37th Meeting of the GST Council, Goa Notifications

income tax return filing in Lucknow

The GST Council, in its 37th meeting held today at Goa, recommended the following: 1. Relaxation in filing of annual returns for MSMEs for FY 2017-18 and FY 2018-19 as under: a. waiver of the requirement of filing FORM GSTR-9A for Composition Taxpayers for the said tax periods; and b. filing of FORM GSTR-9 for those taxpayers who (are required to file the said return but) have aggregate turnover up to Rs. 2 crores made optional for the said tax periods. 2. A Committee of Officers to be constituted to examine the simplification of Forms for Annual Return and reconciliation statement. 3. Extension of last date for filing of appeals against orders of Appellate Authority before the GST Appellate Tribunal as the Appellate Tribunals are yet not functional. 4. In order to nudge taxpayers to timely file their statement of outward supplies, imposition of restrictions on availment of input tax credit by the recipients in cases where details of outward supplies are not furnished by the suppliers in the statement under section 37 of the CGST Act, 2017. 5. New return system now to be introduced from April, 2020 (earlier proposed from October, 2019), in order to give ample opportunity to taxpayers as well as the system to adapt and accordingly specifying the due date for furnishing of return in FORM GSTR-3B and details of outward supplies in FORM GSTR-1 for the period October, 2019 – March, 2020. 6. Issuance of circulars for uniformity in application of law across all jurisdictions: a. procedure to claim refund in FORM GST RFD-01A subsequent to favourable order in appeal or any other forum; b. eligibility to file a refund application in FORM GST RFD-01A for a period and category under which a NIL refund application has already been filed; and c. clarification regarding supply of Information Technology enabled Services (ITeS services) (in supersession of Circular No. 107/26/2019-GST dated 18.07.2019) being made on own account or as intermediary. Page 2 of 2 7. Rescinding of Circular No.105/24/2019-GST dated 28.06.2019, ab-initio, which was issued in respect of post-sales discount. 8. Suitable amendments in CGST Act, UTGST Act, and the corresponding SGST Acts in view of creation of UTs of Jammu & Kashmir and Ladakh. 9. Integrated refund system with disbursal by single authority to be introduced from 24th September, 2019. 10. In principle decision to link Aadhar with registration of taxpayers under GST and examine the possibility of making Aadhar mandatory for claiming refunds. 11. In order to tackle the menace of fake invoices and fraudulent refunds, in principle decision to prescribe reasonable restrictions on passing of credit by risky taxpayers including risky new taxpayers.

