RECENT CHANGES IN ‘GST’

[Mr. M. GOVINDARAJAN]

22^nd GST Council

The 22^nd meeting of GST Council was held on 06.10.2017.  The Council considered various items and also has taken into consideration of the grievances of the stakeholders in facing the problems in filing returns, grievances in rate and recommended many a item in the said meeting.   The notifications have been issued by the Central Government/Board accepting many of the recommendations of the GST Council.   In this articles the changes that have been taken place in GST provisions with reference to the newly issued notifications are discussed.

Exemption to inter-State Supplies

Section 23 of the Central Goods and Services Tax Act, 2017 (‘CGST Act’ for short) provides the list of persons who are not liable for registration under CGST Act.  Section 23(2) provides that the Government may, on the recommendations of the Council, by notification, specify the category of persons who may be exempted from obtaining registration under this Act.

Vide Notification No. 10/2017-Integrated tax, dated 13.10.2017 the Government exempted the persons making inter-State supplies of taxable services and having an aggregate turnover to be computed on all India basis, not exceeding ₹ 20 lakhs in a financial year as the ‘category of persons’, from obtaining registration.  The aggregate value of supplies, to be computed on all India basis, should not exceed an amount of ₹ 10 lakhs in case of ‘special category States’ as specified in Article 279A(4)(g) of the Constitution other than Jammu and Kashmir.   The special category states are-

• State of Arunachal Pradesh;
• Assam;
• Manipur;
• Megalaya;
• Mizoram;
• Nagaland;
• Sikkim;
• Tirupura;
• Himachal Pradesh; and
• Uttarkhand.

Composition Scheme

Section 10 provides for opting a registered person to pay tax under composition scheme if his aggregate turn over in the preceding financial year did not exceed ₹ 50 lakhs.    The said section gives powers to Government to increase the above limit up to ₹ 1  crore.  Vide Notification No.08/2017-Central tax, dated 28.06.2017 with effect from 01.07.2017 the Government increase the threshold limit for composition scheme to ₹ 75 lakhs from ₹ 50 lakhs and increase for special category States to ₹ 50 lakhs.

The threshold limit for opting for composition scheme has been increased from ₹ 75 lakhs to Re.1 crore and for special category States, the threshold limit has been increased to ₹ 75 lakhs, by the Government vide Notification No.46/2017-Central tax, dated 13.10.2017 and for union territory this limit has been increased to Re. 1 crore from ₹ 75 lakhs vide Notification No. 16/2017-Union Territory tax, dated 13.10.2017.

Amendment in Rule regarding composition levy

Vide Notification No. 34/2017- Central Tax, dated 15.09.2017 Rule 3(3A) has been inserted in regard to composition levy.  An amendment has been brought to this Rule vide Notification No. 45/2017-Central Tax, dated 13.10.2017 substituting the said Rule 3(3A).  The newly substituted Rule 3(3A) provides that a person who-

• has been granted registration on a provisional basis under rule 24; or
• has been granted certificate of registration under rule 10(1)

may opt to pay tax under section 10 with effect from the first day of the month immediately succeeding the month in which he files an intimation in Form GST CMP – 02 and shall furnish the statement in Form GST ITC – 03 in accordance with the provisions of Rule 44(4) within a period of 90 days from the day on which such person commences to payt ax under section 10.  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.

Clarification

Vide Order No.01/2017-Central Tax, dated 13.10.2017and Order No. 01/2017-Union Territory Tax, dated 13.10.2017 the Central Government made orders for the removal of difficulties.

It is clarified that if a person supplies goods and/or services referred to in para 6(b) of Schedule II of the CGST Act, 2017 and also supplies any exempt services including services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount, the said person shall not be ineligible for the composition scheme under section 10 subject to fulfillment of all other conditions specified therein.

It is further clarified that in computing his aggregate turnover to determine his eligibility for composition scheme, value of supply of any exempt services including services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount, shall not be taken into account.

Invoice

Vide Notification No. 45/2017- Central Tax, dated 13.10.2017 Rule 46A has been inserted.  The new Rule 46A provides that notwithstanding anything contained in-

• Rule 46
• Rule 49
• Rule 54

where a registered person is supplying taxable as well as exempted goods or services or both to an unregistered person, a single ‘invoice-cum-bill of supply’ may be issued for all such supplies.

The said notification intends to amend Rule 54(2).  After this amendment Rule 54(2) provides that where the supplies of taxable service is an insurer or a banking company or a financial institution, including a non-banking financial company, the said supplier shall issue a consolidated tax invoice or any other document in lieu thereof, for the supply of services made during a month at the end of the month whether issued or made available physically or electronically whether or not serially number and whether or not containing the address of the recipient of taxable service but containing other information as mentioned under Rule 46.

Returns

Vide Notification No. 45/2017-Central Tax, dated 13.10.2017 a proviso has been inserted to Rule 62(1) which requires a registered person opting composition scheme, shall file a quarterly return in Form GSTR – 4 in the portal. 

