CA Pooja Ketan Khatod

CA Pooja Ketan Khatod

35th GST Council Meeting was held on 21 June 2019 at New Delhi, after a long gap of more than three months.

This was the first council meeting chaired by the re-elected government and India’s second woman Union Finance Minister, Mrs Nirmala Sitharaman.

The 35th GST Council meeting concluded with consensus on the following matters:-

1. GST annual return due date extended till 31 August 2019 for FY 2017-18

The due date for filing GSTR-9, GSTR-9A, and GSTR-9C for the FY 2017-18 has been extended by two months, till 31 August 2019. Official notification can be made anytime soon.

Legal Provision:-

Section 44

1. Every registered person, other than an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person, shall furnish an annual return for every financial year electronically in such form and manner as may be prescribed on or before the thirty-first day of December following the end of such financial year.

– GSTR 9 for Regular taxpayer

– GSTR9A for Composition dealer.

2. Every registered person who is required to get his accounts audited in accordance with the provisions of sub-section (5) of section 35 shall furnish, electronically, the annual return under sub-section (1) along with a copy of the audited annual accounts and a reconciliation statement, reconciling the value of supplies declared in the return furnished for the financial year with the audited annual financial statement, and such other particulars as may be prescribed.

3. Section 35(5) “every registered person whose turnover during a financial year  exceeds the prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant and shall submit a copy of the audited annual accounts, the reconciliation statement under sub-section (2) of Section 44 and such other documents in such form and manner as may be prescribed”.

4. Rule 80(3) of the CGST Rules “every registered person whose aggregate turnover during a financial year exceeds two crore rupees shall get his accounts audited as specified under sub-section (5) of Section 35 and he shall furnish a copy of the audited annual accounts and a reconciliation statement, duly certified, in GSTR 9C, electronically through the common portal either directly or through a Facilitation Centre notified by the Commissioner”.

2. Aadhar-enabled GST Registration introduced:

In order to ease the current process of GST registration and reduce the paperwork involved, GST Council has given a go-ahead to a new system for verification of taxpayers registering themselves under GST. Aadhar number shall be linked to the GSTIN while generation.

Legal Provision:-

As per Section 22 of the CGST Act, specified that “ Every supplier shall be liable to be registered under this Act in the State or Union territory , other than special category States, from where he makes a taxable supply of goods or services or both , if his aggregate turnover in a financial year exceeds Forty lakh rupees”

But the person makes taxable supplies of goods or services or both from any of the special category States; he shall be liable to be registered if his aggregate turnover in a financial year exceeds Ten lakh rupees.

( North-Eastern States, J&K, Himachal Pradesh and Uttarakhand)

GSTIN no is PAN based but now as per GST Council Discussion they want to make it Aadhar linked so that it gets easier for a person to take registration under the Act. This might be the case wherein  GSTIN is Aadhar linked then all the information will automatically generated on the portal, Actual position will get to know ,only after it gets implemented.

3. NAA tenure extended by two years

Tenure of National Anti-profiteering Authority (NAA) was due to end by 30 November 2019. GST Council has further extended this tenure by two years, to enable it to take up all the pending cases. Hence, the authority can take up new cases in future due to rate cut issues.

Legal Provision:- 

Section 171 of the Central Goods and Services Tax Act, 2017 provides for Anti Profiteering measure. As per Sub Section 1 of Sec 171 of CGST ACT, 2017, “Any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices.” Thus it makes mandatory for every taxpayer to pass on the benefits arising out of following to the recipient of the goods or services or goods and services.

  • Reduction of rate of tax on any supply of goods or services.
  • Benefit of input tax credit.

