Latest Update On GST :

Summary of 23rd GST Council Meet :

Changes to be made prospectively from 15th November

Changes in Composition Scheme

Composition scheme limit to be increased to Rs 1.5 crore (can be extended to Rs 2 crore later).
1 % GST rate for manufacturers & traders
Composition tax of 1% on turnover of taxable goods (turnover of exempted goods to be excluded)
Those supplying goods and services (services not exceeding Rs 5 lakhs in total) eligible for compositions scheme
Composition Returns, GSTR-4 due date extended to 24th December
Composition dealers cannot make inter-state sales. Input tax benefit not allowed.

Relief in GSTR compliance

All businesses to file GSTR-1 and GSTR-3B till March 2018.
GSTR-2 and GSTR-3 filing dates for July 2017 to March 2018 will be worked out later by a Committee of Officers
Turnover under Rs 1.5 Cr to file quarterly GSTR-1
Turnover above Rs 1.5 Cr to file monthly GSTR-1
All businesses to file GSTR-3B by 20th of next month till March 2018.

Extension of GSTR-1 filing Due Dates

For turnover upto Rs. 1.5 cr:

Period (Quarterly)	Due dates
July- Sept	31st Dec 2017
Oct- Dec	15th Feb 2018
Jan- Mar	30th April 2018

For turnover of more than Rs 1.5 cr:

Period	Dates
July to Oct	31st Dec 2017
Nov	10th Jan 2018
Dec	10th Feb 2018
Jan	10th Mar 2018
Feb	10th Apr 2018
March	10th May 2018

Relief for service providers

All service providers with turnover up to Rs 20 lakhs exempt from GST registration. Including those who supply inter-state or supply through e-commerce operator, such service providers do not have to register.

Challenges ahead for Restaurants

GST rate cut to 5% with no input tax credit.

Other taxpayer relief measures

Late Fees reduced – For delayed filing of NIL returns, late fee reduced from Rs 200 per day to Rs 20 per day.
Late Fee credit – Late fees for GSTR-3B of July, Aug and Sept waived. Any late fees paid for these months will be credited back in Electronic Cash Ledger under ‘Tax’ and can be utilized to make GST payments.
Manual filing for Advance Ruling application to be introduced
Export of services to Nepal and Bhutan are exempt from GST and have now been allowed to claim a refund of input tax credit paid, if any.
TRAN-1 can be filed and revised till 31st December 2017. Revision to be done only once.
Timelines for filing of GSTR-2 and GSTR-3 for July to March 2018 to be worked out by Committee of Officers. However, subsequent month filing of GSTR-1 will not be impacted.

Others GSTR filing extensions

Return	Revised Due Date	Old Due Date
GSTR-5 (for Non Resident)	15th Dec 2017	Earlier of 20th August 2017 or 7 days from date of registration
GSTR-4 (for Composition Dealers)	24th Dec 2017	18th October 2017
GSTR-6 (for Input Service Distributor)	31st Dec 2017	13th August 2017
ITC-04 (for job work) for quarter of Jul-Sep	31st Dec 2017	25th October 2017
TRAN-1	31st Dec 2017	30th September 2017

GST Rate Changes

28% slab pruning cost to government= 20,000 crore
1 % composition rate for manufacturers & traders
Reduced from 28% to 18% W.e.f. 15th Nov 2017 – Shampoo, Perfume, tiles, watches
Reduced from 28% to 12% – Wet grinders, tanks
Reduced from 18% to 12% – Condensed milk, refined sugar, diabetic food
Reduced from 12% to 5% – Desiccated coconut, idli dosa batter, coir products
Reduced from 5% to Nil – Duar meal, khandsari sugar, dried vegetables
Restaurants within hotels (room tariff <7,500- 5% without ITC
Restaurants within hotels (room tariff >7,500 ) still 18% with ITC
Outdoor catering 18% with ITC

As per 22nd GST Council meeting of 6th October 2017

Lesser burden of compliance for small businesses

The government has recognised hardship faced by small businesses with turnover of within Rs 1.5cr, by delaying their return filing compliance to once a quarter from once a month. Taxes will be paid quarterly.

Small businesses will also have to file monthly returns for three months – July, August, and September – and the switchover to quarterly filing will happen from the cycle starting October 1.

Relief for Service Providers

Exemption from Registration for a service provider if the aggregate turnover is less than Rs. 20Lacs (10 Lacs in special category state except for J&K) even if they are making inter-state supplies of services.

Services provided by a GTA to an Unregistered person shall be exempted from GST.

TDS/TCS provisions shall be postponed till 31.03.2018.

Small businesses will also have to file monthly returns for three months – July, August, and September – and the switchover to quarterly filing will happen from the cycle starting October 1.

Relief for Exporters

Refund cheques for July exports will be processed by Oct 10 and refund cheques for August exports will be processed by Oct 18.

Every exporter will now get an e-wallet. In the e-wallet, there would be a notional amount for credit. The refund they will eventually get will be offset from that amount. The e-wallet will be introduced from April next year.

Merchant exporters will pay a nominal 0.1% GST applicable on exports to enable their suppliers to claim ITC.

