GST - E-WAY BILL AND LATEST

GST – SHOW CAUSE NOTICE

GST Department of states have started sending notices to dealers who have opted for GST Composition Scheme for failure to mention “Composition taxable person” on every notice or Sign Board displayed at a prominent place of their principal place of business and at every additional place of their business. We come across one such notice issued by GST department of Punjab. Extract of Such notice is as follows :-

To,

M/s The …………..

New ……. Jalandhar

Jalandhar- GSTIN ……

Subject: Show cause notice for penal action under section 125 of the Punjab GST Act, 2017, for failure to display Sign Board.

Notice

Whereas you are a registered person under section 10 of the Punjab Goods & Service Tax Act, 2017. As per rule 5 (1) (f) of the Punjab Goods & Service Tax Rules, 2017. you should have to mention the words “Composition taxable Person, not eligible to collect tax on supplies” at the top of bill of supply issued by you and as per rule 5 (1) (g) of the Punjab Goods & Service Tax Rules, 2017, you should have to mention “Composition taxable person’ on every notice or Sign Board displayed at a prominent place at your principal place of business and at every additional place of business.

But as per rules (mentioned above) you: –

1. have not mention the words ‘Composition taxable Person, not eligible to collect tax on supplies” at the top of bill of supply,

2. have not mention “Composition taxable person” on Sign Board displayed at a prominent place at your principal place.

Thus you have contravened the provisions of said rule (s). Therefore, you are directed as to why penalty under section 125 of the Punjab GST Act, 2017. be not imposed. For the above purpose, you are directed to appear in person or through authorized representative.

GST - E-WAY BILL

DIFFICULTIES

1.    Strong end to end technology infrastructure to generate e-way bills still lacking.

2.    The e-way bill system has been rolled out in 10 states. The e-way bill

has to be generated every time worth more than Rs.50000 and beyond a distance of 10 k.m. At the end of each month, companies have to upload all the e-way bills on the GST network. However, many companies do not have a way to track all their shipments on a single technology platform.  Also, since the e-way bill has to be generated for every shipment beyond 10 k.m., companies need to measure in real time the distance between the pickup and delivery points. That may lead companies to miss generating e-way bills, resulting in undue check and blockages while the shipments are en-route.  Also nobody knows who is authorized to check a consignment and who is not. This is one area where regulations are not very clear.

Another key question is what mechanisms will be used to check the value of the shipments.   Additional capital need to invest in technology infrastructure.

GST - LATEST CHANGES IN RATES

RECOMMENDATIONS FOR CHANGES IN GST/IGST RATE AND

CLARIFICATIONS IN RESPECT OF GST RATE ON CERTAIN GOODS

 [As per discussions in the 25^thGST Council Meeting held on 18^thJanuary, 2018]

 These decisions of the GST Council are being communicated for general information, and will be given effect to through Gazette notifications / circulars which only shall have the force of law.    It is proposed to issue notification giving effect to the recommendations of the Council on 25^th January, 2018 to be effective from 00 HRS on 25^th January, 2018  

GST - LATEST POLICY CHANGES

Recommendations made during the 25^th meeting of the GST Council held in New Delhi on 18^th January, 2018

Policy Changes                                                                                                                              The following recommendations have been made by the GST Council in its 25^th meeting held today at New Delhi:                                      

1.     The late fee payable by any registered person for failure to furnish                                    FORM GSTR-1 (supply details), FORM GSTR-5 (Non-resident taxable person) or FORM GSTR-5A (OIDAR) is being reduced to fifty rupees per day and shall be twenty rupees per day for NIL filers. The late fee payable for failure to furnish FORM GSTR-6 (Input Service Distributor) shall be fifty rupees per day. 

2.     Taxable persons who have obtained voluntary registration will now be permitted to apply for cancellation of registration even before the expiry of one year from the effective date of registration. 

3.     For migrated taxpayers, the last date for filing FORM GST REG-29 for cancellation of registration is being extended by further three months till 31^st March, 2018. 

