KYA BADLA, KITNA BADLA : A Comparative Analysis of Recent GST Notifications Issued by CBIC dated 29/01/2019, effective from 01/02/2019
The Central Board of Indirect Taxes and Customs (CBIC) has notified various amendments to the Goods and Services Tax which came into force on 01st February 2019 which is considered as the effective date. On a whole CBIC has issued 13 notifications on 29th January 2019 according to which various amendments and deferments have been done and explained in the article.
At the outset, some of the important amendments pertains to
– registration requirements in case of multiple places of business,
– the composition scheme,
– scope of the term ‘supply’,
– provisions related to input tax credit,
– cross-utilisation of input tax credit,
– issuance of single credit notes/debit notes for multiple invoices,
– insertion of new activities/transactions not to be treated as supply of goods or services,
– provisions relating to exports, etc
The Amendments brought into force can be summarized in the following manner
| 1. | Registration Requirement
CGST Registration provision amended to align Special Category States Notification No. 06/2019 – Central Tax 29/01/2019 |
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| Prior 01/02/2019 | W.e.f 01/02/2019 | ||
| Threshold Limit | The threshold limit for registration was INR 10 lakh in states of Assam, Arunachal Pradesh, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand | The threshold limit for registration has been increased from INR 10 lakh to INR 20 lakh in states of Assam, Arunachal Pradesh, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand | |
| Multiple Business Vertical
Central Goods and Services Tax (Amendment) Rules, 2019 Notification No. 03/2019 – Central Tax 29/01/2019 |
Existence of the term and concept of Multiple Business vertical | The term ‘multiple business verticals’ has been removed from the provisions of registration and has been substituted by the term ‘multiple places of business’, and separate registration for each such place of business within the state or union territory shall be granted subject to the fulfilment of conditions specified therein. | |
| Separate Registration by Special Economic Zones
Central Goods and Services Tax (Amendment) Rules, 2019 Notification No. 03/2019 – Central Tax 29/01/2019 |
Separate registration was not required by a person having a special economic zone unit of a developer | A separate registration shall be required by a person having a special economic zone (SEZ) unit or being an SEZ developer from his/her other units located outside the SEZ in the same state or union territory. | |
| E- Commerce Operators | – | Mandatory registration is required for those e-commerce operators who are required to collect tax at source under the relevant provisions of GST law- Section 52 of CGST Act | |
| 2. | Scope of the term ‘supply’ Central Goods and Services Tax (Amendment) Rules, 2019 Notification No. 03/2019 – Central Tax 29/01/2019 | ||
| Prior 01/02/2019 | W.e.f 01/02/2019 | ||
| Inclusions and reference of Schedule II | Activities to be treated as supply of goods or supply of services are mentioned in Schedule II | For any activity to qualify as ‘supply’ under the GST Act, mere inclusion in Schedule II (activities to be treated as supply of goods or supply of services) is not sufficient, as the said activity has to qualify as ‘supply’ at the first place as per the relevant provisions under GST3 and thereafter the same can get further classified as supply of goods or services under Schedule II.
