GST - Bizsolindia Services Pvt.Ltd · Tax Act, 2017 (13 of 2017) i.e. “the place of supply of service is outside India” Types of services:- Sr.No. Nature of Supply General Description

simplifying GST Tax Update

Oct 2019 Vol.62

Bizsol …partners in strategy

…thinking of GST, think of Bizsol!

Goods & Services Tax

• New GST rates on goods from 1st Oct 2019.

[Notification no. 14/2019 & 15/2019-CT(R) dated 30th Sept 2019]

S.No Tariff Item Description of goods Existing Rate

Amended Rate

1. 0813 Tamarind, dried 5% Exempt

2. Marine Fuel 18% 5%

3. 8509 Wet Grinder Consisting of stone as grinder 12% 5%

4.

8601 to 8608

Goods, falling under chapter 86 of tariff like railway locomotives, wagons, coaches, railway maintenance vehicles, rolling stock, track fixtures, fittings, signals, control equipments etc. (without refund of accumulated ITC)

5%

12%

5.

3923 or 6305

Woven and non-woven bags and sacks of polyethylene or polypropylene strips or the like, whether or not laminated, of a kind used for packing of goods”

As applicable

12%

6. 9607 20 00

Parts of Slide Fasteners 18% 12%

7. 22029990 Caffeinated Beverages 18% 28% + 12% Cess

8. Petrol, LPG or CNG driven vehicles having engine capacity not exceeding 1200cc. and diesel driven vehicle with engine capacity not exceeding 1500cc used by person with orthopedic physical disability

-

18%

9.

7103

precious stones (other than diamonds) and semi-precious stones, whether or not worked or graded but not strung, mounted or set; ungraded precious stones (other than diamonds) and semi-precious stones, temporarily strung for convenience of transport

3%

0.25%

10.

7104

Synthetic or reconstructed semi-precious stones, whether or not worked or graded but not strung, mounted or set; ungraded synthetic or reconstructed semi-precious stones, temporarily strung for convenience of transport

3%

0.25%

11. 0813 Tamarind dried - Nil

12. 46 Plates and cups made up of all kinds of leaves/ flowers/bark

- Nil


• Specified goods for Petroleum operations or coal bed methane operations undertaken under Hydrocarbon Exploration Licensing Policy (HELP) or Open Acreage Licensing Policy (OALP) are charged at 5% GST. Futher supplier can opt for 18% GST in case of mentioned goods so supplied are sought to be disposed of in non-serviceable form, after mutilation on transaction value. [Notification no. 16/2019-CT(R) dated 30th Sept 2019]

• Earlier, supply of only gold by nominated agency to any recipient was exempted (w.e.f. 01-Jan-19) subject to condition that such recipient further exports jewellery made out of such gold within 90 days of above supply. Now, from 1st Oct 2019 supply of even silver and platinum would be exempted subject to fulfilment of similar conditions. [Notification no 17/ 2018 CT (R) dated 30th Sep 2019]

• GOI has notified composition scheme for payment of tax @ 6% by suppliers having annual turnover of preceding year up to ₹ 50 Lakhs. However, some goods such as tobacco falling under chapter 24 were excluded from scope of this scheme. GOI via this notification has further excluded aerated water (HSN 2202 10 10) from purview of this composition scheme. This notification will come into force from 01-Oct-2019. [Notification no 18/2019 CT (R) dated 30th Sep 2019] ,[Notification no 43/2019 CT dated 7th Mar 2019]

• GOI w.e.f. 01-Oct-2019 has exempted supply of any good to Food and Agricultural Organization of United Nations (FAO) for execution of specified projects (such as Green Agriculture) but subject to certification by any officer not below the rank of Deputy Secretary to GOI. [Notification no 19/2019 CT (R) dated 30th Sep 2019]

