GST TDS Rules Amended: Transactions Between Public Sector Undertakings Now Exempt from TDS Requirements Under GST.
Notifications
GST
TDS under GST – public sector undertaking – supply from on
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Kerala Government exempts quit rent for agricultural land used in coffee plantations from GST under HSN 9986.
Case-Laws
GST
The quit rent / lease rent paid to Kerala Government on the land us
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'Classic Malabar Parota' & 'Whole Wheat Malabar Parota' fall under 18% GST in Schedule III, Heading 2106.
Case-Laws
GST
‘Classic Malabar Parota’ and ‘Whole Wheat Malabar Parota’ class
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Medicines and Implants for In-Patient Care Qualify as Composite Supply, Exempt Under Health Care Services.
Case-Laws
GST
The supply of medicines, consumables and implants used in the course of providing health care services to in-patients for diagnosis or treatment are naturally bundled and are provided in conjunction with each other, would be considered as “Composite Supply” and eligible for exemption under the category ‘health care services’.
TMI Updates – Highlights, quic
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Court Bars Revenue Authorities from Forcing ONGC to Deposit GST Dues Amid Petitioner's Financial Hardship.
Case-Laws
GST
Recovery of GST dues from the debtors – extreme financial hardship – t
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COMMISSION PAYMENT
Query (Issue) Started By: – nandankumar roy Dated:- 5-11-2018 Last Reply Date:- 20-12-2018 Goods and Services Tax – GST
Got 5 Replies
GST
WE ARE PAYING COMMISSION TO PARTY AS A SALES COMMISSION : PARTY IS NOT REGISTERED TO GST AS THEIR ALL TRANSACTION WITH IN TURNOVER LIMIT 20 LACS CITERIA
1ST PARTY INTRA STATE AND PAYING 7 LACS
2ND PARTY INTERSTATE AND PAYING 9 LACS
WHAT WILL BE IMPACT ON TRANSACTION IN GST REGIME AND WHETHER ANY LIABILITY ARISE IN FUTURE WITH US . PL HELP REGARDING THIS MATTER WHO HAVE CLEAR IDEA AND ADVANCE THANKS.
N K ROY
Reply By Nandan Khambete:
The Reply:
No impact in GST till 30.9.2019 as RCM for 9(4) CGST is deferred till 30.09.2019.
Reply By DR.MARIAPPAN GOVINDARAJAN:
The R
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INSTANT NOODLES: INSTANT PROFITS
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 5-11-2018
If noodles can be cooked and consumed instantly, why not profit on sale of noodles! In yet another case where anti-profiteering charges have been established, the National Anti-profiteering Authority (NAA) has confirmed that sale of Maggie Noodle pack (Noodles) at same price even after rate of GST on it was reduced from 18% to 12% w.e.f. 15 November, 2017 was a case of anti-profiteering u/s 171 of the CGST Act 2017 read with Rule 128 CGST Rules, 2017 and that the dealer ought to be booked and penalized for indulging in such anti-profiteering act.
In a recent order dated 8th October, 2018, the NAA has in the matter of Ankur Jain and DGAP, CBIC, New Delhi v. Kunj Lub Marketing Pvt. Ltd., Hardoi (UP) (2018) 10 TMI 510; confirmed the allegation of anti-profiteering and penalized the dealer.
The complainant (retailer) lodged an e-mail complaint stating that he had purc
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price reduction would have been around 21 paise to the retailer and around 25 paise to the ultimate consumer which would have been inconvenient to both the retailer and the consumer. However, on Maggi Noodles pack of 70 gms. bearing MRP of ₹ 12/- per pack, the benefit on account of GST rate reduction for the retailer would have been approximately 56 paise against which the distributor had reduced the price by 92 paise with reduced MRP of ₹ 11/- and thus, the benefit in respect of ₹ 5/- MRP pack had been passed on by reducing the price of other packs of Maggi Noodles by more than what was required. It claimed that the benefit of GST rate reduction had been passed on in respect of Maggie Noodles as a whole.
The dealer has contended that it had passed on the benefit of GST rate reduction in respect of 70 gm. pack of Maggi Noodles bearing MRP of ₹ 12/- by reducing the price for the complainant and the ultimate consumer by 92 paise and Re. 1/- respectively, which w
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H
I
J
K
L=112% of E
M=[H-L]
N=[K*M]
1
MAGGI 2-MIN Mas Ndls 35Gms
5.00
4.67
3.96
18%
12468
4.67
4.17
12%
382048
4.43
0.24
90,778/-
Total Profiteering on sale of the Product
90,778/-
The NAA considered the report of DGAP and carved out the following issues to be decided by the Authority:
* Whether the benefit accrued due to reduction in the rate of tax of one product can be passed on via another product or not?
* Whether there was any violation of the provisions of Section 171 of the CGST Act, 2017 in this case?
* If yes then what was the quantum of profiteering?
It noted that there is no doubt that the benefit of reduction in the GST rate was not passed on to the recipients by way of commensurate reduction in the price charged by the dealer which amounts to violation of the provisions of Section 171 of the Act.
Further, the distributor had no legal sanction to increase the base price of the product on his own and what was required of him was that he should
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in respect of which products he would pass on the benefit and in respect of which products he would not pass such benefit. As per the provisions of Section 171 of the Act the benefit has to be passed on to each recipient and the same can not be selectively granted or denied. It is also clear that the Maggi Noodle pack of 35 Gms. is distinct from a 70 Gms. pack and both the packs may be bought by the different recipients/customers and hence the benefit accruing to one customer can not be given or denied to another nor can the benefit given to one set of customers arbitrarily enhanced and set off against the another. No such adjustments are permissible under the law.
The NAA held that the distributor had denied benefit of the reduction in GST rate to the consumers in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and had thus realized more price from them than he was entitled to collect and had also compelled them to pay more GST than that they were required t
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TDS under GST – public sector undertaking – supply from one PSU to another PSU exempted from applicability of provisions relating to TDS
61/2018 Dated:- 5-11-2018 Central GST (CGST)
GST
CGST
CGST
Government of India
Ministry of Finance
(Department of Revenue)
Central Board of Indirect Taxes and Customs
Notification No. 61/2018 – Central Tax
New Delhi, the 5th November, 2018
G.S.R. 1084 (E).- In exercise of the powers conferred by sub-section (3) of section 1, read with section 51 of the Central Goods and Services Tax Act, 2017 (12 of 2017), hereafter in this notification referred to as the said Act, the Central Government, on the recommendations of the Council, hereby makes the following further amendments in the notifi
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Scope of principal and agent relationship under Schedule I of CGST Act, 2017 in the context of del-credere agent – Reg.
73/47/2018 Dated:- 5-11-2018 CGST – Circulars / Ordes
GST
Circular No. 73/47/2018-GST
F. No. 20/16/04/2018- GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
New Delhi, Dated the 5th November, 2018
The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/ Commissioners of Central Tax (All)
The Principal Directors General/ Directors General (All)
Madam/Sir,
Subject: Scope of principal and agent relationship under Schedule I of CGST Act, 2017 in the context of del-credere agent – Reg.
Post issuance of circular No. 57/31/2018-GST dated 4th September, 2018 from F. No. CBEC/20/16/4/2018-GST, various representations have been received from the trade and industry, as well as from the field formations regarding the scope and ambit of principal agent relatio
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paid to a normal agent. In order to guarantee timely payment to the supplier, the DCA can resort to various methods including extending short-term transaction-based loans to the buyer or paying the supplier himself and recovering the amount from the buyer with some interest at a later date. This loan is to be repaid by the buyer along with an interest to the DCA at a rate mutually agreed between DCA and buyer. Concerns have been expressed regarding the valuation of supplies from Principal to recipient where the payment for such supply is being discharged by the recipient through the loan provided by DCA or by the DCA himself. Issues arising out of such loan arrangement have been examined and the clarifications on the same are as below:
Sl. No.
Issue
Clarification
1
Whether a DCA falls under the ambit of agent under Para 3 of Schedule I of the CGST Act?
As already clarified vide circular No. 57/31/2018-GST dated 4th September, 2018, whether or not the DCA will fall under the am
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n cases where the DCA is not an agent under Para 3 of Schedule I of the CGST Act, the temporary short-term transaction based loan being provided by DCA to the buyer is a supply of service by the DCA to the recipient on Principal to Principal basis and is an independent supply.
Therefore, the interest being charged by the DCA would not form part of the value of supply of goods supplied (to the buyer) by the supplier. It may be noted that vide notification No. 12/2017-Central Tax (Rate) dated 28th June, 2017 (S. No. 27), services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount (other than interest involved in credit card services) has been exempted.
3.
Where DCA is an agent under Para 3 of Schedule I of the CGST Act and makes payment to the principal on behalf of the buyer and charges interest to the buyer for delayed payment along with the value of goods being supplied, whether the interest will form a part
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Collection of tax at source by Tea Board of India – Reg.
74/48/2018 Dated:- 5-11-2018 CGST – Circulars / Ordes
GST
Circular No. 74/48/2018-GST
F. No. 20/16/04/2018- GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
New Delhi, Dated the 5th November, 2018
The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/Commissioners of Central Tax (All)
The Principal Directors General/ Directors General (All)
Madam/Sir,
Subject: Collection of tax at source by Tea Board of India – Reg.
Tea Board of India (hereinafter referred to as the, “Tea Board”), being the operator of the electronic auction system for trading of tea across the
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rged by the auctioneers and also the amount charged by the Tea Board from sellers, auctioneers and buyers. Thereafter, Tea Board pays to the sellers (i.e. tea producers), from the said escrow account, for the supply of goods made by them (i.e. tea) and to the auctioneers for the supply of services made by them (i.e. brokerage). Under no circumstances, the payment is made by the Tea Board to the auctioneers on account of supply of goods i.e., tea sold at auction.
4. A representation has been received from Tea Board, seeking clarification whether they should collect TCS under section 52 of the CGST Act from the sellers of tea (i.e. the tea producers), or from the auctioneers of tea or from both.
5. The matter has been examined. In exercise
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A SYED ALI FATHIMA Versus THE ASSISTANT STATE TAX OFFICER SUVEILLANCE SQUAD, POOVAR, STATE GST DEPARTMENT, THIRUVANANTHAPURAM, THE STATE OF KERALA REPRESENTED BY THE SECRETARY, THIRUVANANTHAPURAM AND THE COMMISSIONER OF STATE TAX STATE GOODS AND SERVICE TAX DEPARTMENT, THIRUVANANTHAPURAM
GST
2018 (11) TMI 484 – KERALA HIGH COURT – TMI
KERALA HIGH COURT – HC
Dated:- 5-11-2018
WP(C).No. 36047 of 2018
GST
MR A. MUHAMED MUSTAQUE, J.
For The Petitioner : ADVS. SRI.P.S.SOMAN AND
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Scope of Principal-agent relationship in the context of Schedule I of the GGST Act.
CIRCULAR No. 57/2018 Dated:- 5-11-2018 Gujarat SGST
GST – States
CIRCULAR
Commissioner of State Tax,
Gujarat State, Ahmedabad
Dated 5th November, 2018
CIRCULAR No. 57/2018
No.GSL/GST/B.13
Subject: Scope of Principal-agent relationship in the context of Schedule I of the GGST Act.
