Only ONE Return for Composition Scheme tax payer, Tax Payment quarterly.

To give effect to the decisions taken during the GST Council meeting, Notification No. 20/2019 Central Tax has been issued by CBIC to give effect to the following:

Only one return for composition Scheme taxpayer, Tax payment quarterly:

Rule 62 has been amended to give an effect that Composition taxpayer (Either registered u/s 10 or availing benefit of notification no. 2/2019 (Central tax Rate)) will have to file GSTR 4 only on annual basis on 30th April following the end of the Financial year e.g. For FY 2019-20 GSTR 4 has to be filed by 30th April 2020. 

However, tax is required to be paid in Form GST CMP-08 on a quarterly basis on 18th of the month following the end of the quarter.

If any person opts out of Composition Scheme, he has to pay tax for the relevant quarter on 18th of the following month.

e.g. If any taxpayer opts out of composition Scheme w.e.f. 31st August 2019, he has to pay tax for Jul and Aug 2019 in GST CMP-08 by 18th Oct 2019.

GST CMP 08

Note:

1. Even if No tax liability is there, NIL statement GST CMP - 08 has to be filed.

2. Negative values have to be reported as such. If the total tax payable becomes negative, the same has to be carried forward to the next period. This is in case of adjustment on account of a Debit/Credit note.

3. Since GST CMP - 08 is just a statement & not return and nothing expressly specified related to late fees of GST CMP - 08, in our opinion late submission of the same will attract only interest and not late fees.

4. GST CMP - 08 is a basic statement containing Outward supplies, Inward supplies with tax liabilities as can be seen from above.

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Return filing requirement in case of Revocation of cancellation of Registration.

CBIC has issued Circular 99/18/2019 - GST providing clarification on the return filling requirements in case of revocation of cancellation of registration.

If any taxpayer's registration has been cancelled on account of non-filling of returns, there are two possibilities of such cancellation:

Case 1. The registration is cancelled as of current date.

Case 2. The registration is cancelled as of the date of filing of last return.

Case 1: In the first case where the registration is cancelled with effect from the current date, the taxpayer has to file the GST returns upto the date of cancellation before applying revocation of cancellation of registration. and the remaining returns (up to date) should be filed within 30 days of revocation of cancellation of Registration.

e.g. If any tax payer has filed Returns upto Jul 2018. His registration has been cancelled with effect from Dec 2018. He has applied for revocation of cancellation in April 2019.

In such -

Case 2.: He has to file his all returns till Dec. 2019 before applying for revocation of cancellation.

He has to submit all returns from Jan 2019 to Apr 2019 within 30 days of order for revocation of cancellation of registration.

In the Second case where the registration has been cancelled retrospectively from the date of filing last return, the tax payer has to file all the remaining returns within 30 days of revocation of cancellation of registration.

If any tax payer has filed Returns upto Jul 2018. His registration has been cancelled with effect from Jul 2018. He has applied for revocation of cancellation in April 2019.

In such -

He has to submit all returns from Aug 2018 to Apr 2019 within 30 days of order for revocation of cancellation of registration.

Clarification Regarding Confusion on Utilization of IGST Credit (Sec. 49A Vis a Vis Rule 88A Vis a Vis GST Portal).

Background

Initially when the GST Amendment Act 2018 was implemented w.e.f. 1st Feb 2019, one of the highlighted issue was newly inserted Sec. 49A. Which had changed the order of utilization of the IGST credit.

Later on, Rule 88A was inserted to nullify the adverse effect of Additional Cash Blockage of Section 49A which allowed to the utilization of IGST credit first against IGST liability and then in any order against CGST liability or SGST liability.

The Circular 98/17/2019 clarifies the following two things:

1. IGST credit, after utilization against IGST Liability, may be utilized in any order, even in part, against CGST liability and SGST liability.

2. The portal currently supports the pre-amendment order of IGST Credit utilization, i.e. credit utilization before Section 49A and 49B. The taxpayer may continue to utilize the Input tax credit in accordance with the functionality available on Portal.

Revocation of Cancellation of the registration even after expiry 30 days of Notice. - Order No. 5/2019

GST department had cancelled a large number of GST registrations on Suo Motto basis on account of non-filing of returns. According to Sec 30(1) taxpayer may apply for Revocation of cancellation of GST Registration within 30 days of receipt of the notice.

