GST Updates: Reverse Charge Mechanism is deferred till 30 September

The Central Board of Indirect Taxes and Customs issued a notification on 29th June, 2018, postponing the roll-out of the reverse charge mechanism by three more months.

The government has further deferred the reverse charge mechanism under goods and services tax to September 30. Under this mechanism, GST is levied on goods or services procured from unregistered dealers by the buyer and deposited with the government.

This is an anti-tax-evasion measure to ensure that transactions by unregistered people don’t escape tax. In a normal transaction, the supplier of goods or service charges the tax and pays to the government, but in this case, the responsibility reverses and falls on the buyer. 

The mechanism was to kick in from July 1 this year after it had been deferred earlier. The industry had voiced concern that this would increase their compliance burden.

Source: Economic Times

The notification copy can be found below.

GST Updates: Common Enrollment Number for transporters

GST: Transporters can now use common enrollment number across multiple states

To help the logistics industry comply with e-way bill requirements with ease, the Finance Ministry has notified new rules for transporters running businesses in multiple States.

The Central Goods and Services Tax (Sixth Amendment) Rules, 2018, which came into effect on June 19, prescribes: “A transporter who is registered in more than one State or Union Territory having the same Permanent Account Number, may apply for a unique common enrolment number by submitting the details in FORM GST ENR-02 using any one of his Goods and Services Tax Identification Numbers, and upon validation of the details furnished, a unique common enrolment number shall be generated and communicated to the said transporter.”

But it comes with a caveat that if the transporter has obtained a unique common enrolment number (UEN), he will not be eligible to use any of the GSTINs.

Transporters are required to submit the final report after the e-way bill is generated.

The report indicates that tax-paid goods have been delivered, and now can be used for verification in the tax assessment of buyers. Under the new rules, transporters will be given extended time not exceeding three days for recording of the final report.

Ease of Compliance

Generation of e-way bills by a transporter registered in multiple States was seen as an arduous task, as the transporter was required to login with the respective GSTINs in various States to generate the bills.

You can find copy of such notifications below.

Source: The Hindu Business Line

GST Updates: Govt. issued various Notifications on 13th October, 2017

Based on recommendation of GST Council at its meeting held on 06th October, 2017, Ministry of Finance has issued various notifications to make such recommendation effective.

1. Extension of due date for filing Form GSTR-4 (Notification No 41/2017 - GSR 1255(E) - CGST):

By this notification, the Govt. has extended the due date till 15th November, 2017 for filing a return in Form GSTR-4 for the quarter July to September, 2017. This return is required to be filed by Composition dealer pursuant to Section 39(2) of CGST Act, 2017.

2. Extension of due date for filing Form GSTR-5A (Notification No 42/2017 - GSR 1256(E) - CGST):

By this notification, the Govt. has extended the due date till 20th November, 2017 for filing a return in Form GSTR-5A for the month of July, August and September, 2017. This return is required to be filed by the persons supplying online information and database access or retrieval service from a place outside India to a non-taxable online recipient pursuant to Section 39(4) of CGST Act, 2017.

3. Extension of due date for filing Form GSTR-6 (Notification No 43/2017 - GSR 1257(E) - CGST):

By this notification, the Govt. has extended the due date till 15th November, 2017 for filing a return in Form GSTR-6 for the month of July, August and September, 2017. This return is required to be filed by Input Service Distributor pursuant to Section 39(4) of CGST Act, 2017. GSTR-6 contains details of all the documents issued for distribution of Input Tax Credit and the manner of distribution of credit and tax invoice on which credit is received.

4. Extension of due date for filing Form GST ITC-01 (Notification No 44/2017 - GSR 1258(E) - CGST):

By this notification, the Govt. has extended the due date till 31st October, 2017 for filing a return in Form GST ITC-01 for the month of July, August and September, 2017. This return is required to be filed by Registered Dealer who are eligible to avail Input tax credit pursuant to Section 18(1) of CGST Act, 2017. 

5. Exemption from obtaining GST Registration by persons having turnover not exceeding Rs 20 Lacs in financial year (Notification No 10/2017 - GSR 1260(E) - IGST):

Based on recommendation of GST Council, Govt. hereby specifies 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 twenty lakh rupees in a financial year as the category of persons exempted from obtaining registration under the IGST Act

6. RCM in case of intra-state supply by unregistered dealer to registered dealer deferred till 31st March, 2018 (Notification No 38/2017 - GSR 1262(E) - CGST Rate):

Registered Dealer is now not required to pay CGST under reverse charge mechanism under Section 9(4) of CGST Act, 2017. This exemption is in effect till 31st March, 2018.

