Latest Amendments in GST

Highlights of 38th GST Council Meeting, December 18, 2019 and other Amendments

1. GST Audit and Annual Return

The due date for filing GSTR-9, GSTR-9A, and GSTR-9C for the FY 2017-18 has been extended from 31 December 2019 to 31 January 2020.

2. Waiver of late fees

The taxpayer who has not filed GSTR-1 from the period July 2017 to November 2019 will not be penalized, if they file their return by 10 Jan 2020.

3. Blocking of E-Way Bill

As per rule 138 E the tax payers who has not filed their GST returns for consecutive period of two months or two quarters as the case may be, E-Way bill of such taxpayer can’t be generated for making supplies for them.

4. Restriction of claiming of Input Tax Credit (ITC)

The restriction of 20 per cent imposed on availing credit of unmatched invoices or debit notes not reflecting in GSTR 2A has been further reduced to 10 per cent. Thus ITC cannot be availed in excess of 10% of total ITC as reflecting in GSTR-2A with effect from Jan 01, 2020.

BnB Comments:

This is not practically possible to make the above compliance due to following factor:

GSTR-2A being a dynamic form, the inputs reflected in this form gets on changing every day.

GST input credit cannot be claimed on monthly basis for that taxpayer who are taking good or services from those taxpayers who are filing their GSTR-1 on quarterly basis. This will be against the interest of the small and medium supplier of goods/services.

Delay of availment of GST input credit will involve additional working capital cost.

Exporter cannot file the refund application for full GST input credit in the month in which tax payer has exported the goods. Further there is no clarification, as to how the exporter will get the refund since there may not be any export in the subsequent month/months. This may result into denial of refund to the exporter.

It is advisable to the all the exporters as well as all the taxpayers to make their purchase of goods/services from those supplier who are filing their returns on monthly basis.

5. E-invoicing to start from April 01, 2020

The new system for raising all the B2B invoices on the GST portal has received in-principle approval for implementation has been notified w.e.f April 01, 2020. However, the taxpayer may start E-Invoicing on voluntarily basis as per the details given below:

E-invoicing will be mandatory from 1 April 2020 for businesses having turnover of INR 100 crore or more.
It will start on voluntary and trial basis from 1 January 2020 if turnover is INR 500 crore or more.
It will start on voluntary and trial basis from 1 February 2020 if turnover is INR 100 crore or more.
Applicable for B2B invoices only and QR code is required to be mentioned on B2C invoices.
It is applicable on domestic B2B sales, export sales and sales to SEZ units.
Provisions will be applicable on tax invoices, debit notes, credit notes and RCM invoice.

BnB Comments:

With implementation of E- Invoicing system, no separate e-way bill will be required. This invoice will be treated as e-way bill as well. It advisable for tax payers covered under this notification to get their software updated in time to make compliance with E-Invoicing.

6. Rates related changes

Sl. No.	Particulars	Existing position	Announcement on the 38^th Council Meeting	Effective date
1	CH – 9972 Upfront amount payable for long term lease of industrial/ financial infrastructure plots	Exemption available to an entity having 50 per cent or more ownership of Central or State Government	Scope enhanced to allow exemption for entities having 20 percent or more ownership of Central or State Government	01-Jan-20
2	Lottery run by state Government	GST rate 12 per cent	28 per cent	01-Mar-20
3	Lottery Authorized by State Government	GST rate 28 per cent	Continue to remain at 28 per cent	NA
4	CH 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.	GST rate 12 per cent	18 per cent	01-Jan-20

7. New Return System

The new GST return system will now be implemented from April 2020.

8. Tax Rates on Job work services

CBIC issued a clarification on Job Work that:

If any service provided by way of treatment or processing undertaken by a person on goods belonging to another registered person will be liable to tax @ 12%.
If any service provided to Non registered person by way of treatment or processing will be liable to tax @ 18%.

Other Updates

9. Compliance dates under the GST regime in the month of Jan 2020 are as under:

S.No.	Return	Purpose	Period (For months)	Date to be Filed

1	GSTR-3B	Monthly tax payment	Dec-2019	By 20^th Jan 2020

2	GSTR 1 for turnover >INR 1.5 crore	Monthly outward supply	Dec-2019	By 11^th Jan 2020

3	GSTR 1 for turnover upto 1.5 crore	Quarterly Outward supply	Oct 2019-Dec 2019	By 31^st Jan 2020

4	ITC-04	For good send on Job work basis	Oct 2019-Dec 2019	By 25^thJan 2020

5	GSTR-6	Input Service Distributor	Dec- 2019	By 13^th Jan 2020

6	Annual Return GSTR-9	Annual Return	July 2017 to March 2018	By 31^st Jan 2020

7	GSTR 9C	Audit/ Reconciliation	July 2017 to March 2018	By 31^st Jan 2020

Latest Amendments in Company Act

10. Applicability of New Rules in respect of Independent directors

MCA has notified the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019, and the Companies (Accounts) Amendment Rules, 2019. The notification has already come into force with effective from Dec 01, 2019.

As per Rule 4 of Companies (Appointment and Qualification of Directors) Rules, 2014:-

The following class or classes of companies shall have at least two directors as independent directors

the Public Companies having paid up share capital of ten crore rupees or more; or
the Public Companies having turnover of one hundred crore rupees or more; or

the Public Companies which have, in aggregate, outstanding loans, debentures and deposits, exceeding fifty crore rupee.

The new norms shall be applicable to :

Existing Independent directors (IDs),
Individuals who are aspiring to be appointed as independent director,
Companies which are required to appoint Independent directors under the Companies Act 2013.

RESPONSIBILITY OF COMPANY:

An independent director may be selected from Data Bank maintained by institute under MCA;
Responsibility of exercising due diligence before selecting a person from the data bank is on Company;
Appointment of independent director shall be approved by the company in general meeting;
Explanatory statement annexed to the notice of the general meeting called to consider the said appointment shall indicate the justification for choosing the appointee for appointment as independent director.

PROVISIONS FOR EXISTING INDEPENDENT DIRECTOR (ID):

Submission of Application with Institute:

If a person is already appointed as ID in a Company, on 01.12.2019 (the commencement of these rules) he shall within period of three months from such commencement i.e. till 29^th February, 2020 apply online to the institute for inclusion of his name in the data bank.

Passing of examination conducted by Institute:

After inclusion of his name in data bank he must pass an online proficiency self-assessment test, conducted by the institute within a period of one year from the date of inclusion of his name in the data bank, (i.e. 1 year from 29^th February, 2021 or any other date of inclusion of name in data bank)

Failing which, his name shall stand removed from the databank of the institute.

Submission of declaration with Board of Director:

Every independent director shall submit a declaration of compliance of sub-rule (1) [i.e. submission of application with institute] and sub-rule (2) [i.e. submission of application with institute for renewal] to the Board, each time he submits the declaration required under subsection (7) of section 149 of the Act.