1
As INTRODUCED IN LOK SABHA
Bill No. 143 of 2018
THE CENTRAL GOODS AND SERVICES TAX (AMENDMENT)
BILL, 2018
A
BILL
further to amend the Central Goods and Services Tax Act, 2017.
BE it enacted by Parliament in the Sixty-ninth Year of the Republic of India as follows:--
1. (1) This Act may be called the Central Goods and Services Tax (Amendment) Short title
Act, 2018. and
commencement.
(2) Save as otherwise provided, the provisions of this Act shall come into force on
5 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.
12 of 2017. 2. In section 2 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to Amendment
10 as the principal Act), of section 2.
(a) in clause (4),
(i) for the words "Central Board of Excise and Customs", the words "Central
Board of Indirect Taxes and Customs" shall be substituted;
2
(ii) for the words "the Appellate Authority and the Appellate Tribunal",
the words, brackets and figures "the Appellate Authority, the Appellate Tribunal
and the Authority referred to in sub-section (2) of section 171" shall be
substituted;
(b) in clause (17), for sub-clause (h), the following sub-clause shall be substituted, 5
namely:--
"(h) activities of a race club including by way of totalisator or a license to
.
book maker or activities of a licensed book maker in such club; and";
(c) clause (18) shall be omitted;
(d) in clause (35), for the word, brackets and letter "clause (c)", the word, brackets 10
and letter "clause (b)" shall be substituted;
(e) in clause (69), in sub-clause (f), after the word and figures "article 371", the
words, figures and letter "and article 371J" shall be inserted;
(f) in clause (102), the following Explanation shall be inserted, namely:
`Explanation.For the removal of doubts, it is hereby clarified that the 15
expression "services" includes facilitating or arranging transactions in
securities;'.
Amendment 3. In section 7 of the principal Act, with effect from the 1st day of July, 2017,
of section 7.
(a) in sub-section (1),
(i) in clause (b), after the words "or furtherance of business;", the word 20
"and" shall be inserted and shall always be deemed to have been inserted;
(ii) in clause (c), after the words "a consideration", the word "and" shall
be omitted and shall always be deemed to have been omitted;
(iii) clause (d) shall be omitted and shall always be deemed to have been
omitted; 25
(b) after sub-section (1), the following sub-section shall be inserted and shall
always be deemed to have been inserted, namely:
"(1A) where certain activities or transactions, constitute a supply in
accordance with the provisions of sub-section (1), they shall be treated either as
supply of goods or supply of services as referred to in Schedule II."; 30
(c) in sub-section (3), for the words, brackets and figures "sub-sections (1) and
(2)", the words, brackets, figures and letter "sub-sections (1), (1A) and (2)" shall be
substituted.
Amendment 4. In section 9 of the principal Act, for sub-section (4), the following sub-section shall
of section 9. be substituted, namely: 35
"(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 40
person liable for paying the tax in relation to such supply of goods or services or
both.".
Amendment 5. In section 10 of the principal Act,--
of section 10.
(a) in sub-section (1) --
(i) for the words "in lieu of the tax payable by him, an amount calculated at 45
such rate", the words, brackets and figures "in lieu of the tax payable by him
3
under sub-section (1) of section 9, an amount of tax calculated at such rate" shall
be substituted;
(ii) in the proviso, for the words "one crore rupees", the words "one crore
and fifty lakh rupees" shall be substituted;
5 (iii) after the proviso, the following proviso shall be inserted, namely:
"Provided further that a person who opts to pay tax under
clause (a) or clause (b) or clause (c) may supply services (other than those
referred to in clause (b) of paragraph 6 of Schedule II), of value not
exceeding ten per cent. of turnover in a State or Union territory in the
10 preceding financial year or five lakh rupees, whichever is higher.";
(b) in sub-section (2), for clause (a), the following clause shall be substituted,
namely:
"(a) save as provided in sub-section (1), he is not engaged in the supply
of services;".
15 6. In section 12 of the principal Act, in sub-section (2), in clause (a), the words, Amendment
brackets and figure "sub-section (1) of" shall be omitted. of section 12.
7. In section 13 of the principal Act, in sub-section (2), the words, brackets and figure Amendment
"sub-section (2) of" occurring at both the places, shall be omitted. of section 13.
8. In section 16 of the principal Act, in sub-section (2), Amendment
of section 16.
20 (a) in clause (b), for the Explanation, the following Explanation shall be
substituted, namely:--
"Explanation.--For the purposes of this clause, it shall be deemed that
the registered person has received the goods or, as the case may be, services
(i) where the goods are delivered by the supplier to a recipient or
25 any other person on the direction of such registered person, whether
acting as an agent or otherwise, before or during movement of goods,
either by way of transfer of documents of title to goods or otherwise;
(ii) where the services are provided by the supplier to any person
on the direction of and on account of such registered person.";
30 (b) in clause (c), for the word and figures "section 41", the words, figures and
letter "section 41 or section 43A" shall be substituted.
9. In section 17 of the principal Act, Amendment
of section 17.
