Amendments module on GST MT EDUCARE CA INTERMEDIATE

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1 INDEX Segment - 1 Introduction to GST 2 Segment - 2 Taxable Event under GST 3 Segment - 3 Invoice, Time of Supply 6 Segment - 4 Value of Supply 7 Segment - 5 Input Tax Credit (ITC) 8 Segment - 6 Registration under GST 9 Segment - 7 Composition Scheme 11 Segment - 8 Exemptions & Charge in GST 13 Segment - 9 GST Payment Process 19 Segment - 10 Returns under GST 20 Segment - 11 Miscellaneous provisions in GST 21 THARUN RAJ 1

2 Segment - 1 Introduction to GST GST Council to become Government Entity: The decision making body of GST is GST Council, which is constituted as per Article 279A of Constitution. Union Finance Minister is the Chairman of the Council. It is a non profit and non government entity, wherein government held 49% and private entities held 51%. In 27th Council Meeting, it has been decided that Government shall acquire 51% from the private entities thereby making GST Council a 100% government owned entity. Thereafter, 50% owned by CG and 50% owned by SG. THARUN RAJ 2

3 Segment - 2 Taxable Event under GST Whether Separate registration required in each state and within the state? Whether inter-state movement of various modes of conveyance carrying goods or passengers or both, or for repairs and maintenance, between distinct persons as specified in section 25(4) of the CGST Act [except in cases where such movement is for further supply of the same conveyance], is leviable to IGST? Vide Circular No. 1/1/2017 (Dt: ), it is clarified that such interstate movement of Trains, buses, trucks, tankers, trailers, vessels, containers, aircrafts (a) Carrying goods or passengers or both, or (b) For repairs and maintenance, shall not constitute supply and not chargeable to GST. However, applicable CGST/SGST/IGST, as the case may be shall be leviable on repairs and maintenance done for such conveyance. THARUN RAJ 3

4 Some clarifications through Recent Circulars: 1. Whether supply of books, pamphlets, brochures, envelopes, annual reports, leaflets, cartons, boxes etc., printed with design, logo, name, address or other contents supplied by the recipient of such supplies, would constitute supply of goods or supply of services? Vide Circular No. 11/11/2017 (Dt: ) it is clarified that the said activity is composite supply and whether such supplies constitute supply of goods or services would be determined on the basis of what constitutes the principal supply. In the case of printing of books, pamphlets, brochures, annual reports, and the like, where only content is supplied by the publisher or the person who owns the usage rights to the intangible inputs while the physical inputs including paper used for printing belong to the printer, supply of printing [of the content supplied by the recipient of supply] is the principal supply and therefore such supplies would constitute supply of service. In case of supply of printed envelopes, letter cards, printed boxes, tissues, napkins, wall paper etc., printed with design, logo etc. supplied by the recipient of goods but made using physical inputs including paper belonging to the printer, predominant supply is that of goods and the supply of printing of the content [supplied by the recipient of supply] is ancillary to the principal supply of goods and therefore such supplies would constitute supply of goods. 2. Whether activity of bus body building, is a supply of goods or services? Classification of this composite supply as goods or service would depend on which supply is the principal supply which may be determined on the basis of facts and circumstances of each case. 3. Whether retreading of tyres is a supply of goods or services? Retreading of tyres is a composite supply, the pre-dominant element is the process of retreading which is a supply of service. Rubber used for retreading is an ancillary supply. Which part of a composite supply is the principal supply, must be determined keeping in view the nature of the supply involved. Value may be one of the guiding factors in this determination, but not the sole factor. The primary question that should be asked is what is the essential nature of the composite supply and which element of the supply imparts that essential nature to the composite supply. Supply of retreaded tyres, where the old tyres belong to the supplier of retreaded tyres, is a supply of goods 4. Whether Priority Sector Lending Certificates (PSLCs) are outside the purview of GST and therefore not taxable? In Reserve Bank of India FAQ on PSLC, it has been mentioned that PSLC may be construed to be in the nature of goods, dealing in which has been notified as a permissible activity under section 6(1) of the Banking Regulation Act, 1949 vide Government of India notification dated 4th February, PSLC are not securities. PSLC are akin to freely tradeable duty scrips, Renewable Energy Certificates, REP license or replenishment license, which attracted VAT. In GST, there is no exemption to trading in PSLCs. Thus, PSLCs are taxable as goods THARUN RAJ 4

