GST – An Update (As on 1st August, 2019)

GST – An Update (As on 1st August, 2019)
GST
Dated:- 7-8-2019

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Document 1
Pradhan Mantri
Kaushal Vikas Yojana
(PMKVY)
Make
in India
GST
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Digital
India
Pradhan Mantri
Mudra Yojana
(
PMMY
)
GST
Start-Up
India
Port-led
Development
GST-An Update
(As on 1st August, 2019)
GMS AND
al-ifa
GOVERNMENT OF
देशसेवार्थ करसे
उत्पाद
शुल्क
This presentation is for education purposes only and
holds no
legal validity
The Journey to GST
In the year 2000, the then
Prime Minister introduced
the concept of GST and set
up a committee to design a
GST model for the country
2006
2000
Announcement by Union
Finance Minister, during budget
of 2006-07 that GST would
introduced from 1 April 2010
May 2017
First Discussion Paper
was released by the
Empowered Committee
2009
April 2017
2011
Consti

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itutional Perspective (1/2)
Article 366(12A)
Sl No Definition Article
1.
Goods
2.
Service
3.
State
Definition of GST
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“Goods and services tax” means any tax on supply of goods, or services or
both except taxes on the supply of the alcoholic liquor for human
consumption
366(12)
366 (26A)
Definition
Includes all materials, commodities, and articles [Pre Existing Definition]
Anything other than goods [Introduced vide 101st Constitutional Amendment
Act]
366(26B) With reference to articles 246A, 268, 269,269A and Article 279A includes a
Union territory with Legislature. [Introduced vide 101st Constitutional
Amendment Act]
“Goods and Services tax” law while having unique principles, has significant elements of prior Central
and State laws; and is also inspired by VAT/GST legislation of EU, Australia, Malaysia etc. along with
International VAT/GST guidelines of OECD
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GST Law from a Constitutional Perspective (2/2)

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Entertainment Tax (other than those
levied by local bodies)
Luxury Tax
Entry Tax (All forms)
Taxes on lottery, betting & gambling
Surcharges & Cesses
GST
+13 Cesses
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Constitution amended to provide concurrent powers to both Centre & States to levy GST (Centre
to tax sale of goods and States to tax provision of services)
Central Taxes
Tax
Administrations
CEX/ST Act & Rules
Procedures
Multiple State Taxes
Multiple State Tax
Administrations
Multiple Acts & Rules
Multiple procedures
Pre-GST Indirect tax structure in India
Single Tax-GST
Single Tax
Administration
Uniform law
Computerized
uniform procedures
Customs
Duty
Central
Sales Tax
Central
Levies
Excise
Duty
Service
Тах
Entry Tax & Octroi
Entertainment Tax
Electricity Duty
Luxury Tax
VAT
State
Levies
GST
CGST
SGST/UTGST
IGST
GST Structure in India
Outside GST!
00
8
Alcohol for human
consumption
Power to tax remains with the
State
Five petroleum
prod

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g to decide
any matter.
â–  Till its 34th meeting, GST Council has taken 1064 decisions which include 219 decisions taken by
the GST Implementation Council (GIC).
✓
As on 14.05.2019, 1006 decisions have been implemented and only a total of 58 decisions
(of which 39 were unique issues) were under implementation.
In other words, 94.5% of the decisions of the GST Council have already been implemented,
which is a significant achievement given the complicated nature and wide area of subjects/issues
involved and the fact that most decisions were taken unanimously.
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Registration and Threshold (1/19)
â–  Threshold limit of aggregate turnover for exemption from registration and payment of GST for suppliers of
services would be Rs. 20 lakhs and Rs. 10 lakhs (for States of Manipur, Mizoram, Nagaland and Tripura).
â–  Threshold limits of aggregate turnover for exemption from registration and payment of GST for the supplier

