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.