Order further states that "the GST being a new law, the taxpayer may not be familiar with the manner of service of notice by email or available on the portal".

Hence, If any taxpayer's registration has been canceled Suo Motto, and 30 days has also expired, the person may still apply for revocation of cancellation up to 22nd July 2019.

Due Date of GSTR 1 and GSTR 7 for the month of March 2019 is extended - Notification 17 and 18

Due date of GSTR 1 and GSTR 7 Extended.

1. CBIC has extended the due date of GSTR 1 for the month of March 2019 to 13th April 2019 - Notification No. 17/2019 - CT


2. CBIC has extended the due date of GSTR 7 for the month of March 2019 to 12th April 2019 - Notification No. 18/2019 - CT

Clarification regarding Option to pay tax under notification 2/2019 - Composition Scheme for Service Provider.

Clarification regarding Composition Scheme for Service provider

With Respect to the option to pay tax under Notification 2/2019 CT (Rate) - i.e. Composition Scheme for Service provider where the service provider has to pay tax at Flat 6% without availing any input tax credit, CBIC has issued following clarifications vide circular No. 97/16/2019-GST

1. If the registered person wants to opt for the composition scheme of Service provider as per notification no. 2/2019 CT (Rate), will have to file GST CMP-02 latest by 30th April 2019 on the portal.

2. For a new registration, the option to opt for the scheme will be available in GST Reg-01 at sr. No. 5 and 6.1(iii).

3. Once option exercised, it shall be deemed to be applicable to all the registration under the same PAN.

4. The option to pay tax by availing benefit of the said notification shall be effective from the beginning of the year or from the date of Registration.

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Reduced GST Rate for Residential Real Estate projects - Summary of all related Notifications.

GST On Residential Real Estate Projects

To implement the decisions made during the various GST Council meeting on issues related to GST rate for real estate Sector, The CBIC has issued notification multiple notifications. This article explains the effect of these notifications in simple language.

 (Notification 3-2019 CGST Rate)

Particulars	Effective Rate of GST	Applicable rate after abatement for value of land
Construction of Affordable Houses (See Note 1)	1.50% (Without ITC)	1% (Without ITC)
Construction of other than Affordable Houses	7.50% (Without ITC)	5% (Without ITC)

General Notes:

1.    Meaning of Affordable Houses shall be:

For Metro cities	a.     Value Should be Rs. 45 Lakhs or less And b.     Carpet Area of the house should not be more than 60 meters
For other than Metro Cities	a. Value Should be Rs. 45 Lakhs or less And b. Carpet Area of the house should not be more than 90 meters

Note: Metropolitan cities are Bengaluru, Chennai, Delhi NCR (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata and Mumbai (the whole of MMR) with their respective geographical limits

2.    No Input tax credit shall be available.

3.    This is compulsive scheme for any projects starting from 1^st April 2019.

4.    Gross amount for this purpose shall include following:

a.     Cost of Construction

Any other amount charged by the promoter from the buyer of the apartment including preferential location charges, development charges, parking charges, common facility charges etc.

5.    Issues related to Input tax credit has been explained in details with illustrations in the notification itself.

Notes about the ongoing projects:

6.   For ongoing projects the Promoter may opt for the above scheme or continue to pay the tax as per the old scheme with ITC. i.e. At 12% or 18% as the case may be.

7.     For Ongoing project, the Promoter will have to exercise one time option to pay tax as per the old scheme. If Promoter does not exercise the option, it will be deemed that the Promoter has opted for new scheme.

8.     Invoices for supply of the service can be issued during the period from 1st April 2019 to 10th May 2019 before exercising the option, but such invoices shall be in accordance with the option to be exercised.

Notes about the Purchase from Un-registered Dealer:

9.     Person falling under this scheme, i.e. Without ITC Scheme, 80% of the Inputs and Input Service have to be obtained from registered supplier only.

Exception:

a.     Development Rights

b.     Lease of Land

c.      FSI Including additional FSI

d.     Electricity

e.     Petrol

f.       Diesel

g.     Natural Gas

For this purpose Supply on which tax is paid on RCM is considered as purchase from registered supplier only.

10. Cement has to be purchased, in all cases, from Registered Supplier. If Cement is Purchased from un registered supplier, Tax at applicable rate will have to be paid by the Promoter on RCM Basis.