(a) in sub-section (3), the following Explanation shall be inserted, namely:
`Explanation.--For the purposes of this sub-section, the expression
35 ``value of exempt supply'' shall not include the value of activities or transactions
specified in Schedule III, except those specified in paragraph 5 of the said
Schedule.';
(b) in sub-section (5), for clauses (a) and (b), the following clauses shall be
substituted, namely:--
40 "(a) motor vehicles for transportation of persons having approved seating
capacity of not more than thirteen persons (including the driver), except when
they are used for making the following taxable supplies, namely:--
(A) further supply of such motor vehicles; or
(B) transportation of passengers; or
45 (C) imparting training on driving such motor vehicles;
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(aa) vessels and aircraft except when they are used
(i) for making the following taxable supplies, namely:--
(A) further supply of such vessels or aircraft; or
(B) transportation of passengers; or
(C) imparting training on navigating such vessels; or 5
(D) imparting training on flying such aircraft;
(ii) for transportation of goods;
(ab) services of general insurance, servicing, repair and maintenance in so
far as they relate to motor vehicles, vessels or aircraft referred to in clause (a) or
clause (aa): 10
Provided that the input tax credit in respect of such services shall be available--
(i) where the motor vehicles, vessels or aircraft referred to in
clause (a) or clause (aa) are used for the purposes specified therein;
(ii) where received by a taxable person engaged--
(I) in the manufacture of such motor vehicles, vessels or 15
aircraft; or
(II) in the supply of general insurance services in respect of
such motor vehicles, vessels or aircraft insured by him;
(b) the following supply of goods or services or both--
(i) food and beverages, outdoor catering, beauty treatment, health 20
services, cosmetic and plastic surgery, leasing, renting or hiring of motor
vehicles, vessels or aircraft referred to in clause (a) or clause (aa) except
when used for the purposes specified therein, life insurance and health
insurance:
Provided that the input tax credit in respect of such goods or services 25
or both shall be available where an inward supply of such goods or services
or both is used by a registered person for making an outward taxable
supply of the same category of goods or services or both or as an element
of a taxable composite or mixed supply;
(ii) membership of a club, health and fitness centre; and 30
(iii) travel benefits extended to employees on vacation such as
leave or home travel concession:
Provided that the input tax credit in respect of such goods or services
or both shall be available, where it is obligatory for an employer to provide
to its employees under any law for the time being in force.". 35
Amendment 10. In section 20 of the principal Act, in the Explanation, in clause (c), for the words
of section 20. and figures "under entry 84,", the words, figures and letter "under entries 84 and 92A" shall
be substituted.
Amendment 11. In section 22 of the principal Act,
of section 22.
(a) in sub-section (1), after the proviso, the following proviso shall be inserted, 40
namely:--
"Provided further that the Government may, at the request of a special
category State and on the recommendations of the Council, enhance the aggregate
turnover referred to in the first proviso from ten lakh rupees to such amount, not
exceeding twenty lakh rupees and subject to such conditions and limitations, as 45
may be so notified;";
5
(b) in the Explanation, in clause (iii), after the words "State of Jammu and
Kashmir", the words "and States of Arunachal Pradesh, Assam, Himachal Pradesh,
Meghalaya, Sikkim and Uttarakhand" shall be inserted.".
12. In section 24 of the principal Act, in clause (x), after the words "commerce operator", Amendment
5 the words and figures "who is required to collect tax at source under section 52" shall be of section 24.
inserted.
13. In section 25 of the principal Act, Amendment
of section 25.
(a) in sub-section (1), after the first proviso and before the Explanation, the
following proviso shall be inserted, namely:
10 "Provided further that a person having a unit, as defined in the Special
28 of 2005. Economic Zones Act, 2005, in a Special Economic Zone or being a Special
Economic Zone developer shall have to apply for a separate registration, as
distinct from his place of business located outside the Special Economic Zone in
the same State or Union territory.";
15 (b) in sub-section (2), for the proviso, the following proviso shall be substituted,
namely:
"Provided that a person having multiple places of business in a State or
Union territory may be granted a separate registration for each such place of
business, subject to such conditions as may be prescribed.".
20 14. In section 29 of the principal Act, Amendment
of section 29.
(a) in the marginal heading after the word "Cancellation", the words "or
suspension" shall be inserted;
(b) in sub-section (1), after clause (c), the following proviso shall be inserted,
namely:--
25 "Provided that during pendency of the proceedings relating to cancellation
of registration filed by the registered person, the registration may be suspended
for such period and in such manner as may be prescribed.";
(c) in sub-section (2), after the proviso, the following proviso shall be inserted,
namely:--
30 "Provided further that during pendency of the proceedings relating to
cancellation of registration, the proper officer may suspend the registration for
such period and in such manner as may be prescribed.".
15. In section 34 of the principal Act, Amendment
of section 34.
(a) in sub-section (1),
35 (i) for the words "Where a tax invoice has", the words "Where one or more
tax invoices have" shall be substituted;
(ii) for the words "a credit note", the words "one or more credit notes for
supplies made in a financial year" shall be substituted;
(b) in sub-section (3),
40 (i) for the words "Where a tax invoice has", the words "Where one or more
tax invoices have" shall be substituted;
(ii) for the words "a debit note", the words "one or more debit notes for
supplies made in a financial year" shall be substituted.
16. In section 35 of the principal Act, in sub-section (5), the following proviso shall be Amendment
45 inserted, namely:-- of section 35.
"Provided that nothing contained in this sub-section shall apply to any
department of the Central Government or a State Government or a local authority,
whose books of account are subject to audit by the Comptroller and Auditor-General
of India or an auditor appointed for auditing the accounts of local authorities under
50 any law for the time being in force.".
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Amendment 17. In section 39 of the principal Act,
of section 39.
(a) in sub-section (1),
(i) for the words "in such form and manner as may be prescribed", the
words "in such form, manner and within such time as may be prescribed" shall
be substituted; 5
(ii) the words "on or before the twentieth day of the month succeeding
such calendar month or part thereof" shall be omitted;
(iii) the following proviso shall be inserted, namely:--
"Provided that the Government may, on the recommendations of the
Council, notify certain classes of registered persons who shall furnish 10
return for every quarter or part thereof, subject to such conditions and
safeguards as may be specified therein.";
(b) in sub-section (7), the following proviso shall be inserted, namely:
"Provided that the Government may, on the recommendations of the
Council, notify certain classes of registered persons who shall pay to the 15
Government the tax due or part thereof as per the return on or before the last date
on which he is required to furnish such return, subject to such conditions and
safeguards as may be specified therein.";
(c) in sub-section (9),
(i) for the words "in the return to be furnished for the month or quarter 20
during which such omission or incorrect particulars are noticed", the words "in
such form and manner as may be perscribed" shall be substituted;
(ii) in the proviso, for the words "the end of the financial year", the words
"the end of the financial year to which such details pertain" shall be substituted.
Insertion of new 18. After section 43 of the principal Act, the following section shall be inserted, namely:-- 25
section 43A.