4.     The facility for generation, modification and cancellation of e-way bills is being provided on trial basis on the portal ewaybill.nic.in. Once fully operational, the e-way bill system will start functioning on the portal ewaybillgst.gov.in

5.     Certain modifications are being made to the e-way bill rules which are to be notified nationwide for inter-State movement with effect from 01.02.2018 and for intra-State movement with effect from a date to be announced separately by each State but not later than 01.06.2018.

6.     The report and recommendations submitted by the Committee on Handicrafts were also accepted by the GST Council. 

GST - LATEST DECISIONS DT.18.1.18

Decisions relating to Services in the 25^th meeting of GST Council held at New Delhi on 18.01.2018

The following decisions relating to exemptions / changes in GST rates / ITC eligibility criteria, rationalization of rates / exemptions and clarification on levy of GST on services were taken by the Council in the meeting held at New Delhi on 18.01.2018. The information is being uploaded immediately after the GST Council’s decision and it will be subject to further vetting during which the list may undergo some changes. The decisions of the GST Council are being communicated for general information and will be given effect to through Gazette notifications / circulars which shall have force of law. 

(A)                  Exemptions / Changes in GST Rates / ITC Eligibility Criteria

(1)To extend GST exemption on Viability Gap Funding (VGF) for a period of 3 years from the date of commencement of RCS airport from the present period of one year. 

(2)To exempt supply of services by way of providing information under RTI Act, 2005 from GST. 

(3)To exempt legal services provided to Government, Local Authority, Governmental Authority and Government Entity. 

(4)To reduce GST rate on construction of metro and monorail projects (construction, erection, commissioning or installation of original works) from 18% to 12%.

(5)To levy GST on the small housekeeping service providers, notified under section 9 (5) of GST Act, who provide housekeeping service through ECO, @ 5% without ITC.

(6)To reduce GST rate on tailoring service from 18% to 5%.

(7)To reduce GST rate on services by way of admission to theme parks, water parks, joy rides, merry-go-rounds, go-carting and ballet, from 28% to 18%.

(8)To grant following exemptions:

To exempt service by way of transportation of goods from India to a place outside India by air;

To exempt service by way of transportation of goods from India to a place outside India by sea and provide that value of such service may be excluded from the value of exempted services for the purpose of reversal of ITC. The above exemptions may be granted with a sunset clause upto 30th September, 2018.

(9)To exempt services provided by  the Naval Insurance Group Fund by way of  Life Insurance to personnel of Coast Guard under the  Group Insurance Scheme of the Central Government retrospectively w.e.f. 1.7.2017. 

(10)To exempt IGST payable under section 5(1) of the IGST Act, 2017 on supply of services covered by item 5(c) of Schedule II of the CGST Act, 2017 to the extent of aggregate of the duties and taxes leviable under section 3(7) of the Customs Tariff Act, 1975 read with sections 5 & 7 of IGST Act, 2017 on part of consideration declared under section 14(1) of the Customs Act, 1962 towards royalty and license fee includible in transaction value as specified under Rule 10 (c) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. 

(11)To allow ITC of input services in the same line of business at the GST rate of 5% in case of tour operator service.

(12)To reduce GST rate (from 18% to 12%) on the Works Contract Services (WCS) provided by sub-contractor to the main contractor providing WCS to Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity, which attract GST of 12%. Likewise, WCS attracting 5% GST, their sub-contractor would also be liable @ 5%. 

(13)To enhance the exemption limit of Rs 5000/- per month per member to Rs 7500/- in respect of services provided by Resident Welfare Association (unincorporated or nonprofit entity) to its members against their individual contribution.

(14)To reduce GST rate on transportation of petroleum crude and petroleum products (MS, HSD, ATF) from 18% to 5% without ITC and 12% with ITC.

(15)To exempt dollar denominated services provided by financial intermediaries located in IFSC SEZ, which have been deemed to be outside India under the various regulations by RBI, IRDAI, SEBI or any financial regulatory authority, to a person outside India.

(16)To  exempt  (a) services by government or local authority to governmental authority or government entity, by way of lease of land, and (b) supply of land or undivided share of land by way of lease or sub lease where such supply is a part of  specified composite supply of construction of flats etc. and   to carry out suitable amendment in the provision relating to valuation of construction service involving transfer of land or undivided share of land, so as to ensure that buyers pay the  same effective  rate of GST on property built on leasehold and freehold land.

