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GST COUNSELLOR GSTC

VOLUME: 4 11 JULY, 2018 NUMBER: 20

Dear Readers, India has become the world’s sixth biggest economy as per world Bank’s latest statistics. The countries above India are US, China, Japan, Germany and United Kingdom. According to the International Monetary Fund, India is projected to generate growth of 7.4 percent this year and 7.8 percent in 2019. This compares to the world’s expected average growth of 3.9 percent. The GST (Goods and Services Tax) Council, in its meeting on July 21, may consider lowering rates on some items including sanitary napkins and handicrafts. These are the items which have lower revenue implications, but higher perception value. The Council will also take up the issue of rationalization of taxes on various commodities in view of demand raised by stakeholders. However, it will focus mainly on those items which are of general consumption, and have low revenue implication. Over last one year, GST Council has attempted several (over hundred) changes and interpretations to the GST law. While such changes and/or clarificatory notes by way of circulars/press releases/ FAQs/ fliers were desirable at the given time, yet, it implies fragile law on which GST has been built up and implemented in our country. It is more than a year old now and in the ensuing GST Council meeting, it is hoped that it will do a major overhaul to the existing statutory provisions to be taken up by the legislative. Though it is a welcome move, it would be desirable not to do it in haste and allow a reasonable time to all stakeholders to suggest changes/ give feedback.

ASCO’S GOODS & SERVICE TAX COUNSELLOR

(AN INHOUSE FORTNIGHTLY NEWSLETTER ON GST)

(FOR PRIVATE CIRCULATION)

EDITOR: NEHA SOMANI, [B.COM, ACA] CHIEF EDITOR: DR. SANJIV AGARWAL, [FCA, FCS, ACIS (UK)]

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GST COUNSELLOR GSTC

It is pertinent to flag that issue of GSTN and its technical glitches many also be addressed appropriately by the Council as it has been a major game spoiler. Also, it is important to simply the procedures, achieve convergence on tax rates and rationalize exemptions and inclusions (such as petroleum gas, alcoholic beverages, real estate and electricity). The issues such as TDS, TCS, reverse charge have seen the history of being deferred on a quarterly basis. Why not think of doing away with them completely till the new law is settled and people accept such concepts. The ensuing GST Council meeting in third week of July, 2018 is likely to consider and decide on about 50 amendments proposed in GST laws. These legal changes will happen for the first time since GST was launched. Government has invited feedback/comments on these from stakeholders till 15 July, 2018. These changes are aimed at reducing compliance burden and improving ease of doing business. DATE: 11.07.2018 DR. SANJIV AGARWAL

v Pre GST goods with stickers can be sold upto 31st July 2018 [WM-10(6)/2018 dated 14.06.2018]

· Sale of pre-GST packaged goods has now been allowed with stickers of revised rates till July 31, 2018

· After implementing GST from July 1, 2017, the government had allowed use of stickers with revised rates, alongside the printed MRP for pre-packaged items to reflect changes in selling price for three months till September 30. The deadline has been extended several time and the latest was April 30.

· In a latest order, the consumer affairs ministry said the deadline has been extended till July 31 on request made by manufacturers, packers and importers.

v Recent Notifications/Circulars

· In rule 125, 129, 130, 131, 132 & 133 of CGST Rules, 2017, for the words “Directorate General of Safeguards”, the words “Directorate General of Anti-profiteering” shall be substituted; [Notification No. 29/2018 –Central Tax dated 06.07.2018]

v CBIC launches GST ‘Verify App’

· “Every time you shop/eat/buy check the bill if there is any GST amount mentioned, if yes verify through this app if she/he is genuinely registered person

GOODS AND SERVICES TAX UPDATE

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GST COUNSELLOR GSTC

or not, thereby you save the amount shown as tax from the fraudster if he is cheating you,” the statement said.

· The Central Board of Indirect Taxes and Customs (CBIC) has developed and launched a mobile app named ‘ GST Verify ‘ to protect interest of consumers.

· The application is to verify if the person collecting GST from the consumer is eligible to collect it or not. It also provides the details of the person / company collecting GST, an official press statement said.

v Recommendations of Group of Ministers in meeting held on 08.07.2018 There are few following positive amendments proposed by the Government:

· No tax on third country exports · Dilution of section 9(4) of CGST Act, 2017 · No tax on warehouse / High Sea Sale · No interest, if payment not made in 180 days. · Single debit/ credit not against multiple tax invoices · ITC allowed if particular service is obligatory under any law.

v Stakeholders consultation on proposed changes

· In order to engage with the stakeholders and invite comments from the public at

large, the Department of Revenue has decided to make available the proposed amendments in CGST Act, 2017, IGST Act, 2017 and the GST (Compensation to States) Act, 2017 in the public domain.

· Where one can submit his/her feedbacks for draft proposal for amendment on www.mygov.in till 15th July, 2018.

v Major proposed legislative changes

· Presently, registered persons engaged in the supply of services (other than

restaurant services)are not eligible for the composition scheme. Thus, manufacturers or traders couldn't opt for the scheme if they are engaged in supply of allied services even if they are negligible. Therefore, it has been proposed that composition scheme should be allowed even if proportion of , Service' is upto 10% of total turnover in the preceding financial year or Rs. 5 lakhs, whichever is higher.