In terms of Schedule I of the Gujarat Goods and Services Tax Act, 2017 (hereinafter to as the “GGST Act”), the supply of goods by an agent on behalf of the principal without consideration has been deemed to be a supply. In this connection, various representations have been received regarding the scope and ambit of the principal-agent relationship under GST. In order to clarify some of the issues and to ensure uniformity in the implementation of the provisions of the law across the field formations, the Commissioner of State Tax, in exercise of its powers conferred under section 168 (1) of the GGST Act hereby cl
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lf of another.
4. The following two key elements emerge from the above definition of agent:
a) the term 'agent' is defined in terms of the various activities being carried out by the person concerned in the principal-agent relationship; and
b) the supply or receipt of goods or services has to be undertaken by the agent on behalf of the principal.
From this, it can be deduced that the crucial component for covering a person within the ambit of the term “agent” under the GGST Act is corresponding to the representative character identified in the definition of “agent” under the Indian Contract Act, 1872.
5. Further, the two limbs of any supply under GST are “consideration” and “in the course or furtherance of business”. Where the consideration is not extant in a transaction, such a transaction does not fall within the ambit of supply. But, in certain scenarios, as elucidated in Schedule I of the GGST Act, the key element of consideration is not required to be present for treating
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to determine whether the agent is wearing the representative hat and is supplying or receiving goods on behalf of the principal. Since in the commercial world, there are various factors that might influence this relationship, it would be more prudent that an objective criteria is used to determine whether a particular principal-agent relationship falls within the ambit of the said entry or not. Thus, the key ingredient for determining relationship under GST would be whether the invoice for the further supply of goods on behalf of the principal is being issued by the agent or not. Where the invoice for further supply is being issued by the agent in his name then, any provision of goods from the principal to the agent would fall within the fold of the said entry. However, it may be noted that in cases where the invoice is issued by the agent to the customer in the name of the principal, such agent shall not fall within the ambit of Schedule I of the GGST Act. Similarly, where the goods
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ly of goods in terms of Schedule I.
Scenario 2
M/s. XYZ, a banking company, appoints Mr. B (auctioneer) to auction certain goods. The auctioneer arranges for the auction and identifies the potential bidders. The highest bid is accepted and the goods are sold to the highest bidder by M/s. XYZ. The invoice for the supply of the goods is issued by M/s. XYZ to the successful bidder. In this scenario, the auctioneer is merely providing the auctioneering services with no role played in the supply of the goods. Even in this scenario, Mr. B is not an agent of Mis XYZ for the supply of goods in terms of Schedule I.
Scenario 3
Mr. A, an artist, appoints M/s. B (auctioneer) to auction his painting. M/S B arranges for the auction and identifies the potential bidders. The highest bid is accepted and the painting is sold to the highest bidder. The invoice for the supply of the painting is issued by M/s. B on the behalf of Mr. A but in his own name and the painting is delivered to the successfu
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per the APMC Act, the commission agent is a person who buys or sells the agricultural produce on behalf of his principal, or facilitates buying and selling of agricultural produce on behalf of his principal and receives, by way of remuneration, a commission or percentage upon the amount involved in such transaction.
In cases where the invoice is issued by Mr. B to the buyer, the former is an agent covered under Schedule J. However, in cases where the invoice is issued directly by Mr. A to the buyer, the commission agent (Mr. B) doesn't fall under the category of agent covered under Schedule I.
9. In scenario I and scenario 2, Mr. B shall not be liable to obtain registration in terms of clause (vii) of section 24 of the GGST Act. He, however, would be liable for registration if his aggregate turnover of supply of taxable services exceeds the threshold specified in sub-section (1) of section 22 of the GGST Act. In scenario 3, M/s. B shall be liable for compulsory registration in terms
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Scope of principal and agent relationship under Schedule I of GGST Act, 2017 in the context of del-credrc agent.
CIRCULAR No. 73/2018-GST Dated:- 5-11-2018 Gujarat SGST
GST – States
CIRCULAR
Commissioner of State Tax,
Gujarat State, Ahmedabad
Dated 5th November, 2018
CIRCULAR No.73/2018-GST
No. GSL/GST/B.15
Subject: Scope of principal and agent relationship under Schedule I of GGST Act, 2017 in the context of del-credrc agent.
Post issuance of circular No. 57/201 S-GST dated the 5th November, 2018 (effective from 4th September, 2018). various representations have been received from the trade and industry. as well as from the field formations regarding the scope and ambit of principal agent relationship under GST in the context of del-credre agent (hereinafter referred to as “DCA”). In order to clarify these issues and to ensure uniformity of implementation across field formations, the Commissioner of State Tax, in exercise of its powers conferred under section 168 (1) o
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h some interest at a later date. This loan is to be repaid by the buyer along with an interest to the DCA at a rate mutually agreed between DCA and buyer. Concerns lune been expressed regarding the valuation of supplies from Principal to recipient where the payment for such supply is being discharged by the recipient through the loan provided by DCA or by the DCA himself. Issues arising out of such loan arrangement have been examined and the clarification on the same are as below:
Sl. No.
Issue
Clarification
1
Whether a DCA falls under the ambit of agent under Para 3 of Schedule I of the GGST Act?
As already clarified vide circular No. 57/31/2018-GST dated 4th September, 2018, whether or not the DCA will fall under the ambit of agent under Para 3 of Schedule I of the GGST Act depends on the following possible scenarios:
In case where the invoice for supply of goods is issued by the supplier to the customer, either himself or through DCA, the DCA does not fall under the ambit of
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supply.
Therefore, the interest being charged by the DCA would not form part of the value of supply of goods supplied (to the buyer) by the supplier. It may be noted that vide notification No. 12/2017-State Tax (Rate) dated 30th June, 2017 (S. No. 27), services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount (other than interest involved in credit card services) has been exempted.
3.
Where DCA is an agent under Para 3 of Schedule I of the GGST Act and makes payment to the principal on behalf of the buyer and charges interest to the buyer for delayed payment along with the value of goods being supplied, whether the interest will form a part of the value of supply of goods also or not?
In such a scenario following activities are taking place:
1. Supply of goods by the supplier (principal) to the DCA;
2. Further supply of goods by the DCA to the recipient;
3. Supply of agency services by the DCA to the su
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Corrigendum to Circular No. 57/2018-GST dated the 5th November, 2018 (effective from 4th September, 2018).
Corrigendum to Circular No. 57/2018-GST Dated:- 5-11-2018 Gujarat SGST
GST – States
CIRCULAR
Commissioner of State Tax,
Gujarat State, Ahmedabad
Dated 5th November, 2018
Corrigendum to Circular No. 57/2018-GST
No.GSL/GST/B.14
Subject: Corrigendum to Circular No. 57/2018-GST dated the 5th November, 2018 (effective from 4th September, 2018).
In para 9 of the Circular No. 57/2018-GST dated the 5th November, 2018 (effective from) 4th September,2018),
for
“However, in cases where the supply of' agricultural produce is not exempted and liable to lax, such commission agent shall be liable for compulsory registration under su
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who supplies produce out of cultivation of' land is not liable for registration and therefore does not fall within the ambit of the term 'taxable person'. Thus a commission agent who is making supplies on behalf of such an agriculturist, who is not a taxable person. is not liable for compulsory registration under clause (vii) of section 24 of the GGST Act. However, where a commission agent is liable to pay under reverse charge, such an agent will be required to get registered compulsorily under section 24(iii) of GGST Act.”
2. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the Commissioner.
(PD Vaghela)
Commissioner of State Tax,
Gujarat State, Ahemdabad
Circular, Trade Notice, Public
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Jeetendra Kantilal Gandhi Versus State of Karnataka By Commissioner of Commercial Taxes, Bengaluru, Assistant Commissioner of Commercial Taxes, Bengaluru, Assistant Commissioner of Commercial Taxes Bangaluru
GST
2018 (12) TMI 1407 – KARNATAKA HIGH COURT – 2018 (19) G. S. T. L. 410 (Kar.)
KARNATAKA HIGH COURT – HC
Dated:- 5-11-2018
CRL. P No 7465 of 2018
GST
MR P S Dinesh Kumar, J.
For The Petitioner : Sri Chitnis P R, Advocate
For The Respondent : Sri Nitin Ramesh AAG A/w
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Has charity included pay gst
Query (Issue) Started By: – Chiran Kumar Dated:- 4-11-2018 Last Reply Date:- 6-11-2018 Goods and Services Tax – GST
Got 2 Replies
GST
Hello sir … We are running a non profit organisation under registration of 12AAA, and 80G
My doubt is we are running special school in rented building, so has we should pay GST with rent.. by chance if we payed can we reclaimed it..
I hope you oblige my request..
Thank you..
Reply By Rajagopalan Ranganathan:
The Repl
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GST – CONCEPT & STATUS (Updated as on 01st November 2018)
GST
Dated:- 3-11-2018
CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS (CBIC)
DEPARTMENT OF REVENUE
MINISTRY OF FINANCE
GOVERNMENT OF INDIA
AS ON 1st NOVEMBER, 2018
The uniform system of taxation, which, with a few exceptions of no great consequence, takes place in all the different parts of the United Kingdom of Great Britain, leaves the interior commerce of the country, the inland and coasting trade, almost entirely free. The inland trade is almost perfectly free, and the greater part of goods may be carried from one end of the kingdom to the other, without requiring any permit or let-pass, without being subject to question, visit, or examination from the revenue officers. ……This freedom of interior commerce, the effect of uniformity of the system of taxation, is perhaps one of the principal causes of the prosperity of Great Britain; every great country being necessarily the best and most extensive market f
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Article 265 of the Constitution of India provides that no tax shall be levied or collected except by authority of law. As per Article 246 of the Constitution, Parliament has exclusive powers to make laws in respect of matters given in Union List (List I of the Seventh Schedule) and State Government has the exclusive jurisdiction to legislate on the matters containing in State List (List II of the Seventh Schedule). In respect of the matters contained in Concurrent List (List III of the Seventh Schedule), both the Central Government and State Governments have concurrent powers to legislate.
2.2 Before advent of GST, the most important sources of indirect tax revenue for the Union were customs duty (entry 83 of Union List), central excise duty (entry 84 of Union List), and service tax (entry 97 of Union List). Although entry 92C was inserted in the Union List of the Seventh Schedule of the Constitution by the Constitution (Eighty-eighth Amendment) Act, 2003 for levy of taxes on service
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XATION IN POSTINDEPENDENCE INDIA TILL GST:
3.1 In post-Independence period, central excise duty was levied on a few commodities which were in the nature of raw materials and intermediate inputs, and consumer goods were outside the net by and large. The first set of reform was suggested by the Taxation Enquiry Commission (1953-54) under the chairmanship of Dr. John Matthai. The Commission recommended that sales tax should be used specifically by the States as a source of revenue with Union governments' intervention allowed generally only in case of inter-State sales. It also recommended levy of a tax on inter-State sales subject to a ceiling of 1%, which the States would administer and also retain the revenue.
