GSTSEVA https://www.gstseva.com A goods and service tax news updates and blog website GST India Thu, 10 Jan 2019 18:04:45 +0000 en-US hourly 1 https://wordpress.org/?v=5.0.3 https://www.gstseva.com/wp-content/uploads/2017/07/gst-150x150.png GSTSEVA https://www.gstseva.com 32 32 Press note on decisions taken by the GST Council in the 32nd meeting held on 10th January, 2019 https://www.gstseva.com/press-note-on-decisions-taken-by-the-gst-council-in-the-32nd-meeting-held-on-10th-january-2019 Thu, 10 Jan 2019 15:51:37 +0000 https://www.gstseva.com/?p=9769

 

Press note on decisions taken by the GST Council in the 32nd meeting held on 10th January, 2019
GST Council in the 32nd meeting held on 10th January, 2019 at New Delhi took following decisions to give relief to MSME (including small traders), and took following other decisions-
1. Increase in turnover limit for the existing composition scheme: The limit of annual turnover in the preceding financial year for availing composition scheme for goods shall be increased to Rs 1.5 crore. Special category States would decide, within one week, about the composition limit in their respective States.
1.1 Compliance simplification: The compliance under composition scheme shall be simplified as now they would need to file one annual return but payment of taxes would remain quarterly (along with a simple declaration).
2. Higher exemption threshold limit for supplier of goods: There would be two threshold limits for exemption from registration and payment of GST for the suppliers of goods i.e. Rs 40 lakhs and Rs 20 lakhs. States would have an option to decide about one of the limits within a weeks’ time. The threshold for registration for service providers would continue to be Rs 20 lakhs and in case of Special category States Rs 10 lakhs.
3. Composition scheme for services: A composition scheme shall be made available for suppliers of services (or mixed suppliers) with a tax rate of 6% (3% CGST + 3% SGST) having an annual turnover in preceding financial year upto Rs 50 lakhs.
3.1 The said scheme shall be applicable to both service providers as well as suppliers of goods and services, who are not eligible for the presently available composition scheme for goods.
3.2 They would be liable to file one annual return with quarterly payment of taxes (along with a simple declaration).
4. Effective date : The decisions at Sl. No. 1 to 3 above shall be made operational from the 1st of April, 2019.
5. Free Accounting and Billing Software shall be provided to small taxpayers by GSTN. 6. Matters referred to Group of Ministers:
i. A seven member Group of Ministers shall be constituted to examine the proposal of giving a composition scheme to boost the residential segment of the real estate sector.
ii. A Group of Ministers shall be constituted to examine the GST rate structure on lotteries.
7. Revenue mobilization for natural calamities: GST Council 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.
Note: The decisions of the GST Council have been presented in this release in simple language for easy understanding. The same would be given effect to through Gazette notifications/ circulars which shall have the force of law.

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Know How much amount recovered by Government during GST detention upto dec 2018 https://www.gstseva.com/know-how-much-amount-recovered-by-government-during-gst-detention-upto-dec-2018 Wed, 09 Jan 2019 08:23:05 +0000 https://www.gstseva.com/?p=9767 Detection of GST Evasion

Investigation in 3626 cases of GST evasion/violations has been initiated in the present financial year by CGST (Central GST) formations (up to December, 2018).

On the basis of investigation conducted so far it emerges that the amount of tax involved in these 3626 evasion/violations cases as mentioned in part(a) above is estimated to be Rs. 15278.18 crore (up to December, 2018)

An amount of Rs. 9959.29 crore has been recovered out of total detection amount in the present financial year. (up to December,2018).

The following are the figures of tax evasion and recovery in the pre-GST period and the post GST period:

 

    F.Y. 2016-17 F.Y. 2017-18 F.Y. 18-19 (Up to Dec, 18)
Detection      
Quantum of Tax evasion Quantum of Tax evasion Quantum of Tax evasion detected
    detected (C.Ex+S.Tax) detected (C.Ex+S.Tax+GST) (C.Ex+S.Tax+GST)
No. of Cases 10212 6815 8917
         
Amount (in 23618.52 32204.49 48555.06
Rs. Cr.)  
       
         
    F.Y. 2016-17 F.Y. 2017-18 F.Y. 18-19 (Up to Dec, 18)
Recovery Quantum of Tax evasion Quantum of Tax evasion Quantum of Tax evasion detected
    detected (C.Ex+S.Tax) detected (C.Ex+S.Tax+GST) (C.Ex+S.Tax+GST)
       
No. of Cases 11101 6220 6678
Amount (in 6107.88 4579.94 13907.83
Rs. Cr.)  
       

Note: The quantum of evasion detected has gone up in F.Y. 2018-19 (Up to December 2018) over F.Y. and F.Y. 2016-17.

A dedicated Fraud Analytics System namely Directorate General of Analytics & Risk Management (DGARM) has been created by the Central Board of Indirect Taxes and Customs (CBIC) and has become operational w.e.f. 1st July 2017. The DGARM functions as an apex body of CBIC for data analytics and risk management.

The DGARM utilizes internal and external data sources for data mining and analysis to generate outputs for focused and targeted action by field formations and investigation wings of CBIC. It has shared various reports regarding stop filers, GSTR 3B vs. GSTR1 difference etc. with field formations which has resulted in total detection of Rs. 677.68 crore and realization of Rs. 43.06 crore till November, 2018.

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National Anti-Profiteering Authority (NAA) https://www.gstseva.com/national-anti-profiteering-authority-naa Wed, 09 Jan 2019 08:17:29 +0000 https://www.gstseva.com/?p=9765 National Anti-Profiteering Authority (NAA)

The National Anti-Profiteering Authority (NAA) has been constituted under Section 171 of the Central Goods and Services Tax Act, 2017 to ensure that the reduction in rate of tax or the benefit of input tax credit is passed on to the recipient by way of commensurate reduction in prices. Further, the following steps have been taken by the NAA to ensure that customers get the full benefit of tax cuts:

  1. Holding regular meetings with the Zonal Screening Committees and the Chief Commissioners of Central Tax to stress upon consumer awareness programmes;
  2. Launching a helpline to resolve the queries of citizens regarding registration of complaints against profiteering.
  3. Receiving complaints through email and NAA portal.
  4. Working with consumer welfare organizations in order to facilitate outreach activities.

A number of complaints regarding companies not passing on the full benefits of tax cuts to consumers have been received by the National Anti-Profiteering Authority (NAA). The details are as follows:

Complaints received by the NAA in 2018

Month Received on Received by e-mail Received by post Total
  NAA portal      
April 9 0 1 10
         
May 7 0 1 8
         
June 4 2 2 8
         
July 62 3 2 67
         
August 64 6 4 74
         
September 64 0 1 65
         
October 43 44 6 93
         
November 16 18 1 35
         

 

This was stated by Shri Shiv Pratap Shukla, Minister of State for Finance in written reply to a question in Rajya Sabha today.

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GST and Indirect Tax latest update- upto December 2018 https://www.gstseva.com/gst-and-indirect-tax-latest-update-upto-december-2018 Mon, 07 Jan 2019 07:27:18 +0000 https://www.gstseva.com/?p=9758 GST Compliance calendar – January 2019

 

  January 2019    
  Sun Mon Tue Wed Thu Fri Sat
1 2 3 4 5
6 7 8 9 10 11 (GSTR-1) 12
 13 GSTR-6 14 15 16 17 18 19
20  GSTR-3B 21 22 23 24 25 26
27 28 29 30 31 GSTR-7/ GSTR-8*

 

GSTR-1 Outward supply for the month of December 2018)
GSTR-6  Input service distributor for the month of December 2018
GSTR-3B  Summary return tax payment for the month of December 2018
GSTR-7 TDS  for Oct to Dec 2018
GSTR-8 TDS by e-commerce operator for Oct to Dec 2018

 

The GST Council (‘Council’) convened its 31st Meeting on December 22, 2018 after a gap of almost 3 months. The council has proposed reduction of tax rates for serval items, legislative amendments and other changes relating to extension in dates and rationalizing the procedures.

cma rakesh bhalla

By CMA Rakesh Bhalla
Past chairman NIRC of ICAI (CMA)

The Council has not clarified the date from when the aforesaid rate changes will come into force (unlike the past instances where the Council also announced the effective date of rate changes). The Union Finance Minister in his speech has said that January 1, 2019 will be the effective date for rate changes.

 

On the recommendations of GST Council, CBIC issued notification on 31st December 2018. Detail of notifications issued is given below

 

GST Rate on goods

Particulars Notifications
Total Rate of GST- 5%

Marble , Travertine , Crude, Fly ash blocks , Walking sticks , Parts & accessories of carriage of disabled persons, Footwear of sale not exceeding Rs. 1000/- per pair

 

Schedule -1 ( refer Notification 24/2008 – Central Rate Tax) w.e.f 1st January 2019
Total Rate of GST- 12%

Natural cork, shuttle cork bottom etc (Ch 4502/4503)

 

Flexible intermediate bulk containers

Schedule -II ( refer Notification 24/2008 – Central Rate Tax) w.e.f 1st January 2019
Total Rate of GST- 18%

Retreaded or used pneumatic tyres of Rubber (4012)

Video game (9504)

Transmission, Bearing housing, Gear boxes, Fly wheels , Pulley etc  (8483)

 

Schedule – III ( refer Notification 24/2008 – Central Rate Tax) w.e.f 1st January 2019
Total Rate of GST- 28%

 

Substitution

Parts and accessories of vehicles of heading 8711 [S.No.174,Heading 8714]. Omission of reference to parts and accessories of vehicles of heading 8713.Such items shifted to 2.5% CGST.

Schedule – IV ( refer Notification 24/2008 – Central Rate Tax) w.e.f 1st January 2019
Exemptions

 

Un-cooked vegetables , frozen (0710)

Vegetables provisionally preserved for example in brine etc (0711)

Music , printed or in manuscript (4904)

Supply of gifts items received by President, Prime minister, Chief minister of any state / UT or any public servant (Any chapter)

 ( refer Notification 25/2008 – Central Rate Tax) w.e.f 1st January 2019

GST Rate on Services

Services Rate Condition / Notification
Transportation of passengers ,with or with out accompanied baggage,by air,by non-scheduled air transport service or charter operations ,engaged by specified organisations in respect of religious pilgrimage facilitated by the Government of India, underbilateral arrangement.[S.No.8(iva)]

 

5% Provided that credit of input tax charged on goods used in supplying the service  has not been taken 27/2018 – Central Rate Tax)

 

Service of 3rd party insurance of goods carriage 12% 27/2018 – Central Rate Tax)
Leasing of Rental service 18%
Services by way of admission to exhibition of cinematograph films where price of admission ticket is above one hundred rupees 18%
Service by way of construction or engineering or installation or any other technical service provided in set up of Bio gas plant, solar power  based devices , Solar power  generating  system, Wind mills, Waste to energy system etc. 18%
Exemptions

 

Services provided by a goods transport agency,by way of transport of goods in a goods carriage,to,-

(a) Department or Establishment of the Central Government or State Government or Union territory;or

(b) local authority ;or

(c) Governmental agencies,

Which has taken registration under the Central Goods and ServicesTaxAct,2017(12of 2017) only for the purpose of deducting tax under Section51 and not for making a taxable supply of goods or services

 

v  Services provided by a banking company to Basic Saving Bank Deposit (BSBD) account holders under Pradhan Mantri Jan Dhan Yojana (PMJDY).

 

v  Services provided by rehabilitation professionals recognised under the Rehabilitation Council of India Act,1992

Nil 28/2018 – Central Rate Tax)

 

Security services (services provided by way of supply of security personnel) from any person other than a body corporate is required to pay GST on reverse charge basis.

 

18% 29/2018 (Central rate ) dt 31-12-2018

CGST Rules – recent amendments vide circular no. 74/2018

  • A person liable to collect TCS in a particular State in which he does not have an office or any other establishment, will be required to mention name of the State where his principal place of business is located in Part-B of the relevant application form. The State in which such TCS is required to be made, shall be mentioned in Part-A of the relevant application form.

Job work reporting in Form ITC-04 – The details of challan issued when goods are sent from one job worker to another need not be included while filing Form ITC-04 (refer rule 45(3)

Electronic tax invoice & supply bill related changes – Tax payer can issue tax invoice / supply bill complying Information and Technology Act , 2000 without affixing signature or digital signature of the supplier or his authorised representative(refer Rule 46 & 49)

Tax invoice in special casessignature   or digital signature of supplier or his authorised representative will not be required in the following cases: (refer Rule 54)

  • Where supplier   is   an   insurer   or   a   banking   company   or   a financial     institution,     including     a     non-banking     financial company.
  • Where supplier is providing passenger transportation service.

Refund application related changes – As  per  the  above  amendment,  departure  manifest  filed  along  with shipping  bill  will  also  be  considered  sufficient  compliance  for  the purpose of application for refund. (refer rule 96)

Order of Revisional Authority –  Hearing mandatory in certain cases As  per  the  above  amendment,  Revisional  Authority  is  required  to  provide opportunity of hearing if his order is likely to impact the taxpayer adversely (refer Rule 109 A)

Restriction on generation of e-waybill-   no  person (including  a  consignor,  consignee,  transporter,  an  e-commerce  operator  or  a courier agency) shall be allowed to furnish the information in PART A of FORM GST  EWB-01 who

(a) being a person paying tax under section 10, has not furnished the returns for two consecutive tax periods; or

(b) being a person other than a person specified in clause (a), has not furnished the returns for a consecutive period of two months:

Substitution & Insertion of Forms in CGST Rules

Changes in GSTR-9 (Annual Return)

  • Now, additional   liability   not   declared   in   FORM   GSTR-1   and FORM        GSTR-3B  for  FY  2017-18  may  be  declared  in  GSTR-9. However,   taxpayers   cannot   claim   input   tax   credit   unclaimed during FY 2017-18 through this return.
  • Taxpayers shall be given an option to pay any additional liability declared in  this  form,  through  FORM  DRC-03.  Taxpayers  shall select  ?Annual  Return  in  the  drop  down  provided  in  FORM DRC-03. Such liability can be paid through electronic cash ledger only.

