1. Relief to exporters E-way bill Various policy changes Regarding data analytics 4

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1 15 th March, 2018 During the initial months, the redressal of shortcomings and grievances arising out of the reformed law were in a great stint. However, with the passage of time they are being taken up by the department spontaneously by holding several Council Meetings and establishing redressal committees. The GST Council in its 26 th Meeting held at New Delhi on were apprised of the fact of data analysis conducted by GSTN and CBEC in collaboration for the past periods since the reformed law has been rolled out. With this positivism, we can expect more growth oriented decisions from the Govt. in the near future. We bring to you major changes in GST provisions undertaken recently.

2 A. Recommendations made during 26 th GST Council meeting 1. Relief to exporters 1 GST council has extended exemption on imported goods up to 1st October, 2018 EOUs have been exempted from payment of Integrated Tax and the compensation cess payable if any, by amending the Notification No. 52/2003- Customs dated This benefit which was earlier restricted only upto has been proposed to be extended till Appreciating the pace of grant of IGST refunds, council has directed GSTN to expeditiously forward balance refund claims to Customs / Central GST / State GST authorities, for their immediate sanction and disbursal. In order to do more preparatory work in respect of e-wallet scheme, the implementation of the same has been extended for a further period of 6 months (i.e. up to 01 st October, 2018.) 2. E-way bill 2 Council has approved rollout of E-way bill mechanism for inter-state movement of goods from 1 st April, For intra-state movement of goods, e-way bill system will be introduced w.e.f. a date to be announced in a phased manner but not later than 1 st June, Various policy changes 3 The present system of filing of GSTR 3B and GSTR 1 is extended for another three months i.e., April to June, 2018 till the new return system is finalized. A new model was discussed extensively and Group of Ministers on IT has been tasked to finalize the same. Reverse charge mechanism on supply from unregistered person as well as provisions for TDS and TCS (under section 51 and 52 of CGST Act) has been deferred till 30 th June, GST implementation Committee (GIC) has been tasked with the work of redressing the grievances caused to the taxpayers arising out of IT glitches. 4. Regarding data analytics 4 CBEC and GSTN have started detailed data analytics which has revealed that there are major data gaps between self-declared liability in FORM GSTR-1 and FORM GSTR-3B. Also, there is a variance between the amount of IGST & Compensation Cess paid by importers at Customs ports and ITC of the same claimed in GSTR-3B. It was deliberated that this information may be further analysed and adequate action may be initiated accordingly.

3 The above proposals have been summarised in the table given hereinbelow:- Sl. No. (1) Particulars (2) 1 Returns 2 Reverse Charge 3 TDS 4 TCS 5 Exports 6 Exemptions Description (2) Form GSTR 3B Form GSTR 1 Inward supplies from un-registered persons Deduction by CG, SG, or such other specific persons Deduction by e- commerce operator Introduction of e- wallet scheme EOUs have been exempted from payment of Integrated Tax and the compensation cess payable if any, by amending the Notification No. 52/2003-Customs dated Existing time frame (3) Proposed time frame (4) March, 2018 June, 2018 March, 2018 June, 2018 March, 2018 June, 2018 March, 2018 June, B. Amendments in CGST Rules, Time limit for submitting statement in FORM GST TRAN-2 (transitional credit for persons not registered in earlier tax regime) for notional credit of goods lying in stock has been prescribed as 31st March, Improvement or Changes in E-way bill: Transporters, e-commerce operators or courier agencies on authorization from a registered person or consigner can now furnish information in Part-A of FORM GST EWB-01. Public conveyance has also been included as a mode of transport and the responsibility of generating e-way bill in case of movement of goods by public transport would be that of the consignor or consignee. In case of movement of goods on account of job-work, the registered job worker can also generate e-way bill.