3.2 The power to levy tax on sale and purchase of goods in the course of inter-State trade and commerce was assigned to the Union by the Constitution (Sixth Amendment) Act, 1956. By mid-1970s, central excise duty was extended to most manufactured goods. Central excise duty w
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ere came with the New Economic Policy of 1991. The Tax Reforms Committee under the chairmanship of Prof. Raja J Chelliah was appointed in 1991. This Committee recommended broadening of the tax base by taxing services and pruning exemptions, consolidation and lowering of rates, extension of MODVAT on all inputs including capital goods. It suggested that reform of tax structure must have to be accompanied by a reform of tax administration, if complete benefits were to be derived from the tax reforms. Many of the recommendations of the Chelliah Committee were implemented. In 1999-2000, tax rates were merged in three rates, with additional rates on a few luxury goods. In 2000-01, three rates were merged into one rate called Central Value Added Tax (CENVAT). A few commodities were subjected to special excise duty.
3.5 Taxation of services by the Union was introduced in 1994 bringing in its ambit only three services, namely general insurance, telecommunication and stock broking. Gradually,
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were more than ten in some States and these varied for the same commodity in different States. Inter-state sales were subjected to levy of Central Sales Tax. As this tax was appropriated by the exporting State credit was not allowed by the dealer in the importing State. This resulted into exportation of tax from richer to poorer states and also cascading of taxes. Interestingly, States had power of taxation over services from the very beginning. States levied tax on advertisements, luxuries, entertainments, amusements, betting and gambling.
3.7 A report, titled “Reform of Domestic Trade Taxes in India”, on reforming indirect taxes, especially State sales tax, by National Institute of Public Finance and Policy under the leadership of Dr. Amaresh Bagchi, was prepared in 1994. This Report prepared the ground for implementation of VAT in States. Some of the key recommendations were; replacing sales tax by VAT by moving over to a multistage system of taxation; allowing input tax credits f
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he first State to implement VAT, in 2003. In 2005, VAT was implemented in most of the states. Uttar Pradesh was the last State to implement VAT, from 1st January, 2008.
4. INTERNATIONAL PERSPECTIVES ON GST / VAT:
4.1 VAT and GST are used inter-changeably as the latter denotes comprehensiveness of VAT by coverage of goods and services. France was the first country to implement VAT, in 1954. Presently, more than 160 countries have implemented GST / VAT in some form or the other. The most popular form of VAT is where taxes paid on inputs are allowed to be adjusted in the liability at the output. The VAT or GST regime in practice varies from one country to another in terms of its technical aspects like 'definition of supply', 'extent of coverage of goods and services', 'treatment of exemptions and zero rating' etc. However, at a broader level, it has one common principle, it is a destination based consumption tax. From economic point of view, VAT is considered to be a superior system ove
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administer their taxes separately are called 'nonparticipating provinces', whereas provinces which have teamed up with the Federal Government for tax administration are called 'participating provinces'.
4.3 The rate of GST varies across countries. While Malaysia has a lower rate of 6% (Malaysia though scrapped GST in 2018 due to popular uproar against it), Hungary has one of the highest rate of 27%. Australia levies GST at the rate of 10% whereas Canada has multiple rate slabs. The average rate of VAT across the EU is around 19.5%.
5. NEED FOR GST IN INDIA:
5.1 The introduction of CENVAT removed to a great extent cascading burden by expanding the coverage of credit for all inputs, including capital goods. CENVAT scheme later also allowed credit of services and the basket of inputs, capital goods and input services could be used for payment of both central excise duty and service tax. Similarly, the introduction of VAT in the States has removed the cascading effect by giving set-off
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risdiction where consumption takes place. Despite remarkable harmonization in VAT regimes under the auspices of the EC, the national market was fragmented with too many obstacles in free movement of goods necessitated by procedural requirement under VAT and CST.
5.4 In the constitutional scheme, taxation powers on goods was with Central Government but it was limited upto the stage of manufacture and production while States have powers to tax sale and purchase of goods. Centre had powers to tax services and States also had powers to tax certain services specified in clause (29A) of Article 366 of the Constitution. This sort of division of taxing powers created a grey zone which led to legal disputes. Determination of what constitutes a goods or service is difficult because in modern complex system of production, a product is normally a mixture of goods and services.
5.5 As can be seen from the previous paragraphs, India moved towards value added taxation both at Central and State leve
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ril 1, 2010 and that the EC, on his request, would work with the Central Government to prepare a road map for introduction of GST in India. After this announcement, the EC decided to set up a Joint Working Group in May 10, 2007, with the then Adviser to the Union Finance Minister and Member-Secretary of the Empowered Committee as its Co-conveners and four Joint Secretaries of the Department of Revenue of Union Finance Ministry and all Finance Secretaries of the States as its members. This Joint Working Group got itself divided into three Sub-Groups and had several rounds of internal discussions as well as interaction with experts and representatives of Chambers of Commerce & Industry. On the basis of these discussions and interaction, the Sub-Groups submitted their reports which were then integrated and consolidated into the report of Joint Working Group (November 19, 2007).
6.3 This report was discussed in detail in the meeting of the EC on November 28, 2007, and the States were also
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he EC and the Central Government, the EC released its First Discussion Paper (FDP) on GST in November, 2009. This spelled out the features of the proposed GST and has formed the basis for discussion between the Centre and the States.
7. CHALLENGES IN DESIGNING GST:
7.1 In the discussion that preceded amendment in the Constitution for GST, there were a number of thorny issues that required resolution and agreement between Central Government and State Governments. Implementing a tax reform as vast as GST in a diverse country like India required the reconciliation of interests of various States with that of the Centre. Some of the challenging issues, addressed in the run up to GST, were the following:
7.2 Origin-based versus Destination-based taxation: GST is a destination based consumption tax. Under destination based taxation, tax accrues to the destination place where consumption of the goods or services takes place. The existing VAT regime was based on origin principle where Centra
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n. Spending of this income on consumer goods expands the sales tax base of the producing states and thereby contributes to their revenues. In fact, to the extent that consumer expenditures are dependent on the level of income of the residents of a State, it is the producing States that stand to gain the most in additional sales tax revenues (even under the destination basis of consumption taxes) from increased export output.
7.3 Rate Structure and Compensation: There was uncertainty about gains in revenue after implementation of GST. Though attempts were made to estimate a revenue neutral rate, nonetheless it remains an estimate only. It was difficult to estimate accurately as to how much the States will gain from tax on services and how much they will lose on account of removal of cascading effect and phasing out of CST. In view of this, States asked for compensation during the first five years of implementation of GST.
7.3.1 A Committee headed by the Chief Economic Adviser Dr. Arvi
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system of taxation necessarily required that all stakeholders stick to the decisions taken by the supreme body, which was later constituted as the Goods and Services Tax Council (the Council). However, the possibility of departure from the recommendations of such body cannot be completely ruled out. Any departure would definitely affect other stakeholders and in such circumstances there must be a statutory body to which affected parties may approach for dispute resolution. The nature of such dispute resolution body was a bone of contention. Under the Constitution (One Hundred Fifteenth Amendment) Bill, 2011, a Goods and Services Tax Dispute Settlement Authority was to be constituted for this purpose. This body was judicial in nature. The proposed constitution of this Authority was challenged because it's powers would override the supremacy of the Parliament and the State Legislatures. The Constitution (One Hundred Twenty Second Amendment) Bill, 2014 departed from the previous GST amen
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tax tobacco and tobacco products, though these are also under GST. Thus, to ensure smooth transition and provide fiscal buffer to States, it was agreed to keep alcohol completely out of the ambit of GST.
8. CONSTITUTIONAL AMENDMENT:
8.1 As explained above, unification of Central VAT and State VAT was possible in form of a dual levy under the constitutional scheme. Power of taxation is assigned to either Union or States subject-wise under Schedule VII of the Constitution. While the Centre is empowered to tax goods upto the production or manufacturing stage, the States have the power to tax goods at distribution stage. The Union can tax services using residuary powers but States could not. Under a unified Goods and Services Tax scheme, both should have power to tax the complete supply chain from production to distribution, and both goods and services. The scheme of the Constitution did not provide for any concurrent taxing powers to the Union as well as the States and for the purpose
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015. The Bill with certain amendments was finally passed in the Rajya Sabha and thereafter by Lok Sabha in August, 2016. Further the bill was ratified by required number of States and received assent of the President on 8th September, 2016 and has since been enacted as Constitution (101st Amendment) Act, 2016 w.e.f. 16th September, 2016.
8.4 The important changes introduced in the Constitution by the 101st Amendment Act are the following:
* Insertion of new article 246A which makes enabling provisions for the Union and States with respect to the GST legislation. It further specifies that Parliament has exclusive power to make laws with respect to GST on inter-State supplies.
* Article 268A of the Constitution has been omitted. The said article empowered the Government of India to levy taxes on services. As tax on services has been brought under GST, such a provision was no longer required.
* Article 269A has been inserted which provides for goods and services tax on supplies in
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e alcoholic liquor for human consumption from the ambit of GST, and services have been defined.
* Article 368 has been amended to provide for a special procedure which requires the ratification of the Bill by the legislatures of not less than one half of the States in addition to the method of voting provided for amendment of the Constitution. Thus, any modification in GST Council shall also require the ratification by the legislatures of one half of the States.
* Entries in List I and List II have been either substituted or omitted to restrict power to tax goods or services specified in these Lists or to take away powers to tax goods and services which have been subsumed in GST.
* Parliament shall, by law, on the recommendation of the Goods and Services Tax Council, provide for compensation to the States for loss of revenue arising on account of implementation of the goods and services tax for five years.
* In case of petroleum and petroleum products, it has been provided that
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ay be exempted from GST;
* the rates including floor rates with bands of GST;
* any special rate or rates for a specified period to raise additional resources during any natural calamity or disaster;
* special provision with respect to the North- East States, J&K, Himachal Pradesh and Uttarakhand; and
* any other matter relating to the GST, as the Council may decide.
9.2 The Council shall recommend the date on which the goods and services tax be levied on petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel. While discharging the functions conferred by this article, the Goods and Services Tax Council shall be guided by the need for a harmonized structure of goods and services tax and for the development of a harmonized national market for goods and services.
9.3 One half of the total number of Members of the Goods and Services Tax Council shall constitute the quorum at its meetings. The Goods and Services Tax Counc
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e 23rd meeting of the Council, this limit shall be raised to Rs. 1.5 Cr after necessary amendments in the Act. Composition scheme shall not be available to inter- State suppliers, service providers (except restaurant service) and specified category of manufacturers. For special category States (except J&K and Uttarakhand) enumerated in article 279A of the Constitution, threshold exemption limit has been fixed at Rs. 75 lakh.
(iii) Existing tax incentive schemes of Central or State governments may be continued by respective government by way of reimbursement through budgetary route. The schemes, in the present form, would not continue in GST. Further, 50% exemption of the CGST portion will be provided to CSD (Defense Canteens).
(iv) Recommending GST laws, namely CGST Law, UTGST Law, IGST Law, SGST Law and GST Compensation Law paving the way for implementation of GST.