Procedure for "43A. (1) Notwithstanding anything contained in sub-section (2) of section 16,
furnishing section 37 or section 38, every registered person shall in the returns furnished under
return and
availing input sub-section (1) of section 39 verify, validate, modify or delete the details of supplies
tax credit. furnished by the suppliers.
(2) Notwithstanding anything contained in section 41, section 42 or section 43, 30
the procedure for availing of input tax credit by the recipient and verification thereof
shall be such as may be prescribed.
(3) The procedure for furnishing the details of outward supplies by the supplier
on the common portal, for the purposes of availing input tax credit by the recipient
shall be such as may be prescribed. 35
(4) The procedure for availing input tax credit in respect of outward supplies
not furnished under sub-section (3) shall be such as may be prescribed and such
procedure may include the maximum amount of the input tax credit which can be so
availed, not exceeding twenty per cent. of the input tax credit available, on the basis of
details furnished by the suppliers under the said sub-section. 40
(5) The amount of tax specified in the outward supplies for which the details
have been furnished by the supplier under sub-section (3) shall be deemed to be the
tax payable by him under the provisions of the Act.
(6) The supplier and the recipient of a supply shall be jointly and severally
liable to pay tax or to pay the input tax credit availed, as the case may be, in relation to 45
outward supplies for which the details have been furnished under sub-section (3) or
sub-section (4) but return thereof has not been furnished.
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(7) For the purposes of sub-section (6), the recovery shall be made in such
manner as may be prescribed and such procedure may provide for non-recovery of an
amount of tax or input tax credit wrongly availed not exceeding one thousand rupees.
(8) The procedure, safeguards and threshold of the tax amount in relation to
5 outward supplies, the details of which can be furnished under sub-section (3) by a
registered person,--
(i) within six months of taking registration;
(ii) who has defaulted in payment of tax and where such default has
continued for more than two months from the due date of payment of such
10 defaulted amount,
shall be such as may be prescribed.".
19. In section 48 of the principal Act, in sub-section (2), after the word and figures Amendment
"section 45", the words "and to perform such other functions" shall be inserted. of section 48.
20. In section 49 of the principal Act, Amendment
of section 49.
15 (a) in sub-section (2), for the word and figures "section 41", the words, figures
and letter "section 41 or section 43A" shall be substituted;
(b) in sub-section (5),
(i) in clause (c), the following proviso shall be inserted, namely:
"Provided that the input tax credit on account of State tax shall be
20 utilised towards payment of integrated tax only where the balance of the
input tax credit on account of central tax is not available for payment of
integrated tax;";
(ii) in clause (d), the following proviso shall be inserted, namely:
"Provided that the input tax credit on account of Union territory tax
25 shall be utilised towards payment of integrated tax only where the balance
of the input tax credit on account of central tax is not available for payment
of integrated tax;".
21. After section 49 of the principal Act, the following sections shall be inserted, Insertion of
namely: new sections
49A and 49B.
30 "49A. Notwithstanding anything contained in section 49, the input tax credit on Utilisation of
input tax
account of central tax, State tax or Union territory tax shall be utilised towards payment
credit subject
of integrated tax, central tax, State tax or Union territory tax, as the case may be, only to certain
after the input tax credit available on account of integrated tax has first been utilised conditions.
fully towards such payment.
35 49B. Notwithstanding anything contained in this Chapter and subject to the Order of
provisions of clause (e) and clause (f) of sub-section (5) of section 49, the Government utilisation of
input tax
may, on the recommendations of the Council, prescribe the order and manner of credit.
utilisation of the input tax credit on account of integrated tax, central tax, State tax or
Union territory tax, as the case may be, towards payment of any such tax.".
40 22. In section 52 of the principal Act, in sub-section (9), for the word and figures Amendment
"section 37", the words and figures "section 37 or section 39" shall be substituted. of section 52.
23. In section 54 of the principal Act,-- Amendment
of section 54.
(a) in sub-section (8), in clause (a), for the words "zero-rated supplies", the
words "export" and "exports" shall respectively be substituted;
45 (b) in the Explanation, in clause (2),
8
(i) in sub-clause (c), in item (i), after the words "foreign exchange", the
words "or in Indian rupees wherever permitted by the Reserve Bank of India"
shall be inserted;
(ii) for sub-clause (e), the following sub-clause shall be substituted,
namely: 5
"(e) in the case of refund of unutilised input tax credit under
clause (ii) of the first proviso to sub-section (3), the due date for furnishing
of return under section 39 for the period in which such claim for refund
arises;".
Amendment 24. In section 79 of the principal Act, after sub-section (4), the following Explanation 10
of section 79. shall be inserted, namely:--
`Explanation.For the purposes of this section, the word person shall include
"distinct persons" as referred to in sub-section ( 4) or, as the case may be,
sub-section (5) of section 25.'.
Amendment of 25. In section 107 of the principal Act, in sub-section (6), in clause (b), after the words 15
section 107. "arising from the said order,", the words "subject to a maximum of twenty-five crore rupees,"
shall be inserted.
Amendment of 26. In section 112 of the principal Act, in sub-section (8), in clause (b), after the words
section 112. "arising from the said order," the words "subject to a maximum of fifty crore rupees," shall be
inserted. 20
Amendment of 27. In section 129 of the principal Act, in sub-section (6), for the words "seven days",
section 129. the words "fourteen days" shall be substituted.
Amendment of 28. In section 140 of the principal Act, with effect from the 1st day of July, 2017,
section 140.
(a) in sub-section (1), after the letters and word "CENVAT credit", the words "of
eligible duties" shall be inserted and shall always be deemed to have been inserted; 25
(b) in the Explanation 1--
(i) for the word, brackets and figures "sub-sections (3), (4)", the word,
brackets and figures "sub-sections (1), (3), (4)" shall be substituted and shall
always be deemed to have been substituted;
(ii) clause (iv) shall be omitted and shall always be deemed to have been 30
omitted;
(c) in the Explanation 2--
(i) for the word, brackets and figure "sub-section (5)", the words, brackets
and figures "sub-sections (1) and (5)" shall be substituted and shall always be
deemed to have been substituted; 35
(ii) clause (iv) shall be omitted and shall always be deemed to have been
omitted;
(d) after Explanation 2 as so amended, the following Explanation shall be
inserted and shall always be deemed to have been inserted, namely:--
`Explanation 3.--For removal of doubts, it is hereby clarified that the 40
expression "eligible duties and taxes" excludes any cess which has not been
specified in Explanation 1 or Explanation 2 and any cess which is collected as
additional duty of customs under sub-section (1) of section 3 of the Customs
Tariff Act, 1975.'. 51 of 1975.
