CENTRAL GOODS AND SERVICES TAX (EIGHTH AMENDMENT) RULES, 2018 – AN OVERVIEW

[Mr. M. GOVINDARAJAN]

Introduction

The Central Government has made many amendments to the Central Goods and Services Tax Rules, 2017 (which came into effect from 01.07.2017).  Now it has made the eighth amendment to the Rules vide Notification No. 39/2018-Central Tax, dated 4^th September, 2018.  These Rules contains 9 rules causing amendment in various rules and forms.  This article will discuss the salient features of this amendment.

Effective date

Clause (2) provides that save as otherwise provided in these rules, they shall come into force on the date of their publication in the Official Gazette. Rule 6 to this amendment Rules came into effect from 23^th October, 2017.  All other rules came into effect from 04.09.2018 i.e., the date of notification in the Official Gazette.

Cancellation of Registration

Rule 22 provides the procedure for cancellation of registration by the Department itself complying with due process of law i.e., issuing of show cause notice and getting the reply from the assessee.  Rule 22 (4) provides that where the reply furnished by the assessee  is found to be satisfactory, the proper officer shall drop the proceedings and pass an order in FORM GST REG –20.

Rule 2 proposes to insert a new proviso to Rule 22(4) which provides the procedure to drop the proceedings by the proper officer in case no reply is furnished by the assessee.

The newly inserted proviso provides that where the person instead of replying to the notice served for contravention of the provisions contained in clause (b) or clause (c) of sub-section (2) of section 29, furnishes all the pending returns and makes full payment of the tax dues along with applicable interest and late fee, the proper officer shall drop the proceedings and pass an order in FORM GST-REG 20.

This amendment gives some relief to the assessee avoiding litigation.  Even if the registration is cancelled by the Department the assessee is liable to pay the tax with interest and to file returns and also attracting penal provisions. 

Conditions for claiming input tax credit

Rule 36 provides the list of documents on the basis of which the assessee can avail input tax credit.  Rule 36(2) provides that input tax credit shall be availed by a registered person only if all the applicable particulars as specified in the provisions of Chapter VI are contained in the said document, and the relevant information, as contained in the said document, is furnished in FORM GSTR-2 by such person.

Rule 3 gives some relaxation for the conditions stipulated in Rule 36(2).  This rule proposes to insert a proviso to Rule 36(2).  The newly inserted proviso provides that if the said document does not contain all the specified particulars but contains the details of-

• the amount of tax charged;
• description of goods or services;
• total value of supply of goods or services or both;
• GSTIN of the supplier and recipient; and
• place of supply in case of inter-State supply, input tax credit may be availed by such registered person.

The amended Rule enables the assessee to avail input tax credit even furnishing less information but which are essential in the document. 

Amendment to Rule 55

Rule 55 provides the procedure to be following in case the transportation of goods is without invoice. 

Rule 4 proposes to amend Rule 55(5) by inserting the words ‘or in batches or lots’ after the words “completely knocked down condition”.

The amended Rule 55 (4) reads as follows-

 Where the goods are being transported in a semi knocked down or completely knocked down condition or in batches or lots-

(a) the supplier shall issue the complete invoice before dispatch of the first consignment;

(b) the supplier shall issue a delivery challan for each of the subsequent consignments, giving reference of the invoice;

(c) each consignment shall be accompanied by copies of the corresponding delivery challan along with a duly certified copy of the invoice; and

(d) the original copy of the invoice shall be sent along with the last consignment.

New definition for ‘Adjusted Total Turnover’

Rule 89 provides the procedure for the refund of tax, interest, penalty, fees or any other amount.  Rule 89(4) provides that in the case of zero-rated supply of goods or services or both without payment of tax under bond or letter of undertaking in accordance with the provisions of sub-section (3) of section 16 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), refund of input tax credit shall be granted as per the following formula –

Refund Amount = (Turnover of zero-rated supply of goods + Turnover of zero-rated supply of services) x Net ITC ÷Adjusted Total Turnover

Clause (E) of Rule 89(4) defines the expression ‘Adjusted Total Turnover’.

Rule 5 proposes the existing definition of the expression ‘Adjusted Total Turnover’ to be substituted by a new definition.  The newly substitution clause (E) defines the expression ‘Adjusted Total Turnover’ as the sum total of the value of-

• the turnover in a State or a Union territory, as defined under clause (112) of section 2, excluding the turnover of services; and

• the turnover of zero-rated supply of services determined in terms of clause (D) above and non-zero-rated supply of services,

excluding-

• the value of exempt supplies other than zero-rated supplies; and

• the turnover of supplies in respect of which refund is claimed under sub-rule (4A) or sub-rule (4B) or both, if any,

 during the relevant period.