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on of those registration, which were cancelled till 31.03.2019, has been allowed. The
application for revocation can be filed till 22.07.2019.
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Migration (2/19)
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â–  One more window for completion of migration process permitted. Due date for the taxpayers who
did not file the complete FORM GST REG-26 but received only a Provisional ID (PID) till
31.12.2017 for furnishing the requisite details to the jurisdictional nodal officer was extended till
31.01.2019.
â–  Due date for furnishing FORM GSTR-3B and FORM GSTR-1 for the period July, 2017 to February,
2019/quarters July, 2017 to December, 2018 by such taxpayers was extended till 31.03.2019.
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Composition Scheme (3/19)
Composition threshold limit increased to be Rs. 1.5 Crore.
Composition scheme shall not be available to inter-State suppliers and specified category of
manufacturers.
Compliance under Composition Scheme simplified – Taxpayers under Composition scheme have been
allowed to pay

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ear or during the middle of a financial year has to inform the
government about his choice by filing FORM GST CMP-02.
The last date for filing of intimation, in FORM GST CMP-02, for
availing the option of payment of tax under notification No. 2/2019-
Central Tax (Rate) dated 07.03.2019 is extended to 30.09.2019.
The last date for furnishing statement containing the details of the
self-assessed tax in FORM GST CMP-08 for the quarter April, 2019
to June, 2019 (by taxpayers under composition scheme), has been
extended from 31.07.2019 to 31.08.2019.
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Tax Administration (4/19)
â–  In order to ensure single interface, all administrative control over 90% of taxpayers
having turnover below Rs. 1.5 crore would vest with State tax administration and over
10% with the Central tax administration. Further, all administrative control over
taxpayers having turnover above Rs.1.5 crore shall be divided equally in the ratio of
50% each for the Central and State

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constitute the shortfall from the minimum value of goods or services or both required to be
purchased by a promoter for construction of a project as prescribed in notification No. 11/2017- Central Tax
(Rate) dated 28.06.2017,
✓ cement which constitute the shortfall from the minimum value of goods or services or both required to be
purchased by a promoter for construction of project as prescribed in notification No. 11/2017- Central Tax (Rate),
and
capital goods supplied to a promoter for construction of a project on which tax is payable or paid at the rate
prescribed in notification No. 11/2017- Central Tax (Rate).
Earlier, 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 was kept under suspension till 30.09.2019.
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Payment of Tax (6/19)
â–  There shall be no requirement on payment of tax on advances received for supply of
goods by all taxpayer

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the same
are being finalized.
â–  All the supporting documents/invoices in
relation to a claim for refund in FORM GST
RFD-01A are being uploaded electronically on
the common portal at the time of filing of the
refund application itself, thereby obviating the
need for a taxpayer to physically visit a tax
office for submission of a refund application.
â–  Completely electronic refund module has also
been finalized and will be deployed soon.
Export
(7/19)
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â–  E-Wallet Scheme shall be introduced for
exporters soon and till then relief for
exporters shall be given in form of broadly
existing practice.
Supply of services to qualify as exports,
even if payment is received in Indian
Rupees, where permitted by the RBI.
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Return and Late Fees (8/19)
â–  All taxpayers are required to file return FORM GSTR-3B & pay tax on monthly basis.
Taxpayers with turnover up to Rs. 1.5 Cr are required to file information in FOR

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Rs. 50/- per day instead of Rs. 200/- per
day.
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â– 
New Return System (9/19)
New return system is simple with two main annexures. One for reporting details of outward supplies (FORM GST
ANX-1) and one for availing input tax credit (FORM GST ANX-2) based on invoices, etc. uploaded by the supplier.
Invoices can be uploaded continuously by the supplier and can be continuously viewed and accepted by the recipient
for availing input tax credit. This process would ensure that very large part of the return is auto-populated based on the
invoices uploaded by the buyer and the supplier. Simply put, the process would be “UPLOAD – LOCK- PAY” for
most tax payers.
Taxpayers would have the facility to create his profile based on nature of supplies made and received. The information
which a taxpayer would be shown and would be required to fill in the return would depend on his profile.
NIL return filers (no purchase and no sale) shall be given facility to file

