Critical Aspects for GST Returns in 2019
By: – Akshay Hiregange
Goods and Services Tax – GST
Dated:- 4-2-2019
Critical Aspects for GST Returns in 2019
In light of the recent barrage of notifications, Act amendments, we have prepared a small article on few major changes that GST has undergone, and the impact it could have on the GST returns in the year 2019. We would be speaking on the following topics:
* RCM on Security Personnel services
* RCM on purchases from unregistered persons
* Amendment in manner of utilisation of ITC
* Amendment in definition of Supply
* Amendment in ITC Reversal
* Other important Miscellaneous amendments
Reverse Charge Mechanism applicability on security services:
In terms of Notification no.29/2018- Central Tax (Rate) has been issued to include the security personnel services under the ambit of Reverse Charge Mechanism. The notification is effective from the 01/01/2019 and to be considered for the GSTR-3B of January 2019. This
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ake few illustrations for easy understanding:
Supplier
Recipient
Reverse/Forward Charge
Body corporate (Unregd.)
Registered person
RCM
Body corporate (Regd.)
Registered person
FCM
Other than body corp. (Regd.)
Registered person
RCM
Other than body corp. (Regd.)
Regd. For TDS
FCM
Other than body corp. (Regd.)
Composite Dealer
FCM
Registered person
Unregistered
FCM
Unregistered
Unregistered
No GST
Reverse Mechanism not applicable on purchases from unregistered persons Section 9(4):
* Notification no.01/2019 Central Tax (Rate) rescinded the notification no.08/2017 Central Tax (Rate) which deferred the present RCM u/s 9(4) of CGST Act till 30th September 2019 CT(R)
* Therefore, the deferment of RCM on URD procurements till 30th September 2019 is not applicable.
* According to the latest amendment of CGST Act applicable from 1st February 2019, Section 9(4) of CGST Act which states that GST liable under RCM for the procurements from unregistered persons would b
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SGST
Output
1,00,000
1,00,000
1,00,000
TRAN C/f
–
-50,000
–
Input
-2,00,000
-80,000
-80,000
According to Section 49(5) – Applicable up to 31st January 2019:
Payment of Tax
IGST
CGST
SGST
IGST
1,00,000
CGST
1,00,000
SGST
20,000
80,000
ITC Balance
-80,000
-30,000
According to Section 49A & 49(5) – effective from 01/02/2019
Payment of Tax
IGST
CGST
SGST
IGST
1,00,000
CGST
1,00,000
SGST
80,000
Cash
20,000
ITC Balance
–
-1,30,000
The above amendment seems to increase accumulation in CGST and cash pay-out in SGST. This may also be the requirement of the government wherein; the cash pay-out is directed towards the states and the refund if any could be claimed from Centre in a easier and faster process.
The above amendment will be effective from the 01/02/2019 and to be considered for the GSTR-3B of February 2019 month.
Amendment in Definition of Supply
The definition of supply has been changed with retrospective with effect fro
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blic authorities, as may be notified by the Government on the recommendations of the Council,
shall be treated neither as a supply of goods nor a supply of services
(3) Subject to the provisions of sub-sections (1), (1A) and (2), the Government may, on the recommendations of the Council, specify, by notification, the transactions that are to be treated as-
* supply of goods and not as a supply of services; or
* supply of services and not as a supply of goods.
Our comment:
Schedule II of CGST Act provides the transactions which are fall under the ambit of either supply of goods or supply of service, merely transactions covered under schedule II does not make it has a supply. First, it has to satisfy 'supply' within clause (a) to (c) of section 7(1). After satisfying the above conditions, reference would be made to Schedule II to determine as to whether it 'supply of goods' or 'supply of services'.
Amendment in input tax credit reversal:
According to the amendment (w.e.f 01/
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