Analytical approach to the Changes under GST Law w.e.f. 01/02/2019

Introduction: Now a days, with the tremendous changes in GST law, we, as a professional should adapt changes.

Being a professional or taxpayer, Compliance with the GST provisions is a must-do task by us. GST council is favourable in adapting required changes as desired by the industries and Taxpayers. Taxpayers and Professionals are welcoming the outcomes. In this thread, 5 more notifications have been notified under Central Tax by the Central Board of Indirect Tax and Customs on 29/01/2019.

Analysis of Notifications: Notification No. 02/2019 (Central Tax) to 06/2019 (Central Tax) have been notified giving effect to the changes approved by the GST Council in last meetings. Further,  Provisions of the Central Goods and Services Tax (Amendment) Act, 2018 has also been made effective so far.  Notifications wise analysis are discussed below:

1. Notification No. 02/2019-Central Tax dated 29.01.2019

After the enforcement of the GST Law, first time, amendments in the acts are on the cusp of being notified. The Lok Sabha passed the GST Amendment Bill on 09/08/2018 and same was given presidential assent to become an act on 29/08/2018. Provisions are to be made effective once they are being notified. The GST council in its 31st GST Council Meeting held on 22nd December 2018, had announced through the press release dated 04/01/2019 that the effective date of applicability of amendments in GST Act(s) 2018 will be from 1st February 2019. However, no notification was issued in this regard so far. At this instant, this notification has been issued to proclaim such effective date just before three days. Provisions of 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 w.e.f. 01/02/2019. Whereas, provisions of 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 had already been made effective retrospectively w.e.f. 01/07/2017.

2. Notification No. 03/2019-Central Tax dated 29.01.2019

Rules have been made further to amend the Central Goods and Services Tax Rules, 2017 which will be called as Central Goods and Services Tax (Amendment) Rules, 2019. Major points of these rules are as under-

  • Composition levy for Services has been added i.e. Now composition scheme shall be for both Goods & Services.
  • Separate registration for multiple places of business within a State or a Union territory subject to some conditions. No different business verticals are required to take separate registration. such person shall require to have more than one place of business to take separate registration.
  • Rule 21A has been inserted for Suspension of registration. When cancellation of registration is applied under rule 20, the registration shall be deemed to be suspended from the date of submission of the application or the date from which the cancellation is sought, whichever is later.
  • Rule 41A has been inserted for transfer of credit on obtaining separate registration for multiple places of business within a State or Union territory. After obtaining separate registration for multiple places of business if person wants to transfer, either wholly or partly, the unutilised input tax credit lying in his electronic credit ledger to any or all of the newly registered place of business then he need to furnish a statement in the form of GST ITC-02A electronically on the common portal within 30 days from obtaining such separate registrations.

Input tax credit shall be transferred to the newly registered entities in the ratio of the value of assets held by them at the time of registration. ‘Value of Assets’ means the value of the entire assets of the business whether or not input tax credit has been availed thereon.

Format of Form GST ITC-02A has also been given which shall be a declaration for transfer of ITC pursuant to registration under sub-section (2) of section 25.

  • Particulars of A Credit or Debit Note as referred to in section 34 of the act has been provided which shall include Name, Address, GSTIN of supplier, Nature of document, Serial No., Date, Delivery Address, serial number(s) and date(s) of the corresponding tax invoice(s), value of taxable supply of goods or services, rate of tax, signature or digital signature of the supplier or his authorised representative etc. It means now, a single debit note or credit note can be issued for multiple corresponding tax invoices or bill(s) of supply.
  • In case of GST Practitioner, following changes in the rules have been made-
    • Enrolment shall be valid until a period of 30 months from the appointed date. A person enrolled as a goods and services tax practitioner shall be eligible to remain enrolled unless he passes such examination conducted within said period of 30 months. The Last Date for passing the examination for GST Practitioners to be extended till 31/12/2019 for those GST Practitioners who have enrolled under rule 83(1)(b) i.e. who were sales tax practitioner or tax return preparer under the existing law for a period of not less than five years.
    • Further, powers have been given to GST Practitioner by substituting Sub-rule (8) of Rule 83. Now, goods and services tax practitioner can undertake any or all of the following activities on behalf of a registered person, if so authorised by him to-

(a) furnish the details of outward and inward supplies;

(b) furnish monthly, quarterly, annual or final return;