Amendment to Rule 96(10)

Rule 96 provides the procedure for refund of integrated goods paid on goods or services exported out of India.

Rule 6 proposes to substitute Rule 96(10) for the new one.  The newly substituted Rule 96(10) provides that the persons claiming refund of integrated tax paid on exports of goods or services should not have –

• received supplies on which the benefit of the Government of India, Ministry of Finance –

• notification No. 48/2017-Central Tax, dated the 18th October, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i),vide number G.S.R 1305 (E), dated the 18th October, 2017; or

• notification No. 40/2017-Central Tax (Rate), dated the 23rd October, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i),vide number G.S.R 1320 (E), dated the 23rd October, 2017; or

• notification No. 41/2017-Integrated Tax (Rate), dated the 23rd October, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1321 (E), dated the 23rd October, 2017 has been availed; or

• availed the benefit under

• notification No. 78/2017-Customs, dated the 13th October, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1272(E), dated the 13th October, 2017; or

• notification No. 79/2017-Customs, dated the 13th October, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i),vide number G.S.R 1299 (E), dated the 13th October, 2017.

Amendment in Rule 138A (E-way Bill)

Rule 138A(1) provides that the person in charge of a conveyance shall carry-

• the invoice or bill of supply or delivery challan, as the case may be; and
• a copy of the e-way bill in physical form or the e-way bill number in electronic form or mapped to a Radio Frequency Identification Device embedded on to the conveyance in such manner as may be notified by the Commissioner.

The first proviso to this rule provides that nothing contained in clause (b) of this sub-rule shall apply in case of movement of goods by rail or by air or vessel.

Rule 7 proposes to insert a new proviso after the first proviso to Rule 138A (1).

The newly inserted second proviso provides that in case of imported goods, the person in charge of a conveyance shall also carry a copy of the bill of entry filed by the importer of such goods and shall indicate the number and date of the bill of entry in Part A of FORM GST EWB-01.

New Form GST REG – 20

Rule 8 proposes to substitute a new form GST REG-20 for the existing one.    The new form is changed on the basis of the changes in Rule 22(4).  It will cater to the needs of the new proviso to Rule 22(4) i.e., dropping of the proceedings of cancellation of registration of a registered person, if the assessee furnishes all the pending returns and makes full payment of the tax dues along with applicable interest and late fee, instead of filing reply to the show cause notice issued by the proper officer for cancellation of registration.

New Form GST ITC – 04

Rule 9 proposes to substitute a new form GST ITC – 04 for the existing one for giving details of goods/capital goods sent to job worker and received back.  In the existing form the following details are to be furnished-

• Details of inputs/capital goods sent for job-work;
•  Details of inputs/capital goods received back from job worker or sent out from business place of job-work.

In the new form the following details are to be furnished-

• Details of inputs/capital goods sent for job work (includes inputs/capital goods directly sent to place of business /premises of job worker);
• Details of inputs/capital goods received back from job worker or sent out from business place of job work-

• Details of inputs/ capital goods received back from job worker to whom such goods were sent for job work; and losses and wastes:
• Details of inputs / capital goods received back from job worker other than the job worker to whom such goods were originally sent for job work; and losses and wastes:
• Details of inputs/ Capital goods sent to job worker and subsequently supplied from premises of job worker; and losses and wastes.

Form for Annual Return

Rule 10 provides for insertion of Form GSTR – 9 which is for Annual Return which is to be filed under Rule 80 of the Rule by every registered person, other than an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person.  Section 44(1) of the Act provides that every registered person, other than an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person, shall furnish an annual return for every financial year electronically in such form and manner as may be prescribed on or before the thirty-first day of December following the end of such financial year.

The said Rule also provides for insertion of Form GSTR – 9A for Annual Return to be filed by the Composition Dealer, under Rule 80.

The Form GSTR – 9B, the Annual Return meant for e-commerce operators and the Form GSTR – 9C, the Annual Return meant for every registered person whose aggregate turnover during a financial year exceeds two crore rupees shall get his accounts audited as specified under sub-section (5) of section 35 and he shall furnish a copy of audited annual accounts and a reconciliation statement, duly certified, have not yet been notified by the Central Government.