GSTZen

Chapter 5

Transition Provisions

This amendment is retrospective and in applicable w.e.f 1st July 2017.

  • As per the CGST Act transitional credit of cesses like Krishi Kalyan Cess, Education Cess, Secondary and Higher Education Cess etc. would be available.

  • However through a retrospective amendment, such credit has now been barred.

  • New proviso has been inserted to allow the extension of the time limit for receiving back the goods sent on job work.

  • The time period of 1 year or 3 years may be extended on approval of the Commissioner for a further period not exceeding one year or two years respectively.

Relevant date in case of refund of unutilised credit – 54(2)

  • GST Refunds:
  • Relevant date for filing refunds in case of unutilized ITC - Amendments are proposed under explanation 2(e) to Section 54 of the CGST Act to prescribe that the relevant date in the case of refund of unutilised ITC arising out of inverted duty structure, shall be the due date for furnishing of return under section 39 for the period in which such claim for refund arises.
  • Impact
  • As per this amendment the relevant date for calculation of time period for refund of unutilised ITC shall henceforth be the due date for furnishing the return under section 39 for the period in which the claim arises.

  • This amendment has been bought to remove the contradiction involved between section 54(3) and explanation 2(e) of Section 54 which used to earlier provide two different time periods for calculation of relevant date.

Service Exports in INR

  • Refunds in case of export of services –
  • Amendments are proposed under explanation 2(c) to Section 54 of the CGST Act which allows receipt of payment in Indian rupees, where permitted, by the RBI in case of export of services since particularly in the case of exports to Nepal and Bhutan, the payment is received in Indian rupees as per RBI regulations.

  • In this respect, the provisions of Section 2(6)(iv) of the IGST Act are also being amended to provide that services shall qualify as exports even if the payment for the services supplied is received in Indian rupees as per RBI regulations.

Tax Recovery and Pre-Deposit

  • 79 (4) Recovery of Taxes determined:
  • Can be made from distinct persons of the defaulter.
  • Pre-deposits for filing an appeal to Appellate Authority and Appellate Tribunal:
  • It is proposed under Section 107(6) of the CGST Act to put a ceiling on the limit of the amount to be deposited before filing an appeal to the appellate authorities which is 10% of the disputed tax amount subject to maximum limit of Rs.25 crores.

  • Further, it is also proposed under Section 112(8) of the CGST Act, the maximum amount to be deposited to file appeal from the appellate authority to appellate tribunal is 20% of the disputed tax amount along with the amount deposited u/s 107(6) subject to maximum of Rs. 50 crores.

Increase in Time Limit for Penalty u/s129

  • Detention, seizure and release of goods and conveyances in transit:
  • New amendment in the CGST Amendment Bill seeks to increase the time limit before which proceedings under Section 130 can be initiated from seven to fourteen days.

Time Limit for Jobwork Returns.

  • 143(1)
  • Provided that the period of one year or three years, as the case may be, may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding one year and two years respectively
  • Impact
  • New proviso has been inserted to allow the extension of the time limit for receiving back the goods sent on job work.

  • The time period of 1 year or 3 years may be extended on approval of the Commissioner for a further period not exceeding one year or two years respectively.

  • The proviso has been inserted because some job work processes cannot be completed within 1 year (such as hull construction, fabrication of vessels etc.

GST Amendment Act 2018

  • place of supply of service of transportation of goods in case of export of goods from India shall be the place of destination of such goods.

  • Currently the place of supply is the location of the recipient.

  • It is proposed to allow acceptance of receipts in Indian currency for export of services, wherever it is permitted by RBI u/s. 2 (6) (iv).

GST Amendment Act 2018

  • Proposed changes in the IGST Act
  • The reference to Panchayat under Article 243G is sought to be added in the definition of Governmental authority in the Explanation to 2(16).

  • It is proposed u/s 12 (8) that the transporters located in India transporting goods outside the Indian territory would not be liable to pay IGST as a place of supply is outside India and would amount to an export. Issues in relation to Sec 7(5). Want of foreign currency to treat it as “Exports ?

  • It is proposed under Proviso to Section 13(3)(a) that no tax liability shall be imposed on the job work that is done on the goods imported and then exported.

  • Section 20 - The IGST Amendment Bill prescribes the maximum ceiling of INR 50 crores/ 100 crores as pre-deposit for filing appeal to Appellate Authority/ Appellate Tribunal respectively. The amendment is made in line with amendments proposed in Section 107(6) and 112(8) of the CGST Act, 2017.

GST Amendment Act 2018

  • here was no requirement to prove non existence of unjust enrichment for supplies made to SEZ. With the provision allowing taxable person to recover taxes from SEZ, the need to prove the unjust enrichment for supplies made to SEZ is brought in.