Comparative insight into the amended CGST and IGST Acts applicable w.e.f. 01.02.2019
By: – Bimal jain
Goods and Services Tax – GST
Dated:- 29-1-2019<\/p>\n
Comparative insight into the amended CGST and IGST Acts applicable w.e.f. 01.02.2019
\nThe GST Council in its 32nd meeting held on January 10, 2019, gave approval that the changes made by CGST (Amendment) Act, 2018, IGST (Amendment) Act, 2018, UTGST (Amendment) Act, 2018 and GST (Compensation to States) Amendment Act, 2018 along with the corresponding changes in SGST Acts would be notified w.e.f. February 01, 2019.
\nEarlier, the Hon'ble President on August 29, 2018 has given its assent to these four crucial amendment bills of GST law, which got published in the official Gazette of India on August 30, 2018.
\nNow, since the various Amendment Acts are going to be effective from first day of February, 2019, it is highly advisable to plunge into the changes and understand their implications on our business.
\nFor the ease of under<\/p>\n
= = = = = = = =<\/p>\n
Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ised to pass any order or decision under this Act, but does not include the Central Board of Excise Indirect Taxes and Customs, the Revisional Authority, the Authority for Advance Ruling, the Appellate Authority for Advance Ruling, the Appellate Authority, and the Appellate Tribunal and the Authority referred to in sub-section (2) of section 171. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n the State's budget to meet the developmental needs of the region. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n s to be treated as supply of goods or supply of services as referred to in Schedule II. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ly of goods. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ations 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”. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n rnover in State or turnover in Union territory in case of other suppliers, = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n tion 73 or section 74 shall, mutatis mutandis, apply for determination of tax and penalty. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n R 1 crore to 1.5 crores and further to enable registered manufacturers and traders to opt for composition scheme u\/s 10(1) of the CGST Act even if they supply services of value not exceeding 10% of the turnover in a State\/Union territory in the preceding FY or INR 5 lakhs, whichever is higher [Presently, registered persons engaged in the supply of services (other than restaurant services) are not eligible for the composition scheme] = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ness to SME\/ MSME Service providers. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n of section 31 or the date of receipt of payment, whichever is earlier; or = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n r 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; = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n dule II, sale of building. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n C) imparting training on driving, such motor vehicle; = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n otor vehicles, vessels or aircraft is allowed to manufacturer of such motor vehicles, vessels or aircraft and to those engaged in supply of general insurance services in respect of such motor vehicles, vessels or aircraft. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ply; = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n the value of turnover, reduced by the amount of any duty or tax levied under entry 84 of List I of the Seventh Schedule to the Constitution and entries 51 and 54 of List II of the said Schedule. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n his aggregate turnover in a financial year exceeds ten lakh rupees. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n apply for registration in every such State or Union territory in which he is so liable within thirty days from the date on which he becomes liable to registration, in such manner and subject to such conditions as may be prescribed: = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n nted a single registration in a State or Union territory: = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ng 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. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n e credit notes for supplies made in a financial year containing such particulars as may be prescribed. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n Central Government or a State Government or a local authority, whose books of account are subject to audit by the Comptroller and Auditor-General of India or an auditor appointed for auditing the accounts of local authorities under any law for the time being in force. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n T Act relating to 'furnishing of returns', so as to provide for prescribing the procedure for quarterly filing of returns for specified class of registered persons. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ncorrect particulars shall be allowed after the due date for furnishing of return for the month of September or second quarter following the end of the financial year, or the actual date of furnishing of relevant annual return, whichever is earlier. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ishing 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. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n plier. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n n territory tax shall first be utilised towards payment of Union territory tax and the amount remaining, if any, may be utilised towards payment of integrated tax. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n und settlement on account of IGST. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n able to- = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ed to provide that services shall qualify as exports even if the payment for the services supplied is received in Indian rupees as per RBI regulations. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n b-section (5) of section 25. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n dship on innocent assesses having genuine case and not easing business for SME\/ MSME Sectors. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n n (1) within seven days fourteen days of such detention or seizure, further proceedings shall be initiated in accordance with the provisions of section 130: = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n -section (5), the expression “eligible duties and taxes” means = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n to clarify that the expression “eligible duties and taxes” excludes any cess which has not been specified in Explanation 1 or Explanation 2 above and any cess which is collected as additional duty of customs under sub-section (1) of section 3 of the Customs Tariff Act, 1975. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n er in this section referred to as the “principal”) may under intimation and subject to such conditions as may be prescribed, send any inputs or capital goods, without payment of tax, to a job worker for job work and from there subsequently send to another job worker and likewise, and shall, = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n use being shown, be extended by the Commissioner for a further period not exceeding one year and two years respectively. Change in heading = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n shall have the same meaning as assigned to it in the Customs Act, 1962. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n vice are not merely establishments of a distinct person in accordance with Explanation 1 in section 8. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ry. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n abling power for the Govt. to notify a class of registered persons who would be liable to pay tax on reverse charge basis in case of receipt of specified categories of goods or services or both from an unregistered supplier. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n (8) The place of supply of services by way of transportation of goods, including by mail or courier to, = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n rs; = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n rtioned under clauses (a) to (f). = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" Comparative insight into the amended CGST and IGST Acts applicable w.e.f. 01.02.2019By: – Bimal jainGoods and Services Tax – GSTDated:- 29-1-2019 Comparative insight into the amended CGST and IGST Acts applicable w.e.f. 01.02.2019 The GST Council in its 32nd meeting held on January 10, 2019, gave approval that the changes made by CGST (Amendment) Act, … Continue reading “Comparative insight into the amended CGST and IGST Acts applicable w.e.f. 01.02.2019”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-16374","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/16374","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16374"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/16374\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16374"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16374"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16374"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\nChanges are made in pursuance of the change in name of CBEC to CBIC.
\nFurther, the National Anti-Profiteering Authority constituted under Section 171 of the CGST Act is also excluded from the definition of 'adjudicating authority'.
\nSection 2(17)(h) – Definition of 'Business'
\n“business” includes
\n(h) services provided by a race club by way of totalisator or a licence to book maker in such club; and
\n“business” includes
\n(h) services provided by 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
\nThis change ensures that all activities related to a rac<\/p>\n
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\nSection 2(102) – Definition of 'Service'
\n“services” means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any
\nother mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged;
\n“services” means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged;
\nExplanation. For the removal of doubts, it is hereby clarified that the expression “services” includes facilitating or arranging transactions in securities;'.
\nThis explanation provides clarity that although 'securities' [s. 2(h) of Securities Contract Regulations Act, 1956] are excluded from t<\/p>\n
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\n(2) Notwithstanding anything contained in sub-section (1),
\n(a) activities or transactions specified in Schedule III; or
\n(b) such activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public 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.
\n(3) Subject to the provisions of sub-sections (1) and (2), the Government may, on the recommendations of the Council, specify, by notification, the transactions that are to be
\ntreated as-
\n(a) a supply of goods and not as a supply of services; or
\n(b) a supply of services and not as a supply of goods.
\n(1) For the purposes of this Act, the expression “supply” includes-
\n(a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licen<\/p>\n
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\nRetrospective application w.e.f. 01.07.2017
\nTerm 'supply' is amended to exclude activities\/ transactions listed in Schedule II to ensure that the activities\/ transactions as per Schedule II is to determine only whether the same is supply of goods or services. Hence, activities\/ transactions listed in Schedule II (as supply of service or supply of goods) shall be taxed only when they constitute 'supply' in accordance with provisions of Section 7(1)(a), (b) and (c) of the CGST Act.
\nAmendments in definition of 'supply' are made retrospectively applicable. Thus, there shall not be any past litigation on account of any transaction merely covered under Schedule II, but otherwise not a 'supply'.
\nWhat additionally could have been done:
\n * Inclusive definition of supply must be made concrete with no subjectivity;
\n * Clarity must be provided on concept of composite and mixed supply as to manner of determining principal supply and dominant intention;
\n * Activities relating to <\/p>\n
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\nEarlier Section 9(4) of the CGST Act has been omitted and instead, an enabling power is granted for the Govt. to notify a class of registered persons who would be liable to pay tax on reverse charge basis in case of receipt of specified categories of goods or services or both (as against taxable goods or services or both) from an unregistered supplier.
\nThe details of such specified persons and specified goods\/services are to be notified in future.
