Highlights of recommendations by GST Council

o To raise upper limit of turnover for obtaining composition scheme from existing INR 1 Cr. to INR 1.5 Cr.

o Under composition scheme, supply of services allowed but with certain restrictions. Supply of services (other than restaurant services) are allowed up to value not exceeding 10% of turnover in preceding financial year or IRN 5 lakhs whichever is higher

o Levy of RCM (Reverse charge mechanism) on receipt of supplies from un-registered suppliers, to be applicable only to specified goods in case of certain notified classes of registered persons

o To raise threshold limit of aggregate turnover for registration in the state of Assam, Arunachal Pradesh, Himachal Pradesh, Meghalaya, Sikkim and Uttrakhand from existing INR 10 lakhs to INR 20 lakhs

o To allow multiple registrations within same state / UT for multiple places of business in that state / UT

o Mandatory registration for only those e-commerce operators who are required to collect tax at source (TCS).

o If cancellation of registration is applied, it will be treated as temporarily suspended and during the process of cancellation, tax payer is relieved of continued compliance under the law

o Certain transactions are added under schedule 3, thereby making them no supply
1. 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;
2. Supply of warehoused goods to any person before clearance for home consumption; and
3. Supply of goods in case of high sea sales

o Scope of input tax credit is being widened, and it would now be made available in respect of the following:
i) Most of the activities or transactions specified in Schedule III;
ii) Motor vehicles for transportation of persons having seating capacity of more than thirteen (including driver), vessels and aircraft;
iii) Motor vehicles for transportation of money for or by a banking company or financial institution;
iv) Services of general insurance, repair and maintenance in respect of motor vehicles, vessels and aircraft on which credit is available; and
v) Goods or services which are obligatory for an employer to provide to its employees, under any law for the time being in force

o In case the recipient fails to pay the due amount to the supplier within 180 days from the date of issue of invoice, the input tax credit availed by the recipient will be reversed, but liability to pay interest is being done away with.

o Big relief! Registered person may issue consolidated Credit / Debit note in respect of multiple invoices issued in financial year

o Amount of pre-deposit payable for filing of appeal before the Appellate Authority and the Appellate Tribunal to be capped at Rs. 25 Crores and Rs. 50 Crores, respectively.

o Power is given to commissioner to extend time limit for return of inputs and capital goods send on job work, up to 1 year for inputs and 2 years for capital goods

o Supply of services to be considered as exports if payment is received in Indian rupees, only if permitted by RBI

o Place of supply in case of job work of any treatment or process done on goods temporarily imported into India and then exported without putting them to any other use in India, to be outside India.

o Recovery can be made from distinct persons, even if present in different State/Union territories.

o The order of cross-utilisation of input tax credit is being rationalised

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Readers are advised to consult the professional for understanding applicability of this writeup in the respective scenarios. While due care has been taken in preparing this writeup, the existence of mistakes and omissions herein is not ruled out. No part of this writeup should be distributed or copied (except for personal, non-commercial use) without our written permission.

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