7. RCM in case of inter-state supply by unregistered dealer to registered dealer deferred till 31st March, 2018 (Notification No 32/2017 - GSR 1263(E) - IGST Rate):

Registered Dealer is now not required to pay IGST under reverse charge mechanism under Section 5(4) of IGST Act, 2017. This exemption is in effect till 31st March, 2018.

Notifications can be access below or at this link.

GST Updates: Outcome of GST Council Meeting dated 06th October, 2017

Outcome of GST Council Meeting held on 06th October, 2017

GST Council meeting was held on 06th October, 2017 to discuss various matters. Following are the outcome of this meeting.

1. Limit for turnover in compensation scheme raised from Rs 75 Lakh to Rs 1 Crore
2. 1% tax applicable on traders under composition scheme
3. 2% tax will be applicable on manufacturing firms under composition scheme
4. 5% tax applicable on restaurants under composition scheme
5. E-way Bill provisions to be deferred till April, 2018
6. Reverse Charge in case of supplying services or goods by unregistered dealer to registered dealer not to be applicable till 31st March, 2018
7. Dealer with Turnover upto Rs 1.5 Cr (non-composition scheme) required to be file quarterly returns.
8. GST Rate on khakra and unbranded namkeen has been reduced from 12 percent to 5 percent
9. GST Rate on zari work, unbranded ayurveda medicine has been reduced from 12 to 5 percent
10. GST Rate on man-made yarn reduced to 12% from 18%
11. Every exporter will now get an e-wallet. In the e-wallet, there would be a notional amount for credit. The refund they will eventually get will be offset from that amount. The e-wallet will be introduced from April next year.
12. Tax refunds to exports will start from October 10 
13.  GST rate on many job work items reduced from 12 percent to 5 percent. 
14. GST rate on some stationery items, diesel engine parts also reduced to 18percent from the earlier 28 percent.
15. small businesses will also have to file monthly returns for three months – July, August and September – and the switchover to quarterly filing will happen from the cycle starting 1st October.
16. Any person providing exempted service are eligible for compensation scheme.
17. petroleum products remain outside the ambit of GST
18. It has been decided to exempt those service providers whose annual turnover is less than Rs 20 Lacs from obtaining registration even if they are making inter-State taxable supplies of services.
19. registration and operationalization of TDS/TCS provisions shall be postponed till 31.03.2018.
20. Services provided by a Goods Transport Agencies (GTA) to an unregistered person shall be exempted from GST.
21. Taxpayers having annual aggregate turnover uotpo Rs 1.5 Cr shall not be requried to pay GST at the time of receipt of advance on the account of supply of goods.
22. Due Date for filing Form GSTR-4 under composition scheme for quarter July-Sep 2017 shall be extended to 15th November, 2017
23. Due Date for filing Form GSTR-6 by input service distributor for quarter July-Sep 2017 shall be extended to 15th November, 2017

Keep watching the post for more updates on this topic. You can access press release on above at this link.

GST Updates: Conditions for exports of goods or services without payment of IGST

Central Board of Excise and Customs (CBEC) has issued a notification dated 04th October, 2017 specifying the conditions and safeguards for furnishing a Letter of Undertaking (LOU) in place of bond by registered person who intends to supply goods or services for export without payment of IGST. Conditions are are as follows:

1. Those registered persons, who have been prosecuted for any offence under the CGST Act or IGST Act or any of the existing laws in force in a case where the amount of tax evaded exceeds two hundred and fifty lakh rupees, are not eligible to avail this facility

2. LOU shall be furnished on the letter head of the registered person, in duplicate, for a financial year in the annexure to FORM GST RFD – 11 and it shall be executed by the working partner, the Managing Director or the Company Secretary or the proprietor or by a person duly authorised by such working partner or Board of Directors of such company or proprietor.

3. where the registered person fails to pay the tax due along with interest, as specified under sub-rule (1) of rule 96A of Central Goods and Services Tax Rules, 2017, within the period mentioned in clause (a) or clause (b) of the said sub-rule, the facility of export without payment of integrated tax will be deemed to have been withdrawn and if the amount mentioned in the said sub-rule is paid, the facility of export without payment of integrated tax shall be restored.

Copy of such Notification can be accessed at below link:

Notification