\nWhat additionally could have been done:
\nOperation of Section 9(4) in it<\/p>\n
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\nsubject to such conditions and restrictions as may be prescribed:
\nProvided that the Government may, by notification, increase the said limit of fifty lakh rupees to such higher amount, not exceeding one crore rupees, as may be recommended by the Council.
\n(2) The registered person shall be eligible to opt under sub-section (1), if: –
\n(a) he is not engaged in the supply of services other than supplies referred to in clause (b) of paragraph 6 of Schedule II;
\n\t(b) he is not engaged in making any supply of goods which are not leviable to tax under this Act;
\n(c) he is not engaged in making any inter-State outward supplies of goods;
\n(d) he is not engaged in making any supply of goods through an electronic commerce operator who is required to collect tax at source under section 52; and (e) he is not a manufacturer of such goods as may be notified by the Government on the recommendations of the Council:
\nProv<\/p>\n
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\n(1) Notwithstanding anything to the contrary contained in this Act but subject to the provisions of sub-sections (3) and (4) of section 9, a registered person, whose aggregate turnover in the preceding financial year did not exceed fifty lakh rupees, may opt to pay, in lieu of the tax payable by him under sub-section (1) of section 9, an amount of tax calculated at such rate as may be prescribed, but not exceeding,
\n * one per cent of the turnover in State or turnover in Union territory in case of a manufacturer,
\n * two and a half per cent. of the turnover in State or turnover in Union territory in case of persons engaged in making supplies referred to in clause (b) of paragraph 6 of Schedule II, and
\n * half per cent. of the turnover in State or turnover in Union territory in case of other suppliers,
\nsubject to such conditions and restrictions as may be prescribed:
\nProvided that the Governme<\/p>\n
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\nThe amendment also allows supply of services to the extent of above specified limits, apart from services referred in Para 6(b) of Schedule II i.e. restaurant services. This change seems to be inserted in view of clause (b) of Section 10. Clause (b) mentions about composite rate of tax on restaurant service providers. It clarifies that for clause (b), this limit shall apply for services supplied other than restaurant services.
\nWhat additionally could have been done:
\n * It should be clarified that this amount of 10% of turnover in preceding financial year<\/p>\n
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\nSection 12 – Time of supply of goods
\n 12 (2) The time of supply of goods shall be the earlier of the following dates, namely: –
\n (a) the date of issue of invoice by the supplier or the last date on which he is required, under sub-section (1) of section 31, to issue the invoice with respect to the supply; or
\n12 (2) The time of supply of goods shall be the earlier of the following dates, namely: –
\n(a) date of issue of invoice by the supplier or the last date on which he is required under sub-section (1) of section 31 to issue the invoice with respect to the supply; or
\nThis amendment seeks to correct a drafting error and thus includes issuance of invoice\/other documents contained in other sub-sections of Section 31 like continuous supply of goods, etc.
\nWhat additionally could have been done:
\n * Clarity may also be provided in respect of determining time of supply of debit notes issued for increase in taxable value and\/or tax amount of supply of<\/p>\n
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\nThis amendment seeks to correct a drafting error and thus includes issuance of invoice\/other documents contained in other sub-sections of Section 31 like continuous supply of services etc.
\nWhat additionally could have been done:
\n * Clarity may also be provided in respect of determining time of supply of debit notes issued for increase in taxable value and\/or tax amount of supply of services as the same is issued under Section 34 of the CGST Act.
\nSection 16(2)(b) – Conditions for availing Input Tax Credit
\n16(2) Notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless,
\n(a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed;
\n(b) he has received the goods or services or both.\n<\/p>\n
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\n(ii) where the services are provided by the supplier to any person on the direction of and on account of such registered person.”;
\nTo satisfy the requirement of receiving services for availing ITC, it is stated that where the services are provided by the supplier to any person on the direction of and on account of registered person it shall be deemed that such registered person has received the services.
\nPresently this deeming fiction is applicable only in case of “bill-to-ship-to” supply of goods. The same has been extended to services as well.
\nSection 16(2)(c) – Conditions for availing Input Tax Credit
\n16(2) ………………………………….
\n(c) subject to the provisions of section 41, the tax charged in resp<\/p>\n
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\n17(3) The value of exempt supply under sub-section (2) shall be such as may be prescribed and shall include supplies on which the recipient is liable to pay tax on reverse charge basis, transactions in securities, sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building.
