Latest GST changes from the GST council meeting – 31st meeting

Highlights of 31st GST Council meeting

1. 1. GST 2.0 to will be implemented on a trial basis from April 2019 and  it will be implemented by July 1st, 2019
   2. E-way bills norms made strict- Taxpayers cannot generate e-way bill if they do not file GST returns for two tax periods continuously.
   3. Announcements on Present GST return filing*
      • Late fee waiver for all the GST returns yet to be filed as on 22nd December 2018 up to 31st March 2019, for the months July 2017 up to September 2018.
      • Claiming the Input tax credit for Financial Year 2017-18 is allowed up to GSTR-3B filing due date for the month of March 2019, subject to conditions.
      • There is going to be a single tax ledger for each Tax head. For e.g. – The three tax ledgers i.e., Credit, Liability, and Cash will be merged into one ledger for each tax head such as IGST, SGST / UTGST CGST, and Cess.
   4. Simplified Form GSTR-9 & GSTR-9C*
      • HSN code may be declared only for those inward supplies whose value independently accounts for 10% or more of the total value of inward supplies.
      • Any additional payments to be made have to be done in cash through the FORM GST DRC-03.
      • Input Tax Credit cannot be availed through FORM GSTR 9 and FORM GSTR 9C.
      • Verification by a taxpayer who is uploading the reconciliation statement would also be included in FORM GSTR-9C.
   5. Recommendation for due date extension*
      • The due date for filing of GSTR-9 and GSTR-9C, after GST Audit, to be extended till 30 June 2019.
      • GSTR-8 to be filed by e-commerce operators for the period of 1st October 2018 to 31st December 2018 will be extended to 31st January 2019.
      • Filing of ITC-04 for the months of July 2017 to December 2018 to be extended to 31st March 2019.
   6. Rationalization of GST rates*
      • No change in the tax rate of Cement: 13 items of automobile parts, 8 items of the cement industry remain the same under 28% GST Slab.
      • Third party insurance lowered to 12% GST Slab from the earlier 18%.
      • 6 goods and 1 service have been removed from the 28% GST Slab.
      • GST for cinema tickets being less than Rs 100 has a reduced the tax rate from 18% to 12% GST Slab, for the tickets equal to or above Rs 100, GST tax rate has been reduced from 28% to 18%.
      • Lithium-ion batteries charges, video games consoles, small sport related items, accessories for carriages for disabled have been removed from 28% slab.
      • Items claimed to be used by the upper segments such as Air conditioners, dishwashers will remain the same at 28% GST Slab.
      • Bank charges (savings bank), and Pradhan Mantri Jan Dhan Yojana exempted from GST.
      • GST rate on special flights for pilgrims slashed for the economy to 5 percent and business class to 12 percent. These include travel by non-scheduled / chartered operations for religious pilgrimage, which is facilitated by the Government Of India under bilateral agreements.
   7. Others
      • A single authority for disbursement of the refund amount sanctioned by either the Centre or the State tax authorities will be implemented on a pilot basis. The details will be finalized shortly.

NOTE: *The changes mentioned above will come into effect only once notified by CBIC / GSTN.

Highlights from 28th GST council meeting

GST returns filing process simplified

• Quarterly filing for small taxpayers having turnover below Rs. 5 Cr on a quarterly basis against the earlier limit of 1.5 crores. However, these taxpayers have to pay the taxes monthly through a challan.
• The monthly returns to be filed by taxpayers have also been simplified. The new GST return would be simple with two main tables. In one table, the taxpayer would have to report sales and in another report purchases for availing input tax credit. The new return filing system would be based on Invoice “UPLOAD – LOCK – PAY TAX”.
• The amendment shall be carried out by filing a return called amendment return. Also, payments if any would be allowed to be made through the amendment return as it will help save interest liability for the taxpayers.
• This move by the government will make the compliances easy and improve the ease of doing business – The filing burden is reduced for more than 93% taxpayers, as the turnover limit has been hiked from Rs. 1.5 crores to Rs 5. Crores.
• A new facility is recommended where the taxpayers can file the NIL returns by sending SMS

