SUCCESS PRO. By: CA VINOD PARAKH JAIN. CA FINAL Indirect Tax Amendment. Applicable for Nov 2018 Exams

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1 SUCCESS PRO CA FINAL Indirect Tax Amendment Applicable for Nov 2018 Exams By: CA VINOD PARAKH JAIN 1 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

2 INDEX S.No. Particulars Page No. Part 1 Topics excluded for Nov 2018 Attempt 3 Part 2 Amendments GST Amendments 4 Customs Amendments 77 FTP Amendments 78 Note: RTP Released by ICAI Covers Both May & Nov 2018 attempt Amendments. We have Not Covered the May 2018 Attempt Amendments here. If students want to refer MAY 2018 ATTEMPT AMENDMENTS, it is UPLOADED on OUR WEBSITE 2 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

3 Part 1 Topics excluded for May 2018 Attempt List of topic-wise exclusions from the syllabus (1) (2) (3) S. No. in the syllabus 1(ii) Topics of the syllabus Levy and collection of CGST and IGST Application of CGST/IGST law; Concept of supply including composite and mixed supplies, inter-state supply, intra-state supply, supplies in territorial waters; Charge of tax; Exemption from tax; Composition levy 1(vii) Procedures under GST All procedures including registration, tax invoice, credit and debit notes, electronic way bill, accounts and records, returns, payment of tax including reverse charge, refund, job work Exclusions (Provisions which are excluded from the corresponding topic of the syllabus) CGST Act, 2017 & IGST Act, 2017 (i) Rate of tax prescribed for supply of goods* (ii) Rate of tax prescribed for supply of services* (ii) Exemptions for supply of goods CGST Act, 2017 and CGST Rules, 2017 (i) Registration of persons required to collect tax at source (ii) Tax deduction at source except the provisions made effective vide Notification No. 33/2017 CT dated (iii) Collection of tax at source (iv) Furnishing of GSTR-2, GSTR-1A, GSTR-3, GSTR-7, GSTR-8 (v) Claim of input tax credit and provisional acceptance thereof (vi) Matching, reversal & reclaim of input tax credit (vii) Matching, reversal & reclaim of reduction in output tax liability (viii) Categories of supply of goods, tax on which is payable on reverse charge basis under section 9(3) IGST Act, 2017 Categories of supply of goods, tax on which is payable on reverse charge basis under section 5(3) *Rates specified for computing the amount payable under composition levy are included in the syllabus. Notes: (1) In the above table, in respect of the topics of the syllabus specified in column (2) the related exclusion is given in column (3). Where an exclusion has been so specified in any topic of the syllabus, the provisions corresponding to such exclusions, covered in other topic(s) forming part of the syllabus, shall also be excluded. (2) August 2017 edition of the Study Material is relevant for May, 2018 and November, 2018 examinations. The amendments - made after the issuance of this Study Material - to the extent covered in the Statutory Updates for May, 2018 and November, 2018 examinations alone shall be relevant for the said examinations. The Statutory Updates shall be hosted on the BoS Knowledge Portal. (3) The entire content included in the August 2017 edition of the Study Material, except the exclusions mentioned in the table above, and the Statutory Updates for November 2018 examination shall be relevant for the said examination. 3 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

4 Part 2 Amendments V P J CHAPTER 2: SUPPLY UNDER GST Amendment No:1 Circular No. 1/1/2017 IGST dated Clarification on Inter-state movement of various modes of conveyance, carrying goods or passengers or for repairs and maintenance Background Clarification In the above context, the legal provisions in GST laws are as under: a) As per section 24(1)(i) of the CGST Act, persons making any inter-state taxable supply shall be required to be registered under this Act. [Persons making inter-state supplies of taxable services and having an aggregate turnover upto Rs. 20 lakh in a financial year have been exempted from obtaining compulsory registration under section 24(i) of the CGST Act Refer amendment given in point 1 under Chapter 9: Registration]. b) As per section 25(4) of the said Act a person who has obtained or is required to obtain more than one registration, whether in one State or Union territory or more than one State or Union territory shall, in respect of each such registration, be treated as distinct persons for the purposes of this Act. c)schedule I to the said Act specifies situations where activities are to be treated as supply even if made without consideration which also includes supply of goods or services or both between related persons or between distinct persons as specified in section 25, when made in the course or furtherance of business d)section 7(2) of the CGST Act envisages that activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, as may be notified by the Government on the recommendations of the Council, shall be treated neither as a supply of goods nor a supply of services. Against the above background, the issue of INTER-STATE MOVEMENT OF GOODS like movement of various modes of conveyance, between distinct persons as specified in section 25(4) of the said Act, not involving further supply of such conveyance, including- i.trains ii.buses iii.trucks iv.tankers v.trailers vi.vessels vii.containers viii.aircrafts a) carrying goods or passengers or both; or b) for repairs and maintenance, [except in cases where such movement is for further supply of the same conveyance] was discussed in GST Council s meeting held on 11th June, 2017 and the Council recommended that such inter-state movement shall be treated neither as a supply of goods or supply of service and therefore not be leviable to IGST. In view of above, it is hereby clarified that the inter-state movement of goods like movement of various modes of conveyance, between distinct persons as specified in section 25(4) of the CGST Act including the ones specified at (i) to (viii) of para 3, may not be treated as supply and consequently IGST will not be payable on such supply. However, applicable CGST/SGST/IGST, as the case may be, shall be leviable on repairs and 4 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

5 maintenance done for such conveyance. Further as per Circular No. 21/21/2017-GST dated ; It has been clarified that circular 1/1/2017- IGST shall mutatis mutandis apply to inter-state movement of such goods, [[rigs, tools and spares, and all goods on wheels (like cranes) ]]and except in cases where movement of such goods is for further supply of the same goods, such inter-state movement shall be treated neither as a supply of goods or supply of service, and consequently no IGST would be applicable on such movements. In this context, it is also reiterated that applicable CGST/SGST/IGST, as the case maybe, is leviable on repairs and maintenance done for such goods Amendment No:2 Source: Website CBIC Circular 22/22/2017-GST No. Clarification on issues regarding treatment of supply by an artist in various States and supply of goods by artists from galleries Issue Clarification In case of supply of art works by artists in different States other than the State in which they are registered as a taxable person, if the art work is selected by the buyer, then the supplier issues a tax invoice only at the time of supply. Artists give their work of art to galleries where it is exhibited for supply. Issue is whether this activity is taxable in the hands of the artist when the same is given to the art gallery or at the time of actual supply by the gallery. It is seen that Rule 55(1)(c ) of the CGST Rules, 2017 (hereafter referred as the said Rules ) provides that the supplier shall issue a delivery challan for the initial transportation of goods where such transportation is for reasons other than by way of supply. Further, sub-rule (3) of the said rule provides that the said delivery challan shall be declared as specified in rule 138 of the said Rules. It is also seen that Rule 55(4) of the said Rules provides that where the goods being transported are for the purpose of supply to the recipient but the tax invoice could not be issued at the time of removal of goods for the purpose of supply, the supplier shall issue a tax invoice after delivery of goods. A combined reading of the above provisions indicates that the art work for supply on approval basis can be moved from the place of business of the registered person (artist) to another place within the same State or to a place outside the State on a delivery challan along with the e-way bill wherever applicable and the invoice may be issued at the time of actual supply of art work. It is also clarified that the supplies of the art work from one State to another State will be inter-state supplies and attract integrated tax in terms of section 5 of the IGST Act, It is further clarified that in case of supply by artists through galleries, there is no consideration flowing from the gallery to the artist when the art works are sent to the gallery for exhibition and therefore, the same is not a supply. It is only when the buyer selects a particular art work displayed at the gallery, that the actual supply takes place and applicable GST would be payable at the time of such supply. Amendment No:3 Circular 32/06/2018-GST No. Clarifications regarding GST in respect of certain services Issue Is GST leviable on the fee/amount charged in the following situations/cases: (1) A customer pays fees while registering complaints to Consumer Disputes Redressal Commission office and its subordinate offices. These fees are credited into State Customer Welfare Fund s bank account. 5 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

6 Clarificati ons (2) Consumer Disputes Redressal Commission office and its subordinate offices charge penalty in cash when it is required. (3) When a person files an appeal to Consumers Disputes Redressal Commission against order of District Forum, amount equal to 50% of total amount imposed by the District Forum or Rs 25000/- whichever is less, is required to be paid. Services by any court or Tribunal established under any law for the time being in force is neither a supply of goods nor services. Consumer Disputes Redressal Commissions (National/ State/ District) may not be tribunals literally as they may not have been set up directly under Article 323B of the Constitution. However, they are clothed with the characteristics of a tribunal on account of the following: - 1) Statement of objects and reasons as mentioned in the Consumer Protection Bill state that one of its objects is to provide speedy and simple redressal to consumer disputes, for which a quasijudicial machinery is sought to be set up at District, State and Central levels. 2) The President of the District/ State/National Disputes Redressal Commissions is a person who has been or is qualified to be a District Judge, High Court Judge and Supreme Court Judge respectively. 3) These Commissions have been vested with the powers of a civil court under CPC for issuing summons, enforcing attendance of defendants/witnesses, reception of evidence, discovery/production of documents, examination of witnesses, etc. 4) Every proceeding in these Commissions is deemed to be judicial proceedings as per sections 193/228 of IPC. 5) The Commissions have been deemed to be a civil court under CrPC. 6) Appeals against District Commissions lie to State Commission while appeals against the State Commissions lie to the National Commission. Appeals against National Commission lie to the Supreme Court. In view of the aforesaid, it is hereby clarified that fee paid by litigants in the Consumer Disputes Redressal Commissions are not leviable to GST. Any penalty imposed by or amount paid to these Commissions will also not attract GST. Amendment No:4 Circular 32/06/2018-GST No. Clarifications regarding GST in respect of certain services Issue Appropriate clarification may be issued regarding taxability of Cost Petroleum Clarification As per the Production Sharing Contract(PSC) between the Government and the oil exploration & production contractors, in case of a commercial discovery of petroleum, the contractors are entitled to recover from the sale proceeds all expenses incurred in exploration, development, production and payment of royalty. Portion of the value of petroleum which the contractor is entitled to take in a year for recovery of these contract costs is called Cost Petroleum. The relationship of the oil exploration and production contractors with the Government is not that of partners but that of licensor/lessor and licensee/lessee in terms of the Petroleum and Natural Gas Rules, Having acquired the right to explore, exploit and sell petroleum in lieu of royalty and a share in profit petroleum, contractors carry out the exploration and production of petroleum for themselves and not as a service to the Government. Para 8.1 of the Model Production Sharing Contract (MPSC) states that subject to the provisions of the PSC, the Contractor shall have exclusive right to carry out Petroleum Operations to recover costs and expenses as provided in this Contract. The oil exploration and production contractors conduct all petroleum operations at their sole 6 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

7 risk, cost and expense. Hence, cost petroleum is not a consideration for service to GOI and thus not taxable per se. However, cost petroleum may be an indication of the value of mining or exploration services provided by operating member to the joint venture, in a situation where the operating member is found to be supplying service to the oil exploration and production joint venture. Amendment No:5 Circular No. 34/8/2018-GST Clarifications regarding GST in respect of certain services S.No. Issue Clarification 1. Whether activity of bus body building, is a supply of goods or services? In the case of bus body building there is supply of goods and services. Thus, classification of this composite supply, as goods or service would depend on which supply is the principal supply which may be 2. Whether retreading of tyres is a supply of goods or services? 3. Whether Priority Sector Lending Certificates (PSLCs) are outside the purview of GST and therefore not taxable? determined on the basis of facts and circumstances of each case In retreading of tyres, which 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 (retreaded tyres under heading 4012 of the Customs Tariff attracting 28%) 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 at standard rate of 18% under the residuary S. No. 453 of Schedule III of notification No. 1/2017-Central Tax(Rate). GST payable on the certificates would be available as ITC to the bank buying the certificates. Amendment No:6 Circular No. 35/9/2018-GST Joint Venture ---taxable services provided by the members of the Joint Venture (JV) to the JV and vice versa and inter se between the members of the JV Supply of services by an unincorporated association or body of persons (AOP) to a member thereof for cash, deferred payment or other valuable consideration shall be treated as supply of services 7 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

8 Therefore, the law with regard to levy of GST on service supplied by member of an unincorporated joint venture (JV) to the JV or to other members of the JV, or by JV to the members, essentially remains the same as it was under service tax law. JV being an unincorporated temporary association constituted for the limited purpose of carrying out a specified project within a time frame, a comprehensive examination of the various JV agreements (at times, there could be number of inter se agreements between members of the JV) holds the key to understanding of the taxation of transactions involving taxable services between the JV and its members or inter-se between the members of a JV. It is reiterated that the question whether cash calls are taxable or not will entirely depend on the facts and circumstances of each case. Cash calls are raised by an operating member of the joint venture on other members in proportion to their participating interests in the joint venture(unincorporated) to meet the expenditure on the operations to be carried out as per the approved work programme and budget. Taxability of cash calls can be further explained by the following illustrations: Illustration Particulars Treatment A There are 4 members in the JV including the operating member and each one contributes Rs 100 as part of their share. A total amount of Rs 400 is collected. The operating member purchases machinery for Rs 400 for the JV to be used in oil production. B: There are 4 members in the JV including the operating member and each one contributes Rs 100 as part of their share. A total amount of Rs 400 is collected. The operating member thereafter uses its own machine and performs exploration and production activities on behalf of the JV. IT will not be the subject matter of ST/GST for the reason that the operating member is not carrying out an activity for another for consideration. In Illustration A, the money paid for purchase of machinery is merely in the nature of capital contribution and is therefore a transaction in money. the operating member uses its own machinery and is therefore providing service within the scope of supply of CGST Act, 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. Note: CBEC Circular No. 179/5/2014 ST dated had clarified that if cash calls are merely transaction in money, then they are excluded from the definition of service provided in section 65B(44) of the Finance Act, Whether a cash call is merely a transaction in money and hence not in the nature of consideration for taxable service, would depend on the terms of the Joint Venture Agreement, which may vary from case to case. The Circular clarified that cash calls, 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 service tax. The Circular further stated that JV being an unincorporated temporary association constituted for the limited purpose of carrying out a specified project within a time frame, a comprehensive examination of the various JV agreements (at times, there could be number of interse agreements between members of the JV) holds the key to understanding of the taxation of transactions involving taxable services between the JV and its members or inter-se between the members of a JV. In the Service Tax Law, service was defined as an activity carried out by a person for another for consideration [Section 65B(44) of the Finance Act 1994]. Explanation 3 to the said definition stated than an unincorporated association or a body of persons as the case may be, and a member thereof shall be treated as distinct persons. 8 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

9 Source: CBIC Website Circular No. 29/3/2018-GST V P J Clarification regarding applicability of GST on Polybutylene feedstock and Liquefied Petroleum Gas retained for the manufacture of Poly Iso Butylene and Propylene or Di-butyl para Creso Background Issue Clarification Manufacturers of Propylene or Di-butyl para Cresol and Poly Iso Butylene have stated that the principal raw materials for manufacture of such goods are Liquefied Petroleum Gas and Poly butylene feed stock respectively, which are supplied by oil refineries to them on a continuous basis through dedicated pipelines while a portion of the raw material is retained by these manufacturers, the remaining quantity is returned to the oil refineries. whether in this transaction GST would be leviable on the whole quantity of the principal raw materials supplied by the oil refinery or on the net quantity retained by the manufacturers of Propylene or Di-butyl para Cresol and Poly Iso Butylene GST will be payable by the refinery on the value of net quantity of polybutylene feedstock and liquefied petroleum gas retained for the manufacture of Poly Iso Butylene and Propylene or Di-butyl Para Cresol. Though, the refinery would be liable to pay GST on such returned quantity of Polybutylene feedstock and Liquefied Petroleum Gas, when the same is supplied by it to any other person. Source: Website CBIC Circular 27/01/2018-GST No. Clarifications regarding levy of GST on accommodation services, betting and gambling in casinos, horse racing, admission to cinema, homestays, printing, legal services etc. Reg. Questions/ Clarifications sought To clarify whether supply in the situations listed below shall be treated as a supply of goods or supply of service: - 1) The books are printed/ published/ sold on procuring copyright from the author or his legal heir. [e.g. White Tiger Procures copyright from Ruskin Bond] 2) The books are printed/ published/ sold against a specific brand name. [e.g. Manorama Year Book] 3) The books are printed/ published/ sold on paying copyright fees to a foreign publisher for publishing Indian edition (same language) of foreign books. [e.g. Penguin (India) Ltd. pays fees to Routledge (London)] The books are printed/ published/ sold on paying copyright fees to a foreign publisher for publishing Indian language edition (translated). [e.g. Ananda Publishers Ltd. pays fees to Penguin (NY)] Clarifications The supply of books shall be treated as supply of goods as long as the supplier owns the books and has the legal rights to sell those books on his own account. Source: Website CBIC Circular No.44/18/2018-CGST Issue related to taxability of tenancy rights under GST Issue Background (i) Whether transfer of tenancy rights to an incoming tenant, consideration for which is in form of tenancy premium, shall attract GST when stamp duty and registration charges is levied on the said premium, if yes what would be the applicable rate? (ii) Further, in case of transfer of tenancy rights, a part of the consideration for such transfer accrues to the outgoing tenant, whether such supplies will also attract GST? The transfer of tenancy rights against tenancy premium which is also known as pagadi system is prevalent in some States. In this system the tenant acquires, tenancy rights in the property against payment of tenancy premium(pagadi). The landlord may be owner of the property but the possession of the same lies with the tenant. The tenant pays periodic rent to the landlord as long as he occupies 9 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

10 Legal Proposition Conclusion the property. The tenant also usually has the option to sell the tenancy right of the said property and in such a case has to share a percentage of the proceed with owner of land, as laid down in their tenancy agreement. Alternatively, the landlord pays to tenant the prevailing tenancy premium to get the property vacated. Such properties in Maharashtra are governed by Maharashtra Rent Control Act, As per section 9(1) of the CGST Act there shall be levied central tax on the intra-state supplies of services. The scope of supply includes all forms of supply of goods and services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business and also includes the activities specified in Schedule II. The activity of transfer of tenancy right against consideration in the form of tenancy premium is a supply of service liable to GST. It is a form of lease or renting of property and such activity is specifically declared to be a service in para 2 of Schedule II i.e. any lease, tenancy, easement, licence to occupy land is a supply of services To sum up, the activity of transfer of tenancy rights is squarely covered under the scope of supply and taxable per-se. Transfer of tenancy rights to a new tenant against consideration in the form of tenancy premium is taxable. However, renting of residential dwelling for use as a residence is exempt [Sl. No. 12 of 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 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. Note: These Circulars has not been considered by ICAI in RTP. Hence, Students should ignore the same as we have covered the same in VPJ Module released for Nov 2018 attempt. 10 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

