Summary of GST Notifications / Circulars issued in January 2019

The objective of this document is to summarize all the updates of GST (Notifications, Circulars, other amendments and updates of GSTN and E-way bill portal) in one place.

A. GST Notifications

I. Notification No. 1/2019 – Central tax dated 15 Jan.2019:

Notification No.01/2019 was issued to amend the conditions for treating the Supplies made against advance authorization as “Deemed exports” notified vide Notification No. 48/2017.

1. The Pre-import condition was removed and
2. For the cases where exports relevant for the turnover of AA were made prior to this procurement, new condition of submitting the certificate of CA stating that the goods so imported shall be used for in manufacture and supply of taxable goods has been inserted.
3. It should be submitted within period of 6months from the date of supply.
4. Further, it is also clarified that such certificate shall not be required if the credit on the inputs wasn’t availed.

II. Notification No. 2/2019 Central tax dated 29.01.2019:

i. Notification No.02/2019 was issued to notify 01.Feb.2019 as appointed date for the implementation of the changes specified in the CGST amendment act, 2018.

ii. However, the following are yet to be notified

a. Sec 8(b), Sec 17, Sec 18 and Sec 20(a) of the amendment act, relevant for the new return procedure and

b. Sec 28(b)(i) & Sec 28(c)(i)) relevant for explanation of Eligible duties for Transitional credit.

III. Notification No. 3/2019 Central tax dated 29.01.2019:

Notification No.03/2019 was issued to amend certain rules as specified below:

a. Composition scheme

1. Name of the chapter changed from Composition Rules to Composition Levy
2. The table under Rule 7 amended to specify/clarify that the same rate of 0.5% shall be applicable for the Services supplied by the person under composition scheme
3. Form GSTR-4 also has been amended to capture the value of services.

b. Multiple Registrations in Same state:

1. Rule 8: Proviso for specifying the persons to get the Separate GSTIN for the SEZ units has been omitted. The same had been included in the Sec 17 of the CGST amendment act, 2018.
2. Rule 11: Amended to include the procedure option of obtaining different registrations for each of the places of business located in the same state.
3. Accordingly, instruction 12 of FORM GST REG-01 has been amended to replace the words “Places f business” in place of “business verticals”.

c. Suspension of Registration:

1. Rule 21 A: New rule has been inserted to include the concept of Suspension of Registration.
2. This shall be applicable for the cases where the Supplier has applied for Cancellation / as per the decision of the proper officer.
3. Accordingly a note “Note: – Your registration stands suspended with effect from ———- (date).” Shall be inserted in at the end of FORM GST REG-17 and FORM GST REG-20

d. Transfer of Credit:

1. Rule 41A: New rule has been inserted to prescribe the procedure of transferring the balance of ITC ledger, in case where the person has multiple registrations in same date.
2. As per this, the transferor should transfer the Credit in proportion of the “Value of the assets of the Transferee” to the total value by filing “FORM GST ITC-02A” within 30days and the transferee should accept the same.

e. Explanation for value of Exempted supplies:

1. Explanations to Rules 42(1)(i), 43(a)(i) and 43(g) amended to exclude list of taxes levied under entry 92A also (Earlier only 84) from the Value of Total turnover and Exempt supplies.
2. Further, in Explanation for the value of exempt supplies for Rule 42 and 43, clause (a) specifying that the Supplies t Nepal & Bhutan shall be considered has been omitted, as the law has been amended to consider the same as exports (Zero rated sales) .

f. Rule 53-Revised Invoices, Debit/Credit notes:

1. Revised Invoice: Rule 53(1) has been amended to exclude Debit/Credit notes from it’s purview, thereby, restricting it only for revised invoices.
2. Debit/Credit Notes: Rule 53(1A): New rule has been inserted to prescribe the contents of the Debit/Credit notes

g. Applicability of filing GSTR-9C

• Rule 80(3) has been amended to exclude the persons referred to in Proviso to Sec 35(5).

h. Refund

1. Rule 89(2)(f) – Declaration supporting the claim for refund of taxes paid for supplies to SEZ, stating that ”the SEZ has not availed any credit” has been modified as “The tax paid has not been collected from the SEZ”. This is to plug the chance of claiming double benefit by the suppliers. –
2. Formats of FORM GST RFD-01 and FORM GST RFD-01A have been amended accordingly.
3. For Rule 91(2) – Refund order for 90% of provisional refund in form GST RFD-04 – Proviso inserted for this sub-rule states that the order issued in FORM GST RFD-04 shall not be required to be revalidated by the proper officer.
4. For Rule 91(3) – Payment advice for 90% of provisional refund in form GST RFD-05 – Proviso inserted for this sub-rule states that the payment advice shall be revalidated, if the amount hasn’t been disbursed in the FY in which the Payment advice in GST RFD-05 was issued.
5. For Rule 92(4) – Refund order and Payment advice for the balance 10% of the claim, similar proviso’s as discussed above in (xv & xvi) have been inserted.
6. For Rule-96A, the heading has been changed as “Refund of IGST paid on export Export of Goods or Services under Bond or LUT”.
7. In Rule 96A(1)(b), the words ““or in Indian rupees, wherever permitted by the Reserve Bank of India” has been added to the existing words “convertible foreign exchange”. This is to make the rules in line with the amendments in Sec 54 of the act.

