Amendments in CGST & IGST Acts- Analysis

Amending to the Central Board of Revenue Act, 1963, name of the existing “Central Board of Excise & Customs” (CBEC) has been renamed as “Central Board of Indirect Taxes and Customs” (CBIC) vide Finance Act 2018. Accordingly the changes in clause (4) of section 2 of the CGST Act, 2017 was inevitable.

National Anti-Profiteering Authority constituted under section 171(2) has been excluded from the definition of ‘adjudicating authority’.

The amendment seems to be made to ensure that all activities related to a race club are included in definition of business. Further the activities of a licensed book maker in such club has been specifically brought in the definition of the business. The word ‘services’ used earlier has caused a dispute because as per the Act, actionable claims are goods.

It is worth to note that as per newly inserted rule 31A of CGST Rules (dated 23/01/2018), the value of supply of actionable claim in the form of chance to win in betting, gambling or horse racing in a race club shall be 100% of the face value of the bet or the amount paid into the totalisator. TRU has explained vide circular no. 27/01/2018-GST dated 04/01/2018 that GST would be leviable on the entire bet value i.e. total of face value of any or all bets paid into the totalisator or placed with licensed book makers, as the case may be. Illustration: If entire bet value is Rs. 100, GST leviable will be Rs. 28/-

“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.

Explanation.––For the purposes of this clause, factors that should be considered in determining whether goods or services are related include–

(a) the nature of the goods or services;

(b) the nature of the production processes;

(c) the type or class of customers for the goods or services;

(d) the methods used to distribute the goods or supply of services; and

(e) the nature of regulatory environment (wherever applicable), including banking, insurance, or public utilities;

The term local authority will now also include Development board constituted under Article 371J of the Constitution.

Article 371J grants special status to 6 backward districts of Karnataka-Hyderabad region by empowering the President to establish a separate Board to ensure equitable distribution of funds in the State’s budget to meet the developmental needs of the region

This amendment seems to be effected in order to remove the anomaly that in some cases, even though an activity mentioned in Schedule II did not amount to supply, due to deemed inclusion of such activities in definition of supply, it attracted tax. This defeated the objective of Schedule II, which was to give guidance on whether specified activities were to be treated as supply of goods or services.

Advance Rulings dated 26/03/2018 in case of “Caltech Polymers Private Ltd., Kerala”, the Authorities has declared the canteen services provided as per the provisions of factories Act ,1 948 as supply of services on the basis of the paragraph 6(b), without establishing the said activities as supply. The fate of the said ruling and similar other rulings after this retrospective amendment are in question now.

The amendment has put question marks on tax position taken on many transactions especially on the activities which have been considered as taxable under the entry “agreeing to obligation to refrain from an act or to tolerate an act or a situation or to do an act”. Reference may be made to the advance rulings in case of -Maharashtra State Power Generation Company Limited.

The amended section however confers power to the Central Government to notify the class of persons who will be responsible for paying tax under this section on receipt of specified supplies from unregistered persons. It is expected that in near future class or classes of persons dealing in specific products may be specified for the purpose of section 9(4).

This amendment specifies that the tax under composition scheme is now payable only in lieu of the tax payable u/s. 9(1). In other words tax on reverse charge basis, if payable, will not be as per this scheme and the scheme will not be applicable on tax payable by Electronic Commerce Operator u/s. 9(5).

Amendment of section 9(4) and 10(1) clears the path to make the persons under composition scheme to pay tax on RCM against procurement of taxable goods/ services from unregistered persons for re-supply. Ideally, the lower rate of tax under composition scheme is a lump-sum levy on the value additions by the supplier and such scheme does not change the rate of tax of goods or services.

(i) where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise;

(ii) where the services are provided by the supplier to any person on the direction of and on account of such registered person.
(w.e.f. 01/02/2019)

Explanation

Separate provision is created for blocking ITC in respect of vessel and aircrafts. Earlier these items were included in the term “other conveyances”.

A separate provision has been inserted to specify the blockade of ITC shall be available in respect of services of general insurance, servicing, repair and maintenance in so far as they relate to motor vehicles, vessels and aircraft for which the credit is blocked. It has been further specified that ITC on services of general insurance, servicing, repair and maintenance on motor vehicles, vessels or aircraft is allowed to manufacturer of such motor vehicles, vessels or aircraft and to those engaged in supply of general insurance services in respect motor vehicles, vessels or aircraft insured by them.