11 CHAPTER 3: CHARGE OF GST (PART A) Amendment No:1 Notification No. 1/2018 CT dated Rate of composition tax (CGST portion) payable by manufacturers under CGST Act reduced to 0.5% from 1% [Section 10(1) read with rule 7] - Who can opt for the composition levy scheme? A registered person, whose aggregate turnover in the preceding FY does not exceed Rs. 1Crore/75 lakh, may opt to pay an amount calculated at the prescribed rates [mentioned in table below] during the current FY, in lieu of the tax payable by him. S. No. Category of registered persons Rate of tax* 1 Manufacturers, other than manufacturers of such goods as may be 1% ½ %**1 notified by the Government, i.e. ice cream, pan masala and tobacco. of the turnover in the 2 Suppliers making supplies referred to in clause (b) of paragraph 6 of Schedule II [i.e. supply by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink] 3 Any other supplier eligible for composition levy under section 10 of CGST Act and Chapter-II [Composition Rules] of CGST Rules, 2017 State or Union territory 2½ % 2 of the turnover in the State or Union territory** ½ % 1 of the turnover of TAXABLE SUPPLIES OF GOODS in the State or Union territory ** *These are composition rates specified under rule 7 of the CGST Rules, An equivalent amount of SGST is also payable. **Substituted with effect from vide N/No. 03/2018- CT dt ; 1-Effective rate 1% (CGST+ SGST) 2-Effective rate 1% (CGST+ SGST) Analysis Therefore, w.e.f , effective rate of tax under composition scheme for manufacturers has been reduced from 2% to 1% (CGST + SGST). Thus, w.e.f , uniform rate of 1% is applicable for both manufacturers and traders paying tax under composition scheme. Further, Notification No. 8/2017 CT dated has also been amended to provide that for other categories of composition suppliers (other than manufacturers and restaurants), composition tax would be leviable as a percentage of turnover of TAXABLE SUPPLIES OF GOODS. Prior to the amendment, the tax was payable as a percentage of the TURNOVER. Thus, in effect, for traders, exempted supplies would not be added in the turnover for the purpose of levy of 1% composition levy. 11 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

12 Amendment No:2 Corrigendum to Reverse Charge Notifications Nos. 13/2017 CT (R) dated & 10/2017 IT (R) dated Services supplied by an individual advocate including a senior advocate by way of representational services before any court, tribunal or authority, directly or indirectly, to any business entity located in the taxable territory, including where contract for provision of such service has been entered through another advocate or a firm of advocates, or by a firm of advocates, by way of legal services, to a business entity Services provided by an individual advocate including a senior advocate or firm of advocates by way of legal services, directly or indirectly. Explanation.- legal service means any service provided in relation to advice, consultancy or assistance in any branch of law, in any manner and includes representational services before any court, tribunal or authority. An individual advocate including a senior advocate or firm of advocates. Any business entity located in the taxable territory. Amendment No:3 Notification No. 3/2018 CT (R) dated & Notification No. 3/2018 IT (R) dated GST to be payable under reverse charge on renting of immovable property by Central/ State Government, Union territory or local authority to a registered person 1) S.No. Category of supply of service Supplier of service Recipient of Service 5A.* Services supplied by the CG, SG, Union territory or CG, SG, Union Any person registered local authority by way of renting of immovable territory or local under CGST Act,2017 property to a person registered under the CGST Act, 2017 authority 2) insurance agent shall have the same meaning as assigned to it in Section 2(10) of the Insurance Act, 1938 Source: CBIC Website Circular No. 3/1/2018-IGST Dated the 25th May, 2018 applicable on or after the 1 st of April, Applicability of Integrated Goods and Services Tax (integrated tax) on goods supplied while being deposited in a customs bonded warehouse It is seen that the transfer/sale of goods while being deposited in a customs bonded warehouse is a common trade practice whereby the importer files an into-bond bill of entry and stores the goods in a customs bonded warehouse and thereafter, supplies such goods to another person who then files an ex-bond bill of entry for clearing the said goods from the customs bonded warehouse for home consumption. 12 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

13 As Per Section 7(2) of the IGST Act, 2017, the supply of goods imported into the territory of India, till they cross the customs frontiers of India, is treated as a supply of goods in the course of inter-state trade or commerce. Further, the proviso to section 5(1) of the IGST Act provides that the integrated tax on goods imported into India would be levied and collected in accordance with the provisions of section 3 of the Customs Tariff Act, Thus, in case of supply of the warehoused goods, the point of levy would be the point at which the duty is collected under section 12 of the Customs Act, 1962 which is at the time of clearance of such goods under section 68 of the Customs Act. As per section 3(8A) of the CTA the valuation for the purpose of levy of integrated tax on warehoused imported goods at the time of clearance for home consumption would be either the transaction value or the value as per Section 3(8) of the CTA (i.e. valuation done at the time of filing the into-bond bill of entry), whichever is higher. It is therefore, clarified that integrated tax shall be levied and collected at the time of final clearance of the warehoused goods for home consumption i.e., at the time of filing the ex-bond bill of entry and the value addition accruing at each stage of supply shall form part of the value on which the integrated tax would be payable at the time of clearance of the warehoused goods for home consumption. In other words, the supply of goods before their clearance from the warehouse would not be subject to the levy of integrated tax and the same would be levied and collected only when the warehoused goods are cleared for home consumption from the customs bonded warehouse. Note: This Circular has not been considered by ICAI in RTP. Hence, Students should ignore the same as we have covered the same in VPJ Module released for Nov 2018 attempt 13 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

14 CHAPTER 4: EXEMPTION FROM GST POWER TO GRANT EXEMPTION FROM TAX Section 11 Power To Grant Exemption From Tax [Section 11 of The CGST Act/Section 6 of IGST Act] Notification No. 12/2017 CT (R) dated / Notification No. 9/2017 IT (R) dated unless otherwise specified, has exempted the following services wholly from CGST/IGST respectively: List of Exemptions 1. Services by an entity registered under section 12AA of the Income-tax Act, 1961 by way of charitable activities. 2. Services by way of transfer of a going concern, as a whole or an independent part thereof. 3. Pure services provided to Government in relation to Panchayat/ Municipality 3A. Composite supply of goods and services in relation to any function entrusted to a Panchayat 4. Government services in relation function entrusted to a municipality under Article 243W of the Constitution 5. Government services in relation function entrusted to Panchayat under Article 243G of the Constitution 6. Services by the CG, SG, Union territory or local authority 7. Services provided by Govt. to a business entity with an aggregate turnover of up to Rs.20/10 lakhs in the preceding financial year 8. Services provided by the CG, SG, Union territory or local authority to another CG, SG, Union territory or local authority 9. Services provided by Govt. where the consideration for such services does not exceed Rs. 5,000 9A. Services provided by and to Fédération Internationale de Football Association 9B. Supply of services associated with transit cargo to Nepal and Bhutan 9C. Supply of service by a Government Entity to Government 10. Services provided by way of pure labour under the Housing for All (Urban) Mission or Pradhan Mantri Awas Yojana 11. Services provided by way of pure Labour contracts pertaining to a single residential unit 11A. Service provided by Fair Price Shops to Government 12. Services by way of renting of residential dwelling for use as residence 13. Religious ceremonies/places 14. Services by a hotel, inn, guest house, club or campsite having declared tariff less than Rs.1,000 per day. 15. Transport of passengers, with or without accompanied belongings or journey from/to specified airport 16. Services provided to the CG, by way of transport of passengers under regional connectivity scheme 17. Service of transportation of passengers by railways, metro etc. 14 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

15 18. Services by way of transportation of goods by road and inland waterways 19. Services by way of transportation of goods by an aircraft from a place outside India 19A. Services by way of transportation of goods by an aircraft from India to a Place Outside India 19B. Services by way of transportation of goods by a vessel from India to a Place Outside India 20. Services by way of transportation by rail or a vessel from one place in India to another 21. Services provided by a goods transport agency, by way of transport in a goods carriage 21A. Services provided by a goods transport agency to an unregistered person 22. Services by way of giving on hire a motor vehicle/ means of transportation of goods 23. Service by way of access to a road or a bridge on payment of toll charges 23A. Service by way of access to a road or a bridge on payment of annuity 24. Services by way of loading, unloading, packing, storage or warehousing of rice 25. Transmission or distribution of electricity by an electricity transmission or distribution utility 26. Services by the Reserve Bank of India. 27. Specified financial services 28. Services of life insurance business provided by way of annuity under NPS 29. Services of life insurance business provided by the Army, Naval and Air Force Group Insurance Funds 29A. Services of life insurance business provided to the personnel of Coast Guard 30. Services by the Employees State Insurance Corporation 31. Services provided by the Employees Provident Fund Organisation 32. Services provided by the Insurance Regulatory and Development Authority of India 33. Services provided by the SEBI 34. Services by an acquiring bank in relation to settlement 35. Services of general insurance business for specified schemes 36. Services of life insurance business for specified schemes 36A. Services by way of reinsurance 37. Services by way of collection of contribution under the Atal Pension Yojana 38. Services by way of collection of contribution under any pension scheme of the SGs 39. Services by business facilitator or a business correspondent 39A. Services provided by intermediary of financial services to a customer located outside India 40. Services provided to the CG, SG, Union territory under any insurance scheme 41. Upfront amount payable in respect of service by way of granting of long term lease 42. Services provided by Govt. by way of allowing a business entity to operate as a telecom service provider 43. Services of leasing of assets by the Indian Railways Finance Corporation to Indian Railways 44. Services provided by an incubatee up to a total turnover of of Rs.50 Lacs in a FY 45. Legal services 46. Services by a veterinary clinic 47. Services provided by Govt. by way of registration/testing etc. 48. Taxable services, provided by a TBI or a STEP 49. Services by way of collecting or providing news by an independent journalist, Press Trust of India or United News of India 50. Services of public libraries 51. Services provided by the Goods and Services Tax Network to Govt. 52. Services by an organiser to any person in respect of a business exhibition held outside India. 53. Services by way of sponsorship of sporting events 54. Services relating to cultivation of plants and rearing of all life forms of animals etc. 55. Carrying out an intermediate production process as job work in relation to cultivation of plants and rearing of all life forms of animals, except the rearing of horses 15 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

16 56. Services by way of slaughtering of animals 57. Services by way of pre-conditioning, pre-cooling, ripening, waxing, retail packing, labelling of fruits and vegetables 58. Services provided by the National Centre for Cold Chain Development 59. Services by a foreign diplomatic mission located in India 60. Services by a specified organisation in respect of a religious pilgrimage 61. Services by the Govt for issuance of passport, visa, driving license, birth certificate, death certificate 62. Services by the Govt. by way of tolerating non-performance of a contract 63. Services by the Govt. by way of assignment of right to use natural resources to an individual farmer 64. Services by the Govt. by way of assignment of right to use any natural resources before the 1st April, 2016: 65. Services by the Govt. by way of deputing officers after office hours or on holidays 65A. Services by way of providing information under the Right to Information Act, Services by/to an Educational Institutional 67. Services provided by the Indian Institutes of Management (IIMs) 68. Services provided to a recognised sports body 69. Services provided for skill development 70. Services of assessing bodies empanelled centrally by the Directorate General of Training 71. Services provided by training providers Deen Dayal Upadhyaya Grameen Kaushalya Yojana 72. Services provided to Govt. under any training programme. 73. Services provided by the cord blood banks 74. Health care services 75. Services provided of the common bio-medical waste treatment facility to a clinical establishment 76. Services by way of public conveniences 77. Service by an unincorporated body or a non- profit entity to its own members 78. Services by an artist 79. Services by way of admission to a museum, national park, wildlife sanctuary, tiger reserve or zoo 79A. Services by way of admission to a protected monument 80. Services by way of training or coaching in recreational activities 81. Services by way of right to admission to various events 82. Services by way of right to admission to the events organised under FIFA U-17 World Cup For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

17 3. Pure services provided to Government in relation to Panchayat/ Municipality PURE SERVICES (excluding works contract service or other composite supplies involving supply of any goods) provided to the CG, SG or Union territory or local authority or a Governmental authority or a Government Entity [Inserted vide Notification No. 2/2018- CT (R) dated ] by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution. 3A. Composite supply of goods and services in relation to any function entrusted to a Panchayat 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 CG, SG or Union territory or local authority or a Governmental authority or a Government Entity by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution [Inserted vide Notification No. 2/2018- CT (R) dated ] Analysis 9A. Services provided by and to Federation Internationale de Football Association Services provided by and to Fédération Internationale de Football Association (FIFA) and its subsidiaries directly or indirectly related to any of the events under FIFA U17 World Cup 2017 to be hosted in India. Conditions: Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly or indirectly related to any of the events under FIFA U-17 World Cup Inserted vide Notification No. 21/2017- Central Tax Rate; Source: CBIC Website 11A.* Service provided by Fair Price Shops to Government Service provided by Fair Price Shops to Central Government, State Government or Union territory by way of sale of food grains, kerosene, sugar, edible oil, etc. under Public Distribution System against 17 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

18 consideration in the form of commission or margin * Substituted vide Notification No. 47/2017- CT (R) dated B.* Service provided by Fair Price Shops to SG/UT Service provided by Fair Price Shops to State Governments or Union territories by way of sale of kerosene, sugar, edible oil, etc. under Public Distribution System (PDS) against consideration in the form of commission or margin *Inserted vide Notification No. 21/2017- Central Tax (Rate)/ Integrated Tax (Rate) dt ; Source : CBIC Website Omitted vide Notification No.47/2017- Central Tax (Rate) Circular 32/06/2018-GST No. Clarifications regarding GST in respect of certain services Issue Clarification Is hostel accommodation provided by Trusts to students covered within the definition of Charitable Activities and thus, exempt under Sl. No. 1 of notification No. 12/2017-CT (Rate). Hostel accommodation services do not fall within the ambit of charitable activities as defined in para 2(r) of notification No. 12/2017-CT(Rate). However, services by a hotel, inn, guest house, club or campsite, by whatever name called, for residential or lodging purposes, having declared tariff of a unit of accommodation below one thousand rupees per day or equivalent are exempt. Thus, accommodation service in hostels including by Trusts having declared tariff below one thousand rupees per day is exempt. [Sl. No. 14 of notification No. 12/2017- CT(Rate) refers] 16. Services provided to the CG, by way of transport of passengers under regional connectivity scheme Services provided to the CG, 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: Provided that nothing contained in this entry shall apply on or after the expiry of a period of one 3 years* from the date of commencement of operations of the regional connectivity scheme airport as notified by the Ministry of Civil Aviation. * Substituted to three years vide Notification No. 2/2018- Central Tax (Rate) dt For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

19 Viability Gap Funding (VGF) Means a grant one-time or deferred, provided to support infrastructure projects that are economically justified but fall short of financial viability. The lack of financial viability usually arises from long gestation periods and the inability to increase user charges to commercial levels. Infrastructure projects also involve externalities that are not adequately captured in direct financial returns to the project sponsor. 19A.* Services by way of transportation of goods by an aircraft from India to a Place Outside India Services by way of transportation of goods by an aircraft from customs station of clearance in India to a place outside India Note: Nothing contained in this serial number shall apply after the 30th day of September, B.* Services by way of transportation of goods by a vessel from India to a Place Outside India Services by way of transportation of goods by a vessel from customs station of clearance in India to a place outside India Note: Nothing contained in this serial number shall apply after the 30th day of September, *Inserted vide Notification No. 02/2018- CT (R) dated Note: Amendment has also been made in CGST Rules to provide that value of such service may be excluded from the value of exempted services for the purpose of reversal of ITC - Chapter 8: Input Tax Credit of this Update may be referred to for the amendment. 22. Services by way of giving on hire a motor vehicle/ means of transportation of goods Services by way of giving on hire a) to a state transport undertaking, a motor vehicle meant to carry more than twelve passengers; or b) to a goods transport agency, a means of transportation of goods. c) *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 *Inserted vide Notification No. 02/2018- CT (R) dated Transmission or distribution of electricity by an electricity transmission or distribution utility Circular No. 34/8/2018-GST Clarifications regarding GST in respect of certain services Issue (1) Whether the activities carried by DISCOMS against recovery of charges from consumers under State Electricity Act are exempt from GST? Clarification Service by way of transmission or distribution of electricity by an electricity transmission or distribution utility is exempt from GST under notification No. 12/2017- CT (R), Sl. No. 25. The other services such as, - i. Application fee for releasing connection of electricity; ii. Rental Charges against metering equipment; 19 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

20 (2) Whether the guarantee provided by State Government to state owned companies against guarantee commission, is taxable under GST? 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; provided by DISCOMS to consumer are taxable. 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. 29A.* Services of life insurance business provided to the personnel of Coast Guard 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. *Inserted vide Notification No. 02/2018- CT (R) dated ; 36. Services of life insurance business for specified schemes Services of life insurance business provided under following schemesa) Janashree Bima Yojana; b) Aam Aadmi Bima Yojana; c) Life micro-insurance product as approved by the Insurance Regulatory and Development Authority, having maximum amount of cover of Rs.50,000 2,00,000* d) Varishtha Pension BimaYojana; e) Pradhan Mantri Jeevan JyotiBimaYojana; f) Pradhan Mantri Jan DhanYogana; g) Pradhan Mantri Vaya Vandan Yojana. Life insurance has the same meaning as assigned to it in clause (11) of section 2 of the Insurance Act, business Life microinsurance Regulatory and Development Authority (Micro-insurance) Regulations, 2005; shall have the same meaning as assigned to it in clause (e) of regulation 2 of the Insurance product *Inserted vide Notification No. 02/2018- CT (R) dated A.* Services by way of reinsurance of the insurance schemes specified in serial number 35 or 36. *Inserted vide Notification No. 02/2018- Central Tax (Rate) dt ; Source: CBIC Website 39A.* Services provided by intermediary of financial services to a customer located outside India 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). Explanation.- For the purposes of this entry, the intermediary of financial services in IFSC is a person,- (i) who is permitted or recognised as such by the Government of India or any Regulator appointed for 20 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

21 regulation of IFSC; or (ii) who is treated as a person resident outside India under the Foreign Exchange Management (International Financial Services Centre) Regulations, 2015; or (iii) who is registered under the Insurance Regulatory and Development Authority of India (International Financial Service Centre) Guidelines, 2015 as IFSC Insurance Office; or (iv) who is permitted as such by SEBI under the SEBI (International Financial Services Centres) Guidelines, *Inserted vide Notification No. 02/2018- CT (R) dated Services provided to the CG, SG, Union territory under any insurance scheme Services provided to the CG, SG, Union territory under any insurance scheme for which total premium is paid by the CG, SG, Union territory. Circular No. 16/16/2017-GST Issue Is GST leviable on General Insurance policies provided by a State Government to employees of the State government/ Police personnel, employees of Electricity Department or students of colleges/ private schools etc. a) where premium is paid by State Government and b) where premium is paid by employees, students etc.? Clarification on general insurance policies provided by a State Government to employees of the State Government/ Police personnel, employees of Electricity Department or students of colleges/private schools etc. Comment It is hereby clarified that services provided to the Central Government, State Government, Union territory under any insurance scheme for which total premium is paid by the Central Government, State Government, Union territory are exempt from GST under Sl. No. 40 of notification No. 12/2017-Central Tax (Rate). Further, services provided by State Government by way of general insurance (managed by government) to employees of the State government/ Police personnel, employees of Electricity Department or students are exempt vide entry 6 of notification No. 12/2017- CT(R) which exempts Services by Central Government, State Government, Union territory or local authority to individuals. Note: Notification No. 12/2017 CT (R) dated contains various exemptions in respect of intra-state supplies of specified services. Entry 40 of the said notification exempts services provided to the Central Government, State Government, Union territory under any insurance scheme for which total premium is paid by the Central Government, State Government, Union territory. Further, Entry 6 of the Notification exempts services provided by the Central Government, State Government, Union territory or local authority excluding the following services (a) services by the Department of Posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than the Central Government, State Government, Union territory; (b) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport; (c) transport of goods or passengers; or (d) any service, other than services covered under entries (a) to (c) above, provided to business entities. 21 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

22 45. Legal Services Services provided bya) an arbitral tribunal to (i) any person other than a business entity; or (ii) a business entity with an aggregate turnover up to Rs.20 lakh (Rs.10 lakh in the case of special category states) in the preceding financial year; (iii) *the Central Government, State Government, Union territory, local authority, Governmental Authority or Government Entity b) a partnership firm of advocates or an individual as an advocate other than a senior advocate, by way of legal services to- (i) an advocate or partnership firm of advocates providing legal services; (ii) any person other than a business entity; or (iii) a business entity with an aggregate turnover up to Rs.20 lakh (Rs.10 lakh in the case of special category states) in the preceding financial year; (iv) *the Central Government, State Government, Union territory, local authority, Governmental Authority or Government Entity; c) a senior advocate by way of legal services to- (i) any person other than a business entity; or (ii) a business entity with an aggregate turnover up to Rs.20 lakh (Rs.10 lakh in the case of special category states) in the preceding financial year. (iii) *the Central Government, State Government, Union territory, local authority, Governmental Authority or Government Entity; *Inserted vide Notification No. 02/2018- CT (R) dated For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

