Tag: Circular and Notifications (GST)

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Exemption to small suppliers of goods from monthly filing and tax by Notification 40/217 dated 13-10-2017

Section 148 of the CGST Act allows the government to notify certain classes of registered persons, and the special procedures to be followed by such persons including those with regard to registration, furnishing of return, payment of tax and administration of such persons.

 

The notification applies to :

  1. Registered person whose aggregate turnover in the preceding financial year did not exceed one crore and fifty lakh rupees

OR

  1. The registered person whose aggregate turnover in the year in which such person has obtained registration is likely to be less than one crore and fifty lakh rupees

AND

who did not opt for the composition levy under section 10 of the said Act

 

 

In pursuance of powers u/s 148, above suppliers have been required to file returns and make payment of tax on prescribed basis. The method of filing and tax payment has however not been prescribed as yet.

 

Note

  1. While the same notification deals both exemption from tax on advance payments and monthly filing and tax payment, the exemption form tax on advance payment is confined to outward supply of goods but exemption from monthly filing of return and tax shall apply to both small suppliers of goods as well as services.

 

  1. Further, turnover for 2016-17 being more than 1.5 crore can not debar, in the opinion of author from monthly filing and tax because the concept of aggregate turnover has been put into operation by GST law only. So, people having higher turnover but who have not yet crossed the 1.5 crore limit might empt to avail the exemption from monthly fling due to language of the notification.

 

  1. Further although composition dealers are not covered but they are already exempted from monthly filing and payment of tax u/s 39(2)
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Exemption to small suppliers of goods from payment of tax on advance received against supply of goods by Notification 40/217 dated 13-10-2017

Section 148 of the CGST Act allows the government to notify certain classes of registered persons, and the special procedures to be followed by such persons including those with regard to registration, furnishing of return, payment of tax and administration of such persons.

 

The notification applies to :

  1. Registered person whose aggregate turnover in the preceding financial year did not exceed one crore and fifty lakh rupees

OR

  1. The registered person whose aggregate turnover in the year in which such person has obtained registration is likely to be less than one crore and fifty lakh rupees

AND

who did not opt for the composition levy under section 10 of the said Act

 

 

In pursuance of powers u/s 148, payment of tax for above class of persons has  been confined to outward supply of goods at the time of supply u/s 12(2)(a) i.e. the date of issue of invoice by the supplier or the last date on which he is required to issue the invoice with respect to the supply.

 

Section 12(2)(b) which declares the date on which the supplier receives the payment with respect to the Supply as time of supply, where date of receipt falls before the date of supply,  has been dispensed for small suppliers.

 

Note:

  1. Hence persons covered by composition levy shall continued to be taxed for advance payment against supply
  2. Further supplier of services shall also pay tax on advance payments .

Where turnover is likely to be lesser but actually exceeds 1.5 crore, whether such person is required to pay tax on advance payments after crossing 1.5 crore ?

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State Tax officers authorized to sanction refunds of jurisdictional registered persons , except refund of integrated tax paid on export of goods by Notification 39/2017 dated 13-10-2017 and NN 11/2017-IGST dated 13-10-2017

Section 54 and 55 allows refund in following cases:

  • Refund of tax paid on zero-rated supplies of goods or services or both
  • Refund of tax paid on inputs or input services used in making such zero-rated supplies made without payment of tax
  • Refund of tax on the supply of goods regarded as deemed exports
  • Refund of unutilized input tax credit, where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies, except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council
  • Refund of tax paid on a supply which is not provided, either wholly or partially, and for which invoice has not been issued, or where a refund voucher has been issued
  • Refund of tax paid under wrong head
  • The tax and interest, if any, or any other amount paid by the applicant, if he had not passed on the incidence of such tax and interest to any other person
  • Refund of tax paid on supplies received by UN organizations

 

 

However the above notifications has specifically barred the State tax  officers to sanction the refunds covered by Rule 96 which covers the refund of integrated tax paid on export of goods.

