Amendments in GST Laws (CGST Act, 2017, IGST Act, 2017 and the GST (Compensation to States) Act, 2017)

Amendments in GST Laws (CGST Act, 2017, IGST Act, 2017 and the GST (Compensation to States) Act, 2017)

GST Council has reviewed 46 proposed amendments in CGST Act, 2017, IGST Act, 2017 and the GST (Compensation to States) Act, 2017 and has recommended the following amendments:

1. Increased threshold for Composition Scheme: Upper limit of turnover for opting for composition scheme to be raised from Rs. 1 crore to Rs. 1.5 crore. Present limit of turnover can now be raised on the recommendations of the Council.

2. Compsosition Dealers to be allowed to Supply Services: Composition dealers to be allowed to supply services (other than restaurant services), for upto a value not exceeding 10% of turnover in the preceding financial year, or Rs. 5 lakhs, whichever is higher.

3. RCM on Supply of Specified Goods only: Levy of GST on reverse charge mechanism on receipt of supplies from unregistered suppliers, to be applicable to only specified goods in case of certain notified classes of registered persons, on the recommendations of the GST Council.

4. Registration Exemption Threshold Increased from 10 Lac to 20 Lac for Specified States: The threshold exemption limit for registration in the States of Assam, Arunachal Pradesh, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand to be increased to Rs. 20 Lakhs from Rs. 10 Lakhs.

5. Multiple Registration within One State: Taxpayers may opt for multiple registrations within a State/ Union territory in respect of multiple places of business located within the same State/ Union territory.

6. Mandatory Registration only for certain E-com Operators: Mandatory registration is required for only those e-commerce operators who are required to collect tax at source.

7. GST Registration to remain Suspended Temporarily: Registration to remain temporarily suspended while cancellation of registration is under process, so that the taxpayer is relieved of continued compliance under the law.

8. Certain Supplies specified as not to be treated as ‘Supply’: The following transactions to be treated as no supply (no tax payable) under Schedule III:

a). 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;

b). Supply of warehoused goods to any person before clearance for home consumption; and

c.) Supply of goods in case of high sea sales.

9. Scope of ITC Widened: Scope of input tax credit is being widened, and it would now be made available in respect of the following:

a). Most of the activities or transactions specified in Schedule III;

b). Motor vehicles for transportation of persons having seating capacity of more than thirteen (including driver), vessels and aircraft;

c). Motor vehicles for transportation of money for or by a banking company or financial institution;

d). Services of general insurance, repair and maintenance in respect of motor vehicles, vessels and aircraft on which credit is available; and

e). Goods or services which are obligatory for an employer to provide to its employees, under any law for the time being in force.

10. Recipient to pay Invoice in 180 days, else reverse ITC: In case the recipient fails to pay the due amount to the supplier within 180 days from the date of issue of invoice, the input tax credit availed by the recipient will be reversed, but liability to pay interest is being done away with.

11. Consolidated Debit/ Credit Note to be permitted: Registered persons may issue consolidated credit/ debit notes in respect of multiple invoices issued in a Financial Year.

12. Cap on Pre-deposit for Appeal Filing: Amount of pre-deposit payable for filing of appeal before the Appellate Authority and the Appellate Tribunal to be capped at Rs. 25 Crores and Rs. 50 Crores, respectively.

13. Commissioner empowered to extend due date of certain returns: Commissioner to be empowered to extend the time limit for return of inputs and capital sent on job work, upto a period of one year and two years, respectively.

14. INR Supplies to qualify as Exports where RBI permits: Supply of services to qualify as exports, even if payment is received in Indian Rupees, where permitted by the RBI.

15. Place of Supply in the case of certain Job work: 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, to be outside India.

16. Recovery can be made from distinct persons, even if present in different State/ Union territories.

17. The order of cross-utilisation of input tax credit is being rationalised.

These amendments will now be placed before the Parliament and the legislature of State and Union territories with legislatures for carrying out the amendments in the respective GST Acts.

CBIC Press Release dt. 21 July 2018

Draft Amendments to GST Laws: CGST Act, 2017/ IGST Act, 2017/ GST (Compensation to States) Act, 2017

GST Rates of Various Goods reduced, including Zero Rate for Sanitary Napkins/ Rakhi

The GST Council has recommended to reduce tax rates of about more than 50 items of Goods, including providing relief for women by way of exempting Sanitary Napkins, Rakhi, etc., as under:

CBIC Press Release dt. 21 July 2018

However CBIC is yet to notify the exact date from when these revised/ reduced rates shall be applicable.

GST Rates for various Services reduced; certain services related issues clarified

The GST Council has taken various decisions relating to exemptions/ changes in GST rates/ ITC eligibility criteria/ rationalization of rates/ exemptions and has issued clarification on various issues relating levy of GST on services, as under:

CBIC Press Release dt. 21 July 2018

GSTR Sugam and GSTR Sahaj to be Introduced for Composite/ Other Dealers: Monthly Tax Payment and Quarterly Return by Taxpayers having Turnover upto 5 Crores

GST Council has recommended to introduce Sugam and Sahaj GST Return Forms for composite/ other dealers, for ease of compliance to be made by the taxpayers, as under:

1. GST Council has approved the new return formats and associated changes in law. It may be recalled that in the 27th meeting held on 4th of May, 2018 the Council had approved the basic principles of GST return design and directed the law committee to finalize the return formats and changes in law. The formats and business process approved today were in line with the basic principles with one major change i.e the option of filing quarterly return with monthly payment of tax in a simplified return format by the small tax payers.