\n'Explanation.-For the purposes of this sub-section, the expression ''value of exempt supply'' shall not include the value of activities or transactions specified in Schedule III, except those specified in paragraph 5 of the said Schedule.
\nIt is clarified by way of explanation that no reversal of common ITC shall be required on activities or transactions specified in Schedule III (other than sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building) by excluding it from the ambit of 'exempt supply' for the purpose of reversal.
\nSection 17(5)(a) – Blocked credit on motor vehicles
\n (5) Notwithstanding anything contained in sub-sect<\/p>\n
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\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) transportation of passengers; or
\n(C) imparting training on navigating such vessels; or
\n(D) imparting training on flying such aircraft;
\n (ii) for transportation of goods;
\n (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):
\n Provided that the input tax credit in respect of such services shall be available –
\n (i) where the motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) are used for the purposes specified therein;
\n (ii) where received by a taxable person engaged-
\n (I) in the manufacture of such motor vehicles, vessels or aircraft; or
\n (II) in the supply of general insurance services in respect of such motor v<\/p>\n
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\nSection 17(5)(b) – Other blocked credits
\n(b) the following supply of goods or services or both-
\n(i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery except where an inward supply of goods or services or both of a particular category 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;
\n(iii) rent-a-cab, life insurance and health insurance except where
\n(A) the Government notifies the services which are obligatory for an employer to provide to its employees under any law for the time being in force; or
\n(B) such inward supply of goods or s<\/p>\n
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\n(ii) membership of a club, health and fitness centre; and
\n(iii) rent-a-cab, life insurance and health insurance except where
\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 the same to its employees under any law for the time being in force.
\nITC in respect of food and beverages, health services, renting or hiring of motor vehicles, vessels and aircraft, travel benefits to employees etc., can be availed where the provision of such goods or services is obligatory for an employer to provide to its employees under any law for time being in force.
\nFurther ITC on renting or hiring of motor vehicles, vessels or aircraft is allowed when they are used for purposes specified in clause (a) or (aa).
\nWhat additionally could have been done:
\n * Section 17(5) of the CGST Act must be pruned dow<\/p>\n
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\n(c) the term ''turnover'', in relation to any registered person engaged in the supply of taxable goods as well as goods not taxable under this Act, means the value of turnover, reduced by the amount of any duty or tax levied under entry entries 84 and 92A of List I of the Seventh Schedule to the Constitution and entries 51 and 54 of List II of the said Schedule.
\nThis amendment excludes the amount of tax levied under entry 92A of List I from the value of turnover for the purposes of distribution of credit by ISD. The same was inadvertently left out from clause (c) of Explanation to Section 20.
\nEntry 92A of List I covers taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter-State trade or commerce.
\nSection 22(1) second pr<\/p>\n
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\n 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.
\nProviso is inserted under Section 22(1) so as to enable government to enhance the threshold limit of registration in special category states from ten lakh rupees to maximum twenty lakh rupees
\nSection 22 Explanation (iii) – Persons liable for registration
\nExplanation (iii) to section 22 the expression “special category States” shall mean the States as specified in sub-clause (g) of clause (4) of article 279A of the Constitution except the State of Jammu and Kashmir.
\nExplanation (iii) to section 22 the expression “special category States” shall mean the States as specified in sub-clause (<\/p>\n
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\nProvided that a casual taxable person or a non-resident taxable person shall apply for registration at least five days prior to the commencement of business.
\nExplanation. – Every person who makes a supply from the territorial waters of India shall obtain registration in the coastal State or Union territory where the nearest point of the appropriate baseline is located.
\n25 (1) Every person who is liable to be registered under section 22 or section 24 shall apply for registration in every such State or Union territory in which he is so liable within thirty days from the date on which he becomes liable to registration, in such manner and subject to such conditions as may be prescribed:
\nProvided that a casual taxable person or a non-resident taxable person s<\/p>\n
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\nProvided that a person having multiple business verticals in a State or Union territory may be granted a separate registration for each business vertical, subject to such conditions as may be prescribed.
