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CA- INTERMEDIATE
GST AMENDMENTS
applicable for
May 2021 ATTEMPT
By :- CA SANCHIT GROVER
(Only faculty with more than 4.5 years
of experience in tax consultancy at Big 4)
CA INTER
CA. SAHIL GROVER
Video lectures & Study Material
Corporate Laws & Other Laws
AV
J
AC
AD
EM
Y
₹ 7600/- ₹ 7200/-
CA INTER
CA. SANCHIT GROVER
Video lectures & Study Material
TAXATIONTAXATIONA
VJ
AC
AD
EM
Y
₹ 9800/- ₹ 8800/-
Amendments related to Goods & Services Tax For May 21 CA Inter exams
CA SANCHIT GROVER (Insta ID:- Sanchit.Grover.372) Page 1
Note for my Dear Students – CA Sanchit Grover
These notes are useful for Students who are using 4th Edition of our GST book (Blue and
Orange color book). 4th Edition of the book contains only the amendments up to 31st October
2019. Besides, separate amendment notes were provided for amendments during 1st Nov 2019 to
30th April 2020. The link for those notes and related amendment video is as under:-
Link for GST amendments upto 30th April 2020 for Nov 20 exams
Part A of amendment video:-
https://www.youtube.com/watch?v=lDxBtp3gUVs&t=5640s
Part B of amendment video:-
https://www.youtube.com/watch?v=vZSohRdMGuo&t=8451s
GST Amendment Booklet for Nov 20 exams:-
https://drive.google.com/file/d/1CwjNtTr9Vq2HMDQUG4FApRoSOJf9e9H9/view?usp=sharing
This amendment booklet shall be a complete reference for CA Inter students in respect of all
amendments during 1st May 2020 to 31st October 2020 that are relevant for May 2021
examinations of CA Intermediate and IPCC
Separate amendment video has been uploaded on our YouTube channel “CA Knowledge Portal”
discussing these amendments in detail. The link to this amendment video has also been sent to
virtual classes students. All Students are advised to refer to this video lecture while studying
these notes for conceptual clarity
Although 11 amendments have been covered in this booklet, but all these amendments do not
carry equal importance level. Certain amendments that are very important from examination
purpose, have been highlighted in the Index section. Students are advised to study those
amendments in great detail for May 2021 exams.
There may be cases where a provision of law has undergone multiple amendments during 1st May
2020 to 31st October 2020. In such case, as per ICAI guidelines the law prevailing on 31st
October 2020 (after all such amendments) shall be applicable for exam purpose. This point has
been ensured while drafting this amendment booklet
The author would like to acknowledge that since these notes are primarily meant for CA
Intermediate and CA-IPCC Students preparing for May 2021 examination, we have borrowed
certain illustrations and interpretations from latest ICAI Study Material. Revision Test Paper
(RTP) relevant for May 21 exams was not released yet by ICAI at the time of preparation of this
document. Any questions related to these amendments that are released by ICAI in RTP shall be
discussed separately (Don’t worry, separate video for those will be brought on our YouTube
channel…!!)
In case any reader of these notes has any doubt or need any clarification, you can contact me at
Instagram ID given below. Students who have been taking our live or virtual classes must already
have my whatsapp number for queries purpose.
While we have tried to ensure that these notes remain error free, any inadvertent error that may
have been there in these notes may be brought to the knowledge of the author. Your contribution
to make our notes error free shall be highly acknowledged in the future editions.
Amendments related to Goods & Services Tax For May 21 CA Inter exams
CA SANCHIT GROVER (Insta ID:- Sanchit.Grover.372) Page 2
All the Best my dear Students…!!!
Regards,
CA Sanchit Grover
Amendments related to Goods & Services Tax For May 21 CA Inter exams
CA SANCHIT GROVER (Insta ID:- Sanchit.Grover.372) Page 3
Summary of all Amendments
(for last day revision) Sr.
No.
Summary of the amendment Relevant
Provisio
n
Page
No.
Category A:- Amendments relating to Charge of GST 1. State of J&K bifurcate into 2 separate UTs:- UT of Ladakh without legislature
(to be treated as Union Territory for GST purposes) and UT of Jammu &
Kashmir having its own legislature (to be treated as State for GST purposes)
UT of Dadra & Nagar Haveli and UT of Daman & Diu to be merged and treated
as one single Union Territory (it won’t be having its own legislature, hence it
will be treated as Union territory for GST purposes)
Sec
2(114) of
CGST
Act
7
2. The words “whether or not for consideration” deleted from Entry 4 of Schedule II
to clarify the intention of Law :-
- Firstly check whether any transaction (permanent disposal or putting assets to other
than business use) is without consideration, then it should first satisfy the conditions
of Sec 7(1)(c) r/w Schedule I and
- Only after such transaction becomes ‘supply’, we need to read Entry 4 of Schedule
II to decide whether it is supply of goods or supply of services.
Sec
7(1A)
r/w
Schedule
II
9
3. Taxability of Services provided by director to Company shall be as under:-
If Director is not
employee of
Company
It will be treated as ‘Supply’ under GST and reverse
charge shall be applicable (i.e. Company shall be liable
to pay GST, not the director)
If Director is
employee of the
Company
a) Remuneration paid for services that are under scope of
employment contract and TDS deducted u/s 192 of IT
Act – Not to be treated as supply as per Schedule III of
CGST Act
a) Remuneration paid for services that are outside the
scope of employment contract and TDS deducted u/s
194J of IT Act – Treated as ‘supply’ for GST purposes
and reverse charge applicable
Circular
No.
140/10/2
020 dated
10th June
2020
10
Category B:- Amendments relating to Registration and related procedures 4. Important for exams
Following amendments in the registration procedure w.e.f. 21st August 2020:-
1) Assessee now has option whether he wishes to go for Aadhar authentication
after filing Part-B of GST REG-01 or not (even an individual who is in
possession of valid Aadhar number can choose not to go for aadhar
authentication)
2) In case aadhar authentication is not opted OR it is opted but failed, then
following consequences:-
Physical verification of applicant’s premises by PO before grant of
registration (fixed time limit of 60 days removed now, but since concept of
deemed approval has been re-introduced, it should be implied completed
within 21 days)
Instead of Physical verification, PO can go for verification of such
documents he considers fit (however, if he opts for documents verification,
he has to record reasons in writing and also obtain approval from any
Sec
25(6B)
read with
Rule 8, 9
and 25
12
Amendments related to Goods & Services Tax For May 21 CA Inter exams
CA SANCHIT GROVER (Insta ID:- Sanchit.Grover.372) Page 4
officer not below the rank of JC)
3) Concept of deemed approval of GST REG-01 if PO fails to take any action within
:-
a) 3 working days (in case aadhar authentication not mandatory u/s 25(6D) OR
aadhar authentication done successfully within 15 days)
b) 21 working days (in case aadhar authentication not opted OR aadhar
Category C:- Amendments relating to Exemptions under GST
5. In case of following two exemptions, the time limit (beyond which they will become
inoperative) has been extended from 30th Sep 2020 to 30th Sep 2021
a) Services by way of transportation of goods by an aircraft from customs station of
clearance in India to a place outside India
b) Services by way of transportation of goods by a vessel from customs station of
clearance in India to a place outside India
NN
13/2017
issued u/s
11 of
CGST
Act
16
6. A new exemption has been brought to provide that Satellite launch services
supplied by the following shall be exempt from tax:-
Indian space research organization (ISRO)
Antrix Corporation Limited
New Space India Limited
NN
13/2017
issued u/s
11 of
CGST
Act
16
Category D:- Amendments relating to ‘Documentation under GST’ 7. Important for exams
Special procedure of e-invoicing (getting unique IRN and QR code on the invoice by
registering details with IRP) mandatory under Rule 48(4) for any registered person,
whose ATO in any preceding FY from FY 2017-18 onwards, is more than 500
Crore, in respect of the following documents:-
a) B2B invoices (i.e. invoices issued to registered recipients)
b) Invoices for export
c) Debit note or credit note u/s 34
Special procedure u/r 48(4) not mandatory for the following:-
Units in Special Economic Zone (only SEZ units, not SEZ developers)
Banking Company or a Financial Institution (including NBFC) or Insurer
GTA engaged in supplying services of transportation of goods by road in a
goods carriage
Suppliers of passenger transportation service
Suppliers of service by way of admission to exhibition of cinematograph
films in multiplex screens
Consequences of not following special e-invoicing procedure:- Invoice issue shall
be treated as invalid (as if no tax invoice u/s 31 has been issued)
Other amendments when E-invoicing procedure u/r 48(4) followed
a) No need to issue tax invoice copies in duplicate or triplicate
b) Tax invoice to mandatorily contain QR code, having embedded IRN, as one
of the particulars prescribed under Rule 46
c) During movement of goods, it is not mandatory to carry physical copy of tax
invoice, instead, QR Code may be produced for verification by PO
Rule
48(4)
16
8. Not relevant for May 21 exam
W.e.f. 1st April 2021, It is mandatory for all registered person to mention HSN on tax
invoice in the manner below:-
Annual Turnover (ATO)
in the preceding FY
Number of Digits of HSN Code
Proviso
to Rule
46
20
Amendments related to Goods & Services Tax For May 21 CA Inter exams
CA SANCHIT GROVER (Insta ID:- Sanchit.Grover.372) Page 5
ATO ≤ Rs. 5 crores 4 digits in case of B2B invoices
Optional not to mention HSN in case of B2C
invoices
ATO > Rs. 5 crores 6 digits in case of all types of invoices
Category E: - Amendments relating to ‘Payment of tax’ 9. Important for exams
Interest u/s 50 shall be calculated @18% on Net GST Cash liability (i.e. after
adjustment of ITC) in case of late payment of tax (where such supplies have been
declared on self-assessment basis in GST return before initiation of any proceedings
u/s 73 and 74).
