GST: GSTSEVA -Goods and Services Tax Gov India GST-LOGIN Tue, 26 Mar 2019 10:01:22 +0000 en-US hourly 1 GST: GSTSEVA -Goods and Services Tax Gov India 32 32 Eway bill login: GST E-way bill system, upgraded with new features Tue, 26 Mar 2019 10:01:22 +0000 Eway Bill login

Forthcoming changes in e-Waybill system

  1. Auto calculation of route distance based on PIN code for generation of EWB


Now, E-waybill system is being enabled to auto calculate the route distance for movement of goods, based on the Postal PIN codes of source and destination locations. That is, the e-waybill system will calculate and display the actual distance between the supplier and recipient addresses. User is allowed to enter the actual distance as per his movement of goods. However, it will be limited to 10% more than the displayed distance for entry. That is, if the system has displayed the distance between Place A and B, based on the PIN codes, as 655 KMs, then the user can enter the actual distance up to 720KMs (655KMs + 65KMs). In case, the source PIN and destination PIN are same, the user can enter up to a maximum of 100KMs only. If the PIN entered is incorrect, the system would alert the user as INVALID PIN CODE. However, he can continue entering the distance. Further, these e-waybills having INVALID PIN codes are flagged for review by the department.


Route distance calculation between source and destination uses the data from various electronic sources. This data employs various attributes, for example: road class, direction of travel, average speed, traffic data etc. These attributes are picked up from traffic that is on National highways, state highways, expressways, district highways as well as main roads inside the cities. A proprietary logic is then used for approximating the distance between two postal pin codes. The distance thus derived is then provided as the motorable distance at that point of time.


  1. Blocking of generation of multiple E-Way Bills on one Invoice/document


Based on the representation received by the transporters, the government has decided not to allow generation of multiple e-way bills based on one invoice, by any party – consignor, consignee and transporter. That is, once E-way Bill is generated with an invoice number, then none of the parties – consignor, consignee or transporter – can generate the E-Way Bill with the same invoice number. One Invoice, One E-way Bill policy is followed. The change will come in the next version.


  1. Extension of E-Way Bill in case Consignment is in Transit


The transporters had represented to incorporate the provision to extend the E-way Bill, when the goods are in transit. The transit means the goods could be on Road or in Warehouse. This facility is being incorporated in the next version for the extension of E-way Bill.


During the extension of the e-way bill, the user is prompted to answer whether the Consignment is in Transit or in Movement. On selection of In Transit, the address details of the transit place need to be provided. On selection of In Movement the system will prompt the user to enter the Place and Vehicle details from where the extension is required. In both these scenarios, the destination PIN will be considered from the PART-A of the E-way Bill for calculation of distance for movement and validity date. Route distance will be calculated as explained above.

4. Blocking of Interstate Transactions for Composition dealers

As per the GST Act, the composition tax payers are not supposed to do Interstate transactions. Hence next version will not allow generation of e-way bill for inter-state movement, if the supplier is composition tax payer. Also, the supplies of composition tax payers will not be allowed to enter any of the taxes under CGST or SGST for intrastate transactions. In case of Composition tax payer, document type of Tax Invoice will not be enabled.

]]> New GST rates for real estate sector- GST coucil decision Wed, 20 Mar 2019 17:15:27 +0000 Decisions taken by the GST Council in the 34thmeeting held on 19thMarch, 2019 regarding GST rate on real estate sector

GST Council in the 34th meeting held on 19th March, 2019 at New Delhi discussed the operational details for implementation of the recommendations made by the council in its 33rd meeting for lower effective GST rate of 1% in case of affordable houses and 5% on construction of houses other than affordable house. The council decided the modalities of the transition as follows.
Option in respect of ongoing projects:
2. The promoters shall be given a one -time option to continue to pay tax at the old rates (effective rate of 8% or 12% with ITC) on ongoing projects (buildings where construction and actual booking have both started before 01.04.2019) which have not been completed by 31.03.2019.
3. The option shall be exercised once within a prescribed time frame and where the option is not exercised within the prescribed time limit, new rates shall apply.

New tax rates:
4. The new tax rates which shall be applicable to new projects or ongoing projects which have exercised the above option to pay tax in the new regime are as follows.
(i) New rate of 1% without input tax credit (ITC) on construction of affordable houses shall be available for,
(a) all houses which meet the definition of affordable houses as decided by GSTC (area 60 sqm in metros / 90 sqm in non- metros and value upto RS. 45 lakhs), and
(b) affordable houses being constructed in ongoing projects under the existing central and state housing schemes presently eligible for concessional rate of 8% GST (after 1/3rd land abatement).
(ii) New rate of 5% without input tax creditshall be applicable on construction of,-
(a) all houses other than affordable houses in ongoing projects whether booked prior to or after 01.04.2019. In case of houses booked prior to 01.04.2019, new rate shall be available on instalments payable on or after 01.04.2019.
(b) all houses other than affordable houses in new projects.
(c) commercial apartments such as shops, offices etc. in a residential real estate project
(RREP) in which the carpet area of commercial apartments is not more than 15% of total carpet area of all apartments.
Conditions for the new tax rates:
5. The new tax rates of 1% (on construction of affordable) and 5% (on other than affordable houses) shall be available subject to following conditions,-

(a) Input tax credit shall not be available,
(b) 80% of inputs and input services (other than capital goods, TDR/ JDA, FSI, long term lease (premiums)) shall be purchased from registered persons. On shortfall of purchases from 80%, tax shall be paid by the builder @ 18% on RCM basis. However, Tax on cement purchased from unregistered person shall be paid @ 28% under RCM, and on capital goods under RCM at applicable rates.
Transition for ongoing projects opting for the new tax rate:
6.1 Ongoing projects (buildings where construction and booking both had started before 01.04.2019) and have not been completed by 31.03.2019 opting for new tax rates shall transition the ITC as per the prescribed method.
6.2 The transition formula approved by the GST Council, for residential projects (refer to para 4(ii)) extrapolates ITC taken for percentage completion of construction as on 01.04.2019 to arrive at ITC for the entire project. Then based on percentage booking of flats and percentage invoicing, ITC eligibility is determined. Thus, transition would thus be on pro-rata basis based on a simple formula such that credit in proportion to booking of the flat and invoicing done for the booked flat is available subject to a few safeguards.
6.3 For a mixed project transition shall also allow ITC on pro-rata basis in proportion to carpet area of the commercial portion in the ongoing projects (on which tax will be payable @ 12% with ITC even after 1.4.2019) to the total carpet area of the project.
Treatment of TDR/ FSI and Long term lease for projects commencing after 01.04.2019
7. The following treatment shall apply to TDR/ FSI and Long term lease for projects commencing after 01.04.2019.
7.1 Supply of TDR, FSI, long term lease (premium) of land by a landowner to a developer shall be exempted subject to the condition that the constructed flats are sold before issuance of completion certificate and tax is paid on them. Exemption of TDR, FSI, long term lease (premium) shall be withdrawn in case of flats sold after issue of completion certificate, but such withdrawal shall be limited to 1% of value in case of affordable houses and 5% of value in case of other than affordable houses. This will achieve a fair degree of taxation parity between under construction and ready to move property.
7.2 The liability to pay tax on TDR, FSI, long term lease (premium) shall be shifted from land owner to builder underthe reverse charge mechanism (RCM).
7.3 The date on which builder shall be liable to pay tax on TDR, FSI, long term lease (premium) of land under RCM in respect of flats sold after completion certificate is being shifted to date of issue of completion certificate.