9
29. In section 143 of the principal Act, in sub-section (1), in clause (b), after the Amendment
proviso, the following proviso shall be inserted, namely:-- of section
143.
"Provided further that the period of one year and three years may, on sufficient
cause being shown, be extended by the Commissioner for a further period not exceeding
5 one year and two years respectively.".
30. In Schedule I of the principal Act, in paragraph 4, for the words "taxable person", Amendment
the word "person" shall be substituted. of Schedule I.
31. In Schedule II of the principal Act, in the heading, after the word "ACTIVITIES", Amendment of
Schedule II.
the words "OR TRANSACTIONS" shall be inserted and shall be deemed to have been
10 inserted with effect from the 1st day of July, 2017.
32. In Schedule III of the principal Act, -- Amendment of
Schedule III.
(i) after paragraph 6, the following paragraphs shall be inserted, namely:
"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 India.
15 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
20 consumption.";
(ii) The Explanation shall be numbered as Explanation 1 and after Explanation
1 as so numbered, the following Explanations shall be inserted, namely:--
"Explanation 2 .For the purposes of this paragraph, the expression
"warehoused goods" shall have the same meaning as assigned to it in the Customs
52 of 1962. 25 Act, 1962.".
STATEMENT OF OBJECTS AND REASONS
The Central Goods and Services Tax Act, 2017 (the Act) was enacted with a view to
make a provision for levy and collection of tax on intra-State supply of goods or services or
both by the Central Government.
2. The Act provides for certain provisions for smooth transition of existing taxpayers
to new goods and services tax regime. However, the new tax regime had faced certain
difficulties. One of the major inconveniences caused to the taxpayers, especially small and
medium enterprises, was the process of filing return and payment of tax under the Goods and
Services Tax laws. In this regard, the proposed new return filing system envisages quarterly
filing of return and tax payment for small taxpayers along with minimum paperwork. In order
to implement the new return filing system, and also to overcome the above difficulties, it is
proposed to amend the Central Goods and Services Tax Act, 2017.
3. The proposed Central Goods and Services Tax (Amendment) Bill, 2018, inter alia,
provides for the following, namely:--
(i) to amend section 7 of the Act to clarify the scope of supply;
(ii) to amend section 9 of the Act empowering the Central Government to notify
classes of registered persons to pay the tax on reverse charge basis in respect of
receipt of supplies of certain specified categories of goods or services or both from
unregistered suppliers;
(iii) to amend section 10 of the Act so as to enhance the limit of composition levy
from one crore rupees to one crore and fifty lakh rupees;
(iv) to amend section 17 of the Act to specify the scope of input tax credit;
(v) to amend section 22 of the Act to enhance the exemption limit for registration
in the special category States from ten lakh rupees to twenty lakh rupees;
(vi) to amend section 25 of the Act so as to facilitate tax payer to have the option
to obtain multiple registrations for multiple places of business located within the same
State or Union territory and to provide for separate registration for Special Economic
Zone unit or developer;
(vii) to amend section 29 of the Act so as to insert a provision for temporary
suspension of registration while cancellation of registration is under process;
(viii) to insert a new section 43A so as to provide for the new system of filing
return and availing input tax credit;
(ix) to amend sub-section (6) of section 107 of the Act relating to Appeals so as
to provide that the amount of pre-deposit payable for filing of appeal shall be capped
at twenty five crore rupees;
(x) to amend section 129 of the Act so as to increase the period relating to
detention or seizure of goods and conveyance in transit from seven days to fourteen
days.
4. The Bill seeks to achieve the above objectives.
NEW DELHI; PIYUSH GOYAL
The 4th August, 2018.
10
11
PRESIDENT'S RECOMMENDATION UNDER ARTICLE 117 AND 274 OF THE
CONSTITUTION OF INDIA
--------
[Copy of D.O. No. CBEC/20/06/05/2018-GST dated 6th August, 2018 from
Shri Piyush Goyal, Minister of Finance to the Secretary General, Lok Sabha]
The President, having been informed of the subject matter of the Central Goods and
Services Tax (Amendment) Bill, 2018, recommends the introduction of the Central Goods and
Services Tax (Amendment) Bill, 2018, to Lok Sabha under clauses (1) and (3) of article 117
read with clause (1) of article 274 of the Constitution of India, and also recommends to Lok
Sabha the consideration of the Bill.
Notes on clauses
Clause 1 of the Bill provides for the Short title and Commencement.
Clause 2 of the Bill seeks to amend certain expressions used in the Bill.
Clause 3 of the Bill seeks to amend section 7 of the principal Act relating to "Scope of
Supply" in order to clarify the scope of supply.
Clause 4 of the Bill seeks to amend section 9 of the principal Act relating to "Levy and
Collection" so as to restrict the levy of tax on reverse charge basis to receipt of supplies of
certain specified categories of goods or services or both by notified classes of registered
persons from unregistered suppliers on the recommendations of the Council.
Clause 5 of the Bill seeks to amend section 10 of the principal Act relating to
"Composition Levy", so as to raise the statutory threshold of turnover for a taxpayer to be
eligible for the composition scheme from one crore rupees to one crore and fifty lakh rupees,
and to allow the composition taxpayers to supply services (other than restaurant services),
for up to a value not exceeding ten per cent. of turnover in the preceding financial year, or five
lakh rupees, whichever is higher.
Clause 6 of the Bill seeks to amend section 12 of the principal Act relating to "Time of
supply of goods" and the said amendment is drafting in nature.
Clause 7 of the Bill seeks to amend section 13 of the principal Act relating to "Time of
supply of services" and the said amendment is drafting in nature.
