Sectionwise Commentary on The Central Goods And Services Tax (Amendment) Act,2018
By: – Vivek Jalan
Goods and Services Tax – GST
Dated:- 1-2-2019
THE CENTRAL GOODS AND SERVICES TAX (AMENDMENT) ACT, 2018
(NO. 31 OF 2018)
[29th August, 2018]
An Act further to amend the Central Goods and Services Tax Act, 2017.
BE it enacted by Parliament in the Sixty-ninth Year of the Republic of India as follows:-
Short title and commencement
1. (1) This Act may be called the Central Goods and Services Tax (Amendment) Act, 2018.
(2) Save as otherwise provided, the provisions of this Act shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint:
Provided that different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision.
Old Section:
1. (1) This Act may be called t
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n 171" shall be substituted;
Old Clause 4 to Section 2:
“adjudicating authority” means any authority, appointed or authorised to pass any order or decision under this Act, but does not include the Central Board of Excise and Customs, the Revisional Authority, the Authority for Advance Ruling, the Appellate Authority for Advance Ruling, the Appellate Authority and the Appellate Tribunal;
(b) in clause (17), for sub-clause (h), the following sub-clause shall be substituted, namely:-
"(h) activities of a race club including by way of totalisator or a license to book maker or activities of a licensed book maker in such club; and";
Old Clause 17 to Section 2:
“business” includes
(a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit;
(b) any activity or transaction in connection with or incidental or ancillary to sub-clause (a);
(c) any activity or transaction in t
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ncluded. It may be noted that vide Notifcation No 3/2018 Central Tax dated 23rd January, 2018, the Govt had notified that the value of supply of actionable claim in the form of chance to win in betting , gambling or horse racing in a race club is amended to 100% of the face value of the bet or the amount paid into the totalisator.
The term “services” in this clause leads to ambiguity, as actionable claims have been defined as 'goods' in the CGST Act.
(c) clause (18) shall be omitted;
(d) in clause (35), for the word, brackets and letter "clause (c)", the word, brackets and letter "clause (b)" shall be substituted;
Old Clause 35 to Section 2:
“cost accountant” means a cost accountant as defined in clause (c) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959 (23 of 1959);
(e) in clause (69), in sub-clause (f), after the word and figures "article 371", the words, figures and letter "and article 371J" shall be inserte
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ludes facilitating or arranging transactions in securities;'.
Old Clause 102 to Section 2:
“services” means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged.
Commentary : “services” shall include facilitating or arranging transactions in securities, eg. – some service charges or service fees or documentation fees or broking charges or such like fees or charges are charged in relation to transactions in securities.
Amendment of section 7
3. In section 7 of the principal Act, with effect from the 1st day of July, 2017,
(a) in sub-section (1),
(i) in clause (b), after the words "or furtherance of business;", the word "and" shall be inserted and shall always be deemed to have been inserted;
(ii) in clause (c), after the words &qu
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ed to be made for a consideration by a person in the course or furtherance of business;
(b) import of services for a consideration whether or not in the course or furtherance of business;
(c) the activities specified in Schedule I, made or agreed to be made without a consideration; and
(d) the activities to be treated as supply of goods or supply of services as referred to in Schedule II.
(2) Notwithstanding anything contained in sub-section (1),
(a) activities or transactions specified in Schedule III; or
(b) such activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, as may be notified by the Government on the recommendations of the Council,
shall be treated neither as a supply of goods nor a supply of services.
(3) Subject to the provisions of sub-sections (1) and (2), the Government may, on the recommendations of the Council, specify, by notification, the transactions t
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basis as the recipient of such supply of goods or services or both, and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to such supply of goods or services or both.".
Old Section:
(4) The central tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.
Commentary – The objective to amend Section 9 of the Act empowering the Central Government is to notify classes of registered persons to pay the tax on reverse charge basis in respect of receipt of supplies of certain specified categories of goods or services or both from unregistered suppliers;
Amendment of section 10
5. In section 10 of the p
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save as provided in sub-section (1), he is not engaged in the supply of services;".