· Changes in negative list of input tax credit has been proposed. It is proposed that input tax credit should be allowed for the taxes paid on following:

a) Supply of food, transport and insurance provided to employees if it is obligatory for the employer. b) Purchase of motor vehicle if it used for transportation of money for or by a banking company or a financial institution.

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GST COUNSELLOR GSTC

· In case of import of goods, by virtue of Circular No. 3/1/20 18-IGST, Dated May 25, 2018, IGST would be payable only at the time of clearance of goods from Custom bonded warehouse for home consumption. This deferment of levy of GST is done so as to avoid the double taxation. It has been proposed that such situations should be mentioned as 'No Supply' in Schedule III of the CGST Act, 2017 itself.

· As per Section 9(4),a registered person is liable to pay GST under reverse charge on goods or services purchased from unregistered supplier. However, this provision has deferred till September 30, 2018. It has been proposed that only notified registered persons should be liable to pay GST under reverse charge mechanism to benefit the small and medium enterprises.

· It is proposed that ane-Commerce operator, who is not required to collect TCS,

should be exempted from taking compulsory GST registration. In that case, the registration should be obtained only if other conditions are fulfilled, inter-alia, turnover exceeding the threshold limit, inter-State supply, etc.

· As per the existing provisions, a person seeking registration shall be granted a

single registration in a State or Union territory. However, if he has multiple business verticals in a State or Union territory, he may obtain separate registration for each business vertical. Now, it has been proposed that such persons should be allowed to obtain separate registration for his each place of business in a State or Union territory.

· At present, a credit or debit note can be issued only against its underlying

invoice, which is quite cumbersome to correlate. Thus, it is proposed that parties should be allowed to issue consolidated credit or debit note to reduce the compliance burden for taxpayers.

· Once a registered person has applied for cancellation of GST registration, the

proper officer should temporarily suspend its registration till the procedural formalities for cancellation are completed. This amendment would relieve the compliance burden of taxpayers.

· Allow the taxpayers to amend the GST returns. This provision would enable the

taxpayers to correct inadvertent mistakes by filing an amendment return.

· Any department of the Central or State Govt. or Local Authority which is subject to audit by CAG should not be required to get their books of account audited by any Chartered Accountant or Cost Accountant irrespective of prescribed limit of Rs. 2 Crores.

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GST COUNSELLOR GSTC

A ministerial panel tasked by the Goods and Services Tax Council has decided against offering addition tax incentives for digital transactions for a year, citing revenue considerations. The panel headed by Bihar deputy chief minister and finance minister will recommend to the Council, the apex decision making body, to defer any concessions for a year. The Group of Ministers (GoM) will be recommending to the Council that it may think about the proposal of incentivising digital transaction again after a year. The GoM is recommending deferring the proposal for a year. Another ministerial panel also chaired by prime minister on Reverse Charge Mechanism has decided to recommend to the GST Council to notify the registered persons who would come under its purview. The recommendations of these ministerial panels would be placed before the GST Council at its next meeting on July 21. The GoM on digital transaction has decided that this is not an opportune moment to incentivise digital payments as it will have revenue implication. Let returns and GST revenues stabilise, then we can think about incentivising digital transaction.

The GST Council in its last meeting in May had discussed offering a 2% concession in GST rate (where the tax rate is 3% or more) to consumers making payment through cheque or digital mode. The discount is proposed to be capped at Rs. 100 per transaction. The five-member GoM on incentivising digital transaction include Gujarat deputy chief minister, West Bengal finance minister, Haryana excise and taxation minister and Punjab finance minister. On reverse charge mechanism (RCM), Prime Minister said the GoM will recommend that the GST Council decide on the class of registered persons who would be required to deposit taxes on reverse charge basis. We have recommended omitting the present Section 9(4) and introducing a new Section 9(4) which will permit the government, on the recommendations of the GST Council, to notify specific class of registered persons who would be covered under RCM provision. The conditions and the date for levying of RCM would be decided by the council, he added. Under the RCM in GST law, registered dealers are required to make tax payments in case they procure goods from unregistered businesses. At present, RCM has been deferred till September 30.

(SOURCE: BUSINESS LINE DATED 08.07.2018)

GOODS AND SERVICES TAX

GST PANEL RECOMMENDS NO EXTRA TAX INCENTIVES FOR DIGITAL TRANSACTIONS

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GST COUNSELLOR GSTC

A decision of an Appellate Authority for Advance Ruling can have the effect of plugging the leak in GST payments in related party transactions, with or without consideration. The issue came up when JSW Steel and JSW Energy, both of the JSW Group, proposed to enter into a job work agreement under which the former would procure coal or any other input and supply to the latter. The power generated was to be supplied back to the steel company while the energy unit would get job work charges.

During the entire process, the title to the inputs would vest with the steel company along with the power generated. In addition to power, fly ash and other products generated at the power plant using the inputs would also vest with the steel company. JSW Energy approached the Authority for Advance Ruling (AAR) to know the applicability of GST on three things: supply of coal or any other inputs on a job work basis by the steel company to the energy company, supply of power by the latter to the former, and the job work charges payable to the power outfit.

