GST Update January 2019 - jb arsen

GST Update
        January 2019

Extension of due dates
 The due date for furnishing GSTR-9 (annual
  return)    and     GSTR-9C      (reconciliation
  statement) of financial year (FY) 2017-18 has
  been extended till 30.06.2019
  [Order No 03/2018- Central Tax]

 Due date for completion of special procedure
  for migrating into GST extended till 31.01.2019
  [Notification 67/2018- Central Tax]

 Due date for filing GSTR 3B returns by newly
  migrated tax payers for the period July 2017 to
  February 2019 extended till 31.03.2019
  [Notification 68/2018- Central Tax ,
  Notification 69/2018- Central Tax &
  Notification 70/2018- Central Tax]

 Due date for filing GSTR 1 returns by newly
  migrated tax payers who opted to file quarterly
  GSTR 1, for the period July 2017 to December
  2018 extended till 31.03.2019
  [Notification 71/2018- Central Tax]

 Due date for filing GSTR 1 returns by newly
  migrated tax payers who opted to file monthly
  GSTR 1, for the period July 2017 to February
  2019 extended till 31.03.2019
  [Notification 72/2018- Central Tax]

 Late fee shall stand waived for the tax payers
  who failed to furnish GSTR 1 and GSTR 3B for
  the period July, 2017 to September, 2018 by the
  due date but furnishes the said return during the
  period from 22.12.2018 to 31.03.2019.
  [Notification 75/2018- Central Tax &
  Notification 76/2018- Central Tax]

 Late fee for the delayed furnishing of GSTR-4
  for the period July 2017 to September 2018
  fully waived.
  [Notification 77/2018- Central Tax]

 Due date for furnishing Form ITC-04 for the
  period July 2017 to December 2018 extended
  till 31.03.2018
  [Notification 77/2018- Central Tax]

Circulars and Clarifications

It has been clarified that supply of food and beverages by an educational
institution to its students, faculty and staff, where such supply is made
by the educational institution itself, is exempt under Notification No.
12/2017-Central Tax (Rate).

However, such supply of food and beverages by any person other than
the educational institutions based on a contractual arrangement with
such institution is leviable to GST@ 5%.

The banking company shall be liable to pay GST on the entire value of
service charge or fee charged to customers whether or not received via
business facilitator or the business correspondent.

 Movement of rigs, tools & spares and all goods on wheels, on own
  account, where such movement is not intended for further supply of
  such goods but for the provision of service does not involve a supply
  and is not be liable to GST.
 Exemption available to animal, cattle, aquatic and poultry feed would
  not apply to their inputs such as fish meal, meat bone meal, bran,
  sharps etc

 Nature of business establishment making supply of food, drinks and
  other articles for human consumption will not determine whether the
  supply by such establishments is a supply of goods or services. It
  will rather depend on the constituents of each individual supply and
  whether same satisfies the conditions / ingredients of a ‘composite
  supply’ or ‘mixed supply.’

 At the option of the applicant, all documents, undertakings and
  statements to be submitted along with the claim of refund can be
  uploaded online at the time of filing refund application.

 In respect of refund of unutilised input tax credit(ITC) on account of
  inverted tax structure, refund of ITC should not be denied on those
  inputs which are procured at equal or lower rate of GST, than the
  rate of GST on outward supply.

 Where refund applications have been generated on the portal but not
  physically received in the jurisdictional tax offices, communication
  would be sent to the applicant to submit the documents physically
  within a period of 15 days failing which application would be
  rejected.

 ITC of GST paid on invoices of earlier tax period and availed in
  subsequent tax period need not be excluded while calculating
  unutilised input tax credit for the purpose of claiming refund.

 Refund of ITC on stores and spares, packing materials, materials
  purchased for machinery repairs, printing and stationery items,
  should not be denied on the grounds that these are not directly
  consumed in the manufacturing process. Further, expenditure which
  has been charged as a revenue expense in the books of account, shall
  not be held to be capital goods

 In respect of refund of accumulated ITC on account of inverted duty
  structure, refund shall not be allowed on tax paid on input services
  and capital goods.

Services provided by Asian development bank and International
financial corporation are exempted from GST.

