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Detailed Analysis of Amendments by Finance Act, 2020 in GST Acts (With Practical Coverage and Reasoning)

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Detailed Analysis of Amendments by Finance Act, 2020 in GST Acts (With Practical Coverage and Reasoning)
By: AANCHAL KAPOOR
July 7, 2020
All Articles by: AANCHAL KAPOOR       View Profile
  • Contents

CA AANCHAL KAPOOR

FCA, B.COM

Detailed Analysis of Amendments by Finance Act, 2020 in GST Acts72w

(With Practical Coverage and Reasoning) (As on 26-06-2020)

INTRODUCTION:

This article gives an Insight on the amendments made by Finance Act, 2020 passed on 27.03.2020, where in (Chapter IV) Section 118 to 140 of Finance Act, 2020 dealt with GST provisions (CGST, IGST,UTGST, Compensation Cess). As per Section 1(2) (b) of Finance Act , 2020, the provisions of Section 116 to 129, 132 shall come into force on  such date as the Central Government may, by notification in Official Gazette, appoint. As regards the GST provisions, Central Government has enforced the following provisions only, as proposed by Finance Act, 2020.

Section of Finance Act

Corresponding Section of GST Act

Particulars

Source Notification and Date of Enforcement

128

Section 140

Related to Transitional Credit. Words ”within such time and” added

Not. No. 43/2020-CT dated 16.05.2020

Bring into force from 18.05.2020 and Provision to come into effect from 01.07.2017

118

Section 2(114)

Definition of Union territory

Not. No. 49/2020-CT dated 24.06.2020

Provision to come into effect from 30.06.2020

125

Section 109(6)

To Bring in Constitution of  Appellate Tribunal “State Bench” in J&K under CGST Act

129

Section 168(2)

Power to Issue Instructions or Directions by Board

130

Section 172(1)

Removal of Difficulty Order Time Period Extension

The following are the section wise key highlights along with analysis of amendments by Finance Act, 2020.

Central Goods and Services Tax (Chapter IV)( Section 118 to 140)  

Sr. No.

Section Amended

Old Provision

Amendment

New Provision

Reason

Effect

1.

Section 2(114)

(Definition of Union territory)

“Union territory” means the territory of-

(a) the Andaman and Nicobar Islands;

 (b) Lakshadweep; (c) Dadra and Nagar Haveli;

 (d) Daman and Diu;

 (e) Chandigarh; and

(f) other territory.

For clauses (c) and (d), the following clauses shall be  substituted, namely:-

“(c) Dadra and Nagar Haveli and Daman and Diu;

 (d) Ladakh;”.

“Union territory” means the territory of-

(a) the Andaman and Nicobar Islands;

 (b) Lakshadweep;

(c) Dadra and Nagar Haveli and Daman and Diu; (d) Ladakh;

(e) Chandigarh; and

(f) other territory.

The definition of “Union territory” amended to bring into force of the

Jammu and Kashmir Reorganization Act, 2019

And

the Dadra and Nagar Haveli and Daman and Diu (Merger of Union Territories), Act, 2019.

  • Dadra and Nagar Haveli and Daman and Diu merged.  Now the transaction between Dadra and Nagar Haveli

& Daman and Diu will be Intrastate.

 

  • Ladakh added in list of Union Territories.

2.

Section 10 (2) clause (b), (c),(d)

(Composition)

(b) he is not engaged in making any supply of goods which are not leviable to tax under this Act;

 (c) he is not engaged in making any inter-State outward supplies of goods; (d) he is not engaged in making any supply of goods through an electronic commerce operator who is required to collect tax at source under section 52

In sub-section 2 in clauses (b), (c) and (d), after the words “of goods”, the words “or services” shall be inserted.

