GST NEWSLETTER 032120 (MARCH ISSUE)2/2019-Central Tax (Rate) dated 07.03.2019 by fi ling FORM CMP-02. f. A special procedure is being prescribed for registered persons who are corporate

CONTENTSPage

GST Statistical Updates ........................................................................... 02

GSTR 3B Filed from February, 2019 to January, 2020 ............................... 03

Break-Up of GST Collection.......................................................................... 04

Decisions Taken in 39th GST Council Meeting held on 14th March, 2020 ............................................................................ 05

Facilitation measures undertaken by Regulatory authoritiesin view of COVID-19 outbreak ..................................................................... 07

Composition Scheme ................................................................................... 08

FAQs on “OPT for composition levy (Form GST CMP-02)” ........................ 09

Notifications .................................................................................................. 10

Circulars & Orders ....................................................................................... 23

CertificateCourseinGoodsandServicesTax .......................................... 30

GST Quiz ......................................................................................................... 31

2 |GST NEWSLETTER

GST Collections

Trends in GST Collection

GST Revenue collection in the month of February, 2020 is ` 1,05,366 crore.

Source: www.pib.gov.in

GST Statistical Updates

120,000

110,000

100,000

90,000

80,000

GST Collection (in ` Crore)

1,06,577

1,13,865

1,00,289 99,9391,02,083

98,202

91,916

95,380

1,03,492 1,03,184

1,10,828

1,05,366

Jan.,20 Feb.,20Mar.,19 Apr.,19 May.,19 June,19 Jul.,19 Aug.,19 Sep.,19 Oct.,19 Nov.,19 Dec.,19

94,016

100,289 99,939

95,61096,483

102,083

98,202

93,960 94,442

91,916

100,710

95,380

97,637

103,492

94,726

103,184102,503

110,828

97,247

105,366

115,000

110,000

105,000

100,000

95,000

90,000

85,000

80,000May June July

GST collection in FY 2018-19 GST Collection in FY 2019-20

August September October November December January February

Trend in GST Collection (In ` Crore)

GST NEWSLETTER| 3

GSTR 3B Filed from Feb, 2019 to Jan, 2020

Source: http://pib.gov.in

SR. NO FOR THE MONTH UPTO IN LAKH

1 February, 2019 31st March, 2019 75.95

2 March, 2019 30th April, 2019 72.13

3 April, 2019 31st May, 2019 72.45

4 May, 2019 30th June, 2019 74.38

5 June, 2019 31st July, 2019 75.79

6 July, 2019 31st August, 2019 75.80

7 August, 2019 30th September, 2019 75.94

8 September, 2019 31st October, 2019 73.83

9 October, 2019 30th November, 2019 77.83

10 November, 2019 31st December, 2019 81.21

11 December, 2019 31st January, 2020 83.00(Prov)

12 January, 2020 29th February, 2020 83.53

75.95

86.00

84.00

82.00

80.00

78.00

76.00

74.00

72.00

70.00

6800

66.00

72.13

72.45 74.38

75.79 75.80 75.94

73.83

77.83

81.21

83.0083.53

Mar/19

Apr/19

May/19

Dec/19

Jan/19

Feb/1

9Jun/1

9

Jul/19

Aug/19

Sep/1

9

Oct/19

Nov/19

(in Lakh)

Number of GSTR-3B Filed

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Out of total GST collection of `1,05,366 crore, in the month of February, 2020 CGST is `20,569 crore, SGST is `27,348 crore, IGST is `48,503 crore (including `20,745 crore collected on imports) and Cess is `8,947 crore (including `1,040 crore collected on imports).

The government has settled `22,586 crore to CGST and `16,553 crore to SGST from IGST as regular settlement. The total revenue earned by Central Government and the State Governments after regular settlement in the month of February, 2020 is `43,155 crore for CGST and `43,901 crore for the SGST. Source: http://pib.gov.in

GST Collections in February, 2020

46%

8%20%

26%

CGST SGST IGST (Including Imports) CESS (Including Imports)

Source: http://gst.gov.in

Break-up of GST Collection

Forms Period Due Date Remarks

GSTR-1 Feb-2020 11th March , 2020 Turnover greater than `1.50 Crore or opted to filemonthlyReturn

GSTR-1 Jan-March, 2020 30th April, 2020 Quarterly return for registered persons with aggregate turnover up to `1.50 Crores

GSTR-3B Feb-2020 20th March, 2020, 22nd March, 2020 & 24th March, 2020

All registered Persons required to pay GST and fileMonthlyGSTReturn

GSTR-5 Feb-2020 20th March, 2020 For non-resident persons required to pay GST andfileMonthlyGSTReturn

GSTR-5A Feb-2020 20th March, 2020 Non-resident OIDAR services providers requiredtofileMonthlyGSTReturn

GSTR-6 Feb-2020 13th March, 2020 Every Input Service Distributor (ISD Return)

GSTR-7 Feb-2020 10th March, 2020 Filed by person liable to deduct TDS

GSTR-8 Feb-2020 10th March, 2020 Filed by E-Commerce Operators liable to deduct TCS

GSTR-9 & GSTR-9C

2018-19 30th June, 2020 Annual Returns Filed by Regular Taxpayer &Reconciliationstatement&Certification

CMP-08 Jan-March, 2020 18th April, 2020 Statementforpaymentofself-assessedtax

RFD-10 - - Eighteen months after end of the quarter for which refund is to be claimed

Note- As per the new Press release on Covid 19 outbreak, due date for furnishing of return under the GST laws wherethetimelimitisexpiringbetween20thMarch,2020to29thJune,2020shallbeextendedto30thJune,2020.Source-https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1607942

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1. Measures for Trade facilitation a. Interest for delay in payment of GST to

be chargedon thenet cash tax liabilityw.e.f. 01.07.2017 (Law to be amended retrospectively).

b. Where registrations have been cancelled till 14.03.2020, application for revocation of cancellation of registration can be filled up to 30.06.2020 (extensionof period of application as one-time measure to facilitate those who want to conduct business).

c. Annual Return:

• Relaxation to MSMEs from furnishingof Reconciliation Statement in FORM GSTR-9C,forthefinancialyear2018-19,fortaxpayershavingaggregateturnoverbelow `5 crores;

• Due date for filing the Annual returnand the Reconciliation Statement for financialyear2018-19tobeextendedto30.06.2020; and

• Late fees not to be levied for delayed filing of the Annual return and theReconciliation Statement for financialyear2017-18and2018-19fortaxpayerswith aggregate turnover less than `2 crores.

d. A new facility called ‘Know Your Supplier’ to be introduced so as to enable every registered person to have some basic information about the suppliers with whom they conduct or propose to conduct business.

e. The requirement of furnishing FORM GSTR-1for2019-20tobewaivedfortaxpayerswhocould not opt for availing the option of special composition scheme under notification No.2/2019-Central Tax (Rate) dated 07.03.2019byfilingFORM CMP-02.

f. A special procedure is being prescribed for registered persons who are corporate debtors under the provisions of the Insolvency and Bankruptcy Code, 2016 and are undergoing the corporate insolvency resolution process, so as to enable them to comply with the provisions of GST Laws during the CIRP period.

g. A special procedure for registered persons in Dadra and Nagar Haveli & Daman and Diu during transition period, consequent to merger of the UTs w.e.f. 26.01.2020; transition to be completed by 31.05.2020.

h. Extension of due dates for FORM GSTR-3Bfor the month of July, 2019 to January, 2020 till 24th March, 2020 for registered persons having principal place of business in the Union territoryofLadakh.Similarextensionis also recommended for FORM GSTR-1 & FORM GSTR-7.

i Bunching of refund claims allowed across financialyearstofacilitateexporters.

2. Deferment of E-invoice andQR Code

a. Certain class of registered persons (insurance company, banking company, financial institution, non-bankingfinancial institution, GTA, passengertransportation service etc.) to be exempted from issuing e-invoices orcapturing dynamic QR code; and

b. The dates for implementation of e-invoicingandQRCodetobeextendedto 01.10.2020.

3. Deferment of e-wallet Scheme a. Extensionofthetimetofinalizee-Wallet

scheme up to 31.03.2021; and b. Extension of the present exemptions

from IGST and Cess on the imports made under the AA/EPCG/EOU schemes up to 31.03.2021.

Decisions Taken In 39th GST Council Meeting Held On 14th Mar, 2020

6 |GST NEWSLETTER

4. ContinuationofexistingsystemoffurnishingFORM GSTR-1 & FORM GSTR-3B till September, 2020;

5. Other new initiatives a. Seeking information return from Banks;

b. To curb fake invoicing and fraudulent passing of ITC, restrictions to be imposed on passing of the ITC in case of new GST registrations,beforephysicalverificationof premises and Financial KYC of the registered person

6. Issuance of circulars in respect of: a. Clarification in apportionment of ITC in

cases of business reorganization under section 18 (3) of CGST Act read with rule 41(1) of CGST Rules;

b. Appeals during non-constitution of the Appellate Tribunal;

c. Clarification on refund related issues;and

d. Clarification on special procedure forregistered persons who are corporate debtors under the provisions of the Insolvency and Bankruptcy Code, 2016, undergoing the corporate insolvency resolution process.

7. Amendments to the CGST Rules: Key amendments are as below:

a. Procedureforreversalofinputtaxcreditin respect of capital goods partly used foraffectingtaxablesuppliesandpartlyforexemptsuppliesunderrule43(1)(c);

b. ceiling to be fixed for the value of

the export supply for the purpose ofcalculation of refund on zero rated supplies;

c. to allow for refund to be sanctioned in both cash and credit in case of excesspaymentoftax;

d. to provide for recovery of refund on exportofgoodswhereexportproceedsare not realized within the time prescribed under FEMA; and

e. to operationalize Aadhaar authentication fornewtaxpayers.