PRESS RELEASE ON GST RATE ON GOODS AS RECOMMENDED BY THE GST COUNCIL IN ITS 37th MEETING HELD ON 20.09.2019 GST Council in the 37th meeting held on 20.09.2019 at Goa took the following decisions in respect to rates relating to goods. I. GST rates reduction, – a) 18% to 12% on parts of Slide Fasteners b) 18% to 5% on Marine Fuel 0.5% (FO) c) 12% to 5% on Wet Grinders (consisting stone as a grinder) d) 5% to Nil on:- (i) Dried tamarind (ii) Plates and cups made up of leaves/ flowers/bark e) 3% to 0.25% on cut and polished semi- precious stones f) Applicable rate to 5% on specified goods for petroleum operations undertaken under Hydrocarbon Exploration Licensing Policy (HELP) g) Exemptions from GST/IGST on:- (i) imports of specified defence goods not being manufactured indigenously (upto 2024) (ii) supply of goods and services to FIFA and other specified persons for organizing the Under-17 Women’s Football World Cup in India. (iii) supply of goods and services to Food and Agriculture Organisation (FAO) for specified projects in India. II. GST rates have been recommended to be increased from, – a) 5% to 12% on goods, falling under chapter 86 of tariff like railway wagons, coaches, rolling stock (without refund of accumulated ITC). This is to address the concern of ITC accumulation with suppliers of these goods. b) 18% to 28% +12% compensation cess on caffeinated Beverages III. Measures for Export Promotion a) Exemption from GST/IGST:- (i) at the time of import on Silver/Platinum by specified nominated agencies (ii) supply of Silver/Platinum by specified nominated agency to exporters for exports of Jewellery, b) Inclusion of Diamond India Limited (DIL) in the list of nominated agencies eligible for IGST exemption on imports of Gold/ Silver/Platinum so as to supply at Nil GST to Jewellery exporters. IV. A uniform GST rate of 12% on Polypropylene/Polyethylene Woven and Non- Woven Bags and sacks, whether or not laminated, of a kind used for packing of goods (from present rates of 5%/12%/18%) V. GST concession in certain cases for specific period: – a) Exemption to Fishmeal for the period 01.07.17 to 30.09.19. There were doubts as regards taxability of fishmeal in view of the interpretational issues. However, any tax collected for this period shall be required to be deposited. b) 12% GST during the period 1.07.2017 to 31.12.2018, on pulley, wheels and other parts (falling under heading 8483) and used as parts of agricultural machinery. VI. Passenger vehicles of engine capacity 1500 cc in case of diesel, 1200 cc in case of petrol and length not exceeding 4000mm designed for carrying upto 9 persons attract compensation cess of 1% for petrol and 3% for diesel vehicle. Council recommended same compensation cess rate for vehicles having these specifications (length and engine capacity) but designed for carrying more than 10 persons but upto 13 persons. (Presently these vehicles attract compensation cess at the rate of 15%) VII. Other miscellaneous Changes:  Aerated drink manufacturers shall be excluded from composition scheme.  Option to pay GST at the rate of 18% on transaction value at the time of disposal of specified goods for petroleum operations (on which concessional GST rate of 5% was paid at the time of original supply) provided that the goods are certified by Directorate General of Hydrocarbons (DGH) as non-serviceable.  Restriction on refund of compensation cess on tobacco products (in case of inverted duty structure)  Prescribing modalities for allowing concessions on spare parts imported temporarily by foreign airlines for repair of their aircraft, while in India in transit in terms of the Chicago Convention on Civil Aviation.  Certain other changes of technical nature for the sake of clarity in application of notification. VIII. Clarifications as regards applicability of GST rate in respect of certain goods recommended by GST Council which inter-alia includes: a) Mere heating of leguminous vegetables (gram/lentil) for removing moisture, or to soften and puff it or removing the skin, and not subjecting to any other processing or addition of any other ingredients (salt, oil etc.) would be classified under HS code 0713. b) All “mechanical sprayers” falling under HS Code 8424 would attract 12% GST. c) Parts like Solar Evacuation tubes for solar power based devices like solar water heater, solar steam, generation systems, would be eligible to 5% GST rate. d) Exclusive parts and accessories suitable for use solely or principally with a medical device (falling under headings 9018, 9019, 9021 or 9022) would fall in respective headings and attract GST at the concessional rate of 12%. e) Almond milk is classifiable under HS code 22029990 and attracts GST rate of 18%. f) Imported stores for Navy would be entitled to exemption from IGST. The rate changes shall be made effective with effect from 1st October, 2019.

PRESS RELEASE ON GST RATE ON SERVICES AS RECOMMENDED BY THE GST COUNCIL IN ITS 37th MEETING HELD ON 20th SEPTEMBER, 2019 GST Council in the 37th meeting held on 20th September, 2019 at Goa took following decisions relating to changes in GST rates, ITC eligibility criteria, exemptions and clarifications on connected issues. (A) EXEMPTIONS / CHANGES IN GST RATES / ITC ELIGIBILITY CRITERIA: Rate reduction sector wise: Hospitality and tourism: 1. To reduce the rate of GST on hotel accommodation service as below: – Transaction Value per Unit (Rs) per day GST Rs 1000 and less Nil Rs 1001 to Rs 7500 12% Rs 7501 and more 18% 2. To reduce rate of GST on outdoor catering services other than in premises having daily tariff of unit of accommodation of Rs 7501 from present 18% with ITC to 5% without ITC. The rate shall be mandatory for all kinds of catering. Catering in premises with daily tariff of unit of accommodation is Rs 7501 and above shall remain at 18% with ITC. Job work service: 3. To reduce rate of GST from 5% to 1.5% on supply of job work services in relation to diamonds. 4. To reduce rate of GST from 18% to 12% on supply of machine job work such as in engineering industry, except supply of job work in relation to bus body building which would remain at 18%. Exemption sector wise: Warehousing: 5. To exempt prospectively services by way of storage or warehousing of cereals, pulses, fruits, nuts and vegetables, spices, copra, sugarcane, jaggery, raw vegetable fibres such as cotton, flax, jute etc., indigo, unmanufactured tobacco, betel leaves, tendu leaves, rice, coffee and tea. Transportation: 6. To increase the validity of conditional exemption of GST on export freight by air or sea by another year, i.e. till 30.09.2020. 2 Insurance: 7. To exempt “BANGLA SHASYA BIMA” (BSB) crop insurance scheme of West Bengal Government. 8. To exempt services of life insurance business provided or agreed to be provided by the Central Armed Paramilitary Forces (under Ministry of Home Affairs) Group Insurance Funds to their members under the respective Group Insurance Schemes of these Central Armed Paramilitary forces. Export promotion: 9. To exempt services provided by an intermediary to a supplier of goods or recipient of goods when both the supplier and recipient are located outside the taxable territory. 10. To issue a notification under Section 13(13) of IGST Act notifying the place of supply of specified R&D services (such as Integrated discovery and development, Evaluation of the efficacy of new chemical/ biological entities in animal models of disease, Evaluation of biological activity of novel chemical/ biological entities in in-vitro assays, Drug metabolism and pharmacokinetics of new chemical entities, Safety Assessment/ Toxicology, Stability Studies, Bio Equivalence and Bio Availability Studies, Clinical trials, Bio analytical studies) provided by Indian pharma companies to foreign service recipients, as the place of effective use and enjoyment of a service i.e. location of the service recipient. 11. To clarify that the place of supply of chip design software R&D services provided by Indian companies to foreign clients by using sample test kits in India is the location of the service recipient and section 13(3)(a) of IGST Act, 2017 is not applicable for determining the place of supply in such cases. Miscellaneous 12. To allow the registered authors an option to pay GST on royalty charged from publishers under forward charge and observe regular GST compliance. 13. To notify grant of liquor licence by State Governments against payment of license fee as a “no supply” to remove implementational ambiguity on the subject. 14. To exempt services related to FIFA Under-17 Women’s World Cup 2020 similar to existing exemption given to FIFA U17 World Cup 2017. (B) RATIONALIZATION/ TRADE FACILITATION MEASURES: 15. To allow payment of GST on securities lending service under reverse charge mechanism (RCM) at the merit rate of 18% and to clarify that GST on securities lending service for period prior to RCM period shall be paid on forward charge basis. IGST shall be payable on supply of these services and in cases where CGST/SGST/UTGST have been paid, such taxpayers will not be required to pay tax again. 3 16. To allow RCM to suppliers paying GST @ 5% on renting of vehicles, from registered person other than body corporate (LLP, proprietorship) when services provided to body corporate entities. (C) CLARIFICATIONS: 17. To clarify the scope of the entry ‘services of exploration, mining or drilling of petroleum crude or natural gas or both”. 18. To clarify taxability of Passenger Service Fee (PSF) and User Development Fee (UDF) levied by airport operators. Note: It is proposed to issue notifications giving effect to these recommendations of the Council on 1 st October, 2019. [This note presents the decision of the GST Council in simple language for easy understanding which would be given effect to through Gazette notifications/ circulars which shall have force of law.]