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Exemption from registration to Casual Taxable Person till threshold limit for supply handicraft goods expanded by Notification 38/2017 dtd 13-06-2017 and NN 9/2017-IGST dtd 13-10-2017

 

Exemption to Casual taxable person (CTP) from registration u/s 23(2) was allowed for supply of 28 items of handicraft goods till threshold exemption was allowed by Notification 32/2017 dated 15-9-2017 both for inter state and intra state transactions. These handicraft items as per said notifications are exempt when made  by the craftsmen predominantly by hand even though some machinery may also be used in the process.  Further  availability of PAN and generation of e-way bill was made compulsory,  The list of items covered by above notifications has been expanded for certain following further items:

 

  1. In Sl. No. 9, textile handloom products were exempt. Now Handmade shawls, stoles and scarves have been added.
  2. Further 5 items have been added to exemption list of registration for CTP

 

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Construction service to Government and Governmental Authorities for non business, educational, clinical,residential purpose: tax rate reduced to 12% by Notification 24/2017 dtd 21-09-2017

GST Council in its 21st meeting at Hyderabad had recommended reduction of tax rate from 18% to 12% for

Services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of –

(a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession;

(b) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or(iii) an art or cultural establishment; or

(c) a residential complex predominantly meant for self-use or the use of their employees or other persons specified in paragraph 3 of the Schedule III of the CGST Act, 2017 (namely, MPs/Members of State Legislatures, Panchayats, Municipalities, other local authorities, persons holding constitutional posts, chairperson/member/director in a body established by Central Government, State Government or local authorities etc.)

The above reduction in rate has now been notified by Notification dated 21-09-2017.

 

Construction service provided

Ø to above contractees for historical monuments, canal, dam, bridges, other irrigation work, pipeline, conduit or plant for water supply or treatment or serwerage treatment or disposal

Ø for road, bridge, tunnel, or terminal for road transportation for use by general public

Ø Under projects of JNNURM, Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana

Ø Pollution Control or Effluent treatment plant, not located in factory

Ø a structure meant for funeral, burial or cremation of deceased

Ø railways

Ø single residential unit

Ø low-cost houses up to a carpet area of 60 square metres per house

Ø post-harvest storage infrastructure for agricultural produce including a cold storage

Ø mechanised food grain handling system, machinery or equipment for units processing agricultural produce as food stuff excluding alcoholic beverages.

 

Had already been reduced to 12% by Notification dated 22-08-2017

 

 

What is Governmental Authority ?

 

Governmental Authority has meaning under explanation to section 2(16) of IGST as per Notification 12/2017.

 

As per section 2(16), Explanation .––For the purposes of this clause, the expression “governmental authority” means an authority or a board or any other body,––

(i)                set up by an Act of Parliament or a State Legislature; or

(ii)              established by any Government,

 

with ninety per cent. or more participation by way of equity or control, to carry out any function entrusted to a municipality under article 243W of the Constitution

 

Following Function of Municipality are provided under Article 243W of Constitution read with Schedule XII to the Constitution:

  1. Urban planning including town planning.
  2. Regulation of land-use and construction of buildings.
  3. Planning for economic and social development.
  4. Roads and bridges.
  5. Water supply for domestic, industrial and commercial purposes.
  6. Public health, sanitation conservancy and solid waste management.
  7. Fire services.
  8. Urban forestry, protection of the environment and promotion of ecological aspects.
  9. Safeguarding the interests of weaker sections of society, including the handicapped and mentally retarded.
  10. Slum improvement and upgradation.
  11. Urban poverty alleviation.
  12. Provision of urban amenities and facilities such as parks, gardens, playgrounds.
  13. Promotion of cultural, educational and aesthetic aspects.
  14. Burials and burial grounds; cremations, cremation grounds; and electric crematoriums.
  15. Cattle pounds; prevention of cruelty to animals.
  16. Vital statistics including registration of births and deaths.
  17. Public amenities including street lighting, parking lots, bus stops and public conveniences.
  18. Regulation of slaughter houses and tanneries

 

Construction service to Institution not performing above functions shall continue to be taxed @ 18%.