CBIC ISSUES NOTIFICATIONS AND ORDERS TO GIVE EFFECT TO THE DECISIONS TAKEN IN 31ST GST COUNCIL MEETING AND ISSUES CLARIFICATORY CIRCULARS - PWC INDIA
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Tax Insights
from India Tax & Regulatory Services
CBIC issues notifications and
orders to give effect to the decisions
taken in 31st GST Council meeting
and issues clarificatory circulars
January 9, 2019
In brief
The Central Board of Indirect Taxes and Customs (CBIC) has issued various notifications and orders
to give effect to the decisions taken at the 31st GST Council meeting. CBIC also issued multiple
circulars to clarify various issues.
In detail provisos in section 16(4) (Order no. 4/2018-Central
1 and section 37(3) of CGST Tax dated 31 December,
The gist of the developments
Act, 2017. 2018)
are as follows –
(Order no. 2/2018-Central Amendments which do not
Amendments introduced impact rate of tax
through ‘removal of Tax dated 31 December,
difficulty’ orders 2018) The due date for
The due date for submission of specified
The due date for availing
submission of annual details for migration of the
input tax credit (ITC) in
return and reconciliation assessees into GST who did
respect of any invoice,
statement along with GST not complete the migration
where the supply has been
audit report has been procedure has been
made during financial year
extended to 30 June, 2019. extended to 31 January,
2017-18 and the details of
2019.
which have been uploaded (Order no. 3/2018-Central
by the supplier (by March, Tax dated 31 December, (Notification no. 67/2018-
2019), has been extended to 2018) Central Tax dated 31
the due date for furnishing December, 2018)
the monthly return for the The due date for
submission of monthly The due date for
month of March, 2019.
statement of tax collected at submission of Form GSTR
Further, suppliers are also
source by the electronic 3B for the period July, 2017
allowed to rectify any error
commerce operators for the to February, 2019 for the
or omission in respect of
months of October, newly migrated assessees
details of outward supply
November and December, has been extended to 31
disclosed earlier till the date
2018 has been extended to March, 2019. Further, the
of submission of return for
31 January, 2019. due date for submission of
the month of March, 2019.
Form GSTR 1 for
This is sought to be
achieved by inserting
1
The alert does not cover the goods and services. It only orders, which clarify various aspects or
notifications making amendments summarises the notifications/ circulars/ amend any procedures/ law.
relating to changes in rate of various
www.pwc.inTax Insights
the (6) quarters July, 2017 to Information Technology under the return is nil, the late
December, 2018 and for the Act, 2000. fee in excess of INR 10 per day
(20) months July, 2017 to (under Central GST Act, 2017)
For claiming refund of
February, 2019 for such newly has been waived. Further, in
accumulated credit in case
migrated assessees will be 31 cases where the returns in
of inverted duty structure,
March, 2019. Form GSTR 3B for the period
the term ‘relevant period’
July, 2017 to September, 2018
(Notification nos. 68-72/2018- has been defined to mean
has not been filed and is filed
Central Tax all dated 31 the same as for refund
between 22 December, 2018
December, 2018) claim of accumulated credit
and 31 March, 2019 the late
by exporters, i.e. the period
The provisions for deduction fee will be completely waived.
for which the claim has
of tax at source under GST
been filed. (Notification no. 76/2018-
would not be applicable to
Central Tax dated 31
supplies of goods and services A new rule has been
December, 2018)
between two persons when inserted to bar a person
both are required to deduct who has not filed returns For the persons who have not
tax. for two consecutive periods submitted Form GSTR 4
from generation of e-way (return for composition
(Notification no. 73/2018-
bills. This rule will be dealers) for the periods July,
Central Tax dated 31
effective from a date yet to 2017 to September, 2018 and
December, 2018)
be notified. submit Form GSTR 1 for these
The GST Rules have been periods between 22 December,
Forms GST RFD-01 (refund
amended. The key 2018 to 31 March, 2019 the
application), GST RFD-01A
amendments are as under: late fee payable for such delay
(refund application), GSTR
is waived.
A person who is required to 9 (annual return) and
collect tax in a State, where GSTR 9A (annual return) (Notification no. 77/2018-
it does not have a physical and GSTR 9C Central Tax dated 31
presence, can obtain (reconciliation statement December, 2018)
registration in that State by and GST audit report) have
The due date for submission of
mentioning the details of its been substituted with
Form ITC 04 (return for
principal place of business revised formats.
movement of goods to/ from
located in another state.
