Bogus Input Tax Credit claims lead to arrest for issuing fake invoices and passing fraudulent tax credits.
Alleged large-scale fraud involving fraudulent claims of Input Tax Credit (ITC) by issuing fake invoices without actual supplies; the accused, as controller of multiple firms across states, purportedly enabled availing, utilisation and passing on of fictitious ITC based on fabricated documentary records, with documentary evidence and witness statements identifying him as the central organiser and investigators tracing other implicated firms.

Special Window for GST compensation cess shortfall permits central borrowing to be passed as back-to-back loans to states.
A central Special Window will address the GST Compensation Cess shortfall by the Government of India borrowing in tranches and passing the proceeds to participating States as back-to-back loans, recorded as State capital receipts and financing their fiscal deficits, avoiding differential SDL interest rates and not affecting the Centre's fiscal deficit.

Additional borrowing permission under Option-1 allows states to raise extra funds to meet GST shortfall.
Permission under Option-1 permits States to raise additional open market borrowings calibrated at 0.50% of GSDP to address GST revenue shortfalls; participating States also receive unconditional permission to borrow the final 0.50% instalment from the 2% additional borrowings allowed previously, and a special window is being created by the Ministry of Finance to facilitate these borrowings.

Additional borrowing permission waiving reform condition enables several states to raise funds for GST shortfall.
Twenty States have been authorized to mobilize additional funds through GSDP-linked open market borrowings to address GST-related revenue shortfalls, with the final instalment of the extraordinary borrowing limit permitted without the earlier reform conditionality for States that opted for Option-1; a coordinated special borrowing window is also being arranged to facilitate issuance of debt to cover the aggregate shortfall.

Revenue compensation for states remains unresolved after repeated GST Council meetings, prolonging disagreement over shortfall mechanism.
Failure to agree on revenue compensation for states arising from GST shortfalls is the operative issue: the GST Council, in a meeting continuing prior deliberations, did not reach consensus on the mechanism by which states would be compensated for their fiscal shortfall.

E-way bill restriction for high-turnover taxpayers failing GSTR-3B follows after consecutive non-filing, affecting portal access.
Under Rule 138E(b) CGST Rules, E-way Bill generation will be blocked on the EWB Portal after 15 October 2020 for any GSTIN linked to a PAN with Aggregate Annual Turnover above Rs. 5 Crore that has failed to file GSTR-3B returns for two or more consecutive tax periods up to August 2020; the block applies regardless of role as consignor, consignee or transporter and taxpayers should file pending GSTR-3B returns to restore continuous access.

Fake input tax credit scheme exposed; key operator arrested and investigations continue into fictitious firms and forged invoices
A tax-credit fraud was orchestrated through creation and operation of multiple fictitious firms and issuance of invoices without actual supply, resulting in passage of substantial fake input tax credit. Investigation indicates entities were created on forged and bogus documents which routed fraudulent ITC among non-existent firms. A central coordinator was identified, arrested, produced before the magistrate and remanded to judicial custody, while further multi-location investigations continue.

Annual GST return reporting: report only transactions of the relevant financial year; extension granted and threshold-based filing applies.
Taxpayers must report only values pertaining to the financial year 2018-19 in FORM GSTR-9; auto-populated or carried-over figures relating to the prior year should be ignored, and no adverse view will be taken where previously filed returns for 2018-19 include details of supplies or input tax credit pertaining to the prior year. An extended due date has been provided and taxpayers meeting the applicable aggregate turnover thresholds must furnish FORM GSTR-9 and, where required, FORM GSTR-9C.

Fraudulent Input Tax Credit claims led to IGST refund abuse and criminal enforcement action including arrests and ongoing investigations.
Exporters claimed Input Tax Credit on invoices from non existent or shell suppliers, used that ITC to pay IGST on alleged exports, and obtained IGST cash refunds; enforcement searches established that suppliers issued only bills without supplying goods, leading to arrests and ongoing investigations to quantify liabilities and pursue criminal and recovery measures.

Return filing reform: auto-generation of GSTR-3B from GSTR-1 with mandatory timely GSTR-1 filing to enable auto-populated liabilities and credits.
A return filing reform requires timely filing of FORM GSTR-1 to enable viewing of available input tax credit and auto-population of FORM GSTR-3B from GSTR-1 data; measures include revised due dates for quarterly GSTR-1 filers, staged auto-population of liability and ITC via FORM GSTR-2B, mandatory filing sequence with GSTR-1 preceding GSTR-3B, and extension of the GSTR-1/3B system as the default until law is amended.

E invoice compliance: transitional waiver permits late IRN generation to validate invoices and avoid penalty under GST rules.
Taxpayers required to issue e invoices who issued B2B or export invoices without obtaining an IRN during the initial implementation month may obtain IRNs from the Invoice Reference Portal within a limited grace period; upon timely IRN generation such invoices will be deemed valid and penalties for procedural non adherence will be waived, whereas invoices issued after the concession period will be treated as non compliant and subject to ordinary enforcement under the CGST rules.

