Summary of GST Notifications, Circulars & Orders of October 2019

1. The late filing  fees has been waived off for the tax payers of Jammu & Kashmir for GSTR-1, 7 & 3B of Jul’19 and Aug’19.

The late filing fee for GSTR-1, GSTR-7 and GSTR-3B for the months Jul’19 and Aug’19 has been waived, subject to the condition that the returns are filed before the dates given below

{Refer Notification No. 48/2019-CT, Dated: 09th Oct 2019}

2. Filing of Annual return has been made optional for the registered person with T/O < 2 crores.

• The govt. has notified that, filing of annual return is optional for the tax payers with turnover up to 2 Crores for the financial year.
• However, such option has been provided only for the Financial years 2017-18 and 2018-19.
• Further, it is specified that, if the tax payer doesn’t file the same with in the due date, it will be deemed to be filed on the due date.

Comments:

i. Since, the return is optional, the tax payers who wish to make any rectifications can file the same.

ii. Further, since it is mentioned that the same will be deemed to be filed, the filing facility may not be available after the due date for filing the same.

{Refer Notification No. 47/2019-CT, Dated: 09th Oct 2019}

3. Due dates for GSTR-3B and GSTR-1 for Oct’19-Mar’20 have been notified

Notification / Order	Return	Related to	Period	Due date
44/2019	GSTR-3B Monthly	All	Oct’19-Mar’20	20th of following month
45/2019	GSTR-1 Quarterly	Persons with t/o < 1.5Crs	Oct’19-Dec’19	31-Jan-20
			Jan’20-Mar’20	30-Apr-20
46/2019	GSTR-1 Monthly	All	Oct’19-Mar’20	11th of following month

Comments:

i. It is planned to introduce the new returns from Apr’20, unless the same are postponed, the GSTR-1 and 3B shall be replaced with the new returns GST Annx-1, Annx-2 and GST RET-1 shall be applicable.

{Refer Notification No. 44, 45, 46/2019-CT, Dated: 09th Oct 2019}

4. Procedure for Invoicing & Declaration of turnover during the period of suspension of registration has been amended– Rule 21A

• The Rule 21A talks about the suspension of the registration. The sub rule 3 specifies, in case of suspension, the supplier should not make any taxable supplies. Which is leading to interpretation of holding up the activities till the date of revocation.
• Hence, an explanation has been inserted for Rule 21(3) to clarify that the expression “shall not make any taxable supply” shall mean that the registered person can make the supplies but should not issue a tax invoice and, accordingly, should not charge tax on supplies made by him during the period of suspension.”;
• New sub rule (5) has been inserted to specify that, in case of revocation of suspension, the supplier shall
• Issue revised invoices (Tax invoice) for the invoices already issued – (Sec 31(3)(a))
• Declare all such turnover in the first return to be filed after revocation of cancellation – (Sec 40)

Comments :

i. The Explanation is to avoid the unintended ambiguity in the law. And also, to specify that he is not authorized to collect any tax

ii. Further, the new sub-rule is to fill the gap and provide the process to be followed after revocation

5. The total ITC claimed should not be more than 120% of the credit available as per Invoices / Debit notes appearing in GSTR-2A – Rule 36(4)

i. New sub-rule 36(4) has been inserted to specify that the total credit availed on invoices & Debit notes not appearing in GSTR-2A should not exceed 20% of the matched and eligible credit.

ii. The effective date for the same haven’t been notified. Hence, the same shall be effective from the date of notification i.e. 09-Oct-2019

Comments :

• The concept of 20% additional credit has been widely mis-understood by the trade and professionals. To clarify, the same has been explained with an illustration below:

Assume the following:

• The total credit as per the Books of accounts is A = Rs. 500/-
• The total eligible credit of invoices in GSTR-2A matching with invoices in books of accounts is B = Rs. 200/–
• The total credit if invoices only in GSTR-2A is C = Rs. 100/-

The maximum credit that can be availed is D = lower of A(500) & B+B*20% (240) i.e. Rs. 240/- only.

• Further, the period for which the above rule should be applied and the frequency of the same has not been specified.
• Till date, though the department has issued many notices related to the differences between the credit as per GSTR-2A & 3B, there was no absolute provision to deny the credit on that basis.
• Hence, to get a legal back up and also to make more emphasis on credit based on GSTR-2A, new sub-rule has been inserted to specify that the credit availed by the supplier should be supported by the entries in GSTR-2A. However, relaxation has been provided to the extent of 20% of the matched credit.
• Although there are multiple arguments on the legal ramification of the amendment, the compliance of the same would lay a good path for the compliance with Annx-2 of new return formats.