Changes in GSTR-9C (Reconciliation & Certificate)

  • Sign for Item E of Table 5 (+) is replaced with (-) Similarly, Sign for Item J of Table 5 (-) is replaced with (+)
  • It is  clarified  through  instructions  that  it  is  mandatory  to  file FORM GSTR -9 for the FY 2017-18 before filing GSTR-9C. Verification   of   registered   person   introduced   in   GSTR-9C   in addition to verification by auditor

Extension of time limit for filing GSTR-3B for newly migrated taxpayers – Notification Nos. 68/2018, 69/2018, & 70/2018-C.T – The returns for the period July, 2017 to February, 2019 shall be furnished on or before 31.03.2019.

Extension of time limit for filing GSTR-1 for newly migrated taxpayers – Notification Nos. 71/2018 and 72/2018 – The returns for the period July, 2017 to February, 2019 shall be furnished on or before 31.03.2019

Extension for filing ITC-04 – Notification No. 78/2018 C.T – in respect of goods dispatched to a job worker or received from job worker, during the period from July, 2017 to December, 2018 has been extended till the 31.03.2019.

Exemption from collecting TDS – Notification No. 73/2018-C.T- Exemption has been granted from applicability of TDS in respect of supplies of goods or services which takes place between one person to another person specified under clause (a), (b), (c) & (d) of section 51 of CGST Act.

Waiver of late fee for delay filing in GSTR-1/ GSTR3B / GSTR-4 – Notification No. 75, 76 & 77/2018- C.T- Amount of late fees leviable on account of delayed furnishing of GSTR-1 Return for the months/quarters from July, 2017 to September, 2018 has been waived.

However, late fees is waived only in cases where the taxpayer files GSTR-1/ GSTR3B / GSTR-4 between the period from 22.12.2018 to 31.03.2019

Circular No. 76 clarifying various issues – CBIC  has  issued  Circular  No.  76/2018-  GST  dated  31.12.2018  to provide clarification in respect of following miscellaneous issues:

Sale by government departments to unregistered persons –     Sale   of   used   goods   viz.,   scraps,   used   vehicles,   etc.   by   a government department to unregistered persons shall be taxable but tax thereon shall be paid under Forward Charge Mechanism. In such cases, supplier (govt. department) shall be liable to take registration under GST.

GSTR-3B Return filed after due date – Penalty – Penalty as per Section 73(11) of CGST Act shall not be imposed in cases where GSTR-3B Return has been filed after the due date as there is no default of payment of taxes. However,  in  such  cases,  penalty  under  Section  125  may  be imposed.

 Tax rate for debit /credit notes issued under Section 142(2) –     In  cases  where  debit/credit  note  is  to  be  issued  under  Section 142(2)  of  CGST  Act,  pertaining  to  a  supply  made  in  pre  GST regime, the GST rate as per the GST Acts would be applicable.

Applicability of TDS provisions – Section 51 of the CGST Act  (TDS) is also applicable to authority or a board or any other body set up by an Act of Parliament or a State legislature or established by any Government with 51% or more   participation   by   way   of   equity   or   control   is   with   the Government.

Taxable value under GST to include TCS under Income Tax Act – Taxable  value  for  GST  shall  include  the  TCS  amount  collected under the provisions of Income Tax Act since the value to be paid to the supplier by the buyer is inclusive of the said TCS.

Owner   of  Goods”   for  the  purposes  of  Section  129(1)  on detention / seizure of goods in transit –  If    the    invoice or   any    other    specified    document    is accompanying  the  consignment  of  goods,  then  either  the consignor  or  the  consignee  should  be  deemed  to  be  the owner. If   the   invoice   or   any   other   specified   document   is   not accompanying  the  consignment  of  goods,  then  the  proper officer  should  determine  who  should  be  declared  as  the owner of the goods.

Composition Scheme – Clarification on withdrawal / denial –   CBIC has issued Circular No. 77/2018-GST dated 31.12.2018 to provide clarification  in  respect  of denial  of composition  option  by  tax authorities and effective date thereof.

Clarification on export of services

CBIC has issued Circular No. 78/2018-GST dated 31.12.2018 to provide clarification relating to export of services in a particular situation.

Issue:  In  case  an  exporter  of  services  outsources  a  portion  of  the services  contract  to  another  person  located  outside  India,  what  would be the tax treatment of the said portion of the contract at the hands    of the exporter?

Clarification:

Total  value  of  services  as  agreed  to  in  the  contract  between  the exporter  of  services  located  in  India  and  the  recipient  of  services located outside India will be considered as export of services.

Supplier  of  services  located  in  India  would  be  liable  to  pay  IGST under       RCM  on  the  import  of  services  on  that  portion  of  services which has been provided by the supplier located outside India.     Supplier in India eligible to avail ITC of IGST paid under RCM.

Clarification on refund related issues –    CBIC has issued Circular No. 79/2018-GST dated 31st December, 2018 to clarify certain issues relating to refund.

 Physical submission of refund claims:

All  documents/undertaking/statements  to  be  submitted  along with        the  claim  for  refund  in  Form  GST  RFD-01A  shall  be uploaded on the common portal. Neither the application nor any of the supporting documents, shall be required to be submitted physically.However, the taxpayer will have the option to physically submit the refund application along with supporting documents, if he so chooses.

Calculation of refund of accumulated ITC on account of inverted duty structure:

In case of multiple inputs attracting different rates of tax, the term “Net ITC” [in the formula provided in Rule 89(5) of the CGST Rules] covers ITC availed on all inputs in the relevant period, irrespective of their rate of tax.

Refund of accumulated ITC of Compensation Cess (Cess)- In this context, the circular addresses the following three issues-

Issue 1: How should the amount of cess to be refunded be calculated post  issuance  of  Circular  No.  45/19/2018-GST  dated  30.05.2018 (where  it     was  clarified  that  refund  of  accumulated  ITC  of  cess  is available) but ITC was not availed of the cess paid on the inputs.

Clarification – Refund on account of cess is to be recomputed as if the same was available in the respective months in which the refund of unutilized ITC was claimed on account of exports made under LUT/bond. If the aggregate of these recomputed amounts of refund of cess is less than or equal to the eligible refund of cess calculated in respect of the month in which the same has actually been claimed, then the aggregate of the recomputed   refund   of   cess   of   the   respective months would be admissible.

Issue 2: Can the refund of accumulated ITC of cess paid on coal be rejected  on  the  ground  that  coal  is  used  for  generation  of  electricity which  is  an  intermediate  product  and  not  the  final  product  which  is exported and since electricity is exempt from GST, the ITC of the tax paid on coal for generation of electricity is not available?

Clarification: There is no distinction between    intermediate  goods  / services and final goods/services under GST. Since coal   is   an   input used  in  the  production  of,  for  example  aluminium,  albeit  indirectly through   the   captive   generation   of   electricity,   which   is   directly connected  with the business of the registered person, ITC in relation to the same cannot be denied.

Issue 3: Can the ITC which is reversed be held as ‘Net ITC’ and the same  can  be  used  in  calculating  the  maximum  refund  amount  on account of   zero-rated supplies?

Clarification: ITC which is reversed cannot  be   held   to   have   been ‘availed’ in the relevant period and therefore, the same  cannot  be  part of refund of unutilized ITC.

Non-consideration of  ITC  of  GST  paid  on  invoices  of  earlier  tax period availed in  subsequent tax period:

Net ITC? [as defined in Rule 89(4) of the CGST Rules] means ITC availed on inputs and input services during the period for which the refund claim has been filed.  ITC can be said to have been “availed” when it is entered into the electronic credit ledger. Therefore, ITC of invoices issued in earlier tax period but availed in subsequent tax period cannot be excluded from the calculation of the refund amount for the subsequent tax period.

Misinterpretation of the meaning of the term “inputs” :

GST  paid   on   inward   supplies   of   stores   and   spares,   packing materials etc. shall be available as ITC as long as these inputs are used  for  the  purpose  of  the  business  and/or  for  effecting  taxable supplies, including zero-rated supplies, and the ITC for such inputs is not restricted.

Stores and spares, the expenditure on which has been charged as a revenue expense in the books of account, cannot be held to be capital goods

Refund of accumulated ITC on input services and capital goods arising on account of inverted duty structure – Refund  of  tax  paid  on  input  services  and  capital  goods  as  part  of refund  of  input  tax  credit  accumulated  on  account  of  inverted  duty structure is not  allowed.

 Clarification regarding GST rates & classification of Goods    CBIC has issued Circular No. 80/2018-GST dated 31st December, 2018 to clarify the applicable HSN & GST rates on the following items:

Chhatua or Sattu :

HSN            –     1106

GST Rate   –     If unbranded : Nil If branded and packed : 5%

Fish meal and other raw materials used for making cattle / poultry / aquatic feed

HSN            –     2301

GST Rate   –     5%

LPG supplied in bulk for ultimate supply  for domestic use

 LPG   supplied   in   bulk,   whether   by   a   refiner/fractionator   to   an   Oil Marketing Companies (OMC) or by one OMC to another for bottling and further supply for domestic use will attract GST rate of 5%. (S. No. 165A of the N. No. 1/2017- Central Tax (Rate) dated  28.06.2017

Polypropylene  Woven  and  Non-Woven  Bags  and  PP  Woven  and NonWoven Bags laminated with BOPP

HSN            – 3923

GST Rate   – 18%

 Non-laminated   woven   bags   would   be   classified   as   per   their constituting materials.

Wood logs for pulping

HSN            – 4403

GST Rate   – 18%

Bagasse based laminated particle board

Chapter       – 44

GST Rate   – 12%

Three pieces of fabrics sold in pack as ladies salwar suit

Chapter       – 50 to 55 and 60 on the basis of their constituent materials

GST Rate   – 5%

Waste  to  Energy  Plant   (WTEP)  –  Scope  of  entry  No.  234   of Schedule  I  of  Notification  No.1/2017-  Central  Tax  (Rate)  dated 28.6.2017

The said notification specifically applies only to  the  goods  falling under chapters 84, 85 and 94.

Concessional  GST  rate  of  5%  would  be  available  only  to  such machinery,  equipment etc., which fall under Chapter 84, 85 and 94 and used in the initial  setting  up  of  renewable  energy  plants  and devices including WTEP.

Turbo Charger for railways

HSN            – 8414

GST Rate   – 18%

Rigs, tools & Spares moving inter-State for provision of service

Any such movement on own account (not     involving distinct person in terms of Section 25), where such movement is    not intended for further supply of such goods does not constitute a   supply  and  would  not  be liable to GST.

CBIC issued Circulars  (82 to 86 dated 01st January 2019) clarifying 

  • Exemption to IIMs
  • GST applicability / exemption to services provided by Asian development bank and international finance corporation.
  • Printing of pictures – clarification on classification and rate -18%
  • Supply of food & beverages by educational institution- clarification on applicability of exemption
  • Applicability of GST on services of business facilitator or business correspondent to banking company.

Extension of time limit for availing ITC and rectification of errors/ omissions relating to supplies made during Financial Year 2017-18

  • CBIC has issued Central Goods and Services Tax (Second Removal of Difficulties) order , 2018 dated 31.12.2018 to extend the time limit for availing ITC on invoice/debit note for supplies relating to the FY2017-18

 A proviso is inserted in Section 16(4) of the CGST Act to allow availment of ITC after the due date of furnishing of the return under Section 39 for the month of September, 2018 till the due date of furnishing of the return for the month of March,2019. (Order no. 2 dated 31st December 2018)

Extension of time limit by 30th June 2019  for furnishing Annual Return in Form GSTR-9 / GSTR-9A and reconciliation statement for the Financial Year 2017-18 . (Order no. 3 dated 31st December 2018)

Extension of time limit for furnishing of Form GSTR-8 for the period October-December 2018- now it is extended to 31st January 2019 (Order no. 4 dated 31st December 2018)

Effective date of amendments made in CGST, SGST and IGST Acts –  The Council has notified February 1, 2019 as the date when amendments made in the Central Goods and Services Tax Act, 2017 (‘CGST Act’), the Integrated Goods and Services Tax Act, 2017 (‘IGST Act’) and relevant State Goods and Services Tax Act, 2017 (‘SGST Act’) in 2018 will become applicable. The important amendments that will become effective, are as under:

  • Merchanting sales, in-bond sales and high sea sales getting placed under Schedule III (transactions not qualifying as supply)
  • No reversal of credit on activities mentioned under Schedule III
  • Availability of credit on all motor vehicles except passenger transport vehicles with seating capacity of more than 13 passengers
  • Non-availability of credit on repair and insurance of motor vehicle
  • Non-availability of credit on leasing, renting and hiring of motor vehicle
  • Facility of issuance of consolidated credit and debit note against multiple invoices
  • Facility to obtain separate registration for separate place of business in a State even though falling under same ‘business vertical’
  • The place of supply of services supplied in respect of goods temporarily imported into India for any treatment or process will be the location of service recipient
  • The place of supply of transportation services for export of goods to be the destination of such goods in case both supplier and recipient are in India

Legislative changesThe following changes have been proposed under the CGST Act

 A Centralized Appellate Authority for Advance Ruling (‘CAAAR’) to be created where conflicting decisions have been given by two or more State Appellate Authority for Advance Ruling (AAARs); and

  • Interest to be applicable on amount payable net of admissible input tax credit. Consequently, interest will not be payable where there is sufficient credit balance in Electronic Credit Ledger.