The AAR’s March 5, 2018 order said that the proposed activity of the energy company is manufacture, and does not fall within the purview of treatment or process, as defined by job work. It also said that as both the companies are related parties, any supplies made between them, even without consideration, will be subject to GST. However, the order did not say anything about levying GST in respect of the coal and other inputs supplied by the steel company to the energy company as the transaction pertains to the GST liability of the former and not of the latter.

The energy company then moved the Appellate Authority. The authority made it clear that the transaction between the appellant (JSW Energy) and JSL (JSW Steel Limited) does not qualify for job work. The ruling by the Maharashtra Appellate Authority for Advance Ruling (AAAR), probably a first by any State AAAR after the introduction of GST on July 1 last year, is binding only on the applicant and the jurisdictional officer concerned. Although, such a decision does not have precedent value like that of a High Court or Supreme Court judgment, it can be used as persuasive tool in future cases. However, this decision can be challenged, through a special dispensation, before a Division Bench of a High Court.

From a policy standpoint, credit should ideally be available for all the GST paid on inputs used for business, unless there is a specific restriction under the law. The Government should consider legislative changes to enable input credit in such a situation. Also, it underlines the importance of broadening the GST base by including electricity within its fold.

(SOURCE: BUSINESS LINE DATED 07.07.2018)

RELATED PARTY DEALS ARE NOT JOB WORK, WILL ATTRACT GST, RULES APPELLATE AUTHORITY FOR ADVANCE RULING

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GST COUNSELLOR GSTC

The Central Board of Indirect Taxes and Custom (CBIC) is working on a mechanism to deal with such entities. Technically, an entity with a turnover of Rs. 20 lakh (Rs. 10 lakh or more in Special Category States comprising of eight North-Eastern States and the two hilly states: Uttarakhand and Himachal Pradesh, but except Jammu and Kashmir) can collect GST from consumers. However, the same is not applicable for merchants enrolled under Composition Scheme under which any trader or manufacturer has a turnover between Rs. 20 lakh and Rs. 1 crore.

CBIC Member said on the sidelines of an industry event here that tax officials have managed to deduct tax evasion worth over Rs. 2,000 crore since July. Of this, Rs. 100-150 crore came into light in the last 2-3 days, Joseph said, adding that all these were done through fake invoices and other fraudulent activities. He asked the industry to help curb this practice. One can easily check who is eligible to collect GST with the help of an app, ‘GST VERIFY.’ If there is a merchant who is not eligible, then one can send the complaint.

The Government is thinking of reducing the number of tax slabs to 3 or 4 but that will take time. At present, there are four general slabs, 5,12,18 and 28 per cent while there are special tax rate of 3 per cent for gold and silver and 0.25 per cent for uncut diamond.

(SOURCE: BUSINESS LINE DATED 07.07.2018)

The format for annual returns and audit is likely to be approved by the GST Council in its meeting on July 21 and industry expects that there could be some reconciliation with annual IT returns as the Government aims to check tax evasion. Goods and Services Tax (GST) was rolled out on July 1, 2017, and this is the first year when businesses will have to file annual returns (GSTR-9) for 2017-18 fiscal by December 31, 2018. Also those businesses with turnover of more than Rs 2 crore will have to file audit reports along with the annual returns. The revenue officers have prepared a draft of the annual returns form, which will be deliberated by the all powerful GST Council chaired by Union Finance Minister and comprising state finance ministers as members, in its meeting on July 21. The GST Network, which manages the IT backbone for the new indirect tax regime will thereafter finalize the software to enable businesses to file the returns. Tax experts said they expect the annual returns form to be in line with that in the erstwhile Value Added Tax (VAT) regime, with some columns for reconciliation with Income Tax returns and audit report. They expect the forms to be made available online by October, so that the returns could be filed within the December due date.

GST COUNCIL MAY APPROVE ANNUAL RETURNS FORM ON JULY 21; EXPERTS EXPECT RECONCILIATION WITH ITR

GST: CBIC WARNS AGAINST TAX COLLECTION BY UNAUTHORISED ENTITIES

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GST COUNSELLOR GSTC

Considering the fact that the key objective of GST is to expand the tax base, it is expected that the GST annual return would require some information related to annual accounts and income tax returns, in addition to the details which were required to be submitted in the erstwhile VAT annual returns. They expect that in the VAT era, assessments were made on the basis of annual returns and the same process should be followed in the GST regime as well. Experts said the businesses might commit some error in the monthly returns filed and those could get corrected in the annual returns and hence assessment should be on the basis of annual returns. Given the first year of GST, the industry would expect the Annual Return format to be simple and if possible only require PAN based data reconciliation with the financials and not state wise or GSTIN wise data reconciliation with financials. The said demand essentially being on account of most company IT systems not being configured to extract state wise financials. Under the VAT regime, businesses were required to file returns in every state where they are registered and hence linking their annual returns with that of the same filed under IT returns was not feasible. Some of the Industry expectations are online forms with least manual intervention seeking selected information, clarity on the need for annual state-wise financial statements and finally, deferment of GST audits in the first year. But, with GST being PAN based registration, it would be easier to reconcile the sales and purchases with that reported in IT returns. As per the IT return forms notified by the income tax department, businesses filing ITR-4 (Presumptive Income From Business & Profession) will have to give information regarding turnover/gross receipt reported for GST as well as GST Identification Number (GSTIN). Besides, in ITR-6 which is to be filed by companies, businesses have to specify GST paid or refunded or credit outstanding. Over 1.14 crore businesses are registered under the GST regime. Of these, about 18 lakh businesses have opted for composition scheme.