(b) he is not engaged in making any supply of goods or services which are not leviable to tax under this Act;

 (c) he is not engaged in making any inter-State outward supplies of goods or services;

 (d) he is not engaged in making any supply of goods or services through an electronic commerce operator who is required to collect tax at source under section 52

Section 10 of the CGST Act is being amended, so as to exclude from the ambit of the Composition scheme certain categories of taxable persons, engaged in making-

  1. supply of services not leviable to tax under the CGST Act, or
  2. inter-State outward supply of services, or
  3.  outward supply of services through an eCommerce operator required to collect TCS u/s 52.
  • Section 10 exclusions widened to exclude the Exempt Services, Interstate supply of services, Services provided through E-Commerce Operator.

 

  • Amendment required due to insertion of second Proviso to Sec. 10(1) by CGST (Amendment) Act, 2018 which included that persons rendering Services of value not exceeding 10% of turnover in preceding F.Y or 5 lakh whichever is higher can opt for Composition u/s 10(1).
  • To come in line with the said amendment, the word “or services” has been inserted i.e. Person supplying Exempt Services, Interstate supply of services, Services provided through E-Commerce Operator, will be excluded from the purview of Section 10(1) and cannot opt for Composition. 

3.

Section 16 (4)

(Time Limit for Credit Availment)

(4) A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier.

In section 16 of the Central Goods and Services Tax Act, in sub-section (4), the words “invoice relating to such” shall be omitted

(4) A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier.

Sub section (4) of the section 16 of the CGST Act is being amended to delink the date of issuance of debit note from the date of issuance of the underlying invoice for purposes of availing input tax credit.

Benevolent Amendment

  • Before the said amendment the time limit to avail input tax credit in respect of debit note was linked to its invoice i.e. when invoice relating to such debit note pertained but after the said amendment the debit note issuance date becomes relevant to consider the due date for entitling the credit.
  • The same can be explained through the help of illustrations:

Document Type

Document date

Due date for availing credit

Before Amendment

Debit note

15-08-2019

(Linked to Invoice dated 01-03-2019)

Return for the month of sept. 2019

Debit note

15-11-2019

(Linked to Invoice dated 01-03-2019)

Return for the month of sept. 2019.

The credit was not getting availed for Debit notes issued after 6 months from end of Financial Year to which Invoice pertains to.

After amendment

Debit note

15-08-2019

(Linked to Invoice dated 01-03-2019)

Invoice Linkage became irrelevant

Return for the month of sept. 2020

Debit note

15-11-2019

 (Linked to Invoice dated 01-03-2019)

Invoice Linkage became irrelevant

Return for the month of sept. 2020.

The credit which was earlier not getting availed for Debit notes issued after 6 months from end of Financial Year to which Invoice pertains to will now be available.

 

4.

Section 29 (1)(c)

(Cancellation of Registration)

(c) the taxable person, other than the person registered under sub-section (3) of section 25, is no longer liable to be registered under section 22 or section 24.

 “(c) the taxable person is no longer liable to be registered under section 22 or section 24 or intends to opt out of the registration voluntarily made under sub-section (3) of section 25:

“(c) the taxable person is no longer liable to be registered under section 22 or section 24 or intends to opt out of the registration voluntarily made under sub-section (3) of section 25

Clause (c) of sub-section (1) of section 29 of the CGST Act is being amended to provide for cancellation of registration power to Proper Officer Suo moto or on application, where the Registration has been obtained voluntarily under sub-section (3) of section 25.

Earlier the section did not empower the proper officer to cancel the voluntary registration of person registered under section 25
(3)
. By deletion of words “other than” and making requisite changes in section 29(1)(c) the power is now granted. 

5.

Section 30 (1)-Proviso substituted

(Revocation of Cancellation)

Provided that the registered person who was served notice under sub-section (2) of section 29 in the manner as provided in clause (c) or clause (d) of sub-section (1) of section 169 and who could not reply to the said notice, thereby resulting in cancellation of his registration certificate and is hence unable to file application for revocation of cancellation of registration under sub-section (1) of section 30 of the Act, against such order passed up to 31.03.2019, shall be allowed to file application for revocation of cancellation of the registration not later than 22.07.2019.(Inserted by 5th ROD Order,2019)

In section 30 of the Central Goods and Services Tax Act, in sub-section (1), for the proviso, the following proviso shall be substituted, namely:–– “Provided that such period may, on sufficient cause being shown, and for reasons to be recorded in writing, be extended,–– (a) by the Additional Commissioner or the Joint Commissioner, as the case may be, for a period not exceeding thirty days; (b) by the Commissioner, for a further period not exceeding thirty days, beyond the period specified in clause (a).