• Services provided by way of renting of motor vehicle by any Individual/Firm/LLP to any Body corporate (companies), covered under reverse charge mechanism and taxable @5%. However if the service provider charges GST @12% then he can continue with Forward Charge and no Reverse Charge applicable. [Notification no 22/2019 CT (R) dated 30th Sep 2019]

• No GST Exemption applicable for the development rights supplied on or after 1st April, 2019 w.r.t real estate sector from 1st Oct 2019. [Notification No.23/2019-CT (R) dated 30th Sep 2019]


• Service by way of grant of alcoholic liquor license, against consideration in the form of license fee or application fee or by whatever name it is called by the State Governments in which they are engaged as public authorities, shall be treated neither as a supply of goods nor a supply of service.[Notification No.25/2019-CT (R) dated 30th Sep 2019]

• GST Rates changes for below services from 1st Oct 2019: -

Sr.No. Particulars HSN GST Rate A) Hotel accommodation, restaurant and other services: - (i)

‘Hotel accommodation’ having value of supply of a unit of accommodation above Rs. 1,000 but less than or equal to Rs.7,500 per unit per day or equivalent

9963 12% - Without ITC

(ii) Restaurant services other than at ‘Specified premises’ 9963 5% - without ITC (iii) Supply of goods, being food or any other article for human

consumption or any drink, by the Indian Railways or Indian Railways Catering and Tourism Corporation Ltd. or their licensees, whether in trains or at platforms.

9963 5% - without ITC

(iv) Outdoor Catering or Composite supply of ‘outdoor catering’ together with renting of premises or supply of ‘outdoor catering’, at premises other than ‘specified premises’ provided by any person except- (a) suppliers providing ‘hotel accommodation’ at ‘specified

premises’, or (b) suppliers located in specified premises’

9963 5% - without ITC

(vi) Accommodation, food and beverage services other than (i) to (v) above

9963 18%

B) Job work services: - When the process carried out by the job worker amounts to

“manufacture” 9988 18%

When the process carried out by the job worker does not amount to “manufacture”

9988 12%

Services by way of job work in relation to diamonds falling under chapter 71 in the First Schedule to the Customs Tariff Act, 1975 (51of 1975);

9988 1.5%

Services by way of job work in relation to bus body building; 9988 18%


C) Others: - Services provided by and to Fédération International de

Football Association (FIFA) and its subsidiaries directly or indirectly related to any of the events under FIFA U-17 Women's World Cup 2020 to be hosted in India

99 NIL

Services by way of storage or warehousing of cereals, pulses, fruits, nuts and vegetables, spices, copra, sugarcane, jaggery, raw vegetable fibres such as cotton, flax, jute etc., indigo, unmanufactured tobacco, betel leaves, tendu leaves, coffee and tea.

9967 or 9985

NIL

Services of life insurance provided or agreed to be provided by the Central Armed Police Forces (under Ministry of Home Affairs) Group Insurance Funds to their members under the Group Insurance Schemes of the concerned Central Armed Police Force

9971 or 9991

NIL

Services by way of right to admission to the events organised under FIFA U-17 Women's World Cup 2020.

9996 NIL

The services by way of transportation of goods by an aircraft or vessel from customs station of clearance in India to a place outside India shall be exempted till 30th day of September 2020. This exemption was to end on 31.03.2019. However, it has been extended for further 1 year.

9965 NIL

[Notification no 20/2019 & 21/2019 CT (R) dated 30th Sep 2019]

• In case of Builder now, Reverse charge will be applicable on the goods Cement supplied by unregistered supplier to promoter without any condition or limit. Government has widened the applicability of reverse charge on cement supplied by unregistered supplier to promoters.

[Notification no 24/2019 CT (R) dated 30th Sep 2019]


• The place of supply of services shall be the location of the recipient of services in case of supply of research and development services related to pharmaceutical sector as specified in below table by a person located in taxable territory to a person located in the non-taxable territory subject to fulfillment of the following conditions: -

Conditions:- (i) Supply of services from the taxable territory are provided as per a contract between the

service provider located in taxable territory and service recipient located in non-taxable territory.