8. Certain amendments to be carried out in the GST laws.

9. Changes in the GST rates: a. GST rate on all types of matches

(Handmade and other than Handmade) has been rationalised to 12% (from 5% on Handmade matches and 18% on other matches).

b. GST on mobile phones and specifiedparts was increased from 12% to 18%.

c. GST on Maintenance, Repair and Overhaul (MRO) service in respect to aircraft was reduced from 18% to 5% with full ITC.

d. ItisproposedtoissuenotificationsgivingeffecttotheserecommendationsoftheCouncil on 01st April, 2020.

Refer link for complete details:

http://www.cbic.gov.in/resources//htdocs-cbec/press-release/press-release-goods-services.

ssionid=686EA260552CAA61C14CBAE95E3CCA74

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1 Those having aggregate annual turnover of less than Rs. 5CrorecanfileGSTR-3Bforthemonth of March, April and May 2020 by the last week of June, 2020. No interest, late fee, and penalty to be charged.

2 OtherscanfilereturnsdueinMarch,AprilandMay 2020 by last week of June 2020 but the same would attract reduced rate of interest @9 % per annum from 15 days after due date (current interest rate is 18 % per annum). No late fee and penalty to be charged, if complied before till 30th June 2020.

3 Date for opting for composition scheme is extended till the lastweek of June, 2020.Further, the last date for making payments for the quarter ending 31st March, 2020 and filingofreturnfor2019-20bythecompositiondealerswillbeextendedtillthelastweekofJune, 2020.

4 DateforfilingGSTannualreturnsofFY18-19,

Facilitation measures undertaken by Regulatory authorities in view of

COVID-19 outbreakwhichisdueon31stMarch,2020isextendedtill the last week of June 2020.

5 Due date for issue of notice, notification,approval order, sanction order, filing ofappeal, furnishing of return, statements, applications, reports, any other documents, time limit for any compliance under the GST lawswherethetimelimitisexpiringbetween20th March 2020 to 29th June 2020 shall be extendedto30thJune2020..

6 Necessary legal circulars and legislative amendments to give effect to the aforesaidGST relief shall follow with the approval of GST Council.

7 Payment date under Sabka Vishwas Scheme shall be extended to 30th June, 2020. Nointerest for this period shall be charged if paid by 30th June, 2020.

Refer link for complete details: https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1607942

8 |GST NEWSLETTER

Composition SchemeComposition Scheme is an easy and simple scheme under GST for small businesses. This is to bringrelieftosmalltaxpayerssothattheycangetrid of tiresome GST formalities. Thus, an option has been provided where they can pay GST at a fixed rate of turnover and can be relieved fromthe detailed compliance of the provisions of law. Compositionschemecanbeoptedbyanytaxpayerwhose turnover is less than ` 1.5 crore.

Advisory on Opting-in Composition Scheme for 2020-21 by fi ling FORM GST CMP-02A. How to opt-in Composition

Scheme: i. The application for opting-in composition

scheme for the financial year, 2020-21has been made available on GST Portal.

ii. The taxpayers who are already in composition scheme in previous fi nancial year are not required to opt in for composition again for FY 2020-2021.

iii. The eligible registered taxpayers, whowant to opt-in for composition scheme for the Financial Year 2020-2021, may file FORM GST CMP-02 application up to 31st March, 2020 (Now extendedup to 30th June, 2020 due to Covid 19 outbreak) on common portal.

iv. Thetaxpayersshouldnavigateasfollows: Log-in > Services > Registration >

Application to opt for Composition Levy > Filing Form GST CMP-02 > File application under DSC/EVC.

Once CMP-02 application is filed, thecomposition scheme shall be available tothetaxpayer.

The taxpayers who were regulartaxpayers inpreviousfinancialyearbutare opting-in composition scheme for 2020-21 should file ITC-03 for reversalof ITC credit on stocks of Inputs, semi-finished goods and finished goodsavailable with him within a period as prescribed under Rule 3(3A) of CGST Rules, 2017.

B. Return /PaymentAll taxpayers opting in for composition schemeshallfileFORM GST CMP-08 quarterly and pay GST andshallfileFORM GSTR-4 annually.

C. Who are eligible taxpayers for opting-in for Composition Scheme:-Followingtaxpayersmayoptforthisscheme:

• Thenormal taxpayershavingaggregateturnover (at PAN level) below`1.5 Crore inthepreviousfinancialyear,who doesn’t want to avail ITC facility,

• Thenormal taxpayershavingaggregateturnover (at PAN level) below `75 lakh in the previous financial year who aresituated in following states:

• Arunachal Pradesh, • Manipur, • Meghalaya, • Mizoram, • Nagaland,• Sikkim, • Tripura and • Uttarakhand:

• Thenormaltaxpayerssupplyingservicesand/ormixedsupplieshavingaggregateturnover in the previous financial yearbelow `50 lakhs.

D. Taxpayers, who are not eligible for opting in composition scheme:

• Suppliers of the goods/services who are notliabletobetaxedunderGST,

• Inter-State outward suppliers of goods/services,

• The taxpayers supplying throughe-commerce operators, who are required tocollecttaxundersection52,

• The manufacturers of notified goodslike (i) Ice cream and other edible ice, whether or not containing cocoa, (ii) All goods, i.e. Tobacco and manufactured tobacco substitutes and (iii) Pan Masala, (iv) Aerated water

• ACasualtaxpayer, • ANon-ResidentForeignTaxpayer, • A person registered as Input Service

Distributor (ISD), • A person registered as TDS Deductor /

TaxCollector,Source: https://www.gst.gov.in/newsandupdates/read/356

GST NEWSLETTER| 9

Source: https://tutorial.gst.gov.in/userguide/compositionpoc/optforcomposition.htm

1 How do I go from regular to composition scheme in GST?

Any taxpayer who is registered as normaltax payer under GST needs to file anapplication to opt for Composition Levy in Form GST-CMP-02 at GST Portal prior to the commencement of financial year for whichthe option to pay tax under the aforesaidsectionisexercised.

2. When can I opt for the Composition Levy?

Inordertoavailthisscheme,youneedtofilean online application to opt for Composition Levywiththetaxauthorities.Taxpayerswhocan opt for this scheme can be categorized as below:New Taxpayers: Any person who becomes liable to register under GST Act, after the appointedday,needstofilehisoptiontopaycomposition amount in the Application for New Registration in Form GST REG-01.Existing Taxpayers: Any taxpayer whois registered as normal tax payer underGST needs to file an application to opt forComposition Levy in Form GST-CMP-02 at GST Portal prior to the commencement of financialyearforwhichtheoptiontopaytaxundertheaforesaidsectionisexercised.

3. Is it mandatory to fi le a Stock Intimation? How do I fi le a Stock Intimation?

Yes,itismandatorytofileaStockIntimation. Inadditiontofilingtheapplicationtooptfor

Composition Levy, you would also require to fileaStockIntimationtofurnishthedetailsofstock including inward supply of goods from unregistered persons, held by you on the day preceding the date from which you opt to pay the composition amount. You are required to file Stock Intimation details within 30 daysof the date from which Composition Levy is sought.

The application to opt for Composition Levy is notsubjecttoapprovalbythetaxauthorities.Onfilingof theapplication,youaremarkedas a composition taxpayer in the systemand consequential changes are made in the

FAQs on “OPT for Composition Levy (Form GST CMP-02)”

system. However, in case it is found that you were not eligible for the Composition Levy or havenotfiledStockIntimation,youwouldbecompulsorily pushed out of the Composition Levy by initiating appropriate proceedings.

StockIntimationfiledbyyouisnotsubjecttoprocessingbyState&CentreTaxAuthorities.However, in case it is found out by the taxauthorities that the particulars of stock and ITC reversal furnished in the Stock Intimation are incorrect, thetaxauthoritiescan initiateappropriate demand proceedings from back officeagainstyou.

4. Can I save the Application to Opt for Composition Levy?

Yes, the application can be saved for up to 15 days from the date of initiation after which it will be purged by the system.

Saved applications can be accessed using the My Saved Applications functionality available intheTaxpayers’Interface.

5. Can I opt for Composition Levy, if I have dealt in services?

Yes, you can opt for Composition Levy, even if you have dealt in services, from FY 2019-20 onwards.

6. I have dealt in services from 1st April 2019 to 31st July 2019 and have fi led application to opt for Composition Levy. My application has been rejected. Why?

IfyouhavefiledFormGSTR-1orFormGSTR-3B for April/ May/ June 2019 against any GSTIN registered on your PAN across India for FY 2019-20, your application to opt for Composition Levy will be rejected.

7. What are the returns to be fi led by a Composition taxpayer?

Composition taxpayerneeds topay taxandfurnish a statement, every quarter or part thereof, as the case may be, in FORM GST CMP-08. And further he has to furnish a returnforeveryfinancialyearorpartthereof,as the case may be, in FORM GSTR-4.

10 |GST NEWSLETTER

Notifi cations

Notifi cation no. 08/2020- Central Tax dated 2nd March, 2020In exercise of the powers conferred by section164 of the Central Goods and Services Tax Act,2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following rules further to amend the Central GoodsandServicesTaxRules,2017,namely:-

(1) These rules may be called the Central Goods andServicesTax(SecondAmendment)Rules,2020.

Save as otherwise provided in these rules, they shall come into force on the date of their publicationintheOfficialGazette.

2. IntheCentralGoodsandServicesTaxRules,2017,witheffectfromthe1stMarch,2020,inrule 31A, for sub-rule (2), the following sub-rule shall be substituted, namely:-

“(2) The value of supply of lottery shall be deemed to be 100/128 of the face value of ticketorofthepriceasnotifiedintheOfficialGazette by the Organising State, whichever is higher.

Explanation:– For the purposes of this sub-rule, the expression“OrganisingState”hasthesamemeaningas assigned to it in clause (f) of sub-rule (1) of rule 2 of the Lotteries (Regulation) Rules, 2010.”.

