SECTION WISE ANALYSIS OF THE CENTRAL GOODS AND SERVICES TAX (AMENDMENT) ACT, 2018 AS NOTIFIED ON 30-08-2018 [44]

Short title and commencement.

 (1) This Act may be called the Central Goods and Services Tax (Amendment) Act, 2018.

(2) Save as otherwise provided, the provisions of this Act shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint:

Provided that different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision.

Amendment of section 2 (Definitions).

In section 2 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the principal Act),––

Provisions as per CGST Act’2017 Amendment New Provision Analysis
(4) “adjudicating authority” means any authority, appointed or authorised to pass any order or decision under this Act, but does not include

  • the Central Board of Excise and Customs,
  • the Revisional Authority,
  • the Authority for Advance Ruling,
  • the Appellate Authority for Advance Ruling,
  • the Appellate Authority and
  • the Appellate Tribunal;
(a) in clause (4),––

(i) for the words “Central Board of Excise and Customs”, the words “Central Board of Indirect Taxes and Customs” shall be substituted;

(ii) for the words “the Appellate Authority and the Appellate Tribunal”, the words, brackets and figures “the Appellate Authority, the Appellate Tribunal and the Authority referred to in sub-section (2) of section 171” shall be substituted;

(4) “adjudicating authority” means any authority, appointed or authorised to pass any order or decision under this Act, but does not include

  • the Central Board of Indirect Taxes and Customs,
  • the Revisional Authority,
  • the Authority for Advance Ruling,
  • the Appellate Authority for Advance Ruling,
  • the Appellate Authority,
  • the Appellate Tribunal and
  • the Authority referred to in sub-section (2) of section 171
Adjudicating authority does not include Anti-Profiteering Authority constituted u/s 171 of CGST Act 2017.
(17) “business” includes—

* * * * *

(h) services provided by a race club by way of totalisator or a licence to book maker in such club ; and

(b) in clause (17), for sub-clause (h), the following sub-clause shall be substituted, namely:—

“(h) activities of a race club including by way of totalisator or a license to book maker or activities of a licensed book maker in such club; and”;

(17) “business” includes—

* * * * *

“(h) activities of a race club including by way of totalisator or a license to book maker or activities of a licensed book maker in such club; and

Scope of activities of race club broadened under GST.
(18) “business vertical” means a distinguishable component of an enterprise that is engaged in the supply of individual goods or services or a group of related goods or services which is subject to risks and returns that are different from those of the other business verticals.

Explanation.—For the purposes of this clause, factors that should be considered in determining whether goods or services are related include—

(a) the nature of the goods or services;

(b) the nature of the production processes;

(c) the type or class of customers for the goods or services;

(d) the methods used to distribute the goods or supply of services; and

(e) the nature of regulatory environment (wherever applicable), including banking, insurance, or public utilities;

(c) clause (18) shall be omitted; Concept of business vertical omitted and corresponding changes also made in sub-section 2 of section 25 of CGST Act 2017.

Now more than one registration in single states may be obtained for different place of businesses even if there are no separate verticals.

Similar Charges are also made in section 8 of IGST Act 2017.

(35) “cost accountant” means a cost accountant as defined in clause (c) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959; (d) in clause (35), for the word, brackets and letter “clause (c)”, the word, brackets and letter “clause (b)” shall be substituted; (35) “cost accountant” means a cost accountant as defined in clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959; Respective clauses of section 2(1) (b) of Cost and Works Accountants ct,1959 read as under:

(b) “cost accountant” means a person who is a member of the Institute;

(c) “Council” means the Council of the Institute;

So, Drafting error is rectified.

(69) “local authority” means—

* * * * *

(f) a Development Board constituted under article 371 of the Constitution; or

(e) in clause (69), in sub-clause (f), after the word and figures “article 371”, the words, figures and letter “and article 371J” shall be inserted; (69) “local authority” means—

* * * * *

(f) a Development Board constituted under article 371 and article 371J of the Constitution; or

Development Board constituted under special provisions with respect to state of Karnataka also included in definition of local authority for the purpose of GST Act.

Note: Local Authority

Has power to deduct tds u/s. 51.

Is under obligation to file return u/s. 150.

The duties performed by any person as a Chairperson or a Member or a Director in a body established by local authority and who is not deemed as an employee before the commencement of CGST Act shall neither be not be treated as supply under GST (SCH-I).

(102) “services” means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, Currency or denomination for which a separate consideration is charged; (f) in clause (102), the following Explanation shall be inserted, namely:––

Explanation.––For the removal of doubts, it is hereby clarified that the expression “services” includes facilitating or arranging transactions in securities;’.

(102) “services” means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, Currency or denomination for which a separate consideration is charged;

Explanation.––For the removal of doubts, it is hereby clarified that the expression “services” includes  facilitating or arranging transactions in securities;

Clarification

 Amendment of section 7 (Scope of supply).

In section 7 of the principal Act, with effect from the 1st day of July, 2017,–

Provisions as per CGST Act’2017 Amendment New Provision Analysis
(1) For the purposes of this Act, the expression “supply” includes—

(a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business;

(b) import of services for a consideration whether or not in the course or furtherance of business;

(c) the activities specified in Schedule I, made or agreed to be made without a consideration; and

(d) the activities to be treated as supply of goods or supply of services as referred to in Schedule II.

 (a) in sub-section (1), ––

(i) in clause (b), after the words “or furtherance of business;”, the word

“and” shall be inserted and shall always be deemed to have been inserted;

(ii) in clause (c), after the words “a consideration”, the word “and” shall

be omitted and shall always be deemed to have been omitted;

(iii) clause (d) shall be omitted and shall always be deemed to have been

omitted;

(1) For the purposes of this Act, the expression “supply” includes—

(a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business;

(b) import of services for a consideration whether or not in the course or furtherance of business; AND

(c) the activities specified in Schedule I, made or agreed to be made without a consideration; AND

(d) the activities to be treated as supply of goods or supply of services as referred to in Schedule II.

 

Drafting error rectified.

SCH-II does not decide whether a transaction is supply or not, rather it decides whether a supply is in nature of supply of goods or supply of services.

 (b) after sub-section (1), the following sub-section shall be inserted and shall always be deemed to have been inserted, namely:––

“(1A) where certain activities or transactions, constitute a supply in accordance with the provisions of sub-section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II.”;

(1A) where certain activities or transactions, constitute a supply in

accordance with the provisions of sub-section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II.;

SAME AS ABOVE
(3) Subject to the provisions of sub-sections (1) and (2), the Government may, on the recommendations of the Council, specify, by notification, the transactions that are to be treated as—

(a) a supply of goods and not as a supply of services; or

(b) a supply of services and not as a supply of goods.

(c) in sub-section (3), for the words, brackets and figures “sub-sections (1) and (2)”, the words, brackets, figures and letter “sub-sections (1), (1A) and (2)” shall be substituted. (3) Subject to the provisions of sub-sections (1), (1A) and (2), the Government may, on the recommendations of the Council, specify, by notification, the transactions that are to be treated as—

(a) a supply of goods and not as a supply of services; or

(b) a supply of services and not as a supply of goods.

SAME AS ABOVE

Amendment of section 9 (Levy and Collection).

In section 9 of the principal Act, for sub-section (4), the following sub-section shall be substituted, namely:––

Provisions as per CGST Act’2017 Amendment New Provisions Analysis
(4) The central tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. (4) The Government may, on the recommendations of the Council, by notification, specify a class of registered persons who shall, in respect of supply of specified categories of goods or services or both received from an unregistered supplier, pay the tax on reverse charge basis as the recipient of such supply of goods or services or both, and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to such supply of goods or services or both. (4) The Government may, on the recommendations of the Council, by notification, specify a class of registered persons who shall, in respect of supply of specified categories of goods or services or both received from an unregistered supplier, pay the tax on reverse charge basis as the recipient of such supply of goods or services or both, and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to such supply of goods or services or both. RCM Provision on supplies from unregistered person restricted to

  • some specific class of registered person and
  • for specific category of goods or services

Amendment of section 10 (Composition Levy).

In section 10 of the principal Act,—

Provisions as per CGST Act’2017 Amendment New Provisions Analysis
(1) Notwithstanding anything to the contrary contained in this Act but subject to the provisions of sub-sections (3) and (4) of section 9, a registered person, whose aggregate turnover in the preceding financial year did not exceed fifty lakh rupees,

may opt to pay, in lieu of the tax payable by him, an amount calculated at such rate as may be prescribed, but not exceeding,—

(a) one per cent. of the turnover in State or turnover in Union territory in case of a manufacturer,

(b) two and a half per cent. of the turnover in State or turnover in Union territory in case of persons engaged in making supplies referred to in clause (b) of paragraph 6 of Schedule II, and

(c) half per cent. of the turnover in State or turnover in Union territory in case of other suppliers, subject to such conditions and restrictions as may be prescribed:

Provided that the Government may, by notification, increase the said limit of fifty lakh rupees to such higher amount, not exceeding one crore rupees, as may be recommended by the Council.