23 Evaluate the tax liability in each of the following situations? 54. Services relating to cultivation of plants and rearing of all life forms of animals etc. Services relating to cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products or agricultural produce by way of a) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing; b) supply of farm labour; c) processes carried out at an agricultural farm including tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations which do not alter the essential characteristics of agricultural produce but make it only marketable for the primary market; d) renting or leasing of agro machinery or vacant land with or without a structure incidental to its use; e) loading, unloading, packing, storage or warehousing of agricultural produce; f) agricultural extension services; g) services by any Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale or purchase of agricultural produce. h) *Services by way of fumigation in a warehouse of agricultural produce.; *Inserted vide Notification No. 02/2018- Central Tax (Rate) dt ; Source: CBIC Website 23 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

24 Agricultural extension Agricultural produce Agricultural Produce Marketing Committee Board or means application of scientific research and knowledge to agricultural practices through farmer education or training. means any produce out of cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products, on which either no further processing is done or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics but makes it marketable for primary market. means any committee or board constituted under a State law for the time being in force for the purpose of regulating the marketing of agricultural produce. Circular No. 16/16/2017-GST Issue Is GST applicable on warehousing of agricultural produce such as tea (i.e. black tea, white tea Clarifications regarding applicability of GST and availability of ITC in respect of certain services Comment 1) As mentioned above, as per Entry 54 of Notification, the GST rate on loading, unloading packing, storage or warehousing of agricultural produce is Nil. 2) Tea used for making the beverage, such as black tea, green tea, white tea is a processed product made in tea factories after carrying out several processes, such as drying, rolling, shaping, refining, oxidation, packing etc. on green leaf and is the processed output of the same. 3) Thus, green tea leaves and not tea is the agricultural produce eligible for exemption 24 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

25 etc.), processed coffee beans or powder, pulses (de-husked or split), jaggery, processed spices, processed dry fruits, processed cashew nuts etc.? available for loading, unloading, packing, storage or warehousing of agricultural produce. Same is the case with coffee obtained after processing of coffee beans. 4) Similarly, processing of sugarcane into jaggery changes its essential characteristics. Thus, jaggery is also not an agricultural produce. 5) 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 also not agricultural produce. However whole pulse grains such as whole gram, rajma etc. are covered in the definition of agricultural produce. 6) In view of the above, it is hereby clarified that processed products such as tea (i.e. black tea, white tea etc.), processed coffee beans or powder, pulses (dehusked or split), jaggery, processed spices, processed dry fruits, processed cashew nuts etc. fall outside the definition of agricultural produce and therefore the exemption from GST is not available to their loading, packing, warehousing etc. and that any clarification issued in the past to the contrary in the context of Service Tax or VAT/ Sales Tax is no more relevant. 55. Carrying out an intermediate production process in relation to cultivation of plants and rearing of all life forms of animals Carrying out an intermediate production process as job work in relation to cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products or agricultural produce. Circular No. 19/19/2017-GST Clarification on taxability of custom milling of paddy Issue: Whether custom milling of paddy by Rice millers for Civil Supplies Corporation is liable to GST or is exempted under Entry 55? Clarification: 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 an intermediate production process in relation to cultivation of plants for food, fibre or other similar products or agricultural produce. In view of the above, it is clarified that milling of paddy into rice is not eligible for exemption under S. No 55 of Notification 12/ Central Tax (Rate) dated 28th June 2017 and corresponding notifications issued under IGST and UTGST Acts. Therefore, it is hereby clarified that milling of paddy into rice on job work basis, is liable to GST at the rate of 5%, on the processing charges (and not on the entire value of rice). 65A.* Services by way of providing information under the Right to Information Act, 2005 *Inserted vide Notification No. 02/2018- CT (R) dated For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

26 66. Services by/to an Educational Institutional Services provided - a) by an educational institution to its students, faculty and staff; (aa) *by an educational institution by way of conduct of entrance examination against consideration in the form of entrance fee; b) to an educational institution, by way of,- (i) transportation of students, faculty and staff; (ii) catering, including any mid-day meals scheme sponsored by the CG, SG or Union territory; (iii) security or cleaning or house-keeping services performed in such educational institution; (iv) services relating to admission to, or conduct of examination by, such institution; upto higher secondary:** (v) supply of online educational journals or periodicals Provided that nothing contained in entry (b) ***sub-items (i), (ii) and (iii) of item (b) shall apply to an educational institution other than an institution providing services by way of pre-school education and education up to higher secondary school or equivalent. *Provided further that nothing contained in sub-item (v) of item (b) shall apply to an institution providing services by way of,- (i) pre-school education and education up to higher secondary school or equivalent; or (ii) education as a part of an approved vocational education course *Inserted; **Omitted ; ***Substituted vide Notification No. 02/2018- CT (R) dated Educational institution Approved vocational education course means an institution providing services by way of,- pre-school education and education up to higher secondary school or equivalent; education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force; education as a part of an approved vocational education course. means, - (i) a course run by an industrial training institute or an industrial training centre affiliated to the National Council for Vocational Training or State Council for Vocational Training offering courses in designated trades notified under the Apprentices Act, 1961 (52 of 1961); or (ii) a Modular Employable Skill Course, approved by the National Council of Vocational Training, run by a person registered with the Directorate General of Training, Ministry of Skill Development and Entrepreneurship; 66. Services by/to an Educational Institutional Circular No. 28/02/2018-GST Clarifications regarding GST on College Hostel Mess Fees Issue: Clarification: Whether services provided by a College Hostel Mess are exempt from GST? It has been clarified that the educational institutions have mess facility for providing food to their students and staff. Such facility is either run by the institution/ students themselves or is outsourced to a third person. If the catering services is one of the services provided by an educational institution to its students, faculty and staff and the said educational institution is covered by the definition of educational institution as given above, then the same is exempt [covered under item (a) of 26 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

27 entry 66 of the Notification]. If the catering services, i.e., supply of food or drink in a mess or canteen, is provided by anyone other than the educational institution, then it is a supply of service to the concerned educational institution and attracts GST [Circular No. 28/02/2018 GST dated ] 75. Services provided of the common bio-medical waste treatment facility to a clinical establishment Circular No. 32/06/2018-GST Clarifications regarding GST in respect of certain services Issue Is GST leviable in following cases: (1) Hospitals hire senior doctors/ consultants/ technicians independently, without any contract of such persons with the patient; and pay them consultancy charges, without there being any employer employee relationship. Will such consultancy charges be exempt from GST? Will revenue take a stand that they are providing services to hospitals and not to patients and hence must pay GST? (2) Retention money: Hospitals charge the patients, say, Rs.10000/- and pay to the consultants/ technicians only Rs. 7500/- and keep the balance for providing ancillary services which include nursing care, infrastructure facilities, paramedic care, emergency services, checking of temperature, weight, blood pressure etc. Will GST be applicable on such money retained by the hospitals? (3) Food supplied to the patients: Health care services provided by the clinical establishments will include food supplied to the patients; but such food may be prepared by the canteens run by the hospitals or may be outsourced by the Hospitals from outdoor caterers. What will be the GST implication? Clarification Health care services provided by a clinical establishment, an authorised medical practitioner or para-medics are exempt. [Sl. No. 74 of notification No. 12/2017CT(Rate) dated as amended refers]. (1) Services provided by senior doctors/ consultants/ technicians hired by the hospitals, whether employees or not, are healthcare services which are exempt. (2) Healthcare services have been defined to mean any service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicines in India[para 2(zg) of notification No. 12/2017CT(Rate)]. Therefore, hospitals also provide healthcare services. The entire amount charged by them from the patients including the retention money and the fee/payments made to the doctors etc., is towards the healthcare services provided by the hospitals to the patients and is exempt. When outsourced, there should be no ambiguity that the suppliers shall charge tax as applicable and hospital will get no ITC. If hospitals have their own canteens and prepare their own food; then no ITC will be available on inputs including capital goods and in turn if they supply food to the doctors and their staff; such supplies, even when not charged, may be subjected to GST. Food supplied to the in-patients as advised by the doctor/nutritionists is a part of composite supply of healthcare and not separately taxable. Other supplies of food by a hospital to patients (not admitted) or their attendants or visitors are taxable. 27 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

28 77. Service by an unincorporated body or a non- profit entity to its own members Service by an unincorporated body or a non- profit entity registered under any law for the time being in force, to its own members by way of reimbursement of charges or share of contribution a) as a trade union; b) for the provision of carrying out any activity which is exempt from the levy of Goods and service Tax; or c) up to an amount of Rs.5,000 7,500 *per month per member for sourcing of goods or services from a third person for the common use of its members in a housing society or a residential complex. *Substituted vide Notification No. 02/2018- Central Tax (Rate) dt ; Source: CBIC Website Trade union has the same meaning as assigned to it in clause (h) of section 2 of the Trade Unions Act, A.* Services by way of admission to a protected monument Services by way of admission to a protected monument so declared under the Ancient Monuments and Archaeological Sites and Remains Act 1958 or any of the State Acts, for the time being in force *Inserted vide Notification No. 47/2017- CT (R) dated ; 81. Services by way of right to admission to various events Services by way of right to admission toa) 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, where the consideration for admission is not more than Rs 250 per person as referred to in (a), (b) and (c) above. *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 *Substituted vide Notification No. 02/2018- CT (R) dated Recognised sporting event means any sporting event,- (i) organised by a recognised sports body where the participating team or individual represent any district, State, zone or country; (ii) organised - (A) by a national sports federation, or its affiliated federations, where the participating teams or individuals represent any district, state or zone; (B) by Association of Indian Universities, Inter-University Sports Board, School Games Federation of India, All India Sports Council for the Deaf, Paralympic Committee of India or Special Olympics Bharat; (C) by Central Civil Services Cultural and Sports Board; (D) as part of national games, by Indian Olympic Association; or (E) under Panchayat Yuva Kreeda Aur Khel Abhiyaan (PYKKA) Scheme; 28 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

29 Note: Parallel exemptions from IGST have been extended to supply of inter-state services by amending Notification No. 9/2017 IT (R) dated , which grants exemption to supply of inter-state services from IGST, vide Notification No. 25/2017 IT (R) dated , Notification No. 31/2017 IT (R) dated , Notification No. 33/2017 IT (R) dated , Notification No. 49/2017 IT (R) dated and Notification No. 2/2018 IT (R) dated I. OTHER EXEMPTIONS 1. Reverse charge on procurements made from unregistered persons deferred till 30th June,2018 Intra State Supplies Intra-State supplies of goods or services or both received by a registered person from any unregistered supplier, are exempt from the whole of the central tax leviable thereon under section 9(4). However, the said exemption shall not be applicable where the aggregate value of such supplies of goods or service or both received by a registered person from any or all the suppliers, who is or are not registered, exceeds Rs. 5,000 in a day [Notification No.8/2017 CT (R) dated ]. Analysis Notification No. 38/2017 CT (R) dated has omitted the said proviso with effect from thereby exempting all intra-state procurements made by a registered person from unregistered person, without any upper limit for daily procurements. Earlier, The Central Government vide Notification No. 38/2017 Central Tax (Rate) dated 13th October, 2017 has provided that any registered person procuring taxable goods/services from unregistered suppliers, shall not be required to pay CGST under reverse charge mechanism U/s 9(4) of CGST Act, 2017 till March 31, 2018 with effect from 13th Oct, Further in order to continue such exemption, the Central Government vide Notifications No. 10/2018 Central Tax (Rate), 11/2018 Integrated Tax (Rate) dated 23rd March, 2018 has provided that any registered person procuring taxable goods/services from unregistered Extension in time limit to make an application for refund by specified persons suppliers, shall not be required to pay CGST/IGST under reverse charge mechanism U/s 9(4) of CGST Act or u/s 5(4) of IGST Act, 2017 respectively till 30th June,2018 The aforesaid said exemption has further been extended to vide Notification No. 12/2018 CT (R) dated & Notification No. 13/2018 IT (R) dated Further, inter-state procurements made by a registered person from an unregistered person were also exempted from IGST till vide Notification No. 32/2017 IT (R) dated The above exemptions have been extended till vide Notifications No. 10/2018 CT (R) dated and Notification No. 11/2018 IT (R) dated Inter State Supplies Further, inter-state procurements made by a registered person from an unregistered person have also been exempted from IGST till vide Notification No. 32/2017 IT (R) dated Further vide Notification No. 11/2018 Integrated Tax (Rate) the date has been extended upto 30th day of June, For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

30 2. Intra-State supplies received by a TDS deductor from any unregistered supplier exempt from CGST 3* Exemption on Intra-state supply of service by way of grant of license to explore or mine petroleum The Central Government has exempted the intra-state supply of services by way of grant of license or lease to explore or mine petroleum crude or natural gas or both, from so much of the central tax as is leviable on the consideration paid to CG in the form of CG s share of profit petroleum as defined in the contract entered into by the Central Government in this behalf. * Notification no. 5/2018- CT (R) dated Similarly Notification has been issued exempting Inter State Supply- Notification No. 5/2018- Integrated Tax (Rate) 4.* Exemption from IGST on royalty and license fee to the extent it is paid on the consideration attributable to royalty and license fee included in transaction value under Rule 10(1)(c) of Customs Valuation (Determination of value of imported Goods) Rules, The Central Government has exempted the integrated tax leviable under section 5 read with section 7 of the said Act on the supply of services, imported into the territory of India, Covered by item 5(c ) of Schedule II to the CGST Act, 2017 as made applicable by section 20 of the said Act, to the extent of the aggregate of the duties of Customs leviable under Section 3(7) of the Customs Tariff Act, 1975, on the consideration declared under section 14(1) of the Customs Act, 1962 towards royalties and license fees included in the transaction value as specified under Rule 10(1)(c ) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 on which the appropriate duties of Customs have been paid. *Notification No. 6/2018-Integrated Tax (Rate) dated 25 th Jan 2018; 5* Supply of services having place of supply in Nepal or Bhutan, against payment in Indian Rupees 6* Services received from a provider of service located in a non- taxable territory by way of supply of online educational journals or periodicals to an educational institution other than an institution providing services by way of- (i) pre-school education and education up to higher secondary school or equivalent; or (ii) education as a part of an approved vocational education course; [Notification No. 2/2018 CT (R) dated ]. Source: Website CBIC Circular 27/01/2018-GST No. Clarifications regarding levy of GST on accommodation services, betting and gambling in casinos, horse racing, admission to cinema, homestays, printing, legal services etc. Reg. 1. Will GST be charged on actual tariff or 1. Declared or published tariff is relevant only for determination declared tariff for accommodation services? of the tax rate slab. GST will be payable on the actual amount charged (transaction value). 2. What will be GST rate if cost goes up (more 2. GST rate would be determined according to declared tariff for 30 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

31 than declared tariff) owing to additional bed. the room, and GST at the rate so determined would be levied on the entire amount charged from the customer. For example, if the declared tariff is Rs per unit per day but the amount charged from the customer on account of extra bed is Rs. 8000, GST shall be charged at 18% on Rs Where will the declared tariff be published? 3. Tariff declared anywhere, say on the websites through which business is being procured or printed on tariff card or displayed at the reception will be the declared tariff. In case different tariff is declared at different places, highest of such declared tariffs shall be the declared tariff for the purpose of levy of GST. 4. Same room may have different tariff at different times depending on season or flow of tourists as per dynamic pricing. Which rate to be used then? 5. If tariff changes between booking and actual usage, which rate will be used? 6. GST at what rate would be levied if an upgrade is provided to the customer at a lower rate? 7. Whether for the purpose of entries at Sl. Nos. 34(ii) [admission to cinema] and 7(ii)(vi)(viii) [Accommodation in hotels, inns, etc.], of notification 11/2017-CT (Rate) dated 28th June 2017, price/ declared tariff includes the tax component or not? 8. Whether rent on rooms provided to inpatients is exempted? If liable to tax, please mention the entry of CGST Notification 11/2017CT(Rate) 9. What will be the rate of tax for bakery items supplied where eating place is attached - manufacturer for the purpose of composition levy? 4. In case different tariff is declared for different seasons or periods of the year, the tariff declared for the season in which the service of accommodation is provided shall apply. 5. Declared tariff at the time of supply would apply. 6. If declared tariff of the accommodation provided by way of upgrade is Rs 10000, but amount charged is Rs 7000, then GST would be 28% on Rs 7000/-. 1. Price/ declared tariff does not include taxes. Room rent in hospitals is exempt. Any service by way of serving of food or drinks including by a bakery qualifies under section 10 (1) (b) of CGST Act and hence GST rate of composition levy for the same would be 5%. Source: CBIC Website Circular No. 16/16/2017-GST Clarifications regarding applicability of GST and availability of ITC in respect of certain services Issue Is GST leviable on inter-state transfer of aircraft engines, parts and accessories for use by their own airlines? Comment 1. Under Schedule I of the CGST Act, supply of goods or services or both between related persons or between distinct persons as specified in Section 25, when made in the course or furtherance of business, even if, without consideration, attracts GST. 2. It is hereby clarified that credit of GST paid on aircraft engines, parts & accessories will be available for discharging GST on inter state supply of such aircraft engines, parts & accessories by way of inter-state stock transfers between distinct persons as specified in section 25 of the CGST Act, notwithstanding that credit of input tax charged on consumption of such goods is not allowed for supply of service of transport of passengers by air in economy class at GST rate of 5%. 31 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

32 Source: Website CBIC Circular 27/01/2018-GST No. Clarifications regarding levy of GST on accommodation services, betting and gambling in casinos, horse racing, admission to cinema, homestays, printing, legal services etc. Reg. Questions/ Clarifications sought Whether legal services other than representational services provided by an individual advocate or a senior advocate to a business entity are liable for GST under reverse charge mechanism? Clarifications Yes. In case of legal services including representational services provided by an advocate including a senior advocate to a business entity, GST is required to be paid by the recipient of the service under reverse charge mechanism, i.e. the business entity. Source: Website CBIC Circular 32/06/2018-GST No. Clarifications regarding GST in respect of certain services Issue Whether the services of elephant or camel ride, rickshaw ride and boat ride should be classified under heading 9964 (as passenger transport service) in which case, the rate of tax on such services will be 18% or under the heading 9996 (recreational, cultural and sporting services) treating them as joy rides, leviable to GST@ 28%? Clarification Elephant/ camel joy rides cannot be classified as transportation services. These services will attract 18% with threshold exemption being available to small service providers. [Sl. No 34(iii) of notification No. 11/2017-CT(Rate) dated as amended by notification No. 1/2018-CT(Rate) dated refers] Note: These Circulars has not been considered by ICAI in RTP. Hence, Students should ignore the same as we have covered the same in VPJ Module released for Nov 2018 attempt 32 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

