Amendments to MGST Act, 2017 [L. A. BILL No. LXXI OF 2018. Dt. 22-11-2018] - L.A. BILL No. LXXI OF 2018 - Maharashtra SGST

In pursuance of clause (3) of article 348 of the Constitution of India, the following translation in English of the Maharashtra Goods and Services Tax (Amendment) Bill, 2018 (L. A. Bill No. LXXI of 2018), introduced in the Maharashtra Legislative Assembly on the 22 nd November 2018, is hereby published under the authority of the Governor. By order and in the name of the Governor of Maharashtra, RAJENDRA G. BHAGWAT, Secretary (Legislation) to Government, Law and Judiciary Department. -------- L. A. BILL No. LXXI OF 2018. A BILL further to amend the Maharashtra Goods and Services Tax Act, 2017. WHEREAS both Houses of the State Legislature were not in session ; AND WHEREAS the Governor of Maharashtra was satisfied that circumstances existed which rendered it necessary for him to take immediate action further to amend the Maharashtra Goods and Services Tax Act, 2017, for the purposes hereinafter appearing ; and, therefore, promulgated the Maharashtra Goods and Services Tax (Amendment) Ordinance, 2018 Mah. (XLIII of 2017.on the 13th October 2018; Mah. Ord. XXII of 2018.) AND WHEREAS it is expedient to replace the said Ordinance by an Act of the State Legislature; it is hereby enacted in the Sixty-ninth Year of the Republic of India as follows :- Short title and commencement. 1. (1) This Act may be called the Maharashtra Goods and Services Tax (Amendment) Act, 2018. (2) Section 1 shall be deemed to have come into force on the 13th October 2018. (3) Save as otherwise provided, remaining sections shall come into force on such date as the Government may, by notification in the Official Gazette, appoint and different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision. Amendment of section 2 of Mah. XLIII of 2017. 2. In section 2 of the Maharashtra Goods and Services Tax Act, 2017 (Mah. XLIII of 2017.) (hereinafter referred to as the principal Act ), (a) in clause (4), for the words the Appellate Authority and the Appellate Tribunal the words, brackets and figures, the Appellate Authority, the Appellate Tribunal and the Authority referred to in sub-section (2) of section 171 shall be substituted ; (b) in clause (16), for the words Central Board of Excise and Customs the words Central Board of Indirect Taxes and Customs shall be substituted ; (c) in clause (17), for sub-clause (h), the following sub-clause shall be substituted, namely :- (h) activities of a race club including by way of totalisator or a license to book maker or activities of a licensed book maker in such club; and ; (d) clause (18) shall be deleted ; (e) in clause (35), for the word, brackets and letter clause (c) the word, brackets and letter, clause (b) shall be substituted; (f) in clause (69), in sub-clause (f), after the word and figures article 371 the words, figures and letter and article 371J shall be inserted; (g) in clause (102), the following Explanation shall be inserted, namely: Explanation . For the removal of doubts, it is hereby clarified that the expression, services includes facilitating or arranging transactions in securities ; . Amendment of section 7 of Mah. XLIII of 2017. 3. In section 7 of the principal Act, with effect from the1st day of July 2017, (a) in sub-section (1), (i) in clause (b), after the words or furtherance of business; the word and shall be inserted and shall always be deemed to have been inserted ; (ii) in clause (c), after the words a consideration the word and shall be deleted and shall always be deemed to have been deleted ; (iii) clause (d) shall be deleted and shall always be deemed to have been deleted; (b) after sub-section (1), the following sub-section shall be inserted and shall always be deemed to have been inserted, namely : (1A) Where certain activities or transactions constitute a supply in accordance with the provisions of sub-section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II. ; (c) in sub-section (3), for the words, brackets and figures sub-sections (1) and (2) the words, brackets, figures and letter sub-sections (1), (1A) and (2) shall be substituted. Amendment of section 9 of Mah. XLIII of 2017. 4. In section 9 of the principal Act, for sub-section (4), the following subsection shall be substituted, namely: (4) The Government may, on the recommendations of the Council, by notification, specify a class of registered persons who shall, in respect of supply of specified categories of goods or services or both received from an unregistered supplier, pay the tax on reverse charge basis as the recipient of such supply of goods or services or both, and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to such supply of goods or services or both. . Amendment of section 10 of Mah. XLIII of 2017. 