GST 2016 Taxation

List of Proposed Amendment in GST law

Below are the some important amendment proposed by GST council GST law which will overhauls most of the current issues faced by tax payer including amendment in Credit, debit note simplified return and services provided by composite dealers. Comment are invited on proposal by 15.07.2018

Activities of a race club

Changes are being made to ensure that all activities related to a race club are included. The term “services” in this clause leads to ambiguity, as actionable claims have been defined as ‘goods’ in the CGST Act.

Local authority-article 371J of the constitution

Article 371J of the Constitution grants special status to 6 backward districts of Karnataka-Hyderabad region. Under this article, the President is empowered to establish a separate Board to ensure equitable distribution of funds in the State’s budget to meet the developmental needs of the region. It is being added now based on the request received from the State of Karnataka.

2 (102) Explanation-For the removal of doubts, it is hereby clarified that the expression “services” includes facilitating or arranging transactions in securities

ACTIVITIES TO BE TREATED AS SUPPLY OF GOODS OR SUPPLY OF SERVICES

Activities will not be treated as supply merely because they fall in Schedule II of Section 7 of CGST Act, Activity in schedule II will be taxable only if it satisfy the criteria of Sec-7 clause a,b and c.

Schedule-I

  1. Import of services by a taxable person from a related person or from any of his other establishments outside India, in the course or furtherance of business.

This will ensure that import of services by entities which are not registered under GST (say, they are only making exempted supplies ) but are otherwise engaged in business activities is taxed when received from a related person or from any of their establishments outside India.

Schedule III (New) Exclusion of supply of warehoused goods to any person before clearance for home consumption from levy of tax

It is sought to ensure that there is no double taxation of transactions where supply of goods occurs in the course of high sea sales and sale of warehoused goods, before clearance for home consumption.

Sec9(4) It is proposed to take an enabling power for the Government to notify a class of registered persons who would be liable to pay tax on reverse charge basis in case of receipt of goods from an unregistered.

Sec 10 (1) and (2): Under Composition scheme a person who opts to pay tax under clause (a), clause (b) or clause (c) may supply services of value not exceeding ten percent of turnover in the preceding financial year in a State or Union territory or five lakh rupees, whichever is higher.

Bill TO Ship TO concept extended to Services also

Sec 16(2)(b): Situations, for the purposes of availing of ITC on goods by the registered person, a deeming provision is present as an Explanation to section 16(2)(b) vide which the registered person is deemed to have received the goods where the goods are delivered by the supplier to a recipient or any other person on the direction of the said registered person. It is now proposed to provide this deeming fiction in case of services as well which

Sec 16(2) Second Proviso: No interest on credit reversal due to non-payment to the vendor within 180 days

Sec17(5): Credit for use of Motor vehicle will be allowed for:

for transportation of money for or by a banking company or a financial institution

(aa) services of general insurance, servicing, repair and maintenance in so far as they relate to motor vehicles, vessels and aircraft for which the credit is not available in accordance with the provisions of clause (a);

Provided that the input tax credit in respect of such goods or services or both shall be available, 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.

Assam has been excluded from the category of the special status state.

e-Commerce Operator having a turnover of less than INR 20 lakhs and not required to collect tax at source will not be mandatorily required to register.

Credit/Debit note: Proposed to allow issuance of consolidated credit/debit notes in respect of multiple invoices issued in a Financial Year without linking the same to individual invoices.

Revision of return : It is proposed to allow filing of amendment return to correct inadvertent mistakes in the GST return for the earlier period

Procedure for recovery of ITC from the recipient where the transaction is reported but no tax is paid by the supplier

Credit Utilization pattern: Utilization of CGST / SGST for payment of IGST will be allowed only after exhausting the balance of IGST

Appeal Filling: A ceiling of INR 25 crores is provided for deposit for preferring any appeal before appellate authority and INR 50 crores for filing an appeal before appellate Tribunal

Goods sent for Job Work: The return period of one year for input and three years for capital goods can be extended by commissioner.

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