GST Updates for April 2019

gst registration

Reversal of ITC availed  under Composition scheme for suppliers of goods or services or both – Suppliers of goods or services or both upto an aggregate turnover of Rs. 50 lakh, can opt to pay GST @ 6% (3% CGST + 3% SGST) and not collect any tax from the recipient on such supplies. Benefit of ITC is also not available to suppliers taking benefit of this notification (Notification No. 2/2019-Central Tax (Rate)

Also, as per Circular No. 97/16/2019-GST, dated 5-4-2019, a registered person who wishes to opt for benefit of said notification shall file intimation in Form GST CMP-02 by selecting the category of registered person as “Any other supplier eligible for composition levy”. Such person would also be required to furnish a statement in Form GST ITC-03.

Refund of accumulated ITC to merchant exporter clarified: Refund of accumulated input tax credit to merchant exporter where supplies are received by him after availing benefit under Notification No. 40/2017-Central Tax (Rate) or 41/2017-Integrated Tax (Rate) has been clarified by CBIC. As per  Circular No. 94/13/2019-GST, dated 28-3-2019, this refund of accumulated ITC under CGST Rule 89(4B) must be applied under the category ‘any other’ instead of ‘refund of unutilized ITC on account of exports without payment of tax’. Refund claim shall be filed in the Form GST RFD-01A.

Clarification regarding order of utilisation of ITC of IGST to set-off output tax liability – Rule 88A of the Central Goods and Services Tax Rules, 2017 (‘CGST Rules’) was inserted and relaxed the order of setting off IGST credit against CGST and SGST liability (in any order). The CBIC has now clarified that the taxpayers can utilise excess credit of IGST towards payment of CGST or SGST in any sequence and proportion provided that IGST liability is fully discharged first. [Circular No. 98/2019 dated April 23, 2019]

Non-filing of GST Returns to debar generation of e-way bill – Rule 138E of the CGST Rules was introduced on December 31, 2018 to provide that taxpayers who have not furnished their GST returns for consecutive two tax periods, will not be able to generate e-way bill. This provision was not notified till date and has been made effective from June 21, 2019. Rule 138E allows Commissioner to relax this provision on sufficient causes.

In this context, it is advisable that the taxpayers file their GST returns on time to avoid any obstruction in business due to non-generation of e-way bill.The taxpayers who could not file returns for genuine reasons (including IT issues), should approach their jurisdictional Commissioner for relaxing applicability of this provision. [Refer Notification No. 22/2019 dated April 23, 2019]

Changes in e-way bill portal – To improve operational efficiencies in e-way bill system, following changes have been integrated in the e-way bill portal:

 Auto calculation of route distance: The portal has been designed to auto-compute the distance basis the PIN code of source and destination locations. The user also has an option to enter actual distance, with maximum 10 percent variation of auto calculated distance.

 Single e-way bill for single invoice: Until now, where consignee or transporter originally generated an e-way bill, the consignor had an option to generate e-way bill for the same invoice. This option will no longer be available with consignor.

 Extension of e-way bill can now be sought for goods in transit or in movement. For availing the extension, the taxpayer is required to choose one of the following reasons and add remarks thereon:

  • Natural calamity,
  • Law and order,
  • Transhipment
  • Accident,
  • Others

On selection of the reason, the taxpayer needs to fill details of mode of transportation, location of goods and vehicle details for which the extension is required. Extended date is auto-calculated basis the reason and the distance between location of goods and final destination of goods.

Report on expiry date of e-way bills: Taxpayers can now view list of e-way bills that are about to expire in next four days from the date of view

Transfer of ITC in case of death of sole proprietor – Clarification- Transferee / successor shall be liable to pay any tax, interest or any penalty due from the transferor –  CBIC has clarified that transfer or change in the ownership of business will include transfer or change in the ownership of business due to the death of the sole proprietor. It is also stated that the transferee / successor shall be liable to pay any tax, interest or any penalty due from the transferor in cases of transfer of business due to death of sole proprietor. Circular No. 96/15/2019-GST, dated 28-3-2019 further clarifies that in case of transfer of business on account of death of sole proprietor, the transferee / successor shall file Form GST ITC-02 in respect of the registration which is required to be cancelled on account of death of the sole proprietor, before filing the application for cancellation of such registration by the legal heirs