4 Bills to Amend CGST/ IGST/ UTGST Acts (GST Laws), introduced by Govt.

4 Bills to Amend CGST/ IGST/ UTGST/ Compensation Cess Acts (GST Laws), introduced by Govt.

Govt. has introduced 4 bills in the Lok Sabha (dt. 7 Aug. 2018), for making amendments in the provisions under the GST Laws relating to ‘Supply’, ‘Reverse Charge Mechanism (RCM)’, ‘Composition Scheme’, ‘Input Tax credit (ITC)’, ‘GST Returns (GSTR)’, etc., by way of the CGST (Amendment) Act 2018, IGST (Amendment) Act 2018, UTGST (Amendment) Act 2018 and GST (Compensation to States) Amendment Act 2018. These bills are likely to be passed in the current session of the Parliament.

Proposed Bills to Amend GST Laws presented in Parliament (dt. 7 Aug. 2018)

CGST (Amendment) Bill 2018

IGST (Amendment) Bill 2018

UTGST (Amendment) Bill 2018

GST (Compensation to States) Amendment Bill 2018

List of 32 Amendments Proposed in Central GST Act

1. Clause 1 of the Bill provides for the Short title and Commencement.

2. Clause 2 of the Bill seeks to amend certain expressions used in the Bill.

3. Clause 3 of the Bill seeks to amend section 7 of the principal Act relating to “Scope of Supply” in order to clarify the scope of supply.

4. Clause 4 of the Bill seeks to amend section 9 of the principal Act relating to “Levy and Collection” so as to restrict the levy of tax on reverse charge basis to receipt of supplies of certain specified categories of goods or services or both by notified classes of registered persons from unregistered suppliers on the recommendations of the Council.

5. Clause 5 of the Bill seeks to amend section 10 of the principal Act relating to Composition Levy”, so as to raise the statutory threshold of turnover for a taxpayer to be eligible for the composition scheme from one crore rupees to one crore and fifty lakh rupees, and to allow the composition taxpayers to supply services (other than restaurant services), for up to a value not exceeding ten per cent. of turnover in the preceding financial year, or five lakh rupees, whichever is higher.

6. Clause 6 of the Bill seeks to amend section 12 of the principal Act relating to “Time of supply of goods” and the said amendment is drafting in nature.

7. Clause 7 of the Bill seeks to amend section 13 of the principal Act relating to “Time of supply of services” and the said amendment is drafting in nature.

8. Clause 8 of the Bill seeks to amend section 16 of the principal Act relating to “Eligibility and conditions for input tax credit”, in order to provide for input tax credit in cases of “Bill-to-ship-to” model in the case of supply of services. The said clause further seeks to include the provisions relating to the new return format as specified in the proposed new section 43A, for availment of input tax credit.

9. Clause 9 of the Bill seeks to amend section 17 of the principal Act relating to Apportionment of credit and blocked credits”, in order to further expand the scope of eligibility of input tax credit.

10. Clause 10 of the Bill seeks to amend section 20 of the principal Act relating to “Manner of distribution of credit by Input Service Distributor”, in order to exclude the amount of tax levied under Entry 92A of List I of the Seventh Schedule of the Constitution from the value of turnover for the purposes of distribution of credit.

11. Clause 11 of the Bill seeks to amend section 22 of the principal Act relating to “Persons liable for registration”, so as to increase the threshold turnover for registration in special category States of Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand from ten lakh rupees to twenty lakh rupees.

12. Clause 12 of the Bill seeks to amend section 24 of the principal Act relating to Compulsory registration in certain cases”, so as to provide for mandatory registration for only those e-commerce operators who are liable to collect tax at source under section 52 of the principal Act.

13. Clause 13 of the Bill seeks to amend section 25 of the principal Act relating to “Procedure for registration”, so as to allow persons having multiple places of business in a State or Union territory to obtain separate registration for each such place of business, and to insert the provisions for separate registration for a person having a unit(s) in a Special Economic Zone or being a Special Economic Zone developer, distinct from his other units located outside the Special Economic Zone.

14. Clause 14 of the Bill seeks to amend section 29 of the principal Act relating to Cancellation of registration”, so as to provide for temporary suspension of registration while cancellation of registration is under process.

15. Clause 15 of the Bill seeks to amend section 34 of the principal Act relating to “Credit and debit notes”, so as to allow registered persons to issue consolidated credit or debit notes in respect of multiple invoices issued in a Financial Year.

16. Clause 16 of the Bill seeks to amend section 35 of the principal Act relating to “Accounts and other records” so as to provide that any Department of the Central or State Government or local authority which is subject to audit by the Comptroller and Auditor-General of India need not get their books of account audited by any Chartered Accountant or Cost Accountant.

17. Clause 17 of the Bill seeks to amend section 39 of the principal Act relating to Furnishing of returns”, so as to provide for prescribing the procedure for quarterly filing of returns with monthly payment of taxes.

18. Clause 18 of the Bill seeks to insert a new section 43A to provide for prescribing the procedure for furnishing return and availing input tax credit.

19. Clause 19 of the Bill seeks to amend section 48 of the principal Act relating to “Goods and Services Tax Practitioners”, so as to allow Goods and Services Tax Practitioners to perform other functions such as filing refund claim, filing application for cancellation of registration, etc.

