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Conference on Recent GST Amendment by CCBMP Udaipur Branch of ICAI

Join the conference/seminar organized by CCBMP Udaipur Branch of ICAI on the topic "Recent GST Amendment" and learn about major changes, levy provisions, composition taxable persons, ITC, registration provisions, and more. Date: 16th March 2019. Venue: ICAI Bhawan, Udaipur, Rajasthan.

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Conference on Recent GST Amendment by CCBMP Udaipur Branch of ICAI

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  1. Conference/seminar organised by CCBMP(Udaipur branch of CIRC of ICAI) Topic “recent GST amendment” Date – 16th March 2019 Venue : ICAI Bhawan, G Block , sector 14, HiranMagri, Udaipur(Raj) CA PP SINGH B.SC(H), FCA, CS Author of the Book – DNA of TDS & TCS /DNA of GST with Pleading & Practice , Certified GST consultant From ICAI New Delhi Contact No. +91-9711521060, 9871229590 cappsingh@gmail.com

  2. CA P.P Singh B.Sc (Hons)., FCA, CS GST certification course by ICAI • Post-qualification experience of around 19 years in the field of direct & indirect tax particularly income tax, service tax and VAT as well as sales tax. • Experience of handling the matters of indirect taxes particularly GST, service tax, DVAT, CST, Central Excise and other related matters. • Authored the book The DNA of TDS&TCS (including withholding tax, advance tax and equalisation levy) & DNA of GST with pleading & practice • Background material on GST for empowerment of girl students ICAI, New Delhi • Corporate trainer and guest Faculty with Indian Institute of Management(IIM), NIFMS, Faridabad(Institute of Minister Finance),ICAI New Delhi and ICSI, New Delhi and other trade association.

  3. Major changes by GST amendment Act Changes in supply Changes in levy provisions Changes for composition taxable persons Changes related to ITC Changes in Registration provisions Invoice /credit notes/ debit notes Job work Return filings Demand and recovery Detention, Seizure and Release of goods and conveyances in transit Place of supply Appeal Miscellaneous /others

  4. Change in definition of certain terms

  5. Change in definition of service

  6. Changes in supply

  7. Purpose of schedule II is only to classify supply [ new subsection 1A inserted in section 7 • (1A) where certain activities or transactions constitute a supply in accordance with the provisions of sub-section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II.

  8. Change in schedule-1

  9. More entry in schedule IIIACTIVITIES OR TRANSACTIONS WHICH SHALL BE TREATED NEITHER AS A SUPPLY OF GOODS NOR A SUPPLY OF SERVICES 2. Services by any court or Tribunal established under any law for the time being in force. 7. 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. 8. (a) Supply of warehoused goods to any person before clearance for home consumption; (b) Supply of goods by the 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.] MEANING OF COURT : Explanation[1].—For the purposes of paragraph 2, the term "court" includes District Court, High Court and Supreme Court. [Explanation 2.—For the purposes of paragraph 8, the expression "warehoused goods" shall have the same meaning as assigned to it in the Customs Act, 1962 (52 of 1962).] Effect: There shall be no reversal of common credit on account of these supplies, because reversal required only for exempt supply and not in the case of no supply.

  10. Changes in reverse charge u/s 9(4)/5(4)

  11. Comparison of section 9(3) Vs. 9(4)

  12. Composition taxable person

  13. Comparison of amendment in section 10

  14. Comparison of amendment in section 10

  15. Whether service provider can opt composition scheme? • No , a trader or manufacture opting composition scheme may provide service upto 10% of turnover in a State or Union territory in the preceding financial year or ₹5 lakhs , whichever is higher but a service provider can't opt for composition scheme

  16. Input tax credit

  17. CONDITIONS FOR TAKING INPUT TAX CREDIT [SEC.16(2)] Notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless, • he is in possession of • tax invoice issued by a supplier registered under this Act or • debit note issued by a supplier registered under this Act, or • other prescribed* tax paying documents ; • he has received the goods or services or both. • subject to the provisions of section 41 or section 43A( claim of ITC as self assessed , in the return on provisional basis) • the tax charged in respect of such supply has been actually paid to the Government, • either in cash or • through utilisation of input tax credit admissible in respect of the said supply; • he has furnished the return under section 39( First return u/s 40, annual return u/s 44, final return 45) * Prescribed rule 36 for Documentary requirements and conditions for claiming ITC

  18. One of the condition for credit entitlement is Recipient has received the goods or services Actual receiving of goods Notional receiving of goods Deemed receiving of goods: Goods sent directly to job worker for further processing goods against an invoice may be received in lots or installments, Note: need to read with place of supply provisions. There may be situation where supply does not involvemovement of goods. Further, this term receipt of goods also mentioned in the time of supply

  19. DEEMED RECEIVING OF GOODS For the purposes of this clause, it shall be deemedthat the registered person has received the goods where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise; [Explanation below 16(2)(b)of CGST] Bill to ship to model: where the goods are delivered by the supplier to a recipient or any other person on the direction of a third person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to the goods or otherwise, it shall be deemed that the said third person has received the goods and the place of supply of such goods shall be the principal place of business of such person; [sec 10(1)(b) of IGST] Note: bill to ship model available for goods not for service earlier but after new explanation to section 16(2) it is available for service also.