5. In section 10 of the principal Act,- (a) in sub-section (1),- (i) for the words in lieu of the tax payable by him, an amount calculated at such rate the words, brackets and figures in lieu of the tax payable by him under sub-section (1) of section 9, an amount of tax calculated at such rate shall be substituted; (ii) in the proviso, for the words one crore rupees the words one crore and fifty lakh rupees shall be substituted; (iii) after the proviso, the following proviso shall be inserted, namely : Provided further that, a person who opts to pay tax under clause (a) or clause (b) or clause (c) may supply services (other than those referred to in clause (b) of paragraph 6 of Schedule II), of value not exceeding ten per cent. of turnover in the State in the preceding financial year or five lakh rupees, whichever is higher. ; (b) in sub-section (2), for clause (a), the following clause shall be substituted, namely: (a) save as provided in sub-section (1), he is not engaged in the supply of services; . Amendment of section 12 of Mah. X 6. In section 12 of the principal Act, in sub-section (2), in clause (a), the words, brackets and figure sub-section (1) of shall be deleted. Amendment of section 13 of Mah. XLIII of 2017. 7. In section 13 of the principal Act, in sub-section (2), the words, brackets and figure sub-section (2) of , at both the places where they occur, shall be deleted. Amendment of section 16 of Mah. XLIII of 2017. 8. In section 16 of the principal Act, in sub-section (2), (a) in clause (b), for the Explanation, the following Explanation shall be substituted, namely:- Explanation .-For the purposes of this clause, it shall be deemed that the registered person has received the goods or, as the case may be, services (i) where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise; (ii) where the services are provided by the supplier to any person on the direction of and on account of such registered person. ; (b) in clause (c), for the word and figures section 41 the words, figures and letter section 41 or section 43A shall be substituted. Amendment of section 17 of Mah. XLIII of 2017. 9. In section 17 of the principal Act, (a) in sub-section (3), the following Explanation shall be inserted, namely: Explanation .-For the purposes of this sub-section, the expression value of exempt supply shall not include the value of activities or transactions specified in Schedule III, except those specified in paragraph 5 of the said Schedule. ; (b) in sub-section (5), for clauses (a) and (b), the following clauses shall be substituted, namely:- (a) motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver), except when they are used for making the following taxable supplies, namely:- (A) further supply of such motor vehicles; or (B) transportation of passengers; or (C) imparting training on driving such motor vehicles; (aa) vessels and aircraft except when they are used (i) for making the following taxable supplies, namely:- (A) further supply of such vessels or aircraft; or (B) transportation of passengers; or (C) imparting training on navigating such vessels; or (D) imparting training on flying such aircraft; (ii) for transportation of goods; (ab) services of general insurance, servicing, repair and maintenance in so far as they relate to motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa): Provided that, the input tax credit in respect of such services shall be available,- (i) where the motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) are used for the purposes specified therein; (ii) where received by a taxable person engaged- (I) in the manufacture of such motor vehicles, vessels or aircraft; or (II) in the supply of general insurance services in respect of such motor vehicles, vessels or aircraft insured by him; (b) the following supply of goods or services or both- (i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, leasing, renting or hiring of motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) except when used for the purposes specified therein, life insurance and health insurance: Provided that, the input tax credit in respect of such goods or services or both shall be available where an inward supply of such goods or services or both is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply ; (ii) membership of a club, health and fitness centre; and (iii) travel benefits extended to employees on vacation such as leave or home travel concession : Provided that, the input tax credit in respect of such goods or services or both shall be available, where it is obligatory for an employer to provide the same to its employees under any law for the time being in force. . Amendment of section 20 of Mah. XLIII of 2017. 