7.4 The liability of builder to pay tax on construction of houses given to land owner in a JDA is also being shifted to the date of completion. Decisions from para 7.1 to 7.4 are expected to address the problem of cash flow in the sector.
Amendment to ITC rules:
8. ITC rules shall be amended to bring greater clarity on monthly and final determination of ITC and reversal thereof in real estate projects. The change would clearly provide procedure for availing input tax credit in relation to commercial units as such units would continue to be eligible for input tax credit in a mixed project.
9. The decisions of the GST Council have been presented in this note in simple language for easy understanding. The same would be given effect to through Gazette notifications/ circulars which alone shall have force of law.
. *****

GST RETURNS: GST Return will simplified Soon Fri, 08 Mar 2019 08:37:24 +0000


Proposed GST Return documents, as approved by competent authority

New Delhi: 08/03/2019

Proposed Return documents, as approved by competent authority, can now be downloaded from the Download section of the GST Portal.

This is to enable various stakeholders in adapting their systems to make them compatible with the proposed return format and business processes.

These are the simplified proposed Return, Simplified Returns under GST regime is now available on GSTN portal in PDF format. 

Type of New Simplified GST Returns :

RET-1 Monthly/Quarterly Return
RET-2 Sahaj Return
RET-3 Sugam Return

Download Returns in PDF from Here:


Features of New GST Returns

1. Periodicity of filing return will be deemed to be monthly for all taxpayers unless quarterly filing of the return is opted for.

2. For newly registered taxpayers, turnover will be considered as zero and hence they will have the option to file monthly, Sahaj, Sugam or Quarterly (Normal)return.

3. Change in periodicity of the return filing (from quarterly to monthly and vice versa) would be allowed only once at the time of filing the first return by a taxpayer.

4. The periodicity of the return filing will remain unchanged during the next financial year unless changed before filing the first return of that year.

5. The taxpayers opting to file quarterly return can choose to file any of the quarterly return namely – Sahaj, Sugam or Quarterly Normal).

6. Taxpayers filing return as Quarterly (Normal) can switch over to Sugam or Sahaj return and taxpayers filing return as Sugam can switch over to Sahaj return only once in a financial year at the beginning of any quarter.

7. Taxpayers filing return as Sahaj can switch over to Sugam or Quarterly (Normal)return and taxpayers filing return as Sugam can switch over to Quarterly (Normal) return more than once in a financial year at the beginning of any quarter.

8. Taxpayers opting to file quarterly return as ‘Sahaj’ shall be allowed to declare outward supply under B2C category and inward supplies attracting reverse charge only. Such taxpayers cannot make supplies through e-commerce operators on which tax is required to be collected under section 52. Such tax payers shall not take credit on missing invoices and shall not be allowed to make any other type of
inward or outward supplies. However, such taxpayers may make Nil rated, exempted or Non-GST supplies which need not be declared in the said return.

9. Taxpayers opting to file quarterly return as ‘Sugam’ shall be allowed to declare outward supply under B2C and B2B category and inward supplies attracting reverse charge only. Such taxpayers cannot make supplies through e-commerce operators on which tax is required to be collected under section 52. Such tax payers shall not take credit on missing invoices and shall not be allowed to make
any other type of inward or outward supplies. However, such taxpayers may make Nil rated, exempted or Non-GST supplies which need not be declared in said return.

10. Taxpayers opting to file monthly return or Quarterly (Normal) return shall be able to declare all types of outward supplies, inward supplies and take credit on missing invoices.

Indirect Tax Updates- Feb 2019 Wed, 06 Mar 2019 06:37:13 +0000 The GST Council (Council), in its 33rd meeting, has recommended a reduction in the rate of tax on supply of under-construction residential properties to 5% (1% for the affordable housing segment) without any input tax credit (ITC). This is proposed to be made effective from 1 April, 2019. Recommendations with regard to the aforesaid by the Council are summarised below

cma rakesh bhalla

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

  • The effective rate of tax on affordable housing properties is proposed to be reduced to 1% without any ITC. For other residential properties, the rate is proposed to be reduced to 5% without ITC.
  • Affordable housing has been defined as a residential house/ flat of carpet area of up to 90 square meters (sqm) in non-metropolitan cities/ towns or 60 sqm in metropolitan cities, with a value cap up to INR 4.5 million in both cases. Bengaluru, Chennai, NCR, Hyderabad, Kolkata and Mumbai would be considered as metropolitan cities.
  • The intermediate supplies relating to land, such as TDR, JDA, lease premium, FSI etc. are proposed to be exempted when in relation to residential property on which GST is payable.
  • Respective committees of the GST Council would prepare the transitional rules covering the issues which may need to be addressed to implement such change in rates and would put it in public domain by 10 March, 2019.

GST invoices to mandatorily mention place of supply: CBIC has reiterated that all registered persons making supply of goods/services in course of inter-State trade or commerce shall specify the place of supply along with the name of the State in the tax invoice.  Contravention of any of the provisions of CGST Act or the Rules made there under attracts penal action under the provisions of Sections 122 or 125. It further notes that number of registered persons (especially in banking, insurance and telecom sectors) are not mentioning place of supply. (Circular No. 90/9/2019-GST, dated 18-2-2019)

-In-bond sale of goods during July, 2017 to March, 2018 Deemed compliance of transaction not reported correctly: Considering that facility to correctly report the nature of transaction in Form GSTR-1 furnished on the common portal was not available during the period July, 2017 to March, 2018, in respect of supply of warehoused goods while being deposited in a customs bonded warehouse, CBIC has clarified that, as a one-time exception, suppliers who have paid CGST and SGST on such supplies, during the said period, would be deemed to have complied with the provisions of law as far as payment of tax on is concerned. (Circular No. 91/10/2019-GST, dated 18-2-2019)

-Government of India vide Circular No. 89/08/2019-GST dated 18th February 2019 titled “Mentioning details of inter-state supplies made to unregistered persons in Table 3.2 of FORM GSTR-3B and Table 7B of FORM GSTR-1”
Important points are as follows:

  • Required details to be filed in Table 3.2 of FORM GSTR-3B. Non-filing of appropriate details in this table would result in noon-appropriation of tax to receiving state.
  • Accordingly, it is instructed that the registered persons making inter-State supplies to unregistered persons shall report the details of such supplies along with the place of supply in Table 3.2 of FORM GSTR-3B and Table 7B of FORM GSTR–1 as mandated by the law. Contravention of any of the provisions of the Act or the rules made there under attracts penal action under the provisions of section 125 of the CGST Act.

-Government of India issued notification  “seeks to insert tariff item 9806 00 00 in chapter 98 of the First schedule to Customs tariff act, 1975 to impose basic customs duty of 200% on all goods originating in or exported from Pakistan” The Central Government levied Import duty on all goods originating from Pakistan @ 200%  from 16th February 2019.  Day after announcing that it is withdrawing most favored nation (MFN) status to Pakistan on the backdrop of the Pulwama terror attack, India on Saturday also increased duties on imports from Pakistan to 200%. Increasing duties would significantly hit Pakistan’s exports to India. (Notification No. 05/2019-Customs dated 16th February 2019)

Important cases decided

-The Authority for Advance Rulings in Tamilnadu has issued advance ruling  – Whether sale of Goods stored in Free Trade Warehousing Zone (FTWZ) by a foreign supplier which is cleared to Domestic Tariff Area (DTA) customer in India would result in supply subject to levy under GST Act 2OI7?  Whether foreign supplier need a registration in such FTWZ-  It was held that the Applicant is not liable to pay IGST at the time of removal of goods from the FTWZ to DTA. Recipient unit in DTA is liable to pay taxes on filing Bill of entry for consumption.As no tax is payable by foreign supplier in FTWZ, thereby registration is also not required for the same. (Advance Ruling No.  24/AAR/2018 dated 31st December 2018Sadesa Commercial Offshore De macau Ltd )