It has been clarified that service of “printing of pictures” falls under
service code “998386: Photographic and videographic processing
services” and attract GST at 18% and not under “998912: Printing and
reproduction services of recorded media, on a fee or contract basis”
which attract GST at 12%.

 Service provider                  Service receiver
 located in India                located outside India

             Sub-contractor located
                 outside India

Where exporter of service outsources a portion of the service contract
to a person outside India, total value of service as agreed to in the
contract between the exporter of services located in India and the
recipient of services located outside India will be considered as export
of services.

Service provided by the subcontractor located outside India shall be
treated as import of service by the principal contractor and would be
liable to GST under reverse charge mechanism.

It has been clarified that even if service receiver has paid directly to the
subcontractor for the outsourced portion of service, that portion of
consideration shall also be treated as consideration for export of service.

 Where the taxpayer has sought withdrawal from the composition
  scheme, the effective date of such withdrawal shall be the date
  indicated by him in his application filed in FORM GST CMP-04 but
  such date may not be prior to the commencement of the financial
  year in which such application for withdrawal is being filed.

 Where taxpayer has contravened the provisions of GST Act or GST
  rules and tax authorities denies the taxpayer, the option to pay tax
  under composition scheme, the effective date of such denial shall be
  from a date, including any retrospective date as may be determined
  by tax authorities, but shall not be prior to the date of such
  contravention.

 Penal provisions under section 73 of the CGST Act are generally not
  invoked in case of delayed filing of the return in FORM GSTR-3B
  where tax along with applicable interest has already been paid.
  However a general penalty under section 125 of the CGST Act may
  be imposed after following the due process of law, which may extend
  up to Rs.25,000/-

 In respect of revision of prices of any goods or services supplied
  before the implementation of GST, thereby requiring issuance of any
  supplementary invoice, debit note or credit note, the rate as per the
  provisions of the GST Acts would be applicable.

 Only such authority or a board or any other body set up by an Act of
  parliament or a State legislature or established by any Government
  in which fifty one per cent or more participation by way of equity or
  control is with the Government shall be liable to deduct TDS under
  Section 51 of the GST Act.

 Taxable value for the purposes of GST shall include the TCS amount
  collected under the provisions of the Income Tax Act.

 In respect of goods detained while in transit, if the invoice or any
  other specified document is accompanying the consignment of
  goods, then either the consignor or the consignee would be deemed
  to be the owner. If the invoice or any other specified document is not
  accompanying the consignment of goods, then in such cases, the
  proper officer would determine who should be declared as the owner
  of the goods.

All long duration programs offered by IIMs conferring degree/ diploma
including one- year Post Graduate Programs for Executives shall be
exempt from GST.

Amendments in the Act

 1     Rate of tax in respect of multimodal transport
Explanation has been inserted in Notification 11/2017 to provide that
the scope of entry in the GST rate notification for multimodal
transport with GST rate of 12% covers only domestic multimodal
transport.
[Notification 30/2018- Central Tax (Rate)]*

 2    Additional services covered under reverse charge
Government has brought the following category of services to be
taxed under reverse charge mechanism:

 Sl No. Nature of service                  Service receiver
 1      Services provided by business      A banking company, located in
        facilitator.                       the taxable territory
 2      Services provided by an agent      A business correspondent,
        of business correspondent          located in the taxable territory.
 3       Supply of security personnel by   A registered person, located in
        a non corporate entity.            the taxable territory.

Further the following category of services has been exempted from
reverse charge mechanism:
 Service provided by a goods transport agency to a government
  entity which has taken registration only for the purpose of
  deducting TDS.
 Supply of security personnel to:
   Composition tax payer
   Government entity which has taken registration only for the
     purpose of deducting TDS
[Notification 27/2018- Central Tax (Rate)]*

3   Additional services covered under exemption list
The following services have been exempted from GST:
 Service provided by a goods transport agency to a government
  departments/local authorities which has taken registration only
  for the purpose of deducting TDS under Section 51 of GST Act.

 Services provided by a banking company to Basic Saving Bank
  Deposit account holders under Pradhan Mantri Jan Dhan Yojana.

