17-08-2017
GST NOTIFICATIONS
CGST ACT
CGST ACT
v Exemption from RCM to the TDS deductors, in case of intra-state supplies received from unregistered person
The Government has provided exemption, on the intra-state supplies made by unregistered person and received by the persons responsible for deducting tax at source, from paying whole of the tax under RCM i.e. the supplies made to a TDS deductor by an unregistered dealer is exempt.
As per section 51 of the CGST Act, it is required that:
‘A department or establishment of the Central Government or State Government, local authority, Governmental agencies or such persons or category of persons as may be notified by the Government, to deduct TDS @ 1% from the payment made or credited to the supplier of taxable goods or services or both, where the total value of such supply, under a contract, exceeds Rs.2.5 lakhs’.
This exemption is subject to a condition that the TDS deductor is not liable to be registered otherwise then by way of Compulsory registration under CGST Act, 2017. The persons who are required to deduct tax under section 51 of the CGST Act are required to be compulsorily registered under GST i.e. if the supply made to the TDS deductor exceeds Rs.2.5 lakhs under a contract.
The corresponding notification for the same have been issued under the UTGST Act i.e. Notification No. 9/2017-UTGST (Rate) dated 28.06.2017.
SSKM Comments:
The exemption is allowed to the persons covered under Section 51 who are providing NIL rated, wholly exempt or non-taxable supplies of goods or services, if they are required to deduct TDS. One of the example is Electricity Boards of State Governments.
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N. No. 9/2017-CGST (Rate) dated 28.06.2017
v CGST exemption for dealers operating under Margin Scheme notified
The Government has exempted the intra-state supplies of second hand goods, from whole of the tax under RCM, made by the unregistered person to the registered dealer engaged in the business of buying and selling the second hand goods and who pays GST on the value of outward supply of such second hand goods.
Therefore, if a registered dealer of second hand goods purchases second hand goods from an unregistered person, the transaction will not attract GST, in case of intra-state supplies. Further, when the dealer sells the goods to its customers, the GST will be charged on the margin money as per the valuation rules. So, here only taxes on the margin money is paid to the Government.
In case the registered dealer is purchasing the second hand goods from a registered person, the transaction will attract GST. Further, when the dealer sells the goods to its customers, the GST will be charged on the margin money as per the valuation rules, if the ITC is not availed. So, here both the GST charged on the purchases of goods and taxes on the margin money is paid to the Government.
Hence, the benefit has been given to the dealer, in case of intra-state supplies, who deals with the unregistered supplier, for not paying the GST under RCM.
The corresponding notification for the same have been issued under the UTGST Act i.e. Notification No. 10/2017-UTGST (Rate) dated 28.06.2017 and GST (Compensation to states) Act i.e. Notification No. 4/2017-Compensation Cess (Rate) dated 20.07.2017.
E.g. 1: Intra-state supply from unregistered person to the registered dealer of second hand goods
The registered dealer will further sell it to the
customer, at say Rs.100.So, the GST will be
charged on the margin money i.e. on Rs.40 as
per the valuation rules and GST on Rs.60 is
exempt by virtue of this notification.
E.g. 2: Any supply from registered person to the registered dealer of second hand goods
The registered person selling the second
value) i.e. GST of Rs.6 (say 10% rate).
The registered dealer will further sell it to the
customer, at say Rs.100. So, the GST will be
charged on the margin money i.e. on Rs.40 as
per the valuation rules, if the ITC of Rs.6 is not
availed and on Rs.100, if the ITC of Rs.6 will
be availed.
N. No. 10/2017-CGST (Rate) dated 28.06.2017
v Notifications related to the Supply of Services
1. The Government has notified vide Notification No. 11/2017-CGST (rate) dated 28.06.2017, the schedule of GST rates for all the services along with the service accounting codes and the conditions. The corresponding notification for the same have been issued under the IGST Act i.e. Notification No. 8/2017-IGST (Rate) dated 28.06.2017 and UTGST Act i.e. Notification No. 11/2017-UTGST (Rate) dated 28.06.2017.
2. The Government has notified vide Notification No. 12/2017-CGST (rate) dated 28.06.2017, the schedule for the exempted services along with the conditions for exemption. The corresponding notification for the same have been issued under the IGST Act i.e. Notification No. 9/2017-IGST (Rate) dated 28.06.2017 and UTGST Act i.e.Notification No. 12/2017-UTGST (Rate) dated 28.06.2017.
v Services by Government, a local authority etc. by way of any activity relating to any function entrusted to a Panchayat are exempted from GST
The Government has notified that the activities in relation to a function entrusted to Panchayat would not be subject to GST, where these activities or transactions are undertaken by the Central Government or State Government or any local authority in which they are engaged as public authority.
Such activities shall neither be treated as supply of goods nor supply of services for the purpose of the GST.
The activities in relation to a function entrusted to a Panchayat under article 243G of the Constitution of India are
a) the preparation of plans for economic development and social justice;
b) the implementation of schemes for economic development and social justice as may be entrusted to them including those in relation to the matters listed in the Eleventh Schedule.
The corresponding notification for the same have been issued under the IGST Act i.e. Notification No. 11/2017-IGST (Rate) dated 28.06.2017 and UTGST Act i.e. Notification No. 14/2017-UTGST (Rate) dated 28.06.2017.
