Some Major Changes through the GST Amendment Acts

More than a year long journey of this landmark reform GST was no less than a roller coaster ride. However, the government has been making its constant efforts to pave out ways to make compliance under this law easier. And one such step was to release an Amendment Act leading to clarification for a number of anomalies under the law earlier. The GST Amendment Act 2018 had received presidential assent on 29 Aug, 2018 and was made effective from 01 Feb, 2019. The attempt was to plug in the loopholes in the framework.

Some of the major amendments are as mentioned below-

Inclusion of new paras in Schedule III- Effective from July 01,2017

The scope of activities or transactions referred in Schedule III has been widened by inclusion of following activities:-

  • International or merchant trading.
  • Bond-to-bond transfer.
  • High seas sales transaction

Reverse Charge Mechanism u/s9(4)

  • The purview of levy of tax on inward supplies under section 9(4) has been restricted. It has been provided that only specified classes of registered person as notified by the Government shall be liable to pay GST on reverse charge basis in respect of specified goods and services.

Restrictions on Availment of Input Tax Credit 

S.No. Ineligible Input Exception (if any)
1. Motor-vehicles for transportation of persons having approved seating capacity of not more than 13 persons (including the driver)*no restrictions on ITC in respect of motor vehicles for transportation of person having approved seating capacity of more than 13 Further, no restrictions on ITC in respect of vehicle other than motor vehicles for transportation of the person IT can be availed if they are used for:-

  • Further supply of motor vehicles
  • Transportation of passengers
  • Imparting training on driving of motor vehicles
2. Vessels & aircrafts IT can be availed if they are used for:-

  • Further supply of such vessels & aircraft. Transportation of passengers
  • Imparting training on navigating/flying such vessels/aircraft.·
  • For the transportation of goods
3. Services of general insurance, servicing, repair and maintenance in so far as they relate to motor vehicles, vessels or aircraft as referred above IT can be availed if such services are used

  • For purposes specified above
  • In manufacture of motor- vehicles, vessels, aircraft
  • In the supply of general insurance services in respect of such motor vehicles, vessels or aircraft insured by supplier
4. Food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, leasing, renting or hiring of motor vehicle, vessels or aircraft as referred above, life insurance and health insurance, membership of a club, health and fitness center, travel benefits extended to employees on vacation such as leave or home travel concession Credit shall be available in respect of supply of these goods or services where-

  • Same category of outward supply or as an element of taxable composite or mixed supply is made by the recipient
  • Motor vehicle etc., are used for specified purposes
  • It is obligatory on the employer to provide such services to its employees under any law for the time being in force

Place of supply

  • For the goods that have been temporarily imported in India for job – work or any treatment or process and then exported without putting them to any other use in India other than that which is required for such repairs or treatment or process, the place of supply shall be outside India.
  • The place of supply of services by way of transportation of goods from a place in India to a place outside India by a transporter located in India, shall be the destination of goods i.e. outside India.

Supply without consideration

  • Person who is not registered, but is otherwise engaged in business activities shall be liable to tax when such services are received from any of its establishments or related party outside India.

Credit utilization for the payment of output tax

  • The taxpayer shall now be able to utilize credit on account of CGST, SGST/UTGST, only after using all the credits on account of IGST available to him. The manner of utilization of GST credit shall be as under;
  1. Credit of IGST to be utilized first for the liability of IGST-CGST-SGST/UT GST
  2. Then, credit of CGST to be utilized for liability of CGST-IGST (if any)
  3. Then, credit of SGST/UT GST to be utilized for liability of SGST/UT GST-IGST(if any)
  4. Cross utilization of credit between CGST and SGST/UT GST shall not be

The GST Amendment Act has been released after looking into various issues raised by different industries. Many procedural changes have also taken place. The expectations are high, now let’s see how implementation will add cherry on the cake by smoothening things out.

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