4 Distance for not providing conveyance details in Part B of FORM GST EWB-01 has been extended to 50kms (instead of 10kms earlier) within state / union territory. Validity of Unique Number generated under Rule 138(1) for updation of Part B has been extended to 15 days (from 72 hours earlier). The value of exempt supplies of goods shall be excluded while determining consignment value when the invoice is issued in respect of both exempt and taxable supplies. It has also been provided that where goods are transported by railways, the railways shall not deliver the goods unless e-way bill is produced at the time of delivery Validity of E-way bill or consolidated e-way bill shall be as follows: o Up to 100 km 1 day. o For every 100 km or part thereof thereafter - 1 additional day. However, in case of Over Dimensional Cargo 11, the validity shall be as follows: o Up to 20 km 1 day. o For every 20 km or part thereof thereafter 1 additional day. The person shall be deemed to have accepted the details in Part A of Form GST EWB-01 if he does not communicate his acceptance or rejection o Within 72 hours of details being made available to him on common portal or o At the time of delivery of goods, Whichever is earlier. No e-way bill shall be required in following cases: o Where goods are being transported Under customs bond from an ICD or CFS to a customs port, airport, air cargo complex and land customs station, or from one customs station / port to another customs station / port, or Under customs supervision, or Under customs seal o Where goods being transported are transit cargo from or to Nepal / Bhutan o Where goods being transported are exempt from tax under Notification No. 7/2017-Central Tax (Rate)[supply by CSD] and 26/2017-Central Tax (Rate) [supply by Dept. Of atomic Energy to NPCIL] o Any movement caused by defence formation under Ministry of Defence as consignor or consignee o Where the consignor of goods is Central Govt., State Govt. or local authority for transport of goods by rail

5 C. Clarifications in respect of certain services 6 Service of bus body building is a composite supply and classification of it as a supply of goods or supply of service would depend on principal supply which shall be determined on the basis of facts and circumstances of each case. Retreading of tyres is also a composite supply, predominant element of which is process of retreading - a supply of service, while rubber used thereof is an ancillary supply. Supply of retreaded tyres where the old tyres belong to supplier is a supply of goods taxable at 28%. It has been clarified that trading in Priority Sector Lending Certificates (PSLCs) shall be liable to GST at standard rate of 18%, and such GST paid would be available as ITC to the bank buying said Certificates. While service by way of electricity transmission / distribution is exempt, other services provided by Distribution Companies (DISCOMS) such as application fee for electricity connection, metering equipment rentals / testing fee, labour charges from customers for shifting meters / service lines, duplicate bill charges would be taxable under GST. Service provided by Central /State Govt. to any business entity including PSUs by way of guaranteeing loans taken by them from financial institutions against consideration in any form, including Guarantee Commission, shall be subject to GST. It has been clarified that Consumer Disputes Redressal Commissions (National/ State/District) being clothed with characteristics of Tribunal on account of various factors, fee (including penalty) paid by litigants to such Commissions shall not attract GST. Value of petroleum which the oil exploration & production contractor takes for recovery of contract costs under Production Sharing Contract (PSC) with Government, is not a consideration for service to GOI, hence not taxable. Lease/renting of self-propelled access equipment (Boom Scissors/ Telehandlers) with or without operator shall be taxed at the same rate of IGST as applicable on import thereof. Credit of IGST paid at the time of import would be available for discharging IGST liability on rental services. Entire amount charged by hospital from patients including food supplied and retention money shall be exempt. Further, services provided by senior doctors/ consultants/ technicians hired by hospitals (whether employees or not) being healthcare services, shall also be exempt. However, other supplies of food to patients (not admitted) or their attendants/visitors shall be taxable. Elephant/ camel joy rides are not transportation services and shall be liable to GST at 18% with threshold exemption available to small service providers. Hostel accommodation provided by trusts to students (having

6 declared tariff exceeding Rs. 1000/- per day), not being charitable activities, shall be liable to GST. D. Clarification regarding appointment of officers as a proper officer 7 It has been prescribed that While SCN shall be issued by Central tax officers of Audit Commissionerate and Directorate General of Goods and Services Tax Intelligence (DGGSTI), same shall be adjudicated by competent central tax officer of Executive Commissionerate in whose jurisdiction the noticee is registered. SCN shall be adjudicated by the competent central tax officer in whose jurisdiction noticee from whom the highest demand has been made falls, in case there are more than one noticees falling in multiple Commissionerates. Moreover, adjudication shall be done by an officer of the rank of Additional Director/Commissioner where principal places of business of noticees fall in multiple Commissionerates and amount of central tax and IGST (including cess) exceeds Rs. 5 crores. Superintendent of Central Tax is empowered to issue show cause notices/orders, thus, all officers up to rank of Additional/Joint Commissioner of Central Tax are assigned as 'proper officer' in terms of Section 73 and 74 of CGST Act. E. Clarification regarding non transition of CENVAT credit in certain cases 8 Credit which had been held inadmissible in last order-in-original / appellate order as it existed on July 1, 2017, taken in electronic ledger in terms of u/s 140(1), (2), (3), (4), (5), (6) or (8) shall not be utilized to discharge GST liability till such order is in existence. During the period when such order is in operation, if disputed credit is utilized, it shall be recovered from taxpayer with interest and penalty. Similarly, blocked credit carried forward and taken in electronic ledger in contravention of Section 140 shall not be utilized and shall be recovered from the taxpayer with interest and penalty. In all cases where disputed credit or blocked credit is higher than Rs. 10 lakhs, taxpayers must submit an undertaking that same shall not be utilized or has not been availed as transitional credit, while in other cases, need to submit the undertaking shall not apply.

