Important developments in GST

Rationalisation of GST rates on certain goods:

The Central Government vide Notification No. 41/2017 - Central Tax (Rate) dated November 14, 2017 has amended Notification No. 01/2017 - Central Tax (Rate) dated June 28, 2017 to, inter-alia, reduce GST rate on approximately 177 items earlier falling in 28% slab to 18% slab, leaving only 50 items that will still be taxed at GST rate of 28%.Further, the CBEC vide Press Release dated November 16, 2017 has grouped these items for easy reference which includes beauty or make-up preparations, slabs of marbles and granite, ceramic tiles, chocolates, chewing gum/bubble gum etc.

Additionally, 2 items have been moved from 28% to 12% and around other 54 items also moved to lower tax brackets.

The changes are effective from 00hrs on 15th of November, 2017.

Note: Please also see Notification No. 43/2017 - Integrated Tax (Rate) dated November 14, 2017.

Changes relating to GST rates on restaurant and other services:

The Central Government vide Notification No. 46/2017-Central Tax (Rate) dated November 14, 2017 has made the following changes in GST rates of restaurant and other services:

The changes are effective from 00hrs on 15th of November, 2017.

Notes:

1. Outdoor catering will continue to be at 18% with full ITC.
2. Please also see Notification No. 48/2017 - Integrated Tax (Rate) dated November 14, 2017.

Amendment in the CGST Rules, 2017 

The Central Government vide Notification No. 55/2017 - Central Tax dated November 15, 2017 has amended the CGST Rules, 2017. Some of the technical changes are as under:

• No reversal in respect of services supplied to Nepal & Bhutan: Manner of determination of ITC in respect of inputs/ input services/ capital goods and reversal thereof in specified cases is contained under Rule 42 and Rule 43 of the CGST Rules, 2017.

Now, an explanation has been inserted in Rule 43, after sub-rule (2), to provide for exclusion of value of supply of services to Nepal and Bhutan, against payment in Indian Rupees, at the time of calculating aggregate value of exempt supplies. In nutshell, it can be said that ITC in respect of services supplied to Nepal and Bhutan, against payment in Indian Rupees, need not to be reversed.

Note: Supply of services having place of supply in Nepal and Bhutan, against payment in Indian Rupees have been exempted vide Notification No. 42/2017-Integrated Tax (Rate) dated October 27, 2017.

• Issue of consolidated invoice by banking companies made optional: In Rule 54, in sub-rule (2), for the words 'supplier shall issue', the words 'supplier may issue' is substituted to make it optional for an insurer or a banking company or a financial institution, including a non-banking financial company, to issue a consolidated tax invoice or any other document in lieu thereof for supply of services made during a month at the end of the month.
• New Rules inserted on 'Manual filing & processing': After Rule 97 and Rule 107,new Rules (Rule 97A and Rule 107A) has been inserted to provide for manual filing of application, intimation, reply, declaration, statement or issuance of the notice, order or certificate in required forms for the purpose of refund and advance ruling.

(Process of manual filing and processing of refund claims in respect of zero-rated supplies has been detailed out in Circular No. 17/17/2017 - GST dated November 15, 2017)

• New Refund forms: For the purpose of claiming refund manually by casual taxable person or non-resident taxable person, tax deductor, tax collector and other registered taxable person, 'Form GST RFD-01 A' and 'Form GST RFD-01 B' has been inserted after Form GST RFD-01.

Return filing made easy 

The return filing process has been further simplified in the following manner:

• All taxpayers would file monthly return in Form GSTR-3B along with payment of taxes by 20th of the succeeding month till March, 2018 -Notification No. 56/2017-Central Tax dated November 15, 2017.

• For filing of details in Form GSTR-1 till March 2018, taxpayers would be divided into two categories. Details of these two categories along with the last date of filing GSTR-1 are as follows:

Taxpayers with annual aggregate turnover up to Rs. 1.5 Crore need to file GSTR-1 on quarterly basis as per following frequency: (Notification No. 57/2017 - Central Tax dated November 15, 2017)

Taxpayers with annual aggregate turnover more than Rs. 1.5 Crore need to file GSTR-1 on monthly basis as per following frequency:(Notification No. 58/2017 - Central Tax dated November 15, 2017)                   

Note: The time period for filing GSTR-2 and GSTR-3 for the months of July 2017 to March 2018 would be worked out by a Committee of Officers. Therefore, filing of GSTR-1 will continue for the entire period without requiring filing of GSTR-2 & GSTR-3 for the previous month / period.

Extension of dates for furnishing other Forms
 

Taking cognizance of the late availability or unavailability of some forms on the GSTN portal, it has been decided that the due dates for furnishing the following forms shall be extended as under:             

Reduction in late fees for delayed filing of return in Form GSTR-3B
 

The Central Government vide Notification No. 64/2017-Central Tax dated November 15, 2017 has reduced the per day penalty for delay in filing of return in Form GSTR-3B from October 2017 onwards in the following manner:

Notes:

1. Late fees prescribed above is total of both CGST and SGST/UTGST law
2. The penalty for late filing of returns for the month of July, August and September has already been waived off and refunds are being credited to taxpayers online GST account. Furthermore, it has been decided that where any such late fees were paid, it will be re-credited to the electronic cash ledger under the 'tax head' instead of 'fee head' so as to enable the taxpayers to use that amount to discharge their future tax liabilities.

No GST on Advances in respect of supply of goods 

The Central Government vide Notification No. 66/2017 - Central Tax dated November 15, 2017, has notified the registered person who did not opt for the composition levy, as the class of persons who shall pay the CGST on outward supply of goods at the time of supply as specified in Section 12(2)(a) of the CGST Act, 2017 including in the situations attracting the provisions of Section 14.

Section 12(2)(a) of the CGST Act, 2017, prescribes time of supply for goods as the date of issuance of invoice or the last date on which invoice is required to be issued. 

Thus, no GST will be applicable on advance amount received in respect of goods.

It may be noted that this notification has been issued in suppression of earlier Notification No. 40/2017 - Central Tax dated October 13, 2017, wherein the stated benefit was allowed only to small assessees whose aggregate turnover in preceding financial year did not exceed Rs. 1.5 crore. Now, the provision has been generalised for all the registered assessees other than composition supplier.

Reverse charge on supply of Raw Cotton by agriculturist:

The Central Government vide Notification No. 43/2017-Central Tax (Rate) dated November 14, 2017 has notified 'supply of raw cotton by agriculturist' as a supply, the tax on which shall be liable to be paid by the recipient of such supply (i.e. any registered person) under reverse charge.

This notification shall come into force with effect from November 15, 2017.

Note: Please also see Notification No. 45/2017 - Integrated Tax (Rate) dated November 14, 2017