Article contains summary of Notifications, Circulars and Orders issued by CBIC in the Month of June 2019 in simple language.

Page Contents

I. Due date for furnishing Annual return for the period July 2017-March 2018 was extended up to 31st August 2019

Considering the various representations made by the trade and the commerce forum and also the number of returns filed till date, the council has decided to extend the due dates for filing the Annual return and Audit report by 2 months.
Accordingly, the due date was extended from 30.Jun.19, to 31.Aug.19

{Refer: Removal of difficulty order 06/2019 issued on 28th of Jun’19}

II. The regd. Person supplying OIDAR services from outside India to an Unregd. Person in India, are exempted from compliances of annual return and Audit

The persons supplying “Online Information and Data Access and Retrieval” (OIDAR) services from Outside India, to unregd. recipients in India are liable to get registered under GST.

Such persons need to file the details of outward supplies and pay tax through GSTR-5A on monthly basis by 12th of the Following month.

Earlier, there were no exceptions for these persons from applicability of Sec 44 and Sec 35 of the CGST act. Therefore, they had to file the Annual return (GSTR-9) and reconciliation with certification of the auditor in GSTR-9C.

Considering the practical possibilities of the compliance requirements, the same are now exempted from the compliance of GSTR-9 & 9C.

{Refer: Notification no. 30/2019 issued on 28th of Jun, 19}

III. The due dates for furnishing GSTR-1 and GSTR-3B, for the months Jul’19- Sep’19, were notified

The due dates for furnishing of GSTR-1 and GSTR-3B for the period Jul’2019 to Sep’19 are:

Return Related to Period Due date
GSTR-1_Quarterly Persons with t/o < 1.5Crs Jul’19-Sep’19 31-Oct-19
GSTR-1_Monthly All Jul’19-Sep’19 11th of following month
GSTR-3B_Monthly All Jul’19-Sep’19 20th of following month

{Refer: Notification no. 27, 28 and 29/2019 issued on 28th of Jun’19}

IV. The due dates for furnishing GSTR-7 & ITC-04 for all the previous months / quarters was extended up to 31.Aug.19

Return Related to Period Due date
GSTR-7_TDS Tax deductors u/s 51 Oct’18-Jun’19 31-Aug-19
ITC-04_Quarterly Persons having Job work Jul’17-Jun’19 31-Aug-19

V. The balances of the cash ledger under different classifications can be freely transferred among all such bifurcations.

  • The Cash ledger maintained in the GSTN portal is bifurcated based on the recipient i.e. Centre/State/Integrated and it is further bifurcated into Tax, Interest, Late fee..etc. resulting in 20 combinations.
  • The deposited under a category can’t be utilised for the payment of liability under other categories.
  • Such system was cumbersome, causing undue hardship on the tax payers and many instances were noticed, where the amount was deposited under wrong head and there is no way to utilize it, other than claiming a refund.
  • Considering the challenges, a common wallet type of cash ledger has been demanded since the inception of GST law.
  • Now the same has got the approval of the council and new rule 87(13) was inserted to enable the taxpayers to transfer the funds from any category to any other category by filing FORM GST PMT-09. However, the effective date of the same is yet to be notified.
  • The same may get notified once the portal is ready with the related infrastructure built in it.
  • Further, the department also indicated that the bifurcations will be reduced from 20 to 5major heads.

VI. Validity of E-way bills can be extended even after their expiry, but within 8hrs.

  • The validity of the E-way bills generated shall be decided based on the distance and the mode of transport as prescribed in Rule 138(10).
  • If the transportation gets affected due to any exceptional circumstances and the goods can’t be delivered before expiry of the E-way bill, the validity of the sae can be extended by filing a request in the portal. However, the same should be done before expiry of the E-waybill.
  • Considering the difficulties face by the trade and Industry, the council has approved to allow the extension even after expiry of the E-way bills, but within 8hrs from the time of expiry.
  • Accordingly, new proviso to rule 138(10) was inserted w.e.f. 28.Jun.2019
  • Further, the validity of E-way bills for “multimodal shipment in which at least one leg involves transport by ship” also has been provided as One day for every 20Km or part thereof.

