Gist on gst amendment act 2018 applicable w.e.f. 01.02.2019
GST Amendment Act 2018 applicable w.e.f. 01.02.2019 vide Notification No. 02/2019 – Central Tax Dated 29th January, 2019.
Section 9(4) – Application Reverse charge Mechanism in case of purchase from unregistered persons.
Reverse Charge shall be applicable on notified classes of registered person for the purchase of specified goods and services from unregistered dealers.
The Government shall, by notification, specify such “specified goods or services and specified classes of registered person” for application of reverse charge.
The details of such specified persons and specified goods/ services are to be notified in future.
Section 10 – Composition Scheme
Threshold limit of turn over raised from 1 Crore to 1.5 Crores. And composition scheme dealers also allowed to supply services (other than restaurant services) upto limit of 10% of total turnover or 5 lakhs whichever is higher.
Section 16 (2)(b)(ii). Eligibility and conditions for taking the input tax credit:
This section is amended in order to provide input tax credit to suppliers of services in cases of “Bill- to-ship-to” model.
Presently “bill-to-ship-to” model is applicable only in case of supply of goods.
Section 17(5)(a), (aa) [newly inserted subsection] and (ab) [newly inserted subsection] – Blocked credit on motor vehicles
Sec 17(5)(a) –– ITC Shall not be available in respect of Motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver) except when they are used for further supply of such motor vehicle; or transportation of passengers; or imparting training of driving.
This is to note, references of other types of vehicles are omitted, it means ITC can be claimed for other types of vehicle e.g trucks, forklift, dumpers and other special purpose vehicle
Sec 17(5)(aa). ITC Shall not be available on Vessels and aircraft except when they are used for making further supply of such vessels or aircraft; or transportation of passengers; or imparting training on navigating such vessels; or imparting training on flying such aircraft; for transportation of goods;
Sec 17(5)(ab). ITC shall not be available in case of purchase of general insurance services; or servicing; or repair and maintenance for motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa):
Section 17(5)(b) – Other blocked credits
ITC on the following supply of goods or services cannot be availed unless it is obligatory for an employer to provide to its employees under any law for time being in force.—
food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, leasing, renting or hiring of motor vehicles, vessels or aircraft, life insurance, health insurance, membership of a club/health and fitness centre, travel benefits extended to employees on vacation such as leave or home travel concession etc.
Further ITC on renting or hiring of motor vehicles, vessels or aircraft is allowed when they are used for purposes specified in clause (a) or (aa). Section 20(c) – Manner of distribution of credit by ISD
The amendment is in order to allow a registered person to exclude the amount of tax levied under Entry 92A of List I of the Seventh Schedule of the Constitution from the value of turnover for the purposes of distribution of credit.
Entry 92A of List I covers taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter-State trade or commerce.
Section 25(2) – Procedure for registration (Multiple Registration)
Persons having multiple places of business in a State or Union territory is allowed to obtain separate registrations for each such place of business, if they wish so. Thus, the requirement of having multiple business vertical for obtaining separate registration is dispensed with.
Section 34 – Debit and Credit Notes
Amendment allow a registered person to issue consolidated credit / debit notes as prescribed under Section 34 of the CGST Act in respect of multiple invoices issued in a Financial Year replacing sub section 1 and 3 without linking the same to individual invoices. However corresponding changes in Rule 53 of the CGST Rules shall also be required which prescribes corresponding invoice number and date of invoice as one of the mandatory particulars on debit and credit notes. Further, suitable amendments in return format is also required.
Section 35(5) – Accounts and other records
As per this amendment, any Department of the Central or State Government or local authority which is subject to audit by the Comptroller and Auditor-General (CAG) of India need not get their books of account audited by any Chartered Accountant (CA) or Cost Accountant (CMA).
Section 39 (1)- Furnishing of returns
As per the amendment in Section 39(1) of the CGST Act relating to ?furnishing of returns‘ Government shall notify certain classes of registered person for quarterly filing of returns other than an Input Service Distributor or a non-resident taxable person or a person paying tax under the provisions of section 10 (Composition Scheme) or section 51 or section 52 (who is liable to deduct of TDS or collect TCS in GST).
Section 39 (7)- Furnishing of returns
As per the amendment, Government shall notify the procedure for certain class of registered person for monthly payment of taxes even in case of quarterly filing of return.
Section 39(9)- Furnishing of returns
If registered person finds any omission or incorrect particulars in the returns filed (other than as a result of scrutiny, audit, inspection or enforcement activity by the GST authorities), he shall be able to rectify such omission or incorrect particulars in the returns subject to payment of interest, before the due date for furnishing the return for the month of September of the following year or the Annual return filing, whichever is earlier.
