The Finance Bill, 2020 (BILL No. 26 OF 2020) was introduced in Lok Sabha by the Minister of Finance, Miss. Nirmala Sitharaman on February 1, 2020. It proposed to amend The Central Goods and Services Tax 2017. As per section 5(2)(b) of The Finance Bill 2020 (BILL No. 26 OF 2020) states that all sections shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint. Below mentioned is comparison between status of act before Finance Bill 2020 And status of Act after Finance Bill 2020 along with impact of amendment.
| Provisions as per CGST Act 2017 | Provisions as per amended CGST Act 2017 via Finance Bill 2020 (BILL No. 26 OF 2020) related to GST Act. | Effect of amendment along with analysis as to comparison | ||||||
| Section 2(114) – Definition of ‘Union territory’ | ||||||||
| Section (2) (114) “Union territory” means the territory of—
a) the Andaman and Nicobar Islands; b) Lakshadweep; c) Dadra and Nagar Haveli; (d) Daman and Diu; (e)Chandigarh; and (f) other territory. Explanation. ––For the purposes of this Act, each of the territories specified in sub-clauses (a) to (f) shall be considered to be a separate Union territory; |
“Union territory” means the territory of—
a) the Andaman and Nicobar Islands; b) Lakshadweep; c) Dadra and Nagar Haveli and Daman and Diu; d) Ladakh; e) Chandigarh; and f) other territory. Explanation. ––For the purposes of this Act, each of the territories specified in sub-clauses (a) to (f) shall be considered to be a separate Union territory; |
Amended to align the definition of “Union territory” in line with the Jammu and Kashmir Reorganisation Act, 2019 and the Dadra and Nagar Haveli and Daman and Diu (Merger of Union Territories), Act, 2019. | ||||||
| Section 10 – Composition Scheme | ||||||||
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Section (10)(2):- The registered person shall be eligible to opt under sub-section (1), if: — a) he is not engaged in the supply of services other than supplies referred to in clause (b) of paragraph 6 of Schedule II; b) he is not engaged in making any supply of goods which are not leviable to tax under this Act; c) he is not engaged in making any inter-State outward supplies of goods; d) he is not engaged in making any supply of goods through an electronic commerce operator who is required to collect tax at source under section 52; and e) he is not a manufacturer of such goods as may be notified by the Government on the recommendations of the Council: |
(2) The registered person shall be eligible to opt under sub-section (1), if: — a) he is not engaged in the supply of services other than supplies referred to in clause (b) of paragraph 6 of Schedule II; b) he is not engaged in making any supply of goods or services which are not leviable to tax under this Act; c) he is not engaged in making any inter-State outward supplies of goods or services; d) he is not engaged in making any supply of goods or services through an electronic commerce operator who is required to collect tax at source under section 52; and e) he is not a manufacturer of such goods as may be notified by the Government on the recommendations of the Council: |
Amended clauses (b), (c) and (d) of sub-section (2) of section 10 of the Central Goods and Services Tax Act to harmonise the conditions for eligibility for opting to pay tax under sub-section (1) and subsection (2A) of the said Act.
Subsection 2A of Section 10 of CGST Act 2017 states that registered manufacturers and traders may opt for composition scheme u/s 10(1) of the CGST Act even if they supply services of value not exceeding 10% of the turnover in a State/Union territory in the preceding FY or INR 5 lakhs, whichever is higher. |
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| Section 16 – Eligibility and conditions for taking input tax credit. | ||||||||
| Section (16) (4):- A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier. | (16) (4) A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier. | Amended as to delink the date of issuance of debit note from the date of issuance of the underlying invoice for purposes of availing input tax credit. | ||||||
| Section 29 – Cancellation of registration. | ||||||||
| Section (29)(1)(C):- the taxable person, other than the person registered under sub-section (3) of section 25, is no longer liable to be registered under section 22 or section 24. | “(c) the taxable person is no longer liable to be registered under section 22 or section 24 or intends to opt out of the registration voluntarily made under sub-section (3) of section 25:”. | Amended so as to provide for cancellation of registration obtained voluntarily under sub-section (3) of section 25.