Clause 8 of the Bill seeks to amend section 16 of the principal Act relating to "Eligibility
and conditions for input tax credit", in order to provide for input tax credit in cases of "Bill-
to-ship-to" model in the case of supply of services. The said clause further seeks to include
the provisions relating to the new return format as specified in the proposed new section
43A, for availment of input tax credit.
Clause 9 of the Bill seeks to amend section 17 of the principal Act relating to
"Apportionment of credit and blocked credits", in order to further expand the scope of
eligibility of input tax credit.
Clause 10 of the Bill seeks to amend section 20 of the principal Act relating to "Manner
of distribution of credit by Input Service Distributor", in order to exclude the amount of tax
levied under Entry 92A of List I of the Seventh Schedule of the Constitution from the value
of turnover for the purposes of distribution of credit.
Clause 11 of the Bill seeks to amend section 22 of the principal Act relating to "Persons
liable for registration", so as to increase the threshold turnover for registration in special
category States of Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and
Uttarakhand from ten lakh rupees to twenty lakh rupees.
Clause 12 of the Bill seeks to amend section 24 of the principal Act relating to
"Compulsory registration in certain cases", so as to provide for mandatory registration for
only those e-commerce operators who are liable to collect tax at source under section 52 of
the principal Act.
Clause 13 of the Bill seeks to amend section 25 of the principal Act relating to "Procedure
for registration", so as to allow persons having multiple places of business in a State or
Union territory to obtain separate registration for each such place of business, and to insert
the provisions for separate registration for a person having a unit(s) in a Special Economic
Zone or being a Special Economic Zone developer, distinct from his other units located
outside the Special Economic Zone.
12
13
Clause 14 of the Bill seeks to amend section 29 of the principal Act relating to
"Cancellation of registration", so as to provide for temporary suspension of registration
while cancellation of registration is under process.
Clause 15 of the Bill seeks to amend section 34 of the principal Act relating to "Credit
and debit notes", so as to allow registered persons to issue consolidated credit or debit
notes in respect of multiple invoices issued in a Financial Year.
Clause 16 of the Bill seeks to amend section 35 of the principal Act relating to "Accounts
and other records" so as to provide that any Department of the Central or State Government
or local authority which is subject to audit by the Comptroller and Auditor-General of India
need not get their books of account audited by any Chartered Accountant or Cost Accountant.
Clause 17 of the Bill seeks to amend section 39 of the principal Act relating to
"Furnishing of returns", so as to provide for prescribing the procedure for quarterly filing of
returns with monthly payment of taxes.
Clause 18 of the Bill seeks to insert a new section 43A to provide for prescribing the
procedure for furnishing return and availing input tax credit.
Clause 19 of the Bill seeks to amend section 48 of the principal Act relating to "Goods
and Services Tax Practitioners", so as to allow Goods and Services Tax Practitioners to
perform other functions such as filing refund claim, filing application for cancellation of
registration, etc.
Clause 20 of the Bill seeks to amend section 49 of the principal Act relating to "Payment
of tax, interest, penalty and other amounts" in order to provide that the credit of State tax or
Union territory tax can be utilised for payment of integrated tax only when the balance of the
input tax credit on account of central tax is not available for payment of integrated tax.
Clause 21 of the Bill seeks to insert two new sections, namely, section 49A and section
49B. Section 49A seeks to specify that a taxpayer would be able to utilise the input tax credit
on account of central tax, State tax or Union territory tax only after exhausting all the credit on
account of integrated tax available to him towards payment or integrated tax, Central tax,
State tax or Union territory tax. Section 49B seeks to empower the Government to prescribe
any specific order of utilisation of input tax credit of any of the taxes for payment of any tax.
Clause 22 of the Bill seeks to amend section 52 of the principal Act relating to "Collection
of tax at source", in order to give the reference of section 39.
Clause 23 of the Bill seeks to amend section 54 of the principal Act relating to "Refund
of tax", in order to provide that the principle of unjust enrichment will apply in case of a
refund claim arising out of supplies of goods or services or both made to a Special Economic
Zone developer or unit, and to allow receipt of payment in Indian rupees, where permitted, by
the Reserve Bank of India in case of export of services.
Clause 24 of the Bill seeks to amend section 79 of the principal Act relating to "Recovery
of tax", to enable recovery to be made from distinct persons registered in different States or
Union territories in order to ensure speedy recovery from other establishments of the
registered person.
Clause 25 of the Bill seeks to amend section 107 of the principal Act relating to "Appeals
to Appellate Authority", in order to specify twenty-five crore rupees as the upper limit of the
amount of pre-deposit payable for filing of appeal before the Appellate Authority.
Clause 26 of the Bill seeks to amend section 112 of the principal Act relating to "Appeals
to Appellate Tribunal", in order to specify fifty crore rupees as the upper limit of the amount
of pre-deposit payable for filing of appeal before the Appellate Tribunal.
Clause 27 of the Bill seeks to amend section 129 of the principal Act relating to
"Detention, seizure and release of goods and conveyances in transit", in order to increase
the time limit before which proceedings under section 130 can be initiated from seven to
fourteen days.
14
Clause 28 of the Bill seeks to amend section 140 of the principal Act relating to
"Transitional arrangements for input tax credit", in order to clarify with retrospective effect
from 1st July, 2017 that the cesses and additional duty of excise (on textile and textile articles)
levied under the pre-Goods and Services Tax laws shall not be a part of transitional input tax
credit under the goods and services tax.
Clause 29 of the Bill seeks to amend section 143 of the principal Act relating to "Job
work procedure" in order to empower the Commissioner to extend the time limit for return of
inputs and capital goods sent on job work, upto a period of one year and two years,
respectively.
Clause 30 of the Bill seeks to amend Schedule I of the principal Act relating to "Activities
to be treated as supply even if made without consideration".
Clause 31 of the Bill seeks to amend the title of Schedule II of the principal Act from
"Activities to be treated as supply of goods or supply of services" to "Activities or transactions
to be treated as supply of goods or supply of services".