6. GSTR-3B has been specified as the return in lieu of GSTR-3 required u/s 39 – Rule 61

The rule 61(5) has been amended to specify that, in case where the due date for furnishing the returns GSTR-1 and GSTR-2 (Under Sec 37 & 38), has been extended, GSTR-3B shall be the return to be filed under Sec 39 of CGST act.

The effective date for this amendment has been specified as 01-Jul-17.

Comments:

• Earlier, vide Notification No. 10/2017-CT, Dated: 28th Jun 2017, new rule 61(5) has been inserted to specify that the GSTR-3B is the return in lieu of GSTR-3, again vide Notification No. 17/2017-CT, dated: 27th Jul 2017, the said sub-rule was amended to specify that the 3B is not a return in lieu of GSTR-3.
• Further, the department in its press release dated 18-Oct-18, has specified that the last date for availing the credit for FY 17-18 shall be the date filing GSTR-3B of Sep’18 or date of filing annual return whichever is earlier.
• Considering the above facts, the Gujarath HC in case of “AAP AND  CO.,  CHARTERED  ACCOUNTS  THROU  AUTHORISED  PARTNER Versus UNION  OF  INDIA  &  3  other(s)” had specified that the GSTR-3B is not a return as per Sec 39.
• As a result of the above decision, the date of filing annual return has become the last date for availing credit for the financial year.
• To tackle the same, as expected, the department has amended the rule 61(5) with retrospective effect, to specify that the GSTR-3B shall be return in lieu of GSTR-3 referred in Sec 39.

7. The Central govt. shall disburse the consolidated refund amount (CGST+SGST+IGST) – Rule 91(4).

• As per the existing procedure, the proper officer shall finalize the refund claime and issue payment advice, later the disbursement of the CGST/SGST/IGST shall be done by the respective officers.
• Considering the delay in disbursement of refunds by state governments, new Sub-rule 4 has been inserted in Rule 91, to provide that all the components shall be disbursed by the Central govt. and the later the same shall be adjusted with the state govt.s.

Comments:

• The govt. is trying to explore the possible ways and means to speed-up the refund mechanism by making amendments to the procedure from time-to-time.
• But, the effective implementation of the amendments wouldn’t happen unless there is a behavioural change in the attitude of the officers.

8. The Tax practitioner/Return preparer enrolled as GST practitioner has to pass the examination within 30 days from the appointed date – Rule 83A

9. The Standing committee formed for appropriation of money credited to the “Consumer welfare fund” (fund) shall provide 50% of the funds to CBDT for creating awareness on GST, after ensuring that minimum of Rs. 25crs are available for its consumer welfare activities. – Rule 97(7A)

10. Rule 117(1A) has prescribed the time limit for extension of last date for filing Tran-1 for certain tax payers, who had actually missed to file the same due to technical glitches in the GST portal.

Now the same has been extended from 31-Mar-19 to 31-Dec-19.

11. Before issuing any Show Cause Notice (SCN), the officer shall communicate the details of any tax, interest and penalty as ascertained by the said officer, in Part A of FORM GST DRC-01A. And the recipient can provide his submissions in Part B of the same.

{Refer Notification No. 49/2019-CT, Dated: 09th Oct 2019 for all the above referred amendments in Rules}

12. The due date for FORM GST CMP-08 quarterly return of Composition dealers has been extended from 18-Oct-19 to 22-Oct-19.

{Refer Notification No. 50/2019-CT, Dated: 24th Oct 2019}

13. In accordance with Article 370, The territorial jurisdiction for the Commissioner of Jammu has been amended as the “Union territory of Jammu and Kashmir and Union territory of Ladakh”

{Refer Notification No. 51/2019-CT, Dated: 31st Oct 2019}

14. Persons who had inadvertently filed the “NIL” Refund application (RFD 01/01A) under any category, can file a new refund application for the same period. Subject to the conditions and procedure prescribed.

A. Conditions:

i. If the claim is for refund of the accumulated input tax credit on account of :

• • Exports without payment of tax
  • Supplies to SEZ Unit/SEZ Developer without payment of tax
  • Accumulation due to Inverted tax structure and

the supplier has not filed any refund application for the future period under the same category.

ii. For other categories, no other conditions other tan filing the NIL application shall be applicable.

B. Procedure:

i. The regd. person shall file the refund application for the same period under “Any other” category

ii. The application should contain all the supporting documents, which are required in the regular process

iii. The proper offer shall review the same and ask for the additional info., if any

iv. After review the officer shall compute the eligible refund and ask the recipient to reverse the credit through DRC-03.