5 Reverse Charge Mechanism (RCM): Note: Reverse Charge Mechanism under Sec. 9(4) has been deferred upto Therefore, currently Sec. 9(3) and Sec. 9(5) are only effective. Also, the provisions of TDS under Sec. 51 & TCS under Sec. 52 is also deferred upto THARUN RAJ 5

6 Segment - 3 Invoice, Time of Supply Consolidated invoice by an insurer or banking company or financial institution (incl. NBFC): Before AMENDMENT The Supplier SHALL issue a Consolidated invoice for the supply of services made during a month After AMENDMENT The supplier MAY issue a consolidated invoice for the supply of services made during a month [Vide Notification No. 55/2017(Dt: 15/11/17) No GST on Advances in Case of Goods [Sec. 12(2)]: Time of Supply (TOS) as per Sec. 12(2) of CGST Act, 2017 in case of goods covered under forward charge mechanism was earlier of date of invoice and date of payment received. However, TOS under Sec. 12(2) is amended and as per the amended provision, TOS shall be date of invoice (WHICH is EARLIER of Due date of Invoice or Actual date of Invoice). Therefore, now no GST is payable on advance received and on such advances GST is payable as and when the invoice is issued or to be issued, whichever is EARLIER. THARUN RAJ 6

7 Segment - 4 Value of Supply Value of Supply in case of lottery, betting, gambling and horse racing [Rule 31A of CGST Rules, 2017) - Inserted Vide Notification No. 03/2018 (Dt: 23/01/2018)]: Particulars No other valuation method is applicable, as the words used in this rule is notwithstanding anything contained in the provisions of valuation chapter. Before this amendment, value was determined in terms of Sec. 15 of CGST Act, 2017 i.e. Transaction Value 1. The logic behind it is that the rate of GST is 12%. Lottery run by state governments means a lottery not allowed to be sold in any state other than the organising state. Organising state is the state which is empowered to organise lottery system. 2. The logic behind it is that the rate of GST is 28%. Lottery authorised by state government means a lottery which is authorised to be sold in states other than organising state. 3. Please go through the example below: VALUE 1. Supply of lottery run by State Government [Face Value of the ticket (or) Price as notified by organising state, WHICHEVER IS HIGHER] X 100/ Supply of lottery authorised by State Government 3. Supply of actionable claim in the form of Chance to win in betting, gambling or horse racing in a race club [Face Value of the ticket (or) Price as notified by organising state, WHICHEVER IS HIGHER] X 100/ % of the face value of bet or the amount paid into the totalisator [Not on the commission earned by the totalisator] Total 1,000 people participated in the betting of final IPL match between SRH V. CSK. 600 people placed the bet that CSK shall win the tournament and 400 placed the bet that SRH shall win the tournament. Each person paid 5,000 as the bet amount and the totalisator received 50,00,000 as bet value and finally SRH won the tournament. Now, Totalisator has to pay the entire bet value after reducing his commission of 2% and taxes to 400 people, which shall be 50,00,000 (-) Commission of 2% on 50,00,000 (-) GST@ 28% on 50,00,000 = 35,00,000. Amount received by each person = 35,00,000/400 = 8,750 against their contribution of 5,000 thereby making a gain of 3,750. THARUN RAJ 7

8 Segment - 5 Input Tax Credit (ITC) Meaning of Exempted Supplies for the purpose of reversal of ITC on inward supplies under Rule 42 and Rule 43 of CGST Rules, 2017: Before AMENDMENT: As per Section 17(3) of CGST Act, 2017 Exempted Supplies MEANS A) Notified as Exempted by way of notification in official gazette After AMENDMENT [Notification No. 3/2018 (Dt: 23/01/2018)]: Same as above but excludes the following - INCLUDES D) Supplies taxable under RCM B) Nil Rated Supplies E) Transactions in Securities C) Non taxable Supplies F) Sale of Land G) Sale of Building, where entire consideration is received post obtaining completion certificate. 1. Supply of services having place of supply in Nepal or Bhutan, against payment in Indian rupees 2. Services by way of accepting deposits, extending loans or advances, in so far as the consideration is represented by way of interest or discount except in case of banking company or Financial institution or NBFC. 3. Services by way of transportation of goods by a vessel from the customs station of clearance in India to a place outside India. THARUN RAJ 8

