RECENT DEVELOPMENTS IN GST V Raghuraman GST COUNCIL

RECENT DEVELOPMENTS IN GST V. Raghuraman.

GST COUNCIL RECOMMENDATIONS V. Raghuraman.

32 nd 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, 2018 along 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. 2019 for 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.

32 nd 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.

32 nd 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.

32 nd 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.

31 st 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 12 AA of the Income-tax Act shall be exempted. V. Raghuraman.

31 st 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.

31 st 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.

Notifications V. Raghuraman.

Registration and returns Notification No. Nature of amendment 67/2018 – CT Dt. 31. 12. 20 18 Seeks to extend time limit to complete registration process to the persons who did not file the complete FORM GST, but received only a Provisional Identification Number (PID). Time limit to supply information for the purpose of completion of the registration is extended till 31 st January 2019 (from 31 st August 2018). Similarly, the time limit to submit the information such as GSTIN, ARN etc. , through email has been extended till 28 th Feb. 2019 V. Raghuraman.

Registration and returns Notification No. Nature of amendment 68/2018 -CT 69/2018 -CT 70/2018 -CT 71/2018 -CT 72/2018 -CT Dt 31. 12. 2018 Consequent to the extension of time limit to complete the registration, this notification seeks to extend the time limit for furnishing the return in FORM GSTR-3 B /GSTR-1 for such migrated taxpayers. The new due date for filing GSTR-3 B would be 31 st March 2019 V. Raghuraman.

TDS- exemption Notification No. Nature of amendment Notification Seeks to exclude the supplies between Government No. 73/2018 Departments and PSUs to other Government Departments from the application of provision relating to Tax deduction at source. Therefore, where the supplies are by one entity (which is notified as entity which is required to deduct tax), to another entity which is also notified as required to deduct tax, then in such cases, no TDS would be required on such supplies. V. Raghuraman.

Amendment to CGST Rules- Notification 74/2018 dt. 31. 12. 2018 Rule Nature of amendment dt. 12 Provides for manner of registration for a person required to collect tax in terms of Section 52, where such person does not have physical presence in the state where he is required to collect tax. The principal place will be responsible. 45(3) Requirement of reporting movement of goods between one job worker to another job worker in GST-ITC-04 is not required. 46, 49 In case where electronic invoice (bill of supply / ISD invoice/ & 54 consolidated invoice/ ticket) is issued in accordance with the provisions of the Information Technology Act, 2000, then in such cases, the requirement of signature or digital signature on the invoice is not required. V. Raghuraman.

Amendment to CGST Rules- Notification 74/2018 dt. 31. 12. 2018 Rule Nature of amendment dt. 89(5) The said rule deals with the procedure for claiming refund in case of inverted duty structure. The definitions relating to the phrases ‘adjusted total turnover’ and ‘relevant period’, earlier was defined specifically under this sub- rule. Now with this amendment, these phrases have the same meaning as contained in sub-rule (4) which deals with refund of accumulated credit on account of exports. V. Raghuraman.

Amendment to CGST Rules- Notification 74/2018 Rule Nature of amendment 96 The said rule deals with refund of IGST paid on exports. In terms of sub-rule (1) the shipping bill would be deemed to be an application for refund where the person in charge of the conveyance carrying the export goods duly files an export manifest or an export report covering the number and the date of shipping bills or bills of export The amendment is to include the words ‘ a departure manifest’ along with export manifest. Therefore, where the person in charge of conveyance files a departure manifest, then the shipping bill would be the application to claim refund of tax paid on export goods. This amendment is in line with the Notification No. 38/ 2018 -Customs (N. T. ) which introduced Sea Cargo Manifest and Transhipment Regulations, 2018 effective from 1 st August 2018 V. Raghuraman.

Amendment to CGST Rules- Notification 74/2018 Rule Nature of amendment 101 Seeks to provide for audit of the records for the part of the financial year. 109 B Seeks to introduce new rule 109 B, which prescribes the procedure for undertaking revision in terms of Section 108. 138 For the purpose of meaning of ‘handicraft goods’, reference from notification has been changed from 32/2017 to 56/2018 consequent to former’s supercession. 138 E Restriction on furnishing information in Part A of E-way bill in case where returns for a consecutive period of 2 months/2 periods is not filed. Effective date from which this rule would be applicable is yet to be notified. 142(5) Provides that summary of the orders issued under section 73(9), 74(9) and 76(9) shall be uploaded electronically in GST DRC-07. the said rule has been amended to include orders issued under section 75(12) which deals with recovery of the taxes declared in returns but not paid. V. Raghuraman.