(Notification no. 74/2018- job worker) for the period
The requirement of Central Tax dated 31 July, 2017 to December, 2018
disclosure of challans in December, 2018) has been extended to 31
Form GST ITC 04, in case March, 2019.
For the persons who have not
of the goods sent from one
submitted Form GSTR 1 (Notification no. 78/2018-
job worker to another, has
(return for outward supplies) Central Tax dated 31
been withdrawn.
for the periods July, 2017 to December, 2018)
The requirement of affixing September, 2018 who now
The Integrated GST Rules,
signature or digital submit Form GSTR 1 for these
2017 have been amended. The
signature on invoice or a periods between 22 December,
major amendments are as
bill of supply or 2018 to 31 March, 2019, the
under:
consolidated invoice or any late fee payable for such delay
other document issued by is waived. In case of advertisements
an insurer or a banking over internet, the rules
(Notification no. 75/2018-
company or financial have been amended to
Central Tax dated 31
institution, including non- provide a deeming fiction
December, 2018)
banking financial that such services are
companies or ticket issued For delayed submission of provided all over India.
by a passenger transport Form GSTR 3B (periodical
The value of supply of
company has been done return) from the month of
service attributable to
away with, if the respective July, 2017 onwards, the late
different States, when the
document is issued in fee which is in excess of INR
services are supplied/
accordance with the 25 per day (under CGST Act,
performed in multiple
provisions of the 2017) has been waived. In
States and a consolidated
case, Central GST payable
2 pwcTax Insights
consideration is charged any break up for services individual State, will be as
without supplied in an under:
Sr. Nature of supply Allocation of consideration
No.
1 Services in relation to immovable property or stay/ Where such immovable properties etc. are located in
organisation of function in hotels etc. or services multiple States, the services are deemed to be provided
ancillary to them. in all the States. The values would be allocated as
under:
This will also be applicable in the cases, where the
location of the service provider or the service For stay in hotels on the basis of nights stayed.
recipient is outside India.
For stay in houseboat or vessel in proportion of time
spent by the boat or vessel in each State on the basis
of declaration made by service provider. In case of
all other services, including the services by way of
accommodation for organisation of function etc.
and also, in cases, where the stay is made in a hotel
(which is single property located in two or more
contiguous States), in proportion of the immovable
property lying in each State.
2 Services in relation to organisation of event or The value of service for each State shall be determined
assigning of sponsorship to such events, when the by application of the generally accepted accounting
services are supplied to an unregistered person and principles.
the event is held in multiple States.
This will also be applicable in the cases, where the
location of the service provider or the service
recipient is outside India.
3 Supply of services relating to leased circuit, where The value of services for each State would be
the leased circuit is installed in multiple States. determined on the basis of number of points of the
leased circuit in each State and the consideration split
accordingly.
4 Supply of services for goods which need to be If the services are provided on the same goods, the
physically made available by the service recipient value of services would be equally divided between
to the provider, and the services are performed in each of the States where the services are performed.
multiple States and the location of the supplier or
Where the services are provided on different goods,
the recipient is outside India.
the consideration would be split on the proportion
of invoice value of goods in relation to which the
services are performed.
5 Services supplied to an individual, represented The value of the services in each State would be
either as the recipient of services or person acting determined by applying generally accepted accounting
on behalf of the recipient, which require the principles.
physical presence of the recipient or the person
acting on his behalf, where the location of supplier
or the location of recipient is outside India and the
services are supplied in multiple States.
(Notification no. 4/2018-Integrated Tax dated 31 December, 2018)
6 pwcTax Insights
(Circular no. 76/50/2018-GST copy of the refund
Circulars issued, clarifying
dated 31 December, 2018) application and the
various issues2
supporting documents were
A circular is issued providing
A circular is issued, providing required to be physically
clarification on export of
various topical clarifications. submitted to the
services in cases, where a
The key clarifications are as jurisdictional tax officer.
service exporter has
under: Now such documents can
outsourced portion of the
be uploaded on the
Penalty under section service contract to a person
common portal.