(SOURCE: BUSINESS TODAY DATED 08.07.2018)

Union Minister that the best of the Goods and Services Tax (GST) is yet to come. The Government is celebrating July 1 as GST Day as it was on this day last year that India ushered in its biggest indirect tax reform since independence. GST subsumed 17 indirect taxes and 23 cesses from both the Centre and States. Now, the new system prescribes one rate for all goods or services throughout the country, making the nation a unified market. I’m confident that the best of GST in terms of its contribution to society is yet to come.

Finance Minister had earlier called GST a disruptor. However, his thinking has changed now. He said that he had seen experiences of countries all over the world where GST caused a major disruption. I myself used to use the word disruptive when it came to major reform like GST because it takes time to settle down. But after one year I’m not too sure whether I can use the

BEST OF GST IS YET TO COME, SAYS UNION FINANCE MINISTER

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GST COUNSELLOR GSTC

word disruptive for GST reform, adding that the smooth manner of the changeover is almost unprecedented anywhere globally. Listing out the remarkable successes that GST has achieved in a short span of one year, he said that the reform has created a unified market, cascading of taxes has been eliminated and the weighted average of the total taxation basket has come down.

The GST Council is working on continuous rationalisation of tax slabs, and advance direct tax payments have increased as a result of successful implementation of GST. He said the total indirect tax collection for the 9-month period in the previous financial year after implementation of GST is about Rs. 8.2 lakh crore, which, if extrapolated for the whole year, comes to about Rs. 11 lakh crore, an 11.9 per cent increase in indirect tax collections. Meanwhile, the Government announced on Sunday that GST collection in June stood at Rs. 95,610 crore. This is slightly higher than the Rs. 94,016 crore for May but lower than the Rs. 1.03 lakh crore of April.

(SOURCE: BUSINESS LINE DATED 02.07.2018)

Due dates of various filings in July, 2018

S.No. Return/Form Period Due Date 1. GSTR-1(monthly) June, 2018 10th July,2018

2. GSTR-4 April, 2018 to June, 2018 18th July, 2018

3. GSTR-5 June, 2018 20th July, 2018

4. GSTR-5A June, 2018 20th July, 2018

5. GSTR-3B June, 2018 20th July, 2018

6. GSTR-1 (quarterly) April, 2018 to June, 2018 31st July, 2018

7. GSTR-6 July, 2017 to June, 2018 31st July,2018

OBLIGATIONS UNDER GOODS AND SERVICES TAX

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GST COUNSELLOR GSTC

Advance ruling on taxability of hotel accommodation services in relation to SEZ

In Gogte Infrastructure Development Corporation Ltd., In Re (2018) 93 taxmann.com 201; (2018) 5 TMI 759 (AAR, Karnataka), where the applicant was providing hotel accommodation / restaurant services to employees and guests of units located in Special Economic Zones (SEZ) and charging CGST and SGST at applicable rates which was objected to by SEZ units on the ground that being zero rated supply, rate of GST should be Nil, the Authority for Advance Ruling held that the supplies of goods or service towards the authorized operations shall be treated as supplies to SEZ Unit. Further, the place of supply of the services by way of lodging in a hotel shall be the location at which the immovable property (hotel) is located and the place of supply of restaurant and catering services shall be the location where the services are actually performed. Therefore, the hotel accommodation and restaurant services provided to the employees and guests of SEZ units could not be treated as supply of goods & services to SEZ units as the services rendered by the applicant were neither part of authorized operations nor were consumed inside the SEZ.

Advance Ruling on sale of going concern In Re: Rajasthan Foods Pvt. Ltd. Case No. KAR ADRG 6/2018 (AAR Karataka), it was held that the instant case, applicant sought advance ruling on taxability on transaction of sale of one of the units alongwith fixed and current assets and liabilities / loans at a fixed lump sum consideration. It has been ruled that transfer or a going concern means the transfer of a running business which is capable of being carried on by the purchaser as an independent business. Such transfer of the business as a whole will comprise comprehensive transfer or immovable property, goods and transfer of unexecuted orders, employees, goodwill etc. A going concern is a concept of accounting and applies to the business of the company as a whole. Transfer of a going concern means the transfer of a running business which is capable of being carried on by the purchaser as an independent business. In the instant case, the applicant had not furnished any documentary evidence to establish that the Applicant is a going concern except their admission that it is an ongoing business and the transaction proposes to transfer all the assets and liabilities to the new owner. It implies that the business will continue in the new hands with regularity and a nature of permanency. The sale of a going concern by a business house would not attract tax under the Goods and Services (GST) regime.

RECENT GST ADVANCE RULINGS

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GST COUNSELLOR GSTC

Notification No. 29/2018 – Central Tax dated 06.07.2018

G.S.R. 611 (E).- In exercise of the powers conferred by section 164 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government hereby makes the following rules further to amend the Central Goods and Services Tax Rules, 2017, namely:-

1. (1) These rules may be called the Central Goods and Services Tax (Seventh Amendment) Rules, 2018.