After submitting the proof of the same, the proper officer shall issue the refund order and the payment order.

{Refer Circular No. 110/29/2019-CT, Dated: 03rd Oct 2019}

15. Procedure for claiming the refund amount in cases where the original claim of  refund was rejected (in part/full) in RFD-06 but subsequently received the favourable order in appeal or any other forum

A. Background:

In case appeals against the rejection of refund application, the credit amount is not being re-credited to the credit ledger, until the appeal is finally rejected. And  Currently the process of appeal is manual.

B. Procedure:

i. The regd. person shall file a new refund application for the same period under “Refund on account of assessment/provisional assessment/appeal/any other order” category

ii. The application should contain details of the

• • Type of the Order (appeal/any other order),
  • Order No., Order date and the Order Issuing Authority
  • Copy of the present Order (Appeal/Other) and
  • Copy of the rejection order (RFD-06-Rejection of refund)
  • The proper offer shall review the same and ask for the additional info., if any
  • Since the amount debited earlier haven’t been recredited, the regd. person shall not be required to reverse any credit in this process

iii. After receiving all the documents and details specified above, the proper officer shall issue the refund order and payment order.

iv The amount remained as rejected, if any, shall be re-credited to the respective electronic ledger.

{Refer Circular No. 111/30/2019-CT, dated: 03rd Oct 2019}

16. The Circular 105/24/2019 – Related to Clarification on various doubts related to treatment of secondary or post-sales discounts under GST has been withdrawn.

{Refer Circular No. 112/31/2019-CT, Dated: 03rd Oct 2019}

17. Clarification on GST classification and rate of tax for certain Goods

	Type of goods	HSN	Rate of tax	Conditions / Explanation provided
1	Leguminous vegetables such as grams when subjected to mild heat treatment	713	Exempt [S. No. 45-Notification No. 2/2017-CTR]	Leguminous vegetables which are subjected to mere heat treatment for removing moisture, or for softening and puffing or removing the skin, and not subjecting to any other processing or addition of any other ingredients such as salt and oil
		713	5% [S. No. 25-Notification No. 1/2017-CTR]	Above referred goods, if branded and packed in a unit container
2	Almond Milk	2202 99 90	18%	As such almond milk neither constitutes any fruit pulp or fruit juice. Therefore, it is not classifiable under tariff item 2202 99 20.
3	Applicable GST rate on Mechanical Sprayer	8424	18% [S. No. 195B of SCH-II to Notification No. 1/2017-CTR]	mechanical sprayers were excluded from the ambit of the said S. No. 325 of Schedule III.
4	Taxability of imported stores by the Indian Navy		Exempt	On the basis of Sec 90(1), 90(2) and 90(3) of the Customs act, it is clarified that the goods taken on board of Naval ships shall be construed as exported to any place outside India. Further, there is an exemption under customs act for the goods imported for Crew of Indian Naval ship.
5	Taxability  of goods imported under lease.		Exempt from Import duties – Customs [S. No. 547A; 557A & 557B –N/n. 50/2017-Customs] Taxable under RCM as Import of Service	1. Goods imported on temporary basis, aircrafts, aircraft engines and other aircraft parts imported into India under a transaction covered by item 1(b) or 5(f) of Schedule II of the CGST Act, 2017 are exempted from IGST, 2. Similarly, rigs and ancillary items imported for oil or gas exploration and production taken on lease by the importer for use after import have also been exempted 3. Subsequently, all goods, vessels, ships (other than motor vehicles) imported under lease, by the importer for use after import, were also exempted. All the above exemptions are subject to condition No. 102 of the N/n_50/2017_Customs_30.6.17
6	Applicable GST rate on parts for the manufacture solar water heater and system		18% [S. No. 234 of SCH-I to Notification No. 1/2017-CTR]	Solar water heater and system would also be covered under S. No 234 as solar power device. Hence, Parts including Solar Evacuated Tube falling under chapter 84, 85 and 94 for the manufacture of solar water heater and system will attract 5% GST.
7	Applicable GST on parts and accessories suitable for use solely or principally with a medical device	9018, 9019, 9021 or 9022	12%	As per chapter note 2(b) of the Chapter 90, parts and accessories of the instruments used mainly and principally for the medical instrument of chapter 90 shall be classified with the machine only. Thus, as per chapter note 2(b), parts of ophthalmic equipment suitable for use solely or principally with an ophthalmic equipment should be classified with the ophthalmic equipment only and shall attract 12%

 {Refer Circular No. 113/32/2019-CT, Dated: 11th Oct 2019}

18. It is clarified that the scope of support services to exploration, mining or drilling of petroleum crude or natural gas or both shall be decided based on the explanatory notes to Heading 9983 and 9986.

