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Implications of Notification 02/2019-Central Tax dated 29-01-2019 on the various GST related provisions of The Central Goods and Services Tax (Amendment) Act, 2018.
The Central Goods and Services Tax (Amendment) Act, 2018 was introduced in Lok Sabha by the Minister of Finance, Mr. Piyush Goyal on August 7, 2018. It amends The Central Goods and Services Tax 2017. As per section 1(2)(b) The Central Goods and Services Tax (Amendment) Act, 2018 all sections shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.
Notification 02/2019-Central Tax dated 29-01-2019 has been issued which says that provisions The Central Goods and Services Tax (Amendment) Act, 2018 (31 of 2018), except clause (b) of section 8, section 17, section 18, clause (a) of section 20, sub-clause (i) of clause (b) and sub-clause (i) of clause (c) of section 28, shall come into force on 01-02-2019. Following are the implications of this notification-
We are also attaching herewith copies of The Central Goods and Services Tax 2017 and Comparative insight into the amended CGST and IGST Acts applicable w.e.f. 01.02.2019 by CA Bimal Jian for your kind perusal.
| Finance Act 2018 | CGST Act | Brief Description | Date of Applicability |
| 1 | 1 | Bill provides for the Short title and Commencement. | 01-02-2019 |
| 2 | 2 | Amend certain expressions used in the Bill | 01-02-2019 |
| 3 | 7 | Term ‘supply’ is amended to exclude activities/ transactions listed in Schedule II to ensure that the activities/ transactions as per Schedule II is to determine only whether the same is supply of goods or services. Hence, activities/ transactions listed in Schedule II (as supply of service or supply of goods) shall be taxed only when they constitute ‘supply’ in accordance with provisions of Section 7(1)(a), (b) and (c) of the CGST Act. Amendments in definition of ‘supply’ are made retrospectively applicable. Thus, there shall not be any past litigation on account of any transaction merely covered under Schedule II, but otherwise not a ‘supply’. | 01-02-2019 |
| 4 | 9 | Amend section 9 of the principal Act relating to “Levy and Collection” so as to restrict the levy of tax on reverse charge basis to receipt of supplies of certain specified categories of goods or services or both by notified classes of registered persons from unregistered suppliers on the recommendations of the Council. | 01-02-2019 |
| 5 | 10 | This amendment gives effect to the earlier decision of the GST Council to increase threshold limit for the composition suppliers from INR 1 crore to 1.5 crores and further to enable registered manufacturers and traders to 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 [Presently, registered persons engaged in the supply of services (other than restaurant services) are not eligible for the composition scheme] The amendment also allows supply of services to the extent of above specified limits, apart from services referred in Para 6(b) of Schedule II i.e. restaurant services. This change seems to be inserted in view of clause (b) of Section 10. Clause (b) mentions about composite rate of tax on restaurant service providers. It clarifies that for clause (b), this limit shall apply for services supplied other than restaurant services | 01-02-2019 |
| 6 | 12 | This amendment seeks to correct a drafting error and thus includes issuance of invoice/other documents contained in other sub-sections of Section 31 like continuous supply of goods, etc. | 01-02-2019 |
| 7 | 13 | This amendment seeks to correct a drafting error and thus includes issuance of invoice/other documents contained in other sub-sections of Section 31 like continuous supply of services etc. | 01-02-2019 |
| 8 | 16 | A. Amend section 16 of the principal Act relating to “Eligibility and conditions for input tax credit”, in order to provide for input tax credit in cases of “Bill to-ship-to” model in the case of supply of services.