(c) make deposit for credit into the electronic cash ledger;

(d) file a claim for refund;

(e) file an application for amendment or cancellation of registration;

(f) furnish information for generation of e-way bill;

(g) furnish details of challan in FORM GST ITC-04;

(h) file an application for amendment or cancellation of enrolment under rule; and

(i) file an intimation to pay tax under the composition scheme or withdraw from the said scheme:

It is to be noted that where any application relating to a claim for refund or an application for amendment or cancellation of registration or where an intimation to pay tax under composition scheme or to withdraw from such scheme has been submitted by the goods and services tax practitioner authorised by the registered person, a confirmation shall be sought from the registered person and the application submitted by the said practitioner shall be made available to the registered person on the common portal and such application shall not be further proceeded with until the registered person gives his consent to the same.

  • Changes has been made related to refund. Now, the order issued in FORM GST RFD-04 shall not be required to be revalidated by the proper officer. Further, the payment advice in FORM GST RFD-05 shall be required to be revalidated where the refund has not been disbursed within the same financial year in which the said payment advice was issued. The order issued in FORM GST RFD-06 shall not be required to be revalidated by the proper officer.
  • Changes in Form GSTR-4: Changes has been made in Clause 6 and 7 for the Tables. Turnover has been substituted by “Total Turnover”. Further, Column No. 3 has been inserted in clause 6 and Column Nos. 4 & 8 have been inserted in clause 7 namely “Out of turnover reported in (2/3/7), turnover of services”.
  • Others: Declaration has been changed in Form GST RFD-01 and GST RFD-01A. In FORM GST APL-01, changes has also be made in Clause 15 for the tables and Clause 18 has been inserted namely- “Place of supply wise details of the integrated tax paid (admitted amount only) mentioned in the Table in sub-clause (a) of clause 15 (item (a)), if any.” Further, In FORM GST APL-05, changes has also be made in Clause 14 for the tables and Clause 15 has been inserted namely- “Place of supply wise details of the integrated tax paid (admitted amount only) mentioned in the Table in sub-clause (a) of clause 14 (item (a)), if any.”

3. Notification No. 04/2019-Central Tax dated 29.01.2019

Jurisdiction of Joint Commissioner (Appeals) has been defined through this notification with wider powers w.e.f. 01/02/2019.

4. Notification No. 05/2019-Central Tax dated 29.01.2019

To align the rates for Composition Scheme with CGST Rules, 2017, the words and figures , “an amount of tax calculated at the rate specified in rule 7 of the Central Goods and Services Tax Rules, 2017:” has been taken the place of “an amount calculated at the rate of half per cent” w.e.f. 01/02/2019. Thus, Notification No. 8/2017 – Central Tax, dated the 27th June, 2017 has been amended and Now, an eligible registered person, whose aggregate turnover in the preceding financial year did not exceed one crore rupees (fifty lakh rupees in case of specified states), may opt to pay, in lieu of the central tax payable by him, an amount of tax calculated at the rate specified in rule 7 of the Central Goods and Services Tax Rules, 2017:

5. Notification No. 06/2019-Central Tax dated 29.01.2019

To align special category states with the explanation in section 22 of CGST act, 2017, notification no. 65/2017 dated -central tax dated 15.11.2017 has been amended. As per notification no. 65/2017, persons making supplies of services, other than supplies specified under sub-section (5) of section 9 of the said Act through an electronic commerce operator who is required to collect tax at source under section 52 of the said Act, and having an aggregate turnover, to be computed on all India basis, not exceeding an amount of twenty lakh rupees in a financial year, as the category of persons exempted from obtaining registration under the said Act. In the first proviso, aggregate turnover has been limited to 10 lakh rupees in case of “special category States” as specified in sub-clause (g) of clause (4) of article 279A of the Constitution, other than the State of Jammu and Kashmir, which has now been amended vide notification  06/2019 and  for the words, brackets, letters and figures “sub-clause (g) of clause (4) of article 279A of the Constitution, other than the State of Jammu and Kashmir”, words, brackets and figures “the first proviso to sub-section (1) of section 22 of the said Act, read with clause (iii) of the Explanation to the said section” shall be substituted. Accordingly, the proviso shall be read as

“Provided that the aggregate value of such supplies, to be computed on all India basis, should not exceed an amount of ten lakh rupees in case of “special category States” as specified in the first proviso to sub-section (1) of section 22 of the said Act, read with clause (iii) of the Explanation to the said section.”