Composition Scheme changes

Person otherwise eligible for availing the composition scheme and are providing any exempt services shall now be eligible for the composition scheme.

Eligibility of composition scheme raised to Rs 1 crore.

Traders will pay 1%, manufacturers 2% and restaurants 5% under the composition scheme.

Due date of FORM GSTR-4 for the quarter July-September, 2017 is extended to 15th November 2017

RCM postponed

RCM applicable for the purchases from the unregistered dealer shall be suspended till 31.03.2018.

No GST on advance receipts for businesses with turnover under Rs 1.5cr

Taxpayers having annual turnover upto 1.5 Crore shall not be required to pay GST at the time of receipt of advances on account of supply of goods.

Significant rate changes

GST on unbranded Ayurvedic medicines has been reduced from 12% to 5%.

Tax rate for man-made yarn has been reduced to 12% from 18%. The decision will have an effect on textiles.

GST rate on many job work items reduced from 12% to 5%. GST rate on some stationery items, diesel engine parts also reduced to 18% from the earlier 28%.

GST on khakra and unbranded namkeen has been reduced from 12% to 5%. Tax on zari work has been reduced from 12% to 5%.

35% abatement on old leasing contract of vehicle

Printing Job work rate revised from 12% to 5%

Others

E-way bill has been deferred to 1st April 2018

Relief for jewellers as no need to furnish PAN card on jewellery purchase of more than Rs 50,000. The amount of jewellery purchase for which KYC will be required will be determined later.

35% abatement on old leasing contract of vehicle

Due date of GSTR-6 (filed by an input service distributor) for the months of July, August and September 2017 has been extended to 15.11.2017

Under consideration

Finance Minister Arun Jaitley announced that a group of ministers will relook tax on AC restaurants. GST for AC restaurants may become cheaper from 18% to 12%. A group of ministers has been formed to devise the mechanism. The GoM will submit its report in 14 days.

GoM will also make the composition scheme more attractive

Composition Scheme- Notification 3 & 8/2017

Composition scheme threshold has been notified to be 75 lakhs . This will be beneficial to small businesses.

Notification 3 contains the composition scheme rules which had been issued ealrier on 17th May.

Reverse Charge- Notification 5/2017

The persons who only supply goods/services on which reverse charge applies are exempted from registering under GST registration.

For example, For example, Ola Cabs enlist drivers to ply their cars. Drivers are providing chauffeur/driving services to Ola and Ola is the service receiver.

Ola pays GST on the drivers’ services on reverse charge basis. Drivers are not required to register under GST thus removing the burden of tax compliance for individuals with limited resources (drivers) to large companies (Ola) with enough resources.

Sections coming into force-Notification 1 & 9/2017

With the Notification of 19th June and 28th June, most of the CGST Act is now in force. Only sections 51 & 52 (TDS & TCS respectively) are not applicable as the government has relaxed TDS & TCS provisions for the time being to give more time to the e-commerce sellers.

Sections 42(9) & 43(9) are not applicable.

These clauses say that if the output tax liability is reduced (or input tax credit is increased) due to a debit note (or a credit note) [mismatch of invoices reconciliation] then such amount shall be refunded by crediting electronic ledger. This is not applicable right now as there will not be any reconciliation for 2 months.

Rules-Notification 10/2017

CBEC has issued the rules on valutation, transisition, refunds etc. in a 247 page document.

HSN Codes-Notification 12/2017

Every registered person with turnover more than 1.5 crores must mention the HSN Codes in each and every invoice.

However, the numbers of digits to be mentioned in the Invoice depends on the annual turnover in the preceding financial year.

Turnover in previous FY	No. of digits
Upto Rs. 1.50 Cr	NIL
More than Rs. 1.50 Cr. & upto Rs. 5 Cr	2 digits
More than Rs. 5 Cr	4 digits

This is effective from 1st July, i.e., all invoices from 1st July must be GST compliant and have details of HSN codes.

The same notifications have also been made under IGST (notification 5).

Rates of interest-Notification 13/2017

The rates of interest are same as mentioned in the Act. The notification ratifies the rates.

This notification shall come into force from the 1st day of July, 2017

Sections	Interest p.a.
Sec 50(1)- Failure to pay tax	18%
Sec 50(3)- Less tax paid/ excess ITC availed	24%
Sec 54(12)- Interest on refunds withheld in an appeal later given	6%
Sec 56- Interest on delayed refunds	6%
Proviso to 56- Interest on refunds ordered in an appeal	9%

The same notification has also been made under IGST (notification 6).

Common Portal- Notification 4 /2017

It is notified that the GST website of the Common Portal is www.gst.gov.in managed by Goods and Services Tax Network.

