GOODS & SERVICES TAX UPDATE – 3

CENTRAL GOODS & SERVICES TAX (CGST) Some sections of CGST Act, 2017 to come into effect from 01.07.2017 Central Government vide Notification No. 09/2017-Central Tax, dt. 28-06-2017 has provided 1st July 2017 on which the following sections of CGST Act, 2017 will come into force: Section No. Description 6 Authorization of Officers of State Tax or Union Territory Tax as proper officer in certain circumstances 7-9 Levy & Collection of Tax 11 Power to grant exemption from tax 12-21 Time & Value of Supply and Input Tax Credit 31-34 Tax Invoice, Credit and Debit Notes 35-36 Accounts and Records 37-41 Details of Outward Supplies, Inward Supplies, Returns, First Return and claim of Input Tax Credit and provisional acceptance thereof 42 & 43 except proviso to respective sub-sections (9) Matching, Reversal and Reclaim of Input Tax Credit and Reduction in Output Tax Liability 44-48 Annual Return, Final Return, notice to return defaulters, Levy of Late Fee, GST practitioners 49-50 Payment of Tax, interest, penalty and other amounts and Interest on delayed payment of tax 53 Transfer of Input Tax Credit 54-58 Refunds 59-64 Assessment 65-66 Audit 67-72 Inspection, Search, Seizure and Arrest 73-84 Demands & Recovery 85-94 Liability to pay in Certain Cases 95-106 Advance Ruling 107-121 Appeals and Revision 122-138 Offences and Penalties 140-142 Transitional Provisions 143-145 Job work procedure, Presumption as to documents and admissibility of micro films, fax, printouts as documents and as evidence. 147-163 Miscellaneous Provisions 165-174 [Notification No. 09/2017-Central Tax, dt. 28-06-2017] Additional CGST Rules, 2017 notified By exercising the powers conferred by Section 164 of the CGST Act, 2017, Central Government vide Notification No. 10/2017-Central Tax, dt. 28-06-2017 has amended Central Goods and Services Tax Rules, 2017 w.e.f 1st July 2017. The Central Goods and Services Tax Rules, 2017 are amended to include: Chapter No. Rule(s) Description IV 27-35 Determination of Value of Supply V 36-45 Input Tax Credit VI 46-55 Tax Invoice, Credit and Debit Notes VII 56-58 Accounts and Records VIII 59-84 Returns IX 85-88 Payment of Tax X 89-97 Refund XI 98-102 Assessment and Audit XII 103-107 Advance Ruling XIII 108-116 Appeals and Revision XIV 117-121 Transitional Provisions XV 122-137 Anti-Profiteering XVI 138 E-way Rules The Rules and the formats provided therein are final to the effect and required to be adhered for respective purposes. [Notification No. 10/2017-Central Tax, dt. 28-06-2017] Amendment in modes of Verification of electronic documents as notified Central Government vide Notification No. 11/2017-Central Tax, dt. 28-06-2017 has w.e.f 22nd June 2017 amended Notification No. 06/2017-Central Tax, dt. 19-06-2017 to substitute Bank account based One Time Password (OTP) as an additional mode of verification with the following, for the purpose of the Rule 26: -       ii.            Electronic verification code generated through net banking login on the common portal;     iii.            Electronic verification code generated on the common portal: It is important to note that where the mode of authentication of any document is through any of the aforesaid modes, such verification will be done within 2 days of furnishing the documents. [Notification No. 11/2017-Central Tax, dt. 28-06-2017] Number of HSN digits required on tax invoice notified First proviso to Rule 46 of the Central Goods and Services Tax Rules, 2017 provides that the Board may, on the recommendations of the Council, by notification, specify-         i.            the number of digits of Harmonized System of Nomenclature code for goods or services that a class of registered persons shall be required to mention, for such period as may be specified in the said notification; and       