Arjuna (Fictional Character): Krishna, Happy Janmashtami. The festival of Lord Krishna’s Janmashtami is being celebrated all over the country with glee. Recently the government has brought in the amendments in GST. So joyfully what about "Dahihandi" in GST?
Krishna (Fictional Character): Arjuna, to break the Dahihandi, human pyramids are formed, so that the sweet Dahi (yogurt) and rewards can be enjoyed. Similarly the Government is forming pyramids so that the taxpayers can enjoy the sweets of GST.
Arjuna: Krishna, What major changes have been made to the GST Act?
Krishna: Arjuna, earlier GST Council had proposed many important changes to the Act, from which maximum changes recommended, have received the Consent. These major amendments have been notified in the Official Gazette published on 30th August, 2018.
Arjuna: Krishna, what Major Changes have been made?
Krishna: Arjuna, The official Gazette published have the amendments in relation to –Definition of supply, Input Tax credit, Refund, Registration, Issuance of debit/credit note, Cross utilization of credit, also amendments to schedules under CGST Act have been made.
Arjuna: Krishna, as the base of pyramid is the most important, similarly in GST ITC is the base which is the most important layer if the sweets of GST are to be enjoyed. What amendments in relation to Input Tax credit have been made?
Krishna: Arjuna, truly said, ITC is one of the important layer in pyramid of GST.
the scope of ITC availability have been widened so that the taxpayers can enjoy this “Dahihandi”, the following changes have been made-
1. Input Tax Credit in relation to Passenger Vehicle having seating capacity of more than 13 , used for other than Personal purpose would be allowed
Due to this input tax credit would now be available in respect of dumpers, work-trucks, fork-lift trucks and other special purpose motor vehicles when used for other than personal purpose.
For ex. If a company purchases a bus for its employees conveyance, the ITC of tax paid on such bus purchased would now be available as its more than 13 seater and also not used for personal purpose
2. If ITC is allowed for purchase of motor vehicle as above then , ITC in respect of services of general insurance, servicing, repair and maintenance in respect of those motor vehicles, vessels and aircraft would also be allowed.
3. ITC is not available in respect of membership of a club, health and fitness center, travel benefits to employees on vacation such as leave or home travel concession etc.
But now it has been amended, to allow ITC in respect of such goods or services or both, where the provision of such goods or services or both is obligatory for an employer to provide to its employees under any law for the time being in force.
4., Input tax credit on account of State tax shall be utilized towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax.
That means to say that credit of SGST can be utilized to pay liability under IGST only when CGST credit is not available to knock off IGST liability.
5. Taxpayer would be able to utilize credit on account of CGST, SGST/UTGST, only after exhausting all the credit on account of IGST available to them.
Arjuna: Krishna, What lesson the taxpayer should take from this?
Krishna: Arjuna, taxpayer should make the pyramid (GST) by following the laws. The one who follows it will get the fruit otherwise the pyramid will collapse. Last year, dahihandi of GST was launched at too much height. But gradually, the government reduced the height of dahihandi by reducing tax rates, postponing RCM, removing taxability of advances of goods, etc to make it achievable. In this year, to resolve the queries, multiple stages of amendments have been brought. So the Government is making law more liberal and setting up a friendly relation between the taxpayers and the GST law, so that taxpayers would happily enjoy the Sweet Dahi of “GST Dahihandi”.