2. All taxpayers excluding small taxpayers and a few exceptions like ISD etc. shall file one monthly return. The return is simple with two main tables. One for reporting outward supplies and one for availing input tax credit based on invoices uploaded by the supplier. Invoices can be uploaded continuously by the seller and can be continuously viewed and locked by the buyer for availing input tax credit. This process would ensure that very large part of the return is automatically filled based on the invoices uploaded by the buyer and the seller. Simply put, the process would be “UPLOAD – LOCK – PAY” for most tax payers.

3. Taxpayers would have facility to create his profile based on nature of supplies made and received. The fields of information which a taxpayer would be shown and would be required to fill in the return would depend on his profile.

4. NIL return filers (no purchase and no sale) shall be given facility to file return by sending SMS.

5. Council approved quarterly filing of return for the small taxpayers having turnover below Rs. 5 Cr as an optional facility. Quarterly return shall be similar to main return with monthly payment facility but for two kinds of registered persons – small traders making only B2C supply or making B2B + B2C supply. For such taxpayers, simplified returns have been designed called Sahaj and Sugam. In these returns details of information required to be filled is lesser than that in the regular return.

6. The new return design provides facility for amendment of invoice and also other details filed in the return. Amendment shall be carried out by filing of a return called amendment  return. Payment would be allowed to be made through the amendment return as it will help save interest liability for the taxpayers.

7. 93% of the taxpayers have a turnover of less than Rs 5 Cr and these taxpayers would benefit substantially from the simplification measures proposed improving their ease of doing business. Even the large taxpayers would find the design of new return quite user friendly.

CBIC Press Release dt. 21 July 2018

Reverse Charge Mechanism to be further Deferred/ Suspended for 12 months upto 30 Sept. 2019

GST Council has recommended to further defer/ suspend the Reverse Charge Mechanism (RCM) for 12 months upto 30 Sept. 2018, as against already notified date of 30 Sept. 2018.

Multiple Registrations for One Taxpayer in One State

Taxpayers to be allowed to obtain multiple GST Registrations even in one state, as against existing restrictions for doing so.

Migration window to Finally re-open Once upto 31 Aug. 2018

Those who could not migrate or who are having provisional GST Registration, can migrate/ register under GST upto 31 Aug. 2018 and applicable late fee/ penalty shall be waived,as under:

1. The GST Council in its 28th meeting held today at New Delhi has approved the proposal to open the migration window for taxpayers, who received provisional IDs but could not complete the migration process.

2. The taxpayers who filed Part A of FORM GST REG-26, but not Part B of the said FORM are requested to approach the jurisdictional Central Tax/State Tax nodal officers with the necessary details on or before 31st August, 2018.

3. The nodal officer would then forward the details to GSTN for enabling migration of such taxpayers.

4. It has also been decided to waive the late fee payable for delayed filing of return in such cases. Such taxpayers are required to first file the returns on payment of late fees, and the waiver will be effected by way of reversal of the amount paid as late fees in the cash ledger under the tax head.

5. Taxpayers who intend to complete the migration process are requested to approach their jurisdictional Central Tax/State Tax nodal officers in this regard.

CBIC Press Release dt. 21 July 2018

Simplification and Rationalization of GST Laws, specially for MSMEs and Small Taxpayers

GST Council to meet again on 4 Aug. 2018 to deliberate and discuss issues relating to Simplification and Rationalization of GST Laws, specially for MSMEs and Small Taxpayers.

Refund of ITC to Textile Sector from 27 July 2018

GST Council has recommended to allow refund of unutilised ITC to taxpayers in the Textiles Sector, to boost job creation and compliance in the Sector. Fabrics attract GST at the rate of 5% subject to the condition that refund of accumulated ITC on account of inversion will not be allowed. However, considering the difficulty faced by the Fabric sector on account of this condition, the GST Council has recommended for allowing refund to fabrics on account of inverted duty structure. The refund of accumulated ITC shall be allowed only with the prospective effect on the purchases made after the notification is issued.

Composition Scheme for Dealers having Turnover upto 1.5 Crore

GST Council has recommended to increase the threshold for registration under composition scheme, from Rs. 1 crore to 1.5 crore.

Cancellation of Registration to be Simplified

GST Council has recommended to simplify the process of cancellation of registration. Now compliance requirements will stop from the date of submission of application for cancellation, as the registration number will be suspended immediately.

Registration Threshold Increased from 10 Lac to 20 Lac for Certain States

GST Council has recommended to increase the turnover threshold limit for registration in the case of certain States from Rs. 10 Lac to Rs. 20 Lac, i.e. Assam, Arunachal Pradesh, Himachal Pradesh, Meghalaya, Uttarakhand and Sikkim (6 states).