Gist of various GST notifications/ order giving effect to recommendations made in 22nd GST Council meeting

[Bimal jain]

Dear Professional Colleague,

Gist of various GST notifications/ order giving effect to recommendations made in 22^nd GST Council meeting

The GST Council on October 6, 2017, has introduced slew of reforms in its 22^ndmeeting held at New Delhi, amidst the anomalies going on in the Trade and Industry on various critical provisions of GST Law and Rules made thereunder. To give effect to the changes suggested, around 41 new Notifications and an Order were issued by the Government on October 13, 2017, under CGST, UTGST, IGST and Compensation Cess. Few more notifications are expected soon to implement left out changes like the concept of quarterly return for small businesses etc. For the ease of reference, we are summarising hereunder the important notifications, for your easy digest:

Notifications/Order pertaining to composition scheme

• Enhancement of turnover limit for Composition Scheme

The Central Government vide Notification No. 46/2017- Central Tax dated October 13, 2017 has enhanced the turnover limit from ₹ 75 lakhs to ₹ 1 crore in respect of all eligible registered persons other than specified special category states. In case of special category states i.e. Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh, the turnover limit has been enhanced from 50 lakhs to 75 lakhs.

• Extension of time limit for filling of return in Form GSTR – 4 for the quarter ending September 2017 by a composition dealer upto November 15, 2017

The Commissioner vide Notification No. 41/2017 – Central Tax dated October 13, 2017, has extended the time limit for furnishing the return by a composition supplier, in FORM GSTR-4 for the quarter July to September 2017 upto November 15, 2017.

• Order for removal of difficulties in implementation of Composition Scheme -

The Central Government vide Order No. 01/2017-Central Tax dated October 13, 2017 has issued Central Goods and Services Tax (Removal of difficulties) Order, 2017, to clarify the following in relation to composition scheme:

• Supplier of food with services eligible for composition scheme even if exempt services are also provided: If a person supplies goods/services referred to in clause (b) of paragraph 6 of Schedule II of the CGST Act, 2017 [i.e. Supply of food & beverages with services] and also supplies any exempt services, including services by way of extending deposits, loans or advances in so far as the consideration is in form of interest or discount, the said person shall be eligible for the composition scheme under Section 10 of the CGST Act, 2017, subject to the fulfilment of all other conditions specified therein.
• Non-inclusion of exempt services for calculating aggregate turnover:Further, for computing aggregate turnover in order to determine eligibility for composition scheme, value of supply of such exempt services shall not be taken into account.

Notifications pertaining to Reverse Charge Mechanism (“RCM”)

• No RCM on intra-state procurements made from unregistered person till March 31, 2018

The Central Government vide Notification No. 38/2017 – Central Tax (Rate) dated October 13, 2017, has amended Notification No. 8/2017 – Central Tax (Rate) dated June 28, 2017 (“Notification No. 8”), by omitting proviso under Paragraph 1 which deals with the exemption limit of ₹ 5000 per day available to the registered person on procurement of goods or services from any or all unregistered suppliers.

Notification No. 8 seeks to provide exemption from CGST [leviable under Section 9(4) of the CGST Act, 2017] on intra-state supplies of taxable goods/services received from unregistered suppliers. It is now provided that the stated exemption shall be available to all the registered persons till March 31, 2018.

Therefore, any registered person procuring taxable goods/services from unregistered suppliers, shall not be required to pay CGST under reverse charge mechanism till March 31, 2018.

Notes:

1. Similar notification is issued under the UTGST Act vide Notification No. 38/2017 – Union Territory tax (Rate) dated October 13, 2017.
2. Notification No. 8 was effective from July 1, 2017

• No RCM on inter-state procurements made from unregistered person till March 31, 2018

The Central Government vide Notification No. 32/2017 – Integrated Tax (Rate) dated October 13, 2017, has exempted the inter-state supply of goods or services or both received by a registered person from any supplier, who is not registered, from the whole of the IGST leviable under Section 5(4) of the IGST Act, 2017 till March 31, 2018.

Therefore, any registered person procuring taxable goods/services from unregistered suppliers, shall not be required to pay IGST under reverse charge mechanism till March 31, 2018.

• RBI is liable to pay GST under RCM in case of services procured from Member of Overseeing Committee

Notification No. 13/2017 dated June 28, 2017 [“RCM Notification”] specifies the category of services on which GST is liable to be paid by the service recipient under reverse charge in terms of Section 9(3) of the CGST Act, 2017.

The Central Government vide Notification No. 33/2017- Central Tax (Rate) dated October 13, 2017 has inserted new entry [S.No. 10] in the list of services under RCM Notification, to provide that supply of services by the members of Overseeing Committee constituted by the Reserve Bank of India (RBI) to the RBI, shall be covered under RCM i.e. CGST thereon shall be paid by RBI under RCM.

Notes:-

1. Similar notification is issued under the UTGST Act vide Notification No. 33/2017 – Union Territory tax (Rate) dated October 13, 2017.
2. Similar notification is issued under the IGST Act vide Notification No. 34/2017- Integrated Tax (Rate) dated October 13, 2017.