7 F. Other Notifications and Clarifications The Notification No. 6/2018-Central Tax prescribing lower amount of Rs. 25 per day on late filing of FORM GSTR-5A (by a person providing OIDAR services) has been rescinded. 9 The penalty for late filing of return is Rs. 200 per day. Finance Ministry has clarified applicability of GST on various transactions between Joint venture and its member. It has been clarified that supply of services by an unincorporated association or body of persons to members for cash, deferred payment or other valuable consideration shall be treated as supply of services. Taxability of cash calls, which are raised by an operating member of JV on other members in proportion to their participating interests to meet the expenditure on the operations to be carried out, will depend entirely on the facts and circumstances of each case. 10 In order to ease exporters' GST refund woes, revenue authorities will set up camps across the country for a fortnight beginning March 15, as per recent statement of CBEC Chairperson Vanaja Sarna. A special fortnight campaign will be instituted from 15th March upto 29th March, 2018 to sort out the errors in filing of refund claims, This is indeed a welcome step by CBEC.

8 Our Team Dilip B. Desai Chairman & Managing Partner Mumbai Soumen Adak CEO Kolkata Manoj Daga Group CEO Mumbai Kolkata Siladitya Sarkar Mukesh Bajaj Abhishek Gupta Pankaj Patwari Mumbai Narendra Pati Delhi Manoj Mishra Bengaluru K. R. Rajgopalan Anil Kumar Chennai S. Sundararaman Coimbatore C. S. Sathyanarayanan Hyderabad V. Srinivasachary Ahmedabad Vikash Agarwal Contact Us To know more about Baker Tilly DHC, please visit or any of our offices as mentioned below: Corporate Offices: 701, Leela Business Park,AndheriKurla Road, Constantia, B Wing, 7 th floor, 11, Dr. U. N. Brahmachari Andheri (E), Mumbai Street, Kolkata Tel: +91 (22) Fax: +91 (22) Tel: +91 (33) Fax: +91 (33) Website: Offices: Ahmedabad, Bengaluru, Chennai, Cochin, Coimbatore, Gurugram, Hydrabad, Jaipur, Kolkata, Mumbai, New Delhi, Pune. Disclaimer: This publication is brought to you by Baker Tilly DHC Pvt. Ltd. Baker Tilly DHC Pvt. Ltd. is an independent member of Baker Tilly International. Baker Tilly International Limited is an English Company. Baker Tilly International provides no professional services to clients. Each member firm is a separate and independent legal entity and each describes itself as such. Baker Tilly DHC Pvt. Ltd. is not Baker Tilly International s agent and does not have the authority to bind Baker Tilly International or act on Baker Tilly International s behalf. None of Baker Tilly International, Baker Tilly DHC Pvt. Ltd nor any other member firm has a right to exercise management control over any other member firm. This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact Baker Tilly DHC Pvt. Ltd to discuss these matters in the context of your particular circumstances. Baker Tilly DHC Pvt. Ltd, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.

9 1 Press Release exporter extension in GST Council meeting held on Press Note E way bill in GST Council meeting held on Press Note Return RCM TDS in GST Council meeting held on Press Note Data Analytics in GST Council meeting held on Notification No. 12/2018-Central Tax, Dated Circular No. 32/2018-CGST, Dated & Circular No. 34/2018-CGST, Dated Circular No. 31/2018-CGST, Dated Circular No. 33/2018-CGST, Dated Notification No. 13/2018-Central Tax, Dated Circular No. 35/2018-CGST, Dated Over Dimensional Cargo means a cargo carried as a single indivisible unit and which exceeds the dimensional limits prescribed in Rule 93 of Central Motor Vehicle Rules, 1989, made under the Motor Vehicles Act, 1988.