In case tax has been paid after initiation of proceedings u/s 73 and 74, Interest u/s 50
shall be calculated on Gross Tax liability (i.e. before adjustment of ITC)
Proviso
to Sec 50
(applicab
le w.e.f.
1st July
2017)
21
Category F: - Amendments relating to ‘Returns under GST’ 10 GSTR-3B shall continue to be filed on monthly basis only but due date of filing
shall be as under:-
In case of registered persons having ATO > 5 Cr.
in preceding FY
20th of next month
In case of registered persons having ATO < 5 Cr.
in preceding FY
22nd or 24th of next
month
In case of a registered person having ATO < 1.5 Cr. in preceding FY or current
FY, GSTR-1 may be filed on quarterly basis – due date of filing shall be 13th
day of month immediately succeeding the relevant quarter In case of registered persons filing GSTR-1 on monthly basis, due date shall be
11th day of immediately succeeding month
Sec 37
and 39 of
CGST
Act
22
11. Following returns/statements can be filed through SMS facility:-
a) Nil GSTR-3B
b) Nil GSTR-1
c) Nil GST CMP-08 (in case of composition dealers)
Nil return/statement means such cases where all tables are Nil or empty
Rule 67A 23
Amendments related to Goods & Services Tax For May 21 CA Inter exams
CA SANCHIT GROVER (Insta ID:- Sanchit.Grover.372) Page 6
GST
Amendments
in
Detail
Amendments related to Goods & Services Tax For May 21 CA Inter exams
CA SANCHIT GROVER (Insta ID:- Sanchit.Grover.372) Page 7
GST Amendments for CA Inter & CA IPCC (May 2021)
Amendment No. 1: - Change in the definition of Union Territory – Amendment in Sec 2(114)
Relevant Chapter : Introduction to GST
What we
already know
Earlier, Jammu & Kashmir (including the territory of Ladakh) was a full state with its own
legislature. Article 370 provided that any act passed by Parliament would apply to J&K only
after it is approved by Legislative Assembly of J&K. Accordingly, CGST Act & IGST Act
(passed by Parliament) were ratified by J&K Assembly and SGST Act was also passed by it.
In short, legally J&K was considered at par with any other State of India for the purposes of
GST.
Further, UT of Dadra & Nagar Haveli and UT of Daman & Diu were two separate UTs (both
were without legislature)
Why was there
need for
amendment
The introduction of Jammu & Kashmir Reorganization Act, 2019 has led to the bifurcation of
State of Jammu & Kashmir into two Union Territories namely
the Union Territory of Jammu & Kashmir (to have its own legislature)
the Union Territory of Ladakh (without legislature)
The Re-organization was effective from 31st October 2019.
Further, a new Act was passed namely “The Dadra and Nagar Haveli and Daman and Diu
(Merger of Union Territories) Act, 2019” which has merged these two union territories. The
new UT has become effective from 26th Jan 2020 and will not have any legislature of its own
(just like earlier). The main purpose for doing this was to reduce duplication of services and
reduce the cost of administration.
What is the
amendment
after FA 2020
UT of Jammu & Kashmir will be treated as ‘State’ for GST purpose (since it has
legislature of its own)
UT of Ladakh will be treated as Union territory for GST purpose
UT of Dadra & Nagar Haveli and Daman & Diu will be treated as single Union
Territory for GST purpose
Illustrations to understand the amendment Illustration 1:- Taxes applicable if transaction happening between X Ltd (Supplier) and Y Ltd. (Recipient)
S
No.
Location of
Supplier
Location of
Recipient
Status before amendment Status after amendment
Type of Type of tax Type of Type of tax
Category A: - Amendments relating to Charge of GST
Amendments related to Goods & Services Tax For May 21 CA Inter exams
CA SANCHIT GROVER (Insta ID:- Sanchit.Grover.372) Page 8
transaction applicable transaction applicable 1. J&K J&K Intra-State Supply CGST + SGST Intra-State Supply CGST + SGST
2. Ladakh Ladakh Intra-State Supply CGST + SGST Intra-State Supply CGST + UTGST
3. J&K Ladakh Intra-State Supply CGST + SGST Inter-State Supply IGST
4. Ladakh J&K Intra-State Supply CGST + SGST Inter-State Supply IGST
5. Dadra &
Nagar Haveli
Daman &
Diu
Inter-State Supply IGST Intra-State Supply CGST + UTGST
6. Daman &
Diu
Dadra &
Nagar Haveli
Inter-State Supply IGST Intra-State Supply CGST + UTGST
Illustration 2:- Taxes applicable if transaction happening between two branches/establishments of the same
person
S
No.
Location of
Supplier
branch
Location of
Recipient
Status before amendment Status after amendment
Type of
transaction
Type of tax
applicable
Type of
transaction
Type of tax
applicable 1. J&K J&K Not a supply No GST Not a supply No GST
2. Ladakh Ladakh Not a supply No GST Not a supply No GST
3. J&K Ladakh Not a supply No GST Inter-State Supply IGST
4. Ladakh J&K Not a supply No GST Inter-State Supply IGST
5. Dadra &
Nagar Haveli
Daman &
Diu
Inter-State Supply IGST Not a supply No GST
6. Daman &
Diu
Dadra &
Nagar Haveli
Inter-State Supply IGST Not a supply No GST
Illustration No. 3:- Mr. X, a dealer of stationery goods, having branches in Jammu and Ladakh, started his
business operations on 1st May 2020. His aggregate turnover upto 31st December 2020 is 15 lacs only. However,
he made a stock transfer of goods from Jammu branch to Ladakh branch on 1st Jan 2021. Further, certain items
were also sent from Ladakh branch to Jammu branch on the very next day. Mr. X is of the opinion that since his
aggregate turnover is less than 40 lakhs, he is not required to take any registration under GST and pay any tax.
Examine whether his contention is correct or not ?
Ans) Provisions of Law
As per Section 7(1)(c) r/w Schedule I, where any transfer of goods or services happens between deemed distinct
persons in course and furtherance of business, it will be considered as supply even if there is no consideration
involved. Section 25 provides that any branches or establishments of any person, located in different States or
UTs, shall be considered as establishments of different persons.
Further, Section 24 provides that any person making Inter-State supply of goods has to compulsorily take
registration under GST, irrespective of his aggregate turnover.
