The objective of this document is to summarize all the updates of GST (Notifications, Circulars, other amendments and updates) in one place. 7 Central tax notifications, 8 Central tax Rate notifications, 5 Central tax circulars, 1 Order, 2 Removal of difficulty orders were issued during the month of Mach 2019. The same are being summarized below.
a. Notification No. 10/2019 was issued to Increase in limit for compulsory registration for supplier of Goods from 20L to 40L e.f. 01st April 2019.
b. Effectively, below are the conditions for being eligible for this benefit:
c. Notified the due date for quarterly GSTR-1 for Apr’19-Jun’19 as 31st Jul 2019
d. Notified the due date for monthly GSTR-1 for Apr’19-Jun’19 as 11th of the following month.
e. Notified the due date for monthly GSTR-3B for Apr’19-Jun’19 as 20th of the following month.
Note: From the above notifications (11, 12& 13), it appears that the department is planning to implement the new return formats w.e.f. Jul’19 onwards.
f. Notification No. 14/2019 was issued to increase the threshold limit for composition scheme for supplier of Goods from 1Cr to 1.5Cr. w.e.f. 01.Apr.19.
g. To opt for Composition scheme for FY 19-20,
h. Extended the due date for ITC-04 (Quarterly Return for the Job wok) for the period Jul’17-Mar’19 to 30th June 2019.
This notification has been issued to amend the rules in accordance with the recent changes in the law.
i. Reversal of credit for flats sold after OC – Rule 42 & 43:
j. Rule 88A – Order of utilization of credit has been inserted in accordance with the amendment act. There by the credit utilisation shall be as followed:
|Type of liability||Order of the credit to be used|
k. Rule 100 – Assessment in certain cases has been amended to include the forms for uploading the summary of the Order or the Assessments passed in FORM GST DRC-01 & 07.
l. Rule 142 – Notice and order for demand of amounts payable under the act has been amended to widen the scope of applicability of the Summary of the Assessment orders / Replies..Etc in FORM GST DRC-01, 03,06 and 07.
m. Also formats of few forms DRC-01, 02, 07, 08, ASMT-13, 15 and 16 have been amended w.e.f. 04.Apr.19
n. Notification No. 14/2019 was issued to provide an indirect composition scheme for Supplier of services whose turnover of previous year is up to 50L with 6% rate and no ITC w.e.f. 01st April 2019.
o. However, few conditions have been prescribed for the same. Most of them are similar to the conditions for the eligibility of the compositions scheme for goods.
This notification has been issued to prescribe the new rates for the Real estate sector.
p. The summary of the same are as followed:
|Type of apartment||Category||New Rate of tax||Comparison effective rate after 1/3rd ded.n||Conditions|
|Old rate||New rate|
>affordable residential apartments
>by a promoter in RREP / REP – to a buyera. Newb. Ongoing – not opted for old rates
|1.50%||8% or 12%||1%||i. Tax Should be paid in Cash
ii. No ITC – To be reported in GSTR-3B- 4D(2)
iii. Reverse the credit availed, relevant for future Income
iv. 1/3rd deduction for land value
v. Promoter includes Developer & Land owner
vi. 80% regd. Procurements –
>Short fall – 18% RCM Payment on Fin.year basis – Return by 30th Jun.
>Cement URD – 28% RCM – Monthly basis>Capital goods URD – applicable rate, compulsory RCM 9(4)
vii. Affordable –
> Area – 60/90 sqm in Metro/non-metro and
> Gross value – <45L
Viii. TOS for the above shall be at CC or OC whichever is earlier and the value will be the first sale value of similar flat sold near to date of JDA less land value (1/3rd)
viii. Landowner would be eligible for credit of tax charged by the developer.
|Other than affordable Residential apartments of above category||7.50%||12%||5%|
|Commercial||Construction of Commercial apartments by a promoter in RREP
b. Ongoing – not opted for old rates
|Residential||Residential Ongoing project- Covered under 8% earlier Old affordable housing schemes & Opted for old rates||12%||8%||8%||Option should be exercised by 10.May.19|
|Residential / Commercial||> Commercial in REP / RREP
> Residential Other than those covered above & opted for old
q. The tax treatment for the new transactions related to the land owner shall be as followed:
|Development rights||Land owner to Builder||Residential: Exempted, if all the flats were sold before OC.
Otherwise, liable under RCM, on value in proportion of flats remained unsold as on date of OC.Commercial:Developer would be liable to pay GST under RCM
|Construction services||Builder to land owner||Taxable|
|Construction services||Land owner to Buyer||Taxable if sold prior to OC|
r. The exemption notification 12/2017 has been amended to include the services provided by the land owner to the developer by way of Transfer of development rights/ FSI/ Long term lease for the residential projects.
s. The above exemption shall be subject to the conditions that all the flats are sold prior to OC.
t. The RCM notification 13/2017 has been amended to notify the services provided by the land owner to the developer by way of Transfer of development rights/ FSI/ Long term lease for the residential projects as specified services under reverse charge i.e. under Sec 9(3).
u. This notification has been issued to specify the time of supply for
would be the date of issuance of completion certificate or occupancy certificate whichever is earlier.