(a) in sub-section (1) —

(i) for the words “in lieu of the tax payable by him, an amount calculated at such rate”, the words, brackets and figures “in lieu of the tax payable by him under sub-section (1) of section 9, an amount of tax calculated at such rate” shall be substituted;

(ii) in the proviso, for the words “one crore rupees”, the words “one crore and fifty lakh rupees” shall be substituted;

(iii) after the proviso, the following proviso shall be inserted, namely:––

“Provided further that a person who opts to pay tax under clause (a) or clause (b) or clause (c) may supply services (other than those referred to in clause (b) of paragraph 6 of Schedule II), of value not exceeding ten per cent. of turnover in a State or Union territory in the preceding financial year or five lakh rupees, whichever is higher.”;

(1) Notwithstanding anything to the contrary contained in this Act but subject to the provisions of sub-sections (3) and (4) of section 9, a registered person, whose aggregate turnover in the preceding financial year did not exceed fifty lakh rupees, may opt to pay, in lieu of the tax payable by him under sub-section (1) of section 9, an amount calculated at such rate as may be prescribed, but not exceeding,—

(a) one per cent. of the turnover in State or turnover in Union territory in case of a manufacturer,

(b) two and a half per cent. of the turnover in State or turnover in Union territory in case of persons engaged in making supplies referred to in clause (b) of paragraph 6 of Schedule II, and

(c) half per cent. of the turnover in State or turnover in Union territory in case of other suppliers, subject to such conditions and restrictions as may be prescribed:

Provided that the Government may, by notification, increase the said limit of fifty lakh rupees to such higher amount, not exceeding one crore rupees and fifty lakh rupees, as may be recommended by the Council.

Provided further that a person who opts to pay tax under clause (a) or clause (b) or clause (c) may supply services (other than those referred to in clause (b) of paragraph 6 of Schedule II), of value not exceeding ten per cent. of turnover in a State or Union territory in the preceding financial year or five lakh rupees, whichever is higher.;

Drafting error rectified. Earlier it was interpreted that composition dealers were unintentionally not liable for pay tax under RCM.

Power to increase composition limit enhanced.

Composition dealer may also provide other services upto 10% of their total turnover or Rs. 5 Lakh whichever is less.

(2) The registered person shall be eligible to opt under sub-section (1), if:—

(a) he is not engaged in the supply of services other than supplies referred to in clause (b) of paragraph 6 of Schedule II;

(b) in sub-section (2), for clause (a), the following clause shall be substituted, namely:––

“(a) save as provided in sub-section (1), he is not engaged in the supply

of services;”.

(2) The registered person shall be eligible to opt under sub-section (1), if:—

(a) save as provided in sub-section (1), he is not engaged in the supply

of services;

SAME AS ABOVE

Amendment of section 12 (Time of Supply of Goods).

In section 12 of the principal Act, in sub-section (2), in clause (a), —

Provisions as per CGST Act’2017 Amendment New Provisions Analysis
(2) The time of supply of goods shall be the earlier of the following dates, namely:—

(a) the date of issue of invoice by the supplier

or

the last date on which he is required, under sub-section (1) of section 31, to issue the invoice with respect to the supply;

the words, brackets and figure “sub-section (1) of” shall be omitted (2) The time of supply of goods shall be the earlier of the following dates, namely:—

(a) the date of issue of invoice by the supplier

or

the last date on which he is required, under sub-section (1) of section 31, to issue the invoice with respect to the supply;

Rectification of drafting error.

Earlier time of supply was covering cases falling u/s. 31(3)  to 31(7) only.

Amendment of section 13(Time of Supply of Services).

In section 13 of the principal Act, in sub-section (2),––

Provisions as per CGST Act’2017 Amendment New Provision Analysis
(2) The time of supply of services shall be the earliest of the following dates, namely:—

(a) the date of issue of invoice by the supplier, if the invoice is issued within the period prescribed under sub-section (2) of section 31

or

the date of receipt of payment, whichever is earlier; or

(b) the date of provision of service, if the invoice is not issued within the period prescribed under sub-section (2) of section 31

or

the date of receipt of payment, whichever is earlier; or

the words, brackets and figure “sub-section (2) of” occurring at both the places, shall be omitted. (2) The time of supply of services shall be the earliest of the following dates, namely:—

(a) the date of issue of invoice by the supplier, if the invoice is issued within the period prescribed under sub-section (2) of section 31

or

the date of receipt of payment, whichever is earlier; or

(b) the date of provision of service, if the invoice is not issued within the period prescribed under sub-section (2)  of section 31

or

the date of receipt of payment, whichever is earlier; or

DRAFTING ERROR RECTIFIED

Amendment of section 16 ( Eligibility and conditions for taking input tax credit).

In section 16 of the principal Act, in sub-section (2),––

Provisions as per CGST Act’2017 Amendment New Provisions Analysis
(b) he has received the goods or services or both.

Explanation.—For the purposes of this clause, it shall be deemed that the registered person has received the goods

where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise;

(a) in clause (b), for the Explanation, the following Explanation shall be substituted, namely:—

“Explanation.—For the purposes of this clause, it shall be deemed that

the registered person has received the goods or, as the case may be, services––

(i) where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise;

(ii) where the services are provided by the supplier to any person on the direction of and on account of such registered person.”;

“Explanation.—For the purposes of this clause, it shall be deemed that

the registered person has received the goods or, as the case may be, services–

(i) where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise;

(ii) where the services are provided by the supplier to any person on the direction of and on account of such registered person.;

BILL-TO-SHIP-TO model approved for supply of services also.
(c) subject to the provisions of section 41, the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilisation of input tax credit admissible in respect of the said supply; and (b) in clause (c), for the word and figures “section 41”, the words, figures and letter “section 41 or section 43A” shall be substituted. (c) subject to the provisions of section 41 or section 43A, the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilisation of input tax credit admissible in respect of the said supply; and

Amendment of section 17 (Apportionment of credit and blocked credits.)

In section 17 of the principal Act,––

Provisions as per CGST Act’2017 Amendment New Provisions Analysis
(3) The value of exempt supply under sub-section (2) shall be such as may be prescribed, and shall include supplies on which the recipient is liable to pay tax on reverse charge basis, transactions in securities, sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building. (a) in sub-section (3), the following Explanation shall be inserted, namely:––

Explanation.—For the purposes of this sub-section, the expression ‘‘value of exempt supply’’ shall not include the value of activities or transactions specified in Schedule III, except those specified in paragraph 5 of the said Schedule.’;

(3) The value of exempt supply under sub-section (2) shall be such as may be prescribed, and shall include supplies on which the recipient is liable to pay tax on reverse charge basis, transactions in securities, sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building.

Explanation.—For the purposes of this sub-section, the expression ‘‘value of exempt supply’’ shall not include the value of activities or transactions specified in Schedule III, except those specified in paragraph 5 of the said Schedule

SCH-III of CGST Act, 2017 lists activities or transactions which shall be treated as neither supply of goods nor supply of services, so in this case it was auumed that ITC shall NOT be available, so clarification is provided in this regards that for activities or transactions specified in Schedule III, ITC SHALL be available, EXCEPT for the activities and transactions involving Sale of land and sale of building (subject to clause (b) of paragraph 5 of Schedule II, sale of building).

 

As per clause (b) of Para 5 of SCH-II sale of building shall not be treated as supply WHERE the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier. SINCE THERE IS NO SUPPLY SO NO ITC IS AVAILABLE

(5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, input tax credit shall not be available in respect of the following, namely:—

(a) motor vehicles and other conveyances except when they are used—

(i) for making the following taxable supplies, namely:—

(A) further supply of such vehicles or conveyances; or

(B) transportation of passengers; or

(C) imparting training on driving, flying, navigating such vehicles

or conveyances;

(ii) for transportation of goods;

(b) in sub-section (5), for clauses (a) and (b), the following clauses shall be

substituted, namely:—

“(a) motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver), except when

they are used for making the following taxable supplies, namely:—

(A) further supply of such motor vehicles; or

(B) transportation of passengers; or

(C) imparting training on driving such motor vehicles;

(aa) vessels and aircraft except when they are used–

(i) for making the following taxable supplies, namely:—

(A) further supply of such vessels or aircraft; or

(B) transportation of passengers; or

(C) imparting training on navigating such vessels; or

(D) imparting training on flying such aircraft;

(ii) for transportation of goods;

(ab) services of general insurance, servicing, repair and maintenance in so far as they relate to motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa):

Provided that the input tax credit in respect of such services shall be available-

(i) where the motor vehicles, vessels or aircraft referred to in

clause (a) or clause (aa) are used for the purposes specified therein;

(ii) where received by a taxable person engaged—

(I) in the manufacture of such motor vehicles, vessels or aircraft; or

(II) in the supply of general insurance services in respect of such motor vehicles, vessels or aircraft insured by him;

(5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, input tax credit shall not be available in respect of the following, namely:—

(a) motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver), except when they are used for making the following taxable supplies, namely:—

(A) further supply of such motor vehicles; or

(B) transportation of passengers; or

(C) imparting training on driving such motor vehicles;

(aa) vessels and aircraft except when they are used–

(i) for making the following taxable supplies, namely:—

(A) further supply of such vessels or aircraft; or

(B) transportation of passengers; or

(C) imparting training on navigating such vessels; or

(D) imparting training on flying such aircraft;

(ii) for transportation of goods;

(ab) services of general insurance, servicing, repair and maintenance in so far as they relate to motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa):

Provided that the input tax credit in respect of such services shall be available-

(i) where the motor vehicles, vessels or aircraft referred to in

clause (a) or clause (aa) are used for the purposes specified therein;

(ii) where received by a taxable person engaged—

(I) in the manufacture of such motor vehicles, vessels or aircraft; or

(II) in the supply of general insurance services in respect of such motor vehicles, vessels or aircraft insured by him;

DETAILED ANALYSIS IS PROVIDED AFTER THIS TABLE
(b) the following supply of goods or services or both—

(i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery except where an inward supply of goods or services or both of a particular category is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply;

(ii) membership of a club, health and fitness centre;

(iii) rent-a-cab, life insurance and health insurance except where—

(A) the Government notifies the services which are obligatory for

an employer to provide to its employees under any law for the time being in force; or

(B) such inward supply of goods or services or both of a particular

category is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as part of a Taxable composite or mixed supply; and

(iv) travel benefits extended to employees on vacation such as leave or home travel concession;

(b) the following supply of goods or services or both—

(i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, leasing, renting or hiring of motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) except when used for the purposes specified therein, life insurance and health insurance:

Provided that the input tax credit in respect of such goods or services or both shall be available where an inward supply of such goods or services or both is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply;

(ii) membership of a club, health and fitness centre; and

(iii) travel benefits extended to employees on vacation such as leave or home travel concession:

Provided that the input tax credit in respect of such goods or services or both shall be available, where it is obligatory for an employer to provide to its employees under any law for the time being in force.”.