33 CHAPTER 6: TIME OF SUPPLY Amendment No-1 [Notification No. 40/2017 CT dated ] No GST on advance received against supply of goods for assessees (excluding composition suppliers) having aggregate turnover up to Rs.1.5 crore in the preceding financial year The registered person whose aggregate turnover in the preceding financial year did not exceed Rs. 1.5 crore or the registered person whose aggregate turnover in the year in which such person has obtained registration is likely to be less than Rs. 1.5 crore and who did not opt for the composition levy have been notified as the class of persons who shall pay CGST on the outward supply of goods at the time of supply as specified in section 12(2)(a) of the CGST Act including in the situations attracting the provisions of section 14 of the said Act. These persons shall accordingly furnish the details and returns as mentioned in Chapter IX of the said Act and the rules made thereunder and the period prescribed for the payment of tax by such class of registered persons shall be such as specified in the said Act. Analysis In simple words, the time of supply for suppliers of goods having aggregate turnover up to Rs. 1.5 crore in the preceding financial year (excluding composition suppliers) will be the time of issue of invoice. Thus, GST will not be leviable on advances received against supply of goods in case of such suppliers. Notification No. 40/2017 CT dated has been superseded by Notification No. 66/2017 CT dated to specify that all registered suppliers of goods (excluding composition suppliers) shall pay CGST on the outward supply of goods at the time of supply as specified in section 12(2)(a) of the CGST Act. In other words, time of supply for all registered suppliers of goods (excluding composition suppliers) will be the time of issue of invoice, without any turnover limit. This amendment has become effective from Amendment Notification No. 4/2018- Deferment of liability on exchange transaction between No-2 Central Tax (Rate) Builder and owner of land Section 148 empowers the Government to notify, on the recommendations of the Council, and subject to such conditions and safeguards as may be prescribed, 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, in exercise of the powers conferred by section 148 of the CGST Act, 2017, the CG, on the recommendations of the Council, hereby notifies the following classes of registered persons, namely :- a) registered persons who SUPPLY DEVELOPMENT RIGHTS to a developer, builder, construction company or any other registered person against consideration, wholly or partly, in the form of construction service of complex, building or civil structure; and b) registered persons who SUPPLY CONSTRUCTION SERVICE OF COMPLEX, building or civil structure to supplier of development rights against consideration, wholly or partly, in the form of transfer of development rights, as the registered persons in whose case the liability to pay central tax on supply of the said services, on the consideration received in the form of construction service referred to in clause (a) above and in the form of development rights referred to in clause (b) above, shall arise at the time when the said developer, builder, construction company or any other registered person, as the case may be, transfers possession or the right in the 33 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

34 constructed complex, building or civil structure, to the person supplying the development rights by entering into a conveyance deed or similar instrument (for example allotment letter). Analysis The liability to pay GST in case of transfer of development rights (TDR) against consideration in the form of construction service and on construction service against consideration in the form of TDR has been deferred to the time when the possession or right in the property is transferred to the land owner by entering into a conveyance deed or similar instrument (eg. allotment letter). Parallel amendment has been made with regard to liability to pay IGST on the said services vide Notification No. 4/2018 IT (R) dated For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

35 CHAPTER 7 VALUE OF SUPPLY Amendment No: 1 Notification No, 12/2017- Integrated Tax dated Provisions introduced for computing proportionate value of advertisement services attributable to different States or Union territories in the absence of any contract between the supplier of service and recipient of services As per section 12(14) of the IGST Act, 2017, place of supply of advertisement services provided to the Central Government/ State Government/ Statutory body/ Local authority meant for the State or Union Territory identified in contract or agreement is taken as being in each of such States or Union territories. The value of such supplies is in proportion to the services provided by way of dissemination in the respective States or Union territories as may be determined in terms of the contract or agreement entered into in this regard or, in the absence of such contract or agreement, on such other basis as may be prescribed. A new rule 3 has been inserted in IGST Rules to provide a mechanism to compute the proportionate value of advertisement services attributable to different States or Union territories in the absence of any contract between the supplier of service and recipient of services. The new rule provides as under: 1. Short title and commencement.- (1) These rules may be called the Integrated Goods and Services Tax Rules, (2)Application of Central Goods and Services Tax Rules.- The Central Goods and Services Tax Rules, 2017, for carrying out the provisions specified in section 20 of the Integrated Goods and Services Tax Act, 2017 shall, so far as may be, apply in relation to integrated tax as they apply in relation to central tax. 3. The proportion of value attributable to different States or Union territories, in the case of supply of advertisement services to the Central Government, a State Government, a statutory body or a local authority, under Section 12(14) of the Integrated Goods and Services Tax Act, 2017, in the absence of any contract between the supplier of service and recipient of services, shall be determined in the following manner namely:- (a) In the case of newspapers and publications, the amount payable for publishing an advertisement in all the editions of a newspaper or publication, which are published in a State or Union territory, as the case may be, is the value of advertisement service attributable to Illustrations: ABC is a government agency which deals with the all the advertisement and publicity of the Government. It has various wings dealing with various types of publicity. In furtherance thereof, it issues release orders to various agencies and entities. These agencies and entities thereafter provide the service and then issue invoices to ABC indicating the amount to be paid by them. ABC issues a release order to a newspaper for an advertisement on Beti bachao beti padhao, to be published in the newspaper DEF (whose head office is in Delhi) for the editions of Delhi, Pune, Mumbai, Lucknow and Jaipur. The release order will have details of the newspaper like the periodicity, language, size of the advertisement and the amount to be paid to such a newspaper. The place of supply of this service shall be in the Union territory of Delhi, and the States of Maharashtra, Uttar Pradesh and Rajasthan. The amounts payable to the 35 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

36 the dissemination in such State or Union territory. (b) in the case of printed material like pamphlets, leaflets, diaries, calendars, T shirts etc, the amount payable for the distribution of a specific number of such material in a particular State or Union territory is the value of advertisement service attributable to the dissemination in such State or Union territory, as the case may be. (c) (i) in the case of hoardings other than those on trains, the amount payable for the hoardings located in each State or Union territory, as the case may be, is the value of advertisement service attributable to the dissemination in each such State or Union territory, as the case may be. (c ) (ii) in the case of advertisements placed on trains, the breakup, calculated on the basis of the ratio of the length of the railway track in each State for that train, of the amount payable for such advertisements is the value of advertisement service Pune and Mumbai editions would constitute the proportion of value for the state of Maharashtra which is attributable to the dissemination in Maharashtra. Likewise the amount payable to the Delhi, Lucknow and Jaipur editions would constitute the proportion of value attributable to the dissemination in the Union territory of Delhi and States of Uttar Pradesh and Rajasthan respectively. DEF should issue separate State wise and Union territory wise invoices based on the editions. Illustrations: As a part of the campaign Swachh Bharat, ABC has engaged a company GH for printing of one lakh pamphlets( at a total cost of one lakh rupees) to be distributed in the states of Haryana, Uttar Pradesh and Rajasthan. In such a case, ABC should ascertain the breakup of the pamphlets to be distributed in each of the three States i.e. Haryana, Uttar Pradesh and Rajasthan, from the Ministry or 2 department concerned at the time of giving the print order. Let us assume that this breakup is twenty thousand, fifty thousand and thirty thousand respectively. This breakup should be indicated in the print order. The place of supply of this service is in Haryana, Uttar Pradesh and Rajasthan. The ratio of this breakup i.e 2:5:3 will form the basis of value attributable to the dissemination in each of the three States. Separate invoices will have to be issued State wise by GH to ABC indicating the value pertaining to that State i.etwenty thousand rupees- Haryana, fifty thousand rupees- Uttar Pradesh and thirty thousand rupees- Rajasthan. Illustrations: ABC as part of the campaign Saakshar Bharat has engaged a firm IJ for putting up hoardings near the Airports in the four metros i.e. Delhi, Mumbai, Chennai and Kolkata. The release order issued by ABC to IJ will have the citywise, locationwise breakup of the amount payable for such hoardings. The place of supply of this service is in the Union territory of Delhi and the States of Maharashtra, Tamil Nadu and West Bengal. In such a case, the amount actually paid to IJ for the hoardings in each of the four metros will constitute the value attributable to the dissemination in the Union territory of Delhi and the States of Maharashtra, Tamil Nadu and West Bengal respectively. Separate invoices will have to be issued State wise and Union territory wise by IJ to ABC indicating the value pertaining to that State or Union territory. Illustrations: ABC places an order on KL for advertisements to be placed on a train with regard to the Janani Suraksha Yojana. The length of a track in a state will vary from train to train. Thus for advertisements to be placed on the Hazrat Nizamuddin Vasco Da Gama Goa Express which runs through Delhi, Haryana, Uttar Pradesh, Madhya Pradesh, Maharashtra, Karnataka and Goa, KL may ascertain the total length of the track from Hazrat Nizamuddin to Vasco Da Gama as well as the length of the track in each of these States and Union territory from the website The place of supply of this service is in the Union territory of Delhi and States of Haryana, Uttar Pradesh, Madhya Pradesh, Maharashtra, Karnataka and Goa. The value of the supply in each of these States and Union territory attributable to the dissemination in these States will be in the ratio of the 36 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

37 (d) (i) attributable to the dissemination in such State or Union territory, as the case may be. V P J length of the track in each of these States and Union territory. If this ratio works out to say 0.5:0.5: 2:2 :3:3:1, and the amount to be paid to KL is one lakh twenty thousand rupees, then KL will have to calculate the Statewise and Union territory wise breakup of the value of the service, which will be in the ratio of the length of the track in each State and Union territory. In the given example the Statewise and Union territory wise breakup works out to Delhi (five thousand rupees), Haryana( five thousand rupees), Uttar Pradesh (twenty thousand rupees), Madhya Pradesh (twenty thousand rupees), Maharashtra (thirty thousand rupees), Karnataka (thirty thousand rupees) 3 and Goa (ten thousand rupees). Separate invoices will have to be issued State wise and Union territory wise by KL to ABC indicating the value pertaining to that State or Union territory. in the case of advertisements on the back of utility bills of oil and gas companies etc, the amount payable for the advertisements on bills pertaining to consumers having billing addresses in such States or Union territory as the case may be, is the value of advertisement service attributable to dissemination in such State or Union territory. (d) (ii) in the case of advertisements on railway tickets, the breakup, calculated on the basis of the ratio of the number of Railway Stations in each State or Union territory, when applied to the amount payable for such advertisements, shall constitute the value of advertisement service attributable to the dissemination in such State or Union territory, as the case may be. (e) in the case of advertisements over radio stations the amount payable to such radio station, which by virtue of its name is part of a State or Union territory, as the case may be, is the value of advertisement service attributable to dissemination in such State or Union territory, as the case may be. Illustration: ABC has issued a release order to MN for display of advertisements relating to the Ujjwala scheme on the railway tickets that are sold from all the Stations in the States of Madhya Pradesh and Chattisgarh. The place of supply of this service is in Madhya Pradesh and Chattisgarh. The value of advertisement service attributable to these two States will be in the ratio of the number of railway stations in each State as ascertained from the Railways or from the website Let us assume that this ratio is 713:251 and the total bill is rupees nine thousand six hundred and forty. The breakup of the amount between Madhya Pradesh and Chattisgarh in this ratio of 713:251 works out to seven thousand one hundred and thirty rupees and two thousand five hundred and ten rupees respectively. Separate invoices will have to be issued State wise by MN to ABC indicating the value pertaining to that State. Illustration: For an advertisement on Pradhan Mantri Ujjwala Yojana, to be broadcast on a FM radio station OP, for the radio stations of OP Kolkata, OP Bhubaneswar, OP Patna, OP Ranchi and OP Delhi, the release order issued by ABC will show the breakup of the amount which is to be paid to each of these radio stations. The place of supply of this service is in West Bengal, Odisha, Bihar, Jharkhand and Delhi. The place of supply of OP Delhi is in Delhi even though the studio may be physically located in another state. Separate invoices will have to be issued State wise and Union territory wise by MN to ABC based on the value pertaining to each State or Union territory. f) in the case of advertisement on television channels, the amount attributable to the value of advertisement service disseminated in a State shall be calculated on the basis of the viewership of such channel in such State, which in turn, shall be calculated in the following manner, namely: 37 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

38 (i) the channel viewership figures for that channel for a State or Union territory shall be taken from the figures published in this regard by the Broadcast Audience Research Council; (ii) the figures published for the last week of a given quarter shall be used for calculating viewership for the succeeding quarter and at the beginning, the figures for the quarter 1st July, 2017 to 30th September, 2017 shall be used for the succeeding quarter 1st October, 2017 to 31st December, 2017; (iii) where such channel viewership figures relate to a region comprising of more than one State or Union territory, the viewership figures for a State or Union territory of that region, shall be calculated by applying the ratio of the populations of that State or Union territory, as determined in the latest Census, to such viewership figures; (iv) the ratio of the viewership figures for each State or Union territory as so calculated, when applied to the amount payable for that service, shall represent the portion of the value attributable to the dissemination in that State or Union territory. Illustration: ABC issues a release order with QR channel for telecasting an advertisement relating to the Pradhan Mantri Kaushal Vikas Yojana in the month of November, In the first phase, this will be telecast in the Union territory of Delhi, States of Uttar Pradesh, Uttarakhand, Bihar and Jharkhand. The place of supply of this service is in Delhi, Uttar Pradesh, Uttarakhand, Bihar and Jharkhand. In order to calculate the value of supply attributable to Delhi, Uttar Pradesh, Uttarakhand, Bihar and Jharkhand, QR has to proceed as under I.QR will ascertain the viewership figures for their channel in the last week of September 2017 from the Broadcast Audience Research Council. Let us assume it is one lakh for Delhi and two lakhs for the region comprising of Uttar Pradesh and Uttarakhand and one lakh for the region comprising of Bihar and Jharkhand; II. since the Broadcast Audience Research Council clubs Uttar Pradesh and Uttarakhand into one region and Bihar and Jharkhand into another region, QR will ascertain the population figures for Uttar Pradesh, Uttarakhand, Bihar and Jharkhand from the latest census; III. by applying the ratio of the populations of Uttar Pradesh and Uttarakhand, as so ascertained, to the Broadcast Audience Research Council viewership figures for their channel for this region, the viewership figures for Uttar Pradesh and Uttarakhand and consequently the ratio of these viewership figures can be calculated. Let us assume that the ratio of the populations of Uttar Pradesh and Uttarakhand works out to 9: 1. When this ratio is applied to the viewership figures of two lakhs for this region, the viewership figures for Uttar Pradesh and Uttarakhand work out to one lakh eighty thousand and twenty thousand respectively; IV. in a similar manner the breakup of the viewership figures for Bihar and Jharkhand can be calculated. Let us assume that the ratio of populations is 4:1 and when this is applied to the viewership figure of one lakh for this region, the viewership figure for Bihar and Jharkhand works out to eighty thousand and twenty thousand respectively; 5 V. the viewership figure for each State works out to Delhi (one lakh), Uttar Pradesh (one lakh eighty thousand), Uttarakhand (twenty thousand), Bihar (eighty thousand) and Jharkhand (twenty thousand). The ratio is thus 10:18:2:8:2 or 5:9:1:4:1(simplification). VI.this ratio has to be applied when indicating the breakup of the amount pertaining to each State. Thus if the total amount payable to QR by ABC is twenty lakh rupees, the State wise breakup is five lakh rupees(delhi), nine lakh rupees (Uttar Pradesh) one lakh rupees (Uttarakhand), four lakh rupees (Bihar) and one lakh rupees ( Jharkhand). Separate invoices will have to be issued State wise and Union territory wise by QR to ABC indicating the value pertaining to that Stateor Union territory. (g) in the case of advertisements at cinema halls the amount payable to a cinema hall or screens ABC commissions ST for an advertisement on Pradhan Mantri Awas Yojana to be displayed in the cinema halls in Chennai and Hyderabad. The place of supply of this service is in the states of Tamil Nadu and Telengana. The amount actually paid to the cinema hall or screens in a multiplex, in Tamil Nadu and Telangana as the case may be, is the value of advertisement 38 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

39 (h) (i) in a multiplex, in a State or Union territory, as the case may be, is the value of advertisement service attributable to dissemination in such State or Union territory, as the case may be. service in Tamil Nadu and Telangana respectively. Separate invoices will have to be issued State wise and Union territory wise by ST to ABC indicating the value pertaining to that State. in the case of advertisements over internet, the amount attributable to the value of advertisement service disseminated in a State or Union territory shall be calculated on the basis of the internet subscribers in such State or Union territory, which in turn, shall be calculated in the following manner, namely:- (i) the internet subscriber figures for a State shall be taken from the figures published in this regard by the Telecom Regulatory Authority of India ; (ii) the figures published for the last quarter of a given financial year shall be used for calculating the number of internet subscribers for the succeeding financial year and at the beginning, the figures for the last quarter of financial year shall be used for the succeeding financial year ; (iii) where such internet subscriber figures relate to a region comprising of more than one State or Union territory, the subscriber figures for a State or Union territory of that region, shall be calculated by applying the ratio of the populations of that State or Union territory, as determined in the latest census, to such subscriber figures; (iv) the ratio of the subscriber figures for each State or Union territory as so calculated, when applied to the amount payable for this service, shall represent the portion of the value attributable to the dissemination in that State or Union territory. Illustration: ABC issues a release order to WX for a campaign over internet regarding linking Aadhaar with one s bank account and mobile number. WX runs this campaign over certain websites. In order to ascertain the statewise breakup of the value of this service which is to be reflected in the invoice issued by WX to ABC, WX has to first refer to the Telecom Regulatory Authority of India figures for quarter ending March, 2017, as indicated on their website These figures show the service area wise internet subscribers. There are twenty two service areas. Some relate to individual States some to two or more States and some to part of one State and another complete State. Some of these areas are metropolitan areas. In order to calculate the State wise breakup, first the State wise breakup of the number of internet subscribers is arrived at. (In case figures of internet subscribers of one or more States are clubbed, the subscribers in each State is to be arrived at by applying the ratio of the respective populations of these States as per the latest census.). Once the actual number of subscribers for each State has been determined, the second step for WX involves calculating the State wise ratio of internet subscribers. Let us assume that this works out to 8: 1 : 2 and so on for Andhra Pradesh, Arunachal Pradesh, Assam.. and so on. The third step for WX will be to apply these ratios to the total amount payable to WX so as to arrive at the value attributable to each State. Separate invoices will have to be issued State wise and Union territory wise by WX to ABC indicating the value pertaining to that State or Union territory. in the case of advertisements through short messaging service the amount attributable to the value of advertisement service disseminated in a State or Union territory shall be calculated on the basis of the telecommunication ( herein after referred to as telecom) subscribers in such State or Union territory, which in turn, shall be calculated in the following manner, namely:- (a) the number of telecom subscribers in a telecom circle shall be ascertained from the figures published by the Telecom Regulatory Authority of India on its website ; (b) the figures published for a given quarter, shall be used for calculating subscribers for the succeeding quarter and at the beginning, the figures for the quarter 1st July, 2017 to 30th September, 2017 shall 39 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

40 be used for the succeeding quarter 1st October, 2017 to 31st December, 2017; (c) where such figures relate to a telecom circle comprising of more than one State, or Union territory, the subscriber figures for that State or Union territory shall be calculated by applying the ratio of the populations of that State or Union territory, as determined in the latest census, to such subscriber figures. (d) the ratio of the subscriber figures for each State or Union territory as so calculated, when applied to the amount payable for that service, shall represent the portion of the value attributable to the dissemination in that State or Union territory. Illustration-1: In the case of the telecom circle of Assam, the amount attributed to the telecom circle of Assam is the value of advertisement service in Assam. Illustration-2: The telecom circle of North East covers the States of Arunachal Pradesh, Meghalaya, Mizoram, Nagaland, Manipur and Tripura. The ratio of populations of each of these States in the latest census will have to be determined and this ratio applied to the total number of subscribers for this telecom circle so as to arrive at the State wise figures of telecom subscribers. Separate invoices will have to be issued State wise by the service provider to ABC indicating the value pertaining to that State. Illustration-3: ABC commissions UV to send short messaging service to voters asking them to exercise their franchise in elections to be held in Maharashtra and Goa. The place of supply of this service is in Maharashtra and Goa. The telecom circle of Maharashtra consists of the area of the State of Maharashtra (excluding the areas covered by Mumbai which forms another 7 circle) and the State of Goa. When calculating the number of subscribers pertaining to Maharashtra and Goa, UV has to I. obtain the subscriber figures for Maharashtra circle and Mumbai circle and add them to obtain a combined figure of subscribers; II. obtain the figures of the population of Maharashtra and Goa from the latest census and derive the ratio of these two populations; III. this ratio will then have to be applied to the combined figure of subscribers so as to arrive at the separate figures of subscribers pertaining to Maharashtra and Goa; IV the ratio of these subscribers when applied to the amount payable for the short messaging service in Maharashtra circle and Mumbai circle, will give breakup of the amount pertaining to Maharashtra and Goa. Separate invoices will have to be issued State wise by UV to ABC indicating the value pertaining to that State. Illustration-4: The telecom circle of Andhra Pradesh consists of the areas of the States of Andhra Pradesh, Telangana and Yanam, an area of the Union territory of Puducherry. The subscribers attributable to Telangana and Yanam will have to be excluded when calculating the subscribers pertaining to Andhra Pradesh. Note: The aforesaid Notification was covered by us in VPJ Module in Place of Supply. But it has been considered by ICAI in Value of Supply. Amendment No: 2 [Notification No. 3/2018 CT dated ] New rule 31A introduced in CGST Rules to provide for valuation of supply of lottery *Rule 31A Value of supply in case of lottery, betting, gambling and horse racing * Inserted vide Notf no. 03/2018 CT dated ; Source: CBIC Website (1) Notwithstanding anything contained in the provisions of this Chapter, the value in respect of supplies specified below shall be determined in the manner provided hereinafter. 40 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