-Electricity transmission No. 34 struck down: Gujarat High Court has struck down Para 4(1) of the CBIC Circular No. 34/8/2018-GST as ultra vires the provisions of CGST Section 8 as well as Notification No. 12/2017-Central Tax (Rate), serial No. 25. It is observed that meaning of transmission and distribution of electricity does not change either in Negative list regime  nor in GST regime.  It was also held that services which stood included within the ambit of transmission and distribution of electricity during the pre-negative list regime, as per 2010 circular, cannot now be sought to be excluded by merely issuing a clarificatory circular. (Torrent Power Ltd. v. Union of India – 2019-TIOL-15-HC-AHM-GST)

-GST TRAN-2 – Calcutta High Court allows revision: Observing that there is no ground as to why a person filing Form GST TRAN-2 should not be allowed to correct and file such revised form, Calcutta High Court has allowed filing of revised Form GST TRAN-2 (Optical Health Solutions Pvt. Ltd. v. UoI SCC online Cal 171)

-Goods detained due to multiple invoices in single e-way bill Kerala High Court grants interim relief: The Court provided interim relief after observing that the department may find it practically difficult in tracking multiple invoices with respect to a single e-way bill. It noted that it was not a case where the e-way bill did not mention all the invoices. (Stove Kraft (P) Ltd. v. Asst. STO – 2019-VIL-61-KER)

-GST on TCS collected under Income Tax CBIC Circular No. 76 stayed: Kerala High Court has directed the State authorities not to act on clarification at Sl. No. 5 of the CBIC Circular 76/50/2018-GST pending disposal of the writ petition. The circular states that TCS collected under Income Tax Act is includible since value to be paid by buyer is inclusive of said TCS.  The High Court observed that the petition raises prima facie issue which needs attention. (PSN Automobiles v. UOI – 2019-TIOL-14-HC-KERALA-GST)

-Non-production of goods is not a ground for imposition of penalty: Kerala High Court has held that penalty cannot be imposed for not producing the goods (before the officer) after release on bond, when there is a security equivalent to value of goods which could be invoked. It noted that there was no question of tax and penalty being not paid as bank guarantee could be invoked at any time. (Noushad Allakkat v. Stata Tax Officer – WA. No. 2070 of 2018, decided on 8-11-2018, Kerala High Court )

-Profiteering even when increased base price still lower than pre-GST price: In a case of increase in the base price of product after GST rate reduction, where base price was still lesser as compared to pre-GST price, National Anti-profiteering Authority has held that benefit of price reduction was not passed on. The Authority in this regard observed that not increasing MRP when tax rates were increased after implementation of GST was a business call taken by the respondent and therefore no concession on this ground would be available. It held that the benefits from rate reduction cannot be denied just because the MRP was not changed earlier by the assessee to extend extra benefit to consumers. (Surya Prakash Loonker v. Excel Rasayan Pvt. Ltd. – 2019-VIL-02-NAA)

-Recovery of part of premium from employees Maharashtra AAR has held that payments received by the applicant-company from its employees for payment to insurance companies cannot be treated as a supply of service. Further, AAR also held that ITC cannot be claimed by assessee in respect of hotel accommodation for its expatriate GM/MD since it was for their personal comfort and if they had stayed in other residential flat, GST would not have been paid as renting service in such case was exempted.  (POSCO Order No. GST-ARA-36/2018-19/B-110)

-Services of sales promotion to principal Coverage under intermediary service: Karnataka Appellate AAR has held that appellant providing services of business marketing, sales promotion and post sale support services in India for a principal company in Germany will be termed intermediary under section 2(13) of IGST Act. ( Toshniwal Brothers (P) Ltd. Order No. KAR/AAAR/06/2018-19, dated 9-1-2019, Karnataka AAAR )


-All Industry Rates of duty drawback amendments effective from 20-2-2019: Ministry of Finance has clarified amendments made to All Industry Rates (AIRs) of duty drawback by Notification No. 12/2019-Cus. (N.T.), effective from 20-2-2019. Changes include enhanced AIRs/caps of drawback on leather sofa cover including automobile upholstery, synthetic filament tow, carpets, silk articles, boots, gold jewellery and mobile phones. Drawback has been rationalised for silver jewellery/articles. Certain new tariff items have been created to allow better differentiation of exports.  (CBIC Circular No. 5/2019-Cus., dated 20-2-2019 )

-Advance authorisation – Removal of pre-import condition for IGST exemption: Pre-import condition to avail exemption from IGST and Compensation Cess for imports under Advance Authorisation has been removed.  (CBIC Notification No. 01/2019-Cus., dated 10-01-2019 ) As per the new additional conditions, in case of imports after discharge of export obligation in full, if IGST exemption is claimed and if the facility of Input Tax Credit (ITC) has been availed in respect of inputs used for manufacture and supply of goods exported, then the importer needs to furnish a bond, binding himself to use the imported material in his factory or in the factory of his supporting manufacturer. Additionally, the importer is now required to submit a certificate from a chartered accountant certifying that the inputs have been so used.

-Clubbing of Authorisations issued only within 18 months – HoP amended: DGFT has amended Para 4.38 of FTP Handbook of Procedures relating to Facility of Clubbing of Authorisations. Only authorisations issued within 18 months from the date of earliest authorisation can be clubbed subject to condition that imports are made within 30 months of the earliest authorisation. Any import made beyond 30 months of the earliest authorisation shall be regularised as per Para 4.49 of HoP. All cases clubbed as per earlier provisions are not to be reopened. (Public Notice No. 70/2015-2020)

-Essential parts can be treated as complete goods for customs but not Motor Vehicle Act: In a case involving import of essential parts for assembling e-rickshaw, Delhi High Court has held that Rule 2(a) of Interpretative Rules, treating unfinished articles as complete. The High Court observed that legal fiction created by a statute cannot be extended beyond the purpose for which it is created. It directed Customs to clear goods withheld because of absence of type certificate required under Motor Vehicles Act. (Ramakrishna Sales v. UOI – W.P.(C) 1232/2018, decided on 31-1-2019, Delhi High Court]

-Drawback on re-exports – GR declaration when not required: Delhi High Court has held that non-commercial re-export of duty-paid goods would be entitled to drawback under Section 74 of the Customs Act and that requirement of Guaranteed Remittance was not necessary in a case where the exporter and owner of the goods were one and the same. The High Court in this case, Kingfisher Airlines was cannibalized and subsequently an aircraft engine was imported so that the aircraft chassis could be flown back, held that the petitioner was entitled to drawback on re-export of aircraft engine. (International Lease Finance Corporation v. UOI – W.P.(C) 6344/2018, decided on 10-1-2019, Delhi High Court)

-Demand of anti-dumping duty for imports under Advance Authorisation: Rejecting the plea that bond/LUT executed by assessee-importer did not cover the anti-dumping duty leviable on material imported under Advance Authorisation, The Tribunal observed that the bond executed did not make any distinction between the duties leviable. Larger Bench order in Caprihans and Bombay High Court decision in Dharampal Lalchand Chug were distinguished. The case was also found fit for category (d) of Explanation 1 of Customs Section 28 (relevant date). (Kopran Ltd. v. Commissioner – Order No. A/85037/2019, dated 10-1-2019, CESTAT Mumbai)