11. In case there is a shortfall of 80% of purchase of goods or service from registered supplier, On such shortfall the Promoter will have to pay tax at 18% on Reverse charge basis.

e.g.

Total Purchase	Rs. 100,000/-
80% of the total Purchase	Rs. 80,000/-
Actual Purchase from Registered supplier	Rs. 70,000/-
Short fall of Purchase from Registered Supplier	Rs. 10,000/-
Tax to be paid at 18% on RCM basis (10000 x 18%)	Rs.1,800/-

12. The Promoter shall have to maintain project wise account of Inward supplies from registered person and unregistered person. The shortfall shall be calculated at the year end.

The Promoter shall have to file a Form in which details of such shortfall will have to disclose.

13.Development rights, long term lease of land, or FSI sold by un-registered person to promoter shall be liable for tax under RCM. Promoter shall be liable to pay tax at 18% on such charges under RCM.

Notes Related to Sale of FSI or Transfer of Development Right or Lease:

14. GST shall be exempt on FSI or transfer of Development right or long term lease of more than 30 years Provided :

The promoter shall be liable to pay tax at applicable rate on RCM basis on such proportion of value of:

a.     Transfer of Development Right

b.     FSI

c.      Long term lease

In respect of unsold units on the date of completion certificate or first occupancy. The rate of RCM is 1% for affordable housing and 5% for other than affordable housing. Notification No. 04/2019- Central (Rate)

15.       GST on FSI or Transfer of development rights or long term lease other than mentioned in point no. 14 shall be payable by promoter on RCM basis.(Notification No. 5/2019 – Central Rate)

16.  Liability to pay GST on FSI or Transfer of Development Rights or long ter lease other than mentioned in point no. 14 shall arise on the date  of issuance of completion Certificate or on its first occupation, whichever is earlier. (Notification No. 6/2019 – Central Rate)

17.  For following cases GST shall be payable by promoter in case of purchase from unregistered supplier (Notification No. 7/2019 – Central Rate)

a.     Shortfall from 80% of purchase from registered supplier

b.     Cement

c.      Capital Goods used for the Project

18. GST rate shall be 18% for shortfall of purchase from registered person from 80% other than cement and capital goods. (Notification No. 8/2019 – Central Rate)

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Extension of due date to 30th June of filling Form GST ITC -04 for the period of Jul 17 to Mar-19 - Notification 15/2019 CT

GST ITC - 04 Due date extended.

CBEC has vide notification number 15/2019, extended the due date of filing form GST ITC 04 for the period of Jul 2017 to Mar 2019. The new due date will be 30th June 2019.

What is Form GST ITC 04:

If any manufacturer Sends goods or capital asset for job work for which he has taken input tax credit he has to file GST ITC 04 for sending and receiving back such goods.

As per rule 45 (3) of the said rules, the principal manufacturer is required to file FORM GST ITC-04 mentioning therein details of challans in respect of goods dispatched to a job worker or received from a job worker or sent from one job worker to another job worker. As per rule 45 (3), the detail in FORM GST ITC-04 needs to be filed one quarterly basis on or before the 25th day of the month succeeding the said quarter.

New return filling system under GST - The way forward.

The GSTN has placed a document on new GST Return filling system on 8^th March 2019 on the GST portal. It has been proposed that the new return system shall be operational on a trial basis from 1st April 2019 and on a compulsory basis from 1st Jul 2019.

Here in this article, we have explained the requirements and applicability of all the three returns namely Sahaj, Sugam and Normal. The taxpayer can opt to file ANY ONE of the three returns depending upon the applicability and business requirement. Each return has different features.

This article in later part also discusses the flow of Input tax credit in the new return formats.