{Refer Circular No. 114/2019-CT, Dated: 11th Oct 2019}

19. It is clarified that airlines need not pay GST on the Airport levies

i. Passenger Service Fee (PSF) and User Development Fee (UDF) are the amounts charges levied by airport operator but collected by the Airlines on behalf of the airport operator

ii. PSF & UDF are consideration for the services provided by Airport operators. Hence, they are liable to pay GST.

• • Airlines should:
    • Satisfy the Pure-agent conditions
    • Issue invoice showing the value of PSF&DSF along with the GST component of the same
    • Pay GST on the ticket charges excluding the PSF & DSF
    • Pay GST on the collection charges received from Airport operators

{Refer Circular No. 115/34/2019-CT, Dated: 11th Oct 2019}

20. Displaying the name of the Donors (Individuals) by the recipient of the Donation is not a supply, subject to the following conditions:

• The gift or donation is made to a charitable organization
• The payment has the character of gift or donation, there is no Quid Pro Quo
• The purpose is philanthropic (i.e. it leads to no commercial gain) and not advertisement

Note: The clarification is specific for the Individual donors.

{Refer Circular No. 116/35/2019-CT, Dated: 11th Oct 2019}

21. Place of supply in case of software/design services related to ESDM industry shall be decide based on the principal suppy

{Refer Circular No. 118/37/2019-CT, Dated: 11th Oct 2019}

22. GST is payable on the lending fees received by lender for the lending of securities under “Securities Lending Scheme, 1997”

• Under the Scheme, lender of securities lends to a borrower through an approved intermediary under an agreement for a specified period with the condition that the borrower will return equivalent securities of the same type or class at the end of the period along with the corporate benefits accruing on the securities borrowed.
• The lenders earn lending fee for the same.
• The activity of lending of securities is not a transaction in securities as it does not involve disposal of securities and therefore is not excluded from the definition of services
• The supply of lending of securities under the scheme is classifiable under heading 997119 and is leviable to GST@18% under Sl. No. 15(vii) of Notification No. 11/2017-CT (Rate)
• For the past period i.e. from 01.07.2017 to 30.09.2019, IGST is payable under forward charge by the lender and w.e.f. 01-Oct-19, the borrower of securities shall be liable to discharge GST under RCM – Sl. No 16 of Notification No. 22/2019-CT(Rate).

{Refer Circular No. 119/38/2019-CT, Dated: 11th Oct 2019}

23. The license fee charged by the States for grant of Liquor licences to vendors reg., not a supply and hence, not liable to GST

i. Services proved by the Government to business entities including by way of grant of privileges, licences, mining rights, natural resources such as spectrum etc. against payment of consideration in the form of fee, royalty etc. are taxable under GST.

ii. Tax is required to be paid by the business entities on such services under reverse charge.

iii. However, considering the agreement between the Central & State govt.s, w.r.t. the liquor licences, the council has suggested to notify the service by way of grant of alcoholic liquor licence, against consideration in the form of licence fee or others as neither a supply of goods nor a supply of service.

iv. Further, it is clarified that this special dispensation applies only to supply of service by way of grant of liquor licenses by the State Governments

{Refer Circular No. 121/40/2019-CT Dated: 11th Oct 2019}

24. The effective date of explanation inserted in Notification No. 11/2017-CT (Rate) for Sr. No. 3(vi) – reg. shall be the effective date of the original provision, i.e. 27_Jun-2017

{Refer Circular No. 120/39/2019-CT, Dated: 11th Oct 2019}

25. Maritime courses approved by DG Shipping and conducted by Maritime Training Institutes of India are exempted – Sl.No.66 of the Notification No. 12/2017- Central Tax (Rate), Dated: 28th Jun 2017

{Refer Circular No. 117/2019-CT, Dated: 11th Oct 2019}

26. The govt. has published the Concept note for E-Invoicing along with the Standard, Schema and Template

{Source: GST site: https://taxguru.in/goods-and-service-tax/gst-e-invoice-system-concept-note-standard-schema-template.html}

27. Clarifications on making payment through DRC-03

{Source: GST site: https://taxguru.in/goods-and-service-tax/payment-voluntary-basis-form-gst-drc-03.html}

Thank you for the patient reading. Hope this document has added value to your knowledge. For feedback or comments, please write to vamshi@cajvk.in

{Disclaimer: 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 based on the contents of this document.}