Notifi cation no. 09/2020 – Central Tax dated 16th March, 2020Inexerciseofthepowersconferredbysection148oftheCentralGoodsandServicesTaxAct,2017(12of 2017) (hereinafter referred to as the said Act), the Central Government, on the recommendations of the Council, hereby notifies the persons whoare foreign company which is an airlines company coveredunderthenotification issuedundersub-section (1) of section 381 of the Companies Act, 2013 (18 of 2013) and who have complied with the sub-rule (2) of rule 4 of the Companies (Registration of Foreign Companies) Rules, 2014, as the class of registered persons who shall follow the special procedure as mentioned below.

2. The said persons shall not be required to furnish reconciliation statement in FORM GSTR-9C to the CentralGoodsandServicesTaxRules,2017undersubsection (2) of section 44 of the said Act read with sub-rule (3) of rule 80 of the said rules:

Provided that a statement of receipts and payments for the financial year in respect of itsIndian Business operations, duly authenticated by a practicing Chartered Accountant in India or a firmoraLimitedLiabilityPartnershipofpracticingChartered Accountants in India is submitted for each GSTIN by the 30th September of the year succeedingthefinancialyear.

Notifi cation No. 10/2020 – Central Tax dated 23rd March, 2020 Inexerciseofthepowersconferredbysection148of theCentralGoods and Services TaxAct, 2017(12 of 2017) (hereinafter referred to as the said Act), the Government, on the recommendations of theCouncil,herebynotifiesthosepersonswhoseprincipal place of business or place of business was in the erstwhile Union territory of Daman and Diu or in the erstwhile Union territory of Dadra and Nagar Haveli till the 26th day of January, 2020; and is in the merged Union territory of Daman and Diu and Dadra and Nagar Haveli from the 27th day of January, 2020 onwards, as the class of persons who shall, except as respects things done oromittedtobedonebeforethenotification,followthe following special procedure till the 31st day of May, 2020 (hereinafter referred to as the transition date) as mentioned below.

2. The said registered person shall,-

(i) ascertainthetaxperiodaspersub-clause(106) of section 2 of the said Act for the purposes of any of the provisions of the said Act for the month of January,2020 and February, 2020 as below:-

a. January, 2020: 1st January, 2020 to 25th January, 2020;

b. February, 2020: 26th January, 2020 to 29th February, 2020;

GST NEWSLETTER| 11

(ii) irrespective of the particulars of taxcharged in the invoices, or in other like documents, raised from the 26th January, 2020 till the transition date, pay the appropriate applicable tax in thereturn under section 39 of the said Act;

(iii) who have registered Goods and Services TaxIdentificationNumber(GSTIN)intheerstwhile Union territory of Daman and Diu and the erstwhile Union territory of Dadra and Nagar Haveli till the 25th day of January, 2019 have an option to transfer thebalanceofinputtaxcredit(ITC)afterthefilingofthereturnforJanuary,2020,from the registered Goods and Services TaxIdentificationNumber(GSTIN)intheerstwhile Union territory of Daman and Diu to the registered GSTIN in the new Union territory of Daman and Diu and Dadra and Nagar Haveli by following the procedure as below:-

a. the said class of persons shall intimate the jurisdictional tax officer of thetransferor and the transferee regarding the transfer of ITC, within one month of obtaining new registration;

b. the ITC shall be transferred on the basis of the balance in the electronic credit ledger upon filing of the return in theerstwhile Union territory of Daman andDiu,forthetaxperiodimmediatelybefore the transition date;

c. the transfer of ITC shall be carried out through the return under section 39 of the said Act for the tax periodimmediately before the transition date and the transferor GSTIN shall debit the said ITC from its electronic credit ledger in Table 4(B)(2) of FORM GSTR-3B and the transferee GSTIN shall credit the equal amount of ITC in its electronic credit ledger in Table 4(A)(5) of FORM GSTR-3B.

3. The balance of Union territory taxes inelectronic credit ledger of the said class of persons, whose principal place of business lies in the Union territory of Daman and Diu, as on the 25th day of January, 2020, shall be transferredasbalanceofUnionterritorytaxin the electronic credit ledger.

Notification No. 11/2020 – Central Tax dated 23rd March, 2020 Inexerciseofthepowersconferredbysection148of theCentralGoods and Services TaxAct, 2017(12 of 2017) (hereinafter referred to as the said Act), the Government, on the recommendations of the Council, hereby notifies those registeredpersons(herein after referred to as the erstwhile registered person), who are corporate debtors under the provisions of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), undergoing the corporate insolvency resolution process and themanagementofwhoseaffairs arebeingundertaken by interim resolution professionals (IRP) or resolution professionals (RP), as the class of persons who shall follow the following special procedure, from the date of the appointment of the IRP/RP till the period they undergo the corporate insolvency resolution process, as mentioned below.

2. Registration.- The said class of persons shall, witheffectfromthedateofappointmentofIRP / RP, be treated as a distinct person of the corporate debtor, and shall be liable to take anew registration (hereinafter referred to as the new registration)in each of the States or Union territories where the corporate debtor was registered earlier, within thirty days of the appointment of the IRP/RP:

Provided that in cases where the IRP/RP has been appointed prior to the date of this notification,heshall takeregistrationwithinthirty days from the commencement of this notification, with effect from date of hisappointment as IRP/RP.

3. Return.- The said class of persons shall, after obtaining registration file the first returnunder section 40 of the said Act, from the date on which he becomes liable to registration till the date on which registration has been granted.

4. Input tax credit.-(1)The said class of persons shall,inhisfirstreturn,beeligibletoavailinputtaxcreditoninvoicescoveringthesuppliesofgoods or services or both, received since his appointment as IRP/RP but bearing the GSTIN of the erstwhile registered person, subject to the conditions of Chapter V of the said Act

12 |GST NEWSLETTER

andtherulesmadethereunder,excepttheprovisions of sub-section (4) of section 16 of the said Act and sub-rule (4) of rule 36 of the Central Goods and Service Tax Rules, 2017(hereinafter referred to as the said rules).

(2)Registered persons who are receiving supplies from the said class of persons shall, for the period from the date of appointment of IRP / RP till the date of registration as required in this notification or thirty daysfromthedateofthisnotification,whicheverisearlier,beeligibletoavail inputtaxcrediton invoices issued using the GSTIN of the erstwhile registered person, subject to the conditions of Chapter V of the said Act and the rules made there under, except theprovisions of sub-rule (4) of rule 36 of the said rules.

5. Any amount deposited in the cash ledger by the IRP/RP, intheexistingregistration, fromthe date of appointment of IRP/RP to the date of registration in terms of this notificationshall be available for refund to the erstwhile registration.

Explanation.- For the purposes of thisnotification, the terms “corporate debtor”,“corporate insolvency resolution profe-ssional”, “interim resolution professional” and “resolution professional” shall have the same meaning as assigned to them in the Insolvency and Bankruptcy Code, 2016 (31 of 2016).

Notification No. 12/2020 – Central Tax dated 23rd March, 2020 In exercise of the powers conferred by section148 of the Central Goods and Services Tax Act,2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following amendment in the notification ofthe Government of India in the Ministry of Finance (Department of Revenue), No. 21/2019- Central Tax, dated the 23rd April,2019, published in theGazetteof India,Extraordinary,Part II, Section3,Sub-section (i) vide number G.S.R. 322(E), dated the 23rd April, 2019, namely:–

In the said notification, in paragraph 2, thefollowing proviso shall be inserted, namely: –

“Provided that the said persons who have, instead

of furnishing the statement containing the details of payment of self-assessed tax in FORM GST CMP-08 have furnished a return in FORM GSTR-3B under theCentralGoodsandServicesTaxRules,2017 (hereinafter referred to as the said rules) for the taxperiods in thefinancial year2019-20,suchtaxpayersshallnotberequiredtofurnishthestatement in outward supply of goods or services or both in FORM GSTR-1 of the said rules or the statement containing the details of payment of self-assessedtaxinFORM GST CMP-08 for all the taxperiodsinthefinancialyear2019-20.”

Notification No. 13/2020 – Central Tax dated 23rd March, 2020 Inexerciseofthepowersconferredbysub-rule(4)of rule48of theCentralGoodsandServicesTaxRules, 2017(hereinafter referred as said rules), the Government on the recommendations of the Council,andinsupersessionofthenotificationofthe Government of India in the Ministry of Finance, DepartmentofRevenueNo.70/2019–CentralTax,dated the 13th December, 2019, published in the Gazetteof India,Extraordinary,Part II, Section3,Sub-section (i) vide number G.S.R. 926 (E), dated the 13thDecember, 2019, except as respectsthings done or omitted to be done before such supersession, hereby notifies registered person,other than those referred to in sub-rules (2),(3), (4) and (4A) of rule 54 of the said rules, whose aggregate turnover in a financial year exceedsone hundred crore rupees, as a class of registered person who shall prepare invoice and other prescribed documents, in terms of sub-rule (4) of rule 48 of the said rules in respect of supply of goods or services or both to a registered person.

2.Thisnotificationshallcomeintoforcefromthe1st October, 2020.

Notification No. 14/2020 – Central Tax dated 23rd March, 2020 In exercise of thepowers conferredby the sixthproviso to rule 46 of the Central Goods and Services TaxRules,2017(hereinafterreferredtoasthesaidrules), the Government, on the recommendations of theCouncil,andinsupersessionofthenotificationof the Government of India in the Ministry of Finance, Department of Revenue No. 72/2019 –Central Tax, dated the 13th December, 2019,published in the Gazette of India, Extraordinary,

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Part II, Section 3, Sub-section (i) vide number G.S.R 928(E),datedthe13thDecember,2019,exceptasrespects things done or omitted to be done before suchsupersession,herebynotifiesthataninvoiceissued by a registered person, whose aggregate turnoverinafinancialyearexceedsfivehundredcrore rupees, other than those referred to in sub-rules (2), (3), (4) and (4A)of rule 54 of said rules, and registered person referred to in section 14 of the Integrated Goods and Services Tax Act, 2017, toan unregistered person (hereinafter referred to as B2C invoice),shall have Dynamic Quick Response (QR) code:

Provided that where such registered person makes a Dynamic Quick Response (QR)code available to the recipient through a digital display, such B2C invoice issued by such registered person containing cross-reference of the payment using a Dynamic Quick Response(QR) code, shall be deemed to be having Quick Response (QR) code.