Old Section:
10. (1) Notwithstanding anything to the contrary contained in this Act but subject to the provisions of sub-sections (3) and (4) of section 9, a registered person, whose aggregate turnover in the preceding financial year did not exceed fifty lakh rupees, may opt to pay, in lieu of the tax payable by him, an amount calculated at such rate as may be prescribed, but not exceeding,
(a) one per cent. of the turnover in State or turnover in Union territory in case of a manufacturer,
(b) two and a half per cent. of the turnover in State or turnover in Union territory in case of persons engaged in making supplies referred to in clause (b) of paragraph 6 of Schedule II, and
(c) half per cent. of the turnover in State or turnover in Union territory in case of other suppliers,
subject to such conditions and restrictions as may be prescribed:
Provided that the Government may, by notificati
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to opt for the scheme under sub-section (1) unless all such registered persons opt to pay tax under that sub-section.
Commentary – The objective to amend Section 10 of the Act so as to enhance the limit of composition levy from one crore rupees to one crore and fifty lakh rupees; Further Even if Composition dealers supply services of value not exceeding 10% of the turnover in the preceding financial year in a State/Union territory or ₹ 5 lakhs, whichever is higher, they are eligible for composition scheme.
Amendment of section 12
6. In section 12 of the principal Act, in sub-section (2), in clause (a), the words, brackets and figure "sub-section (1) of" shall be omitted.
Old Section:
(2) The time of supply of goods shall be the earlier of the following dates, namely:-
(a) the date of issue of invoice by the supplier or the last date on which he is required, under sub-section (1) of section 31, to issue the invoice with respect to the supply; or
Amendment of sec
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ay be, services
(i) where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise;
(ii) where the services are provided by the supplier to any person on the direction of and on account of such registered person.";
(b) in clause (c), for the word and figures "section 41", the words, figures and letter "section 41 or section 43A" shall be substituted.
Old Section:
(2) Notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless,
(a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed;
(b) he has received the goods or ser
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here.
Amendment of section 17
9. In section 17 of the principal Act,
(a) in sub-section (3), the following Explanation shall be inserted, namely:
'Explanation.-For the purposes of this sub-section, the expression "value of exempt supply" shall not include the value of activities or transactions specified in Schedule III, except those specified in paragraph 5 of the said Schedule.';
(b) in sub-section (5), for clauses (a) and (b), the following clauses shall be substituted, namely:-
"(a) motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver), except when they are used for making the following taxable supplies, namely:-
(A) further supply of such motor vehicles; or
(B) transportation of passengers; or
(C) imparting training on driving such motor vehicles;
(aa) vessels and aircraft except when they are used
(i) for making the following taxable supplies, namely:-
(A)
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es, cosmetic and plastic surgery, leasing, renting or hiring of motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) except when used for the purposes specified therein, life insurance and health insurance:
Provided that the input tax credit in respect of such goods or services or both shall be available where an inward supply of such goods or services or both is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply;
(ii) membership of a club, health and fitness centre; and
(iii) travel benefits extended to employees on vacation such as leave or home travel concession:
Provided that the input tax credit in respect of such goods or services or both shall be available, where it is obligatory for an employer to provide the same to its employees under any law for the time being in force.".
Old Section:
(3) The value of exempt supply under
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s or services or both of a particular category is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply;
(ii) membership of a club, health and fitness centre;
(iii) rent-a-cab, life insurance and health insurance except where
(A) the Government notifies the services which are obligatory for an employer to provide to its employees under any law for the time being in force; or
(B) such inward supply of goods or services or both of a particular category is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as part of a taxable composite or mixed supply; and
(iv) travel benefits extended to employees on vacation such as leave or home travel concession;
Commentary – The objective to amend Section 17 of the Act is to specify the scope of input tax credit.
* S 17 (3) – No reversal will be required
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n the Explanation, in clause (c), for the words and figures "under entry 84,", the words, figures and letter "under entries 84 and 92A" shall be substituted.
Old Section:
Explanation.
(c) the term "turnover", in relation to any registered person engaged in the supply of taxable goods as well as goods not taxable under this Act, means the value of turnover, reduced by the amount of any duty or tax levied under entry 84 of List I of the Seventh Schedule to the Constitution and entries 51 and 54 of List II of the said Schedule.