“Provided that such period may, on sufficient cause being shown, and for reasons to be recorded in writing, be extended,––

 (a) by the Additional Commissioner or the Joint Commissioner, as the case may be, for a period not exceeding thirty days;

(b) by the Commissioner, for a further period not exceeding thirty days, beyond the period specified in clause (a).”

A proviso to sub-section 1 of section 30 of the CGST Act is being inserted to empower the jurisdictional tax authorities to extend the date for application of revocation of cancellation of registration in deserving cases.

Before amendment the period of 30 days from date of service of cancellation order was available to apply for revocation of cancellation. i.e. when 30 days use to expire the cancellation could not be revoked.

After the amendment the powers given to jurisdictional

  1. Additional Commissioner or the Joint Commissioner to extend the period by 30 days i.e. (Max days=30+30)
  2. Commissioner, for a further period not exceeding thirty days i.e. (Max days=30+30+30)

 

On Reasons recorded in writing and on sufficient cause being shown.

6.

Section 31 (2)-Proviso substituted

(2) A registered person supplying taxable services shall, before or after the provision of service but within a prescribed period, issue a tax invoice, showing the description, value, tax charged thereon and such other particulars as may be prescribed:

Provided that the Government may, on the recommendations of the Council, by notification and subject to such conditions as may be mentioned therein, specify the categories of services in respect of which––

(a) any other document issued in relation to the supply shall be deemed to be a tax invoice; or

(b) tax invoice may not be issued.

“Provided that the Government may, on the recommendations of the Council, by notification,––

(a) specify the categories of services or supplies in respect of which a tax invoice shall be issued, within such time and in such manner as may be prescribed; (b) subject to the condition mentioned therein, specify the categories of services in respect of which–– (i) any other document issued in relation to the supply shall be deemed to be a tax invoice; or (ii) tax invoice may not be issued.”

(2) A registered person supplying taxable services shall, before or after the provision of service but within a prescribed period, issue a tax invoice, showing the description, value, tax charged thereon and such other particulars as may be prescribed:

“Provided that the Government may, on the recommendations of the Council, by notification,–– (a) specify the categories of services or supplies in respect of which a tax invoice shall be issued, within such time and in such manner as may be prescribed; (b) subject to the condition mentioned therein, specify the categories of services in respect of which–– (i) any other document issued in relation to the supply shall be deemed to be a tax invoice; or (ii) tax invoice may not be issued.”.

Section 31(2) proviso of the is being amended to provide enabling provision to prescribe the manner of issuance of invoices in case of supply of taxable services.

Enabling provisions for giving power to Government  to specify  category of services for issuance of Tax Invoice within prescribed time and manner.

(The clause will be practically more understandable on issuance of related Notifications, as the government trying to cover invoicing issues of Service Sector e.g.  Banks, Insurance, GTA, Movie Tickets  etc.)

7.

Section 51 (3) and section 51 (4)

(Tax Deduction at Source Certificate)

(3) The deductor shall furnish to the deductee a certificate mentioning therein the contract value, rate of deduction, amount deducted, amount paid to the Government and such other particulars in such manner as may be prescribed.

(4) If any deductor fails to furnish to the deductee the certificate, after deducting the tax at source, within five days of crediting the amount so deducted to the Government, the deductor shall pay, by way of a late fee, a sum of one hundred rupees per day from the day after the expiry of such five days period until the failure is rectified, subject to a maximum amount of five thousand rupees.

(3) A certificate of tax deduction at source shall be issued in such form and in such manner as may be prescribed.

(4) shall be omitted.

(3) A certificate of tax deduction at source shall be issued in such form and in such manner as may be prescribed.