-Clarification issued by Ministry to assessee is not a circular: CESTAT Delhi has held that a clarification issued by the Ministry to the assessee cannot be treated as a circular and that the same is not binding on the adjudicating authority who can differ on well-reasoned arguments. The Tribunal upheld the order of Commissioner (Appeals) extending exemption under Notification No. 12/2012-Cus., to a manufacturer of power bank where the appellate authority ignored the clarification issued by Ministry and asserted that power bank was a battery charger of mobile handsets. Judgment of the Supreme Court in State of Punjab v. Nokia India was relied. (Commissioner v. S B Industries – 2019-VIL-37-CESTAT-DEL)

Central Excise & Service Tax

-Service Tax exemption to services provided that exemption is available to ADB and IFC from by ADB & IFC: CBIC through Circular No. GST in terms of provisions of ADB Act and IFC 211/1/2019-ST dated 15-01-2019 has clarified  that the services provided by Asian Development Bank (ADB) and Indian Financial Corporation (IFC) are exempted from service tax too ( Circular No. 83/2/2019-GST )

-Warehouse in foreign land can be a place of removal to avail Cenvat Credit: CESTAT Mumbai has held that Cenvat credit can be availed on foreign warehouse services received by a company in India for which service tax was paid under reverse charge mechanism. It was held that denial of credit would amount to double taxation. (Eaton Industrial System (P) Ltd. v. Commissioner – 2019-TIOL-470-CESTAT-MUM)

-CAG cannot carry compulsory service tax audit of private agencies, after GST: Relying on Central GST Section 174(2), Gujarat High Court has held that there was no saving of Rule 5A of Service Tax Rules, 1994 such that fresh audit proceedings under the said rule cannot be initiated by CAG. It was observed that with the enactment of GST, Finance Act 1994 and Service Tax provisions stood repealed. The High Court in this regard stayed CAG audit of a private limited company providing warehouse and logistical support services in SEZ. CAG was directed not to carry out any further Service Tax audit of petitioner. (Oil Field Warehouse and Service Ltd v. UOI – R/Special Civil Application No. 16232 of 2018, decided on 17-10-2018, Gujarat High Court)

-Cenvat credit on guest house – formula set aside: Bombay High Court has held that rough and ready formula as formulated by CESTAT regarding availability of Cenvat credit on guest houses, that credit was available only on guest houses situated near the manufacturing unit, was not entirely satisfactorily. The High Court in this regard held that even in relation to guest house not situated close to the manufacturing unit, if the use was not for personal use or consumption of the employees exclusion clause in definition of input service, may not apply. (ACG Associated Capsules P. Ltd. v. Commissioner – Central Excise Appeal No. 55 of 2018, decided on 5-12-2018, Bombay High Court)

-Cenvat credit on maintenance charges for common area of business premises: CESTAT Delhi has allowed Cenvat credit on maintenance charges for common area of a business premises taken on rent by assessee. The charges were related to roads, street lights, drainage, etc., provided beyond the manufacturing premises but were charged based on per square meter of business premises occupied. The Tribunal observed that these charges were indirectly related to business and were covered in the main part of definition of input services. Judgment of the Supreme Court in the case of Karnani Properties was relied on. (Mahle Engine Components v. Commissioner – Final Order No. 50046/2019, dated 15-1-2019, CESTAT Delhi)

-Cenvat reversal on inputs cleared as such FIFO system to be followed: In a case involving removal of inputs as such, CESTAT Ahmedabad has held that first-in first-out (FIFO) system must be applied and removal of inputs from the old stock of a manufacturer must be considered. t noted that that the quantity removed from time to time was carried forward from the old stock and the stock balance of the input was much more than the quantity cleared. (Wimplast Ltd. v. Commissioner – Final Order No. A/12948/2018, dated 13-12-2018, CESTAT Ahmedabad)

Value Added Tax (VAT)

-Sale of goods when in bonded warehouse, not exempt from CST: Bombay High Court has held that sale made by transfer of documents while goods are in bonded warehouse would not qualify as exempt under Section 5(2) of the Central Sales Tax Act, relating to high sea sales. Observing that concept of crossing the customs frontiers of India is distinct from customs barriers of India, the High Court termed such sale as local sale. (Commissioner v. Radhasons International – 2019-VIL-62-BOM)

-Sales tax on replacements during warranty period Matter referred to Larger Bench: Supreme Court has referred to its Larger Bench the issue as to whether sales tax was payable based on credit note issued for replacement of spare parts of automobile under warranty. It expressed reservations on propositions laid down in Mohd. Ekram Khan & Sons. The Court in this regard observed that price included cost of spare parts and that sales tax was paid on car as well as spare parts inventory with the dealer. (Tata Motors v. Dy. Commissioner Judgement dated 5-2-2019 in Civil Appeal No. 1822 of 2007 and Ors., Supreme Court)

-Edible oil, vanaspati and sugar are  agricultural produce for market fee-  Supreme Court has upheld High Court Order holding that edible oil, vanaspati and sugar are covered under he definition of agricultural produce under Section 2(1)(a) of the Maharashtra Agricultural Produce Marketing (Regulation) Act, 1963, for the purpose of levy of market fee. (Britannia v. Bombay Agricultural Produce Marketing Committee – Civil Appeal No. 1746 of 2010, decided on 24-1-2019, Supreme Court)


About Author: 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).
The Central Board of Indirect Taxes and Customs (CBIC) has constituted three Working Groups to study and recommend measures to facilitate trade, promote exports and improve compliance Sun, 24 Feb 2019 06:41:25 +0000 The Central Board of Indirect Taxes and Customs (CBIC) has constituted three Working Groups to study and recommend measures to facilitate trade, promote exports and improve compliance.

The Working Groups will focus on:-

  • improving the legislative structure of customs tariff and update it to suit the emerging and future needs of the economy and industry. Special focus would be given to create a comprehensive export tariff structure to enhance India’s export competitiveness
  • export promotion and facilitation with emphasis on boosting exports through e-commerce, addressing the trade facilitation barriers faced in India’s export markets and improving the quality of logistics services for exporters.
  • enhancing compliance, plugging loopholes to improve revenue collection on customs and curb IGST refund frauds

The groups will consult the stakeholders extensively, including the Export Promotion Councils and relevant wings of the Ministry of Commerce and industry.

The Groups will submit their report within a period of two months.

“The recommendations of the Groups, which will be taken-up for the implementation on priority, would further enhance the ease of doing business and export competitiveness. CBIC will be using advanced data analytics tools for augmenting revenue and curbing frauds”, said Pranab Kumar Das, Chairman, Central Board of Indirect Taxes and Customs.

GST return GSTR 3B due date for month of jan 2019 extended to Wed, 20 Feb 2019 17:42:43 +0000 GST return GSTR 3B due date for month of jan 2019 extended to

For All states except Jammu and Kashmir 22nd Feb 2019

for Jammu and Kashmir 28th Feb 2019

Here is the notification

[To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i)]

Government of India
Ministry of Finance

(Department of Revenue)
Central Board of Indirect Taxes and Customs

Notification No. 09/2019 – Central Tax
New Delhi, the 20th February, 2019
G.S.R…..(E).–In exercise of the powers conferred by section 168 of the Central Goods and Services Tax Act, 2017 (12 of 2017) read with sub-rule (5) of rule 61 of the Central Goods and Services Tax Rules, 2017 (hereafter in this notification referred to as the said rules), the Commissioner, on the recommendations of the Council, hereby makes the following further amendments in notification number 34/2018 – Central Tax, dated the 10th August, 2018, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R.761(E), dated the 10th August, 2018, namely:–

In the said notification, in the first paragraph, after the sixth proviso, the following provisos shall be inserted, namely: –

“Provided also that the return in FORM GSTR-3B of the said rules for the month of January, 2019 shall be furnished electronically through the common portal, on or before the 22nd February, 2019:

Provided also that the return in FORM GSTR-3B of the said rules for the month of January, 2019 for registered persons whose principal place of business is in the State of Jammu and Kashmir shall be furnished electronically through the common portal, on or before the 28th February, 2019.”.

