GST (Amendment) Act 2018 to be effective from 1st February
The GST regime has indeed completed a successful year and has brought about remarkable fiscal consolidation besides great ease of doing business. During this financial year, the GST council had also proposed the Central government to make amendments the GST Acts with a view to revise certain provisions under GST and make them more lucid for the taxpayers having GST registration. These include the long-awaited new GST return filing procedure, the Reverse Charge Mechanism (RCM) which was “partially suspended” till 30th September 2019, availing of the Input Tax credit and so on.
The GST Council had successfully drafted 4 amendment bills to the CGST Act-2017, IGST Act-2017, UTGST Act-2017 and GST (Compensation to States) Act-2017. These were tabled on 7th August 2018. The GST amendment bills are given below:
- CGST (Amendment) Bill 2018
- IGST (Amendment) Bill 2018
- UTGST (Amendment) Bill 2018
GST (Compensation to States) Amendment Bill 2018
These 4 Amendment Bills have been passed as GST Amendment Acts and will be brought into effect from 1st February 2019.
#1. When will the amendments to the GST Act be made effective?
The 4 crucial amendment bills of GST law, that were proposed by the GST council were consented by the Honourable President of India on 29th August 2018. These were published in the official Gazette of India on 30th August 2018 as-
- CGST (Amendment) Act 2018
- IGST (Amendment) Act 2018
- UTGST (Amendment) Act 2018
- GST (Compensation to States) Amendment Act 2018
These 4 Amendment Acts will be implemented with effect from 1st February 2019. To enhance the ease of understanding of the taxpayers having GST registration, the 4 GST Amendment Acts have been summarized below.
#2. What are the amendments made in the CGST (Amendment) Act 2018?
The government has introduced a total 32 amendments in the CGST Act-2017. The crucial amendments are listed below-
- Section 2(4): The “Central Board of Excise and Customs”, shall be renamed as “Central Board of Indirect Taxes and Customs”.
- Section 9(4): It seeks to revive the Reverse Charge Mechanism under GST. The government may specify the class of registered persons, who shall pay GST on reverse charge basis for the supplies received from registered suppliers.
- Section 10(1): It seeks to raise the threshold limit of the annual turnover taxpayer for getting GST registration under the composition scheme to ₹1.5 crores from ₹1 crore. Additionally, it will enable the dealers having GST registration under composition scheme to render services (except restaurant) for value up to 10% of their turnover in the previous fiscal year, or ₹5 lakhs, whichever is more.
- Section 29: This shall amend the phrase “Cancellation of GST registration”, wherein there will be an option for temporary suspension of GST registration upon application for cancellation of GST registration till final cancellation.
#3. What is special about IGST (Amendment) Act 2018?
4 amendments are made in the IGST Act 2017, which are given below:
- Section 5: It seeks to notify categories of persons having GST registration who have to pay GST on RCM basis with regard to receipt of specific supplies from unregistered dealers (URD).
- Section 12: It seeks to notify that in case goods are transported outside India, the place of destination of such goods shall be the place of the supply itself.
- Section 17: It seeks to provide for the settlement of IGST balance amount equally under CGST & SGST heads.
- Section 20: This states the correct amounts of pre-deposit payable for filing appeals before-
- The Appellate Authority–– ₹50 crores
- The Appellate Tribunal–– ₹100 crores.
#4. How is UTGST Act 2017 amended?
3 amendments have been made in IGST Act 2017, which are as follows:
- Section 7: It seeks to notify classes of having GST registration who have to pay GST on RCM basis as regards receipt of specified supplies from URD.
- Section 9: This shall provide that ITC on account of the UTGST shall be used for settlement of IGST liability only if the balance of input tax credit of CGST is not available for the same.
- Besides, sections 9A and 9B have been introduced for “Utilization of input tax credit” and “Order of utilization of input tax credit” respectively.
#5. What is there in the GST (Compensation to States) Act 2018?
Only 2 amendments are introduced in IGST Act 2017. These are given below:
- Section 10(3A): New subsection is added to provide that any amount in the Compensation Fund that is unutilized shall be distributed between CGST & SGST heads anytime during FY.
- Section 5: In case of any Compensation Fund deficit against the actual requirement, it shall be released u/s 7 for 2 months’ period anytime during the year at 50% of the requirement. However, this should not go beyond the total Compensation amount transferred to Centre & States.
This shall be recovered from the Centre and the balance 50% will be recovered from the States in proportion with the determined base year revenue.
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