2.Thisnotificationshallcomeintoforcefromthe1st day of October, 2020.

Notification No. 15/2020 – Central Tax dated 23rd March, 2020 In exercise of the powers conferred by sub-section (1) of section 44 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereafter inthisnotificationreferredtoas thesaidAct), readwithrule80oftheCentralGoodsandServicesTaxRules,2017(hereafterinthisnotificationreferredto as the said rules), the Commissioner, on the recommendationsoftheCouncil,herebyextendsthe time limit for furnishing of the annual return specifiedundersection44ofthesaidActreadwithrule 80 of the said rules, electronically through the commonportal, for thefinancial year 2018-2019till 30.06.2020.

Notification No. 16/2020 – Central Tax dated 23rd March, 2020 Inexerciseofthepowersconferredbysection164oftheCentralGoodsandServicesTaxAct,2017(12of 2017), the Central Government hereby makes the following rules further to amend the Central GoodsandServicesTaxRules,2017,namely:-

1. (1) These rules may be called the Central Goods andServicesTax(ThirdAmendment)Rules,2020.

(2) Save as otherwise provided in these rules, they shall come into force on the date of their publicationintheOfficialGazette.

2. In the Central Goods and Services Tax Rules,2017 (hereinafter referred to as the said rules), in rule 8, after sub-rule (4), the following sub-rule shall be inserted, namely:-“(4A)The applicant shall, while submitting an application under sub-rule (4), with effectfrom01.04.2020,undergoauthenticationofAadhaar number for grant of registration.”.

3. In the said rules, in rule 9, in sub-rule (1), with effect from 01.04.2020, the following sub-rule shall be inserted, namely:-“Provided that whereaperson,other than thosenotifiedundersub-section (6D) of section 25,fails to undergo authenticationofAadhaarnumberasspecifiedinsub-rule (4A) of rule 8, then the registration shall be granted only after physical verification of theprinciple place of business in the presence of the saidperson,notlaterthansixtydaysfromthedateof application, in the manner provided under rule 25 and the provisions of sub-rule (5) shall not be applicable in such cases.”.

4. In the said rules, for rule 25, the following rule shall be substituted, namely:- “Physical verification of business premises in certain cases.-Where the proper officer is satisfied that the physicalverificationoftheplaceofbusinessofapersonisrequired due to failure of Aadhaar authentication before the grant of registration, or due to any other reason after the grant of registration, he maygetsuchverificationoftheplaceofbusiness,in the presence of the said person, done and the verificationreportalongwiththeotherdocuments,including photographs, shall be uploaded in FORM GST REG-30 on the common portal within a period offifteenworkingdaysfollowingthedateofsuchverification.”.

5. In the said rules, in rule 43, in sub-rule (1)with effectfromthe1stApril,2020,-

(a) for clause (c), the following clause shall be substituted, namely:-

“c) the amount of input tax in respect of capitalgoods not covered under clauses (a) and (b), denotedas”A,beingtheamountoftaxasreflectedon the invoice, shall credit directly to the electronic credit ledger and the validity of the useful life of

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suchgoodsshallextenduptofiveyearsfromthedate of the invoice for such goods:

Provided that where any capital goods earlier covered under clause (a) is subsequently covered under this clause, input tax in respect of suchcapital goods denoted as “A” shall be credited to the electronic credit ledger subject to the condition that the ineligible credit attributable to the period during which such capital goods were covered by clause (a),denoted as “Tie”, shall be calculated at therateoffivepercentagepointsforeveryquarterorpartthereofandaddedtotheoutputtaxliabilityofthetaxperiodinwhichsuchcreditisclaimed:

Provided further that the amount “Tie” shall be computedseparatelyforinputtaxcreditofcentraltax, State tax,Union territory tax and integratedtaxanddeclaredinFORM GSTR-3B.

Explanation.-An item of capital goods declaredunder clause (a) on its receipt shall not attract the provisions of sub-section (4) of section 18, if it is subsequently covered under this clause.”

(b) for clause (d), the following clause shall be substituted, namely:-

“the aggregate of the amounts of “A” credited to the electronic credit ledger under clause (c) in respect of common capital goods whose useful life remainsduring the taxperiod, tobedenotedas“Tc”, shall be the common credit in respect of such capital goods:

Provided that where any capital goods earlier covered under clause (b) are subsequently covered under clause (c), the input tax credit claimed inrespect of such capital good(s) shall be added to arrive at the aggregate value “Tc;”;

(c) inclause(e),thefollowingExplanationshallbeinserted, namely:-

“Explanation.-For the removal of doubt, it is clarifiedthatuseful lifeofanycapitalgoodsshallbeconsideredasfiveyearsfromthedateofinvoiceand the said formula shall be applicable during the useful life of the said capital goods.”;

(d) clause (f) shall be omitted.

6. In the said rules, in rule 80, in sub-clause (3), the following proviso shall be inserted, namely:-

“Provided that every registered person whose

aggregate turnover during the financial year2018-2019exceedsfivecrorerupeesshallgethisaccounts audited as specified under sub-section(5) of section 35 and he shall furnish a copy of audited annual accounts and a reconciliation statement,dulycertified,inFORM GSTR-9C for the financial year 2018-2019, electronically throughthe common portal either directly or through a FacilitationCentrenotifiedbytheCommissioner.”.

7. In the said rules, in rule 86, after sub-rule (4), the following sub-rule shall be inserted, namely:-

“(4A) Where a registered person has claimed refund of any amount paid as tax wrongly paidorpaid inexcessforwhichdebithasbeenmadefrom the electronic credit ledger, the said amount, if found admissible, shall be re-credited to the electroniccreditledgerbytheproperofficerbyanorder made in FORM GST PMT-03.”.

8. In the said rules, in rule 89, in sub-rule (4), for clause (C), the following clause shall be substituted, namely:

(C) “Turnover of zero-rated supply of goods” means the value of zero-rated supply of goods made during the relevant period without payment oftaxunderbondorletterofundertakingorthevalue which is 1.5 times the value of like goods domestically supplied by the same or, similarly placed, supplier, as declared by the supplier, whichever is less, other than the turnover of supplies in respect of which refund is claimed under sub-rules (4A) or (4B) or both;.

9. In the said rules, in rule 92,-

(a) after sub-rule (1), the following sub-rule shall be inserted, namely:-

“(1A)Where,uponexaminationof theapplicationof refund of any amount paid as tax other thanthe refundof tax paid on zero-rated supplies ordeemedexport,theproperofficerissatisfiedthata refund under sub-section (5) of section 54 of the Act is due and payable to the applicant, he shall make an order in FORM RFD-06 sanctioning the amount of refund to be paid, in cash, proportionate to the amount debited in cash against the total amount paid for discharging tax liability for therelevant period, mentioning therein the amount adjusted against any outstanding demand under

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theActorunderanyexistinglawandthebalanceamount refundable and for the remaining amount which has been debited from the electronic credit ledgerformakingpaymentofsuchtax,theproperofficershall issueFORM GST PMT-03 re-crediting thesaidamountas InputTaxCredit inelectroniccredit ledger.”;

(b) in sub-rule (4), after the words, brackets and figure “amount refundable under sub-rule (1)”,thewords,brackets,figureandletter“orsub-rule(1A)”, shall be inserted;

(c) in sub-rule (5), after the words, brackets and figure“amountrefundableundersub-rule(1)”,thewords,figuresandletter“orsub-rule(1A)”,shallbeinserted.

10. In the said rules, in rule 96, in sub-rule (10), in clause (b) with effect from the 23rd October,2017,thefollowingExplanationshallbeinserted,namely,-

“Explanation.- For the purpose of this sub-rule,thebenefitofthenotificationsmentionedthereinshall not be considered to have been availed only where the registered person has paid Integrated GoodsandServicesTaxandCompensationCessoninputsandhasavailedexemptionofonlyBasicCustomsDuty(BCD)underthesaidnotifications.”.

11. In the said rules, after rule 96A, the following rule shall be inserted, namely:-

“96B. Recovery of refund of unutilised input tax credit or integrated tax paid on export of goods where export proceeds not realised. –(1)Where anyrefundofunutilisedinputtaxcreditonaccountof export of goods or of integrated tax paid onexport of goods has been paid to an applicantbut the sale proceeds in respect of such exportgoods have not been realised, in full or in part, in India within the period allowed under the Foreign Exchange Management Act, 1999 (42 of 1999),includinganyextensionofsuchperiod,thepersonto whom the refund has been made shall deposit the amount so refunded, to the extent of non-realisation of sale proceeds, along with applicable interest within thirty days of the expiry of thesaidperiodor,asthecasemaybe,theextendedperiod, failing which the amount refunded shall be recovered in accordance with the provisions of section 73 or 74 of the Act, as the case may be, as is

applicable for recovery of erroneous refund, along with interest under section 50:

Provided that where sale proceeds, or any part thereof, in respectof suchexport goodsarenotrealised by the applicant within the period allowed undertheForeignExchangeManagementAct,1999(42 of 1999), but the Reserve Bank of India writes offtherequirementofrealisationofsaleproceedson merits, the refund paid to the applicant shall not be recovered.

(2)Where the sale proceeds are realised by the applicant, in full or part, after the amount of refund has been recovered from him under sub-rule(1) and the applicant produces evidence about such realisation within a period of three months from the date of realisation of sale proceeds, the amount so recovered shall be refunded by theproperofficer, to theapplicant to theextentof realisation of sale proceeds, provided the sale proceedshavebeenrealisedwithinsuchextendedperiod as permitted by the Reserve Bank of India.”.

12. In the said rules, in rule 141, in sub-rule (2), for the word “Commissioner”. the words “proper officer”shallbesubstituted.