Clause 32 of the Bill seeks to amend Schedule III of the principal Act relating to
"Activities or transactions which shall be treated neither as a supply of goods nor a supply
of services".
FINANCIAL MEMORANDUM
The proposed Central Goods and Services Tax (Amendment) Bill, 2018 does not involve
any recurring or non-recurring expenditure from the Consolidated Fund of India.
15
MEMORANDUM REGARDING DELEGATED LEGISLATION
Clause 13 of the Bill empowers the Central Government to prescribe the procedure for
allowing persons having multiple places of business in a State or Union territory to obtain
separate registrations for each such place of business.
Clause 14 of the Bill empowers the Central Government to prescribe the procedure for
suspension of registration while cancellation of registration is under process.
Clause 17 of the Bill empowers the Central Government to prescribe the procedure for
filing of returns and payment of taxes.
Clause 18 of the Bill empowers the Central Government to prescribe the procedure for
furnishing returns and availing input tax credit.
Clause 21 of the Bill empowers the Central Government to prescribe the specific order
of utilisation of input tax credit of any of the taxes.
2. The matters in respect of which the rules may be made are generally matters of
procedure and administrative details and it is not practicable to provide for them in the Bill
itself. The delegation of legislative powers is, therefore, of a normal character.
16
ANNEXURE
EXTRACTS FROM THE CENTRAL GOODS AND SERVICES TAX ACT, 2017
(12 OF 2017)
* * * * *
2. In this Act, unless the context otherwise requires,-- Definitions.
* * * * *
(4) "adjudicating authority" means any authority, appointed or authorised to
pass any order or decision under this Act, but does not include the Central Board of
Excise and Customs, the Revisional Authority, the Authority for Advance Ruling, the
Appellate Authority for Advance Ruling, the Appellate Authority and the Appellate
Tribunal;
* * * * *
(17) "business" includes--
* * * * *
(h) services provided by a race club by way of totalisator or a licence to
book maker in such club ; and
* * * * *
(18) "business vertical" means a distinguishable component of an enterprise
that is engaged in the supply of individual goods or services or a group of related
goods or services which is subject to risks and returns that are different from those of
the other business verticals.
Explanation.--For the purposes of this clause, factors that should be considered
in determining whether goods or services are related include--
(a) the nature of the goods or services;
(b) the nature of the production processes;
(c) the type or class of customers for the goods or services;
(d) the methods used to distribute the goods or supply of services; and
(e) the nature of regulatory environment (wherever applicable), including
banking, insurance, or public utilities;
* * * * *
(35) "cost accountant" means a cost accountant as defined in clause (c) of
23 of 1959. sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959;
* * * * *
(69) "local authority" means--
* * * * *
(f) a Development Board constituted under article 371 of the Constitution; or
* * * * *
17
18
(102) "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;
* * * * *
CHAPTER III
LEVY AND COLLECTION OF TAX
Scope of 7. (1) For the purposes of this Act, the expression "supply" includes--
supply.
(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;
(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.
* * * * *
(3) Subject to the provisions of sub-sections (1) and (2), the Government may, on the
recommendations of the Council, specify, by notification, the transactions that are to be
treated as--
(a) a supply of goods and not as a supply of services; or
(b) a supply of services and not as a supply of goods.
* * * * *
Levy and 9. ( 1 ) * * * * *
collection.
(4) The central tax in respect of the supply of taxable goods or services or both by a
supplier, who is not registered, to a registered person shall be paid by such person on
reverse charge basis as the recipient 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 the supply of such goods
or services or both.
* * * * *
Composition 10. (1) Notwithstanding anything to the contrary contained in this Act but subject to
levy. 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,--
(a) one per cent. of the turnover in State or turnover in Union territory in case of
a manufacturer,
(b) two and a half per cent. of the turnover in State or turnover in Union territory
in case of persons engaged in making supplies referred to in clause (b) of paragraph 6
of Schedule II, and
(c) half per cent. of the turnover in State or turnover in Union territory in case of
other suppliers,
subject to such conditions and restrictions as may be prescribed:
19
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.
(2) The registered person shall be eligible to opt under sub-section (1), if:--
(a) he is not engaged in the supply of services other than supplies referred to in
clause (b) of paragraph 6 of Schedule II;
* * * * *
CHAPTER IV
TIME AND VALUE OF SUPPLY
12. ( 1 ) * * * * * Time of
supply of
(2) The time of supply of goods shall be the earlier of the following dates, namely:-- goods.
(a) the date of issue of invoice by the supplier or the last date on which he is
required, under sub-section (1) of section 31, to issue the invoice with respect to the
supply; or
* * * * *
13. ( 1 ) * * * * * Time of
supply
(2) The time of supply of services shall be the earliest of the following dates, namely:-- of services.
(a) the date of issue of invoice by the supplier, if the invoice is issued within the
period prescribed under sub-section (2) of section 31 or the date of receipt of payment,
whichever is earlier; or
(b) the date of provision of service, if the invoice is not issued within the period
prescribed under sub-section (2) of section 31 or the date of receipt of payment,
whichever is earlier; or
(c) the date on which the recipient shows the receipt of services in his books of
account, in a case where the provisions of clause (a) or clause (b) do not apply:
Provided that where the supplier of taxable service receives an amount up to one
thousand rupees in excess of the amount indicated in the tax invoice, the time of supply to
the extent of such excess amount shall, at the option of the said supplier, be the date of issue
of invoice relating to such excess amount.
Explanation.--For the purposes of clauses (a) and (b)--
(i) the supply shall be deemed to have been made to the extent it is covered by
the invoice or, as the case may be, the payment;
(ii) "the date of receipt of payment" shall be the date on which the payment is
entered in the books of account of the supplier or the date on which the payment is
credited to his bank account, whichever is earlier.
* * * * *
CHAPTER V
INPUT TAX CREDIT
16. ( 1 ) * * * * * Eligibility and
conditions for
(2) Notwithstanding anything contained in this section, no registered person shall be taking input
entitled to the credit of any input tax in respect of any supply of goods or services or both to tax credit.
him unless,--
* * * * *
(b) he has received the goods or services or both.
