GST provisions have been very dynamic since the implementation of GST. Over the period of time, GST council has made several recommendations to remove the hindrances faced by trade and public at large. The Lok Sabha passed the GST Amendment Bill on 09/08/2018 and which was assented by president to become an act on 29/08/2018 which provisions to be made effective once notified. In 31st GST Council Meeting dated 22nd December 2018, GST council had announced that the effective date of applicability of amendments in GST Act(s) 2018 will be from 1st February 2019 via press release dated 04/01/2019.
Aside, provisions of the Central Goods and Services Tax (Amendment) Act, 2018 , except clause (b) of section 8, section 17, section 18, clause (a) of section 20, sub-clause (i) of clause (b) and sub-clause (i) of clause (c) of section 28, shall come into force w.e.f. 01/02/2019. Whereas, provisions of clause (b) of section 8, section 17, section 18, clause (a) of section 20, sub-clause (i) of clause (b) and sub-clause (i) of clause (c) of section 28 had already been made effective retrospectively w.e.f. 01/07/2017.
Summarized version of the amendments applicable from 01.02.2019 has been enumerated here under:
- 1. Composition Scheme
- • Upper limit of turnover for opting of composition scheme shall be raised from Rs. 1Cr to Rs. 1.5 Cr.
- • A Composite dealer(in goods) shall be allowed to supply services (other than restaurant services), for a value not exceeding -Higher of 10% of turnover in the preceding financial year, or Rs. 5 lakh.
- 2. Registration requirements:
- • Revised threshold limit for registration : The threshold limit of turnover for exemption from registration in the States of Assam, Arunachal Pradesh, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand shall be increased to Rs. 20 Lakh (Previous limit was Rs. 10 lakh)
- • Multiple registration in same state/UT: Taxpayers may opt for multiple registrations within a State/U.T in respect of multiple places of business located within the same State/U.T on the same PAN.
- • Mandatory Registration: Mandatory registration is required for only those e-commerce operators who are required to collect tax at source.
- • Temporary suspension of registration: Registration shall be remain temporarily suspended while cancellation of registration is under process, so that the taxpayer could get relief of further continued compliance under the law.(i.e Taxpayers will not be required to file returns).
- 3. Reverse Charge Mechanism (RCM):
- • In case of purchase of notified goods from unregistered suppliers, Reverse charge mechanism shall be applicable to notified registered persons.
- • RCM applicable without any exemption limit w.e.f 01-02-2019 for a class of registered persons in respect of supply of specified categories of goods or services or both received from an unregistered supplier as per Notification No.01/2019 – Central Tax (Rate) and amended section 9(4) of CGST Act. Till date, neither class of registered persons nor specified categories of goods has been prescribed by the Govt. As such, now scope of section 9(4) reduced to specified dealers or specified goods or services.
- 4. New insertion in Schedule III :
- The following transactions shall not treated as supply (i.e no tax payable under GST) under Schedule III:-
- • Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India;
- • Supply of warehoused goods to any person before clearance for home consumption; and
- • Supply of goods in case of high sea sales.
- 5. Allowability of ITC :
- Input tax credit would now be available in respect of the following:-
- • Most of the activities or transactions specified in Schedule III;
- • Motor vehicles for transportation of persons having seating capacity of more than thirteen (including driver). In case of vessels and aircraft, ITC will be allowed only if such are used for purpose as specified in section 17(5);
- • Services of general insurance, repair and maintenance in respect of motor vehicles, vessels and aircraft on which credit is available; and
- • Goods or services which are obligatory for an employer to provide to its employees, under any law for the time being in force.
- 6. Consolidated credit/debit notes for multiple invoices:
- • Registered persons may issue consolidated credit/debit notes to a party in respect of multiple invoices issued in a Financial Year to that party.
- 7. Provisions related to job work:
- • Commissioner may extend the time limit for return of inputs and capital sent on job work, up to a period of 1 year and 2 years, respectively.
- • Place of supply shall be outside India, where job work or any treatment or process has been done on goods temporarily imported into India and then exported out of India without putting them to any other use in India except the uses which were necessary for the purpose of such job work or treatment or process.
- 8. Receipts in INR allowed in case of exports:
- If RBI would permit, Supply of services outside India shall be regarded as exports, even if payment is received in Indian Rupees.
- 9. Recovery provisions:
- Recovery of taxes, interest, fine, penalty etc. can be made from distinct persons, even if such distinct persons are present in different State/Union territories.