[F.No.20/06/16/2018-GST (Pt. II)]
(Dr. Sreeparvathy S.L.) Under Secretary to the Government of India

Note: – The principal notification number 34/2018 –Central Tax, dated the 10th August, 2018 was published in the Gazette of India, vide number G.S.R. 761(E), dated the 10th August, 2018 and was last amended by notification no. 70/2018, dated the 31st December, 2018, published in the Gazette of India, Extraordinary, vide number 1247 G.S.R. (E), dated the 31st December, 2018.

Due Date of following GST return has been extended Sat, 09 Feb 2019 14:48:56 +0000 GST news and updatesDue Date of following GST return has been extended

Form GSTR 7 gst return for all the month has been extended as follows because of notification number 07/2019 dated 31/01/2019

oct 2018 – extended till 28/02/2019

Nov 2018 – extended till 28/02/2019

Dec 2018 – extended till 28/02/2019

and by the notification number 08/2019 dated 08/02/2019 for :

Jan 2019-extended till 28/02/2019

Form Number GSTR 7 applicable to persons who require to deduct TDS under section 51 of CGST ACT

Notifications are as follows

[To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i)]

Government of India
Ministry of Finance
(Department of Revenue)
[Central Board of Indirect Taxes and Customs]

Notification No. 07/2019 – Central Tax
New Delhi, the 31st January, 2019

G.S.R. (E):- In exercise of the powers conferred by sub-section (6) of section 39 read with section 168 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Commissioner hereby makes the following amendment in the notification of the Government of India in the Ministry of Finance, Department of Revenue No. 66/2018-Central Tax, dated the 29th November, 2018, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 1150(E), dated the 29th November, 2018, namely:-

In the said notification, for the words, figures and letters “the 31st day of January, 2019”, the words, figures and letters “the 28th day of February, 2019” shall be substituted.

[F. No. 20/06/17/2018-GST]
(Dr. Sreeparvathy S.L.) Under Secretary to the Government of India

Note: – The principal notification No. 66/2018-Central Tax, dated the 29th November, 2018 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 1150(E), dated the 29th November, 2018.

[To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i)]

Government of India
Ministry of Finance
(Department of Revenue)
[Central Board of Indirect Taxes and Customs]

Notification No. 8/2019 – Central Tax
New Delhi, the 8th February, 2019

G.S.R. …..(E).—In exercise of the powers conferred by sub-section (6) of section 39 read with section 168 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereinafter referred to as the said Act), the Commissioner hereby extends the time limit for furnishing the return by a registered person required to deduct tax at source under the provisions of section 51 of the said Act in FORM GSTR-7 of the 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 month of January, 2019 till the 28th day of February, 2019.

[F. No. 20/06/17/2018-GST (Pt. I)]
(Dr. Sreeparvathy S.L.) Under Secretary to the Government of India






New system of GSTN Sat, 09 Feb 2019 05:51:11 +0000 New System of GSTN

GSTN will focus, amongst others, on the development of new return filing, further improving the user interface, and Business Intelligence and Analytics. Improvement in User Interface on the basis of feedback is a continuous process. Few important initiatives/improvements made for better User Experience are:

Questionnaire for filing GSTR-3B to avoid errors by taxpayers.

Option to generate pre-populated Challan by the system to avoid depositing Cash in wrong Head by the taxpayers.

Introduction of one click Nil return filing.

Suggested utilisation of ITC informed to the taxpayer for discharging tax liability.

Contextual help for GST transactions like Registration, Returns, Payment, etc.

GSTN has started work on BI & Analytics. Different scenarios of BI have been identified on which work is going on such as Persona based Analysis, Predictive Analysis, Fraud/Anomaly Detection, Statistical Scoring, 360-degree view of taxpayers, Circular Trading & Network Analysis, etc. Further, GSTN shares data with tax authorities on the following:

Mis-match between figures reported in GSTR-1 & GSTR-3B.

Mis-match between figures reported GSTR-3B and that computed by the system in GSTR-2A.

Taxpayers who have generated e-way bill but not filed tax returns

Comparison of GSTR-1 & GSTR-3B for liability analysis, GSTR-2A & GSTR-3B for comparison of ITC being claimed by taxpayers, and analysis regarding taxpayers who have generated e-way bill but not filed tax returns is being done and the reports generated are shared with tax authorities for taking appropriate action.

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

Export Promotion Capital Goods Scheme Wed, 06 Feb 2019 15:20:25 +0000 In order to facilitate import of capital goods for producing quality goods and services and enhance India’s manufacturing competitiveness, the Central Government has been implementing a Scheme called the Export Promotion Capital Goods Scheme under the Foreign Trade Policy for manufacturer exporters with or without supporting manufacturer(s), merchant exporters tied to supporting manufacturer(s) and service providers.

Under the Scheme, EPCG Authorizations are issued with actual user condition and import validity of 24 months to import capital goods (except those specified in negative list) for pre-production, production and post-production at zero customs duty, and subject to fulfilment of specific Export Obligation equivalent to 6 times of duties, taxes and cess saved on capital goods, to be fulfilled in 6 years from date of issue of Authorization. In addition, the Authorization holder is required to fulfil Average Export Obligation achieved by him in the preceding three licensing years for the same and similar products. However, if minimum 75% of specific Export Obligation and 100% of Average Export Obligation is fulfilled within half the original export obligation period, remaining export obligation can be condoned. Further, in case of indigenous sourcing of capital goods and for exports of Green Technology products, specific EO is only 75%. For Units located in North East Region and Jammu & Kashmir, specific EO is only 25%. Presently, capital goods imported for physical exports are also exempt from IGST and Compensation Cess up to 31.03.2019. 

The number of defaulters reported in the last three years is 1347 nos. in 2015-16; 1122 nos. in 2016-17 and 1031 nos. in 2017-18. The Regional Authorities have taken penal action under the Foreign Trade (Development & regulation Act), 1992 by issuing show cause notices and passing adjudication orders for recovery of customs duty along with interest.

This information was given by the Minister of State of Commerce and Industry, C. R. Chaudhary, in written replies in the Lok Sabha today.

Indirect Taxes Updates- Upto Jan 2019 Mon, 04 Feb 2019 06:54:39 +0000  

Amendments to CGST Act 2017 in CGST Act 2018 which will be in force from 01st February 2019.  The key amendments that will take effect are as under: 

cma rakesh bhalla

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

Supplies from unregistered persons – Section 9(4) substituted

Section 9 has been amended to provide that tax shall be liable to be paid under RCM by specified class of persons on supply of specified categories of goods or services received from un-registered persons.

Earlier, taxpayers were liable to pay tax under RCM in case of receipt of supplies from un-registered persons (though this provision has been kept suspended)

Composition levy / scheme – Section 10 amended

  • Section 10(1) amended to clearly provide that the composition option is with respect to tax payable under Section 9(1)
  • Government empowered to increase threshold limit for composition taxpayers to Rs. 1.5 Crores as per GST Council’s recommendation.
  • Composition taxpayers shall be allowed to supply services upto a Value of Rs. 10% of turnover or Rs. 5 lakhs, whichever is higher.


Input Tax Credit

  • Section 16 of CGST Act amended to provide for deemed receipt of services by registered person where the services are provided by the supplier to any person on the direction and on account of such registered person.
  • Credit available on motor vehicles for transportation of persons having a seating capacity of more than 13 passengers.
  • Credit on services of insurance, servicing, repair and maintenance of motor vehicles has been barred and will be available in specified circumstances.
gst app

        For Regular Updates Download GSTSEVA APP

  • Credit on leasing, renting or hiring of motor vehicles barred and available only in cases where credit on motor vehicle itself would have been available or used for making outward supply of same category.