(i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, leasing, renting or hiring of motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) except when used for the purposes specified therein, life insurance and health insurance:

Provided that the input tax credit in respect of such goods or services or both shall be available where an inward supply of such goods or services or both is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply;

(ii) membership of a club, health and fitness centre; and

(iii) travel benefits extended to employees on vacation such as leave or home travel concession:

Provided that the input tax credit in respect of such goods or services or both shall be available, where it is obligatory for an employer to provide to its employees under any law for the time being in force.

TO CORRECT SOME DRAFTING ERRORS.

DETAILED ANALYSIS IS PROVIDED AFTER THIS TABLE

DETAILED ANALYSIS OF CHANGES RELATED TO MOTOR VEHICLES AND OTHER CONVEYANCES

OLD PROVISIONS NEW PROVISIONS
RESTRCITED ALLOWED RESTRCITED ALLOWED
All Motor Vehicles as defined in clause (28) of section 2 of the Motor Vehicles Act, 1988 such as Cars, Trucks, Work-Trucks, Dupmers, Fork-Lift Trucks, Trolleys, Tractors, Two Wheelers etc. If used for making  further TAXABLE supply of such vehicles Only those Motor vehicles which are used for transportation of persons If used for making  further TAXABLE supply of such vehicles
If used for transportation of passengers (ONLY IF IT IS A TAXABLE SUPPLY) If used for transportation of passengers (ONLY IF IT IS A TAXABLE SUPPLY)
If used for transportation of goods. (EVEN IF IT IS NOT A TAXABLE SUPPLY) If used for imparting training on driving these vehicles (ONLY IF IT IS A TAXABLE SUPPLY)
If used for imparting training on driving these Vehicles. (TAXABLE SUPPLY) If Approved Seating Capacity > 13 Person

(Including the Driver)

Other conveyances  like Vessels & Aircrafts. If used for making  further TAXABLE supply of such conveyances Vessels and Aircafts If used for making further TAXABLE supply of such vessels or aircraft; or
If used for transportation of passengers (ONLY IF IT IS A TAXABLE SUPPLY) If used for transportation of passengers. (ONLY IF IT IS A TAXABLE SUPPLY)
If used for transportation of goods. (EVEN IF IT IS NOT ATAXABLE SUPPLY) If used for transportation of goods. (EVEN IF IT IS NOT A TAXABLE SUPPLY)
If used for imparting training on flying these conveyances (ONLY IF IT IS A TAXABLE SUPPLY) If used for imparting training on flying such aircraft. (ONLY IF IT IS A TAXABLE SUPPLY)
If used for imparting training on navigating these conveyances (ONLY IF IT IS A TAXABLE SUPPLY) If used for imparting training on navigating such vessels. (ONLY IF IT IS A TAXABLE SUPPLY)
Services of general insurance, servicing, repair and maintenance in so far as they relate to motor vehicles, vessels or aircraft as referred above. If ITC of Such Motor Vehicle , Vessel or Aircraft is allowed
To a taxable person engaged in the manufacture of such motor vehicles, vessels or aircraft
To a taxable person engaged in the supply of general insurance services in respect of such motor vehicles, vessels or aircraft insured by him)

Impact

1. ITC on Motor Vehicles and other conveyances like vessels and aircrafts is already allowed for following purposes:

  • If it is used for making further taxable supply as such
  • If it is used for transportation of goods. Even if for In-house purpose or even if outward transportation supply is not taxable.
  • If it is used for transportation of passengers. (Only Taxable Supplies)
  • If it is used for imparting training on driving, flying or navigating purposes. (Only Taxable Supplies)

2. Earlier ITC on all OTHER Motor Vehicles and Conveyances were restricted, but now out of these restricted Motor Vehicles and Conveyances:

  • ITC on only those Motor Vehicles (i.e. not other conveyances)
  • which are having approved seating capacity of up to 13 persons (Including Driver)
  • which are used for transportation of persons
  • is RESTRICTED.

In other words not only ITC on Motor vehicles which are not meant to carry persons (like dumpers, fork lift trucks, work trucks etc.) is now allowed but those motor vehicles which are meant to carry persons and their approved seating is more than 13 persons (Including Driver), ITC on them is now also allowed.

3. Earlier ITC on Services of general insurance, servicing, repair and maintenance in so far as they relate to motor vehicles, vessels or aircraft as referred above were allowed, however now if ITC on the motor vehicles, vessels or aircraft is restricted than ITC on Services of general insurance, servicing, repair and maintenance in so far as they relate to them is also restricted.

DETAILED ANALYSIS OF CHANGES IN RESTRCTIONS TO INPUT TAX CREDITS FOR OTHER SUPPLIES.

OLD PROVISIONS NEW PROVISIONS
RESTRCITED ALLOWED RESTRCITED ALLOWED
Rent a Cab Where an inward supply of a particular category is used for making an outward supply of the same category.

(even id made as an element of a taxable composite or mixed supply)

OR

Where the Govt. notifies such services as obligatory for an employer to provide to its employees under any law for the time being in force

Leasing, renting or hiring of motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) except when used for the purposes specified therein, Where an inward supply of a particular category is used for making an outward supply of the same category.

(even id made as an element of a taxable composite or mixed supply)

Life insurance and health  insurance Life insurance and health insurance
Travel benefits extended to employees on vacation such as leave or home travel concession Travel benefits extended to employees on vacation such as leave or home travel concession Where the Govt. notifies such services as obligatory for an employer to provide to its employees under any law for the time being in force

Impact

1. There were some drafting errors as regards conditions for allowing credit of ITC in case of Rent-a cab services. Life Insurance and health insurance services and Travel benefits extended to employees. These drafting errors have been rectified in this amendment.

2. ITC on leasing / hiring of motor vehicles and other conveyances have been allowed only where ITC on principal supply is allowed.

3. In case of leasing / hiring of motor vehicles and other conveyances where ITC on principal supply is NOT allowed, then also one may avail such ITC if he enters into same category of business transactions i.e. of leasing and hiring of such assets.

Amendment of section 20. (Manner of distribution of credit by Input Service Distributor)

In section 20 of the principal Act, in the Explanation, in clause (c),

Provisions as per CGST Act’2017 Amendment New Provisions Analysis
for the words and figures “under entry 84,”, the words, figures and letter “under entries 84 and 92A” shall be substituted. LIST-I (Union List)

84. Duties of excise on the following goods manufactured or produced in India, namely:—

(a) petroleum crude;

(b) high speed diesel;

(c)motor spirit (commonly known as petrol);

(d) natural gas;

(e) aviation turbine fuel; and

(f)tobacco and tobacco products

92A. 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.

Amendment of section 22 (Persons liable for registration.)

In section 22 of the principal Act,––

Provisions as per CGST Act’2017 Amendment New Provisions Analysis
(a) in sub-section (1), after the proviso, the following proviso shall be inserted,

namely:—

“Provided further that the Government may, at the request of a special category State and on the recommendations of the Council, enhance the aggregate turnover referred to in the first proviso from ten lakh rupees to such amount, not exceeding twenty lakh rupees and subject to such conditions and limitations, as may be so notified;”;

Provided further that the Government may, at the request of a special category State and on the recommendations of the Council, enhance the aggregate turnover referred to in the first proviso from ten lakh rupees to such amount, not exceeding twenty lakh rupees and subject to such conditions and limitations, as may be so notified; Now even special category states may request for higher turnover limit for registration purposes.

Amendment of section 24. (Compulsory registration in certain cases.)

In section 24 of the principal Act, in clause (x)

Provisions as per CGST Act’2017 Amendment New Provisions Analysis
(x) every electronic commerce operator; after the words “commerce operator”, the words and figures “who is required to collect tax at source under section 52” shall be inserted. (x) every electronic commerce operator who is required to collect tax at source under section 52; Now only those electronic commerce operators who are required to collect TCS u/s 52 are required to obtain mandatory registration u/s 24.

Earlier all the e-commerce operators were required to be registered irrespective of the fact that they were not required doing so as per section 22.

Amendment of section 25. (Procedure for registration.)

In section 25 of the principal Act,––

Provisions as per CGST Act’2017 Amendment New Provisions Analysis
(1) Every person who is liable to be registered under section 22 or section 24 shall apply for registration in every such State or Union territory in which he is so liable within thirty days from the date on which he becomes liable to registration, in such manner and subject to such conditions as may be prescribed:

Provided that a casual taxable person or a non-resident taxable person shall apply for registration at least five days prior to the commencement of business.

Explanation.—Every person who makes a supply from the territorial waters of India shall obtain registration in the coastal State or Union territory where the nearest point of the appropriate baseline is located.