Earlier, it was a debatable issue that whether ITC is blocked or not on the aforesaid services in connection with such vehicles and conveyances. The question was unresolved that “Whether the phrase “in respect of” will also include expenses related to such motor vehicle?”. Some of the experts were of view that the same would have wider impact and can covers all the goods and services that are relatable to motor vehicles, however, some were of the view that this phrase is very restricted and is limited to ITC on the purchase of motor vehicles. This amendment has settled the issue for future, but issue of availability of ITC prior to 01/02/2019 is still debatable.

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.
(w.e.f. 01/02/2019)

Blockade of ITC in respect of “rent a cab” has been expanded to the blockade of ITC in respect of 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.

Blockade of ITC in respect of aforesaid supplies has been specified to not applicable in cases where goods or services or both is obligatory for an employer to provide to its employees under any law for the time being in force.

This amendment has excluded the amount of tax levied under entry no. 92A of List I from the value of turnover for the purposes of distribution of credit by ISD.

Entry 92A of List I (Union List) covers “Taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter-State trade or commerce”. In other words this amendment provides that

all type of other taxes i.e. Central Excise, State excise, VT, CST levied on the goods which are outside the scope of GST i.e. petrol, diesel, liquor etc. would not be included in the computation of turnover for the purpose of distribution of credit by ISD.

Provided further that the Government may, at the request of a special category State and on the recommendations of the Council, 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, as may be so notified.

(w.e.f. 01/02/2019)

the expression “special category States” shall mean the States as specified in sub-clause (g) of clause (4) of article 279A of the Constitution except the State of Jammu and Kashmir and States of Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand.

(w.e.f. 01/02/2019)

The threshold limit of turnover for registration for 6 special category States, viz., Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand is increased from ten lakh rupees to twenty lakh rupees.

Total numbers of States have been specified in in sub-clause (g) of clause (4) of article 279A of the Constitution were 11. Prior to this amendment, out of those 11, threshold limit was Rs. 10 lakhs in 10 States. By this amendment, in the context of threshold limit for registration, special status of 6 more states have been removed. In post amendment scenario only four States i.e., Manipur, Mizoram, Nagaland and Tripura only have a lower threshold limit of Rs. 10 Lakhs.

every electronic commerce operator;

every electronic commerce operator who is required to collect tax at source under section 52;

(w.e.f. 01/02/2019)

Earlier every ECO was liable to be registered irrespective of the amount of its turnover. As per the amended provision, only those e-commerce operators who are required to collect tax at source under Section 52 would be required to be registered compulsorily.

It is prudent to mention that vide Notification No. 52/2018 Central Tax dated 13/09/2018, the Central Government has notified that every electronic commerce operator, not being an agent, shall collect an amount calculated at a rate of half per cent. of the net value of intra-State taxable supplies made through it by other suppliers where the consideration with respect to such supplies is to be collected by the said operator.

Thus it appears that the ECO which are not acting as agent and whose turnover is within the threshold limit are not liable to be registered.

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.

(w.e.f. 01/02/2019)

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.

Provided that a person having multiple places of businessin 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.

(w.e.f. 01/02/2019)

Cancellation of registration.

Cancellation or suspension of registration.

(w.e.f. 01/02/2019)

Provided that during 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.

(w.e.f. 01/02/2019)

Provided further that during 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.

(w.e.f. 01/02/2019)

Where a tax invoice has been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply, or where the goods supplied are returned by the recipient, or where goods or services or both supplied are found to be deficient, the registered person, who has supplied such goods or services or both, may issue to the recipient a credit note containing such particulars as may be prescribed.

Where one or more tax invoices havebeen issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply, or where the goods supplied are returned by the recipient, or where goods or services or both supplied are found to be deficient, the registered person, who has supplied such goods or services or both, may issue to the recipient one or more credit notes for supplies made in a financial yearcontaining such particulars as may be prescribed.

(w.e.f. 01/02/2019)

Where a tax invoice has been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to be less than the taxable value or tax payable in respect of such supply, the registered person, who has supplied such goods or services or both, shall issue to the recipient a debit note containing such particulars as may be prescribed.

