The Central Board of Indirect Taxes & Customs ("CBIC") has
notified the following Sections of the Finance (No.2) Act, 2019 which
pertain to various sections in the Central Goods and Services Tax Act,
2017 ("CGST Act") w.e.f January 1st, 2020 vide Notification No. 01/2020 -
Central Tax dated January 1st, 2020 -
The
Central Board of Indirect Taxes & Customs ("CBIC") has notified
Section 114 of the Finance (No.2) Act, 2019 which pertains to insertion
of a new section 17A in the Integrated Goods and Services Tax Act, 2017
("IGST Act") w.e.f January 1st, 2020 vide Notification No. 01/2020 -
Integrated Tax dated January 1st, 2020.
The
Central Board of Indirect Taxes & Customs ("CBIC") had earlier
notified the following Sections of the Finance (No..2) Act, 2019 which
pertain to the following sections in the Central Goods and Services Tax
Act, 2017 ("CGST Act") w.e.f September 01, 2019 vide Notification
No. 39/2019 - Central Tax dated August 31st, 2019 -
| Current provisions | Proposed provisions | Effect | |||
| Second proviso to section 10 - Composition Scheme | |||||
| Second proviso to section 10(1): "Provided further that a person who opts to pay tax under clause (a) or clause (b) or clause (c) may supply services (other than those referred to in clause (b) of paragraph 6 of Schedule II), of value not exceeding ten per cent. Of turnover in a State or Union territory in the preceding financial year or five lakh rupees, whichever is higher."; | Second proviso to section 10 (1): "Provided further that a person who opts to pay tax under clause (a) or clause (b) or clause (c) may supply services (other than those referred to in clause (b) of paragraph 6 of Schedule II), of value not exceeding ten per cent. Of turnover in a State or Union territory in the preceding financial year or five lakh rupees, whichever is higher."; Explanation: For the purposes of second proviso, the value of exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount shall not be taken into account for determining the value of turnover in a State or Union territory."; | A
new sub-section (2A) is being inserted in section 10 of the CGST Act to
bring in an alternative composition scheme for supplier of services or
mixed suppliers (not eligible for the earlier composition scheme) having
an annual turnover in preceding financial year up to Rs 50 lakhs. Further, explanation is being added to section 10 to clarify that: i. For computing the aggregate turnover to determine eligibility for the composition scheme, value of exempt supplies services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount shallnot be taken into account; and ii. For determining the value of turnover in a State or Union territory to calculate tax payable, value of exempt supplies of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount; and value of the first supplies from 1st of April till the date when the taxpayer becomes liable for registration shall not be taken into account. | |||
| Section 10(2)(d): The registered person shall be eligible to opt under sub-section (1), if- - (d) he is not engaged in making any supply of goods through an electronic commerce operator who is required to collect tax at source under section 52; and | Section 10(2)(d): The registered person shall be eligible to opt under sub-section (1), if- - (d) he is not engaged in making any supply of goods through an electronic commerce operator who is required to collect tax at source under section 52; and | ||||
| Section 10(2)(e): The registered person shall be eligible to opt under sub-section (1), if- - (e) he is not a manufacturer of such goods as may be notified by the Government on the recommendations of the Council: | Section 10(2)(e): The registered person shall be eligible to opt under sub-section (1), if- - (e) he is not a manufacturer of such goods as may be notified by the Government on the recommendations of the Council; and | ||||
| After Clause (e) of Section 10(2): | After Clause (e) of Section 10(2), the following clause (f) shall be inserted: The registered person shall be eligible to opt under sub-section (1), if- - "(f) he is neither a casual taxable person nor a non-resident taxable person:" | ||||
| After sub section 10(2): | After sub section 10(2), the following sub-section 2A shall be inserted: "(2A) Notwithstanding anything to the contrary contained in this Act, but subject to the provisions of sub-sections (3) and (4) of section 9, a registered person, not eligible to opt to pay tax under sub-section (1) and sub-section (2), whose aggregate turnover in the preceding financial year did not exceed fifty lakh rupees, may opt to pay, in lieu of the tax payable by him under sub-section (1) of section 9, an amount of tax calculated at such rate as may be prescribed, but not exceeding three per cent.. of the turnover in State or turnover in Union territory, if he is not- - (a) engaged in making any supply of goods or services which are not leviable to tax under this Act; (b) engaged in making any inter-State outward supplies of goods or services; (c) engaged in making any supply of goods or services through an electronic commerce operator who is required to collect tax at source under section 52; (d) a manufacturer of such goods or supplier of such services as may be notified by the Government on the recommendations of the Council; and (e) a casual taxable person or a non-resident taxable person. Provided that where more than one registered person are having the same Permanent Account Number issued under the Income-tax Act, 1961, the registered person shall not be eligible to opt for the scheme under this sub-section unless all such registered persons opt to pay tax under this sub-section."; | ||||
