Recent Amendments in GST Act and Rules

 Recently, Government has issued 2 Notifications both are very critical.

With the amendments in GST Laws, GST officials will enjoy more powers which adds on the difficulties in the miserable life of tax payers and tax professionals, these amendments are directly going to affect working capital of the tax payer and will also affect the tax compliance procedures making it more cumbersome. In this article we will touch upon only two notifications, namely: 

1.     Notification No. 92/2020- Central Tax dated 22^nd December 2020 – amended the act.

2.     Notification No. 94/2020- Central Tax dated 22nd December 2020  – amended the rule.   

      Read the full article:  Recent amendments in GST Act and Rules

Recommendation of 40th GST Council Meeting dated 12th June 2020

Following relaxation was recommended in GST Council Meeting for filing of GSTR Returns dated 12-06-2020. The Same would be given effect through relevant circulars/ Notifications.

• Relaxation for Taxpayers having aggregate turnover up to ₹5 Crore by waiver of late fee and Interest if the GSTR-3B for the period May 2020 to July 2020 are furnished by Sept. 2020 ( dates to be notified ).
• One time extension in period for seeking revocation of cancellation of registration To facilitate tax payers who could not filed their cancelled GST registration resorted in time, an opportunity is being provided for filing of application of revocation of cancellation registration up to 30.09.2020 in all cases where registration have been cancelled till 12.06.2020.
• As per the earlier issued notification no. 31/2020 issued below specified date was notified to file GSTR-3B for small tax payers, now relaxation is provided to small tax payers by reducing the rate of interest for filing GSTR-3B for the period Feb 20 to April 20 beyond specified dates to 9% pa. from 18% if filing is done till 30.09.2020:

No.	Taxpayer on the basis of	Rate of	Tax Period	Specified dates for filing of       GSTR-3B (Condition)
1	Turnover  ₹1.5 Cr- ₹5Cr	NIL	Feb 20, March 20	On or before 29th day of June, 2020
			April,20	On or before 30th day of June, 2020
2	Turnover < ₹1.5Cr	NIL	Feb,20	On or before 30th day of June, 2020
			March,20	On or before 3rd day of July, 2020
			April,20	On or before 6th day of July, 2020

• Relaxation for July-17 to Jan- 20, in filing GSTR-3B return:

Return	Period	Late Fee		Condition
GSTR 3B	July-17 to Jan 2020	NIL if no tax liability	Maximum 500 per return in case of liability	GSTR-3B furnished between 1.07.2020 to 30.09.2020

GST Liability on Director's remuneration

The issue of remuneration to directors has been examined under following two different categories:

• leviability of GST on remuneration paid by companies to the independent directors defined in terms of section 149(6) of the Companies Act, 2013 or those directors who are not the employees of the said company; and
• leviability of GST on remuneration paid by companies to the whole-time directors including managing director who are employees of the said company.

Whether or not a "Director" is an employee of the company. In this regard, from the perusal of the relevant provisions of the Companies Act, 2013, it can be inferred that:

• the definition of a whole time-director under section 2(94) of the Companies Act, 2013 is an inclusive definition, and thus he may be a person who is not an employee of the company.
• the definition of "independent directors" under section 149(6) of the Companies Act, 2013, read with Rule 12 of Companies (Share Capital and Debentures) Rules, 2014 makes it amply clear that such director should not have been an employee or proprietor or a partner of the said company, in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed in the said company.

Therefore, in respect of such directors who are not the employees of the said company, the services provided by them to the Company, in lieu of remuneration as the consideration for the said services,  the recipient of the said services i.e. the Company, is liable to discharge the applicable GST on it on reverse charge basis. 

It is hereby clarified that the remuneration paid to such independent directors, or those directors, by whatever name called, who are not employees of the said company, is taxable in hands of the company, on reverse charge basis.

Accordingly, it is clarified that the part of Director's remuneration which are declared as "Salaries" in the books of a company and subjected to TDS under Section 192 of the IT Act, are not taxable being consideration for services by an employee to the employer in the course of or in relation to his employment.

It is further clarified that the part of employee Director's remuneration which is declared separately other than "salaries‟ in the Company's accounts and subjected to TDS under Section 194J of the Income Tax Act as Fees for professional or Technical Services shall be treated as consideration for providing services, and is therefore, taxable. The recipient of the said services i.e. the Company, is liable to discharge the applicable GST on it on reverse charge basis.

Copy of Circular: Clarification in respect of levy of GST on Director’s Remuneration

RECENT AMENDMENTS UNDER GST

• Due date to furnish GST return for F,Y, 2018-19 extended to September 30, 2020. Notification No.41/2020-Central Tax, 5th May. 2020.

• CBIC earlier vide Notification no. 35/2020 dated 3rd April, 2020 extended the period of validity till 30th April, 2020 for e-way bill validity expires during the period 20th day of March, 2020 to 15th day of April, 2020. Now CBIC vide Notification No. 40/2020-Central Tax, dated 5th May, 2020, provided that where an e-way bill has been generated on or before the 24th day of March, 2020 and its period of validity expires during the period 20th day of March, 2020 to the 15th day of April, 2020, the validity period of such e-way bill shall be deemed to have been extended till the 31st day of May, 2020. Notification No. 40/2020-Central Tax, 5th May, 2020.

•  A registered person registered under the provisions of the Companies Act, 2013 (18 of 2013) shall, during the period from the 21st day of April, 2020 to the 30th day of June, 2020, also be allowed to furnish the return under section 39 in FORM GSTR3B verified through electronic verification code (EVC).  A registered person who is required to furnish a Nil return under section 39 in FORM GSTR-3B for a tax period, any reference to electronic furnishing shall include furnishing of the said return through a short messaging service using the registered mobile number and the said return shall be verified by a registered mobile number based One Time Password facility. Notification No.38/2020-Central Tax, 5th May. 2020.

UNION BUDGET 2020- IMPORTANT AMENDMENTS INTRODUCED IN GST ACT

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).

Miscellaneous:

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

Disclaimer: ‐
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.

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.

Source: Circular No.129/48/2019-GST, dated 24.12.2019

PROVISIONAL ITC in FORM GSTR-3B as per the New CGST Rule

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

Source:  http://cbic.gov.in