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8 GST Rule Updates You Need to Know Before 1st April 2019

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CBIC has recently announced many updates to the existing GST rules in various meetings and through notifications. These are going to be in effect within 15 days from 1st April 2019. We have brought a compilation of all the updates for our users:

  1. Notifications:
  2. GST Registration Exemption:

W.e.f. 1st April 2019, any person who is engaged in exclusive supply of goods and whose aggregate turnover in the financial year does not exceed forty lakh rupees is exempt from obtaining the registration under GST Act except for the following:

  1. Persons required to take compulsory registration under section 24
  2. Person engaged in the supplies of Ice cream and other edible ice, whether or not containing cocoa , Pan masala and All goods, i.e. Tobacco and manufactured tobacco substitutes (24)
  3. Persons engaged in making intra-state supplies in the States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura, Uttarakhand
  4. Persons exercising option under the provisions of sub-section (3) of section 25, or such registered persons who intend to continue with their registration

[Notification 10/2019-Central Tax dt. 07-Mar-2019] & [Notification 02/2019-Union Territory Tax dt. 07-Mar-2019]

  1. Due Date of filing GSTR-1:

The due date for filing GSTR 1 has been notified as follows:

Period

Turnover Upto

Due Date

April 19 – June 19 (Quarterly)

1.5 Crore

31.07.2019

Apr-19

Above 1.50 Crore

11.05.2019

May-19

Above 1.50 Crore

11.06.2019

Jun-19

Above 1.50 Crore

11.07.2019

[Notification 11 & 12/2019-Central Tax dt. 07-Mar-2019]

  1. Due date of filing GSTR-3B:

The due date for filing GSTR 3B for all the registered person is notified as follows:

S.NO.

Month

Due Date

1

Apr-19

20.05.2019

2

May-19

20.06.2019

3

Jun-19

20.07.2019

[Notification 13/2019-Central Tax dt. 07-Mar-2019]

  1. Threshold limit of composition scheme:

Threshold limit of composition scheme has been increased which has to be opted from 01-04-2019.

Taxable Person

Turnover

Taxable person located in Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Uttarakhand

75 Lacs

Taxable person located in states other

than above state

1.50 Crore

[Notification 14/2019-Central Tax dt. 07-Mar-2019]

  1. New composition scheme for SME and MSME:

New Composition has been announced for SME and MSME sector First supplies of goods or services or both upto an aggregate turnover of fifty lakh rupees made on or after the 1st day of April in any financial year, by a registered person.  For availing this scheme following condition need to be satisfied:-

  1. Supplies are made by a registered person, -
    1. whose aggregate turnover in the preceding financial year was fifty lakh rupees or below;
    2. who is not eligible to pay tax under sub-section (1) of section 10 of the said Act;
  • who is not engaged in making any supply which is not leviable to tax under the said Act;
  1. who is not engaged in making any inter-State outward supply;
  2. who is neither a casual taxable person nor a non-resident taxable person;
  3. who is not engaged in making any supply through an electronic commerce operator who is required to collect tax at source under section 52; and
  • who is engaged in making the supplies of Ice cream and other edible ice, whether or not containing cocoa ( 2105 00 00), Pan masala (2106 90 20) and All goods, i.e. Tobacco and manufactured tobacco substitutes (24).
  1. Where more than one registered persons are having the same Permanent Account Number, issued under the Income Tax Act, 1961(43 of 1961), central tax on supplies by all such registered persons is paid at the rate specified under this notification.
  2. The registered person shall not collect any tax from the recipient on supplies made by him nor shall he be entitled to any credit of input tax.
  3. The registered person shall issue, instead of tax invoice, a bill of supply as referred to in clause (c) of sub-section (3) of section 31 of the said Act with particulars as prescribed in rule 49 of Central Goods and Services Tax Rules.
  4. The registered person shall mention the following words at the top of the bill of supply, namely: - ‘taxable person paying tax in terms of notification No. 2/2019-Central Tax (Rate) dated 07.03.2019, not eligible to collect tax on supplies’.
  5. The registered person opting to pay central tax at the rate of three percent under this notification shall be liable to pay central tax at the rate of three percent on all outward supplies specified in column (1) notwithstanding any other notification issued under sub-section (1) of section 9 or under section 11 of said Act. 7.
  6. The registered person opting to pay central tax at the rate of three percent on inward supplies on which he is liable to pay tax under sub-section (3) or, as the case may be, under sub-section (4) of section 9 of said Act at the applicable rates.

Explanation: For the purposes of this notification, the expression “first supplies of goods or services or both” shall be for the purposes of determining eligibility of a person to pay tax under this notification, include the supplies from the first day of April of a financial year to the date from which he becomes liable for registration under the said Act but for the purpose of determination of tax payable under this notification shall not include the supplies from the first day of April of a financial year to the date from which he becomes liable for registration under the Act.