i. Other points

1. Rule 83, related to GST practitioners has been amended to change the name of the board, Time limit to pass the exam to 30months and the services that can be provided in capacity as GSTP.
2. Rule 85 & 86 – Liability/Credit ledgers are amended to include the reference to the rules related t new formats.
3. The formats of FORM GST APL-01 appeal to the Appellate Authority and FORM GST –APL-05 have been amended to include the new % of pre deposit requirements, tables for reporting the break-up of the payments made i.e. Total liability, Amounts admitted, Pre-deposit..etc.

IV. Notification No. 4/2019 Central tax dated 29.01.2019:

• Issued to define the jurisdictional powers f the joint commissioner, the same has been same by amending Notification no. 02/2017 Central tax dated 19.Jun.17.

V. Notification No. 5/2019 Central tax dated 29.01.2019:

• Issued to amend the notification 8/2017 dated 28.Jun.17 to make the GST rate for composition scheme in line with the rates in Rule 7.

VI. Notification No. 6/2019 Central tax dated 29.01.2019:

The Specified persons in Special category states and the State of Jammu & Kashmir, making taxable supplies through E-commerce operator are exempted from registration vide Notification no. 65/2017 dated 15.Nov.2017, if their turnover is less than 10Lakhs.

The said notification is amended to exclude the state Jammu & Kashmir by changing the reference for the Special category states. Thereby the Exemption limit for the persons of Jammu and Kashmir shall be 20Lakhs.

VII. Notification No. 1/2019 Central Tax (Rate) dated 29.01.2019:

• Since the act was amended to restrict 9(4) to specified persons to be notified by the govt., the notification no.8/2017 Central tax (Rate) Dated 28.Jun.2017, through which the exemption for Sec 9(4) (RCM for procurements from URD) up to Rs. 5,000 was provide has been rescinded.
• Thereby, the relevant notifications 38/2017 dated 13.Oct.17 – Full exemption from 9(4) up to 31.Mar.19 and 22/2018 dated 06.Aug.18 Extension of exemption up to 30.Sep.19 would also stand null.

B. GST Circulars:

VIII. Circular No. 82/1/2019 Central Tax dated 01.01.2019:

• Till 31^st Jan,18,the IIMs were not covered under the definition of Educational institutions, and hence the services provided by them were leviable to tax, except for the 3 long duration courses covered under Sl. No. 67 of the exemption notification 12/2017.
• From 31stJan,18, as per the new IIMs act, the IIMs shall get covered under the definition of Educational institutions and there by
  • All the long-term (> 1 yr.) certification courses, where a degree shall be granted by IIMs shall be exempt either by entry 66 or by 67 of 12/2017
  • All the short-term programmes, where a participation certification shall be issued by the IIMs shall be liable to GST @ 18%.
• Since the entry 67 became redundant, the same has been removed vide notif.n no. 28/2018 dated 31.12.2018 w.e.f. 20.01.2019.

IX. Circular No. 83/2/2019 Central Tax dated 01.01.2019:

It is discussed and clarified that, since the respective enactments provide from exemption for collection or payment of any type if taxes, it is clarified that the services provided by Asian Development Bank (ADB) and International Finance Corporation (IFC) shall stand exempted from GST also, even if there is not specific mention in the exemption notification.

X. Circular No. 84/3/2019 Central tax dated 01.01.2019

• It is clarified that service of “printing of pictures” falls under service code “998386: Photographic and video graphic processing services” and not under “998912: Printing and reproduction services of recorded media, on a fee or contract basis”
• Hence, the tax is to be paid @ 18% but not at 12%

XI. Circular No. 85/4/2019 Central tax dated 01.01.2019

It is clarified that the “supply of food and beverage services” to students, Faculty and Staff

• by educational institution is exempted vide Sl.no. 66 of Notification no 12/2017
• By any other person shall be liable to tax @ 5% vide Sl.no. 7(i) of notification 11/2017

XII. Circular No. 86/5/2019 Central tax dated 01.01.2019

Value:

It is clarified that, since the charges for the services of “Business facilitator”(BF) or the “Business correspondent” (BC) are collected by banks from customers, the taxable value of the services provided by BF/BC the shall be the amount collected by bank, from customer, for such services of BF/BC.

Exemption:

It is also clarified that the Exemption related to Rural banks, as per Sl. No. 39 of the notification 12/2017 shall continued to be applicable for the BF/BC services received by the Rural branches of the Banks.

XIII. Circular No. 87/6/2019 Central tax dated 01.01.2019

• It is clarified that the change in the words in Sec 140(1) from “CENVAT credit“ to “of Eligible duties” doesn’t result in denial of carry forward of the credit balance of Service tax.
• It is also confirmed that, any kind of Cesses levied under existing laws, including the cess collected under customs act, shall not be allowed as transitional credit.