9 Segment - 6 Registration under GST UIN applicable to entire country 1: UIN is an Unique Identity Number to be obtained by UN Organisations, Embassy and Consulates for the purpose of availing refund on GST paid on inward supplies in terms of Sec. 55 of CGST Act, 2017 Unique Identity Number (UIN) generated in a state shall be applicable throughout the country and no need to apply for UIN in every state. Retrospective amendment in registration Certificate not possible 2: A registered person shall make an application for amendment in registration details in FORM GST REG 14, as per Sec. 28 of CGST Act, 2017 within 15 days of such change (However, in case of change in constitution resulting in change of PAN of the person, then a new application for registration shall be made and the existing registration stands cancelled in terms of Sec. 29 of CGST Act, 2017). The registration certificate shall not stand amended with effect from the date earlier than the date of submission of the application in FORM GST REG 14, except with the order of the Commissioner for reasons to be recorded in writing. (Retrospective amendment possible only with the order of Commissioner) Lock in period of 1 year not applicable in case of voluntary registration: A person is required to get registered only when aggregate turnover in a financial year exceeds 20 lakhs (Except in case of compulsory registration under sec. 24) Even if the aggregate turnover does not exceed 20 lakhs, a person can get registered and it is termed as voluntary registered. But, such person, being a taxable person is required to pay GST. There was a restriction that a person who has applied for voluntary registration cannot surrender his registration under Sec. 29, within 1 year from the effective date of registration. However, the said provision is Omitted Vide Notification No. 03/2018 (Dt: ). Therefore, even a person who has obtained voluntary registration can surrender his registration immediately in terms of Sec. 29 of CGST Act, Inserted Vide Notification No. 75/2017 (Dt: 29/12/2017) 2 Inserted Vide Notification No. 75/2017 (Dt: 29/12/2017) THARUN RAJ 9

10 Some FAQ s handled through Twitter: 1. Whether civil contractor doing projects in various states requires separate registration for all states or a single registration at state of head office will suffice? A supplier of service will have to register at the location from where he is supplying services. 2. If there are two SEZ units within same state, whether two registrations are required to be obtained? SEZs under same PAN in a state require one registration. 3. I am registered in TN and getting the service from unregistered dealer of AP, should I take registration in AP to discharge GST under RCM? Any person who makes make inter- state taxable supply is required to take registration. However, compulsory registration is not applicable in case of interstate supply of services. Therefore, the recipient in TN shall generate the invoice as per Sec. 31(3) by mentioning IGST and make it available to supplier in AP. 4. If a company in Maharashtra holds only one event in Delhi, will they have to register in Delhi? Will paying IGST from Maharashtra suffice? Only if you provide any supply from Delhi you need to take registration in Delhi (i.e. Sale of tickets or merchandise for the event). Else, registration at Mumbai is sufficient (and pay IGST on supplies made from Mumbai to Delhi) Suo-moto Cancelation by officials of registration for Normal Taxpayer Facility for Suo Moto Cancellation of registration by the Tax Official, has been enabled on GST Portal. This process of cancellation could be initiated by tax official, if registered person has contravened such provisions of the act or the rules made thereunder as may be prescribed or Composition person has not furnished returns for three consecutive tax periods or in other cases as mentioned in Section 29 of the CGST Act, THARUN RAJ 10

11 Segment - 7 Composition Scheme Increase in time limit of filing FORM GST ITC 03: FORM GST ITC 03 - Declaration of ITC reversal w.r.to Inputs held in stock, Inputs contained in WIP and FG held in stock and Capital goods, for the purpose of Sec. 18(4) upon opting for composition Scheme. Before AMENDMENT FORM GST ITC 03 to be filed within 90 days from the day on which such person commences to pay tax under composition scheme After AMENDMENT The said period of 90 days is increased to 180 days Vide Notification no. 3/ CT (Dt: ) Such Person refers to the person opting for composition scheme. Even though the words used are commences to pay tax it should be understood as effective date of commencement of composition scheme. Increase in time limit of filing FORM GST CMPT 03: FORM GST CMP 03 - Intimation of stock details on the date of opting for composition scheme, for the purpose of Sec. 18(4) applicable for persons registered under the existing law migrating on the appointed day Before AMENDMENT FORM GST CMP 03 to be filed within 60 days from the day on which option for composition levy is exercised or within such further period as may be extended by the Commissioner in this behalf After AMENDMENT The said period of 60 days is increased to 90 days Vide Notification no. 22/ CT (Dt: ) FORM GST CMP 03 is same as FORM GST ITC 03, except that the latter one is filed by a registered person under GST whereas the former one is filed by a person registered under earlier law and migrating to GST (Directly to Composition Scheme). Please note that a person registered under earlier scheme is required to get registered under GST as per Sec. 22(1) within 30 days from the appointed date i.e. 1/7/2017, even though the aggregate turnover during a financial year does not exceed 20 lakhs. THARUN RAJ 11