\n25 (2) A person seeking registration under this Act shall be granted a single registration in a State or Union territory:
\nProvided that a person having multiple business vertical places of business in a State or Union territory may be granted a separate registration for each such business vertical place of business, subject to such conditions as may be prescribed.
\nProviso is substituted to allow persons having multiple places of business in a State or Union territory to obtain separate registrations for each such place of business, if they wish so. Thus, the requirement of having multiple business vertical for obtaining separate registration is dispensed with.
\nSection 29(1) – Cancellation or Suspension of Registration
\n29 <\/p>\n
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\nThis amendment provides for suspension of registration during pendency of proceedings relating to cancellation of registration. This would relieve the taxpayer of continued compliance burden under the law till such time as the process of allowing cancellation of registration is completed.
\nSimilar changes are also made in sub-section (2) after the proviso of Section 29(2)
\nSection 34 – Debit and Credit Notes
\n34 (1) Where a tax invoice has been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply, or where the goods supplied are returned by the recipient, or where goods or services or both supplied are found to be deficient, the registered person, who has supplied such goods or services or both, may<\/p>\n
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\n(2) …
\n(3) Where a tax invoice has one or more tax invoices have been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to be less than the taxable value or tax payable in respect of such supply, the registered person, who has supplied such goods or services or both, shall issue to the recipient a debit note one or more debit notes for supplies made in a financial year containing such particulars as may be prescribed.
\nThe amendment seeks to permit a registered person to issue consolidated credit \/ debit notes as prescribed under Section 34 of the CGST Act in respect of multiple invoices issued in a Financial Year without linking the same to individual invoices.
\nHowever corresponding changes in Rule 53 of the CGST Rules shall also be required which prescribes corresponding invoice number and date of invoice <\/p>\n
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\nThis amendment provides that any department of the Central or State Government\/local authority which is subject to audit by CAG need not get their books of account audited by any CA or CMA.
\nSection 39 (1)- Furnishing of returns
\n39 (1) Every registered person, other than an Input Service Distributor or a non-resident taxable person or a person paying tax under the provisions of section 10 or section 51 or section 52 shall, for every calendar month or part thereof, furnish, in such form and manner as may be prescribed, a return, electronically, of inward and outward supplies of goods or services or both, input tax credit availed, tax payable, tax paid and such other particulars as may be prescribed, on or before the twe<\/p>\n
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\nSection 39 (7)- Furnishing of returns
\n39 (7) Every registered person, who is required to furnish a return under sub-section (1) or sub-section (2) or sub-section (3) or sub-section (5), shall pay to the Government the tax due as per such return not later than the last date on which he is required to furnish such return.
\n39 (7) Every registered person, who is required to furnish a return under sub-section (1) or sub-section (2) or sub-section (3) or sub-section (5), shall pay to the Government the tax due as per such return not later than the last date on which he is required to furnish such return.
\nProvided 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<\/p>\n
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\n39 (9) Subject to the provisions of sections 37 and 38, if any registered person after furnishing a return under sub-section (1) or sub-section (2) or sub-section (3) or sub-section (4) or sub-section (5) discovers any omission or incorrect particulars therein, other than as a result of scrutiny, audit, inspection or enforcement activity by the tax authorities, he shall rectify such omission or incorrect particulars in the return to be furnished for the month or quarter during which such omission or incorrect particulars are noticed in such form and manner as may be prescribed, subject to payment of interest under this Act:
\nProvided that no such rectification of any omission or incorrect particulars shall be allowed after the due date for<\/p>\n
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\n(4) The procedure for availing input tax credit in respect of outward supplies not furnished under sub-section (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 the said sub-section.
\n(5) The amount of tax specified in the outward supplies for which the details have been furnished by the supplier under sub-section (3) shall be deemed to be the tax payable by him under the provisions of the Act.
\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 ha<\/p>\n
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\nHowever, the supplier and recipient have been made jointly and severally liable to pay tax for details furnished\/ not furnished by the supplier in respect of which the return has not been furnished.
\nSection 48(2) – GST Practitioner
\n48 (2) A registered person may authorise an approved goods and services tax practitioner to furnish the details of outward supplies under section 37, the details of inward supplies under section 38 and the return under section 39 or section 44 or section 45 in such manner as may be prescribed.
