1. Amendment in Section 10 of CGST Act 2017,
Composition taxpayers to make intra-state supply through e-commerce operators subject to certain conditions, clause (d) of sub-section (2) and clause (c) of sub-section (2A) in section 10 of the CGST Act which restrict the suppliers supplying goods through e-commerce operators from opting to pay tax under composition levy are amended so as to remove such restriction, thereby enabling the unregistered suppliers and composition taxpayers to make the intra-state supply of goods through such e-commerce operators.
Extract of updated Section 10(2)(d) and 10(2A)(c) of CGST Act, 2017 as follows: Section 10(2)(d) “he is not engaged in making any supply of goods or services through an electronic commerce operator who is required to collect tax at source under section 52” Section 10(2A)(c) “he is not engaged in making any supply of goods or services through an electronic commerce operator who is required to collect tax at source under section 52” |
2. Amendment in Section 16 of CGST Act, 2017,
2nd proviso to sub-section (2) of section 16 of the CGST Act which restricts a registered person from availment of input tax credit in case, the recipient fails to make the payment of consideration and tax to the supplier. Further, 3rd proviso specifies re-availment thereof whenever such payments are made. These are proposed to be amended to align with the return filing system provided in the said Act.
In order to make such alignment, reversal of input tax credit along with interest under section 50 has been proposed. Rule 37 has already been substituted to provide for reversal of input tax credit in case of non-payment of consideration to the supplier.
It has been further proposed that such input tax credit can be re-availed without any time limit as soon as such payment is made to the supplier.
Extract of updated 2nd proviso and 3rd Proviso to sub-section (2) of section 16 of the CGST Act, 2017 as follows: “Provided further that where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be added to his output tax liability, along with interest thereon paid by him along with interest payable under section 50, in such manner as may be prescribed:” “Provided also that the recipient shall be entitled to avail of the credit of input tax on payment made by him to the supplier of the amount towards the value of supply of goods or services or both along with tax payable thereon.” |
3. Amendment in section 17 of CGST Act, 2017,
a) Explanation to section 17(3) of the CGST Act which states that the "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 is proposed to be amended to restrict availment of input tax credit in respect of supply of warehoused goods to any person before clearance for home consumption as specified in para 8(a) of Schedule III of the said Act, by including the value of such transactions in the value of exempt supply for the purpose of input tax credit reversal.
Extract of updated Explanation to section 17(3) of the CGST Act, 2017 as follows: “For the purposes of this sub-section, the expression "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 except,–– (i) the value of activities or transactions specified in paragraph 5 of the said Schedule; and (ii) the value of such activities or transactions as may be prescribed in respect of clause (a) of paragraph 8 of the said Schedule”; |
b) Further, sub-section (5) of said section is also proposed to be amended so as to provide that input tax credit shall not be available in respect of goods or services or both received by a taxable person, which are used or intended to be used for activities relating to his obligations under corporate social responsibility referred to in section 135 of the Companies Act, 2013.
Extract of new Section 17(5)(fa) of CGST Act, 2017 as follows: “(fa) goods or services or both received by a taxable person, which are used or intended to be used for activities relating to his obligations under corporate social responsibility referred to in section 135 of the Companies Act, 2013;”. |
4. Amendment in section 23 of CGST act 2017,
A retrospective amendment has been proposed in section 23 prescribing exemption from registration to bring clarity and establish its overriding effect over the provisions of liability to register on exceeding threshold limit and mandatory registration, thereby enabling a harmonious interpretation.
Consequently, sub-sections (1) and sub-section (2) of section 23 of the CGST Act are proposed to be amended, with retrospective effect from 01st July, 2017, so as to include the non-obstante clause, thereby having overriding effect over sections 22 and 24. In other words, persons liable for compulsory registration in terms of sub-section (1) of section 22 and section 24 of the Act need not register if specifically exempt under sub-section (1) of section 23.
Extract of updated Section 23 of CGST Act, 2017 as follows: “Notwithstanding anything to the contrary contained in sub-section (1) of section 22 or section 24, a) the following persons shall not be liable to registration, namely:–– i. any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax under this Act or under the Integrated Goods and Services Tax Act, 2017; ii. an agriculturist, to the extent of supply of produce out of cultivation of land; b) the Government may, on the recommendations of the Council, by notification, subject to such conditions and restrictions as may be specified therein, specify the category of persons who may be exempted from obtaining registration under this Act.”. |
5. Amendment in Sections 37, 39, 44, and 52 of CGST Act, 2017,
New sub-sections (5), (11), (2) and (15) in sections 37, 39, 44 and 52 of the CGST Act respectively are proposed to be inserted so as to provide a time limit upto which the details of outward supplies under section 37 or return for a tax period furnished by a registered person under section 39 or the annual return under sub-section (1) of section 44 for a financial year or the statement under sub-section (4) of section 52 for a month can be furnished by an electronic commerce operator.
In other words, it has been proposed to set an outer limit on the time period upto which forms GSTR-1, GSTR-3B, GSTR-9 and GSTR-8 can be filed.
Further, it also seeks to provide an enabling provision for extension of the said time limit, subject to certain conditions and restrictions, for a registered person or a class of registered persons.