Section 43A – Procedure for furnishing return and availing input tax credit (Insertion of new Section in CGST Act)
This new inserted Section 43A provides the procedure for furnishing return and availing ITC.
As per this new provisions, the tax on details of outward supplies declared by the supplier will be deemed to be payable by the supplier.
However, the supplier and recipient have been made jointly and severally liable to pay tax for details furnished/not furnished on the common portal by the supplier in respect of which the return has not been furnished.
Sec 49 (5)(c) & (d) – Payment of Tax
Clauses (c) and (d) in Section 49(5) are amended to provide that the ITC of SGST/ UTGST can be used for payment of IGST liability only in case where the balance of the ITC of CGST is not available for payment of IGST liability.
Section 49A – Utilisation of input tax credit subject to certain conditions (Insertion of new
section in CGST Act)
According to this Section, a taxpayer would be able to utilise the ITC of CGST, SGST or UTGST only after exhausting all the ITC of IGST towards payment or IGST, CGST, SGST/UTGST.
Therefore, the manner of utilizing of ITC would be as followed:
ITC of IGST first to be utilized for liability of IGST – CGST – SGST
then ITC of CGST to be utilized for liability of CGST/IGST
ITC of SGST to be utilized for liability of SGST/IGST
Section 49B – Order of utilisation of input tax credit conditions (Insertion of new section in
CGST Act)
As per this Section, the Government may prescribe any specific order of utilization of ITC for payment of taxes. This provision is subject to clause (e) and (f) of Section 49(5) i.e. CGST and SGST/UTGST cannot be cross utilized for payment of tax liability.
Section 54 (2)(C) and Section 54 (8) – Refunds of tax
In this amendment, “zero rated supply” is replaced with the word “export”
This section is amended to provide that the principle of unjust enrichment will apply in case of a refund claim arising out of supplies of goods or services made to a Special Economic Zone (SEZ) developer or unit, and to allow receipt of payment in Indian currency, where permitted, by the RBI in case of export of services.
Section 54 Explanation (2)(e) – Relevant date for filing refunds in case of unutilized ITC
This amendment prescribes that, in the case of refund of unutilised ITC arising out of inverted duty structure, the due date shall be the date for furnishing of return under section 39 (on or before the twentieth day of the following month). For all other cases of unutilized ITC, relevant date shall be the end of any tax period as mentioned in Section 54(3) of the CGST Act.
Section 107(6) & 112(8) – Appeal to Appellate Authority and Appellate Tribunal
The amendment of this section provides a condition to deposit an amount of 10% of the disputed tax amount subject to maximum limit of INR 25 crores (50 Crores CGST+SGST)with the GST department before filing an appeal to the appellate authority u/s 107 (6).
Further, an amount to be deposited to file appeal before the appellate authority [u/s 112(8)] to appellate tribunal is 20% of the disputed tax amount along with the amount deposited u/s 107(6) subject to maximum of INR 50 crores (100 Crores CGST+SGST).
Section 129 (6) Detention, seizure and release of goods and conveyances in transit:
Amended in order to increase the time limit from 7 days to 14 days before which proceedings shall be initiated. Further, if goods are of perishable in nature or likely to depreciate in value then, the said period may be reduced from 14 days by a proper officer.
According to this amendment, a person transporting goods or owner of goods has to pay tax and penalty within 14 days of such detention or seizer of goods, equal to 100% of tax payable or in case of exempt goods 2% of value goods or 25000 whichever is less, where owner comes forward to pay tax and penalty, otherwise if other than owner comes forward for payment of tax and penalty then tax and penalty shall be equal to 50% of value of goods and in case of exempt goods 5% of value of goods or 25000 whichever is less.
Failing the above, further proceedings shall be initiated in accordance with the provisions of section 130 where goods shall be liable to confiscation and the person shall be liable to penalty under section 122
Section 140(1) – Transitional arrangement of Input Tax Credit
This is applicable with retrospective effect from 01.07.2017
This amendment clarifies that cesses and additional duty of excise (on textile and textile articles) levied under the pre-Goods and Services Tax laws shall not be a part of the transitional input tax credit under the goods and services tax. Further it clarifies that the expression ?eligible duties and taxes? excludes any cess and any cess which is collected as additional duty of customs under sub-section (1) of section 3 of the Customs Tariff Act, 1975.
Section 143(1)(b) – Job work procedure
As per the inserted proviso of Section 143, commissioner may extend the period of one year to further one more year in case of input and extend the period of three years for further more two years in case of Capital goods on showing sufficient cause.
Schedule III – Activities or transactions which shall be treated neither as supply of goods nor supply of services
Transactions including High Seas Sale and Supply of goods from warehouse, shall neither be treated a supply of goods nor supply of services. Further, there shall be no reversal of common credit on account of these supplies.