CBIC has issued Notification No. 44/2019-Central Tax to  Notification No. 49/2019-Central Tax on 9th October 2019 under CGST Act, 2017 Read with CGST Rules, 2017 which have great implications on the organization as a whole. Kindly find our analysis of the various Notifications;

1. Summary of GST Notifications dated 09th October 2019

Sr. No. Notification No. Date of Notification Description
1 Notification No. 44/2019-Central Tax 09/10/2019 Prescribe the due date for furnishing of return in FORM GSTR-3B for the months of October, 2019 to March, 2020
2 Notification No. 45/2019-Central Tax 09/10/2019 The due date for furnishing FORM GSTR-1 for registered persons having aggregate turnover of up to 1.5 crore rupees for the quarters from October, 2019 to March, 2020
3 Notification No. 46/2019-Central Tax 09/10/2019 Due date for furnishing of return in FORM GSTR-1 for registered persons having aggregate turnover more than 1.5 crore rupees for the months of October, 2019 to March, 2020
4 Notification No. 47/2019-Central Tax 09/10/2019 Seeks to make filing of annual return under section 44 (1) of CGST Act for F.Y. 2017-18 and 2018-19 optional for small taxpayers whose aggregate turnover is less than Rs 2 crores and who have not filed the said return before the due date.
5 Notification No. 48/2019-Central Tax 09/10/2019 Amend notification No. 41/2019 – Central Tax, dated the 31st August, 2019
6 Notification No. 49/2019 – Central Tax 09/10/2019 Changes in the CGST Rules, 2017

2. Extension of Applicability of GSTR-3B till March 2020

[Notification no 44/2019- Central Tax Dated 9th October, 2019]

CBIC has extended the applicability of GSTR-3B for all assesees till March 2020. Post which New Return scheme is proposed.

Return Due Date
GSTR-3B – All Assessees to whom it is applicable 20th of the Succeeding Month.
Payment of Tax , Interest, Penalty, Fees or any other amount payable under GST which requires debiting of Electronic Cash Ledger 20th of the Succeeding Month.

3. Due Dates for GSTR-1 in case of Monthly and Quarterly Filing till March 2020

[Notification no 45/2019, 46/2019- Central Tax Dated 9th October, 2019]

Type of Assesses Months/ Quarters Due Date
Registered persons having Aggregate turnover of up to INR 1.5 Cr  in the preceding financial year or the current financial year and have opted for Quarterly filing of Return Oct 2019 – Dec 2019 31st  Jan 2020
January 2020 – March 2020 30th April 2020
Registered persons having Aggregate turnover of more than INR 1.5 cr  in the preceding financial year or the current financial year, Each of Month from October 2019 to March 2020 11th of the succeeding month.

It may also be noted that time limit for furnishing return u/s 38(2) i.e GSTR-2 has also been extended till further Notification but the same has not been done for return u/s 39 i.e  GSTR-3.

4. Annual Return for Registered persons whose aggregate turnover in a financial year does not exceed two crore rupees

[Notification no 47/2019- Central Tax Dated 9th October, 2019]

As per the last GST Council Meeting recommendations, filing of GSTR-9 was made optional in case of Registered person whose aggregate turnover in a financial year does not exceed two crore rupees. However, there are various sections of GST Act which get triggered from the due date of filing of Annual Return. For Instance, time limit for Availment of ITC, Issue of Credit Notes, Period of Retention of Accounts, Issue of Order u/s 73 & & 74 etc. Thus, CBIC issued Notification No. 47/2019- Central Tax Dated 9th October, 2019 whereby it was deemed that Annual return for aforementioned persons shall be deemed to be furnished on the due date if it has not been furnished before the due date.

5. Extension of Due Dates of Filing GSTR-1 / 3B / 7 for J & K

[Notification no 48/2019-Central Tax Dated 9th October, 2019]

The  registered person whose principal place of business is in the state of Jammu & Kashmir, having aggregate turnover more then Rs. 1.5 crore in preceding financial year or in current financial year, following return’s due date under GST have been extended.

Sr. No. Form No. For the Period Due Date
1. GSTR-1 July & August 2019 11th October 2019
2. GSTR-3B July & August 2019 20th October 2019
3. GSTR-7 July & August 2019 10th October 2019

6. Amendment in GST Rules

[Notification No. 49/2019-Central Tax Dated 9th October, 2019]

A. Capping of Input Tax Credit upto 20% of Eligible Credit

In line with GST Council’s decision of 37th Council meeting on capping input tax credit, Sub Rule 4 to Rule 36 of the CGST Rules, 2017 has been inserted which makes it mandatory to review Input Tax Credit as appearing in GSTR-2A of the taxpayer. It mandates that the taxpayer shall not avail ITC in excess of 20% of the eligible credit available in GSTR-2A over and above the eligible credit.

For achieving this, the taxpayer has to conduct monthly reconciliation of input with GSTR-2A and then avail the input accordingly (maximum capped to 120% of eligible credit available) in GSTR-3B.

Modus Operandi of above:

Suppose a taxpayer is filing GSTR-3B regularly where outward supplies and input tax credit is claimed and taxes are paid on summary basis. The taxpayer has invoices and debit notes relating to inputs/ input services/ capital goods amounting to Rs. 500,000/-. However, eligible input tax credit appearing in GSTR-2A is Rs 400,000/-.

