Latest Updates on GST

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1 Latest Updates on GST Extension of Exemption of payment of tax under Reverse Charge Supply of Goods and Services by unregistered person to registered person Un-Registered Seller Such registered person is required to pay tax under RCM Registered Buyer Such Payment of Tax under RCM u/s 9(4) CGST Act, 2017 and u/s 5(4) of IGST Act, 2017 is now exempted Upto 30 th September, CA Gadia Manish R 3 Suspension of TDS/TCS Provisions Press Released The provisions of sections 51 and 52 of the Central Goods and Services Tax Act, 2017 relating to tax deduction at source (TDS) and collection of tax at source (TCS) respectively, shall remain suspended till CA Gadia Manish R CA Gadia Manish R 4 1

2 E-Way Bill requirements relaxed in the State of Maharashtra No e-way bill required for intra-state movement of Hank, Yarn, Fabric and Garments goods in the following scenarios Goods Conditions Of any Value Any goods, if the consignment value does not exceed I Lac (Previously Rs. 50,000/-) If these Goods are transported for a distance of upto 50 Km within the State of Maharashtra for the purpose of job work If the movement of goods commences and terminates within the state of Maharashtra CA Gadia Manish R 5 Priority Sector Lending Certificate under RCM Lent 100 Crs Will Buy a PSLC worth Rs.50Crs to Meet the Target and Avoid Default GST on Priority Sector Lending Certificate will now be payable by Yes Bank (i.e. the recipient of such certificate) Target of Lending 150Crs. To Priority Sectors Lent 200 Crs CA Gadia Manish R 7 E-way Bill Registration for Transporters Transporter X Maharashtra Rajasthan West Bengal Registered in multiple state having Multiple GSTIN Transporters can now have Single Registration for Multiple States for E-way Bill One Unique Enrollment Number will be issued for the purpose of E-way Bill CA Gadia Manish R 6 SEIS Nil rate of GST PSLC 12% GST GST rate for REC and PSLC Classified under Heading 4907 POS? EWB? As per Circular No. 34/8/ GST dated (S.No.3) PSLC are 18% under the residual entry S. No. 453 of Schedule III of notification No. 01/2017-Central Tax (Rate). PSLC is 12% or 18%? CA Gadia Manish R 8 2

3 GST rate of 18 % under the residual entry at S.No. 453 of Schedule III of notification No. 01/2017-Central Tax (Rate) applies only to those goods which are not covered under any other entries of Schedule I, II, IV, V, or VI of the notification. in modification of S.No. 3 of Circular No. 34/8/2018- GST dated , it is hereby clarified that Renewable Energy Certificates (RECs) and Priority Sector Lending Certificates (PSLCs) and other similar documents are classifiable under heading 4907 and attract 12% GST. The duty credit scrips, however, attract Nil GST CA Gadia Manish R 9 No contract for supply of Moulds/Dies to be supplied by Component manufacturer Original equipment manufacturer (OEM) Not a supply since not related or distinct persons Supply Moulds Not related No need to reverse ITC as it is provided in the course of furtherance of business Reverse ITC Component Manufacturer No need to add the value of such moulds/dies as per section 15(2)(b) as the cost was not to be incurred by the component manufacturer CA Gadia Manish R 11 Dies and Mould provided by OEM Servicing of Cars Contract for Supply of Moulds and Dies by Component Manufacturer Original equipment manufacturer (OEM) The moulds are not provided As per Notn No. 26/18 CT in the shall course be deemed of furtherance to have of business, been hence paid for ITC the purposes is required to be of reversed the second availed proviso on to subsection (2) moulds of section such 16 Moulds Circular No. 47/21/2018-GST Component Manufacturer For section 15(2)(b) of CGST Act 2017, the amortized cost of such moulds/dies shall be added to the value of the components CA Gadia Manish R 10 Whether supply of goods/services? If the value of supply of goods What is the principal supply Supply of Goods / Services? and services are separately Circular No. shown in the invoice, GST shall 47/21/2018- Single price charged in the Invoice GST be levied at the rates applicable to goods and services separately Supply of Goods Supply of Service CA Gadia Manish R 12 3