In computing aggregate turnover in order to determine eligibility of a registered person to pay central tax at the rate of three percent under this notification, value of supply of exempt services 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.

[Notification 02/2019-Central Tax (rate) dt. 07-Mar-2019] & [Notification 02/2019-Union Territory Tax (rate) dt. 07-Mar-2019]

  1. Circulars
  1. Sales Promotions Schemes:

Following clarification has been issued w.r.t. doubts related to treatment of sales promotion scheme under GST:

Transaction Type

Supply

Value

ITC

Free Samples and

Gifts given to other

than distinct entity

and related person

No Supply

NIL

No ITC to be availed and reversal 42, 43

needs to be made

Free Samples and

Gifts given to distinct

entity and related

person

Supply

Valuation in Accordance to Rule

28 of CGST Rules 2017

ITC to be availed

on all the inputs,

input services and

capital goods

Buy one get one free

offer when goods or

services are different

or same

One Supply /Mixed Supply /Composite

Supply as the case may be

Taxable value to be

ascertained in accordance to Section 15 read with Valuation

provisions

ITC to be availed on all the inputs, input services and capital goods

Discounts including ‘Buy more,save more’ offers ((if shown

on invoice itself)

 

Supply

Valuation will be

after discounts

ITC to be availed on all the inputs, input services and capital goods

Staggered Discount

Determined established before or

at the time of supply

Supply

Valuation will be

after discounts

ITC to be availed on all the inputs, input services and capital goods

Discount offered by

way of Credit note

after time of supply

Original Supply

Tax liability can be

reduced only after

ensuring recipient

has reversed the

IRC

 

Secondary Discounts

offered subsequently

even if not known

prior to supply

Original Supplies

Value to be

considered without

discount

No impact on availability or otherwise of ITC in the hands of supplier in this case.

[Circular-No 92/11/2019- GST dt. 07-Mar-2019]

  1. Nature of supply of Priority Sector Lending Certificates (PSLC)

GST on PSLCs for the period 1.7.2017 to 27.05.2018 will be paid by the seller bank on forward charge basis and GST rate of 12% will be applicable on the supply as per Circular No. 62/36/2018-GST dated 12.09.2018

GST on PSLC trading on reverse charge basis from 28.05.2018 onwards to be paid by the buyer bank as per Notification No. 11/2018-Central Tax (Rate) dated 28.05.2018

Nature of supply of PSLC between banks may be treated as a supply of goods in the course of inter-State trade or commerce. Accordingly, IGST shall be payable on the supply of PSLC traded over e-Kuber portal of RBI for both periods i.e 01.07.2017 to 27.05.2018 and from 28.05.2018 onwards.

However, where the bank liable to pay GST has already paid CGST/SGST or CGST/UTGST as the case may be, such banks for payment already made, shall not be required to pay IGST towards such supply.

[Circular No. 93/12/2019-GST dt. 08-Mar-2019]

  1. TCS Exclusion to compute GST liability:

Corrigendum to Circular No. 76/50/2018-GST dated 31st December, 2018 issued vide F.No. CBEC- 20/16/04/2018-GST- Reg. TCS amount would be excluded from the value of goods for computing GST liability.

The CBDT has clarified that TCS is not a tax on goods but an interim levy on the possible “income” rising from the sale of goods by the buyer In a relief to buyers of high value cars and jewellery, the Central Board of Indirect Taxes and Customs (CBIC) has said that the tax collection at source (TCS) amount would be excluded from the value of goods for computing GST liability.

What is the correct valuation methodology for ascertainment of GST on Tax collected at source (TCS) under the provisions of the Income Tax Act, 1961?

  1. Section 15(2) of CGST Act specifies that the value of supply shall include “any taxes, duties cesses, fees and charges levied under any law for the time being in force other than this Act, the SGST Act, the UTGST Act and the GST (Compensation to States) Act, if charged separately by the supplier.”
  2. For the purpose of determination of value of supply under GST, Tax collected at source (TCS) under the provisions of the Income Tax Act, 1961 would not be includible as it is an interim levy not having the character of tax.

IRIS Business is a leading GST Suvidha Provider (GSP) providing an easy and efficient solution for GST (IRIS Sapphire) and E-way bill (IRIS Topaz) compliance. To have your GST queries solved and to know more about our solution, please contact us at support@irisgst.com

About Manoj Jain

Manoj Jain, a CA and CS, has been working with IRIS for over 8 years and is currently one of the key subject matter experts for IRIS’ GST compliance offerings. He also has been guiding the clients for GST law related matters. Before GST he was handling US compliance analyzing US financial statements and reviewing XBRL filings for US and India market. He enjoys listening to music and traveling.

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