(4)Omitted

Section 51 of the CGST Act is being amended to remove the requirement of issuance of TDS certificate by the deductor;

 And

 to omit the corresponding provision of late fees for delay in issuance of TDS certificate.

New Rules for Issuance of Tax deduction Certificate to be prescribed, penalty for non-issuance clause deleted.

8.

Section 109 (6)

(6) The Government shall, by notification, specify for each State or Union territory except for the State of Jammu and Kashmir, a Bench of the Appellate Tribunal (hereafter in this Chapter, referred to as “State Bench”) for exercising the powers of the Appellate Tribunal within the concerned State or Union territory:

Provided that for the State of Jammu and Kashmir, the state bench of the goods and services tax Appellate Tribunal constituted under this Act shall be the State Appellate Tribunal constituted under the Jammu and Kashmir Goods and Services Tax Act, 2017.

(a) the words “except for the State of Jammu and Kashmir” shall be omitted;

 (b) the first proviso shall be omitted.

The Government shall, by notification, specify for each State or Union territory except for the State of Jammu and Kashmir, a Bench of the Appellate Tribunal (hereafter in this Chapter, referred to as “State Bench”) for exercising the powers of the Appellate Tribunal within the concerned State or Union territory:

Section 109 of the CGST Act is being amended to bring the provision for Appellate Tribunal under the CGST Act in the Union territory of Jammu and Kashmir and Ladakh.

Amended to bring into force of the

Jammu and Kashmir Reorganization Act, 2019

J&K under normal CGST Appellate Tribunal.

9.

Section 122 (1A) inserted

Penalties

  1. Where a taxable person who––

(i) supplies any goods or services or both without issue of any invoice or issues an incorrect or false invoice with regard to any such supply;

(ii) issues any invoice or bill without supply of goods or services or both in violation of the provisions of this Act or the rules made thereunder;

(iii) to (vi) ……

(vii) takes or utilizes input tax credit without actual receipt of goods or services or both either fully or partially, in contravention of the provisions of this Act or the rules made thereunder;

(viii)…….

(ix) takes or distributes input tax credit in contravention of section 20, or the rules made thereunder;

“(1A) Any person who retains the benefit of a transaction covered under clauses (i), (ii), (vii) or clause (ix) of sub-section (1) and at whose instance such transaction is conducted, shall be liable to a penalty of an amount equivalent to the tax evaded or input tax credit availed of or passed on.”

“(1A) Any person who retains the benefit of a transaction covered under clauses (i), (ii), (vii) or clause (ix) of sub-section (1) and at whose instance such transaction is conducted, shall be liable to a penalty of an amount equivalent to the tax evaded or input tax credit availed of or passed on.”

Section 122 of the CGST Act is being amended by inserting a new sub-section to make the beneficiary of the transactions  retaining benefit  of passing on or availing fraudulent Input Tax Credit liable for penalty similar to the penalty leviable on the person who commits such specified offences.

Amendment made to curb the malpractices like Fake Invoicing/Bogus Billing etc. The legislature has tried to cover middlemen, racketeers, accountants ,mediator / beneficiary or any other person  retaining benefit and knowingly enters into such transaction also held liable with same degree of offence as Supplier or Receiver or Transporter or Warehouse Keeper etc.

A word of Caution for all!

e.g. In practice it has been noticed that the GST number was taken in the name of employee by passing a benefit of some monthly payment. In turn kingpin/racketeer used to get % of commission by selling GST invoice and only filing GST-R1 return.  The bank account of such person is kept under control of such racketeer. There was no harsh punishment on such kingpin except sec. 122(3) of ₹ 25000/- (per Act). Now, covered by 122(1A) and Penalty of an amount equivalent to the tax evaded or input tax credit availed of or passed on becomes applicable.

10.