(2) They shall be deemed to have come into force with effect from the 12th day of June, 2018.

2. In the Central Goods and Services Tax Rules, 2017, -

(i) in rule 125, for the words “Directorate General of Safeguards”, the words “Directorate General of Anti-profiteering” shall be substituted;

(ii) in rule 129, for the words “Director General of Safeguards”, wherever they occur, the words “Director General of Anti-profiteering” shall be substituted;

(iii) in rule 130, in sub-rule (2), for the words “Director General of Safeguards”, at both places where they occur, the words “Director General of Anti-profiteering” shall be substituted;

(iv) in rule 131, for the words “Director General of Safeguards”, the words “Director General of Anti-profiteering” shall be substituted;

(v) in rule 132, in sub-rule (1), for the words “Director General of Safeguards”, the words “Director General of Anti-profiteering” shall be substituted;

(vi) in rule 133, for the words “Director General of Safeguards”, wherever they occur, the words “Director General of Anti-profiteering” shall be substituted.

[F. No.349/58/2017-GST (Pt.)]

(Mohit Tewari)

Under Secretary to the Government of India

GOODS AND SERVICES TAX : FROM THE GOVERNMENT

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GST COUNSELLOR GSTC

Note:- The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide notification No. 3/2017-Central Tax, dated the 19th June, 2017, published vide number G.S.R 610 (E), dated the 19th June, 2017 and last amended vide notification No. 28/2018-Central Tax, dated the 19th June, 2018, published vide number G.S.R 574 (E), dated the 19th June, 2018.

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WM-10(6)/2018 Government of India Ministry of Consumer Affairs, Food& Public Distribution

Department of Consumer Affairs Legal Metrology Division

Dated: 14.06.2018

Subject:- The Legal Metrology (Packaged Commodities) Amendment Rules, 2017 vide Notification No. GSR 629(E) dated 23rd June, 2017- Advisory for smooth Implementation- regarding.

The undersigned is directed . to refer to the amendments made in the Legal Metrology (Packaged Commodities) Rules, 2011 vide GSR 629(E) dated 23rd June, 2017, the advisory issued on 19.12.2017, the permission granted on 2.1.2018 to enable old stocks to be cleared upto 31.1.2018 which was further extended upto 28.2.2018 and further extended upto 30.4.2018 vide letter dated 1.3.2018. Now, on representations received, manufacturers /packers/importers are allowed for putting stickers/ tags/ online printing etc. upto 31.07.2018 for making the mandatory declarations required under the Legal Metrology (Packaged Commodities) Amendment Rules, 2017.

2. On the further representations of the industries Associations, it is requested that:

(i) Efforts may be made to give wide publicity to the provisions of the Legal Metrology (Packaged Commodities) Amendment Rules, 2017 so as to spread awareness amongst manufacturers/ packers/ importers and retailers etc.

(ii) The initial enforcement steps may only be in the nature of investigational surveys. Any deficiency noticed should be brought to the notice of the concerned. This is being suggested to provide an opportunity to manufacturers/packers to update their label declarations. It is expected that in the initial period there should be no prosecution for the shortcomings in requirements in the labeling in respect of font size, if it is not affecting the consumers in anyway.

(iii) The Enforcement Authorities of your State may accordingly be advised for due compliance of the above guidelines.

(iv) The above permission is extended upto 31.07.2018 for better implementation of rules.

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GST COUNSELLOR GSTC

(v) Country of origin, shall be mandatorily declared along with other declarations including best before or use by date or expiry date etc., required under these rules.

3. This issues with the approval of the Competent Authority.

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Commissioner of Central GST, Pune-II, Trade Notice No. 13/GST-II/2018-19 dated 13-6-2018

Subject: Opening of New Minor Heads '507-Road and Infrastructure Cess' and '508-Social Welfare Surcharge' under Major Head '0037-Customs' and for '507-Road and Infrastructure Cess' below Sub-Major Head '03-Non Shareable Duties' Under Major Head-'0038-Union Excise Duties' - Regarding.

Attention of the Trade is invited to the Office Memorandum dated 19-4¬2018 issued under F. No. Coord/13-6/H/A/cs/Vol.VIII/2018-19/37 by the Deputy Controller of Accounts. Office of Pr. Chief Controller of Accounts, Central Board of Excise & Customs, A.G.C.R. Building, 1st Floor, LP. Estate, New Delhi. The said O.M. is reproduced below :-

The following corrections/changes have been made in Major Head "0037-Customs" and in Major Head "0038-Union Excise Duties" below Sub-Major Head '03-Non shareable Duties' by office of the Controller General of Accounts vide Correction Slip No. 899, dated 13-4-2018 and No. 900, dated 13-4-2018 respectively :

(i) New Minor heads '507-Road and Infrastructure Cess' and '508-Social Welfare Surcharge' under Major Head '0037-Customs' and '507-Road and Infrastructure Cess' below Sub-Major-head '03-Non Shareable Duties' Under Major Head '0038-Union Excise Duties' have been inserted.