13. In the said rules, in FORM GST RFD-01, after the declaration under rule 89(2)(g), the following undertaking shall be inserted, namely:-

I hereby undertake to deposit to the Government the amount of refund sanctioned along with interest in case of non-receipt of foreign exchange remittances as per the proviso to section 16 of the IGST Act, 2017 read with rule 96B of the CGST Rules 2017.

Signature

Name

Designation / Status”.

“UNDERTAKING

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Notification No. 17/2020 – Central Tax dated 23rd March, 2020 In exercise of thepowers conferredby sub-section (6D) of section 25 of the Central Goods andServicesTaxAct,2017(12of2017),theCentral Government, on the recommendations oftheCouncil,herebynotifiesthattheprovisionsof sub-section (6B) or sub-section (6C) of the said Act shall not apply to a person who is not a citizen of India or to a class of persons other than the following class of persons, namely:–

(a) Individual;

(b) Authorised signatory of all types;

(c) Managing and authorised partner; and

(d) Karta of an Hindu undivided family.

2. Thisnotificationshall come intoeffect fromthe1st day of April, 2020

Notification No. 18/2020 – Central Tax dated 23rd March, 2020 In exercise of thepowers conferredby sub-section (6B) of section 25 of the Central Goods andServicesTaxAct,2017(12of2017),theCentral Government, on the recommendations of the Council, hereby notifies the date ofcoming into force of thisnotification as thedate, from which an individual shall undergo authentication,ofAadhaarnumber,asspecifiedinrule8oftheCentralGoodsandServicesTaxRules, 2017 (hereinafter referred to as the said rules), in order to be eligible for registration:

Provided that if Aadhaar number is not assigned tothesaidindividual,heshallbeofferedalternateandviablemeansof identification inthemannerspecifiedinrule9ofthesaidrules.

2.Thisnotificationshallcomeintoeffectfromthe1st day of April, 2020.

Notification No. 19/2020 – Central Tax dated 23rd March, 2020 In exercise of thepowers conferredby sub-section (6C) of section 25 of the Central Goods andServices Tax Act, 2017 (12 of 2017) ,theCentral Government, on the recommendations of the Council, hereby notifies the date ofcomingintoforceofthisnotificationasthedate,from which the –

(a) authorised signatory of all types;

(b) Managing and Authorised partnersof a partnershipfirm;and

(c) Karta of an Hindu undivided family,

shall undergo authentication of possession of Aadhaar number,as specified in rule 8ofthe Central Goods and Services Tax Rules, 2017(hereinafter referred to as the said rules), in order to be eligible for registration under GST:

Provided that if Aadhaar number is not assigned tothesaidpersons,theyshallbeofferedalternateandviablemeansof identification inthemannerspecifiedinrule9ofthesaidrules.

2.Thisnotificationshallcomeintoeffectfromthe1st day of April, 2020

Notification No. 20/2020 – Central Tax dated 23rd March, 2020 Inexerciseofthepowersconferredbysub-section(6) of section 39 read with section 168 of the Central Goods and Services Tax Act, 2017 (12 of2017)(hereafterinthisnotificationreferredtoasthe said Act), the Commissioner hereby makes thefollowingfurtheramendmentinnotificationof the Government of India in the Ministry of Finance (Department of Revenue), No.26/2019 –CentralTax,datedthe28thJune,2019,publishedin the Gazette of India, Extraordinary, Part II,Section 3, Sub-section (i) vide number G.S.R.452(E), dated the 28th June, 2019, namely:–

Inthesaidnotification,inthefirstparagraph,for the second and third proviso, the following provisosshall be substituted, namely: –

“Provided further that the return by a registered person,requiredtodeducttaxatsourceundertheprovisions of section 51 of the said Act in FORM GSTR-7 of the Central Goods and Services TaxRules, 2017 under sub-section (3) of section 39 of the said Act read with rule 66 of the Central Goods andServices Tax Rules, 2017, for themonths of July, 2019 to October,2019, whose principal place of business is in the erstwhile State of Jammu and Kashmir shall be furnished electronically through the common portal, on or before the 24th March, 2020:

Provided also that the return by a registered person,requiredtodeducttaxatsourceunder

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the provisions of section 51 of the said Act in FORM GSTR-7 of the Central Goods and Services TaxRules,2017undersub-section(3)ofsection39 of the said Act read with rule 66 of the Central Goods and Services Tax Rules, 2017,for the months of November, 2019 to February, 2020, whose principal place of business is in the Union territory of Jammu and Kashmir or the Union territory of Ladakh shall be furnished electronically through the common portal, on or before the 24th March, 2020.”

2.This notification shall be deemed to havecomeintoforcewitheffectfromthe20th Day of December, 2019.

Notification No. 21/2020 – Central Tax dated 23rd March, 2020 Inexerciseofthepowersconferredbysection148oftheCentralGoodsandServicesTaxAct,2017(12of2017)(hereafterinthisnotificationreferredto as the said Act), the Central Government, on the recommendations of the Council, hereby makesthefollowingamendmentinnotificationofthe Government of India in the Ministry of Finance (Department of Revenue), No. 45/2019 –Central Tax,datedthe09thOctober,2019,publishedintheGazetteofIndia,Extraordinary,PartII,Section3,Sub-section (i), vide number G.S.R. 768(E), dated the 09th October, 2019, namely:–

In thesaidnotification, in thesecondparagraph,the following proviso shall be inserted, namely: –

“Provided that for registered persons whose principal place of business is in the erstwhile State of Jammu and Kashmir or the Union territory of Jammu and Kashmir or the Union territory of Ladakh, shall furnish the details of outward supply of goods or services or both in FORM GSTR-1 under the Central Goods and Services Tax Rules, 2017 effected during the quarterOctober-December, 2019 till 24th March, 2020.”.

2. This notificationshall be deemedto comeinto force with effect from the 31st Day of January, 2020.

Notification No. 22/2020 – Central Tax dated 23rd March, 2020 Inexerciseofthepowersconferredbysecondproviso to sub-section (1) of section 37 read

with section 168 of the Central Goods and ServicesTaxAct,2017(12of2017)(hereafterinthisnotificationreferredtoasthesaidAct),theCommissioner, on the recommendations of the Council, hereby makes the following further amendment in notification of the Governmentof India in the Ministry of Finance (Department of Revenue), No.46/2019 –Central Tax, dated the9th October, 2019, published in the Gazette ofIndia,Extraordinary,PartII,Section3,Sub-section (i) vide number G.S.R.769(E), dated the 09th October, 2019, namely:–

Inthesaidnotification,inthefirstparagraph,forthefirstproviso,thefollowingprovisoshallbe substituted, namely: –

“Provided that for registered persons whose principal place of business is in the erstwhile State of Jammu and Kashmir, the time limit for furnishing the details of outward supplies in FORM GSTR-1 of Central Goods and Services Tax Rules, 2017, by such class of registeredpersons having aggregate turnover of more than 1.5crorerupeesintheprecedingfinancialyearorcurrentfinancial year, for themonthofOctober,2019 till 24th March, 2020.”.

Inthesaidnotification,inthefirstparagraph,after the second proviso, the following proviso shall be inserted, namely: –

“Provided that for registered persons whose principal place of business is in the Union territory of Jammu and Kashmir or the Union territory of Ladakh, the time limit for furnishing the details of outward supplies in FORM GSTR-1 of Central GoodsandServicesTaxRules,2017,bysuchclass of registered persons having aggregate turnover of more than 1.5 crore rupees in theprecedingfinancialyearorcurrentfinancialyear, for the months of November, 2019 to February till 24th March, 2020.”.

2.Thisnotificationshallbedeemedtocomeinto force with effect from the 20th Day of December, 2019

Notification No. 23/2020 – Central Tax dated 23rd March, 2020 Inexerciseofthepowersconferredbysecondproviso to sub-section (1) of section 37 read

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with section 168 of the Central Goods and ServicesTaxAct,2017(12of2017)(hereafterinthisnotificationreferredtoasthesaidAct),theCommissioner, on the recommendations of the Council, hereby makes the following further amendment in notification of the Governmentof India in the Ministry of Finance (Department of Revenue), No.28/2019 –Central Tax, datedthe 28th June, 2019, published in the Gazette ofIndia,Extraordinary,PartII,Section3,Sub-section (i) vide number G.S.R.454(E), dated the 28th June, 2019, namely:–

Inthesaidnotification, inthefirstparagraph,forthe first proviso, the following proviso shall besubstituted, namely: –

“Provided that for registered persons whose principal place of business is in the erstwhile State of Jammu and Kashmir, the time limit for furnishing the details of outward supplies in FORM GSTR-1 ofCentralGoodsandServicesTaxRules,2017,bysuch class of registered persons having aggregate turnover of more than 1.5 crore rupees in the precedingfinancialyearorcurrentfinancialyear, for each of the months from July, 2019 to September, 2019 till 24th March, 2020.”


Notification No. 24/2020 – Central Tax dated 23rd March, 2020 Inexerciseofthepowersconferredbysection148oftheCentralGoodsandServicesTaxAct,2017(12of2017)(hereafterinthisnotificationreferredto as the said Act), the Central Government, on the recommendations of the Council, hereby makes thefollowingamendmentinnotificationoftheGovernment of India in the Ministry of Finance (Department of Revenue), No. 27/2019 –Central Tax,datedthe28thJune,2019,publishedintheGazetteof India,Extraordinary,Part II, Section3,Sub-section (i), vide number G.S.R. 453 (E), dated the 28th June, 2019, namely:–

Inthesaidnotification,inthesecondparagraph,forthefirstproviso,thefollowingprovisoshallbe substituted, namely: –

“Provided that for registered persons whose

principal place of business is in the erstwhile State of Jammu and Kashmir, shall furnish the details of outward supply of goods or services or both in FORM GSTR-1 under the Central Goods andServicesTaxRules,2017effectedduring thequarter July-September, 2019 till 24th March,2020.”.

2.Thisnotificationshallbedeemedtocomeinto force with effect from the 30th Day of November, 2019.