(a) in sub-section (1), after the first proviso and before the Explanation, the following proviso shall be inserted, namely:––

“Provided further that a person having a unit, as defined in the Special Economic Zones Act, 2005, in a Special Economic Zone or being a Special Economic Zone developer shall have to apply for a separate registration, as distinct from his place of business located outside the Special Economic Zone in the same State or Union territory.”;

(1) Every person who is liable to be registered under section 22 or section 24 shall apply for registration in every such State or Union territory in which he is so liable within thirty days from the date on which he becomes liable to registration, in such manner and subject to such conditions as may be prescribed:

Provided that a casual taxable person or a non-resident taxable person shall apply for registration at least five days prior to the commencement of business.

Provided further that a person having a unit, as defined in the Special Economic Zones Act, 2005, in a Special Economic Zone or being a Special Economic Zone developer shall have to apply for a separate registration, as distinct from his place of business located outside the Special Economic Zone in the same State or Union territory.

Explanation.—Every person who makes a supply from the territorial waters of India shall obtain registration in the coastal State or Union territory where the nearest point of the appropriate baseline is located.

Since supply from DTA to SEZ is considered as inter-state supply, in fact a zero rated supply ( if it is for authorised operations)

So where a person is having place of business both in DTA and SEZ, even though within the same state, then also he shall obtain separate registration for both the places.

(2) A person seeking registration under this Act shall be granted a single registration in a State or Union territory:

Provided that a person having multiple business verticals in a State or Union territory may be granted a separate registration for each business vertical, subject to such conditions as may be prescribed.

(b) in sub-section (2), for the proviso, the following proviso shall be substituted, namely:––

“Provided that a person having multiple places of business in a State or Union territory may be granted a separate registration for each such place of business, subject to such conditions as may be prescribed.”.

(2) A person seeking registration under this Act shall be granted a single registration in a State or Union territory:

Provided that a person having multiple business verticals in a State or Union territory may be granted a separate registration for each such place of business business vertical, subject to such conditions as may be prescribed.

No separate registrations for separate business premises may also be obtained, even if they are from same business verticals.

Amendment of section 29. (Cancellation or suspension of registration.)

In section 29 of the principal Act,––

Provisions as per CGST Act’2017 Amendment New Provisions Analysis
Cancellation of registration. (a) in the marginal heading after the word “Cancellation”, the words “or suspension” shall be inserted; Cancellation or suspension of registration. Provisions to suspend registration  provided in the act.
(1) The proper officer may, either on his own motion or on an application filed by the registered person or by his legal heirs, in case of death of such person, cancel the registration, in such manner and within such period as may be prescribed, having regard to the circumstances where,–

(a) *****; or

(b) *****; or

(c) ******.

(b) in sub-section (1), after clause (c), the following proviso shall be inserted, namely:—

“Provided that during pendency of the proceedings relating to cancellation of registration filed by the registered person, the registration may be suspended for such period and in such manner as may be prescribed.”;

(1) The proper officer may, either on his own motion or on an application filed by the registered person or by his legal heirs, in case of death of such person, cancel the registration, in such manner and within such period as may be prescribed, having regard to the circumstances where,–

(a) *****; or

(b) *****; or

(c) ******.

Provided that during pendency of the proceedings relating to cancellation of registration filed by the registered person, the registration may be suspended for such period and in such manner as may be prescribed.

Provisions to suspend registration  provided in the act.
(2) The proper officer may cancel the registration of a person from such date, including any retrospective date, as he may deem fit, where,––

(a) *****; or

(b) *****; or

(c) *****; or

(d) *****; or

(e) *****.

Provided that the proper officer shall not cancel the registration without giving the person an opportunity of being heard.

(c) in sub-section (2), after the proviso, the following proviso shall be inserted, namely:—

“Provided further that during pendency of the proceedings relating to cancellation of registration, the proper officer may suspend the registration for such period and in such manner as may be prescribed.”.

(2) The proper officer may cancel the registration of a person from such date, including any retrospective date, as he may deem fit, where,––

(a) *****; or

(b) *****; or

(c) *****; or

(d) *****; or

(e) *****.

Provided that the proper officer shall not cancel the registration without giving the person an opportunity of being heard.

Provided further that during pendency of the proceedings relating to cancellation of registration, the proper officer may suspend the registration for such period and in such manner as may be prescribed.

Provisions to suspend registration  provided in the act.

Amendment of section 34. (Credit and debit notes.)

In section 34 of the principal Act,––

Provisions as per CGST Act’2017 Amendment New Provisions Analysis
(1) Where a tax invoice has been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply, or where the goods supplied are returned by the recipient, or where goods or services or both supplied are found to be deficient, the registered person, who has supplied such goods or services or both, may issue to the recipient a credit note containing such particulars as may be prescribed. (a) in sub-section (1),––

(i) for the words “Where a tax invoice has”, the words “Where one or more tax invoices have” shall be substituted;

(ii) for the words “a credit note”, the words “one or more credit notes for

supplies made in a financial year” shall be substituted;

(1) Where one or more tax invoices have a tax invoice has been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply, or where the goods supplied are returned by the recipient, or where goods or services or both supplied are found to be deficient, the registered person, who has supplied such goods or services or both, may issue to the recipient one or more credit notes for supplies made in a financial year a credit note containing such particulars as may be prescribed. Now no need to issue separate credit note for each and every bill, rather one may issue single credit note for all the bills with a single financial year.
(3) Where a tax invoice has been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to be less than the taxable value or tax payable in respect of such supply, the registered person, who has supplied such goods or services or both, shall issue to the recipient a debit note containing such particulars as may be prescribed. (b) in sub-section (3),––

(i) for the words “Where a tax invoice has”, the words “Where one or more tax invoices have” shall be substituted;

(ii) for the words “a debit note”, the words “one or more debit notes for

supplies made in a financial year” shall be substituted.

(3) Where one or more tax invoices have a tax invoice has been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to be less than the taxable value or tax payable in respect of such supply, the registered person, who has supplied such goods or services or both, shall issue to the recipient one or more debit notes for supplies made in a financial year a debit note containing such particulars as may be prescribed. Now no need to issue separate debit note for each and every bill, rather one may issue single debit note for all the bills with a single financial year.

Amendment of section 35. (Accounts and other records.)

In section 35 of the principal Act, in sub-section (5), the following proviso shall be inserted, namely:— 

Provisions as per CGST Act’2017 Amendment New Provisions Analysis
(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. “Provided that nothing contained in this sub-section shall apply to any department of the Central Government or a State Government or a local authority, whose books of account are subject to audit by the Comptroller and Auditor-General of India or an auditor appointed for auditing the accounts of local authorities under any law for the time being in force.” (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.

Provided that nothing contained in this sub-section shall apply to any department of the Central Government or a State Government or a local authority, whose books of account are subject to audit by the Comptroller and Auditor-General of India or an auditor appointed for auditing the accounts of local authorities under any law for the time being in force.

Every department of the Central Government or  a State Government or  a local authority, whose books of account are subject to audit by the Comptroller and Auditor-General of India or  an auditor appointed for auditing the accounts of local authorities under any law for the time being in force.

IS NOT REQUIRED TO FILE AUDIT REPORT, FORM GSTR-9C

Amendment of section 39. (Furnishing of returns.)

In section 39 of the principal Act,––

Provisions as per CGST Act’2017 Amendment New Provisions Analysis
(1) Every registered person, other than an Input Service Distributor or a non-resident taxable person or a person paying tax under the provisions of section 10 or section 51 or section 52 shall, for every calendar month or part thereof, furnish, in such form and manner as may be prescribed, a return, electronically, of inward and outward supplies of goods or services or both, input tax credit availed, tax payable, tax paid and such other particulars as may be prescribed, on or before the twentieth day of the month succeeding such calendar month or part thereof. (a) in sub-section (1),––

(i) for the words “in such form and manner as may be prescribed”, the words “in such form, manner and within such time as may be prescribed” shall be substituted;

(ii) the words “on or before the twentieth day of the month succeeding such calendar month or part thereof” shall be omitted;

(iii) the following proviso shall be inserted, namely:—

“Provided that the Government may, on the recommendations of the Council, notify certain classes of registered persons who shall furnish return for every quarter or part thereof, subject to such conditions and safeguards as may be specified therein.”;

(1) Every registered person, other than an Input Service Distributor or a non-resident taxable person or a person paying tax under the provisions of section 10 or section 51 or section 52 shall, for every calendar month or part thereof, furnish, in such form, manner and within such time form and manner as may be prescribed, a return, electronically, of inward and outward supplies of goods or services or both, input tax credit availed, tax payable, tax paid and such other particulars as may be prescribed, on or before the twentieth day of the month succeeding such calendar month or part thereof.

Provided that the Government may, on the recommendations of the Council, notify certain classes of registered persons who shall furnish return for every quarter or part thereof, subject to such conditions and safeguards as may be specified therein.

Powers provided to change periodicity and due date of GSTR-3 and GSTR-3B returns.
(7) Every registered person, who is required to furnish a return under sub-section (1) or sub-section (2) or sub-section (3) or sub-section (5), shall pay to the Government the tax

due as per such return not later than the last date on which he is required to furnish such return.

(b) in sub-section (7), the following proviso shall be inserted, namely:––

“Provided that the Government may, on the recommendations of the Council, notify certain classes of registered persons who shall pay to the Government the tax due or part thereof as per the return on or before the last date on which he is required to furnish such return, subject to such conditions and safeguards as may be specified therein.”;

(7) Every registered person, who is required to furnish a return under sub-section (1) or sub-section (2) or sub-section (3) or sub-section (5), shall pay to the Government the tax due as per such return not later than the last date on which he is required to furnish such return.