(ii) New Sub Heads 'Cess Collection' and 'Deduct Refunds' have been inserted under above Minor Heads. Accordingly, the following Accounting Codes have been allotted by office of the Controller General of Accounts :

S. No.

Minor Head Sub Head Description

Head of Accounts

Major Head Serial Code

SCCD Code

1 2 3 4 5 6 1. 0037-00-507

Road and Infrastructure Cess

01-Cess Collection

0037.00.507.01 00370286 110

02-Deduct Refunds

0037.00.507.02 00370287 111

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GST COUNSELLOR GSTC

2. 0037-00-508 Social Welfare Surcharge

01-Cess Collection

0037.00.508.01 00370288 118

02-Deduct Refunds

0037.00.508.02 00370289 118

3. 0038-03-507 Road and Infrastructure Cess

01-Cess Collection

0038.03.507.01 00380402 111

02-Deduct Refunds

0038.03.507.02 00380403 110

2. All the Trade Association and Chamber of Commerce and Industries, Goods and Services Tax assessees are requested to bring the same to the notice of all their members/constituents for their information and further necessary action.

3. Hindi version will follow.

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Commissioner of Commercial Taxes, Bengaluru Circular No. 16/2017-18, dated 2-3-2018

Sub : Issuance and use of C-Form declaration under the Central Sales Tax Act, 1956 from 1st July, 2017 onwards - Regarding.

Ref: 1. The Taxation Laws (Amendment) Act, 2017 (Central Act No. 18 of 2017), dated 4th

May, 2017.

2. Office Memorandum dated 7th November, 2017 issued by Ministry of Finance,

Department of Revenue, State Tax Division, New Delhi vide F. No. 28011/03/2017-

ST-II.

Representations have been received from different dealers regarding issuance of declarations in Form-C under the Central Sales Tax Act, for interstate purchase of High Speed Diesel for use in Captive power generation, mining activity etc. in view of implementation of Goods and Services Tax with effect from 1st July, 2017.

2. The matter is examined

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GST COUNSELLOR GSTC

(i) The definition of "goods" in Central Sales Tax Act, 1956 under Section 2(d) upto 30th June, 2017 was as under :

(d) "goods" includes all materials, articles, commodities and all other kinds of movable property, but does not include newspapers, actionable claims, stocks, shares and securities'.

3. In view of implementation of GST with effect from 1st July, 2017, definition of "goods" under clause (d) of Section 2 of CST Act, 1956 has been amended vide reference (1) above and the same is reproduced as under :

'(d) "goods" means - (i) petroleum crude; (ii) high speed diesel; (iii) motor spirit (commonly known as petrol); (iv) natural gas; (v) aviation turbine fuel; and (vi) alcoholic liquor for human consumption

4. The Ministry of Finance, Department of Revenue, State Tax Division, New Delhi has issued a clarification in Office Memorandum dated 7th November, 2017 vide reference (2) above, clarifying " 'Goods' referred to in section 8(3)(b) of the CST Act, 1956 will have the same meaning as defined and amended under section 2(d) of the said Act. However it does not affect the provisions of section 8(3)(b) of the CST Act relating to communication network or mining or generation or distribution of electricity or any other form of power".

5. Further, the goods referred to in section 8(3)(b) of the CST Act are the class or classes of goods specified in the certificate of registration of the registered dealer purchasing the goods as being intended for resale by him or subject to any rules made by the Central Government in this behalf, for use by him in the manufacture or processing of goods for sale or in the telecommunication network or in mining or in the generation or distribution of electricity or any other form of power.

6. In view of the above clarification issued by the Government of India and the

provisions of CST Act, the following instructions are issued :

(i) Form-C declarations are to be issued for the period from 1st July, 2017 onwards only in respect of inter-state purchase of goods enumerated in para (3) above for any of the following purposes :

(a) resale of above six goods;

(b) use in the manufacture or processing of above six goods for sale.

(c) use in the telecommunication network or in mining or in the generation or distribution of electricity or any other form of power.

(ii) This Circular cannot be made use of for legal interpretation of the provisions of law, as it is clarificatory in nature.

For text of Notifications / Circulars / Press Releases, please visit www.gstcounsellor.com

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GST COUNSELLOR GSTC

SERVICE OF DOCUMENTS & NOTICES UNDER GST

The statutory provisions for service of notices etc in certain circumstances are provided in section 169 of the CGST Act, 2017. Methods of Service of Documents Various methods of service of any decision, notice, order, summon or any other communication under the Act or Rules have been provided in section 169, are as follows: (a) By giving or tendering it directly or through a messenger or courier to the addressee or the

taxable person or to his manager or to person duly authorized or an advocate or a tax practitioner holding authority to appear in the proceeding on behalf of the taxpayer or to a person regularly employed by him in connection with the business, or to any adult member of family residing with the taxpayer, or

(b) By registered post or speed post or courier with acknowledgement due, to the person for whom it is intended or his authorised agent, if any at his last known place of business or residence, or

S.No. Legal Maxims Meaning

1. Onus probandi Onus of proof; burden of proof

2. Pari materia Acts should be taken together as forming one system and

as interpreting and enforcing each other

3. Pari passu On an equal footing, with simultaneous progress

4. Pendente lite During litigation

5. Per incuriam A judgment given without reference to precedent

DECODING GST LAW

LET’S LEARN LEGAL MAXIMS

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GST COUNSELLOR GSTC

(c) By sending a communication to his e-mail address, provided at the time of registration or as amended from time to time or

(d) By making it available on common portal, or (e) By publication in a newspaper circulating in the locality of taxpayer or the person to whom

it is issued is last known to have resided, carried on business or personally worked for gain, or

(f) If none of the above is practicable, by affixing it in some conspicuous place on his last known place of business or residence address, or

(g) If such affixing is also not practicable, by affixing a copy thereof on the notice board of the officer who has passed such decision or order or issued such summons or notice.