Amendment of section 22
11. In section 22 of the principal Act,
(a) in sub-section (1), after the proviso, the following proviso shall be inserted, namely:-
"Provided further that the Government may, at the request of a special category State and on the recommendations of the Council, enhance the aggregate turnover referred to in the first proviso from ten lakh rupees to such amount, not exceeding twenty lakh rupees and s
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d under this Act with effect from the appointed day.
(3) Where a business carried on by a taxable person registered under this Act is transferred, whether on account of succession or otherwise, to another person as a going concern, the transferee or the successor, as the case may be, shall be liable to be registered with effect from the date of such transfer or succession.
(4) Notwithstanding anything contained in sub-sections (1) and (3), in a case of transfer pursuant to sanction of a scheme or an arrangement for amalgamation or, as the case may be, de-merger of two or more companies pursuant to an order of a High Court, Tribunal or otherwise, the transferee shall be liable to be registered, with effect from the date on which the Registrar of Companies issues a certificate of incorporation giving effect to such order of the High Court or Tribunal.
Explanation.For the purposes of this section,
(i) the expression “aggregate turnover” shall include all supplies made by the taxable
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) every electronic commerce operator.
Commentary Small e-commerce operators who are not required to collect TCS u/s 52 would not be liable for registration.
Amendment of section 25
13. In section 25 of the principal Act,
(a) in sub-section (1), after the proviso and before the Explanation, the following proviso shall be inserted, namely:
"Provided further that a person having a unit, as defined in the Special Economic Zones Act, 2005 (28 of 2005), in a Special Economic Zone or being a Special Economic Zone developer shall have to apply for a separate registration, as distinct from his place of business located outside the Special Economic Zone in the same State or Union territory.";
(b) in sub-section (2), for the proviso, the following proviso shall be substituted, namely:
"Provided that a person having multiple places of business in a State or Union territory may be granted a separate registration for each such place of business, subject to such conditions a
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ertical, subject to such conditions as may be prescribed.
Commentary – S 25(2) – New 2nd, 3rd & 4th Provisio – Persons having multiple places of business in a State or Union territory may obtain separate registrations for each such place of business. Separate registration for a person having a unit(s) in a SEZ.
Amendment of section 29
14. In section 29 of the principal Act,
(a) in the marginal heading after the word "Cancellation", the words "or suspension" shall be inserted;
(b) in sub-section (1), after clause (c), the following proviso shall be inserted, namely:-
"Provided that during pendency of the proceedings relating to cancellation of registration filed by the registered person, the registration may be suspended for such period and in such manner as may be prescribed.";
(c) in sub-section (2), after the proviso, the following proviso shall be inserted, namely:-
"Provided further that during pendency of the proceedings relating to c
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,
(a) a registered person has contravened such provisions of the Act or the rules made thereunder as may be prescribed; or
(b) a person paying tax under section 10 has not furnished returns for three consecutive tax periods; or
(c) any registered person, other than a person specified in clause (b), has not furnished returns for a continuous period of six months; or
(d) any person who has taken voluntary registration under sub-section (3) of section 25 has not commenced business within six months from the date of registration; or
(e) registration has been obtained by means of fraud, wilful misstatement or suppression of facts:
Provided that the proper officer shall not cancel the registration without giving the person an opportunity of being heard.
Commentary – The objective to amend Section 29 of the Act so as to insert a provision for temporary suspension of registration while cancellation of registration is under process;
Amendment of section 34
15. In section 34 of the
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be deficient, the registered person, who has supplied such goods or services or both, may issue to the recipient a credit note containing such particulars as may be prescribed.
(2) Any registered person who issues a credit note in relation to a supply of goods or services or both shall declare the details of such credit note in the return for the month during which such credit note has been issued but not later than September following the end of the financial year in which such supply was made, or the date of furnishing of the relevant annual return, whichever is earlier, and the tax liability shall be adjusted in such manner as may be prescribed:
Provided that no reduction in output tax liability of the supplier shall be permitted, if the incidence of tax and interest on such supply has been passed on to any other person.
