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Key Updates in Goods & Services Tax April 2019

Key Updates in Goods & Services Tax – April 2019

Increased Turnover Thresholds for GST registration

Central Government vide Notification No. 10/ 2019-Central Tax has increased the turnover limit for exemption from GST registration to Rs 40 Lakhs for any person engaged in the exclusive supply of goods w.e.f  01.04.2019. Said exemption will not be available to the following person-

  1. Persons required to take compulsory registration under section 24 of CGST Act
  2. Persons engaged in notified supplies like Ice cream, Pan Masala and Tobacco etc.
  3. Persons making intra-State supplies in the states of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura, and Uttarakhand.
  4. Persons with voluntary registrations or intend to continue such registration.

Composition scheme for Supplier of services

Central Government vide Notification No. 2/ 2019-Central Tax (Rate) has notified the conditions for opting composition scheme by supplier of services with a tax rate of 6% having an annual turnover in preceding year up to Rs 50 lakhs w.e.f 01.04.2019. The said option is available to the persons qualifying the following conditions:

  1. Persons with aggregate turnover in the preceding financial year was Rs 50 lakh or below.
  2. Persons not eligible to pay tax under Composition Scheme.
  3. Persons who are not making any supplies which are not leviable to tax.
  4. Persons who are not making any inter-State outward supply
  5. Persons who are neither a casual taxable person nor a non-resident taxable person
  6. Persons should not be making supplies of Ice cream and other edible ice, (whether or not containing cocoa), Pan Masala and Tobacco and manufactured tobacco substitutes.

The CGST Rules, 2017, as applicable to a person paying tax under section 10 of the said Act shall, mutatis mutandis, apply to a person paying tax under this notification

Due date for filing Quarterly GSTR-1 

Central Government vide Notification No. 11/ 2019-Central Tax has notified that due date for filing GSTR-1 for taxpayers having an aggregate turnover up to Rs. 1.5 crores for the quarter ending June 2019 shall be 31.07.2019.

Due date for filing of monthly GSTR 1

Central Government vide Notification No. 12/ 2019-Central Tax has notified that due date for filing GSTR-1 for taxpayers having an aggregate turnover more than Rs. 1.5 crores for the month of  April 2019 to June 2019 shall be the 11th day of the month succeeding such month.

Increased Thresholds under Composition Scheme

Central Government vide Notification No. 14/ 2019-Central Tax enhanced the threshold of taxpayers having aggregate turnover for availing Composition Scheme u/s 10 of the CGST Act, 2017 to Rs. 1.5 crores in the preceding Financial Year except for the States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, and Uttarakhand. For such States, the threshold for opting for composition scheme shall be Rs 75 lakhs.

Due date for filing ITC 04 extended

Central Government vide Notification No. 15/2019-Central Tax has extended the due date for filing the ITC- 04 i.e. GST return for intimation to the commissioner in respect of goods dispatched to a job worker or received from a job worker or sent from one job worker to another Job worker during the period July 2017 to March 2019 till 30.06.2019.

No GST on Tax Collected at Source (TCS)

The Corrigendum dated March 7, 2019, issued to Circular No. 76/50/2018-GST dated December 31, 2018 (‘Circular’) clarifies that collection of tax at source (TCS) is an interim levy under Income Tax laws and not a tax per se. Therefore, TCS shall not be added to the taxable value for the purpose of charging GST. This clarification comes as quite a relief for businesses specifically for the automotive sector to avoid apprehension of litigation on this aspect.

Clarification on the treatment of sales promotion schemes under GST

Central Government has issued Circular No. 92/11/2019-GST to clarify the following:

Free Samples & Gifts

Samples which are supplied free of cost, without any consideration, do not qualify as “supply” under GST, except where the activity falls within the ambit of Schedule I of the CGST Act. Further, Input Tax Credit shall not be available in respect of goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples. Thus, it is clarified that input tax credit shall not be available to the supplier on the inputs, input services, and capital goods to the extent they are used in relation to the gifts or free samples distributed without any consideration.

However, where the activity of distribution of gifts or free samples falls within the scope of “supply” on account of the provisions contained in Schedule I of the CGST Act, the supplier would be eligible to avail of the Input Tax Credit.

Buy one get one free offer

Prima facie, It appears that in case of offers like “Buy One, Get One Free”, one item is being “supplied free of cost” i.e. without any consideration. But in fact, this is not an individual supply of free goods but it is a case of two or more individual supplies but single price is being charged for the entire supply. It can at best be treated as supplying two goods for the price of one.

GST of such supply will be dependent upon as to whether the supply is a composite supply or a mixed supply and the rate of tax shall be determined. It is also clarified that ITC shall be available to the supplier for the inputs, input services and capital goods used in relation to supply of goods or services or both as part of such offers.

Discounts including ‘Buy more, save more’ offers

It is clarified that discounts offered by the suppliers to customers (including staggered discount under “Buy more, save more” scheme and post supply / volume discounts established before or at the time of supply) shall be excluded to determine value of supply provided they satisfy the parameters laid down in sub-section (3) of section 15 of the CGST Act including the reversal of ITC by the recipient of the supply as is attributable to the discount on the basis of document (s) issued by the supplier. It is further clarified that the supplier shall be entitled to avail the ITC for such inputs, input services and capital goods used in relation to the supply of goods or services or both on such discounts.

Amendment in CGST Rules

Central Government vide Notification No. 16/2019-Central Tax has amended the CGST rules. These rules may be called the Central Goods and Services Tax (Second Amendment) Rules, 2019. Few of the relevant extracted amendments are as follows:

Rule 42-    In rule 42 (1) (g), after the word & figure “FORM GSTR 2” the word & figure at summary level in FORM GSTR-3B” shall be inserted in order to  include the GST inputs for all kind of supplies covered under the said rules in Form-GSTR-3B as well which was not mentioned earlier therein.

Rule 88A- Order of utilization of input tax credit.- Input tax credit of integrated tax shall first utilized towards payment of integrated tax, then towards the payment of central tax and State tax or Union territory tax respectively. Provided that the input tax credit on account of central tax, State tax or Union territory tax shall be utilized towards payment of integrated tax, central tax, State tax or Union territory tax, as the case may be, but only after the input tax credit available of integrated tax has first been utilized fully.

 

Last Updated: 5th April 2019
This article is contributed by: 

Vaibhav Matta
Assistant Director

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