The meaning of terms such as authorised representative, common portal, tax practitioner etc shall be governed by the definitions provided in GST law or rules, as the case may be. What documents require service Service may be required in relation to any of the following :

(a) Any decision (b) Any order (c)Summons (d) Notice (e) Other communication such as letter of enquiry, notice of hearing, seeking details or information, audit report, recovery notice etc.

These terms have not been defined but shall take their meanings under General Clauses Act. Such communications are required for administration of the tax law under various provisions. However, notice means show cause notice as referred to in section 28(1) of Customs Act, 1962. When deemed to be served Every decision, order, summon, notice or any communication shall be deemed to have been served to the addressee on the date on which it is tendered or published or a copy thereof is affixed in the manner as provided in section 169(1) of the CGST Act, 2017.

Service in case of registered or speed post

Any decision, order, summons, notice or any other communication shall be deemed to be served where such communication is sent by registered post or speed post in terms of section 169 (3). Accordingly, when any such communication is sent by registered post or speed post, it shall be deemed to have been received by the addressee at the expiry of the period normally taken by a registered/speed post letter in transit unless contrary is proved.

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GST COUNSELLOR GSTC

GST GAINS AND PAINS @ ONE YEAR On 1st July 2018, GST in India completed first year of implementation. Goods and Services Tax was launched on the 1st July, 2017 in a majestic ceremony held in the Central Hall of Parliament on the midnight of 30th June, 2017. The first year has been remarkable both for the sheer variety of challenges that implementation of GST has thrown up and for the willingness and ability of policy makers and tax administrators to rise up to these challenges and respond befittingly. But more importantly, the first year of GST has been an example to the world of the readiness of the Indian taxpayer to be a partner in this unprecedented reform of Indian taxation. Accordingly, it was decided by CBIC that the 1st of July, 2018 shall be commemorated as “GST Day”. Before implementation of Goods and Service Tax (GST), Indian taxation system was a mix of central, state and local area levies. In the constitutional scheme, taxation power on goods was with Central Government but it was limited up to the stage of manufacture and production while States had power to tax sale and purchase of goods. Centre had the exclusive power to tax services. This sort of division of taxing powers created a grey zone which led to legal disputes since determination of what constitutes a goods or service became increasingly difficult. GST collection in last month of first year of GST i.e. June, 2018 is reported to be Rs. 95,610 crore. The breakup of Rs. 95,610 crore is CGST Rs. 15968 crore, SGST Rs. 22,021 crore, IGST Rs. 49498 crore (out of which Rs. 24,493 crore from imports) and compensation cess Rs. 8,122 crore. Thus, in first quarter of current fiscal 2018-19, total GST collection is Rs. 2.93 lakh crore. This brings the total GST collection during first year of GST in India to Rs. 10.34 lakh crore. The tax payer’s base has also expanded in GST regime to over 70 lakh as against 64 lakh is 2016-17 whereas average tax collection has gone up from Rs. 81 lakh crore to Rs. 91.38 lakh crore in GST regime. GST has improved tax revenue as well as tax compliance. Not only this, GST has been helpful in increasing income tax returns and direct tax revenue as well. Collection of GST revenue w.e.f 01.07.2017-30.06.2018

Tax for the Month Revenue (crores) July, 2017 Rs. 93,590/- August, 2017 Rs 93,029/- September, 2017 Rs 95,132/- October, 2017 Rs 85,931/- November, 2017 Rs 83,716/-

GOODS AND SERVICES TAX UNDERSTANDING

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GST COUNSELLOR GSTC

December,2017 Rs 88,929/- January,2018 Rs 88,047/- Febuary,2018 Rs 89,264/- March, 2018 Rs.1,03,000/- April, 2018 Rs. 94,016/- May, 2018 Rs. 95,610/- June, 2018 Collection figures NA as not due Journey in numbers so far Number of Taxes (CGST/IGST/SGST/UTGST) 4 Number of cess 1 New registration approved 47,94,828 Number of migrated taxpayers 63,76,767 Number of notifications issued 334 Number of circulars issued 53 Number of press release issued 170 Number of GST Council meeting 27 Number of returns filed till date 12 crores Number of Invoices processed 380 crores Number of payment transactions 4.03 crores Despite all good features of GST, India GST suffers from many infirmities viz, number of returns and frequency of filing such returns, more tax slabs than desirable, distortions in tax rate via compensation cess, one nation - one tax could not actually happen, fragile and weak GST network and so on…… the list could be long. If we analyze the inflation, though there is rise in general inflation in the country during GST regime, it cannot be solely attributed to GST. It is difficult to establish that GST has led to inflation so much so that all the three cases of anti-profiteering adjudicated so far have gone in favour of taxpayers. No doubt troubles are there, it is hoped that with the concerted efforts of Government and honest feed back by the trade, industry and other stake holders, GST can be expected to evolve as a efficient tax system in future. In the give set of Circumstances, GST will continue to be simplified, rationalized and improved upon. After one year now, simplification of GST returns is being worked out and it is hoped that by this year end, we may have simplified as well as single GST return forms. Also, Government is expected to make change in the GST law which are essential for tax payer’s facilitation. High tax on items which do not yield much revenue may be lowered. Presently more of tax is coming from handful of items and bulk of items yield a lower tax revenue. GST slab rates can also come down to three (presently four – 5, 12, 18 and 28 percent). GST Council meeting is expected to meet for 28th time in last one year on 21 July, 2018. While it is expected that GST procedures and implementation concerns are going to be simplified in next one year in the wake up of general elections in few states and Lok Sabha election in May, 2019, GST Council may dwell upon reduction of rates on few items from 28% to 18% and 18% to 12%, reduction in number of tax rate slabs, enlargement of scope of GST so as to include some petroleum products, real estate and ease of filing returns including simplification for composition dealers etc.

