Analysis of CGST (Fifth Amendment ) Rules 2018

By | June 20, 2018
(Last Updated On: June 20, 2018)

Central Goods and Services tax (Fifth Amendment ) Rules, 2018

The Central Government vide Notification No. 26 /2018 –Central Tax dated 13th June, 2018 has notified following rules further to amend the Central Goods and Service Tax Rules ,2017.

ParticularsExisting provisionRevised provision
Insertion in Rule : 37
Reversal of input tax credit in the case of non-payment of consideration
New proviso in Rule 37 has been inserted to provide that that the value of supplies on account of any amount added in accordance with the provisions of clause (b) of sub-section (2) of section 15 shall be deemed to have been paid for the purposes of the second proviso to sub-section (2) of section 16.

Remarks: With the insertion of this proviso any amount that the supplier is liable to pay in relation to supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both shall be deemed to have been paid and no reversal of input tax credit on such amount is required to be made in case recipient fails to pay to the supplier the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice.

Substitution in proviso to sub- rule (3) of Rule : 83

Provisions relating to a goods and services tax practitioner

Provided that no person to whom the provisions of clause (b) of sub-rule (1) apply shall be eligible to remain enrolled unless he passes the said examination within a period of one yearfrom the appointed dateProvided further that no person to whom the provisions of clause (b) of sub-rule (1) apply shall be eligible to remain enrolled unless he passes the said examination within a period of eighteen months from the appointed date.

Remarks: By this amendment, a person who was enrolled as a sales tax practitioner or tax return preparer under the earlier law for a period of not less than five years shall be eligible to remain enrolled unless he passes the said examination within a period of 18 months from the appointed date. Earlier he was required to pass the said examination within a period of one year.

Substitution in sub- rule (5) of Rule: 89

Refund of input tax credit on account of inverted duty structure.

Maximum Refund Amount = {(Turnover of inverted rated supply of goods) x Net ITC ÷ Adjusted Total Turnover} – tax payable on such inverted rated supply of goodsMaximum Refund Amount = {(Turnover of inverted rated supply of goods and services) x Net ITC ÷ Adjusted Total Turnover} – tax payable on such inverted rated supply of goods and services.

The above change has been given a retrospective effect from 01.07.2017.

Substitution in clause (a) of sub- rule (3) of Rule 95: Refund of tax to certain persons.Refund of tax paid by the applicant was available only if the price of supply covered under a single tax invoice exceeds Rs. 5000.Now, this condition has been omitted from the said rule therefore, no condition of amount of invoice to claim refund.

The above change has been given a retrospective effect from 01.07.2017.

Insertion of proviso in sub- rule (1) of Rule 97: Consumer Welfare FundAll amounts of duty/central tax/ integrated tax /Union territory tax/cess and income from investment along with other monies specified under C.E Act, CGST Act,2017; IGST Act,2017; UTGST Act,2017 and Compensation to States Act, 2017 shall be credited to the Fund

Provided that an amount equivalent to fifty per cent of the amount of cess determined under sub-section (5) of section 54 read with section 11 of the Goods and Services Tax (Compensation to States) Act, 2017 (15 of 2017), shall be deposited in the Fund.

Substitution of clause (3) in Rule 133|: Order of the AuthorityWhere the Authority determines that a registered person has not passed on the benefit of the reduction in the rate of tax on the supply of goods or services or the benefit of input tax credit to the recipient by way of commensurate reduction in prices, the Authority may order

(a) reduction in prices;

(b) Return to the recipient, an amount equivalent to the amount not passed on by way of commensurate reduction in prices along with interest at the rate of 18%. from the date of collection of the higher amount till the date of the return of such amount or recovery of the amount including interest not returned, as the case may be; in case the eligible person does not claim return of the amount or is not identifiable, and depositing the same in the fund referred to in section 57

(c) imposition of penalty as specified under the Act; and

(d) cancellation of registration under the Act

Where the Authority determines that a registered person has not passed on the benefit of the reduction in the rate of tax on the supply of goods or services or the benefit of input tax credit to the recipient by way of commensurate reduction in prices, the Authority may order-

(a) reduction in prices;

(b) Return to the recipient, an amount equivalent to the amount not passed on by way of commensurate reduction in prices along with interest at the rate of eighteen per cent. from the date of collection of the higher amount till the date of the return of such amount or recovery of the amount including interest not returned, as the case may be; in case the eligible person does not claim return of the amount or is not identifiable, and depositing the same in the fund referred to in section 57

(c) The deposit of an amount equivalent to 50% of the amount determined under the above clause in the Fund constituted under section 57 and the remaining fifty per cent of the amount in the Fund constituted under section 57 of the Goods and Services Tax Act, 2017 of the concerned State, where the eligible person does not claim return of the amount or is not identifiable;

(d) imposition of penalty as specified under the Act; and

(e) cancellation of registration under the Act.

Explanation: For the purpose of this sub-rule, the expression, ―concerned State‖ means the State in respect of which the Authority passes an order.

Remarks: Amendment in the rule has been made to provide that the funds ordered to be paid by such authority shall be shared equally by Center & the concerned State. 

Insertion of clause (o) in sub-rule (14) of Rule 138: E-way bill.A new clause (o) has been inserted to the list of specified goods on which no e-way bill is required to be generated

Clause (o) contains “empty cylinders for packing of liquefied petroleum gas are being moved for reasons other than supply.”

Remarks: Empty cylinders sent by the fabricator are not eligible for this relaxation which is only available between bolting plant and the distributor-dealer-consumer network which meets the conditions prescribed.

Insertion of sl. No 10 in instructions to Form GSTR 4 (A quarterly return to be filed by the composition suppliers)Serial 4A of Table 4 which requires information about Inward supplies received from a registered supplier (other than supplies attracting reverse charge) is not required to be furnished for the tax periods July, 2017 to September, 2017, October, 2017 to December, 2017, January, 2018 to March, 2018 and April, 2018 to June, 2018.
Insertion in Form GST PCT-01

(Application for Enrolment as Goods and Services Tax Practitioner)

 Enrolment sought as:

11. Sales Tax practitioner under existing law for a period of not less than five years

12. Tax return preparer under existing law for a period of not less than five years]

Form GST- RFD-01Changes have been made in the said form in the Statement related to the refund of accumulated ITC due to inverted tax structure. This is to make the form in line with the changes made in the formula for calculating Refund. Similar change has been made in RFD – 01A for online filing.

Reference : ICAI

 

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