GST Trends April 018 www.skpgroup.com
GST Trends April 018 The year gone by was a transitional year and undoubtedly, a roller coaster ride in terms of fire fighting with the complexities in GST regime. The new financial year could bring a stable GST regime. Top Trends Authority for Advance Rulings (AAR) constituted in various states have begun to pronounce their decisions. Return simplification Action underway with the Group of Ministers (GoM) inviting stakeholders consultations for the design of new return filing mechanism. Late filing of LuT in the financial year 017-18 - condoned and the facility for export under LuT can be allowed on a retrospective basis taking into account the facts and circumstances of the case (Circular No. 7/11/018-GST). Action points for assesses in the new financial year: Determine the periodicity of GSTR-1 New invoice series e-way Bill for inter-state movement of goods (>INR 50,000) Annual reconciliation of books and GST returns Exemption of IGST and compensation cess available under Advance Authorisation (AA), Export Promotion Capital Goods (EPCG) and Export Oriented Unit (EOU) till 1 October 018. Letter of Undertaking (LuT) (for exports without payment of IGST): Application of LuT for the financial year 018-19 has been made online. No manual submission of any documents required; ITC reversal as per Section 16() of the CGST Act (Payment within 180 days). Judicial Pronouncements Issue Ruling SKP Comments Classification of skin care preparation as Medicament under heading 00 of the Customs Tariff Act, 1975 [West Bengal-AAR(GST)] Merely manufacturing a skin care preparation using an Ayurvedic authoritative text book does not imply that the product is a medicament. Its curative and therapeutic use are also to be considered. In the given case, the skin care preparation products were classified as medicament or cosmetic product post consideration of various factors. With the multiple rate structure under GST, classification disputes are set to rise. This ruling shows that in order to verify the classification of any product, it is necessary to consider the raw materials used, the output derived, the end use of the output, etc.
GST Trends April 018 Issue Ruling SKP Comments Whether canteen services provided by the employer to employee qualify as supply of service under GST [Kerala AAR (GST)] (Canteen services inside the factory premises - Mandatory requirement under the Factories Act, 198) AAR has referred to Schedule II of the CGST Act, 017 which describes the activities to be treated as a supply of goods or supply of services. In accordance with the said schedule, supply of food shall be treated as a supply of service. Furthermore, the recovery of cost from the employees is a consideration for the supply. Therefore, it was held that irrespective of whether the activity is undertaken for profit or not, the canteen services is a supply of service, and chargeable under GST. The AAR has opened many doors of interpretations under GST perspective. Various services are provided by the company to its employees, e.g., house rent/boarding and lodging, travelling, etc. It would be interesting to watch the impact of this verdict on such other transactions between employee and employer and to which extent the tax net would cover such transactions. Also, since employee and employer are related parties, the valuation of such services would lead to further disputes. GST Implication on high sea sales [Kerala AAR (GST)] The definition of import of goods means bringing goods into India from a place outside India. Furthermore, IGST is levied on import of goods into India. In case of the applicant, the goods were never imported into India at any stage. Thus, IGST would not be applicable. This AAR decision is a reconfirmation to the Circular No. /017-Customs. It clarifies that IGST would levied only when the goods are imported in India and IGST would be payable at the time of importation. Therefore, the transaction of high sea sale when the goods are not physically imported in India would not be taxable. GST on one time lease premium (Writ Petition Bombay High Court) One time lease premium consideration on any lease or letting out building, including commercial, industrial or residential complex for business, either wholly or partly, would qualify as supply under Section 7 of CGST Act, 017. In accordance with the same, the one time lease payment would attract GST. The argument of the petitioner was that one time lease payment is similar to sale of immovable property as the owner loses the right to use the property for a long period of time. However, the revenue held that the lease transaction qualifies as a supply and therefore falls under the ambit of GST. This could have an impact on similar agreements routinely entered by developers. It is to be noted that an Advance Ruling is binding only on the applicant who had sought it and the concerned jurisdictional authority, i.e., an Advance Ruling is specific to an applicant and shall not be applicable to other taxpayers facing similar issues. However, the above mentioned Advance Rulings provides clarity about the issues being faced and provide persuasive value in matters before the tax authorities.
