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RECENT DEVELOPMENTS IN GST

RECENT DEVELOPMENTS IN GST. GST COUNCIL RECOMMENDATIONS. 32nd GST Council Meeting: 10.01.2019.

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RECENT DEVELOPMENTS IN GST

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  1. RECENT DEVELOPMENTS IN GST V. Raghuraman.

  2. GST COUNCIL RECOMMENDATIONS V. Raghuraman.

  3. 32nd GST Council Meeting: 10.01.2019 • Changes made by CGST (Amendment) Act,2018, IGST (Amendment) Act, 2018, UTGST (Amendment) Act, 2018 and GST (Compensation to States) Amendment Act,2018along with amendments in CGST Rules, notifications and Circulars issued earlier and the corresponding changes in SGST Acts would be notified w.e.f. 01.02.2019. • The last date for passing the examination for GST Practitioners to be extended till 31.12.2019for those GST Practitioners who have enrolled under rule 83(1)(b) i.e. who were sales tax practitioner or tax return preparer under the existing lawfor a period of not less than five years V. Raghuraman.

  4. 32nd GST Council Meeting: 10.01.2019 • 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. • 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). Free GST accounting and billing software will be provided to small taxpayers by GSTN. V. Raghuraman.

  5. 32nd GST Council Meeting: 10.01.2019 • 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 at Rs 10 lakhs. • 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 the preceding Financial Year up to Rs 50 lakhs. 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. They would be liable to file one Annual Return with Quarterly Payment of Taxes (along with a Simple Declaration) with effect from 1.4.2019. V. Raghuraman.

  6. 32nd GST Council Meeting: 10.01.2019 • 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. • 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. V. Raghuraman.

  7. 31st GST Council Meeting: 22.12.2018 • Reduction in GST rates/exemptions on services: 1. GST rate on cinema tickets above Rs. 100 shall be reduced from 28% to 18% and on cinema tickets upto Rs. 100 from 18% to 12%. 2. GST rate on third party insurance premium of goods carrying vehicles shall be reduced from 18% to 12% 3. Services supplied by banks to Basic Saving Bank Deposit (BSBD) account holders under Pradhan Mantri Jan Dhan Yojana (PMJDY) shall be exempted. 4. Services supplied by rehabilitation professionals recognised under Rehabilitation Council of India Act, 1992 at medical establishments, educational institutions, rehabilitation centers established by Central Government / State Government or Union Territories or entity registered under section 12AA of the Income-tax Act shall be exempted. V. Raghuraman.

  8. 31st GST Council Meeting: 22.12.2018 5. Services provided by GTA to Government departments/local authorities which have taken registration only for the purpose of deducting tax under Section 51 shall be excluded from payment of tax under RCM and the same shall be exempted. 6. Exemption on services provided by Central or State Government or Union Territory Government to their undertakings or PSUs by way of guaranteeing loans taken by them from financial institutions is being extended to guaranteeing of such loans taken from banks. 7. Air travel of pilgrims by non-scheduled/charter operations, for religious pilgrimage facilitated by the Government of India under bilateral arrangements shall attract the same rate of GST as applicable to similar flights in Economy class (i.e. 5% with ITC of input services). V. Raghuraman.

  9. 31st GST Council Meeting: 22.12.2018 8. Parliament and State legislatures shall be extended the same tax treatment with regard to payment of tax under RCM (reverse charge mechanism)as available to Central and State Governments. 9. Security services (supply of security personnel) provided to a registered person, except Government Departments which have taken registration for TDS and entities registered under composition scheme, shall be put under RCM. 10. Services provided by unregistered Business Facilitator (BF) to a bank and agent of Business correspondent (BC) toa BC shall be put under RCM. [Notification no. 29/2018-CT (R) dt. 31.12.2018] V. Raghuraman.