41 Supply Supply of lottery run by State Governments Supply of lottery authorised by State Governments Supply of actionable claim in the form of chance to win in betting, gambling or horse racing in a race club Value Higher of the two amounts to be deemed as the value 100/112 of the face value of ticket OR 100/112 of the price as notified in the Official Gazette by the organising State Higher of the two amounts to be deemed as the value 100/128 of the face value of ticket OR 100/128 of the price as notified in the Official Gazette by the organising State 100% of the face value of the bet or the amount paid into the totalisator Explanation: For the purposes of this sub-rule, the expressions- (a) lottery run by State Governments means a lottery not allowed to be sold in any State other than the organizing State; (b) lottery authorised by State Governments means a lottery which is authorised to be sold in State(s) other than the organising State also; and (c) Organising State has the same meaning as assigned to it in clause Rule 2(1)(f) of the Lotteries (Regulation) Rules, Source: Website CBIC Circular 27/01/2018-GST No. Clarifications regarding levy of GST on accommodation services, betting and gambling in casinos, horse racing, admission to cinema, homestays, printing, legal services etc. Reg. Questions/ Clarifications sought Vide notification No. 11/2017-Central Tax (Rate) dated the 28th June 2017 entry 34, GST on the service of admission into casino under Heading 9996 (Recreational, cultural and sporting services) has been 28%. Since the Value of supply rule has not specified the method of determining taxable amount in casino, Casino Operators have been informed to collect 28% GST on gross amount collected as admission charge or entry fee. The method of levy adopted needs to be clarified The provision in rate schedule notification No. 11/2017-Central Tax Clarifications Relevant part of entry 34 of the said CGST notification reads as under: Heading 9996 (Recreational, cultural and sporting services) - (iii) Services by way of admission to entertainment events or access to amusement facilities including exhibition of cinematograph films, theme parks, water parks, joy rides, merry-go rounds, gocarting, casinos, racecourse, ballet, any sporting event such as Indian Premier League and the like. - 14% (iv) (v) Gambling % As is evident from the notification, entry to casinos and gambling are two different services, and GST is leviable at 28% on both these services (14% CGST and 14% SGST) on the value determined as per section 15 of the CGST Act. Thus, 28% would apply on entry to casinos as well as on betting/ gambling services being provided by casinos on the transaction value of betting, i.e. the total bet value, in addition to GST levy on any other services being provided by the casinos (such as services by way of supply of food/ drinks etc. at the casinos). Betting, in pre-gst regime, was subjected to betting tax on full bet value GST would be leviable on the entire bet value i.e. total of face value of any or all bets paid into the totalisator or placed with licensed book makers, as 41 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

42 (Rate) dated the 28th June 2017 does not clearly state the tax base to levy GST on horse racing. This may be clarified. the case may be. Illustration: If entire bet value is Rs. 100, GST leviable will be Rs. 28/-. Note: This Circular has not been considered by ICAI in RTP. Hence, Students should ignore the same 42 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

43 CHAPTER 8 INPUT TAX CREDIT Amendment No.1 Notification No. 55/2017 CT dated Separate Computation for CGST/SGST/UTGST/IGST [Rule 43(2)] The amount Te shall be computed separately for central tax, State tax, Union territory tax and integrated tax. *[Explanation: -For the purposes of rule 42 and this rule, it is hereby clarified that the aggregate value of exempt supplies shall exclude: - (a) the value of supply of services specified in the notification No. 42/2017-Integrated Tax (Rate); [It Provides full exemption to supply of services having POS in Nepal & Bhutan against Payment in Indian Rupees ] (b) the value of 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 a banking company or a FI including NBFC, engaged in supplying services by way of accepting deposits, extending loans or advances; and (c) the value of supply of services by way of transportation of goods by a vessel from the customs station of clearance in India to a place outside India.] Amendment No.2 Notf no. 22/2017- CT dt In case of goods sent from one job worker to another job worker, the challan may be issued either by the principal or the job worker sending the goods to another job worker Rule 45 of CGST Rules, 2017 Conditions and restrictions in respect of inputs and capital goods sent to the job worker 1) The inputs, semi-finished goods or capital goods shall be sent to the job worker under the cover of a challan issued by the principal, including where such goods are sent directly to a job-worker and where the goods are sent from one job worker to another job worker, the challan may be issued either by the principal or the job worker sending the goods to another job worker: Provided that the challan issued by the principal may be endorsed by the job worker, indicating therein the quantity and description of goods where the goods are sent by one job worker to another or are returned to the principal: Provided further that the challan endorsed by the job worker may be further endorsed by another job worker, indicating therein the quantity and description of goods where the goods are sent by one job worker to another or are returned to the principal. (Insertion) 2) The challan issued by the principal to the job worker shall contain the details specified in rule 55. 3) The details of challans in respect of goods dispatched to a job worker or received from a job worker or sent from one job worker to another during a quarter shall be included in FORM GST ITC-04 furnished for that period on or before the 25th day of the month succeeding the said quarter or within such further period as may be extended by the Commissioner by a notification in this behalf. Provided that any extension of the time limit notified by the Commissioner of State tax or the Commissioner of Union territory tax shall be deemed to be notified by the Commissioner. 43 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

44 4) Where the inputs or capital goods are not returned to the principal within the time stipulated in section 143, it shall be deemed that such inputs or capital goods had been supplied by the principal to the job worker on the day when the said inputs or capital goods were sent out and the said supply shall be declared in FORM GSTR-1 and the principal shall be liable to pay the tax along with applicable interest. Explanation.- For the purposes of this Chapter,- 1) the expressions capital goods shall include plant and machinery as defined in the Explanation to section 17; 2) for determining the value of an exempt supply as referred to in sub-section (3) of section 17- a) the value of land and building shall be taken as the same as adopted for the purpose of paying stamp duty; and b) the value of security shall be taken as one per cent. of the sale value of such security. 44 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

45 CHAPTER 9 REGISTRATION Amendment No.1 Persons making inter-state supplies of taxable services up to Rs. 20,00,000 exempted from obtaining registration Persons making supplies of services through an ECO (other than supplies specified under section 9(5) of the CGST Act) and having aggregate turnover up to Rs. 20,00,000 exempted from obtaining registration D. Suppliers of Services below threshold limit exempted from Compulsory Registration even if carrying out in inter-state supplies The persons making inter-state supplies of taxable services and having an aggregate turnover, to be computed on all India basis, not exceeding an amount of Rs. 20 lakh in a financial year have been exempted from obtaining compulsory registration. However, the aggregate value of such supplies, to be computed on all India basis, should not exceed an amount of Rs.10 lakh in case of following Special Category States, other than the State of Jammu and Kashmir. [Notification No. 10/2017 IT dated ] Further Persons making supplies of services, other than supplies specified under section 9(5) of the said Act through an e-commerce operator who is required to collect tax at source under section 52 of the said Act, and having an aggregate turnover, to be computed on all India basis, not exceeding an amount of Rs. 20 lakh in a financial year, as the category of persons exempted from obtaining registration under the said Act: Provided that the aggregate value of such supplies, to be computed on all India basis, should not exceed Rs.10 lakh in case of special category States, other than the State of Jammu and Kashmir. [Notification No. 65/2017 Central Tax; Source: CBIC website] Analysis Hence, all service providers, whether supplying intra-state, inter-state or through ecommerce operator, will be exempt from obtaining GST registration, provided their aggregate turnover does not exceed Rs. 20 lakhs (Rs. 10 lakhs in special category States except J & K). Source: Website CBIC Circular 27/01/2018-GST No. Clarifications regarding levy of GST on accommodation services, betting and gambling in casinos, horse racing, admission to cinema, homestays, printing, legal services etc. Reg. Questions/ Clarifications sought Whether homestays providing accommodation through an Electronic Commerce Operator, Clarifications Notification No. 17/2017-Central Tax (Rate), has been issued making ECOs liable for payment of GST in case of accommodation services provided in hotels, inns guest houses or other commercial places meant for residential or 45 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

46 below threshold limit are exempt from taking registration? lodging purposes provided by a person having turnover below Rs. 20 lakhs (Rs. 10 lakhs in special category states) per annum and thus not required to take registration under section 22(1) of CGST Act. Such persons, even though they provide services through ECO, are not required to take registration in view of section 24(ix) of CGST Act, Amendment No:2 75/2017 CT dt Foreign Diplomatic Mission / UN Organization to be granted centralized UIN [Section 25(9) & (10)] - Unique Identity Number (UIN) Analysis [Section 25(9) & (10) read with rule 17], Such person shall file an application in a prescribed form (GST REG-13) electronically at the GST Common Portal either directly or through a Facilitation Centre notified by the Commissioner. The Unique Identity Number granted under sub-rule (1) to a person under Section 25(9)(a) shall be applicable to the territory of India.* UIN shall be assigned by the proper officer upon submission of application in said form or after filling up the said form or after receiving a recommendation from the Ministry of External Affairs, Government of India. Registration certificate shall be issued within 3 working days from the date of submission of application. Amendment No:3 Notification No. 75/2017 CT dated Effective date of amendment in registration details can be earlier than the date of submission of the application for amendment only when the Commissioner orders the same Rule 19 of CGST Rules, 2017 Amendment of registration The significant aspects of the Rule 19 are as under: Where there is any change in the particulars furnished in registration application/uin application, registered person shall submit an application in prescribed manner, within 15 days of such change, along with documents relating to such change at the Common Portal. In case of amendment of core fields of information, the proper officer may, on the basis of information furnished or as ascertained by him, approve or reject amendments in the registration particulars in the prescribed manner. Such amendment shall take effect from the date of occurrence of event warranting such amendment. However, where change relates to non-core fields of information, registration certificate shall stand amended upon submission of the application for amendment on the Common Portal. Where a change in the constitution of any business results in change of PAN of a registered person, the said person shall apply for fresh registration. The reason for the same is that GSTIN is PAN based. Any change in PAN would warrant a new registration. Notwithstanding anything contained above, any particular of the application for registration shall not stand amended with effect from a date earlier than the date of submission of the application except with the order of the Commissioner for reasons to be recorded in writing and subject to such conditions as the Commissioner may, in the said order, specify. If the proper officer fails to take any action,- 46 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

47 a) within 15 working days from the date of submission of the application, or b) within 7 working days from the date of the receipt of the reply to the show cause notice, the certificate of registration shall stand amended to the extent applied for and the amended certificate shall be made available to the registered person on the common portal. Amendment No:4 Notification No. 75/2017 CT dated Application for cancellation of voluntary registration can be considered before one year from the effective date of registration Procedure for cancellation of registration [Rule 20 & Rule 22 of CGST Rules, 2017] A registered person seeking cancellation of registration shall electronically submit the application for cancellation of registration in prescribed form within 30 days of occurrence of the event warranting cancellation. He is required to furnish in the application the details of inputs held in stock or inputs contained in semifinished/finished goods held in stock and of capital goods held in stock on the date from which cancellation of registration is sought, liability thereon, details of the payment, if any, made against such liability and may furnish relevant documents thereof. [Provided that no application for the cancellation of registration shall be considered in case of a taxable person, who has registered voluntarily, before the expiry of a period of one year from the effective date of registration.] [Omitted vide Notf no.03/2018-ct dt ] Where a person who has submitted an application for cancellation of his registration is no longer liable to be registered, proper officer shall issue the order of cancellation of registration within 30 days from the date of submission of application for cancellation. Where the proper officer cancels the registration suo-motu, he shall not cancel the same without giving a show cause notice and without giving a reasonable opportunity of being heard, to the registered person. The reply to such show cause notice (SCN) has to be submitted within 7 days of service of notice. If reply to SCN is satisfactory, proper officer shall drop the proceedings and pass an order in prescribed form. Where registration of a person is liable to be cancelled, proper officer shall issue the order of cancellation of registration within 30 days from the date of reply to SCN. The cancellation of registration shall be effective from a date to be determined by the proper officer. He will direct the taxable person to pay arrears of any tax, interest or penalty including the amount liable to be paid under section 29(5) 47 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

48 CHAPTER 10 TAX INVOICE, CREDIT AND DEBIT NOTES Amendment No:1 Notification No. 3/2018 CT dated Provisions introduced for issuance of invoice/debit note/credit note by registered taxable person (having same PAN and State code as ISD) to ISD to transfer the credit of common input services Rule 54 of CGST Rules Tax invoice in special cases [Section 31(2) and proviso to section 31(1) read with rules 54 and 55] Tax invoice by Input Service Distributor (ISD) [Rule 54(1)] Rule 54(1A) An Input Service Distributor invoice or, as the case may be, an Input Service Distributor credit note issued by an Input Service Distributor shall contain the following details:- a) name, address and Goods and Services Tax Identification Number of the Input Service Distributor;. (a) A registered person, having the same PAN and State code as an Input Service Distributor, may issue an invoice or, as the case may be, a credit or debit note to transfer the credit of common input services to the Input Service Distributor, which shall contain the following details:- (i) name, address and Goods and Services Tax Identification Number of the registered person having the same PAN and same State code as the Input Service Distributor; (ii) a consecutive serial number not exceeding sixteen characters, in one or multiple series, containing alphabets or numerals or special characters hyphen or dash and slash symbolised as - and / respectively, and any combination thereof, unique for a financial year; (iii) date of its issue; (iv) Goods and Services Tax Identification Number of supplier of common service and original invoice number whose credit is sought to be transferred to the Input Service Distributor; (v) name, address and Goods and Services Tax Identification Number of the Input Service Distributor; (vi) taxable value, rate and amount of the credit to be transferred; and (vii) signature or digital signature of the registered person or his authorised representative. (b) The taxable value in the invoice issued under clause (a) shall be the same as the value of the common services Amendment No:2 Notification No. 45/2017 CT dated & Notification No. 55/2017 CT dated Insurer/banking company/financial institution, including NBFC can issue a consolidated tax invoice at month end for the supply made during that month As per Rule 54(2) to 54(4), following suppliers may issue a tax invoice, but they are also permitted to issue any other document in lieu of tax invoice, by whatever name called: As Per Rule 54(2), where the supplier of taxable service is an insurer or a banking company or a financial institution, including a NBFC, the said supplier shall issue a tax invoice consolidated tax invoice or any other document in lieu thereof, by whatever name called, for the supply of services made during a month at the end of the month, whether issued or made available, physically or electronically whether or not serially numbered, and 48 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

49 whether or not containing the address of the recipient of taxable service but containing other information as mentioned under rule 46. Supplier of taxable service Insurer/Banking company/financial institution, including NBFC Document in lieu of the tax invoice consolidated tax invoice for the supply of services made during a month at the end of the month Optional Mandatory information information Serial Other information as prescribed for a Tax Invoice, under number rule 46 Address of the Such document may be issued/ made available, recipient of physically/ electronically taxable service Amendment No: 3 Notification No. 3/2018 CT dated Person-in-charge of the conveyance to carry a copy of the tax invoice/ bill of supply where such person is not required to carry an e-way bill A new rule 55A - Tax invoice or bill of supply to accompany transport of goods, has been inserted in the CGST Rules. Tax Invoice or bill of supply to accompany transport of goods.- The person-incharge of the conveyance shall carry a copy of the tax invoice or the bill of supply issued in accordance with the provisions of rules 46, 46A or 49 in a case where such person is not required to carry an e-way bill under these rules. Invoice to be issued by recipient of supply liable to pay tax under reverse charge [2 nd Proviso to Rule 46] where an invoice is required to be issued under section 31(3)(f), a registered person may issue a consolidated invoice at the end of a month for supplies covered under section 9(4), the aggregate value of such supplies exceeds rupees five thousand in a day from any or all the suppliers. As per Notification No. 08/2017 CT (Rate) dated , intra-state supplies of goods and/or services received by a registered person from an unregistered supplier are exempt from tax provided the aggregate value of such supplies received from any/all unregistered suppliers is upto Rs. 5,000 in a day. Author s Note: As per Notification No. 08/2017 CT (Rate) dated , intra-state supplies of goods and/or services received by a registered person from an unregistered supplier are exempt from tax provided the aggregate value of such supplies received from any/all unregistered suppliers is upto Rs. 5,000 in a day. Notifications No. 10/2018 Central Tax (Rate), 11/2018 Integrated Tax (Rate) dated 23rd March, 2018 has provided that any registered person procuring taxable goods/services from unregistered Extension in time limit to make an application for refund by specified persons suppliers, shall not be required to pay CGST/IGST under reverse charge mechanism U/s 9(4) of CGST Act or u/s 5(4) of IGST Act, 2017 respectively till 30th June,2018. It has been Further extended uptill 30 th September For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

50 CHAPTER 11 ACCOUNTS AND RECORDS E-way Bill provisions made effective from Section 68 of the CGST Act stipulates that the Government may require the person in charge of a conveyance carrying any consignment of goods of value exceeding such amount as may be specified to carry with him such documents and such devices as may be prescribed. Rule 138 of CGST Rules, 2017 prescribes e-way bill as the document to be carried for the consignment of goods in certain prescribed cases. E-way bill- Meaning What are the benefits of e-way bill? E-Way Bill Generation Provisions of E-Way Bill A waybill is a receipt or a document issued by a carrier giving details and instructions relating to the shipment of a consignment of goods and the details include name of consignor, consignee, the point of origin of the consignment, its destination, and route. Electronic Way Bill (E-Way Bill) is a compliance mechanism wherein by way of a digital interface the person causing the movement of goods uploads the relevant information prior to the commencement of movement of goods and generates e-way bill on the GST portal. In other words, E-way bill is an electronic document generated on the GST portal evidencing movement of goods. Following benefits are expected from e-way bill mechanism: (i) Physical interface to pave way for digital interface resulting in elimination of state boundary check-posts (ii) It will facilitate faster movement of goods (iii) It will improve the turnaround time of trucks and help the logistics industry by increasing the average distances travelled, reducing the travel time as well as costs. E-way Bill is generated electronically in Form GST EWB 01 on the common portal. It is important to note here that the Common GST Electronic Portal for furnishing electronic way bill is [managed by the National Informatics Centre, Ministry of Electronics & Information Technology, Government of India] whereas the Common GST Electronic Portal for facilitating registration, payment of tax, furnishing of returns and computation and settlement of integrated tax is [managed by the Goods and Services Tax Network, a company incorporated under the provisions of section 8 of the Companies Act, 2013] as notified vide Notification No. 9/2018 CT dated The facility of generation, cancellation, updation and assignment of e-way bill shall be made available through SMS to the supplier, recipient and the transporter, as the case may be. E-way Bill can be generated through various modes like Web (Online), Android App, SMS, using Bulk Upload Tool and API based site to site integration etc. E-way bill system has been introduced for inter-state movement of goods across the country from For intra-state movement of goods, e-way bill system has been introduced in a phased manner. The provisions relating to E-way Bill, as contained in rules 138, 138A, 138B, 138C, and 138D [Chapter XVI] of the CGST Rules, 2017, have been substituted with new rules vide Notification No. 12/2018 CT dated and have been made effective from [except rule 138(7)] vide Notification No. 15/2018 CT dated For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