(ii) Such supply of services fulfills all other conditions in the definition of export of services, except sub- clause (iii) provided at clause (6) of Section 2 of Integrated Goods and Services Tax Act, 2017 (13 of 2017) i.e. “the place of supply of service is outside India”

Types of services:-

Sr.No. Nature of Supply General Description of Supply

1 Integrated discovery and development

This process involves discovery and development of molecules by pharmaceutical sector for medicinal use. The steps include designing of compound, evaluation of the drug metabolism, biological activity, manufacture of target compounds, stability study and long-term toxicology impact.

2 Integrated development

3 Evaluation of the efficacy of new chemical/ biological entities in animal models of disease

This is in vivo research (i.e. within the animal) and involves development of customized animal model diseases and administration of novel chemical in doses to animals to evaluate the gene and protein expression in response to disease. In nutshell, this process tries to discover if a novel chemical entity that can reduce or modify the severity of diseases. The novel chemical is supplied by the service recipient located in non-taxable territory.

4 Evaluation of biological activity of novel chemical/ biological entities in in-vitro assays

This is in vitro research (i.e. outside the animal). An assay is first developed and then the novel chemical is supplied by the service recipient located in non-taxable territory and is evaluated in the assay under optimized conditions.


5 Drug metabolism and pharmacokinetics of new chemical entities

This process involves investigation whether a new compound synthesized by supplier can be developed as new drug to treat human diseases in respect of solubility, stability in body fluids, stability in liver tissue and its toxic effect on body tissues. Promising compounds are further evaluated in animal experiments using rat and mice.

6 Safety Assessment/ Toxicology

Safety assessment involves evaluation of new chemical entities in laboratory research animal models to support filing of investigational new drug and new drug application. Toxicology team analyses the potential toxicity of a drug to enable fast and effective drug development.

7 Stability Studies Stability studies are conducted to support formulation, development, safety and efficacy of a new drug. It is also done to ascertain the quality and shelf life of the drug in their intended packaging configuration.

8 Bio-equivalence and Bioavailability Studies

Bio-equivalence is a term in pharmacokinetics used to assess the expected in vivo biological equivalence of two proprietary preparations of a drug. If two products are said to be bioequivalent it means that they would be expected to be, for all intents and purposes, the same. Bioavailability is a measurement of the rate and extent to which a therapeutically active chemical is absorbed from a drug product into the systemic circulation and becomes available at the site of action.

9 Clinical trials The drugs that are developed for human consumption would undergo human testing to confirm its utility and safety before being registered for marketing. The clinical trials help in collection of information related to drugs profile in human body such as absorption, distribution, metabolism, excretion and interaction. It allows choice of safe dosage.

10 Bio analytical studies Bio analysis is a sub-discipline of analytical chemistry covering the quantitative measurement of drugs and their metabolites, and biological molecules in unnatural locations or concentrations and macromolecules, proteins, DNA, large molecule drugs and metabolites in biological systems.

[Notification no 4/2019 IGST dated 30th Sep 2019]


• In case a NIL refund is claimed in FORM GST RFD-01A/RFD-01 for a given period under a particular category, refund claim can again be applied for the said period under “Any Other” category (instead of the category under which the NIL refund claim was originally filed), along with all the supporting documents, provided following conditions are satisfied: - The registered person must have filed a NIL refund claim in FORM GST RFD-01A/ RFD-01 for certain

period under a particular category - Further no refund claims must have been filed by the registered person under the same category for

any subsequent period for below category(s) of refunds: (i) Refund of unutilized input tax credit (ITC) on account of exports without payment of tax; (ii) Refund of unutilized ITC on account of supplies made to SEZ Unit/SEZ Developer without payment of

tax; (iii) Refund of unutilized ITC on account of accumulation due to inverted tax structure.