Conclusion in the present case
After Finance Act 2020, Jammu & Kashmir and Ladakh shall be treated different State and Union territory for
the purposes of GST. Accordingly, branches of Mr. X shall be considered as separate persons in accordance with
Section 25.
Where goods are transferred from Jammu branch to Ladakh branch or vice versa, it will be considered as Inter-
State supply as per Schedule I. Accordingly, by applying provisions of section 24, Mr. X will be required to take
mandatory registration in both J&K and Ladakh (irrespective of the fact that aggregate turnover of Mr. X is less
than 40 lakhs)
Amendments related to Goods & Services Tax For May 21 CA Inter exams
CA SANCHIT GROVER (Insta ID:- Sanchit.Grover.372) Page 9
Amendment No. 2:- Slight Change in Entry 4 of Schedule II – Sec 7(1A) r/w Schedule II Relevant Chapter : Concept of Supply under GST
What is the
existing
entry in
Schedule II
Sec 7(1A) read with Schedule II doesn’t enlarge the scope of the term ‘supply’. In respect of
transactions/activities that fall within the scope of ‘supply’ as defined in 7(1), Schedule II
merely clarifies whether such transactions would be treated as supply of goods or supply of
services.
Entry 4 of Schedule II used to provide the following:-
Nature of transaction Whether treated as Supply
of goods or services
Goods forming part of business assets are transferred or
disposed off by/under directions of person carrying on the
business so as no longer to form part of those assets,
whether or not for consideration
Supply of goods
Goods held/used for business are put to private use or are
made available to any person for use for any purpose other
than business, by/under directions of person carrying on
the business, whether or not for consideration
Supply of services
What was
the
confusion
Due to the words “whether or not for consideration”, some officers were taking the
interpretation that if some business assets were disposed off without consideration to non-
related persons and ITC is also not claimed on procurement of such business assets, then also
it should be treated as Supply of goods [although this transaction is not falling within the
ambit of Schedule I r/w Sec 7(1)(c)].
However, this was never the intention of legislature. If any transaction is not a supply as per
Section 7(1), then Section 7(1A) r/w Schedule II cannot bring it within ambit of ‘supply’
What is the
amendment
by FA 2020
Finance Act 2020 has deleted the words ‘whether or not for consideration’ retrospectively
with effect from 1st July 2017. This deletion was done primarily to ensure that there is no
scope for confusion in interpretation of Entry 4 of Schedule II.
After deletion of these words, it is now clear that if any transaction (permanent disposal or
putting assets to other than business use) is without consideration, then it should first satisfy
the conditions of Sec 7(1)(c) r/w Schedule I and only after such transaction becomes
‘supply’, we need to read Entry 4 of Schedule II to decide whether it is supply of goods or
supply of services.
Illustrations to understand the impact of this amendment
Activity Whether a Supply or
not
Whether Supply of goods
or services
1) Table in conference room of office sold for Rs.
5,000 (ITC was availed)
Yes - Sec 7(1)(a) Supply of goods - as per
Schedule II
2) Table in conference room given to scrap dealer for
free (ITC was earlier availed)
Yes – Sec 7(1)(c)
read with Schedule I
Supply of goods - as per
Schedule II
3) Motor car was purchased 5 years ago and now
it is given to scrap dealer for free (No ITC was
availed earlier)
No (since ITC was
not availed earlier)
N/A – there is no need to
check Schedule II here
since it is not even supply
Exam Note for Students:- The above amendments made by FA 2020 was notified on 1st Jan 2021, however
since this amendment is retrospective in nature, the same may be applicable for May 2021 exams.
Amendments related to Goods & Services Tax For May 21 CA Inter exams
CA SANCHIT GROVER (Insta ID:- Sanchit.Grover.372) Page 10
Amendment No. 3:- CBIC Circular regarding taxability of services by directors to
Company/Body Corporate – Circular No. 140/10/2020 – GST (dated 10th June 2020) Relevant Chapter : Concept of Supply under GST and Reverse Charge
What we
already
know
Section 7(2)(a) r/w Schedule III provides that ‘Services by an employee to the employer in the
course of or in relation to his employment’ shall be outside the ambit of ‘supply’.
Further, Notification No. 13/2017 issued u/s 9(3) provides that in case of services supplied by
a director of a company/body corporate to the said company/ body corporate, reverse charge
shall be applicable.
Some
background
knowledge
There are generally two types of directors in any company or body corporate:-
1) Directors who are under employment contract with the company (i.e. where employer-
employee contract exists). These are generally referred to by different names liles Executive
director or whole time director or Managing director.
2) Directors who are not employees of the company. These types of directors are known by
different names like non-executive directors, independent directors etc. They usually receive
sitting fees and commission for their services.
Clarification by CBIC circular regarding Taxability of Services by Directors
Where
Director is
not
employee
of
Company
In respect of such directors, the services provided by them to the Company, in lieu of
remuneration, are clearly outside the scope of Schedule III of CGST Act and are therefore
taxable.
In fact in such cases, reverse charge is applicable i.e. the Company receiving the services is
liable to pay GST to the government
Where
Director is
employee
of the
Company
Basic test to be applied:- Check whether all the activities performed by the director are in
the course of employer-employee relationship (i.e. a “contract of service”) or there is any
element of “contract for service”
How does Income tax law differentiate between above two scenarios
Income tax law also makes a similar differentiation of remuneration received by directors
who are employees of company:-
Salaries paid to directors are subject to TDS u/s 192 of IT Act
In case remuneration paid to directors is in nature of professional fees and not salary,
the same is liable for deduction under Section 194J of IT Act
GST treatment suggested by CBIC circular Case 1:- Part of Director’s
remuneration which is declared as
‘Salaries’ in the books of company and subjected to TDS u/s 192
Not taxable for GST purposes also. Such
amount will be covered under Schedule III since this amount represents consideration for
services by an employee to employer in course of
or in relation to his employment
Case 2:- That part of employee
Director’s remuneration which is
declared separately other than
‘salaries’ in the Company’s accounts
It will be treated as consideration for providing
services which are outside the scope of Schedule
III of CGST Act and hence taxable. Further
reverse charge will be applicable in this case i.e.
Amendments related to Goods & Services Tax For May 21 CA Inter exams
CA SANCHIT GROVER (Insta ID:- Sanchit.Grover.372) Page 11
and subjected to TDS u/s 194J of IT
Act as fees for Professional or
Technical services
the employer Company shall be liable to pay
GST to government
llustrations to understand the concept
Illustration 1:- Mr. X is working as a director with A Ltd. under employment contract with the company. He
has received the following amounts from the Company:-
Remuneration paid for rendering services under employment contract (TDS was
deducted u/s 192 of Income Tax Act, 1961 by A Ltd)
12,00,000
Remuneration paid for rendering professional services (outside the employment
contract). TDS u/s 194J of Income Tax Act, 1961 deducted on this amount
50,000
Besides Mr. X, A Ltd has also employed an independent director, Mr. Y, who is not engaged in day to day
working of the Company. Mr. Y is paid a sum of Rs. 20,000 as sitting fees for attending Board meetings of the
Company.
A Ltd. has also received professional services of management consultancy from XY Associates, a partnership
firm in which both the directors (Mr. X and Y) are working partners, for which a sum of Rs. 2,00,000 was
paid. Discuss the taxability of each of the above payments made by A Ltd.
Solution:- Taxability of different payments made by A Ltd. shall be as under:-
Type of Payment made Taxability along with reasons
1) Rs. 12,00,000 paid to Mr.
X (director who is also
employee of the
company)
In this case, since consideration is paid for services rendered by employee
in course of employment, it will be outside ambit of ‘supply’ in accordance
with Schedule III of CGST. Accordingly, there shall be no levy of GST in
this case
2) Rs. 50,000 paid to Mr. X
for a separate contract for
professional services
In this case, consideration is paid to employee director for services that are
outside the scope of his employment contract (this is evident by the fact
that company has deducted TDS u/s 194J for purposes of Income Tax Act).