| Section 10(3): The option availed of by a registered person under sub-section (1) shall lapse with effect from the day on which his aggregate turnover during a financial year exceeds the limit specified under sub-section (1). | Section 10(3): The option availed of by a registered person under sub-section (1) or sub-section (2A), as the case may be, shall lapse with effect from the day on which his aggregate turnover during a financial year exceeds the limit specified under sub-section (1) or sub-section (2A), as the case may be. | ||||
| Section 10(4): A taxable person to whom the provisions of sub-section (1) apply shall not collect any tax from the recipient on supplies made by him nor shall he be entitled to any credit of input tax. | Section 10(4): A taxable person to whom the provisions of sub-section (1) or as the case may be, sub-section (2A), apply shall not collect any tax from the recipient on supplies made by him nor shall he be entitled to any credit of input tax. | ||||
| Section 10(5): If the proper officer has reasons to believe that a taxable person has paid tax under sub-section (1) despite not being eligible, such person shall, in addition to any tax that may be payable by him under any other provisions of this Act, be liable to a penalty and the provisions of section 73 or section 74 shall, mutatis mutandis, apply for determination of tax and penalty.. | Section 10(5): If the proper officer has reasons to believe that a taxable person has paid tax under sub-section (1) or sub-section (2A), as the case may be, despite not being eligible, such person shall, in addition to any tax that may be payable by him under any other provisions of this Act, be liable to a penalty and the provisions of section 73 or section 74 shall, mutatis mutandis, apply for determination of tax and penalty. | ||||
| After sub-section (5) of section 10: | After sub-section (5) of section 10, the following Explanations shall be inserted: Explanation 1.- - For the purposes of computing aggregate turnover of a person for determining his eligibility to pay tax under this section, the expression "aggregate turnover" shall include the value of supplies made by such person from the 1st day of April of a financial year upto the date when he becomes liable for registration under this Act, but shall not include the value of exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount. Explanation 2.- - For the purposes of determining the tax payable by a person under this section, the expression "turnover in State or turnover in Union territory" shall not include the value of following supplies, namely:- - (i) supplies from the first day of April of a financial year up to the date when such person becomes liable for registration under this Act; and (ii) exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount.’. | ||||
| Second Proviso after sub-section (1) of Section 22: Persons liable for registration | |||||
| In sub-section (1) of Section 22, after the second proviso: | In sub-section (1) of Section 22, after the second proviso, the following proviso shall be inserted: "Provided also that the Government may, at the request of a State and on the recommendations of the Council, enhance the aggregate turnover from twenty lakh rupees to such amount not exceeding forty lakh rupees in case of supplier who is engaged exclusively in the supply of goods, subject to such conditions and limitations, as may be notified. Explanation.- - For the purposes of this sub-section, a person shall be considered to be engaged exclusively in the supply of goods even if he is engaged in exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount.". | A proviso and an explanation is being inserted in section 22 of the CGST Act so as to provide for higher threshold exemption limit from Rs. 20 lakhs to such amount not exceeding Rs. 40 lakhs in case of supplier who is engaged in exclusive supply of goods. | |||
| After sub-section (6) of Section 25: Procedure for registration | |||||
| After sub-section (6) of Section 25: | After sub-section (6) of Section 25 the following sub-sections 6A, 6B, 6C, 6D shall be inserted: "6(A) Every registered person shall undergo authentication, or furnish proof of possession of Aadhaar number, in such form and manner and within such time as may be prescribed: Provided that if an Aadhaar number is not assigned to the registered person, such person shall be offered alternate and viable means of identification in such manner as Government may, on the recommendations of the Council, prescribe: Provided further that in case of failure to undergo authentication or furnish proof of possession of Aadhaar number or furnish alternate and viable means of identification, registration allotted to such person shall be deemed to be invalid and the other provisions of this Act shall apply as if such person does not have a registration. (6B) On and from the date of notification, every individual shall, in order to be eligible for grant of registration, undergo authentication, or furnish proof of possession of Aadhaar number, in such manner as the Government may, on the recommendations of the Council, specify in the said notification: Provided that if an Aadhaar number is not assigned to an individual, such individual shall be offered alternate and viable means of identification in such manner as the Government may, on the recommendations of