About GST registrations

• The taxpayers can opt for multiple GST registrations within a State or Union territory with respect to multiple places of business located within the same State / Union territory
• GST registration mandatory for e-commerce operators only on those non – exempt goods.
• Threshold limit for exemption of GST increased to 20 lakhs from earlier 10 lakhs for these states – Sikkim, Arunachal Pradesh, Himachal Pradesh, Uttarakhand, Assam, and Meghalaya.

*This may be subject to amendment in law.

Reverse charge Mechanism deferred

• RCM deferred for a year till 30th September 2019.
• In the meantime, an amendment is proposed to Levy GST on reverse charge mechanism only on specified goods in case of certain notified classes of registered persons who receive supplies from unregistered suppliers.

Composition dealers to be allowed to supply services

• Limit (other than restaurant services), for up to a value not exceeding 10% of turnover in the preceding financial year, or Rs. 5 lakhs, whichever is higher.

Transaction to be treated as no supply (no tax payable)

• Supply of goods which are warehoused to any person before clearance for home consumption
• In case of high sea sales if there is any supply of goods
• Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India

Important announcement on invoicing

• Registered persons may issue consolidated credit/debit notes in respect of multiple invoices issued in a Financial Year.

Scope of Input Tax Credit widened

• Most of the transactions or activities specified in Schedule III
  1. Motor vehicles for transportation of persons having the seating capacity of more than 13 (including the driver), vessels and aircraft.
  2. Motor vehicles for transportation of money for or by a banking company or financial institution;
  3. Services of general insurance, repair and maintenance in respect of motor vehicles, vessels and aircraft on which credit is available; and
  4. Goods or services which are obligatory for an employer to provide to its employees, under any law for the time being in force.
• In case, the recipient fails to pay the due amount to the supplier within 180 days from the date of issue of invoice, the ITC availed by the recipient will be reversed, but the liability to pay interest is being done away with in that case.
• The Commissioner to be empowered to extend the time limit for return of inputs and capital sent on job work, up to a period of 1 or 2 years, respectively.
• If the payment is received in Indian rupee or INR the supply of services to qualify as exports, where permitted by RBI
• Place of supply in case of job work of any treatment or process done on goods temporarily imported into India and then exported without putting them to any other use in India, to be outside India.
• Recovery can be made from distinct persons, even if present in different State / Union territories.
• The order of cross-utilization of input tax credit is being rationalized. You need to wait for the announcement for the clarity of this.

Read more on Input Tax Credit

Transporters to take note of e-way bills compliance

• In the next 6 months as the RFID readers or tags to be implemented, this may relieve the transporters from waiting at checkposts.
• Standard operating procedure to be adopted to help the transporters from unnecessary hardship at checkposts

Read more on E-way bill

Highlights from 27th GST council meeting 

Simplified return filing

• GST council approved easier return filing framework. The software for the new filing system will be put in place in six months.
• There will be one return per month for taxpayers excluding a few exceptions like composition dealers and nil taxpayers.

Unidirectional Flow of invoices

• There will be a unidirectional flow of invoices uploaded by the seller anytime during the particular month which would be a valid document for availing Input Tax credit by the buyer.
• Invoices for the B2B transaction shall need to use HSN at 4 digit level or more to achieve uniformity in the reporting system.

Easy IT interface

• The dealers of B2B will have to fill the invoice wise details if the outward supply made by them, based on which the system will calculate his / her tax liability.
• The taxpayer shall have a user-friendly IT interface and an offline tool to upload the invoices.

No Automated reversal of credit

• No Automatic reversal of input tax credit from a buyer on non-payment of tax by the seller.
• In case of default payment of the tax, recovery shall be made from the seller.