Late fee for delayed filing of returns Notification Nature of return 75/2018 31. 12. 2018 GSTR-1 Where GSTR-1, for the period from July 2017 till September 2018, was not filed, but filed between the dates, 22. 12. 2018 – 31. 03. 2019, the late fee would be waived 76/2018 31. 12. 2018 GSTR-3 B Where GSTR-3 B, for the period from July 2017 till September 2018, was not filed, but filed between the dates, 22. 12. 2018 – 31. 03. 2019, the late fee would be waived. For assessee who have already filed albeit belatedly, the late fee is reduced to Rs. 25 per day of default, except in case of NIL returns, which is Rs. 10 per day of default 77/2018 31. 12. 2018 GSTR-4 Where GSTR-4, for the period from July 2017 till September 2018, was not filed, but filed between the dates, 22. 12. 2018 – 31. 03. 2019, the late fee would be waived 78/2018 31. 12. 2018 ITC-04 Time limit to file GST-ITC-04 (job work return), for the period from July 2017 to December 2018, is extended to 31. 03. 2019 V. Raghuraman.

Jurisdiction of officer 79/2018/ Amends Notification 2/2017 which prescribes the powers of the officers. In terms of the amendment, the officers mentioned in column (3) of the table or officers subordinate to such officer, could exercise his jurisdiction of officer specified in column(2), as may be assigned by the Board. V. Raghuraman.

Removal of difficulty orders Order No. 04/2018– Extends the due date for furnishing the statement in 31. 12. 201 FORM GSTR-8 by e-commerce companies for the 8 months of October 2018 to December, 2018 till 31. 01. 2019. 03/2018– Extends the due date for furnishing of annual returns in 31. 12. 201 FORM GSTR-9, FORM GSTR-9 A and reconciliation 8 statement in FORM GSTR-9 C for the FY 2017 -2018 till 30. 06. 2019. 2/2018 – A. Extends the due date for availing ITC on the invoices 31. 12. 201 or debit notes relating to such invoices issued during 8 the FY 2017 -18 B. Allows rectification of errors in GSTR-1 till due date for V. Raghuraman. furnishing GSTR-1 for the month of March 2019

IGST Rules – determination of place of supply Integrated Goods and Services Tax Rules, 2017 Rule 4 -9 has been inserted in Integrated Goods and Services Tax Rules, 2017 to provide for manner of determination of place of supply of services where the supply of services attributable to different States or Union territories Rule 4 Determination of place of supply relating to immovable property services Rule 5 Services relating to admission to or organising of event Rule 6 Supply of leased circuit Rule 7 Supply of services wherein goods are required to made available to the service provider in terms of Section 13(7) of the IGST Act, 2017 Rule 8 Determination of place of supply relating to immovable property services in terms of Section 13(7) of the IGST Act, 2017 Rule 9 Services relating to admission to or organising of event in terms of Section 13(7) of IGST Act, 2017 V. Raghuraman.

Circulars and clarifications 87/06/2019 Credit of Service tax in terms of section 140(1) is eligible to be carried 2. 01. 2019 forward and the same is linked to the stock available Credit on cessess is not eligible to be carried forward 86/05/2019 01. 2019 Clarification regarding value of services supplied by Business facilitators and Business Correspondents to Banks : Valuation: value of service charged by Bank whether directly from customer or through business facilitator shall be considered to be value for the purpose of payment of GST Exemption to rural accounts: classification as to which is rural branch as adopted by the bank in terms of RBI guidelines should be accepted 85/04/2019 01. 2019 Clarification on food and beverage services supplied by educational institution. Thought rate notification specifies that the supply of food at canteen in the premises of educational institution would attract 5% tax rate, the same would be exempt from GST if the conditions specified under notification 12/2017 -CT(R) are fulfilled V. Raghuraman.