12 Change in rate of tax under composition scheme 3: Registered Person Before AMENDMENT After AMENDMENT MANUFACTURER CGST - 1% + SGST - 1% Total - 2% on Turnover TRADER RESTAURANT SERVICE PROVIDER CGST - 0.5% + SGST - 0.5% Total - 1% on Turnover CGST - 2.5% + SGST - 2.5% Total - 5% on Turnover CGST - 0.5% + SGST - 0.5% Total - 1% on Turnover IN THE STATE or UT CGST - 0.5% + SGST - 0.5% Total - 1% on TAXABLE Turnover IN THE STATE or UT CGST - 2.5% + SGST - 2.5% Total - 5% on TAXABLE Turnover IN THE STATE or UT Effect of this amendment is that previously, on exempted supplies also GST was payable. But, now in case of trader and restaurant service provider, GST is payable only on the taxable supplies. However, the position remains same in case of Manufacturer as GST is still payable on exempted supplies but at a reduced rate of 1% instead of 2%. Interstate supplies is not referred here, as it may be noted that a person making interstate supplies cannot opt for composition scheme in terms of Sec. 10 of CGST Act, Amendment in GSTR-4: Composition taxpayers can now file amendment details of advance of reverse charge or advances for which invoice is received in current period in various tables of Form GSTR 4, such as table 5A (for supply), Table 5C (for debit/credit notes), Table 7 (for tax on outward supply made ) 3 Amended Vide Notification No. 3/2018 ( ) THARUN RAJ 12

13 Segment - 8 Exemptions & Charge in GST New Exemptions added in services between 1/11/2017 to 30/4/2018: 4 1. Supply of services by Govt. by way of grant of licence or lease to explore or mine petroleum crude or natural gas or both against consideration in the form of petroleum (Usually termed as profit petroleum) 2. Composite supply of goods and services in which the value of supply of goods constitutes not more than 25% of the value of the said composite supply provided to the Govt. or a Governmental authority or a Govt. Entity by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or Municipality under article 243W of the Constitution. Article 243G read with 11th Schedule to Constitution State Government may be law endow the Panchayats with such powers and authority as may be necessary to enable them to function as institutions of self government in relation to matters listed in 11th Schedule. Article 243W read with 12th Schedule to Constitution State Government may be law endow the Municipalities with such powers and authority as may be necessary to enable them to function as institutions of self government in relation to matters listed in 12th Schedule 1. Agriculture including agricultural expansion 1. Regulation of land use and construction of land buildings. 2. Land improvement, implementation of land reforms, land consolidation and soil conservation. 2. Urban planning including the town planning. 3. Animal Husbandry, Dairying and poultry 3. Planning for economic and social development 4. Fisheries Industry 4. Urban poverty alleviation 5. Minor irrigation, water management and watershed development 5. Water supply for domestic, industrial and commercial purposes 6. Social forestry and farm forestry 6. Fire services 7. Small scale industries in which food processing industry is involved 7. Public health sanitation, conservancy and solid waste management 8. Minor forest produce 8. Slum improvement and up-gradation 9. Safe water for drinking 9. Safeguarding the interests of the weaker sections of society, including the physically handicapped and mentally unsound 10. Khadi, village and cottage industries 10. Urban forestry, protection of environment and promotion of ecological aspects 11. Rural housing 11. Construction of roads and bridges 12. Fuel and fodder 12. Provision of urban amenities and facilities such as parks, gardens and playgrounds 13. Rural electrification, including distribution of electricity 13. Promotion of cultural, educational and aesthetic aspects 4 As exemptions w.r.to goods are not tested in exams, it is not given in this amendments module THARUN RAJ 13