73(11) of the Central GST outside India. It has been
Act, 2017 is not applicable clarified that: In case of refund of
in case of delayed filing of accumulated credit due to
In such case, two supplies
Form GSTR 3B returns as an inverted duty structure,
take place; one from Indian
such penalty pertains to the refund would be
service exporter to the end
non-payment of tax. granted irrespective of
client, and another from
However, penalty for applicable tax rates on the
outsourced service provider
delayed payment of tax various inputs (whether
to Indian service exporter.
under section 125 of the higher or lower or equal to
Central GST Act, 2017 is The Indian service exporter the rate applicable on
applicable. will be required to pay GST output supply).
under reverse charge on
In case of revision of prices, The assessee would get
services received from the
after the appointed date, of interest on delayed refund
outsourced service
any goods or services on the refund amount
provider.
supplied before the immediately starting from
appointed day, which If the full consideration for the date after expiry of 60
requires issuance of any the services as per the days from the date of
supplementary invoice, contract is not received in receipt of application
debit note, credit note, the convertible foreign (ARN) till the refund has
rate as per the provisions of exchange where the end been actually credited to
the Central GST Act, 2017 client directly pays the the bank account of the
will be applicable. outsourced service claimant.
provider, even that portion
The provisions of tax Where the refund
of the consideration would
deduction at source under application has been
be treated as receipt for
section 51 of the Central electronically submitted
exports if Reserve Bank of
GST Act, 2017 are and the ARN is generated
India has permitted
applicable only to such on the common portal
retention of part of
authority or board or any before the issuance of this
consideration outside India
other body set up by an Act circular but the application
and the Indian service
of Parliament or a State has not been received by
exporter has paid
legislature or established by the jurisdictional office
Integrated GST on
any Government in which (except refund of excess
consideration paid to
51% or more participation balance in electronic cash
outsourced service provider
by way of equity or control ledger), the refund claims
under reverse charge.
is with the Government. of less than INR 1,000
(Circular no. 78/52/2018-GST should be rejected and the
Taxable value for the
dated 31 December, 2018) amount re-credited to the
purposes of GST shall
electronic credit ledger. In
include the amount of tax A circular is issued providing
case of refund claims for
collected at source (TCS) clarification on various issues
amounts more than INR
under the provisions of the relating to refund. The major
1,000 the claimant should
Income-tax Act, 1961 since clarifications are as under:
be sent an electronic mail
the value to be paid to the
While submitting the communication to submit
supplier by the buyer is
refund application, it was the application to the
inclusive of the TCS.
previously required that the jurisdictional office within
2
Only the circulars having wider impact
have been covered in this tax insight.
2 pwcTax Insights
15 days of receipt of the portion of compensation (Circular no. 79/53/2018-GST
mail, failing which, the cess attributable towards dated 31 December, 2018)
refund application would exports, the amount of
A circular is issued, clarifying
be dismissed and the credit claimed would be
the applicable rate of tax and
amount debited would be treated as total credit and
classification of various goods.
re-credited to the credit the refund claim would be
Some salient clarifications are
ledger. In case of refund allowed of such amount in
as under:
applications of excess the proportion of exports. If
balance in electronic cash the assessee avails the LPG supplied in bulk,
ledger, the amount debited balance credit after whether by refiner/
in the electronic cash ledger reversing the initial entry fractionator to OMC or by
may be re-credited if there writing off the one OMC to another for
are no liabilities in proportionate ITC of cess, it bottling and further supply
electronic liability register. can again claim the refund for domestic use will attract
The amount should be re- of such credit of cess and GST @ 5% with effect from
credited, even though the consequently, refund. 25 January, 2018.
return in Form GSTR 3B (Restricted to amount of
Concessional rate of GST
for the relevant period has refund computed to be
on goods used for setting
not been filed. available, if the entire
up of Waste to Energy
credit has been claimed
If an exporter, whose Plants is available only on
initially).
output does not attract the goods covered under
compensation cess, has not The credit of an invoice for chapters 84, 85 and 94, and
claimed credit of previous period, which is other products would not
compensation cess until claimed in subsequent be eligible for the
May, 2018 and decides to period, should be concessional rate of tax.
avail credit of such considered for the purpose Further, the supplier needs
compensation cess later of computing eligible to satisfy himself with
and claims refund of such refund for the period for requisite document from
compensation cess in a which such credit has been the buyer before claiming
single month in which the claimed. concessional rate of tax.
credit is claimed, the
The credit of any inputs Any inter-State movement
amount of refund would be
used in the business and for of goods for provision of
recomputed as if the same
making taxable (including service on own account by a
was available in the months
zero rated) supplies should service provider, where
in which refund of
be considered as net ITC neither transfer of title in
accumulated credits due to
for refund, and ITC claimed such goods nor transfer to a
exports has been claimed.
as inputs on items such as distinct person is involved,
The consignments exported
stores and spares does not constitute a supply
on payment of Integrated
(including charged off to of such goods and it is
GST in the past would not
revenue and not clarified that any
be eligible for such refund
capitalised), packing movement on own account
of compensation cess.
materials, material would not be liable to GST.