(v) In order to ensure single interface, all administrative control over 90% of taxpayers having turnover below Rs. 1.
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s shall be exempted from obtaining registration:
* Suppliers of services, having turnover upto Rs. 20 lakh, making inter State supplies;
* Suppliers of services, having turnover upto Rs. 20 lakh, making supplies through e-commerce platforms.
(xi) The reverse charge mechanism under sub-section (4) of section 9 of the CGST Act, 2017 and under sub-section (4) of section 5 of the IGST Act, 2017 has been suspended till 30.09.2019.
(xii) There shall be no requirement on payment of tax on advance received for supply of goods by all taxpayers.
(xiii) Supply from GTA to unregistered persons has been exempted from tax.
(xiv) TDS/TCS provisions to be implemented from 01.10.2018.
(xv) E-Wallet Scheme shall be introduced for exporters from 01.04.2019 and till then relief for exporters shall be given in form of broadly existing practice.
(xvi) All taxpayers are required to file return FORM GSTR-3B & pay tax on monthly basis.
(xvii) Taxpayers with turnover upto Rs. 1.5 Cr are required to f
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subsequently waived off shall be re-credited to the Electronic Cash Ledger of registered person under “Tax” head instead of “Fee” head.
(xxi) From October 2017 onwards, the amount of late fee for late filing of GSTR-3B payable by a registered person is as follows:
* whose tax liability for that month was 'NIL' will be Rs. 20/- per day instead of Rs. 200/- per day;
* whose tax liability for that month was not 'NIL' will be Rs. 50/- per day instead of Rs. 200/- per day.
(xxi) Facility has been introduced for manual filing of refund application.
(xxii) Supply of services to Nepal and Bhutan shall be exempted from GST even if payment has not been received in foreign convertible currency – such suppliers shall be eligible for input tax credit.
(xxiii) Centralized UIN shall be issued to every Foreign Diplomatic Mission / UN Organization by the Central Government.
(xxiv) Rate of interest on delayed payments and delayed refund has been recommended.
(xxv) Migration window was opened o
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the Central Goods and Services Tax (Amendment) Act, 2018, the Integrated Goods and Services Tax (Amendment) Act, 2018, the Union Territory Goods and Services Tax (Amendment) Act, 2018 and the Goods and Services Tax (Compensation to States) Amendment Act, 2018, respectively. The major amendments brought about by these Acts are as below:
(i) Upper limit of turnover for opting for composition scheme to be raised from Rs. 1 Cr to Rs. 1.5 Cr. Present limit of turnover can now be raised on the recommendations of the Council.
(ii) Composition dealers to be allowed to supply services (other than restaurant services), for up to a value not exceeding 10% of turnover in the preceding financial year, or Rs. 5 lakh, whichever is higher.
(iii) Levy of GST on reverse charge mechanism on receipt of supplies from unregistered suppliers, to be applicable to only specified goods in case of certain notified classes of registered persons, on the recommendations of the GST Council.
(iv) The thres
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ply of goods in case of high sea sales.
(ix) Scope of input tax credit is being widened, and it would now be made available in respect of the following:
(a) Most of the activities or transactions specified in Schedule III;
(b) Motor vehicles for transportation of persons having seating capacity of more than thirteen (including driver), vessels and aircraft
(c) Services of general insurance, repair and maintenance in respect of motor vehicles, vessels and aircraft on which credit is available; and
(d) Goods or services which are obligatory for an employer to provide to its employees, under any law for the time being in force
(x) Registered persons may issue consolidated credit/debit notes in respect of multiple invoices issued in a Financial Year.
(xi) Amount of pre-deposit payable for filing of appeal before the Appellate Authority and the Appellate Tribunal to be capped at Rs. 25 Cr and Rs. 50 Cr respectively.
(xii) Commissioner to be empowered to extend the time limit for ret
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ortioned.
(xviii) Fifty per cent of such amount, as may be recommended by the Council, which remains unutilised in the Compensation Fund, at any point of time in any financial year during the transition period shall be transferred to the Consolidated Fund of India as the share of Centre, and the balance fifty per cent. shall be distributed amongst the States in the ratio of their base year revenue.
(xix) In case of shortfall in the amount collected in the Fund against the requirement of compensation to be released for any two months' period, fifty per cent. of the same, but not exceeding the total amount transferred to the Centre and the States as recommended by the Council, shall be recovered from the Centre and the balance fifty per cent. from the States in the ratio of their base year revenue.
In order to ensure that the changes in the Centre and the State GST laws are brought into force simultaneously, these amendments will be made effective from a date to be notified in the fut
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y to create his profile based on nature of supplies made and received. The fields of information which a taxpayer would be shown and would be required to fill in the return would depend on his profile.
(v) NIL return filers (no purchase and no sale) shall be given facility to file return by sending SMS.
(vi) There shall be quarterly filing of return for the small taxpayers having turnover below Rs. 5 Cr as an optional facility. Quarterly return shall be similar to main return with monthly payment facility but for two kinds of registered persons – small traders making only B2C supply or making B2B + B2C supply. For such taxpayers, simplified returns have been designed called Sahaj and Sugam. In these returns details of information required to be filled is lesser than that in the regular return.
(vii) The new return design provides facility for amendment of invoice and also other details filed in the return. Amendment shall be carried out by filing of a return called amendment r
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y of goods or services shall be subjected to integrated GST (Integrated tax / IGST). The IGST model is a unique contribution of India in the field of VAT. The IGST Model envisages that Centre would levy IGST (Integrated Goods and Service Tax) which would be CGST plus SGST on all inter-State supply of goods or services or both. The inter-State supplier will pay IGST on value addition after adjusting available credit of IGST, CGST, and SGST on his purchases. The Exporting State will transfer to the Centre the credit of SGST used in payment of IGST. The person based in the destination State will claim credit of IGST while discharging his output tax liability in his own State. The Centre will transfer to the importing State the credit of IGST used in payment of SGST. The relevant information will also be submitted to the Central Agency which will act as a clearing house mechanism, verify the claims and inform the respective governments to transfer the funds. The major advantages of IGST Mo
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The list of goods and services in case of which reverse charge would be applicable has also been notified.
10.4 Compensation to States: The Goods and Services Tax (Compensation to States) Act, 2017 provides for compensation to the States for the loss of revenue arising on account of implementation of the goods and services tax. Compensation will be provided to a State for a period of five years from the date on which the State brings its SGST Act into force. For the purpose of calculating the compensation amount in any financial year, year 2015-16 will be assumed to be the base year, for calculating the revenue to be protected. The growth rate of revenue for a State during the five-year period is assumed be 14% per annum. The base year tax revenue consists of the states' tax revenues from: (i) State Value Added Tax (VAT), (ii) central sales tax, (iii) entry tax, octroi, local body tax, (iv) taxes on luxuries, (v) taxes on advertisements, etc. However, any revenue among these taxes ari
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018.
10.6 Anti-Profiteering Mechanism: Implementation of GST in many countries was coupled with increase in inflation and the prices of the commodities. This happened in spite of the availability of the tax credit. This was happening because the supplier was not passing on the benefit to the consumer and thereby indulging in illegal profiteering. Any reduction in rate of tax or the benefit of increased input tax credit should have been passed on to the recipient by way of commensurate reduction in prices.
10.6.1 National Anti-profiteering Authority (NAPA) has been constituted under GST by the Central Government to examine the complaints of non-passing the benefit of reduced tax incidence. The Authority shall cease to exist after the expiry of two years from the date on which the Chairman enters upon his office unless the Council recommends otherwise.
10.6.2 The Authority may determine whether any reduction in the rate of tax or the benefit of input tax credit has been passed on to t
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t shall be effective from a date to be notified in the future. The benefit of threshold exemption is not available in inter-State supplies of goods.
10.9 Composition Scheme: An optional composition scheme (i.e. to pay tax at a flat rate on turnover without credits) is available to small taxpayers (including to manufacturers other than specified category of manufacturers and service providers) having an annual turnover of up to Rs. 1 Cr (Rs. 75 lakh for special category States (except J&K and Uttarakhand) enumerated in article 279A of the Constitution). This limit has been raised to Rs. 1.5 Cr after necessary amendments in the GST Acts. The amendment shall be effective from a date to be notified in the future.
10.10 Zero rated Supplies: Export of goods and services are zero rated. Supplies to SEZs developers and SEZ units are also zero-rated. The benefit of zero rating can be taken either with payment of integrated tax, or without payment of integrated tax under bond or Letter of Unde
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d on B2C supplies would also be transferred by Centre to the destination State. The transfer of funds would be carried out on the basis of information contained in the returns filed by the taxpayers.
10.13 Modes of Payment: Various modes of payment of tax available to the taxpayer including internet banking, debit/ credit card and National Electronic Funds Transfer (NEFT) / Real Time Gross Settlement (RTGS).
10.14 Tax Deduction at Source: Obligation on certain persons including government departments, local authorities and government agencies, who are recipients of supply, to deduct tax at the rate of 1% from the payment made or credited to the supplier where total value of supply, under a contract, exceeds two lakh and fifty thousand rupees. The provision for TDS has been operationalized wef 01st October 2018. Exemption from the provisions of TDS has been given to certain authorities under the Ministry of Defence.
10.15 Refunds: Refund of tax to be sought by taxpayer or by any othe
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due date of filing of annual return or from the date of erroneous refund for raising demand for short-payment or non-payment of tax or erroneous refund and its adjudication in case of fraud, suppression or willful mis-statement.
10.18 Recovery of Arrears: Arrears of tax to be recovered using various modes including detaining and sale of goods, movable and immovable property of defaulting taxable person.
10.19 Appellate Tribunal: Goods and Services Tax Appellate Tribunal would be constituted by the Central Government for hearing appeals against the orders passed by the Appellate Authority or the Revisional Authority. States would adopt the provisions relating to Tribunal in respective SGST Act.
10.20 Advance Ruling Authority: Advance Ruling Authority would be constituted by States in order to enable the taxpayer to seek a binding clarity on taxation matters from the department. Centre would adopt such authority under CGST Act.
10.21 Transitional Provisions: Elaborate transitional p
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Act, IGST Act and GST (Compensation to States) Act were passed by the Parliament and since been notified on 12th April, 2017. All the other States (except J&K) and Union territories with legislature have passed their respective SGST Acts. The economic integration of India was completed on 8th July, 2017 when the State of J&K also passed the SGST Act and the Central Government also subsequently extended the CGST Act to J&K.
11.2. In its 28th meeting held in New Delhi on 21.07.2018, the GST Council recommended certain amendments in the CGST Act, IGST Act, UTGST Act and the GST (Compensation to States) Act. These amendments have been passed by Parliament and have been enacted, after receiving the assent of the Hon'ble President of India on 29.08.2018, as the Central Goods and Services Tax (Amendment) Act, 2018, the Integrated Goods and Services Tax (Amendment) Act, 2018, the Union Territory Goods and Services Tax (Amendment) Act, 2018 and the Goods and Services Tax (Compensation to Stat
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ficers, ease of exports, and extension of last dates for filling up various forms, etc.