51 ELECTRONIC WAY BILL E-Way bill provision is governed by Section 68 and Rules 138, 138A, 138B, 138C and 138D of CGST Rules, 2017 (Chapter XVI). Section 60 of CGST Act Inspection of goods in movement 1) The Government may require the person in charge of a conveyance carrying any consignment of goods of value exceeding such amount as may be specified to carry with him such documents and such devices as may be prescribed. 2) The details of documents required to be carried under section 60(1) shall be validated in such manner as may be prescribed. 3) Where any conveyance referred to in section 60(1) is intercepted by the proper officer at any place, he may require the person in charge of the said conveyance to produce the documents prescribed under the said sub-section and devices for verification, and the said person shall be liable to produce the documents and devices and also allow the inspection of goods. Rule 138 of CGST Rules* Information to be furnished prior to commencement of movement of goods and generation of e-way bill Substituted vide Notf No. 12/2018-Central Tax, dated , to be effective from the date as shall be notified; Source: CBIC Website 51 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

52 Information to be furnished before movement of Goods [Rule 138(1)] Goods transported by Registered person either consignor or consignee [Rule 138(2)] Generation of e-way bill by Transporter of goods by Road [Rule 138(3)] Unique E-Way Bill Number [Rule 138(4)] Transfer of goods from one conveyance to another in the course of transit [Rule 138(5)] Multiple consignments transported in one conveyance [Rule 138(6)] Where E-way bill not generated by consignor or consignee [Rule 138(7)] Information furnished available to supplier [Rule 138(8)] Cancellation of E- way bill [Rule 138(9)] Validity of E-way bill [Rule 138(10)] Every registered person who causes movement of goods of consignment value exceeding Rs. 50,000: (i) in relation to a supply; or (ii) for reasons other than supply; or (iii) due to inward supply from an unregistered person, shall, before commencement of such movement, furnish information relating to the said goods in Part-A of a prescribed form, electronically, on the common portal. Where the goods are transported by the registered person as a consignor or the recipient of supply as the consignee, whether in his own conveyance or a hired one or by railways or by air or by vessel, the said person or the recipient may generate the e-way bill electronically on the common portal after furnishing information in Part-B of such prescribed form. Where the e-way bill is not so generated and the goods are handed over to a transporter for transportation by road, the registered person shall furnish the information relating to the transporter in Part B of the prescribed form on the common portal and the e-way bill shall be generated by the transporter on the said portal on the basis of the information furnished by the registered person in Part A of the prescribed form. However, the registered person or, as the case may be, the transporter may, at his option, generate and carry the e-way bill even if the value of the consignment is less than Rs. 50,000. Provided further that where the movement is caused by an unregistered person either in his own conveyance or a hired one or through a transporter, he or the transporter may, at their option, generate the e-way bill in prescribed form on the common portal in the manner specified in this rule. Provided also that where the goods are transported for a distance of less than 10 km within the State or Union territory from the place of business of the consignor to the place of business of the transporter for further transportation, the supplier or the transporter may not furnish the details of conveyance in Part B of the prescribed form. Upon generation of the e-way bill on the common portal, a unique e-way bill number (EBN) shall be made available to the supplier, the recipient and the transporter on the common portal. Any transporter transferring goods from one conveyance to another in the course of transit shall, before such transfer and further movement of goods, update the details of conveyance in the e-way bill on the common portal in prescribed form. However, where the goods are transported for a distance of less than 10 km within the State or Union territory from the place of business of the transporter finally to the place of business of the consignee, the details of conveyance may not be updated in the e-way bill. After e-way bill has been generated in accordance with the provisions of Rule 138(1), where multiple consignments are intended to be transported in one conveyance, the transporter may indicate the serial number of e-way bills generated in respect of each such consignment electronically on the common portal and a consolidated e-way bill maybe generated by him on the said common portal prior to the movement of goods. Where the consignor or the consignee has not generated E-Way Bill in accordance with the provisions of Rule 138(1) and the value of goods carried in the conveyance is more than Rs. 50,000, the transporter shall generate E-way Bill on the basis of invoice or bill of supply or delivery challan, as the case may be, and may also generate a Consolidated E-Way Bill on the common portal prior to the movement of goods. The information furnished in Part A of the prescribed form shall be made available to the registered supplier on the common portal who may utilize the same for furnishing details in FORM GSTR-1. However, when the information has been furnished by an unregistered supplier in prescribed form, he shall be informed electronically, if the mobile number or the is available. Where an e-way bill has been generated under this rule, but goods are either not transported or are not transported as per the details furnished in the e-way bill, the e-way bill may be cancelled electronically on the common portal, either directly or through a Facilitation Centre notified by the Commissioner, within 24 hours of generation of the e-way bill. However, an e-way bill cannot be cancelled if it has been verified in transit in accordance with the provisions of rule 138B. An e-way bill or a consolidated e-way bill generated under this rule shall be valid for the period as mentioned in column (3) of the Table below from the relevant date, for the distance the goods have to be transported, as mentioned in column (2) of the said Table. S.No. (1) Distance (2) Validity period (3) 52 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

53 1 Upto 100 km One day 2 For every 100 km or part thereof thereafter One additional day V P J Provided that, the Commissioner may, by notification, extend the validity period of e-way bill for certain categories of goods as may be specified therein. Provided further that where, under circumstances of an exceptional nature, the goods cannot be transported within the validity period of the e-way bill, the transporter may generate another e-way bill after updating the details in Part B of prescribed form. Acceptance/ rejection of E-way bill [Rule 138(11) & 12] Validity of e-way bill [Rule 138(13)] E-way bill not required to be generated [Rule 138(14)] Explanation For the purposes of this rule, the relevant date shall mean the date on which the e-way bill has been generated and the period of validity shall be counted from the time at which the eway bill has been generated and each day shall be counted as 24 hours. The details of e-way bill generated under Rule 138(1) shall be made available to the recipient, if registered, on the common portal, who shall communicate his acceptance or rejection of the consignment covered by the e- way bill [Rule 138(11)]. Where the recipient referred to in Rule 138(11) does not communicate his acceptance or rejection within 72 hours of the details being made available to him on the common portal, it shall be deemed that he has accepted the said details [Rule 138(12)]. The e-way bill generated under this rule or under rule 138 of the Goods and Services Tax Rules of any State shall be valid in every State and Union territory. Notwithstanding anything contained in this rule, no e-way bill is required to be generated a) where the goods being transported are specified in Annexure*; b) where the goods are being transported by a non-motorised conveyance; c) where the goods are being transported from the port, airport, air cargo complex and land customs station to an inland container depot or a container freight station for clearance by Customs; and d) in respect of movement of goods within such areas as are notified under clause (d) of sub-rule (14) of rule 138 of the GST Rules of the concerned State. Explanation - The facility of generation and cancellation of e-way bill may also be made available through SMS. *Annexure contains a list of items where E-way bill is not required to be generated. When is e-way bill required to be generated? [Rule 138(1)] Every registered person who causes movement of goods of consignment value exceeding Rs. 50,000: (iv) in relation to a supply; or (v) for reasons other than supply; or (vi) due to inward supply from an unregistered person, shall, BEFORE COMMENCEMENT OF SUCH MOVEMENT, furnish information relating to the said goods in Part-A of FORM GST EWB-01, electronically, on the common portal and a unique number will be generated on the said portal. Explanation 2.- Meaning of consignment value of goods The consignment value of goods shall be the value: determined as per section 15, declared in an invoice/bill of supply/ delivery challan issued in respect of the said consignment and also includes the central tax, State or Union territory tax, integrated tax and cess charged, if any, in the document and shall exclude the value of exempt supply of goods where the invoice is issued in respect of both exempt and taxable supply of goods. 53 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

54 (2) Information to be furnished in e- way bill: Special situations where e-way bill needs to be issued even if the value of the consignment is less than Rs. 50,000: An e-way bill Form GST EWB-01 contains two parts: (I) Part A to be furnished by the registered person** who is causing movement of goods of consignment value exceeding Rs. 50,000/- and (II) Part B (transport details) is to be furnished by the person who is transporting the goods. **However, information in Part-A may be furnished: by the transporter, on an authorization received from such registered person [First proviso to rule 138(1)] or by the e-commerce operator or courier agency, where the goods to be transported are supplied through an such e-commerce operator or a courier agency [Second proviso to rule 138(1)]. (i) Inter-State transfer of goods by principal to job-worker: Where goods are sent by a principal located in one State or Union territory to a job worker located in any other State or Union territory, the e-way bill shall be generated either by the principal or the job worker, if registered, irrespective of the value of the consignment. [Third proviso to rule 138(1)]. (ii) Inter-State transfer of handicraft goods by a person exempted from obtaining registration Where handicraft goods* are transported from one State or Union territory to another State or Union territory by a person who has been exempted from the requirement of obtaining registration under clauses (i) and (ii) of section 24, the e- way bill shall be generated by the said person irrespective of the value of the consignment[fourth proviso to rule 138]. *Handicraft goods are the goods specified in Notification No. 32/2017-C.T. dated which exempts the casual taxable persons making inter-state taxable supplies of such handicraft goods from obtaining registration. 3. Who is mandatorily required to generate e-way bill? Goods transported by Registered person either as consignor or consignee [Rule 138(2)] Goods are transported by railways/air/ vessel [Rule 138(2A)] Where the goods are transported by the registered person as a consignor or the recipient of supply as the consignee, whether in his own conveyance or a hired one or a public conveyance BY ROAD, the said person shall generate the e-way bill in FORM GST EWB-01 electronically on the common portal after furnishing information in Part B of FORM GST EWB-01. Where the goods are transported by railways or by air or vessel, the e-way bill shall be generated by the registered person, being the supplier or the recipient, who shall, either before or after the commencement of movement, furnish, on the common portal, the information in Part B of FORM GST EWB-01: Provided that where the goods are transported by railways, the railways shall not deliver the goods unless the e-way bill required under these rules is produced at the time of delivery. Generation of e- way bill by Where the e-way bill is not generated by registered person and the goods are handed over to a transporter for transportation by road, the registered person shall furnish the 54 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

55 Transporter of goods by Road [Rule 138(3)] Explanation 1 to rule 138(3) When is it not mandatory to furnish the details of conveyance in Part-B? Explanation 2 to rule 138(3) information relating to the transporter on the common portal and the e-way bill shall be generated by the transporter on the said portal on the basis of the information furnished by the registered person in Part A of FORM GST EWB-01: Provided further that where the movement is caused by an unregistered person either in his own conveyance or a hired one or through a transporter, he or the transporter may, at their option, generate the e-way bill. Provided that the registered person or, the transporter may, at his option, generate and carry the e-way bill even if the value of the consignment is less than Rs50,000: Provided also that where the goods are transported for a distance of upto 50 kilometers within the State or Union territory from the place of business of the consignor to the place of business of the transporter for further transportation, the supplier or the recipient, or as the case may be, the transporter may not furnish the details of conveyance in Part B of FORM GST EWB-01. Where the goods are supplied by an unregistered supplier to a recipient who is registered, the movement shall be said to be caused by such recipient if the recipient is known at the time of commencement of the movement of goods. The e-way bill shall not be valid for movement of goods by road unless the information in Part-B of FORM GST EWB-01 has been furnished However, details of conveyance may not be furnished in Part-B of the e-way bill where the goods are transported for a distance of upto 50 km within the State/Union territory as specified in third proviso to Rule138(3) and the proviso to Rule 138(5). Unique E-Way Bill Number [Rule 138(4)] Transfer of goods from one conveyance to another in the course of transit [Rule 138(5) &(5A)] Upon generation of the e-way bill on the common portal, a unique e-way bill number (EBN) shall be made available to the supplier, the recipient and the transporter on the common portal. Where the goods are transferred from one conveyance to another, the consignor or the recipient, who has provided information in Part A, or the transporter shall, before such transfer and further movement of goods, update the details of conveyance in Part B of the e-way bill on the common portal: Provided that where the goods are transported for a distance of upto 50 kilometers within the State or Union territory from the place of business of the transporter finally to the place of business of the consignee, the details of the conveyance may not be updated in the e-way bill. Multiple consignments transported in Rule 138(5A) - The consignor/recipient, who has furnished the information in Part A, or the transporter, may assign the e-way bill number to another registered or enrolled transporter for updating the information in Part B for further movement of the consignment: Provided that after the details of the conveyance have been updated by the transporter in Part B, the consignor or recipient, as the case may be, who has furnished the information in Part A shall not be allowed to assign the e-way bill number to another transporter. After e-way bill has been generated in accordance with the provisions of Rule 138(1), where multiple consignments are intended to be transported in one conveyance, the transporter may indicate the serial number of e-way bills generated in respect of each 55 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

56 one conveyance [Rule 138(6)] Where E-way bill not generated by consignor or consignee [Rule 138(7)] such consignment electronically on the common portal and a consolidated e-way bill in FORM GST EWB-02 maybe generated by him on the said common portal prior to the movement of goods. Where the consignor/consignee has not generated E-Way Bill in FORM GST EWB-01 and the aggregate of the consignment value of goods carried in the conveyance is more than Rs 50,000, the transporter, except in case of transportation of goods by railways, air and vessel, shall, in respect of inter-state supply, generate the e-way bill in FORM GST EWB-01 on the basis of invoice or bill of supply or delivery challan, as the case may be, and may also generate a consolidated e-way bill in FORM GST EWB-02 on the common portal prior to the movement of goods: Provided that where the goods to be transported are supplied through an e-commerce operator or a courier agency, the information in Part A of FORM GST EWB-01 may be furnished by such e-commerce operator or courier agency. Analysis Thus, a consolidated E-way bill is generated when the transporter is carrying multiple consignments in a single vehicle. Consolidated E-way bill allows the transporter to carry a single document, instead of a separate document for each consignment in a conveyance. Consolidated EWB is like a trip sheet and it contains details of different e-way bills in respect of various consignments being transported in one vehicle and these e-way bills will have different validity periods. Hence, Consolidated EWB does not have any independent validity period. Further, individual consignment specified in the Consolidated EWB should reach the destination as per the validity period of the individual EWB. Information submitted for e- way bill can be used for filing GST Returns [Rule 138(8)] Cancellation of E- way bill [Rule 138(9)] Validity of E-way bill/ consolidated e- way bill [Rule 138(10)] The information furnished in Part A of the prescribed form shall be made available to the registered supplier on the common portal who may utilize the same for furnishing details in FORM GSTR-1. However, when the information has been furnished by an unregistered supplier in in FORM GST EWB-01, he shall be informed electronically, if the mobile number or the is available. Where an e-way bill has been generated under this rule, but goods are either not transported or are not transported as per the details furnished in the e-way bill, the e-way bill may be cancelled electronically on the common portal, within 24 hours of generation of the e-way bill. However, an e-way bill cannot be cancelled if it has been verified in transit in accordance with the provisions of rule 138B. Provided further that the unique number generated under sub-rule (1) shall be valid for a period of 15 days for updation of Part B. S.No. (1) Distance (2) Validity period (3) 1 Upto 100 km One day in cases other than Over Dimensional Cargo 2 For every 100 km or part thereof thereafter One additional day in cases other than Over Dimensional Cargo 3 Upto 20 km One day in case of Over Dimensional Cargo 4 For every 20 km. or part One additional day in case of Over Dimensional 56 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

57 thereof thereafter Cargo: Extension of validity period The Commissioner may, on the recommendations of the Council, by notification, extend the validity period of e-way bill for certain categories of goods as may be specified therein. Where, under circumstances of an exceptional nature, including trans-shipment, the goods cannot be transported within the validity period of the e-way bill, the transporter may extend the validity period after updating the details in Part B, if required. Explanation 1: Relevant date Explanation 2: Over Dimensional Cargo shall mean the date on which the e-way bill has been generated and the period of validity shall be counted from the time at which the eway bill has been generated and each day shall be counted as the period expiring at midnight of the day immediately following the date of generation of eway bill. It shall mean a cargo carried as a single indivisible unit and which exceeds the dimensional limits prescribed in rule 93 of the Central Motor Vehicle Rules, 1989, made under the Motor Vehicles Act, 1988 Acceptance/ rejection of E- way bill [Rule 138(11) & 12] E-way bill generated in one State is valid in another [Rule 138(13)] E-way bill not required to be generated [Rule 138(14)] The details of e-way bill generated under Rule 138(1) shall be made available to thea) supplier, if registered, where the information in Part A has been furnished by the recipient/transporter; or b) recipient, if registered, where the information in Part A has been furnished by the supplier/transporter, Where the person to whom the information specified in sub-rule (11) has been made available does not communicate his acceptance or rejection within 72 hours of the details being made available to him on the common portal, or the time of delivery of goods whichever is earlier, it shall be deemed that he has accepted the said details. The e-way bill generated under this rule or under rule 138 of the Goods and Services Tax Rules of any State shall be valid in every State and Union territory. Notwithstanding anything contained in this rule, no e-way bill is required to be generated a) where the goods being transported are specified in Annexure; S. No. Description of Goods 1) Liquefied petroleum gas for supply to household and non-domestic exempted category (NDEC) customers 2) Kerosene oil sold under PDS 3) Postal baggage transported by Department of Posts 4) Natural or cultured pearls and precious or semi-precious stones; precious metals and metals clad with precious metal (Chapter 71) 5) Jewellery, goldsmiths and silversmiths wares and other articles (Chapter 71) 6) Currency 7) Used personal and household effects 8) Coral, unworked (0508) and worked coral (9601)] 57 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

58 b) where the goods are being transported by a non-motorised conveyance; c) where the goods are being transported from the customs port, airport, air cargo complex and land customs station to an inland container depot or a container freight station for clearance by Customs; d) in respect of movement of goods within such areas as are notified under Rule 138(14)(d) of the State or UTGST Rules in that particular State or Union territory; e) where the goods, other than de-oiled cake, being transported, are specified in the Schedule appended to notification No. 2/2017- Central tax (Rate) f) where the goods being transported are alcoholic liquor for human consumption, petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas or aviation turbine fuel; g) where the supply of goods being transported is treated as no supply under Schedule III of the Act; h) where the goods are being transported (i) under customs bond from an inland container depot or a container freight station to a customs port, airport, air cargo complex and land customs station, or from one customs station or customs port to another customs station or customs port, or (ii) under customs supervision or under customs seal; i) where the goods being transported are transit cargo from or to Nepal or Bhutan; j) where the goods being transported are exempt from tax under notification No. 7/2017-Central Tax (Rate) and notification No. 26/2017Central Tax (Rate) k) any movement of goods caused by defence formation under Ministry of defence as a consignor or consignee; l) where the consignor of goods is the Central Government, Government of any State or a local authority for transport of goods by rail; m) where empty cargo containers are being transported; and n) where the goods are being transported upto a distance of twenty kilometers from the place of the business of the consignor to a weighbridge for weighment or from the weighbridge back to the place of the business of the said consignor subject to the condition that the movement of goods is accompanied by a delivery challan issued in accordance with rule 55. Explanation. - The facility of generation, cancellation, updation and assignment of e-way bill shall be made available through SMS to the supplier, recipient and the transporter, as the case may be Rule 138A of CGST Rules Documents and devices to be carried by a person-in-charge of a conveyance Documents and devices to be carried by a person-in-charge of a conveyance Invoice Reference The person in charge of a conveyance shall carry a) the invoice or bill of supply or delivery challan, as the case may be; and b) a copy of the e-way bill in physical form or the e-way bill number in electronic form or mapped to a RFID* embedded on to the conveyance [except in case of movement of goods by rail or by air or vessel] in such manner as may be notified by the Commissioner[Rule 138A(4)] The Commissioner may, by notification, require a class of transporters to obtain a unique RFID* and get the said device embedded on to the conveyance and map the e- way bill to the RFID* prior to the movement of goods. [Rule 138A(3)]. A registered person may obtain an Invoice Reference Number from the common portal by uploading, on the said portal, a tax invoice issued by him in the prescribed 58 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