 Exemption on services provided by Government to their
  undertakings or PSUs by way of guaranteeing loans taken by
  them from financial institutions has been extended to
  guaranteeing of such loans taken from banks.

 Services provided by rehabilitation professionals at medical
  establishments, educational institutions, rehabilitation centres
  established by Government or entity registered under section
  12AA of the Income-tax Act.
[Notification 28/2018- Central Tax (Rate)]*

    4   Additional goods covered under exemption list
The following goods have been exempted from GST:
 Frozen vegetables
 Provisionally preserved vegetables
 Music manuscripts
 Public auction of gift items received by the President, Prime
  Minister, Governor or Chief Minister of any State or Union
  territory, or any public servant, where auction proceeds are to be
  used for public or charitable cause.
 Supply of gold to registered persons by entities specified in list
  32 of Notification No. 50/2017-Customs
[Notification 27/2018- Central Tax & Notification 26/2018- Central
Tax]*

    5   Change in the GST rate of goods and services

Sl No. Nature of service                          Earlier   Revised
                                                  Rate      Rate
1       Movie tickets above Rs.100/-              28%       18%
2       Movie tickets below Rs.100/-              18%       12%
3       Third party insurance of goods carrying   18%       12%
        vehicle
4       Air travel of pilgrims facilitated by     28%       18%
        government.

Sl No. Description of goods                             Earlier   Revised
                                                          Rate      Rate
  1       Natural cork                                    12%       5%
  2       Fly ash blocks                                  12%       5%

  3       Walking sticks                                  12%       5%
  4       Marble rubble                                   18%       5%
  5       Agglomerated cork                               18%       12%
  6       Cork roughly squared or debugged                18%       12%
  7       Articles of Natural cork                        18%       12%
  8       Accessories for Handicapped Mobility            28%       5%
          Vehicles
  9       Power banks                                     28%       18%
  10      Video game consoles, equipments used for        28%       18%
          Billiards and Snooker and other sport related
          items of HSN code 9504
  11      Retreated & used pneumatic Rubber tyres         28%       18%
  12      Colour Television Sets & monitors up to “32     28%       18%
          Inches”
  13      Digital & Video Camera recorders                28%       18%
  14      Pulleys, transmission shafts, cranks and gear   28%       18%
          boxes under HSN 8483

[Notification 24/2018- Central Tax (Rate) & Notification 27/2018-
Central Tax (Rate)]*

 6     Availment of ITC pertaining to the invoices of FY 2017-18
The time limit for availing Input Tax Credit (ITC) for invoices pertaining
to FY 2017-18 has been extended to the due date of filing GSTR-3B of
March 2019.
[Order 02/2018- Central Tax]

 7     Transaction between Govt entities exempted from TDS.
Proviso has been inserted in Notification 50/2018- Central Tax to
provide that the liability to deduct TDS shall not be applicable where
the transaction is between one Government department or local
authority and another Government department or local authority.
[Notification 73/2018- Central Tax]

8    Amendments in GST Rules
Rule 138E has been introduced in CGST Rules 2017, to provide that
restriction would be imposed on the taxpayer to generate E-way bill,
where returns for two consecutive month has not been filed.
Rule 4 to Rule 9 has been inserted in IGST Rules 2017, to determine
the proportionate value attributable to different states or union
territories in respect of services provided in more than one state or
union territory.
GST RFD-01 A has been revised to provide the facility of availing
the following type of refunds through:
     Refund       on      account     of      assessment/provisional
      assessment/appeal/any other order;
     Tax paid on an intra-State supply which is subsequently held
      to be inter-state supply and vice versa;
     Excess payment of tax.
[Notification 74/2018- Cental Tax & Notification 04/2018-
Integrated Tax]

      Taxability of EPC contracts of solar power generating
 9    plant
It has been provided that in respect of Engineering, procurement
and construction (EPC) contracts of solar power generating plant
and other renewable plants, deemed value of supply of the goods
attracting 5% GST rate would be 70% of the gross value of the
EPC contract, and the remaining 30% would be deemed as supply
of taxable services attracting standard GST rate.
[Notification 27/2018- Central Tax]*
*Similar notifications inserted under IGST/UTGST Acts.