The newly inserted proviso provides that the registered person who opts to pay tax under section 10 with effect from the first 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 section 10 and shall furnish the returns as applicable to him for the period of the quarter prior to opting to pay tax under section 10.

GSTR-1

Table 6 of GSTR – 1 deals with the particulars to be given for ‘zero rated supplies and deemed exports’.   Originally the table contains 10 columns.  The Notification No.45/2017-Central Tax, dated 13.10.2017 intends to omit the 10^th column which provides for furnishing the amount ‘cess’.

GSTR – 1A

Table 4 of GSTR – 1A deals with the particulars to be given for ‘zero rated supplies and deemed exports’.   Originally this table contains 7 columns.  The Notification No. 45/2017-Central tax, dated 13.10.2017 intends to add 8^th column for furnishing the details of cess. 

GSTR – 4

GSTR – 4 is the return to be filed quarterly by a registered person opting to pay under composition scheme.  Nine instructions are there in regard to filing of GSTR – 4.  The Notification No. 45/2017-Central Tax, dated 13.10.2017 intends to insert 10^th instruction which provides 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 4A provides for furnishing information regarding inward supplies received from a registered supplier (other than supplies attracting reverse charge).

Vide Notification No.41/2017-Central Tax, dated 13.10.2017 the Commissioner extend the time limit for furnishing the return by a composition supplier in Form GSTR – 4 under section 39(2) of the Act read with Rule 62 of CGST Rules, 2017 for the quarter July to September 2017 till 15.11.2017.

GSTR – 5A

Vide Notification No. 42/2017-Central Tax, dated 13.10.2017 the Commissioner 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 referred to in Section 14 of the Integrated Goods and Services Tax Act, 2017 and Rule 64 of the Central Goods and Services Tax Rules, 2017 till 20.11.2017.  This notification shall be deemed to have come into force on 15.09.2017.

GSTR – 6

Vide Notification No. 43/2017-Central Tax, dated 13.10.2017 the Commissioner extended the time limit for furnishing the return by an Input Service Distributor in Form GSTR – 6 under section 39(4) of the CGST Act, read with Rule 65 for the months of July 2017, August 2017 and September 5ill 15.11.2017.

GST ITC – 01

Vide Notification No. 44/2017-Central Tax, dated 13.10.2017 the Commissioner extended the time limit for making a declaration in Form GST ITC – 01 by the registered persons, who have become eligible during the months of July 2017, August 2017 and September 2017 to the effect that they are eligible to avail input tax credit under section 18(1) till 31.10.2017.

Vide Notification No. 40/2017- Central Tax, dated 13.10.2017 the Central Government notifed the registered person whose-

• aggregate turnover in the preceding financial year did not exceed ₹ 1.50 crores; or
• aggregate turnover in the year in which such person has obtained registration is likely to be less than ₹ 1.50 crores

and who did not opt for the composition levy under section, as the ‘class of persons’ who shall pay the central tax on the outward supply of goods at the time supply as specified in section 12(2)(a) of the Act including the situations attracting section 14 and shall accordingly furnish the details and returns as mentioned in Chapter IX of the Act and the rules made there under and the period prescribed for the payment of tax by such class of registered persons shall be such as specified in the said Act.

Proper Officers for Refund

Vide Notification No.39/2017-Central Tax, dated 13.10.2017 and vide Notification No. 11/2017-Integrated tax, dated 13.10.2017 the Central Government specified that the officers  appointed under the respective State Goods and Services Tax Act, 2017 or the Union Territory Goods and Services Tax Act, 2017 who are authorized to be the proper officers for the purposes of section 55 or section 55 (which deal with refund) by the Commissioner of the said Acts, shall act proper officers for the purpose of sanction of refund under section 55 or section 55 of the CGST Act read with the rules made there under except Rule 96 in respect of a registered person located in the territorial jurisdiction of the said officers who applies for the sanction to the refund to the said officers.

Exemption

Vide Notification No. 32/2017-Central Tax, dated 15.09.2017 the Central Government specified the casual taxable persons making taxable supplies of handicraft goods as the category of persons exempted from obtaining registration.  The expression ‘handicraft goods’ is defined in the explanation as the goods mentioned in column 2 of the Table and HSN Code mentioned corresponding to the goods.  There are 28 goods mentioned in the table. 

Vide Notification 38/2017- Central Tax, dated 13.10.2017 brought an amendment to the Notification No. 32/2017-Central Tax, dated 15.09.2017.    It proposes to substitute the serial No.9 which describes the goods ‘Textile (handloom products), handmade shawls, stoles and scarves – The HSN codes including 50, 58, 61, 62, 63.

The Notification also intends to insert the following after serial number 28-

Sl. No. 29 – Chain stitch – Any chapter;

Sl. No. 30 – Crewel, namda, gabba – Any chapter;

Sl. No.31 – Wicker willow products – Any chapter;

Sl. No. 32 – Toran  - Any chapter;

Sl. No. 33 – Articles made of shoal – Any chapter