Special Drive against fake GST registrations targets cancellation, ITC blocking and recovery while urging proactive compliance safeguards.
A nationwide Special Drive targets cancellation of fake GST registrations, blocking of ITC under Rule 86A and recovery of ITC claimed from non-existent registrants using data analytics and intelligence. To avoid unintended harm to genuine taxpayers, the note advises displaying GSTIN certificates and name boards at all business locations, registering additional places of business where supplies or storage occur, maintaining prescribed accounts at each location per Section 35, retaining lease/NOC/ownership proofs, undertaking Aadhaar authentication, and monitoring supplier compliance to prevent ITC challenges. (AI Summary)

Input tax credit eligibility limited to invoices reported by suppliers in GSTR 1/IFF that appear in GSTR 2B, requiring invoice wise matching.
Only invoices or debit notes the supplier has furnished in GSTR 1 or IFF and which appear in GSTR 2B may be claimed as input tax credit; the test is document wise matching against GSTR 2B, not aggregate reconciliation. Certain categories (imports, import of services, ISD credits, supplies from unregistered persons) are excluded from this restriction. Taxpayers should maintain invoice level reconciliation, park non matched credits in a Deferred/Unreconciled ITC account and enforce vendor filing and contractual indemnities to preserve ITC. (AI Summary)

Input tax credit delinking from original invoices faces conflicting interpretation after amendment, risking litigation over claim periods.
The amendment delinks entitlement to Input Tax Credit on debit notes from the financial year of the original invoice, permitting claim periods based on the year the debit note is issued; however, a Gujarat AAR ruling treated the invoice year as decisive despite the amendment, raising interpretive conflict. The explanatory memorandum supports delinking for purposes of availing credit, commentators note possible retrospective-curative arguments and emphasize litigation risk given competing views about the effect of a notwithstanding clause and vested-credit jurisprudence. (AI Summary)

Best judgement assessment cannot be invoked solely for failure to file GSTR-3B absent material proving suppression of turnover.
An inspection, search and seizure power under GST requires written delegation from a competent officer of prescribed rank; actions by subordinate officers lacking such written authorisation are incompetent. Best judgement assessment should not be invoked solely for non-filing of a return where other statutory returns disclose turnover and no material proves suppression. Procedural protections-personal hearing, directory treatment of transitional credit rules, and distinction between employee remuneration and director fees for taxation-are critical to fair GST administration. (AI Summary)

GST on director remuneration: employment status determines whether services are excluded or attract reverse charge applicability.
Whether GST applies to director remuneration depends on characterisation of the director-company relationship: if the director renders services in an employer-employee capacity those services are excluded from supply and not taxable; if no employment nexus exists (as with independent, non executive or nominee directors) the payments are not excluded and may be taxable under the reverse charge mechanism per the notification on directors' services. (AI Summary)

Compliance deadline extensions ease statutory filing, interest and penalty obligations, and streamline corporate and customs compliance.
Statutory and regulatory compliance timelines across income tax, indirect tax, customs and corporate law are extended to a uniform revised cutoff, with reduced interest rates and waivers of late fees and penalties in specified cases. GST relief differentiates small and large taxpayers, allowing deferred GSTR 3B filing with interest concessions for larger taxpayers and full waivers for smaller ones; composition scheme and related GST filings are similarly deferred. MCA filings attract waiver of additional fees, board meeting periodicity is extended, auditor reporting applicability is postponed, insolvency default threshold is raised, and select banking fees are temporarily relaxed. (AI Summary)

Interest on delayed GST payment on net liability recommended, plus deferment of new returns and e invoicing and ITC safeguards.
The 39th GST Council recommended retrospective computation of interest on delayed GST payments on the net liability paid in cash, deferred implementation of e invoicing and new GST returns, imposed restrictions on claiming input tax credit for new registrations pending physical verification and KYC, recalibrated rates to address inverted duties, extended reliefs for filing and revocation of registrations, continued IGST exemption on certain imports, and directed IT and administrative measures to stabilise the GST portal and reporting linkages. (AI Summary)

Annual Return compliance: expanded ITC reconciliation and new bifurcation/reporting obligations increase reporting burdens and reconciliation risk.
Annual Return imposes extensive nine month reconciliations and new disclosure fields that do not auto populate from GSTR 1 and GSTR 3B, requiring taxpayers to reclassify sales, purchases, credit/debit notes and to bifurcate Input Tax Credit into Inputs, Capital Goods and Input Services. Reliance on GSTR 2A for available ITC is inadequate because it does not confirm supplier payment, and the return separately computes ITC that will lapse by comparing GSTR 2A/import records with ITC availed in GSTR 3B, creating a narrow corrective window and substantial IT system and reporting burdens. (AI Summary)

Service tax scope expanded as base broadens and liability rules change, including new cess and reverse-charge extensions.
The Budget broadens the service tax base and revises charging rules: the consolidated tax rate is raised and a Swachh Bharat Cess power introduced; the Negative List is narrowed to bring admissions to amusement facilities, manufacture-related processes for alcoholic liquor, chit funds and lottery distribution, and most government-to-business services into the tax net. Reimbursable expenditures are included in taxable value; partial reverse charge provisions (including manpower and security services) move to full reverse charge and aggregators may be liable. Penalty, recovery, exemption, abatement and Cenvat credit rules are also amended to align compliance and credit timings. (AI Summary)