12. ROLE OF CBIC:
12.1 CBIC is playing an active role in the drafting of GST law and procedures, particularly the CGST and IGST law, which will be exclusive domain of the Centre. This apart, the CBIC has prepared itself for meeting the implementation challenges, which are quite formidable. The number of taxpayers has gone up significantly. The existing IT infrastructure of CBIC has been suitably scaled up to handle such large volumes of data. Based on the legal provisions and procedure for GST, the content of work-flow software such as ACES (Automated Central Excise & Service Tax) would require re-engineering. The name of IT project of CBIC under GST is 'SAKSHAM' involving a total project value of Rs. 2,256 Cr.
12.2 Augmentation of human resources would be necessary to handle large taxpayers' base in GST scattered across the length and breadth of the country. Capacity building, particularly in th
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ng the implementation of GST. It had set up the Feedback and Action Room which monitored the GST implementation challenges faced by the taxpayer and act as an active interface between the taxpayer and the Government.
13. GOODS & SERVICES TAX NETWORK:
13.1 Goods and Services Tax Network (GSTN) has been set up by the Government as a private company under erstwhile Section 25 of the Companies Act, 1956. GSTN would provide three front end services to the taxpayers namely registration, payment and return. Besides providing these services to the taxpayers, GSTN would be developing back-end IT modules for 27 States who have opted for the same. Infosys has been appointed as Managed Service Provider (MSP). GSTN has selected 73 IT, ITeS and financial technology companies and 1 Commissioner of Commercial Taxes (CCT, Karnataka), to be called GST Suvidha Providers (GSPs). GSPs would develop applications to be used by taxpayers for interacting with the GSTN. The diagram below shows the work distri
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r GST law, can access the data. Data can be accessed by audit authorities as per law. No other entity can have any access to data available with GSTN.
14. GST: A GAME CHANGER FOR INDIAN ECONOMY:
14.1 GST will have a multiplier effect on the economy with benefits accruing to various sectors as discussed below.
14.2 Benefits to the exporters: The subsuming of major Central and State taxes in GST, complete and comprehensive setoff of input goods and services and phasing out of Central Sales Tax (CST) would reduce the cost of locally manufactured goods and services. This will increase the competitiveness of Indian goods and services in the international market and give boost to Indian exports. The uniformity in tax rates and procedures across the country will also go a long way in reducing the compliance cost.
14.3 Benefits to small traders and entrepreneurs: GST has increased the threshold for GST registration for small businesses. Those units having aggregate annual turnover more tha
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.
14.5 Benefits for common consumers: With the introduction of GST, the cascading effects of CENVAT, State VAT and service tax will be more comprehensively removed with a continuous chain of set-off from the producer's point to the retailer's point than what was possible under the prevailing CENVAT and VAT regime. Certain major Central and State taxes will also be subsumed in GST and CST will be phased out. Other things remaining the same, the burden of tax on goods would, in general, fall under GST and that would benefit the consumers.
14.6 Promote “Make in India”: GST will help to create a unified common national market for India, giving a boost to foreign investment and “Make in India” campaign. It will prevent cascading of taxes and make products cheaper, thus boosting aggregate demand. It will result in harmonization of laws, procedures and rates of tax. It will boost export and manufacturing activity, generate more employment and thus increase GDP with gainful employment leadin
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t are at present governing our indirect tax system will lead to simplification and uniformity. Reduction in compliance costs as multiple record-keeping for a variety of taxes will not be needed, therefore, lesser investment of resources and manpower in maintaining records. It will result in simplified and automated procedures for various processes such as registration, returns, refunds, tax payments. All interaction shall be through the common GSTN portal, therefore, less public interface between the taxpayer and the tax administration. It will improve environment of compliance as all returns to be filed online, input credits to be verified online, encouraging more paper trail of transactions. Common procedures for registration of taxpayers, refund of taxes, uniform formats of tax return, common tax base, common system of classification of goods and services will lend greater certainty to taxation system.
15. EXPERIENCE OF REGISTRATION & RETURN FILING:
15.1 Registration & Returns Sna
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8
74,02,151
16.
No. of 3(B) returns filed for April, 2018
73,40,548
17.
No. of 3(B) returns filed for May, 2018
74,12,201
18.
No. of 3(B) returns filed for June, 2018
74,25,276
19.
No. of 3(B) returns filed for July, 2018
73,78,868
20.
No. of 3(B) returns filed for August, 2018
72,56,452
21.
No. of 3(B) returns filed for September, 2018
67,45,848
22.
No. of GSTR 1 returns filed for July, 2017
59,11,994
23.
No. of GSTR 1 returns filed for August, 2017
24,41,466
24.
No. of GSTR 1 returns filed for September, 2017
65,74,840
25.
No. of GSTR 1 returns filed for October, 2017
25,04,083
26.
No. of GSTR 1 returns filed for November, 2017
25,30,097
27.
No. of GSTR 1 returns filed for December, 2017
65,75,078
28.
No. of GSTR 1 returns filed for January, 2018
24,98,750
29.
No. of GSTR 1 returns filed for February, 2018
24,86,344
30.
No. of GSTR 1 returns filed for March, 2018
65,39,245
3
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se certain challenges not only for the government but also for business community, tax administration and even common citizens of the country. Some of these challenges relate to the unfamiliarity with the new regime and IT systems, legal challenges, return filing and reconciliations, passing on transition credit. Lack of robust IT infrastructure and system delays makes compliance difficult for the taxpayers. Many of the processes in the GST are new for small and medium enterprises in particular, who were not used to regular and online filing of returns and other formalities.
16.2 Based on the feedback received from businesses, consumers and taxpayers from across the country, attempt has been made to incorporate suggestions and reduce problems through short-term as well as long-term solutions. After rectifying system glitches, E-way bill for inter-State movement of goods has been successfully implemented from 1st April 2018. As regards intra-State supplies, option was given to States t
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Market Fee Valid Post-GST Implementation Under State Law; Supported by Entry 66, List-II, VIIth Schedule.
Case-Laws
GST
Levy of market fee – Validity of levy after promulgation of Goods and s
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GST paid under wrong head
Query (Issue) Started By: – Kaustubh Karandikar Dated:- 3-11-2018 Last Reply Date:- 6-11-2018 Goods and Services Tax – GST
Got 13 Replies
GST
XYZ paid GST wrongly under IGST instead of paying under CGST + SGST for the period July'17 to September'18. Can they adjust the same while paying current months liability by issuing credit notes or they need to again pay CGST + SGST and then claim refund of IGST wrongly paid?
Reply By KASTURI SETHI:
The Reply:
Dear Querist, Are you sure about 'Place of supply' ? More details are required for correct reply.
Reply By Kaustubh Karandikar:
The Reply:
XYZ (Punjab) receiving commission for abroad on which GST is paid. As per Section 13(8) of IGST Act the PO
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licable.
Reply By Kaustubh Karandikar:
The Reply:
yes received from abroad. But will it not fall under Section 8(2) of IGST Act and if not under which sub-section of Section 7 will it fall?
Reply By KASTURI SETHI:
The Reply:
Dear Sir,
Your client is supplying /providing services, namely, " intermediary services" abroad and getting commission from a foreign service receiver. Service has been consumed outside India. As per Section 13(8) (b) of IGST Act, 2017, place of supply is location of supplier i.e. within India . So it is inter-State supply. and not intra-State. These, being intermediary services, are NOT covered under Section 7 of IGST Act.
Reply By Kaustubh Karandikar:
The Reply:
Sir, i appreciate your views. But Secti
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inter -State supply and reap the benefits of Inter-State inherent in Section 13 instead of thinking about depositing against wrong type of tax.I wish other learned experts intervene to clear the air.
Reply By Alkesh Jani:
The Reply:
Dear Sir,
In this regards, prima facie, I concur with the views of Sh. Kasturiji Sir, that as per the query, it can be treated as inter-state service.
However, few clarification in the matter is required such as
* The services provided is with regards to any goods as given in Section 13(3)(a)?
* Whether payment is received in foreign currency?
* Have you raised any Invoice to Foreign Service recipient?
Further, Section 13 of IGST Act, clearly states that “Place of supply of service where location of
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The Tripura State Goods and Services Tax (Thirteenth Amendment) Rules, 2018.
F.1-11(91)-TAX/GST/2018(Part-II) Dated:- 3-11-2018 Tripura SGST
GST – States
Tripura SGST
Tripura SGST
GOVERNMENT OF TRIPURA
FINANCE DEPARTMENT
(TAXES & EXCISE)
NO.F.1-11(91)-TAX/GST/2018(Part-II)
Dated, Agartala, the 3rd November, 2018
N O T I F I C A T I O N
In exercise of the powers conferred by section 164 of the Tripura State Goods and Services Tax Act, 2017 (Tripura Act No. 9 of 2017), the State Government hereby makes the following rules further to amend the Tripura State Goods and Services Tax Rules, 2017, namely:-
1. (1) These rules may be called the Tripura State Goods and Services Tax (Thirteenth Amendment) Rules, 2018.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Tripura State Goods and Services Tax Rules, 2017 (hereinafter referred to as the said rules), after rule 83, the following rule shall be inserted, namely:-
“8
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e same and the manner of its payment shall be specified by NACIN on the official websites of the Board, NACIN and common portal.
(5) Examination centers.- The examination shall be held across India at the designated centers. The candidate shall be given an option to choose from the list of centers as provided by NACIN at the time of registration.
(6) Period for passing the examination and number of attempts allowed.- (i) A person enrolled as a goods and services tax practitioner in terms of sub-rule (2) of rule 83 is required to pass the examination within two years of enrolment:
Provided that if a person is enrolled as a goods and services tax practitioner before 1st of July 2018, he shall get one more year to pass the examination:
Provided further that for a goods and services tax practitioner to whom the provisions of clause (b) of sub-rule (1) of rule 83 apply, the period to pass the examination will be as specified in the second proviso of sub-rule (3) of said rule.
(ii) A pe
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ifying marks.- A person shall be required to secure fifty per cent. of the total marks.
(9) Guidelines for the candidates.- (i) NACIN shall issue examination guidelines covering issues such as procedure of registration, payment of fee, nature of identity documents, provision of admit card, manner of reporting at the examination center, prohibition on possession of certain items in the examination center, procedure of making representation and the manner of its disposal.
(ii) Any person who is or has been found to be indulging in unfair means or practices shall be dealt in accordance with the provisions of sub-rule (10). An illustrative list of use of unfair means or practices by a person is as under: –
(a) obtaining support for his candidature by any means;
(b) impersonating;
(c) submitting fabricated documents;
(d) resorting to any unfair means or practices in connection with the examination or in connection with the result of the examination;
(e) found in possession of an
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if any. The results shall also be communicated to the applicants by e-mail and/or by post.
(12) Handling representations.- A person not satisfied with his result may represent in writing, clearly specifying the reasons therein to NACIN or the jurisdictional Commissioner as per the procedure established by NACIN on the official websites of the Board, NACIN and common portal.
(13) Power to relax.- Where the Board or State Tax Commissioner is of the opinion that it is necessary or expedient to do so, it may, on the recommendations of the Council, relax any of the provisions of this rule with respect to any class or category of persons.