59 Number in lieu of tax invoice Documents in lieu of e-way bill V P J form and produce the same for verification by the proper officer in lieu of the tax invoice and such number shall be valid for a period of 30 days from the date of uploading [Rule 138A(2)]. In the said case, the registered person will not have to upload the information in Part A for generation of e-way bill and the same shall be auto-populated by the common portal on the basis of the information furnished in the prescribed form [Rule 138A(3)]. Where circumstances so warrant, the Commissioner may, by notification, require the person-in-charge of the conveyance to carry the following documents instead of the e-way billa) tax invoice or bill of supply or bill of entry; or b) a delivery challan, where the goods are transported for reasons other than by way of supply. [Rule 138A(3)] RFIDs are Radio Frequency Identification Device used for identification. Rule 138B of CGST Rules Verification of documents and conveyances 1) The Commissioner or an officer empowered by him in this behalf may authorise the proper officer to intercept any conveyance to verify the e-way bill in physical form for all inter-state and intra State movement of goods. 2) The Commissioner shall get Radio Frequency Identification Device readers installed at places where the verification of movement of goods is required to be carried out and verification of movement of vehicles shall be done through such device readers where the e-way bill has been mapped with the said device. 3) The physical verification of conveyances shall be carried out by the proper officer as authorised by the Commissioner or an officer empowered by him in this behalf. However, on receipt of specific information on evasion of tax, physical verification of a specific conveyance can also be carried out by any officer after obtaining necessary approval of the Commissioner or an officer authorised by him in this behalf. Rule 138C of CGST Rules Inspection and verification of goods 1) A summary report of every inspection of goods in transit shall be recorded online by the proper officer in Part A within 24 hours of inspection and the final report in Part B shall be recorded within 3 days of such inspection. 2) Where the physical verification of goods being transported on any conveyance has been done during transit at one place within the State or Union territory, no further physical verification of the said conveyance shall be carried out again in the State or Union territory, unless a specific information relating to evasion of tax is made available subsequently. Rule 138D of CGST Rules Facility for uploading information regarding detention of vehicle Where a vehicle has been intercepted and detained for a period exceeding thirty minutes, the transporter may upload the said information in FORM GST EWB-04 on the common portal. Explanation. - For the purposes of this Chapter, the expressions transported by railways, transportation of goods by railways, transport of goods by rail and movement of goods by rail does not include cases where leasing of parcel space by Railways takes place. 59 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

60 Issuance of notice for failure to furnish the information return within stipulated time [Section 150(3)] Where a person who is required to furnish information return has not furnished the same within the time specified in section 150(1) or section 150(2), the said authority may serve upon him a notice requiring furnishing of such information return within a period not exceeding ninety days from the date of service of the notice and such person shall furnish the information return Clarification regarding e-way bills CBIC vide Press Release No. 144/2018 dated has clarified following issues regarding the new e-way bill system: (1) Situation :- Consider a situation where a consignor is required to move goods from City X to City Z. He appoints Transporter A for movement of his goods. Transporter A moves the goods from City X to City Y. For completing the movement of goods i.e., from City Y to City Z, Transporter A now hands over the goods to Transporter B. Thereafter, the goods are moved to the destination i.e. from City Y to City Z by Transporter B. How would the e-way bill be generated in such situations? Clarification :- It is clarified that in such a scenario, only one e-way bill would be required. Part A can be filled by the consignor and then the e-way bill will be assigned by the consignor to Transporter A. Transporter A will fill the vehicle details, etc. in Part B and will move the goods from City X to City Y. On reaching City Y, Transporter A will assign the said e-way bill to the Transporter B. Thereafter, Transporter B will be able to update the details of Part B. Transporter B will fill the details of his vehicle and move the goods from City Y to City Z. (2) Situation : - Consider a situation where a consignor hands over his goods for transportation on Friday to transporter. However, the assigned transporter starts the movement of goods on Monday. How would the validity of e-way bill be calculated in such situations? Clarification : - It is clarified that the validity period of e-way bill starts only after the details in Part B are updated by the transporter for the first time. In the given situation, Consignor can fill the details in Part A on Friday and handover his goods to the transporter. When the transporter is ready to move the goods, he can fill the Part B i.e. the assigned transporter can fill the details in Part B on Monday and the validity period of the e-way bill will start from Monday. Circular No. 23/23/2017 GST dated Clarification on issues in respect of maintenance of books of accounts relating to additional place of business by a principal or an auctioneer for the purpose of auction of tea, coffee, rubber etc. Issue: Clarification: As per the first proviso of section 35(1) of the CGST Act both the principal and the auctioneer are required to maintain the books of accounts relating to their additional place(s) of business in such places. However, principal and auctioneer face difficulties in relation to maintaining books of accounts at each and every additional place of business related to stock of goods like tea, coffee, rubber, etc. meant for supply through an auction. Whether both the principal as well as the auctioneer can be allowed to maintain the books of accounts relating to the additional place(s) of business at their principal place of business itself? (a) The principal and the auctioneer of tea, coffee, rubber etc. are required to declare warehouses where such goods are stored as their additional place of business. The buyer is 60 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

61 also required to disclose such warehouse as his additional place of business if he wants to store the goods purchased through auction in such warehouses. (b) Both the principal and the auctioneer are required to maintain the books of accounts relating to each and every place of business in that place itself as per the first proviso to sub-section (1) of section 35 of the CGST Act. However, in case difficulties are faced in maintaining the books of accounts, it is clarified that they may maintain the books of accounts relating to the additional place(s) of business at their principal place of business instead of such additional place(s). (c) Such principal or auctioneer shall intimate their jurisdictional proper officer in writing about the maintenance of books of accounts relating to additional place(s) of business at their principal place of business. (d) Further, the principal or the auctioneer shall be eligible to avail input tax credit (ITC) subject to the fulfilment of other provisions of the Act and the rules made thereunder. It is further clarified that this Circular is applicable to the supply of tea, coffee, rubber, etc. where the auctioneer claims ITC in respect of the supply made to him by the principal before the auction of such goods and the said goods are supplied only through auction. 61 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

62 CHAPTER 13 RETURNS [Notification Nos. 57 & 58/2018 CT dated as amended, Notification Nos. 17 & 18/ 2018 CT dated & Notification No. 16/2018 CT ] Taxpayers with annual aggregate turnover up to Rs. 1.5 crore to file GSTR-1 on quarterly basis and taxpayers with annual aggregate turnover greater than Rs. 1.5 crore to file GSTR-1 on monthly basis There have been many issues in the functioning of GSTN since it became operational. Therefore, a simplified return in Form GSTR 3B was introduced in July, 2017 to help businesses to file returns easily in the initial months of GST roll out. This was to be followed with filing of returns -- GSTR - 1, 2 and 3. Further, to ease the compliance requirements for small tax payers, the GST Council allowed taxpayers with annual aggregate turnover up to Rs. 1.5 Crore to file details of outward supplies in Form GSTR-1 on a quarterly basis and on monthly basis by taxpayers with annual aggregate turnover greater than Rs. 1.5 Crore. The GST Council also recommended to postpone the date of filing of Forms GSTR-2 (details of inward supplies) and GSTR-3 (monthly return) for all normal tax payers, irrespective of turnover, till further announcements are made in this regard. The return process has still not been streamlined and the GST Council has extended GSTR-3B filing requirement till the end of June, (GSTR-3B filing requirement has been further extended till March 2019 vide Notification No. 34/2018 CT dated ) 62 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

63 CHAPTER 14 REFUND Amendment No:1 Amendment/Insertion in Rule 89 Rule 89(4)- Refund in case of zero rated supply of goods or services Rule 89(4) of the CGST Rules has been substituted with a new sub-rule retrospectively from In the case of zero-rated supply of goods or services or both without payment of tax under bond or letter of undertaking in accordance with the provisions of section 16(3) of the Integrated Goods and Services Tax Act, 2017, refund of input tax credit shall be granted as per the following formula - Refund Amount = (Turnover of zero-rated supply of goods + Turnover of zero-rated supply of services) x AAAAAANet ITCAAAA Adjusted Total Turnover Where,- A). "Refund amount" means the maximum refund that is admissible; B). "Net ITC" means input tax credit availed on inputs and input services during the relevant period; C). "Turnover of zero-rated supply of goods" means the value of zero-rated supply of goods made during the relevant period without payment of tax under bond or letter of undertaking, other than the turnover of supplies in respect of which refund is claimed under sub-rules (4A) or (4B) or both;* D). "Turnover of zero-rated supply of services" means the value of zero-rated supply of services made without payment of tax under bond or letter of undertaking, calculated in the following manner, namely:- Zero-rated supply of services is the aggregate of the payments received during the relevant period for zero-rated supply of services and zero-rated supply of services where supply has been completed for which payment had been received in advance in any period prior to the relevant period reduced by advances received for zero-rated supply of services for which the supply of services has not been completed during the relevant period; E). "Adjusted Total turnover" means the turnover in a State or a Union territory, as defined under Section 2(112), excluding (a)the value of exempt supplies other than zero-rated supplies, and (b) the turnover of supplies in respect of which refund is claimed under subrules (4A) or (4B) or both, if any * during the relevant period; (F) Relevant period means the period for which the claim has been filed.* Rule 89(4A): Refund Circular No. 37/11/2018 GST dated IT has clarified that the relevant period has been defined in the context of the refund claim and is not linked to a tax period. The exporter, at his option, may file refund claim for one calendar month / quarter or by clubbing successive calendar months / quarters. The calendar month(s) / quarter(s) for which refund claim has been filed, however, cannot spread across different financial years. In the case of supplies received on which the supplier has availed the benefit of Notification No. 48/2017-Central Tax dated 18th October, 2017 (i.e., where supplier has claimed refund 63 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

64 claimed on of tax paid on deemed exports), refund of input tax credit, availed in respect of other inputs ITC paid on Inward Supplies (Deemed Exports) or input services used in making zero-rated supply of goods or services or both, shall be granted. Note: In case of deemed exports, refund application can be made either by the recipient of deemed export supplies or by the supplier of deemed export supplies if the recipient does not claim ITC on such goods and gives an undertaking that the supplier may claim the refund. Rule 89(4B) In the case of supplies received on which the supplier has availed the benefit of: Refund notification No. 40/2017-Central Tax (Rate) dated / notification No. 41/2017- claimed on Integrated Tax (Rate) dated [concessional rate of 0.1% (0.05% CGST + ITC paid on Inward 0.05% SGST & 0.1% IGST) for supply of goods made to merchant exporters for export], or Supplies by Notification No. 78/2017 Cus dated / Notification No. 79/2017 Cus dated EOU, [imports of goods by EOUs/ Advance Authorisation / EPCG schemes], Merchant or all of them, Exporters & Refund of input tax credit, availed in respect of inputs received under the said notifications for Advance export of goods and the input tax credit availed in respect of other inputs or input services to Authorisation etc. the extent used in making such export of goods, shall be granted [Notification No. 3/2018 CT dated ] [Notification No. 75/2017 CT dated ] Rule 89(5): Computing refund of ITC on account of inverted duty structure In the case of refund on account of inverted duty structure, refund of input tax credit shall be granted as per the following formula Maximum Refund Amount = {(Turnover of inverted rated supply of goods) x Net ITC Adjusted Total Turnover} - tax payable on such inverted rated supply of goods Maximum Refund Amount = { Turnover of inverted rated supply of goods and services x AAAAAANet ITCAAAA Adjusted Total Turnover } - tax payable on such inverted rated supply of goods and services. [Substituted via Notification No. 21/2018 Central Tax] Explanation:- For the purposes of this sub-rule, the expressions (a) Net ITC shall mean input tax credit availed on inputs during the relevant period other than the input tax credit availed for which refund is claimed under sub-rules (4A) or (4B) or both; and (b) Adjusted Total turnover shall have the same meaning as assigned to it in sub-rule (4). [Notification No. 21/2018 CT dated ] 64 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

65 Amendment No: 2 Notification No. 21/2018 Central Tax V P J Manual filing of application of refund enabled for UN bodies and embassies etc. under rule 95(1) of CGST Rules and (ii) Threshold monetary limit of price of the supply covered under a single tax invoice for claiming refund by such applicants, removed Rule 95 of CGST Rules, 2017 Refund of tax to certain persons [Section 54(2), 55 read with Rule 95] Form and documents for filing the refund claim [Rule 95(1)] Acknowledgment for refund claim [Rule 95(2)] Conditions to be satisfied for sanction of refund [Rule 95(3) & (4)] Any person eligible to claim refund of tax paid by him on his inward supplies as per notification issued section 55 shall apply for refund in FORM GST RFD-10 once in every quarter, electronically on the common portal or otherwise**(i.e. through a Facilitation Centre notified by the Commissioner), either directly or through a Facilitation Centre notified by the Commissioner, along with a statement of the inward supplies of goods or services or both in FORM GSTR-11, prepared on the basis of the statement of the outward supplies furnished by the corresponding suppliers in FORM GSTR-1.**[Thus Form May be Filed Manually also and Preparation on basis of supplier s GSTR-1 is deleted] An acknowledgement for the receipt of the application for refund shall be issued in FORM GST RFD-02. As per Rule 95(3) - The refund of tax paid by the applicant shall be available ifa) the inward supplies of goods or services or both were received from a registered person against a tax invoice and the price of the supply covered under a single tax invoice exceeds five thousand rupees, excluding tax paid, if any;** b) name and Goods and Services Tax Identification Number or Unique Identity Number of the applicant is mentioned in the tax invoice; and c) such other restrictions or conditions as may be specified in the notification are satisfied. Supremacy provision in case of inconsistency [Rule 95(5)] As per Rule 95(4) - The provisions of rule 92 shall, mutatis mutandis, apply for the sanction and payment of refund under this rule. Where an express provision in a treaty or other international agreement, to which the President or the Government of India is a party, is inconsistent with the provisions of this Chapter, such treaty or international agreement shall prevail. *Inserted**Omitted vide Notf no. 75/2017-CT dt Amendment No: 3 Various Notifications Amendment of Rule 96 Rule 96 of CGST Rules, 2017 Refund of integrated tax paid on goods [or services]* exported out of India 1) The shipping bill filed by [an exporter of goods]** shall be deemed to be an application for refund of integrated tax paid on the goods exported out of India and such application shall be deemed to have been filed only when:- a) the person in charge of the conveyance carrying the export goods duly files an export manifest or an export report covering the number and the date of shipping bills or bills of export; and b) the applicant has furnished a valid return in FORM GSTR-3or FORM GSTR- 3B, as the case may be; 65 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

66 2) The details of the [relevant export invoices in respect of export of goods]** contained in FORM GSTR-1 shall be transmitted electronically by the common portal to the system designated by the Customs and the said system shall electronically transmit to the common portal, a confirmation that the goods covered by the said invoices have been exported out of India. Provided that where the date for furnishing the details of outward supplies in FORM GSTR-1 for a tax period has been extended, the supplier shall furnish the information relating to exports as specified in Table 6A of FORM GSTR-1 after the return in FORM GSTR-3B has been furnished and the same shall be transmitted electronically by the common portal to the system designated by the Customs. Provided further that the information in Table 6A so furnished shall be auto-drafted in GSTR-1 for the said tax period. (Source: RTP May 2018 Attempt, [Notification No. 51/2017 CT dated ]) 3) Upon the receipt of the information regarding the furnishing of a valid return in FORM GSTR-3 or FORM GSTR-3B, as the case may be from the common portal, the system designated by the Customs or the proper officer of Customs, as the case may be, shall process the claim of refund in respect of export of goods** and an amount equal to the integrated tax paid in respect of each shipping bill or bill of export shall be electronically credited to the bank account of the applicant mentioned in his registration particulars and as intimated to the Customs authorities. Procedure of claiming IGST Refund on Exports [Rule 96(1), (2) & (3)] 4) The claim for refund shall be withheld where,- a) a request has been received from the jurisdictional Commissioner of central tax, State tax or Union territory tax to withhold the payment of refund due to the person claiming refund in accordance with the provisions of section 54(10) or section 54(11); or b) the proper officer of Customs determines that the goods were exported in violation of the provisions of the Customs Act, ) Where refund is withheld in accordance with the provisions of clause (a) of rule 96(4), the proper officer of integrated tax at the Customs station shall intimate the applicant and the jurisdictional Commissioner of central tax, State tax or Union territory tax, as the case may be, and a copy of such intimation shall be transmitted to the common portal. 6) Upon transmission of the intimation under rule 96(5), the proper officer of central tax or State tax or Union territory tax, as the case may be, shall pass an order in Part B of FORM GST RFD For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

67 7) Where the applicant becomes entitled to refund of the amount withheld under clause (a) of rule 96(4), the concerned jurisdictional officer of central tax, State tax or Union territory tax, as the case may be, shall proceed to refund the amount after passing an order in FORM GST RFD-06. 8) The Central Government may pay refund of the integrated tax to the Government of Bhutan on the exports to Bhutan for such class of goods as may be notified in this behalf and where such refund is paid to the Government of Bhutan, the exporter shall not be paid any refund of the integrated tax. (9) The application for refund of integrated tax paid on the services exported out of India shall be filed in FORM GST RFD-01 and shall be dealt with in accordance with the provisions of rule 89 * (10)The persons claiming refund of integrated tax paid on export of goods or services should not have received supplies on which the supplier has availed the benefit of : Notification No. 48/2017-CT dated [deemed exports] or Notification No. 40/2017-CT (R) dated /notification No. 41/2017 IT (R) dated [concessional rate of 0.1% (0.05% CGST % SGST & 0.1% IGST) for supply of goods made to merchant exporters for export] or Notification No. 78/2017 Cus dated / Notification No. 79/2017 Cus dated [imports of goods by EOUs/ Advance Authorisation / EPCG schemes] *Inserted **Substituted vide various notifications Circular No. 37/11/2018 GST dated It is clarified that the exporter receiving goods at concessional rate of 0.1% (0.05% CGST % SGST & 0.1% IGST) will be eligible to take credit of the concessional tax so paid by him. The supplier who supplies goods at the concessional rate will be eligible for refund on account of inverted tax structure as per the provisions of section 54(3)(ii) of the CGST Act. However, it may be noted that the exporter of such goods can export the goods only under LUT / bond and cannot export on payment of integrated tax. Amendment No.4 Notification No. 39/2017 CT dated Cross-empowerment of State Tax officers for processing and grant of refund Section 6(1) of the CGST Act authorises the officers appointed under the SGST Act or the UTGST Act to be the proper officers for the purposes of CGST Act, subject to such conditions as the Government shall, on the recommendations of the Council, by notification, specify. Further, rule 96 of the CGST Rules stipulates the procedure for refund of IGST paid on goods exported out of India. Central Government has specified vide Notification No. 39/2017 CT dated that the officers appointed under the respective SGST Acts/UTGST Act who are authorized to be the proper officers for the purposes of section 54/section 55 of the said Acts by the Commissioner of the said Acts, shall act as proper officers for the purpose of sanction of refund under section 54 or section 55 of the CGST Act read with the rules made thereunder except rule 96 of the CGST Rules, in respect of a registered person located in the territorial jurisdiction of the said officers who applies for the sanction of refund to the said officers. Parallel amendment has been made for sanction of refund under IGST Act vide Notification No. 11/2017 IT dated Notification No. 39/2017 CT dated has been amended vide Notification No. 10/2018 CT The amended notification provides that the officers appointed under the respective SGST Acts/UTGST Act who are authorized to be the proper officers for the purposes of section 54/section 55 of the said Acts by the Commissioner of the said Acts, shall act as proper officers for the purpose of sanction of refund under section 54 or section 55 of the CGST Act read with the rules made thereunder except sub rules 67 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