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ts 35th meeting held
on 21.06.2019 has decided to introduce the new return system in a phased manner, as described below:
✓ Between July, 2019 to September, 2019, the new return system (FORM GST ANX-1 & FORM GST ANX-2
only) to be available for trial for taxpayers. Taxpayers to continue to file FORM GSTR-1 & FORM GSTR-3B as
at present;
✓ From October, 2019 onwards, FORM GST ANX-1 to be made compulsory. Large taxpayers (having aggregate
turnover of more than Rs. 5 crores in previous year) to file FORM GST ANX-1 on monthly basis whereas small
taxpayers to file first FORM GST ANX-1 for the quarter October, 2019 to December, 2019 in January, 2020;
✓ For October and November, 2019, large taxpayers to continue to file FORM GSTR-3B on monthly basis and
will file first FORM GST RET-01 for December, 2019 in January, 2020. It may be noted that invoices etc. can be
uploaded in FORM GST ANX-1 on a continuous basis both by large and small taxpayers from October, 2019
onw

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. The GST Council in its 35th
meeting held on 21.06.2019 decided that the Rule 138
E of the CGST rules, pertaining to blocking of e-way
bills on non-filing of returns for two consecutive tax
periods, be brought into effect from 21.08.2019.
Electric Vehicles (10/19)
The Council in its 36th meeting held on 27.07.2019
decided to reduce the GST rates on electric vehicles
from 12% to 5% and charger or charging stations for
electric vehicles from 18% to 5% w.e.f. 01.08.2019.
Hiring of electric buses (of carrying capacity of more
than 12 passengers) by local authorities has been
exempted from GST w.e.f. 01.08.2019.
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ITC
â–  ITC in relation to invoices issued by the
supplier during FY 2017-18 may be availed by
the recipient till the due date for furnishing of
FORM GSTR-3B for the month of March,
2019, subject to specified conditions.
â–  To provide sufficient time to the trade and
industry to furnish the declaration in FORM
GST ITC-04, relating to job w

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s implementation and
related structural issues.
The Group of Ministers will be assisted by the
committee of experts from Central Government,
State Governments and the NIPFP (National
Institute of Public Finance and Planning), who
would study and share the findings with GoM.
The GOM in turn would give
recommendation to the GST Council.
its
Electronic Invoicing (12/19)
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The Council in its 35th meeting held on
21.06.2019 decided to introduce electronic
invoicing system in a phase-wise manner for
B2B transactions.
The Phase 1 is proposed to be voluntary and it
shall be rolled out from Jan, 2020.
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â—‰
Real Estate (13/19)
GST shall be levied at effective rate of 5% on residential properties outside affordable segment and 1% on affordable housing
properties.
Definition of affordable housing: A residential house/flat of carpet area of up to 90 sqm in non-metropolitan cities/towns and
60 sqm in metropolitan cities having

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option given to real estate firms to continue to pay tax at the old rates (effective rate of 8% or 12% with
ITC) on on-going projects (buildings where construction and actual booking have both started before 01.04.2019) which have
not been completed by 31.03.2019.
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Natural Calamity Cess (14/19)
GST Council in its 32nd Meeting held on 10.01.2019 approved levy of Cess on Intra-State Supply of
Goods and Services within the State of Kerala at a rate not exceeding 1% for a period not exceeding 2
years.
Kerala Government has, accordingly, decided to levy one per cent. 'Kerala Flood Cess' on value of intra-
state supply of goods by taxable person to an unregistered person in respect of supplies specified in
TABLE under sub-clause (2) of clause 14 of the Kerala Finance Bill, 2019.
The said flood cess shall be levied from 01.08.2019.
Kerala government has also decided to allow local bodies to collect entertainment tax on movie tickets up
to 10 per cent.

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Place of supply in case of job work of any treatment or process done on goods temporarily
imported into India and then exported without putting them to any other use in India, would be
outside India.
The following transactions to be treated as no supply (no tax payable) under Schedule III:
✓
✓
Supply of goods from a place in the non-taxable territory to another place in the non-
taxable territory without such goods entering into India;
Supply of warehoused goods to any person before clearance for home consumption;
Supply of goods in case of high sea sales.
Registered persons may issue consolidated credit/debit notes in respect of multiple invoices
issued in a Financial Year.
Amount of pre-deposit payable for filing of appeal before the Appellate Authority and the
Appellate Tribunal capped at Rs. 25 Cr and Rs. 50 Cr respectively.
Recovery can be made from distinct persons, even if present in different State/Union territories.
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Recent

