GST Update M.S. CHHAJED & CO. GST UPDATE 2/

Transcription

1 GST Update st June 2018 FOR PRIVATE CIRCULATION ONLY M.S. CHHAJED & CO. GST UPDATE 2/

2 E-way Bill Now E-way Bill shall be required to be generated for intra-state movement of goods in the following states: West Bengal (effective from 3rd June, 2018) Tamil Nadu (effective from 2nd June, 2018) Chhattisgarh, Goa, Jammu and Kashmir, Odisha, Punjab and Mizoram (effective from 1st June, 2018) E-way bill for movement of goods intra-state has already been implemented in states/union territories of Andaman & Nicobar, Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Chandigarh, Dadar & Nagar Haveli, Daman & Diu, Gujarat, Haryana, Himachal Pradesh, Jharkhand, Karnataka, Kerala, Lakshadweep, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Nagaland, Puducherry, Rajasthan, Sikkim, Telangana, Tripura, Uttar Pradesh and Uttarakhand. M.S. CHHAJED & CO. GST UPDATE 2/

3 GST Refund Central Board of Indirect Taxes and Customs (CBIC) has issued circular 45/19/2018-GST, dated May 30th, 2018, clarifying the following issues faced by the assesses for claiming refund: Refund claimed by an Input Service Distributor (ISD), Composition Taxpayer or a Non-Resident Taxable Person The circular clarifies that in the case of a claim for refund of balance in the electronic cash ledger filed by an ISD or a composition taxpayer the return in filing of summary return in Form GSTR-3B and sales in GSRT-1 is not mandatory. Further in the case of claim for refund of balances lying in the electronic cash and/or credit ledger by a non-resident taxable person, the filing of the details in Form GSTR-1 and the return in Form GSTR-3B is not mandatory. The return in Form GSTR-4 filed by a composition taxpayer, the details filed in FORM GSTR-6 by an ISD and the return in Form GSTR-5 filed by a non-resident taxable person shall be sufficient for claiming the said refund. M.S. CHHAJED & CO. GST UPDATE 2/

4 Refund of IGST paid on export of services and supplies made to a Special Economic Zone developer or a Special Economic Zone unit Representation were made that while filing the return in Form GSTR-3B for a given tax period, errors made in declaring the Zero Rated Supplies as Taxable Supplies, barred the assessee s to file refund claim in Form GST RFD-01. It is clarified that for the tax periods commencing from to , such registered persons shall be allowed to file the refund application in Form GST RFD-01A on the common portal subject to certain conditions. Refund of un-utilised input tax credit of compensation cess availed on inputs in cases where the final product is not subject to the levy of compensation cess: It is clarified that a registered person making zero rated supply under bond or LUT may claim refund of un-utilised credit including that of compensation cess paid on inputs. Registered persons also have option to make zero-rated supply on payment of integrated tax but they cannot utilise the credit of the compensation cess paid on inputs for payment of integrated tax in view of the proviso to section 11(2) of the Cess Act 2017, which allows the utilisation of the input tax credit of cess, only for the payment of cess on the outward supplies. Accordingly, they cannot claim refund of compensation cess in case of zero-rated supply on payment of integrated tax. Requirement of Bond or Letter of Undertaking (LUT) in the case of zero rated supply of exempted or non-gst goods and refund issues: It is clarified that in respect of refund claims on account of export of non-gst and exempted goods without payment of integrated tax there is no need for any Bond or LUT. Registered persons exporting non-gst goods shall comply with the requirements prescribed under the Central Excise Act, 1944 and/or the relevant VAT law and/or the Customs Act, 1962, if any. Exporter would M.S. CHHAJED & CO. GST UPDATE 2/