Notification No. 25/2020 – Central Tax dated 23rd March, 2020 Inexerciseof the powers conferred bysection168oftheCentralGoodsandServicesTaxAct,2017 (12 of 2017) read with sub-rule (5) of rule 61 of the Central Goods and Services Tax Rules,2017(hereafterinthisnotificationreferredtoas the said rules), the Commissioner, on the recommendations of the Council, hereby makes thefollowingfurtheramendmentinnotificationofthe Government of India in the Ministry of Finance (Department of Revenue), No.44/2019 –Central Tax, dated the 09th October, 2019, published intheGazetteofIndia,Extraordinary,PartII,Section3, Sub-section (i) vide number G.S.R.767(E), dated the 09th October, 2019, namely:–

i.Inthesaidnotification,inthefirstparagraph,forthefirstproviso,thefollowingprovisoshallbe substituted, namely: –

“Provided that the return in FORM GSTR-3B of the said rules for the months of October, 2019 for registered persons whose principal place of business is in the erstwhile State of Jammu and Kashmir, shall be furnished electronically through the common portal, on or before the 24th March, 2020.”

ii. In thesaidnotification, in thefirstparagraph,after thefifthproviso, the followingprovisoshallbe inserted, namely: –

“Provided also that the return in FORM GSTR-3B of the said rules for the months of November, 2019 to February, 2020 for registered persons whose principal place of business is in the Union territory of Jammu and Kashmir or the Union territory of Ladakh, shall be furnished electronically through the common portal, on or before the 24th March, 2020.”

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2.Thisnotificationshallbedeemedtocomeinto force with effect from the 20thDay ofDecember, 2019

Notification No. 26/2020 – Central Tax dated 23rd March, 2020 Inexerciseofthepowersconferredbysection168oftheCentralGoodsandServicesTaxAct,2017 (12 of 2017) read with sub-rule (5) of rule61oftheCentralGoodsandServicesTaxRules,2017(hereafterinthisnotificationreferredto as the said rules), the Commissioner, on the recommendations of the Council, hereby makes thefollowingfurtheramendmentinnotificationof the Government of India in the Ministry of Finance (Department of Revenue), No.29/2019 –CentralTax,datedthe28thJune,2019,publishedintheGazetteofIndia,Extraordinary,PartII, Section 3, Sub-section (i) vide number G.S.R.455(E), dated the 28th June, 2019, namely:–

Inthesaidnotification,inthefirstparagraph,for the fourth proviso, the following proviso shall be substituted, namely: –

“Provided also that the return in FORM GSTR-3B of the said rules for the months of July,2019 to September, 2019 for registered persons whose principal place of business is in the erstwhile State of Jammu and Kashmir, shall be furnished

electronically through the common portal, on or before the 24th March, 2020.”


Notification No. 27/2020 – Central Tax dated 23rd March, 2020 Inexerciseofthepowersconferredbysection148of theCentralGoods and Services TaxAct, 2017(12of2017)(hereafterinthisnotificationreferredto as the said Act), the Central Government, on the recommendations of the Council, hereby notifies the registered persons havingaggregate turnover of up to 1.5 crore rupeesintheprecedingfinancialyearorthecurrentfinancial year,astheclassof registeredpersons who shall follow the special procedure as mentioned below for furnishing the details of outward supply of goods or services or both.

2. The said registered persons shall furnish the details of outward supply of goods or services or both in FORM GSTR-1 under the Central Goods andServicesTaxRules,2017,effectedduringthequarter as specified in column (2) of the Tablebelow till the time period as specified in thecorresponding entry in column (3) of the said Table, namely:-

TableSI No. Quarter for which details in FORM GSTR-1

are furnishedTime period for furnishing details in

FORM GSTR-1(1) (2) (3)1 April, 2020 to June, 2020 31st July, 20202 July, 2020 to September, 2020 31st October, 2020

3. The time limit for furnishing the details or return, as the case may be, under sub-section (2) of section 38 of the said Act, for the months of April, 2020 to September,2020shallbesubsequentlynotifiedintheOfficialGazette

Notification No. 28/2020 – Central Tax dated 23rd March, 2020 Inexerciseofthepowersconferredbythesecondproviso to sub-section (1) of section 37 read with

section168oftheCentralGoodsandServicesTaxAct,2017(12of2017)(hereafterinthisnotificationreferred to as the said Act), the Commissioner, on the recommendations of the Council, hereby extendsthetimelimitforfurnishingthedetailsof outward supplies in FORM GSTR-1 of the Central Goods and Services Tax Rules, 2017, by suchclass of registered persons having aggregate turnover of more than 1.5 crore rupees in the

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precedingfinancialyearorthecurrentfinancialyear, for each of the months from April, 2020 to September, 2020 till the eleventh day of the month succeeding such month.

2. The time limit for furnishing the details or return, as the case may be, under sub-section (2) of section 38 of the said Act, for the months of April, 2020 toSeptember,2020shallbesubsequentlynotifiedintheOfficialGazette.

Notification No. 29/2020 – Central Tax dated 23rd March, 2020 In exercise of the powers conferred by section168 of the Central Goods and Services Tax Act,2017(12of2017)(hereafterinthisnotificationreferred to as the said Act),read with sub-rule (5) of rule 61 of the Central Goods and Services Tax Rules, 2017 (hereafter in thisnotificationreferred to as the said rules), the Commissioner, on the recommendations of the Council, hereby specifiesthatthereturninFORM GSTR-3B of the said rules for each of the months from April, 2020 to September, 2020 shall be furnished electronically through the common portal, on or before the twentieth day of the month succeeding such month:

Provided that, for taxpayershavinganaggregateturnoverofuptorupeesfivecrorerupeesinthepreviousfinancialyear,whoseprincipalplaceofbusiness is in the States of Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh, the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherr, Andaman and Nicobar Islands or Lakshadweep, the return in FORM GSTR-3B of the said rules for the months of April, 2020 to September, 2020 shall be furnished electronically through the common portal, on or before the twenty-second day of the month succeeding such month:

Provided further that, for taxpayers having anaggregateturnoverofuptorupeesfivecrorerupeesinthepreviousfinancialyear,whoseprincipalplaceof business is in the States of Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or Odisha, the

Union territories of Jammu and Kashmir, Ladakh, Chandigarh or Delhi, the return in FORM GSTR-3B of the said rules for the months of April, 2020 to September, 2020 shall be furnished electronically through the common portal, on or before the twenty-fourth day of the month succeeding such month.

2. Payment of taxes for discharge of tax liability as per FORM GSTR-3B. –Every registered person furnishing the return in FORM GSTR-3B of the said rules shall, subject to the provisions of section 49 of the said Act, discharge his liability towards taxby debiting the electronic cash ledgerorelectronic credit ledger, as the case may be and his liability towards interest, penalty, fees or any other amount payable under the said Act by debiting the electronic cash ledger, not later than the last date, as specified in the firstparagraph, on which he is required to furnish the said return.

Notification No. 02/2020 – Central Tax (Rate) dated 26th March, 2020Inexerciseofthepowersconferredbysub-section(1), (3) and sub-section (4) of section 9, sub-section (1) of section 11, sub-section (5) of section 15 and section148oftheCentralGoodsandServicesTaxAct, 2017 (12 of 2017), the Central Government, onbeingsatisfiedthatitisnecessaryinthepublicinterest so to do, on the recommendations of the Council, hereby makes the following further amendmentsinthenotificationoftheGovernmentof India, in the Ministry of Finance (Department of Revenue)No.11/2017-Central Tax (Rate), datedthe 28th June, 2017, published in the Gazette ofIndia,Extraordinary,PartII,Section3,Sub-section (i), vide number G.S.R. 690(E), dated the 28thJune, 2017, namely:-

Inthesaidnotification,intheTable,againstserialnumber 25,

(a)after item (i) and entries relating thereto, in columns(3), (4) and (5), the following items and entries shall be inserted, namely, -

(3) (4) (5)“(ia) Maintenance, repair or overhaul services in respect of aircrafts, aircraft engines and other aircraft components or parts

2.5 -

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(b)in item (ii), in column (3), after the brackets and figures “(i)”, theword, brackets, andfigures “and(ia)” shall be inserted.

2.Thisnotificationshallcomeintoforcewitheffectfrom the 1st day of April, 2020.

Notification No. 03/2020 – Central Tax (Rate) dated 25th March, 2020Inexercise of the powers conferred by sub-section (1) of section 9 and sub-section (5) of section15oftheCentralGoodsandServicesTaxAct, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India in theMinistry of Finance (Department of Revenue), No.1/2017-CentralTax(Rate),datedthe28thJune, 2017, published in the Gazette of India, Extraordinary,PartII,Section3,Sub-section(i),vide number G.S.R. 673(E), dated the 28th June, 2017, namely:-

In the said notification, -

(a) in Schedule I –2.5%, serial number 187and the entries relating thereto shall be omitted;

(b) in Schedule II -6%,-

(i) after serial number 75and the entries relating thereto, the following serial number and entries shall be inserted, namely :

“75A. 3605 00 10 All goods”;

(ii) serial numbers 202 and 203 and the entries relating thereto shall be omitted;

(c) in Schedule III-9%,-

(i) serial number 73 and the entries relating thereto shall be omitted;

(ii) in serial number 379, for the entry in column (3), the entry “All goods” shall be substituted;

2.Thisnotificationshallcomeintoforceonthe1stday of April, 2020.

Notification No. 02/2020 – Integrated Tax (Rate) dated 26th March, 2020Inexerciseofthepowersconferredbysub-section(1), (3) and sub-section (4) of section 5, sub-section (1) of section 6 and clauses (iii) and (xxv) of section 20 of the Integrated Goods

andServicesTaxAct,2017(13of2017),readwithsub-section (5) of section 15 and section 148 of the Central Goods and Services Tax Act,2017 (12 of 2017), the Central Government, on the recommendations of the Council, and on being satisfied that it is necessary in the publicinterest so to do, hereby makes the following further amendments in the notification of theGovernment of India, in the Ministry of Finance (Department of Revenue) No. 8/2017-Integrated Tax(Rate),datedthe28thJune,2017,publishedintheGazetteofIndia,Extraordinary,PartII,Section3, Sub-section (i) vide number G.S.R. 683 (E), dated the 28th June, 2017, namely:-


(a) after item (i) and entries relating thereto, in columns(3), (4) and (5), the following items and entries shall be inserted, namely,


5 -

b) in item (ii), in column (3), after the brackets and figures“(i)”,theword,brackets,andfigures“and(ia)” shall be inserted.