Modes of verification-Notification 6 & 11/2017

The modes of verification are-

Aadhaar based Electronic Verification Code (EVC)
Electronic verification code generated through net banking login on the common portal
Electronic verification code generated on the common portal

[Points ii & iii replacing the earlier Bank account based OTP as per earlier notification]

Central Tax Rate Notification (28.06.2017)

Most of the goods are kept at the same rates as announced by the GST council earlier but rough or non industrial unworked diamond or precious stones will be charged CGST at the rate of 0.125%.
List of goods exempt from CGST. No change in the list.
Oil, gas, coal and petroleum licenses and sub-contract licenses and leases will be charged GST at the rate of 2.5%.
The person liable to deduct TDS as per the GST law supplying intrastate goods or services to an unregistered person would be exempt from CGST.
Cashew nuts, not shelled or peeled, Bidi wrapper leaves (tendu), Tobacco leaves, silk yarn, Supply of lottery would have reverse charge applicable under GST.
Refund of the unutilized ITC would not be provided in the case of the tax on output being lower than the tax on inputs for certain goods mainly related to the textile and railways.
The supply of goods by CSD to unit run canteens and authorized customers and supply of goods by the unit run canteens to the authorized customers.
50% of the tax paid on inward supplies of goods by the CSD for further supply to unit run canteens or authorized customers can be claimed as refund under GST.
Person liable to deduct TDS as per the GST law supplying intra goods or services to an unregistered person would be exempt from CGST.
Intrastate supply of second hand goods by a registered person who deals in selling second hand goods to an unregistered person would be exempt from CGST.

Integrated Tax

Sections in force-Notification No. 3/2017

The Central Government has notified that provisions of sections 4 to 13, 16 to 19, 21, 23 to 25 of The Integrated Goods and Service Tax Act, 2017 shall come into force from 1st July 2017.

Provisions of CGST will also apply for IGST- Notification No. 4/2017

The Integrated Goods and Services Tax Rules, 2017 have been notified and are deemed to have come into force retrospectively from 22nd June 2017.

The Central Goods and Services Tax Rules, 2017, for carrying out the provisions specified in section 20 of the Integrated Goods and Services Tax Act, 2017 shall, so far as may be, apply in relation to integrated tax as they apply in relation to central tax. Section 20 mentions the CGST provisions that will apply mutatis mutandis for IGST.

GST News -Integrated Tax (Rates) Notifications

Cases where the e-commerce operator will pay IGST- Notification No. 14/2017

E-commerce operator will pay the IGST in the following services-

Transportation of passengers by a radio-taxi, motorcab, maxicab and motor cycle (Eg. Ola outstation from Bangalore to Chennai)
Providing accommodation in hotels, inns and other commercial places meant for residential or lodging purposes. For example, a small hotel registered on Oyo rooms. Oyo rooms will pay IGST However, if the person (hotel) supplying such service through e-commerce is liable for registration under GST then that person will pay. Eg, Ibis Hotel is a large multi-chain hotel also registered on Oyo rooms. Then Ibis Hotel will pay.

It will come into force with effect from the 1st July 2017.

Goods on which reverse charge applies-Notification No.4/2017

A list of goods on which reverse charge applies is issued by CBEC. When the supply is made by the specified person, then IGST will be payable on reverse charge basis by the recipient of the intra-state supply of such goods. All the provisions of will apply to such recipient.

No ITC for Construction- Notification No. 12/2017

No refund of unutilized ITC will be allowed input tax credit shall be allowed for IGST in construction of a complex, building etc. (works contract). Except in cases where the entire consideration has been received after issuance of completion certificate or after its first occupation, whichever is earlier.

This is in keeping with the provision of not allowing ITC.

This will come into force with effect from the 1st day of July 2017.

Reverse Charge- Notification No. 10/2017

List of services on which reverse charge is applicable is issued. It is the same as issued under CGST Act.

Army Canteens- Notification No. 6 & 7/2017

In the public interest exempts, the following are exempted from IGST (& also CGST)-

The supply of goods by the Canteen Stores Department (CSD) to the Unit Run Canteens or
The supply of goods by the CSD/Unit Run Canteens to the authorized customers

The CSD can claim a refund of 50% on IGST of all input goods received by it for subsequent supply of such goods to the Unit Run Canteens or to the authorized customers of the CSD.

This notification shall come into force with effect from the 1st July 2017.

Inverted Rate Structure- Tax On Inputs>Tax On Outputs- Notification No.5/2017

Refund of unutilised ITC will NOT be allowed, when the ITC is accumulated due to rate of tax on inputs being higher than the rate of tax on the output goods (except nil rated or fully exempted goods).

High tax on the imported raw materials compels manufacturers to raise the price. On the other hand, foreign finished goods have lower tax rate. In conclusion, manufactured goods by the domestic industry become uncompetitive against imported finished goods.

List of goods on which this notification applies.

For UIN & Diplomats Notification No. 13/2017

This notification specifies the conditions applicable –

UN or specified international organisations and
Foreign diplomats in India

Panchayat services- Notification No. 11/2017

Constitutional services of the Panchayat are not covered under GST.

News on GST Act

The entire framework of GST is based on GST Act. It was devised by the GST Council, which is a committee consisting of the Union Finance Minister (Chairperson), the Union Minister of State, the minister in-charge of finance or taxation or any other minister nominated by each State Government.

GST News – Rule Changes

The GST is a constitutional amendment, and any change in the law will also affect the rules therein. Rules for invoicing, rules for penalty, rules defining the point of taxation – these are just some of the examples of any rule change in the model law.

GST India

Search This Blog