Due process for the recovery and reversal

• Recovery of tax or reversal of ITC will be through a due process of issuing notice and order.
• The due process will be online and automated to lessen human interface.

Supplier side control

• In case of default payment of the tax by the seller above the threshold amount to pass the ITC shall be blocked to control the misuse of ITC facility.
• Analytical tools would be used to identify such transactions at the earliest and prevent the loss of revenue.

Transitions

• The current arrangement of GSTR-3B and GSTR-1 will continue.
• The new return will have the facility for invoice-wise data upload and also a facility for claiming ITC on self-declaration basis, as in case of GSTR 3B now.
• The dealer will be fed with information about the gap between the credit available to them as per the invoices uploaded by the sellers and the provisional credit claimed by them.

The content of return and implementation

• Simplification of the return will be by reducing the content required to be filled in the return.
• Government is eager to introduce the easier return design at the earliest to reduce the compliance burden on the trade.

Highlights from 26th GST council meeting 

• E-way Bill
  • Implementation from April 1, 2018 for inter-state movement of goods.
  • Implementation of intra-state e-way bill from April 15, 2018 in a staggered manner (States to be divided into 4 lots to execute the staggered rollout). The entire country to be covered by June 1.
  • Generation and carrying of e-way bill for goods above Rs. 50,000 mandatory.
• GSTR filing
  • Existing system of filing returns to continue for another 3 months i.e., till June 2018. This means, filing of GSTR-1 and GSTR-3B will be continue as per current norm.
• Reverse Charge Mechanism
  • It will not be applicable till June 2018.
• TDS & TCS applicability
  • It has been put forward until 30th June 2018 pending procedural
• GST for exporters
  • They will continue with the current exemption till 1st Oct 2018 by which time an e-Wallet scheme should be in place.

Highlights from 25th GST council meeting held on 18th January 2018

• Late fee reduction
  • Late fees amount decreases to Rs. 50 per day for GSTR-1, GSTR-5, GSTR-5A, and GSTR-6 . In case of Nil return filed for GSTR-1, GSTR-5, GSTR-5A late fee decreases to Rs. 20 per day.
• Cancellation of registration by voluntary registrants can be applied before the expiry of 1 year from the date of registration.
• Cancellation of registration (REG – 29) by migrated taxpayers extended till 31st March 2018.
• The E-way bill portal will shift to ewaybillgst.gov.in on the successful implementation of e-Way bills.
• Certain modification to e-way bill rules to be notified soon.
• Acceptance of recommendations made by Handicraft committee: The desicion of rates to come later.
• 29 Handicraft items put under 0% slab. There is also a reduction in GST rates for few agricultural products.
• GST Rates slashed for 29 Goods and 53 Services. These rates will come into effect from 25th January 2018. A few more items may be included to the list.
• The Council also discussed the process to make return filing simpler. Businesses at present have to file GSTR-3B as well as GSTR-1, which is the final invoice wise sales returns. Finance minister Arun Jaitley indicated that filing one return may be the only requirement going forth.
• Finance minister Arun Jaitley said the panel at its next meeting may also consider bringing under the Goods and Services Tax purview items like the petroleum and real estate which are currently outside the new regime.
• Rs 35,000 crore of Integrated-GST will be provisionally divided between the central and states.

Related:

• All the decisions related to the 25th GST council meeting is here.
• The new GST rates from the 25th council meet is here.

Highlights from 24th GST council meeting held on 16th December 2017

• E-way bill system testing continues until January 25, the compulsion of loading will be from Feb.
• 15 states agree on the intra-state e-way bill.
• From 16th Jan 2018, the e-way bill rules will roll out on a trial basis.
• The e-way bill will implement in India from 1st Feb 2018 for inter-state transport
• The states can opt to follow the e-way bill system for intra-state transport anytime between 1st Feb to 1st June 2018.
• From 1st June 2018 e-way bill rules for intra-state transport will uniformly apply to all states.