v. This notification has been issued to specify that the builder shall be liable to pay tax under RCM on the following:
|Type of Expense||Rate of GST||Value|
|Inputs & Input services other than cement||18%
(Notification No. 07/2019-CTR)
|Short fall to 80%|
|All unregd. Procurements|
|Capital Goods||Applicable rates||All unregd. Procurements|
w. This notification has been issued to prescribe the rate of tax for the shortfall Inputs & Input services other than cement as 18%.
x. This notification has been issued amend the notification no. 2/2019-CTR (composition scheme for service providers) to
Subject: Clarification on various doubts related to treatment of sales promotion schemes under GST – Reg.
|Free samples & Gifts|
|1||Free samples / gifts issued will amount to supply or not?||> As per Sec 7(1)(a), the goods or services or both which are supplied free of cost (without any consideration) shall not be treated as “supply‟ under GST (except in case of activities mentioned in Schedule I of the said Act).
>Accordingly, it is clarified that samples which are supplied free of cost, without any consideration, do not qualify as “supply” under GST, except where the activity falls within the ambit of Schedule I of the said Act.
|2||Whether the input tax paid on such goods shall be eligible for credit?||> Sec 17(5)(h) provides that ITC shall not be available in respect of goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples.
> Thus, it is clarified that input tax credit shall not be available to the supplier on the inputs, input services and capital goods to the extent they are used in relation to the gifts or free samples distributed without any consideration
> Credit shall be eligible, only if the distribution of such goods are treated as Supply
|Buy one get one free offers|
|3||Taxability and ITC w.r.t. The goods provided as free||>It is not an individual supply of free goods but a case of two or more individual supplies where a single price is being charged for the entire supply. It can at best be treated as supplying two goods for the price of one.
> Taxability of such supply will be dependent upon as to whether the supply is a composite supply or a mixed supply and the rate of tax shall be determined as per the provisions of section 8 of the said Act
> ITC shall be available to the supplier for the inputs, input services and capital goods used in relation to supply
|Discounts including ‘Buy more, save more’ offers|
|4||Whether the supplier can reduce the liability to the extent of discount?
If yes, is there any need for reversal of ITC?
|> Discounts offered by the suppliers to customers shall be excluded to determine the value of supply provided they satisfy the parameters laid down in Sec 15.
> Supplier shall be eligible for ITC.
> In case of discounts through credit notes, the recipient shall be liable to reverse the credit.
|Secondary discounts – Discounts not known at the time of supply|
|5||Whether supplier can issue credit note?
Whether the recipient shall be liable to reverse credit?
|> Credit note referred u/s 34 can’t be issued, as the same is not known before making the supply.
> Financial credit note can be issued irrespective of any other conditions
>Supplier need not to reverse any credit in this regard. Note: The circular is silent on the ITC of the recipient. However, in one of the recent AARs, it is specified that the recipient has to reverse the credit, due to the non-payment.
Subject: Nature of Supply of Priority Sector Lending Certificates (PSLC) – regarding
Subject: Clarifications on refund related issues under GST– Reg.
|Sl. No||Relevant for||Issue||Clarification|
|1||a. Person claiming refund of ITC under Inverted duty structure and
b. Reversed lapsed credit related to wooven fabrics, in view of Notification no. 20/2018-CTR dated 26.07.2018
|Since the old credit is reversed in current month GSTR-3B and the GSTN has calculated the eligible refund for the month on the basis of net ITC, there is a shortfall in the refund processed.||The balance can be availed in the current month RFD-01A under category of “Any other”|
|2||Liable to reverse lapsed credit related to wooven fabrics, in view of Notification no. 20/2018-CTR dated 26.07.2018 but not reversed.||How to do that now?||Do it through DRC-03|
|3||What are the consequences of delay?||Interest @ 18% p.a. Should be paid from the due date of Aug’18 return till the date of reversing the same.|
|What is Notification No. 20/2018-CTR?
Earlier, vide Notification No. 5/2017-CTR, it was notified that the ITC on certain goods shall not be eligible for refund under inverted duty structure.
a. Availing benefits of Notification No. 40/2017 and
b. Claiming refund of accumulated ITC
|How to claim the refund of the credit accumulated in respect of transaction covered under notification no. 40/2017?||a. Eligible as per Rule 89(4B)
b. The same should be claimed in RFD-01A, under category of “Any other”
c. Same should be supported by all documents require for “refund of unutilized ITC on account of exports without payment of tax”.
a. Person submitted RFD-01A for refund of ITC under, credit ledger was debited
b. The ITC was re-credited due to the deficiency memo issued by officer
|Such persons are unable to file the fresh refund application for the same period.||a. Submit a manual application with rectifications under same ARN
b. Up on request form officer, debit the credit ledger using DRC-03
c. Up on receipt of that proof of debit, the proper officer shall process the refund
Subject: Verification of applications for grant of new registration
Subject: Clarification in respect of transfer of input tax credit in case of death of sole proprietor – Reg
Thank you for the patient reading. Hope this document has added value to your knowledge.
Special thanks to Mr CA Hemanth kumar, for helping in the finalization of this article.
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This document had been written to provide updates under GST in a simple manner. The author shall not be responsible for any of the decision made on the basis of the contents of this document.