  • Credit on food and beverages, outdoor catering, health services etc. remains barred except where such expenses are obligatory under any law.

ITC restriction – Amendment in Section 17

  • Value of exempt supply (for proportionate reversal) will not include activities specified in Schedule III, except sale of land & sale of building in respect of which construction has been completed prior to sale.

  • Section 17(5)(a) amended to provide ITC in respect of motor vehicles only in certain cases

  • ITC will be available in respect of motor vehicles having approved seating capacity of more than 13 persons. For motor vehicles having approved seating capacity upto 13 persons, ITC will be available only when such vehicles are used for
  • Further supply of such motor vehicles
  • Transportation of passengers
  • Imparting training on driving such motor vehicles

ITC in respect of general insurance, servicing, repair and maintenance relating to motor vehicles, vessels and aircraft will not be available if credit of motor vehicles is restricted.

ITC, however, will be available if the recipient is engaged in the:

  • manufacture of such motor vehicles, vessels or aircraft; or
  • supply of general insurance services in respect of such motor vehicles, vessels or aircraft insured by him;

Credit distribution by ISD – Turnover – Amendment in Section 20

Definition of turnover for the purpose of distribution of ITC by Input Service distributor not to include CST paid on non-GST supplies.

Amendment in Section 22 (Persons liable for registration)

  • Threshold limit for registration can be increased to Rs. 20 lakhs from Rs. 10 lakhs on request by special category State and based on recommendations of GST Council

  • Special Category States – meaning amended to exclude Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand

Amendments in Section 25 (Procedure for registration)

  • SEZ developer or SEZ unit shall be required to obtain separate registration distinct from its registration for place of business located outside SEZ.
  • A person having multiple places of business in a State/UT shall be allowed to obtain a separate registration for each such place of business subject to prescribed conditions.

Amendment in Section 29 (Cancellation of registration)

Provisions included for suspension of registration when cancellation proceedings are pending.

Amendment in Section 34 (Credit / debit notes)

Section 34 has been amended to enable issuance of single debit / credit note in respect of multiple invoices issued for supplies made during a financial year.

C& AG audited entities-Amendment in Section 35

Audit by Chartered Accountant as per Section 35 not required for department of Central / State Government or local authority whose accounts are subject to audit by C&AG.

Amendment in Section 49 (Credit utilisation – priority rule)

Balance of ITC in SGST / UTGST ledger shall be allowed for payment of IGST only when balance of ITC in CGST ledger is

not available for payment of IGST.

Insertion of new Section 49A (Credit utilisation)

ITC on account of CGST, SGST or UTGST to be first utilised for payment of IGST, CGST, SGST or UTGST only after ITC available on account of IGST has been first utilised fully towards such payment.

.Amendment in Section 54 (Refund)

Section 54(8)(a) has been amended to provide that tax paid at the time of exports shall be refunded to the applicant in case of exports – reference to zero rated supply effectively omitted and amended to reflect only exports

Amendment in Section 107 (Pre-deposit before Appellate Authority)

Maximum pre-deposit amount in case of appeal before an Appellate Authority capped at Rs. 25 Crores.

Amendment in Section 112 (Pre-deposit before Tribunal)

Maximum pre-deposit amount in case of appeal before Appellate Tribunal capped at Rs. 50 Crores.

Amendment in Section 129

Time period for payment of tax and penalty by a transporter or owner on seizure of goods increased from 7 to 14 days.

Amendment in Section 143 (Job work)

Time period for which goods/capital goods can be retained by job-worker may be extended by Commissioner for one more year in case of inputs and two more years in case of capital goods

Entry 4 of Schedule I amended to provide that import of services by any person from a related person or from any of his other establishments outside India, in the course or furtherance of business shall be deemed to be supply even if made without consideration. [‘Taxable person’ substituted with ‘person’]

Amendment in Schedule III (Neither supply of goods nor services

Following new entries inserted in Schedule III:

  • Supply of goods from a place in non-taxable territory to another place in non-taxable territory without such goods entering into India.

  • Supply of warehoused goods to any person before clearance for home consumption.

  • Supply of goods by consignee to any other person, by endorsement of documents of title to the goods, after the goods have been dispatched from the port of origin located outside India but before clearance for home consumption.

Clarification on GST rate applicable on supply of food and beverage services by educational institution” – Government of India issued Circular No. 85/04/2019-GST dated 1st January 2018 titled “Supply of all services by an educational institution to its students, faculty, and staff is exempt under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.

  • Supply of all services including supply of food and beverages by an educational institution to its students, faculty, and staff would also be exempt from tax.
  • Supply of food and beverages by any person other than the educational institutions based on a contractual arrangement with such institution is leviable to GST@ 5%.

Proposal of 32nd GST council meeting

GST registration threshold for supply of  goods proposed to be doubled: – GST Council in its 32 meeting held on 10-1-2019 has recommended increase in the GST registration  threshold for supply of goods from Rs 20 lakh to Rs 40 lakh with effect from 1-4-2019. This threshold will also be doubled for the special category States from Rs. 10 lakh to Rs 20 lakh.

GST Composition Scheme set to be broadened: GST Council has recommended increase in turnover threshold for Composition Scheme for goods to Rs 1.5 crore from the present limit of Rs. 1 crore. Suppliers rendering either independent services or providing a mixed supply of goods & services with a turnover of up to Rs 50 lakhs p.a can join this scheme, where the tax rate is fixed at 6%. Now Composition tax payers will pay tax quarterly, but file returns annually.


States given powers -For choosing if they want to sustain the threshold exemption at Rs 20 Lakh or Rs 40 Lakh

Real Estate sector – A committee has been set up to consider real estate GST rates

Calamity cess – A cess rate of 1% by Kerala state to be imposed on intra state sales for a period of 2 years

Budget Update- there is no major changes in GST except following

  • Government has moved GST Council to appoint a Group of Ministers to examine and make recommendations to reduce GST burden on home buyers at the earliest.
  • GST registered SME units will get 2% interest rebate on incremental loan of Rs 1Crore.
  • Requirement of sourcing by government enterprises from SMEs increased up to 25%, of which, at least 3% to be sourced from women-led SMEs
  • Government E-procurement Market place (GeM) platform extended to Central Public Sector Enterprises

Important cases decided

  • Anti-Profiteering has issued Order No. 17/2018 dated 07-12-2018 in case of  M/S Harish Bakers & Confectioners Pvt. Ltd.- Applicant had alleged that although the GST rate applicable on the Chocolates had been reduced from 28% to 18% w.e.f. 15.11.2017, the Respondent had not reduced the prices of 2 products viz. the Nestle Munch Nuts 32 Gm Chocolate and the Cadbury Dairy Mik Chocolate (here-in-after referred to as the products) and had thus not passed on the benefit of such rate reduction to him. He had also submitted the pre-rate reduction invoice  and the post rate reduction invoice.
  • Anti-Profiteering has issued Order No. 28/2018 dated 27-12-2018 in case of  M/S Ahuja Radios.- No Profiteering proved– Anti-profiteering allegations were investigated on the supply of product on account of not passing on the benefit of reduction in the rate of tax w.e.t. 15.11.2017. NAA held that There was no increase in the per unit price (excluding GST) in respect  of both the products and Allegation of profiteering by the Respondent was not sustainable.
  • Detention of goods not permissible over minor detectable errors:- The High Court, however, held that if IGST has not been paid correctly, goods need to be released only on furnishing of the bank The Court was also of the view that if a human error which can be seen by naked eye is detected, the same cannot   be   capitalised   for   penalization. (Rai Prexim India Pvt. Ltd. v. State of Kerala –  2018- VIL-553-KER)
  • Seizure orders and notices were issued to petitioners under sections 129 (1) and (3), respectively, on ground that E-Way Bill-01 were not accompanied by Transporters when goods were intercepted. Batch of all the writ petitions were in the month of March 2018. The High Court of Allahabad decided a case of Godrej & Boyce Manufacturing Co. Ltd Held that Vehicle transporting the goods broke down hence, goods transferred to another vehicle, therefore delay was neither intentional nor deliberate and hence penalty was not attracted Fault in any case is unintentional and thus no seizure or imposition of penalty under section 129 is possible