the Council, specify in the said notification. (6C) On and from the date of notification, every person, other than an individual, shall, in order to be eligible for grant of registration, undergo authentication, or furnish proof of possession of Aadhaar number of the Karta, Managing Director, whole time Director, such number of partners, Members of Managing Committee of Association, Board of Trustees, authorised representative, authorised signatory and such other class of persons, in such manner, as the Government may, on the recommendation of the Council, specify in the said notification: Provided that where such person or class of persons have not been assigned the Aadhaar Number, such person or class of persons shall be offered alternate and viable means of identification in such manner as the Government may, on the recommendations of the Council, specify in the said notification. (6D) The provisions of sub-section (6A) or sub-section (6B) or sub-section (6C) shall not apply to such person or class of persons or any State or Union territory or part thereof, as the Government may, on the recommendations of the Council, specify by notification. Explanation.—For the purposes of this section, the expression "Aadhaar number" shall have the same meaning as assigned to it in clause (a) of section 2 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016.". | A New sub-section is being inserted in section 25 of the CGST Act to make Aadhaar authentication mandatory for specified class of new taxpayers and to prescribe the manner in which certain class of registered taxpayers are required to undergo Aadhaar authentication. | |||
| Insertion of New Section 31A: Facility of digital payment to Recipient. | |||||
| After Section 31: | After section 31, Section 31A shall be inserted: "31A. The Government may, on the recommendations of the Council, prescribe a class of registered persons who shall provide prescribed modes of electronic payment to the recipient of supply of goods or services or both made by him and give option to such recipient to make payment accordingly, in such manner and subject to such conditions and restrictions, as may be prescribed.". | A new section 31A is being inserted in the CGST Act so that specified suppliers shall have to mandatorily give the option of specified modes of electronic payment to their recipients of goods or services. | |||
| Section 44: Annual Return | |||||
| Sub Section (1) of section 44: Every registered person, other than an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person, shall furnish an annual return for every financial year electronically in such form and manner as may be prescribed on or before the thirty-first day of December following the end of such financial year. | After Sub Section (1) of section 44, the following proviso shall be inserted: Every registered person, other than an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person, shall furnish an annual return for every financial year electronically in such form and manner as may be prescribed on or before the thirty-first day of December following the end of such financial year. "Provided that the Commissioner may, on the recommendations of the Council and for reasons to be recorded in writing, by notification, extend the time limit for furnishing the annual return for such class of registered persons as may be specified therein: Provided further that any extension of time limit notified by the Commissioner of State tax or the Commissioner of Union territory tax shall be deemed to be notified by the Commissioner.". | New provisos are being inserted in sub-section (1) of section 44 of the CGST Act so as to empower the Commissioner to extend the due date for furnishing Annual return (prescribed FORM GSTR-9/9A) and reconciliation statement (prescribed FORM GSTR-9C). | |||
| Section 49: Payment of tax, interest, penalty and other amounts. | |||||
| Sub Section (9) of section 49: | After Sub Section (9) of section 49 the following sub section (10) and (11) shall be inserted: "(10) A registered person may, on the common portal, transfer any amount of tax, interest, penalty, fee or any other amount available in the electronic cash ledger under this Act, to the electronic cash ledger for integrated tax, central tax, State tax, Union territory tax or cess, in such form and manner and subject to such conditions and restrictions as may be prescribed and such transfer shall be deemed to be a refund from the electronic cash ledger under this Act. (11) Where any amount has been transferred to the electronic cash ledger under this Act, the same shall be deemed to be deposited in the said ledger as provided in sub-section (1).". | New sub-sections are being inserted in section 49 of the CGST Act to provide a facility to the registered person to transfer an amount from one (major or minor) head to another (major or minor) head in the electronic cash ledger. | |||
| Section 52: Collection of tax at source. | |||||
| After Sub section (4) of section 52: | After Sub section (4) of section 52, the following proviso shall be inserted: "Provided that the Commissioner may, for reasons to be recorded in writing, by notification, extend the time limit for furnishing the statement for such class of registered persons as may be specified therein: Provided further that any extension of time limit notified by the Commissioner of State tax or the Commissioner of Union territory tax shall be deemed to be notified by the Commissioner."; | New provisos are being inserted in sub-sections (4) and (5) of section 52 of the CGST Act so as to empower the Commissioner to extend the due date for furnishing of monthly and annual statement by the person collecting tax at source. | |||
