Monday, 10 February 2020


Amendment in penalty provisions:
Section 122 of the CGST Act has been amended to comprise that the person involved/benefited out of fake ITC (Input Tax Credit) shall also be liable for a penalty of 100% of the tax involved. The penalty will be levied on that person who retains the benefit of a fraudulent supply of goods and/or services and on a person at whose instance such fraudulent transactions are executed.

However, it would be expedient for the enforcement authorities to ensure that bonafide person or recipients do not have to pass through the harshness of such severe provisions.

Section 132 of the CGST Act has been amended to make the offence of a fraudster availing ITC (Input Tax Credit) without any invoice or bill as cognizable and non-bailable. The law is amended to extend the imprisonment to those ‘who causes to commit’ and ‘person retaining the benefit’. Before introducing the amendment, the punishment was restricted only to the person who committed the fraud.

Date for ITC on Debit Note:The date of the debit note will be considered for availing ITC (Input Tax Credit).  This will benefit a lot, now, ITC in respect of a debit note issued in, for example, Financial year 2020-21 for an invoice of Financial year 2019-20 can now be claimed by the recipient on or before the due date of September 2021 return or the annual return of Financial Year 2020-21, whichever is earlier.

Composition scheme to service providers:
Composition scheme cannot be availed by taxpayers supplying services outside the state, making exempt supplies, or making supplies through e-commerce operators who are liable for Tax Collected at Source (TCS).

Refunds due to inverted tax prevalent for tobacco products is barred with a retrospective effect from 1 July 2017. the retrospective effect has been given for transition provisions from 1 July 2017.  

A new provision has been included to provide for the cancellation of voluntary GST registration of distinct people.

The power to condone the delay in applying for revocation of cancellation has been given to Additional Commissioners and Commissioners for 30 days.

The supply of fishmeal provided a retrospective GST exemption from 1 July 2017 to 30 September 2019.

It further seeks to retrospectively levy central tax at the reduced rate of six per cent. on supply of pulley, wheels and other parts (falling under heading 8483) and used as parts of agricultural machinery of headings 8432, 8433 and 8436, during the period from the 1st day of July, 2017 up to 31st day of December, 2018 (both days inclusive).  It also seeks to provide that no refund shall be made of the tax which has already been collected.

CBIC extended the time limit to issue the removal of difficulty order from earlier three-year limit to now five years w.e.f 1 July 2017. Also, the board’s approval is not required for the order to determine the expense in special audit and extension of the time limit to return the inputs and capital goods from job worker.

Aligned the definition of “Union territory” in line with the Jammu and Kashmir Reorganization Act, 2019 and the Dadra and Nagar Haveli and Daman and Diu (Merger of Union Territories), Act, 2019. Thus, new union territory, Ladakh has been included in the definition of Union Territory. Jammu & Kashmir will have its appellate tribunal.

Source: Finance Bill 2020

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This article is intended for private circulation & knowledge sharing purpose only. We have made best of our efforts to ensure the accuracy of information in this article, however we will not be responsible for any errors that may have sneaked in unconsciously and do not accept any liability whatsoever, for any direct or consequential loss arising to any one from any kind of use of this article.

Saturday, 4 January 2020

Dear GST-registered dealer - DON’T DO ANY OF THESE

You will be inviting trouble if GSTR 3B return is not filed on or before 20th of coming month or late filed. CBIC has released CIRCULAR NO. 129/48/2019-GST [F. NO. 20/06/04/2019-GST], DATED 24-12-2019. Crux of the matter in nutshell is as below:
  • You will receive an e-mail/ message alert from GST department on 17th of the month to file GSTR-3B by 20th.
  • If GSTR 3B is not filed on or before 20th i.e. due date then again message will come on 21st that the return is not filed.
  • If the return is not filed till 25th, then department will issue a notice in GSTR- 3A directing to file the return within 15 days,
  • If the returns is still not filed within 15 days, then the proper officer in GST department will assess your liability of that month and determine the tax to the best of his judgement under FORM ASMT-13 ,
  • If the said return remains unfurnished within the statutory period of 30 days from issuance of order in FORM ASMT-13, then proper officer may initiate proceedings under section 78 and recovery under section 79 of the CGST Act.

All these email and messages are going to be generated automatically by the system. So now onwards, if you need to avoid strict action by the department be firm in timely filing of GST return.

Saturday, 28 December 2019


The CBIC released an important NOTIFICATION NO. 49/2019 - CENTRAL TAX, dated 9-10-2019, inserting a new sub-rule (4) under rule 36 of the CGST Rules, 2017, stating that provisional credit can be hereafter claimed in the GSTR-3B only to the extent of 20% of eligible ITC reflected in the GSTR-2A.
Read more: Provisional ITC in Form FSTR-3B as per the New CGST Rules


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