 Other important changes

  • The CBIC has already issued the draft of new simplified return mechanism. The new return filing system shall be introduced on a trial basis from April 1, 2019 and shall be made mandatory from July 1, 2019.
  • The movement of rigs, tools & spares and all goods on wheels for the provision of service, shall not be subject to GST where such movement is not intended for further supply of goods.
  • The facility to generate e-way bill shall be suspended if a taxpayer does not file returns for two consecutive tax periods.
  • There will be a single cash ledger for each head (CGST, SGST, IGST and Cess). The bifurcations between tax, interest, penalty, fee and others will be done away with
  • A taxpayer shall be able to submit all documents for filing refund claim electronically, obviating the need to physically visit the department. The following types of refunds shall be made available through RFD-01A.
  • Refund on account of assessment, re-assessment or any other order

Excess tax paid , Tax paid under wrong head (IGST instead of CGST and SGST and vice-versa)

Any other refund

  • In future, a single authority (Centre or State) shall disburse the refund. The proposal will be initially implemented on pilot basis.

Important cases decided

GST anti-profiteering authority, the National Anti-profiteering Authority says HUL has allegedly profiteered to the extent of ?383 crore since GST rate cut in November 2017- It was observed that, after allowing for certain deductions, the confirmed amount of tax benefit that the company has not passed on to consumers was assessed at Rs. 383 crores. NAA asked HUL to deposit Rs. 223 crore in central and state consumer welfare funds as the company had proactively deposited Rs. 160 crore with the central consumer welfare fund, set up under the anti-profiteering laws.The authority also directed HUL to reduce the prices of its products by way of commensurate reduction keeping in view the reduced rates of tax  and the benefit of ITC.

No profiteering when MRP unchanged despite increase in post-GST tax rate- The National Anti- profiteering Authority (NAA) held that the effective tax rates for the impugned product has increased post GST and the respondent has still maintained the same MRP and the reduction in base price was more than the increase in ITC and hence, there was no profiteering by the respondent. [Mandalika Sakunthala v. Fabindia Overseas, Case No. 13/2018, Order dated 16-11- 2018)

 Profiteering when increase in base price from same date as rate reduction is more than ITC denied- The NAA rejected the contention of the respondent that Section 171 was applicable only for contracts entered into for supply before GST rate change or availability of ITC and both parties agree to such change. (Ravi Charaya v. Hardcastle Restaurants Case No. 14/2018, decided on 16-11-2018, National Anti-Profiteering Authority)

Non-reduction of base price when CVD subsumed in IGST on imported goods, is profiteering – It was held that price offered prior to implementation of GST was to be reduced by the amount of CVD [Crown Express Dental Lab v. Theco India Pvt Ltd. – 2018-VIL-12-NAA]

GST on transfer of right to use buses for passenger transportation- The service was held to be classifiable under Heading No. 9966. held as supply of service as per clause 5(f) of Schedule II to the CGST Act (SST Sustainable Transport Solutions India Pvt. Ltd. Order No. GST-ARA-68/2018-19/B-129, dated 15-10-2018, AAR Maharashtra]

 Transfer of ownership without physical imports IGST not payable – The Authority in this regard held that for goods supplied on an out and out basis there is no levy till the time of their customs clearance in compliance with Section 12 of the Customs Act and Section 3 of the Customs Tariff [ INA Bearings India Pvt. Ltd. – 2018-VIL-290-AAR]

 Provision for subscription by a club when included under business It noted that funds collected are spent on organising meetings providing facilities to members. Services provided against subscription/membership fee was held classifiable under SAC Heading 99959. [In RE: Inner Wheel Club Order No. 23/WBAAR/2018-19, dated 26-11-2018, AAR West Bengal]

Services from sweet shop cum restaurant is a composite supply- The activity of the applicant was held classifiable under restaurant services under Heading 9963 and held liable to GST @ 5% under Notification No. 11/2017-Central Tax (Rate), without ITC. [Kundan Misthan Bhandar Order No. 08/2018-19/Advance Ruling/DDN/5459, dated 22-10-2018, AAR Uttarakhand]

Supplies when classifiable as mixed and not composite supply-  it was held that where supply of parts and services are known and can be supplied individually or in any combination to customers, supplies would be covered as mixed supplies. [Sandvik Asia Pvt. Ltd. Ruling No. RAJ/AAR/2018-19/21, dated 12-10-2018, AAR Rajasthan]

Ancillary services linked to lease of industrial plots not exempt – AAR Chandigarh has held that additional/ancillary services (Transfer fees, Extension fees, Conversion fees, Processing fees, bifurcation fees and tower installation charges) provided in respect of industrial plots, are liable to GST [In RE: Punjab Small Industries & Export Ltd. Ruling No. CT/01/A.R./CHD/2018/8042, dated 8-11-2018, AAR Chandigarh]

GST payable on penal interest collected for tolerating delayed EMI- GST AAR Maharashtra has held that penal interest collected by the applicant in pursuance of tolerating the act of delayed payment of EMI by the customers, would constitute a supply under Section 7(1)(d) of the CGST Act read with Clause 5(e) of Schedule II thereof. [In RE: Bajaj Finance Ltd. – 2018-VIL-275-AAR]

Customs

Expeditious disposal of unclaimed cargo via auction New procedure – According to Circular No. 49/2018-Cus., dated 3-12-2018, in case entire process of auction is not concluded within 180 days of commencement of auction, custodian shall inform the bidder about extended time.

SEZ Time period for bringing back jewellery after processing, revised – Time-period for bringing back studded gold jewellery, silver jewellery and imitation jewellery, sent outside the SEZ for sub-contracting, has been revised to 45 days. (Notification dated 9-11-2018)

EOUs – Customs and Central Excise notifications amended to align with FTP- The amendment also provides for re- import of specified goods by EOUs within 7 years of export, for repair and reconditioning. ( Circular No. 50/2018-Cus., dated 6-12-2018)

Non-basmati rice made eligible for MEIS benefits- The benefit would be available at the rate of 5% of exports made with effect from 26-11-2018 up to 25-3-2019. Public Notice No. 49/2015-20, dated 22-11-2018 has been issued for this purpose

Important cases under Excise and Service Tax

Electricity generated from bagasse and sold out Cenvat Rule 6 not applicable- It observed that electricity generated from bagasse, like that generated through solar power, hydro power, wind power etc., is not covered under Chapter 27 of the Central Excise Tariff. [Shivratna Udyog Ltd. v. Commissioner – Order No. A/87964/2018, dated 20-11-2018, CESTAT Mumbai]

Service Tax liability of courier agent in case of international courier- The Tribunal observed that despite payment in foreign exchange said services cannot be treated as export of service. It noted that the appellant was performing entire services within India and no part of the service was provided outside India. [UPS Jetair Express v. Commissioner – Order No. A/87929/2018, dated 16-11-2018, CESTAT Mumbai]

Cenvat credit available on manpower supply for OHC at hazardous unit – The Tribunal observed that denial on ground of failing to keep separate records of emergency treatment was not fatal, as OHC was to meet emergency situations. Rallis India Ltd. v. Commissioner – Order No. A/88008/2018, dated 26-11-2018, CESTAT Mumbai]

 No Real Estate Agent service even if land sold not owned- the Tribunal held that assessee was not engaged in real estate agent service. It also held that in the absence of any defined consideration for alleged services there was no contract of service at all and hence no liability. [Premium Real Estate Developers v. Commissioner – Final Order No. 53322-53323/2018, dated 27-11-2018, CESTAT Del

 Area-based exemption Commencement of production – Effect of absence of particular plant- CESTAT Delhi has held that non-existence of DM/RO plant will not prove that cosmetics were not manufactured in a unit claiming area-based exemption. [Proveda Herbals v. Commissioner – Final Order No. 53292/2018, dated 16-11-2018, CESTAT Delhi]

Retrospective exemption when department failed to acknowledge merger before-  It held that certificate of single registration, though issued later, should be deemed to have been issued from the date of entitlement. [Vidyut Mettalics Pvt Ltd v. Commissioner – Order No. A/87857/2018, dated 6-11-2018, CESTAT Mumbai]

 

About Author 

Mr Rakesh Bhalla

*Member ZAC & RAC Chandigarh - Central Excise & Service Tax (now GST) & Customs, Govt. of India, Member of Indirect Tax committee SIAM , Member, ASSOCHAM National Indirect Taxes Committee, Chief General Manager Finance- SML Isuzu Ltd., Winner Achiever Award 2015 by ICAI (CMA). He can be reach at nancybhalla@yahoo.com
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Important press release related to GST council https://www.gstseva.com/important-press-release-related-to-gst-council Fri, 04 Jan 2019 18:29:14 +0000 https://www.gstseva.com/?p=9750       The GST Council has met 31 times so far. Till the 30th GST Council Meeting, a total of 918 decisions have been taken and 294 notifications have been issued by the Central Government. In the 31st GST Council Meeting held on 22nd December, 2018, a total of 29 decisions were taken which have been implemented through the issuance of the requisite notifications and Circulars.

Based on the representations received from various stake holders, including trade and industry, certain amendments were recommended by the GST Council. Consequently, the Central Goods and Services Tax (Amendment) Act, 2018, the Union Territory Goods and Services Tax (Amendment) Act, 2018, the Goods and Services Tax (Compensation to States) Amendment Act, 2018 and the Integrated Goods and Services Tax (Amendment) Act, 2018 received the assent of the Hon’ble President of India on 29.08.2018. The GST Council i n its 31st meeting held on 22nd December, 2018 decided that the said amendment Acts would be brought into force with effect from 1st February, 2019.

 

The details of rationalization of GST rates on services are as under:

 

Sl. GST Council Meeting   Gist   of   Rate   Changes   of Date  of  Implementation  (by
No.         Services way of Notification)
       
1 20th  Meeting dated 5th  August, GST rate was reduced on total 22-08-2017
  2017       10 group of services  
             
2 21st Meeting dated 9th GST rate was reduced on total 4 21-09-2017 and 22-09-2017
  September, 2017     group of services  
             
3 22nd Meeting, dated 6th GST rate was reduced on total 21 13-10-2017
  October, 2018     group of services  
             
4 23rd Meeting, dated 10th GST rate was reduced on total 3 14-11-2017
  November, 2018     group of services  
             
5 25th Meeting, dated 18th GST rate was reduced on total 34 25-01-2018
  January, 2018     group of services  
       
6 28th  Meeting, dated 21st  July, GST rate was reduced on total 16 27-07-2018
  2018       group of services  
             
7 31st Meeting dated 22nd GST rate was reduced on total 8 01-01-2019
  December, 2018     group of services  
             

 

 

This was stated by Shri Shiv Pratap Shukla, Minister of State for Finance in a written reply to a question in Lok Sabha today.

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In future GST may have single slab instead of 12% and 18% https://www.gstseva.com/in-future-gst-may-have-single-slab-instead-of-12-and-18 Mon, 24 Dec 2018 18:17:25 +0000 https://www.gstseva.com/?p=9747 In future GST may have single slab instead of 12% and 18%.

With the GST transformation completed, we are close to completing the first set of rate of rationalisation i.e. phasing out the 28% slab except in luxury and sin goods.

Honable finance minister Arun Jaitley hinted.

