With the approval from the GST council in the meeting held on January 10 2019, the changes made by the CGST (Amendment) Act, 2018, IGST (Amendment) Act, 2018, UTGST (Amendment) Act, 2018, and GST Amendment Act (Compensation to States), 2018 along with the corresponding changes in SGST Acts will be applicable from 1sr February 2019.
Keeping in view the implementation of the amendments made in the GST taking place from 1st Feb 2019, it is highly recommended that you must be aware of the changes that have been made in order to understand how they could affect your business.
While some of the amendments provide ease to businessmen, on the other hand, there are some that may be a cause of concern for certain businesses. It is highly recommended to go through some information in order to work accordingly from February 2019 onwards. Here’s an insight into the most important changes that have been made. In order to make it more understandable, we have provided explanations of all the points in a simplified manner.
Changes have been made in relation to various areas including the reverse charge in case of procurement from unregistered persons, eligibility for composition scheme, ITC on motor vehicles, deals involving import and export of goods and services and many more.
From eligibility of registration of e-commerce operators, multiple registrations within the same place, furnishing of returns, recovery of taxes from 2 different persons to the procedure of cancellation of GST registration, a lot has been amended and you must be aware of the new version of the GST that has been rolled out.
Here’s an article that includes the 20 most important amendments in the GST Amendment Act which one must read and will clarify all your queries about the changes that have been made in the respective section. Learn more about Invoices under GST
Initially as per section 9(4) of CGST Act 2018, supply of goods or services, from unregistered person to registered person, were covered under reverse charge basis.
Later on vide notification no. 8/2017-Central Tax (Rate) dated 28th June2017 such reverse charge only applicable in case supply of goods and services received from unregistered person is greater than Rs. 5000 per day which again amended by notification no. 38/2017-Central Tax (Rate) dated 13th October 2017, the intra-state supplies of goods or services or both received by a registered person from unregistered person has been postponed from the central tax completely.
The said provision has been extended till 30th September, 2019, vide notification no. 22/2018 – Central Tax (Rate) dated 6th August, 2018.
However, with effect from 1st Feb 2019, Section 9(4) has been completely amended. Now the registered person is liable to pay tax on reverse charge basis only if following two conditions are satisfied –
With the amendment under GST Amendment Act, the coverage of tax payable under reverse charge basis would be restricted.
It must be noted that the notified class of registered person and the specified categories of goods and services are yet to be notified by the Government and the same would be intimated as and when notified.
There are two major amendment in GST amendment act 2018 with respect to composition scheme, Earlier the threshold limit of turnover for the taxpayer to be eligible for the composition scheme is INR 1 Crore.
However, after amendment with effect from 01st Feb 2019 registered person having turnover up to INR 1.5 crore can opt for composition scheme.
Before 1st February 2019, Persons engaged in supply of services (other than restaurant service) are not eligible for the composition scheme or in other words person opted for composition scheme was not allowed to make supply of services.
With effect from 1st February 2019, Person opting for composition scheme is allowed to supply services other than services referred in para 6 (b) of schedule II. i.e. Restaurant services.
Total value of supply of services should not exceed higher of the following –
The same can be understood with the help of following table
Schedule III contain list of services which will be treated neither as a supply of goods nor a supply of services. Earlier activities covered under this schedule treated as part of exempted supply and reversal of common ITC was to be made.
However, with effect from 1st Feb 2019, new explanation has been inserted mentioning that the term ‘value of exempt supply’ shall not include the value of activities or transactions specified in schedule III, except those specified in paragraph 5 of the said schedule.
Meaning thereby that no reversal of common input tax credit is required on activities or transactions specified in schedule III other than sales of land and sale of building (other than those specified in paragraph 5).
Earlier ITC on all types of motor vehicles was restricted however in GST Amendment Act with effect from 1st Feb 2019, the Input tax credit shall only be restricted in case of motor vehicles for transportation of persons having approved seating capacity up to 13 persons (including the driver).
However, such motor vehicles when put to use for the following purposes, ITC would be allowed even if their seating capacity is equal to or less than 13 people as per the GST Amendment Act.
In other words, for all the motor vehicles with approved seating capacity of more than 13 people, ITC would be allowed.
In case of vessels and aircrafts, input tax credit shall be available only when vessels and aircrafts are used for following–
From 1st February, 2019, Services of general insurance, servicing, repair and maintenance in so far as they relate to motor vehicles, vessels or aircraft
From 1st February 2019, ITC on food and beverages, outdoor catering, beauty treatment etc. would be allowed in following circumstances
Earlier Every electronic commerce operator was compulsorily required to obtain registration however with effect from 1st Feb 2019 only those electronic commerce operator who is required to collect tax at source under section 52 are compulsorily required to obtain registration as per the GST Amendment Act.
