Daily Dose of GST Update By CA Pradeep Jain
This article deals with Section 188 – Taxability of supply of services in certain cases & Section 191- Provision for transfer of unutilized Cenvat Credit by taxable person having centralized registration under the earlier law of Revised Model GST Law.
188. Taxability of supply of services in certain cases
This is a newly added section to provide for taxation for such instances of service provision where the point of taxation was occurring before the appointed day. It states that in cases where the point of taxation lies before the appointed day then the tax will be applicable as per the earlier law. In the old draft, this was non-existent and this has been added to bring more clarity in situations where point of taxation comes into play. Situations like taxation on advances and subsequent adjustment in the invoice value are such transactions where this provision becomes relevant. Although continuing with the advance eg. it might still be open to debate that how the tax paid on advance before the appointed day are to be adjusted against the invoices issued after the appointed day. Will refund be granted of this tax paid on advances and full tax will have to be paid on the invoice issued under the new regime is yet to be clarified.
An explanation has also been added stating that where the portion of a supply of service is not covered by this section, then such portion will be taxable under the new act.
A very similar provision has been added as section 189 also for supply of goods where it has been stated that where the point of taxation lies before the appointed day in respect of supply of goods then tax will be payable on such supply in accordance with the earlier law.
191. Provision for transfer of unutilized Cenvat Credit by taxable person having centralized registration under the earlier law
Another section has been added keeping in view that many concerns have taken the centralized registration in respect of their units and were availing the cenvat at a single premise and were filing a consolidated return in respect of all such units. Now under GST regime, the registration is to be taken separately for each state. The old draft was silent on the treatment of cenvat balance which was lying with them but was pertaining to various units. Thus it was not clear how the cenvat shall be carried forward and whether the other units will get their share of cenvat.
This newly added provision states that where a taxable person having centralized registration under the earlier law has obtained a registration under this Act, such person shall be allowed to take, in his electronic credit ledger, credit of the amount of cenvat credit carried forward in a return, furnished under the earlier law by him. An important proviso in this section is that such credit may be transferred to any of the registered taxable persons having the same PAN for which the centralized registration was obtained under the earlier law. Thus distribution of cenvat has been made possible without conditions.
Another proviso added states that if the taxable person files his return for the period ending with the day immediately preceding the appointed day within 3 months of the appointed day, such credit shall be allowed subject to the condition that the said return is either an original return or a revised return where the credit has been reduced from that claimed earlier. Also it has been specifically stated that out of the credit claimed, only that much portion of the cenvat shall be allowed which is admissible under the new law.
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