10. In section 20 of the principal Act, in the Explanation, in clause (c), for the words and figures under entry 84 the words, figures and letter under entries 84 and 92A shall be substituted. Amendment of section 22 of Mah. XLIII of 2017. 11. In section 22 of the principal Act, - (a) in sub-section (1), after the proviso, the following proviso shall be inserted, namely:- Provided further that, the Government may, at the request of a special category State and on the recommendations of the Council, enhance the aggregate turnover referred to in the first proviso from ten lakh rupees to such amount, not exceeding twenty lakh rupees and subject to such conditions and limitations, as may be so notified. ; (b) in the Explanation, in clause (iii), after the word Constitution the words except the State of Jammu and Kashmir and the States of Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand shall be inserted. Amendment of section 24 of Mah. XLIII of 2017. 12. In section 24 of the principal Act, in clause (x), after the words commerce operator the words and figures who is required to collect tax at source under section 52 shall be inserted. Amendment of section 25 of Mah. XLIII of 2017. 13. In section 25 of the principal Act, (a) in sub-section (1), after the proviso and before the Explanation, the following proviso shall be inserted, namely :- Provided further that, a person having a unit, as defined in the Special Economic Zones Act, 2005, (28 of 2005.) in a Special Economic Zone or being a Special Economic Zone developer shall have to apply for a separate registration, as distinct from his place of business located outside the Special Economic Zone in the same State. ; (b) in sub-section (2), for the proviso, the following proviso shall be substituted, namely: Provided that, a person having multiple places of business in the State may be granted a separate registration for each such place of business, subject to such conditions as may be prescribed. . Amendment of section 29 of Mah. XLIII of 2017. 14. In section 29 of the principal Act, (a) in the marginal note, after the word Cancellation the words or suspension shall be inserted ; (b) in sub-section (1), after clause (c), the following proviso shall be inserted, namely:- Provided that, during pendency of the proceedings relating to cancellation of registration filed by the registered person, the registration may be suspended for such period and in such manner as may be prescribed. ; (c) in sub-section (2), after the proviso, the following proviso shall be inserted, namely:- Provided further that, during pendency of the proceedings relating to cancellation of registration, the proper officer may suspend the registration for such period and in such manner as may be prescribed. . Amendment of section 34 of Mah. XLIII of 2017. 15. In section 34 of the principal Act, (a) in sub-section (1), (i) for the words Where a tax invoice has the words Where one or more tax invoices have shall be substituted ; (ii) for the words a credit note the words one or more credit notes for supplies made in a financial year shall be substituted ; (b) in sub-section (3) , (i) for the words Where a tax invoice has the words Where one or more tax invoices have shall be substituted; (ii) for the words a debit note the words one or more debit notes for supplies made in a financial year shall be substituted. Amendment of section 35 of Mah. XLIII of 2017. 16. In section 35 of the principal Act, in sub-section (5), the following proviso shall be inserted, namely :- Provided that, nothing contained in this sub-section shall apply to any department of the Central Government or a State Government or a local authority, whose books of account are subject to audit by the Comptroller and Auditor-General of India or an auditor appointed for auditing the accounts of local authorities under any law for the time being in force. . Amendment of section 39 of Mah. XLIII of 2017. 17. In section 39 of the principal Act, (a) in sub-section (1), (i) for the words in such form and manner as may be prescribed the words in such form, manner and within such time as may be prescribed shall be substituted ; (ii) the words on or before the twentieth day of the month succeeding such calendar month or part thereof shall be deleted ; (iii) the following proviso shall be inserted, namely :- Provided that, the Government may, on the recommendations of the Council, notify certain classes of registered persons who shall furnish return for every quarter or part thereof, subject to such conditions and safeguards as may be specified therein. ; (b) in sub-section (7), the following proviso shall be inserted, namely: Provided that, the Government may, on the recommendations of the Council, notify certain classes of registered persons who shall pay to the Government the tax due or part thereof as per the return on or before the last date on which he is required to furnish such return, subject to such conditions and safeguards as may be specified therein. ; (c) in sub-section (9), (i) for the words in the return to be furnished for the month or quarter during which such omission or incorrect particulars are noticed the words in such form and manner as may be prescribed shall be substituted; (ii) in the proviso, for the words the end of the financial year the words the end of the financial year to which such details pertain shall be substituted. Insertion of section 43A in Mah. XLIII of 2017. 