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Key Updates in Goods & Services Tax – February 2019

Supplies against Advance Authorization shall be considered as “Deemed Exports”

Notification No. 01/2019 was issued to provide the conditions for treating the Supplies made against advance authorization as “Deemed Exports” which was earlier notified vide Notification No. 48/2017:

  • The Pre-import condition was removed;
  • A new condition of submitting the certificate of CA stating that the goods so imported shall be used for in manufacture and supply of taxable goods has been inserted;
  • CA Certificate should be submitted within a period of 6 months from the date of supply;
  • CA certificate is not required where the credit on inputs used in the manufacture of export goods was not availed.

J&K excluded from GST limit of 20 Lakhs

The Specified persons in Special category states (other than J&K) and the State of Jammu & Kashmir (J&K), making taxable supplies are exempted from registration vide Notification no. 65/2017 dated 15.11.2017, if their turnover is less than or equal to INR 10 Lakhs and INR 20 Lakhs respectively.

The said notification is amended to exclude the state Jammu & Kashmir by changing the reference for the Special category states. Thereby the Exemption limit for the persons of Jammu and Kashmir shall be INR 10 Lakhs.

GST rates under Composition Scheme

Earlier the rate of composition was based on the Notification No. 8/2017 – Central Tax, dated the 27.06.2017. To align the rates for Composition Scheme with CGST Rules, 2017,  “an amount of tax calculated at the rate specified in rule 7 of the Central Goods and Services Tax Rules, 2017” has been replaced by “an amount calculated at the rate of half percent” vide notification No. 05/2019 w.e.f. 01/02/2019. Thus an eligible registered person, whose aggregate turnover in the preceding financial year did not exceed one crore rupees (fifty lakh rupees in case of specified states), may opt to pay, an amount of tax calculated at the rate specified in rule 7 of the Central Goods and Services Tax Rules, 2017.

Amendments in CGST Rules

  • Composition Scheme: the table under rule 7 amended to specify/clarify that the same rate of 0.5% shall be applicable for the goods & services supplied by “Any other supplier eligible for composition levy under section 10 and the provisions of this Chapter”
  • Multiple Registrations in the same State:
  1. Rule 8: Proviso for specifying the persons to get the Separate GSTIN for the SEZ units has been omitted. The same had been included in the Sec 17 of the CGST amendment act, 2018;
  2. Rule 11: Amended to include the procedure option of obtaining different registrations for each of the places of business located in the same state;
  3. Accordingly, instruction 12 of FORM GST REG-01 has been amended to replace the words “Places of business” in place of “business verticals.
  • Suspension of Registration:
  1. Rule 21 A: New rule has been inserted to include the concept of Suspension of Registration;
  2. This shall be applicable for the cases where the Supplier has applied for Cancellation / as per the decision of the proper officer;
  3. Accordingly a note “Note: – Your registration stands suspended with effect from (date).” Shall be inserted in at the end of FORM GST REG-17 and FORM GST REG-20;
  • Revised Invoices, Debit/Credit Notes:
  1. Revised Invoice: Rule 53(1) has been amended to exclude Debit/Credit notes from its purview, thereby, restricting it only for revised invoices;
  2. Debit/Credit Notes: Rule 53(1A): New rule has been inserted to prescribe the contents of the Debit/Credit notes
  3. In Section 34 amendment is made to enable the registered person to issue a single or multiple credit notes or debit notes against multiple invoices.
  4. Detail of all invoices against which a single credit note or debit note has been issued shall be provided. Hence, a credit note or debit note shall still be linked with a single or multiple invoices, as the case may be.

RCM on Supplies from Unregistered Persons

RCM under GST will be applicable on supply by an unregistered person to registered person from 01/02/2019 on specified goods and services as per Notification No. 1/2019 Central Tax (Rate) dated 29.01.2019. However, the list of specified goods and services to be notified u/s 9(4) of the CGST Act is awaited. Therefore, the provision of RCM under GST would be applicable once the list of specified goods & services would be notified.

Clarification on Transitional Credit

  • It is clarified that the change in the words in Sec 140(1) from “CENVAT credit“ to “Eligible duties” doesn’t result in denial of carrying forward of the credit balance of Service tax.

It is also confirmed that any kind of Cesses levied under existing laws, including the Cess collected under customs act, shall not be allowed as transitional credit.

Last Updated: 7th February 2019
This article is contributed by:

CA Vaibhav Matta
Assistant Director

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