14 14. Road, culverts, bridges, ferries, waterways and other means of communication 14. Burials and burials grounds, cremation and cremation grounds and electric crematoriums 15. Education including primary and secondary schools 15. Cattle ponds, prevention of cruelty to animals 16. Non-conventional sources of energy 16. Regulation of slaughter houses and tanneries 17. Technical training and vocational education 17. Public amenities including street lighting, parking spaces, bus stops and public conveniences 18. Adult and non-formal education 18. Vital statistics including registration of births and deaths 19. Public distribution system 20. Maintenance of community assets 21. Welfare of the weaker sections of the in particular of the schedule caste and schedule tribes 22. Social welfare, including welfare of the handicapped and mentally retarded 23. Family welfare 24. Women and child development 25. Markets and Fairs 26. Health and sanitation including hospitals, primary health centres and dispensaries 27. Cultural activities 28. Libraries 29. Poverty Alleviation Programmes 3. Services by way of transportation of goods by an aircraft from customs station of clearance in India to a place outside India (Exemption applicable upto 30/9/2018). 4. Services by way of transportation of goods by a vessel from customs station of clearance in India to a place outside India (Exemption applicable upto 30/9/2018). 5. Services by way of renting of motor vehicle for transport of students, faculty and staff, to a person providing services of transportation of students, faculty and staff to an educational institution providing services by way of pre-school education and education upto higher secondary school or equivalent. 6. Services of life insurance provided or agreed to be provided by the Naval Group Insurance Fund to the personnel of Coast Guard under the Group Insurance Schemes of the Central Government. 7. Services by an intermediary of financial services located in a multi services SEZ with International Financial Services Centre (IFSC) status to a customer located outside India for international financial services in currencies other than Indian rupees (INR). 8. Services by way of fumigation in a warehouse of agricultural produce. 9. Services by way of providing information under the Right to Information Act, Services by way of right to admission to (a) circus, dance, or theatrical performance including drama or ballet; (b) award function, concert, pageant, musical performance or any sporting event other than a recognised sporting event; (c) recognised sporting event; (d) planetarium, where the consideration for right to admission to the events or places as referred to in items (a), (b), (c) or (d) above is not more than Rs 500 per person. THARUN RAJ 14

15 11. Services by way of admission to a protected monument so declared under the Ancient Monuments and Archaeological Sites and Remains Act 1958 (Irrespective of entry ticket price, the service is exempted) 12. Services provided by an educational institution by way of conduct of entrance examination against consideration in the form of entrance fee. Amendments to existing amendments: 1. Services provided to the Central Government, by way of transport of passengers with or without accompanied belongings, by air, embarking from or terminating at a regional connectivity scheme airport, against consideration in the form of viability gap funding - Exemption period increased from 1 year to 3 years, from the date of commencement of operations. 2. Services in relation to life insurance under micro insurance schemes is exempted - Sum assured increased from 50,000 to 2,00, In case of specified general insurance and life insurance schemes, which are exempted, the exemption is now extended to re-insurance of such schemes. 4. Services provided by a Resident welfare association(rwa) to its members against maintenance charges of 5,000 per month per member is exempted. The limit of 5,000 is enhanced to 7,500. Therefore if RWA collects a maintenance charge > 7,500, then entire maintenance charges are taxable. 5. Supply of notified services to educational institution (Transportation, Catering, Security or Housekeeping, Admission to or conduct of examination) has been expanded to include Supply of online educational journals or periodicals. 6. Supply of notified services to educational institution - Amended matrix of exemptions 1. Transportation of students, faculty & Staff Pre-School education & Education upto higher secondary or equivalent Education as a part of curriculum for obtaining a qualification recognised by law for the time being in force Approved Vocational Education Exempted Taxable Taxable 2. Catering Exempted Taxable Taxable 3. Security or House keeping 4. Admission to or Conduct of examination 5. Supply of online educational journals and periodicals Exempted Taxable Taxable Exempted Exempted Exempted Taxable Exempted Taxable THARUN RAJ 15

