conditional B2B exemption met.
Section 269SU mandates that businesses above the statutory turnover threshold provide facilities to accept payments through prescribed electronic modes, with a daily penalty under section 271DB for non-compliance subject to proof of good reasons. Rules prescribe RuPay debit card, UPI and UPI QR Code as mandatory modes with a short implementation window; subsequent circulars grant a limited grace period before penalties and set a conditional B2B exemption requiring only B2B transactions and at least 95% non-cash receipts. (AI Summary)

GST on Priority Sector Lending Certificates clarified as taxable goods; seller responsible for tax on past trades.
PSLCs are tradable instruments treated as goods (not securities) for GST purposes; they attract GST under their tariff classification rather than a residual rate, purchasers can claim input tax credit, and for an earlier transition period the seller bank was required to discharge GST liability on a forward charge basis. (AI Summary)

Retrospective amendment to transitional credit alters GST transitional claims and affects previously available judicial relief.
Administrative and regulatory GST responses to the COVID 19 downturn include deferral of compliance deadlines, expanded virtual personal hearings with prescribed SOPs (including consented WhatsApp use), and a CBIC warning about fraudulent refund processing links. Critically, a retrospective amendment to transitional input tax credit time limits has been enacted, affecting prior judicial relief for taxpayers. GSTN now allows insolvency and resolution professionals to register and discharge tax liabilities for corporate debtors under specified registration procedures. (AI Summary)

Refund of Input Tax Credit denied where IGST refund claimed, affecting zero rated supplies' refund entitlement.
The statutory proviso denying refund of input tax credit when refund of IGST is claimed conflicts with the rules' pooled, proportionate allocation method. The refund rules treat the credit ledger as a pool and apportion refundable ITC by a turnover ratio, producing a maximum refundable amount that may be reduced by ledger availability. Applying the proviso to reduce the formulaic maximum would require tracing credits and create complexity; a clarification or amendment is needed to reconcile the denial clause with the proportionate refund mechanism and to preserve the zero rating principle. (AI Summary)

Composition levy under GST: simplified quarterly tax option requiring state-wise opt-in, restricted input tax credit and procedural compliance.
Section 10 permits eligible taxpayers to opt for a composition levy paying prescribed percentages of turnover instead of regular GST; eligibility is determined by aggregate turnover on an all India PAN basis with exclusions for certain inward supplies and notified goods. The option requires state wise exercise and specified electronic filings (CMP 01/02/03, ITC 3/ITC 01, GSTR 4), mandates invoice and signboard disclosures, and imposes conditions whose breach causes automatic withdrawal, reversal of input tax credit for stock and potential liability under the regular tax and penalty provisions. (AI Summary)

MSME classification change adds turnover criterion and excludes exports from turnover, altering eligibility and support access.
Notification revises MSME classification to use combined investment and turnover criteria, removes the manufacturing/service distinction, and excludes export receipts from turnover calculations for classification. The revision raises ceilings for medium enterprises to align classification with current economic realities, with detailed guidelines to be issued separately and an operational handholding mechanism ("Champions") available for assistance and queries. (AI Summary)

Recovery of unpaid tax: procedural distinction between non-fraud shortfalls and fraud-driven evasion, with differing notice, payment and penalty rules.
Recovery under the CGST regime follows two procedural tracks: section 73 for non-fraudulent short-payment, erroneous refund or wrong ITC, and section 74 where fraud, willful misstatement or suppression of facts to evade tax is alleged. Both sections require service of a detailed statement, allow pre-notice voluntary payment of tax with interest (and prescribed penalty in some cases) to conclude proceedings, prescribe differing limitation periods and penalties depending on culpability, and treat court or tribunal stays as excluded for limitation computation. (AI Summary)

Late fee waiver in GST: notifications and COVID-era extensions ease compliance burden for delayed GSTR filings.
Late fees under Section 47 apply for failure to furnish prescribed GST returns, while Section 128 empowers the Government to waive such fees on Council recommendation. The executive has issued numerous notifications waiving, reducing or condoning late fees for specific returns and periods, and during the COVID 19 period extended filing deadlines, e way bill validity, and provided conditional windows for waiver subject to specified filing dates and taxpayer classes. Tensions remain over portal failures and the penal nature of late fees, prompting calls for mechanisms to protect genuine taxpayers. (AI Summary)

Restriction on transferability of duty credit scrips: SEZ-to-DTA clearances attract import controls and licensing requirements.
MEIS duty credit scrips are classified as goods under HSN 4907 and transfers from SEZ units to DTA units attract customs duties under Section 30 of the SEZ Act, 2005 as if imported. The scrips do not fit specific 49070010-30 subheadings and thus fall under 49070090, which is restricted under the import policy, potentially requiring licence conditions for clearance. Paperless electronic scrips issued via EDI ports are not treated as physical goods and are not impacted in the same manner, creating a compliance gap for paper scrips issued in non EDI SEZ zones. (AI Summary)

Advance tax exemption sought for mid year installments to rephase payments and ease COVID related fiscal hardship.
Advance tax installments due 15th June and 15th September 2020 should be exempted and rephased into two installments on 15th December 2020 and 15th March 2021 to relieve cash flow hardship caused by lockdown; reasons include difficulty in estimating income, expected fall in earnings, increased operating and capital costs, risks of bad debts and depressed prices, and the likelihood that TDS/TCS will cover much of the tax liability. (AI Summary)

Online filing and video-conference hearings: tribunal permits electronic submission with verified soft copies and remote hearings.
CESTAT amended appellate procedure to permit soft-copy submissions and video-conference hearings while retaining physical filings. Amendments require memorandum of appeal and cross-objection to include valid mobile numbers and e-mail addresses and a verification that soft copies are true copies. Soft copies of appeals, paper books and stay applications are to be stored on two pen drives and filed alongside paper filings, though several pen-drive filing requirements have been kept in abeyance. Rule 19 now allows the President to authorize hearings via video conferencing, overriding personal hearing requirements. (AI Summary)

Annual Information Statement centralises taxpayer profile and specified financial transactions to streamline verification and tax compliance.
The Annual Information Statement (revised Form 26AS) centralises taxpayer identification details with records of tax deducted or collected at source, tax payments, demands and refunds, pending and completed proceedings, and specified financial transactions such as share and property dealings, enabling taxpayers and tax authorities to cross verify reported income and taxes and to identify and rectify information mismatches. (AI Summary)

MSME classification changes: new investment-and-turnover thresholds govern enterprise categories, replacing prior investment-only criteria.
The statutory MSME classification now uses joint criteria of investment in Plant and Machinery or Equipment and turnover with specified thresholds for micro, small and medium enterprises, replacing the prior investment-only regime; the change is effected by a notification under the MSME Development Act and will be implemented from the stated effective date, with detailed implementation guidelines to follow and turnover data reportedly sourced from the GST portal. (AI Summary)

Zero rated supply treatment for tooling: physical export requirement may preclude zero rating, urging contractual and structuring remedies.
Supplies of tools, dies and jigs made in India but retained domestically do not qualify as exports under the statutory definition of export as taking goods out of India; accordingly, such supplies are treated as intra state and not zero rated, producing non refundable GST costs. Mitigation pathways include characterising part of the consideration as exported services, structuring the tooling and exported components as a composite supply so export treatment prevailing for components can extend to tooling, or deploying an intermediary in the contractual chain to convert tax cost into recoverable input tax. Comparative foreign regimes offer tailored zero rating relief for tooling used in exports. (AI Summary)