5 be eligible for refund of un-utilised input tax credit of central tax, state tax, union territory tax, integrated tax and compensation cess. Scope of the restriction imposed by rule 96(10) of the CGST Rules, regarding nonavailment of the benefit of notification Nos. 48/2017-Central Tax dated the , 40/2017-Central Tax (Rate) dated , 41/2017-Integrated Tax (Rate) dated , 78/2017-Customs dated or 79/2017-Customs dated : Sub-rule (10) of rule 96 of the CGST Rules seeks to prevent an exporter, who is receiving goods from suppliers availing the benefit of certain specified notifications under which they supply goods without payment of tax or at reduced rate of tax, from exporting goods under payment of integrated tax. The said restriction is not applicable to an exporter who has procured goods from suppliers who have not availed the benefits of the specified notifications for making their outward supplies. Further, the said restriction is also not applicable to an exporter who has procured goods from suppliers who have, in turn, received goods from registered persons availing the benefits of these notifications since the exporter did not directly procure these goods without payment of tax or at reduced rate of tax. There might be a scenario where a manufacturer might have imported capital goods by availing the benefit of Notification No. 78/2017-Customs dated or 79/2017-Customs dated Thereafter, goods manufactured from such capital goods may be supplied to an exporter. It is hereby clarified that this restriction does not apply to such inward supplies of an exporter. M.S. CHHAJED & CO. GST UPDATE 2/

6 Taxability of Tenancy Rights Doubts were raised regarding the taxability on transfer of tenancy rights to a incoming tenant for consideration, in form of tenancy premium, and stamp duty and registration charges is levied on the such premium. Question also arises regarding taxability in the case of transfer of tenancy rights, a part of the consideration for such transfer accrues to the outgoing tenant. Circular No. 44/18/2018- CGST has issued clarification that the transfer of tenancy rights is squarely covered under the scope of supply and taxable per-se. Transfer of tenancy rights for consideration in the form of tenancy premium is taxable. However, renting of residential dwelling for use as a residence is exempt vide notification No. 12/2017-Central Tax(Rate). Hence, grant of tenancy rights in a residential dwelling for use as residence dwelling against tenancy premium or periodic rent or both is exempt. As regards to services provided by outgoing tenant by way of surrendering the tenancy rights against consideration in the form of a portion of tenancy premium is liable to GST. M.S. CHHAJED & CO. GST UPDATE 2/

7 Press Releases and Clarifications Press Release was issued on 28th May, 2018 clarifying that the news requiring farmers to register under the GST Law and pay GST on agriculture support services are false. Support services to agriculture, forestry, fishing or animal husbandry continues to be exempted from GST. Further renting or losing of vacant land by farmers for agriculture, forestry, fishing, animal husbandry or batai" also continues to be exempted. The Ministry of Finance has issued clarification, 354/52/2018- TRU dated May 7th, 2018, in regards to levy of reduced rate of 8% GST on affordable housing. Key points are hereunder: Low cost houses up to a carpet area of 60 sq. mts. per house in an affordable housing project have been given infrastructure status. Builders/ Developers are required to determine whether the project qualifies as affordable housing project, as defined under the Notification No. 31/6/2009-INF MOF, to avail the benefit of reduced rate. Projects approved for Credit Linked Subsidy Scheme under the Housing for All (Urban) Mission, Pradhan Mantri Was Yojana, Pradhan Mantri Awas Yojana (Urban) attracts concessional rate of GST i.e. 8%. As per the guidelines of Ministry of Housing and Urban Affairs, the interest subsidy is required to be credited directly to the loan account of beneficiaries through Primary Lending Institutions (PLIs ). Hence recommendation is issued to the relevant housing authority to prescribe a certificate to be issued by the PLIs on the basis of which the builder may charge reduced rate of GST. M.S. CHHAJED & CO. GST UPDATE 2/

8 Disclaimer: The document is intended for private circulation and for knowledge sharing purpose only. This material and the information contained herein is intended to provide general information on a particular subject or subjects and is not an exhaustive treatment of such subject(s). The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business. The firm expressly disclaim all and any liability and responsibility to any person whether a purchaser or reader of this publication or not, in respect of anything, and of the consequences of anything, done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this publication. M.S. CHHAJED & CO. GST UPDATE 2/

9 Contact M. S. Chhajed & Co. Chartered Accountants Kamal Shanti, Nr. Sardar Patel Colony Under Bridge, Sardar Patel Colony, Ahmedabad (O) / www. mschhajedandco.com M.S. CHHAJED & CO. GST UPDATE 2/