20. Clause 20 of the Bill seeks to amend section 49 of the principal Act relating to “Payment of tax, interest, penalty and other amounts” in order to provide that the credit of State tax or Union territory tax can be utilised for payment of integrated tax only when the balance of the input tax credit on account of central tax is not available for payment of integrated tax.

21. Clause 21 of the Bill seeks to insert two new sections, namely, section 49A and section 49B. Section 49A seeks to specify that a taxpayer would be able to utilise the input tax credit on account of central tax, State tax or Union territory tax only after exhausting all the credit on account of integrated tax available to him towards payment or integrated tax, Central tax, State tax or Union territory tax. Section 49B seeks to empower the Government to prescribe any specific order of utilisation of input tax credit of any of the taxes for payment of any tax.

22. Clause 22 of the Bill seeks to amend section 52 of the principal Act relating to “Collection of tax at source”, in order to give the reference of section 39.

23. Clause 23 of the Bill seeks to amend section 54 of the principal Act relating to “Refund of tax”, in order to provide that the principle of unjust enrichment will apply in case of a refund claim arising out of supplies of goods or services or both made to a Special Economic Zone developer or unit, and to allow receipt of payment in Indian rupees, where permitted, by the Reserve Bank of India in case of export of services.

24. Clause 24 of the Bill seeks to amend section 79 of the principal Act relating to “Recovery of tax”, to enable recovery to be made from distinct persons registered in different States or Union teiritories in order to ensure speedy recovery from other establishments of the registered person.

25. Clause 25 of the Bill seeks to amend section 107 of the principal Act relating to “Appeals to Appellate Authority”, in order to specify twenty-five crore rupees as the upper limit of the amount of pre-deposit payable for filing of appeal before the Appellate Authority.

26. Clause 26 of the Bill seeks to amend section 112 of the principal Act relating to “Appeals to Appellate Tribunal”, in order to specify fifty crore rupees as the upper limit of the amount of pre-deposit payable for filing of appeal before the Appellate Tribunal.

27. Clause 27 of the Bill seeks to amend section 129 of the principal Act relating to Detention, seizure and release of goods and conveyances in transit”, in order to increase the time limit before which proceedings under section 130 can be initiated from seven to fourteen days.

28. Clause 28 of the Bill seeks to amend section 140 of the principal Act relating to Transitional arrangements for input tax credit”, in order to clarify with retrospective effect from 1st July, 2017 that the cesses and additional duty of excise (on textile and textile articles) levied under the pre-Goods and Services Tax laws shall not be a part of transitional input tax
credit under the goods and services tax.

29. Clause 29 of the Bill seeks to amend section 143 of the principal Act relating to “Job work procedure” in order to empower the Commissioner to extend the time limit for return of inputs and capital goods sent on job work, upto a period of one year and two years, respectively.

30. Clause 30 of the Bill seeks to amend Schedule I of the principal Act relating to “Activities to be treated as supply even if made without consideration”.

31. Clause 31 of the Bill seeks to amend the title of Schedule II of the principal Act from Activities to be treated as supply of goods or supply of services” to “Activities or transactions to be treated as supply of goods or supply of services”.

32. Clause 32 of the Bill seeks to amend Schedule III of the principal Act relating to Activities or transactions which shall be treated neither as a supply of goods nor a supply of services”.

List of 4 Amendments proposed in Integrated GST Act

1. To amend section 5 of the Act empowering the Central Government to notify classes of registered persons to pay tax on reverse charge basis in respect of receipt of supplies of certain specified Categories of goods or services or both from unregistered suppliers;

2. To amend section 12 of the Act to provide that if the transportation of goods is to a place outside India, the place of supply shall be the place of destination of such goods;

3. To amend section 17 of the Act to make a provision for settlement of balance in the integrated tax account equally between the Central Government and the State Governments; and

4. To amend section 20 of the Act to specify the amount of pre-deposit payable for filing of appeals

(a) before the Appellate Authority to be capped at fifty crore rupees;

(b) before the Appellate Tribunal to be capped at one hundred crore rupees.

List of 3 Amendments proposed in UTGST Act

1. To amend section 7 of the Act so as to empower the Central Government to notify classes of registered persons to pay the tax on reverse charge basis in respect of receipt of supplies of certain specified categories of goods or services or both from unregistered suppliers;

2. To amend section 9 of the Act so as to provide that input tax credit on account of the Union territory tax shall be utilised towards payment of integrated tax only when the balance of the input tax credit on account of central tax is not available for payment of integrated tax; and

3. To insert new sections 9A and 9B relating to “Utilisation of input tax credit” and “Order of utilisation of input tax credit”.

List of 2 Amendments proposed in GST (Compensation to States) Act

1. To insert a new sub-section (3A) in section 10 of the Act so as to provide that any amount remaining unutilised in the Compensation Fund may, on the recommendations of the Council, be distributed between Centre and the States at any point of time in a financial year; and

2. To provide that in case of shortfall in the amount collected in the Fund against the requirement of compensation to be released under section 7 for any two months’ period, fifty per cent. of the same, but not exceeding the total amount transferred to the Centre and the States as recommended by the Council shall be recovered from the Centre and the balance fifty per cent. from the States in the ratio of their base year revenue determined in accordance with the provisions of section 5 of the Act.

One Response

  1. Sanju Aug 8, 2018

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