Clarifications of issues under GST related to casual taxable person and recovery of excess Input Tax Credit distributed by an Input Service distributor. - GST - States - 10/2018-GST

Circular No. 10/2018-GST OFFICE OF COMMISSIONER OF STATE TAX CHHATTISGARH, ATAL NAGAR, RAIPUR No. /CT/Tech//2018/10820 Atal Nagar, Raipur Dated : 16.11.2018 To, Special Commissioner Additional Commissioners/ Joint Commissioners/Deputy Commissioners/ Assistant Commissioner/State Tax Officers/ State Tax, Chhattisgarh (All) . Subject: Clarifications of issues under GST related to casual taxable person and recovery of excess Input Tax Credit distributed by an Input Service distributor - Reg. The Central Board of Indirect Taxes Customs (CBIC) has issued Circular No. 71/45/18-GST dated 25.10.2018, to address various issues regarding the subject matter. In accordance with circular issued by CBIC and in order to ensure uniformity in the implementation of the provisions of law across the field formations, in exercise of powers conferred by section 168 (1) of the Chhattisgarh Goods and Services Tax Act, 2017 (hereinafter referred to as the CGGST Act ), the issues are clarified hereby as detailed hereunder: S.No. Issue Clarification 1. Whether the amount required to be deposited as advance lax while taking registration as a casual taxable person (CTP) should be 100% of the estimated gross tax liability or the estimated tax liability payable in cash should be calculated after deducting the due eligible ITC which might be available to CTP? 1. It has been noted that while applying for registration as a casual taxable person, the FORM GST REG-1 (S. No.11) seeks information regarding the estimated net tax liability only and not the gross tax liability. 2. It is accordingly clarified that the amount of advance tax which a casual taxable person is required to deposit while obtaining registration should be calculated after considering the due eligible ITC which might be available to such taxable person. 2. As per section 27 the Chhattisgarh Goods and Services Tax Act, 2017 (hereinafter referred to as the said Act), period of operation by causal taxable person is ninety days with provision for extension of same by the proper officer for a further period not days. Various exceeding ninety representations have been received for further extension of the said period beyond the period of 180 days, as mandated law. 1. It is clarified that in case of long running exhibitions (for a period more than 180 days). the taxable person cannot be treated as a CTP and thus such person would be required to obtain registration as a normal taxable person. 2. While applying for normal registration the said person should upload a copy of the allotment letter granting him permission to use the premises for the exhibition and the allotment letter/consent letter shall be treated as the proper document as a proof for his place of business. 3. In such cases he would not be required to pay advance tax for the purpose of registration. 4. He can surrender such registration once the exhibition is over. 3. Representations have been received regarding the manner of recovery of excess credit distributed by an Input Service Distributor (ISD) in contravention of the provisions contained in section 20 of the CGGST Act. 1. According to Section 21 of the CGGST Act where the ISD distributes the credit in contravention of the provisions contained in section 20 of the CGGST Act resulting in excess distribution of credit to one or more recipients of credit, the excess credit so distributed shall be recovered from such recipients along with interest and penalty if any. 2. The recipient unit(s) who have received excess credit from ISD may deposit the said excess amount voluntarily alongwith interest if any by using FORM GST DRC-03. 3. If the said recipient unit(s) does not come forward voluntarily. Necessary proceedings may be initiated against the said unit(s) under the provisions of section 73 or 74 of the CGGST Act as the case may be. FORM GST DRC-07 can be used by the tax authorities in such cases. 4. It is further clarified that the ISD would also be liable to a general penalty under the provisions contained in section 122(1)(ix) of the CGGST Act. 2. Difficulty, if any or any suggestion in respect of the above instructions may please be communicated to this office at the earliest. (Sangeetha P.) Commissioner, State Tax Chhattisgarh