CENTRAL GOODS AND SERVICES TAX (FOURTH AMENDMENT) RULES, 2019 – AN OVERVIEW

[Mr. M. GOVINDARAJAN]

Introduction

To carry out the provisions of the Central Goods and Services Tax Act, 2017 (‘Act’ for short) the Central Government made the Central Goods and Services Tax Rules, 2017 (‘Rules’ for short) vide Notification No.07/2017, dated 27.06.2017, which came into effect from 22.06.2017.  Changes in law are common.  This rule is not an exception to this.  This Rule met 14 amendments during the year 2017, 14 amendments during the year 2018 and in the current year 3 amendments and the present amendment is the fourth amendment.  In this article the overview of the amendments made in the Rules will be discussed.

Fourth amendment

Vide Notification No. 31/2019-Central Tax, dated 28.06.2019 the Central Government made the fourth amendment to the Rule.  The date of effect of the amendment is with effect from 28.06.2017 unless otherwise specifically indicated other dates for effect. 

Amendment to registration

Chapter III of the Rule dealt with the procedure for registration under the Act.  Rule 10 provides for the issue of registration certificate in Form GST REG – 6.  The amendment proposed to insert Rule 10A.  The new Rule 10A requires the registered person to submit the details of bank accounts.    The new Rule 10A provides that after a certificate of registration in FORM GST REG-06 has been made available on the common portal and a Goods and Services Tax Identification Number has been assigned, the registered person, except those who have been granted registration under-

•  rule 12 (granting of registration to persons required to deduct tax at source or collect tax at source);or
•  rule 16 (suo motu registration),

 shall as soon as may be, but not later than forty five days from the date of grant of registration or the date on which the return required under section 39 is due to be furnished, whichever is earlier, furnish information with respect to details of bank account, or any other information, as may be required on the common portal in order to comply with any other provision. 

Rule 10A came into effect from 28.06.2019.

Cancellation of registration

Rule 21 provides the grounds on which the Department may cancel the registration certificate.  The amendment adds one more ground that the registration certificate is liable to be cancelled if there is any violation of Rule 10A.

Clarification of Kerala Flood Cess

The amendment inserted Rule 32A with effect from 01.07.2019 which gives clarification in determining the value for the calculation of Kerala Flood Cess.  The new Rule 32A provides that the value of supply of goods or services or both on which Kerala Flood Cess is levied under clause 14 of the Kerala Finance Bill, 2019 shall be deemed to be the value determined in terms of section 15 of the Act, but shall not include the said cess.

QR Code in tax invoice

Rule 46 provides the procedure for issue of tax invoice.  The amendment sought to insert QR Code in the tax invoice by inserting a proviso to this Rule.  The date of effect of this rule will be later. The new proviso inserted to Rule 46 provides that the Government may, by notification, on the recommendations of the Council, and subject to such conditions and restrictions as mentioned therein, specify that the tax invoice shall have Quick Response (QR) code.

The amendment also sought to insert the QR code in the ‘bill of supply’ also.  The amendment inserted a proviso to Rule 49 which provides the procedure for issue of ‘bill of supply’.    The date of effect of this rule will be later. The new proviso inserted to Rule 49 provides that the Government may, by notification, on the recommendations of the Council, and subject to such conditions and restrictions as mentioned therein, specify that the ‘bill of supply’ shall have QR code.

Return for TDS

Rule 66 provides the procedure for filing the return by a person who required deducting tax at source.  Rule 66 (2) provides that the details furnished by the deductor under sub-rule (1) shall be made available electronically to each of the suppliers in Part C of FORM GSTR-2A and FORM-GSTR- 4A on the common portal after the due date of filing of FORM GSTR-7.

There is an amendment to Rule 66(2).  After amendment Rule 66(2) provides that the details furnished by the deductor under sub-rule (1) shall be made available electronically to each of the deductees on the common portal after filing of FORM GSTR-7 for claiming the amount of tax deducted in his electronic cash ledger after validation.

This amendment came into effect from 28.06.2019.