VII. Applicability of Rule 138E is postponed by 2 months i.e. up to 21. Aug.2019

  • As per Rule 138E, persons who have not filed returns for 2 consecutive tax periods, their GSTIN shall not be allowed to be mentioned anywhere in Part A of the E-way bill.
  • Earlier the same was notified vide 22/2019_CT dated 23.Apr. 19 w.e.f. 21. Jun.19.
  • Now the council has decided to postpone the same by 2 months. Hence the same is notified w.e.f. 21.Aug.19
  • Further, the Rue 138E(a) was tweaked to specify that the quarterly return shall be considered for the persons opted for 6% scheme. And the return includes the statement in FORM GST CMP-08.

VIII. For new registrations, Bank account details should be updated within 45 days from date of Reg.n or before the due date for filing the first return

  • Considering the representations from the trade, the facility of providing the bank account details after obtaining the registration was provided.
  • Further, the time limit for the same, prescribed by inserting new Rule 10A, is earlier of:
    • 45th day from the date of grant of reg.n or
    • The due date for filing the first return for that reg.n
  • If the same is not complied, the proper officer can cancel the registration on that ground

Note: The above requirement of bank account details is not applicable for the persons registered for TDS and also for the Suo moto registrations made by the departments.

{Refer: point 2 & 3 of 31/2019_CT dated 28.Jun.19}

IX. Value of supply in cases where Kerala Flood Cess is applicable shall be the value as per Sec15 but shall not include the said Cess.

  • As per Sec’15 of the CGST act, the taxable value for charging GST shall include all the taxes and Cess except those are charged under CGST/SGST/UTGST/Comp.Cess act.
  • Since the Kerala Flood Cess has been levied under Kerala Finance Bill, 2019, such cess will also form part of taxable value for calculating GST.
  • To avoid the same, new rule 32A was inserted to specify that the IX. Value of supply in cases where Kerala Flood Cess is applicable shall be the value as per Sec15, but shall not include the said Cess.

Note: The said cess shall be applicable w.e.f. 1-Aug-19, only on Intra State Un regd. Supplies, at the rate of 1% or 0.25%. The same should be paid by filing FORM KFC-A through the portal “www.keralataxes.gov.in”.

X. QR code shall be made mandatory for invoices and Bill of Supply.

  • As a step in the process of implementing E-invoicing, the govt has inserted new proviso to the invoice rules.
  • The proviso states that the govt may notify that the Invoice / Bill of Supply shall have a QR code on it.
  • However, the effective date for the same is yet to be notified.

XI. The rules related to the claim of TDS/TCS by the deductee/Collectee have been amended to make them in line with the portal

  • As per the original process specified in the returns, the deductee/Collectee shall be able to see the TDS/TCS made in their GSTR2A/4A and the same can be claimed by filing GSTR-02.
  • However, as on date, the GSTR-02 is not notified and deductee/Collectee can view and claim the same through the return dashboard. And the tax claimed shall get added to their cash ledger
  • Rule 66, 67 & 87 were amended to make the rules in line with the actual process in the portal.

XII. Rules 91, 92 & 94 were amended to facilitate the refund of all the taxes CGST/SGST/IGST together

Currently, for refund claims, the proper officer can issue the order for disbursement of the taxes as per his jurisdiction i.e. State tax / Central tax. And for the remaining, he shall issue a payment advice to the other officer.

Most of the cases, the other officers are not quick enough to process such disbursements. This is resulting the delay in the process.

To avoid this, the respective rules are amended by replacing the word “payment advice” with the words “Payment order” to specify that the proper officer shall issue payment order for the entire amount (CGST, SGST & IGST) and later the accounts shall be settled b/w State & Central govt..

However, the effective date for the same is yet to be notified.

XIII. Some procedural amendments were made for the rules related to Anti-profiteering

The key points are:

  • Extension of time limit by 1 month, for examination of evidence in the application by Standing committee (SC).
  • Extension of time limit by 1 month, for examining and forwarding the applications to SC by State level Standing committee (SSLC)
  • Extension of time limit by 3 months, for investigation by Director General of Anti profiteering (DGAP)

XIV. Clarification – GST on additional / penal interest collected for late payment of instalments (EMIs)

Issue: Whether the interest collected for delay in payment of EMIs shall be liable to GST or Exempted?

The taxability was explained by classifying the transactions into two categories.