Arun Jaitley ?????? ? ??????? ?????? ????????? ???????, ???????? 23, 2018

His Facebook post tittled “Eighteen Months of GST” Reproduced below

The Goods and Services Tax was implemented w.e.f. 1st July, 2017. It hasn’t completed eighteen months of implementation as yet. The GST has been at the receiving end of a lot of ill-informed and motivated criticism. What has been its real performance?
The Pre-GST regime
India had the worst indirect tax system anywhere in the world. Both the Centre and the State Government were entitled to levy a set of taxes. There were seventeen taxes levied. An entrepreneur, therefore, faced seventeen inspectors, seventeen returns and seventeen assessments. The rate of taxation were exorbitantly high. The standard rate of VAT and excise was 14.5% and 12.5% respectively. To this could be added the CST and the cascading effect of tax on tax. The standard rate thus became 31% on a large number of commodities. The assessees had only two options – either to pay a high rate of tax or evade it. Tax evasion was prevalent to a large extent. India comprised of multiple markets. Each State was a separate market because the rate of tax could be different. Interstate sales became inherently inefficient because trucks had to wait for hours and days at the State borders.
The GST impact on 1st July, 2017
From the date of its implementation, the GST changed the situation radically. All seventeen taxes were combined into one. The whole of India became one market. The interstate barriers disappeared. Entry into the cities became open with abolition of the entry tax. States were charging an entertainment tax ranging from 35% to 110%. This came down radically. 235 items were being charged at either 31% tax or even higher. All except 10 such items were brought down immediately to 28%. The 10 such items were brought down to even a lower rate i.e.18%. Multiple slabs were fixed transiently in order to ensure the tax of no commodity goes up radically. This contained the inflation impact. Most aam aadmi items were placed in the zero or 5% tax bracket. Returns became online; assessments will be online; multiple inspectors had disappeared. The States were guaranteed that for the first five years they will be ensured a 14% annual revenue increase.
The revenue trends
A frequently made comment has been that the revenue positon has been disappointing. The comment is based on an inadequate understanding of both the targets and the revenue increase. The targets set for the State in the GST regime is unprecedently high. Even though GST commenced on 1st July, 2017, the base year for revenue increase has been calculated is 2015-16. For each year a 14% increase is guaranteed. Thus, even when 18 months have not been finished since the launch of GST, on this day every State has a target of improving its revenue with three 14% increases compounded annually over the base year of 2015-16. This is close to a 50% being reached in the second year itself. It is almost an unachievable target. Yet six States have already achieved it, another seven are within a striking distance of achieving it and only eighteen are still more than 10% away from achieving it. By the third, fourth and fifth year, as in the case of VAT, the ability to increase revenues and closing the gap will substantially increase. Those States which do not achieve the target of 14% are paid out of the compensation cess. The requirement of compensation cess in the second year is expected to be much lower than the first year. This increase in the tax collection has to be factored keeping in mind the significant rate reduction which has taken place in the GST. The reduction in monetary terms amounts to about Rs.80000 crores per year. Notwithstanding the substantial tax reduction, the GST collection in the first six months of this year has shown a significant improvement as compared to the first year. The average monthly tax collected in the first year was Rs.89700 crore as compared to Rs.97100 crore per month in the second year.
The rate rationalisation
We were faced with a situation with a large number of commodities being taxed heavily in the pre-GST regime. The Congress legacy of indirect tax was a 31% tax. We transiently put them in the 28% slab. As the revenues kept increasing, we started bringing down the rates. Most of the commodities have seen tax reduced. Today, barring tobacco products, luxury vehicles, molasses, air-conditioners, aerated water, large TVs, and dish washers, all 28 items have been transferred from 28% slab to 18% and 12% slab. Only cement and auto parts are items of common use which remain in 28% slab. Our next priority will be to transfer cement into a lower slab. All other building materials have already been transferred from 28% to 18% and 12%. The sun is setting on the 28% slab.
Of the 1216 commodities which are used, broadly 183 are taxed at zero rate, 308 at 5%, 178 at 12% and 517 at 18%. The 28% slab is now a dying slab. Restaurants are being levied a tax compounded under the composition of turnover at 5%. Assessees with turnover upto Rs.20 lakhs are exempted from tax payment. Assessees upto Rs.1 crore turnover can get a composition by paying 1% tax. The composition scheme for small service tax assessees is under consideration. Cinema tickets tax between 35% to 110% has been brought down to 12% and 18%. The GST has helped in controlling inflation. Evasion has also come down.
The net effect
Lower rate of taxes, increased tax base, higher collections, easy for trade and least interface in assessments with a significant part of the tax rationalisation over, the growth percentage in the years to come will increase. The transformation has been done over a period of 18 months. Any abrupt transformation could have been either detrimental to revenue or to trade.
The GST Council
The GST Council has had 31 meetings. It is India’s first experiment with the federal institution. It is a body that has behaved with utmost responsibility. Several thousand decisions, including legislative drafting, rules drafting, notifications, fixing initial rates and rationalising rates have all been taken unanimously with consensus. The political noise outside is inconsistent with the harmony inside the Council.
A personal thought with regard to the future road map
With the GST transformation completed, we are close to completing the first set of rate of rationalisation i.e. phasing out the 28% slab except in luxury and sin goods. A future road map could well be to work towards a single standard rate instead of two standard rates of 12% and 18%. It could be a rate at some mid-point between the two. Obviously, this will take some reasonable time when the tax will rise significantly. The country should eventually have a GST which will have only slabs of zero, 5% and standard rate with luxury and sin goods as an exception.
Epilogue
Those who oppressed India with a 31% indirect tax and consistently belittled the GST must seriously introspect. Irresponsible politics and irresponsible economics is only a race to the bottom.

 

 

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Recommendations made during 31st Meeting of the GST Council https://www.gstseva.com/recommendations-made-during-31st-meeting-of-the-gst-council Sat, 22 Dec 2018 15:16:01 +0000 https://www.gstseva.com/?p=9741 Ministry of Finance

Recommendations made during 31st Meeting of the GST Council

Posted On: 22 DEC 2018 4:45PM by PIB Delhi

            The GST Council in its 31st meeting held today at New Delhi made the following policy recommendations:

  1. There would be a single cash ledger for each tax head. The modalities for implementation would be finalised in consultation with GSTN and the Accounting authorities.
  1. A scheme of single authority for disbursement of the refund amount sanctioned by either the Centre or the State tax authorities would be implemented on pilot basis. The modalities for the same shall be finalized shortly.
  2. The new return filing system shall be introduced on a trial basis from 01.04.2019 and on mandatory basis from 01.07.2019.
  3. The due date for furnishing the annual returns in FORM GSTR-9, FORM GSTR-9A and reconciliation statement in FORM GSTR-9C for the Financial Year 2017 – 2018 shall be further extended till 30.06.2019.
  4. The following clarificatory changes, inter-alia, shall be carried out in the formats/instructions according to which the annual return / reconciliation statement is to be submitted by the taxpayers:

  1. Amendment of headings in the forms to specify that the return in FORM GSTR-9 &FORM GSTR-9Awould be in respect of supplies etc. ‘made during the year’ and not ‘as declared in returns filed during the year’;
  2. All returns in FORM GSTR-1&FORM GSTR-3B have to be filed before filing of FORM GSTR-9&FORM GSTR-9C;
  3. All returns in FORM GSTR-4 have to be filed before filing of FORM GSTR-9A;
  4. HSN code may be declared only for those inward supplies whose value independently accounts for 10% or more of the total value of inward supplies;
  5. Additional payments, if any, required to be paid can be done through FORM GST DRC-03 only in cash;
  6. ITC cannot be availed through FORM GSTR-9 &FORM GSTR-9C;
  7. All invoices pertaining to previous FY (irrespective of month in which such invoice is reported in FORM GSTR-1) would be auto-populated in Table 8A of FORM GSTR-9;
  8. Value of “non-GST supply” shall also include the value of “no supply” and may be reported in Table 5D, 5E and 5F of FORM GSTR-9;
  9. Verification by taxpayer who is uploading reconciliation statement would be included in FORM GSTR-9C.

  1. The due date for furnishing FORM GSTR-8 by e-commerce operators for the months of October, November and December, 2018 shall be extended till 31.01.2019.

  1. The due date for submitting FORM GST ITC-04 for the period July 2017 to December 2018 shall be extended till 31.03.2019.

  1. 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.

  1. All the supporting documents/invoices in relation to a claim for refund in FORM GST RFD-01Ashall be 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. GSTN will enable this functionality on the common portal shortly.

  1. The following types of refunds shallalso be made available throughFORM GST RFD-01A:
  1. Refund on account of Assessment/Provisional Assessment/Appeal/Any Other Order;
  2. Tax paid on an intra-State supply which is subsequently held to be inter-State supply and vice-versa;
  3. Excess payment of Tax; and
  4. Any other refund.

  1. In case of applications for refund in FORM GST RFD-01A(except those relating to refund of excess balance in the cash ledger)which are generated on the common portal before the roll out of the functionality described in point (10) above, and which have not been submitted in the jurisdictional tax office within 60 days of the generation of ARN, the claimants shall be sent communications on their registered email ids containing information on where to submit the said refund applications. If the applications are not submitted within 15 days of the date of the email, the said refund applications shall be summarily rejected, and the debited amount, if any, shall be re-credited to the electronic credit ledger of the claimant.

  1. One more window for completion of migration process is being allowed. The 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 shall be extended till 31.01.2019. Also, the 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 shall be extended till 31.03.2019.

  1. Late fee shall be completely waived for all taxpayers in case FORM GSTR-1, FORM GSTR-3B &FORM GSTR-4 for the months / quarters July, 2017 to September, 2018, are furnished after 22.12.2018 but on or before 31.03.2019.

  1. Taxpayers who have not filed the returns for two consecutive tax periods shall be restricted from generating e-way bills. This provision shall be made effective once GSTN/NIC make available the required functionality.

  1. Clarifications shall be issued on certain refund related matters like refund of ITC accumulated on account of inverted duty structure, disbursal of refunds within the stipulated time, time allowed for availment of ITC on invoices, refund of accumulated ITC of compensation cess etc.

  1. Changes made by CGST (Amendment) Act, 2018, IGST (Amendment) Act, 2018, UTGST (Amendment) Act, 2018 and GST (Compensation to States) Amendment Act, 2018 and the corresponding changes in SGST Acts would be notified w.e.f. 01.02.2019.

The requisite Notifications/Circulars for implementing the above recommendations of the GST Council shall be issued shortly.

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Formation of GoM as Recommended by the GST Council in Its 31st Meeting held on 22.12.2018 https://www.gstseva.com/formation-of-gom-as-recommended-by-the-gst-council-in-its-31st-meeting-held-on-22-12-2018 Sat, 22 Dec 2018 15:13:30 +0000 https://www.gstseva.com/?p=9739 Ministry of Finance

Formation of GoM as Recommended by the GST Council in Its 31st Meeting held on 22.12.2018.

Posted On: 22 DEC 2018 4:48PM by PIB Delhi

The GST Council in its 31st meeting held today at New Delhi has approved the proposal to form a 7 Member Group of Ministers to study the revenue trend, including analysing the reasons for structural patterns affecting the revenue collection in some of the States. The study would include the underlying reasons for deviation from the revenue collection targets vis a vis original assumptions discussed during the design of GST system, its 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 its recommendation to the GST Council.

The members of the GoM and the Committee of experts would be announced in due course of time

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In-Principle approval given for Law Amendments during 31stMeeting of the GST Council https://www.gstseva.com/in-principle-approval-given-for-law-amendments-during-31stmeeting-of-the-gst-council Sat, 22 Dec 2018 15:11:02 +0000 https://www.gstseva.com/?p=9737 Ministry of Finance

In-Principle approval given for Law Amendments during 31stMeeting of the GST Council

Posted On: 22 DEC 2018 4:49PM by PIB Delhi

 

The GST Council in its 31st meeting held today at New Delhi gave in principle approval to the following amendments in the GST Acts:

  1. Creation of a Centralised Appellate Authority for Advance Ruling (AAAR) to deal withcases of conflicting decisions by two or more State Appellate Advance Ruling Authorities on the same issue.
  2. Amendment of section 50 of the CGST Act to provide that interest should be charged only on the net tax liability of the taxpayer, after taking into account the admissible input tax credit, i.e. interest would be leviable only on the amount payable through the electronic cash ledger.

The above recommendations of the Council will be made effective only after the necessary amendments in the GST Acts are carried out.

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Rate Changes – Recommendations made during 31st Meeting of the GST Council held on 22nd December, 2018 https://www.gstseva.com/rate-changes-recommendations-made-during-31st-meeting-of-the-gst-council-held-on-22nd-december-2018 Sat, 22 Dec 2018 15:08:33 +0000 https://www.gstseva.com/?p=9735

Recommendations made during 31st Meeting of the GST Council held on 22nd December, 2018 (New Delhi)-Rate changes

Posted On: 22 DEC 2018 4:50PM by PIB Delhi

GST Council in the 31st meeting held on 22nd December, 2018 at New Delhi took following decisions relating to changes in GST rates on goods and services. The decisions of the GST Council have been presented in this note for easy understanding. The same would be given effect to through Gazette notifications/ circulars which shall have force of law.

  1. GST rate reduction on goods which were attracting GST rate of 28% :
  2. 28% to 18%
  • Pulleys, transmission shafts and cranks, gear boxes etc., falling under HS Code 8483
  • Monitors and TVs of upto screen size of 32 inches
  • Re-treaded or used pneumatic tyres of rubber;
  • Power banks of lithium ion batteries. Lithium ion batteries are already at 18%. This will bring parity in GST rate of power bank and lithium ion battery.
  • Digital cameras and video camera recorders
  • Video game consoles and other games and sports requisites falling under HS code 9504.
  1. 28% to 5%
  • Parts  and accessories for the carriages for disabled persons
  1. GST rate reduction on other goods,-
  1. 18% to 12%
  • Cork roughly squared or debagged
  • Articles of natural cork
  • Agglomerated cork
  1. 18% to 5%
  • Marble rubble
  1. 12% to 5%
  • Natural cork
  • Walking Stick
  • Fly ash Blocks
  1.  12% to Nil:
  • Music Books
  1. 5% to Nil
  • Vegetables, (uncooked or cooked by steaming or boiling in water), frozen, branded and put in a unit container
  • Vegetable provisionally preserved (for example by sulphur dioxide gas, in brine, in sulphur water or in other preservative solutions), but unsuitable in that state for immediate consumption.
  • III. GST on solar power generating plant and other renewable energy plants
  • GST rate of  5% rate has been prescribed on renewable energy devices & parts for their manufacture (bio gas plant/solar power based devices, solar power generating system (SGPS) etc) [falling under chapter 84, 85 or 94 of the Tariff]. Other goods or services used in these plants attract applicable GST.
  • Certain disputes have arisen regarding GST rates where specified goods attracting 5% GST are supplied along with services of construction etc and other goods for solar power plant.
  • To resolve the dispute the Council has recommended that in all such cases, the 70% of the gross value shall be deemed as the value of supply of said goods attracting 5% rate and the remaining portion (30%) of the aggregate value of such EPC contract shall be deemed as the value of supply of taxable service attracting standard GST rate.

Reduction in GST rates/exemptions on services:

  • GST rate on cinema tickets above Rs. 100 shall be reduced from 28% to 18% and on cinema tickets upto Rs. 100 from 18% to 12%.
  • GST rate on third party insurance premium of goods carrying vehicles shall be reduced from 18% to 12%
  • Services supplied by banks to Basic Saving Bank Deposit (BSBD) account holders under Pradhan Mantri Jan Dhan Yojana (PMJDY) shall be exempted.
  • Air travel of pilgrims by non-scheduled/charter operations, for religious pilgrimage facilitated by the Government of India under bilateral arrangements shall attract the same rate of GST as applicable to similar flights in Economy class (i.e. 5% with ITC of input services).
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Decisions taken by the GST Council in the 31st meeting held regarding GST rate on services https://www.gstseva.com/decisions-taken-by-the-gst-council-in-the-31st-meeting-held-regarding-gst-rate-on-services Sat, 22 Dec 2018 15:04:58 +0000 https://www.gstseva.com/?p=9733 Ministry of Finance

Decisions taken by the GST Council in the 31st meeting held regarding GST rate on services

Posted On: 22 DEC 2018 5:50PM by PIB Delhi

GST Council in the 31stmeeting held on 22nd December, 2018 at New Delhi took following decisions relating to changes in GST rates, ITC eligibility criteria, exemptions andclarificationson connected issues.The decisions of the GST Council have been presented in this note in simple languagefor easyunderstanding. The same would be given effect to through Gazette notifications/ circulars which shall have force of law.