\n48 (2) A registered person may authorise an approved goods and services tax practitioner to furnish the details of outward supplies under section 37, the details of inward supplies under section 38 and the return under section 39 or section 44 or section 45, and to perform such other functions in such manner as may be prescribed.
\nThis amendment allows the GST practitioner to perform other functions such as, filing refund claim, filing application for cancel<\/p>\n
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\n49 (5) The amount of input tax credit available in the electronic credit ledger of the registered person on account of
\n(a)….
\n(b)….
\n(c) the State tax shall first be utilized towards payment of State tax and the amount remaining, if any, may be utilized towards payment of integrated tax;
\nProvided 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 for payment of integrated tax;”;
\n(d) the Union territory tax shall first be utilized towards payment of Union territory tax and the amount remaining, if any, may be utilized towards payment of integrated tax;
\nProvided that the input tax credit on account of Union territory tax shall be utilised towards payment of integrate<\/p>\n
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\nTherefore, the manner of utilisation of GST credits is as follows:
\nCredit of IGST to be utilised first for liability of: IGST – CGST – SGST
\nThen,
\n * Credit of CGST to be utilised for liability of: CGST\/ IGST (If any)
\n * Credit of SGST to be utilised for liability of: SGST\/ IGST (if any)
\nSection 49B – Order of utilisation of input tax credit
\n–
\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 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.
\nThis Section provides an enabling power for the Government to prescribe any specific order of utilization of ITC for payment of taxes.
\nThis provision is subject to clause (e) and (f) of Section 49(5) i.<\/p>\n
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\n(a) refund of tax paid on zero-rated supplies of goods or services or both or on inputs or input services used in making such zero-rated supplies;
\n(b) ………..
\n54 (8) Notwithstanding anything contained in sub-section (5), the refundable amount shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to-
\n(a) refund of tax paid on zero-rated supplies export and exports of goods or services or both or on inputs or input services used in making such zero-rated supplies exports;
\n(b) ………..
\nThis seeks to amend Section 54 relating to "Refund of tax", to provide that the principle of unjust enrichment will apply in case of a refund claim arising out of supplies of goods or services or both made to a SEZ developer or unit.
\nSection 54 Explanation (2)(c) – Relevant date for filing refunds in case of export of services
\n(c) in the case of services exported out of India where a refund of tax p<\/p>\n
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\nSection 54 Explanation (2)(e) – Relevant date for filing refunds in case of unutilized ITC
\nExplanation. -For the purposes of this section, –
\n(2) “relevant date” means-
\n…………….
\n(e) in the case of refund of unutilised input tax credit under sub-section (3), the end of the financial year in which such claim for refund arises.
\nExplanation. -For the purposes of this section, –
\n(2) “relevant date” means-
\n…………….
\n(e) in the case of refund of unutilised input tax credit under clause (ii) of first proviso to sub-section (3), the end of the financial year due date for furnishing of return under section 39 for the period in which such claim for refund arises.
\nThis seeks to prescribe that the relevant date in the case of refund of unutilised ITC arising out of inverted <\/p>\n
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\nThis amendment provides that recovery may be made from distinct persons present in different States \/ UTs in order to ensure speedy recovery from other establishments of the registered person.
\nThis amendment is anti-industry and will be retrograde in nature. Operation of units in other states should not be affected if there are disputes in one state and a consequent recovery. This should have been dropped in the interest of industry.
\nSection 107(6) & 112(8) – Appeal to Appellate Authority and Appellate Tribunal
\n107 (6) No appeal shall be filed under sub-section (1), unless the appellant has paid-
\n(a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and
\n(b) a sum equal to ten per cent. of the remaining amount of tax in dispute arising from the said order, in relation to which the appeal has been filed.
\n107 (6) No appeal shall be filed under sub-section (1), unless the app<\/p>\n
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\nPre-deposit amount under GST also should be 7.5% at first level of appeal and 2.5% at second level, totalling together 10% of disputed tax amount subject to maximum of INR 10 Crores, as was in Service tax and Excise era.
\n112 (8) No appeal shall be filed under sub-section (1), unless the appellant has paid
\n(a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him, and
\n(b) a sum equal to twenty per cent. of the remaining amount of tax in dispute, in addition to the amount paid under sub-section (6) of section 107, arising from the said order, in relation to which the appeal has been filed.