Category 1: If such instalment facility is provided by supplier

Clarification: As per the valuation provisions ( Sec 15(2)(d)) any interest/penalty/late fee collected for delay in payment of , the additional amount and the penal interest charged by A should be included in the value of the mobile.

Eg: A supplies a mobile to B for 40K and provides the option of paying the consideration in 4 instalments with 11K each. Also specified that for any delay of installment, 1k/day shall be collected as penal interest.

Therefore, total value of the mobile is 44K+ penal interest collected.

Category 2: If such instalments facility is provided by others

Clarification: The additional / penal interest charged by C to B shall be covered under Sl. No. 27 of Notif.n No. 12/2017- CTR_ 28.06. 17 and hence exempted. The supply between A and B is an independent supply and the penal interest charged by C shouldn’t be included in the value of the mobile.

Eg: A supplies a mobile to B for 40K, and a 3rd party C provides option of availing loan for that purchase and repaying the same in 4 instalments of 12K each Also specified that for any delay of instalment, 1k/day shall be collected as penal interest.

Therefore, total value of the mobile is 40K. The value of supply made by C is 4K+Penal interest and is exempted. However, if C charges any processing charges or other fees, same shall be liable to tax.

It is further clarified that the transaction of levy of additional / penal interest does not fall within the ambit of entry 5(e) of Schedule II of the CGST Act i.e. “agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act”, as this levy of additional / penal interest satisfies the definition of “interest” as contained in Notif.n No. 12/2017_CTR_28.06.17.

{Refer: Circular 103/22/2019 dated 28.06.2019}

XV. Place of supply (POS) for the Cargo handling services provided by ports to the clients shouldn’t be treated as “in relation to Immovable property”

Issue: For the purpose of determining place of supply, whether the services provided by the ports to clients should be treated as services provided in relation to immovable property or not.

Clarification: It is clarified that such services are ancillary to or related to cargo handling services and are not related to immovable property. Hence, the POS should be determined as per the general rule. i.e.

  1. If supplier & Recipient are in India,
    1. Recipient is registered: POS shall be the registered place of the recipient.
    2. Recipient is unregistered: POS shall the location of recipient as per records of the supplier
  2. If one of the, supplier (or) Recipient are outside India and the other is in India,
    1. Location of is recipient is available: such location
    2. IF not available, then location of the supplier.

{Refer: Circular 103/22/2019 dated 28.06.2019}

XVI. The POS for the services on unpolished diamonds such as cutting and polishing activity which have been temporarily imported and are not put to any use in India shall be the place of the recipient

Issue: Whether the above referred services gets covered under Sec 13(3)(a) of IGST act and considered as performance based or it gets covered under the second proviso to that clause?

Clarification: It is clarified that such services shall be covered by the proviso to Sec 13(3)(a) and hence the place of supply should be considered as per general rule. i.e.

  1. Location of is recipient is available: such location
  2. IF not available, then location of the supplier.

{Refer: Circular 103/22/2019 dated 28.06.2019}

XVII. If a refund application is wrongly mapped to an officer other than the proper officer, such other officer can process the claim of refund

Issue: Due to the errors in mapping the GSTINs to the respective officers, the refund claims are being assigned to the wrong officers. And the facility of forwarding to the proper officer is yet to be available in the Portal. Hence, the applications are piling up for a long period.

Clarification: Until the facility of forwarding is provided, the office to who is assigned by the system should process the refund claim. After processing, the same should be intimated to the common portal, so that the mapping can be rectified for future communications.

E.g. Jurisdictional officer as per the circular No. 01/2017 dated 20.09.2017 is Mr. A-State tax officer, but the portal has mapped the refund application to Mr. B-Central tax officer, then Mr B can process the refund and intimate the portal to update the mapping for future communications.

{Refer: Circular 104/22/2019 dated 28.06.2019}

XVIII. Clarification on treatment of secondary or post-sales discounts under GST – reg.

a. If the discount was given for the original supply, without any future obligations – Taxable value & tax can be reduced

If the post-sale discount is given by the supplier of goods to the dealer without any further obligation or action required at the dealer’s end, then the post sales discount given by the said supplier will be related to the original supply of goods and it would not be included in the value of supply, in the hands of supplier of goods, subject to the fulfilment of provisions of section 15(3) of the CGST Act.

