THE CENTRAL GOODS AND SERVICES TAX (AMENDMENT) BILL, 2018
By: – DR.MARIAPPAN GOVINDARAJAN
Goods and Services Tax – GST
Dated:- 11-8-2018<\/p>\n
Introduction
\nThe Central Goods and Services Tax Act, 2017 (the Act) was enacted with a view to make a provision for levy and collection of tax on intra-State supply of goods or services or both by the Central Government. The Act provides for certain provisions for smooth transition of existing taxpayers to new goods and services tax regime. However, the new tax regime had faced certain difficulties. One of the major inconveniences caused to the taxpayers, especially small and medium enterprises, was the process of filing return and payment of tax. For this purpose the Government proposed to amend the Act so as to provide of ease of procedure. The Government introduced 'The Central Goods and Services Tax (Amendment) Bill, 2018 ('Bill' for short) on 07.08.2018. The details of amendments proposed in the Bill are discussed in this article<\/p>\n
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\nTo rectify the same clause 2(d) of the Bill proposes to substitute the section 2(1) (c) by section 2 (1)(b).
\nLocal authority
\nClause 2(e) of the Bill proposes to expand the definition of 'local authority' under section 2(69) by including the Regional Council constituted under Article 371J of the Constitution.
\nServices
\nSection 2(105) of the Act defines the term 'services'. Clause 2(f) of the Bill proposes to add Explanation to this section which clarifies the expression “services” includes facilitating or arranging transactions in securities.
\nScope of supply
\nSection 7(1) gives the scope of the term 'supply'. Section 7(1) has four sub clauses from (a) to (d). Clause 3(a) proposes to om<\/p>\n
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\nComposition levy
\nClause 5(a) of the Bill proposes to increase the threshold limit for composition of levy from Re.1 crore to ₹ 1.5 crores. This clause further proposes to add second proviso to the section 10(1) which reads as – a person who opts to pay tax under-
\n * clause (a) (1% of State or UT turnover by a manufacturer) or
\n * clause (b) (2.5% of State or UT turnover by a hotel) or
\n * clause (c) (0.5% of State or UT turnover by other suppliers)
\nmay supply services (other than those referred to in clause (b) of paragraph 6 of Schedule II), of value not exceeding ten per cent. of turnover in a State or Union territory in the preceding financial year or five lakh rupees, whichever is high<\/p>\n
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\nApportionment of credit and blocked credits
\nClause 9(a) of the Bill proposes to add explanation to section 17(3) which defines the expression 'value of exempt supply' as not including the value of activities or transactions specified in Schedule III, except those specified in paragraph 5 of the said Schedule.'
\nClause 9(b) of the bill proposes to substitute section 17(5)(a) and 17(5)(b). The newly substituted section 17(5)(a) provides that –
\n(a) motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver), except when they are used for making the following taxable supplies, namely:-
\n(A) further supply of such motor vehicles; or
\n(B) transportation of passengers; or
\n(C) imparting training on driving such motor vehicles;
\n(aa) vessels and aircraft except when they are used
\n(i) for making the following taxable supplies, namely:-
\n(A) further supply of such vessels or aircraft; or
\n(B<\/p>\n
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\nProvided that the input tax credit in respect of such goods or services or both shall be available where an inward supply of such goods or services or both is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply;
\n(ii) membership of a club, health and fitness centre; and
\n(iii) travel benefits extended to employees on vacation such as leave or home travel concession:
\nProvided that the input tax credit in respect of such goods or services or both shall be available, where it is obligatory for an employer to provide to its employees under any law for the time being in force.
\nThreshold limit for special States
\nClause 11(a) proposes to enhance the threshold limit to the Special categories not exce<\/p>\n
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\nSuspension of registration
\nClause 14(a) proposes to change the margin heading of section 29 from 'Cancellation of registration' to 'Cancellation or suspension of registration.'
\nClause 14(b) proposes to insert a proviso to section 29(1)(c) which provides 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
\nClause 14(c) proposes to insert a proviso to section 29(2) which provides 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.
\nApplicability of section <\/p>\n
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\nClause 17(b) proposes to insert a proviso to section 39(7) which provides that the Government may, on the recommendations of the Council, notify certain classes of registered persons who shall pay to the Government the tax due or part thereof as per the return on or before the last date on which he is required to furnish such return, subject to such conditions and safeguards as may be specified therein.
\nProcedure for furnishing return and availing input tax credit
\nClause 18 proposes to insert a new section 43A to deal with the procedure for furnishing return and availing input tax credit. Section 43A provides-
\n43A(1) Notwithstanding anything contained in sub-section (2) of section 16, section 37 or section 38, every registered person shall in the returns furnished under sub-section (1) of section 39 verify, validate, modify or delete the details of suppl<\/p>\n
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\n(6) The supplier and the recipient of a supply shall be jointly and severally liable to pay tax or to pay the input tax credit availed, as the case may be, in relation to outward supplies for which the details have been furnished under sub-section (3) or sub-section (4) but return thereof has not been furnished.
\n(7) For the purposes of sub-section (6), the recovery shall be made in such manner as may be prescribed and such procedure may provide for non-recovery of an amount of tax or input tax credit wrongly availed not exceeding one thousand rupees.
\n(8) The procedure, safeguards and threshold of the tax amount in relation to outward supplies, the details of which can be furnished under sub-section (3) by a registered person,-
\n(i) within six months of taking registration;
\n(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, sha<\/p>\n
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\nOrder of utilization of input tax credit.
\n49B. Notwithstanding anything contained in this Chapter and subject to the provisions of clause (e) and clause (f) of sub-section (5) of section 49, the Government may, on the recommendations of the Council, prescribe the order and manner of utilization 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.
\nRecovery of tax
\nClause 24 of the bill proposes to insert an explanation to section 79(4) which provides that the word person shall include “distinct persons” as referred to in sub-section (4) or, as the case may be, sub-section (5) of section 25.
\nPre deposit on appeal
\nSection 107(6) provides that no appeal shall be<\/p>\n
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\nJob work
\nClause 29 proposes to insert a second proviso to section 143(1)(b) which provides 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.
\nAmendment to Schedule III
\nClause 32 (i) proposes to add the following paras in Schedule III-
\n7. 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.
\n8. (a) Supply of warehoused goods to any person before clearance for home consumption;
\n(b) Supply of goods by the consignee to any other person, by endorsement of documents of title to the goods, after the goods have been dispatched from the port of origin located outside India but before clearance for<\/p>\n
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