Reduction inGST rates/exemptions on services:

  1. GST rate on cinema tickets above Rs. 100 shall be reducedfrom 28% to 18% and on cinema tickets uptoRs. 100 from 18% to 12%.
  2. GST rate on third party insurance premium of goods carrying vehicles shall be reduced from 18% to 12%
  3. Services supplied by banks to Basic Saving Bank Deposit (BSBD) account holders under PradhanMantri Jan DhanYojana (PMJDY) shall be exempted.
  4. Services supplied by rehabilitation professionals recognised under Rehabilitation Council of India Act, 1992at medical establishments, educational institutions, rehabilitation centers established by Central Government / State Government or Union Territories or entity registered under section 12AA of the Income-tax Actshall be exempted.
  5. Services provided by GTA to Government departments/local authorities which have taken registration only for the purpose of deducting tax under Section 51 shall be excluded from payment of tax under RCM and the same shall be exempted.
  6. Exemption on services provided by Central or State Government or Union Territory Government to their undertakings or PSUs by way of guaranteeing loans taken by them from financial institutions is being extended to guaranteeing of such loans taken from banks.
  7. Air travel of pilgrims by non-scheduled/charter operations, for religious pilgrimage facilitated by the Government of India under bilateral arrangements shall attract the same rate of GST as applicable to similar flights in Economy class (i.e. 5% with ITC of input services).

Rationalization

  1. Parliament and State legislatures shall be extended the same tax treatment with regard to payment of tax under RCM (reverse charge mechanism)as available to Central and State Governments.
  2. Security services (supply of security personnel) provided to a registered person,except Government Departments which have taken registration for TDS and entities registered under composition scheme, shall be put under RCM.
  3. Services provided by unregistered Business Facilitator (BF) to a bank and agent of Business correspondent (BC) toa BC shall be put under RCM.

Clarifications

  1. To clarifythat with effect from 31st January, 2018 degrees/ diploma awarded by IIMs under IIM Act, 2017 will be exempt from GST.
  2. To clarify that the services provided by IFC and ADB are exempt from GST in terms of provisions of IFC Act, 1958 and ADB Act, 1966.
  3. To clarify to West Bengal that services provided by Council/ Board of Primary/ Secondary/ Higher Secondary Education for conduct of examination to its students are exempt.
  4. To clarify that “printing of pictures” falls under service code “998386: Photographic and videographic processing services” of the scheme of classification of services and attract GST @18% and not under “998912: Printing and reproduction services of recorded media, on a fee or contract basis”which attracts GST @12%.
  5. To clarify that leasing of pumps and reservoirs by the OMCs to petrol pump dealers is a mixed supply and the Licence Fee Recovery (LFR) charged for the same shall be leviable to GST @ 28%, the rate applicable to pumps. Leasing of land and buildings along with equipment shall fall under heading 9972 (real estate services) and attract GST rate of 18%.
  6. To clarify that the incentives paid by RBI to Banks under “Currency Distribution and Exchange Scheme” (CDES)are taxable.
  7. To clarify under section 11(3) of the CGST Act, 2017 that scope of entry for multi-modal transport with GST rate of 12% inserted w.e.f. date 26.07.2018, covers only transport of goods from a place in India to another place in India, that is, only domestic multi-modal transport.
  8. To clarify that the nature of business establishment making supply of food, drinks and other articles for human consumption will not determine whether the supply by such establishments is a supply of goods or services. It will rather depend on the constituents of each individual supply and whether same satisfies the conditions / ingredients of a ‘composite supply’ or ‘mixed supply’.
  9. To clarify that GST is exempt on supply of food and drinks by an educational institution when provided by the institution itself to its students, faculty and staff and is leviable to GST of 5% when provided by any other person based on a contractual arrangement with such institutions.
  10. To clarify that the banking company is liable to pay GST on the entire value of service charge or fee charged to customers whether or not received via business facilitator or the business correspondent.
  11. To issue a clarification to Food Corporation of India (FCI) that the service provided by godown owner in case of lease with services, where the godown owner, besides leasing the warehouse, undertakes to carry out activities of storage and preservation of stored food grains, is the service of storage and warehousing of agricultural produce and the same is exempt.

***

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Recommendations made during 31st Meeting of the GST Council held regarding Rate changes and clarification in Goods https://www.gstseva.com/recommendations-made-during-31st-meeting-of-the-gst-council-held-regarding-rate-changes-and-clarification-in-goods Sat, 22 Dec 2018 14:59:50 +0000 https://www.gstseva.com/?p=9731

Recommendations made during 31st Meeting of the GST Council held regarding Rate changes and clarification in Goods

Posted On: 22 DEC 2018 5:51PM by PIB Delhi

GST Council in the 31st meeting held on 22nd December, 2018 at New Delhi took following decisions relating to changes in GST rates, and clarification (on Goods). The decisions of the GST Council have been presented in this note for easy understanding. The same would be given effect to through Gazette notifications/ circulars which shall have force of law.

  1. GST rate reduction on goods which were attracting GST rate of 28% :
  1. 28% to 18%
  • Pulleys, transmission shafts and cranks, gear boxes etc., falling under HS Code 8483
  • Monitors and TVs of uptoscreen size of 32 inches
  • Re-treaded or used pneumatic tyres of rubber;
  • Power banks of lithium ion batteries. Lithium ion batteries are already at 18%. This will bring parity in GST rate of power bank and lithium ion battery.
  • Digital cameras and video camera recorders
  • Video game consoles and other games and sports requisites falling under HS code 9504.
  1. 28% to 5%
  • Parts  and accessories for the carriages fordisabled persons

  1. GST rate reduction on other goods,-
  1. 18% to 12%
  • Cork roughly squared or debagged
  • Articles of natural cork
  • Agglomerated cork
  1. 18% to 5%
  • Marble rubble
  1. 12% to 5%
  • Natural cork
  • Walking Stick
  • Fly ash Blocks
  1.  12% to Nil:
  • Music Books
  1. 5% to Nil
  • Vegetables, (uncooked or cooked by steaming or boilinginwater), frozen, branded and put in a unit container
  • Vegetable provisionally preserved (for example by sulphur dioxide gas, in brine, in sulphur water or in other preservative solutions), but unsuitable in that state for immediate consumption.
  1. Miscellaneous
  • Exemption from GST on supply of gold by Nominated Agencies to exporters of article of gold Jewellery.
  • Exemption from GST on proceeds received by Government from auction of gifts received by President, Prime Minister, Governor or Chief Minister of a State and public servants, the proceeds of which is used for public or charitable cause.
  • Exemption from IGST/Compensation cess on vehicles imported for temporary purposes under the Customs Convention on the Temporary importation of Private Road Vehicles (carnet de passages-en-douane).
  • Rate of 5%/18% to be applied based on transaction value of footwear
  • Uniform GST rate of 12% on Flexible Intermediate Bulk Container (FIBC) from existing 5%/12% (depending on the value)

  • III. GST on solar power generating plant and other renewable energy plants
  • GST rate of  5% rate has been prescribed on renewable energy devices & parts for their manufacture (bio gas plant/solar power based devices, solar power generating system (SGPS) etc) [falling under chapter 84, 85 or 94 of the Tariff]. Other goods or services used in these plants attract applicable GST.
  • Certain disputes have arisen regarding GST rates where specified goods attracting 5% GST are supplied along with services of construction etc and other goods for solar power plant.
  • To resolve the dispute the Council has recommended that in all such cases, the 70% of the gross value shall be deemed as the value of supply of said goods attracting 5% rate and the remaining portion (30%) of the aggregate value of such EPC contract shall be deemed as the value of supply of taxable service attracting standard GST rate.

  • IV. Clarifications:
  • Sprinkler system consisting of nozzles, lateral and other components would attract 12% GST rate under S.No. 195B of notification No. 1/2017-Central Tax (Rate) dated 28.6.2018
  • Movement of Rigs, Tools & Spares and all goods on wheels on own account where such movement is not intended for further supply of such goods but for the provision of service does not involve a supply (e.g., movement of testing equipment etc.) and is not be liable to GST.
  • The goods with description Bagasse Board [whether plain or laminated] falling under Chapter 44 attract GST at the rate of 12%.
  • ConcessionalGST rate of 5% applies to the LPG supplied in bulk to an OMC by refiners/fractioners for bottling for further supply to household domestic consumers.
  • While animal/cattle/aquatic/poultry feed are exempt vide S. No. 102 of notification No. 2/2017-Central Tax (Rate), this exemption would not apply to their inputs such as fish meal, meat bone meal, bran, sharps, oil cakes of various oil seeds etc.
  • Manure of determination of classification of vitamins, provitamins etc. as animal feed supplements
  • Sattu or Chattuafalling under HS code 1106 and attracts the applicable GST rate.
  • Polypropylene Woven and Non-Woven Bags and PP Woven and Non-Woven Bags laminated with BOPP falls under HS code 3923 and attract 18% GST rate.
  • 18% GST is applicable on wood logs including the wood in rough/log used for pulping.
  • Turbo charger is classified under heading 8414 and attracts 18% GST and not 5% GST.
  • Fabric even if embroidered or has stitching of lace and tikki etc., and even if sold in three piece fabric as ladies suit set, will be classifiable as fabric andwould attract 5% GST.
  • Scope of concessional rate of 5% GST rate for specified equipment for waste to energy plant.

This is for information only. For exact details of changes, the notification/Circular/ Clarification may please be referred to, as and when they are issued.

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31st GST council meeting will be held today- penalties may reduce https://www.gstseva.com/31st-gst-council-meeting-will-be-held-today-penalties-may-reduce Sat, 22 Dec 2018 04:36:47 +0000 https://www.gstseva.com/?p=9728 31st GST Council meeting will be held today to discuss issues related to ease of filing of returns, refund processes and cutting GST rates on some items.

WHISPERS – Under active consideration in GST Council meet –

Postponement of GSTR-9 & GSTR-9C
• Good news for builders
• Time to correct mismatches between the GSTR-1 and GSTR-3B on the GSTN portal
• Waiver or part reduction of some penalties
• Rationalization of Cash Ledger procedure by reduction of heads
• Blocking of e-Way Bill facility of not non-filers
• Reduction of tax rates on select items

Not immediately but steps to reduce litigation and writs such as to allow ITC on invoices or debit notes of 2017-18 u/s 16(4) till March 31, 2019. Some of these may be decided this time but deferred till next meeting in January.

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Government Released GST evasion data, Know here https://www.gstseva.com/government-released-gst-evasion-data-know-here Sat, 15 Dec 2018 04:52:58 +0000 https://www.gstseva.com/?p=9708 Goods and Services Tax (GST) evasion

During the current financial year (between April 2018 to November 2018) 3196 cases involving an amount of Rs. 12766.85 Crore have been identified.

Suspected GST Evasion amounting to Rs. 12766.85 has come to the light till the month of November, 2018. An amount of Rs. 7909.96 Cr. has been recovered during the period April 2018 to November 2018. The State-Wise details of detection of GST Evasion cases and recovery are as under:

 

    Detection Recovery
Sr. No. Name of the No. Of Amount (in No. Of Amount
  State/U.T Cases Cr) Cases (in Cr)
1 Andhra Pradesh 38 359.01 26 235.68
2 Arunachal Pradesh 29 17.19 15 10.69
3 Assam 21 46.17 19 44.73
4 Bihar 182 490.01 167 484.02
5 Chhattisgarh 36 180.18 34 158.57
6 Goa 31 30.95 27 17.9
7 Gujarat 303 548.16 232 405.55
8 Haryana 210 757.19 172 301.23
9 Himachal Pradesh 10 37.7 8 4.35
10 Jammu & Kashmir 25 109.67 20 40.45
11 Jharkhand 145 494.6 105 246.27
12 Karnataka 127 844.17 66 594.99
13 Kerala 54 447.03 43 278.35
14 Madhya Pradesh 252 499.16 259 384.92
15 Maharashtra 418 3898.72 363 2475.27
16 Manipur 2 0.18 2 0.05
17 Meghalaya 7 34.35 7 33.89
18 Mizoram 0 0 0 0
19 Nagaland 0 0 0 0
20 Odisha 80 237.78 58 155.45
21 Punjab 75 60.69 70 40.19
22 Rajasthan 207 427.76 192 302.11
23 Sikkim 1 6 1 0.2
24 Tamil Nadu 148 757.34 101 426.47
25 Telangana 103 244.25 71 95.83
26 Tripura 8 3.85 4 0.19
27 Uttar Pradesh 233 998.62 185 605.59
28 Uttarakhand 24 119.82 19 59.08
29 West Bengal 225 336.36 209 157.73
30 Delhi 144 741.52 119 331.27
31 Chandigarh 7 2.8 5 3.23
32 Daman & Diu 10 8.44 10 8.64
  Dadar & Nagar        
33 Haveli 6 1.75 5 1.67
34 Puducherry 35 25.43 20 5.4
  Andaman &        
35 Nicobar 0 0 0 0
36 Lakshadweep 0 0 0 0
  Total 3196 12766.85 2634 7909.96

 

The following measures are being taken by Government to check GST evasion:

  1. Intelligence based enforcement
  2. E-Way Bill squads
  3. Systematic Analysis of Data
  4. Setting-up of Directorate General ( Analytics & Risk Management)

This was stated by Shri Shiv Pratap Shukla, Minister of State for Finance in a Written Reply to a question in Lok Sabha today.