  10. Notifications V. Raghuraman.

  11. Registration and returns V. Raghuraman.

  12. Registration and returns V. Raghuraman.

  13. TDS- exemption V. Raghuraman.

  14. Amendment to CGST Rules- Notification 74/2018 dt. 31.12.2018 V. Raghuraman.

  15. Amendment to CGST Rules- Notification 74/2018 dt. 31.12.2018 V. Raghuraman.

  16. Amendment to CGST Rules- Notification 74/2018 V. Raghuraman.

  17. Amendment to CGST Rules- Notification 74/2018 V. Raghuraman.

  18. Late fee for delayed filing of returns V. Raghuraman.

  19. Jurisdiction of officer V. Raghuraman.

  20. Removal of difficulty orders V. Raghuraman.

  21. IGST Rules – determination of place of supply V. Raghuraman.

  22. Circulars and clarifications V. Raghuraman.

  23. Circulars and clarifications V. Raghuraman.

  24. Circulars and clarifications V. Raghuraman.

  25. Circulars and clarifications- refund- 79/53/2018-31.12.2018 V. Raghuraman.

  26. Circulars and clarifications- refund- 79/53/2018-31.12.2018 V. Raghuraman.

  27. Circulars and clarifications- refund- 79/53/2018-31.12.2018 V. Raghuraman.

  28. Circulars and clarifications- refund- 79/53/2018-31.12.2018 V. Raghuraman.

  29. Circulars and clarifications- refund- 79/53/2018-31.12.2018 V. Raghuraman.

  30. Circulars and clarifications V. Raghuraman.

  31. Circulars and clarifications V. Raghuraman.

  32. GST AMENDMENT ACT V. Raghuraman.

  33. Definition:1.1. Adjudicating authority [Section2(4)]: Amendment to replace CBIC in the place of CBEC and also to exclude authority for anti profiteering referred to in Section 171(2). Orders of the authority for anti profiteering would not be considered to be appealable orders before appellate authority. V. Raghuraman.

  34. Definition:Business [Section 2(17)] Among other things, certain transactions relating to race clubs are covered under the definition of business. The present amendment is to the sub- clause relating to activities of a race club. In terms of the amendment, activities of a race club including by way of totalisator or a license to book maker or activities of a licensed book maker in such club, is defined as business. Earlier, only the services by way of totalisator and license to book maker in such club was covered. V. Raghuraman.

  35. Definition: Business Vertical [Section 2(18)] Definition of business vertical is omitted. Section 25(2) which provided for an option to an assessee to go for separate registration to business vertical is also being amended to provide that separate registration could be permissible for each place of business within a state. With this amendment, an assessee could obtain separate registration for each place of business within a State also. Suitable amendments are carried out in registration provisions also. V. Raghuraman.

  36. Definition: Cost Accountant [Section 2(35)]: The definition referred to Section 2(1)(c) of Cost and Works Accountant Act, 1959. However, the said section defines the term ‘Council’. Cost Accountant is defined in Section 2(1)(b). The present amendment is to rectify the said anomaly. In terms of Section 2(1)(b) “cost accountant” means a person who is a member of the Institute. V. Raghuraman.

  37. Definition:Local Authority [section 2(69)] The subject amendment is to treat Development Board constituted under article 371J of the Constitution for development of Hyderabad -Karnataka region as local authority. V. Raghuraman.

  38. Definition:Services [section 2(102)] To amend the definition o of service so as to include the activity of facilitating or arranging transactions in securities as services. This would lead to levy of GST on the charges levied by the agencies which facilitate the issue, sale or purchase etc., of securities. V. Raghuraman.

  39. Supply [section 7]- Retrospective from 1.7.2017 Section 7 which defines scope of supply has been amended to make it clear that the entries covered in Schedule II to the CGST Act, 2017 are merely for classification purposes and would not by itself constitute supply on stand alone basis. V. Raghuraman.

  40. Supply: [section 7 & Sch. I] In terms of Section of section 7(1)(c) the activities listed in Schedule I are termed as supplies even where such activities are not for consideration. Entry (4) of the said schedule provided that import of services by a taxable person from a related person in the course of business or commerce was deemed as service. The said entry has been amended to provide that import of services by ‘a person’ from related persons etc. This seems to cover import of services by a non taxable persons without consideration from a relative etc. V. Raghuraman.