Explanation :- For the purposes of this sub-rule, the expressions –
(a) “jurisdictional Commissioner” means the Commissioner having jurisdiction over the place declared as address in the application for enrolment as the GST Practitioner in FORM GST PCT-1. It shall refer to the Commissioner of Central Tax if the enrolling authority in FORM GST PCT-1 has
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and orders issued from time to time under the said Acts and Rules.”.
3. In the said rules, after rule 142, the following rule shall be inserted, namely:-
“142A. Procedure for recovery of dues under existing laws. – (1) A summary of order issued under any of the existing laws creating demand of tax, interest, penalty, fee or any other dues which becomes recoverable consequent to proceedings launched under the existing law before, on or after the appointed day shall, unless recovered under that law, be recovered under the Act and may be uploaded in FORM GST DRC-07A electronically on the common portal for recovery under the Act and the demand of the order shall be posted in Part II of Electronic Liability Register in FORM GST PMT-01.
(2) Where the demand of an order uploaded under sub-rule (1) is rectified or modified or quashed in any proceedings, including in appeal, review or revision, or the recovery is made under the existing laws, a summary thereof shall be uploaded on the common
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on shall be made only after the new entity is registered.
Before applying for cancellation, please file your tax return due for the tax period in which the effective date of surrender of registration falls or furnish an application to the effect that no taxable supplies have been made during the intervening period (i.e. from the date of registration to the date of application for cancellation of registration).”.
5. In the said rules, in FORM GSTR-4, in the Instructions, for Sl. No. 10, the following shall be substituted, namely:-
“10. Information against the Serial 4A of Table 4 shall not be furnished.”.
6. In the said rules, for FORM GST PMT-01 relating to “Part II: Other than return related liabilities”, the following form shall be substituted, namely:-
“Form GST PMT -01
[See rule 85(1)]
Electronic Liability Register of Registered Person
(Part-II: Other than return related liabilities)
(To be maintained at the Common Portal)
Reference No.-
GSTIN/Temporary Id –
Date-
Name
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.
2. All payments made out of cash or credit ledger against the liabilities would be recorded accordingly.
3. Reduction or enhancement in the amount payable due to decision of appeal, rectification, revision, review etc. will be reflected here.
4. Negative balance can occur for a single Demand ID also if appeal is allowed/ partly allowed. Overall closing balance may still be positive.
5. Refund of pre-deposit can be claimed for a particular demand ID if appeal is allowed even though the overall balance may still be positive subject to the adjustment of the refund against any liability by the proper officer.
6. The closing balance in this part shall not have any effect on filing of return.
7. Reduction in amount of penalty would be automatic if payment is made within the time specified in the Act or the rules.
8. Payment made against the show cause notice or any other payment made voluntarily shall be shown in the register at the time of making payment through credit or cash. Deb
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Order No. (original)
10.
Order date (original)
11.
Latest order no.
12.
Latest order date
13.
Date of service of the order (optional)
14.
Name of the officer who has passed the order (Optional)
15.
Designation of the officer who has passed the order
16.
Whether demand is stayed
ð Yes ð No
17.
Date of stay order
18.
Period of stay
From – to –
Part B – Demand details
19.
Details of demand created
(Amount in Rs. in all Tables)
Act
Tax
Interest
Penalty
Fee
Others
Total
1
2
3
4
5
6
7
Central Acts
State/ UT Acts
CST Act
20.
Amount of demand paid under existing laws
Act
Tax
Interest
Penalty
Fee
Others
Total
1
2
3
4
5
6
7
Central Acts
State/UT Acts
CST Act
21.
(19-20)
Balance amount of demand proposed to be recovered under GST laws
<< Auto-populated >>
Act
Tax
Interest
Penalty
Fee
Others
Total
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2
3
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7
Central Acts
State/UT Acts
CST Act
Signature
Name
Designation
Jurisdiction
To
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hall be inserted, namely:-
“FORM GST DRC-08A
[See rule 142A(2)]
Amendment/Modification of summary of the order creating demand under existing laws
Reference no.
Date –
Part A – Basic details
Sr. No.
Description
Particulars
(1)
(2)
(3)
1.
GSTIN
2.
Legal name
<
3.
Trade name, if any
<
4.
Reference no. vide which demand uploaded in FORM GST DRC-07A
5.
Date of FORM GST DRC-07A vide which demand uploaded
6.
Government Authority who passed the order creating the demand
ðState /UT ð Centre
<
7.
Old Registration No.
<< Auto, editable>>
8.
Jurisdiction under earlier law
<
9.
Act under which demand has been created
<
10.
Tax period for which demand has been created
<
11.
Order No. (original)
<
12.
Order date (original)
<
13.
Latest order no.
<
14.
Latest order date
<
15.
Date of service of the or
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T Acts
CST Act
Signature
Name
Designation
Jurisdiction
To
_______________ (GSTIN/ID)
Name
_______________ (Address )
Copy to –
Note –
1. Reduction includes payment made under existing laws. If the demand of tax is to be increased then a fresh demand may be created under FORM GST DRC-07A.
2. Copy of the order vide which demand has been modified /rectified / revised/ updated can be uploaded. Payment document can also be attached.
3. Amount recovered under the Act including adjustment made of refund claim will be automatically updated in the liability register. This form shall not be filed for such recoveries.”.
By Order of the Governor,
(Nagesh Kumar B, IAS)
Joint Secretary
Government of Tripura
Finance Department
Note:- The principal rules were published in the Tripura Gazette, Extraordinary Issue, vide notification No.F.1-11(91)-TAX/GST/2017, dated the 22nd June, 2017, published vide number 206, dated the 22nd June, 2017 and last amended vide notification No.F.1-11(
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THE HIMACHAL PRADESH GOODS AND SERVICES TAX (AMENDMENT) ORDINANCE, 2018.
LLR-D(6)-15/2018-LEGN. Dated:- 3-11-2018 Himachal Pradesh SGST
GST – States
Himachal Pradesh SGST
Himachal Pradesh SGST
H. P. Ordinance No. 1 of 2018
THE HIMACHAL PRADESH GOODS AND SERVICES TAX (AMENDMENT) ORDINANCE, 2018
Promulgated by the Governor of Himachal Pradesh in the Sixty ninth year of the Republic of India.
AN ORDINANCE further to amend the Himachal Pradesh Goods and Services Tax Act, 2017 (Act No.10 of 2017)
WHEREAS, the Legislative Assembly of Himachal Pradesh is not in session and the Governor of Himachal Pradesh is satisfied that circumstances exist which render it necessary for him to take immediate action;
NOW THEREFORE, in exercise of the powers conferred by clause (1) of Article 213 of the Constitution of India, the Governor of Himachal Pradesh is pleased to promulgate the following Ordinance.
1. Short title and Commencement.-(1) This Ordinance may be called the Himachal Pra
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ted;
(b) In clause (16), for the words “Central Board of Excise and Customs”, the words “Central Board of Indirect Taxes and Customs” shall be substituted;
(c) in clause (17), for sub-clause (h), the following subclause 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”;
(d) clause (18) shall be omitted;
(e) in clause (35), for the word and signs “clause (c)”, the word and sign “clause (b)'' shall be substituted;
(f) in clause (69), in sub-clause (f), after the word and figures “article 371”, the words, figures and letter “and article 371J” shall be inserted;
(g) in the end of clause (102), the following Explanation shall be inserted, namely:
“Explanation.For the removal of doubts, it is hereby clarified that the expression “services” includes facilitating or arranging transactions in securities;”.
3. Amendment of section 7.-In section 7 of th
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cipal Act, for sub-section (4), the following sub-section shall be substituted, namely:
“(4) The Government may, on the recommendations of the Council, by notification, specify a class of registered persons who shall, in respect of supply of specified categories of goods or services or both received from an unregistered supplier, pay the tax on reverse charge 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.”.
5. Amendment of section 10.- In section 10 of the principal Act,-
(a) in sub-section (1) ,-
(i) for the words and sign “in lieu of the tax payable by him, an amount calculated at such rate”, the words, signs and figures “in lieu of the tax payable by him under sub-section (1) of section 9, an amount of tax calculated at such rate” shall be substituted;
(ii) in the proviso, for the words “o
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ection (2) of” wherever occurring, shall be omitted.
8. Amendment of section 16.-In section 16 of the principal Act, in sub-section (2),
(a) in clause (b), for the Explanation, the following Explanation shall be substituted, namely:-
“Explanation.-For the purposes of this clause, it shall be deemed that the registered person has received the goods or, as the case may 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; and
(ii) where the services are provided by the supplier to any person on the direction of and on account of such registered person.”; and
(b) in clause (c), after the word and figures “section 41”, the words, figures and letter “or section 43A” shall be inserted.
9. Amendment of section 17.-In section 17 of the principal Act,
(a)
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arting training on navigating such vessels; or
(D) imparting training on flying such aircraft; and
(ii) for transportation of goods; (ab) services of general insurance, servicing, repair and maintenance in so far as they relate to motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa):
Provided that the input tax credit in respect of such services shall be available-
(i) where the motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) are used for the purposes specified therein; and
(ii) where received by a taxable person engaged-
(A) in the manufacture of such motor vehicles, vessels or aircraft; or
(B) in the supply of general insurance services in respect of such motor vehicles, vessels or aircraft insured by him;
(b) the following supply of goods or services or both-(i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, leasing, renting or hiring of motor vehicles, vessels or
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he words, figures and letters “under entries 84 and 92A” shall be substituted.
11. Amendment of section 22.-In section 22 of the principal Act,
(a) in sub-section (1), in the end of the proviso for the sign “.”, the sign “:” shall be substituted and thereafter the following new 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 subject to such conditions and limitations, as may be so notified.”;
(b) in the Explanation, in clause (iii), after the word “Constitution”, the words and signs “except the State of Jammu Kashmir and States of Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand” shall be inserted.”.
12. Amendment of section 24.-In section 24 of the principal Act, in clause (x), after the words “commer
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14. Amendment of section 29.-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), in the end of clause (c) for the sign “.”, the sign “:” shall be substituted and thereafter, the following new 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.”; and
(c) in sub-section (2), in the end of the proviso for the sign “.” the sign “:” shall be substituted and thereafter the following proviso shall be inserted, namely:-
“Provided further that during pendency of the proceedings relating to cancellation of registration, the proper officer may suspend the registration for such period and in such manner as may be prescribed.”.
15. Amendment of section 34.- In section 34 of the principal
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Auditor-General of India or an auditor appointed for auditing the accounts of local authorities under any law for the time being in force.”.
17. Amendment of section 39.- In section 39 of the principal Act,
(a) in sub-section (1), for the words “in such form and manner as may be prescribed”, the words and sign “in such form, manner and within such time as may be prescribed” shall be substituted and for the words and sign “on or before the twentieth day of the month succeeding such calendar month or part thereof .” , the sign “:” shall be substituted and thereafter the following proviso shall be inserted, namely:-
“Provided that the Government may, on the recommendations of the Council, notify certain classes of registered persons who shall furnish return for every quarter or part thereof, subject to such conditions and safeguards as may be specified therein.”;
(b) In sub-section (7), in the end for the sign “.”, the sign “:” shall be substituted and thereafter the following provis
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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 section 43, the procedure for availing of input tax credit by the recipient and verification thereof shall be such as may be prescribed.