(3) Where a tax invoice has been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to be less
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this sub-section shall apply to any department of the Central Government or a State Government or a local authority, whose books of account are subject to audit by the Comptroller and Auditor-General of India or an auditor appointed for auditing the accounts of local authorities under any law for the time being in force.".
Old Section:
(5) Every registered person whose turnover during a financial year exceeds the prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant and shall submit a copy of the audited annual accounts, the reconciliation statement under sub-section (2) of section 44 and such other documents in such form and manner as may be prescribed.
Commentary: Sec 35 (5) – Any department of the Central or State Government / local authority which is subject to audit by CAG need not get their books of account audited by a CA/ CMA.
Amendment of section 39
17. In section 39 of the principal Act,
(a) in sub-section (1),
(i) for t
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h conditions and safeguards as may be specified therein.";
(c) in sub-section (9),
(i) for the words "in the return to be furnished for the month or quarter during which such omission or incorrect particulars are noticed", the words "in such form and manner as may be perscribed" shall be substituted;
(ii) in the proviso, for the words "the end of the financial year", the words "the end of the financial year to which such details pertain" shall be substituted.
Old Section:
(1) Every registered person, other than an Input Service Distributor or a non-resident taxable person or a person paying tax under the provisions of section 10 or, section 51 or section 52 shall, for every calendar month or part thereof, furnish, in such form and manner as may be prescribed, a return, electronically, of inward and outward supplies of goods or services or both, input tax credit availed, tax payable, tax paid and such other particulars as may be prescri
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n of any omission or incorrect particulars shall be allowed after the due date for furnishing of return for the month of September or second quarter following the end of the financial year, or the actual date of furnishing of relevant annual return, whichever is earlier.
Commentary: S 39 (9) Returns – Returns may be amended – It is proposed to provide for allowing taxpayers to amend the returns. The draft forms are already out for public comments.
Insertion of new section 43A
18. After section 43 of the principal Act, the following section shall be inserted, namely:-
Procedure for furnishing return and availing input tax credit.
"43A. (1) Notwithstanding anything contained in sub-section (2) of section 16, section 37 or section 38, every registered person shall in the returns furnished under sub-section (1) of section 39 verify, validate, modify or delete the details of supplies furnished by the suppliers.
(2) Notwithstanding anything contained in section 41, section 42 or
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ly shall be jointly and severally liable to pay tax or to pay the input tax credit availed, as the case may be, in relation to outward supplies for which the details have been furnished under sub-section (3) or sub-section (4) but return thereof has not been furnished.
(7) For the purposes of sub-section (6), the recovery shall be made in such manner as may be prescribed and such procedure may provide for non-recovery of an amount of tax or input tax credit wrongly availed not exceeding one thousand rupees.
(8) The procedure, safeguards and threshold of the tax amount in relation to outward supplies, the details of which can be furnished under sub-section (3) by a registered person,-
(i) within six months of taking registration;
(ii) who has defaulted in payment of tax and where such default has continued for more than two months from the due date of payment of such defaulted amount,
shall be such as may be prescribed.".
Commentary – New S 43 A : A new section is being
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e input tax credit on account of State tax shall be utilised towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax;";
(ii) in clause (d), the following proviso shall be inserted, namely:
"Provided that the input tax credit on account of Union territory tax shall be utilised towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax;".
Old Section:
(2) The input tax credit as self-assessed in the return of a registered person shall be credited to his electronic credit ledger, in accordance with section 41, to be maintained in such manner as may be prescribed.
(5) The amount of input tax credit available in the electronic credit ledger of the registered person on account of
(a) integrated tax shall first be utilised towards payment of integrated tax and the amount remaining
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subject to certain conditions.
"49A. Notwithstanding anything contained in section 49, the input tax credit on account of central tax, State tax or Union territory tax shall be utilised towards payment of integrated tax, central tax, State tax or Union territory tax, as the case may be, only after the input tax credit available on account of integrated tax has first been utilised fully towards such payment.
Order of utilisation of input tax credit.