  • Sale to international passenger from shop at domestic airport attracts GST– Sale of goods to international passenger from a shop located at a domestic airport or domestic security hold area is liable to Bombay High Court has held that such supply is not a taxable supply under Section 2(78) of the CGST Act, which is only applicable to shops past immigration counter and customs frontiers at international airports. Madhya Pradesh High Court has held that supply to such shop would be liable to GST [ A-1  Cuisines (P) Ltd. v. Union of India – 2018-VIL-575-BOM]


  • Seizure  due   to   expiry   of   e-way   bill,   when wrong – Allahabad High Court has allowed   release of goods noting that instructions   received from department did  not  match  with  the documents produced ( Timexo Fasteners State of UP – 2018-VIL-532-ALH)


  • Purchase in different State, and subsequent transportationomission of e-way bill:- Kerala High Court has quashed detention of a car purchased in  Puducherry and carried to Kerala, on omission  of e-way It pointed that sale was of intra-State nature, since purchaser acquired   temporary registration and insurance in Puducherry. Transport of the vehicle by the  dealer on behalf of the purchaser was hence  termed  to  be  of  used  personal  effects, thereby attracting exemption from the e-way bill. [ Kun Motors Co. Pvt. Ltd. v.  Asst.  State  Tax   Officer. Judgement dated 6  -12-2018 in W.A. N  o. 1803 of 2018, Kerala High Court]


  • Place of supply of imports made through different State: In a case where importer in Mumbai importing at Haldia (W.B) and then supply therefrom after storing the goods in the warehouse at Haldia, Maharashtra AAR has held that place from where the supplier makes a taxable supply shall be the location of the supplier e. Mumbai Head Office, since the applicant do not have any godown in the state of West Bengal. [ In RE  :  Sonkamal Enterprises Private Limited – 2018-VIL-309-AAR]


  • Construction service Occupancy certificate is completion certificate – Considering Karnataka State local law, AAR Karnataka has held  that chartered enginner’s completion certificate for date of completion of property cannot be a substitute to the one issued by the competent authority which decides tax liability on Immoveable property.  It was also held that any consideration received before such date will be considered as towards supply and liable under Entry 5 of Schedule II of the CGST Act [ In RE : Bindu Ventures – Advance  Ruling N o. KAR ADRG 32/2018, dated 3-12-2018, AAR


  • Supplies to dutyfree shop at airport liable to GST, as it is not export– Observing that duty-free shop (DFS) situated at airport cannot be treated as a territory outside India as per provisions of IGST Act [Vasu Clothing (P) v. UOI – 2018-VIL-577-MP]


  • Bill-to-ship-to mode not limited to only three parties: Holding that IGST Section 10(1)(b) does not limit transaction to only three parties, AAR Raj asthan has allowed the applicant to transact on bill-to-ship-to mode in a transaction involving 4 (Sanjog Steels Pvt. Ltd. Advance Ruling No. RAJ/AAR/2018-19/25, dated 2-11-2018, AAR Rajasthan


  • Service to other units by employees at Services rendered by employees at corporate office in areas of accounting, administrative work and IT system maintenance, which benefits units  in other parts of the country is “supply” (Columbia Asia Hospitals Pvt Ltd. – Order No. KAR/AAAR/05/2018-19, dated 12-12-2018, AAAR Karnataka)

  • Service not ‘Pure Service’ when goods used significantly: In a case involving street lighting infrastructure and upkeep services provided to a municipal corporation, Odisha AAR has held that, considering contractual nature of work which fits in Section 2(119) of CGST Act and significant use of goods/material involved, said services will not constitute ‘pure services’  (Super  Wealth  Financial  Enterprises      Order N 4/ODISHA-AAR/2018-19, dated      31-10-2018, AAR Odisha]


  • Transport service accompanying supply of food to attract 18% GST: Telangana AAR has held that supply of food by also transporting it from place of production to the place of sale is a composite supply under Section 8 of CGST Act and that transportation is ancillary with supply of food (outdoor catering) being the principal supply. (In Prism Hospitality Services – TSAAR Order No. 12/2018, dated 26-9-2018, AAR Telangana)


  • ITC of IGST paid in Bill-to-ship-to model, available: AAR Rajasthan has held that ITC of IGST paid on  -to-ship-applicant purchases goods from a supplier in a different State but asks him to deliver them to another person in that very State, is available. Provisions of Sections 16 and 17 of CGST were relied. [In RE: Umax Packaging Advance Ruling No. RAJ/AAR/2018-19/23, dated 2-11-2018, AAR Rajasthan]


  • Transfer of development rights to a developer Karnataka AAR has held that a land owner who supplies development rights to a developer for a consideration received in the form of construction services shall pay GST at the time when the builder transfers share of land owner’s premises.  (Patrick Bernardinz Advance Ruling No. KAR ADRG 29/2018, dated 28-11-2018, AAR Karnataka]




  • Documents for online IEC applications, clarified- DGFT has clarified that if IEC is required to be issued in the name of the firm, the application must be made in the name of the firm. (Trade Notice No. 39/2015-20)


  • Advance authorisation available to other exporters based on ratified norms: All applicants of Advance Authorization are now eligible to apply and get their authorizations based on ratified norms which are available on DGFT website in the form of minutes.  (DGFT Public Notice No. 64/2015-20)


  • IGST refund on exports Resolution of some EGM related errors: CBIC has instructed its officers to take all necessary steps to ensure that all EGMs of cargo related to past cases are filed before 31-1-2019. (Circular No. 1/2019-Cus.)
  • EPCG Scheme – List of products importable revised: EPCG scheme now allows import of furniture and fixtures, flooring materials and furnishing materials for hospitals. (Public Notice No. 61/2015-20)


  • Re-export/return of imported SCOMET items Procedure prescribed: DGFT has prescribed procedure for re-export/return of imported SCOMET items due to reasons of obsolescence of technology of imported items, cancellation of order by Indian buyer/end user, dead on arrival (Public Notice No. 59/2015-20)


  • Customs duty reduced on specified imports from Malaysia, ASEAN, South Korea and Japan: Customs duties on import of specified goods from Malaysia, South Korea and from ASEAN countries have been reduced. Further, basic customs duty has been reduced on gear box and parts thereof [Tariff Item 8708 40 00], of specified motor vehicles, when imported from Japan under the India-Japan Comprehensive Economic Partnership Agreement.