Accordingly, schedule III shall not be applicable here. Hence, these
services shall be subjected to tax under reverse charge i.e. A Ltd. shall be
liable to pay GST on Rs. 50,000
3) Sitting fees of Rs. 20,000
paid to Mr. Y, a independent
director
Since this amount is paid to a director, who is not employee of the
company, there shall be no applicability of Schedule III in this case. GST
shall be payable on Rs. 20,000 under reverse charge i.e. A Ltd. shall be
Taxability of Services by director [CBIC circular]
Director is Employee of
Company
Director is not Employee
of Company – TDS u/s
194J
Salary for services in
course of employment
– TDS deducted u/s
192
Salary for services not
in course of
employment – TDS
deducted u/s 194J
Not Supply as per
Sch III
Treated as Supply – tax payable
under RCM by Body Corporate
Amendments related to Goods & Services Tax For May 21 CA Inter exams
CA SANCHIT GROVER (Insta ID:- Sanchit.Grover.372) Page 12
liable.
4) Rs. 2,00,000 paid as
management consultancy
charges to XY associates
In this case, professional services are rendered by XY Associates, a
partnership firm. These services shall be subjected to GST under forward
charge i.e. XY Associates shall be liable to pay GST. The fact that both the
partners of XY Associates are also directors of A Ltd. would not make any
difference to the taxability of these services.
Category B: - Amendments relating to Registration and related procedures
Amendment No. 4:- Change in the manner of Aadhar based authentication New GST
registrations – Sec 25(6B) read with Rule 8, Rule 9 and Rule 25
Relevant Chapter ;- Registration under GST
What we
already
know
FA 2019 brought in Sec 25(6A) and Sec 25(6B) to provide for aadhar authentication for
existing GSTIN holders as well as persons applying for fresh registration under GST.
Case 1:-
In case of
Existing
registered
persons
holding
GSTIN
Sec 25(6A) provided that every registered person shall undergo
authentication or furnish proof of possession of Aadhar number, in such
form and manner and within such time as may be prescribed. In case Aadhar
is not assigned to such registered person, such person shall be offered
alternate and viable means of identification in such manner as Gov. may,
on the recommendation of GST Council, prescribed.
In case of failure to comply with the above, Registration allotted to such
person shall be deemed to be invalid and all Other provisions of the Act
shall apply as if such person does not have registration
Case 2:-
In case of
persons
applying
for fresh
registratio
n
Sec 25(6B) read with Rule 8 provide that every individual, shall undergo
authentication of Aadhar number while filing application in REG-01 (it is
done post submission of Part-B of application).
As per sec 25(6B) read with notification issued u/ 25(6D), in case of any
person, other than individual, aadhar authentication shall be required in
respect of the following persons:-
a) Karta of HUF
b) Managing and Authorized partners of a partnership firm
c) Authorized signatories of all types
Further, notification u/s 25(6D) also provides that any person who is not
Indian citizen is not required to get aadhar authentication
Consequences if Aadhar is not assigned to persons specified above in Case 2
In this case, registration shall be granted (i.e. REG-06 issued) only after physical
verification of the principal place of business is conducted in following manner:-
Physical verification shall be done by Proper Officer in presence of person seeking
registration (i.e. applicant)
It shall be conducted within 60 days from date of application (REG-01)
Verification report along with other documents (including photographs) shall be
uploaded in form GST REG-30 on the common portal within 15 days from date of
such verification.
Concept of deemed approval of REG-01 if no reply received within 3 working days
from submission of application, shall not apply in the above case
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Amendments related to Goods & Services Tax For May 21 CA Inter exams
CA SANCHIT GROVER (Insta ID:- Sanchit.Grover.372) Page 13
Amendment
No 1:-
Option to
choose ‘No’
while opting
for Aadhar
authenticatio
n
As per new procedure introduced w.e.f. 21st Aug 2020, applicant will have to choose whether
he wishes to undergo aadhar authentication or not (in case he choose not to, then additional
steps for physical verification have to be done – discussed in next column)
Situation 1:- What is the procedure if Aadhar authentication opted Once the applicant chooses ‘Yes’, then aadhar authentication is done in following manner:-
GST system sends "authentication link" to the concerned persons at their GST
registered mobile numbers and email ids mentioned in the GST REG-01, for the
aadhaar authentication.
Upon clicking authentication link, a screen will come with a declaration where the
applicant needs to enter an Aadhar number and click on ‘validate’
Scenario 1:- Aadhar authentication is done successfully
a) On successful matching of the details GST REG-01 with UIDAI (unique
Identification Authority of India), an OTP will be sent on their email and mobile
registered with the Aadhar.
b) Once OTP is entered in the box provided in the screen, validation will be complete
and a message of successful e-KYC authentication will be shown
Scenario 2:- Failure of Aadhar authentication
While going through above procedure, it is possible that authentication may fail due to
following possible reasons:-
Mobile number may not be updated in records of UIDAI
Details entered in REG-01 mismatch with details in UIDAI records
Any technical issue while matching process
In case of failure to authenticate Awadhi details, GSTIN would be allotted to applicant only
after physical verification (or alternatively verification of necessary documents) is carried out
by proper Officer (PO)
Which date would be considered as ‘Date of Submission’ of GST REG-01
Scenario 1:- Where aadhar authentication is
successfully done within 15 days from submission of
Part-B of GST REG-01
Date of Aadhar authentication
Scenario 2:- Where Aadhar authentication is failed
within 15 days from submission of Part-B of GST
REG-01
15th day from submission of Part-
B of GST REG-01
Situation 2:- What is the procedure if Aadhar authentication is not opted while
filling GST REG-01
As per new procedure introduced w.e.f. 21st Aug 2020, applicant has option to choose ‘No’
for aadhar authentication after filing Part-B of GST REG-01. In such case, GST REG-01
shall be considered as filed on the date when Part-B of GST REG-01 is submitted.
However, in such case also, GSTIN would be allotted to applicant only after physical
verification (or alternatively verification of necessary documents) is carried out by proper
Officer (PO)
This option is generally opted by following types of applicants:-
Applicant who doesn’t possess Aadhar and is also not willing to obtain Aadhar
merely for getting GST registration
Applicant who possesses Aadhar but doesn’t want to go for Aadhar authentication
(for whatever reason..!!)
What are the consequences if Aadhar authentication is not successfully done
Where a person (other than individual who is not Indian citizen),
Amendments related to Goods & Services Tax For May 21 CA Inter exams
CA SANCHIT GROVER (Insta ID:- Sanchit.Grover.372) Page 14
- Fails to undergo Aadhar authentication in the manner prescribed
- Does not opt for authentication of Aadhar number
GST registration shall be granted only after physical verification of the place of business in the presence of
said person. (there is no fixed time limit prescribed but due to provisions of deemed registration, it is implied
that such process should be completed within 21 days from date of filing REG-01)
Once physical verification is over, the verification report (along with photographs & other documents) shall be
uploaded in form GST REG-30 on the common portal within a period of 15 days following such verification
Alternative to Physical Verification of Place of Business
Rule 9 provides that if PO may, in lieu of physical verification of place of business, carry out the verification
of such documents as he may deem fit. But if he wishes to go for Documents verification (instead of physical
verification of premises), he has to satisfy following conditions:-
- He has to record reasons in writing why he has chosen documents verification instead of physical
verification of premises
- He has to obtain approval of an officer not below the rank of Joint Commissioner
Amendment
No. 2:-
Concept of
Deemed
approval of
REG-01 re-
introduced
Examination of documents & information by PO Once application in GST REG-01 is filed, it is forwarded to PO who shall examine the
application and accompanying documents. There can be two cases here:-
Case 1:- If PO has no objections or needs no additional clarifications
If PO finds all information & documents in order, he shall approve the application and grant
registration certificate in form GST REG-06 within the prescribed time period (3 days or 21
days)
Case 2:- If PO has certain objections or needs additional clarifications
PO shall issue Show cause notice (SCN) in form GST REG-3 within the prescribed time
period (3 days or 21 days) in any of the following 2 situations:-
Where application submitted is found to be deficient, either in terms of any
information or any document required
Where PO requires any further clarification with regard to any information or
document
Prescribed time limit to issue REG-06 or to issue SCN in REG-03
a) In case aadhar authentication is done successfully
within 15 days of filling Part-B of GST REG-01 or
b) where aadhar authentication is not applicable
(individual who is not Indian citizen)
3 working days from
Date of submission of
GST REG-01
a) In case person doesn’t opt for Aadhar authentication
b) Where person fails to authenticate aadhar within 15
days of filing Part-B of filing GST REG-01
21 working days from
Date of submission of
GST REG-01
If no action is taken by PO in above prescribed time limit, registration application shall be
deemed to have been approved and applicant shall be granted GSTIN at expiry of
3days/21days
Amendments related to Goods & Services Tax For May 21 CA Inter exams
CA SANCHIT GROVER (Insta ID:- Sanchit.Grover.372) Page 15
Summary of above Aadhar authentication (AA) procedure in Tabular Form
Whether AA
opted while
filing GST REG-
01
Whether AA
was completed
within 15 days
from filing Part-
B
What will be
considered as ‘Date of
Submission of GST
REG-01’
Within how many
days ‘Deemed
registration’
provisions will apply
Mr. A (not a
citizen of
India)
AA not
applicable in his
case
N/A Date on which Part-B is
filled
3 working days
Mr. B
(Indian
Citizen)
No N/A Date on which Part-B is
filled
21 working days
Mr. C
(Indian
Citizen)
Yes No 15th day from
submission of Part-B
21 working days
Mr. D
(Indian
Citizen)
Yes Yes Date of completion of
AA
3 working days
Summary of the amendments in Registration procedure Basis of
differentiation
Pre – Amendment (i.e.