49B. Notwithstanding anything contained in this Chapter and subject to the provisions of clause (e) and clause (f) of sub-section (5) of section 49, the Government may, on the recommendations of the Council, prescribe the order and manner of utilisation of the input tax credit on account of integrated tax, central tax, State tax or Union territory tax, as the case may be, towards payment of any such tax.".
Commentary: New Sec 49A & 49B : The Order for availing the set off of ITC has been rationalized dramatically. This would t
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(2),
(i) in sub-clause (c), in item (i), after the words "foreign exchange", the words "or in Indian rupees wherever permitted by the Reserve Bank of India" shall be inserted;
(ii) for sub-clause (e), the following sub-clause shall be substituted, namely:
"(e) in the case of refund of unutilised input tax credit under clause (ii) of the first proviso to sub-section (3), the due date for furnishing of return under section 39 for the period in which such claim for refund arises;".
Old Section:
(8) Notwithstanding anything contained in sub-section (5), the refundable amount shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to-
(a) refund of tax paid on zero-rated supplies of goods or services or both or on inputs or input services used in making such zero-rated supplies;
(b) refund of unutilised input tax credit under sub-section (3);
(c) refund of tax paid on a supply which is not provided, eithe
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e may be, the inputs or input services used in such goods,
(i) if the goods are exported by sea or air, the date on which the ship or the aircraft in which such goods are loaded, leaves India; or
(ii) if the goods are exported by land, the date on which such goods pass the frontier; or
(iii) if the goods are exported by post, the date of despatch of goods by the Post Office concerned to a place outside India;
(b) in the case of supply of goods regarded as deemed exports where a refund of tax paid is available in respect of the goods, the date on which the return relating to such deemed exports is furnished;
(c) in the case of services exported out of India where a refund of tax paid is available in respect of services themselves or, as the case may be, the inputs or input services used in such services, the date of
(i) receipt of payment in convertible foreign exchange, where the supply of services had been completed prior to the receipt of such payment; or
(ii) issue of
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unds would also be available against the same.
Please see detailed discussion in the commentary u/s 2(6) of The IGST Act 2018.
Amendment of section 79
24. In section 79 of the principal Act, after sub-section (4), the following Explanation shall be inserted, namely:-
'Explanation.For the purposes of this section, the word person shall include "distinct persons" as referred to in sub-section (4) or, as the case may be, sub-section (5) of section 25.'.
Old Section:
(4) Where the amount recovered under sub-section (3) is less than the amount due to the Central Government and State Government, the amount to be credited to the account of the respective Governments shall be in proportion to the amount due to each such Government.
Commentary: Recovery can be made from any branch of a registered person in any state.
Amendment of section 107
25. In section 107 of the principal Act, in sub-section (6), in clause (b), after the words "arising from the said order,&
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under sub-section (1), unless the appellant has paid-
(a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him, and
(b) a sum equal to twenty per cent. of the remaining amount of tax in dispute, in addition to the amount paid under sub-section (6) of section 107, arising from the said order, in relation to which the appeal has been filed.
Amendment of section 129
27. In section 129 of the principal Act, in sub-section (6), for the words "seven days", the words "fourteen days" shall be substituted.
Old Section:
(6) Where the person transporting any goods or the owner of the goods fails to pay the amount of tax and penalty as provided in sub-section (1) within seven days of such detention or seizure, further proceedings shall be initiated in accordance with the provisions of section 130.
Commentary – The objective to amend Section 129 of the Act so as to increase the period relating
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nd shall always be deemed to have been omitted;
(d) after Explanation 2 as so amended, the following Explanation shall be inserted and shall always be deemed to have been inserted, namely:-
'Explanation 3.-For removal of doubts, it is hereby clarified that the expression "eligible duties and taxes" excludes any cess which has not been specified in Explanation 1 or Explanation 2 and any cess which is collected as additional duty of customs under sub-section (1) of section 3 of the Customs Tariff Act, 1975 (51 of 1975).'.