Where one or more tax invoices havebeen issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to be less than the taxable value or tax payable in respect of such supply, the registered person, who has supplied such goods or services or both, shall issue to the recipient one or more debit notes for supplies made in a financial year containing such particulars as may be prescribed.

(w.e.f. 01/02/2019)

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.

(w.e.f. 01/02/2019)

Provisions relating to audit as per section 35(5) [read with section 44(2) will now be not applicable in case of any department of the Central or State Government/local authority which is subject to audit by CAG. Such departments are not required to get any audit u/s, 35(5).

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 functionsin such manner as may be prescribed.

(w.e.f. 01/02/2019)

Scope of the work of GST practitioner, which was earlier confined to filing of returns has now been expanded and the Government may prescribe some other functions also, which can be performed by GSTP on behalf of the taxable persons.

Provided that the input tax credit on account of State 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;

(w.e.f. 01/02/2019)

The amendment provides that while discharging liability under IGST Act, ITC on account of CGST will be fully utilised prior to the utilisation of ITC on account of SGST. In other words, the credit of SGST can be utilized for payment of IGST only when the balance of the input tax credit on account of CGST is not available for payment of IGST.

Provided that the input tax credit on account of 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;

(w.e.f. 01/02/2019)

The amendment provides that while discharging liability under IGST Act, ITC on account of CGST will be fully utilised prior to the utilisation of ITC on account of UTGST. In other words, the credit of UTGST can be utilized for payment of IGST only when the balance of the input tax credit on account of CGST is not available for payment of IGST.

49A. Utilisation of input tax credit subject to certain conditions.

Notwithstanding anything contained in section 49, the input tax credit on account of central tax, State tax or Union territory tax shall be utilised towards payment of integrated tax, central tax, State tax or Union territory tax, as the case may be, only after the input tax credit available on account of integrated tax has first been utilised fully towards such payment.

(w.e.f. 01/02/2019)

The inserted section provides that credit on account of CGST, SGST/UTGST can be utilised only after exhausting the credit on account of IGST.

Therefore, the manner and priority of utilisation of GST credits is as follows:

a) Credit of IGST shall be utilised first against the liability of IGST, then against the liability of CGST & then against the liability of SGST.

b) Credit of CGST to be utilised for liability of: CGST/ IGST.

c) Credit of SGST to be utilised for liability of: SGST/ IGST.

This may result in input tax credit accumulation and accordingly may affect the cash position of the taxable persons.

49B. Utilisation of input tax credit.

Notwithstanding anything contained in this Chapter and subject to the provisions of clause (e) and clause (f) of sub-section (5) of section 49, the Government may, on the recommendations of the Council, prescribe the order and manner of utilisation of the input tax credit on account of integrated tax, central tax, State tax or Union territory tax, as the case may be, towards payment of any such tax.

(w.e.f. 01/02/2019)

This Section confers special power on the Government to prescribe any specific order of utilization of ITC for payment of taxes, which may even supersede the existing sections of chapter-10.

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, the discrepancy shall be communicated to both persons in such manner and within such time as may be prescribed.

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.

(w.e.f. 01/02/2019)

The words and figure “or section 39” have been inserted to include reference of returns filed by the supplier. Now the details of outward supply u/s. 52 (TCS) may be matched with the details of outward supplies provided by the original supplier in GSTR-1 and also with returns filed under section 39.

refund of tax paid on export of goods or services or both or on inputs or input services used in making such exports;

(w.e.f. 01/02/2019)

This amendment relating to refund provides 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 SEZ developer or unit.

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, 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;

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;

(w.e.f. 01/02/2019)

Receipt of payment in Indian rupees, where permitted, by the RBI in case of export of services is also included in the explanation and thus the condition of receiving the payment only in convertible foreign exchange has been dispensed with.

Similar amendment has also been made in sub-clause (iv) clause (6) of Section 2 of the IGST Act to provide that services shall qualify as exports even if the payment for the services supplied is received in Indian rupees as per RBI regulations.

54 Explanation Clause (2)(e)

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;

(w.e.f. 01/02/2019)

It has now been explained that the relevant date in the case of refund of unutilised ITC arising out of inverted duty structure, shall be the due date for furnishing of return under section 39 for the period in which such claim for refund arises.

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.

