GST (Amendment) Act, 2018 from 1st February 2019
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The President of India gave assent on 29th August 2018 to make amendments to following GST laws:
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The Central Goods and Services Tax (Amendment) Act 2018
*The Integrated Goods and Services Tax (Amendment) Act 2018
The Union Territory Goods and Services Tax (Amendment) Act 2018*
The Goods and Services Tax (Compensation to States) Amendment Act 2018.
The GST council in its 31st GST Council Meeting held on 22nd December 2018, has announced through the press release that the effective date of applicability of amendments in GST Act(s) 2018 will be from 1st February 2019.
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GST law
Changes to Central GST Act 2017
Following are the Changes in the Relevant Sections of CGST Act 2017 by replacing it with the Central GST Amendment Act 2018:
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Changes in Definitions
Scope of Supply
Levy and collection
Composition scheme
Time of supply of goods
Time of supply of goods
conditions for taking the input tax credit
Apportionment of credit and blocked credits
Distribution of credit by Input Service Distributor
Persons liable for registration
Compulsory registration
Procedure for registration
Cancellation of registration
Credit and debit notes
Accounts and other records
Procedure for furnishing return and availing input tax credit
Payment of tax, interest, penalty and other amounts
Utilisation of input tax credit subject to certain conditions
Order of utilisation of input tax credit
Collection of tax at source
Refund of tax
Recovery of tax
Appeals to Appellate Authority
Appeals to Appellate Tribunal
Detention, seizure and release of goods and conveyances in transit
Transitional arrangements for the input tax credit
Job work procedure
Schedule II
Schedule III#####too big list
Definitions of CGST Act 2017
Section 2(4). Adjudicating Authority:
New Definition: “adjudicating authority” means any authority, appointed or authorised to pass any order or decision under this Act, but does not include the Central Board of Indirect Taxes and Customs, the Revisional Authority, the Authority for Advance Ruling, the Appellate Authority for Advance Ruling, the Appellate Authority, the Appellate Tribunal and the Authority referred to in sub-section (2) of section 171”
Earlier Definition: “adjudicating authority” means any authority, appointed or authorised to pass any order or decision under this Act, but does not include the Central Board of Excise and Customs, the Revisional Authority, the Authority for Advance Ruling, the Appellate Authority for Advance Ruling, the Appellate Authority and the Appellate Tribunal;
Section 2(17) (h). Definitions of CGST Act 2017: business
New Definition: activities of a race club including by way of totalisator or a license to bookmaker or activities of a licensed bookmaker in such club; and
Earlier Definition: services provided by a race club by way of totalisator or a licence to bookmaker in such club; and
Section 2(18). Definitions of CGST Act 2017: business vertical
This definition has been deleted in its entirety.
Earlier Definition: “business vertical” means a distinguishable component of an enterprise that is engaged in the supply of individual goods or services or a group of related goods or services which is subject to risks and returns that are different from those of the other business verticals.
Section 2(35). Definitions of CGST Act 2017: cost accountant
New Definition: “cost accountant” means a cost accountant as defined in clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959.
Earlier Definition: “cost accountant” means a cost accountant as defined in clause (c) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959.
Section 2(69) (f). Definitions of CGST Act 2017: local authority
New Definition: a Development Board constituted under article 371 and article 371J of the Constitution;
Earlier Definition: a Development Board constituted under article 371 of the Constitution;
Section 2(102). Definitions of CGST Act 2017: services
New Definition: “services” means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged;
Explanation.––For the removal of doubts, it is hereby clarified that the
expression “services” includes facilitating or arranging transactions in
securities;
Earlier Definition: “services” means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged;
Section 7. The scope of supply:
Amended relating to “Scope of Supply” in order to clarify the scope of supply
(1)(b)
Replaced clause: import of services for consideration whether or not in the course or furtherance of business and;
Earlier clause: import of services for consideration whether or not in the course or furtherance of business;
(1)(c)
Replaced clause: the activities specified in Schedule I, made or agreed to be made without a Consideration;
[Note: The word “and” after the word “consideration” is omitted and always deemed to have been omitted]
Earlier clause: the activities specified in Schedule I, made or agreed to be made without consideration; and
(1)(d)
This clause has been deleted in its entirety.
Earlier clause: the activities to be treated as supply of goods or supply of services as referred to in Schedule II.
(1A) newly inserted after sub-section (1) of Section 7:
“ 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 ”
(3)
Replaced sub-section: Subject to the provisions of sub-sections (1), (1A) and (2), the Government may, on the recommendations of the Council, specify, by notification, the transactions that are to be treated as—
(a) a supply of goods and not as a supply of services; or
(b) a supply of services and not as a supply of goods.