[Circular No 110/31/2019 – CGST, dated 3rd Oct 2019]

• Procedure to claim refund in FORM GST RFD-01 (subsequent to favorable order in appeal/ another forum) has been explained:

- In case of favorable order is received by a registered person in appeal or in any other forum in respect of a

refund claim originally rejected through issuance of an order in FORM GST RFD-06,

o the registered person needs to file a fresh refund application under the category “Refund on account

of assessment/provisional assessment/appeal/any other order”.

- Since the amount of claim has already been debited to Electronic Credit Ledger, no fresh debiting of amount

is required.

- Details of the type of the Order (appeal/any other order), Order No., Order date and the Order Issuing

Authority would have to be furnished. Further, copy of the order of the Appellate or other authority and

copy of its refund rejection order would also have to be furnished.

- The proper officer disposing the application for refund under the category “Refund on account of

assessment/provisional assessment/appeal/any other order” shall also ensure re-credit of any amount

which remains rejected in the order of the appellate (or any other authority). However, such re-credit shall

be made following the guideline as laid down in para 4.2 of Circular no. 59/33/2018 – GST dated

04/09/2018. [Circular No 111/31/2019 – CGST, dated 3rd Oct 2019]

• Some relief to Dealer & chanin by withdrawing Circular no. 105/24/2019-GST dated 28.06.2019, regarding the treatment of secondary or post-sales discounts under GST, in view of numerous representations expressing apprehensions on the implications of the said Circular. [Circular No 112/31/2019 – CGST, dated 3rd Oct 2019]


Customs

• Levy of IGST has been exempted on all the goods imported into India by Food & Agricultural Organization of United Nations (FAO) for execution of below mentioned projects with specified conditions. - Strengthening Capacities for Nutrition-sensitive Agriculture and Food systems. - Green Ag: Transforming Indian Agriculture for Global Environment benefits and the

conservation of Critical Biodiversity and Forest landscape.[Notification no.32/2019-Customs dated 30th Sep 2019]

• Exemption of Custom Duty & Additional duty on import of machinery, equipment, instruments, components etc for the purpose of Light Combat Aircraft Programme (LCAP) has been extended to 4th December 2021.[Notification no.33/2019-Customs dated 30th Sep 2019]

• Amendment has been made in Notification no.50/2017-Customs dated 30th June 17 & levy of Custom Duty and IGST has been exempted on import of following with specified conditions.

- Along with Gold, Import of Silver or Platinum by specified banks & other entities (as per

list 34) has been inserted. - Terminology has been changed for S.No. 557A & 557B for smooth reading & understanding

of provision. - Import of Ship/Vessels for providing cable laying or repairing services in Indian Customs

water. - Diamond India Limited (DIL) has been inserted in list 34.

[Notification no.34/2019-Customs dated 30th September 2019]

• Along with Custom Duty, IGST has been exempted on import of specified goods by Ministry of Defence, Government of India or the defence forces till 30th June 2024.[Notification no.35/2019-Customs dated 30th September 2019]


• A new regulation named “Transhipment of Cargo to Nepal under Electronic Cargo Tracking

System Regulation,2019” has been issued by CBIC which includes procedure for declaration

of transhipment & arrival of goods at custom station, permission for loading goods &

transshipment. [Notification no.68/2019-Customs (N.T.) dated 30th Sep 2019]

• A new regulation named “Manufacture & Other operations in Warehouse regulations,

2019” has been issued by CBIC which includes procedure & conditions for transport &

receipt of goods in Warehouse, provisions for Audit, Penalty etc. Also, one form is issued to

be filled while dispatch & receipt of goods in warehouse.[Notification no.69/2019-Customs

(N.T.) dated 1st Oct 2019]

• Warehouse (Custody and Handling of goods) Regulations, 2016” has been amended that

this regulation will not be applicable to Warehouse operating under Section 65.

[Notification no.70/2019-Customs (N.T.) dated 1st October 2019]

• Warehoused goods (Removal) Regulations, 2016 has been amended that this regulation will

not be applicable to Warehouse operating under Section 65.