18. After section 43 of the principal Act, the following section shall be inserted, namely :- Procedure for furnishing return and availing input tax credit. 43A. (1) Notwithstanding anything contained in sub-section (2) of section 16, section 37 or section 38, every registered person shall in the returns furnished under sub-section (1) of section 39 verify, validate, modify or delete the details of supplies furnished by the suppliers. (2) Notwithstanding anything contained in section 41, section 42 or section 43, the procedure for availing of input tax credit by the recipient and verification thereof shall be such as may be prescribed. (3) The procedure for furnishing the details of outward supplies by the supplier on the common portal, for the purposes of availing input tax credit by the recipient shall be such as may be prescribed. (4) The procedure for availing input tax credit in respect of outward supplies not furnished under sub-section (3) shall be such as may be prescribed and such procedure may include the maximum amount of the input tax credit which can be so availed, not exceeding twenty per cent. of the input tax credit available, on the basis of details furnished by the suppliers under the said sub-section. (5) The amount of tax specified in the outward supplies for which the details have been furnished by the supplier under sub-section (3) shall be deemed to be the tax payable by him under the provisions of the Act. (6) The supplier and the recipient of a supply shall be jointly and severally liable to pay tax or to pay the input tax credit availed, as the case may be, in relation to outward supplies for which the details have been furnished under sub-section (3) or sub-section (4) but return thereof has not been furnished. (7) For the purposes of sub-section (6), the recovery shall be made in such manner as may be prescribed and such procedure may provide for nonrecovery of an amount of tax or input tax credit wrongly availed not exceeding one thousand rupees. (8) The procedure, safeguards and threshold of the tax amount in relation to outward supplies, the details of which can be furnished under sub-section (3) by a registered person,- (i) within six months of taking registration; (ii) who has defaulted in payment of tax and where such default has continued for more than two months from the due date of payment of such defaulted amount, shall be such as may be prescribed. . Amendment of section 48 of Mah. XLIII of 2017. 19. In section 48 of the principal Act, in sub-section (2), after the word and figures section 45 the words and to perform such other functions shall be inserted. Amendment of section 49 of Mah. XLIII of 2017. 20. In section 49 of the principal Act, (a) in sub-section (2), for the word and figures section 41 the words, figures and letter section 41 or section 43A shall be substituted; (b) in sub-section (5), (i) in clause (c), the following proviso shall be inserted, namely :- Provided that, the input tax credit on account of State tax shall be utilised towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax; ; (ii) in clause (d), the following proviso shall be inserted, namely :- Provided that the input tax credit on account of Union territory tax shall be utilised towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax; . Insertion of sections 49A and 49B in Mah. XLIII of 2017. 21. After section 49 of the principal Act, the following sections shall be inserted, namely: Utilisation of input tax credit subject to certain conditions. 49A. Notwithstanding anything contained in section 49, the input tax credit on account of State tax shall be utilised towards payment of integrated tax or State tax, as the case may be, only after the input tax credit available on account of integrated tax has first been utilised fully towards such payment. Order of utilization of input tax credit. 