Sabka Vishwas (Legacy Dispute Resolution) Scheme-2019

gst registration in Lucknow

Sabka Vishwas (Legacy Dispute Resolution) Scheme-2019: Golden Opportunity to Wipe off Old Tax Dues

There is a flood of Offers/Sale/Discounts going on in the Market. So why only the Private Sector should have all the fun. Government has also come out with the “Indirect Taxes Sale” providing up to 70% Discount.

The Finance Minister in her maiden budget introduced Sabka Vishwas (Legacy Dispute Resolution) 2019 (LDRS) in order to curb the pending litigations under the erstwhile Indirect Tax Enactments. The scheme provides relief from tax, penalty, interest, immunity from prosecution, etc., on account of pending disputes.

Effective Date of LDRS: The effective date will be notified in the official Gazette.

Indirect Taxes Enactments covered under LDRS: Scheme covers 29 enactments  including Excise , Service Tax, Sugar Cess, Salt Cess, tobacco cess  enactments etc.

Eligibility conditions to avail benefit under LDRS:

All persons are eligible to opt for the scheme. Except the following:

> who have filed an appeal before the appellate forum and such appeal has been heard finally on or before the 30th day of June, 2019

> who have been convicted for any offence punishable for the matter for which he intends to file a declaration

> who have been issued a show cause notice and the final hearing has taken place on or before the 30th day of  June, 2019

> who have been issued a show cause notice for an erroneous refund or refund

> who have been subjected to an enquiry or investigation or audit and the amount of duty involved in the said enquiry or investigation or audit has not been quantified on or before the 30th day of June, 2019

> a person making a voluntary disclosure after being subjected to any enquiry or investigation or audit; or

> a person making a voluntary disclosure after having filed a return wherein he has indicated an amount of duty as payable, but has not paid it

> who have filed an application in the Settlement Commission for settlement of a case

> persons seeking to make declarations with respect to excisable goods set forth in the Fourth Schedule to the Central Excise Act, 1944.