  20. S-16(2)(b) he has received the goods or services or both. (Amendment by CGST(Amendment) Act, 2018) New explanation w.e.f. 1-2-2019. in place of old one below sec 16(2)(b) For the purposes of this clause, it shall be deemed that the registered person has received the goods or, as the case may be, services— • where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise; • where the services are provided by the supplier to any person on the direction of and on account of such registered person.

  21. Time limit for availing credit of ITC[S-16(4)] A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains orfurnishing of the relevant annual return, whichever is earlier. Note: return u/s 39 is form 3 which is not working and form 3B is under rule 61(5) “Where the time limit for furnishing of details in FORM GSTR-1 under section 37 and in FORM GSTR-2 under section 38 has been extended and the circumstances so warrant, the Commissioner may, by notification, specify the manner and conditions subject to which the]return shall be furnished in FORM GSTR-3B electronically” Note: actual date of furnishing return 3B is not relevant . Suppose for any reason Form 3B of September could not filed by due date whether unavailed credit would lapse. Yes, as per sec 16(4). Note: no time limit for re-credit on making payment.

  22. New provision to sec 16(4) by order no 2/2018 dated 31st December, 2018 for increasing time limit. “Provided that the registered person shall be entitled to take input tax credit 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 under the said section for the month of March, 2019 in respect of any invoice or invoice relating to such debit note for supply of goods or services or both made during the financial year 2017-18, the details of which have been uploaded by the supplier under sub-section (1) of section 37 till the due date for furnishing the details under sub-section (1) of said section for the month of March, 2019.” Note: credit can be taken upto due date of return of march 2018. i.e 20th April 2019

  23. No reversal of common ITC for activities covered under Schedule III [explanation below section 17(3)] • Where the goods or services or both are used by the registered person partly for effecting taxable supplies including zero-rated supplies under this Act or under the Integrated Goods and Services Tax Act and partly for effecting exempt supplies under the said Acts, the amount of credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies including zero-rated supplies.[ S-17(2)] • The value of exempt supply under sub-section (2) shall be such as may be prescribed(Rule rules 42 and 43 of the CGST Rules), and shall include supplies on which the recipient is liable to pay tax on reverse charge basis, transactions in securities, sale of land and, subject to clause (b)of paragraph 5 of Schedule II, sale of building.

  24. ITC ON THE BASIS OF USE OF INPUTS [SEC 17(2)] exempt supply” means supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt from tax under section 11, or under section 6 of the Integrated Goods and Services Tax Act, and includes non-taxable supply.[ sec 2(47)] (+) Inclusion in deemed exempt supply as per section 17(3)

  25. VALUE OF EXEMPT SUPPLY& INCLUSION [SEC 17(3)] • The value of exempt supply under sub-section (2) shall be such as may be prescribed, and • shall include • supplies on which the recipient is liable to pay tax on reverse charge basis, • transactions in securities, • sale of land and, • subject to clause (b) of paragraph 5 of Schedule II, sale of building.(Construction of complex where Consideration received before completion of construction or first occupancy) Note: For the purposes of this sub-section, the expression "value of exempt supply" shall not include the value of activities or transactions specified in Schedule III, except those specified in paragraph 5 of the said Schedule.[Explanation added by Central Goods and Services Tax (Amendment) Act, 2018. Para 5 of 3 rd schedule: 5. Sale of land and, subject to clause (b)of paragraph 5 of Schedule II, sale of building.

  26. BLOCK CREDIT [S-17(5)]

  27. Separate entry for vessel/aircraft

  28. Whether ITC in respect of insurance of motor vehicle/other conveyance shall be allowed ? If such motor vehicles/conveyance are used for making taxable supply, credit of ITC shall be allowed because it is expressly not covered in blockage of credit. Argument in favour: earlier in the CENVAT credit rule input service exclude among other things (BA) Service of general insurance business, servicing, repair and maintenance, in so far as they relate to a motor vehicle which is not a capital goods. In other words credit was not allowed in respect of insurance, repair and maintenance of motor car. However there are no such express provision excluding such services from the definition of input service. Input service defined under section 2(60) is a wide enough . Input service is defined U/S 2(60) as “input service” means any service used or intended to be used by a supplier in the course or furtherance of business; further credit blockage is only of ITC in respect of motor vehicle and other conveyance. Therefore ITC in respect of insurance or repair may be allowed. Further amendment in section 17(5) w.e.f 01-02-2019 only so earlier period it should be allowed. Argument against: since the credit is not allowed in respect of capital assets itself therefore it should not be allowed in respect of repair insurance thereof.