The said clause further seeks to include the provisions relating to the new return format as specified in the proposed new section 43A, for availment of input tax credit. |
Clause A. 01-02-2019
Clause B. Not yet notified |
| 9 | 17 | B. Amend section 17 of the principal Act relating to “Apportionment of credit and blocked credits”, in order to further expand the scope of eligibility of input tax credit. | 01-02-2019 |
| 10 | 20 | This amendment excludes the amount of tax levied under entry 92A of List I from the value of turnover for the purposes of distribution of credit by ISD. The same was inadvertently left out from clause (c) of Explanation to Section 20. Entry 92A of List I covers taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter-State trade or commerce. | 01-02-2019 |
| 11 | 22 | Amend section 22 of the principal Act relating to “Persons liable for registration”, so as to increase the threshold turnover for registration in special category States of Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand from ten lakh rupees to twenty lakh rupees | 01-02-2019 |
| 12 | 25 | Now, only those e-commerce operators who are required to collect tax at source under Section 52 would be required to take compulsory registration. Other small e-commerce operators would now be eligible for availing the threshold exemption limit benefit for registration purposes. | 01-02-2019 |
| 13 | 26 | A. Amend section 25 of the principal Act relating to “Procedure for registration”, so as to allow persons having multiple places of business in a State or Union territory to obtain separate registration for each such place of business, and
To insert the provisions for separate registration for a person having a unit(s) in a Special Economic Zone or being a Special Economic Zone developer, distinct from his other units located outside the Special Economic Zone. |
01-02-2019 |
| 14 | 29 | B. Amend section 29 of the principal Act relating to “Cancellation of registration”, so as to provide for temporary suspension of registration while cancellation of registration is under process. This would relieve the taxpayer of continued compliance burden under the law till such time as the process of allowing cancellation of registration is completed. | 01-02-2019 |
| 15 | 34 | Amend section 34 of the principal Act relating to “Credit and debit notes”, so as to allow registered persons to issue consolidated credit or debit notes in respect of multiple invoices issued in a Financial Year | 01-02-2019 |
| 16 | 35 | Amend section 35 of the principal Act relating to “Accounts and other records” so as to provide that any Department of the Central or State Government or local authority which is subject to audit by the Comptroller and Auditor-General of India need not get their books of account audited by any Chartered Accountant or Cost Accountant | 01-02-2019 |
| 17 | 39 | Amend section 39 of the principal Act relating to “Furnishing of returns”, so as to provide for prescribing the procedure for quarterly filing of returns with monthly payment of taxes | Not yet Notified |
| 18 | 43A | Insert a new section 43A to provide for prescribing the procedure for furnishing return and availing input tax credit | Not yet Notified |
| 19 | 48 | Amend section 48 of the principal Act relating to “Goods and Services Tax Practitioners”, so as to allow Goods and Services Tax Practitioners to perform other functions such as filing refund claim, filing application for cancellation of registration, etc. | 01-02-2019 |
| 20 | 49 | A. Amend section 49 of the principal Act relating to “Payment of tax, interest, penalty and other amounts” in order to provide that the credit of State tax or Union territory tax can be utilized for payment of integrated tax only when the balance of the input tax credit on account of central tax is not available for payment of integrated tax | 01-02-2019 |
| 21 | 49A & 49B | Insert two new sections, namely, section 49A and section 49B. Section 49A seeks to specify that a taxpayer would be able to utilize the input tax credit on account of central tax, State tax or Union territory tax only after exhausting all the credit on account of integrated tax available to him towards payment or integrated tax, Central tax, State tax or Union territory tax. Section 49B seeks to empower the Government to prescribe any specific order of utilization of input tax credit of any of the taxes for payment of any tax. | 01-02-2019 |
| 22 | 52 | Amend section 52 of the principal Act relating to “Collection of tax at source”, in order to give the reference of section 39. | 01-02-2019 |
| 23 | 54 | A. Amend section 54 of the principal Act relating to “Refund of tax”, in order to provide that the principle of unjust enrichment will apply in case of a refund claim arising out of supplies of goods or services or both made to a Special Economic Zone developer or unit, and
B. To allow receipt of payment in Indian rupees, where permitted, by the Reserve Bank of India in case of export of services. |
01-02-2019 |
| 24 | 79 | Amend section 79 of the principal Act relating to “Recovery of tax”, to enable recovery to be made from distinct persons registered in different States or Union territories in order to ensure speedy recovery from other establishments of the registered person. | 01-02-2019 |