Provided that the Government may, on the recommendations of the Council, notify certain classes of registered persons

who shall pay to the Government the tax due or part thereof as per the return on or before the last date on which he is required to furnish such return, subject to such conditions and safeguards as may be specified therein.

 

 

 

Powers provided to change periodicity and due date of depositing taxes.
(9) Subject to the provisions of sections 37 and 38, if any registered person after furnishing a return under sub-section (1) or sub-section (2) or sub-section (3) or sub-section (4) or sub-section (5) discovers any omission or incorrect particulars therein, other than as a result of scrutiny, audit, inspection or enforcement activity by the tax authorities, he shall rectify such omission or incorrect particulars in the return to be furnished for the month or quarter during which such omission or incorrect particulars are noticed, subject to payment of interest under this Act:

Provided that no such rectification of any omission or incorrect particulars shall be allowed after the due date for furnishing of return for the month of September or second quarter following the end of the financial year, or the actual date of furnishing of relevant annual return, whichever is earlier.

(c) in sub-section (9),––

(i) for the words “in the return to be furnished for the month or quarter during which such omission or incorrect particulars are noticed”, the words “in such form and manner as may be prescribed” shall be substituted;

(ii) in the proviso, for the words “the end of the financial year”, the words

“the end of the financial year to which such details pertain” shall be substituted.

(9) Subject to the provisions of sections 37 and 38, if any registered person after furnishing a return under sub-section (1) or sub-section (2) or sub-section (3) or sub-section (4) or sub-section (5) discovers any omission or incorrect particulars therein, other than as a result of scrutiny, audit, inspection or enforcement activity by the tax authorities, he shall rectify such omission or incorrect particulars in such form and manner as may be prescribed, in the return to be furnished for the month or quarter during which such omission or incorrect particulars are noticed, subject to payment of interest under this Act:

Provided that no such rectification of any omission or incorrect particulars shall be allowed after the due date for furnishing of return for the month of September or second quarter following the end of the financial year to which such details pertain, or the actual date of furnishing of relevant annual return, whichever is earlier.

Changes made in provisions for corrections in return particulars.

New section 43A inserted. (Procedure for furnishing return and availing input tax credit.)

After section 43 of the principal Act, the following section shall be inserted, namely:—

Provisions as per CGST Act’2017 Amendment and New Provisions Analysis
Sections referred

16(2) – Conditions to avail ITC.

37 – Furnishing details of outward supplies.

38 – Furnishing details of inward supplies.

39(1) – filing GSTR-3 / GSTR-3B

41 – Claim of input tax credit and provisional Acceptance thereof.

42 – Matching, reversal and reclaim of input tax credit.

43 – Matching, reversal and reclaim of reduction in output tax liability.

Analysis

Changes made in procedure of filing returns, claiming ITC so as to make provisions for GSTR-SAHAJ & GSTR-SUGAM as announced in press release issued after 28th meeting of GST Council.

43A Procedure for furnishing return and availing input tax credit.

(1) Notwithstanding anything contained in sub-section (2) of section 16, section 37 or section 38, every registered person shall in the returns furnished under sub-section (1) of section 39 verify, validate, modify or delete the details of supplies furnished by the suppliers.

(2) Notwithstanding anything contained in section 41, section 42 or section 43, the procedure for availing of input tax credit by the recipient and verification thereof shall be such as may be prescribed.

(3) The procedure for furnishing the details of outward supplies by the supplier on the common portal, for the purposes of availing input tax credit by the recipient shall be such as may be prescribed.

(4) The procedure for availing input tax credit in respect of  outward supplies NOT furnished under sub-section (3)

shall be such as may be prescribed and such procedure may include  the maximum amount of the input tax credit which can be so availed, not exceeding twenty per cent. of the input tax credit available,  on the basis of details furnished by the suppliers under the said sub-section.

(5) The amount of tax specified in the outward supplies for which the details have been furnished by the supplier under sub-section (3) shall be deemed to be the tax payable by him under the provisions of the Act.

(6) The supplier and the recipient of a supply shall be jointly and severally liable to pay tax or  to pay the input tax credit availed, as the case may be, in relation to outward supplies  for which the details have been furnished under sub-section (3) or sub-section (4)  but return thereof has not been furnished.

(7) For the purposes of sub-section (6), the recovery shall be made in such manner as may be prescribed and such procedure may provide for non-recovery of an amount of tax or input tax credit wrongly availed not exceeding one thousand rupees.

(8) The procedure, safeguards and threshold of the tax amount in relation to outward supplies, the details of which can be furnished under sub-section (3) by a registered person,—

(i) within six months of taking registration;

(ii) who has defaulted in payment of tax and where such default has continued for more than two months from the due date of payment of such defaulted amount, shall be such as may be prescribed.

Amendment of section 48. (Goods and services tax practitioners.)

In section 48 of the principal Act, in sub-section (2),

Provisions as per CGST Act’2017 Amendment New Provisions Analysis
(2) A registered person may authorise an approved goods and services tax practitioner to furnish the details of outward supplies under section 37, the details of inward supplies under section 38 and the return under section 39 or section 44 or section 45 in such manner as may be prescribed. after the word and figures “section 45”, the words “and to perform such other functions” shall be inserted. (2) A registered person may authorise an approved goods and services tax practitioner to furnish the details of outward supplies under section 37, the details of inward supplies under section 38 and the return under section 39 or section 44 or section 45 and to perform such other functions in such manner as may be prescribed. Provision to expand powers and scope of work for GSTP provided.

Amendment of section 49. (Payment of tax, interest, penalty and other amounts.)

In section 49 of the principal Act,––

Provisions as per CGST Act’2017 Amendment New Provisions Analysis
(2) The input tax credit as self-assessed in the return of a registered person shall be credited to his electronic credit ledger, in accordance with section 41, to be maintained in such manner as may be prescribed. (a) in sub-section (2), for the word and figures “section 41”, the words, figures and letter “section 41 or section 43A” shall be substituted; (2) The input tax credit as self-assessed in the return of a registered person shall be credited to his electronic credit ledger, in accordance with section 41 or section 43A, to be maintained in such manner as may be prescribed. Reference to new section 43A inserted.
(5) The amount of input tax credit available in the electronic credit ledger of the registered person on account of––

(a) integrated tax shall first be utilised towards payment of integrated tax and the amount remaining, if any, may be utilised towards the payment of central tax and State tax, or as the case may be, Union territory tax, in that order;

(b) the central tax shall first be utilised towards payment of central tax and the amount remaining, if any, may be utilised towards the payment of integrated tax;

(c) the State tax shall first be utilised towards payment of State tax and the

amount remaining, if any, may be utilised towards payment of integrated tax;

(d) the Union territory tax shall first be utilised towards payment of Union territory tax and the amount remaining, if any, may be utilised towards payment of integrated tax;

(e) the central tax shall not be utilised towards payment of State tax or Union territory tax; and

(f) the State tax or Union territory tax shall not be utilised towards payment of central tax.

(b) in sub-section (5),––

(i) in clause (c), the following proviso shall be inserted, namely:––

“Provided that the input tax credit on account of State tax shall be utilised towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax;”;

(ii) in clause (d), the following proviso shall be inserted, namely:––

“Provided that the input tax credit on account of Union territory tax shall be utilised towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax;”.

(5) The amount of input tax credit available in the electronic credit ledger of the registered person on account of––

(a) integrated tax shall first be utilised towards payment of integrated tax and the amount remaining, if any, may be utilised towards the payment of central tax and State tax, or as the case may be, Union territory tax, in that order;

(b) the central tax shall first be utilised towards payment of central tax and the amount remaining, if any, may be utilised towards the payment of integrated tax;

(c) the State tax shall first be utilised towards payment of State tax and the

amount remaining, if any, may be utilised towards payment of integrated tax;

Provided that the input tax credit on account of State tax shall be utilised towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax;

(d) the Union territory tax shall first be utilised towards payment of Union territory tax and the amount remaining, if any, may be utilised towards payment of integrated tax;

Provided that the input tax credit on account of Union territory tax shall be utilised towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax;

(e) the central tax shall not be utilised towards payment of State tax or Union territory tax; and

(f) the State tax or Union territory tax shall not be utilised towards payment of central tax.

New Sequence of ITC Setoff:

(a) IGST à IGST à CGST à SGST / UGST

(b) CGST à CGST à IGST

(c) SGST à SGST à IGST (However, SGST à IGST only when Balance in CGST is NIL i.e. for payment of IGST exhaust CGST first then SGST)

(d) UGST à UGST à IGST (However, UGST à IGST only when Balance in CGST is NIL i.e. for payment of IGST exhaust CGST first then UGST)

(e) CGST à SGST / UGST (NOT ALLOWED)

(f) SGST / UGST à CGST (NOT ALLOWED)

New sections 49A and 49B .

After section 49 of the principal Act, the following sections shall be inserted, namely:––

Provisions as per CGST Act’2017 Amendment and New Provisions Analysis
“49A. Utilisation of input tax credit subject to certain conditions.

Notwithstanding anything contained in section 49, the input tax credit on account of central tax, State tax or Union territory tax shall be utilised towards payment of integrated tax, central tax, State tax or Union territory tax, as the case may be, only after the input tax credit available on account of integrated tax has first been utilised fully towards such payment.

Sequence of Utilization ITC:

1. IGST

2. Intra Head

3. Inter-Head as per section 49

49B. Order of utilisation of input tax credit.

Notwithstanding anything contained in this Chapter and subject to the provisions of clause (e) and clause (f) of sub-section (5) of section 49, the Government may, on the recommendations of the Council, prescribe the order and manner of utilisation of the input tax credit on account of integrated tax, central tax, State tax or Union territory tax, as the case may be, towards payment of any such tax.”.