 

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Extension of due date for filing FORM GSTR-9, FORM GSTR-9A and FORM GSTR-9C https://www.gstseva.com/extension-of-due-date-for-filing-form-gstr-9-form-gstr-9a-and-form-gstr-9c Mon, 10 Dec 2018 04:40:08 +0000 https://www.gstseva.com/?p=9655
Extension of due date for filing FORM GSTR-9, FORM GSTR-9A and FORM GSTR-9C?

FORM GSTR-9 and FORM GSTR-9A have been notified vide notification No. 39/2018-Central Tax, dated 04.09.2018 while FORM GSTR-9C has been notified vide notification no. 49/2018-Central Tax, dated 13.09.2018 as part of the CGST Rules.

The competent authority has decided to extend the due date for filing FORM GSTR-9, FORM GSTR-9A and FORM GSTR-9C till 31st March, 2019. The requisite FORMs shall be made available on the GST common portal shortly.

Relevant order is being issued.

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GST on real estate : an Important press release for home/flat buyers https://www.gstseva.com/gst-on-real-estate-an-important-press-release-for-home-flat-buyers Sat, 08 Dec 2018 15:12:58 +0000 https://www.gstseva.com/?p=9646 New Delhi: 8 December 2018 Ministry of Finance issued a press release to clarify the tax rate impact on Pre-GST and Post-GST property. 

The press release focusing on two issues:-

  1. comparing the tax rates between pre and post GST
  2. Applicability of tax in contrast where sale of constructed building take place with or without obtaining Completion Certificate

Below are details summarized by us and also the copy of press release  

 

Type of transactions                                      Effective RATE OF TAX

in GST
Effective tax  rate   
pre-GST i.e old regime 
OUR REMARKS                                                
Under Construction Building
                 Affordable Government Schemes                                                         
                 Other Than Affordable schemes               


8%



12%
15-18%Previously no
input credit i.e
ITC was 
available 

Apart from 1/3rd
rebate on
GST rate, builder must pass ITC
benefit
ON READY-TO-MOVE FLATS       Completion Certificate issued      NILNILGST NOT
applicable 

ON READY-TO-MOVE FLATS        
Completion Certificate
not-issued                                                 
8% and 12%15-18%Same as under
construction
property

Effective tax rate on complex, building, flat etc.

New Delhi: 8 December 2018, PIB news
 

It is brought to the notice of buyers of constructed property that there is no GST on sale of complex/ building and ready to move-in flats where sale takes place after issue of completion certificate by the competent authority. GST is applicable on sale of under construction property or ready to move-in flats where completion certificate has not been issued at the time of sale.

   Effective rate of tax and credit available to the builders for payment of tax are summarized in the table for pre-GST and GST regime.

Period

Output Tax Rate

Input Tax Credit details

Effective Rate of Tax

Pre- GST

Service Tax: 4.5%

VAT: 1% to 5%

(composition scheme)

Central Excise on most of the construction materials: 12.5%

VAT: 12.5 to 14.5%

Entry Tax: Yes

No input tax credit (ITC) of VAT and Central Excise duty paid on inputs was available to the builder for payment of output tax, hence it got embedded in the value of properties. Considering that goods constitute approximately 45% of the value, embedded ITC was approximately 10- 12%.

Effective pre-GST tax incidence: 15- 18%

GST

Affordable housing segment: 8%,

 

Other segment: 12% after 1/3rd abatement of value of land

Major construction materials, capital goods and input services used for construction of flats, houses, etc. attract GST of 18% or more.

ITC available and weighted average of ITC incidence is approximately 8 to10%.

Effective GST incidence,

for affordable segment and for other segment has not increased as compared to pre- GST regime.

 

Housing projects in the affordable segment such as Jawaharlal Nehru National Urban Renewal Mission, Rajiv Awas Yojana, Pradhan Mantri Awas Yojana or any other housing scheme of State Government etc., attract GST of 8%. For such projects, after offsetting input tax credit, the builder or developer in most cases will not be required to pay GST in cash as the builder would have enough ITC in his books of account to pay the output GST.

  For projects other than affordable segment, it is expected that the cost of the complex/ buildings/ flats would not have gone up due to implementation of GST. Builders are also required to pass on the benefits of lower tax burden to the buyers of property by way of reduced prices/ installments, where effective tax rate has been down.

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GST And other Indirect Tax Latest Updates-November 2018 https://www.gstseva.com/gst-and-other-indirect-tax-latest-updates-november-2018 Mon, 03 Dec 2018 15:42:05 +0000 https://www.gstseva.com/?p=9523 Indirect Taxes Updates

GST, Customs, Excise, Service Tax & VAT

Month November2018

CMA RAKESH BHALLA
By CMA Rakesh Bhalla
Past chairman NIRC of ICAI (CMA)
nancybhalla@yahoo.com

GST UPDATES

CBIC extended due date for filing Form GSTR-7 till 31stJanuary 2019

CBIC has extended time limit for furnishing return by a registered person required to deduct tax at source under provisions of section 51 of said Act in FORM GSTR – 7 of Central Goods and Services Tax Rules, 2017 under sub -section (3) of section 39 of the said Act read with rule 66 of the Central Goods and Services Tax Rules, 2017 for the months of October, 2018 to December, 2018 till the 31st day of January, 2019. (Refer Notification No. 66/2018 –Central Tax dated 29.11.2018)


TDS provisions under GST –Exemption to supplies from one PSU to another PSU: 

Provisions relating to Tax Deduction as Source (TDS) would not be applicable in respect of supply of goods or services or both from a public sector undertaking to another public sector undertaking. This exemption as provided through Notification No. 50/2018-Central Tax has been extended to such supplies with effect from 1-10-2018, the date when TDS provisions came into effect in the GST regime. (Refer Notification No. 61/2018-Central Tax, dated 05-11-2018)


CGST Rules –New Rule notified for recovery of dues under existing’ laws: 

New Rule 142A has been inserted in CGST Rules, 2017 for recovery of dues under ‘existing’ laws (i.e., central excise, service tax, VAT, etc.). Accordingly, a summary of order issued under any existing law creating demand of tax, interest, penalty or any other dues will be uploaded in FORM GST DRC-07A on the common portal. Demand will be posted in Part II of Electronic Liability Register in FORM GST PMT-01. FORM GST DRC-07A and FORM GST DRC-08A have also been notified for this purpose. Further, new Rule 83A has been inserted relating to examination of GST Practitioners. (Refer Notification No. 60/2018-Central Tax, dated 30-10-2018)


Job work -Form GST ITC-04 can be filed till 31-12-2018: 

Declaration in FORM GST ITC-04, in respect of goods dispatched to a job worker or received from a job worker or sent from one job worker to another, during Jul 2017 to September, 2018 can now be furnished till 31st day of Dec.,2018. (Refer Notification No. 59/2018-Central Tax, dated 26-10-2018


Valuation–Interest on loan/credit by Del-credere agent when includible: 

CBIC has clarified that when del-credere agent (DCA) is not an agent of supplier, temporary short-term transaction-based loan provided by DCA to buyer is an independent supply of service by DCA to recipient on principal to principal basis and will not form part of value of supply of goods. Credit by DCA to recipient is not a separate supply, if DCA acts as an agent for principal. In such cases, value of interest charged for such credit is includible in value of supply of goods by DCA to recipient. Reiterating earlier Circular No. 57/31/2018-GST, dated 4-9-2018, it notes that where the invoice for supply of goods is issued by the DCA in his own name, the DCA would fall under ambit of agent. (Refer Circular No. 73/47/2018-GST, dated 5-11-2018)


Return of goods –Procedure to be followed:

CBIC has listed various procedures which may be followed by manufacturer, wholesaler/retailer for return of time expired goods.,return of such goods can be treated either as fresh supply and consequent issue of tax invoice, or by issue of credit note. In fresh supply, manufacturer destroying returned expired goods will be liable to reverse ITC availed on return supply, if any. Tax liability can only be adjusted in case of credit note, if same has been issued within limit specified under Section 34(2) of CGST Act. (Refer Circular No. 72/46/2018-GST, dated 26-10-2018)


Tea Board required to collect TCS from tea producers and auctioneers:

Tea Board of India is required to collect TCS from sellers (i.e. tea producers) on the net value of supply of goods i.e. tea; and from auctioneers of the tea on the net value of supply of Services (i.e. brokerage). Tea Board being the operator of the electronic auction system for trading of tea across the country including for collection and settlement of payments, falls under the category of electronic commerce operator liable to collect tax at source (TCS) under GST law.(Refer Circular No. 74/48/2018-GST, dated 5-11-2018).


Cancellation of GST registration –Procedure clarified:

Application for cancellation of GST registration is not to be rejected because of violation of 30 days deadline from the occurrence of the event warranting cancellation. Further, debit of ITC on available stock can be done at the time of submitting Form GSTR-10, whose last date has been extended till 31-12-2018, for the cancellations made by 30-9-2018. The requirement to debit the electronic credit and/or cash ledger by suitable amounts is not a prerequisite for applying for cancellation of registration. Taxpayers who have filed application for cancellation will not be required to file other returns. (Refer Circular No. 69/43/2018-GST, dated 26-10-2018)Registration of Casual Taxable Person & recovery of excess credit distributed by ISD-Clarified

CBIC has clarified that amount of advance tax required to be deposited by casual taxable person (CTP), while obtaining registration, is to be calculated after considering eligible ITC available to such person. It is also stated that a taxable person would not be treated as CTP beyond 180 days and would have to apply for normal registration by uploading document granting him permission to use premises for the exhibition. Also, advance tax is not required if normal registration is taken. 

This circular also clarifies on recovery of excess credit distributed by an Input Service Distributor. The excess credit so distributed shall be recovered from recipients along with interest and penalty if any. ISD would also be liable to a general penalty under Section 122(1)(ix) of the CGST Act. (Refer Circular No. 71/45/2018-GST, dated 26-10-2018)


Refund of ITC and IGST clarified:

CBIC has issued a circular clarifying certain issues on refund of ITC and IGST. since common portal at present does not have facility for fresh refund application once deficiency memo is issued, taxpayer will be required to submit rectified applications under earlier ARN only and there is no need to re credit ITC in electronic credit ledger. It also states that a suitable clarification would be issued separately for cases in which such re-credit has already been carried out. Further, clarifying latest amendments in the refund provisions of the CGST Rules, it is stated that exporters who have received capital goods under EPCG, either through import or through domestic procurement, can claim refund of IGST paid on exports. (Refer Circular No. 70/44/2018-GST, 26-10-2018)


Service of notice–‘Affixation’ only when other methods not practicable: 

Allahabad High Court has held that use of words ‘if none of the modes is practicable’ in Section 169 of the CGST Act clearly indicates that it is only after that all earlier mentioned methods are found as not practicable for service of notice that resort can be taken for affixation of same at some conspicuous place. The High Court observed that there was violation of natural justice as GST registration was cancelled without serving SCN. It also noted thatregistration was cancelled on basis of prima facie opinion without indicating material for same, and that there was nothing on record to establish the time, date and place and the manner in which service by affixation was resorted to. [KashiBartanBhandarv.State of UP -2018-VIL-499-ALH]


GST E-way Bill –Missing Zero in the mentioned distance, a typographical mistake:

Observing that distance between Kerala and Uttarakhand is a matter of record and thus verifiable, Kerala High Court has held that distance showed in e-way bill as 280 km, instead of 2800 km (one zero missing), was a typographical error, and a minor error. The High Court observed that CBIC had come across many minor discrepancies in e-way bills, resulting in summary detention of the goods, while it issued Circular No. 64/38/2018-GST dated 14-9-2018. Fact that goods under detention had very short shelf life, was also noted. [SabithaRiyaz v.UOI -2018-TIOL-156-HC-KERALA-GST]


Manual filing of TRAN-1 and GSTR-3B to avoid lapse of ITC:

In a case where the assessee was not able to distribute Input Tax Credit (ITC) brought forward from the erstwhile regime, due to some technical issues in uploading TRAN-1, Bombay High Court has directed the assessee to manually file copy of the revised TRAN-1, ITC-01 and GSTR-3B at Mumbai. The Court however refrained itself from giving directions to the Commissioners of Delhi, Gujarat and Karnataka where the branches to whom the credit was distributed, were located. [Indusind Media Communications v.UOI -2018-VIL-468-BOM]

Reg: Tool amortisation cost (dies and moulds supplied by vehicle manufacturer to component manufacturer on free of cost (‘FOC’) basis)shall be included in the value of components

The applicant was engaged in the manufacture of automotive components as per the specifications given by its customer. In order to manufacture the same, tailor-made tools were required. Such tools were provided by the customer to the applicant on FOC basis. 

AAR held that transfer of tools by the customer to the applicant will not qualify as supply under Clause 1 (Permanent transfer of business assets) of Schedule I of the CGST Act. This is because tools were given by customer to applicant temporarily and that too for limited purpose. AAR further states that amortized value of tools will be included in assessable value of components under Section 15(2)(b) of CGST Act which provides for inclusion of amount liable to be incurred by supplier but incurred by recipient. The applicant could not have manufactured components without such tools. Accordingly, the applicant was required to incur such cost which was incurred by the customer on its behalf. (Nash Industries (I) Private Limited, 2018-VIL-266-AAR)

TRANS-1 issue : Condition on exempted goods manufacturer / trader to avail credit of stock in hand only if duty paying document is not more than 12 months old as on July 1, 2017 [Section 140(3)(iv) of the Central Goods and Services Tax Act, 2017 (‘CGST Act’)] 

The Bombay High Court held that the provision is constitutional, for the following reasons :

– Assessee cannot pick and choose a condition for challenge by alleging that the availment is undisputedly conditional but one of the conditions having nexus with the availment is unconstitutional, arbitrary and excessive. 