  • Capital goods for distribution of power not importable under EPCG: Import of capital goods required for distribution of electrical energy (power) in not permitted under EPCG scheme. (DGFT Circular No. 15/2015-20, dated 4-1-2019 )


Important cases decided

  • Valuation Assessing officer to give reasons for rejecting value: Supreme Court has held that it is incumbent upon assessing officer to give reasons for rejecting transaction value; to establish that price is not the sole consideration; and to give the reasons supported by material to arrive at own assessable value (Commissioner v. Sanjivani Non-Ferrous Trading Judgement dated 10-12-2018 in Civil Appeal Nos. 18300-18305 of 2017, Supreme Court)
  • Exemption Use in any other project but for specified work, does not bar exemption: CESTAT Mumbai has allowed benefit of Notification No. 21/2002-Cus. (Sl. No. 230) to hydraulically operated self-propelled piling rig for construction of road in a case where it was alleged that the goods were involved in activities other than those specified. (Gammon India Ltd. v. Commissioner – Order No. A/88154-88156/2018, dated 19-12-2018, CESTAT Mumbai) 
Central Excise & Service Tax

Important cases decided

  • Cenvat  credit on inputs used in excess  of what  prescribed  when  available:  Observing that actual consumption of material could vary from bill of material supplied along with designs and drawings by the principal, CE  STAT  Kolkata has set aside  demand  of  Cenvat   credit on alleged excess inputs-  (Bhawani Metal &   Body Building    Commissioner  Order  No.   FO/A/77081- 77086 /2018, dated 4-12-2018, CE   STAT Kolkata)
  • Excise duty based on different MRPs affixed on  different    packages,    correct:     CE   STAT Kolkata has dismissed plea of the  department that since same type of cement was being sold at different MRPs, the highest of the  MRPs was to be taken for purpose of payment of central excise duty-  (Order N FO/A/77087/2018, dated 4-12-2018, CE  STAT Kolkata)
  • Distribution of Cenvat credit to other units optional till 2016: Bombay High Court hasheld that it was within the discretion of the assessee whether to utilize Cenvat credit at one  of its unit or distribute it amongst other units   providing output   The    High    Court    however    dismissed   appeal         observing  that  the  entire exercise was revenue neutral as distribution of Cenvat  credit  to  various  units  would  result  in lesser            service  tax        being    paid      by         them.  [Commissioner v. Oerlikon Balzers Coating India Judgement dated 19-12-2018 in Central Excise Appeal N  o. 117/2018, Bombay High Court]

  • Refund -Limitation – Time taken by Ministry to be excluded: Bombay High Court has held that time consumed by the concerned Ministry in granting certificates required for retrospective exemption and refund must be ignored  [JSW Dharamatar Port (P) v.  Union of India – 2018-VIL-573-BOM-ST]

*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).

GSTBreaking- A Big day for GST amendment act and more Fri, 01 Feb 2019 01:33:32 +0000 GST Notifications
The CBIC has issued *13 notifications on 29th January’2019*. These notifications mainly cover the applicability of *Amendment Act’2018* and *suspension of RCM liability*.
*Central Tax*
1. *Notification No. 02/2019 – Seeks to bring into force the CGST (Amendment) Act, 2018*
2. *Notification No. 03/2019 – Seeks to amend the CGST Rules, 2017*
3. *Notification No. 04/2019 – Seeks to amend notification No. 2/2017-Central Tax dated 19.06.2017 so as to define jurisdiction of Joint Commissioner (Appeals)*
4. *Notification No. 05/2019 – Seeks to amend notification No. 8/2017-Central Tax dated 27.06.2017 so as to align the rates for Composition Scheme with CGST Rules, 2017*
5. *Notification No. 06/2019 – Seeks to amend notification No. 65/2017-Central Tax dated 15.11.2017 in view of bringing into effect the amendments (to align Special Category States with the explanation in section 22 of CGST Act, 2017) in the GST Acts*
*Central Tax – Rate*
6. *Notification No. 01/2019 – Seeks to rescind notification No. 8/2017-Central Tax (Rate) dated 28.06.2017 in view of bringing into effect the amendments (regarding RCM on supplies by unregistered persons) in the GST Acts*
*Integrated Tax*
7. *Notification No. 01/2019 – Seeks to bring into force the IGST (Amendment) Act, 2018*
8. *Notification No. 02/2019 – Seeks to amend notification No. 7/2017-Integrated Tax dated 14.09.2017 to align with the amended Annexure to Rule 138(14) of the CGST Rules, 2017*
9. *Notification No. 03/2019 – Seeks to amend notification No. 10/2017-Integrated Tax dated 13.10.2017 in view of bringing into effect the amendments (to align Special Category States with the explanation in section 22 of CGST Act, 2017) in the GST Acts*
*Integrated Tax – Rate*
10. *Notification No. 01/2019 – Seeks to rescind notification No. 32/2017-Central Tax (Rate) dated 13.10.2017 in view of bringing into effect the amendments (regarding RCM on supplies by unregistered persons) in the GST Acts*
*Union Territory Tax*
11. *Notification No. 01/2019 – Seeks to bring into force the UTGST (Amendment) Act, 2018*
*Union Territory Tax – Rate*
12. *Notification No. 01/2019 – Seeks to rescind notification No. 8/2017-Union Territory Tax (Rate) dated 28.06.2017 in view of bringing into effect the amendments (regarding RCM on supplies by unregistered persons) in the GST Acts*
*Compensation Cess*
13. *Notification No. 01/2019 – Seeks to bring into force the GST (Compensation to States) Amendment Act, 2018*
Now import invoices from EWAY bill directly for GSTR 1 Mon, 28 Jan 2019 04:14:25 +0000

Now No need to punch all Invoices in GSTR-1.
You can directly import your all invoices declared in E-Way Bill system into Form GSTR-1.
Only those invoices will be punched, for which no Eway Bill has been generated.

GSTAT -Cabinet approves creation of the National Bench of the Goods and Services Tax Appellate Tribunal Thu, 24 Jan 2019 05:08:45 +0000 Cabinet approves creation of the National Bench of the Goods and Services Tax Appellate Tribunal (GSTAT)

The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved the creation of National Bench of the Goods and Services Tax Appellate Tribunal (GSTAT).

The National Bench of the Appellate Tribunal shall be situated at New Delhi. GSTAT shall be presided over by the President and shall consist of one Technical Member (Centre) and one Technical Member (State).

The creation of the National Bench of the GSTAT would amount to one time expenditure of Rs.92.50 lakh while the recurring expenditure would be Rs.6.86 crore per annum.


Goods and Services Tax Appellate Tribunal is the forum of second appeal in GST laws and the first common forum of dispute resolution between Centre and States. The appeals against the orders in first appeals issued by the Appellate Authorities under the Central and State GST Acts lie before the GST Appellate Tribunal, which is common under the Central as well as State GST Acts. Being a common forum, GST Appellate Tribunal will ensure that there is uniformity in redressal of disputes arising under GST, and therefore, in implementation of GST across the country.

Chapter XVIII of the CGST Act provides for the Appeal and Review Mechanism for dispute resolution under the GST Regime. Section 109 of this Chapter under CGST Act empowers the Central Government to constitute, on the recommendation of Council, by notification, with effect from such date as may be specified therein, an Appellate Tribunal known as the Goods and Services Tax Appellate Tribunal for hearing appeals against the orders passed by the Appellate Authority or the Revisional Authority.

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


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.

Know How much amount recovered by Government during GST detention upto dec 2018 Wed, 09 Jan 2019 08:23:05 +0000 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)
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.

National Anti-Profiteering Authority (NAA) Wed, 09 Jan 2019 08:17:29 +0000 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.

GST and Indirect Tax latest update- upto December 2018 Mon, 07 Jan 2019 07:27:18 +0000 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%



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


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%


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?


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]


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
Important press release related to GST council Fri, 04 Jan 2019 18:29:14 +0000       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.

In future GST may have single slab instead of 12% and 18% Mon, 24 Dec 2018 18:17:25 +0000 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.
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.



Recommendations made during 31st Meeting of the GST Council Sat, 22 Dec 2018 15:16:01 +0000 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.