Analysis of GST Notifications Issued on 29th January 2019

ANALYSIS OF CENTRAL TAX NOTIFICATIONS 

1. Notification No. 01/2019–Central Tax (Rate) – Reverse Charge on unregistered purchases is still on hold

The notifications No 8/2017 Central Tax (Rate) has been rescinded as it has become irrelevant consequent to amendment to Sec 9(4) of The CGST Act 2017.

The Reverse Charge on Unregistered Purchases shall be on hold till the government specifies category of persons u/s 9(4) on whom reverse charge for unregistered purchase shall be applicable.

Amended Section 9(4) is as follows –             

 “(4) The Government may, on the recommendations of the Council, by notification, specify a class of registered persons who shall, in respect of supply of specified categories of goods or services or both received from an unregistered supplier, pay the tax on reverse charge basis as the recipient of such supply of goods or services or both, and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to such supply of goods or services or both.”.

2. Notification No. 01/2019–Integrated Tax (Rate) – Reverse Charge on unregistered purchases is still on hold

The notifications No 32/2017 Integrated Tax (Rate) has been rescinded as it has become irrelevant consequent to amendment to Sec 5(4) of The IGST Act 2017.

The Reverse Charge on Unregistered Purchases shall be on hold till the government specifies category of persons u/s 5(4) on whom reverse charge for unregistered purchase shall be applicable.

Amended Section 5(4) is as follows –             

“(4) The Government may, on the recommendations of the Council, by notification, specify a class of registered persons who shall, in respect of supply of specified categories of goods or services or both received from an unregistered supplier, pay the tax on reverse charge basis as the recipient of such supply of goods or services or both, and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to such supply of goods or services or both.”.

3. Notification No. 02/2019 – Central Tax Dated 29/01/2019

The CGST (Amendment) Act 2018 comes into force w.e.f. 1st February 2019. The commentary for the same is appended hereto.

1. The CGST (Amendment) Act 2018 comes into force from 1st February 2019 except the following –

A.  Section 43A of The CGST Act has been deferred. Hence ITC can be still availed in GSTR 3B on provisional basis irrespective of the reflection in GSTR 2A.

B.  Due to the deferment of Sec 43A, the corresponding amendment to Sec 16(2)(c) of The CGST Act 2017 has also been deferred which subjects the ITC taken to Sec 43A. Hence as of now, ITC can be still availed in GSTR 3B on provisional basis irrespective of the reflection in GSTR 2A.

C.  Due to the deferment of Sec 43A, the corresponding amendment to Sec 49 of The CGST Act 2017 has also been deferred which provides for the ITC taken to be credited to the ITC ledger in accordance with Sec 43A.

D.  The amendments to Sec 39 of The CGST Act has been put on hold. The amendments to Sec 39 were mainly to facilitate the implementation of new returns. The said section may be made effective when the new returns are implemented.

E.  While the transitional Credit u/s 140(1) is allowed for “eligible duties”, yet the definition of the same has been deferred.

4. Notification No. 03/2019 – Central Tax Dated 29/01/2019

1. In Rule 7 – A provision has been made to bring even “Services: under Composition levy at a future date.

2. In Rule 11 & 41A – Separate registration may be taken in the same state for separate “place of business” also as against previously for separate “business vertical”. The amendment is corresponding to the amendment in Sec 25(2)

The ITC shall be transferred to such new registrations vide Form ITC-02A. The Form has been notified also.

3. Rule 21A – Before cancellation of registration, another event for “Suspension of Registration” has been inserted till the time the proceedings are completed.                                                                                                

4. Rule 53 (1A) – The details to be furnished in a Cr/Dr Note is provided separately. The same is done to bring into effect the amendments in Sec 34 so that one Cr/Dr Note can be issued for multiple invoices.

5. Rule 83 – Relaxation in time is given for passing GST Practitioners exam. Further the Scope of Services which may be provided by GST Practitioners are enhanced.

6. Rule 85 & 86 – ITC of IGST can now be adjusted against output CGST & SGST before adjusting the corresponding ITC of CGST & SGST.

7. Rule 89 – The declaration for SEZ has been amended incase of refund.

8. Rule 91 & 92 – Relaxations in rules of validating & re-validating the orders of refunds by officers

9. Amendments have been made in Forms PCT-05, GSTR-4, RFD-1, RFD-1A, APL-01, APL-05.

5. Notification No. 04/2019 – Central Tax Dated 29/01/2019

1. The position of Joint Commissioner (Appeals) have been created

6. Notification No. 05/2019 – Central Tax Dated 29/01/2019

1. The rate of Tax in case of Composition levy shall be specified in Rule 7

7. Notification No. 02/2019 – Central Tax Dated 29/01/2019 & Notification No. 03/2019 – Integrated Tax Dated 29/01/2019

1. Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand have also been included in special category states for the purpose of registration.

8. Notification No. 01/2019 – Integrated Tax Dated 29/01/2019

The IGST (Amendment) Act 2018 comes into force w.e.f. 1st February 2019. The commentary for the same is appended hereto.

9. Notification No. 02/2019 – Integrated Tax Dated 29/01/2019

An anomaly Notification 7/2017 Integrated Tax, has been rectified.

10. Notification No. 0 1/2019 – GST Compensation –Dated 29/01/2019

GST (Compensation to States) Amendment Act, 2018 comes into force w.e.f. 1st February 2019.