Sec 15(3) says that, the discount should have been agreed on or before the date of supply and the recipient should reverse the credit to the extent the tax specified in the credit note.

b. If the discount is given for any future obligation such as promotional campaigning… etc, – the amount shall be liable to tax in the hands of the recipient

If the additional discount given by the supplier of goods to the dealer is the post-sale incentive requiring the dealer to do some act like undertaking special sales drive, advertisement campaign, exhibition etc., then such transaction would be a separate transaction and the additional discount will be the consideration for undertaking such activity and therefore would be in relation to supply of service by dealer to the supplier of goods.

The dealer, being supplier of services, would be required to charge applicable GST on the value of such additional discount and the supplier of goods, being recipient of services, will be eligible to claim input tax credit (hereinafter referred to as the “ITC”) of the GST so charged by the dealer.

c. If the discount is given to dealer with an obligation to pass on that discount to his customer– Taxable in the hands of the dealer

If the additional discount is given by the supplier of goods to the dealer to offer a special reduced price by the dealer to the customer to augment the sales volume, then such additional discount would represent the consideration flowing from the supplier of goods to the dealer for the supply made by dealer to the customer.

This additional discount as consideration, payable by any person (supplier of goods in this case) would be liable to be added to the consideration payable by the customer, for the purpose of arriving value of supply, in the hands of the dealer, under section 15 of the CGST Act.

The customer, if registered, would be eligible to claim ITC of the tax charged by the dealer only to the extent of the tax paid by the said customer to the dealer in view of second proviso to section 16(2) of the CGST Act.

d. If an accounting credit note is given – The recipient need not reverse the proportional credit

If post-sales discount granted by the supplier of goods is not permitted to be excluded from the value of supply in the hands of the said supplier not being in accordance with the provisions contained in section 15(3) of CGST Act, the supplier can issue an accounting credit note.

Further, the recipient will not be required to reverse ITC attributable to the tax already paid on such post-sale discount received by him through issuance of financial / commercial credit notes by the supplier of goods.

{Refer: Circular 105/22/2019 dated 28.06.2019}

XIX. The suppliers located in the departure area of international airports and making tax free sales can claim refund of accumulated credit

  • vide notification no. 11/2019_CTR_29.Jun.2019 has notified that the suppliers are eligible to claim the refund of the taxes paid on inward supplies of such Goods, if:
    • The outlet is in international airport and is beyond immigration counter
    • The sales made were tax free
    • The recipient is “Outgoing international tourist” and is leaving India
    • The recipient should also be eligible for refund of taxes paid
    • The supplier should receive the foreign exchange
  • Further, new rule 95A was inserted to explain the process of claiming the refund. Which is as followed:
    • Supplier should furnish the application form in FORM GST RFD- 10B on a monthly or quarterly basis through the portal.
    • The application should be accompanied by Self certified copies of Sales made and related purchase invoices
    • The refund shall be processed if all the above referred conditions are met.
  • The procedure for claim and processing of the refund was further clarified vide circular 106/25/2019 dated 29.Jun.2019. The key points are:
    • Since the supplier is not eligible for credit, the refund is for the taxes paid on inward supplies but not for the accumulated credit
    • The refund is invoice based but not the basis of the credit ledger or other returns
    • The supplier should maintain the details of inward supplies and the corresponding outward supply details in the format given as Annexure A to the Circular.
    • The supplier should also maintain the declarations from the passenger in the format prescribed in the Annexure B to the circular.
    • Till the time the refund application is available online, the application should be filed manually.

The scheme shall be applicable for outward supplies made from 01. Jul.19, i.e. tax paid on procurements prior to 1.Jul.19 can also claimed as refund, if the same are sold after 01.Jul.19.

XX. Miscellaneous:

  • Format for Annual return by composition dealer (Revised FORM GSTR-4) was notified
  • Formats of REG-07 & REG-12 were amended to facilitate the changes related to bank account details Format for FORM DRC-03 was amended.
  • Few instructions and table headings of FORM GSTR-9 were amended to provide the details from April 2018 to March 2019 instead of April 2018 to September 2018;

Thank you for the patient reading. Hope this document has added value to your knowledge.

For feedback or comments, please write to Team JVK & Associates on 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.

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