20
Explanation.--For the purposes of this clause, it shall be deemed that the
registered person has received the goods where the goods are delivered by the
supplier to a recipient or any other person on the direction of such registered person,
whether acting as an agent or otherwise, before or during movement of goods, either
by way of transfer of documents of title to goods or otherwise;
(c) subject to the provisions of section 41, the tax charged in respect of such
supply has been actually paid to the Government, either in cash or through utilisation
of input tax credit admissible in respect of the said supply; and
* * * * *
Apportionment 17. ( 1 ) * * * * *
of credit and
blocked (3) The value of exempt supply under sub-section (2) shall be such as may be
credits. prescribed, and shall include supplies on which the recipient is liable to pay tax on reverse
charge basis, transactions in securities, sale of land and, subject to clause ( b) of
paragraph 5 of Schedule II, sale of building.
* * * * *
(5) Notwithstanding anything contained in sub-section (1) of section 16 and
sub-section (1) of section 18, input tax credit shall not be available in respect of the following,
namely:--
(a) motor vehicles and other conveyances except when they are used--
(i) for making the following taxable supplies, namely:--
(A) further supply of such vehicles or conveyances; or
(B) transportation of passengers; or
(C) imparting training on driving, flying, navigating such vehicles
or conveyances;
(ii) for transportation of goods;
(b) the following supply of goods or services or both--
(i) food and beverages, outdoor catering, beauty treatment, health services,
cosmetic and plastic surgery except where an inward supply of goods or services
or both of a particular category is used by a registered person for making an
outward taxable supply of the same category of goods or services or both or as
an element of a taxable composite or mixed supply;
(ii) membership of a club, health and fitness centre;
(iii) rent-a-cab, life insurance and health insurance except where--
(A) the Government notifies the services which are obligatory for
an employer to provide to its employees under any law for the time being
in force; or
(B) such inward supply of goods or services or both of a particular
category is used by a registered person for making an outward taxable
supply of the same category of goods or services or both or as part of a
Taxable composite or mixed supply; and
(iv) travel benefits extended to employees on vacation such as leave or
home travel concession;
* * * * *
21
20. ( 1 ) * * * * * Manner of
distribution of
Explanation.--For the purposes of this section,-- credit by
Input Service
* * * * * Distributor.
(c) the term ''turnover'', in relation to any registered person engaged in the supply
of taxable goods as well as goods not taxable under this Act, means the value of
turnover, reduced by the amount of any duty or tax levied under entry 84 of List I of the
Seventh Schedule to the Constitution and entries 51 and 54 of List II of the said
Schedule.
* * * * *
24. Notwithstanding anything contained in sub-section (1) of section 22, the following Compulsory
categories of persons shall be required to be registered under this Act,-- registration in
certain cases.
* * * * *
(x) every electronic commerce operator;
* * * * *
25. (1) Every person who is liable to be registered under section 22 or section 24 shall Procedure for
apply for registration in every such State or Union territory in which he is so liable within registration.
thirty days from the date on which he becomes liable to registration, in such manner and
subject to such conditions as may be prescribed:
Provided that a casual taxable person or a non-resident taxable person shall apply for
registration at least five days prior to the commencement of business.
Explanation.--Every person who makes a supply from the territorial waters of India
shall obtain registration in the coastal State or Union territory where the nearest point of the
appropriate baseline is located.
(2) A person seeking registration under this Act shall be granted a single registration
in a State or Union territory:
Provided that a person having multiple business verticals in a State or Union territory
may be granted a separate registration for each business vertical, subject to such conditions
as may be prescribed.
* * * * *
29. ( 1 ) * * * * * Cancellation
of
(c) the taxable person, other than the person registered under sub- section (3) of registration.
section 25, is no longer liable to be registered under section 22 or section 24.
* * * * *
34. (1) Where a tax invoice has been issued for supply of any goods or services or Credit and
both and the taxable value or tax charged in that tax invoice is found to exceed the taxable debit
notes.
value or tax payable in respect of such supply, or where the goods supplied are returned by
the recipient, or where goods or services or both supplied are found to be deficient, the
registered person, who has supplied such goods or services or both, may issue to the
recipient a credit note containing such particulars as may be prescribed.
* * * * *
(3) Where a tax invoice has been issued for supply of any goods or services or both
and the taxable value or tax charged in that tax invoice is found to be less than the taxable
value or tax payable in respect of such supply, the registered person, who has supplied such
goods or services or both, shall issue to the recipient a debit note containing such particulars
as may be prescribed.
* * * * *
22
CHAPTER VIII
ACCOUNTS AND RECORDS
Accounts and 35. ( 1 ) * * * * *
other records.
(5) Every registered person whose turnover during a financial year exceeds the
prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant
and shall submit a copy of the audited annual accounts, the reconciliation statement under
sub-section (2) of section 44 and such other documents in such form and manner as may be
prescribed.
* * * * *
Furnishing of 39. (1) Every registered person, other than an Input Service Distributor or a
returns.
non-resident taxable person or a person paying tax under the provisions of section 10 or
section 51 or section 52 shall, for every calendar month or part thereof, furnish, in such form
and manner as may be prescribed, a return, electronically, of inward and outward supplies of
goods or services or both, input tax credit availed, tax payable, tax paid and such other
particulars as may be prescribed, on or before the twentieth day of the month succeeding
such calendar month or part thereof.
* * * * *
(7) Every registered person, who is required to furnish a return under sub-section (1)
or sub-section (2) or sub-section (3) or sub-section (5), shall pay to the Government the tax
due as per such return not later than the last date on which he is required to furnish such
return.
* * * * *
(9) Subject to the provisions of sections 37 and 38, if any registered person after
furnishing a return under sub-section (1) or sub-section (2) or sub-section (3) or sub-section
(4) or sub-section (5) discovers any omission or incorrect particulars therein, other than as
a result of scrutiny, audit, inspection or enforcement activity by the tax authorities, he shall
rectify such omission or incorrect particulars in the return to be furnished for the month or
quarter during which such omission or incorrect particulars are noticed, subject to payment
of interest under this Act:
Provided that no such rectification of any omission or incorrect particulars shall be
allowed after the due date for furnishing of return for the month of September or second
quarter following the end of the financial year, or the actual date of furnishing of relevant
annual return, whichever is earlier.