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| Section 30 – Revocation of cancellation of registration. | ||||||||
| Proviso to sub-section (1) of section 30:- Provided that the registered person who was served notice under sub-section
(2) of section 29 in the manner as provided in clause (c) or clause (d) of sub- section (1) of section 169 and who could not reply to the said notice, thereby resulting in cancellation of his registration certificate and is hence unable to file application for revocation of cancellation of registration under sub-section (1) of section 30 of the Act, against such order passed up to 31-3-2019, shall be allowed to file application for revocation of cancellation of the registration not later than 22-7-2019 |
“Provided that such period may, on sufficient cause being shown, and for reasons to be recorded in writing, be extended, ––
a. by the Additional Commissioner or the Joint Commissioner, as the case may be, for a period not exceeding thirty days; b. by the Commissioner, for a further period not exceeding thirty days, beyond the period specified in clause (a).”. |
Bill seeks to substitute the proviso to sub-section (1) of section 30 of the Central Goods and Services Tax Act so as to empower the jurisdictional tax authorities to extend the period provided to file an application for revocation of cancellation of registration. | ||||||
| Section 31 – Tax Invoice. | ||||||||
| Proviso to subsection (2) of Section 31: – Provided that the Government may, on the recommendations of the Council, by notification
and subject to such conditions as may be mentioned therein, specify the categories of services in respect of which–– a. any other document issued in relation to the supply shall be deemed to be a tax invoice; or b. tax invoice may not be issued. |
“Provided that the Government may, on the recommendations of the Council, by notification, –
a) specify the categories of services or supplies in respect of which a tax invoice shall be issued, within such time and in such manner as may be prescribed; b) subject to the condition mentioned therein, specify the categories of services in respect of which–– (i) any other document issued in relation to the supply shall be deemed to be a tax invoice; or (ii) tax invoice may not be issued.”. |
Amend section 31 of the Central Goods and Services Tax Act so as to empower the Government to notify the categories of services or supplies in respect of which tax invoice shall be issued and to make rules regarding the time and manner of its issuance. | ||||||
| Section 51 – Tax deduction at source. | ||||||||
| Section 51: –
(3) The deductor shall furnish to the deductee a certificate mentioning therein the contract value, rate of deduction, amount deducted, amount paid to the Government and such other particulars in such manner as may be prescribed (4) If any deductor fails to furnish to the deductee the certificate, after deducting the tax at source, within five days of crediting the amount so deducted to the Government, the deductor shall pay, by way of a late fee, a sum of one hundred rupees per day from the day after the expiry of such five days period until the failure is rectified, subject to a maximum amount of five thousand rupees |
(3) A certificate of tax deduction at source shall be issued in such form and in such manner as may be prescribed.
4) If any deductor fails to furnish to the deductee the certificate, after deducting the tax at source, within five days of crediting the amount so deducted to the Government, the deductor shall pay, by way of a late fee, a sum of one hundred rupees per day from the day after the expiry of such five days period until the failure is rectified, subject to a maximum amount of five thousand rupees |
Amend section 51 of the Central Goods and Services Tax Act so as to empower the Government to make rules to provide for the form and manner in which a certificate of tax deduction at source shall be issued. | ||||||
| Section 109 – Constitution of Appellate Tribunal and Benches thereof. | ||||||||
| Section 109 (6): –
(6) The Government shall, by notification, specify for each State or Union territory except for the State of Jammu and Kashmir, a Bench of the Appellate Tribunal (hereafter in this Chapter, referred to as “State Bench”) for exercising the powers of the Appellate Tribunal within the concerned State or Union territory: Provided that for the State of Jammu and Kashmir, the State Bench of the Goods and Services Tax Appellate Tribunal constituted under this Act shall be the State Appellate Tribunal constituted under the Jammu and Kashmir Goods and Services Tax Act, 2017: Provided further that the Government shall, on receipt of a request from any State Government, constitute such number of Area Benches in that State, as may be recommended by the Council: Provided also that the Government may, on receipt of a request from any State, or on its own motion for a Union territory, notify the Appellate Tribunal in a State to act as the Appellate Tribunal for any other State or Union territory, as may be recommended by the Council, subject to such terms and conditions as may be prescribed. |
(6) The Government shall, by notification, specify for each State or Union territory except for the State of Jammu and Kashmir a Bench of the Appellate Tribunal (hereafter in this Chapter, referred to as “State Bench”) for exercising the powers of the Appellate Tribunal within the concerned State or Union territory:
Provided that for the State of Jammu and Kashmir, the State Bench of the Goods and Services Tax Appellate Tribunal constituted under this Act shall be the State Appellate Tribunal constituted under the Jammu and Kashmir Goods and Services Tax Act, 2017: Provided further that the Government shall, on receipt of a request from any State Government, constitute such number of Area Benches in that State, as may be recommended by the Council: Provided also that the Government may, on receipt of a request from any State, or on its own motion for a Union territory, notify the Appellate Tribunal in a State to act as the Appellate Tribunal for any other State or Union territory, as may be recommended by the Council, subject to such terms and conditions as may be prescribed. |
Amend sub-section (6) of section 109 of the Central Goods and Services Tax Act so as to make the provisions for Appellate Tribunal and its benches thereof applicable in the Union territories of Jammu and Kashmir and Ladakh. | ||||||
| Section 122– Penalty for certain offences. | ||||||||
| Section 122: –