Quantum of Relief available under LDRS:

The relief available to a declarant under this Scheme shall be calculated as follows:

S. N. Situation Relief Available
1 where the tax dues are relatable to a show cause notice or one or more appeals arising out of such notice which is pending as on the 30th day of June, 2019       Tax Dues up to 50 Lakhs  : 70 % Tax Dues more than 50 lakhs   : 50 %  
2 where the tax dues are relatable to a show cause notice for late fee or penalty only, and the amount of duty in the said notice has been paid or is nil : Entire amount of late fee or penalty
3 where the tax dues are relatable to an amount in arrears : Duty amount up to 50 laksh : 60% Duty Amount more than 50 lakhs : 40%  
4 where the tax dues are linked to an enquiry, investigation or audit against the declarant and the amount quantified on or before the 30th day of June, 2019 is: Tax Dues up to 50 Lakhs  : 70 % Tax Dues more than 50 lakhs : 50 %  
5 where the tax dues are payable on account of a voluntary disclosure by the declarant, then No Relief
     

Please Note that any amount paid as pre-deposit at any stage of appellate proceedings under the indirect tax enactment or as deposit during enquiry, investigation or audit, shall be deducted when issuing the statement indicating the amount payable by the declarant. However if Pre-deposit or deposit amount exceeds the amount payable under declaration, the declarant shall not be entitled to any refund.

Meaning of “Tax Dues” under LDRS

S. N. Situation Tax Dues
1. Where a single appeal arising out of an order is pending as on the 30th day of June, 2019 before the appellate forum The total amount of duty which is being disputed in the said appeal  
2. Where more than one appeal arising out of an order, one by the declarant and the other being a departmental appeal, which are pending as on the 30th day of June, 2019 before the appellate forum The sum of the amount of duty which is being disputed by the declarant in his appeal and the amount of duty being disputed in the departmental appeal  
3 Where a show cause notice under any of the indirect tax enactment has been received by the declarant on or before the 30th day of June, 2019 The amount of duty stated to be payable by the declarant in the said notice
4   Where an enquiry or investigation or audit is pending against the declarant    The amount of duty payable under any of the indirect tax enactment which has been quantified on or before the 30th day of June, 2019
  5 Where the amount has been voluntarily disclosed by the declarant The total amount of duty stated in the declaration
6 Where an amount in arrears relating to the declarant is due                The amount in arrears

Whether any interest or penalty is payable?

If a Declarant opts for this scheme he is not required to pay any amount towards interest and penalty.

 How to make payment of liability under LDRS Scheme?

Amount payable under LDRS cannot be paid by utilizing input tax credit account under the indirect tax enactment or any other Act. The payment is to be discharged in cash only.

 Whether tax liability paid under LDRS Scheme can be claimed as ITC?

No. The tax discharged under LDRS cannot be claimed as ITC.

 Procedure for filing declaration under LDRS Scheme:

Step 1: Submission of declaration electronically in prescribed manner

Step 2: Designated Committee (DC) to verify the correctness of the declaration, except in case of voluntary disclosure

Step 3: a) Declared dues accepted by Designated Committee – DC shall issue statement of amount payable electronically within 60 days from date of declaration

b) In case amount assessed by DC is higher than the declaration amount – DC shall issueestimate of amount payable electronically within 30 days from the date of declaration and the declarant shall be afforded an opportunity of being heard before issue of final statement

Step 4: Declarant will have to pay the amount electronically within 30 days from the date of issue of such statement.

Step 5: DC shall issue a discharge certificate in electronic form, within 30 days of said payment and submission of proof of withdrawal of appeal, Discharge Certificate shall be conclusive to the matter and time period.

Any appeal or reference or a reply to the show cause notice against any order or notice giving rise to the tax dues, before the appellate forum, other than the Supreme Court or the High Court shall be deemed to be withdrawn.

In case of any writ petition or appeal or reference before the High Court or Supreme Court, the declarant shall file an application for withdrawal.

 Implication of issue of Discharge Certificate

Issuance of discharge certificate with respect to the amount payable, shall be conclusive as to the matter and time period stated therein, and;

•The declarant shall not be liable to pay any further duty, interest or penalty with respect to the matter and time period covered in the declaration

•The declarant shall not be prosecuted under the indirect tax enactment with respect to the matter and time period covered in the declaration

•No matter and time period covered by the declaration shall be reopened in any other indirect enactment

 Concluding Remarks:

This is more liberal scheme compared to previous Voluntary Compliance Encouragement Scheme (VCES) scheme.  (VCES) offered waiver of interest and penalty only, whereas LDRS not only provides for waiver of Interest and Penalty but waiver of Tax dues also. So, this is the golden opportunity for those who wants to get rid of litigation and pending tax liability.

Though the scheme has been announced but there are many doubts which we expect will be clarified once the rules and FAQs are also issued.

This amnesty scheme once again enhanced the “Vishwas” of Dishonest / Non-compliant assesses fully justifying its Title.

Disclaimer:

The contents of this article are meant for information purpose only. Readers are advised to refer the full text of scheme and consult their legal advisors for better understanding.

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