Proposed amendments in Central Goods and Services Tax Act, 2017 (‘CGST Act’)
Key Amendments
► Section 17(5) of the CGST Act has been amended to restrict ITC on inward supplies used or intended to be used for corporate social responsibility under Section 135 of the Companies Act, 2013 – No effective date has been prescribed
► Section 23 of the CGST Act providing exemption from GST registration retrospectively w.e.f. 01st July 2017 to provide overriding effect of Section 22 (i.e., exceeds threshold turnover for registration) or Section 24 (persons mandatorily required to obtain registration) of the CGST Act.
► Value of exempt supply in terms of Section 17(3) of the CGST Act to include para 8(a) of schedule III “Supply of warehoused goods to any person before clearance for home Consumption” as value of exempt supply.
► Amendment in Section 10 of the CGST Act to allow the persons registered under the Composition scheme to supply goods (not services) through an ECO.
► Amendment in Section 56 of the CGST Act to provide for an enabling provision for computing the period of delay for calculation of interest on delayed refunds.
► A penalty amounting to INR 10,000/- or the amount of tax involved, whichever is higher, has been prescribed for E-commerce operators for any of the following defaults:
(a) Supply of goods or services through it by an unregistered person, other than a person who is exempted from obtaining registration to make such supply.
(b) Inter-State supply of goods or services through its platform by a person not eligible for making such inter-state supply. Such defaults may cover inter-state supplies by persons registered under the composition scheme, etc.
(c) Fails to furnish correct details in Form GSTR-8 (TCS return) for any outward supply of goods effected through it by a person exempted from obtaining registration.
► GST returns cannot be furnished after 3 years from the due date of furnishing return of the following:
(a) GSTR-1 (Details of outward supplies);
(b) GSTR-3B (Details of tax liability and ITC)
(c) GSTR-9 (Annual Return)
(d) GSTR-8 (TCS return)
Other amendments
► Amendment in Schedule III of the CGST Act to provide that the following activities/ transactions shall neither be treated as supply of goods nor supply of services w.e.f. 1st July 2017:
► Merchant exports
► High sea sales
► Supply of warehoused goods before clearance for home consumption
Further, where the tax has already been paid in respect of such transactions/ activities during the period from 01st July 2017 to 31st January 2019, no refund of such tax paid shall be available.
► Amendment in Sub-section (1) of section 132 of the CGST Act to decriminalize following offences specified in clauses (g), (j) and (k) of the said sub-section:
► Obstructing/ preventing any officer to discharge his duties
► Tampering/ destruction of material evidence/ documents
► Failure to provide information required or furnishing false information
Further, monetary threshold for launching prosecution for the offences has been increased to INR 2 Crore from INR 1 Crore, except for the offences related to the issuance of invoices without a supply of goods/ services.
Proposed amendments in Integrated Goods and Services Tax Act, 2017 (‘IGST Act’)
► Place of supply in case of transportation of goods including mail/ courier to a place outside India shall no longer be the place of destination of such goods.
► Amendment in the definition of “OIDAR services” to remove reference of “essentially automated and involving minimal human intervention”.
► Amendment in definition of “non-taxable online recipient” to widen its ambit by removing the condition of receipt of online information and database access or retrieval (OIDAR) services for purposes other than commerce, industry or any other business or profession.
Proposed amendments under Customs:
Key changes
- The time limit for disposal of cases by Settlement Commission has been prescribed as nine months from the last day of the month in which the application under Section 127B is made.
- Various changes have been made in the Customs tariff to introduce new tariff lines or modify existing tariff lines across various chapters.
- In order to simplify the tax structure, BCD exemption has been provided to various items viz. Ferrous waste and scrap, specified capital goods and machinery required for manufacture of lithium-ion cells for batteries used in electric vehicles etc.
