GST Council in its 28th meeting held on 21st July, 2018, came out with several important decisions relating to rate cut in various goods, simplified Return process and change in provisions of GST Act. This article deals with comprehensive analysis of the recommendations provided at the meeting.
Proposal with respect to amendments in CGST Act, IGST Act, UTGST Act and the GSt (Compensation to States) Act
Turnover to opt for composition scheme to be raised from Rs. 1 crore to Rs. 1.5 crores. Moreover, the persons registered under composition scheme will be eligible to supply services upto the value of 10% of turnover in the preceding financial year or Rs. 5 lakhs, whichever is higher
The provision of levy of GST on RCM basis on supply from unregistered person to be made applicable for specified class of registered persons on certain goods
Exemption from registration has been extended to persons in Special category States having turnover upto Rs. 20 lakhs
The registered persons may obtain different registrations within a State/Union Territory for the multiple place of business even when they are not a separate business vertical
E-commerce operators are exempted from obtaining compulsory registration except when they are required to collect tax at source
The registration shall remain suspended till the order of cancellation of registration to relieve the registered person from continued compliance under law
Schedule III may be amended to keep the following out of the preview of supply:
- Goods supplied to non-taxable territory from non-taxable territory without passing through the taxable territory
- Imported Goods supplied from warehouse before the clearance for home consumption
- Supply of goods in high seas sale i.e. sale before filing documents for clearance of imported goods. The same has been allowed since the final buyer is considered as importer who shall pay the required IGST while clearing goods.
The benefit of input tax credit has been extended in respect of the following supply:
- Specified activities specified of Schedule III even though the tax is not leviable on same
- Motor vehicles having seating capacity of more than 13 persons when used for service of passenger transportation. Earlier, the credit was available irrespective of the seating capacity. Moreover, credit of vessels and aircrafts is also available.
- Motor vehicles for transportation of money which was not available earlier since money is not goods
- General insurance, repair and maintenance services in respect of motor vehicles, vessels and aircrafts on which credit is available
- Mandatory supply of goods and services by employer to its employees
The levy of interest has been done away with on the reversal of credit when the consideration is not paid to the supplier within 180 days from the date of invoice
A consolidated credit/debit note can now be issued for multiple invoices issued in a financial year in place of multiple note
Maximum amount of pre-deposit while filing appeal before appellate authority and Tribunal has been restricted to Rs. 25 crores and Rs. 50 crores respectively
Supply of service shall be deemed to be export of service when the receipt of consideration in Indian Rupees is permitted by RBI
Place of supply of job work service provided on imported goods and exported without using it in India is outside India
Recovery of dues related to a person can be made from its other registered places whether in the same Sate or not.
Proposal with respect to migration provisions
The migration window shall be opened again for the taxpayers who received provisional IDs but could not complete the migration process because of non-filing of Part B of FORM GST REG-26. Such taxpayers are required to submit the necessary details to the jurisdictional Central Tax/State Tax nodal officers by 31st August, 2018 who shall forward the same to GSTN for enabling the migration. Late fee payable for delayed filing of Return has been exempted through the route of payment and then reversal in the cash ledger.
Proposal with respect to Simplified GST Return
The Council approved the new Return formats and associated changes in law. The taxpayers are now required to file one simplified Return with two tables- one for reporting outward supplies and other for availing input tax credit based on invoices uploaded by supplier. The invoices uploaded by the supplier can be continuously viewed and locked by the recipient. Thus, the process would be “UPLOAD-LOCK-PAY” for most taxpayers.
To enable ease of Return filing, the taxpayers are allowed to create their own based on nature of outward and inward supplies. Based on this information, the requisite field of information shall be shown for the taxpayer to furnish the required information. Moreover, NIL Return can be filed through SMS.
Taxpayers having turnover below Rs. 5 crores can file simplified quarterly Return called “Sahaj and Sugam” with monthly payment. However such facility is available only to small traders making only B2B or B2B + B2C supply.
The new Return design provides for the facility of amending the invoice and other details filed in the Return through an “Amendment Return”. To save from the burden of interest, payment facility has been allowed in the amendment Return.
Proposal with respect to Rate Cut on various goods
Various exemptions and reductions in tax rates have been recommended by the Council to provide relief to the industry and common people at large. Goods such as lithium-ion batteries, vacuum cleaners, food grinders, mixers, storage water heaters, hair dryers, hand dryers, paint, varnishes, water cooler, milk cooler, ice cream coolers, perfumes, toilet sprays and toilet preparation have been brought to 18 from 28 per cent slab.
Moreover, benefit of input tax refund on account of inverted duty structure has been extended to fabric manufacturers. Fabrics taxed at 5% with no benefit of input tax refund were imposing huge difficulty in Fabric sector. This is a welcome step to be applied prospectively after the issue of Notification.
The rate change, exemptions and other proposals made shall be given effect once the Notifications are issued for the same.
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