  29. Blockage of ITC of repair , insurance etcamendment by CGST(Amendment) Act,2018[w.e.f 01-02-2019] Section 17(5)(ab) input tax credit shall not be available in respect of services of general insurance, servicing, repair and maintenance in so far as they relate to motor vehicles, vessels or aircraft, however ITC shall be available • where the motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) are used for the purposes specified therein; • where 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; Note: beneficiary of proposed amendment shall be car manufacturing company and insurance company.

  30. Other block credit [S-17(5)(b)]

  31. Effect of amendment

  32. ITC in respect of travel benefits to employee

  33. Changes related Registration provisions

  34. Change in compulsory registration u/s 24

  35. Multiple registration in a state[proviso u/s 25(2) substituted

  36. Change in rule 11

  37. Definition of business vertical deleted

  38. Suspension of GST registration until cancelled[S-29]

  39. Power of proper officer to suspend cancellation [S-29(2)]

  40. Rule 21- cancellation of registration for non compliance and may be retrospectively also. Registration to be cancelled in certain cases 21. The registration granted to a person is liable to be cancelled, if the said person,— (a) does not conduct any business from the declared place of business; or [(b) issues invoice or bill without supply of goods or services in violation of the provisions of the Act, or the rules made thereunder; or (c) violates the provisions of section 171[ related to Anti-profiteering measure] of the Act or the rules made thereunder.

  41. Two registration required one for SEZ unit and other for non SEZ unit[ New 2nd proviso added to S-25(1)]

  42. Changes in issue of credit notes/debit notes

  43. WHEN CREDIT NOTE WILL BE ISSUED? • taxable value in the tax invoice is found to exceed the taxable value in respect of such supply • tax charged in the tax invoice is found to exceed the tax payable in respect of such supply • goods supplied are returned by the recipient, or • where goods or services supplied are found to be deficient.[S-34(1)]

  44. One or more credit notes may be issued for one or more invoice[ S-34]

  45. One or more debit notes may be issued for one or more invoice[ S-34]

  46. Revised system of ITC adjustment against output tax liability[ S-49 &49-A,49B]

  47. OLD SYSTEM OF INPUT TAX CREDIT UTILIZATION- [SEC 49(4)] The amount available in the electronic credit ledger may be used for • making any payment towards output tax under CGST Act or • under the Integrated Goods and Services Tax Act • in such manner( manner of utilization u/s 49(5)) and • subject to such conditions and within such time as may be prescribed. Meaning of output tax: 2(82) “output tax” in relation to a taxable person, means the tax chargeable under this Act on taxable supply of goods or services or both made by him or by his agent but excludes tax payable by him on reverse charge basis; in other words ITC can't be used for payment of tax under reverse charge.

  48. S-49(5) • The amount of input tax credit available in the electronic credit ledger of the registered person on account of— (a)   integrated tax shall first be utilised towards payment of integrated tax and the amount remaining, if any, may be utilised towards the payment of central tax and State tax, or as the case may be, Union territory tax, in that order; (b)   the central tax shall first be utilised towards payment of central tax and the amount remaining, if any, may be utilised towards the payment of integrated tax; (c)   the State tax shall first be utilised towards payment of State tax and the amount remaining, if any, may be utilised towards payment of integrated tax: [* Provided that the ITC on account of SGST shall be utilised towards payment of IGST only where the balance of the ITC on account of CGST is not available for payment of IGST ;] (d)   the UTGST shall first be utilised towards payment of UTGST and the amount remaining, if any, may be utilised towards payment of IGST :   [* Provided that the input tax credit on account of UTGST shall be utilised towards payment of IGST only where the balance of the input tax credit on account of CGST is not available for payment of IGST ; (e)   the central tax shall not be utilised towards payment of State tax or Union territory tax; and (f)   the State tax or Union territory tax shall not be utilised towards payment of central tax.

  49. Utilisation of input tax credit subject to certain conditions[ S-49A] Notwithstanding anything contained in section 49, the input tax credit on account of CGST, SGST or UTGST shall be utilised towards payment of IGST, CGST , SGST or UTGST , as the case may be, only after the input tax credit available on account of IGST has first been utilised fully towards such payment. Order of utilisation of input tax credit [S-49B] Notwithstanding anything contained in this Chapter and subject to the provisions of clause (e) and clause (f) of sub-section (5) of section 49, the Government may, on the recommendations of the Council, prescribe the order and manner of utilisation of the input tax credit on account of integrated tax, central tax, State tax or Union territory tax, as the case may be, towards payment of any such tax.

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