Circulars and clarifications 84/03/2019 01. 2019 “printing of pictures” falls under service code “ 998386 and is liable to tax at 18% 83/02/2019 01. 2019 The services provided by International Finance Corporation (IFC) and Asian Development Bank (ADB) are exempt from GST in terms of provisions of IFC Act, 1958 and ADB Act. The exemption will be available only to the services provided by ADB and IFC and not to any entity appointed by or working on behalf of ADB or IFC 82/01/2019 01. 2019 Exemption to IIMs a. for the period from 1 st. July, 2017 to 30 th. January, 2018, GST exemption would be available only to three long duration programs specified above b. from 31 st. January, 2018 to 31 st. December, 2018, IIMs can avail exemption either under Sl. No 66 or Sl. No. 67 of the said notification for the eligible programmes V. Raghuraman.

Circulars and clarifications Circular # Clarifications 81/55/2018 GST 31. 12. 2018 “sprinklers”, in the said entry 195 B, covers sprinkler irrigation system. Accordingly, sprinkler system consisting of nozzles, lateral and other components would attract 12% GST rate 80/54/2018 31. 12. 2018 Issues relating to classification of Animal feed, Chhatua, Fish meal etc. are clarified V. Raghuraman.

Circulars and clarifications- refund- 79/53/201831. 12. 2018 Various issues relating to refund are being clarified Physical submission of refund claims with jurisdictional proper officer: Due to the non-availability of the complete electronic refund module, circulars 17/17/2017 -GST dated 15. 11. 2017 and Circular No. 24/24/2017 -GST dated 21. 12. 2017 were issued prescribing manual filing of refund application after filing GST RFD-01 A through online. In view of the hardships faced by the tax payers, the process is further, simplified so as to allow submission of documents online rather than submitting physical copies. However, at the option of the assessee, he could still submit the documents in physical form. Calculation of refund amount for claims of refund of accumulated Input Tax Credit(ITC) on account of inverted duty structure: Refund on account of inverted duty structure where inputs attracting multiple involved, has been explained by way of an illustration. V. Raghuraman. rates are

Circulars and clarifications- refund- 79/53/201831. 12. 2018 Various issues relating to refund are being clarified Disbursal of refund amounts after sanction: Tax shall be considered to have been refunded only when the amount has been credited to the bank account of the claimant. Therefore, interest will be calculated starting from the date immediately after the expiry of sixty days from the date of receipt of application till date of deposit Refund applications that have been generated on the portal but not physically received in the jurisdictional tax offices: A. All applications for refund less than Rs. 1000/- refund be rejected and the amount to be credited back to the electronic credit ledger. B. The claimants who have not submitted the physical documents were not submitted would have to be sent communication to comply within 15 days and to be communicated that if not submitted within 15 days, the refund would be rejected and the and amount to be credited back to the electronic credit ledger / cash ledger (as the case may be). V. Raghuraman.

Circulars and clarifications- refund- 79/53/201831. 12. 2018 Various issues relating to refund are being clarified Issues related to refund of accumulated Input Tax Credit of Compensation Cess: Clarifications regarding refund of accumulated compensation cess on account of zero rated supplies: A. Where credit of compensation was not availed earlier: refund on account of compensation cess is to be recomputed as if the same was available in the respective months in which the refund of unutilized credit of CGST/SGST/UTGST/IGST was claimed on account of exports made under LUT/Bond. If the aggregate of these recomputed amounts of refund of cess B. Refund of cess paid on coal used in generation of electricity which in turn used in manufacture of exported goods: refund is eligible even though the coal is. V. Raghuraman. used indirectly in exports

Circulars and clarifications- refund- 79/53/201831. 12. 2018 Various issues relating to refund are being clarified C. ITC on cess availed but reversed later and considered as cost in books: ITC reversed cannot be claimed as refund as the same is considered as cost and deduction for IT purposes would have been claimed. Non consideration of ITC of GST paid on invoices of earlier period availed in subsequent period: ITC could be availed at any due date for filing returns for the month of September next financial year or date of filing of annual returns, which ever is earlier. Therefore refund cannot be rejected where credit is availed on the invoices issued in the earlier months to which refund is being claimed. V. Raghuraman.