Statement of supplies by e-commerce operator

Rule 67 provides the procedure for the manner of submission of Statement of supplies by e-commerce operator.  Rule 67 (2) provides that the details furnished by the operator under sub-rule (1) shall be made available electronically to each of the suppliers in Part C of FORM GSTR-2A on the common portal after the due date of filing of FORM GSTR-8.

There is an amendment to Rule 67(2).  After amendment Rule 67(2) provides that the details furnished by the deductor under sub-rule (1) shall be made available electronically to each of the suppliers on the common portal after filing of FORM GSTR-8 for claiming the amount of tax deducted in his electronic cash ledger after validation.

This amendment came into effect from 28.06.2019.

Electronic Cash Ledger

The second proviso to Rule 87(1) was omitted by the amendment.  The original second proviso to Rule 87(1) provides that  a person supplying online information and database access or retrieval services from a place outside India to a non-taxable online recipient referred to in section 14 of the Integrated Goods and Services Tax Act, 2017 may also do so through the Board’s payment system namely, Electronic Accounting System in Excise and Service Tax from the date to be notified by the Board.

Rule 87(9) provides that any amount deducted under section 51 or collected under section 52 and claimed in FORM GSTR-02 by the registered taxable person from whom the said amount was deducted or, as the case may be, collected shall be credited to his electronic cash ledger in accordance with the provisions of rule 87.    There are amendments to Rule 87(9).  After amendment the Rule 87(9) provides that any amount deducted under section 51 or collected under section 52 and claimed by the registered taxable person from whom the said amount was deducted or, as the case may be, collected shall be credited to his electronic cash ledger. 

The above said amendments came into effect from 28.06.2019.

Rule 87(13) has been newly inserted which will come into effect later as notified by the Central Government.  The new Rule 87(13) provides that a registered person may, on the common portal, transfer any amount of tax, interest, penalty, fee or any other amount available in the electronic cash ledger under the Act to the electronic cash ledger for integrated tax, central tax, State tax or Union territory tax or cess in FORM GST PMT-09.

Refund

Changes were made in the following rules-

• Rule 91 – Grant of provisional refund;
• Rule 92 – Order sanctioning refund;
• Rule 94 – Order sanctioning interest on delayed refunds.

In these rules where the words ‘payment advice’ appears the same have been substituted by the expression ‘payment order’. 

After amendment Rule 92(4) provides that the proper officer shall make refund on the basis of consolidated payment advice.  Rule 92(4A) has also been inserted which provide that the Central Government shall disburse the refund based on the consolidated payment advice issued under sub-rule (4).

Rule 95A has been newly inserted with effect from 01.07.2019.  The new rule provides the procedure for refund of taxes to the retail outlets established in departure area of an international Airport beyond immigration counters making tax free supply to an outgoing international tourist.  The procedure is as detailed below-

•  Retail outlet established in departure area of an international airport, beyond the immigration counters, supplying indigenous goods to an outgoing international tourist who is leaving India shall be eligible to claim refund of tax paid by it on inward supply of such goods.
•  Retail outlet claiming refund of the taxes paid on his inward supplies, shall furnish the application for refund claim in FORM GST RFD- 10B on a monthly or quarterly basis, as the case may be, through the common portal either directly or through a Facilitation Centre notified by the Commissioner.
• The self-certified compiled information of invoices issued for the supply made during the month or the quarter, as the case may be, along with concerned purchase invoice shall be submitted along with the refund application.
• The refund of tax paid by the said retail outlet shall be available if-

• the inward supplies of goods were received by the said retail outlet from a registered person against a tax invoice;
•  the said goods were supplied by the said retail outlet to an outgoing international tourist against foreign exchange without charging any tax;
•  name and Goods and Services Tax Identification Number of the retail outlet is mentioned in the tax invoice for the inward supply; and
• such other restrictions or conditions, as may be specified, are satisfied.
• The provisions of rule 92 shall, mutatis mutandis, apply for the sanction and payment of refund under this rule.