Prior to applicability of this notification, the taxpayer could have claimed the entire Rs 500,000 based on his own records. However, now this provisional ITC claim cannot exceed Rs 480,000. [Rs 400,000 +   20% of eligible credit of Rs 400,000]

The above amendment has led to opening of various issues like;

  1. How to avail ITC of vendors who are in Quarterly Scheme? Do we need to wait for three months before actual availment of ITC?
  2. It will mandate monthly reconciliation of GSTR-2A which itself is quite a task.
  3. Whether ITC would be available for entries where the supplier has uploaded the data or submitted the return but not filed the same?
  4. GSTR-3B needs to be suitably amended to show availment of missing credit claimed (i.e. 20%) separately.
  5. It is not clear upto when this 20% credit claimed would continue and after which it would be added to the output tax liability. In the proposed return process, it was T+2 post which credit was required to added to output tax liability. However no such period is provided in the aforesaid notification.

All these are important questions as excess availment of ITC will lead to penal interest @ 24% p.a. This clause requires more robust infrastructure on the part of the GSTN. Industry would require more breather time to implement the above clause. It is recommended that the Government may bring the circular in this respect to clarify the doubts asap.

B. GSTR-3B to be considered as GSTR-3 : Retrospective Amendment from 1st July, 2017

There has been a long standing debate that GSTR-3B is a statement and not a return in lieu of GSTR-3. In fact, there has been a judgment of Gujarat High Court [AAP & CO., CHARTERED ACCOUNTS THROU AUTHORISED PARTNER VERSUS UNION OF INDIA] confirming the above view.

However, the Government has amended Rule 61(4) of CGST Rules retrospectively from 1st July, 2017 and stated that the cases where the due date of GSTR-1 or GSTR-2 has been extended, Monthly return u/s 39(1) shall be filed in GSTR-3B.

This will pose an issue for assessee who have claimed credit of FY 2017-18 after due date of filing return for the month of March 2019 [Removal of Difficulty Order No. 02/2018 -Central Tax dated 31-12-2018].

C. Clarification in case of Suspension of Registration

An Explanation has been inserted to Rule 21A(3) whereby it is stated that registered person, whose registration has been suspended under sub-rule (1) or sub-rule (2), shall not make any taxable supply during the period of suspension and shall not be required to furnish any return under section 39.

It is clarified that for the purposes of this sub-rule, the expression “shall not make any taxable supply” shall mean that the registered person shall not issue a tax invoice and, accordingly, not charge tax on supplies made by him during the period of suspension.

Further a new sub-rule 21A(5) has been added where registered person has to issue revised invoice u/s 31(3)(a) and issue First Return u/s 40 after the revocation of suspension for the entire period.

D. Notice and order for demand of amounts payable under the Act.

There has been amendment in Rule 142 whereby the proper officer shall, before service of SCN notice u/s 73 or 74, shall communicate the details of any tax, interest and penalty as ascertained by the said officer, in Part A of FORM GST DRC-01A. Where the assessee has made partial payment of the amount communicated to him or desires to file any submissions against the proposed liability, he may make such submission in Part B of FORM GST DRC-01A.

E. Other Changes

  1. Rule 83A has been amended which requires GSTP (Goods & Services Tax Practitioner) who have earlier enrolled as Tax practioner in the earlier law to pass the exam within 30 months from the appointed date.
  2. Rule 91 has been amended e.f. 24th Sep 2019, whereby refunds will be disbursed basis Consolidated Payment advice. Thus single authority will be empowered to ensure disbursal of complete refund amount.
  3. Rule 97 of Consumer Welfare Fund has been amended where it is required that the Committee shall make available to the Board 50 per cent. of the amount credited to the Fund each year, for publicity or consumer awareness on Goods and Services Tax, provided the availability of funds for consumer welfare activities of the Department of Consumer Affairs is not less than twenty-five crore rupees per annum.
  4. Rule 117(1A) of Transitional Provisions has been amended whereby Commissioner on the recommendation of GST Council may extend the date of Filing TRAN-1 not beyond 31st December, 2019 [Earlier it was 31st March, 2019] in respect of registered persons who could not submit the said declaration by the due date on account of technical difficulties on the common portal and in respect of whom the Council has made a recommendation for such extension. Correspondingly the date of TRAN-2 in above cases has been extended to 31st January, 2020.

In case of any Clarification, do contact the Undersigned.

Jointly By:

CA. Chitresh Gupta
FCA, B. Com(H), IFRS (Cert.), IDT (Cert.)
Co-Author of book “GST –Law, Analysis & Procedures”
Faculty on Goods & Services Tax by ICAI
CA. Shilpi Gupta
FCA, M.Com, B. Com(H) -SRCC
Co-Author of book “GST –Law, Analysis &
Procedures”
Faculty on Goods & Services Tax by ICAI

More Under Goods and Services Tax

4 Comments

  1. Mohan R says:

    6. Amendment in GST Rules
    [Notification No. 49/2019-Central Tax Dated 9th October, 2019]

    A. Capping of Input Tax Credit upto 20% of Eligible Credit

    Notification No.49/2019 on capping of ITC upto 20%, is it applicable in the current return filing process. Because Sec 43A comes into effect only after the new return filing method is adopted and it is going to be only from April 2020.

  2. skjain1147 says:

    Sir /Madam . In my one case at the time of filing of TRAN 1 I could not take the benefit some duties which were already available with me as per Excise Return filed for the period 30.06.2017 . I filed TRAN 1 but left to take some credit which is available as per Excise return . As per latest notification can I revise the same Tran 1 . Plz guide

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