16 New Services under RCM: Services by government to business entity (Other than renting of immovable property) was covered under RCM where liability to pay GST is on business entity. However, it has been amended that even in case of renting of immovable property, it is covered under RCM if the business entity is registered. Therefore, all services ( Other than renting of immovable property services to unregistered business entity) to business entity is covered under RCM under Sec. 9(3) of CGST Act, Recent Circulars on service in relation to agriculture or agricultural produce: Q A Whether green tea, black tea and white tea are agricultural produce? Vide Circular 16/16/2017 (Dt: ), it is clarified that tea used for making beverage, such as black tea, green tea, white tea is a processed product made in tea factories after carrying out several process, on green leaf and is the processed output of the same. Thus, green tea leaves and not tea is the agricultural produce. Q A Whether jaggery is agricultural produce? Vide Circular 16/16/2017 (Dt: ), it is clarified that processing of sugarcane into jagerry changes its essential characteristics. Thus, jaggery is not an agricultural produce. However, sugar cane is an agricultural produce Q A Whether pulses are agricultural produce? Vide Circular 16/16/2017 (Dt: ), it is clarified that pulses commonly known as dal are obtained after dehusking or splitting or both. The process of dehusking or splitting is usually not carried out by farmers or at farm level but by the pulse millers. Therefore pulses (Dehusked or split) are not agricultural produce. However, whole pulse grains such as whole gram, rajma etc., are covered in the definition of agricultural produce. Q A Whether Milling of paddy into rice by rice millers is exempted? Vide Circular 19/19/2017 (Dt: ), it is clarified that milling of paddy is not an intermediate production process in relation to cultivation of plants. It is a process carried out after the process of cultivation is over and paddy has been harvested. Further, processing of paddy into rice is not usually carried out by cultivators but by rice millers. Milling of paddy into rice also changes its essential characteristics. Therefore milling of paddy into rice cannot be considered as intermediate production process in relation to cultivation of plants for food, fibre or other similar products or agricultural produce. Note: From this circular, it is clear that rice is not an agricultural produce. But as per the interpretation of the definition of agricultural produce, paddy to rice falls under any processing done on primary produce, which do not alter its essential characteristics but makes it marketable for primary market. THARUN RAJ 16

17 GST implications on GTA - Revised: 1. Following Consignments are exempted - Consignment of Specified goods i.e. Relief Materials for natural and man-made disasters; Agricultural Produce; Milk, Salt, Food grains (incl flours); Organic Manure; Newspapers & Magazines; Defence or Military Equipment. - Single Consignment - Single Carriage - Freight does not exceed 1,500 - Single Consignment - Multiple Carriages - Freight does not exceed Other Consignments transported for registered recipients > Taxable under RCM under Sec. 9(3) 3. Other Consignments transported for unregistered recipients > Where unregistered recipient is other than Individual, HUF or AJP not having factory > Taxable under RCM under Sec. 9(3) - Compulsory Registration applicable under Sec Other Consignments transported for unregistered recipients > Where unregistered recipient is Individual, HUF or AJP not having factory > Exempted Conclusion: GTA never pays GST Q A Q A Whether the activities carried by DISCOMS against recovery of charges from consumers under State Electricity Act are exempt from GST? Vide Circular 34/08/2018 (Dt: ), it is clarified that Service by way of transmission or distribution of electricity by an electricity transmission or distribution utility is exempt from GST. However charges for the following services are taxable: i. Application fee for releasing connection of electricity; ii. Rental Charges against metering equipment; iii. Testing fee for meters/ transformers, capacitors etc.; iv. Labour charges from customers for shifting of meters or shifting of service lines; v. charges for duplicate bill; Whether the guarantee provided by State Government to state owned companies against guarantee commission, is taxable under GST? The service provided by Central Government/State Government to any business entity including PSUs by way of guaranteeing the loans taken by them from financial institutions against consideration in any form including Guarantee Commission is taxable. THARUN RAJ 17

18 GST implications on Joint Venture - Circular No. 35/09/2018: The circular clarified that that cash calls (Contribution from members), sometimes, could be in the nature of advance payments made by members towards taxable services received from joint venture(jv); and that payments made out of cash calls pooled by a JV towards taxable services received from a member or a third party is in the nature of consideration and hence attracts GST. Illustration -1: Purchases machinery out of total contribution for use in the business of JV Joint Venture Members Contributed 100 each = Total 400 Engaged in exploration and production of oil The said transaction is not subjected to GST for the reason that the operating member is not carrying out an activity for another for consideration. The money paid for purchase of machinery is merely in the nature of capital contribution and is therefore a transaction Mr. A (Operating Member) Mr. B Mr. C Mr. D in money. Illustration - 2: Joint Venture Engaged in exploration and production of oil Uses his own machine and performs exploration and production activities on behalf of JV for a consideration of 400 Members Contributed 100 each = Total 400 The operating member uses its own machinery and is therefore providing service within the scope of supply of CGST Act, Mr. A (Operating Member) Mr. B Mr. C Mr. D This is because in this scenario, the operating member is recovering the cost appropriated towards machinery and services from the other JV members in their participating interest ratio. THARUN RAJ 18