ii.            the class of registered persons that would not be required to mention the Harmonized System of Nomenclature code for goods or services, for such period as may be specified in the said notification In this regard, Central Government vide Notification No. 12/2017-Central Tax, dt. 28-06-2017 has w.e.f 1st July 2017 notified the following number of digits of Harmonized System of Nomenclature (HSN) Codes which are required to be mentioned in a tax invoice issued by a registered person having prescribed annual turnover: S. No. Annual Turnover in the preceding Financial Year Number of Digits of HSN Code Upto Rs. 1.5 crore Nil More than Rs. 1.5 crore and upto Rs. 5 crores 2 More than Rs. 5 crores 4 Similar requirement for mentioning HSN Codes in tax invoice has been prescribed under IGST Act, 2017 vide Notification No. 05/2017-Integrated Tax, dt. 28-06-2017. [Notification No. 12/2017-Central Tax, dt. 28-06-2017 & Notification No. 05/2017-Integrated Tax, dt. 28-06-2017] Interest Rates under CGST Act, 2017 prescribed Central Government vide Notification No. 13/2017-Central Tax, dt. 28-06-2017 has w.e.f 1st July 2017 prescribed the following rates of interest per annum for respective sections as follows: S. No. CGST Act, 2017 Sections Section description Rate of interest 50(1) Failure to pay tax or part thereof to the Government within period prescribed 18% 50(3) For undue or excess claim of ITC or reduction of output tax liability 24% 54(12) Interest on withheld refund 6% 56 Interest on delayed refunds 6% Proviso to 56 Interest on refund arising from order passed by Adjudicating Authority/ Appellate Authority/ Tribunal/ Court and not refunded within 60 days 9% Further, similar interest rates have been prescribed under IGST Act, 2017 vide Notification No. 06/2017-Integrated Tax, dt. 28-06-2017 with regards to section 20 of IGST Act, 2017. [Notification No. 13/2017-Central Tax, dt. 28-06-2017 & Notification No. 06/2017-Integrated Tax, dt. 28-06-2017] INTEGRATED GOODS & SERVICES TAX (IGST) Some sections of IGST Act, 2017 to come into effect from 1.07.2017 Central Government vide Notification No. 03/2017-Integrated Tax, dt. 28-06-2017 has provided 1st July 2017 as the date on which the following sections of IGST Act, 2017 will come into force: Section No. Description 4 Authorization of Officers of State Tax or Union Territory Tax as proper officer in certain circumstances 5-6 Levy & Collection of Tax 7-9 Determination of Nature of Supply 10-13 Place of Supply of Goods or Services or Both 16 Zero Rated Supply 17-19 Apportionment of Tax and Settlement of Funds 21 & 23-25 Miscellaneous [Notification No. 03/2017-Integrated Tax, dt. 28-06-2017] IGST Rules, 2017 notified. Central Government vide Notification No. 04/2017-Integrated Tax, dt. 28-06-2017 has w.e.f 22nd June 2017 notified Integrated Goods and Services Tax Rules, 2017. It has further been provided that the Central Goods and Services Tax Rules, 2017, for carrying out the provisions specified in section 20 of the Integrated Goods and Services Tax Act, 2017 will apply in relation to integrated tax as they apply in relation to central tax. [Notification No. 04/2017-Integrated Tax, dt. 28-06-2017] UNION TERRITORY GOODS & SERVICES TAX Central Government vide Notification No. 03/2017-Union Territory Tax, dt. 28-06-2017 has provided 1st July 2017 as the date on which the following sections of UTGST Act, 2017 will come into force: Section No. Description 6 Authorization of Officers of State Tax or Union Territory Tax as proper officer in certain circumstances 7-8 Levy & Collection of Tax 9-10 Payment of Tax & Transfer of ITC 11 Officers required to assist proper officers 12-13 Demands & Recovery 14-16 Advance Ruling 18-20 Transitional Provisions 23-26 Miscellaneous [Notification No. 03/2017-Union Territory Tax, dt. 28-06-2017]