Section 52 of the CGST Act mandates all the e-commerce operator to collect tax at source in respect of all the taxable supplies made through it by other suppliers, wherein, the consideration in respect of all such supplies is collected by it. Which means only those ecommerce operators who works under marketplace model, compulsory registration will be applicable such as amazon, flipkart etc.
Earlier person is not allowed to take multiple registration with in same state for same business vertical. Only different verticals will be allowed to take separate registration.
Now registration can be taken based on place of business. multiple registration with in same state allowed for each place of business.
However, where multiple registration will be taken with in same state, each such registration shall be considered as distinct person and taxability will be applicable accordingly.
During the ongoing process of cancellation of registration, there would be temporary suspension of registration. This would result into releasing the compliance burden while the cancellation of registration is under process.
Earlier as per the provision of section 34 Debit and Credit Note, single debit note or credit note is issued against each invoices.
With effect from 1st Feb 2019, the registered person is allowed to issue a consolidated debit / credit note in respect of the multiple invoices issued in a financial year. One to one correlation is not required.
Section 43A has been newly inserted. This section contain provision with respect to procedure for following –
Earlier The credit of SGST / UTGST can be utilized first towards payment of SGST / UTGST and second towards payment of IGST.
NEW SECTION 49A INSERTED –
As per the newly inserted section, input tax credit of IGST needs to be first utilized fully towards payment of IGST, CGST, SGST/UTGST.
Once the input tax credit of IGST is utilized, the input tax credit of CGST, SGST / UTGST can be utilized for payment of IGST, CGST, SGST/UTGST.
Before 1st Feb 2019, the ITC tax settlement was as per below table:
With effect from 1st Feb 2019, the ITC tax settlement will be as per below table:
Important conditions for utilization of input tax credit
As per the earlier provision in case of export of services, receipt has to be received in foreign convertible exchange only then such export of services will be qualified for refund of IGTS.
However with effect from 1st Feb 2019, In case of services exported out of India, the receipt of payment in Indian rupees which is permitted by the RBI, qualifies as export.
Explanation has been inserted which says that the word person shall include ‘distinct person’. Meaning thereby that recovery of tax can be made from distinct person present in different states / UTs.
Earlier In case the person fails to pay the tax amount and penalty as provided under section 129(1) within 7 days of detention or seizure, further proceedings shall be initiated in accordance with the provisions of section 130.
From 1st Feb 2019 onwards, time limit of payment of tax amount and penalty has been increased from 7 days to 14 days. Which means that the proceedings in accordance with section 130 shall be initiated in case of non-payment within a period of 14 days of detention or seizure.
The amendment is in the form of clarification and the same is having a retrospective effect from 1st July, 2017. The clarification is as follows –
It is re-mentioned here that all the above points are in the form of clarification and the same are effective retrospectively from 1st July, 2017.
EARLIER POSITION –
A registered person can send inputs / capital goods to a job worker for job work purpose without payment of tax.
It is mandatory that the inputs need to be brought back within a period of one year and capital goods needs to be brought back within a period of three years.
AMENDMENT IN THE PROVISION –
The commissioner can extend the above referred period of one year (in case of inputs) and three years (in case of capital goods) for further period not exceeding one year (in case of inputs) and two years (in case of capital goods). However, it is mandatory to provide sufficient cause for the extension.
OUTCOME OF THE AMENDMENT –
New proviso has been inserted which states that the place of supply in case of transportation of goods to a place outside India shall be the place of destination of such goods i.e. place outside India.
Earlier CGST and SGST was getting charged by courier companies in such cases, however after this amendment IGST would be charged by courier company even if service recipient and service provider both are in same state.
As per the earlier provision, tax exemption was available in case of job work services supplied in respect of goods which are temporarily imported into India only for the purpose of repairs and the said goods are exported back after such repairs.
However, amendment with effect from 1st Feb 2019 has been made to extent the tax exemption benefit in case of job work services supplied in respect of goods which are temporarily imported into India for repairs or for any other treatment or process and the said goods are exported back after such repairs or treatment or process.
Now the scope of exemption has been extended and covered all the process and treatment done good imported temporarily.
Amendment has been made and ceiling on limit of amount to be deposited before filling appeal to appellate authority and appellate tribunal has been provided.
The same can be understood with the help following table.
Conclusion
Having listed the most important points from the amendments made, we hope we could help you understand them and their applicability in the future.
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