 Anti-profiteering

Rule 128 (1) requires the Standing Committee to examine the application received by it within two months from the date of receipt.  The amendment gives relaxation.  The Standing Committee if it could not complete the examination of the complaint within two months it may extend to such period not exceeding one month for reasons to be recorded in writing as may be allowed by the Authority.

After amendment Rule 128(2) provides that All applications from interested parties on issues of local nature or those forwarded by the Standing Committee shall first be examined by the State level Screening Committee and the Screening Committee shall, within two months from the date of receipt of a written application, or within such extended period not exceeding a further period of one month for reasons to be recorded in writing as may be allowed by the Authority, upon being satisfied that the supplier has contravened the provisions of section 171, forward the application with its recommendations to the Standing Committee for further action.

Rule 129(6) requires the Director General of Anti-profiteering to complete the investigation within a period of three months of the receipt of reference from the Standing Committee.  The amendment fixed the period as six months instead of three months.

Rule 133 (1) is also amended by giving the Authority to give the time to issue orders within 6 months from the date of receipt of investigation report from Director General instead of 3 months.

Rule 133(2A) has been newly inserted which provides that the Authority may seek the clarification, if any, from the Director General of Anti Profiteering on the report submitted under sub-rule (6) of rule 129 during the process of determination under sub-rule (1).

Rule 133(3) gives the Anti-Profiteering Authority in their order to direct the registered person against whom the complaint is made, to deposit 50% of the amount determined by the Authority.   Now the amendment gives additional power to levy interest on the above said deposit at the rate of 18% from the date of collection of the higher amount till the date of deposit of such amount in the Consumer Welfare Fund.

Rule 133(5) (a) and (b) have been introduced in the fourth amendment to the Rules.  The newly inserted Rule 133(5) (a)  provides that notwithstanding anything contained in sub-rule (4), where upon receipt of the report of the Director General of Anti-profiteering, the Authority has reasons to believe that there has been contravention of the provisions of section 171 in respect of goods or services or both other than those covered in the said report, it may, for reasons to be recorded in writing, within the time limit specified in sub-rule (1), direct the Director General of Anti-profiteering to cause investigation or inquiry with regard to such other goods or services or both, in accordance with the provisions of the Act and these rules.  Rule 133(5)(b) provides that the investigation or enquiry under clause (a) shall be deemed to be a new investigation or enquiry and all the provisions of rule 129 shall mutatis mutandis apply to such investigation or enquiry.

E-way bill

The amendment has brought changes in E-way Bill as detailed below-

• Rule 138 (10) in the Table in Column No. 3 against sl. No. 1 to 4 in the Table, after the expression ‘over dimensional cargo’ the expression ‘or multimodal shipment in which at least one leg involves transport by ship’ has been inserted.
• Third proviso has been inserted to Rule 138(10) which provides that the validity of the e-way bill may be extended within eight hours from the time of its expiry.
• Rule 138 (a) has been amended to some extent.  The amended Rule 138 E (a) provided that being a person paying tax under section 10, or availing the benefit of notification of the Government of India, Ministry of Finance, Department of Revenue No. 02/2019– Central Tax (Rate), dated the 7th March, 2019, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 189, dated the 7th March, 2019, has not furnished the statement in FORM GST CMP-08 for two consecutive quarters.

Amendments in forms

The following forms have met amendments-

• Form GST REG – 1 – the details of bank accounts to be furnished;
• Form GST REG – 7 -  Part B – entry 12A has been inserted to furnish the details of bank account;
• Form GST REG – 12 – Entry no. 13 has been inserted to furnish the details of bank account, which is optional.
• Form GSTR – 4 – New form has been substituted for the old form (with effect from 28.06.2019)
• Form GST PMT – 09 has been inserted (date of effect will be notified later);
• Form GST RFD – 05 – the word ‘advice’ wherever comes, replaced by the word ‘order’ (date of effect will be notified later);
• New Form GST RFD – 10 B (with effect from 01.07.2019) has been introduced which is the application for refund by Duty free shops/Duty paid shops;
• Form GST DRC – 03 – New form is substituted (effect from 28.06.2019).