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Changes Proposed in the CGST Act, 6 Changes in IGST and Two in GST Compensation
Act
A
year after the introduction of GST, the government has proposed major changes
in GST laws. The proposed changes include newer version of the Reverse Charge
Mechanism, no transitional credit for cess,
definition of services for composition scheme and input tax credit, among
others.
It
proposes 38 changes in CGST Act 2017, six changes and explanations in IGST Act
2017 and two in GST (Compensation to States) Act. Some of these changes are in
response to earlier decisions taken by the GST Council, while a few have been
proposed on the basis of representations made by trade and industry. The
government has invited comments from stakeholders by July 15.
The
Finance Ministry has already indicated that it will table the amendments during
the forthcoming session of Parliament scheduled from July 18.
Reverse Charge Mechanism
Taking
note of the recommendation of the Group of States’ Finance Ministers on RCM, it
has now proposed to delete the present Section 9 (4) and introduce a new
Section 9 (4), which will permit the government, on the recommendations of the
GST Council, to notify a specific class of registered persons and goods that
would be covered under the RCM provision.
Any
manufacturer or trader can opt for the composition
scheme, provided his/her turnover is up to ₹1 crore. Also, barring
restaurants, no services can be part of the composition scheme. Now based on
decision by the GST Council, there is a
proposal to raise the threshold to ₹1.5 crore.
Also,
the demand of industry has been accepted in the proposed amendment where a
manufacturer or trader can opt for composition scheme even if they supply
services. But there is a condition prescribed that supply of services should
not be more that 10 per cent of the total turnover or ₹5 lakh, whichever
is lower in the previous financial years.
Input tax credit
The
government proposes five changes and one explanation here. One such proposal
talks about providing deeming provision for both goods and services. Deeming
provision means the registered person is
deemed to have received the goods where the goods are delivered by the
supplier to a recipient or any other person on the direction of the said
registered person. This definition will be applicable to services.
Another
amendment proposed is to remove the liability to pay interest in case where the
recipient has been made liable to pay an amount equal to the ITC availed in
case he fails to pay to the supplier of goods or services or both the amount
towards the value of supply along with tax payable thereon within a period of
180 days from the date of issue of invoice by the supplier.