2.Thisnotificationshallcomeintoforcewitheffectfrom the 1st day of April, 2020.

Notification No. 03/2020 – Integrated Tax (Rate) dated 25th March, 2020Inexercise of the powers conferred by sub-section (1) of section 5 of the Integrated Goods and Services Tax Act, 2017 (13 of2017) read with sub-section (5) of section 15 of the Central Goods and Services Tax Act,2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following further amendments in the notificationoftheGovernmentofIndiaintheMinistry of Finance (Department of Revenue), No.1/2017-IntegratedTax(Rate),datedthe28thJune, 2017, published inthe Gazette of India, Extraordinary,PartII,Section3,Sub-section(i),vide number G.S.R. 666 (E), dated the 28thJune, 2017, namely:-

22 |GST NEWSLETTER

In the said notification, -

(a) in Schedule I -5%, serial number 187 and the entries relating thereto shall be omitted;


(i) after serial number 75and the entries relating thereto, the following serial number and entries shall be inserted, namely :

“75A. 3605 00 10 All goods”;


(c) in Schedule III- 18%,-

(i) serial number 73 and the entries relating thereto shall be omitted;

(ii) in serial number 379, for the entry in column (3), the entry “All goods” shall be substituted;

2.Thisnotificationshallcomeintoforceonthe1stday of April, 2020.

Notification No. 02/2020 – Union Territory Tax (Rate) dated 26th March, 2020In exercise of thepowers conferredby sub-section (1), (3) and sub-section (4) of section 7, sub-section(1)ofsection8,clauses(iv)and(xxvii)of section 21 of the Union Territory Goods and ServicesTaxAct,2017(14of2017),readwithsub-section (5) of section 15 and section 148 of the Central Goods and Services Tax Act,2017 (12 of 2017), the Central Government, on the recommendations of the Council, and on being satisfied that it is necessary in the publicinterest so to do, hereby makes the following furtheramendmentsinthenotificationoftheGovernment of India, in the Ministry of Finance (Department of Revenue) No.11/2017-Union TerritoryTax(Rate),datedthe28thJune,2017,published in the Gazette of India, Extraordinary,Part II, Section 3, Sub-section (i), vide number G.S.R. 702(E), dated the 28th June, 2017, namely:-


(a) after item (i) and entries relating thereto, in columns(3), (4) and (5), the following items and entries shall be inserted, namely,


2.5 -

(b) in item (ii), in column(3), after the brackets and figures “(i)”, the word, brackets, andfigures“and(ia)”shallbeinserted;

2. This notification shall come into force witheffectfromthe1stdayofApril,2020.

Notification No. 03/2020 – Union Territory Tax (Rate) dated 25th March, 2020Inexerciseofthepowersconferredbysub-section(1) of section 7of the Union Territory Goods and ServicesTaxAct,2017(14of2017)readwithsub-section (5) of section 15 of the Central Goods andServicesTaxAct,2017(12of2017),theCentral Government, on the recommendations of the Council, hereby makes the following furtheramendmentsinthenotificationoftheGovernment of India in the Ministry of Finance (Department of Revenue), No.1/2017-Union territory Tax (Rate), dated the 28thJune, 2017,publishedintheGazetteofIndia,Extraordinary,Part II, Section 3, Sub-section (i), vide number G.S.R. 710(E), dated the 28thJune, 2017, namely:-

Inthesaidnotification,-

(a) in Schedule I –2.5%, serial number 187 and the entries relating thereto shall be omitted;


(i) after serial number 75 and the entries relating thereto, the following serial number and entries shall be inserted, namely :-

“75A. 3605 00 10 All goods”;


(c) in Schedule III-9%,-

serial number 73 and the entries relating thereto shall be omitted;

in serial number 379, for the entry in column (3), the entry “All goods” shall be substituted;

2. Thisnotificationshallcomeintoforceonthe1st day of April, 2020.

GST NEWSLETTER| 23

Circulars & Orders

Circular no. 132/2/2020 – GST dated 18th March, 2020 Clarifi cation in respect of appeal in regard to non-constitution of Appellate Tribunal – reg

1. Various representations have been received wherein the issue has been decided against the registered person by the adjudicating authority or refund application has been rejected by the appropriate authority and appeal against the said order is pending before the appellate authority. It has been gathered that the appellate process is being kept pending by several appellate authorities on the grounds that the appellate tribunal has been not constituted and that till such time no remedy is available against their Order-in-Appeal, such appeals cannot be disposed. Doubts have been raised across the fieldformations in respect of the appropriate procedure to be followed in absence of appellate tribunal for appeal to be made under section 112 of the Central Goods and Services Tax Act, 2017 (hereinafter referredto as the “CGST Act”).

2. The matter has been examined in detail.In order to clarify the issue and to ensure uniformity in the implementation of the provisionsofthelawacrossfieldformations,theBoard,inexerciseofitspowersconferredby section 168 (1) of the CGST Act, hereby issues the following clarifications andguidelines.

3.1 Appeal against an adjudicating authority is to be made as per the provisions of Section 107 of the CGST Act. The sub-section (1) of the section reads as follows: -

“107. (1) Any person aggrieved by any decision or order passed under this Act or the State Goods and Services Tax Act or the Union Territory GoodsandServicesTaxActbyanadjudicatingauthority may appeal to such Appellate

Authority as may be prescribed within three months from the date on which the said decision or order is communicated to such person.”

3.2 Relevant rules have been prescribed for implementation of the above Section. The relevant rule for the same is rule 109AofCentralGoodsandServicesTaxRules, 2017 which reads as follows

“109A. Appointment of Appellate Authority.- (1) Any person aggrieved by any decision or order passed under this ActortheStateGoodsandServicesTaxAct or the Union Territory Goods and ServicesTaxActmayappealto–

(a) the Commissioner (Appeals) where such decision or order is passed by the Additional or Joint Commissioner;

(b) any officer not below the rank of JointCommissioner (Appeals) where such decision or order is passed by the Deputy or Assistant Commissioner or Superintendent,

within three months from the date on which the said decision or order is communicated to such person.”

3.3 Hence, if the order has been passed by Deputy or Assistant Commissioner or Superintendent, appeal has to be made to the appellate authority appointed who would not be an officer below the rank of JointCommissioner. Further, if the order has been passed by Additional or Joint Commissioner, appeal has to be made to the Commissioner (Appeal) appointed for the same.

4.1 The appeal against the order passed by appellate authority under Section 107 of the CGST Act lies with appellate tribunal. Relevant provisions for the same is mentioned in the Section 112 of the CGST Act which reads as follows: -

“112 (1) Any person aggrieved by an order passed against him under section 107 or

24 |GST NEWSLETTER

section 108 of this Act or the State Goods and Services TaxAct or theUnion Territory Goods and Services Tax Actmay appeal tothe Appellate Tribunal against such order within three months from the date on which the order sought to be appealed against is communicated to the person preferring the appeal.”

4.2 The appellate tribunal has not been constituted in view of the order by Madras High Court in case of Revenue Bar Assn. v. Union of India and therefore the appeal cannotbefiledwithinthreemonthsfromthedate on which the order sought to be appealed against is communicated. In order to remove difficultyarisingingivingeffecttotheaboveprovision of the Act, the Government, on the recommendations of the Council, has issued the Central Goods and Services Tax (Ninth Removal of Diffi culties) Order, 2019 dated 03.12.2019. It has been provided through the said Order that the appeal to tribunal can be made withinthreemonths(sixmonthsincase of appeals by the Government) from the date of communication of order or date on which the President or the State President, as the case may be, of the Appellate Tribunal entersoffice,whicheverislater.

4.3 Hence, as of now, the prescribed time limit to make application to appellate tribunal will be counted from the date on which President or the State President enters office. Theappellate authority while passing order may mention in the preamble that appeal may be made to the appellate tribunal whenever it is constituted within three months from the President or the State President enters office. Accordingly, it is advised that theappellate authorities may dispose all pending appealsexpeditiouslywithoutwaitingfortheconstitution of the appellate tribunal.

Circular no. 133/03/2020 – GST dated 23rd March, 2020 Clarifi cation in respect of apportionment of input tax credit (ITC) in cases of business reorganization under section 18 (3) of CGST Act read with rule 41(1) of CGST Rules -reg

Representations have been received from

varioustaxpayersseekingclarificationinrespectof apportionment and transfer of ITC in the event of merger, demerger, amalgamation or change in the constitution/ownership of business. Certain doubts have been raised regarding the interpretation of sub-section (3) of section 18 of theCentralGoods and Services TaxAct, 2017(hereinafter referred to as the CGST Act) and sub-rule (1) of rule 41of the Central Goods and Services Tax Rules, 2017 (hereinafter referredto as theCGSTRules) in the context of businessreorganization.

2. According to sub-section (3) of section 18 of the CGST Act,

“Where there is a change in the constitution of a registered person on account of sale, merger, demerger, amalgamation, lease or transfer of the business with the specific provisions fortransfer of liabilities, the said registered person shall be allowed to transfer the input taxcredit which remains unutilized in his electronic credit ledger to such sold, merged, demerged, amalgamated, leased or transferred business in such manner as may be prescribed.”

Further, according to sub-rule (1) of rule 41 of the CGST Rules:

“A registered person shall, in the event of sale, merger, de-merger, amalgamation, lease or transfer or change in the ownership of business for any reason, furnish the details of sale, merger, de-merger, amalgamation, lease or transfer of business, in FORM GST ITC-02, electronically on the common portal along witharequestfortransferofunutilizedinputtaxcredit lying in his electronic credit ledger to the transferee:

Provided that in the case of demerger, the input taxcreditshallbeapportionedintheratioofthevalueofassetsofthenewunitsasspecifiedinthedemerger scheme.