[Notification no.71/2019-Customs (N.T.) dated 1st Oct 2019]

• Exchange rate has been notified for specified currencies. Schedule 1

S.No. Foreign Currency Rate of Exchange of one unit of foreign currency equivalent to Indian rupees

(1) (2) (3) (a) (b) (For Imported goods) (For Exported goods)

1 EURO 79.55 76.65

2 US Dollar 72.15 70.45

[Notification no.72/2019-Customs (N.T.) dated 3rd Oct 2019]

• Levy of Anti-Dumping Duty has been removed on import of Ductile Iron Pipes in India from

China.[Notification no.39/2019-Customs (ADD) dated 28th Sept 2019]


Foreign Trade Policy

• Export of all varieties of Onions, is prohibited with immediate effect.

[Notification no.21/2015-20-dated 29th Sep 2019]

• Export of Electronic Cigarettes and Parts or Components thereof is prohibited.

[Notification no.22/2015-20-dated 30th Sep 2019]

• As C&F exports are also eligible for Transport & Marketing Assistance (TMA), Aayat Niryat

Form ANF-7(A)A has been amended i.e. the words “CIF” wherever used may be read as

“CIF/C&F”.[Public notice no.38/2015-20-dated 30th Sep 2019]

• There is no extension in date regarding Import of Pulses & it has to be completed by 31st

October 2019, failing which the importers may be debarred for allotment of quota of pulses

in future. [Trade notice no.35/2019-20-dated 30th Sep 2019]

Company Law

• ROC Compliances for October

1. ADT-1 (Auditor Appointment) 15 days from the date of AGM.

2. AOC-4 (Annual Accounts ) 30 Days from the date of AGM.

3. MGT-7 (Annual Return) 60 Days from the Date of AGM.

4. MGT-14 (Resolution for Board Report and Annual Accounts) 30th Days from the date of

Board meeting of approval of accounts (Applicable to Public Limited Companies)

5. MSME (if Applicable) Half yearly Return from April-19 to Sep-19 Due date 31st October

2019

6. Form 8 (LLP) Filing of Annual Accounts Due date 30th October, 2019


Income Tax

• The CBDT has directed in proceedings of all regular tax assessment shall be conducted electronically.

Subject to some execptions as prescribed in the circular. [circular no. 27/2019 dated 26th Sep,2019]

• The CBDT has clarified the following in respect of option exercised by domestic company under section

115BAA to pay tax at a lower rate of 22 per cent for assessment year beginning on or after 01.04.2020

:-

- A domestic company which would exercise option of availing benefit of lower tax rate U/s 115BAA

shall not be allowed to claim set off of any brought forward loss on account of additional

depreciation.

- As provisions of Section 115JB (MAT) will not be applicable to aforementioned domestic company it

has been clarified that tax credit of MAT shall not be available consequent to exercise of option.

Note: As there is no time limit within which option U/s 115BAA can be exercised a domestic company having

brought forward loss on account of additional depreciation or MAT Credit can opt to pay tax at lower

rate after set off of losses and/or utilization of MAT credit. [Circular no.29/2019 dated 02nd Oct,2019]

• New Section 194N was notified from 01st September,2019 levying a TDS at a rate of 2% on cash

withdrawal in excess or Rs.1 Crore during a previous year the credit of tax deducted shall be given to

the person from whose account tax is deducted and paid.[Notification No.74/2019 dated 27th

Sep,2019]

• Due date for linking of PAN with aadhar extendted from 30.09.2019 to 31.12.2019. [Notification

No.75/2019 dated 28th Sep, 2019]

• CBDT has extended the due date of filing ITRs and Tax audit reports from 30th September, 2019 to 31st

October,2019 in respect of persons whose accounts are required to be audited.


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Documents

GST - Bizsolindia Services Pvt.Ltd · Tax Act, 2017 (13 of 2017) i.e. “the place of supply of service is outside India” Types of services:- Sr.No. Nature of Supply General Description