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Changes made by Recent notifications issued by CBEC on 13th October 17

Ranjan Mehta 
on 16 October 2017

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In the backdrop of 22nd meeting of GST Council held on 06.10.2017 a few notifications were issued by the CBEC on 13.10.2017. Here is a draft advisory related to those notifications.

All these changes shall be effective from 13.10.2017.

Changes in the Law (CGST/IGST)

Notification No 38/2017 (Central Tax) & Notification No 09/2017 (Integrated Tax)

A few items have been notified to be included in the category of Handicraft items, which were earlier notified to be exempted from registration even in case of Inter State Supply transactions.

Notification No 39/2017 (Central Tax) & 11/2017 (Integrated Tax)

Officers of the State and Union Territories have been empowered to issue refunds u/s 54 or 55 in relation to CGST and IGST also. Earlier the respective officers were only empowered to issue the refunds. This move is to help exporters to get easy refund.

Notification No 40/2017 (Central Tax)

This notification brought in a major change in the GST Law in terms of compliance and also a big relief to MSME sector. As per this notification supplier of Goods; whose turnover during the previous financial year was less than 1.5 crore and in case of newly registered persons if the turnover is likely to be less than 1.5 crore during the current financial year; will be allowed to file returns in the manner prescribed in chapter IX of CGST Act.

This means that quarterly return feature will be brought in the law in the due course. As of now they have just notified such class of persons who will be eligible for such new return procedure (as recommended by GST Council it is to be quarterly). However such procedure is still awaited as the same needs to be brought in the law which needs amendment and parliament is not session. So there may be an ordinance issued by the Govt. for all such changes.

Important to note here is that such benefit is extended to the supplier of goods and NOT to the supplier of services. Composition dealers are already availing the facility of quarterly returns.

Further, there are probabilities that this will increase burden of large taxpayer having turnover more than 1.5 crore since taking credit from such small taxpayers may be a difficult situation since automatic credit may not be available and accounts would be required to be maintained differently.

Notification No 41/2017, 42/2017, 43/2017, 44/2017 (Central Tax)

Due Dates of filing of following forms have been extended :-


Sl. No.

Form

Purpose of Form

Old Due Date

New Due Date

1

GSTR 4

Composition Dealer’s Return

18.10.2017

15.11.2017

2

GSTR 5A

OIDAR service provider

10.10.2017

15.11.2017

3

GSTR 6

Input Service Distributor

13.10.2017

15.11.2017

4

ITC 01

Availing Inputs by persons switching from Composition to normal scheme or newly registered persons

Within 30 Days

31.10.2017


Notification No-45/2017 (Central Tax)

A few amendments have been made into the CGST Rules, 2017 vide this notification.

  • Changes in Composition Rules, new rule 3A inserted: this rule has been inserted to enable provisions related to opting composition scheme by dealers under the new enhanced limits of composition limit. This options is given the 3rd time. This rule says that the composition scheme shall be effective from the 1st day of the next month of opting for the same through furnishing form CMP-02. ITC -03 will also be required to be filed within 90 days from the effective date of composition. Rule 62 has also been amended to enable filing of GSTR-4 from the date of effective composition scheme.
  • Changes in Invoice Rules, new rule 46A inserted: As per this rule dealers supplying taxable as well as exempted goods may issue invoice-cum-bill of supply. Now there is no need to issue separate invoices for exempted and taxable goods supplied simultaneously.
  • Changes in Invoice Rules, rule 54 amended: A banking and financial company may issue a consolidated invoice at the end of the month for all the services rendered during the month.
  • A few changes have been made in the return forms to enable deemed exports.

Notification No-46/2017 (Central Tax)

Turnover limits for composition scheme have been increased to Rs. 1 crore from existing 75 Lakhs (for special category states the same has been increased to Rs. 75 Lakhs from existing 50 Lakhs). Person opting composition scheme this month can available the benefit w.e.f. 01.11.2017

Notification No 31/2017 (Central Tax Rate)

  • In various cases of works contract where rates were reduced by notification no 20/2017 and 24/2017 earlier, in cases where the contracts were related to Govts and Local authorities, contracts provided by Govt entities have also been included.
  • In cases of works contracts where more than 75% of work constituted earth work; rates are reduced from existing 12% to 5% (only in case of works contract provided by Govts, local authorities and Govt. entities)
  • Other Change in rates or other related conditions

Existing Rate of Tax

Changes

Transportation of passengers

5%

Credit of Input tax can be taken in relation to services availed for the same line of business such as renting of vehicle or passenger transport service

Leasing of Motor Vehicles

Same rate of tax which is charged on supply of such goods

Now the tax rate shall be 65% of tax rate on the supply of such type of goods, if such vehicle is purchased and leased prior to 01.07.2017

Printing services

Different rates

Where physical inputs are provided by the recipient i.e. paper etc and such inputs carry rate of tax of 6%; CGST rate has been reduced to 6%

Printing Service

Different rates

Where physical inputs are NOT provided by the recipient i.e. paper etc and such inputs carry rate of tax @6% or 2.5% or NIL; CGST rate has been reduced to 6%


Notification No 32/2017 (Central Tax Rate)

Services provided by GTA to unregistered person have been exempted. Now with this exemption GTA service providers are no longer required to be registered since all the services provided by them are either exempt or covered under reverse Charge u/s 9(3). So now they can start surrendering there registrations.

Notification 33/2017 (Central Tax Rate) and 07/2017 (Compensation Cess Rate)

Change in rate of motor vehicles: Rate of tax of motor vehicles procured prior to 01.07.2017 when resold post GST regime:- The rates have been reduced to 65% of actual rate of tax chargeable on such Motor Vehicles in GST. These changes have also been made effective in compensation cess.

Notification 35/2017 (Central Tax Rate)

Exemption to Goods: Supply of Duty credit scrips have now been exempted from GST.

Notification 36/2017 (Central Tax Rate) & 32/2017 (Integrated Tax Rate)

Exemption from reverse charge u/s 9(4), CGST Act, 2017 and 5(4) of IGST Act, 2017: A very welcome step for all the dealers. All the registered persons have been exempted from the applicability of reverse charge u/s 9(4) i.e. goods or services procured from unregistered persons till 31.03.2018.

Now, no reverse charge will be required to be paid for procurement from unregistered persons, however the same will be continued in case of goods or services notified u/s 9(3), e.g. Advocates, Govt services, GTA Services etc.

Important to note that this change shall be effective from the date of notification i.e. 13.10.2017. However we would advise to give the effect from 14.10.2017 to avoid any litigation.

Notification 37/2017 (Central Tax Rate)

GST Rates have been changed for various goods, for detailed rate structure, kindly see the attached notification.

Notification No 10/2017 (Integrated tax)

Exemption from registration to Interstate service providers: Service providers engaged in providing taxable supplies have been exempted from registration if the turnover does not cross the mandatory registration threshold of Rs. 20 Lakhs.

Earlier all the suppliers making interstate supplies were required to get themselves registered irrespective of their turnover, in terms of provisions of sec 24(i).

However, this benefit is not extended to supplier of goods.


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