68 (1) to (8) and sub rule (10) of rule 96 of the CGST Rules, in respect of a registered person located in the territorial jurisdiction of the said officers who applies for the sanction of refund to the said officers. Parallel amendment has been made in Notification No. 11/2017 IT dated vide Notification No. 1/2018 IT dated Amendment No: 5 Notification No. 55/2017 CT dated New rule 97A inserted in CGST Rules to provide for manual filing and processing for refund applications Notwithstanding anything contained in this Chapter, in respect of any process or procedure prescribed herein, any reference to electronic filing of an application, intimation, reply, declaration, statement or electronic issuance of a notice, order or certificate on the common portal shall, in respect of that process or procedure, include manual filing of the said application, intimation, reply, declaration, statement or issuance of the said notice, order or certificate in such Forms as appended to these rules. Amendment No.6 Circular No. 18/18/2017 GST dated Clarification on refund of unutilized ITC of GST paid on inputs by exporters of fabrics Notification No. 5/2017 CT (R) dated as amended has been issued under clause (ii) of the proviso to section 54(3) of the CGST Act, 2017 restricting refund of unutilised input tax credit (ITC) of GST paid on inputs in respect of certain specified goods (e.g. fabrics falling under specific chapters and headings), including ITC of GST paid on inputs. However, the aforesaid notification having been issued under clause (ii) of the proviso to section 54(3) of the CGST Act, 2017, said restriction on refund of unutilised ITC of GST paid on inputs will not be applicable to zero rated supplies, i.e. (a) exports of goods or services or both; or (b) supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit. Accordingly, as regards export of fabrics it is clarified that, subject to the provisions of section 54(10) of the CGST Act, 2017, a manufacturer of such fabrics will be eligible for refund of unutilized ITC of GST paid on inputs [other than the ITC of GST paid on capital goods] in respect of fabrics manufactured and exported by him. Note: Section 54(3) of the CGST Act, 2017 stipulates that: Subject to the provisions of section 54(10), a registered person may claim refund of any unutilised input tax credit at the end of any tax period. However, no refund of unutilised input tax credit shall be allowed in cases other than: (i) zero rated supplies made without payment of tax; (ii) where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council. 68 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

69 Amendment No: 7 Notification No. 40/2017- Central Tax (Rate) V P J Provisions relating to Consumer Welfare Fund under rule 97 of CGST Rules amended Consumer Welfare fund Rule 97 of CGST Rules, 2017 Consumer Welfare Fund [Section 57, 58 read with Rule 97] 1) All amounts of duty/central tax/ integrated tax /Union territory tax/cess and income from investment along with other monies specified in Section 12C(2) of the Central Excise Act, 1944, section 57 of the CGST Act read with section 20 of the IGST Act, 2017, section 21 of the UTGST Act, 2017 and section 12 of the Goods and Services Tax (Compensation to States) Act, 2017 (15 of 2017) shall be credited to the Fund: Provided that an amount equivalent to 50% of the amount of integrated tax determined under section 54(5) of the CGST Act, 2017, read with section 20 of the IGST Act, 2017, shall be deposited in the Fund. 2) Where any amount, having been credited to the Fund, is ordered or directed to be paid to any claimant by the proper officer, appellate authority or court, the same shall be paid from the Fund. 3) Accounts of the Fund maintained by the CG shall be subject to audit by the C&AG of India. 4) The following applicants can apply for a grant from Consumer Welfare Fund: (i) the Central Government or State Government; (ii) regulatory authorities or autonomous bodies constituted under an Act of Parliament or the Legislature of a State or Union Territory; (iii) any agency or organization engaged in consumer welfare activities for a minimum period of three years, registered under the Companies Act, 2013 or under any other law for the time being in force; (iv) village or mandal or samiti or samiti level co-operatives of consumers especially Women, Scheduled Castes and Scheduled Tribes; (v) an educational or research institution incorporated by an Act of Parliament or the Legislature of a State or Union Territory in India or other educational institutions established by an Act of Parliament or declared to be deemed as a University under section 3 of the University Grants Commission Act, 1956 and which has consumers studies as part of its curriculum for a minimum period of three years; and (vi) a complainant as defined under Section 2(1)(b) of the Consumer Protection Act, 1986, who applies for reimbursement of legal expenses incurred by him in a case instituted by him in a consumer dispute redressal agency. Amounts to be credited to/paid from Consumer Welfare Fund All credits to the Consumer Welfare Fund shall be made under rule 92(5) [Rule 97(1)]. Any amount, having been credited to the Consumer Welfare Fund, ordered or directed as payable to any claimant by orders of the proper officer, Appellate Authority or Appellate Tribunal or Court, shall be paid from the Fund [Rule 97(2)]. Utilisation of Consumer Welfare Fund Person who may apply for grant from Consumer Welfare Fund The Government shall, by an order, constitute a Standing Committee who shall make recommendations for proper utilisation of the money credited to the Consumer Welfare Fund for welfare of the consumers [Rule 97(4)]. The Central Consumer Protection Council and the Bureau of Indian Standards shall recommend to the GST Council, the broad guidelines for considering the projects or proposals for the purpose of incurring expenditure from the Consumer Welfare Fund [Rule 97(9)]. Any agency or organisation engaged in consumer welfare activities for a period of 3 years registered under the provisions of the Companies Act, 2013 or under any other law for the time being in force, including village or mandal or samiti level cooperatives of consumers especially Women, Scheduled Castes and Scheduled Tribes, or any industry as defined in the Industrial Disputes Act, 1947 recommended by the Bureau of Indian Standards to be engaged for a period of five years in viable and useful research activity which has made, or is likely to make, significant contribution in formulation of standard mark of the products of mass consumption, the Central Government or the State Government may make an application for a grant from the Consumer Welfare Fund. [Rule 97(6)] 69 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

70 However, a consumer may make application for reimbursement of legal expenses incurred by him as a complainant in a consumer dispute, after its final adjudication. [Proviso to Rule 97(6)] Source: Website CBIC Notification No. 40/2017- Central Tax (Rate) Concessional rate of tax at 0.05% on intra-state supply of taxable goods by a registered supplier to a registered recipient for export Central Government has exempted the intra-state supply of taxable goods (hereafter in this notification referred to as the said goods ) by a registered supplier to a registered recipient for export, from so much of the central tax leviable thereon under section 9 of the said Act, as is in excess of the amount calculated at the rate of 0.05 per cent., subject to fulfilment of the following conditions, namely: - (i) the registered supplier shall supply the goods to the registered recipient on a tax invoice; (ii) the registered recipient shall export the said goods within a period of ninety days from the date of issue of a tax invoice by the registered supplier; (iii) the registered recipient shall indicate the Goods and Services Tax Identification Number of the registered supplier and the tax invoice number issued by the registered supplier in respect of the said goods in the shipping bill or bill of export, as the case may be; (iv) the registered recipient shall be registered with an Export Promotion Council or a Commodity Board recognised (v) by the Department of Commerce; the registered recipient shall place an order on registered supplier for procuring goods at concessional rate and a copy of the same shall also be provided to the jurisdictional tax officer of the registered supplier; (vi) the registered recipient shall move the said goods from place of registered supplier a) directly to the Port, Inland Container Deport, Airport or Land Customs Station from where the said goods are to be exported; or b) directly to a registered warehouse from where the said goods shall be move to the Port, Inland Container Deport, Airport or Land Customs Station from where the said goods are to be exported; (vii) if the registered recipient intends to aggregate supplies from multiple registered suppliers and then export, the goods from each registered supplier shall move to a registered warehouse and after aggregation, the registered recipient shall move goods to the Port, Inland Container Deport, Airport or Land Customs Station from where they shall be exported; (viii) in case of situation referred to in condition (vii), the registered recipient shall endorse receipt of goods on the tax invoice and also obtain acknowledgement of receipt of goods in the registered warehouse from the warehouse operator and the endorsed tax invoice and the acknowledgment of the warehouse operator shall be provided to (ix) the registered supplier as well as to the jurisdictional tax officer of such supplier; and when goods have been exported, the registered recipient shall provide copy of shipping bill or bill of export containing details of Goods and Services Tax Identification Number (GSTIN) and tax invoice of the registered supplier along with proof of export general manifest or export report having been filed to the registered supplier as well as jurisdictional tax officer of such supplier. 2. The registered supplier shall not be eligible for the above mentioned exemption if the registered recipient fails to export the said goods within a period of ninety days from the date of issue of tax invoice. Source: Website CBIC Notification No. 21/2018 Central Tax Central Goods and Services Tax (Fourth Amendment) Rules, Section 54 of CGST Act Penalty for failure to furnish information return Time limit within which refund claim can be filed Section 54(2) 70 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

71 A specialised agency of the United Nations Organisation or any Multilateral Financial Institution and Organisation notified under the United Nations (Privileges and Immunities) Act, 1947, Consulate or Embassy of foreign countries or any other person or class of persons, as notified under section 55, entitled to a refund of tax paid by it on inward supplies of goods or services or both, may make an application for such refund, in such form and manner as may be prescribed [Refer Rule 95, before the expiry of six months from the last day of the quarter in which such supply was received.* *Such agencies may make an application for refund, in such specified form and manner as may be prescribed within six months from the end of the quarter in which such supply was received. (Vide Notification No. 20/2018 Central Tax dated 28th March, 2018; Source: CBIC Website), the Government has extended the time limit from six months from the end of the quarter to eighteen months from the last date of the quarter in which such supply was received. Note: These Circulars has not been considered by ICAI in RTP. Hence, Students should ignore the same as we have covered the same in VPJ Module released for Nov 2018 attempt 71 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

72 CHAPTER 15 JOB WORK Circular No.38/12/2018 Central Tax dated 26th March, 2018 Clarification on issues related to Job Work 1. Scope/ambit of job work 2. Requirement of registration for the principal 3. Requirement of registration for the job worker: 4. Supply of goods by the principal from job worker s place of business/ premises: The job worker is expected to work on the goods sent by the principal only. In this regard it is clarified that the job worker, in addition to the goods received from the principal, can use his own goods for providing the services of job work. provisions of section 143 of the CGST Act are applicable to a registered person. Thus, it is only a registered person who can send the goods for job work under the said provisions. It may also be noted that the registered person (principal) has the choice whether or not to avail or not to avail of the benefit of these special provisions. It is clarified that a job worker is required to obtain registration only in cases where his aggregate turnover, to be computed on all India basis, in a financial year exceeds the threshold limit regardless of whether the principal and the job worker are located in the same State or in different States. It is clarified that the supply of goods by the principal from the place of business / premises of the job worker will be regarded as supply by the principal and not by the job worker. Movement of goods from the principal to the job worker and the documents and intimation required therefor: The following is clarified with respect to the issuance of challan, furnishing of intimation and other documentary requirements in this regard: i. Where goods are sent by principal to only one job worker: ii. Where goods are sent from one job worker to another job worker: iii. Where the goods are returned to the principal by the The principal shall prepare in triplicate, the challan in terms of rules 45 and 55 of the CGST Rules, for sending the goods to a job worker. Two copies of the challan may be sent to the job worker along with the goods. The job worker should send one copy of the said challan along with the goods, while returning them to the principal. The FORM GST ITC-04 will serve as the intimation as envisaged under section 143 of the CGST Act, In such cases, the goods may move under the cover of a challan issued either by the principal or the job worker. In the alternative, the challan issued by the principal may be endorsed by the job worker sending the goods to another job worker, indicating therein the quantity and description of goods being sent. The same process may be repeated for subsequent movement of the goods to other job workers The job worker should send one copy of the challan received by him from the principal while returning the goods to the principal after carrying out the job work. 72 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

73 job worker: iv. Where the goods are sent directly by the supplier to the job worker: v. Where goods are returned in piecemeal by the job worker: vi. Submission of intimation: In this case, the goods may move from the place of business of the supplier to the place of business/premises of the job worker with a copy of the invoice issued by the supplier in the name of the buyer (i.e. the principal) wherein the job worker s name and address should also be mentioned as the consignee, in terms of rule 46(o) of the CGST Rules. The buyer (i.e., the principal) shall issue the challan under rule 45 of the CGST Rules and send the same to the job worker directly in terms of para (i) above. In case of import of goods by the principal which are then supplied directly from the customs station of import, the goods may move from the customs station of import to the place of business/premises of the job worker with a copy of the Bill of Entry and the principal shall issue the challan under rule 45 of the CGST Rules and send the same to the job worker directly. In case the goods after carrying out the job work, are sent in piecemeal quantities by a job worker to another job worker or to the principal, the challan issued originally by the principal cannot be endorsed and a fresh challan is required to be issued by the job worker. It is clarified that it is the responsibility of the principal to include the details of all the challans relating to goods sent by him to one or more job worker or from one job worker to another and its return therefrom during a quarter in FORM GST ITC-04 by the 25th day of the month succeeding the quarter or within such period as may be extended by the Commissioner. The FORM GST ITC-04 will serve as the intimation as envisaged under section 143 of the CGST Act. Further, as per the provisions contained in rule 138 of the CGST Rules, an e-way bill is required to be generated by every registered person who causes movement of goods of consignment value exceeding Rs. 50,000 even in cases where such movement is for reasons other than for supply (e.g. in case of movement for job work). Further, the third proviso to rule 138(1) of the CGST Rules provides that the e-way bill shall be generated either by the principal or by the registered job worker irrespective of the value of the consignment, where goods are sent by a principal located in one State/Union territory to a job worker located in any other State/ Union territory. It may also be noted that as per Explanation 1 to rule 138(3) of the CGST Rules, where the goods are supplied by an unregistered supplier to a registered recipient, the movement shall be said to be caused by such recipient if the recipient is known at the time of commencement of the movement of goods. In other words, the e-way bill shall be generated by the principal, wherever required, in case the job worker is unregistered. Liability to issue invoice, determination of place of supply and payment of GST: On conjoint reading of all the related provisions the following is clarified with respect to the issuance of an invoice, time of supply and value of supply: i. Supply of job work services The job worker, as a supplier of services, is liable to pay GST on the value of supply of such service if he is liable to be registered. The value of services would be determined in terms of section 15 of the CGST Act and would include not only the service charges but also the value of any goods or services used by him for supplying the job work services, if recovered from the principal. In this regard,, it is clarified that the value of moulds and dies, jigs and fixtures or tools may not be included in the value of job work services provided its value has been factored in the price for the supply of such services by the job worker. It may be noted that if the job worker is not registered, GST would be payable by the principal on reverse charge basis in terms of the provisions contained in section 9(4) of the CGST Act. However, the said provision has been kept in abeyance for the time being. 73 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

74 ii. Supply of goods by the principal from the place of business/ premises of job worker iii. Supply of waste and scrap generated during the job work Section 143 of the CGST Act provides that the principal may supply, from the place of business / premises of a job worker after completion of job work or otherwise. Since the supply is being made by the principal, it is clarified that the time, value and place of supply would have to be determined in the hands of the principal irrespective of the location of the job worker s place of business/premises. Further, the invoice would have to be issued by the principal. It is also clarified that in case of exports directly from the job worker s place of business/premises, the LUT or bond, as the case may be, shall be executed by the principal. Illustration: The principal is located in State A, the job worker in State B and the recipient in State C. In case the supply is made from the job worker s place of business / premises, the invoice will be issued by the supplier (principal) located in State A to the recipient located in State C. The said transaction will be an inter- State supply. In case the recipient is also located in State A, it will be an intra- State supply. Section 143(5) of the CGST Act provides that the waste and scrap generated during the job work may be supplied by the registered job worker directly from his place of business or by the principal in case the job worker is not registered. The principles enunciated in Para (ii) above would apply mutatis mutandis in this case. Violation of conditions laid down in section 143: If the inputs or capital goods are neither returned nor supplied from the job worker s place of business / premises within the specified time period, the principal would issue an invoice for the same and declare such supplies in his return for that particular month in which the time period of one year / three years has expired. The date of supply shall be the date on which such inputs or capital goods were initially sent to the job worker and interest for the intervening period shall also be payable on the tax. If such goods are returned by the job worker AFTER the stipulated time period, the same would be treated as a supply by the job worker to the principal and the job worker would be liable to pay GST if he is liable for registration in accordance with the provisions contained in the CGST 11 Act read with the rules made thereunder. Availability of input tax credit to the principal and job worker: In this regard, It is clarified that the input tax credit would be available to the principal, irrespective of the fact whether the inputs or capital goods are received by the principal and then sent to the job worker for processing, etc. or whether they are directly received at the job worker s place of business/premises, without being brought to the premises of the principal. It is also clarified that the job worker is also eligible to avail ITC on inputs, etc. used by him in supplying the job work services if he is registered. 74 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

75 CHAPTER 19 DEMANDS AND RECOVERY Circular specifying proper officers under sections 73 and 74 of the CGST Act and under the IGST Act and fixing monetary limits for issuance of show cause notices by different level of officers All officers up to the rank of Additional/Joint Commissioner of Central Tax are assigned as the proper officer for issuance of show cause notices (SCNs) and orders under subsections (1), (2), (3), (5), (6), (7), (9) and (10) of sections 73 and 74 of the CGST Act. Further, they are so assigned under the IGST Act as well, as per section 3 read with section 20 of the said Act. In pursuance of section 2(91) of the CGST Act read with section 20 of the IGST Act, the Board has assigned the officers mentioned in Column (2) of the Table below, the functions as the proper officers in relation to issue of show cause notices and orders under sections 73 and 74 of the CGST Act and section 20 of the IGST Act (read with sections 73 and 74 of the CGST Act), up to the monetary limits as mentioned in columns (3), (4) and (5) respectively of the Table below:- Sl. No. CGST Officer Monetary limit of CGST (including cess) not paid or short paid or erroneously refunded or ITC of CGST wrongly availed or utilized for issuance of SCNs and passing of orders under sections 73 and 74 of CGST Act Monetary limit of IGST (including cess) not paid or short paid or erroneously refunded or ITC of IGST wrongly availed or utilized for issuance of SCNs and passing of orders under sections 73 and 74 of CGST Act made applicable to matters in relation to IGST vide section 20 of the IGST Act Monetary limit of CGST and IGST (including cess) not paid or short paid or erroneously refunded or ITC of CGST and IGST wrongly availed or utilized for issuance of SCNs and passing of orders under sections 73 and 74 of CGST Act made applicable to IGST vide section 20 of the IGST Act (1) (2) (3) (4) (5) 1. Superintendent Not exceeding Rupees 10 Not exceeding Rupees 20 Not exceeding Rupees 20 lakh of Central Tax lakh lakh 2. Deputy or Assistant Commissioner of Central Tax Above Rupees 10 lakh and not exceeding Rupees 1 crore Above Rupees 20 lakh and not exceeding Rupees 2 crores Above Rupees 20 lakh and not exceeding Rupees 2 crores 3. Additional or Joint Commissioner of Central Tax Above Rupees 1 crore without any limit Above Rupees 2 crores without any limit Above Rupees 2 crores without any limit The central tax officers of Audit Commissionerates and Directorate General of Goods and Services Tax Intelligence (hereinafter referred to as DGGSTI ) shall exercise the powers only to issue show cause notices. A show cause notice issued by them shall be adjudicated by the competent central tax officer of the Executive Commissionerate in whose jurisdiction the noticee is registered. In case show cause notices have been issued on similar issues to a noticee(s) and made answerable to different levels of adjudicating authorities within a Commissionerate, such show cause notices should be adjudicated by the adjudicating authority competent to decide the case involving the highest amount of central tax and/or integrated tax (including cess). [Circular No. 31/05/2018 GST dated ] 75 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website:

76 CHAPTER 22 APPEALS AND REVISION Appointment of Appellate Authority A new rule 109A has been inserted in CGST Rules to appoint Appellate Authority as under: [Notification No. 55/2017 CT dated ] 76 For Success Pro CA Vinod Parakh Jain, Ph:/whatsapp: , website: