Monday, 8 July 2019


1. Interest to be computed on net tax liability 
Earlier there was a confusion among taxpayers on the issue of delayed payment of tax, whether interest would be charged on gross tax liability or only on net tax liability. 
A Proviso has been inserted in Section 50 of the CGST Act, 2017 (‘Interest on Delayed Payment of Tax’) to clarify that interest for late payment of tax shall be levied only on that portion of tax which has been paid by debiting the electronic cash ledger.
The exception to this rule is, where returns are filed subsequent to initiation of any proceedings under GST Act, in that case the interest shall be levied on the gross tax liability. 

2. Transfer amount from one head (major or minor) to another in electronic cash ledger 
Earlier, if the assesse has wrongly deposited any amount under wrong head either minor head (tax, interest, penalty or fee) or major head (IGST, SGST, CGST, UTGST), the only option left with the assesse is to apply for refund. The amount kept under a particular head was not allowed to be transferred from one head to another in the electronic ledger. 
Now a registered person has been provided with the facility to transfer any amount of tax, interest, penalty, fee or any other amount available in the electronic cash ledger to the electronic cash ledger for Integrated Tax, Central Tax, State Tax, Union Territory Tax or Cess through a new form PMT-09 subject to the conditions and restrictions prescribed under GST Act. Such transfer shall be deemed to be a refund from the electronic cash ledger. 

3. Aadhaar Authentication 
Every registered person shall authenticate, or furnish proof of possession of Aadhaar number. 
If an Aadhaar number is not assigned to the registered person, such person shall be offered an alternate and viable means of identification.
In case of failure to undergo authentication or furnish proof of possession of Aadhaar number or furnish alternate and viable means of identification, registration allotted to such person shall be deemed to be invalid.

4. Composition Scheme will apply to service providers also
Section 10 of CGST Act, as is presently, makes provisions only in respect of suppliers of goods. This section is proposed to be amended by inserting section 10(2A) of CGST Act to provide for composition scheme for suppliers of service and goods with aggregate turnover upto Rs 50 lakhs. The tax rate will be upto 3% CGST plus 3% SGST/UTGST.

Following are other changes in section 10 of CGST Act –
(a) 'Exempt supply' will not include interest or discount on deposits, loans or advances. Thus, this interest will not be considered for calculating 'aggregate turnover' for eligibility of composition scheme.
(b) Interest will also not be considered for calculating exemption limit of first 10/20/40 lakhs in the first year of operation of business.
(c) Casual taxable person or non-resident taxable person will not be eligible for composition scheme. Earlier, conditions (a) and (c) were already provided. Only condition (b) is a fresh relaxation.

5. Changes in calculation of exemption of 20/40 lakhs
The small taxable persons with aggregate turnover upto 10/20/40 lakhs are not required to register under CGST. Now, it is provided that Calculation of exemption of 20/40 lakhs will be excluding interest on deposits, loans and advances – explanation 2 to section 22 of CGST Act (proposed to be inserted)

6. Powers to Central Government to refund State Tax
At present, if taxable person is under jurisdiction of Central Government, if Central Government sanctions refund, the taxable person has to go to State/Union Territory GST authorities to get refund of SGST/UTGST. Now, it is provided that Central Tax Authorities may refund SGST/UTGST also – section 54(6A) of CSGT Act proposed to be inserted.

7. Penalty for profiteering
Penalty upto 10% of amount profiteered can be imposed by Authority for Anti-Profiteering. The penalty will not be payable if amount ordered is deposited within 30 days – section 171(3A) of CGST Act proposed to be inserted.