between 1st April 2020 to
20th Aug 2020)
Post Amendment (i.e. w.e.f. 21st August 2020)
When will
alternative
means be
applicable
If the applicant does not have
Aadhar
2 Situations:-
a) Applicant has not opted for Aadhar authentication
process or
b) Applicant opted for Aadhar authentication process but
it could not be completed within 15 days
What are the
prescribed
alternative
means
Only one method was
prescribed:- Compulsory
physical verification of the
place of business of applicant
before granting registration
(has to be completed within
60 days of submission of
registration application)
Instead of 1, now 2 methods have been prescribed:-
1) Physical verification of place of business of applicant
before granting registration
(no time limit has been prescribed now, but since
concept of deemed approval applies if no action taken by
PO within 21 days, so such time limit is implied for
completion of physical verification also)
2) Instead of physical verification, PO can go for
verification of such documents as he considers fit
(however, if he opts for documents verification, he has to
record reasons in writing and also obtain approval from
any officer not below the rank of JC)
Concept of
deemed
approval
Concept of deemed approval
was made inapplicable in
cases where aadhar
authentication was mandatory
Concept of deemed approval shall be applicable even in
cases where aadhar authentication required – time limit
shall be 3 days or 21 days depending on the situation
(explained in table above)
Process of obtaining registration under GST – Section 25 + Rule 8 & 9
Within a period of 30 days
Person becomes liable for
registration u/s 22 or 24
5 days prior to commencement of business (in case of CTP)
Whether Aadhar authentication
(‘AA’) is required u/s 25 ?
No, if Person is notified u/s 25(6D)
– Person not Indian Citizen
Date of Submission of REG-
01 = Date of filling Part-B
above
Yes, if Person is not notified u/s
25(6D)
Person Opts for AA Person doesn’t Opt
for AA
AA done successfully within 15
days from filing Part-B
AA not completed within
15 days of filing Part-B Date of Submission of REG-01
= Date of filling Part-B above
Date of Submission of REG-01 =
Date of AA
Date of Submission of REG-01
= 15th Day from filing Part-B
above
Separate application
in each State
PO to conduct Physical verification of place of
business (In lieu of this Original Documentation
verification can also be done by PO after
recording reasons in writing and taking
permission from senior officer not below JC level
Apply for
registration
in Form GST
REG-01
Fill Part-A of GST REG-01 by filling follow. details:-
a) Mobile No. – validated using OTP
b) Email ID - validated using OTP
c) PAN – validated from CBDT database
d) State/UT in which registration sought
Temporary
Reference
Number (TRN)
communicated on
Phone and e-mail
Submit Part-B of GST REG-01
with ‘Specified information
and documents’ + Advance
Deposit in case of CTP
a) If Information is not in Order OR
b) PO requires additional
information/clarification
PO to issue SCN in GST REG-03 within
21 days from submission of REG-01
PO to grant GST REG-06
within 21 days from
Submission of REG-01
PO finds the reply
satisfactory
Verification report in
GST REG-30 (along
with photos) to be
uploaded within 15
days from date of
physical verification
PO to examine Application &
documents in next 21 days from Date
of Submission of REG-01 and take
either of 2 Steps (If no action taken,
then Deemed registration)
All Information is in order +
No further Clarification
required by PO
Applicant doesn’t reply in GST REG-04
within 7 days from receipt of REG-03
Reject the application and
issue GST REG- 05 within
next 7 days
Applicant replies in GST REG-04
within 7 days from receipt of REG-02
PO doesn’t find the
reply satisfactory
PO doesn’t take
any action in 7 days
PO to examine Application & documents in
next 3 days from Date of Submission of
REG-01 and take either of 2 Steps (If no
action taken, then Deemed registration)
PO to grant GST REG-06
within next 7 days
All Information is in order + No
further Clarification required by PO
a) If Information is not in Order OR
b) PO requires additional
information/clarification
PO to grant GST REG-06 within 3
days from Submission of REG-01 PO to issue SCN in GST REG-03 within 3
days from submission of REG-01
Applicant doesn’t reply in GST REG-04
within 7 days from receipt of REG-03 Applicant replies in GST REG-04
within 7 days from receipt of REG-03
Reject the application and
issue GST REG- 05 within
next 7 days
PO finds the reply
satisfactory
PO doesn’t find the
reply satisfactory
Deemed
registration
to Applicant
PO doesn’t take
any action in 7 days
PO to grant GST REG-06 within next 7 days
Reasons for rejection to
be mentioned in REG-05
AA required for individual, or Karta
of HUF or Managing partner or
Authorized signatory
Prepared by:- CA Sanchit Grover (AVJ Academy)
Prepared by:- CA Sanchit Grover
Amendments related to Goods & Services Tax For May 21 CA Inter exams
CA SANCHIT GROVER (Insta ID:- Sanchit.Grover.372) Page 16
Category C:- Amendments relating to Exemptions under GST
Amendment No. 5:- Extension of time limit for 2 exemptions related to transportation services Relevant Chapter ;- Exemptions under GST
Which are the exemptions What is the amendment brought
a) Services by way of transportation of goods by an aircraft
from customs station of clearance in India to a place outside
India
b) Services by way of transportation of goods by a vessel from
customs station of clearance in India to a place outside India
Both these exemptions were applicable till
30th September 2020 (after such date they
were to be made ineffective).
Now this date has been extended to 30th
September 2021
Amendment No. 6:- New Exemption brought for Satellite Launch Services Relevant Chapter ;- Exemptions under GST
What is the
new
exemption
entry
Satellite launch services supplied by the following shall be exempt from tax:-
Indian space research organization (ISRO)
Antrix Corporation Limited
New Space India Limited
Category D:- Amendments relating to Documentation and E-Waybill under GST
Amendment No. 7:- Requirement of issuing e-invoice w.e.f. 1st October for selected taxpayers– Rule 48(4) of CGST Rules
Relevant Chapter;- Documentation under GST
What we
already
know
- Currently under GST law, every registered supplier making taxable supplies of goods has
to issue invoice (containing the particulars prescribed under Rule 46) in triplicate.
Similarly, suppliers of taxable services have to issue invoice in duplicate (containing the
particulars prescribed in Rule 46)
- These invoices may be signed manually or digitally signed. Further, if the invoice has
been issued electronically in accordance with the provisions of Information Technology
Act, then there is no need for any type of signature
Introduction
of concept of
e-invoicing
under GST
Rule 48 provides that there shall be certain notified class of registered taxpayers who shall
issue invoice in prescribed format GST INV-01 after obtaining Invoice Reference number by
uploading information on Common Goods and Services Tax Electronic Portal (known as
IRP or Invoice registration portal in common language) in the prescribed manner.