Earlier sub-section: (3) Subject to the provisions of sub-sections (1) and (2), the Government may, on the recommendations of the Council, specify, by notification, the transactions that are to be treated as—
(a) a supply of goods and not as a supply of services; or
(b) a supply of services and not as a supply of goods.
Section 9. Levy and collection:
Amended so as to restrict the levy of tax on reverse charge basis under Section 9(4) on receipt of supplies of certain specified categories of goods or services or both by notified classes of registered persons from unregistered suppliers on the recommendations of the Council. This is against the earlier provision that was applicable for all purchases from the unregistered supplier.
Section 10. Composition levy:
Amended so as to raise the statutory threshold of turnover for a taxpayer to be eligible for the composition scheme from Rs 1 crore to Rs 1.5 crores, and to allow the composition taxpayers to supply services (other than restaurant services), for up to a value not exceeding ten per cent. of turnover in the preceding financial year, or five lakh rupees, whichever is higher.
Section 12. Time of supply of goods:
Amended and the said amendment is drafting in nature.
12(2)(a)
Replaced clause: the date of issue of invoice by the supplier or the last date on which he is required, under section 31, to issue the invoice with respect to the supply; or
[Note: The word “under sub-section (1) of” is omitted]
Earlier clause: the date of issue of invoice by the supplier or the last date on which he is required, under sub-section (1) of section 31, to issue the invoice with respect to the supply; or
Section 13. Time of supply of services:
Amended and the said amendment is drafting in nature.
Replaced clauses:
(a) the date of issue of invoice by the supplier, if the invoice is issued within the period prescribed under section 31 or the date of receipt of payment, whichever is earlier; or
(b) the date of provision of service, if the invoice is not issued within the period prescribed under section 31 or the date of receipt of payment, whichever is earlier; or
[Note: The word “under sub-section (2) of” is omitted in both clauses]
Earlier clauses:
(a) the date of issue of invoice by the supplier, if the invoice is issued within the period prescribed under sub-section (2) of section 31 or the date of receipt of payment, whichever is earlier; or
(b) the date of provision of service, if the invoice is not issued within the period prescribed under sub-section (2) of section 31 or the date of receipt of payment, whichever is earlier; or
Section 16. Eligibility and conditions for taking the input tax credit:
Amended in order to provide for the input tax credit in cases of “Bill- to-ship-to” model in the case of supply of services. The said Amendment further seeks to include the provisions relating to the new return format as specified in the proposed new section 43A, for availing the input tax credit.
Section 17. Apportionment of credit and blocked credits:
Amended in order to further expand the scope of eligibility of input tax credit.
Newly inserted explanation to Section 17(3):
‘Explanation.—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.’;
Section 17(5) amended as follows:
Clause (a) and (b) replaced with (a), (aa), (ab) and (b):
Replaced clauses:
(a) 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 making the following taxable supplies, namely:—
(A) further supply of such motor vehicles; or
(B) transportation of passengers; or
(C) imparting training on driving such motor vehicles;
(aa) vessels and aircraft except when they are used––
(i) for making the following taxable supplies, namely:—
(A) further supply of such vessels or aircraft; or
(B) transportation of passengers; or
(C) imparting training on navigating such vessels; or
(D) imparting training on flying such aircraft;
(ii) for transportation of goods;
(ab) services of general insurance, servicing, repair and maintenance in so far as they relate to motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa):
Provided that the input tax credit in respect of such services shall be available—
(i) where the motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) are used for the purposes specified therein;
(ii) 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;
(b) the following supply of goods or services or both—
(i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, leasing, renting or hiring of motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) except when used for the purposes specified therein, life insurance and health insurance:
Provided that the input tax credit in respect of such 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;
(ii) membership of a club, health and fitness centre; and
(iii) travel benefits extended to employees on vacation such as leave or home travel concession:
Provided that the input tax credit in respect of such goods or services or both shall be available, where it is obligatory for an employer to provide the same to its employees under any law for the time being in force.”.
Earlier clause (a) and (b):
(a) motor vehicles and other conveyances except when they are used––
(i) for making the following taxable supplies, namely:—
(A) further supply of such vehicles or conveyances ; or
(B) transportation of passengers; or
(C) imparting training on driving, flying, navigating such vehicles
or conveyances;
(ii) for transportation of goods;
(b) the following supply of goods or services or both—
(i) food and beverages, outdoor catering, beauty treatment, health services,
cosmetic and plastic surgery except where an inward supply of goods or services or both of a particular category 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;
(ii) membership of a club, health and fitness centre;
(iii) rent-a-cab, life insurance and health insurance except where––
(A) the Government notifies the services which are obligatory for an
employer to provide to its employees under any law for the time being in
force; or
(B) such inward supply of goods or services or both of a particular
category is used by a registered person for making an outward taxable
supply of the same category of goods or services or both or as part of a
taxable composite or mixed supply; and
(iv) travel benefits extended to employees on vacation such as leave or
home travel concession;
Section 20. The manner of distribution of credit by Input Service Distributor:
Amended in order 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.