-The right to avail transitional credit is neither indefeasible nor absolute under the existing law or in transitional arrangements set out or in the substantive provisions permitting availment of credit.

(JCB India Limited v. Union of India, 2018-VIL-165-BOM)

However, The Gujarat High Court held that provision is unconstitutional, for the following reasons 

– The credit was a vested right which cannot be taken away. 

– The condition imposed for availing such benefit has no rational or reasonable basis. 

 (Filco Trade Center Private Limited v. Union of India, 2018-VIL-403-GUJ)TRANS-1 issue : Restriction on right of a dealer to carry forward credit if the prescribed forms are not furnished within prescribed period [Proviso to Section 140(1) of the Gujarat Goods and Services Tax Act, 2017] 

The High Court held that the restriction is constitutional, for the following reasons: 

– A combined reading of relevant provisions shows that statutory provisions do not deny the benefit of credit where necessary declarations are furnished. Thus, no existing or vested right has been taken away. 

– The prescription of time limit within which necessary declarations must be made, is neither without authority nor unreasonable. (Willowood Chem Pvt Ltd v. Union of India, 2018-VIL-433-GUJ)


TRANS-1 issue : No credit on capital goods that were in transit as on July 1, 2017 

The Court held that not granting transitional credit on capital goods in transit on date of introduction of GST is not in violation of Constitution of India, 1950 on following grounds: 

– The distinction between inputs and capital goods is in not artificial or arbitrary and both form different and distinct classes 

– Taxing statutes contained self-sufficient scheme of levying computation and calculation of tax. The time in which a return is to be filed for purpose of assessment of tax cannot be dependent on will of a dealer (RSPL Limited v. Union of India, 2018-VIL-477-GUJ) 


Lotteries are ‘goods’ –GST leviable:

Relying on Supreme Court decision in case of Sunrise Associates, Calcutta High Court has held that lotteries are generally speaking ‘goods’ and come within definition of ‘actionable claims’. It was also held that actionable claims other than lottery, gambling and betting kept out of scope of CGST Act as per Schedule-III and therefore, lottery can be charged to tax under Central GST Act, 2017. Further, High Court held that it is within domain of GST Council to decide rate of tax and differential levy of tax is permissible. It, however, added that if a resolution adopted in the GST Council meeting breachesany fundamental right or any provision of the Constitution of India, the same can be adjudicated upon by a Writ Court. [Teesta Distributors v. Union of India -2018-VIL-455-WB]


Transport planning–Admissibility of exemption:

GST AAR Andhra Pradesh has held that consultancy services for preparation of transport studies such as Comprehensive Mobility Plan, Transit Oriented Development Plan, Integrated Public Transport Plan and consultancy services of preparation of detailed project reports on Metro Rail Projects, come within functions of municipality under Article 243W read with Twelfth Schedule to the Constitution of India. The AAR observed that urban transportation is part of urban planning which is entrusted to municipality, and that activities are covered under public amenities in the Twelfth Schedule. It was held that hence activities undertaken by applicant as governmental authority are covered by exemption under Not. No. 12/2017-Central Tax (Rate). [In RE: Amaravathi Metro Rail Corp Ltd-Ruling No. AAR/AP/07(GST)/2018, dated 2-7-2018, AAR Andhra Pradesh]


Job work for foreign entity liable to GST @ 18%:

GST AAR Andhra Pradesh has held that process of providing job work service to foreign principal, in premises of applicant as per specifications of recipient of services, is taxable under GST and liable to tax @ 18%. AAR in this regard held that place of supply for the transaction was location of the service where actually performed i.e., business premises of the applicant. [In RE: SynthiteIndustries -Ruling No. AAR/AP/08(GST)/2018, dated 20-8-2018, AAR Andhra Pradesh]


Toll charge not excludible from value of security service:

GST AAR West Bengal has held that toll charges paid by a security services provider providing services to the bank, are not excludible from value of the supply under Rule 33 of the CGST Rules, 2017. The AAR was of the view that GST will be payable on the entire value of the supply, including toll charges paid. The applicant was held as not acting as a ‘pure agent’ of the bank while paying toll charges. The toll charges were held as cost of service provided to the banks so that the vehicles can access roads/bridges to provide security services to the banks. [In RE: Premier Vigilance & Security Pvt Ltd. -20/WBAAR/2018-19 dated 2-11-2018, AAR West Bengal]


IIMs eligible for both Sl. 66(a) and 67 of Notification No. 12/2017-CT (Rate):

GST AAR West Bengal has held that Indian Institute of Management, Calcutta is an educational institution within the meaning of clause 2(y)(ii) of Notification No. 12/2017-Central Tax (Rate) and is eligible for benefit of Entry No. 66(a) of said notification, applicable to such educational institutions as such. The AAR, however, also observed that applicant would also be eligible for benefit under Entry No. 67 as it specifically concerns IIMs, and courses mentioned therein will be eligible under the specific entry even if not mentioned elsewhere. [In RE: Indian Institute of Management, Calcutta–Order No. 21/WBAAR/2018-19 dated 2-11-2018, AAR West Bengal]


Amount received from contract brewing units for use of IP, liable to GST:

Appellate Authority for Advance Rulings Karnataka has held that by permitting brewers to use trademarks owned by applicant, permitting acquisition of know-how on production and packaging of applicant’s beer, applicant has permitted the brewer to use intellectual property rights covered under clause 5(c) of the Schedule II of the CGST Act. The service supplied by the appellant was held classifiable under Service Code 999799 as ‘other services nowhere else classified’. Amount in the nature of reimbursement of expenses, received from brewers, was held liable to GST @ 18%. 

[In RE: United Breweries-Order No. KAR/AAAR/03/2018-19, dated 23-10-2018, AAAR Karnataka]

 


No concessional GST on works contract carried for business purposes:

Observing that main object of the company was to carry on business of purchasing, selling, trading of electrical energy, AAR GST Madhya Pradesh has held that projects by assesse applicant under various government schemes are carried out for business purposes. The applicant was hence denied the benefit of concessional rate of GST @ 12% to works contract services received by them for construction and erection for power distribution. The applicant was however held to be a government entity as per Notification No. 31/2017-Central Tax (Rate). [In RE: MP Poorv Kshetra Company Ltd. -Advance Ruling No. 14/2018, dated 18-9-2018, AAR Madhya Pradesh]


Bus body building on chassis provided by principal is supply of service:

AAR Goa has held that in a case where bus body builder builds body on chassis provided by the principal for body building, and charges fabrication charges (including certain material that was consumed during the process of job-work), the supply shall merit classification as supply of services under HSN 9988 and hence, should be taxed @ 18% GST. The Authority placed reliance on the ratio of the judgement in the case of Prestige Engineering (India) Ltd. [1994 (73) ELT 497 (SC)],wherein it was held that addition or application of items by job worker would not detract from the nature and character of his work. [In RE: Automobile Corporation of Goa Ltd.-2018-VIL-217-AAR Goa]


ITC available only on services used for business purposes:

Observing that the services received were varied in nature and intended partly for business use (to the extent intended for the plant, plant area or plant building) and partly for non-business use (to the extent intended for use outside the plant area), AAR Odishahas held that the tax paid by the applicant for the services which were used for business purpose only would be eligible for input tax credit. The applicant was engaged in manufacture of calcinedalumina in its refinery, and as part of its business had townships and residential colony. It was running hospitals for its employees and had guest houses for touring employees and guests. The applicant received various services of repair and maintenance in the townships, guest houses, hospitals and horticulture, received as part of its business operations. [In RE: National Aluminium Company Ltd. -2018-VIL-208-AAR Odisha]


 

Service of providing Pollution Control Certificate liable to GST –Not pure service provided by the Govt:

Service provided for issuing Pollution under Control Certificate (PUC) for vehicles on behalf of State Government is liable to GST. AAR Goa while holding so observed that services were not covered under Schedule III to the Central Goods and Service Tax Act, 2017 as well as Goa Goods and Service Tax Act, 2017. It was held that applicant did not provide pure service provided by the Central Government, State Government, Union Territory or Local Authorities or by a Governmental Authority by way of any activity in relation to    any function entrusted to a panchayat under Article 243G of the Constitution or relation to any function entrusted to the municipality under the Article 243W of the Constitution. It was also noted that services of testing of pollution were provided on payment of service charge. [In RE: Venkatesh Automobiles-2018-VIL-218-AAR Goa]


Processing natural gas is job work:

GST AAR Kerala has held that the activity of processing natural gas and other inputs received from the oil company (BPCL) on free of cost basis and manufacturing industrial gases shall fall under the scope of ‘job work’ under GST. It was held that the activity was job work as the output would not be owned by the applicant providing the service. It was held that the statute does not specify any restriction that the ‘inputs’ subject to the treatment or process shall be taxable goods. The activity was held to fall under Serial No.(ii) of the HSN 9988 and taxable at the rate of 18% under GST. 

[In RE: Podair Air Products India (P) Ltd.-2018-VIL-245-AAR Kerala]


Supply of medicines to in-patients is composite supply –Exemption available under healthcare services:

Supply of medicines, consumables and implants used in the course of providing health care services to in-patients for diagnosis or treatment would be considered as composite supply. The Advance Ruling Authority of Kerala in this regard observed that as far as an in-patient is concerned, the hospital is expected to provide lodging, care, medicine and food as part of treatment under supervision till discharge from the hospital. It was also held that these activities would be eligible for exemption under the category of health care services. [In RE: Kims Healthcare Management Ltd.-2018-VIL-246-AAR Kerala]

Customs

 IGST refund in invoice mismatch issue–Officer interface facility extended:

Alternative mechanism with an officer interface to resolve invoice mismatches errors for IGST refund extended for shipping bills filed till 15-11-2018. Further, similar mechanism will also be available in cases where refund scroll generated for a much lesser IGST amount than what was actually paid against exported goods, due to errors by exporter or customs officer. As per Circular No. 40/2018-Cus., exporters are required to once submit Revised Refund Request for the differential amount, even in cases where compensation cess was not mentioned in shipping bill.


Reimport of goods earlier exported by post –Exemption clarified:

Customs Notification Nos. 45/17-Cus, and 46/2017-Cus, issued in supersession of Notification No. 94/96-Cus., are also applicable to the re-import of goods which were earlier exported through Post. The concessions available under Notification No.94/96-Cus havebeen continued through these notifications. This circular also states that reference to Section 51 of the Customs Act in the notification does not seek to deny the benefit to the goods to which Section 51 may not apply. (Refer Circular No. 45/2018-Cus., dated 19-11-2018)


Pharma exports –Track and Trace system for drug formulations postponed:

Date for implementation of Track and Trace system for export of drug formulations extended up to 1-7-2019. The extension is with respect to maintaining Parent-Child relationship in packaging levels and its uploading on Central Portal, for both SSI and non-SSI manufactured drugs. Para 2.90 A (vi) and (vii) of FTP Handbook of Procedure 2015-20 amended in this regard by DGFT Public Notice No. 43/2015-2020, dated 1-11-2018. The system was to be implemented by 15-11-2018.


 In-bond manufacturing –Forms consolidated, and procedures clarified: 

CBIC has updated procedure for seeking permission for in-bond manufacturing and for maintaining various records. An elaborate Circular No. 38/2018-Cus., dated 18-10-2018 issued for this purpose also prescribes various forms and clarifies duty liability on removal of processed goods from such warehouse. The form for seeking permission for in-bond manufacture will also serve the purpose for seeking grant of license as a private bonded warehouse. Further, a separate form to be maintained by a unit operating under Section 65 of the Customs Act, for receipt, processing and removal of goods, has been prescribed. The circular also prescribes a triple duty bond for the warehoused goods which is required to be executed by the owner of the warehoused goods. 

No duty is required to be paid in respect of imported goods contained in resultant product in case

resultant product manufactured or worked upon in a bonded warehouse is exported. However, transaction will also be covered under definition of ‘supply’ and consequently be liable to GST if resultant product is cleared for domestic consumption. 


 EPCG authorisations are now valid for 24 instead of 18 months:

Validity period of Export Promotion Capital Goods (EPCG) Authorisations has been extended from 18 months to 24 months. DGFT Public Notice No. 47/2015-20, dated 16-11-2018 while amending Para 2.16 of the FTP Handbook of Procedures Vol. 1, also states that import validity period of EPCG Authorisations which have been issued prior to 16-11-2018 and whose validity has not expired on this date, shall also be extended to 24 months from the date of issuance of the Authorisation.