What is the meaning of E-invoicing:- E-invoice doesn’t mean now invoices shall be
generated through GST portal. Invoices will be generated by accounting software/ERPs of
taxpayers but additional requirement is that specified particulars of invoice in form GST INV-
01 will have to be uploaded by taxpayer in specified format (JSON format) on notified
Invoice Registration Portals (IRPs) and thereafter a unique Invoice reference number (IRN)
shall be assigned to each invoice.
This IRN, allotted by e-invoice system, will be a unique 64 character number and hence there
will be unique identity for each invoice for the entire FY in the entire GST system for a
particular taxpayer
Who has Any registered person, whose aggregate turnover in any preceding FY from FY 2017-18
Amendments related to Goods & Services Tax For May 21 CA Inter exams
CA SANCHIT GROVER (Insta ID:- Sanchit.Grover.372) Page 17
been notified
under Rule
48(4)
onwards, exceeds 500 Crore, is required to issue e-invoice as per the prescribed procedure
Exceptions:- Following category of persons do not have to follow this method (even if their
ATO exceeds 500 cr.):-
Units in Special Economic Zone (only SEZ units, not SEZ developers)
Banking Company or a Financial Institution (including NBFC) or Insurer
GTA engaged in supplying services of transportation of goods by road in a goods
carriage
Suppliers of passenger transportation service
Suppliers of service by way of admission to exhibition of cinematograph films in
multiplex screens
What type of
documents
need to be
issued as per
new method
Invoices issued to registered customers (i.e. E-invoicing not required for B2C
supplies)
Invoice issued for export of goods or services
Debit note and Credit note issued as per Sec 34
Interesting fact:- Although practically word ‘e-invoicing’ is being used to refer to this new
system, but actually apart from B2B & export invoices, debit notes and credit notes also have
to be issued as per new system only
Process of
generating
E-invoices
E-invoice shall be generated using the following procedure:-
a) A taxpayer shall generate an invoice using his own ERP or accounting/billing software.
This invoice will be serially numbered (maximum 16 digits) and would contain all
particulars as prescribed under Rule 46.
b) Thereafter, he will upload the prescribed details of that invoice on Common GST
Electronic portal in JSON (Government has notified 10 websites managed by GSTIN,
commonly referred to as Invoice registration portal or IRP). These prescribed details
have been given in format GST INV-01 (apart from Rule 46 particulars, some extra
particulars, mainly optional fields, can also be filled)
c) This JSON file can be generated using offline utility tool (provided by IRP) and also by
online tools (Direct API with supplier’s system or GSP based) for bulk generation of e-
invoices.
d) Based on the information uploaded on IRP, after certain validation checks, an Invoice
reference number (IRN) will be generated by portal. Portal will add its own signature
and QR Code to the Invoice. This QR code will contain all important details on the
invoice which can be verified by any person using a mobile app.
e) E-invoice containing the IRN, QR Code and signature provided by IRP shall be returned
to supplier in JSON format. This invoice can be converted to pdf format and also printed
by supplier, before being shared with the recipient. IRP will not directly share the e-
invoice with the recipient.
f) Additionally, IRP shall forward details of this invoice to GST portal [gst.gov.in] based
on which GSTR-1 details of the supplier can be auto-populated. Further, IRP shall also
forward details of E-invoice to EWB portal [ewaybill.nic.in] to allow automatic fetching
of information in EWB
Further, once the above procedure is followed, notified taxpayers do not have to issue
duplicate or triplicate invoices (in case of goods and services respectively)
What if new
e-invoicing
system is not
followed
In case of notified Taxpayers, invoice has to be mandatorily issued through above procedure,
otherwise it shall not be considered to be a valid GST Invoice (in other words, all
consequences will follow as if no tax invoice was issued for such transaction).
Impact of this point Date on which
invoice generated
by Supplier
Date on which IRN
allotted by IRP
Consequences
Amendments related to Goods & Services Tax For May 21 CA Inter exams
CA SANCHIT GROVER (Insta ID:- Sanchit.Grover.372) Page 18
31-03-2021 02-04-2021 Invoice will be considered as valid tax invoice
from 2nd April 2021 only
Movement of goods shall commence only after
2nd April 2021 & Time of supply of supplier
shall also be determined based on this date
Recipient cannot claim ITC before 2nd April
2021
31-03-2021 No IRN allotted Invoice will not be treated as valid tax invoice
In case movement of goods is done, goods are
liable for confiscation, further supplier shall
also be liable for penalty u/s 122
Recipient will not be able to avail ITC (since
any invoice not containing IRN shall not be
treated as valid invoice)
Advantages
of E-
invoicing
concept
Advantages of E-invoicing for taxpayers
1) Reduction of time due to auto-generation of GSTR-1 and EWB
Once data pertaining to each invoice is uploaded on IRP for generation of IRN, IRP will
automatically share the data with GST Common portal for auto-updation of details in GSTR-1
of Supplier and GSTR-2A of recipient. Similarly, IRP will also share the data with E-waybill
portal and help in generation of EWB.
2) Reduction in transcript errors
Since same details uploaded by supplier are automatically fetched by system in GSTR-1 and
EWB, it will ensure that there are no errors due to clerical mistakes while manually entering
information in GSTR-1 and EWB. This will substantially reduce mismatches between
information reported by supplier in GSTR-1 and information reported by recipient in his
GSTR-3B (leading to lesser disputes and business efficiency)
Advantages of E-Invoicing for GST Authorities
1) Real-time reporting of transaction by suppliers
Concept of e-invoicing will ensure that supplier provides all the details of his transaction to
IRP on real time basis. Once this information is provided to IRP, then there are almost no
chances of making any fraudulent changes or adjustments afterwards. Further, this will also
tackle the menace of fake invoicing
2) Ease in checking of goods while in transit
While the goods are being transported, if GST officers wish to physically check the goods vis-
à-vis the details shared in invoice, they can easily do so by scanning QR code using offline
tools (like mobile app). This will ensure better tax administration (Earlier tax officers had no
mechanism to ensure that invoice being accompanied with the goods is actually genuine
invoice or not)
Applicability
of E-
invoicing
concept on
certain
transactions
CBIC has clarified about applicability of E-invoicing concept on the following transactions:-
Supplies made by a registered supplier (having ATO > 500
Cr.) to unregistered customers (B2C supplies)
E-invoicing not applicable
Supplies made by a registered supplier (having ATO > 500
Cr.) that are notified under reverse charge u/s 9(3)
E-Invoicing applicable
Supplies received from unregistered suppliers by a
registered recipient (having ATO > 500 Cr.) notified under
reverse charge u/s 9(3) or 9(4) – self invoicing required by
recipient u/s 31(3)
E-Invoicing not applicable
Supplies made by a registered supplier (having ATO > 500
Cr.) located in DTA to any SEZ Unit
E-Invoicing applicable
Illustrations relating to E-invoicing concept
Amendments related to Goods & Services Tax For May 21 CA Inter exams
CA SANCHIT GROVER (Insta ID:- Sanchit.Grover.372) Page 19
Illustration 1:- Genpact Ltd. has 2 units in the State of Haryana:- one unit in DTA and another in SEZ. The
details of turnover of these units during FY 2019-20 is as under:-
Value of supplies by DTA unit to registered customers 150 Crore
Value of supplies by DTA unit to unregistered customers 200 Crore
Value of supplies by SEZ unit to registered customers 120 Crore
Value of supplies by SEZ unit to unregistered customers 180 Crore
Total ATO of Genpact Ltd. 650 Crore
Since aggregate turnover of Genpact Ltd. is more than 500 crore in FY 2019-20, concept of e-invoicing shall
become applicable w.e.f. 1st October 2020.
