Dr. Sanjiv Agarwal

The following are the major changes recommended by the GST Council in its 25th meeting held on 18th January, 2018, ahead of Union Budget– 2018 which shall be presented on 1st February, 2018. The Council is again meeting on 28 January, 2018 and it is expected that there may be some changes in GST law to be taken up in Finance Bill.

Changes in relation to Goods

Reduction from 28% to 18%

√ GST rate on supply of old and used motor vehicles [medium and large cars and SUVs] on the margin of the supplier shall be applicable @18%.

(no input tax credit of central excise duty/value added tax or GST paid on such vehicles has been availed)

Reduction from 28% to 12%

√ GST on supply all types of old and used motors vehicles [other than medium and large cars and SUVs] on the margin of the supplier shall applicable @12%.

(no input tax credit of central excise duty /value added tax or GST paid on such vehicles has been availed)

Changes in relation to Services

Exemptions

√ Legal services provided to Government, Local Authority, Governmental Authority and Government Entity shall be exempt.

√ Value of exempt supply under sub-section (2) of section 17, shall not include the value of deposits, loans or advances on which interest or discount is earned.

√ Service by way of transportation of goods from India to a place outside India by air is exempt up to 30th September, 2018.

√ Service by way of transportation of goods from India to a place outside India by sea is exempt up to 30th September, 2018

√ Exemption limit for services provided by Resident Welfare Association has been enhanced from Rs. 5000/- to Rs. 7500/-

√ Pure services provided to Govt. entity has been exempted vide entry no. 3 of Notification No. 12/2017 Central Tax (Rate).

Reverse Charge

GST on renting of immovable property by Government or local authority to a registered person shall be paid under reverse Charge while renting of immovable property by government or local authority to un-registered person shall continue under forward charge.

Changes in relation to Compensation Cess

On the following goods, the rate of GST Compensation Cess has been reduced to ‘NIL’

√ All types of old and used motors vehicles [other than medium and large cars and SUVs] on the margin of the supplier (no input tax credit of central excise duty /value added tax or GST paid on such vehicles has been availed)

√ Old and used motor vehicles [medium and large cars and SUVs], on the margin of the supplier

(no input tax credit of central excise duty/value added tax or GST paid on such vehicles has been availed)

√ Motor vehicles [falling under heading 8702, as it was in excise regime] cleared as ambulances, duly fitted with all fitments, furniture and accessories necessary for an ambulance from the factory manufacturing ambulance from the factory manufacturing such vehicles. (10-13 seater buses and ambulances, subject to specified conditions)

Returns and General Compliance

  • The late fee payable by any registered person for failure to furnish the following returns has been reduced to fifty rupees per day

√ FORM GSTR-1 (supply details),

√ FORM GSTR-5 (Non-resident taxable person) or

√ FORM GSTR-5A (OIDAR)

√ FORM GSTR-6 (Input Service Distributor)

  • Late fee payable on failure shall be twenty rupees per day for NIL filers.
  • Persons who had obtained voluntary registration can now apply for cancellation of their registration even before the expiry of one year from the effective date of registration.
  • For migrated taxpayers, the last date for filing FORM GST REG-29(cancellation of registration) extended till 31 March, 2018.
  • The facility for generation, modification and cancellation of e-way bills is being provided:

√ On trial basis- ewaybill.nic.in

√ Once fully operational- ewaybillgst.gov.in

The above recommendations are proposed to be implemented via notifications to be issued giving effect from 00 hours on 25.01.2018.

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One response to “Recent Major Changes In Levy of Tax and Cess under GST Regime”

  1. Jitender Kanswal says:

    Very nice piece of Summary

    Thanks you.

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