Section 132 (1)

Punishment

132. (1) Whoever commits any of the following offences, namely:-

(a) supplies any goods or services or both without issue of any invoice, in violation of the provisions of this Act or the rules made there under, with the intention to evade tax;

(b) issues any invoice or bill without supply of goods or services or both in violation of the provisions of this Act, or the rules made thereunder leading to wrongful availment or utilisation of input tax credit or refund of tax;

(c) avails input tax credit using such invoice or bill referred to in clause (b);

(d) collects any amount as tax but fails to pay the same to the Government beyond a period of three months from the date on which such payment becomes due;

(e) evades tax, fraudulently avails input tax credit or fraudulently obtains refund and where such offence is not covered under clauses (a) to (d);

(i)for the words “Whoever commits any of the following offences”, the words “Whoever commits, or causes to commit and retain the benefits arising out of, any of the following offences’’ shall be substituted;

(ii) for clause (c), the following clause shall be substituted, namely:––

“(c) avails input tax credit using the invoice or bill referred to in clause (b) or fraudulently avails input tax credit without any invoice or bill;”;

(iii) in sub-clause (e), the words “, fraudulently avails input tax credit” shall be omitted.

132. (1) Whoever commits, or causes to commit and retain the benefits arising out of, any of the following offences, namely:-

(a) supplies any goods or services or both without issue of any invoice, in violation of the provisions of this Act or the rules made there under, with the intention to evade tax;

(b) issues any invoice or bill without supply of goods or services or both in violation of the provisions of this Act, or the rules made thereunder leading to wrongful availment or utilisation of input tax credit or refund of tax;

(c) avails input tax credit using the invoice or bill referred to in clause (b) or fraudulently avails input tax credit without any invoice or bill;

(d) collects any amount as tax but fails to pay the same to the Government beyond a period of three months from the date on which such payment becomes due;

(e) evades tax or fraudulently obtains refund and where such offence is not covered under clauses (a) to (d);

Section 132 of the CGST Act is being amended to make the offence of fraudulent availment of input tax credit without an invoice or bill a cognizable and non-bailable offence; and to make any person who commits, or causes the commission, or retains the benefit of transactions arising out of specified offences liable for punishment.

This amendment has two aspects:

  1. causes to commit and retain the benefits arising out of

Covers the middlemen, racketeers, accountants ,mediator / beneficiary or any other person being held liable with same degree of offence as Supplier or Receiver

 

2) (ii) for clause (c), the following clause shall be substituted, namely:––

“(c) avails input tax credit using the invoice or bill referred to in clause (b) or fraudulently avails input tax credit without any invoice or bill;”;

(iii) in sub-clause (e), the words “, fraudulently avails input tax credit” shall be omitted.

Shifting of Fraudulent  Availment of Input Tax Credit from (e) to (c) ---Impact ---

Offence made cognizable and non-bailable offence, at par with the supply without invoice or fake invoice  issuing provisions

Before Amendment the Fraudulent availment of Input Tax Credit was Non cognizable and bailable.

A word of caution for taking Any Other ITC in 3B returns without billing in support of it subject to Limits prescribed in Section 132(1) is punishable as Non cognizable and bailable offence.

11.

Section 140 (1),

Section 140 (2),

Section 140 (3),

Section 140 (5),

Section 140 (6),

Section 140 (7),

Section 140 (8),

Section 140 (9)

(Transitional Credit Provisions)

140. (1) A registered person, other than a person opting to pay tax under section 10, shall be entitled to take, in his electronic credit ledger, the amount of CENVAT credit carried forward in the return relating to the period ending with the day immediately preceding the appointed day, furnished by him under the existing law in such manner as may be prescribed:

…………………………………………..

