turned_inGST in Nutshell

GST- An Overview >

Background of GST

This part gives background of GST

<p>The structure of indirect taxes in India (as existing unto 30-6-2017) was based on three lists in Seventh Schedule to Constitution of India, which came into effect on 26-1-1950. These lists are mostly based on Government of India Act, 1935.</p> <p>The provisions were based on situation prevailing in 1935. That structure had become outdated due to changes in situations, technology etc.</p> <p>World has moved towards common Goods and Services Tax (GST) long ago. However, so far as India is concerned, GST is the tax for twenty first century [It is rightly said that India is like an elephant. It takes time to start, but once started, it is very difficult to stop it].</p> <p>Finally, India has moved into GST on 1-7-2017.</p> <p>It is a one way street - now there can be no going back. We have to face the challenges of GST. There is no other way.</p> <p><strong>Amendments made to GST Acts vide Amendment Act, 2018</strong></p> <p>After gaining experience of implementation of GST, various amendments have been made in monsoon session of Parliament in August 2018. The amendments may be notified and may be made effective on or before 1-1-2019. The major changes are summarized below:</p> <p>&nbsp;</p> <p>u Reverse charge provisions in respect of supplies received from unregistered person will apply in respect of specified goods or services or both [section 9(4) of CGST Act and section 5(4) of IGST Act]</p> <p>u Eligibility for composition scheme increased from Rs. one crore to Rs. 1.50 crores [section 10(1) of CGST Act]</p> <p>u Composition scheme is not available to supply of services (except supply of food services). However, a taxable person under composition scheme can supply services upto 10% of his turnover in previous financial year or Rs. five lakhs, whichever is higher. [second proviso to section 10(1) of CGST Act]</p> <p>u Motor vehicles having approved seating capacity exceeding 13 persons (inclu&shy;ding driver) will be eligible for ITC [section 17(6)(<em>a</em>)]</p> <p>u Leasing, renting or hiring, insurance, repairs and maintenance expenses relating to motor vehicle, vessel and aircraft will not be eligible where ITC of such motor vehicles is not eligible. [section 17(5)(<em>b</em>)(<em>i</em>) of CGST Act]</p> <p>u ITC will be available in case of canteen expenses by factories employing more than 250 persons [proviso to section 17(5)(<em>b</em>) of CGST Act]</p> <p>u Exemption limit in case of some special category states increased from Rs. 10 lakhs to Rs. 20 lakhs [section 22(1) of CGST Act]</p> <p>u A person can have multiple registrations in same State/Union Territory for different establishments. Concept of &lsquo;business vertical&rsquo; scrapped [second <em>proviso </em>to section 25(2) of CGST Act]</p> <p>u Registration will be suspended till cancelled. Thus, no need to file returns from date of suspension to date of cancellation of GSTIN Registration [section 29(1)(<em>c</em>) of CGST Act]</p> <p>u One or more debit/credit notes can be issued for one or more tax invoices [section 34(1) and section 34(3) of CGST Act]</p> <p>u Government and local authority not required to submit annual GST report [proviso to section 35(5) of CGST Act]</p> <p>u Time limit for fling returns will be fixed in Rules (as staggering is proposed) [section 39(1) of CGST Act]</p> <p>u Enabling provision to introduce revised system of uploading of invoices and matching of invoices [section 43A of CGST Act]</p> <p>u GST Practitioner can perform other functions as may be prescribed [section 48 of CGST Act]</p> <p>u Credit of SGST/UTGST can be utilized for payment of IGST only when credit of CGST is not available for payment of IGST [proviso to section 9(b) of UTGST Act] &ndash; similar provision will be made in each SGST Act</p> <p>u SGST/UTGST Credit can be utilized for payment of IGST only when credit of CGST is not available for payment of IGST [section 49(5) of CGST Act]</p> <p>u Input tax credit of IGST should first be utilized fully for IGST, CGST and SGST/ UTGST, and then only credit of CGST, SGST or UTGST should be utilized for payment of IGST, CGST, SGST/UTGST [section 49A of CGST Act] - - However, SGST/UTGST credit cannot be utilized for payment of CGST. Further ITC of CGST cannot be utilized for payment of SGST/UTGST.</p> <p>u Government can prescribe the order and manner for utilization of ITC [section 49C of CGST Act] [seems to be only an enabling provision].</p> <p>u Payment for exports can be in Indian Rupees where RBI allows [section 54(8) (c) of CGST Act]</p> <p>u Upper limit of pre-deposit for fling first appeal is Rs. 50 crores of IGST [or Rs. 25 crores of CGST plus Rs. 25 crores of SGST/UTGST] [section 107(8)(<em>b</em>) of CGST Act]</p> <p>u Upper limit of pre-deposit for fling second appeal <em>i.e.</em> appeal before Tribunal is Rs. 100 crores of IGST [or Rs. 50 crores of CGST plus Rs. 50 crores of SGST/ UTGST] [section 112(8)(<em>b</em>) of CGST Act]</p> <ul> <li>Krishi Kalyan Cess, Education Cess, Cess collected as Additional duty of customs under section 3(1) of Customs Tariff Act and any other cess not specified in <em>Explanation 1 </em>or 2 to section 140 of CGST Act will not be eligible for carry forward [section 140 of CGST Act]. The Amendment is with retrospective effect from 1-7-2017.</li> <li>Supply of goods by endorsement of documents before clearance for home consumption is neither supply of goods nor supply of services <em>e. </em>high seas sale [Schedule III para 8(b) of CGST Act]</li> <li>Supply of goods from one place out of India to another place out of India without goods entering India [para 7 Schedule II of CGST Act].</li> <li>Supply of goods when in customs bonded warehouse is neither supply of goods nor supply of services [Schedule III para 8(a) of CGST Act]</li> <li>Payment for exports can be received in Indian Rupees if permitted by RBI [section 2(6) of IGST Act]</li> <li>If destination of goods is out of India, place of supply will be out of India even when supplier and recipient of service are in India [proviso to section 12(8) of IGST Act]</li> <li>Goods can be imported in India for repairs or processing and exported without payment of GST [second <em>proviso </em>to section 13(3)(a) of IGST Act]</li> <li>Some drafting mistakes have been corrected.</li> </ul>

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