Goods and Services Tax collections rise, indicating economic recovery and suggesting continued revenue improvement into the festive season.
Goods and Services Tax (GST) receipts for September show a year on year increase and an uptick over August; collections are detailed by Central GST, State GST, Integrated GST (including import collections) and cess, with import and domestic sources reported above the prior year month's levels, and observers link the rise to resumed economic activity and measures like e invoicing that may reduce leakage.

GST revenue rise in September driven by IGST receipts and intergovernmental settlements boosting central and state shares.
Gross Goods and Services Tax receipts for September 2020 totalled Rs. 95,480 crore, with IGST the largest component and amounts from import of goods included within IGST. Regular settlements transferred specified sums from IGST to CGST and SGST, producing post settlement totals accruing to the Central and State governments. The release reports year on year increases for the month, provides percentage comparisons for import and domestic transaction sources, and supplies state wise collection data for September 2020 versus September 2019, excluding GST on import of goods.

Special Window Borrowing for GST compensation shortfall-Centre coordinates market debt with Cess backed repayment and interest support.
Two borrowing frameworks are set out for addressing the GST compensation shortfall. Under the Special Window, the Centre coordinates State market borrowing, subsidises limited interest cost differentials versus G sec yields, grants special Article 293 permission above normal ceilings, and provides that interest and principal are to be paid from the Compensation Cess, with the amounts not treated as State debt for prescribed norms. The alternative permits States to borrow directly, service interest from their resources, and receive Centre commitment for principal repayment from Cess proceeds after the transition period, with modified eligibility and reform linked limits.

GST matching tool reconciles GSTR 2B with purchase registers offline, using seven parameter matching, tolerances and CSV export.
The Matching Offline Tool reconciles Form GSTR 2B with a taxpayer's purchase register offline by importing GSTR 2B JSON and a prescribed purchase register template under a profile per GSTIN. Records are matched on seven parameters (GSTIN, document type, number, date, taxable value, total tax and tax head amounts) and classified as Exact Match, Partial Match, Probable Match, Unmatched, In GSTR 2B not in PR or In PR not in GSTR 2B. Users may set per tax head tolerance (0-10) and enable approximation for document numbers; results can be filtered, refined and exported as CSV/Excel.

GST compensation due to states faces shortfall; borrowing options and cess extension proposed to bridge the gap.
Provisional GST compensation liabilities to states for 2020-21 total Rs. 1,51,365 crore, driven down by COVID 19 lockdown effects and a contraction in nominal GDP. The 41st GST Council offered two borrowing options-an RBI facilitated special window for a portion of shortfall or full market borrowing-and allowed states to choose their preferred option, with compensation cess extension proposed to repay borrowings. The Centre's GST target and actual collections to August 2020 are substantially below budgeted estimates.

GST revenue collection declines year-on-year; IGST settled to CGST/SGST and small-taxpayer filing relief further extended.
Gross GST revenue for August 2020 was lower year on year, allocated among CGST, SGST, IGST and cess; regular IGST settlements were made to CGST and SGST producing net receipts for Central and State Governments, imports and domestic receipts declined relative to the same month last year, and return filing relief for taxpayers below the turnover threshold was extended.

Import data visibility in GST returns now shows bill of entry details from customs, with exclusions and a feedback mechanism.
GSTR-2A now displays import and SEZ inward-supply bill of entry details sourced from the ICEGATE customs system via two new tables; the upload is a trial, currently excludes non-EDI port and courier/post imports, and amendment data for bill of entries will be provided in a later update, with taxpayers asked to submit feedback through the GST self-service portal.

Auto-drafted input tax credit statement available monthly to aid ITC reconciliation and streamline return filing; feedback invited.
Introduction of an auto-drafted input tax credit (ITC) statement generated for each registered person from supplier-filed sales returns and related filings, issued as a static monthly statement on a fixed date in the succeeding month. It provides document-level invoice details, a section-wise summary of ITC available and non-available with advisory notes for return reporting, will include import-of-goods data from the customs interface shortly, and is released on a trial basis for taxpayer feedback via the self-service portal.

GST compensation shortfall: two borrowing options proposed for states-Central special window or state market borrowings with cess repayment.
States remain entitled to GST compensation for the transition period, but the GST Compensation Fund is insufficient for 2020 21; the GST Council must decide how to meet the shortfall and may recommend extension of the Compensation Cess. Two options are proposed: a Centre coordinated Special Window for State borrowing with Centre bearing part of interest margin and repayment from extended cess, or individual State market borrowings with principal to be repaid from future cess proceeds and interest met by States, alongside recalibrated borrowing limits.