(2) A registered person, other than a person opting to pay tax under section 10, shall be entitled to take, in his electronic credit ledger, credit of the unavailed CENVAT credit in respect of capital goods, not carried forward in a return, furnished under the existing law by him, for the period ending with the day immediately preceding the appointed day in such manner as may be prescribed:

(1), after the words “existing law”, the words “within such time and” shall be inserted and shall be deemed to have been inserted;

(2), after the words “appointed day”, the words “within such time and” shall be inserted and shall be deemed to have been inserted;

(3), for the words “goods held in stock on the appointed day subject to”, the words “goods held in stock on the appointed day, within such time and in such manner as may be prescribed, subject to” shall be substituted and shall be deemed to have been substituted;

(5), for the words “existing law”, the words “existing law, within such time and in such manner as may be prescribed” shall be substituted and shall be deemed to have been substituted;

(6), for the words “goods held in stock on the appointed day subject to”, the words “goods held in stock on the appointed day, within such time and in such manner as may be prescribed, subject to” shall be substituted and shall be deemed to have been substituted;

(7), for the words “credit under this Act even if”, the words “credit under this Act, within such time and in such manner as may be prescribed, even if” shall be substituted and shall be deemed to have been substituted;

(8), for the words “in such manner”, the words “within such time and in such manner” shall be substituted and shall be deemed to have been substituted;

(9), for the words “credit can be reclaimed subject to”, the words “credit can be reclaimed within such time and in such manner as may be prescribed, subject to” shall be substituted and shall be deemed to have been substituted.

(1) A registered person, other than a person opting to pay tax under section 10, shall be entitled to take, in his electronic credit ledger, the amount of CENVAT credit carried forward in the return relating to the period ending with the day immediately preceding the appointed day, furnished by him under the existing law within such time and in such manner as may be prescribed:

…………………………………………..

(2) A registered person, other than a person opting to pay tax under section 10, shall be entitled to take, in his electronic credit ledger, credit of the unavailed CENVAT credit in respect of capital goods, not carried forward in a return, furnished under the existing law by him, for the period ending with the day immediately preceding the appointed day within such time and in such manner as may be prescribed:

…………………………………..

Section 140 of the CGST Act is being amended w.e.f. 01.07.17, to prescribe the time limit for taking transitional credit

Retrospective Amendment w.e.f 01.07.2017 to overcome the effect of Judgements like Sidhartha Enterprises, Adfert Technologies Pvt. Ltd., Bhargava Motors, A.B. Pal Electricals Pvt. Ltd. vs UOI, M/S. Blue Bird Pure Pvt. Ltd. etc., allowing Delayed Filling of Transitional Credit based upon the ground that Rules cannot provide the Time Limit when there is No Time Frame Provided in Act.

In the said judgements, it was held that in absence of any reference to Time Frame being provided under Section 140, to the filing of TRAN-1 Form, Rule 117 has to be read and understood as directory and not mandatory. The vested right of the property of the petitioner stood accrued and the same cannot be taken away by the respondents by way of Rules.

Hence, amendment in Act in Sections 140(1), (2),(3),(5),(6),(7),(8),(9) added the Time Frame provision for Transitional Credit to be provided by Rules.  

12.

Section 168 (2)

Power to issue Instructions

  1. The Commissioner specified in clause (91) of section 2, sub-section (3) of section 5, clause (b) of sub-section (9) of section 25, sub-sections (3) and (4) of section 35, sub-section (1) of section 37, sub-section (2) of section 38, sub-section (6) of section 39, sub-section (5) of section 66, sub-section (1) of section 143, sub-section (1) of section 151, clause (l) of sub-section (3) of section 158 and section 167 shall mean a Commissioner or Joint Secretary posted in the Board and such Commissioner or Joint Secretary shall exercise the powers specified in the said sections with the approval of the Board.

In section 168 of the Central Goods and Services Tax Act, in sub-section (2), for the words, brackets and figures “sub-section (5) of section 66, sub-section (1) of section 143”, the words, brackets and figures “sub-section (1) of section 143, except the second proviso thereof” shall be substituted.

(2) The Commissioner specified in clause (91) of section 2, sub-section (3) of section 5, clause (b) of sub-section (9) of section 25, sub-sections (3) and (4) of section 35, sub-section (1) of section 37, sub-section (2) of section 38, sub-section (6) of section 39, sub-section (5) of section 66, sub-section (1) of section 143, sub-section (1) of section 151, clause (l) of sub-section (3) of section 158 and section 167 shall mean a Commissioner or Joint Secretary posted in the Board and such Commissioner or Joint Secretary shall exercise the powers specified in the said sections with the approval of the Board.