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| 3. | Composition Scheme CBIC aligns rates for Composition Scheme with CGST Rules, 2017 Notification No. 05/2019 – Central Tax 29/01/2019 | ||
| Prior 01/02/2019 | W.e.f 01/02/2019 | ||
| Threshold Limit | The threshold limit for the composite suppliers was INR 1 crore | The threshold limit for the composite suppliers has been increased from INR 1 crore to INR 1.5 crore. | |
| Supplier of Services
Central Goods and Services Tax (Amendment) Rules, 2019 Notification No. 03/2019 – Central Tax 29/01/2019 |
Composition Scheme was applicable only on supplier of goods | The supplier of services can also opt for the composition scheme. | |
| Limit prescribed for Supplier of Services for Composition Scheme | – | A person opting for such scheme may supply services (other than restaurant services) of value not exceeding 10% of the turnover in a state/union territory in the preceding financial year or INR 5 lakh, whichever is higher. | |
| 4. | Input Tax Credit Central Goods and Services Tax (Amendment) Rules, 2019 Notification No. 03/2019 – Central Tax 29/01/2019 | ||
| Prior 01/02/2019 | W.e.f 01/02/2019 | ||
| Restriction placed | Input Tax Credit on Motor Vehicles | Input tax credit has been restricted for motor vehicles for transportation of persons having a seating capacity of not more than 13 persons except when they are used for making further supply of motor vehicles, transportation of passengers or imparting training on driving such motor vehicles. | |
| Input Tax Credit on Vessels and Aircrafts | input tax credit shall not be available in respect of vessels and aircraft except when they are used for making further supply of such vessels or aircrafts, transportation of passengers, imparting training or navigating such vessels or imparting training on flying such aircraft. | ||
| Input Tax Credit on Services of General Insurance | Input tax credit for services of general insurance, servicing, repair and maintenance relating to motor vehicles, vessels or aircrafts shall be available only where the motor vehicles, vessels and aircrafts are used for the above-mentioned purpose or received by a taxable person engaged in the manufacture of such motor vehicles, vessels or aircrafts or in the supply of general insurance services in respect of such motor vehicles, vessels or aircrafts | ||
| Input tax credit on employee-related welfare goods or services or both | Input tax credit on employee-related welfare goods or services or both (eg food and beverages, outdoor catering, beauty treatments, health services, etc.) shall be available where such supply is used for making outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply | ||
| Input tax credit of services such as club memberships, health and fitness centres, travel benefits on vacation, etc | Input tax credit of services such as club memberships, health and fitness centres, travel benefits on vacation, etc. shall be available where the provision of such goods or services or both is obligatory for an employer to provide its employees under any law for the time being in force | ||
| Inclusion of an explanation | – | An explanation has been inserted to provide that the ‘value of exempt supply’ shall not include the value of activities or transactions specified in Schedule III (other than the sale of land and building). | |
| 5. | Credit Note/ Debit Note Central Goods and Services Tax (Amendment) Rules, 2019 Notification No. 03/2019 – Central Tax 29/01/2019 | ||
| Prior 01/02/2019 | W.e.f 01/02/2019 | ||
| Raising of Consolidated Credit/ Debit Note | Separate credit/ debit note was to be raised for invoices pertaining to a financial year | A registered person can issue a consolidated credit note/debit note in respect of multiple invoices issued in a financial year. | |
| 6. | Cross-utilisation of ITC rationalized Central Goods and Services Tax (Amendment) Rules, 2019 Notification No. 03/2019- Central Tax 29/01/2019 |
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| Prior 01/02/2019 | W.e.f 01/02/2019 | ||
| Mode | – | The credit of state tax/union territory tax can be utilised for payment of integrated tax only when the balance of input tax credit on account of central tax is not available for payment of integrated tax. | |
| New Section 49 A | – | A new section has been inserted to provide that the input tax credit on account of central tax and state tax/union territory tax can be utilised towards the payment of integrated tax, central tax and state tax/union territory tax only after the input tax credit available on account of integrated tax has been first utilised fully towards such payment. | |
| New Section 49 B | – | A new section has been inserted to allow the government, on the recommendation of the GST Council, to provide a specific order in which a registered person can utilise input tax credit, viz. integrated tax, central tax and state tax or union territory, for the settlement of the tax liability. | |
| 7. | Export of Services Central Goods and Services Tax (Amendment) Rules, 2019 Notification No. 03/2019 – Central Tax 29/01/2019 | ||
| Prior 01/02/2019 | W.e.f 01/02/2019 | ||
| Meaning & Clause of Consideration | – | A service can be said to be exported even if the consideration is received in Indian rupees wherever permitted by the Reserve Bank of India subject to the fulfilment of other conditions prescribed therein. | |
| 8. | Refund Central Goods and Services Tax (Amendment) Rules, 2019 Notification No. 03/2019 – Central Tax 29/01/2019 | ||
| Prior 01/02/2019 | W.e.f 01/02/2019 | ||
| Relevant Date | – | The relevant date in the case of refund of unutilised ITC arising out of the 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 | |
| 9. | Ceiling on Pre deposit for Appeals CBIC defines jurisdiction of Joint Commissioner (Appeals) under GST Notification No. 04/2019 – Central Tax 29/01/2019 | ||
| Prior 01/02/2019 | W.e.f 01/02/2019 | ||
| Restrictions w.r.t. maximum limit | – | The amount to be deposited before filing an appeal to the Appellate Authorities shall be restricted to a maximum limit of INR 25 crore and to the Appellate Tribunal, to a maximum of INR 50 crore. | |
| 10. | Transitional Provisions Central Goods and Services Tax (Amendment) Rules, 2019 Notification No. 03/2019 – Central Tax 29/01/2019 | ||
| Prior 01/02/2019 | W.e.f 01/02/2019 | ||
| Retrospective amendment | – | The provision has been retrospectively amended to include CENVAT credit of eligible duties and further clarifies that the expression ‘eligible duties and taxes’ excludes any cess specified therein.