(17)To amend entry 3 of notification No. 12/2017-CT(R) so as to exempt pure services provided to Govt. entity.

(18)To expand pure services exemption under S. No. 3 of 12/2017-C.T. (Rate) so as to include composite supply involving predominantly supply of services i.e. upto 25% of supply of goods.

(19)To reduce job work services rate for manufacture of leather goods (Chapter 42) and footwear (Chapter 64) to 5%.

(20)To exempt services relating to admission to, or conduct of examination provided to all educational institutions, as defined in the notification. To exempt services by educational institution by way of conduct of entrance examination against consideration in the form of entrance fee.

(21)To enhance the limit to Rs 2 lakh against Sl. No. 36 of exemption notification No. 12/2017-C.T. (Rate) which exempts services of life insurance business provided under life micro insurance product approved by IRDAI upto maximum amount of cover of Rs. 50,000. 

(22)To exempt reinsurance services in respect of insurance schemes exempted under S.Nos. 35 and 36 of notification No. 12/2017-CT (Rate). [It is expected that the premium amount charged from the government/insured in respect of future insurance services is reduced.]

(23)To increase threshold limit for exemption under entry No. 80 of Notification No. 12/2017-C.T. (Rate) for all the theatrical performances like Music, Dance, Drama, Orchestra, Folk or Classical Arts and all other such activities in any Indian language in theatre GST from Rs.250 to 500 per person and to also extend the threshold exemption to services by way of admission to a planetarium.

(24)To reduce GST on Common Effluent Treatment Plants services of treatment of effluents, from 18% to 12%. 

(25)To exempt services by way of fumigation in a warehouse of agricultural produce.

(26)To reduce GST to 12% in respect of mining or exploration services of petroleum crude and natural gas and for drilling services in respect of the said goods.

(27)To exempt subscription of online educational journals/periodicals by educational institutions who provide degree recognized by any law from GST.

(28)To exempt the service provided by way of renting of transport vehicles provided to a person providing services of transportation of students, faculty and staff to an educational institution providing education upto higher secondary or equivalent.

(29)To extend the concessional rate of GST on houses constructed/ acquired under the Credit Linked Subsidy Scheme for Economically Weaker Section (EWS) / Lower Income Group (LIG) / Middle Income Group-1 (MlG-1) / Middle Income Group-2 (MlG-2) under the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana (Urban) and low-cost houses up to a carpet area of 60 square metres per house in a housing project which has been given infrastructure status, as proposed by Ministry of Housing & Urban Affairs, under the same concessional rate.  

(30)To tax time charter services at GST rate of 5%, that is at the same rate as applicable to voyage charter or bare boat charter, with the same conditions. 

(31)To levy concessional GST @12% on the services provided by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of building used for providing (for instance, centralized cooking or distributing) mid-day meal scheme by an entity registered under section 12AA of IT Act. 

(32)To exempt services provided by and to Federation International de Football Association (FIFA) and its subsidiaries directly or indirectly related to any of the events under FIFA U-20 World Cup in case the said event is hosted by India.

(33)To exempt government’s share of profit petroleum from GST and to clarify that cost petroleum is not taxable per se.

(B)                 Rationalization of certain exemption entries

(1)To provide in CGST rules that value of exempt supply under sub-section (2) of section 17, shall not include the value of deposits, loans or advances on which interest or discount is earned (This will not apply to a banking company and a financial institution including a non-banking financial company engaged in providing services by way of extending deposits, loans or advances).

(2)To defer the liability to pay GST in case of TDR against consideration in the form of construction service and on construction service against consideration in the form of TDR to the time when the possession or right in the property is transferred to the land owner by entering into a conveyance deed or similar instrument (e.g. allotment letter). No deferment in point of taxation in respect of cash component. 

(3)To tax renting of immovable property by government or local authority to a registered person under reverse Charge while renting of immovable property by government or local authority to un-registered person shall continue under forward charge

(4)To define insurance agent in the reverse charge notification to have the same meaning as assigned to it in clause (10) of section 2 of the Insurance Act, 1938, so that corporate agents get excluded from reverse charge.