(w.e.f. 01/02/2019)

The newly inserted explanation to the section relating to recovery of taxes provides that recovery may be made from distinct persons present in any State(s) / UT(s) in order to ensure recovery from other establishments of the registered person. This section entrust the proper officers with arbitrary power and for the sake of justice some restrictions and conditions are expected on such power.

(6) No appeal shall be filed under sub-section (1), unless the appellant has paid—

(a)in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and

(b)a sum equal to ten per cent. of the remaining amount of tax in dispute arising from the said order, in relation to which the appeal has been filed.

(6) No appeal shall be filed under sub-section (1), unless the appellant has paid—

(a)in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and

(b)a sum equal to ten per cent. of the remaining amount of tax in dispute arising from the said order, subject to a maximum of twenty-five crore rupees,in relation to which the appeal has been filed.

a sum equal to twenty per cent. of the remaining amount of tax in dispute, in addition to the amount paid under sub-section (6) of section 107, arising from the said order, in relation to which the appeal has been filed.

a sum equal to twenty per cent. of the remaining amount of tax in dispute, in addition to the amount paid under sub-section (6) of section 107, arising from the said order, subject to a maximum of fifty crore rupees,in relation to which the appeal has been filed.

(w.e.f. 01/02/2019)

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 sevendays of such detention or seizure, further proceedings shall be initiated in accordance with the provisions of section 130:

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 fourteendays of such detention or seizure, further proceedings shall be initiated in accordance with the provisions of section 130:

(w.e.f. 01/02/2019)

A registered person, other than a person opting to pay tax under section 10, shall be entitled to take, in his electronic credit ledger, the amount of CENVAT credit carried forward in the return relating to the period ending with the day immediately preceding the appointed day, furnished by him under the existing law in such manner as may be prescribed:

A registered person, other than a person opting to pay tax under section 10, shall be entitled to take, in his electronic credit ledger, the amount of CENVAT credit of eligible duties carried forward in the return relating to the period ending with the day immediately preceding the appointed day, furnished by him under the existing law in such manner as may be prescribed:

(w.e.f. 01/07/2017)

the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Textile and Textile Articles) Act, 1978 ( 40 of 1978);

…

(w.e.f. 01/07/2017)

the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Textile and Textile Articles) Act, 1978 (40 of 1978);

(w.e.f. 01/07/2017)

For removal of doubts, it is hereby clarified that the expression “eligible duties and taxes” excludes any cess which has not been specified in Explanation 1 or Explanation 2 and any cess which is collected as additional duty of customs under sub-section (1) of section 3 of the Customs Tariff Act, 1975. (51 of 1975).

(w.e.f. 01/07/2017)

The explanation is inserted w.r.e.f. 01/07/2017 to clarify that the expression “eligible duties and taxes” excludes any cess which has not been specified in Explanation 1 or Explanation 2 above and any cess which is collected as additional duty of customs under sub-section (1) of section 3 of the Customs Tariff Act, 1975.

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.

(w.e.f. 01/02/2019)

Vide the amendment Act, a proviso is inserted in Section 143 to provide that the prescribed periods may, on sufficient cause being shown, be extended by the Commissioner for a limited period.

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.

Import of services by a person from a related person or from any of his other establishments outside India, in the course or furtherance of business.

(w.e.f. 01/02/2019)

Import of services by unregistered person in furtherance of business are made liable to tax when received from a related person or from any of their establishments outside India.

ACTIVITIES TO BE TREATED AS SUPPLY OF GOODS OR SUPPLY OF SERVICES

ACTIVITIES OR TRANSACTIONSTO BE TREATED AS SUPPLY OF GOODS OR SUPPLY OF SERVICES

(w.e.f. 01/07/2017)

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.

(w.e.f. 01/02/2019)

(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.

(w.e.f. 01/02/2019)

The paragraph has been inserted to expand the scope of transactions which are neither supply of goods and nor supply of services. It excludes the transactions involving movement of goods from one non-taxable territory to another non-taxable territory from the net of GST. This is to be noted that the above amendment is connected with supply of goods only and not with supply of services.

Circular no. 33/2017 – Cus. dated 1st August, 2017and Circular no. 3/1/2018-IGST dated 25th May, 2018may be referred to. Advance ruling in the case of M/s. BASF India Limited, Maharashtra, dated 21/05/2018 may also be referred to.