The refund of purchased for machinery
(Circular no. 80/54/2018-GST
compensation cess paid on repairs, printing and
dated 31 December, 2018)
inputs would be available, stationery items should be
irrespective of whether the considered for refund if A circular is issued clarifying
inputs are used to make an such credit is otherwise that the services provided by
intermediate product (such eligible. International Finance
as electricity), which is used Corporation and Asian
The refund of tax paid on
to make the final product Development Bank are exempt
input services and capital
which is exported. from GST in terms of
goods would not be
International Finance
In case of compensation available in case of claim of
Corporation (Status,
cess paid on inputs used for refund of accumulated
Immunities and Privileges)
domestic supply as well as credit due to inverted duty
Act, 1958 and Asian
exports, where the assessee structure.
Development Bank Act, 1966
only avails the credit of the
6 pwcTax Insights
respectively. The exemption the issues arising from Central of customs under section
will be available only to the GST (Amendment) Act, 2018 3(1) of the Customs Tariff
services provided by Asian on section 140(1) of the Act, 1975 will be allowed.
Development Bank (ADB) and Central GST Act, 2017 dealing
(Circular no. 87/06/2019-GST
International Finance with carry forward of credit
dated 2 January, 2019)
Corporation (IFC), and not to balances. The clarifications are
any entity appointed by or as under: The takeaways
working on behalf of ADB or
The closing balance of The Council had issued a number
IFC.
CENVAT credit pertaining of amendments, some of which,
(Circular no. 83/02/2019-GST to service tax can be carried were not announced at the time of
dated 1 January, 2019) forward as the legislative the 31st GST Council meeting. The
intent was not to disallow amendment in Integrated GST
A circular is issued, clarifying
transition CENVAT credit Rules, determining the place of
the issues relating to
in the form of service tax. supply where a service straddles
transactions between the
banking companies and The expression “eligible multiple States is prospective in
banking facilitators (BF)/ duties” under section nature and it would be interesting
banking correspondents (BC). 140(1) of the Central GST to see the approach adopted by
The clarifications are as under: Act, 2017 does not refer to the authorities for the past
the condition regarding period. The further simplification
Banking company provides of refund procedures, doing away
goods in stock or to a
services to the customers with physical submission of
condition regarding inputs
and is liable to pay GST on application and various
and input services in
the entire value of service supporting documents is
transit. It has also been
charge or fee charged to welcome, and will lead to
decided not to notify
customers, whether or not reduction in procedural aspects.
clauses 28(b)(i) and
received via BF/ BC. Parties claiming refund of
28(c)(i) of the Central GST
To avail exemption on (Amendment) Act, 2018 compensation cess as exporters
services provided in (dealing with linking carry will need to review the
relation to ‘accounts in forward of closing balance classifications and their impact
rural area branch’, the of credits as per returns on past claims which are still
applicable conditions in with various conditions) to unprocessed. Further, the
notification, i.e., the avoid such linkage. clarifications regarding carry
classification of services of forward of CENVAT credit of
The eligible duties which service tax etc. clear the
BF/ BC in their respective
are allowed to be carried apprehension of the industry
individual capacity should
forward under section regarding potential challenge to
be covered under the
140(1) of the Central GST carry forward of service tax
heading 9971, and the
Act, 2017 would only cover credits etc. on the basis of
service should be with
the duties listed as eligible language as drafted. However, the
respect to accounts in a
duties in sr. nos. 1 to 7 of clarification prohibiting the carry
branch located in the rural
explanation 1 to section 140 forward of the credit of the cesses
area. The classification
of the Central GST Act, may see judicial challenge from
adopted by the bank as per
2017 and eligible duties and the industry.
the Reserve Bank of India
taxes as listed in sr. nos. 1
guidelines in this regard Let’s talk
to 8 of explanation 2 to
should be accepted.
section 140 of the Central For a deeper discussion of how
(Circular no. 86/05/2019-GST GST Act, 2017. this issue might affect your
dated 1 January, 2019) business, please contact your
No transition credit of
A circular is issued, clarifying cesses, including cess local PwC advisor
collected as additional duty
6 pwcTax Insights
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