(3) The procedure for furnishing the details of outward supplies by the supplier on the common portal, for the purposes of availing input tax credit by the recipient shall be such as may be prescribed.
(4) The procedure for availing input tax credit in respect of outward supplies not furnished under subsection (3) shall be such as may be prescribed and such procedure may include the maximum amount of the input tax credit which can be so availed, not exceeding twenty per cent. of the input tax credit available, on the basis of details furnished by the suppliers under
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months of taking registration; and
(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.”.
19. Amendment of section 48.-In section 48 of the principal Act, in sub-section (2), after the word and figures “section 45”, the words “and to perform such other functions” shall be inserted.
20. Amendment of section 49.-In section 49 of the principal Act,
(a) in sub-section (2), after the word and figures “section 41”, the words, figures and letter “or section 43A” shall be inserted;
(b) in sub-section (5),
(i) in clause (c), in the end for the sign “;”, the sign”:” shall be substituted and thereafter the following proviso shall be inserted, namely:
“Provided that the 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 f
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hing 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.”.
22. Amendment of section 52.-In section 52 of the principal Act, in sub-section (9), after the word and figures “section 37”, the words and figures “or section 39” shall be inserted.
23. Amendment of section 54.-In section 54 of the principal Act,-
(a) in sub-section (8), in clause (a), for the words and signs “zero-rated supplies of “, the words “export of ” and for the words and sign “such zero rated supplies”, the words “such exports” shall be substituted;
(b) in the Explanation after sub-section (14), in clause (2),-
(i) in sub-clause (c), in item (i), after the words “foreign exchange”, the words “
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ection 112 of the principal Act, in sub-section (8), in clause (b), after the words “arising from the said order,” the words “subject to a maximum of fifty crore rupees,” shall be inserted.
27. Amendment of section 129.-In section 129 of the principal Act, in sub-section (6), for the words “seven days”, the words “fourteen days” shall be substituted.
28. Amendment of section 143.-In section 143 of the principal Act, in sub-section (1), in clause (b), in the end of proviso for the sign “:”, the sign” ” shall be substituted and thereafter, the following proviso shall be inserted, namely:-
“Provided further that the period of one year and three years may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding one year and two years respectively.”.
29. Amendment of schedule I.-In Schedule I of the principal Act, in paragraph 4, for the words “taxable person”, the word “person” shall be substituted.
30. Amendment of schedule II.-In Schedule
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In Re: M/s. Cable Corporation of India Limited
GST
2018 (12) TMI 533 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – 2019 (20) G. S. T. L. 631 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – AAR
Dated:- 3-11-2018
GST-ARA-63/2018-19/B-134
GST
SHRI B.V. BORHADE, AND SHRI PANKAJ KUMAR, MEMBER
PROCEEDINGS
(under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017)
The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act”] by Cable Corporation of India Limited, the applicant, seeking an advance ruling in respect of the following issue.
Whether the supply of transportation services, rendered by the Applicant, will be exempt from the levy of GST in terms of Sl. no. 18 of the Notification No. 12/2017 – Central Tax (Rate) dated 28th June, 2017
A
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n India.
2. The Applicant was registered under the erstwhile tax regime, and was discharging excise duty, service tax and value added tax (VAT) on the manufacture, on commission and sale of the products, as applicable.
3. Under the current regime, the Applicant is registered as per the provisions of the GST Laws.
4. The Applicant is engaged in the work of Supply, Laying and Terminating of 220kV U/G cables package to the recipient. The engagement comprises of two separate agreements with respect to the supply of goods and services envisaged, which are as follows”-
a) A supply of goods contract regarding the engineering, manufacturing, supply and type testing of Cable Package-C ('Goods');
b) A Services Contract for Cable Package-C (which includes Detailed Route Survey, Planning, Transportation, Insurance, Delivery at site, Unloading, Handling, Store, laying, installation (including civil works), Jointing, Termination, testing, Demonstration for acceptance, Commissioning, Documentat
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rom the levy of GST. One of such services so specified is that of transportation of goods services made by a supplier other than a GTA or courier agency.
8. In the light of the same, the question which is arising is whether the supply of transportation services, being rendered by the Applicant under the contract for services, will be exempt from levy of GST in terms of Sl. no. 18 of the Notification No. 12/2017 – Central Tax (Rate) dated 28th June, 2017
9. Under the said factual scenario, the Applicant requests the Hon'ble Maharashtra Authority for Advance Ruling to issue a ruling on the following question (A) Whether the supply of transportation services, rendered by the Applicant under the aforesaid facts or circumstances will be exempt from the levy of GST in terms of Sl. no. 18 of the Notification No. 12/2017 – Central Tax (Rate) dated 28th June, 2017.
STATEMENT CONTAINING APPLICANT'S INTERPRETATION OF LAW AND/OR FACTS, AS THE CASE MAY BE, IN RESPECT OF QUESTION(S) ON WHICH ADVA
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roup or Service Code (Tariff)
Description of Services
Rate (per cent.)
Condition
18
Heading 9965
Services by way of transportation of goods
(a) by road except the services of-
(i) a goods transportation agency;
(ii) a courier agency;
(b) inland waterways
Nil
Nil
C.2 In other words, the Applicant shall be eligible to claim exemption from the levy of GST in relation to such transportation services supplied by it under the contract for services, vide the above discussed Notification, provided it is neither GTA nor a courier agency.
C3. Now, 'GTA' has been defined in the Explanation to Sl. no 9 and 11 of Notification No. 11/2017 dated 28th June, 2017 as follows:
“goods transport agency” means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called.
C.4 In the instant case, Applicant is engaging a GTA to undertake the activity of transportation of goods by road for the Applicant. The GTA service prov
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Applicant shall be eligible to claim exemption from the levy of GST in relation to such transportation services supplied by it under the contract for services.
Transportation charges collected from the customer is a 'principal supply in itself.
C.6 The contract of services entered between the Applicant and the recipient contemplates separate consideration for the supply of the following services:
a. Transportation and Insurance charges;
b. Installation charges; and
C. Training charges
C.7 Now as per the above discussed Notification, the exemption available is only with respect to the supply of transportation of goods services by a supplier, not being a GTA or courier agency, from the levy of GST. Thus, for determining the applicability of the notification, it is to necessary to examine whether all the supply of services provided for in the services contract will constitute a 'composite supply' or not.
C.8 The term 'composite supply' has been defined under section 2(30) of th
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11 Thus, a combined reading of the definition of composite supply and principal supply indicates that a composite supply has only one 'principal supply. If a particular contract has more than one principal supplies, the supply under the said contract will cease to be composite supply.
C.12 Further, there is no strait-jacket formula to determine as to what constitutes a “composite supply'. The determination as to whether a supply constitutes a “composite supply or separate supplies is very subjective and is required to be determined on the basis of the facts and circumstances of each case.
C.13 In the light of the above, reference may be made to the observations of the Supreme court in cases to get some guiding principles. The Court, in the case of State of Madras vs Gannon Dunkerley and Company (Madras) Ltd [2015 (330) ELT 0011 SC] = 1958 (4) TMI 42 – SUPREME COURT OF INDIA, while extensively discussing the divisibility of contracts observed:
“To avoid misconception, it must be stat
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, Mumbai reported [2007 (6) STR 3 (SC)] = 2007 (1) TMI 91 – SUPREME COURT. The contract under consideration was a turnkey agreement between the parties which separately provided for the offshore supply of goods and service, onshore supply of goods and services and the services of construction and erection. It was held by the Hon'ble Supreme Court that very fact that in the contract, the supply segment and Service segment have been Specified in different parts of the contract is a pointer to show that the liability of the Appellants thereunder would also be different.
C.15 In the light of the above observations, the following points maybe noted with respect to the instant scenario:
a. The supply of services under consideration are mutually exclusive and independent and are not intrinsically linked to each other in any manner.
b. The services contract provides for supply of transportation services, installation Services and testing services along with separate considerations for each
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hile the installation and testing services are provided by the Applicant itself, the transportation services are being sub-contracted by the Applicant.
C.17 Thus, in the light of the above, it is submitted that the supply of services envisaged under the services contract are distinct and independent. The fact that a single contract provides for all the supply of services, cannot be a conclusive indicator of the supplies constituting a 'composite supply'. The fact that the contract envisages different considerations for each supply, it is indicative of the parties intention to consider each of them to be separate and independent
C.18 Further, it is pertinent to note that even though the contract envisages a single consideration for transportation and insurance services, the Applicant is charging majorly for the transportation services only. The economic reality of the supply is such that the Applicant has a common insurance cover for all such transportation of goods services supplied
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Questions
D.1 Whether the supply of transportation services, rendered by the Applicant under the contract for services, will be exempt from the levy of GST in terms of Sl. no. 18 of the Notification No. 12/ 2017-CT (Rate) dated 28.06.2017.
Applicants understanding
D.2 As explained in the above para C, the Applicant is making an independent supply of transportation of goods service. Further, it is neither a GTA transportation agency nor a courier agency and thus is eligible to claim exemption from levy of GST under Notification No. 12/2017 dated 27.06.2017.
03. CONTENTION – AS PER THE CONCERNED OFFICER
The submission, as reproduced verbatim, could be seen thus-
Please refer to letter No. NSK-II Div/29/T-II/2-17-18 dated 25.09.2018 the above subject wherein Application for Advance Ruling filed by M/s. Cable Corporation of India Ltd. (M/s CCL) before the Member (CGST & SGST) of the Advance Ruling Authority, Maharashtra, Mumbai was forwarded.
2. M/s Cable Corporation of India Lt
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n on transportation service provided by an entity other than GTA. As the applicant is not GTA, his supply of transportation service, he claims, is exempt vide the above notification. In this case as the M/s CCL is hiring the service of GTA therefore, he is the recipient of such services and not a supplier thereof, The question of the Applicant providing transportation service therefore is not correct.
(iii) To decide the issue of taxability of the consideration payable under the Second Contract for inland/local transportation and ancillary services like in-transit insurance, which are included in the freight bills the contracts referred to above needs to be examined. The First Contract includes ex works supply of all equipments and materials.
The scope Of the works includes testing and supply of Cable Package required for Successful commissioning. The second contract includes all other activities required to be performed for complete execution of the Cable package. The scope of the
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hough awarded under two separate contract agreements, clauses under both them make it abundantly clear that notwithstanding the break up of the Contract Price, the contract shall, at all times, be construed as a single source responsibility and the Applicant shall remain responsible to ensure execution of both the contracts to achieve successful completion. Any breach in any part of the First Contract shall be treated as a breach of the Second Contract, and vice versa.
The two contracts are, therefore, linked by a cross fall breach clause deeming that any breach in either of the contracts to be a breach of the other contract as well, providing the recipient with an absolute right to terminate both the contracts or claim damages. The 'cross fall breach clause', settles unambiguously that supply of goods, their transportation to the contractee's site delivery and related services are not separate contracts, but only form parts of an indivisible composite works contract supply, as define
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erial No.18 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.
