New GST provisions effective from 30-6-2020-Introduced by Finance Act, 2020, Notification No. -49/2020-CT dated 24th June 2020

Background:                                             

Goods & Service Tax (in short “GST”) introduced in year 2017 undergone various changes on recurring basis. In Feb’ 2020 the Finance Bill was introduced which eventually enacted as Finance Act’ 2020 (in short F.A.’2020). The F.A’ 2020 by its virtue notified various sections, amongst which few were notified earlier and few are still in vain. At this point of time, CBIC vide Notification-49/2020-CT dated 24th June 2020 has notified 4 Sections of F.A.’ 2020. In this compilation an effort is being made to analyse these notified sections and their impact.

Section 118 of the Finance Act, 2020 

Analysis:

Section 2(114) of CGST Act, 2017 defines union territory: Here two events happened in constitution:

1. Earlier Dadra and Nagar Haveli and Daman and Diu were two Union territory which is now merged by CG, so they become a single Union territory.

2. Jammu & Kashmir has been removed as state and formed in two Union territory, i.e. UT of J & K which has own legislative body so considered equivalent to state for GST purposes and UT of Ladakh which is a UT with no legislative body.

Existing Law:

“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.

Amended Law:

Now to carry the amendments in constitution, definition amended:

“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

Section 125 of the Finance Act, 2020 

Analysis:

Constitution of Appellate Tribunal and Benches thereof: With Reference to Sec. 109(6) of CGST Act’ 2017

1. CG has the power to notify Appellate Tribunal in each state, Union territory but not in Jammu & Kashmir

2. The Appellate Tribunal in J & K shall be constituted under J & K GST Act’ 2017 as per first proviso to Sec. 109(6) of CGST Act’ 2017

3. Now Jammu & Kashmir has been removed as state and formed in two Union territory, i.e. UT of J & K which has own legislative body so considered equivalent to state for GST purpose and UT of Ladakh which is a UT with no legislative body.

Existing Law:

1. Earlier CG don’t have the power to constitute Appellate Tribunal in J & K

2. Appellate Tribunal was to be constituted under J & K GST Act’ 2017

Amended Law:

Now to carry the amendments in constitution, words except J & K removed in Sec 109(6) & first proviso to Sec. 109(6) omitted i.e. now CG can constitute Appellate Tribunal for both newly formed UT’s

Section 118 of the Finance Act, 2020 

Analysis:

Power to issue instructions or directions: With Reference to Sec 168 of CGST Act, 2017

1. CBIC may issue orders, instructions or directions to the central tax officers which need to be followed by the officers concerned

2. Now reference to Commissioner mentioned in various sections in act was made

3. Further commissioner means commissioner posted in CBIC in policy making

Existing Law: Earlier the list of sections referred included Sec. 66(5) of CGST Act’ 2017, which deals with fixation of fees and remuneration by commissioner in case of Special Audit

Amended Law: Now Sec. 66(5) is omitted from the list, since Sec. 168 is clearly mentions commissioner in CBIC and Sec. 66(5) refers to the Jurisdictional Commissioner so there was an absurd interpretation of the statue.

Section 130 of the Finance Act, 2020 

Analysis:

Removal of difficulties: The Government has reserved some special power with introduction of CGST Act vide Sec. 172 of CGST Act, 2017

1. Where CG with recommendation GST Council

2. Has power to make such provisions not inconsistent with the provisions of this Act or the rules or regulations

3. For Removing Difficulty in implementation of new statue

4. By General or a Special Order in Official Gazette

5. Passed in Both house of parliament

Existing Law: Now the provision to Sec. 172(1) states that such power shall be vested till 3 years from implementation of this law i.e. till 30/06/2020

Amended Law: But considering that GST is still not settled, the said period has been extended to 5 Years vide Section 130 of Finance Act, 2020.So, now removal of difficulty orders can be issued till 30/06/2022

Author can be reached at gstrajender@ca-spark.com

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2 Comments

  1. vswami says:

    OFFhand
    One’s personal, instant reaction is that, in effect, the successively resorted to extension of the due date in the matter of/for ‘removal of difficulties’ presently being faced with, – many of the kind right from inception’,- in the implementation and enforcement of them on one hand, and compliance by taxpayer/ impact on its client (consumer) on the other, has the inherent potential to have far reaching ramifications and irresolute consequences.
    That is of the same kind of difficulties as arising and open to be foreseen in the aftermath of the Order of the appellate authority recently reported @ –
    No Service Tax on construction of residential complex prior to 01.06.2010
    Anyone with an insight and thoughts to share for THE COMMON GOOD !

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