Section 168 of the CGST Act is being amended to make provisions for enabling the jurisdictional commissioner to exercise powers under sub-section (5) of section 66 and second proviso to sub-section (1) of section 143.

For Sec. 66(5) [Special Audit Fee]and Sec.143(1)[Job work Procedure] jurisdictional commissioner to exercise powers, no approval of the Board required.

13.

Section 172 (1)

(1) If any difficulty arises in giving effect to any provisions of this Act, the Government may, on the recommendations of the Council, by a general or a special order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act or the rules or regulations made there under, as may be necessary or expedient for the purpose of removing the said difficulty: Provided that no such order shall be made after the expiry of a period of three years from the date of commencement of this Act.

(1), in the proviso, for the words “three years”, the words “five years” shall be substituted.

(1) If any difficulty arises in giving effect to any provisions of this Act, the Government may, on the recommendations of the Council, by a general or a special order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act or the rules or regulations made there under, as may be necessary or expedient for the purpose of removing the said difficulty: Provided that no such order shall be made after the expiry of a period of five years from the date of commencement of this Act.

Section 172 of the CGST Act is being amended to make provision for enabling issuance of removal of difficulties order for another 2 years, i.e. till five years from the date of commencement of the said Act.

Removal of difficulties order issuance time period for another 2 years in totality 5 years from the date of commencement of the said Act extended.

14.

SCHEDULE II

Transfer of business assets

  1. where goods forming part of the assets of a business are transferred or disposed of by or under the directions of the person carrying on the business so as no longer to form part of those assets, whether or not for a consideration, such transfer or disposal is a supply of goods by the person;

(b) where, by or under the direction of a person carrying on a business, goods held or used for the purposes of the business are put to any private use or are used, or made available to any person for use, for any purpose other than a purpose of the business, whether or not for a consideration, the usage or making available of such goods is a supply of services;

In Schedule II to the Central Goods and Services Tax Act, in paragraph 4, the words “whether or not for a consideration,” at both the places where they occur, shall be omitted and shall be deemed to have been omitted with effect from the 1st day of July, 2017.

Transfer of business assets

  1. where goods forming part of the assets of a business are transferred or disposed of by or under the directions of the person carrying on the business so as no longer to form part of those assets, whether or not for a consideration, such transfer or disposal is a supply of goods by the person;

(b) where, by or under the direction of a person carrying on a business, goods held or used for the purposes of the business are put to any private use or are used, or made available to any person for use, for any purpose other than a purpose of the business, whether or not for a consideration, the usage or making available of such goods is a supply of services;

Entries at 4(a) & 4(b) in Schedule II of the CGST Act is being amended w.e.f. 01.07.2017 to make provision for omission of supplies relating to transfer of business assets made without any consideration from Schedule II of the said Act.

The Retrospective Amendment w.e.f 01.07.2017 is brought to be in line with Amendment made by CGST Amendment Act, 2018 which inserted after section 7(1A) after Section 7 (1), stating that Schedule II does not specify whether the Activity is supply or not, but once it is held as Supply by Section 7(1), be classified into SUPPLY OF GOODS OR SUPPLY OF SERVICES.

Hence, this amendment removed the words with or without consideration, as without consideration can cover  only those cases as specified in Schedule I. Schedule II cannot create a new levy.

15.

GST rate notifications : Retrospective exemption from, or levy or collection of, central tax in respect of supply of Fish Meal (2301) during the period from 01.07.2017 to 30.09.2019, with No refund of already collected taxes.

16.

GST rate notifications : Retrospective levy of Central Tax @6% shall be levied or collected in respect of supply of Pulley, Wheels and other parts (falling under heading 8483) and used as parts of agricultural machinery (falling under headings 8432, 8433 and 8436) from 01.07.2017 to 31.12.2018, with No refund of already excess collected taxes.