Any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit should have been passed on to the recipient by way of commensurate reduction in prices. However it has been the experience of many countries that when GST was introduced there has been a marked increase in inflation and the prices of the commodities. This happened in spite of the availability of the tax credit right from the production stage to the final consumption stage which should have actually reduced the final prices. This was obviously happening because the supplier was not passing on the benefit to the consumer and thereby indulging in illegal profiteering. National Anti-profiteering Authority is therefore being constituted by the central Government to examine whether input tax credits availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in prices. So NAA was due to end by 30th Nov 2019 but council has extended it further 2 years. , indicating that the GST Council has plans for further rationalisation of GST rates.

4. 10% penalty to apply for any delay in depositing profiteered amount

GST Council has approved a levy of 10% penalty for delay in depositing the profiteered amount by more than 30 days. This is a fair measure that would encourage timely compliance by the taxpayer.  

5. E-invoicing to start from January 2020

The new system for raising all the tax invoices on the GST portal has received in-principle approval for implementation from 1 January 2020. This applies to only B2B invoicing. By this system, no separate e-way bill will be required in case of e-invoice. Returns to be framed from these e-invoices. A phased implementation is being worked out.

Earlier, the government had fixed Rs 50 crore as the limit for the applicability of e-invoicing.

6. E-ticketing made mandatory for multiplexes

Among other major decisions, the GST Council approved the electronic ticketing system, for multiplexes, having multi-screens. This will help curb cases of tax evasion and the use of black tickets that have been prevalent.

7. Rate cut decision on electric vehicles, chargers & leasing thereof deferred; Committee to submit its report

The decision to cut GST rates for electric vehicles and electric chargers have been postponed to the next Council meeting. The matter has been referred to the Fitment Committee for checking the feasibility of the rate cut. At present, the GST rates for electric vehicles and electric chargers are 12% and 28% respectively.

Likewise, the valuation rules for goods and services pertaining to solar power generating systems and wind turbines will be placed before the next Fitment Committee. The suggestions made by this Committee will be placed before the next GST Council meeting.

8. Rate cut for lottery put on hold; Matter to be referred before an Attorney General

The previous council meet had not tabled the rate cut matter for lotteries. The 35th GST Council meeting discussed the matter at length and also brought to light two pending cases on this matter before the high court and supreme court respectively. Although the courts had referred the matter back to GST Council, the Council has decided to consult the Attorney General of India.

9. GSTAT to be GST Appellate Tribunal.

The GST council also definitively stated the Goods and Service Tax Appellate Tribunal will be the appellate authority and will adjudicate on appeals arising from central and state tax authorities’ in-house dispute resolution system. The states will decide the number of GSTAT required by them as a result of which there can be two tribunals in a single state.

10. Other Due date extensions

Form New due date
ITC-04 for July 2017- June 2019 31 August 2019
CMP-02 for opting into the composition scheme for service providers under Notification 2/2019-CT rate 31 July 2019

CMP-02 Notification

[TO BE PUBLISHED IN THE GAZZETE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

Government of India

Ministry of Finance (Department of Revenue)

Notification No. 2/2019-Central Tax (Rate)

As amended Notification No.09/2019 –Central Tax (Rate) dated 29.03.2019

G.S.R (E).-  In exercise of the powers conferred by sub-section (1) of section 9, sub-section (1) of section 11, sub-section (1) of section 16  of the Central Goods and Services  Tax Act, 2017 (12 of 2017) (herein after referred to as the “said Act”), the Central Government, on the recommendations of the Council, and on being satisfied that it is necessary in the public interest so to do, hereby notifies that the central tax, on the intra-State supply of goods or services or both as specified in column (1) of the Table below, shall be levied at the rate specified in the corresponding entry in column (2), subject to the conditions as specified in the corresponding entry in column (3) of the said table below, namely:-

Table

Description of supply Rate (per cent.)  

Conditions

(1) (2) (3)
First supplies of goods or services or both upto an aggregate turnover of fifty lakh rupees made on or after the 1st day of April in any financial year, by a registered person.  