Circulars and clarifications- refund- 79/53/201831. 12. 2018 Various issues relating to refund are being clarified Interpretation of ‘inputs’: ITC on inputs is available where such goods are used or intended to be used for business. Therefore, credit / refund on spares, packing materials etc. , cannot be denied. Refund of credit of input services and capital goods in case of inverted duty structure: It is clarified that both the law and the related rules clearly prevent the 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 V. Raghuraman.

Circulars and clarifications Circular # Clarifications 78/52/2018 - Clarifications on export of services using a third party located outside 31. 12. 2018 India to perform the services. In terms of the clarifications: a) Services by Indian exporter to foreign recipient is termed as exporter even if part of the consideration is directly paid by recipient to foreign third party service provider; b) Services provided by third party service provider would be import of service in the hands of the Indian exporter. 77/51/2018 - Clarifications regarding effective date from which the exit from / denial 31. 12. 2018 of composition scheme would be applicable: a) In case of application by the assessee to exit from composition scheme, the date indicated in the CMP-04. b) In case of denial of option by the tax authorities, the effective date of such denial shall be from a date, including any retrospective date as may be determined by tax authorities, but shall not be V. Raghuraman. prior to the date of contravention of the provisions.

Circulars and clarifications 76/50/2018 - 31. 12. 2018 a) Clarifications on the issue of sale of scrap or used goods by Governments to registered /unregistered persons: A. Sale to registered persons: registered recipient is liable to pay on reverse charge basis; B. Sale to unregistered persons: Government department would be liable to pay GST b) Penalty under section 73(11) is not payable for delayed filing GSTR-3 B. c) In case of revision of prices on goods or services supplied prior to 01. 07. 2017, the rate as per the provisions of the GST Acts(both CGST and SGST or IGST) would be applicable for issuance of supplementary invoice or debit note etc. d) TCS (under income tax provisions) collected from buyer on sale of scrap shall be added to value for the purpose of payment of GST e) TDS provisions in terms of section 51 would be applicable to entities which are set up under an act of Parliament / State Legislature and is controlled by Central or State Government. Therefore, to qualify as person liable to TDS, both the conditions are applicable. V. Raghuraman.

GST AMENDMENT ACT V. Raghuraman.

Definition: 1. 1. Adjudicating authority [Section 2(4)]: Ø Amendment to replace CBIC in the place of CBEC and also to exclude authority for anti profiteering referred to in Section 171(2). Ø Orders of the authority for anti profiteering would not be considered to be appealable orders before appellate authority. V. Raghuraman.

Definition: Business [Section 2(17)] Ø Among other things, certain transactions relating to race clubs are covered under the definition of business. Ø 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. Ø Earlier, only the services by way of totalisator and license to book maker in such club was covered. V. Raghuraman.

Definition: Business Vertical [Section 2(18)] Ø 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. Ø With this amendment, an assessee could obtain separate registration for each place of business within a State also. ØSuitable amendments are carried out in registration provisions also. V. Raghuraman.

Definition: Cost Accountant [Section 2(35)]: ØThe 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). ØThe 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.

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

Definition: Services [section 2(102)] Ø To amend the definition o of service so as to include the activity of facilitating or arranging transactions in securities as services. ØThis 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.

Supply [section 7]- Retrospective from 1. 7. 2017 Ø 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.

Supply: [section 7 & Sch. I] Ø 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. Ø 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. Ø The said entry has been amended to provide that import of services by ‘a person’ from related persons etc. Ø This seems to cover import of services by a non taxable persons without consideration from a relative etc. V. Raghuraman.

Supply: [section 7 & Sch. III] Ø In terms of Section 7(2) activities listed in Schedule III are not considered to be supplies for the purpose of levy of GST. Ø 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.

Levy on reverse charge basis: [Section 9(4)] ØSection 9(4) prior to its amendment provided for levy of GST on supplies to a registered person from an unregistered person. ØUp 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.

Composition: [Section 10] Ø Amendment so as to raise the maximum limit of turnover for becoming eligible to this scheme to Rs. 1. 50 crores. Ø 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 subsections of section 9. Ø 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.