During the month of October 2020, Genpact Ltd. made following supplies:-
Type of supply Amount of
supply
Whether E-
invoicing applicable
a) Supplies by DTA unit to registered customers in DTA 5,00,000 Yes
b) Supplies by DTA unit to unregistered customers in DTA 12,00,000 No
c) Exports made by DTA unit 4,00,000 Yes
d) Supplies by SEZ unit to registered customers in DTA 10,00,000 No
e) Supplies by SEZ unit to unregistered customers in DTA 8,00,000 No
f) Exports made by SEZ unit 3,00,000 No
g) Supplies made by DTA unit to SEZ unit (Stock transfer) 15,00,000 Yes
h) Supplies made by SEZ unit to DTA unit (Stock transfer) 6,00,000 No
Illustration 2:- EY India Pvt. Ltd. is a registered supplier in Haryana engaged in supply of professional
services. Its aggregate turnover during the last 3 FYs is as under:-
Relevant Period Amount of aggregate turnover
FY 2017-18 350 Crore
FY 2018-19 540 Crore
FY 2019-20 420 Crore
FY 2020-21 upto 30th Sep 2020 180 Crore
Whether E-Invoicing will be mandatory for EY India w.e.f. 1st October 2020
Solution:- As per Rule 48(4), e-invoicing shall be mandatory for any registered person having aggregate
turnover exceeding 500 crore in any preceding financial year from FY 2017-18 onwards. In the given case,
since ATO is more than 500 crore in FY 2018-19, E-invoicing shall be mandatory w.e.f. 1st October 2020.
Illustration 3:- Raina Legal Associates is a firm of advocates having aggregate turnover of 600 crore in FY
2019-20. It is registered under GST. It has supplied legal consultancy services to X Ltd. during Nov 2020 for
Rs. 5,00,000. Aggregate turnover of X Ltd. during FY 2019-20 is 750 crore. Raina Legal is of the view that
although it is registered under GST but it is not required to pay any GST on Rs. 5,00,000 services to X Ltd.
Further, e-invoicing under Rule 48(4) is also not applicable on it. It has advised X Ltd that X Ltd should raise
E-invoice as well as discharge GST on legal services under reverse charge. Is this advice correct
Solution:- The advice given by Raina Legal is partially correct and partially incorrect. In the given case, legal
services provided by firm of advocates to X Ltd. shall be covered under reverse change u/s 9(3) and hence X
Ltd. shall be liable to pay GST.
However, since Raina Legal is registered under GST, it shall be liable to issue tax invoice u/s 31. Further,
since aggregate turnover of Raina Legal is more than 500 crore in FY 2019-20, e-invoicing under rule 48(4)
shall be mandatory for Raina Legal. No invoice is required to be issued by X Ltd. (since reverse charge
supplies haven’t been procured from unregistered supplier)
Amendments related to Goods & Services Tax For May 21 CA Inter exams
CA SANCHIT GROVER (Insta ID:- Sanchit.Grover.372) Page 20
Other Amendments w.e.f. 1st October 2020 relating to E-Invoicing Due to introduction of E-Invoicing concept under Rule 48(4), there were certain other consequential
amendments done in other rules as well:-
Relevant Provision What is the amendment
1) Rule 48(1) prescribes that in case of supply of goods, tax
invoice has to be prepared in Triplicate, whereas Rule 48(2)
prescribes that in case of supply of services, tax invoice has
to be prepared in Duplicate.
Rule 48(6) has clarified that where invoice has
been issued in manner prescribed u/r 48(4) [in
other words, where e-invoicing is mandatory],
there shall be no need to issue invoice copies in
duplicate/triplicate
2) Rule 46 prescribes various particulars that are
mandatorily required to be stated on tax invoice. Some of
these are GSTIN of supplier, GSTIN of recipient,
description of goods, HSN code, Taxable value, rate of tax,
amount of tax, signature etc.
In respect of invoices that are issued in manner
prescribed under Rule 48(4), one more
mandatory particular should be there on
invoice:-
“Quick Response code, having embedded
Invoice Reference Number (IRN) in it”
3) Rule 138-A prescribes following mandatory documents
that are required to be carried by person-in-charge of a
conveyance during movement of goods:-
Invoice of Bill of Supply (in case where movement
is for Supply)
Delivery Challan (in case where movement is for
reasons other than Supply)
Bill of Entry (in case where movement is of
Imported goods)
Besides the above documents, EWB (in physical form or e-
form) shall also be accompanied with the goods
Rule 138A(2) amended to provide that in cases
where invoice is issued in manner prescribed
under Rule 48(4), then the Quick Response
Code (QR Code) having embedded Invoice
Reference number (IRN) in it, may be
produced electronically for verification by
Proper Officer, in lieu of the physical copy of
such tax invoice.
Amendments related to Goods & Services Tax For May 21 CA Inter exams
CA SANCHIT GROVER (Insta ID:- Sanchit.Grover.372) Page 21
Amendment No. 8:- Requirement to specify HSN on tax invoice mandatory for all Class of
Taxpayers now– Amendment not applicable for May 21 Students, but just for knowledge
Relevant Chapter ;- Documentation under GST
What is the
existing
provision
In accordance with proviso to Rule 46 read with Notification No. 12/2017, Taxpayers have
to mention only few digits of HSN on tax invoice, based on what is their turnover
Annual Turnover (AT) in the preceding FY Number of Digits of HSN Code
ATO ≤ Rs.1.5 crores Nil
Rs. 5 crores ≥ ATO > Rs.1.5 crores 2
ATO > Rs. 5 crores 4
However, in case of Importers/Exporters, HSN of 8 digits was mandatory (so ensure that
they are compatible with global standards)
What is the
amendment
New Notification 78/2020 has been issued under first proviso to Rule 46, that has mandated
all taxpayers to compulsorily mention HSN on tax invoice in the manner below:-
Annual Turnover (AT) in the
preceding FY
Number of Digits of HSN Code
ATO ≤ Rs. 5 crores 4 digits in case of B2B invoices
Optional not to mention HSN in case of B2C
invoices
ATO > Rs. 5 crores 6 digits in case of all types of invoices
Illustrations from ICAI Study Material
The turnovers of Yellow Lemon Pvt. Ltd., Red Pepper Pvt. Ltd. and Blue Berry Pvt. Ltd. in
the previous financial year are Rs. 1.5 crore, Rs. 4.8 crore and Rs. 6 crore respectively.
While Yellow Lemon Pvt. Ltd. and Red Pepper Pvt. Ltd. will be required to upload 4 digits
of HSN code of the goods sold to registered persons, uploading of 4 digits HSN code will be
optional for the two companies when the goods are sold to unregistered persons. Blue Berry
Pvt. Ltd. will have to upload 6 digits of HSN code of goods sold by it.
Whether this
amendments
would apply
for May 21
The above amendment has been made effective from 1st April 2021. Accordingly, ICAI
Study Material has clarified that this amendment shall not be applicable for Students of May
2021 attempt.
This amendment has been discussed here only for knowledge purposes
Category E:- Amendments relating to Chapter of ‘Payment of tax’
Amendment No. 9:- Interest to be calculated on Net Cash Tax Liability (not Gross Tax
Liability) in case of delayed payment of self assessed liability– Proviso to Section 50
Relevant Chapter : Payment of tax under GST
What we
already
know
I) Circumstances in which Interest is payable as per Sec 50
Interest is payable in following 3 circumstances:-
Case 1:- Where a person is liable to pay tax but fails to pay it (in full or in part) to the
Government within the prescribed time
Case 2:- Undue or excess claim of input tax credit under section 42(10)
Case 3:- Undue or excess reduction in output tax liability under section 43(10)
Practically since the procedure of ITC reconciliation is not effective, Case 2 & Case 3 are
redundant. So only Case 1 is practically operative in Section 50
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II) Rate & Manner of charging Interest
Interest shall be charged @18% p.a. from the date following the due date of payment to the
actual date of payment of tax.
III) Whether Interest will be charged on Gross tax liability or Net tax liability
Earlier in case of delay in payment of tax liability, interest used to be charged on Gross tax
liability (i.e. output tax liability without adjustment of ITC available). This was on account of
lack of any clarification under Sec 50.