6. Amendments in Section 54 of CGST Act, 2017,
Sub-section (6) of section 54 which specifies the procedure for refund of tax is proposed to be amended so as to remove the reference to the provisionally accepted input tax credit to align the same with the present scheme of availment of self-assessed input tax credit as per sub-section (1) of section 41 of the said Act.
Extract of updated Section 54(6) of CGST Act, 2017 as follows: “Notwithstanding anything contained in sub-section (5), the proper officer may, in the case of any claim for refund on account of zero-rated supply of goods or services or both made by registered persons, other than such category of registered persons as may be notified by the Government on the recommendations of the Council, refund on a provisional basis, ninety per cent. of the total amount so claimed, excluding the amount of input tax credit provisionally accepted, in such manner and subject to such conditions, limitations and safeguards as may be prescribed and thereafter make an order under sub-section (5) for final settlement of the refund claim after due verification of documents furnished by the applicant.” |
7. Amendments in Section 56 of CGST Act, 2017,
Section 56 of the CGST Act, 2017 which sets out the provision for interest on delayed refunds is proposed to be amended so as to provide for manner, conditions and restrictions as may be prescribed for computation of period of delay beyond 60 days from the date of receipt of refund application till the date of refund, for the purpose of calculation of interest on such delayed refunds.
Extract of updated Section 54(6) of CGST Act, 2017 as follows: “If any tax ordered to be refunded under sub-section (5) of section 54 to any applicant is not refunded within sixty days from the date of receipt of application under sub-section (1) of that section, interest at such rate not exceeding six per cent. as may be specified in the notification issued by the Government on the recommendations of the Council shall be payable in respect of such refund from the date immediately after the expiry of sixty days from the date of receipt of application under the said sub-section till the date of refund of such tax for the period of delay beyond sixty days from the date of receipt of such application till the date of refund of such tax, to be computed in such manner and subject to such conditions and restrictions as may be prescribed.” |
8. Amendment in Section 122 of CGST Act, 2017,
A new sub-section (1B) in section 122 of the CGST Act, 2017 which sets out the penalties for certain offences, is proposed to be inserted so as to provide for penal provisions applicable to Electronic Commerce Operators in case of contravention of provisions relating to supplies of goods made through them by unregistered persons or allowing an inter-State supply of goods or services or both through it by a person who is not eligible to make such inter-State supplies or furnishes incorrect details in its monthly statement.
Extract of new Section 122(1B) of CGST Act, 2017 as follows: “(1B) Any electronic commerce operator who–– (i) allows a supply of goods or services or both through it by an unregistered person other than a person exempted from registration by a notification issued under this Act to make such supply; (ii) allows an inter-State supply of goods or services or both through it by a person who is not eligible to make such inter-State supply; or (iii) fails to furnish the correct details in the statement to be furnished under sub-section (4) of section 52 of any outward supply of goods effected through it by a person exempted from obtaining registration under this Act, shall be liable to pay a penalty of ten thousand rupees, or an amount equivalent to the amount of tax involved had such supply been made by a registered person other than a person paying tax under section 10, whichever is higher.” |
9. Amendment in Section 132 of CGST Act, 2017,
Sub-section (1) of section 132 of the CGST Act, 2017 which sets out the provisions for punishment for certain offences, is proposed to be amended so as to decriminalize the following offences:
obstructing or preventing any officer in the discharge of their duties under this Act
tampering with or destroying any material evidence or documents
failing to supply any information which he is required to supply under this Act or the rules made thereunder or supplies false information
Further, the monetary threshold for launching prosecution for the offences under the said Act has been proposed to be increased from one hundred lakh rupees to two hundred lakh rupees, except for the offences related to issuance of invoices without supply of goods or services or both.
10. Amendment in Section 138 of CGST Act, 2017,
First proviso to sub-section (1) of section 138 of the CGST Act, 2017 which sets out the provisions for compounding of offences is proposed to be amended so as
to simplify the language of clause (a),
to omit clause (b) and
to substitute clause (c)
of the said proviso so as to exclude the persons involved in offences relating to issuance of invoices without supply of goods or services or both from the option of compounding of the offences under the said Act.
intra-state
It further seeks to amend sub-section (2) so as to rationalize the amount for compounding of various offences by reducing the minimum as well as maximum amount for compounding.
11. Amendment in Section 158A of CGST Act, 2017,
A new section 158A in the CGST Act, 2017 is proposed to be inserted so as to provide for the manner and conditions for sharing of the information furnished by the registered person in his return or in his application of registration or in his statement of outward supplies or periodical returns or Annual Return or the details uploaded by him for generation of electronic invoice or E-way bill or any other details, as may be prescribed, on the common portal with such other systems, as may be notified, with the consent of the supplier or the recipient (where such details include identity information).
12. Amendment in Schedule III of CGST Act, 2017,
Para 7, 8(a) and 8(b) were inserted in Schedule III of the CGST Act, 2017 with effect from 01.02.2019 to keep certain transactions/ activities, such as supplies of goods from a place outside the taxable territory to another place outside the taxable territory, high sea sales and supply of warehoused goods before their home clearance, outside the purview of GST.
Such transactions or activities are proposed to be amended to give retrospective applicability to Paras 7, 8 (a), and 8 (b) of the said Schedule, with effect from 01st July 2017.
It is also being clarified that where the tax has already been paid in respect of such transactions/ activities during the period from 01st July 2017 to 31st January 2019, no refund of such tax paid shall be available.
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