| After Sub section (5) of section 52: | After Sub section (5) of section 52, the following proviso shall be inserted: "Provided that the Commissioner may, on the recommendations of the Council and for reasons to be recorded in writing, by notification, extend the time limit for furnishing the annual statement for such class of registered persons as may be specified therein: Provided further that any extension of time limit notified by the Commissioner of State tax or the Commissioner of Union territory tax shall be deemed to be notified by the Commissioner.". | ||||
| Insertion of New Section 53A: Transfer of certain Amounts | |||||
| After section 53: | New Section 53A was inserted after section 53: Where any amount has been transferred from the electronic cash ledger under this Act to the electronic cash ledger under the State Goods and Services Tax Act or the Union territory Goods and Services Tax Act, the Government shall, transfer to the State tax account or the Union territory tax account, an amount equal to the amount transferred from the electronic cash ledger, in such manner and within such time as may be prescribed.". | A new section 53A is being inserted in the CGST Act so as to provide for transfer of amount between Centre and States consequential to amendment in section 49 of the CGST Act allowing transfer of an amount from one head to another head in the electronic cash ledger of the registered person. | |||
| Section 168 - Power to issue instructions or directions | |||||
| Sub section (2) of section 168: The Commissioner specified in clause (91) of section 2, sub-section (3) of section 5, clause (b) of sub-section (9) of section 25, sub-sections (3) and (4) of section 35, sub-section (1) of section 37, sub-section (2) of section 38, sub-section (6) of section 39, sub-section (5) of section 66, sub-section (1) of section 143, sub-section (1) of section 151, clause (l) of sub-section (3) of section 158 and section 167 shall mean a Commissioner or Joint Secretary posted in the Board and such Commissioner or Joint Secretary shall exercise the powers specified in the said sections with the approval of the Board. | Sub section (2) of section 168: The Commissioner specified in clause (91) of section 2, sub-section (3) of section 5, clause (b) of sub-section (9) of section 25, sub-sections (3) and (4) of section 35, sub-section (1) of section 37, sub-section (2) of section 38, sub-section (6) of section 39, "sub-section (1) of section 44, sub-sections (4) and (5) of section 52," sub-section (5) of section 66, sub-section (1) of section 143, sub-section (1) of section 151, clause (l) of sub-section (3) of section 158 and section 167 shall mean a Commissioner or Joint Secretary posted in the Board and such Commissioner or Joint Secretary shall exercise the powers specified in the said sections with the approval of the Board. | Consequent to the amendments in section 44 and section 52 of the CGST Act, section 168 is being amended so as to specify that in respect of sub-section (1) of section 44 and subsections (4) and (5) of section 52, Commissioner or Joint Secretary shall exercise the powers specified in the said sections with the approval of the Board. | |||
| Section 171 - Anti-profiteering measure | |||||
| After sub-section (3) of section 171: | After sub-section (3) of section 171 the following section 3A shall be inserted: "Where the Authority referred to in sub-section (2) after holding examination as required under the said sub-section comes to the conclusion that any registered person has profiteered under sub- section (1), such person shall be liable to pay penalty equivalent to ten per cent. of the amount so profiteered: Provided that no penalty shall be leviable if the profiteered amount is deposited within thirty days of the date of passing of the order by the Authority. Explanation.— For the purposes of this section, the expression "profiteered" shall mean the amount determined on account of not passing the benefit of reduction in rate of tax on supply of goods or services or both or the benefit of input tax credit to the recipient by way of commensurate reduction in the price of the goods or services or both." | Section 171 of the CGST Act is being amended so as to empower the National Antiprofiteering Authority (under sub-section (2) of section 171 of the Act) to impose penalty equivalent to 10% of the profiteered amount. | |||
| Current provisions | Proposed provisions | Effect |
| Insertion of New Section 17A: Transfer of Certain Amounts | ||
| After section 17, the following Section 17A shall be inserted: "Where any amount has been transferred from the electronic cash ledger under this Act to the electronic cash ledger under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, the Government shall transfer to the State tax account or the Union territory tax account, an amount equal to the amount transferred from the electronic cash ledger, in such manner and within such time, as may be prescribed." | A new section 17A is being inserted in the IGST Act so as to bring into the Act, provisions for transfer of amount between Centre and States consequential to amendment in section 49 of the CGST Act allowing transfer of an amount from one head to another head in the electronic cash ledger of the registered person. | |
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