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(1A) Any person who retains the benefit of a transaction covered under clauses (i), (ii), (vii) or clause (ix) of sub-section (1)and at whose instance such transaction is conducted, shall be liable to a penalty of an amount equivalent to the tax evaded or input tax credit availed of or passed on. | Bill seeks to insert a new sub-section (1A) in section 122 of the Central Goods and Services Tax Act so as to make the beneficiary of certain transactions at whose instance such transactions are conducted liable for penalty. | ||||||
| Section 132– Punishment for certain offences. | ||||||||
| Section 132: –
1. Whoever commits any of the following offences, namely: — a. …………… b. …………… c. avails input tax credit using such invoice or bill referred to in clause (b); d. ……………. e. evades tax, fraudulently avails input tax credit or fraudulently obtains refund and where such offence is not covered under clauses (a) to (d);
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2. Whoever commits, or causes to commit and retain the benefits arising out of any, of the following offences, namely: —
a. …………… b. …………… c. avails input tax credit using such invoice or bill referred to in clause (b); avails input tax credit using the invoice or bill referred to in clause (b) or fraudulently avails input tax credit without any invoice or bill; d. ……………. e. evades tax, fraudulently avails input tax credit or fraudulently obtains refund and where such offence is not covered under clauses (a) to (d);
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Bill seeks to amend section 132 of the Central Goods and Services Tax Act so as to make the offence of fraudulent availment of input tax credit without invoice or bill cognizable and non-bailable under sub-section (1) of section 69 and to make any person who retains the benefit of certain transactions and at whose instance such transactions are conducted liable for punishment. | ||||||
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Section 140: – amend section 140 of the Central Goods and Services Tax Act relating to transitional arrangements for input tax credit, so as to prescribe the time limit and the manner for availing input tax credit against certain unavailed credit under the existing law. This amendment shall take effect retrospectively from the 1st day of July, 2017. |
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| Section 168– Power to issue instructions or directions. | ||||||||
| • Section-168
1. Board may, if it considers it necessary or expedient so to do for the purpose of uniformity in the implementation of this Act, issue such orders, instructions or directions to the central tax officers as it may deem fit, and thereupon all such officers and all other persons employed in the implementation of this Act shall observe and follow such orders, instructions or directions. 2. The Commissioner specified in clause (91) of section 2, sub-section (3) of section 5, clause (b) of sub-section (9) of section 25, sub-sections (3) and (4) of section 35, sub-section (1) of section 37, sub-section (2) of section 38, sub-section (6) of section 39, sub-section (1) of section 44, sub-sections (4) and (5) of section 52 , sub-section (5) of section 66, sub-section (1) of section 143, sub-section (1) of section 151, clause (l) of sub-section (3) of section 158 and section 167 shall mean a Commissioner or Joint Secretary posted in the Board and such Commissioner or Joint Secretary shall exercise the powers specified in the said sections with the approval of the Board.
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1. Board may, if it considers it necessary or expedient so to do for the purpose of uniformity in the implementation of this Act, issue such orders, instructions or directions to the central tax officers as it may deem fit, and thereupon all such officers and all other persons employed in the implementation of this Act shall observe and follow such orders, instructions or directions. 2. The Commissioner specified in clause (91) of section 2, sub-section (3) of section 5, clause (b) of sub-section (9) of section 25, sub-sections (3) and (4) of section 35, sub-section (1) of section 37, sub-section (2) of section 38, sub-section (6) of section 39, sub-section (1) of section 44, sub-sections (4) and (5) of section 52 , sub-section (5) of section 66, sub-section (1) of section 143 sub-section (1) of section 143, except the second proviso thereof, sub-section (1) of section 151, clause (l) of sub-section (3) of section 158 and section 167 shall mean a Commissioner or Joint Secretary posted in the Board and such Commissioner or Joint Secretary shall exercise the powers specified in the said sections with the approval of the Board.
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Amend section 168 of the Central Goods and Services Tax Act so as to make provisions for enabling the jurisdictional Commissioners to exercise powers under sub-section (5) of section 66 and also under second proviso to sub-section (1) of section 143 | ||||||
| Section 172– Removal of Difficulties | ||||||||
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(1) If any difficulty arises in giving effect to any provisions of this Act, the Government may, on the recommendations of the Council, by a general or a special order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act or the rules or regulations made thereunder, as may be necessary or expedient for the purpose of removing the said difficulty: Provided that no such order shall be made after the expiry of a period of three years from the date of commencement of this Act.
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(1) If any difficulty arises in giving effect to any provisions of this Act, the Government may, on the recommendations of the Council, by a general or a special order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act or the rules or regulations made thereunder, as may be necessary or expedient for the purpose of removing the said difficulty: Provided that no such order shall be made after the expiry of a period of three Five years from the date of commencement of this Act. |
Amend section 172 of the Central Goods and Services Tax Act so as to extend the time limit provided for removal of difficulties thereunder from three years to five years, with effect from the date of commencement of the said Act | ||||||
| Schedule-II:- In Schedule II to the Central Goods and Services Tax Act, in paragraph 4, the words “whether or not for a consideration,” at both the places where they occur, shall be omitted and shall be deemed to have been omitted with effect from the 1st day of July, 2017 | ||||||||
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