8. National Appellate Authority for Advance Ruling
National Appellate Authority for Advance Ruling (NAAAR) will be constituted by Central Government on recommendation of GST Council, under section 101A of CGST Act (proposed to be inserted). The NAAAR shall consist of President, Technical Member (Centre) and Technical Member (State).
Presently, appeal against order of Authority of Advance Ruling (AAR) of a State/Union Territory lies with Appellate Authority of Advance Ruling (AAAR) of the State/Union Territory. It is found that in some case, the Appellate Authority of Advance Ruling (AAAR) of two States/Union Territories give conflicting advance rulings on same question. In that case, provision has been made to file appeal before National Appellate Authority for Advance Ruling.
Appeal can be filed by – (a) departmental officer authorised by Commissioner of the State where AAAR has given ruling (b) Applicant who is distinct person as per section 25 of CGST Act [i.e. person who has obtained separate GST registration in different State, but with same Income Tax PAN] - section 101B(1) of CGST Act (proposed to be inserted).
Thus, third person cannot file appeal, even if he is aggrieved by decisions of two different AAAR of two different States/Union Territories.
Appeal should be filed within 30 days in case of taxable person and within 90 days in case of departmental appeal - section 101B(2) of CGST Act (proposed to be inserted). The NAAAR can condone delay in filing appeal.
The ruing of NAAAR shall be binding on department only in respect of taxable persons with same Income Tax PAN. The ruling will also bind applicants and registered persons with same Income Tax PAN [In case of other taxable persons, the ruling will only have persuasive value - section 103 (1A) of CGST Act (proposed to be inserted).

9. Time limit for filing TCS statement can be extended
Section 52 of CGST Act is being amended to provide powers to Commissioner for granting extension of time limit for filing TCS statements [at present, such exemption is given by circulars or notifications without authority].

10. Time limit for filing annual return can be extended
Section 44 of CGST Act is being amended to provide powers to Commissioner for granting extension of time limit for filing annual returns [at present, such exemption is given by circulars or notifications without authority].

11. Amnesty Scheme for past dues of excise duty, service tax and other taxes which were payable upto 30-6-2017
A scheme titled 'Sabka Vikas Legacy Dispute Resolution) Scheme, 2019 is proposed to be inserted. The scheme is for resolution and settlement of legacy cases of Central Excise, service tax and other taxes.

Wednesday, 12 June 2019

Transition plan to the new GST Return

The GST Council in its 31st meeting decided that a new GST return system will be introduced to facilitate taxpayers. In order to ease transition to the new return system, a transition plan has been worked out. The details of the indicative transition plan are as below: -

There are three main components to the new return – 
One main return (FORM GST RET-1) and two annexures (FORM GST ANX-1 and (FORM GST ANX-2) respectively.

Between July to September, 2019 (for three months), the new return system (ANX-1 & ANX-2 only) would be available for trial for taxpayers to make themselves familiar.  In this period, taxpayers shall continue to fulfill their compliances by filing FORM GSTR-1 and FORM GSTR-3B.

Form GST ANX -1 is compulsory  for large tax payers from October, 2019 and from January, 2020 for small tax payers-
From October, 2019 onwards, FORM GST ANX-1 shall be made compulsory and FORM GSTR-1 would be replaced by FORM GST ANX-1. The large taxpayers (i.e. those taxpayers whose aggregate annual turnover in the previous financial year was more than Rs. 5 Crore) would upload their monthly FORM GST ANX-1 from October, 2019 onwards. However, the first compulsory quarterly FORM GST ANX-1 to be uploaded by small taxpayers (with aggregate annual turnover in the previous financial year upto Rs. 5 Crore) would be due only in January, 2020 for the quarter October to December, 2019. It may be noted that invoices etc. can be uploaded in FORM GST ANX-1 on a continuous basis both by large and small taxpayers from October, 2019 onwards. FORM GST ANX-2 may be viewed simultaneously during this period but no action shall be allowed on such FORM GST ANX-2. 

Filing of GSTR-3B shall be continued for large tax payers till December, 2019 and for small tax payers till September,2019. From January, 2020 onwards, all taxpayers shall be filing FORM GST RET-01 and FORM GSTR-3B shall be completely phased out.-

For October and November, 2019, large taxpayers would continue to file FORM GSTR-3B on monthly basis. They would file their first FORM GST RET-01 for the month of December, 2019 by 20th January, 2020. 

The small taxpayers would stop filing FORM GSTR-3B and would start filing FORM GST PMT-08 from October, 2019 onwards. They would file their first FORM GST-RET-01 for the quarter October, 2019 to December, 2019 from 20th January, 2020. 