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| 11. | Insertions to Schedule III of the CGST Act Central Goods and Services Tax (Amendment) Rules, 2019 Notification No. 03/2019 – Central Tax 29/01/2019 | ||
| Prior 01/02/2019 | W.e.f 01/02/2019 | ||
| Activities not to be treated as supply of goods or supply of services | – | · The term ‘transactions’ has been inserted after the word ‘activities’
· Supply of goods from a place in a non-taxable territory to another place in a nontaxable territory without such goods entering into a taxable territory · Supply of goods in the course of high seas sale · Sale of warehoused goods to any person before clearance for home consumption. |
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| 12. | Suspension of Registration pending cancellation proceedings
Central Goods and Services Tax (Amendment) Rules, 2019 Notification No. 03/2019 – Central Tax 29/01/2019 |
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| Prior 01/02/2019 | W.e.f 01/02/2019 | ||
| Insertion of Rule 21 A | – | Person who applied for cancellation, cannot make any taxable supply and need not furnish any return under Section 39 of the CGST Act. | |
| 13. | Scope of GST Practitioners widened Central Goods and Services Tax (Amendment) Rules, 2019 Notification No. 03/2019 – Central Tax 29/01/2019 | ||
| Prior 01/02/2019 | W.e.f 01/02/2019 | ||
| Additional activities which can be taken by GST Practitioners | – | · Furnish information for generation of E-Way Bill · Furnish details of challan in FORM GST ITC 04 · File an application for amendment or cancellation of enrolment under rule 58 · File an intimation to pay tax under the composition scheme or withdraw from the said scheme |
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Other Amendments pertaining to CGST Amendment Act 2018 have not yet brought into force- Notification No. 02/2019 – Central Tax 29/01/2019
– Sec 8 (b) – Reference to Sec 43 A in Section 16(2)(c)- New Return Filing procedure
– Sec 17- Amendment to Sec 39
– Sec 18-Sec 43 A
– Sec 20(a)- Reference of Sec 43 A and Section 49(2)
Miscellaneous Amendments
– Due date for FORM GSTR-7 – Tax Deducted at Source has been extended from January 31, 2019 to February 28, 2019 for the month of October 2018 to December 2018.
– Due date for FORM GSTR-8 – Tax Collected at Source has been extended from January 31, 2019 to February 7, 2019 for the month of October 2018 to December 2018
– Government has extended the date for submission of FORM GST TRAN-1 till March 31, 2019 for the taxpayers who could not submit the form due to technical issues or whose cases are recommended by GST Council.
Notifications Withdrawan
– RCM under CGST on procurement from unregistered dealer’s withdrawn Notification No. 01/2019 – Central Tax (Rate) 29/01/2019
– RCM under UTGST on procurement from unregistered dealer’s withdrawn Notification No. 01/2019 – Union Territory Tax (Rate) 29/01/2019
– RCM under IGST on procurement from unregistered dealer’s withdrawn Notification No. 01/2019 – Integrated Tax (Rate) 29/01/2019
Author Bio
A full of knowledge article
I thanks CA Rubneet for sharing such a informative information
Madam, Regarding composition – the notification marked 5/2019 does not relate to the enhancement of turnover to 1.50 cr. Pls confirm whether the said enhancement is applicable from 01.02.2019 itself.
YOU HAVE NOT ANALYSED THE CHANGES MADE IN SECTION 12 (8) OF GST FOR GST EXEMPTION ON DESTINATION OF GOODS OUTSIDE INDIA.
how to make transit sale. how to make the bill and eway bill pl describe
very good presentation. Thank you
Nice compilation of all the provisions. Great!
Rubneet, you have done wonderful job. Very helpful.
Very brief and amazing presentation. Helpful, Thank you.
Dear Rubneet, well done. You have crossed your boss now..keep it up
Very useful information in Analysis