* * * * *
Goods and 48. ( 1 ) * * * * *
services tax
practitioners. (2) A registered person may authorise an approved goods and services tax practitioner
to furnish the details of outward supplies under section 37, the details of inward supplies
under section 38 and the return under section 39 or section 44 or section 45 in such manner
as may be prescribed.
* * * * *
CHAPTER X
PAYMENT OF TAX
Payment of 49. ( 1 ) * * * * *
tax, interest,
penalty and (2) The input tax credit as self-assessed in the return of a registered person shall be
other credited to his electronic credit ledger, in accordance with section 41, to be maintained in
amounts. such manner as may be prescribed.
* * * * *
23
(5) The amount of input tax credit available in the electronic credit ledger of the registered
person on account of--
* * * * *
(c) the State tax shall first be utilised towards payment of State tax and the
amount remaining, if any, may be utilised towards payment of integrated tax;
(d) the Union territory tax shall first be utilised towards payment of Union territory
tax and the amount remaining, if any, may be utilised towards payment of integrated
tax;
* * * * *
52. ( 1 ) * * * * * Collection of
tax at source.
(9 ) Where the details of outward supplies furnished by the operator under
sub-section (4) do not match with the corresponding details furnished by the supplier under
section 37, the discrepancy shall be communicated to both persons in such manner and
within such time as may be prescribed.
* * * * *
CHAPTER XI
REFUNDS
54. ( 1 ) * * * * * Refund of
tax.
(8) Notwithstanding anything contained in sub-section (5), the refundable amount
shall, instead of being credited to the Fund, be paid to the applicant, if such amount is
relatable to--
(a) refund of tax paid on zero-rated supplies of goods or services or both or on
inputs or input services used in making such zero-rated supplies;
* * * * *
(e) the tax and interest, if any, or any other amount paid by the applicant, if he
had not passed on the incidence of such tax and interest to any other person; or
* * * * *
CHAPTER XVIII
APPEALS AND REVISION
107. ( 1 ) * * * * * Appeals
to
(6) No appeal shall be filed under sub-section (1), unless the appellant has Appllate
paid-- Authority.
* * * * *
(b) a sum equal to ten per cent, of the remaining amount of tax in dispute arising
from the said order, in relation to which the appeal has been filed.
* * * * *
112. ( 1 ) * * * * * Appeals
to
(8) No appeal shall be filed under sub-section (1), unless the appeallant has Appllate
paid-- Tribunal.
* * * * *
(b) a sum equal to twenty per cent of the remaining amount of tax in
dispute, in addition to the amount paid under sub-section (6) of section 107,
arising from the said order, in relation to which the appeal has been filled.
* * * * *
24
Detention, 129. ( 1 ) * * * * *
seizure and
release of (6) Where the person transporting any goods or the owner of the goods fails to pay
goods and the amount of tax and penalty as provided in sub-section (1) within seven days of such
conveyances
in transit.
detention or seizure, further proceedings shall be initiated in accordance with the provisions
of section 130:
Provided that where the detained or seized goods are perishable or hazardous in
nature or are likely to depreciate in value with passage of time, the said period of seven days
may be reduced by the proper officer.
* * * * *
Transitional 140. (1) A registered person, other than a person opting to pay tax under section 10,
arrangements
for input tax
shall be entitled to take, in his electronic credit ledger, the amount of CENVAT credit carried
credit. forward in the return relating to the period ending with the day immediately preceding the
appointed day, furnished by him under the existing law in such manner as may be prescribed:
Provided that the registered person shall not be allowed to take credit in the
following circumstances, namely:--
(i) where the said amount of credit is not admissible as input tax credit
under this Act; or
(ii) where he has not furnished all the returns required under the existing
law for the period of six months immediately preceding the appointed date; or
(iii) where the said amount of credit relates to goods manufactured and
cleared under such exemption notifications as are notified by the Government.
* * * * *
Explanation 1.--For the purposes of sub-sections (3), (4) and (6), the expression
"eligible duties" means--
* * * * *
(iv) the additional duty of excise leviable under section 3 of the Additional
Duties of Excise (Textile and Textile Articles) Act, 1978; 40 of 1978.
* * * * *
Explanation 2.--For the purposes of sub-section (5), the expression "eligible
duties and taxes" means--
* * * * *
(iv) the additional duty of excise leviable under section 3 of the Additional
Duties of Excise (Textile and Textile Articles) Act, 1978; 40 of 1978.
* * * * *
CHAPTER XXI
MISCELLANEOUS
Job work 143. ( 1 ) * * * * *
procedure.
(b) supply such inputs, after completion of job work or otherwise, or
capital goods, other than moulds and dies, jigs and fixtures, or tools, within one
year and three years, respectively, of their being sent out from the place of
business of a job worker on payment of tax within India, or with or without
payment of tax for export, as the case may be:
Provided that the principal shall not supply the goods from the place of
business of a job worker in accordance with the provisions of this clause unless
25
the said principal declares the place of business of the job worker as his additional
place of business except in a case--
(i) where the job worker is registered under section 25; or
(ii) where the principal is engaged in the supply of such goods as
may be notified by the Commissioner.
* * * * *
SCHEDULE I
[See section 7]
ACTIVITIES TO BE TREATED AS SUPPLY EVEN IF MADE WITHOUT CONSIDERATION
* * * * *
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.
SCHEDULE II
[See section 7]
ACTIVITIES TO BE TREATED AS SUPPLY OF GOODS OR SUPPLY OF SERVICES
* * * * *
LOK SABHA
--------
A
BILL
further to amend the Central Goods and Services Tax Act, 2017.
--------
(Shri Piyush Goyal, Minister of Finance, Corporate Affairs, Railways and Coal)
MGIPMRND--1400LS--06.08.2018
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