Friday, 8 March 2019

GST changes applicable from April 1, 2019

To reducing the compliance burden of small taxpayers and to bring certainty in various ambiguous matters, GST Council in the 32nd meeting, held on 10th January, 2019, had taken various key decisions. 

There are 7 important changes effective from April 1, 2019. This article gives insight of notifications and circulars issued on March 7, 2019 by the CBIC.

Read more

Monday, 23 July 2018

Recommendations made during the 28th GST Council Meet: Based on Official Press Release

The GST Council in its 28thmeeting held here today has recommended certain amendments in the CGST Act, IGST Act, UTGST Act and the GST (Compensation to States) Act.

The major recommendations are as detailed below:

  1. Upper limit of turnover for opting for composition scheme to be raised from `1 crore to `1.5 crore. Present limit of turnover can now be raised on the recommendations of the Council.
  2. Composition dealers to be allowed to supply services (other than restaurant services), for upto a value not exceeding 10% of turnover in the preceding financial year, or `5 lakhs, whichever is higher.
  3. Levy of GST on reverse charge mechanism on receipt of supplies from unregistered suppliers, to be applicable to only specified goods in case of certain notified classes of registered persons, on the recommendations of the GST Council.
  4. The threshold exemption limit for registration in the States of Assam, Arunachal Pradesh, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand to be increased to `20 Lakhs from `10 Lakhs.
  5. Taxpayers may opt for multiple registrations within a State/Union territory in respect of multiple places of business located within the same State/Union territory.
  6. Mandatory registration is required for only those e-commerce operators who are required to collect tax at source.
  7. Registration to remain temporarily suspended while cancellation of registration is under process, so that the taxpayer is relieved of continued compliance under the law.
  8. The following transactions to be treated as no supply (no tax payable) under Schedule III:
§  Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India;
§  Supply of warehoused goods to any person before clearance for home consumption; and
§  Supply of goods in case of high sea sales.
  1. Scope of input tax credit is being widened, and it would now be made available in respect of the following:
§  Most of the activities or transactions specified in Schedule III;
§  Motor vehicles for transportation of persons having seating capacity of more than thirteen (including driver), vessels and aircraft;
§  Motor vehicles for transportation of money for or by a banking company or financial institution;
§  Services of general insurance, repair and maintenance in respect of motor vehicles, vessels and aircraft on which credit is available; and
§  Goods or services which are obligatory for an employer to provide to its employees, under any law for the time being in force.
  1. In case the recipient fails to pay the due amount to the supplier within 180 days from the date of issue of invoice, the input tax credit availed by the recipient will be reversed, but liability to pay interest is being done away with.
  2. Registered persons may issue consolidated credit/debit notes in respect of multiple invoices issued in a Financial Year.
  3. Amount of pre-deposit payable for filing of appeal before the Appellate Authority and the Appellate Tribunal to be capped at `25 Crores and `50 Crores, respectively.
  4. Commissioner to be empowered to extend the time limit for return of inputs and capital sent on job work, upto a period of one year and two years, respectively.
  5. Supply of services to qualify as exports, even if payment is received in Indian Rupees, where permitted by the RBI.
  6. Place of supply in case of job work of any treatment or process done on goods temporarily imported into India and then exported without putting them to any other use in India, to be outside India.
  7. Recovery can be made from distinct persons, even if present in different State/Union territories.
  8. The order of cross-utilisation of input tax credit is being rationalised.
These amendments will now be placed before the Parliament and the legislature of State and Union territories with legislatures for carrying out the amendments in the respective GST Acts.
Press Release:

