India: Critical Developments In The GST Regime

Last Updated: 6 November 2017
Article by SKP  

Post implementation of Goods and Services Tax (GST), the government continues to make necessary interventions in key areas to ease the pain of taxpayers. Some key updates are summarised below:

Deemed exports

Categories of supplies that would qualify as deemed exports under Section 147 of Central Goods and Services Tax Act, 2017 has been provided vide Notification no. 48/2017-Central Tax dated 18 October 2017. Supplies have been categorised as follows:

Documents required for claiming refund on the GST paid on deemed exports 49/2017-Central Tax dated 18 October 2017.

Relief to merchant exporters[1]

The government has provided for a concessional GST rate of 0.1% on supply of taxable goods to merchant exporters. The concessional rate would apply on fulfilment of certain prescribed conditions. Some key conditions are:

  1. The goods would be required to be transported directly from the premises of a merchant exporter to a port, inland container depot, registered warehouse, airport or land customs station from where the goods are to be exported.
  2. The exporter should be registered with an Export Promotion Council (EPC) or a commodity board recognised by the Department of Commerce.
  3. The exporter should place an order with the supplier for a concessional GST rate and a copy of the same should be provided to the jurisdictional tax officer of the registered supplier.
  4. The goods should be exported within a period of 90 days from the date of issue of the tax invoice by the supplier.

Kerala High Court's decision on e-Way Bill compliances

The documents that have to be carried by a goods transporter in the course of inter-state movement have not been notified by the central government. Goods being held by the state government for non-compliance to furnished prescribed documents for the transport of goods as per the Integrated Goods and Services Tax (IGST) Rules is creating confusion among the transporters.

In light of the above, a recent judgement has been passed by the Kerala High Court on e-Way Bill compliances. It held that detention of goods by the state government for non-compliance of prescribed documents under the IGST Act cannot be legally sustained as the documents required for inter-state transport of goods have not been notified in the Act yet.

Late Fee waived off

Late fees for filing GSTR-3B for the month of August and September 2017 have been waived off vide Notification no 50/2017-Central Tax. Late fees paid by the taxpayer at the time of filing GSTR-3B would be credited to the taxpayer's cash ledger on the GST portal online.

ITC-04: Job workers

  • Details of inputs or capital goods sent and received back from job workers are to be furnished on a quarterly basis in Form ITC-04.
  • Excel offline facility for ITC-04 has been released on the GST portal on 24 October 2017. The due date for filing of ITC-04 for the quarter ending September 2017 was 25 October 2017. The due date has been proposed to be extended and a notification in this regard is awaited.

Cancellation of registration of migrated taxpayer

Cancellation of registration for those taxpayers who were not required to obtain registration as per GST Law provisions, but were migrated to GST as they were registered under the erstwhile tax regime, can apply for cancellation of registration through the following methods:

  • Taxpayers who have not issued tax invoices in the GST regime 
    Such taxpayers may apply for cancellation of registration through a new feature enabled on the GST portal from 25 October 2017.
  • Taxpayers who have issued tax invoice in the GST regime
    Such taxpayers may apply for cancellation of registration by filing FORM-GST-REG-16 on the GST portal. The taxpayer would be required to provide the details of the stock held on the effective date of cancellation of registration and file all GST monthly returns for the interim period.

Validity of duty credit scrips increased under FTP

The validity period of duty credit scrips issued under the Foreign Trade Policy (FTP) has been increased from 18 months to 24 months with retrospective effect from 1 January 2016. 

Issuance of consolidated invoices approved

Rule 54 of the Central Goods and Services Tax (CGST) Rules, 2017 has been amended on 18 October 2017 to allow the following suppliers to issue a consolidated tax invoice for the supply of services made at the end of the month:

  1. Insurers
  2. Banking companies
  3. Financial institutions, including non-banking financial institutions


[1] Merchant exporters are traders who procure goods from a manufacturer for export

SKP's comments

The facility of procurement of goods by merchant exporters on payment of 0.1% GST is an important step taken by the government. This would go on to provide relaxation to exporters who have been unable to obtain a refund on input taxes on exports. Furthermore, the government continues to bring in necessary amendments in areas where there is a significant need to relax compliance burden on taxpayers.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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