| 25 | 107 | Amend section 107 of the principal Act relating to “Appeals to Appellate Authority”, in order to specify twenty-five crore rupees as the upper limit of the amount of pre-deposit payable for filing of appeal before the Appellate Authority | 01-02-2019 |
| 26 | 112 | Amend section 112 of the principal Act relating to “Appeals to Appellate Tribunal”, in order to specify fifty crore rupees as the upper limit of the amount of pre-deposit payable for filing of appeal before the Appellate Tribunal. | 01-02-2019 |
| 27 | 129 | Amend section 129 of the principal Act relating to “Detention, seizure and release of goods and conveyances in transit”, in order to increase the time limit before which proceedings under section 130 can be initiated from seven to fourteen days. | 01-02-2019 |
| 28 | 140 | Amend section 140 of the principal Act relating to “Transitional arrangements for input tax credit”, in order to clarify with retrospective effect from 1st July, 2017 that the cesses and additional duty of excise (on textile and textile articles) levied under the pre-Goods and Services Tax laws shall not be a part of transitional input tax credit under the goods and services tax. | 01-02-2019 |
| 29 | 143 | Amend section 143 of the principal Act relating to “Job work procedure” in order to empower the Commissioner to extend the time limit for return of inputs and capital goods sent on job work, upto a period of one year and two years, respectively. | 01-02-2019 |
| 30 | 7 Readwith schedule I | Amend Schedule I of the principal Act relating to “Activities to be treated as supply even if made without consideration” | 01-02-2019 |
| 31 | 7 Readwith schedule II | Amend the title of Schedule II of the principal Act from “Activities to be treated as supply of goods or supply of services” to “Activities or transactions to be treated as supply of goods or supply of services”. | 01-02-2019 |
| 32 | 7 Readwith schedule III | Amend Schedule III of the principal Act relating to “Activities or transactions which shall be treated neither as a supply of goods nor a supply of services”. | 01-02-2019 |
Implications of Notification 01/2019-Integrated Tax dated 29-01-2019 on the various GST related provisions of The Integrated Goods and Services Tax (Amendment) Act, 2018.
The Integrated Goods and Services Tax (Amendment) Act, 2018 was introduced in Lok Sabha by the Minister of Finance, Mr. Piyush Goyal on August 7, 2018. It amends The Integrated Goods and Services Tax 2017. As per section 1(2)(b) The Integrated Goods and Services Tax (Amendment) Act, 2018 all sections shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.
Notification 01/2019-Integrated Tax dated 29-01-2019 has been issued which says that provisions of The Integrated Goods and Services Tax (Amendment) Act, 2018 (32 of 2018) shall come into force on 01-02-2019. Following are the implications of this notification-
We are also attaching herewith copies of The Integrated Goods and Services Tax 2017 and Comparative insight into the amended CGST and IGST Acts applicable w.e.f. 01.02.2019 by CA Bimal Jian for your kind perusal.
| Finance Act 2018 | IGST
Act |
Brief Description | Date of Applicability |
| 1 | 1 | Bill provides for the Short title and Commencement. | 01-02-2019 |
| 2 | 2 | A. This amendment allows receipt of payment in Indian rupees in case of export of services wherever permitted by the RBI.
B. The reference to Panchayat under Article 243G is sought to be added in the definition of Governmental authority. |
01-02-2019 |
| 3 | 5 | Amend section 5 of the principal Act relating to “Levy and Collection” so as to restrict the levy of tax on reverse charge basis to receipt of supplies of certain specified categories of goods or services or both by notified classes of registered persons from unregistered suppliers on the recommendations of the Council. | 01-02-2019 |
| 4 | 8 | Amendment is made to align with the CGST Amendment Act, 2018 which allows more than registration in a state or union territory by removing the requirement of having multiple business verticals. | 01-02-2019 |
| 5 | 12 | In order to provide a level playing field to the domestic transportation companies and promote export of goods, this proviso provides that transportation of goods from a place in India to a place outside India by a transporter located in India would not be chargeable to GST, as place of supply will be outside India | 01-02-2019 |
| 6 | 13 | Amendment is made to not tax job work of any treatment or process done on goods temporarily imported into India (e.g., gold, diamonds) which are then exported. | 01-02-2019 |
| 7 | 17A | This amendment provides that the amount of IGST which does not get apportioned under clauses (a) to (f) for the time being shall be apportioned to the Central Government and State Government/Union Territories @ 50% each on the recommendations of the Council and shall be adjusted against the amounts apportioned under clauses (a) to (f). | 01-02-2019 |
| 8 | 20 | This amendment prescribes the maximum ceiling of INR 50 crores/ 100 crores as predeposit for filing appeal to Appellate Authority/ Appellate Tribunal respectively. The amendment is made in line with amendments proposed in Section 107(6) and 112(8) of the CGST Act, 2017. |
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