This sequence of Utilization ITC may be changed any time by the government.

Amendment of section 52.  (Collection of tax at source.)

In section 52 of the principal Act, in sub-section (9)

 

Provisions as per CGST Act’2017 Amendment New Provisions Analysis
(9) Where the details of outward supplies furnished by the operator under sub-section (4) do not match with the corresponding details furnished by the supplier under section 37, the discrepancy shall be communicated to both persons in such manner and within such time as may be prescribed. for the word and figures “section 37”, the words and figures “section 37 or section 39” shall be substituted. (9) Where the details of outward supplies furnished by the operator under sub-section (4) do not match with the corresponding details furnished by the supplier under section 37 or section 39, the discrepancy shall be communicated to both persons in such manner and within such time as may be prescribed. Drafting Error rectified.

Amendment of section 54. (Refunds)

In section 54 of the principal Act,—

Provisions as per CGST Act’2017 Amendment New Provisions Analysis
(8) Notwithstanding anything contained in sub-section (5), the refundable amount shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to—

(a) refund of tax paid on zero-rated supplies of goods or services or both or on inputs or input services used in making such zero-rated supplies;

(a) in sub-section (8),

in clause (a), for the words “zero-rated supplies”, the words “export” and “exports” shall respectively be substituted;

(8) Notwithstanding anything contained in sub-section (5), the refundable amount shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to—

(a) refund of tax paid on export zero-rated supplies of goods or services or both or on inputs or input services used in making such exports zero-rated supplies;

Principle of Unjust Enrichment is now made applicable even in case of supplies made to SEZ.
Explanation.—For the purposes of this section,––

(1) *****.

(2) “relevant date” means—

(a) *****;

(b) *****;

(c) in the case of services exported out of India where a refund of tax paid is available in respect of services themselves or, as the case may be, the inputs or input services used in such services, the date of––

(i) receipt of payment in convertible foreign exchange, where the supply of services had been completed prior to the receipt of such payment; or

(ii) issue of invoice, where payment for the services had been received in advance prior to the date of issue of the invoice;

(d) *****;

(e) in the case of refund of unutilised input tax credit under sub-section (3), the end of the financial year in which such claim for refund arises;

(f) *****;

(g) *****; and

(h) *****.

(b) in the Explanation, in clause (2),––

(i) in sub-clause (c), in item (i), after the words “foreign exchange”, the words “or in Indian rupees wherever permitted by the Reserve Bank of India” shall be inserted;

(ii) for sub-clause (e), the following sub-clause shall be substituted, namely:––

“(e) in the case of refund of unutilised input tax credit under clause (ii) of the first proviso to sub-section (3), the due date for furnishing of return under section 39 for the period in which such claim for refund arises;”.

Explanation.—For the purposes of this section,––

(1) *****.

(2) “relevant date” means—

(a) *****;

(b) *****;

(c) in the case of services exported out of India where a refund of tax paid is available in respect of services themselves or, as the case may be, the inputs or input services used in such services, the date of––

(i) receipt of payment in convertible foreign exchange or in Indian rupees wherever permitted by the Reserve Bank of India, where the supply of services had been completed prior to the receipt of such payment; or

(ii) issue of invoice, where payment for the services had been received in advance prior to the date of issue of the invoice;

(d) *****;

(e) in the case of refund of unutilised input tax credit under clause (ii) of the first proviso to sub-section (3), the due date for furnishing of return under section 39 for the period the end of the financial year in which such claim for refund arises;

(f) *****;

(g) *****; and

(h) *****.

(c) RBI permits receipts in INR in case of export of goods and services to Nepal and Bhutan.

Under the GST Laws there is no condition of receipt of foreign currency in case of export of goods, however in case of export of services receipt in foreign currency is a pre-condition to claim refund.

Definition of export of services has been amended in IGST Act to allow receipt of INR for export of services wherever permitted by RBI. So consequential amendment is also made here to allow refund in such cases.

(e) As per section 54(3) a registered person may claim refund of any unutilised input tax credit at the end of any tax period, however as per explanation 2(e), in the case of refund u/s 54(3) the relevant date shall be the date at the end of the financial year in which such claim for refund arises. So to remove this anomaly this amendment has been brought.

Amendment of section 79. (Recovery of Tax)

In section 79 of the principal Act,

Provisions as per CGST Act’2017 Amendment New Provisions Analysis
after sub-section (4), the following Explanation shall be inserted, namely:—

Explanation.––For the purposes of this section, the word person shall include “distinct persons” as referred to in sub-section (4) or, as the case may be, sub-section (5) of section 25.’.

Explanation.––For the purposes of this section, the word person shall include “distinct persons” as referred to in sub-section (4) or, as the case may be, sub-section (5) of section 25. Now recovery can be made from distinct person also. i.e. in case of default recover can be made from any registered dealer across India registered with same PAN

Amendment of section 107. (Appeals to Appellate Authority.)

In section 107 of the principal Act,

Provisions as per CGST Act’2017 Amendment   Analysis
(6) No appeal shall be filed under sub-section (1), unless the appellant has paid—

(a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and

(b) a sum equal to ten per cent. of the remaining amount of tax in dispute arising from the said order, in relation to which the appeal has been filed.

in sub-section (6), in clause (b), after the words “arising from the said order,”, the words “subject to a maximum of twenty-five crore rupees,” shall be inserted. (6) No appeal shall be filed under sub-section (1), unless the appellant has paid—

(a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and

(b) a sum equal to ten per cent. of the remaining amount of tax in dispute arising from the said order, subject to a maximum of twenty-five crore rupees, in relation to which the appeal has been filed.

Amount of pre-deposit for disputed demands in case of filing appeals to appellate authority , restricted to a maximum of twenty-five crore rupees.

Amendment of section 112. (Appeals to Appellate Tribunal.)

In section 112 of the principal Act,

Provisions as per CGST Act’2017 Amendment New Provisions Analysis
(8) No appeal shall be filed under sub-section (1), unless the appellant has paid––

(a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him, and

(b) a sum equal to twenty per cent. of the remaining amount of tax in dispute, in addition to the amount paid under sub-section (6) of section 107, arising from the said order, in relation to which the appeal has been filed.

in sub-section (8), in clause (b), after the words “arising from the said order,” the words “subject to a maximum of fifty crore rupees,” shall be inserted. (8) No appeal shall be filed under sub-section (1), unless the appellant has paid––

(a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him, and

(b) a sum equal to twenty per cent. of the remaining amount of tax in dispute, in addition to the amount paid under sub-section (6) of section 107, arising from the said order, subject to a maximum of fifty crore rupees, in relation to which the appeal has been filed.

Amount of pre-deposit for disputed demands in case of filing appeals to appellate tribunal, restricted to a maximum of fifty crore rupees.

Amendment of section 129. (Detention, seizure and release of goods and conveyances in transit.)

In section 129 of the principal Act,

Provisions as per CGST Act’2017 Amendment New Provisions Analysis
(6) Where the person transporting any goods or the owner of the goods fails to pay the amount of tax and penalty as provided in sub-section (1) within seven days of such detention or seizure, further proceedings shall be initiated in accordance with the provisions of section 130:

Provided that where the detained or seized goods are perishable or hazardous in nature or are likely to depreciate in value with passage of time, the said period of seven days may be reduced by the proper officer.

in sub-section (6), for the words “seven days”, the words “fourteen days” shall be substituted. (6) Where the person transporting any goods or the owner of the goods fails to pay the amount of tax and penalty as provided in sub-section (1) within fourteen seven days of such detention or seizure, further proceedings shall be initiated in accordance with the provisions of section 130:

Provided that where the detained or seized goods are perishable or hazardous in nature or are likely to depreciate in value with passage of time, the said period of fourteen seven days may be reduced by the proper officer.

Time to pay tax in case of confiscation of goods increased from seven days to fourteen days.

Retrospective Amendment of section 140. (Transitional arrangements for input tax credit.)

In section 140 of the principal Act, with effect from the 1st day of July, 2017,––

Provisions as per CGST Act’2017 Amendment New Provisions Analysis
(1) A registered person, other than a person opting to pay tax under section 10, shall be entitled to take, in his electronic credit ledger, the amount of CENVAT credit carried

forward in the return relating to the period ending with the day immediately preceding the appointed day, furnished by him under the existing law in such manner as may be prescribed

(a) in sub-section (1), after the letters and word “CENVAT credit”, the words “of eligible duties” shall be inserted and shall always be deemed to have been inserted; (1) A registered person, other than a person opting to pay tax under section 10, shall be entitled to take, in his electronic credit ledger, the amount of CENVAT credit of eligible duties carried forward in the return relating to the period ending with the day immediately preceding the appointed day, furnished by him under the existing law in such manner as may be prescribed Clarification that transition of only eligible duties shall be allowed.

(In our view this credit can’t be restricted now)

Explanation 1.—For the purposes of sub-sections (3), (4) and (6), the expression “eligible duties” means––

(i) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957;

(ii) the additional duty leviable under sub-section (1) of section 3 of the Customs Tariff Act, 1975;

(iii) the additional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act, 1975;

(iv) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Textile and Textile Articles) Act, 1978;

(v) the duty of excise specified in the First Schedule to the Central Excise Tariff Act, 1985;

(vi) the duty of excise specified in the Second Schedule to the Central Excise Tariff Act, 1985; and

(vii) the National Calamity Contingent Duty leviable under section 136 of the Finance Act, 2001,

in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the appointed day.

