RECENT CLARIFICATIONS ISSUED BY GST POLICY WING
By: – DR.MARIAPPAN GOVINDARAJAN
Goods and Services Tax – GST
Dated:- 11-9-2018
Though more than one year has lapsed after the introduction of GST, many confusions arised among the stakeholders. Now and then the Central Government made amendments in the Act as well as Rules. As on date 61 circulars have been issued by the GST Policy Wing clarifying various issues in GST. On 04.09.2018 the GST policy wing issued 5 circulars clarifying the various aspects as detailed below-
* Circular No. 57/2018-GST, dated 04.09.2018 – Scope of Principal-agent relationship in the context of Schedule I of the CGST Act;
* Circular No. 58/2018-GST, dated 04.09.2018 – Recovery of arrears of wrongly availed CENVAT credit under the existing law and inadmissible transitional credit;
* Circular No. 59/2018-GST, dated 04.09.2018 – Clarification on refund related issues.
* Circular No. 60/2018-GST, dated 04.09.2018 – Processing of refund appli
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Board issued clarifications vide Circular No. 57/2018 about the scope of principal-agent relationship.
It is clarified as follows-
* All the activities between the principal and the agent and vice versa do not fall within the scope of the said entry.
* The supply of services between the principal and the agent and vice versa is outside the ambit of the said entry, and would therefore require “consideration” to consider it as supply and thus, be liable to GST.
* 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 in Schedule I.
* Where the goods being procured by the agent on behalf of the principal are invoiced in the name of the agent then further provision of t
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tration under sub-section (vii) of section 24 of the CGST Act.
Recovery of arrears of wrongly availed CENVAT credit
Various representations have been received seeking clarification on the process of
recovery of arrears of wrongly availed CENVAT credit under the existing law and CENVAT credit wrongly carried forward as transitional credit in the GST regime. In this regard the Board issued clarifications vide Circular No. 58/2018-GST, dated 04.09.2018.
The Board has already clarified that the recovery of arrears arising under the existing law shall be made as central tax liability to be paid through the utilization of the amount available in the electronic credit ledger or electronic cash ledger of the registered person, and the same shall be recorded in Part II of the Electronic Liability Register (FORM GST PMT-01).
Since the liability register is not available in the GST portal the Board clarifies that the tax payers taxpayers may reverse the wrongly availed CENVAT credit under t
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be eligible for refund of integrated tax paid on export of goods or services as per section 96(10) of the Act as amended with effect from 04.09.2018.
* No refund under sub-section (5) or sub-section (6) of section 54 shall be paid to an applicant, if the amount is less than ₹ 1000/-.
* The refund claim shall be accompanied by a print-out of FORM GSTR-2A of the claimant for the relevant period for which the refund is claimed.
* The proper officer shall not insist on the submission of an invoice (either original or duplicate) the details of which are present in FORM GSTR-2A of the relevant period submitted by the claimant.
* The claimant shall also submit the details of the invoices on the basis of which input tax credit had been availed during the relevant period for which the refund is being claimed, in the format enclosed as Annexure-A manually along with the application for refund claim in FORM GST RFD-01A and the Application Reference Number (ARN).
* The claimant sha
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ection of claim the proper officer shall order for the re-credit the rejected amount to the electronic credit ledger of the claimant using GST RFD – 01B and proceed further for the recovery of the said amount by issuing a show cause notice and after getting reply and giving a reasonable opportunity of being heard may confirm the demand.
* A sanction order shall be issued for the refund amount for the disbursal of the sanctioned amount to the claimant.
The tax authority may refuse to disburse the sanctioned amount on the contention that the amount is sanctioned incorrectly. The Board clarified that the remedy for correction of an incorrect or erroneous sanction order lies in filing an appeal against such order and not in withholding of the disbursement of the sanctioned amount. If any discrepancy is noticed by the disbursing authority, the same should be brought to the notice of the counterpart refund sanctioning authority, the concerned counterpart reviewing authority and the nodal
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n Stores Department (CSD for short), under the Ministry of Defence, as a person who shall be entitled to claim a refund of-
* 50% of the applicable central tax, integrated tax and Union territory tax paid by the CSD on all inward supplies of goods received by the CSD for the purposes of subsequent supply of such goods to the Unit Run Canteens of the CSD or to the authorized customers of the CSD.
* 50% of the applicable State tax paid by the CSD on the inward supply of goods received by it and supplied subsequently.
Vide circular No. 60/2018-GST, dated 04.09.2018 the Board clarifies the procedure involved in refund to CSD. The above said refund process involves two steps-
* Filing application for refund;
* Processing and sanction of the refund claim.
The complete process of refund is as below-
* The CSD are required to apply for refund on a quarterly basis.
* The CSD will apply for refund with the jurisdictional Central tax/State tax authority to whom the CSD has been assi
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memo covering all aspects, manually in GST RFD – 03.
* The proper officer is to verify with the portal as to the filing of GSTR – 3B.
* The proper officer is to scrutiny the details in Form GST RFD – 10A, GSTR 2A and 3B.
* The Form GSTR – 2A will be an evidence of the accountal of the supply made by the corresponding suppliers to the CSD in relation to which the refund has been claimed by the CSD.
* The proper officer should ensure that the amount of refund sanctioned is 50 % of the Central tax, State tax, Union territory tax and integrated tax paid on the supplies received by CSD.
* The proper officer shall issue the refund sanction/rejection order manually in FORM GST RFD-06 along with the payment advice manually in FORM GST RFD-05 for each tax head separately.
* The amount of sanctioned refund in respect of central tax/integrated tax along with the bank account details of the CSD shall be manually submitted in the PFMS system by the jurisdictional Division's DDO and a si
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ient taxpayer stores his goods in the godown of the transporter, then the transporter's godown has to be declared as an additional place of business by the recipient taxpayer.
* Where the transporter's godown has been declared as the additional place of business by the recipient taxpayer, the transportation under the e-way bill shall be deemed to be concluded once the goods have reached the transporter's godown (recipient taxpayer' additional place of business). Hence, e-way bill validity in such cases will not be required to be extended.
* Whenever the goods are transported from the transporters' godown, which has been declared as the additional place of business of the recipient taxpayer, to any other premises of the recipient taxpayer then, the relevant provisions of the e-way bill rules shall apply. Hence
* The transporter to maintain accounts and records as specified in section 35 of the CGST Act read with rule 58 of the CGST Rules shall continue as a warehouse keeper.
* A
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