• Registered person is liable to pay GST under RCM in case of used vehicles, seized and confiscated goods, old and used goods, waste and scrap supplied by Government or Local Authority

Notification No. 4/2017 dated June 28, 2017 – Central Tax (Rate) [“RCM Notification”] specifies the category of goods on which GST is liable to be paid by the recipient under reverse charge in terms of Section 9(3) of the CGST Act, 2017.

The Central Government vide Notification No. 36/2017-Central Tax (Rate) dated October 13, 2017 has inserted new entry [S.No. 6] in the list of goods under RCM Notification, to provide that ‘used vehicles, seized and confiscated goods, old and used goods, waste and scrap’ supplied by CG, SG, Union Territory or Local Authority to any registered person, shall be covered under RCM i.e. CGST thereon shall be paid by such registered person under RCM.

Notes:-

1. Similar notification is issued under the UTGST Act vide Notification No. 36/2017 – Union Territory tax (Rate) dated October 13, 2017.
2. Similar notification is issued under the IGST Act vide Notification No. 37/2017- Integrated Tax (Rate) dated October 13, 2017.

Amendment in the CGST Rules, 2017:

The Central Government vide Notification No. 45/2017 – Central Tax dated October 13, 2017, has amended CGST Rules, 2017 in a following manner :-

1. Insertion of new Rule 46A - Registered person supplying taxable as well as exempted goods/ services to an unregistered person can issue single “invoice-cum-bill of supply”.

2. Amendment under Rule 54(2) – Insurance or a banking company or a financial institution, including a non-banking financial company shall raise ‘consolidated tax invoice’ in lieu of ‘tax invoice’ for the supply of services made during a month at the end of the month.

3. Proviso inserted under Rule 62(1) - Registered person opting to pay tax under composition scheme with effect from first day of a month which is not the first month of a quarter shall furnish the return in Form GSTR – 4 for that period of the quarter for which he has paid tax under composition scheme and shall furnish the returns as applicable to him for the period of the quarter prior to opting to pay tax under Section 10.

4. Amendment in Form GSTR – 1 – Column titled “Cess” under Table 6 (dealing with Zero rated supplies made to SEZ and deemed export) of Form GSTR – 1 is inserted.

5. Amendment in Form GSTR – 1A - Column titled “Cess” under Table 4 (dealing with Zero rated supplies made to SEZ and deemed export) of Form GSTR – 1A is inserted.

6. Insertion of new instruction for Form GSTR – 4 - i.e. “For the Tax periods July 2017 to September 2017 and October 2017 to December 2017, serial 4A of Table 4 shall not be furnished.” Serial No. 4A of Table 4 deals with inward supplies received from a registered supplier (other than supplies attracting reverse charge).

7. Sub- rule 3(A) in Rule – 3 is substituted - A person who has been granted registration on a provisional basis under Rule 24 or who has been granted certificate of registration under sub-rule (1) of Rule 10 may opt to pay tax under Section 10 (i.e. under composition scheme) with effect from the first day of the month immediately succeeding the month in which he files an intimation in FORM GST CMP-02, on the common portal either directly or through a Facilitation Centre notified by the Commissioner, on or before the 31^st day of March, 2018, and shall furnish the statement in FORM GST ITC-03 within a period of ninety days from the day on which such person commences to pay tax under Section 10.

Provided that the said persons shall not be allowed to furnish the declaration in FORM GST TRAN-1 after the statement in FORM GST ITC- 03 has been furnished.

Notifications pertaining to leasing/supply of Motor Vehicles

Reduction of GST rate to 65% of the rate otherwise applicable on supply or lease of Motor Vehicles procured prior to July 1, 2017

The Central Government vide Notification No. 37/2017-Central Tax (Rate) dated October 13, 2017 has reduced the CGST Rate to 65% of the otherwise applicable CGST rate on Motor Vehicle falling under chapter heading 87 in the following cases:

Leasing of Motor Vehicle:- If the Motor Vehicle was purchased by the lessee prior to July 1, 2017 and supplied on lease before July 01, 2017.

Supply of Motor Vehicle:- If the supplier is a registered person and such supplier had purchased the Motor Vehicle prior to July 1, 2017 and has not availed input tax credit of central excise duty, Value Added Tax or any other taxes paid on such vehicles

Note:-

1. Nothing contained in this notification shall apply on or after July 1, 2020
2. Similar notification is issued under the UTGST Act vide Notification No. 37/2017 – Union Territory tax (Rate) dated October 13, 2017.
3. Similar notification is issued under the IGST Act vide Notification No. 38/2017- Integrated Tax (Rate) dated October 13, 2017.
4. Similar notification is issued under GST (Compensation to the States) Act for Motor Vehicle falling under chapter heading 8702 & 8703 vide Notification No. 7 /2017-Compensation Cess (Rate) dated October 13, 2017.