49B. Notwithstanding anything contained in this Chapter and subject to the provisions of clause (e) and clause (f) of sub-section (5) of section 49, the Government may, on the recommendations of the Council, prescribe the order and manner of utilisation of the input tax credit on account of integrated tax, central tax, State tax or Union territory tax, as the case may be, towards payment of any such tax. . Amendment of section 52 of Mah. XLIII of 2017. 22. In section 52 of the principal Act, in sub-section (9), for the word and figures section 37 the words and figures section 37 or section 39 shall be substituted. Amendment of section 54 of Mah. XLIII of 2017. 23. In section 54 of the principal Act,- (a) in sub-section (8), in clause (a), for the words zero-rated supplies the words export and exports shall respectively, be substituted; (b) in the Explanation, in clause (2), (i) in sub-clause (c), in item (i), after the words foreign exchange the words or in Indian rupees wherever permitted by the Reserve Bank of India shall be inserted; (ii) for sub-clause (e), the following sub-clause shall be substituted, namely: (e) in the case of refund of unutilised input tax credit under clause (ii) of the first proviso to sub-section (3), the due date for furnishing of return under section 39 for the period in which such claim for refund arises; . Amendment of section 79 of Mah. XLIII of 2017. 24. In section 79 of the principal Act, after sub-section (4), the following Explanation shall be inserted, namely:- Explanation. For the purposes of this section, the word person shall include distinct persons as referred to in sub-section (4) or, as the case may be, sub-section (5) of section 25. . Amendment of section 107 of Mah. XLIII of 2017. 25. In section 107 of the principal Act, in sub-section (6), in clause (b), after the words arising from the said order, the words subject to a maximum of twenty-five crore rupees, shall be inserted. Amendment of section 112 of Mah. XLIII of 2017. 26. In section 112 of the principal Act, in sub-section (8), in clause (b), after the words arising from the said order, the words subject to a maximum of fifty crore rupees, shall be inserted. Amendment of section 129 of Mah. XLIII of 2017. 27. In section 129 of the principal Act, in sub-section (6) and in the proviso, for the words seven days , the words fourteen days shall be substituted. Amendment of section 143 of Mah. XLIII of 2017. 28. In section 143 of the principal Act, in sub-section (1), in clause (b), after the proviso, the following proviso shall be inserted, namely :- Provided further that, the period of one year and three years may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding one year and two years respectively. . Amendment of Schedule I of Mah. XLIII of 2017. 29. In Schedule I appended to the principal Act, in paragraph 4, for the words taxable person the word person shall be substituted. Amendment of Schedule II of Mah. XLIII of 2017. 30. In Schedule II appended to the principal Act, in the heading, after the word ACTIVITIES the words OR TRANSACTIONS shall be inserted and shall always be deemed to have been inserted with effect from the 1st day of July 2017. Amendment of Schedule III of the Mah. XLIII of 2017. 31. In Schedule III appended to the principal Act,- (i) after paragraph 6, the following paragraphs shall be inserted, namely :- 7. Supply of goods from a place outside India to another place out side India without such goods entering into India. 8. (a) Supply of warehoused goods to any person before clearance for home consumption; (b) supply of goods by the consignee to any other person, by endorsement of documents of title to the goods, after the goods have been dispatched from the port of origin located outside India but before clearance for home consumption. ; (ii) the existing Explanation shall be renumbered as Explanation 1 and after Explanation 1 as so renumbered, the following Explanation shall be inserted, namely:- Explanation 2.- For the purposes of paragraph 8, the expression warehoused goods shall have the same meaning as assigned to it in the Customs Act, 1962. (52 of 1962.) . Repeal of Mah. Ord. XXII of 2018 and saving. 32. (1) The Maharashtra Goods and Services Tax (Amendment) Ordinance, 2018, (Mah. Ord.XXII of2018.) is hereby repealed. (2) Notwithstanding such repeal, anything done or any action taken (including any notification or order issued) under the corresponding provisions of the principal Act, as amended by the said Ordinance, shall be deemed to have been done, taken or, as the case may be, issued under the corresponding provisions of the principal Act, as amended by this Act. STATEMENT OF OBJECTS AND REASONS The Maharashtra Goods and Services Tax Act, 2017 (Mah. XLIII of 2017) has been enacted with a view to make a provision for levy and collection of tax on intra-State supply of goods or services or both. 2. The Act provides for certain provisions for smooth transition of existing tax payers to new goods and services tax regime. However, the new tax regime has faced certain difficulties. One of the major inconveniences caused to the taxpayers, especially small and medium enterprises, was the process of filing the return and payment of tax under the Goods and Services Tax laws. In this regard, the proposed new return filing system envisages quarterly filing of the return and tax payment for small taxpayers along with minimum paperwork. In order to implement the new return filing system, and also to overcome the above difficulties, it was proposed to amend the Maharashtra Goods and Services Tax Act, 2017, suitably. 