New Year resolutions of GST?


Arjun (Fictional Character): Krishna, New Year celebration and resolutions for the year 2019 are thought over by all. Many new notifications, circulars, orders, etc. in GST are issued on 31-12-2018. What are new changes in GST?

Krishna (Fictional Character): Arjuna, Government brought some changes in the law, rules, rates etc. under GST w.e.f. 1-1-2019. Also, some clarifications are provided for certain issues. Let’s discuss it. Some are useful and some are very confusing.

Arjun: Krishna, What are the notifications issued in relation with GST Rules?

Krishna: Arjuna, Following are certain provisions for which notifications are issued:

  1. Extension in the due date up to 31st March, 2019 of GSTR 3B and GSTR 1 from July, 2017 to February, 2019 for the taxpayers who have completed their migration process now who received provisional IDs but could not complete the migration process earlier.
  2. Exemption for supplies made by Government Departments and PSUs to other Government Departments and vice-versa from GST TDS.
  3. Extension in the due date of GSTR 9 Annual return and GSTR 9C GST Audit up to 30th June, 2019.
  4. There are certain changes in Form GST RFD 01 of GST Refund.
  5. Extension in the due date of Form GST ITC 04 of Job worker upto 31st March, 2019.
  6. One of most important change is that No person shall be allowed to furnish the information in PART A of FORM GSTEWB-01 (E-way bill) in respect of a registered person who,- (a) being a person under composition scheme, has not furnished the returns for two consecutive tax periods; or (b) being a person as a normal taxpayer, has not furnished the returns for a consecutive period of two months.
  7. Waiver of the late fees payable for GSTR 3B, GSTR 1, and GSTR 4 for the months/quarters from July, 2017 to September, 2018 if filed between the periods from 22nd December, 2018 to 31st March, 2019. So what about the late fees already paid by the taxpayers, only government knows.  This is not a welcome move. Its like a student coming late in class is exempt from doing homework.

Arjun: Krishna, are there any changes in the GST rates w.e.f. 1-1-2019?

Krishna: Arjuna, Yes, following are certain changes in the GST rates:

  1. 5% GST will be levied for Footwear of sale value not exceeding Rs.1000 per pair. Earlier the limit was Rs. 500 per pair.
  2. Exemption is provided for Vegetables (uncooked or cooked by steaming or boiling in water)
  3. 5% GST will be applicable for Transportation of passengers, with or without accompanied baggage, by air, by non-scheduled air transport service or charter operations, engaged by specified organizations in respect of religious pilgrimage (For eg: Haj) facilitated by the Government of India, under bilateral arrangement. Provided that credit of input tax charged on goods used in supplying the service has not been taken
  4. Services provided by a goods transport agency, by way of transport of goods in a goods carriage, to, -(a) a Department or Establishment of the Central Government or State Government or Union territory; or (b) local authority; or(c) Governmental agencies is included in the Exemption list. Also the same is excluded from RCM liability u/s 9(3).
  5. The RCM u/s 9(3) would be applicable for the services of Security (services provided by way of supply of security personnel) provided to a registered person provided by any person other than a body corporate. 

Arjun: Krishna, Is there any clarification provided through the circulars issued?

Krishna: Arjuna, following clarification provided through the circulars issued:

  1. If GST return filed late then penalty under the provisions of section 73(11) of the CGST Act is not payable. It is further clarified that since the tax has been paid late in contravention of the provisions of the CGST Act, a general penalty under section 125 of the CGST Act may be imposed after following the due process of law.
  2. It is clarified that provisions of Sec 15(2) of CGST, taxable value for the purposes of GST shall include the TCS amount collected under the provisions of Income Tax Act since the value to be paid to the supplier by the buyer is inclusive of the said TCS. This is going to effect on Cars value of 10 Lakhs and more.
  3. Also, the clarification given for the Denial of composition option by tax authorities and effective date thereof through the circular.
  4. One important circular is issued for providing clarification on refund related issues. So in that clarification in relation with Physical submission of refund claims with jurisdictional proper officer, Calculation of refund amount for claims of refund of accumulated Input Tax Credit (ITC) on account of inverted duty structure, Issues related to refund of accumulated Input Tax Credit of Compensation Cess, etc is given.
  5. Circular regarding the clarification of Embroidered fabric sold in three pieces cloth for lady suits attracts 5% GST is issued.

Arjun: Krishna, Is there any order issued by the Government at the year end?

Krishna: Arjuna, Yes an order relating to claiming the ITC u/s 16(4) up to 31st March, 2019 for the unclaimed ITC of 1st July 17 to 31st Mar 18 is passed. This is a welcome move. But the same needs to be done in returns of the current period and no provision to claim it is given in Annual return. Further non-availability of revised return is going to create a big hurdle to taxpayers.

Arjun: What one should learn from this?

Krishna: Arjuna, It is the beginning of the New Year. Many issues in GST needs to be resolved by Govt. But the Issue of Late fees is wrongly handled, the honest taxpayer is punished and the latecomer is rewarded by waiving late fees. Such type of amendments are not prudent tax reforms.

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CA Umesh Sharma 
on 07 January 2019
Published in GST
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