Relief for Small and Medium Enterprises

No GST on advance received against supply of goods for assesses having aggregate turnover up to ₹ 1.5 crore

The Central Government vide Notification No. 40/2017 - Central Tax dated October 13, 2017, has prescribed that registered persons having aggregate turnover up to ₹ 1.5 Crore in the preceding FY or whose aggregate turnover in the year in which such person has obtained registration is likely to be less than ₹ 1.5 Crore and who did not opt for the composition levy under Section 10, shall pay tax on outward supply of goods at the time of supply in terms of Section 12(2)(a) of the CGST Act, 2017 (i.e. earliest of date of invoice or the last date to issue invoice) including the situation attracting Section 14 (i.e. change in rate of tax) and furnish the returns accordingly.

Therefore, the specified persons mentioned above shall not be required to pay GST on receipt of advances against supply of goods.

No compulsory registration for supplier of services making inter- state supplies but having aggregate turnover less than ₹ 20 lakhs/ ₹ 10 Lakhs

In terms of Section 24 of the CGST Act, 2017, persons making any inter-state taxable supply are required to take compulsory registration in GST irrespective of threshold limits.

The Central Government vide Notification No. 10/2017 – Integrated Tax dated October 13, 2017 has exempted the persons making inter-state supplies of taxable services and having an aggregate turnover not exceeding an amount of ₹ 20 lakhs / ₹ 10 lakhs (in case of Special Category States other than J&K) in a financial year from obtaining compulsory registration in GST.

Other important Notifications

Extension of time limit for filling of return in Form GSTR – 5A for the months of July, August & September 2017 upto November 20, 2017

The Commissioner vide Notification No. 42/2017 – Central Tax dated October 13, 2017, has extended the time limit for furnishing the return in Form GSTR – 5A for the month of July 2017, August 2017 and September 2017 by a person supplying online information and database access or retrieval services from a place outside India to a non-taxable online recipient upto November 20, 2017.

Extension of time limit for filling of return in Form GSTR – 6 for the months of July, August & September 2017 by Input Service Distributor (ISD) upto November 15, 2017

The Commissioner vide Notification No. 43/2017 – Central Tax dated October 13, 2017, has extended the time limit for furnishing the return in Form GSTR – 6 for the month of July 2017, August 2017 and September 2017 by an Input Service Distributor upto November 15, 2017.

Extension of time limit for furnishing declaration under FORM GST ITC-01 to avail the benefit of ITC under Section 18(1) of CGST Act, 2017

The Commissioner vide Notification No. 44/2017 – Central Tax dated October 13, 2017, has extended the time limit for furnishing a declaration in FORM GST ITC-01, by the registered persons, who have become eligible to avail the input tax credit under Section 18(1) of the CGST Act, 2017 during the months of July 2017, August 2017 and September 2017 upto October 31, 2017.

Section 18(1) of the CGST Act, 2017 deals with availability of input tax credit on the inputs held in stock and inputs contained in semi-finished or finished goods held in stock in special circumstances like the persons applying for registration within 30 days from the date on which he become liable to registration, persons taking voluntary registration, persons ceasing to pay tax under composition scheme etc.

Exemption of GST on various notified services

The Government vide Notification No. 32/2017- Central Tax (Rate) dated October 13, 2017, has further amended the Notification No. 12/2017 – Central Tax (Rate), dated June 28, 2017, containing the list of services exempted from GST and has further inserted/amended the following entries:-

1. Supply of service by CG, SG, UT, local authority or governmental authority by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution [Earlier the word, government authority was used].
2. Supply of service by a Government Entity to CG, SG, UT, local authority  or any person specified by them, against consideration received from CG, SG, UT or local authority, in the form of grants.
3. Services provided by a GTA to an unregistered person, including an unregistered casual taxable person but excluding the specified person as notified.
4. Service by way of access to a road or a bridge on payment of annuity.
5. Upfront amount (called as premium, salami etc.) payable in respect of service by way of granting of long term lease of thirty years, or more of industrial plots or plots for development of infrastructure for financial business, provided by the State Government Industrial Development Corporations or Undertakings or by any other entity having 50 per cent or more ownership of CG, SG, UT to the industrial units or the developers in any industrial or financial business area.

Note:-

1. Similar notification is issued under the UTGST Act vide Notification No. 32/2017 – Union Territory tax (Rate) dated October 13, 2017.
2. Similar notification is issued under the IGST Act vide Notification No. 33/2017- Integrated Tax (Rate) dated October 13, 2017.

Empowering State Tax officers for processing and grant of refund

The Central Government vide Notification No. 39/2017 – Central Tax dated October 13, 2017, has specified the proper officers appointed under the respective SGST Act, 2017 or UTGST Act, 2017 to act as proper officers (in respect of a registered person located in the territorial jurisdiction of the said officers who applies for the sanction of refund to the said officers),for sanctioning of refund under section 54 or section 55  of the CGST Act, 2017 read Rules made thereunder except  rule 96 of the Central Goods and Services Tax Rules, 2017 (dealing with refund of IGST paid on goods exported out of India).

Note: Similar notification is issued under the IGST Act, 2017 vide Notification No. 11/2017 –Integrated Tax dated October 13, 2017.

Hope the information will assist you in your Professional endeavours. In case of any query/ information, please do not hesitate to write back to us.