India: Recent Amendments To The GST Regime

Last Updated: 10 January 2018
Article by SKP  

The effective rate of GST for dealers opting for composition scheme revised

The effective rate of GST for manufacturers and traders who have opted for composition scheme under Section 10 of the CGST Act, 2017 has been revised vide Notification No. 1/2018- Central Tax with effect from1 January 2018. The revised rates are:

Dealers Revised provisions Earlier provisions
Manufacturers 1% (0.5% CGST and 0.5% SGST) of the turnover 2% (1% CGST and 1% SGST) of the turnover
Traders 1% (0.5% CGST and 0.5% SGST)
of the turnover of taxable supplies of goods
1 % (0.5% CGST and 0.5% SGST) of the turnover

Implementing a nationwide e-Way Bill system

The Central Board of Excise and Customs (CBEC) vide notification no 74/2017-Central Tax has decided to implement a nationwide e-Way Bill system for the interstate movement of goods from 1 February 2018. The nationwide e-Way Bill system would be rolled out in two phases:

Inter-state movement

  • On a trial basis latest by 16 January 2018, wherein, traders and transporters can use the system on a voluntary basis.
  • Compulsorily from 1 February 2018.

Intra-state movement

  • The date of implementation of e-Way Bills for intra-state movement of goods has been left to the discretion of the respective states.
  • However, all states will have to implement it latest by 1 June 2018.

Extension in due dates of GSTR 1 and other returns

The due date of GSTR 1 for the monthly and quarterly dealers and various other forms has been extended. The revised dates are:

Form No. and period Revised due date Earlier Due Date
GSTR 1 - July 2017 (Monthly) 10 January 2018 31 December 2017
GSTR 1 - August 2017(Monthly) 10 January 2018 31 December 2017
GSTR 1 - September 2017(Monthly) 10 January 2018 31 December 2017
GSTR 1 - October 2017(Monthly) 10 January 2018 31 December 2017
GSTR 1 - November 2017(Monthly) 10 January 2018 10 January 2018
GSTR 1 - July to September 2017 (Quarterly) 10 January 2018 31 December 2017
FORM GSTR - 5A - July to December (Monthly) 31 January 2018 15 December 2017
FORM GSTR - 5 - July to December (Monthly) 31 January 2018 11 December 2017
FORM GST ITC - 01 - July to November (Monthly) 31 January 2018 30 November 2017
FORM GST CMP – 03 31 January 2018 30 November 2017

Updates on GST online portal

  • The functionality for filing TRAN-1 has been removed from the GST Portal.
  • Offline tool for transitional form TRAN-2 has been made available on the GST Portal.
  • A new functionality to track return status has been introduced on the GST Portal.
  • Facility to give details of supplies made to merchant exporters at the rate of 0.1% in all returns has been introduced on the GST Portal.
  • A functionality to declare transfer of Input Tax Credit (ITC) in case of transfer, mergers, amalgamation or transfer of business through FORM ITC GST 02 has been made available on the GST portal.

Impact of Goods and Services Tax on Exports

The Parliamentary standing committee has presented the 139th report on the impact of GST on exports before the Rajya Sabha and Lok Sabha. The report has highlighted the dilemma exporters are facing under the GST regime. Also, appropriate suggestions have been proposed to solve the issues. The tabulated version of issues discussed and suggestions offered are:

Issues Proposed suggestions

Refund Mechanism

  • The refund procedure is tardy and cumbersome.
  • The refund applications are rejected on the slightest pretext.
  • Granting of refunds for GST paid from July 2017 has been started from the month of October 2017. The time lag is huge and therefore exporters are facing working capital blockage.
Formal mechanism for redressal of exporters
  • A dedicated office/unit should be established to address the issues faced by exporters.
  • Such a dedicated office must act as a single window for grievance redressal.
Duty Drawback (DBK) and Rebate of State Levies (RoSL) scheme
  • Post GST, DBK and RoSL rates are low and unrealistic.
  • The scheme does not cover credit for all taxes.
  • Extend the pre-GST DBK rate till 30 June 2018 and work on the revised DBK rates.
  • Encompass all taxes (GST/IGST and embedded/blocked tax) within the ambit of DBK.
Duty Credit scrips (DCS)
  • DCS cannot be used for the payment of GST on domestic or export/imports of goods and services.
  • DCS should be permitted for the payment of GST in domestic procurements and the payment of IGST on exports and imports of goods and services.
Reverse Charge Mechanism
  • Reverse Charge Mechanism provisions should not apply to procurements made in relation to export activities.
The committee is of the view that no IGST should be levied on the following:
  • High sea sales.
  • Job work for exports.
  • Export freight through air, sea and railway.
  • Transactions between the Head office and its branches.
  • Place of supply for intermediary services (as specified under Section 13(8) of the IGST Act, 2017) is location of supplier of services. The committee recommends that the same should be considered as per Section 13(2) i.e. location of recipient of services, so that it is qualified as exports.

In a nutshell, the committee feels that if the taxes paid on inputs used for exports are going to be eventually refunded, then it is an unnecessary procedure of collecting the taxes in the first place. It has been the case that it is easy to pay the tax, but extremely difficult to get a refund.

Updated GST FAQ's and GST Flyers released by the CBEC

Flyers (a lucid explanation of various GST provisions) have been released by CBEC containing 51 important topics such as registration, cancellation under GST, scope of supply, e-Way Bill, job work, valuation under GST, etc.

Also, based on various frequently asked questions by taxpayers and recent notifications under GST, an updated FAQ 2018 has been released on the CBEC website on 1 January 2018.

SKP's Comments
  1. Extension in the due dates again comes as a relief to taxpayers facing technical glitches on the GST online portal and those who were burdened with multiple monthly compliances.
  2. Taxpayers are expecting extension in the due date for Form ITC – 04 (Input credit on Job work-due date was 31 December 2017) as the offline utility tool was incapable of generating error-free JSON file for the submission of return.
  3. It is a welcoming move from the government to invite suggestions from the parliamentary standing committee to simplify the exports and reduce the tax burden on the foreign currency earning sector of the country.
  4. The release of various updates as flyers and FAQ's by CBEC is a great effort to spread awareness on GST amongst the 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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