Government has introduced in Lok Sabha on 8th August 2018  Central Goods and Services Tax (Amendment) Bill, 2018 and proposes several amendment to Central Goods and Services Tax Act, 2017. A Synopsis of Amendment made by CGST (Amendment) Bill, 2018 is as follows:-

1. Amend section 7 of the principal Act relating to “Scope of Supply” in order to clarify the scope of supply.

2. Amend section 9 of the principal Act relating to “Levy and Collection” so as to restrict the levy of tax on reverse charge basis to receipt of supplies of certain specified categories of goods or services or both by notified classes of registered persons from unregistered suppliers on the recommendations of the Council.

3. Amend section 10 of the principal Act relating to “Composition Levy“, so as to raise the statutory threshold of turnover for a taxpayer to be eligible for the composition scheme from one crore rupees to one crore and fifty lakh rupees, and to allow the composition taxpayers to supply services (other than restaurant services), for up to a value not exceeding ten percent of turnover in the preceding financial year, or five lakh rupees, whichever is higher.

4. Amend section 12 of the principal Act relating to “Time of supply of goods” and the said amendment is drafting in nature.

5. Amend section 13 of the principal Act relating to “Time of supply of services” and the said amendment is drafting in nature.

6. Amend section 16 of the principal Act relating to “Eligibility and conditions for input tax credit“, in order to provide for input tax credit in cases of “Bill to-ship-to” model in the case of supply of services. The said clause further seeks to include the provisions relating to the new return format as specified in the proposed new section 43A, for availement of input tax credit.

7. Amend section 17 of the principal Act relating to “Apportionment of credit and blocked credits”, in order to further expand the scope of eligibility of input tax credit.

8. Amend section 20 of the principal Act relating to “Manner of distribution of credit by Input Service Distributor“, in order to exclude the amount of tax levied under Entry 92A of List I of the Seventh Schedule of the Constitution from the value of turnover for the purposes of distribution of credit.

9. Amend section 22 of the principal Act relating to “Persons liable for registration”, so as to increase the threshold turnover for registration in special category States of Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand from ten lakh rupees to twenty lakh rupees.

10. Amend section 24 of the principal Act relating to “Compulsory registration in certain cases”, so as to provide for mandatory registration for only those e-commerce operators who are liable to collect tax at source under section 52 of the principal Act.

11. Amend section 25 of the principal Act relating to “Procedure for registration”, so as to allow persons having multiple places of business in a State or Union territory to obtain separate registration for each such place of business, and to insert the provisions for separate registration for a person having a unit(s) in a Special Economic Zone or being a Special Economic Zone developer, distinct from his other units located outside the Special Economic Zone.

12. Amend section 29 of the principal Act relating to “Cancellation of registration”, so as to provide for temporary suspension of registration while cancellation of registration is under process.

13. Amend section 34 of the principal Act relating to “Credit and debit notes”, so as to allow registered persons to issue consolidated credit or debit notes in respect of multiple invoices issued in a Financial Year.

14. Amend section 35 of the principal Act relating to “Accounts and other records” so as to provide that any Department of the Central or State Government or local authority which is subject to audit by the Comptroller and Auditor-General of India need not get their books of account audited by any Chartered Accountant or Cost Accountant.

15. Amend section 39 of the principal Act relating to “Furnishing of returns”, so as to provide for prescribing the procedure for quarterly filing of returns with monthly payment of taxes.

16. Insert a new section 43A to provide for prescribing the procedure for furnishing return and availing input tax credit.

17. Amend section 48 of the principal Act relating to “Goods and Services Tax Practitioners”, so as to allow Goods and Services Tax Practitioners to perform other functions such as filing refund claim, filing application for cancellation of registration, etc.

18. Amend section 49 of the principal Act relating to “Payment of tax, interest, penalty and other amounts” in order to provide that the credit of State tax or Union territory tax can be utilized for payment of integrated tax only when the balance of the input tax credit on account of central tax is not available for payment of integrated tax.

19. Bill seeks to insert two new sections, namely, section 49A and section 49B. Section 49A seeks to specify that a taxpayer would be able to utilise the input tax credit on account of central tax, State tax or Union territory tax only after exhausting all the credit on account of integrated tax available to him towards payment or integrated tax, Central tax, State tax or Union territory tax. Section 49B seeks to empower the Government to prescribe any specific order of utilization of input tax credit of any of the taxes for payment of any tax.

20. Amend section 52 of the principal Act relating to “Collection of tax at source”, in order to give the reference of section 39.

21. Amend section 54 of the principal Act relating to “Refund of tax”, in order to provide that the principle of unjust enrichment will apply in case of a refund claim arising out of supplies of goods or services or both made to a Special Economic Zone developer or unit, and to allow receipt of payment in Indian rupees, where permitted, by the Reserve Bank of India in case of export of services.

22. Amend section 79 of the principal Act relating to “Recovery of tax”, to enable recovery to be made from distinct persons registered in different States or Union territories in order to ensure speedy recovery from other establishments of the registered person.

23. Amend section 107 of the principal Act relating to “Appeals to Appellate Authority”, in order to specify twenty-five crore rupees as the upper limit of the amount of pre-deposit payable for filing of appeal before the Appellate Authority.

24. Amend section 112 of the principal Act relating to “Appeals to Appellate Tribunal”, in order to specify fifty crore rupees as the upper limit of the amount of pre-deposit payable for filing of appeal before the Appellate Tribunal.

25. Amend section 129 of the principal Act relating to “Detention, seizure and release of goods and conveyances in transit”, in order to increase the time limit before which proceedings under section 130 can be initiated from seven to fourteen days.

26. Amend section 140 of the principal Act relating to “Transitional arrangements for input tax credit”, in order to clarify with retrospective effect from 1st July, 2017 that the cesses and additional duty of excise (on textile and textile articles) levied under the pre-Goods and Services Tax laws shall not be a part of transitional input tax credit under the goods and services tax.

27. Amend section 143 of the principal Act relating to “Job work procedure” in order to empower the Commissioner to extend the time limit for return of inputs and capital goods sent on job work, up to a period of one year and two years, respectively.

28. Amend Schedule I of the principal Act relating to “Activities to be treated as supply even if made without consideration”.

29. Amend the title of Schedule II of the principal Act from “Activities to be treated as supply of goods or supply of services” to “Activities or transactions to be treated as supply of goods or supply of services”.

30. Amend Schedule III of the principal Act relating to “Activities or transactions which shall be treated neither as a supply of goods nor a supply of services”.

Author Bio

CA Amit Pandav is a Qualified Chartered Accountant having around 2.5 years of post-qualification experience in indirect taxation. In such a short span, he has gained valuable experience in VAT, Service Tax, Excise, Customs and GST. He has vastly developed his skills in Indirect Tax Planning and Advisory. Moreover he has lead the team to successfully implement GST in a company engaged in manufacturing and export of Leather products, Logistics, Textile, Media, Telecom, Healthcare, Automobiles, Ecommerce.

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