6. The above view is supported by the following decisions of Advance Ruling Authorities of Maharashtra and West Bengal.
(1) Maharashtra Authority for Advance Ruling has decided the application filed by Shri Dinesh Kumar Agarwal, Mumbai whether transportation charges received by the applicant are liable to GST, especially when the applicant is not a goods transport agency (GTA). Maharashtra Authority for Advance Ruling vide Order No. GST- ARA-36/2017-18/B-43 dated 04.06.2018 = 2018 (7) TMI 1691 – AUTHORITY FOR ADVANCE RULINGS MAHARASHTRA answered in the affirmative that the same is liable to tax as a works contract as per the provisions of Section 2(119) of the GST Act.
(ii) The Authority for Advance Ruling under GST, West Bengal vide Order in case no.7/2018 dated 11.05.2018 in the case of EMC Ltd. [2018 (13) GSTL 217 ( A.A.R.-GST) = 2018 (5) TMI 964 – AUTHORITY FOR ADVANCE RULINGS, WEST BENGAL ruled th
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ten submissions for admission of application . Jurisdictional Officer was not present during the hearing.
The application was admitted and called for final hearing on 19.09.2018, Sh. Chaitanya Bhatt, Advocate along with Ms. Meghna Mohpatra, Advocate appeared and made detailed oral and written contentions. Jurisdictional Officer, Sh. Pradip Zode, Supdt., Division – II, Nashik CGST & Central Excise Commissionerate appeared and stated that they have received the documents and application very late and therefore be granted 20 days time to make their submissions and made written submissions.
05. OBSERVATIONS
We have gone through the facts of the case, oral & written submissions made by the applicant as well as the jurisdictional officer & the applicable provisions of the GST laws in this regard. We find that the applicant is a leading manufacturer & distributor of a wide range of power and control cables in India.
We find that in the present application the applicant has stated and cla
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ld provide the recipient with an adsolute right to terminate both the contracts or claim damages.
In view of these facts we find that the applicant has raised the question as under:-
“Whether the supply of transportation services, rendered by the Applicant, will be exempt from the levy of GST in terms of Sl. no. 18 of the Notification No. 12/2017 – Central Tax (Rate) dated 28th June, 2017”.
We also find from the facts and documents put up before us by the applicant as well as the jurisdictional officer that, the applicant is not transporting the goods but is hiring the services of a GTA to undertake the transportation of goods by road & is claiming to be discharging GST liability under Reverse Charge Mechanism and in such a situation he is a recipient of such service and is not a supplier thereof.
Further, from the submissions made before us, we clearly find that the first contract referred to above includes ex-works supply of all equipments and materials which includes testing an
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s movement and/or installation at the site, the place of supply shall be the location of the goods at the time when movement of the goods terminates for delivery to the recipient or moved to the site for assembly or installation refer to Section 10(1)(a) & (d) of the IGST Act, 2017). The First Contract however does not include the provision and cost of such transportation and delivery. It, therefore, does not amount to a contract for 'supply of goods' unless tied up with the Second Contract. The First Contract has 'no leg' unless supported by the Second Contract. It is no contract at all unless tied up with the Second Contract.
The Contractee is aware of such interdependence of the two contracts. Although awarded under two separate contract agreements, clauses under both them make it abundantly clear that notwithstanding the break up of the Contract Price, the contract shall, at all times, be construed as a single source responsibility and the Applicant shall remain responsible to en
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ly of the goods & allied services are not separately enforceable The recipient has not contracted for ex-factory supply of materials, but for the composite supply, namely Works Contract for Supply, Laying and Terminating or 220KV U/G Cables.
In respect of the proposition of law as made by the jurisdictional officer, we find support from the judgement of Hon. Supreme Court in case of M/s. Indure Ltd. & Anr. vs Commercial Tax Officer & Ors. on 20 September, 2010 C.A. NO. 1123 of 2003 = 2010 (9) TMI 883 – SUPREME COURT OF INDIA, wherein the Hon. SC held as under:
By way of letter of award dated August 16, 1988, N.T.P.C. awarded two contracts to the company for performing the work of erection of aforesaid plant on turnkey basis. Even though two contracts were entered into between the parties but in nutshell it was only one contract for the simple reason that N.T.P.C. kept a right with it with regard to cross-fall breach clause meaning thereby that default in one contract would tantamoun
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In Re: M/s. P.K. Agarwala, (Partnership (Firm)
GST
2019 (1) TMI 1369 – AUTHORITY FOR ADVANCE RULING, JHARKHAND – 2019 (20) G. S. T. L. 605 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING, JHARKHAND – AAR
Dated:- 3-11-2018
JHR/AAR/2018-19/01
GST
Sri Pradhuman Badri Prasad Meena and Sri Ram Chandra Prasad Barnwal Member
Present for the applicant: Mr. Pradeep Kumar Agarwal (Authorized Signatory)
Note: Section 100 of the IGST Act 2017, an appeal against this ruling lies before the Appellate Authority for Advance Ruling constituted under section 99 of IGST Act 2017, within a period of 30 days from the date of service of this order.
The applicant M/s. P.K. AGARWALA (herein after referred to P.K. Agarwala) having GSTN No- 220AABFM9005A1Z6 is a partnership firm. The firm M/s. P.K. AGARWALA is a contractor carrying of contract work of M/s. Uranium Corporation of India Ltd., Jadugoda and made the following submission:-
1. the applicant has been rewarded works contract f
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or a board or any other body including a society, trust, corporation which is –
i) Set up by an act of parliament or State legislative, or
(ii) Established by any government, with 90% or more participation by way of equity or control, to carry out a function entrusted by the Central government, State Government or Local Authority.
4. In the present instance 100% of the equity share is held by the President of India M/s. Uranium Corporation of India Ltd., Jadugoda.
5. The applicant sought Advance Ruling on the following questions/issues:
(i) Whether M/s. Uranium Corporation of India Ltd. -Comes under the Purview of Government Entity.
(ii) What will be the rate of GST on the above attached work order.
6. As per Section 97(2) of the Central Goods and Services Tax Act, 2017(herein after referred to as the 'CGST ACT, 2017) and Jharkhand Goods and Services Tax Act, 2017 empowers the Advance Ruling authority to decide the following issues:-
(a) classification of any goods or serv
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ork order no. T-964 dt. 20.06.2017) and a copy of notification no. 39/2017 integrated tax dt.13.10.2017 with regard to above raised questions:-
a. A “Government Entity” shall be defined as an authority or a board or any other body including a society, trust, corporation which is – Set up by an act of parliament or State legislative, or Established by any government, with 90% or more participation by way of equity or control, to carry out a function entrusted by the Central government, State Government or Local Authority.
b. In the present instance 100% of the equity share is held by the President of India M/s. Uranium Corporation of India Ltd., Jadugoda.
c. Serial No 3 of notification 39/2017 dated 13.10.2017 was issued under the GST Act, Composite supply of works contract as defined in clause 119
d. Details and description of attached work order:
Description
Quantities/units
Rate in figure in Rupees
Amount in Rupees
Clearing of site of all permanent construction, roads, pipel
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upply and transport of earth of specified quality (as per specification and drawing) from any source including all taxes, any filing the same in embankment in random fill zone in layers not exceeding 250mm measured loose in proper profile to various heights above existing ground level after stripping of top soil as per specification, watering of each layer in the stipulated manner as per specification and / or direction of Engineer and compaction by mechanical means (Dozer Static & Vibratory roller) to achieve required degree of compaction as per specification, disposal of excess of unusable material all completer as per drawing specification and direction of Engineer including cost of all machinery tools & tackles for any lead (Sectional measurement for compacted filing will only be paid)
478500 CuM
300
14,35,50,000/-
Supply and transport impervious clay of specified quality (as per specification and drawing) from any source including all taxes, any filing the same in embankment i
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ed coarse and filters as per drawing
5100
751
38,30,100/-
9. Personal Hearing Proceedings:
The Personal hearing of the applicant's Representatives was conducted and concluded on 30/08/18 & 06/09/18 Wherein the the points submitted in the written submission were reiterated.
10. Discussions & Findings :
10.1 We have considered the submissions made by the Applicant in their application for Advance Ruling as well as the submissions made during the Personal Hearing. We also considered the questions/issues on which Advance Rulings have been sought for by the applicant, relevant facts having bearing on the question/issue raised, the applicant's understanding/interpretation of law in respect of the issue.
11. In view of the above, we proceed to deliver Advance Ruling on the two questions, i.e.
(i) Whether M/s. Uranium Corporation of India Ltd. – Comes under the Purview of Government Entity; and
(ii) What will be the rate of GST on the above said work order.
11.1 By going through
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on, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract.” In the instant case the applicant applicant has been awarded works contract for raising a Dam as per the requirement/specifications provided by the recipient.
11.4 In the instant case the applicant is carrying works contract service for M/s. Uranium Corporation of India, which is a Government Body. The rate of GST for Works Contract service has been prescribed in serial number 3 of Notification No. 11/2017-Central Tax (Rate) dated 2806.2017 as amended by Notification No. 20/2017-CentraI Tax (Rate) dated 22.08.2017 & notification no.24/2017-Central Tax (Rate) dated 21.09.2017 as:
“…………… Composite supply of works contract as defined in clause (119) of section 2 of the Jharkhand Goods and Services Tax Act, 2017, supplied to
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ankment or construction made of earth specially one used as a field fortification. The Collins dictionary defines Earth Work as “excavation of earth as in engineering construction; a fortification made of earth. The Wikipedia defines Earth Work as “Earth work are engineering works through the processing of parts of earth surface involving quantities of soil or unformed rocks. After going through different definitions of earth work, we find that Bulk earthworks include the removal, moving or adding of large quantities of soil or rock from a particular area to another. They are done in order to make an area of suitable height and level for a specific purpose.
12.2 It is evident that the work order is for supply of services with material. It is also seen from the work order that the first four part of the work order is related with clearing of earth, excavation, supplying & laying of earth and impervious clay. The major part of the contract involves earth work i.e., more than 75% of the
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GST on Commission received
Query (Issue) Started By: – Kaustubh Karandikar Dated:- 2-11-2018 Last Reply Date:- 21-12-2018 Goods and Services Tax – GST
Got 3 Replies
GST
XYZ (Punjab) receiving commission for abroad on which GST is paid. As per Section 13(8) of IGST Act the POS in case of intermediary services is the location of the supplier of services. Accordingly, the POS would be Punjab. Further the location of supplier is also Punjab and therefore as per Section 8(2) of IGST Act
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post sale discount for cement
Query (Issue) Started By: – RAMESH R Dated:- 2-11-2018 Last Reply Date:- 5-12-2018 Goods and Services Tax – GST
Got 2 Replies
GST
Dear Sir,
1. My Client (Whole sale & Reseller) purhcase cement bag from one famous brand company ₹ 300+GST 28% at the time of purchase of Invoice,my client resale to customer ( Unregistered and end user) rate is per bag ₹ 305+GST 28% after sale they have received discount (Credit note) ₹ 20 per bag + GST 28
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