(b) in the Explanation 1—

(i) for the word, brackets and figures “sub-sections (3), (4)”, the word,

brackets and figures “sub-sections (1), (3), (4)” shall be substituted and shall always be deemed to have been substituted;

(ii) clause (iv) shall be omitted and shall always be deemed to have been omitted;

Explanation 1.—For the purposes of sub-sections (1), (3), (4) and (6), the expression “eligible duties” means––

(i) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957;

(ii) the additional duty leviable under sub-section (1) of section 3 of the Customs Tariff Act, 1975;

(iii) the additional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act, 1975;

(iv) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Textile and Textile Articles) Act, 1978;

(v) the duty of excise specified in the First Schedule to the Central Excise Tariff Act, 1985;

(vi) the duty of excise specified in the Second Schedule to the Central Excise Tariff Act, 1985; and

(vii) the National Calamity Contingent Duty leviable under section 136 of the Finance Act, 2001, in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the appointed day.

Consequential changes as above.

No transitional credit of the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Textile and Textile Articles) Act, 1978.

(In our view this credit can’t be restricted now)

Explanation 2.—For the purposes of sub-section (5), the expression “eligible duties and taxes” means––

(i) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957;

(ii) the additional duty leviable under sub-section (1) of section 3 of the Customs Tariff Act, 1975;

(iii) the additional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act, 1975;

(iv) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Textile and Textile Articles) Act, 1978;

(v) the duty of excise specified in the First Schedule to the Central Excise Tariff Act, 1985;

(vi) the duty of excise specified in the Second Schedule to the Central Excise Tariff Act, 1985;

(vii) the National Calamity Contingent Duty leviable under section 136 of the Finance Act, 2001; and

(viii) the service tax leviable under section 66B of the Finance Act, 1994,

in respect of inputs and input services received on or after the appointed day.

(c) in the Explanation 2—

(i) for the word, brackets and figure “sub-section (5)”, the words, brackets and figures “sub-sections (1) and (5)” shall be substituted and shall always be deemed to have been substituted;

(ii) clause (iv) shall be omitted and shall always be deemed to have been

omitted;

Explanation 2.—For the purposes of sub-sections (1) and (5), the expression “eligible duties and taxes” means––

(i) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957;

(ii) the additional duty leviable under sub-section (1) of section 3 of the Customs Tariff Act, 1975;

(iii) the additional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act, 1975;

(iv) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Textile and Textile Articles) Act, 1978;

(v) the duty of excise specified in the First Schedule to the Central Excise Tariff Act, 1985;

(vi) the duty of excise specified in the Second Schedule to the Central Excise Tariff Act, 1985;

(vii) the National Calamity Contingent Duty leviable under section 136 of the Finance Act, 2001; and

(viii) the service tax leviable under section 66B of the Finance Act, 1994,

in respect of inputs and input services received on or after the appointed day.

Consequential changes as above.

No transitional credit of the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Textile and Textile Articles) Act, 1978.

(In our view this credit can’t be restricted now)

(d) after Explanation 2 as so amended, the following Explanation shall be inserted and shall always be deemed to have been inserted, namely:—

‘Explanation 3.—For removal of doubts, it is hereby clarified that the expression “eligible duties and taxes” excludes any cess which has not been specified in Explanation 1 or Explanation 2 and any cess which is collected as additional duty of customs under sub-section (1) of section 3 of the Customs Tariff Act, 1975.’.

Explanation 3.—For removal of doubts, it is hereby clarified that the expression “eligible duties and taxes” excludes any cess which has not been specified in Explanation 1 or Explanation 2 and any cess which is collected as additional duty of customs under sub-section (1) of section 3 of the Customs Tariff Act, 1975. No Transitional credit of Education Cess, Secondary & Higher Education Cess, Krishi Kalyan Cess etc.

Amendment of section 143. (Job work procedure.)

In section 143 of the principal Act,

Provisions as per CGST Act’2017 Amendment and new Provision Analysis
in sub-section (1), in clause (b), after the proviso, the following proviso shall be inserted, namely:—

“Provided further that the period of one year and three years may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding one year and two years respectively.”.

Power to extend the time limit to

(a) bring back inputs, after completion of job work or  therwise, or capital goods, other than moulds and dies, jigs and fixtures, or tools, within one year and three years, respectively, of their being sent out, to any of his place of business, without payment of tax;

(b) supply such inputs, after  completion of job work or otherwise, or capital goods, other than moulds and dies, jigs and fixtures, or tools, within one year and three years, respectively, of their being sent out from the place of business of a job worker on payment of tax within India, or with or without payment of tax for export, as the case may be:

Amendment of Schedule-I (ACTIVITIES TO BE TREATED AS SUPPLY EVEN IF MADE WITHOUT CONSIDERATION).

In Schedule I of the principal Act,

Provisions as per CGST Act’2017 Amendment   Analysis
4. Import of services by a taxable person from a related person or from any of his other establishments Outside India, in the course or furtherance of business. in paragraph 4, for the words “taxable person”, the word “person” shall be substituted. 4. Import of services by a taxable person from a related person or from any of his other establishments outside India, in the course or furtherance of business. Now

import of services

  • EVEN by a non-taxable person (LIKE PERSON ENGAGED IN PURELY EXEMPETD SUPPLIES)
  • made without consideration
  • from related party
  • for business purpose
  • is taxable under GST.

 Retrospective Amendment of Schedule-II (ACTIVITIES TO BE TREATED AS SUPPLY OF GOODS OR SUPPLY OF SERVICES).

In Schedule II of the principal Act,

Provisions as per CGST Act’2017 Amendment New Provision Analysis
ACTIVITIES TO BE TREATED AS SUPPLY OF GOODS OR SUPPLY OF SERVICES in the heading, after the word “ACTIVITIES”, the words “OR TRANSACTIONS” shall be inserted and shall be deemed to have been

inserted with effect from the 1st day of July, 2017.

ACTIVITIES OR TRANSACTIONS TO BE TREATED AS SUPPLY OF GOODS OR SUPPLY OF SERVICES DRAFTING ERROR

Amendment of Schedule-III. ( ACTIVITIES OR TRANSACTIONS WHICH SHALL BE TREATED NEITHER AS A SUPPLY OF GOODS NOR A SUPPLY OF SERVICES)

In Schedule III of the principal Act, —

Provisions as per CGST Act’2017 Amendment New Provision Analysis
SCH-III

 

ACTIVITIES OR TRANSACTIONS WHICH SHALL BE TREATED NEITHER AS A SUPPLY OF GOODS NOR A SUPPLY OF SERVICES

(i) after paragraph 6, the following paragraphs shall be inserted, namely:––

“7. Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India.

8. (a) Supply of warehoused goods to any person before clearance for home consumption;

(b) Supply of goods by the consignee to any other person, by endorsement of documents of title to the goods, after the goods have been dispatched from the port of origin located outside India but before clearance for home consumption.”;

 

 

 

 

7. Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India.

8. (a) Supply of warehoused goods to any person before clearance for home consumption;

(b) Supply of goods by the consignee to any other person, by endorsement of documents of title to the goods, after the goods have been dispatched from the port of origin located outside India but before clearance for home consumption.;

SUPPLIES OF GOODS MADE OUTSIDE THE TAXABLE SHALL BE TREATED NEITHER AS A SUPPLY OF GOODS NOR A SUPPLY OF SERVICES.
(ii) The Explanation shall be numbered as Explanation 1 and after Explanation 1 as so numbered, the following Explanations shall be inserted, namely:—

“Explanation 2.––

For the purposes of paragraph 8, the expression “warehoused goods” shall have the same meaning as assigned to it in the Customs Act, 1962.”.

 

 

 

 

 

 

 

Explanation 2.––

For the purposes of paragraph 8, the expression “warehoused goods” shall have the same meaning as assigned to it in the Customs Act, 1962.

As per clause (43) of section 2 of Customs Act,1962 “warehouse” means

  • a public warehouse licensed under section 57 or
  • a private warehouse licensed under section 58 or
  • a special warehouse licensed under section 58A;

As per clause (44) of section 2 of Customs Act,1962 “warehoused goods” means goods deposited in a warehouse;

So, clarification has been provided regarding goods supplied from private warehouses or even special warehouse when these are licensed under Customs Act,1962

SECTION WISE ANALYSIS OF THE INTEGRATED GOODS AND SERVICES TAX (AMENDMENT) ACT, 2018 NOTIFIED ON 30-08-2018 [45]

Provisions as per IGST Act’2017 Amendment New Provision Analysis
(6) “export of services” means the supply of any service when,––

(i) the supplier of service is located in India;

(ii) the recipient of service is located outside India;

(iii) the place of supply of service is outside India;

(iv) the payment for such service has been received by the supplier of service in convertible foreign exchange; and

(v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8;

In section 2 of the Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as the principal Act),––

(i) in clause (6), in sub-clause (iv), after the words “foreign exchange”, the words “or in Indian rupees wherever permitted by the Reserve Bank of India” shall be inserted;

(6) “export of services” means the supply of any service when,––

(i) the supplier of service is located in India;

(ii) the recipient of service is located outside India;

(iii) the place of supply of service is outside India;

(iv) the payment for such service has been received by the supplier of service in convertible foreign exchange or in Indian rupees wherever permitted by the Reserve Bank of India; and

(v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8;

RBI permits receipts in INR in case of export of goods and services to Nepal and Bhutan.

Under the GST Laws there is no condition of receipt of foreign currency in case of export of goods, however in case of export of services receipt in foreign currency is a pre-condition.

Definition of export of services has been amended in IGST Act to allow receipt of INR for export of services wherever permitted by RBI.