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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.
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☐
Other decisions (Contd.) (18/19)
Formula and mechanism for GST Compensation Cess has been finalized.
50% of the GST paid will be refunded to CSD (Defense Canteens).
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Centralized UIN shall be issued to every Foreign Diplomatic Mission / UN Organization by the Central
Government for handling their refund related applications.
Rate of interest on delayed payments and delayed refund has been recommended.
â–  Supply from GTA to unregistered persons has been exempted from tax.
â–  Group of Ministers has been constituted to examine the GST Rate Structure on Lotteries.
â–  Group of Ministers has been constituted to look into the issues being faced by MSMEs and to provide
solutions for the same.
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y & collection of GST by the Centre (CGST) and the States
(SGST)
Centre to levy and collect IGST on supplies in the course of inter-State supplies & on imports
Compensation for loss of revenue to States for five years
All transactions and processes only through electronic mode – Non-intrusive administration
PAN Based Registration
Registration mandatory for suppliers of services only if the turnover exceeds Rs.20 lakhs (Rs.10
lakhs in case of States of Manipur, Mizoram, Nagaland and Tripura).
Registration mandatory for suppliers of goods only if the turnover exceeds Rs.40 lakhs (Rs.20
lakhs in case of States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland,
Puducherry, Sikkim, Telangana, Tripura and Uttarakhand)
Main Features of the GST Act (2/5)
Option of Voluntary Registration
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Composition threshold shall be Rs. 150 lakhs, special category States of Arunachal
Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand
h

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e movement
of goods with effect from 01.04.2018. As on 16.06.2018, all States and Union
Territories have introduced e-way bill system for intra-state movement of goods
Refund to be granted within 60 days
Provisional release of 90% refund to exporters within 7 days
Main Features of the GST Act (5/5)
Interest payable if refund not sanctioned in time
Refund to be directly credited to bank accounts
Comprehensive transitional provisions for smooth transition of existing tax payers to GST regime
Special procedures for job work
System of GST Compliance Rating
Anti-Profiteering provision
—
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National Anti-Profiteering Authority (NAA) set up to examine the complaints of non-
passing the benefit of reduced tax incidence.
A three-tier structure adopted to investigate anti-profiteering complaints from consumers.
At the initial level are the state screening committees and a national standing committee to examine complaints.
These committees refer complaint

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– 
Incorporated in March 2013 as Section 25 private limited company with paid up
capital of Rs. 10 crore
â—‰
Equity Holders
39
✓ Central Government – 24.5%
✓ EC and all States together – 24.5%
✓ Financial Institutions – 51%
To function as a Common Pass-through portal for taxpayers-
✓ submit registration application
✓ file returns
✓ make tax payments
To develop back end modules for 27 States (MODEL -II)
Infosys appointed as Managed Service Provider (MSP)
Appointed 73 GST Suvidha Providers (GSPs)
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Goods and Service Tax Network (2/4)
GST Council in its 27th meeting held on 04.05.2018 has approved the change in
shareholding pattern of GSTN
Considering the nature of 'state' function' performed by GSTN, the GST Council felt
that GSTN be converted into a fully owned Government company
Accordingly, the GST Council approved acquisition of entire 51 per cent of equity
held by non-Governmental institutions in GS

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SP Portal
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State and Central Government
Model 1 States
Mobile Apps
GST Provided
Portal
AP Sales
Tax
TN Sales
CBEC
Tax
GST
Common
Core GST System
Portal
Central
Taxpayer
Registratio
Invoice
Upload
Tax
Payments
Returns
Filing
Return
Processing
Tax Ledger Settlement
Bank and
RBI
Interface
Reports
and MIS
n
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Scrutiny
and
Assessment
Role of CBIC
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Role in Policy making: Drafting of GST Law, Rules & Procedures – CGST, UTGST &
IGST Law
CBIC is responsible for administration of the CGST and IGST law
Assessment, Audit, Anti-evasion & enforcement under CGST, UTGST & IGST Law
Levy & collection of Central Excise duty on products outside GST – Petroleum Products
& Tobacco
Levy & collection of Customs duties
Developing linkages of CBIC – GST System with GSTN
Training of officials of both Centre & States
Outreach programs for Trade and Industry
Director General of Anti – Profiteering, CBIC has been mandated t

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