\n112 (8) No appeal shall be filed under sub-section (1), unless the appellant has paid
\n(a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him, and
\n(b) a s<\/p>\n
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\nProvided that where the detained or seized goods are perishable or hazardous in nature or are likely to depreciate in value with passage of time, the said period of seven days fourteen days may be reduced by the proper officer.
\nIt seeks to increase the time limit before which proceedings under Section 130 can be initiated from seven to fourteen days.
\nWhat additionally could have been done:
\n * Section 129 must be amended to restrict levying of penalties only in cases where there is intent to evade taxes;
\n * Further, suitable provision must be incorporated which allows releasing of goods without levying penalty once the proof of payment of appropriate tax is shown or a mere technical breach is shown;
\n * E-Way Bill compliance must be made little easy for small taxpayers upto specified turnover by prescribing simple form with les<\/p>\n
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\n(i)……
\n(ii)….
\n(iii)….
\n(iv) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Textile and Textile Articles) Act, 1978.
\n(v)….”
\n(1) A registered person, other than a person opting to pay tax under section 10, shall be entitled to take, in his electronic credit ledger, the amount of CENVAT credit of eligible duties carried forward in the return relating to the period ending with the day immediately preceding the appointed day, furnished by him under the existing law in such manner as may be prescribed……”
\n“…. Explanation 1.-For the purposes of sub-sections (1), (3), (4) and (6), the expression “eligible duties” means
\n(i)…
\n(ii) …
\n(iii)…
\n(iv) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Textile and Textile Articles) Act, 1978;”
\n(v)…”
\n“…. Explan<\/p>\n
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\nWhat additionally could have been done:
\nCompanies which have availed credit of the cesses (as law was not clear) should be allowed time to reverse the credit within 30 days from the date of the enactment without interest or penalty implication.
\nSection 143(1)(b) – Job work procedure
\n143 (1) A registered person (hereafter in this section referred to as the “principal”) may under intimation and subject to such conditions as may be prescribed, send any inputs or capital goods, without payment of tax, to a job worker for job work and from there subsequently send to another job worker and likewise, and shall,
\n(a) bring back inputs, after completion of job work or otherwise, or capital goods, other than moulds and<\/p>\n
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\n(a) bring back inputs, after completion of job work or otherwise, or capital goods, other than moulds and dies, jigs and fixtures, or tools, within one year and three years, respectively, of their being sent out, to any of his place of business, without payment of tax;
\n(b) supply such inputs, after completion of job work or otherwise, or capital goods, other than moulds and dies, jigs and fixtures, or tools, within one year and three years, respectively, of their being sent out from the place of business of a job worker on payment of tax within India, or with or without payment of tax for export, as the case may be:
\nProvided that the principal shall not supply the goods from the place of busines<\/p>\n
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\nSchedule I – Supply made without consideration
\n4. Import of services by a taxable person from a related person or from any of his other
\nestablishments outside India, in the course or furtherance of business
\n4. Import of services by a taxable person from a related person or from any of his other establishments outside India, in the course or furtherance of business.
\nImport of services by entities which are not registered under GST (say, they are only making exempted supplies) but are otherwise engaged in business activities shall be liable to tax when received from a related person or from any of their establishments outside India.
\nSchedule II – Activities or Transactions to be treated as supply of goods or supply of services<\/p>\n
\nChange in heading retrospectively w.e.f. 01.07.2017
\nSchedule III – Activities or transactions which shall be treate<\/p>\n
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\nThe scope of Schedule III is expanded to include merchant trading, supply of goods in the course of High Seas Sale and Sale of imported warehoused goods. Thus, these transactions shall nether be treated a supply of goods nor supply of services.
\nFurther, there shall be no reversal of common credit on account of these supplies.
\nWhat additionally could have been done:
\n * Amendments in Schedule III should have been made effective retrospectively from 01.07.2017;
\n * Relief in the form of possible refunds should be granted for the tax already paid earlier on sale of goods from custom bonded warehouse;
\n * Inter-Company supply of services provided by Head office to branch office\/ representative office of the same legal entity having a common PAN located in the taxable territory or vice versa should be included in Schedule III so that the same does not qualify as supply of services liable to GST, like centralized fun<\/p>\n
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\n(6) “export of services” means the supply of any service when,
\n(i) the supplier of service is located in India;
\n(ii) the recipient of service is located outside India;
\n(iii) the place of supply of service is outside India;
\n(iv) the payment for such service has been received by the supplier of service in convertible foreign exchange or in Indian Rupees wherever permitted by the Reserve Bank of India; and
\n(v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8.