Conclusion:  In view of above, it can be said that with the elections around the corner, Governments is ready to give relief to GST taxpayers. GST Council has decided to extend the composition scheme for categories of services. Changes in Composition scheme policy will provide further impetus to the retails/service sector. The Council is continuously evaluating the various proposals of rate reduction, simplifying GST provisions, new schemes etc.

About the author:  Author- Shilvi Khandelwal is a chartered accountant by profession. She is DISA, FCA, LLB and B.Com. She is engaged in GST implementation, writing & training in GST. Author can be reach at thetaxsavvy@gmail.com.

Author Bio

Qualification: CA in Practice
Company: B KHOSLA AND COMPANY
Location: JAIPUR, Rajasthan, IN
Member Since: 22 Jun 2017 | Total Posts: 6
I am Shilvi Khandelwal. I am a practising chartered accountant by profession engaged in Internal Control, Tax Planning, GST Implementation and Business Consultancy for various hotels like Radisson, Marriott, Royal Orchid etc & automobile dealers like BMW, VW and Hyundai etc having 6 years of exp View Full Profile

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3 Comments

  1. JITENDER KUMAR RANKA says:

    Mere reading of Notification No. 01/2019–Central Tax (Rate), Any one can conclude oh, RCM on purchase from unregistered suppliers shall have to be paid by registered dealer who purchases.

    But it is not so, Why? Read it:
    The notification of exemption is rescinded as it is not needed now since section 9(4) it self has been amended to the effect that there would be no RCM for purchase of goods/services unless government wants to levy by notification. This has been effected vide CGST amendment Act 2018 (31 of 2018) which is effective from 1st Feb 2019

    RCM for specific goods/services under Section 9(3) remains.

    While in two meetings before last it had been concluded by GST council to remove RCM under section 9(4).

  2. rm says:

    Conclusion:The Council is continuously evaluating the various proposals of rate reduction, simplifying GST provisions, new schemes etc.

    the council and the gst practitioners and professional need to focus also on:-
    01. whether gst portal design and reports user/gst payer friendly for operating in solo and only for law related matter need to be referred to ca,cma,llb etc
    02.Whether gst portal AND RETURNS, AUDIT 9C FORMAT certified by DISA/CISA/ISO/ AICTE/NIC
    03.THE AMENDMENTS, NOTIFICATIONS AND CHANGES ARE MORE THAN THE BASIC LAW WILL INVITE TOO MUCH LITIGATION
    04.NEED FOR OFF LINE, ONLINE SUBMISSION OF RETURNS
    05.ADVOCATES AND GTA -SERVICES UNDER RCM BE SCRAPPED AND BROUGHT UNDER MANDATORY GST REGN ALONG WITH OTHER PROFESSIONS.
    06. LABOUR CHARGES FOR PROJECTS IN RURAL AREAS OF PUBLIC UTILITY FOR STATE /NATIONAL PROJECTS OF ROAD, CANALS, WATER WAYS, POWER,INFRASTRUCTURE BE EXEMPT FROM GST LIKE IN ERSTWHILE VAT
    07. HSD/PETROL FUEL BE BROUGHT UNDER GST FOR INPUT CLAIMS.
    08.FORMAT OF GST PORTAL 1,3B MODIFIED FOR TURNOVER AS PER FINANCIAL AND AS PER GST ACT -RETURNS AS SHOWN IN FORM 9C BUT ADJUSTMENT IN GSTR-1 REQUIRED
    09.MINING/NATURAL RESOURCES WHERE ROYALTY IS ATTRACTING NEED REVIEW FOR GST LIKE SOIL, SAND, AGGREGATE,GRAVEL
    10.RETURNS 1,3B BE ALLOWED TO BE FILED EVEN WITHOUT PAYMENTS AND RETURNS BE MADE QUARTERLY AS BUSINESS REVENUE, RECEIPTS WILL NOT REALIZED MONTHLY DUE TO CERTIFICATION OF WORK CONTRACT SERVICES IN GOVT SECTOR LONG PROCESS

  3. satish v says:

    hi one of our supplier died with out paying GST for last one year. so what is the implication on input we have taken by paying the GST in supplied bills. is that liability need to be paid by us again?

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