What is the
amendment
A lot of representations were filed by industry to GST Council after which the following
proviso has been added in Sec 50 by Finance Act 2019:-
Where supplies have been declared in return filed u/s
39 ( and such return is filed before initiation of
proceedings u/s 73 and 74) but due to delay in filing of
return, tax payment has been delayed
Interest shall be charged on Net
Tax liability (i.e. tax liability to be
discharged through E-cash ledger)
Where tax payment is being made (after due date) in
pursuance of proceedings u/s 73 or 74
Interest shall continue to be
charged on Gross tax liability (i.e.
before adjustment of ITC)
.
Illustration to explain this amendment
Mr. X is a normal taxpayer having aggregate turnover > 5 Crore in preceding FY. During current FY,
following are his details for month of April 2021 Output tax liability = Rs. 15 lakhs
Input tax credit availed = Rs. 10 lakhs
Due date of GSTR-3B in this case will be 20th May 2021
Case When is return filed How will Interest be calculated
Case 1 GSTR-3B filed on 18th May 2021 (Tax
payment of Rs. 5 lakhs made through E-cash
ledger on same date)
No interest shall be applicable in this case
since tax payment has been made before due
date
Case 2 GSTR-3B filed on 31st July 2021 (Mr. X filed
return on his own, without any notice u/s 73 or
74. Tax payment of Rs. 5 lakhs made through
E-cash ledger on same date)
Interest u/s 50 for period 21st May till 31st
July 2020 = (15,00,000 – 10,00,000 ) x 18%
x 72 days/ 365 days
Case 3 GSTR-3B filed on 31st July 2021 (Mr. X
received notice on 20th September 2021 u/s 73
or 74 proposing to recover tax for April month.
Mr. X did not contest such notice & voluntarily
paid Rs. 5L through E-cash ledger & filed
return on 30th September)
Interest u/s 50 for period 21st May till 30th
Sep 2020 = 15,00,000 x 18% x 133 days/ 365
days
In this case, benefit of proviso to Sec 50 will
not be available while calculating interest.
What has changed w.e.f. 1st Sep 2020
Earlier, even in case 2, Interest was charged @18% on 15,00,000 for 72 days. This was creating a lot of
hardship for genuine taxpayers who were honest enough to declare tax in their returns but made a delay in
filing of returns & payment of tax
When is
this
amendment
made
effective
When this provision was made effective from 1st Sep 2020, there were still demands from
industry that this should have been made effective from 1st July 2017. GST Council deliberated
this issue in 37th GST Council Meeting and ultimately decided that this amendment should be
given retrospective effect w.e.f. 1st July 2017. Accordingly, CBIC issued an administrative
instruction on 18th Sep 2020, instructing all GST officers to collect interest only on Net GST
liability for any delayed return filed between 1st July 2017 to 31st Aug 2020 also.
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Category F:- Amendments relating to GST Returns
Amendment No. 10:- Change in Due Date of filing GSTR-3B and GSTR-1 in certain cases
Relevant Chapter;- Filing of GST Return
What we
already know
As per Sec 39(1), every normal registered person has to file GST return on monthly basis.
Initially, it was proposed that GST return would be in form GSTR-3, however, thereafter
Rule 61 was inserted to provide that instead of GSTR-3, a new form GSTR-3B shall be
submitted on or before 20th of the immediately succeeding month.
At the same time, Sec 37 provides that every normal registered person has to file a statement
of outward supplies in form GSTR-1 on monthly basis on or before 10th of immediately
succeeding month (practically 1 day extension is provided, so due date is 11th of next
month).
Further, Sec 148 provides special procedure for registered persons, having aggregate
turnover upto 1.5 Crores in preceding FY or current FY, under which they can file GSTR-1
on quarterly basis on or before last of the month immediately succeeding the quarter
What is the
amendment
Extension of Due Date of Filing monthly GSTR-3B
With effect from 1st Jan 2020, due date of GSTR-3B shall be different for different category
of taxpayers. The new due dates are as under:-
Category of Persons Due Date of filing GSTR-
3B
Registered Person with aggregate turnover of more than 5
crore in immediately preceding FY
20th of the following month
Registered person with aggregate turnover upto 5 crore in
immediately preceding FY And who located in following
States:-
- Jammu & Kashmir - Ladakh
- Himachal Pradesh - Uttrakhand
- Punjab - Haryana
- New Delhi - Uttar Pradesh
- Rajasthan - Bihar
- Jharkhand - West Bengal
- Odisha - Sikkim
- Assam - Meghalaya
- Nagaland - Manipur
- Tripura - Mizoram
- Arunachal Pradesh
24th of the following month
Registered person with aggregate turnover upto 5 crore in
immediately preceding FY And who is located in any State
other than mentioned above
22nd of the following month
Extension of Due Date of filing Quarterly GSTR-1
With effect from 15th Oct 2020, due date for registered persons who are filing their GSTR-1
on quarterly basis (under the special procedure prescribed u/s 148) shall be 13th day of the
month immediately succeeding the relevant quarter. In respect of registered persons who are
filing their GSTR-1 on monthly basis, due date shall be same (i.e. 11th day of immediately
succeeding month)
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Illustration to understand the new Due Dates
Relevant month Due Date of filing
monthly GSTR-3B
Due Date of filing GSTR-1
If filed on monthly basis If file on quarterly basis
October 2020 20th or 22nd or 24th of
Nov 2020
11th of Nov 2020 13th Jan 2021
(instead of 1st Jan 2021)
November 2020 20th or 22nd or 24th of
Dec 2020
11th of Dec 2020
December 2020 20th or 22nd or 24th of
Jan 2021
11th of Jan 2021
Amendment No. 11:- Filing of GSTR-3B, GSTR-1 and GST CMP-08 through SMS– Rule 67-A
of CGST Rules
Relevant Chapter;- Filing of GST Return
What we
already know
Every normal registered person (i.e. who is not composition dealer u/s 10) has to file the
following:-
GST return u/s 39 in form GSTR-3B on monthly basis
Statement of outward supplies u/s 37 in form GSTR-1 on monthly or quarterly basis
Further, composition dealer u/s 10 has to be file the following:-
Statement in form GST CMP-08 on quarterly basis
Return u/s 39 in form GSTR-4 on annual basis
The above returns or statements have to be filed even if no supplies have been made during a
relevant month or quarter (concept of Nil return or statement)
Methods of filing above returns/statements
1) Online filing directly on GST Common Portal
2) Filing through offline utilities provided by GSTN (statement or return is prepared in
excel based offline utilities and then uploaded on Common portal)
3) Filing through GST Suvidha Providers (GSP)
What is the
amendment
With effect from 15th October 2020, a new rule 67A has been inserted which provides that
following returns/statements can be filed through SMS facility:-
a) NIL GSTR-3B u/s 39 in case of normal dealers
b) Nil GSTR-1 u/s 37 in case of normal dealers
c) Nil GST CMP-08 in case of composition dealers
Meaning of Nil Return or Statement
For the purposes of this rule, a Nil GSTR-3B or Nil GSTR-1 or Nil GST CMP-08 means
such return or statement for a tax period in which there is Nil or no entry in all Tables
How does SMS facility work
SMS has to be sent in prescribed format to ‘14409’. A 6 digit code shall be sent by GST
Common portal to registered mobile number (of the authorized signatory) through which
authentication is done.
Illustration to understand the amendment
Mr. Sanchit, a registered person (who has not opted for composition scheme u/s 10), has provided the
following information:-
Particulars Relevant Tax period for which information provided
Oct 2020 Nov 2020 Dec 2020 Jan 2021
Are there any outward supplies done
during the month
Yes Yes No No
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Are there any inward supplies done
during the month
Yes Yes Yes No
Gross Output tax payable 10,00,000 4,00,000 Nil Nil
ITC available 6,00,000 7,00,000 2,50,000 Nil
Net tax to be paid in cash 4,00,000 Nil Nil Nil
Whether there is need to file return/statement in each case
GSTR-1 Yes Yes Yes Yes
GSTR-3B Yes Yes Yes Yes
Manner of filing return/statement
GSTR-1 Through GST
Portal
Through GST
Portal
Through
GST Portal
or SMS
facility
Through GST
Portal or
SMS facility
GSTR-3B Through GST
Portal
Through GST
Portal
Through
GST Portal
Through GST
Portal or
SMS facility