Judgments and advance rulings

             In respect of printing services where only the content is provided by the
   1        publisher, supply of printing material shall be treated as ancillary supply to
            the principal supply ie, printing service.

SWAPNA PRINTING WORKS PVT LTD
2018-TIOL-327-AAR-GST
The applicant is engaged in the business of          It was also observed by the ruling authority that, vide
printing. It procures orders from foreign party      clarification issued under F. No. 354/263/2017-TRU
to print religious texts and then delivers them to   dated 20th October 2017 by the Ministry of Finance,
various places in India. Ruling was sought to        it has been clarified that in respect of printing services
know if such activity classifies as 'supply of       where only the content is provided by the publisher,
goods' or 'supply of services'. It was also sought   while physical inputs used for printing belong to the
as to whether such activity can be classified as     printer, supply of printing material is ancillary to the
'export'.                                            principal supply ie, printing service.
It was observed by the ruling authority that         Held- In view of the above it was held that the
persons located in India as specified by the         applicant's activity of printing the religious texts
recipient are taking the delivery on behalf of the   under the specific orders is a supply of service and not
recipient. As per Section 2(93) of the GST Act,      supply of goods. Further it was held that applicant's
such persons, who receive the supply on behalf       supply is not an export of service, as the recipient of
of the recipient, are also considered recipient.     the service is located in India.

Late payment surcharge cannot be treated as a separate service and the same
   2        shall be included in the value of initial supply to which such charge relates
            to.

MADHYA PRADESH POORV KSHETRA VIDYUT VITARAN COMPANY LTD
2019-TIOL-01-AAR-GST
The applicant is a public sector undertaking        distribution of electricity by an electricity
involved in the supply of electricity to            transmission or distribution of electricity
commercial and non-commercial users.                utility’ is available in respect of delay payment
Applicant issues bill of supply of electricity to   charges collected by the applicant.
customers which has a particular due date to
                                                    Held: In this regard it was held by the ruling
pay. Every payment received after the due date
                                                    authority that delay payment charges cannot be
mentioned is liable to pay delay payment
                                                    treated as a separate service and the same shall
charges.
                                                    be included in the value of initial supply to
Under this circumstance ruling was sought as to     which such charge relates to. Hence the portion
whether exemption under Entry no. 25 of             of delay payment charges attributable to
Notification 12/2017- Central Tax (Rate),           exempted supply shall also be exempted.
bearing     description   ‘Transmission      or

   3        All activities of supply of goods and services shall be taxable under GST
            except those activities that are specifically exempted
SHRIMAD RAJCHANDRA ADHYATMIK SATSANG SADHANA KENDRA
2018-TIOL-32-AAAR-GST
The applicant is a charitable trust, engaged in      Held: In this regard it was held by the ruling
advancement of religion, spirituality & yoga.        authority that all activities of supply of goods
Applicant also engages in the trading of             and services shall be taxable under GST
various products such as books, CDs, DVDs,           except those activities which are specifically
statutes, calendars etc. for the advancement of      exempted. The argument that ancillary
its main object. Under this circumstance             activity shall be treated as exempted where
ruling was sought as to whether such ancillary       main activity is exempted, cannot be accepted.
supply of spiritual products would be taxable
under GST.

Activities performed by the employees at the corporate office in the course of
   4        employment for the units located in other states shall be treated as supply as
            per Entry 2 to Schedule I of CGST Act
COLUMBIA ASIA HOSPITALS PVT LTD
2018-TIOL-31-AAAR-GST
The applicant company is engaged in                 of employment for the units located in other
providing health care services & has                states shall be treated as supply.
operations in six states. The Applicant has its
                                                    Held: In this regard, it was observed that even
corporate office located in Karnataka and
                                                    though the units in different state belong to the
some of the activities like accounting
                                                    same legal entity, corporate office and units
administration and maintenance of IT system
                                                    are distinct person under GST. Hence services
are carried out by the employees stationed at
                                                    provided by the employees at the corporate
corporate office and the consequential benefit
                                                    office to the units cannot be said to be under
flows to the other units located in other states.
                                                    employer-employee relationship and the same
In this context, ruling was sought as to            shall be taxable under GST.
whether the activities performed by the
employees at the corporate office in the course