3. The then proposed Amendments, inter alia, provided for the following, namely:- (i) to amend section 7 of the Act, so as to clarify the scope of supply ; (ii) to amend section 9 of the Act, for empowering the State Government to notify the classes of registered persons for paying the tax on reverse charge basis, in respect of receipt of supplies of certain specified categories of goods or services or both, from the unregistered suppliers ; (iii) to amend section 10 of the Act, so as to enhance the limit of composition levy from one crore rupees to one crore and fifty lakh rupees ; (iv) to amend section 17 of the Act, so as to specify the scope of input tax credit ; (v) to amend section 22 of the Act, in view of the enhancement in the exemption limit for registration in the special category States from ten lakh rupees to twenty lakh rupees ; (vi) to amend section 25 of the Act, so as to facilitate tax payer to have the option to obtain multiple registrations for multiple places of business located within the same State and to provide for separate registration for Special Economic Zone unit or developer ; (vii) to amend section 29 of the Act, so as to insert a provision for temporary suspension of registration while cancellation of registration is under process ; (viii) to insert a new section 43A, so as to provide for the new system of filing return and availing input tax credit ; (ix) to amend sub-section (6) of section 107 of the Act relating to Appeals, so as to provide that the amount of pre-deposit payable for filing of appeal shall be capped at twenty five crore rupees ; (x) to amend section 129 of the Act, so as to increase the period relating to detention or seizure of goods and conveyance in transit from seven days to fourteen days. 4. As both Houses of the State Legislature were not in session and the Governor of Maharashtra was satisfied that circumstances existed which rendered it necessary for him to take immediate action further to amend the Maharashtra Goods and Services Tax Act, 2017 (Mah. XLIII of 2017), for the purposes aforesaid, the Maharashtra Goods and Services Tax (Amendment) Ordinance, 2018 (Mah. Ord. XXII of 2018), was promulgated by the Governor of Maharashtra on the 13 th October 2018. 5. The Bill is intended to replace the said Ordinance by an Act of the State Legislature. SUDHIR MUNGANTIWAR, Minister for Finance. Mumbai, dated the 19th November 2018. MEMORANDUM REGARDING DELEGATED LEGISLATION The Bill involves the following proposals for delegation of legislative power, namely :- Clause 1(3).- Under this clause, power is taken to the State Government, to bring into force the provisions of the Act by notification in the Official Gazette, and appoint different dates for different sections. Clause 13.- Under this clause, power is taken to the State Government to prescribe, by rules, the procedure for allowing persons having multiple places of business in a State or Union territory to obtain separate registrations for each such place of business. Clause 14.- Under this clause, power is taken to the State Government to prescribe, by rules, for suspension of registration while cancellation of registration is under process. Clause 17.- Under this clause, power is taken to the State Government to prescribe, by rules, the procedure for filing of returns and payment of taxes. Clause 18.- Under this clause, power is taken to the State Government to prescribe, by rules, the procedure for furnishing returns and availing input tax credit. Clause 21.- Under this clause, power is taken to the State Government to prescribe, by rules, the specific order of utilisation of input tax credit of any of the taxes. 2. The abovementioned proposals for delegation of legislative power are of normal character. FINANCIAL MEMORANDUM The Bill proposes to amend the Maharashtra Goods and Services Tax Act, 2017 (Mah. XLIII of 2017). There is no provision in the Bill which would involve the recurring or non-recurring expenditure from the Consolidated Fund of the State on its enactment as an Act of the State Legislature.