19 Segment - 9 GST Payment Process No Amendments in this Segment THARUN RAJ 19

20 Segment - 10 Returns under GST Update on Returns: GSTR - 2 (Statement of inward Supplies) & GSTR - 3 (Consolidated return) is deferred upto 30th June Therefore, there is no matching of ITC and GSTR - 3 is replaced with GSTR - 3B, which is a summary return containing the consolidated details of GST payable and ITC availed. GSTR - 1 can be filed on a quarterly basis by registered person whose aggregate turnover during previous year does not exceed 1.5 Crores. However, they shall file GSTR - 3B on a monthly basis on or before the specified date. Fee for Delay in filing returns: Statement (or) Return CGST Act SGST Act IGST Act Other than Nil Return: GSTR - 1 GSTR - 3B GSTR - 4 GSTR - 5 GSTR - 6 Nil Return: GSTR - 1 GSTR - 3B GSTR - 4 GSTR - 5 GSTR - 5A (Return by Nonresident OIDAR Supplier) Annual Return: GSTR - 9 GSTR - 9A GSTR - 9B 25 per day (Subject to a maximum of 5,000) 10 per day (Subject to a maximum of 5,000) 100 per day (Subject to a maximum of 5,000) 100 per day (Subject to a maximum of 0.25% of turnover during the year) There is no possibility of nil return in GSTR - 6 Late Fee for GSTR - 3B of July - September, WAIVED 25 per day (Subject to a maximum of 5,000) 10 per day (Subject to a maximum of 5,000) 100 per day (Subject to a maximum of 5,000) 100 per day (Subject to a maximum of 0.25% of turnover during the year) No Late Fees No Late Fees No Late Fees No Late Fees THARUN RAJ 20

21 Segment - 11 Miscellaneous provisions in GST Special Procedure for Certain Persons [Sec. 148 of CGST Act, 2017]: The CG, may on the recommendations of the council, and subject to such conditions and safeguards as may be prescribed, notify certain classes of registered persons, and the special procedures to be followed by such persons including those with regard to registration, furnishing of return, payment of tax and administration of such persons. Accordingly Vide Notification No. 4/2018 (Dt: 25/1/2018), the following persons are notified in this regard: Land Owner (Registered Person) Supply = Development Rights Consideration = Construction service of complex, building or civil structure Developer (or) Builder (or) Construction Company (or) any other registered person Supply = Construction service of complex, building or civil structure Consideration = Development Rights Land Owner (Registered Person) Liability to pay GST on such consideration shall arise - At the time when the said developer transfers possession or right in constructed complex, building or civil structure to the person supplying development rights by entering into a conveyance deed THARUN RAJ 21

22 Setting up of an IT Grievance Redressal Mechanism to address the grievances of taxpayers due to technical glitches on GST Portal: The Central Government has decided to put in place an IT-Redressal Mechanism, the details of the said grievance redressal mechanism are provided vide Circular No. 39/13/2018-GST dated 3rd April, 2018which are as follows: Introduction Where an IT related glitch has been identified as the reason for failure of a class of taxpayer in filing of a return or a form within the time limit prescribed in the law by a large section of taxpayers and there are collateral evidences available to establish that the taxpayer has made bonafide attempt to comply with the process of filing of form or return, GST Council has delegated powers to the IT Grievance Redressal Committee to approve and recommend to the GSTN on matters identified by it and the steps to be taken to redress the grievance and the procedure to be followed for implementation of the decision. Suggested solutions 1. GST Council Secretariat shall obtain inputs of the Law Committee, where necessary, on the proposal of the GSTN and call meeting of GIC to examine the proposal and take decision thereon. 2. The committee shall examine and approve the suggested solution with such modifications as may be necessary. 3. IT-Grievance Redressal Committee may give directions as necessary to GSTN and field formations of the tax administrations for implementation of the decision. Legal Issues: GST Council has delegated the power to the IT Grievance Redressal Committee to recommend waiver of fine or penalty, in case of an emergency, to the Government in terms of section 128 of the CGST Act, 2017 under such mitigating circumstances as are identified by the committee. All such notifications waiving fine or penalty shall be placed before GST Council. However, Where adequate time is available, the issue of waiver of fee and penalty shall be placed before the GST Council with recommendation of the IT-Grievance Redressal Committee. THARUN RAJ 22