(5)To insert a provision in GST Rules under section 15 of GST Act that the value of lottery shall be 100/112 or 100/128 of the price of lottery ticket notified in the Gazette (the same is currently notified in the rate notification).

(6)To add, in the GST rate schedule for goods at 28%, actionable claim in the form of chance to win in betting and gambling including horse racing.

(7)To insert in GST rules under section 15 of GST Act,-

Notwithstanding anything contained in this chapter, value of supply of Betting & Gambling shall be 100 % of the face value of the bet or the amount paid into the totalizator.

(C)                 Clarifications

(1)To clarify that exemption of Rs 1000/- per day or equivalent (declared tariff) is available in respect of accommodation service in hostels.

(2)To clarify that fee paid by litigants in the Consumer Disputes Commissions and any penalty imposed by these Commissions, will not attract GST.

(3)To clarify that elephant/ camel joy rides are not classified as transportation services and attract GST @ 18% with threshold exemption to small services providers.

(4)To clarify that leasing or rental service, with or without operator, of goods, attracts same GST as supply of like goods involving transfer of title in the said goods. Therefore, the GST rate for the rental services of self-Propelled Access Equipment (Boom. Scissors/Telehandlers) is 28%.

(5)To clarify that,-

1) Services provided by senior doctors/consultants/technicians hired by the hospitals, whether employees or not, are healthcare services which is exempt.    2) Hospitals also provide healthcare services. The entire amount charged by them from the patients including the retention money and the fee/payments made to the doctors etc., is towards the healthcare services provided by the hospitals to the patients and is exempt. 

3) Food supplied to the in-patients as advised by the doctor/nutritionists is a part of composite supply of healthcare and not separately taxable. Other supplies of food by a hospital to patients (not admitted) or their attendants or visitors is taxable.

(6)      To clarify that services by way of,- 

          1.admission to entertainment events or access to amusement facilities including casinos, race-course

          2.ancillary services provided by casinos and race-course in relation to such admission.

         3.services given by race-course by way of totalisator (if given through some other person or charged separately as fees for using totalisator for purpose of betting, are taxable at 28%. Services given by race-course by way of license to bookmaker which is not a service by way of betting and gambling, is taxable at 18%. 

GST - E-WAY BILL

The e-way bill for the inter-state movement has been advanced to February 1 from April 1, while the trial began from January 16. The e-way bill requires online pre-registration of goods before transportation under the new GST regime. Under the e-way mechanism, all goods worth over Rs 50,000 will have to be pre-registered online before they are moved for sale beyond 10 km. The e-way bill mechanism has been introduced in the GST regime to plug tax evasion loopholes. Tax evasion was one of the reasons cited by the government for the fall in revenue collection in October.

Modes of generation of the e-way bill:

1)Web online using browser on a laptop, desktop, phone etc.

2)Android-based mobile app on mobile phones

3)Via SMS through registered mobile number

4)Via API( Application Program Interface) i.e. integration of IT system of the user with e-way bill system for generation of the e-way bill.

5) Tool based bulk generation of e-way bills

6) Third party-based system of Suvidha providers

When an e-way is generated, a unique e-way bill number (EBN) is allocated and is available to the supplier, recipient, and the transporter. As per the schedule of implementation, the nationwide e-way bill system will be ready to be rolled out on a trial basis latest by January 16, 2018. Trade and transporters will be able to use it on a voluntary basis from January 16.

E-way bill is generated when there is a movement of goods:

1) In relation to the supply.

2) For reasons other than a supply (say a return).

3) Due to inward supply from an unregistered person.

In this case, a supply can either be:

1) Sale – sale of goods and payment made

2) Transfer – branch transfers for instance

3) Barter/Exchange – where the payment is by goods instead of in money

Benefits:

1) Taxpayers or transporters need not visit any tax officers or check posts for generation of e-way bill or movement of goods through states.

2) No waiting time at check-posts and faster movement of goods thereby optimum use of vehicles or resources, since there are no check posts in GST regime.

3) User-friendly e-way bill system.

4) Easy and quick generation of e-way bill.

5) Checks and balances for smooth tax administration and process simplification for easier verification of e-way bill by tax officers.