Monday, 15 January 2018

E-Way Bill System

Under GST, transporters should carry an e-Way Bill when moving goods from one place to another. Since it is a new rule introduced under GST, it is necessary for all consignors/ consignees/ transporters to be aware of the required compliance.
E-Way Bill
E-Way Bill is an electronic way bill for movement of goods which can be generated on the e-Way Bill Portal. Transport of goods of more than `50,000 in value cannot be made by a registered person without an e-way bill.
E-way bill can also be managed through web portal and/or SMS.
When an e-way bill is generated a unique e-way bill number (EBN) is allocated and is available to the supplier, recipient, and the transporter.
E-way bill will be generated when there is a movement of goods of value more than `50,000 –
  • In relation to a ‘supply’
  • For reasons other than a ‘supply’ (e.g. goods return)
  • Due to inward ‘supply’ from an unregistered person
For this purpose, a supply may be either of the following:
  • A supply made for a consideration (payment) in the course of business
  • A supply made for a consideration (payment) which may not be in the course of business
  • A supply without consideration (without payment)In simpler terms,  the term ‘supply’ usually means a:
  1. Sale – sale of goods and payment made
  2. Transfer – branch transfers for instance
  3. Barter/Exchange – where the payment is by goods instead of in money
Therefore, E-Way Bills must be generated on the common portal for all above types of movements.
 When E-Way bill is not required
In the following cases it is not necessary to generate E-Way Bill:
  1. The mode of transport is non-motor vehicle
  2. Goods transported from port, airport, air-cargo complex or land customs station to Inland Container Depot (ICD) or Container Freight Station (CFS) for clearance by Customs.
  3. The distance between the consigner or consignee and the transporter is less than 10 Kms and transport is within the same state.
  4. Transport of specified goods (List of Goods)*.
 Who is required to generate an E-Way Bill
  • Registered Person – E-way bill must be generated when there is a movement of goods of more than `50,000 in value to or from a Registered Person. A Registered person or the transporter may choose to generate and carry e-way bill even if the value of goods is less than `50,000.
  • Unregistered Persons – Unregistered persons are also required to generate  e-Way Bill. However, where a supply is made by an unregistered person to a registered person, the receiver will have to ensure all the compliances are met as if they were the supplier. 
  • Transporter – Transporters carrying goods by road, air, rail, etc. also need to generate e-Way Bill if the supplier has not generated an e-Way Bill.
Every Registered person under GST
Before movement of goods
Fill Part A
Form GST EWB-01
Registered person is consignor or consignee (mode of transport may be owned or hired) OR is recipient of goods
Before movement of goods
Fill Part B
Form GST EWB-01
Registered person is consignor or consignee  and goods are handed over to transporter of goods
Before movement of goods
Fill Part B
 The registered person shall furnish the information relating to the transporter in Part B of FORM GST EWB-01
Transporter of goods
Before movement of goods
 Generate e-way bill on basis of information shared by the registered person in Part A of FORM GST EWB-01
An unregistered person under GST and recipient is registered
Compliance to be done by Recipient as if he is the Supplier.
 1. If the goods are transported for a distance of ten kilometers or less, within the same State/Union territory from the place of business of the consignor to the place of business of the transporter for further transportation, the supplier or the transporter may not furnish the details of conveyance in Part B of FORM GST EWB-01.
2. If supply is made by air, ship or railways, then the information in Part A of FORM GST EWB-01 has to be filled in by the consignor or the recipient

 If a transporter is transporting multiple consignments in a single conveyance, they can use the form GST EWB-02 to produce a consolidated e-way bill, by providing the e-way bill numbers of each consignment.
If both the consignor and the consignee have not created an e-way bill, then the transporter can do so by filling out PART A of FORM GST EWB-01 on the basis of the invoice/bill of supply/delivery challan given to them.

Validity of E-Way Bill
An e-way bill is valid for periods as listed below, which is based on the distance travelled by the goods. Validity is calculated from the date and time of generation of e-way bill-
Validity of EWB
Less Than 100 Kms
1 Day
For every additional 100 Kms or part thereof
additional 1 Day

Latest Update on e-Way Bill
1. E way bill rules will be rolled out on a trial basis from 16th Jan 2018
2. The e-way bill rules will be implemented in India from 1st February 2018
3. The states can opt to follow the e-way bill system anytime before 1st June 2018
4. From 1st June 2018 e-way bill rules will uniformly apply to all states.

E-Way Bill System Manual:

Source:National Informatics Centre;New Delhi