4 Issues w.r.t Short term accommodation, conferencing services etc. to SEZ RULING 1. On reading section 16(1)(b) with rule 46 of CGST Rules 2017, it is clearly evident that the supplies of goods or services or both towards the authorised operations only shall be treated as Supplies to SEZ Developer / SEZ Unit. Hotel - Mumbai Location of Supplier POS u/s 12 Whether Intra state or Inter state? Company in SEZ Inter state as per section 7 (5)(b) 2. For Hotel accommodation and restaurant services POS is location of Hotel and place where there is Performance of services respectively. 3. Therefore the services rendered by the applicant are neither the part of authorised operations nor consumed inside the SEZ and hence cannot be said to have been imported or procured into SEZ Unit/Developer. Intra state CA Gadia Manish R Hence in the instant case, the supply is intra state supply CA Gadia Manish R 15 Advance ruling no. AAR KAR ADRG 2/2018 However the following issues still persists after AAR Facts of the case Supply to employees As per section 7(5) (b) Supply of goods or services or both to or by a Special Economic Zone developer or a Special Economic Zone unit; or by a Special Economic Zone developer or a Special Economic Zone unit; or M/s Gogte Infrasturcture Development Corporation Ltd, is engaged in hotel accommodation and restaurant services. They are providing services to the employees & guests of some of the units in SEZ, Belgavi, in addition to the regular customers. They are charging SGST & CGST at the applicable rates. The SEZ units contended that the services are being supplied / rendered to SEZ units only and hence rate of GST is NIL as per provisions of section 16(1) of IGST Act Therefore the applicant filed an application seeking advance ruling on : Whether the Hotel Accommodation & Restaurant services provided by them, within the premises of the Hotel, to the employees & guests of SEZ units, be treated as supply of goods & services to SEZ units in Karnataka or not? CA Gadia Manish R 14 ( c) in the taxable territory, not being an intra-state supply and not covered elsewhere in this section Inter state supply Further as per section 8(1)(i), Supply of services to or by a SEZ or a SEZ developer Shall not be Intra state supply Section 7 and 8 of IGST does not consider POS and LOS. However there is no reference of these sections in AAR CA Gadia Manish R 16 4

5 Circular No. 48/22/2018-GST It is an established principle of interpretation of statutes that in case of an apparent conflict between two provisions, the specific provision shall prevail over the general provision. Inverted rate refund As per Rule 89 of CGST Rules 2017 Notification No. 26/2018 Central Tax Section 7(5)(b) of the IGST Act is a specific provision relating to supplies of goods or services or both made to a SEZ developer or a SEZ unit, which states that such supplies shall be treated as inter-state supplies. clarified that services of short term accommodation, conferencing, banqueting etc., provided to a SEZ developer or a SEZ unit shall be treated as an inter-state supply CA Gadia Manish R 17 Turnover of inverted rated supply of Goods and Services Adjusted Total Turnover Excludes: The value of exempt supplies other than zero-rated supplies and The turnover of supplies in respect of which refund is claimed under sub rules (4A) or (4B) or both Net ITC What about refund of ITC on supply of services? tax payable on such inverted rated supply of Goods and Services 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 CA Gadia Manish R 19 Inverted rate refund 18% 5% In the present case, the output supply is the supply of Job work services and not of goods (fabrics). The notification specifies supply of Fabrics. Hence refund in the present case shall be applicable Supply Can refund of Inverted rate duty be taken considering Notification No. 5/2017-Central Tax (Rate) dated ? CA Gadia Manish R 18 Example Suppose there is an outward supply 5% but inputs services are 18%. Refund as per Formula Particulars Amount Inverted rate T/O 10,00,000 Total T/O 15,00,000 Net ITC availed 2,35,000 Tax paid on Inverted rate 50,000 10,00,000 15,00,000 2,35,000 50,000 1,06,667 Separate Calculation shall be required for CGST, SGST and IGST CA Gadia Manish R 20 5

6 Interception of Conveyances Only the Balance 5 Consignments can be Detained not all the Consignments. Total 25 Consignments, Person In charge could show all Relevant Documents for 20 Consignments Information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of particular situation. CA Manish R. Gadia manish@gmj.co.in Ph : CA Gadia Manish R CA Gadia Manish R 23 Opinions or views are like wrist watches. Every watch shows different time from others. But every one believes that their time is right! TO RECEIVE REGULAR GST UPDATES Follow me Save in your contacts & <YOUR NAME>_<Name of Study Circle> SEND TO CA Gadia Manish R 22 15/07/2018 CA Gadia Manish R 24 6