Replaced clause (c) of the explanation: the term ‘‘turnover’’, in relation to any registered person engaged in the supply of taxable goods as well as goods not taxable under this Act, means the value of turnover, reduced by the amount of any duty or tax levied under entries 84 and 92A of List I of the Seventh Schedule to the Constitution and entries 51 and 54 of List II of the said Schedule.
Earlier clause (c) of the explanation: the term ‘‘turnover’’, in relation to any registered person engaged in the supply of taxable goods as well as goods not taxable under this Act, means the value of turnover, reduced by the amount of any duty or tax levied under entry 84 of List I of the Seventh Schedule to the Constitution and entries 51 and 54 of List II of the said Schedule.
Section 22. Persons liable for registration:
Amended so as to increase the threshold turnover for registration in special category States of Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand from ten lakh rupees to twenty lakh rupees.
Section 24. Compulsory registration in certain cases:
Amended so as to provide for mandatory registration for only those e-commerce operators who are liable to collect tax at source under section 52 of the Act.
Replaced clause (x) every electronic commerce operator who is required to collect tax at source under section 52
Earlier clause (x) every electronic commerce operator
Section 25. Procedure for registration:
Amended also as to allow persons having multiple places of business in a State or Union territory to obtain a separate registration for each such place of business, and to insert the provisions for separate registration for a person having a unit(s) in a Special Economic Zone or being a Special Economic Zone developer, distinct from his other units located outside the Special Economic Zone.
Newly inserted second proviso under sub-section (1):
“Provided further that a person having a unit, as defined in the Special Economic Zones Act, 2005, in a Special Economic Zone or being a Special Economic Zone developer shall have to apply for a separate registration, as distinct from his place of business located outside the Special Economic Zone in the same State or Union territory.”
Proviso to Section 25(2):
Replaced proviso: Provided 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.
Earlier Proviso: Provided that a person having multiple business verticals in a State or Union territory may be granted a separate registration for each business vertical, subject to such conditions as may be prescribed.
Section 29. Cancellation of registration:
Amended so as to provide for temporary suspension of registration while the cancellation of registration is under process.
in the marginal heading after the word “Cancellation”, the words “or suspension” shall be inserted;
in sub-section (1), after clause (c), the following proviso shall be inserted, namely:—
“Provided that during the pendency of the proceedings relating to cancellation of registration filed by the registered person, the registration may be suspended for such period and in such manner as may be prescribed.”;
in sub-section (2), after the proviso, the following proviso shall be inserted, namely:—
“Provided further that during the pendency of the proceedings relating to cancellation of registration, the proper officer may suspend the registration for such period and in such manner as may be prescribed.”.
Section 34. Credit and debit notes:
Amended so as to allow registered persons to issue consolidated credit or debit notes in respect of multiple invoices issued in a Financial Year, by replacing sub-section (1) and (3), at words: “Where a tax invoice has” or “a credit note” or “a debit note” with “Where one or more tax invoices have” or “one or more credit notes for supplies made in a financial year” or “one or more debit notes for supplies made in a financial year” respectively.
Section 35. Accounts and other records:
Amended so as to provide that any Department of the Central or State Government or local authority which is subject to audit by the Comptroller and Auditor-General of India need not get their books of account audited by any Chartered Accountant or Cost Accountant.
Newly inserted proviso
“Provided that nothing contained in this sub-section shall apply 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.”.
Section 39. Furnishing of returns: Amended so as to provide for prescribing the procedure for quarterly filing of returns with monthly payment of taxes.
Replaced sub-section (1):
Every registered person, other than an Input Service Distributor or a
non-resident taxable person or a person paying tax under the provisions of section 10 or section 51 or section 52 shall, for every calendar month or part thereof, furnish, in such form, manner and within such time as may be prescribed, a return, electronically, of inward and outward supplies of
goods or services or both, input tax credit availed, tax payable, tax paid and such other particulars as may be prescribed. on or before the twentieth day of the month succeeding such calendar month or part thereof.
Newly inserted proviso to sub-section (1):
“Provided that the Government may, on the recommendations of the Council, notify certain classes of registered persons who shall furnish return for every quarter or part thereof, subject to such conditions and safeguards as may be specified therein.”;
Newly inserted proviso to sub-section (7)
“Provided that the Government may, on the recommendations of the
Council, 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.”;
Replaced sub-section (9) and its proviso:
Subject to the provisions of sections 37 and 38, if any registered person
after furnishing a return under sub-section (1) or sub-section (2) or sub-section (3) or sub-section (4) or sub-section (5) discovers any omission or incorrect particulars therein, other than as a result of scrutiny, audit, inspection or enforcement activity by the tax authorities, he shall rectify such omission or incorrect particulars in such form and manner as may be prescribed, subject to payment of interest under this Act:
Provided that no such rectification of any omission or incorrect particulars shall be allowed after the due date for furnishing of return for the month of September or second quarter following the end of the financial year to which such details pertain, or the actual date of furnishing of relevant annual return, whichever is earlier.
Section 43A: Procedure for furnishing return and availing input tax credit.
Newly inserted section:
“43A. (1) Notwithstanding anything contained in sub-section (2) of section 16, section 37 or section 38, every registered person shall in the returns furnished under sub-section (1) of section 39 verify, validate, modify or delete the details of supplies furnished by the suppliers.
(2) Notwithstanding anything contained in section 41, section 42 or section 43, the procedure for availing of input tax credit by the recipient and verification thereof shall be such as may be prescribed.
(3) The procedure for furnishing the details of outward supplies by the supplier on the common portal, for the purposes of availing input tax credit by the recipient shall be such as may be prescribed.
(4) The procedure for availing input tax credit in respect of outward supplies not furnished under sub-section (3) shall be such as may be prescribed and such procedure may include the maximum amount of the input tax credit which can be so availed, not exceeding twenty per cent. of the input tax credit available, on the basis of details furnished by the suppliers under the said sub-section.
(5) The amount of tax specified in the outward supplies for which the details have been furnished by the supplier under sub-section (3) shall be deemed to be the tax payable by him under the provisions of the Act.
(6) The supplier and the recipient of a supply shall be jointly and severally liable to pay tax or to pay the input tax credit availed, as the case may be, in relation to outward supplies for which the details have been furnished under sub-section (3) or sub-section (4) but return thereof has not been furnished.
(7) For the purposes of sub-section (6), the recovery shall be made in such manner as may be prescribed and such procedure may provide for non-recovery of an amount of tax or input tax credit wrongly availed not exceeding one thousand rupees.
(8)The procedure, safeguards and threshold of the tax amount in relation to outward supplies, the details of which can be furnished under sub-section (3) by a registered person,—
(i) within six months of taking registration;
(ii) who has defaulted in payment of tax and where such default has continued for more than two months from the due date of payment of such defaulted amount, shall be such as may be prescribed.”.
Section 48. Goods and services tax practitioners: Amended so as to allow Goods and Services Tax Practitioners to perform other functions such as filing the refund claim, filing the application for cancellation of registration, etc.
Replaced sub-section (2) by inserting words highlighted:
A registered person may authorise an approved goods and services tax practitioner to furnish the details of outward supplies under section 37, the details of inward supplies under section 38 and the return under section 39 or section 44 or section 45 and to perform such other functions in such manner as may be prescribed.
Section 49. Payment of tax, interest, penalty and other amounts:
Amended in order to provide that the credit of State tax or Union territory tax can be utilised for payment of integrated tax only when the balance of the input tax credit on account of central tax is not available for payment of integrated tax.
Replaced Sub-section (2):
The input tax credit as self-assessed in the return of a registered person shall be credited to his electronic credit ledger, in accordance with section 41 or section 43A, to be maintained in such manner as may be prescribed.
Inserted new provisos below clause (c) and (d)
“Provided that the input tax credit on account of State tax/Union Territory Tax shall be utilised towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax;”
Section 49A : Utilisation of input tax credit subject to certain conditions:
Newly inserted: This Section seeks to specify that a taxpayer would be able to utilise the input tax credit on account of central tax, State tax or Union territory tax only after exhausting all the credit on account of integrated tax available to him towards payment or integrated tax, Central tax, State tax or Union territory tax.
Section 49B: Order of utilisation of input tax credit:
Newly inserted: This Section seeks to empower the Government to prescribe any specific order of utilisation of input tax credit of any of the taxes for the payment of any tax.
Section 52: Collection of tax at source:
Amended in order to give the reference of section 39 of CGST Act 2017 Furnishing of Returns
Replaced sub-section (9):
Where the details of outward supplies furnished by the operator under sub-section (4) do not match with the corresponding details furnished by the supplier under section 37 or section 39, the discrepancy shall be communicated to both persons in such manner and within such time as may be prescribed.
Section 54. Refund of tax:
Amended in order to provide that the principle of unjust enrichment will apply in case of a refund claim arising out of supplies of goods or services or both made to a Special Economic Zone developer or unit, and to allow receipt of payment in Indian rupees, where permitted, by the Reserve Bank of India in case of export of services.
Replaced clause (a) of sub-section (8) of Section 54:
“refund of tax paid on export of goods or services or both or on inputs or input services used in making such exports;”
[Note: replaced the word ‘zero-rate supplies’ with ‘exports’]
Replaced item 1 of clause (c) to point (2)-Relevant date of the explanation as follows:
“In the case of services exported out of India where a refund of tax paid is available in respect of services themselves or, as the case may be, the inputs or input services used in such services, the date of––
(i) receipt of payment in convertible foreign exchange or in Indian rupees wherever permitted by the Reserve Bank of India, where the supply of services had been completed prior to the receipt of such payment; or
(ii) issue of invoice, where payment for the services had been received
in advance prior to the date of issue of the invoice;”
Replaced the clause (e) to point (2)-Relevant date of the explanation is as follows:
In the case of refund of unutilised input tax credit under clause (ii) of the first proviso to sub-section (3), the due date for furnishing of return under section 39 for the period in which such claim for refund arises;
Section 79. Recovery of tax:
Amended to enable recovery to be made from distinct persons registered in different States or Union territories in order to ensure a speedy recovery from other establishments of the registered person by inserting following explanation:
‘Explanation.––For the purposes of this section, the word person shall include “distinct persons” as referred to in sub-section (4) or, as the case may be, sub-section (5) of section 25.’.
Section 107. Appeals to Appellate Authority:
Amended Authority”, in order to specify twenty-five crore rupees as the upper limit of the amount of pre-deposit payable for the filing of appeal before the Appellate Authority.
Section 112. Appeals to Appellate Tribunal:
Amended in order to specify fifty crore rupees as the upper limit of the amount of pre-deposit payable for the filing of appeal before the Appellate Tribunal.
Section 129. Detention, seizure and release of goods and conveyances in transit:
Amended in order to increase the time limit before which proceedings shall be initiated.
Replaced sub-section(6) of Section 129:
Where the person transporting any goods or the owner of the goods fails to pay the amount of tax and penalty as provided in sub-section (1) within fourteen days of such detention or seizure, further proceedings shall be initiated in accordance with the provisions of section 130.
Section 140. Transitional arrangements for the input tax credit:
Amended in order to clarify with retrospective effect from 1st July 2017 that the 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.
Section 143. Job work procedure:
Amended in order to empower the Commissioner to extend the time limit for return of inputs and capital goods sent on job work, up to a period of one year and two years, respectively.
Newly inserted second proviso to Section 143(1)(b):
“Provided further that the period of one year and three years may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding one year and two years respectively.”.
In SCHEDULE I. of CGST Act 2017 “Activities to be treated as supply even if made without consideration”. : Amended
Replaced para 4 is as follows:
Import of services by a taxable person from a related person or from any of his other establishments outside India, in the course or furtherance of business.
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SCHEDULE II of CGST Act 2017:
Amended the title of Schedule II of the principal Act from “Activities to be treated as a supply of goods or supply of services” to “Activities or transactions to be treated as a supply of goods or supply of services”.
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SCHEDULE III of CGST Act 2017:
“Activities or transactions which shall be treated neither as a supply of goods nor a supply of services”.
Newly inserted paras after 6:
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.”;
Newly inserted explanation 2:
‘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.’.
Changes in IGST Act 2017
Following are the Changes in the Relevant Sections of IGST Act 2017 by replacing it with the Integrated GST Amendment Act 2018:
Section 2(6). Definitions. “export of services
Section 2(16). Definitions. “non-taxable online recipient”
Section 5. Levy and collection:
Amended to empower the Central Government to notify classes of registered persons to pay tax on reverse charge basis in respect of receipt of supplies of certain specified Categories of goods or services or both from unregistered suppliers;
Section 8. Intra-State supply.
Words ‘‘being a business vertical’’ shall be omitted.
Section 12. Place of supply of services where the location of supplier and recipient is in India:
Amended to provide that if the transportation of goods is to a place outside India, the place of supply shall be the place of destination of such goods;
Section 13. Place of supply of services where the location of supplier or location of the recipient is outside India:
Provisions of Section 13(1)(3)(a) Amended and shall not apply in the case of services supplied in respect of goods which are temporarily imported into India for repairs or for any other treatment or process and are exported after such repairs or treatment or process without being put to any use in India, other than that which is required for such repairs or treatment or process;
Section 17. Apportionment of tax and settlement of funds:
Amended to make a provision for settlement of balance in the integrated tax account equally between the Central Government and the State Governments or the Union territories, as the case may be, on ad hoc basis and shall be adjusted against the amount apportioned under the said sub-sections.
Section 20. Application of provisions of Central Goods and Services Tax Act.
Amended to specify the amount of pre-deposit payable for the filing of appeals —
(a) before the Appellate Authority to be capped at fifty crore rupees;
(b) before the Appellate Tribunal to be capped at one hundred crore rupees.
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# ICAI: Those who have not paid membership fee for the year 2018-19 and their names have been removed from the membership, please get your Membership restored by filing Form-9.
# MCA: The Companies (Amendment) Ordinance, 2019 has been notified to give continued effect of The Companies (Amendment) Ordinance, 2018, which was to cease to operate w.e.f. 21.01.2019.
# GST: Detention Order – The Proper Officer realizing the non-compliance of the mandate U/s 129(4), proceeded to pass the rectification order after taking into consideration the objections - Hence, NO malafides – Bright Road Logistics Pvt. Ltd. Vs CTO (2019 (1) TMI 678 - Karnataka HC).
# IT: Assessment u/s 153A - addition u/s 68 - surrender made under pressure, immediately retracted, no other adverse material found from the premises of the appellant, as such, statement cannot be made the basis for the assessment – B. R. Associates Pvt. Ltd. Vs ACIT (2019 (1) TMI 697 - ITAT Delhi).
# IT: TDS u/s 195 - payments made to non-residents for professional fees - assessee was having option of choosing more favourable provisions of the DTAAs – ACIT Vs Grant Thornton (2019 (1) TMI 692 - ITAT Delhi).
# IT: Disallowance u/s 14A(1) - shares held as stock-in-trade is a business activity and not investments made by assessee in order to fall within the ambit of Rule 8D (iii) – PNB Vs Addl.CIT (2019 (1) TMI 689 - ITAT Delhi).
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E-publication on Exempted Supplies under GST
In order to facilitate Chartered Accountants and other stakeholders in understanding the exemptions under GST, Indirect Taxes Committee of ICAI has released an E-publication on Exempted Supplies under GST.
An explicit approach has been embraced in this E-publication for providing a crisp and precise view of elaborative provisions in relation to exempted supply of goods and services. Various important exemptions have been thoroughly analysed in addition to principle and classification of exemption.
To access the same, please click the below link
https://goo.gl/DRCuao
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ELSS: Why Equity Linked Savings Scheme is the best tax saving investment option for you
There are various investment options available in the market for tax saving. However, ELSS beats all other tax-saving options. Here's why.
The onset of the last quarter of the financial year starts the mad rush towards various tax-saving investments available under Section 80C. However, with multiple tax-saving instruments to choose from and very little time spared for comparing them, most investors end up with instruments offering sub-optimal returns and low liquidity.
Here are the main reasons why Equity Linked Savings Scheme (ELSS) beats others as the best tax-saving option:
Why ELSS beats all other tax-saving options
1. Highest returns
As ELSS schemes primary invest in equities, their returns would primarily depend on the performance of their portfolio constituents. While equities as an asset class can be very volatile in the short term, they outperform other asset classes, especially fixed-income products like debt mutual funds, fixed deposits etc., by a wide margin over the long term. Investors with a long-term horizon can easily expect at least 12% annualised returns from ELSS.
For instance, ELSS as a category generated an average annualized return of about 16% and 17% p.a. over the last 5-year and 10-year periods. Some of the top performing ELSS funds like Aditya Birla Sun Life Tax Relief 96, ICICI Prudential Long-Term Equity Fund and Franklin India Tax Shield have delivered higher annualized returns of over 19%, 20% and 18% over the last 10-year period, respectively.
2. Shortest lock-in period
ELSS schemes have the lowest lock-in period of 3 years among all Section 80C options. Among other Section 80C options, ULIPs, tax-saving fixed deposits and National Saving Certificate (NSC) have lock-in periods of 5 years whereas PPF has a lock-in period of 15 years. National Pension Scheme (NPS) investments stay locked-in till your retirement. Thus, ELSS offers the best liquidity among all Section 80C schemes.
3. Tax-free returns and maturity proceeds
Prior to this financial year, ELSS used to fall under the EEE (exempt-exempt-exempt) category. The investment amount, maturity proceeds and dividend income were entirely tax-free. However, the Budget 2018 brought ELSS gains under the ambit of long-term capital gains (LTCG) tax net by taxing its LTCG along with those of other equity and equity-related instruments exceeding Rs 1 lakh per financial year @ 10%. As the LTCG of less than Rs 1 lakh remains tax-free, ELSS investments for most individual investors are likely to remain tax free in practice. Among Section 80C options, only PPF and ULIP offer tax-free maturities. However, the entire maturity proceeds of ULIPs would become taxable if the premium paid exceeds 10% of the sum assured. Among other Section 80C options, interest earned on NSC and tax-saving fixed deposits from banks and post office are taxed according to the investors’ tax slabs.
4. Instills financial discipline
As with other mutual funds, ELSS schemes allow investing through the Systematic Investment Plan (SIP) mode. SIP allows one to spread his investment across several months or even years, which helps in averaging the investment cost during market dips and corrections. The automatic deduction of investment enforces regular savings and investment.
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🌴Whether input tax credit of goods or services should be claimed on the ground that a building has been used in the course or furtherance of business if that building is constructed for providing renting of immovable property services?
🌴🌴 Section 17(5)(d) of the CGST Act 2017 states that input tax credit is blocked on goods or services received by a taxable person for construction of an immovable property on his own account. Only if he does not wish to retain the property but provide further supplies of
works contract services, input tax credit can be allowed.
This means that a person who receives on the property on own account will not be able to take input tax credit. The after use of the property is immaterial once the title of the property belongs to the recipient. So, input tax credit will not be available in respect of goods or services used for construction of property even though the intent is to provide
the said property on rent.
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# Upcoming Due Dates
- 18-01-2019- GSTR-4, Quarterly return for composition dealer
- 20-01-2019- GSTR-3B for the m/o December 2018
# IDTC issued E-publication on Exempted Supplies under GST dt. 16.01.2019
https://idtc-icai.s3-ap-southeast-1.amazonaws.com/download/knowledgeShare18-19/E-publication-Exempted-Supplies-GST.pdf
# GST : CA certificate required for supply of goods against Advance Authorisation within 6 months. However, no such certificate shall be required if ITC has not been availed on inputs used in manufacture of export goods.
Notification No. 1/2019-Central Tax dt. 15-01-2019
http://www.cbic.gov.in/htdocs-cbec/gst/notfctn-01-central-tax-english-2019.pdf
# Case Law : No Penalty u/'s 271(1)(c) if returned and assessed income are same
Armoury International Vs ACIT (ITAT Mumbai) dt. 01.01.2019
# Case law : Absence of price reduction after GST Rate reduction proves Profiteering Shri Surya Prakash Loonker Vs M/s Excel Rasayan Pvt. Ltd (National Anti-Profiteering Authority) dt. 16.01.2019
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NCLT (Principal Bench) : In Technology Development Board vs. Logic Eastern (India) Pvt. Ltd. & Ors.
Tribunal is not supposed to ascertain the quantum of amount of default or to pass a decree as to how much is actually due to Financial Creditor.
Read full case law at : https://dasgovernance.com/2019/01/15/nclt-principal-bench-in-technology-development-board-vs-logic-eastern-india-pvt-ltd-ors/
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# ICAI: IDT Committee has entered into an arrangement to provide the GST contents of the website https://www.taxmanagementindia.com (TMI) at 50% discount at Rs.2,500/- (plus taxes) p.a. to the members of ICAI.
# PMLA: Ministry of Finance (MoF) amends Prevention of Money-laundering (Restoration of Confiscated Property) Amendment Rules, 2016 by inserting Rule-3A Manner of restoration of property during trial – N.N.G.S.R.23(E), dt.11.01.19.
# IT: Addition u/s. 68 - unexplained cash credit - since no books of account are maintained in the ordinary course of business of the assessee, no such addition u/s 68 of the Act is tenable – Nitin Agarwal (HUF) & Ors Vs ITO (2019 (1) TMI 651 - ITAT Delhi).
# IT: Income from purchase and sale of shares - majority of the profits earned are through buying and selling of shares which taken place within a period of 10 days and 100% share transactions were completed within one month - Since the assessee has treated the securities as investment, the revenue is not permitted to take a contrary view – Lakshmikant Inani Vs ACIT (2019 (1) TMI 649 - ITAT Hyd).
# IT_TP - Assessment u/s 144C - Definition of ‘eligible assessee’ would equally apply to the proceedings remanded to the AO for fresh adjudication when the variation in income or loss returned which is prejudicial to the interest of the assessee arises as a consequence of the order of the TPO – Pr.CIT Vs NT Back Office Services Pvt. Ltd. (2019 (1) TMI 597 - Delhi HC).
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👉Finance Ministry asks the Public Sector Banks(PSBs) to gradually bring down the Government's Equity to 52%. Dilution of Govt Stake will help banks to meet 25% Public Float Norms of SEBI.
👉Govt plans to provide Credit Guarantee for term loans of up to Rs 100 Crore as well as Interest Subsidy on loans up to Rs 1,000 Crore for Electronic Manufacturing Companies under the new National Policy on Electronics in works. It has proposed "Credit Guarantee Fund" (CGF) scheme and "Interest Subvention Scheme" (ISS) to boost Electronics Manufacturing Ecosystem in the country.
👉Central Govt. gives Additional Incentives to Jammu & Kashmir to promote investment in the state. The 4 incentives -- Employment Incentive, Transport Incentive, Reimbursement of Central Share of CGST and IGST, Reimbursement of Central Share of Income Tax - have been provided under the Revised Industrial Development Scheme for J&K.
👉RBI imposes a penalty of Rs 1 Crore on Bajaj Finance for deficiencies in regulatory compliance & for violation of 'Fair Practices Code of Master Direction DNBR'
👉NSE to list Well-Governed Firms in New Category to help New Investors & Investors will soon be able to track all companies with High Standards of Corporate Governance in a special category on the NSE.
👉IDFC Bank has changed its name to IDFC First Bank following the merger of Capital First with the private sector lender with effect from January 12, 2019
👉India beats China in Paper Market Growth despite Dumping Fears. India has emerged as the World’s Fastest Growing Paper Market with a Compounded Annual Growth Rate (CAGR) of 6-7%, cocking a snook at China, the biggest consumer of paper globally.
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The Government is planning to integrate NHAI’s FASTag mechanism from April to help track movement of goods and check GST evasion. The Department of Revenue has set up a committee including officers to integrate e-way bill, FASTag and DMIC’s Logistics Data Bank (LDB) services, after consultation with transporters. “It has come to our notice that some transporters are doing multiple trips by generating a single e-way bill. Integration of e-way bill with FASTag would help find the location of the vehicle and when and how many times it has crossed NHAI’s toll plazas
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Work contract 12% Vs 18% Serial No. 3(vi) Sl No Heading Description of the service Rate Condition (1)(2)(3)(4)(5) 3 9954 Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Service Tax Act, 2017, provided to the Central Government, State Government, Union Territory, a local authority, a Governmental Authority or a Government Entity by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of-a civil structure or any other original work meant predominantly for use other than for commerce, industry, or any other business or profession:a structure meant predominantly for use as (i) an educational, (ii) a clinical, or (iii) an art or cultural establishment: ora residential complex predominantly meant for self-use or the use of their employees or other persons specified in paragraph 3 of the Schedule III of the Central Goods and Service Tax Act, 2017.****6**2-12% if ***"Provided that where the services are supplied to a Government Entity, they should have been procured by the said entity in relation to a work entrusted to it by the Central Government, State Government, Union territory or local authority, as the case may be.
###, therefore, evident that the Applicant is supplying works contract service for an original work that is meant for commerce and business. It does not, therefore, satisfy the conditions laid down under Serial No. 3(vi)(a) of the Rate Notification. The Applicant’s supply of works contract service for construction of the Multi-modal IWT Terminal at Haldia, therefore, attracts GST at 18% rate under Serial No. 3(xii) of the Rate
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Case Study: Default in issuing Form 16 Salary TDS certificates makes employer liable to prosecution - Ramprakash Biswanath Shroff Vs CIT (TDS) (Bombay High Court)
Case Study: Merely holding shares for a short period will not convert capital gain into business income - Pr. CIT Vs M/s Viksit Engineering Ltd. (Bombay High Court)
Case Study: Section 148 notice cannot be issued against deceased Assessee - Rajender Kumar Sehgal Vs ITO (Delhi High Court)
Case Study: HC should have condoned delay in removing office objections: CIT Vs M/s Reliance Industries Ltd. (Supreme Court of India)
ICAI: Training Programme for Refreshers / Untrained Peer Reviewers / Other Members wanting to understand and implement Best Practices in their Practice Units, at Hotel Park, 15, Parliament Street, New Delhi, on 19.1.2019, Saturday.
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a) Eway Bill to Integrate Soon with NHAI FASTag https://bit.ly/2QPDqIY
b) 5 Point Agenda for GoM on Real Estate GST - Includes Valuation, Rates and Development Rights https://bit.ly/2QQTtGg
c) Income Tax Bonanza for Salaried Class Coming in this Budget https://bit.ly/2FrtyUB
d) India Levies Anti Dumping Duty on Certain Chinese Chemicals for 5 Years https://bit.ly/2FCoQCH
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NCLAT : In B. Govinda Ramesh vs. Vinyasa Engineering Pvt. Ltd. & Ors.
Tribunal is not required to suo-moto go through all the issues if during the hearing the parties do not address rest of the issues.
Read full case law at : https://dasgovernance.com/2019/01/16/nclat-in-b-govinda-ramesh-vs-vinyasa-engineering-pvt-ltd-ors/