Old Section:
(1) A registered person, other than a person opting to pay tax under section 10, shall be entitled to take, in his electronic credit ledger, the amount of CENVAT credit carried forward in the return relating to the period ending with the day immediately preceding the appointed day, furnished by him under the existing law in such manner as may be prescribed:
Explanation 1.-For the purposes of sub-sections (3), (4) and (6), the express
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ld in stock on the appointed day.
Explanation 2.-For the purposes of sub-section (5), the expression “eligible duties and taxes” means
(i) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957);
(ii) the additional duty leviable under sub-section (1) of section 3 of the Customs Tariff Act, 1975; (51 of 1975)
(iii) the additional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act, 1975; (51 of 1975)
(iv) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Textile and Textile Articles) Act, 1978; (40 of 1978.)
(v) the duty of excise specified in the First Schedule to the Central Excise Tariff Act, 1985; (5 of 1986.)
(vi) the duty of excise specified in the Second Schedule to the Central Excise Tariff Act, 1985; (5 of 1986.) and
(vii) the National Calamity Contingent Duty leviable under section 136 of the Finance Act, 2001; (
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respectively, of their being sent out from the place of business of a job worker on payment of tax within India, or with or without payment of tax for export, as the case may be:
Provided that the principal shall not supply the goods from the place of business of a job worker in accordance with the provisions of this clause unless the said principal declares the place of business of the job worker as his additional place of business except in a case-
(i) where the job worker is registered under section 25; or
(ii) where the principal is engaged in the supply of such goods as may be notified by the Commissioner.
Amendment of Schedule I
30. In Schedule I of the principal Act, in paragraph 4, for the words "taxable person", the word "person" shall be substituted.
Old Section:
4. Import of services by a taxable person from a related person or from any of his other establishments outside India, in the course or furtherance of business.
Commentary: Sch I, Item
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entering into India.
8. (a) Supply of warehoused goods to any person before clearance for home consumption;
(b) Supply of goods by the consignee to any other person, by endorsement of documents of title to the goods, after the goods have been dispatched from the port of origin located outside India but before clearance for home consumption.";
(ii) the Explanation shall be numbered as Explanation 1 and after Explanation 1 as so numbered, the following Explanation shall be inserted, namely:-
'Explanation 2.For the purposes of paragraph 8, the expression "warehoused goods" shall have the same meaning as assigned to it in the Customs Act, 1962 (52 of 1962).'.
Old Section:
1. Services by an employee to the employer in the course of or in relation to his employment.
2. Services by any court or Tribunal established under any law for the time being in force.
3. (a) the functions performed by the Members of Parliament, Members of State Legislature, Members of
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e non-taxable territory without such goods entering into India;
b. Supply of warehoused goods to any person before clearance for home consumption; and
There was a clear Double Taxation wherein GST was paid once incase of Bond Sale and thereafter on clearance for home Consumption. While the ITC was available, yet the output tax would be insufficient to set off the ITC.
The same can be explained with an Example –
i. 'A' imports certain material in India and warehouses the goods. Thus the IGST payable gets deferred.
ii. Now 'A' sells the goods to 'B' and the same is covered in Schedule III and there is no IGST
iii. When 'B' clears the material from the Bonded warehouse, IGST is paid and 'B' gets the ITC
c. Supply of goods in case of high sea sales.
High sea sales is a sale carried out by the actual consignee (i.e. the consignee shown in the Bill of Lading) to another buyer while the goods are on high seas or after their dispatch from the port of loading and before their ar
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ultiple, will be levied and collected only at the time of importation i.e. when the import declarations are filed before the Customs authorities for the customs clearance purposes for the first time. Further, any value addition accruing in each such high sea sale will form part of the value on which IGST is collected at the time of clearance. Thus the final buyer would be responsible for payment of GST on the full value of goods plus any value addition, at time of import.
The GST Councils decision with respect to GST on high sea sales is similar to that of the rules provided under the Customs Tariff Act, 1975. Under the Customs Tariff Act, in respect of imported goods, all duties, taxes, cessessetc will be collected at the time of importation i.e. when the import declarations are filed before the customs authorities for the customs clearance purposes. Clarifications were provided by the GST Council vide Circular No. 33 /2017-Cus dated 1st August, 2017. GST Council Circular No.33/2017
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