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GST COUNSELLOR GSTC

GST HUMOUR!!

Goods & Service Tax (GST) – whether it is Gabbar Singh Tax / Grand Stupid Thought / Goodnight Sweet dreams Take care, people are not at all concerned now. The latest is - G - God! Please help us. S - Save us from confusions & complexities T - Too much trouble and taxing – on health, peace life too!!

· Demand and recovery under GST – Ramesh Chandra Jena, GSTL, Vol. 13, Part 1, dated 07.06.2018.

· Advance ruling for canteen recovery – Abhay Desai, GSTL, Vol. 13, Part 1, dated 07.06.2018.

· Recent Advance Rulings in GST (Part-3) – Dr. Sanjiv Agarwal, www.taxmanagementindia.com, dated 05.07.2018.

· GST gains and pains @ one year – Dr. Sanjiv Agarwal, Business Advisor, dated 10.07.2018.

GST LITERATURE

PROGRAMME : Workshop on GST

DATE : 15th July, 2018

VENUE : Little Angels School, Patel Nagar, Sonepat-13100

ORGANISED BY : Sonepat Branch of NIRC of ICAI

CONTACT DETAILS : 0130-2237070, sonepat@icai.org

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GST COUNSELLOR GSTC

QUOTE OF THE FORTNIGHT!!

Relation with nice people is like ice cubes.

You break, crush, squeeze, beat or grind them, still they chill your life.

GST CAPSULE!!

“I myself used to use the word distruptive when it came to major reform like GST because it takes time to settle down. But after one year I’m not too sure whether I

can use the word disruptive for GST reform” -Arun Jaitley

Finance Minister

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GST COUNSELLOR GSTC

NEW TITLE ON GST by

Dr. Sanjiv Agarwal

Title Compendium of Judicial Pronouncements (Relevant under GST Regime)

Author Dr. Sanjiv Agarwal

Publication February, 2018

Publishers Bloomsbury Publishing India Pvt. Ltd.

Price Rs. 1995/-

Pages 1150 +

ANNOUNCEMENTS

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GST COUNSELLOR GSTC

Highlights

· Judicial interpretation of tax laws · Cases focused on indirect taxes and provisions relevant for Goods & Services Tax (GST) · Unique digest of over 3600 Judicial Pronouncements relevant for GST · Covered under 30 Chapters for better comprehension & understanding · Case laws arranged chronologically along with alphabetical index · Gist of relevant statutory provisions of GST laws at beginning of each Chapter

About the Book

A comprehensive digest of judicial pronouncements on indirect taxes relevant to Goods and Services Tax (GST) covering important and landmark case laws, pronouncements of Tribunal, High Courts and Supreme Court of India including foreign cases. One its own kind, this digest has been divided into thirty chapters covering almost entire gamut of GST laws brought into force from 1st July, 2017. A separate chapter exclusively digests most of the judicial pronouncements delivered by various High Courts on Goods & Service Tax so far. The gist or extracts of statutory provisions of CGST Act / UTGST Act/ SGST / IGST Act have also been provided at the beginning of each Chapter to provide the relevant law pertaining to the Chapter and erstwhile provisions, if relevant. Since the principles of interpretation remain the same, the work provides sound and legal basis to understand and interpret the GST laws. The book also contains alphabetical index of case laws digested, besides meaning of important legal maxims generally used.

Key Features

· Interpretations useful to understand GST laws · Covers principles of interpretation of tax laws · Useful interpretation of various terms / phrases / expressions used in tax laws · Multiple citations of cases reported · Special chapter on GST cases reported so far · Relevant and important cases reported upto January, 2018 digested · Meanings of legal maxims

It is hoped that the Book shall be found useful by professionals, tax payers, industry bodies and all other stakeholders in GST. For any GST related interpretation / queries, please send a mail to asandco@gmail.com

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GST COUNSELLOR GSTC

ANNOUNCEMENTS FOR EXCLUSIVE AND IN HOUSE

SEMINAR / WORK SHOP ON

GOODS AND SERVICE TAX (GST) CONDUCTED BY

DR. SANJIV AGARWAL (FCA, FCS) PLEASE CONTACT AT:

asandco@gmail.com ascogst@gmail.com

v IF YOU WISH TO SUBSCRIBE TO THIS NEWSLETTER, SEND A REQUEST TO ascogst@gmail.com