Time of Supply: [Section 12 & 13] Ø 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. Ø 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 subsection(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.

Input Credit: [Section 16 -17] Ø 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. ØWith introduction of new set of provisions under section 43 A to facilitate filing of returns, the input tax credit is made subject to filing of the return under said new provision. V. Raghuraman.

Input Credit: [Section 16 -17] ØValue 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. Ø V. Raghuraman.

Input Credit: [Section 16 -17] Ø 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.

Input Credit: [Section 16 -17] Ø 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.

Input Credit: [Section 16 -17] Ø 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.

Input Credit: [Section 16 -17] Ø 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.

Input Credit: [Section 16 -17] Ø Input credit restrictions: Ø d) the following supply of goods or services or both: I. Food, insurance and leasing etc. (i) food and beverages, outdoor catering, (ii) beauty treatment, health services, cosmetic and plastic surgery, (iii) leasing, renting or hiring of motor vehicles, vessels or aircraft referred above in the paragraphs (a) and (b) above except such vehicles etc. , are used for the purposes specified therein. (iv) Life insurance and health insurance. V. Raghuraman.

Input Credit: [Section 16 -17] Ø Input credit restrictions: I. Food, insurance and leasing etc. (continuation) However, input tax credit in respect of above referred goods or services or both shall be available where an inward supply of such goods or services or both is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply. V. Raghuraman.

Input Credit: [Section 16 -17] Ø Input credit restrictions: II. Membership of a club, health and fitness center; III. Travel benefits extended to employees on vacation such as leave or home travel concession However, it shall be noted that the input tax credit in respect of such goods or services or both referred to above shall be available, where it is obligatory for an employer to provide to its employees under any law for the time being in force. V. Raghuraman.

Registration: [Section 22 -29] Ø Explanation defining ‘special category states’ is amended so as to exclude States of Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand from the ambit of special category states apart from state of Jammu & Kashmir. Ø Further, new proviso in Section 22(1) is inserted to empower the Central Government, on the recommendation of the Council, to enhance the aggregate turnover referred to in the first proviso from ten lakh rupees to such amount, not exceeding twenty lakh rupees and subject to such conditions and limitations, for the special category states. V. Raghuraman.

Registration: [Section 22 -29] Ø Compulsory registration for Electronic Commerce Operator in terms of Section 24(x) is being proposed to be amended to restrict to the E-Commerce operator who is required to collect tax at source under section 52. Therefore, those E-Commerce operators who are notified as required to collect tax in terms of section 52 would not be required to compulsorily get registered. Ø SEZ unit or developer of SEZ shall be required to obtain separate registration. Such unit / developer is considered as a distinct from his place of business outside the SEZ. V. Raghuraman.

Registration: [Section 22 -29] Ø Consequent to omission of phrase ‘business vertical’, the provisions under section 25 is amended to provide that a person having multiple places of business in a State or Union territory may be granted a separate registration for each such place of business, subject to such conditions as may be prescribed. Ø Provisions of section 29 relating to cancellation of registration is amended to provide for suspension of registration during the process of cancellation. V. Raghuraman.

Debit & Credit Note: [Section 34] Ø Provisions of Section 34 relating to Credit and debit notes, is amended so as to allow registered persons to issue consolidated credit or debit notes (as the case may be) in respect of multiple invoices issued in a Financial Year. V. Raghuraman.

Accounts: [Section 35] Ø Section 35(5) provides that every registered person whose turnover during a financial year exceeds the prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant and shall submit a copy of the audited annual accounts, the reconciliation statement under sub-section (2) of section 44 such other documents in such form and manner as may be prescribed. Ø Amendment to the above sub-section so as to exclude the application of the above sub-section (5) to any department of the Central Government or a State Government or a local authority, whose books of account are subject to audit by the Comptroller and Auditor-General of India or an auditor appointed for auditing the accounts of local authorities under any law for the time being in force. Ø In summary, such departments referred to above, need not get their accounts audited by the chartered accountant or a cost accountant and also are not required to furnish reconciliation statement etc. V. Raghuraman.