 

 

 

 

 

 

 

 

 

 

3

1. Supplies are made by a registered person, –

(i) whose aggregate turnover in the preceding financial year was fifty lakh rupees or below;

(ii) who is not eligible to pay tax under sub-section

(1) of section 10 of the said Act;

(iii) who is not engaged in making any supply which is not leviable to tax under the said Act;

(iv) who is not engaged in making any inter-State outward supply;

(v) who is neither a casual taxable person nor a non-resident taxable person;

(vi) who is not engaged in making any supply through an electronic commerce operator who is required to collect tax at source under section 52; and

(vii) who is not engaged in making supplies of the goods, the description of which is specified in column

(3) of the Annexure below and falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column

(2) of the said annexure.

2.Where more than one registered persons are having the same Permanent Account Number, issued under the Income Tax Act, 1961(43 of 1961), central tax on supplies by all such registered persons is paid  at the rate specified in column (2) under this notification. 

3. The registered person shall not collect any tax from the recipient on supplies made by him nor shall he be entitled to any credit of input tax. 

4. The registered person shall issue, instead  of tax invoice, a bill of supply as referred to in clause (c) of sub-section (3) of section 31 of the said Act with particulars as prescribed in rule 49 of Central Goods and Services Tax Rules. 

5. The registered person shall mention the following words at the top of the bill of supply, namely: – ‘taxable person paying tax in terms of notification No. 2/2019-Central Tax (Rate) dated 07.03.2019, not eligible to collect tax on supplies’. 

6. The registered person opting to pay central tax at the rate of three percent under this notification shall be liable to pay central tax at the rate of three percent on all outward supplies specified in column (1) notwithstanding any other notification issued under sub-section (1) of section 9 or under section 11 of said Act.

7. The registered person opting to pay central tax at the rate of three percent under this notification shall be liable to pay central tax on inward supplies on which he is liable to pay tax under sub-section (3) or, as the case may be, under sub-section (4) of section 9 of said Act at the applicable rates.

8. Where any registered person who has availed of input tax credit opts to pay tax under this notification, he shall pay an amount, by way of debit in the electronic credit ledger or electronic cash ledger, equivalent to the credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock and on capital goods as if the supply made under this notification attracts the provisions of section 18(4) of the said Act and the rules made there-under and after payment of such amount, the balance of input tax credit, if any, lying in his electronic credit ledger shall lapse.

Explanation.-For the purposes of this notification, the expression “first supplies of goods or services or both” shall, for the purposes of determining eligibility of a person to pay tax under this notification, include the supplies from the first day of April of a financial year to the date from which he becomes liable for registration under the  said  Act but  for  the  purpose of determination  of  tax  payable   under  this notification shall not include the supplies from the first day of April of a financial year to the date from which he becomes liable for registration under the Act.

 ANNEXURE

Sl. No. Tariff item, sub- heading, heading or Chapter Description
(1) (2) (3)
1 2105 00 00 Ice cream and other edible ice, whether or not containing cocoa.
2 2106 90 20 Pan masala
3 24 All goods, i.e. Tobacco and manufactured tobacco substitutes

 2. In computing aggregate turnover in order to determine eligibility of a registered person to pay central tax at the rate of three percent under this notification, value of supply of exempt services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount, shall not be taken into

3. –For the purpose of this notification,-

“tariff item”, “sub-heading”, “heading” and “chapter” shall mean respectively a tariff item, sub- heading, heading and chapters specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).

(ii) the rules for the interpretation of the First Schedule to the said Customs Tariff  Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this

4. This notification shall come into force on the 1st day of April,2019.

[F. No.354/25/2019-TRU]

(Gunjan Kumar Verma)

Under  Secretary to the  Government   of India

11. For non-filing of GST returns, E-way bills to be blocked

The law stated that where the GST returns in GSTR-3B/ GSTR-4 is not filed for two consecutive tax periods, e-way bill generation for such taxpayers would be disabled. This will be brought into effect from 21 August 2019, instead of the earlier notified date of 21st June 2019.

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