India: Recent Developments Under GST And Other Indirect Taxes

Last Updated: 16 January 2018
Article by SKP  

The government has continued with its efforts to minimise the difficulties faced by businesses under the GST regime by issuing clarifications and activating the dormant provisions. Enunciated below are some of the key developments:

Updated FAQs released by Central Board of Excise and Customs (CBEC)

CBEC has released an updated version of FAQs to help resolve queries of the taxpayers under the GST regime. Key points on which the FAQ's have provided clarifications and reiterated the existing understanding are as follows:

  • Manual refund claims: By Circular No.17/17/2017-GST dated 15 November 2017 the refund claims on account of zero-rated supplies should be filed and processed manually until further orders. 
  • Shipping bill deemed as an application for refund of IGST: In respect to export of goods on payment of IGST, the shipping bill filed by an exporter should be deemed to be an application for refund of integrated tax paid on the goods exported out of India and there is no need to file a separate refund claim. 
  • Disclosure of advances received in GSTR-1: Where against an advance the invoice is issued in the same tax period, the advance need not be shown separately in Form GSTR-1 but the specified details of invoice itself can be directly uploaded on the system. Details of all advances against which the invoices have not been issued until the end of the tax period should be reported on a consolidated basis in table 11 of Form GSTR-1. It may be noted that regarding notification 66/2017-Central Tax dated 15.11.2017, there is no liability to pay tax at the time of receipt of advance in case of supply of goods. 
  • Valuation in case of supply of construction service: In case of supply of construction service (works contract), involving transfer of property in land or undivided share of land, the value of supply of service and goods portion in such supply shall be equivalent to the total amount charged for such supply less the value of land or undivided share of land. Further, the value of land or undivided share of land, in such supply shall be deemed to be one-third of the total amount charged for such supply. 'Total amount' means the sum total of:

    • Consideration charged for aforesaid service; and
    • The amount charged for transfer of land or undivided share of land, as the case may be. 
  • Time limit for issuing invoice: A registered person supplying services is required to issue an invoice before or after the provision of service but within a period of 30 days from the date of supply of service. For banking and insurance companies, this period is 45 days.

Other updates

  • The release of audit forms: - The powers of the revenue authorities to order an audit under the GST regime is contained in Section 65 and Section 66 of the Central Goods and Services Tax Act, 2017. In this regard, CBEC has notified the applicable forms for sending a notice for conducting an audit to the taxpayer and issuance of an audit report by incorporating the same in the Central Goods and Services Tax Rules, 2017. 
  • Android app for generating e-Way Bill: With the implementation of nationwide e-way bill system less than a month away, an Android app to facilitate the generation of e-way bills by the taxpayers has been launched. The Android app can be downloaded by the taxpayer by login in into his account on the common portal for the e-way bill and registering the International Mobile Equipment Identity (IMEI) number of the mobile on which the app has to be downloaded. 
  • Clarification on the rate of tax on mess facilities in an educational institution:  CBEC vide Circular No. 28/02/2018-GST dated 8 January 2018 has clarified that supply of food or drink by educational institutions having mess facilities to its students and staff is taxable at 5% without input tax credit. It is immaterial whether the educational institution itself provides the service or the institution outsources the activity to an outside contractor. 
  • Extension of due date of audit under Maharashtra Value Added Tax (MVAT): The Maharashtra government vide Circular No. 2T of 2018 dated 12 January 2018 has extended the due date for uploading the MVAT audit report to 15 February 2018. The physical copy of the acknowledgement of submission of audit report should be submitted by 25 February 2018.

SKP's Comments

  • The release of updated FAQ's will help taxpayers to clear the confusion in cases where ambiguity persists. 
  • The government is moving swiftly in operationalising the various provisions of GST. The release of audit forms, e-way bill mobile app and the issuance of time to time clarifications points in this direction. 
  • The next GST Council meeting is scheduled to be held on 18 January 2018 with simplification of return filing process and easing of the process to claim refunds at the top of the agenda.

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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