Returns: [Section 39] Ø Amendment to section 39 so as to empower the Central Government to make rules to fix time limit within which the returns shall be filed and also to notify certain category of assesses who could file the returns on quarterly basis. Ø Amendment is also made to empower the Central Government to notify certain classes of registered persons who shall pay to the Government the tax due or part thereof as per the return on or before the last date on which he is required to furnish such return, subject to such conditions and safeguards as may be specified therein. Ø The above amendments are to allow quarterly filing of returns for the assesses who has turnover of less than Rs. 5 crores. Ø Rectification of errors: Amendment to section 39 so as to empower central government to prescribe the procedure to rectify the errors and also allow such rectification to be made within the end of financial year which such details pertain or the actual date of furnishing of relevant annual return, whichever is earlier V. Raghuraman.

Returns: [Section 43 A] Ø New section 43 A is inserted to prescribe procedure for furnishing return and availing input tax credit. Ø This is to ensure simplification of return procedure GST Practitioners: [Section 48] Ø Amendment to Section 48 so as to increase the scope of work that could be carried out by GST practitioners V. Raghuraman.

Payment of Tax: [Section 49, 49 A and 49 B] Ø Summary of the amendments are as below: a) Payment of tax utilising the input credit is subject to the provisions section 41 and new provisions under section 43 A; b) Manner of Credit of Integrated tax/ Central Tax / Tax is made more clear. Credits of the above shall be utilised only where credit remains after payment of respective taxes. V. Raghuraman.

Payment of Tax: [Section 49, 49 A and 49 B] Ø Summary of the amendments are as below: a) Payment of tax utilising the input credit is subject to the provisions section 41 and new provisions under section 43 A; b) Manner of Credit of Integrated tax/ Central Tax / Tax is made more clear. Credits of the above shall be utilised only where credit remains after payment of respective taxes. V. Raghuraman.

Refunds: [Section 54] Ø Principles of unjust enrichment were earlier not made applicable to refund of accumulated credit on account of Zero rated supplies. However, with the amendment, the said exclusion would be only to refund on account of exports and therefore, refund on account of SEZ supplies would have to satisfy the principles of unjust enrichment. Ø Receipt of consideration in INR wherever permitted by the Reserve Bank of India, is also considered for the purpose of relevant date. In other words, the same would also be considered as receipt in convertible forex. Ø monthly refund facility to the taxable person having inverted tax structure V. Raghuraman.

Refunds: [Section 54] Ø Refund of accumulated credit which was earlier eligible on account of Zero rated supplies, would now be restricted to exports. SEZ supplies would get excluded for the refund purposes. Ø Receipt of consideration in INR wherever permitted by the Reserve Bank of India, is also considered for the purpose of relevant date. In other words, the same would also be considered as receipt in convertible forex. Ø monthly refund facility to the taxable person having inverted tax structure. V. Raghuraman.

Recovery: [Section 79] Ø For the purpose of recovery, person includes distinct person. Pre-deposit for appeal: [Section 107&112] Ø Upper limit of pre-deposit for filing appeal before the Commissioner (Appeals) is fixed at 25 Crore Rupees Ø Similarly, Rs. 50 crore would be the upper limit for appeals before the Tribunal V. Raghuraman.

Detention [Section 129] Ø For the purpose of payment of tax+ interest + penalty for release of detained goods, the time limit has been extended from 7 days to 14 days Transition Provisions 140 (retrospective from 1. 7. 2017) Ø Transition of the cesses is restricted Job work 143 Ø Commissioner could extend the time period within which the inputs / capital goods have to be returned from job worker for a further period of 1 year or 3 years V. Raghuraman.

Amendments to IGST Act, 2017 Ø Receipt of consideration in INR wherever permitted by the Reserve Bank of India, is also considered as receipt in convertible forex. Ø Place of supply of transportation of goods shall be the destination of such goods even though the supplier and recipient of services are located in India. (proviso to Section 12(8)) Ø Place of supply for goods imported in to India temporarily for the purpose of treatment would not get covered under section 13(3). In other words the place of supply shall be location of the recipient of supply V. Raghuraman.

• V. RAGHURAMAN, B. Com, FCA, ACS, Grad. CWA, LLB. Advocate 466, 9 th Cross, 1 st Block, Jayanagar, Bangalore 560011. V. Raghuraman.