Though in absence of any specific indication of retrosepective effect it seems to be operative with prospective effect only, but in view of the circulars issued in the past where it has been held that such transactions are not exigible to GST, a view could be that the insertion in the entry is also retrospective.

(w.e.f. 01/02/2019)

For the purposes of paragraph 8, the expression “warehoused goods” shall have the same meaning as assigned to it in the Customs Act, 1962.

(w.e.f. 01/02/2019)

This amendment is made to include the provisions relating to the new return format and system as specified in the newly inserted Section 43A, for availment of ITC.

The time limit for filing the return has been omitted from the section and the power to prescribe the time of furnishing such returns has been provided to the Government. Omission of time limit in the section has also paved the way for inserting the proviso containing provisions of quarterly returns.

Newly inserted proviso has brought in the possibility of quarterly returns and has empowered the Government to notify certain classes of registered persons, who shall furnish quarterly returns.

It seems prudent to mention that the amendment relating to quarterly returns u/s. 39 will come in force with prospective effect only. No power has been provided u/s. 39 with retrospective effect to prescribe any quarterly return.

The proviso seems to have been inserted in order to provide for prescribing the procedure for monthly payment of taxes even for quarterly filing of returns.

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 the return to be furnished for the month or quarter during which such omission or incorrect particulars are noticed, subject to payment of interest under this Act:

Straight jacket law of rectifying the errors in returns in the period in which such errors are noticed has been dispensed with and the Rule making authority has been empowered to prescribe the form and manner for such rectifications.

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, or the actual date of furnishing of relevant annual return, whichever is earlier.

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, to be maintained in such manner as may be prescribed.

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.

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.

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.

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.

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.

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.

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.

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.

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,—

within six months of taking registration; 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.

This newly inserted section 43A provides for prescribing the procedure for furnishing of returns and availing of ITC. As per this section, the tax on details of outward supplies declared by the supplier will be deemed to be payable by the supplier.

However, the supplier and recipient have been made jointly and severally liable to pay tax for details furnished/ not furnished by the supplier in respect of which the return has not been furnished.

Explanation 1.—For the purposes of sub-sections (3), (4) and (6), the expression “eligible duties” means––

Explanation 1.—For the purposes of sub-sections (1), (3), (4) and (6), the expression “eligible duties” means––

(w.e.f. 01/07/2017)

Explanation 2.—For the purposes of sub-section (5), the expression “eligible duties and taxes” means––

Explanation 2.—For the purposes of sub-sections (1) and (5), the expression “eligible duties and taxes” means––

(w.e.f. 01/07/2017)

the payment for such service has been received by the supplier of service in convertible foreign exchange; and

established by any Government, with ninety per cent. or more participation by way of equity or control, to carry out any function entrusted to a municipality under article 243W of the Constitution;

The obligation on the registered persons of paying tax on reverse charge basis against receipt of taxable supplies from unregistered person has been removed. Earlier the applicability of this provision was postponed w.e.f. 12/10/2017 till 30/09/2019.

The amended section however confers power to the Government to notify the class of persons who will be responsible for paying tax under this section on receipt of specified supplies from unregistered persons.

Similar changes has also been made in section 9(4) of the CGST Act.

an establishment in a State or Union territory and any other establishment being a business vertical registered within that State or Union territory,

an establishment in a State or Union territory and any other establishment registered within that State or Union territory,

As per the newly inserted proviso, in case of transportation of goods from India to other country, the place of destination of such goods will be the place of supply of transportation service. Thus transportation of goods from India to other country

by a transporter located in India will be termed as export of services and accordingly GST will not be levied on such services.

Earlier the services in respect of goods temporarily imported into India for repairs were treated as export of services as because the places of supply in such cases were the location of the recipient of services. By this amendment, the scope of the proviso has been expanded and similar provision will be applicable on services in respect to goods which are temporarily imported in India for job work i.e., any other treatment or processing.

The amount not apportioned under sub-section (1) and sub-section (2) may, for the time being, on the recommendations of the Council, be apportioned at the rate of fifty per cent. to the Central Government and fifty per cent. to 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.

This newly inserted sub-section provides that the amount of IGST which does not get apportioned under clauses (a) to (f) for the time being shall be apportioned to the Central Government and State Governments/Union Territories @ 50% each on the recommendations of the Council and shall be adjusted against the amounts apportioned under clauses (a) to (f).