 

Integrated Goods and Services Tax  (Chapter IV) (Section 134 - 135)

1

Section 25(1)

Proviso

(1) If any difficulty arises in giving effect to any provisions of this Act, the Government may, on the recommendations of the Council, by a general or a special order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act or the rules or regulations made there under, as may be necessary or expedient for the purpose of removing the said difficulty: Provided that no such order shall be made after the expiry of a period of three years from the date of commencement of this Act.

(1), in the proviso, for the words “three years”, the words “five years” shall be substituted.

(1) If any difficulty arises in giving effect to any provisions of this Act, the Government may, on the recommendations of the Council, by a general or a special order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act or the rules or regulations made there under, as may be necessary or expedient for the purpose of removing the said difficulty: Provided that no such order shall be made after the expiry of a period of five years from the date of commencement of this Act.

Section 25 of the IGST Act is being amended to make provision for enabling the issuance of removal of difficulties orders for another 2 years, i.e. till five years from the date of commencement of the said Act.

Removal of difficulties order issuance time period for another 2 years in totality 5 years from the date of commencement of the said Act extended.

2

GST rate notifications : Retrospective exemption from, or levy or collection of, integrated tax in respect of supply of Fish Meal (2301) during the period from 01.07.2017 to 30.09.2019, with No refund of already collected taxes.

3

GST rate notifications : Retrospective levy of Integrated Tax @12% shall be levied or collected in respect of supply of Pulley, Wheels and other parts (falling under heading 8483) and used as parts of agricultural machinery (falling under headings 8432, 8433 and 8436) from 01.07.2017 to 31.12.2018, with No refund of already excess collected taxes.

 

Goods and Services Tax (Compensation to States) (Chapter IV) (Section 140)

1

Section 14(1)

Proviso

(1) If any difficulty arises in giving effect to any provisions of this Act, the Government may, on the recommendations of the Council, by a general or a special order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act or the rules or regulations made there under, as may be necessary or expedient for the purpose of removing the said difficulty: Provided that no such order shall be made after the expiry of a period of three years from the date of commencement of this Act.

(1), in the proviso, for the words “three years”, the words “five years” shall be substituted.

(1) If any difficulty arises in giving effect to any provisions of this Act, the Government may, on the recommendations of the Council, by a general or a special order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act or the rules or regulations made there under, as may be necessary or expedient for the purpose of removing the said difficulty: Provided that no such order shall be made after the expiry of a period of five years from the date of commencement of this Act.

Section 14 of the Goods and Services Tax (Compensation to States) Act, 2017   is being amended to make provision for enabling the issuance of removal of difficulties orders for another 2 years, i.e. till five years from the date of commencement of the said Act.

Removal of difficulties order issuance time period for another 2 years in totality 5 years from the date of commencement of the said Act extended.

 

By: AANCHAL KAPOOR - July 7, 2020

 

Discussions to this article

 

Shri/Ku.

It is irresistible to note the efforts and hard work to this article, this clearly reflects your dedication, really appreciable.

By: Alkesh Jani
Dated: 07/07/2020

Ms.Anchal Kapoor

Hats of to your dedication and patience in grasping, analyzing and presenting the amendments in a lucid style. Great thanks.

By: Prasanna Kumar
Dated: 07/07/2020

Thanks a lottt sir for ur words. I am obliged indeed .

By: AANCHAL KAPOOR
Dated: 08/07/2020

The sum and substance of the amendments are brought out very clearly in a excellent checklist style presentation. Any reader can immediately grasp the implications of the tax amendments VERY quickly......one of the best articles I have read in this Section. Very well written indeed.

Please share your thoughts and opinions on other recent GST amendments like refund of accumulated ITC on exports etc.

By: Jai Shankar
Dated: 08/07/2020

This article is really a ready recknor for all professionals and assessees. Very useful and timely. saved the time and energy of all.

By: KASTURI SETHI
Dated: 09/07/2020

Ms. Aanchal Kapoor,

Very well elaborated and explained article. Keep up the good work.

By: Vikkas Maknotraa
Dated: 09/07/2020

 

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