CBIC notified the provisions of Finance (No. 2) Act, 2019 to amend CGST Act, 2017 - Part 1

CBIC issued the Notification No. 01/2020 - Central Tax on dt. 01 Jan 2020 regarding the implementation of provisions of Finance (No. 2) Act, 2019 to amend the CGST Act, 2017.

As per Notification provisions of sections 92 to 112, except section 92, section 97, section 100 and sections 103 to 110 of the Finance (No. 2) Act, 2019 (23 of 2019) will come into force from 01 Jan 2020.

In this article we will discuss only Section-93 & 94 of Finance (No. 2) Act, 2019.

As per Section-93 of Finance (No. 2) Act, 2019 -

In section 10 of CGST Act, -

(a) in sub-section (1), after the second proviso, the following Explanation shall be inserted -

'Explanation. - For the purposes of second proviso, the value of exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount shall not be taken into account for determining the value of turnover in a State or Union territory.';

(b) in sub-section (2),-

(i) in clause (d), the word and occurring at the end shall be omitted;

(ii) in clause (e), for the word 'Council:'', the words ''Council; and'' shall be substituted;

(iii) after clause (e), the following clause (f) shall be inserted, -

'(f) he is neither a casual taxable person nor a non-resident taxable person:';

(c) after sub-section (2), the following sub-section (2A) shall be inserted, -

'(2A) Notwithstanding anything to the contrary contained in this Act, but subject to the provisions of sub-sections (3) and (4) of section 9, a registered person, not eligible to opt to pay tax under sub-section (1) and sub-section (2), whose aggregate turnover in the preceding financial year did not exceed fifty lakh rupees, may opt to pay, in lieu of the tax payable by him under sub-section (1) of section 9, an amount of tax calculated at such rate as may be prescribed, but not exceeding three per cent. of the turnover in State or turnover in Union territory, if he is not-

(a) engaged in making any supply of goods or services which are not leviable to tax under this Act;

(b) engaged in making any inter-State outward supplies of goods or services;

(c) 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;

(d) a manufacturer of such goods or supplier of such services as may be notified by the Government on the recommendations of the Council; and

(e) a casual taxable person or a non-resident taxable person:

Provided that where more than one registered person are having the same Permanent Account Number issued under the Income-tax Act, 1961, the registered person shall not be eligible to opt for the scheme under this sub-section unless all such registered persons opt to pay tax under this sub-section.”;

(d) in sub-section (3), after the words, brackets and figure 'under sub-section (1)” at both the places where they occur, the words, brackets, figure and letter 'or sub-section (2A), as the case may be,” shall be inserted.

(e) in sub-section (4), after the words, brackets and figure 'of sub-section (1)”, the words, brackets, figure and letter 'or, as the case may be, sub-section (2A)” shall be inserted.

(f) in sub-section (5), after the words, brackets and figure 'under sub-section (1)', the words, brackets, figure and letter 'or sub-section (2A), as the case may be,” shall be inserted.

(g) after sub-section (5), the following Explanations shall be inserted, namely:

'Explanation 1.- - For the purposes of computing aggregate turnover of a person for determining his eligibility to pay tax under this section, the expression 'aggregate turnover” shall include the value of supplies made by such person from the 1st day of April of a financial year up to the date when he becomes liable for registration under this Act, but shall not include the value of exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount.

Explanation 2.- For the purposes of determining the tax payable by a person under this section, the expression 'turnover in State or turnover in Union territory” shall not include the value of following supplies, namely:- -

(i) supplies from the first day of April of a financial year up to the date when such person becomes liable for registration under this Act; and

(ii) exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount.'

Section -94 of Finance (No. 2) Act, 2019 -

In section 22 of CGST Act, in sub-section (1), after the second proviso, the following proviso shall be inserted -

'Provided also that the Government may, at the request of a State and on the recommendations of the Council, enhance the aggregate turnover from twenty lakh rupees to such amount not exceeding forty lakh rupees in case of supplier who is engaged exclusively in the supply of goods, subject to such conditions and limitations, as may be notified.

Explanation.- For the purposes of this sub-section, a person shall be considered to be engaged exclusively in the supply of goods even if he is engaged in exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount.

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