\nThis amendment allows receipt of payment in Indian rupees in case of export of services wherever permitted by the RBI. This is a taxpayer-friendly measure.
\nExplanation to Section 2(16) – Meaning of 'governmental authority'
\n2 (16) “non-taxable online recipient” means any Government, local authority, governmental authority, a<\/p>\n
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\nExplanation. For the purposes of this clause, the expression 'governmental authority' means “an authority or a board or any other body, –
\n(i) set up by an Act of Parliament or a State Legislature; or
\n(ii) established by any Government, with ninety per cent. or more participation by way of equity or control, to carry out any function entrusted to a Panchayat under article 243G or municipality under article 243W of the Constitution.
\nThe reference to Panchayat under Article 243G is sought to be added in the definition of Governmental authority.
\nSection 5(4) – Reverse charge on procurements made from unregistered suppliers
\n(4) The integrated tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient 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 the supply of suc<\/p>\n
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\nThe details of such specified persons and specified goods\/services are to be notified in future.
\nWhat additionally could have been done:
\nOperation of Section 5(4) in its present form, is not conducive as the registered recipient requires to raise self-invoice, capturing individual HSN\/ SAC codes for procurement of specified goods or services, which is operationally not easing business and should be done away completely.
\nExplanation to Section 8 – Establishments of distinct persons
\nExplanation 1. For the purposes of this Act, where a person has,
\n(i) an establishment in India and any other establishment outside India;
\n(ii) an establishment in a State or Union territory and any other establishment outside that State or Union territory; or
\n(iii) an establishm<\/p>\n
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\n(a) a registered person shall be the location of such person;
\n(b) a person other than a registered person, shall be the location at which such goods are handed over for their transportation.
\n12 (8) The place of supply of services by way of transportation of goods, including by mail or courier to, –
\n(a) a registered person shall be the location of such person;
\n(b) a person other than a registered person, shall be the location at which such goods are handed over for their transportation:
\nProvided that where the transportation of goods is to a place outside India, the place of supply shall be the place of destination of such goods.
\nIn order to provide a level playing field to the domestic transportation companies and promote export of goods, this proviso provides that transportation of goods from a place in India to a place outside India by a transporter located in India would <\/p>\n
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\n13 (3) The place of supply of the following services shall be the location where the services are actually performed, namely: –
\n(a) services supplied in respect of goods which are required to be made physically available by the recipient of services to the supplier of services, or to a person acting on behalf of the supplier of services in order to provide the services:
\nProvided that when such services are provided from a remote location by way of electronic means, the place of supply shall be the location where goods are situated at the time of supply of services:
\nProvided further that nothing contained in this clause shall apply in the case of services supplied in respect of goods which are temporarily imported into India for repairs or for any other treatment or process and are exported after such repairs or treatment or process without being put to any other use in India, other than that which is required for such repairs or treatment or process.
\nAmendment is made to not t<\/p>\n
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\nNew proviso in Section 20 – Application of provisions of the CGST Act
\nProvided also that where the appeal is to be filed before the Appellate Authority or the Appellate Tribunal, the maximum amount payable shall be fifty crore rupees and one hundred crore rupees respectively.
\nThis amendment prescribes the maximum ceiling of INR 50 crores\/ 100 crores as pre-deposit for filing appeal to Appellate Authority\/ Appellate Tribunal respectively.
\nThe amendment is made in line with amendments proposed in Section 107(6) and 112(8) of the CGST Act, 2017.
\nHope the information will assist you in your Professional endeavours. In case of any query\/ information, please do not hesitate to write back to us.
\nThanks & Best Regards,
\nBimal Jain
\nFCA, FCS, LLB, B.Com (Hons)
\n Reply By Pankaj Sharma as =
\nDear Would like to discusses one scenario on new proviso inserted by amendment in Sec 12(8) of IGST Act, 2017, where Service of Transportation of Goods by Road, Courie<\/p>\n
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