  41. Supply: [section 7 & Sch. III] In terms of Section 7(2) activities listed in Schedule III are not considered to be supplies for the purpose of levy of GST. Following entries are added to the said schedule: a) Supply of goods from a place in the non taxable territory to another place in the non taxable territory without such goods entering into India. b) Supply of warehoused goods to any person before clearance for home consumption. c) High sea sales V. Raghuraman.

  42. Levy on reverse charge basis: [Section 9(4)] Section 9(4) prior to its amendment provided for levy of GST on supplies to a registered person from an unregistered person. Up on amendment the levy on reverse charge is restricted on certain specified class of supplies as well as on specified class of recipients as may be notified on the recommendations of the Council V. Raghuraman.

  43. Composition: [Section 10] Amendment so as to raise the maximum limit of turnover for becoming eligible to this scheme to Rs. 1.50 crores. Further, the amendment makes it clear that the composition scheme is applicable only for the tax which is payable under Section 9(1), i.e. as a supplier of goods or services or both and the said scheme is not applicable to the taxes payable under other sub-sections of section 9. Further, amendment also allows the composition taxpayers to supply services (other than restaurant services), for value not exceeding 10% of turnover in the preceding financial year, or Rs. 5 Lakhs, whichever is higher. V. Raghuraman.

  44. Time of Supply: [Section 12 & 13] One of the events for computation of time of supply under section 12 and section 13 referred to date of issue of invoice in terms of Section 31(1) and Section 31(2) respectively. Earlier there was no reference to other sub-sections under section 31. The present amendment to the provisions of Section 12 & 13 is towards giving reference to entire section 31 (not restricting to sub section (1) or (2)). Thereby, the invoices issued under sub-section(4) /(5) continuous supply of goods or services, invoicing for goods sent on approval basis (section 31(7)) or special provisions relating to invoices as detailed in section 31(3). V. Raghuraman.

  45. Input Credit: [Section 16 -17] Facility of deemed receipt, is extended to the services also. Where the services are provided to any person on direction of the recipient, then the same is deemed to be have been received by the recipient. With introduction of new set of provisions under section 43A to facilitate filing of returns, the input tax credit is made subject to filing of the return under said new provision. V. Raghuraman.

  46. Input Credit: [Section 16 -17] Value of exempt supply for the purpose of reversal of credit shall not include the value of supplies listed in schedule III except the activity of sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building. This would ensure that items listed in Schedule III, with the above exceptions, is not considered as exempt supplies for the purpose of reversal of credit. V. Raghuraman.

  47. Input Credit: [Section 16 -17] Input credit restrictions: a) motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver). In other words where the seating capacity is more than 13, the same would qualify for credit. V. Raghuraman.

  48. Input Credit: [Section 16 -17] Input credit restrictions: b) vessels and aircraft. c) services of general insurance, servicing, repair and maintenance in so far as they relate to motor vehicles, vessels or aircraft referred to above. V. Raghuraman.

  49. Input Credit: [Section 16 -17] Input credit restrictions: However, the credit on the above would be eligible in the following circumstances: i) where motor vehicle, vessel or aircraft is used for making any of the following taxable supplies: A. Further supply of such motor vehicles /vessel/ aircraft; B. Transportation of passengers; C. Imparting training on driving / navigation/ flying such motor vehicles / vessel/ aircraft; D. Vessel or aircraft used for transportation of goods V. Raghuraman.

  50. Input Credit: [Section 16 -17] Input credit restrictions: However, the credit on the above would be eligible in the following circumstances: ii) Insurance, servicing, repair and maintenance in respect of the above vehicles/ aircraft or vessel would be eligible, where A. where the motor vehicles, vessels or aircraft are used for provision of supply as referred to above. B. where such services are received by a taxable person engaged— (I) in the manufacture of such motor vehicles, vessels or aircraft; or (II) in the supply of general insurance services in respect of such motor vehicles, vessels or aircraft insured by him; V. Raghuraman.

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