Amendment in GST Act 2017

Recent Amendments To The GST Regime

The effective rate of GST for dealers opting for composition scheme revised

The effective rate of GST for manufacturers and traders who have opted for composition scheme under Section 10 of the CGST Act, 2017 has been revised vide Notification No. 1/2018- Central Tax with effect from1 January 2018. The revised rates are:

Dealers	Revised provisions	Earlier provisions
Manufacturers	1% (0.5% CGST and 0.5% SGST) of the turnover	2% (1% CGST and 1% SGST) of the turnover
Traders	1% (0.5% CGST and 0.5% SGST) of the turnover of taxable supplies of goods	1 % (0.5% CGST and 0.5% SGST) of the turnover

Implementing a nationwide e-Way Bill system

The Central Board of Excise and Customs (CBEC) vide notification no 74/2017-Central Tax has decided to implement a nationwide e-Way Bill system for the interstate movement of goods from 1 February 2018. The nationwide e-Way Bill system would be rolled out in two phases:
Inter-state movement

• On a trial basis latest by 16 January 2018, wherein, traders and transporters can use the system on a voluntary basis.
• Compulsorily from 1 February 2018.

Intra-state movement

• The date of implementation of e-Way Bills for intra-state movement of goods has been left to the discretion of the respective states.
• However, all states will have to implement it latest by 1 June 2018.

Extension in due dates of GSTR 1 and other returns

The due date of GSTR 1 for the monthly and quarterly dealers and various other forms has been extended. The revised dates are:

Form No. and period	Revised due date	Earlier Due Date
GSTR 1 - July 2017 (Monthly)	10 January 2018	31 December 2017
GSTR 1 - August 2017(Monthly)	10 January 2018	31 December 2017
GSTR 1 - September 2017(Monthly)	10 January 2018	31 December 2017
GSTR 1 - October 2017(Monthly)	10 January 2018	31 December 2017
GSTR 1 - November 2017(Monthly)	10 January 2018	10 January 2018
GSTR 1 - July to September 2017 (Quarterly)	10 January 2018	31 December 2017
FORM GSTR - 5A - July to December (Monthly)	31 January 2018	15 December 2017
FORM GSTR - 5 - July to December (Monthly)	31 January 2018	11 December 2017
FORM GST ITC - 01 - July to November (Monthly)	31 January 2018	30 November 2017
FORM GST CMP – 03	31 January 2018	30 November 2017

Updates on GST online portal

• The functionality for filing TRAN-1 has been removed from the GST Portal.

• Offline tool for transitional form TRAN-2 has been made available on the GST Portal.

• A new functionality to track return status has been introduced on the GST Portal.

• Facility to give details of supplies made to merchant exporters at the rate of 0.1% in all returns has been introduced on the GST Portal.

• A functionality to declare transfer of Input Tax Credit (ITC) in case of transfer, mergers, amalgamation or transfer of business through FORM ITC GST 02 has been made available on the GST portal.
  
  Impact of Goods and Services Tax on Exports
  
  The Parliamentary standing committee has presented the 139th report on the impact of GST on exports before the Rajya Sabha and Lok Sabha. The report has highlighted the dilemma exporters are facing under the GST regime. Also, appropriate suggestions have been proposed to solve the issues. The tabulated version of issues discussed and suggestions offered are:

Issues	Proposed suggestions
Refund Mechanism The refund procedure is tardy and cumbersome. The refund applications are rejected on the slightest pretext. Granting of refunds for GST paid from July 2017 has been started from the month of October 2017. The time lag is huge and therefore exporters are facing working capital blockage.	Formal mechanism for redressal of exporters A dedicated office/unit should be established to address the issues faced by exporters. Such a dedicated office must act as a single window for grievance redressal.
Duty Drawback (DBK) and Rebate of State Levies (RoSL) scheme Post GST, DBK and RoSL rates are low and unrealistic. The scheme does not cover credit for all taxes.	Extend the pre-GST DBK rate till 30 June 2018 and work on the revised DBK rates. Encompass all taxes (GST/IGST and embedded/blocked tax) within the ambit of DBK.
Duty Credit scrips (DCS) DCS cannot be used for the payment of GST on domestic or export/imports of goods and services.	DCS should be permitted for the payment of GST in domestic procurements and the payment of IGST on exports and imports of goods and services.
Reverse Charge Mechanism	Reverse Charge Mechanism provisions should not apply to procurements made in relation to export activities.
The committee is of the view that no IGST should be levied on the following: High sea sales. Job work for exports. Export freight through air, sea and railway. Transactions between the Head office and its branches. Place of supply for intermediary services (as specified under Section 13(8) of the IGST Act, 2017) is location of supplier of services. The committee recommends that the same should be considered as per Section 13(2) i.e. location of recipient of services, so that it is qualified as exports.

In a nutshell, the committee feels that if the taxes paid on inputs used for exports are going to be eventually refunded, then it is an unnecessary procedure of collecting the taxes in the first place. It has been the case that it is easy to pay the tax, but extremely difficult to get a refund.

Clarification for refunds of cess on goods to be exported, changes in the enabling provisions for reverse charge mechanism (RCM) and composition scheme and returns filing are part of about 35 amendments being finalised in Goods and Services Tax (GST)-related laws. The government is likely to amend the GST laws to introduce enabling provision of bringing in any transaction under RCM, with an aim to extend it first for the composition scheme, government officials said.

At present, the Central GST (CGST) Act defines RCM as the provision where the registered recipient of goods and/or services is liable to pay GST instead of the unregistered supplier. “Now, the definition will be modified to enable it for registered persons also under GST,” a senior official said, adding that this would enable inclusion of composition scheme under the RCM mechanism. The liability to pay tax on reverse charge basis was deferred till June 30 by the GST Council.

The final draft for amendments will be introduced in the next GST Council meeting, following which it would need to be cleared by Union Cabinet before its introduction in the Monsoon Session of Parliament, another senior government official said. One of the amendments is related to the GST (Compensation to States) Act, 2017 to provide more clarity for refunds of cess to manufacturers for goods to be exported. Explaining the proposed change, an official said: “The amendment will bring in more clarity. Say, an automobile manufacturer is selling the car to an exporter, he would have paid cess on it. But, since it is meant to be exported, cess would need to be refunded. So, certain tweaking of the law is required…”

The other proposed amendments for the composition scheme relate to inclusion of supply of services by composition taxpayer up to Rs 5 lakh per year and increase in annual turnover eligibility to Rs 2 crore from Rs 1 crore, after which the eligibility will be increased to Rs 1.5 crore per annum, as approved by the GST Council last year.

Also, amendments would be made to enable taxation of renting of immovable property by government or local authority to a registered person under RCM while renting of immovable property by government or local authority to unregistered person shall continue under forward charge, officials said.