(16) “non-taxable online recipient” means any Government, local authority, governmental authority, an individual or any other person not registered and receiving online information and database access or retrieval services in relation to any purpose other than commerce, industry or any other business or profession, located in taxable territory.

Explanation.––For the purposes of this clause, the expression “governmental authority” means an authority or a board or any other body,––

(i) set up by an Act of Parliament or a State Legislature; or

(ii) established by any Government, with ninety per cent. or more participation by way of equity or control, to carry out any function entrusted to a municipality under article 243W of the Constitution;

In section 2 of the Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as the principal Act),––

(ii) in clause (16), in the Explanation, in the long line, after the words “function entrusted”, the words, figures and letter “to a Panchayat under article 243G or” shall be inserted.

(16) “non-taxable online recipient” means any Government, local authority, governmental authority, an individual or any other person not registered and receiving online information and database access or retrieval services in relation to any purpose other than commerce, industry or any other business or profession, located in taxable territory.

 

Explanation.––For the purposes of this clause, the expression “governmental authority” means an authority or a board or any other body,––

(i) set up by an Act of Parliament or a State Legislature; or

(ii) established by any Government, with ninety per cent. or more participation by way of equity or control, to carry out any function entrusted to a Panchayat under article 243G or to a municipality under article 243W of the Constitution;

Panchayats also included in the meaning of government authority for the purpose of determination of non-taxable online recipient.
4. Levy & Collection.

(4) The integrated tax in respect of the supply of taxable goods or  services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.

In section 5 of the principal Act, for sub-section (4), the following sub-section shall be substituted, namely:––

“(4) The Government may, on the recommendations of the Council, by notification, specify a class of registered persons who shall, in respect of supply of specified categories of goods or services or both received from an unregistered supplier, pay the tax on reverse charge basis as the recipient of such supply of goods or services or both, and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to such supply of goods or services or both.”.

(4) The Government may, on the recommendations of the Council, by notification, specify a class of registered persons who shall, in respect of supply of specified categories of goods or services or both received from an unregistered supplier, pay the tax on reverse charge basis as the recipient of such supply of goods or services or both, and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to such supply of goods or services or both. RCM Provision on supplies from unregistered person restricted to

  • some specific class of registered person and
  • for specific category of goods or services
8. Intra State Supply

(2) Subject to the provisions of section 12, supply of services where the location of the supplier and the place of supply of services are in the same State or same Union territory shall be treated as intra-State supply:

Provided that the intra-State supply of services shall not include supply of services to or by a Special Economic Zone developer or a Special Economic Zone unit.

Explanation 1.––For the purposes of this Act, where a person has,––

(i) an establishment in India and any other establishment outside India;

(ii) an establishment in a State or Union territory and any other establishment outside that State or Union territory; or

(iii) an establishment in a State or Union territory and any other establishment being a business vertical registered within that State or Union territory, then such establishments shall be treated as establishments of distinct persons.

Explanation 2.––A person carrying on a business through a branch or an agency or a representational office in any territory shall be treated as having an establishment in that territory.

In section 8 of the principal Act, in sub-section (2), in Explanation 1, in clause (iii),

the words, ‘‘being a business vertical’’ shall be omitted.

(2) Subject to the provisions of section 12, supply of services where the location of the supplier and the place of supply of services are in the same State or same Union territory shall be treated as intra-State supply:

Provided that the intra-State supply of services shall not include supply of services to or by a Special Economic Zone developer or a Special Economic Zone unit.

Explanation 1.––For the purposes of this Act, where a person has,––

(i) an establishment in India and any other establishment outside India;

(ii) an establishment in a State or Union territory and any other establishment outside that State or Union territory; or

(iii) an establishment in a State or Union territory and any other establishment being a business vertical registered within that State or Union territory, then such establishments shall be treated as establishments of distinct persons.

Explanation 2.––A person carrying on a business through a branch or an agency or a representational office in any territory shall be treated as having an establishment in that territory.

Concept of business vertical omitted and corresponding changes also made in sub-section 2 of section 25 of CGST Act 2017.

Now more than one registration in single states may be obtained for different place of businesses even if there are no separate verticals.

So, Similar Charges are also made in section 8 of IGST Act 2017.

12. Place of supply of services where location of supplier and recipient is in India.

(8) The place of supply of services by way of transportation of goods, including by mail or courier to,––

(a) a registered person, shall be the location of such person;

(b) a person other than a registered person, shall be the location at which such goods are handed over for their transportation.

In section 12 of the principal Act, in sub-section (8), the following proviso shall be

inserted, namely:––

“Provided that where the transportation of goods is to a place outside India, the place of supply shall be the place of destination of such goods.”.

(8) The place of supply of services by way of transportation of goods, including by mail or courier to,––

(a) a registered person, shall be the location of such person;

(b) a person other than a registered person, shall be the location at which such goods are handed over for their transportation.

Provided that where the transportation of goods is to a place outside India, the place of supply shall be the place of destination of such goods.

In case of export of goods, services by way of transportation of goods, including by mail or courier shall be treated as export of services provided other conditions as mentioned in definition of “export of services” are satisfied.
13. Place of supply of services where location of supplier or location of recipient is outside India.

(3) The place of supply of the following services shall be the location where the services are actually performed, namely:—

(a) services supplied in respect of goods which are required to be made physically available by the recipient of services to the supplier of services, or to a person acting on behalf of the supplier of services in order to provide the services:

Provided that when such services are provided from a remote location by way of electronic means, the place of supply shall be the location where goods are situated at the time of supply of services:

Provided further that nothing contained in this clause shall apply in the case of services supplied in respect of goods which are temporarily imported into India for repairs and are exported after repairs without being put to any other use in India, than that which is required for such repairs;

In section 13 of the principal Act, in sub-section (3), in clause (a), for the second proviso, the following proviso shall be substituted, namely:––

“Provided further that nothing contained in this clause shall apply in the case of services supplied in respect of goods which are temporarily imported into India for repairs or for any other treatment or process and are exported after such repairs or treatment or process without being put to any use in India, other than that which is required for such repairs or treatment or process;”.

(3) The place of supply of the following services shall be the location where the services are actually performed, namely:—

(a) services supplied in respect of goods which are required to be made

physically available by the recipient of services to the supplier of services, or to a person acting on behalf of the supplier of services in order to provide the services:

Provided that when such services are provided from a remote location by way of electronic means, the place of supply shall be the location where goods are situated at the time of supply of services:

Provided further that nothing contained in this clause shall apply in the case of services supplied in respect of goods which are temporarily imported into India for repairs or for any other treatment or process and are exported after such repairs or treatment or process without being put to any use in India, other than that which is required for such repairs or treatment or process.

Scope of export of services in case of supply by way of service of goods which are imported into India for repairs and after repair are exported has been expanded to include supply of services by way of any treatment or process on such goods which may or may not amount to repairs.
17. Apportionment of tax and settlement of funds. In section 17 of the principal Act, after sub-section (2), the following sub-section shall be inserted, namely:––

“(2A). The amount not apportioned under sub-section (1) and sub-section (2) may, for the time being, on the recommendations of the Council, be apportioned at the rate of fifty per cent. to the Central Government and fifty per cent. to the State Governments or the Union territories, as the case may be, on ad hoc basis and shall be adjusted against the amount apportioned under the said sub-sections.”.

As per section 17 subsection (1) & (2):

IGST paid by the supplier which cannot be claimed by the recipient for any reason, shall be credited to central government.

The balance amount of IGST shall be apportioned to the,––

(a) State where such supply takes place; and

(b) Central Government where such supply takes place in a Union territory:

However where the place of such supply made by any taxable person cannot be determined separately, the said balance amount shall be apportioned to,––

(a) each of the States; and

(b) Central Government in relation to Union territories,

in proportion to the total supplies made by such taxable person to each of such States or Union territories, as the case may be, in a financial year:

Also where the taxable person making such supplies is not identifiable, the said balance amount shall be apportioned to all States and the Central Government in proportion to the amount collected as State tax or, as the case may be, Union territory tax, by the respective State or, as the case may be, by the Central Government during the immediately preceding financial year.

IGST which is not apportioned as above, for the time being, be apportioned @ 50% to the Central Government and 50% to the State Governments or the Union territories, as the case may be, on ad hoc basis and shall be adjusted against the amount apportioned above.

20. Application of provisions of Central Goods and Services Tax Act.

 

In section 20 of the principal Act, after the fourth proviso, the following proviso shall be inserted, namely:–

“Provided also that where the appeal is to be filed before the Appellate Authority or the Appellate Tribunal, the maximum amount payable shall be fifty crore rupees and one hundred crore rupees respectively.”

Amount of pre-deposit for disputed demands in case of filing appeals to appellate authority , restricted to a maximum of fifty crore rupees.

Amount of pre-deposit for disputed demands in case of filing appeals to appellate Tribunal, restricted to a maximum of one Hundred Crore rupees.

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17 Comments

  1. Jayveer Mehta says:

    Very Useful Compilation. I thought to express gratitude directly on your mail but couldnt find one. Please drop in your details. Will contact you in person

  2. VIVEK ASHOK PATEL says:

    In analysis part of Section 10 ( Composition Leavy) “Drafting error rectified. Earlier it was interpreted that composition dealers were unintentionally not liable for pay tax under RCM.
    Power to increase composition limit enhanced.

    Composition dealer may also provide other services upto 10% of their total turnover or Rs. 5 Lakh whichever is less.”
    The word less is wrong, It is whichever is higher

  3. CA Suresh Jain says:

    Very well made and detailed information but why from 1.2.2019?
    Section wise analysis of amendments to GST Acts (w.e.f. 01.02.2019)

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