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THE CENTRAL GOODS AND SERVICES TAX (AMENDMENT) Act, 2018 R A Y S & Associates
S 1 1. ( 1 ) This Act may be called the Central Goods and Services Tax (Amendment) Act, 2018. ( 2 ) Save as otherwise provided, the provisions of this Act shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint: Provided that different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision. R A Y S & Associates
S 2(18) Business Vertical is deleted As per section 25(2) of the CGST Act, a person seeking registration shall be granted a single registration in a State or Union territory, except in case of multiple business verticals. This option is not currently available to a supplier who has just one vertical but multiple places of business in a State or Union Territory. To ensure clarity in the registration process the concept of business vertical has been removed from GST. A supplier is now allowed to obtain separate registration for each place of his business in a State or Union territory Subject to conditions as may be prescribed. R A Y S & Associates
S 2(102) Service Definition “services” means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged; Explanation:- For the removal of doubts, it is hereby clarified that the expression “services” includes facilitating or arranging transactions in securities R A Y S & Associates
S 7 Supply. ( 1 ST July 2017 ) 7. (1) For the purposes of this Act, the expression “supply” includes– (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; (b) import of services for a consideration whether or not in the course or furtherance of business; and (c) the activities specified in Schedule I made or agreed to be made without a consideration.; and (d) the activities to be treated as supply of goods or supply of services as referred to in Schedule II. (1A) Certain activities or transactions, when constituting a supply in accordance with the provisions of sub-section (1), shall be treated either as supply of goods or supply of services as referred to in Schedule II R A Y S & Associates
SCHEDULE II [ See section 7] ACTIVITIES OR TRANSACTIONS TO BE TREATED AS SUPPLY OF GOODS OR SUPPLY OF SERVICES 1. Transfer a) any transfer of the title in goods is a supply of goods 5 (e) agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act. Maharashtra Authority for Advance Ruling in the case of Maharashtra State Power Generation Company Limited. 7. Supply of Goods The following shall be treated as supply of goods, namely: — Supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration. R A Y S & Associates
SCHEDULE II The taxpayer had contention that:- 1.There is no explicit agreement between the company and the contractor wherein the company is intending to supply service of tolerance of delay . 2. The delay is neither desired by the company nor by the contractor but to impress upon the contractor to adhere to timelines 3. Liquidated damages are in nature of a measure of damages to which parties agree, rather than a remedy. 4. Liquidated damages cannot be said to be the desired income, it is the compensation for loss suffered by recipient 5. Damages are not received by the person for the tolerance of an act, but it is made to compensate the loss suffered. 6. Recovery of liquidated damage is not for supply of service for tolerance of an act. The word ‘obligation’ used in clause clearly means that person should undertake to tolerate an act. There should be a contract for the said purpose and the consideration should be received for such an act of tolerance . 7. Liquidated damages are recovered for compensating the loss suffered by the recipient. Section 73 and 74 of the Indian Contract Act, 1872 provide for recovery of liquidated damages in case of breach of contract R A Y S & Associates
SCHEDULE II Service by CG/SG by way of tolerating an act where consideration received is in form of liquidated damages : S No 62 Notification No 12/2017 CGST (Rate) Rajeshri Food Pvt Ltd ( Karnataka AAR) :- Transfer of Going Concern business is exempt supply of service as mentioned in Sr No 2 of Notification No 12/2017 CGST (Rate) Service of Membership Organization Heading No 9995 It is settled law that mere mention of an item in the Tariff, does not make the same as taxable. In Commissioner of Central Excise, Chandigarh-I v MarkfedVanaspathi and Allied Industries [2003] 4 SCC 1841 the Court held that twin tests of ‘manufacture and marketability’ do not cease to apply if a good falls within a tariff entry, under Excise law. R A Y S & Associates
SCHEDULE I [ See section 7] ACTIVITIES OR TRANSACTIONS TO BE TREATED AS SUPPLY OF GOODS OR SUPPLY OF SERVICES 4) Import of services by a taxable person from a related person or from any of his other establishments outside India, in the course or furtherance of business. This amendment is to ensure that import of services by entities which are not registered under GST (say, they are only making exempted supplies ) but are otherwise engaged in business activities is taxed when received from a related person or from any of their establishments outside India. Columbia Asia Hospitals (P .) Ltd., (AAR-KARNATAKA) R A Y S & Associates
SCHEDULE III [ See section 7] ACTIVITIES OR TRANSACTIONS WHICH SHALL BE TREATED NEITHER AS A SUPPLY OF GOODS NOR A SUPPLY OF SERVICES 7. Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into the taxable territory It is sought to exclude from the tax net such transactions which involve movement of goods, caused by a registered person, from one non-taxable territory to another non-taxable territory Synthite Industries Ltd. (AUTHORITY FOR ADVANCE RULINGS, KERALA) R A Y S & Associates
SCHEDULE III [ See section 7] ACTIVITIES OR TRANSACTIONS WHICH SHALL BE TREATED NEITHER AS A SUPPLY OF GOODS NOR A SUPPLY OF SERVICES 8 (a) Supply of warehoused goods to any person before clearance for home consumption. (b) Supply of goods by the consignee to any other person, by endorsement of documents of title to the goods, after the goods have been dispatched from the port of origin located outside India but before clearance for home consumption. Explanation.- For the purposes of this clause, the expression “warehoused goods” shall have the meaning as assigned to it in the Customs Act, 1962 (52 of 1962. BASF India Ltd (AUTHORITY FOR ADVANCE RULINGS, MAHARASHTRA) - NonTaxable Supply liable for reversal of Common Credit. R A Y S & Associates
Section 9 Levy and collection “( 4 ) The Government may, on the recommendations of the Council, by notification, specify a class of registered persons who shall, in respect of supply of specified categories of goods or services or both received from an unregistered supplier, pay the tax on reverse charge basis as the recipient of such supply of goods or services or both, and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to such supply of goods or services or both. ” R A Y S & Associates
Section 10 Composition Earlier 10. ( 1 ) 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, 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 , an amount calculated at such rate as may be prescribed but not exceeding , Now 10 (1) 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, 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, R A Y S & Associates
Section 10 Composition Earlier Provided that the Government may, by notification, increase the said limit of fifty lakh rupees to such higher amount, not exceeding one crore rupees, as may be recommended by the Council. Now Provided that the Government may, by notification, increase the said limit of fifty lakh rupees to such higher amount, not exceeding one hundred and fifty lakh rupees, as may be recommended by the Council. Recommended under 25 th Council Meeting R A Y S & Associates
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