 Provisional release order appealable before CESTAT: 

Punjab & Haryana High Court held that appeal against order passed by Commissioner (Customs) under Section 110A of Customs Act, 1962, for provisional release of the goods, lies before CESTAT. Department’s plea that such order passed by Commissioner is essentially an administrative decision and not adjudicatory, was rejected. Citing various decisions of Apex Court, High Court observed that whenever civil consequences follow from an order passed by an authority, it assumes character of a quasi-judicial order. [Commissioner v.Gaurav Pharma -2018-VIL-484-P&H-CU]


Advance authorisation –Condition of pre-import for IGST exemption, valid:

Madras High Court dismissed writ petitions challenging Notification No. 79/2017-Cus. amending Notification No. 8/201-Cus. and incorporating -import and physical exports, for exemption from IGST and Compensation Cess on imports under Advance Authorisations. The case involved replenishment of inputs post exports. The Court in this regard noted that by not allowing exemption of IGST at time of import, no benefit in AA scheme is altered by Government, though collateral costs get fastened. It observed that DFIA scheme suited existing operation of petitioner in the GST regime,and that petitioner cannot choose one scheme and insist the government to modify it to its convenience. [Vedanta Ltd. v.Union of India -2018-TIOL-153-HC-MAD-GST]


 Valuation -Exports need not be by same exporter and within same month:

CESTAT Hyderabad has observed that Rule 4 of Customs Valuation (Determination of Value of Export Goods) Rules, 2007 does not require that exports should be by the same exporter. It also noted that the rule only says that the value comparison must be with the goods exported at or around the same time but does not specify that it must be within the same month. The Tribunal held that lower authority should have examined feasibility of finding price of goods of like kind and quality exported at or around the same time. The rejection of the transaction value under Rule 8 by the lower authority was however held to be correct. [ObulapuramMining Company v. Commissioner -Final Order No. A/31240-31242/2018, dated 28-9-2018]

Central Excise and Service Tax

 Cenvat credit available on towers and shelters used for telecom service:

Delhi High Court has allowed Cenvat credit on towers, shelters and parts thereof used for providing telecommunication services. Allowing assessee’s appeal, it observed that the goods at the time of their receipt were movable, and that CESTAT failed to appreciate the permanency test as laid down by the Supreme Court. The High Court held that machine annexed to earth by fixing with nuts and bolts on a foundation, to provide for stability and wobble free operation would not constitute an immovable property. The goods were held to be capital goods and also inputs. [Vodafone Mobile Services v. Commissioner – CEAC 12/2016 and Ors., dated 31-10-2018, Delhi High Court]COD clearance –Tribunal not to dismiss appeal in absence of COD: Chhattisgarh High Court has held that it was not permissible for Tribunal to dismiss appeal filed in 2006 only for want of clearance from Committee on Disputes (COD). The Court observed that the Supreme Court in ONGC’s case never empowered any Court/Tribunal to dismiss appeal in absence of COD clearance. The Court agreed with assessee’s view that the Tribunal should have kept appeals pending till clearance was obtained. Tribunal’s Order dismissing restoration application due to long delay was also set aside, considering the case to be exceptional. [Steel Authority of India v. Commissioner -TAXC No. 8, 9 and 11 of 2018, decided on 26-10-2018, Chhattisgarh High Court]


 DGCEI has all India jurisdiction, pendency u/s.73 unrelated for s.14 notice: 

Delhi High Court has held that Officers of DGCEI have all India jurisdiction and can issue notices and enquire into matters relating to service tax against any assessee/person even if the said person is registered with one or multiple Commissionerates. It also held that pendency of recovery proceeding under Section 73(1) of the Finance Act, 1994 was not a condition precedent for issue of notice under Section 14 of Central Excise Act. The Court also observed that centralised investigation was desirable and necessary to curtail delay. [National Building Construction Company v.UOI -W.P.(C) 1144/2016, decided on 16-11-2018, Delhi High Court]


 Cenvat credit on insurance of life of Joint Managing Director, admissible:

CESTAT Chandigarh has allowed Cenvat credit of tax paid on insurance for the compensation of loss incurred to the assessee due to the life loss of the Joint Managing Director. The insurance, in this case, was taken by the assessee-manufacturer for their use and the premium was also paid by the assessee only. The Tribunal observed that merely because insurance was in the name of Joint Managing Director and not in the name of the company, credit could not be denied. [HPL Additives Limited v. Commissioner -Final Order No. 63255/2018, dated 10-10-2018, CESTAT Chandigarh]


 Cenvat credit on supplementary invoices issued after opting for VCES:

CESTAT Chennai has allowed Cenvat credit in a case where the service provider had issued supplementary invoices to the appellant-assessee after opting for Voluntary Compliance Encouragement Scheme (VCES) 2013. The Tribunal observed that the department having accepted the declaration in terms of VCES and having issued acknowledgement of discharge, cannot seek to recover or deny Cenvat credit. It noted that department did not challenge issuance of VCES-3 nor issued any notice to service provider alleging fraud, etc. [Sri Balaji Castings Pvt. Ltd.v. Commissioner-Final Order No. 2605/2018, dated 5-10-2018, CESTAT Chennai]


 Tractor Cess not imposable on parts and accessories of tractors:

CESTAT New Delhi has held that Tractor Cess imposed under a notification issued under Industrial (Development and Regulation) Act, 1951, was not leviable on parts and accessories of tractors. It observed that parts and accessories of tractor cannot be compared with that of the tractor itself. Reliance in this regard was placed on Ministry of Finance Circular No. 41/88, dated 31-8-1988 relating to cess on automobiles. The Tribunal noted that the principle enunciated in the said circular was applicable. [Gatiman Auto Pvt. Limited v. Commissioner -Final Order Nos. 53087 –53089/2018, dated 9-10-2018, CESTAT Delhi]

 

 


 Export of services when outflow of foreign exchange reduced:

In a case involving remittance of net charges to the foreign parent company, after deduction of service charge or commission, CESTAT Mumbai has allowed refund of service tax paid on export of Business Auxiliary Services. Relying on Income Tax case, it observed that since Indian Rupees were obtained in lieu of foreign exchange, same will be deemed to be convertible exchange. The Tribunal observed that in this way outflow of foreign exchange was reduced to the extent of commission/service charge retained in India. [Import Express India v. Commissioner-Order No.A/87580/2018, dated 10-10-2018, CESTAT Mumbai] 


 Full Cenvat credit available even when service used by others also:

CESTAT Hyderabad has allowed full Cenvat credit to the assessee when the services of lift maintenance and security were enjoyed by other companies also in the same complex. The department had allowed proportionate credit in such case. Comparing it with the enjoyment of one’s porch light by passers-by, the Tribunal observed that assessee-appellant had hired and paid for these services, and there was no rule under which the department can vivisect and partly deny the credit. [AVR Storage Tank Terminals Pvt. Ltd. v. Commissioner -Final Order No. A/31208/2018, dated 20-9-2018, CESTAT Hyderabad]


 Cash refund of amount paid through Cenvat credit, once GST regime in force:

Relying on Section 142(3) of Central GST Act, 2017, CESTAT Chennai has held that once GST regime is in force, pending refund claim, if sanctioned, will necessarily have to be paid in cash irrespective of the fact whether refund amount pertains to Cenvataccount or was paid from account current. The Tribunal was dealing with refund of amount of 6% paid through Cenvat account mistakenly to take benefit of exemption. Allowing cash refund, it observed that any other interpretation will leave assessee high and dry. [Toshiba Machine (Chennai) v. Commissioner-Final Order No. 42462/2018, dated 25-9-2018, CESTAT Chennai]

VAT

 Reassessment order under Karnataka VAT, after GST regime, is valid:

Karnataka High Court has held that merely because a reassessment order under Karnataka VAT Act for year 2012-2013 was passed after coming into force of GST regime in 2017, it would not make such order void in eyes of law. The Court further noted that Section 174 of KGST Act, 2017 saves all rights, liabilities acquired, accrued or incurred under repealed Acts enumerated under Section 173 thereof which includes KVAT. It was also held that ground of attack on Section 174 of KGST Act does not affect validity of KVAT Act. [Prosper Jewel LLP v. Deputy Commissioner-Writ Petition No.20642/2018 (T-RES), decided on 25-10-2018, Karnataka High Court]

 


 Limitation for ITC-Tamil Nadu VAT Section 19(11) constitutionally valid:

Supreme Court has upheld constitutional validity of Section 19(11) of Tamil Nadu VAT Act which restricts input tax credit beyond a certain period. It held that statutory scheme delineated by said provisions was neither arbitrary nor violate right guaranteed to a dealer under Article 19(1)(g) of Constitution of India. The Court held that use of word ‘shall’ in Section 19 (11) indicated that compliance with the same was mandatory and the same was not directory. [ALD Automotive Pvt. Ltd. v. CTO -Civil Appeal Nos.1041210413/2018 and Ors., decided on 12-10-2018, Supreme Court].

About Author:

CMA Rakesh Bhalla

*Member ZAC & RAC Chandigarh - Central Excise & Service Tax (now GST) & Customs, Govt. of India, Member of Indirect Tax committee SIAM , Member, ASSOCHAM National Indirect Taxes Committee, Chief General Manager Finance- SML Isuzu Ltd., Winner Achiever Award 2015 by ICAI (CMA).

 

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Extension of due date of GST return https://www.gstseva.com/extension-of-due-date-of-gst-return Thu, 29 Nov 2018 04:35:19 +0000 https://www.gstseva.com/?p=9501 Extension of due dates for filing GST returns 

In view of the disturbances caused to daily life by Cyclone Titli in the district of Srikakulam, Andhra Pradesh, and by Cyclone Gaza in eleven districts of Tamil Nadu viz., Cuddalore, Thiruvarur, Puddukottai, Dindigul, Nagapatinam, Theni, Thanjavur, Sivagangai, Tiruchirappalli, Karur and Ramanathapuram, the competent authority has decided to extend the due dates for filing various GST returns as detailed below:

Sl. No.Return/FormExtended due dateTaxpayers eligible for extension
1FORM GSTR-3B for the months of September and October, 201830thNovember, 2018Taxpayers whose principal place of business isin the district of Srikakulam in Andhra Pradesh
2FORM GSTR-3Bfor the month of October, 201820thDecember, 2018Taxpayers whose principal place of business is in the 11 specified districts of Tamil Nadu
3FORM GSTR-1 for the months of September and October, 2018 30thNovember, 2018Taxpayers having aggregatturnover of more than 1.5 crore rupees and whose principal place of businessis in the district of Srikakulam in Andhra Pradesh
4FORM GSTR-1 for the month ofOctober, 201820thDecember, 2018Taxpayers having aggregateturnover of more than 1.5 crore rupees and whose principalplace of business is in the eleven specified districts of Tamil Nadu
5FORM GSTR-1 for the quarter July-September, 201830thNovember, 2018Taxpayers having aggregatturnover of upto 1.5 crore rupees and whose principal place of business is in the district of Srikakulam in Andhra Pradesh
6FORM GSTR-4 for the quarter July to September, 201830thNovember, 2018Taxpayers whose principal place of business isin the district of Srikakulam in Andhra Pradesh
7FORM GSTR-7 for the months October to December, 201831stJanuary, 2019All taxpayers

2.       The relevant notifications for the same will be issued shortly.

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GSTR 7A, answer to all your gst tds certificate query https://www.gstseva.com/gstr-7a-answer-to-all-your-gst-tds-certificate-query Thu, 15 Nov 2018 08:54:44 +0000 https://www.gstseva.com/?p=9482 Queries related GST TDS FORM GSTR 7A

 

1. What is Form GSTR-7A?

Form GSTR-7A is a system generated TDS Certificate which is generated once deductor furnishes a return in Form GSTR-7 on the GST Portal and the deductee accepts the details uploaded by deductor and files his return. This TDS Certificate will be available for both Deductor and Deductee.

2. How can I download the TDS certificate?

To download the TDS certificate, access the www.gst.gov.in URL. Login to the GST Portal with valid credentials. Navigate to Services > User Services > View/Download Certificates option.  

3. I have more than one certificate available for download under GSTR-7A certificates. Do I need to download them individually?

Yes, you need to download them individually for each GSTIN.

4. What is TDS Certificate?

A TDS certificate is a certificate generated in Form GSTR-7A on the basis of information furnished in return by Deductor in his Form GSTR-7.

5. How many TDS Certificates are issued per GSTIN?

A single TDS certificate is issued per GSTIN for all the supplies, on which tax has been deducted for every GSTR-7 return filed.

6. Is the signature of Tax Deductor required in TDS Certificate?

Form GSTR-7A is system generated TDS certificate and signature of Tax Deductor is not required.

7. What are the pre-conditions for generation of TDS certificate in Form GSTR-7A?

Precondition for generation of TDS certificate is that deductor furnishes a return in Form GSTR-7 on the GST Portal and the deductee accepts the details uploaded by deductor and files his return.

8. Do I as a taxpayer have to file Form GSTR-7A?

No, you don’t have to file Form GSTR-7A.

9. Can I as a taxpayer (Deductor or Deductee) download and keep a copy of my TDS Certificate for future reference?

Yes, you can view and/or download TDS Certificate in post-login mode on the GST portal.

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GST revenue boost: Mark to 1 lac crore 2nd time in this year read full https://www.gstseva.com/gst-revenue-boost-mark-to-1-lac-crore-2nd-time-in-this-year-read-full Thu, 01 Nov 2018 14:27:14 +0000 https://www.gstseva.com/?p=9477 GST Revenue collections for the month of October 2018 crosses Rupees One Lac Crore

The total gross GST revenue collected in the month of October, 2018 is Rs. 100,710crore of which CGST is Rs. 16,464crore, SGST is Rs. 22,826crore, IGST is Rs. 53,419crore (including Rs. 26,908crore collected on imports) and Cess is Rs. 8,000 crore(including Rs. 955crore collected on imports).

The total number of GSTR 3B Returns filed for the month of September up to 31st October, 2018 is 67.45lakh.

The Government has settled Rs. 17,490 crore to CGST and Rs. 15,107 crore to SGST from IGST as regular settlement. Further, Rs .30,000crore has been settled from the balance IGST available with the Centre on provisional basis in the ratio of 50:50 between Centre and States. The total revenue earned by Central Government and the State Governments after regular and provisional settlement in the month of October, 2018 is Rs. 48,954 crore for CGST and Rs. 52,934crore for the SGST.

The Revenue collected in October, 2018 of Rs. 100,710 crore is higher by 6.64% as compared to September, 2018 collection of Rs. 94,442 crore. The chart shows trends in revenue during the current year. The States which achieved extra- ordinary growth in total taxes collected from the State assesses include Kerala (44%), Jharkhand (20%), Rajasthan (14%), Uttarakhand (13%) and Maharashtra (11%).

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