In view of the various representations received from the industry for simpler GST procedures and rationalization of rates, several crucial decisions were announced in the 31st and the 32nd GST Council Meetings to bring relief to the taxpayers. The key announcements included the further extension of the due date of filing of the GST annual return (GSTR-9) and reconciliation statement (GSTR-9C), rationalization of rates, higher registration thresholds and clarifications regarding refund related issues that are being faced by the taxpayers.
Top Trends
- Extension of GSTR-9 (Annual Return) and GSTR-9C (Reconciliation Statement) of the financial year 2017-18 to 30 June 2019.
- Simplified GST returns will be rolled out on a trial basis from 1 April 2019 and mandatorily from 1 July 2019.
- The GSTN to provide the facility to electronically upload the supporting documents in relation to a claim for refund in GST RFD-01A, thereby eliminating the need for physical submission at the jurisdictional offices.
- Taxpayers who have not furnished the GST returns for two consecutive tax periods would not be allowed to generate E-way bills.
- The time limit for availing Input Tax Credit (ITC) for invoices pertaining to the FY 2017-18 has been extended to the due date of filing GSTR-3B of March 2019.
- States have the option to implement a higher GST registration threshold limit of INR 4 million for a supplier of goods.
Judicial Pronouncements
Issue |
Ruling |
SKP Comments |
Whether the supply of photography services by a company
registered in India to its holding company that is situated outside
India qualify as 'export of services' under the IGST Act,
2017 |
Segoma Ltd., based in Israel, was the holding company of the
applicant. Segoma Ltd., in turn, was a subsidiary of R2Net based in
the United States of America.
The AAR held that to qualify under Section 13(3) (a) of the IGST
Act, recipient of service has to make diamonds physically available
on direct or indirect directions to the service provider and it
does not matter who owned the goods. Thus, the place of supply in
accordance with the said section would be the location where the
services are actually performed, i.e., India. |
On a plain reading of the CGST Act, it appears that the AAR does
not have the jurisdiction to decide on the issues involving
determination of the place of supply. In view of this, it would be
interesting to see whether the applicant can be bound by this
ruling. |
Whether toll taxes reimbursed by the client are chargeable to
GST? |
The Applicant was a provider of security services to the bank
where it would transport cash/coins/bullions in specially built
vehicles or customized cash vans. In the course of rendering
services, it would incur toll charges, which were later reimbursed
by the clients. |
One of the conditions in Rule 33 is that the pure agent should not use the services in its interest. The AAR held that the toll was charged for providing the service by way of access to a road or bridge and the applicant enjoyed these services. The decision of the AAR appears to be in line with the general understanding in the industry and the conditions to qualify as pure agent mentioned in the valuation rules. |
Whether the activities performed by the employees at the
corporate office (CO) in the course of or in relation to
employment, such as accounting, other administrative support and IT
system maintenance for the units located in the other states as
well shall be treated as supply, as per Entry 2 of Schedule I of
the CGST Act or it shall not be treated as supply of services as
per Entry 1 of Schedule III of the CGST Act? |
The applicant has its CO in Karnataka and hospitals in six
different states. Some of the activities for all the units with
respect to accounting, administration and maintenance of the IT
system are carried out by the employees from CO, which forms part
of the registered person in Karnataka. |
The fact that the ruling has been upheld at the appellate stage by the AAAR has imparted further importance to the question of treatment of all expenses, including employee cost incurred at the head office but benefitting all the other branches. The key aspects, which may need to be considered by the businesses, are as follows:
|
It should be noted that an Advance Ruling is binding only on the applicant who had sought it and the concerned jurisdictional authority, i.e., an Advance Ruling is specific to an applicant and shall not be applicable to other taxpayers facing similar issues. However, the above-mentioned Advance Rulings provide clarity about the issues being faced and have persuasive value in matters before the tax authorities.
Compliance Chart for Upcoming GST Due Dates
Form |
Applicable to |
Period |
Due date |
GSTR-1 |
Registered taxpayers with an annual aggregate turnover of more than INR 15 million |
December 2018 |
11 January 2019 |
GSTR-1 |
Registered taxpayers with an annual aggregate turnover of less than INR 15 million |
October to December 2018 |
31 January 2019 |
GSTR-4 |
Taxpayers registered under the composition scheme |
October to December 2018 |
18 January 2019 |
GSTR-3B |
All registered taxpayers |
December 2018 |
20 January 2019 |
GSTR-5 |
Non-resident taxable persons |
December 2018 |
20 January 2019 |
GSTR 5A |
Persons providing Online Information and Database Access or Retrieval (OIDAR) services |
December 2018 |
20 January 2019 |
GSTR 6 |
Input service distributors |
December 2018 |
13 January 2019 |
GSTR-7 |
Persons who are required to deduct TDS under GST |
October to December 2018 |
31 January 2019 |
GSTR-8 |
E-Commerce operators required to deduct TCS under GST |
October to December 2018 |
31 January 2019 |
Other Key Aspects
Revenue collections
The government's gross GST collections in the month of December 2018 stood at INR 0.94 trillion. The government's monthly target of GST revenue collection of INR 1 trillion was not achieved and dropped for the second consecutive month. It would be interesting to see how the recent rationalization of GST rates impacts the revenue collections.
Other key updates under the GST regime
- The GST council has approved to charge 1% cess on the intra-state supply of goods and services within Kerala for a period not exceeding two years.
- The amendments to the GST law passed by the Parliament in August 2018 would be notified with effect from 1 February 2019.
- It has been made mandatory to file all GSTR-1 and GSTR-3B for the financial year 2017-18 before filing the annual return.
- Composition dealers would be required to file one annual return and pay taxes quarterly along with a simple declaration from 1 April 2019.
- Security services provided by non-corporates are liable to GST under reverse charge mechanism from 1 January 2019.
- The supplier or his authorized representative would not be required to provide his physical signature or digital signature in case of issuance of the invoice and related documents in accordance with the provisions of Information Technology Act 2000.
GST in the news
- The GST Council may soon decide to provide a mechanism to amend forms TRAN-1 and TRAN-2 to enable taxpayers to rectify any errors made in availing transitional credit.
- The mining industry has appealed to the government to introduce a single GST rate for the sector to replace the existing system of a multiplicity of taxes.
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