GST Trends April 018 Upcoming GST Due Dates Form Applicable to Period Due Date GSTR-1 (Quarterly) Taxpayers with annual aggregate turnover upto INR 15 million Jan-Mar 018 0 April 018 TRAN-1 Taxpayers who failed to file TRAN-1 due to IT glitches - 0 April 018 GSTR-1 Outward supplies (monthly) Taxpayers with annual aggregate turnover more than INR 15 million March 018 10 May 018 GSTR- Composition scheme April 018 18 May 018 GSTR-B All registered taxpayers April 018 0 May 018 GSTR-5 Non-resident taxable persons April 018 0 May 018 GSTR-5A Online Information and Database Access or Retrieval (OIDAR) April 018 0 May 018 GSTR-1 Outward supplies (monthly) Taxpayers with annual aggregate turnover more than INR 15 million April 018 1 May 018 GSTR-6 Input service distributors July-April 018 1 May 018
GST Trends April 018 Other Key Aspects GST from a Macro Perspective GST Monthly Revenue FY 17-18 (In INR Billion) 96 Aug 17 90 Sep 17 951 Oct 17 GST revenue has witness a fall from November 017. The government is taking anti-evasion measures to plug revenue leakages. 859 Nov 17 87 Dec 17 889 Jan 18 880 Feb 18 89 Mar 18 Annual GST collections vis-à-vis estimates Particulars CGST (in INR billion) IGST (in INR billion) SGST (in INR billion) Comp cess (in INR billion) 017-18 revised budget estimates 1,1 1,619 61.1 018-19 budget estimate 6,09 500 900 017-18 actuals 1,190,660 1,70 60.1 Add - IGST settlement (1,190) 1,190 017-18 actual (after IGST settlement) 1,190,70,910 Add - comp to states 11.7 (11.7) Net 017-18 actuals (after compensation to states) 1,190,70,1.7 08.7 017-18 State s receipt of GST,1.7 017-18 Center s receipt of GST,868.7 1 https://www.indiabudget.gov.in/ub018-19/rec/tr.pdf https://www.indiabudget.gov.in/ub018-19/rec/tr.pdf PIB Press release dated 7 April 018 5
GST Trends April 018 Anti-Evasion Measures e-way Bill e-way Bill would help to keep a track on all movements of goods, thus ensuring that the same are falling under the GST boundaries. Post the smooth rollout of the e-way Bill system for inter-state movement of goods, the government is gradually implementing the system for intra-state movement of goods in the following manner: 1 1 April 018 15 April 018 0 April 018 5 April 018 5 1 May 018 5 1 e-way Bill A snapshot A total of 1,096,905 taxpayers have registered on e-way Bill Portal. 19,796 transporters, who are not registered under GST, have enrolled themselves on the e- Way Bill Portal. More than 0.6 million e-way Bills have been generated between 15 to 17 April 018. The Central helpdesk of GST has made special arrangements with 100 agents exclusively dedicated to answer queries related to e-way Bills. More than 1. million e-way Bills have been successfully generated till 17 April 018. 6
GST Trends April 018 GST disclosure in income tax return forms Income tax Return (ITR) forms have been released for the first time after implementation of the GST and GST has not failed to mark its impact on ITR. Following forms would require disclosure of GST related information: ITR Form For Details ITR ITR ITR 5 ITR 6 For Presumptive Income from Business and Profession Individuals and HUFs having income under the head business or profession For persons other than (i) individual (ii) HUF (iii) company and (iv) person filing Form ITR-7 For companies other than companies claiming exemption under Section 11 GSTR No. and turnover as per GST returns filed Detailed information of outward GST paid, Input Tax Credit (ITC) claimed, GST payable, GST accounts balances in books of accounts, etc. These measures taken by the government are aimed towards inter-departmental coordination, sharing of information and anti-evasion measure. 7
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