A. POINT OF DIFFERENCES BETWEEN THE THREE TYPES OF RETURNS

Particulars	Normal	Sahaj	Sugam
Forms	GST Ret 1	GST Ret 2	GST Ret 3
Annexures	-GST Anx –1 Outward supplies -GST Anx 1 A  Amendment to Outward supplies -GST Anx – 2 - Inward supplies -GST Ans 2A  Amendment to Inward supplies	-GST Anx –1 Outward supplies -GST Anx 1 A  Amendment to Outward supplies -GST Anx – 2 - Inward supplies -GST Ans 2A Amendment to Inward supplies	-GST Anx –1 Outward supplies -GST Anx 1 A  Amendment to Outward supplies -GST Anx – 2 - Inward supplies -GST Ans 2A Amendment to Inward supplies
Periodicity	Return: Quarterly or Monthly Payment: Monthly	Return: Quarterly Payment: Monthly	Return: Quarterly Payment: Monthly
Applicability	For Turnover less than 5 Cr. – Option quarterly For Turnover of more than 5 Cr. – Monthly	Turnover less than 5 Cr.	Turnover less than 5 Cr.
Features	1. All outward supplies 2. The credit of all eligible Inward supplies including missing Invoices (Not uploaded by Supplier) can be taken.	1. Only B2C outward supplies can be shown. 2. Inward supplies attracting tax under RCM can be shown. 3. Cannot make supplies through e-commerce operators. 4. The credit of Missing invoice (Not uploaded by Supplier) not allowed. 5. Not be allowed to make any other type of inward or outward supplies 6. Such taxpayers may make Nil rated, exempted or Non-GST supplies which need not be declared in said return.	The only difference from Sahaj return is that here B2B outward supplies can also be shown. Everything else is same as Sahaj returns.
Particulars	Normal	Sahaj	Sugam
When can the data can be uploaded	Same as Sahaj For Monthly Returns, no documents upload will be possible during 18th to 20th of the following month.	a. Any time during Quarter to which it pertains b. Upto September of the following year or date of filing of annual return whichever is earlier c. No document upload will be possible during 23rd to 25th of the month following end of quarter	Same as Sahaj
Switch	Can be switched to Sugam or Sahaj only ONCE during a year	Can be switched to Sugam or Quarterly Normal MULTIPLE Times during a year	Can be swited to Sugam only ONCE Can be switched to Quarterly Normal MULTIPLE times.
Suitable for	a.    A taxpayer who is also importing and exporting goods/ services (Including Sez Supplies) b.     A taxpayer who is supplying goods/services through E-commerce supplier c.Who wants to avail provisional credit of Invoices not uploaded by Supplier d. More suitable for bigger businesses	a. A taxpayer whose turnover is less than Rs. 5 Crore. b. Who is supplying goods/services only to consumer and not to business c. Who is dealing in only domestic business d. Who does not want to avail Provisional credit of invoices not uploaded by the supplier e. Maybe suitable for a shop keeper selling goods to consumers only	If a taxpayer is supplying goods/services to business, Sugam can be used. Rest all features are same as Sahaj. More suitable for taxpayer who supplies goods to both businesses and consumer or only Businesses.

B. HIGH-LEVEL PROCESS FLOW OF INPUT TAX CREDIT IN SUGAM AND SAHAJ RETURNS

1. For Any document, no action is taken (Accepted, Rejected or Kept pending) shall be deemed to be accepted on the filing of the respective return.

2. The documents uploaded for month ‘M’ by a supplier who did not file his return for the previous two consecutive tax periods (M-1 and M-2 months) shall be made available to the recipient in FORM GST ANX-2 with an indication that the credit shall not be available on such documents. In other words, such documents will be visible to the recipient but the recipient cannot claim ITC on such inward supplies. However, the recipient can reject or keep such documents pending until filing of return by the supplier. For suppliers filing returns on a quarterly basis, this period will be one quarter i.e. if the return of one quarter has not been filed, then recipient will not be able to claim the credit on the invoices uploaded during next quarter.

3.  The return system provides for all editing or amendments from the supplier’s side only. The recipient will have the option to reset / un-lock or reject a document but editing of or amendment to the same shall be made by the supplier only.

C. HIGH-LEVEL PROCESS FLOW OF INPUT TAX CREDIT IN NORMAL RETURNS

Important Notes about the above process 

1. Initially the total of provisional credit to be availed in the return. However later (after Two months in case of monthly return or one quarter in case of quarterly Returns) or if the supplier does not upload the invoices in his return, the recipient shall have to upload the invoice wise details.

e.g. If 3 invoice of April is not uploaded by the supplier, the recipient will have to avail credit in total during the April month. However, if such invoices are not uploaded even up to June, Recipient will have to upload the invoice wise details of all three invoices.

2. In case of supplier later uploads the Invoices, Credit taken provisionally shall have to be reversed.

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