Explanation:-For the purpose of this sub-rule, it is hereby clarified that the “valueof assets”meansthe value of the entire assets of the business, whetherornot input taxcredithasbeenavailedthereon.

3. The issues raised in various representations have been analyzed in the light of various

GST NEWSLETTER| 25

legal provisions under GST. In order to ensure uniformity in the implementation of the provisionsofthelaw,theBoard,inexerciseofits

powers conferred by sub-section (1) of section 168 oftheCGSTActclarifiestheissuesinvolvedintheTable below.

S.No. Issue / Question Carifi cation

a. (i) In case of demerger, proviso to rule 41 (1) of the CGST Rules provides that the input tax credit shallbe apportioned in the ratio of the value of assets of the new units as specifiedin the demerger scheme. However, it is not clear as to whether the value of assets of the new units is to be considered at State level or at all-India level.

Proviso to sub-rule (1) of rule 41 of the CGST Rules provides for apportionmentof the input tax credit in the ratioof thevalueofassetsofthenewunitsasspecifiedinthedemergerscheme.Further, theexplanation to sub-rule (1)of rule41of theCGSTRules states that “value of assets” means the value of the entire assetsofthebusiness,whetherornotinputtaxcredithasbeenavailed thereon. Under the provisions of the CGST Act, a person/ company (having same PAN) is required to obtain separate registration in different States and each such registrationis considered a distinct person for the purpose of the Act. Accordingly, for the purpose of apportionment of ITC pursuant to a demerger under sub- rule (1) of rule 41 of the CGST Rules, the value of assets of the new units is to be taken at the State level (at the level of distinct person) and not at the all-India level.

Illustration A company XYZ is registered in two States of M.P. and U.P. Its total value of assets is worth Rs. 100 crore, while its assets in State of

M.P. and U.P are Rs 60 crore and Rs 40 crore respectively. It demerges a part of its business to company ABC. As a part of such demerger, assets of XYZ amounting to Rs 30 Crore are transferred to company ABC in State of M.P, while assets amounting to Rs 10 crore only are transferred to ABC in State of U.P. (Total assets amounting to Rs 40 crore at all-India level are transferred from XYZ to ABC). The unutilized ITC of XYZ in State of M.P. shall be transferred to ABC on the basis of ratio of value of assetsinStateofM.P.,i.e.30/60=0.5andnot on the basis of all-Indiaratioofvalueofassets,i.e.40/100=0.4.Similarly,unutilizedITC of XYZ in State of U.P. will be transferred to ABC in ratio of valueofassetsinStateofU.P.,i.e.10/40=0.25.

(ii) Is the transferor required to file FORM GST ITC – 02in all States where it is registered?

No.The transferor is required tofileFORM GST ITC-02 only in those States where both transferor and transferee are registered.

26 |GST NEWSLETTER


b. The proviso to rule 41 (1) of theCGSTRulesexplicitlymentions ‘demerger’. Other forms of business reorganization where part of business is hived off orbusiness in transferred as a going concern etc. have not been covered in the said rule. Wherever business reorganization results in partial transfer of business assets along with liabilities, whether the proviso to rule 41(1) of the CGST Rules, 2017 shall be applicable to calculate the amount of transferableITC?

Yes, the formula for apportionment of ITC, as prescribed under proviso to sub-rule (1) of rule 41 of the CGST Rules, shall be applicable for all forms of business re-organization that results in partial transfer of business assets along with liabilities.

(i) Whether the ratio of value of assets, as prescribed under proviso to rule 41 (1) of the CGST Rules, shall be applied in respect of each of theheadsofinputtaxcreditviz.CGST/SGST/IGST/Cess?

No, the ratio of value of assets, as prescribed under proviso to sub-rule (1) of rule 41 of the CGST Rules, shall be applied to the totalamountofunutilizedinputtaxcredit(ITC)ofthetransferori.e. sum of CGST, SGST/UTGST and IGST credit. The said formula need not be applied separately in respect of each heads of ITC (CGST/SGST/IGST). Further, the said formula shall also be applicable for apportionment of Cess between the transferor and transferee.

Illustration A: The ITC balances of transferor X in the State of Maharashtra under CGST, SGST and IGST heads are 5 lakh, 5 lakh and 10 lakh respectively. Pursuant to a scheme of demerger, X transfers 60% of its assets to transferee B. Accordingly, the amount of ITC to be transferred from A to B shall be 60% of 20 lakh (total sum of CGST, SGST and IGST credit) i.e. 12 lakh.

(ii) How to determine the amount of ITC that is to be transferred to the transferee under each taxhead (IGST/CGST/SGST) while filing of FORM GST ITC–02 bythetransferor?

The total amount of ITC to be transferred to the transferee (i.e. sumofCGST,SGST/UTGSTandIGSTcredit)shouldnotexceedtheamount of ITC to be transferred, as determined under sub-rule (1) of rule 41 of the CGST Rules [refer 3 (c) (i) above]. However, the transferor shall be at liberty to determine the amount to betransferredundereachtaxhead(IGST,CGST,SGST/UTGST)within this total amount, subject to the ITC balance available with thetransferorundertheconcernedtaxhead.This isshowninthe illustration below:

GST NEWSLETTER| 27

(1) (2) (3) (4) (5) (6)

State Asset Ratio of Transfe ree

TaxHeads

ITC balance of ansferor (pre- rtionment) as on the date offilingFORM GST ITC–02)

Total amount of ITC nsferred to the tansferee under FORM GST ITC- 02

ITC balance of tansferor(post- ortionme nt) afterfilingofFORMGST ITC–02)

[Col (4) – Col (5)]

Delhi 70% CGST 10,00,000 10,00,000 0

SGST 10,00,000 10,00,000 0

IGST 30,00,000 15,00,000 15,00,000

Total 50,00,000 35,00,000 15,00,000

Haryana 40% CGST 25,00,000 3,00,000 22,00,000

SGST 25,00,000 5,00,000 20,00,000

IGST 20,00,000 20,00,000 0

Total 70,00,000 28,00,000 42,00,000


d. (i) In order to calculate the amount of transferable ITC, the apportionment formula under proviso to rule 41(1) of the CGST Rules has to be applied to the unutilized ITC balance of the transferor. However, it is not clear as to which date shall be relevant to calculate the amount of unutilized ITC balance of transferor.

According to sub-section (3) of section 18 of the CGST Act, “Where there is a change in the constitution of a registered person on account of sale, merger, demerger, amalgamation, lease or transfer ofthebusinesswiththespecificprovisionsfortransferofliabilities,the said registered person shall be allowed to transfer the input tax credit which remains unutilized in his electronic credit ledger to such sold, merged, demerged, amalgamated, leased or transferred business in such manner as may be prescribed.” Further, sub-rule (1) of rule 41 of the CGST Rules prescribes that the registered person shall file thedetails in FORMGST ITC-02 for transferofunutilizedinputtaxcreditlyinginhiselectroniccreditledgertothetransferee.

A conjoint reading of sub-section (3) of section 18 of the CGST Act along with sub-rule (1) of rule 41 of the CGST Rules would imply that the apportionment formula shall be applied on the ITC balance of the transferor as available in electronic credit ledger on the date of filingofFORM GST ITC – 02 by the transferor.

(ii) Which date shall be relevant to calculate the ratio of value of assets, as prescribed in the proviso to rule 41 (1) of the CGST Rules,2017?

According to section 232 (6) of the Companies Act, 2013, “The scheme under this section shall clearly indicate an appointed datefromwhich it shall be effective and the scheme shall be deemedtobeeffectivefromsuchdateandnotatadatesubsequenttotheappointed date”. The said legal provision appears to indicate that the “appointed date of demerger” is the date from which the scheme fordemergercomesintoforceandit isspecifiedintherespectivescheme of demerger. Therefore, for the purpose of apportionment of ITC under rule sub-rule (1) of rule 41 of the CGST Rules, the ratio of the value of assets should be taken as on the “appointed date of demerger”.

In other words, for the purpose of apportionment of ITC under sub-rule (1) of rule 41 of the CGST Rules, while the ratio of the value of assets should be taken as on the “appointed date of demerger”,the said ratio is to be applied on the ITC balance of the transferor onthedateoffilingFORM GST ITC - 02 to calculate the amount to transferable ITC.

28 |GST NEWSLETTER

Circular no. 134/04/2020 – GST dated 23rd March, 2020 Clarifi cation in respect of issues under GST law for companies under Insolvency and Bankruptcy Code, 2016-Reg

2. As per IBC, once an entity defaults certain threshold amount, Corporate Insolvency Resolution Process (hereafter referred to as “CIRP”) gets triggered and the management of such entity (Corporate Debtor) and its assets vest with an interim resolution professional (hereafter referred to as “IRP”) or resolution professional (hereafter referred to as “RP”). It continues to run the business and operations of the said entity as a going concern till the insolvency proceeding is over and an order is passed by the National

Company Law Tribunal (hereinafter referred to as the “NCLT”)

3. To address the aforementioned problems, notification No.11/2020-Central Tax,dated21.03.2020has been issued by the Government prescribing special procedure under section 148 of theCentralGoods and Services TaxAct, 2017(hereinafter referred to as the “CGST Act”) for the corporate debtors who are undergoing CIRP under the provisions of IBC andthe management of whose affairs are being undertaken byIRP/RP. In order to ensure uniformity in the implementation of the provisions of the law across thefieldformations,theBoard,inexerciseofitspowers conferred under section 168(1) of the CGST Act hereby clarifies various issues in thetable below:-


1. How are dues under GST for pre-CIRP period be dealt?

In accordance with the provisions of the IBC and various legal pronouncements on the issue, no coercive action can be taken against the corporate debtor with respect to the dues for period prior to insolvency commencement date. The dues of the period prior to the commencement of CIRP will be treated as ‘operationaldebt’andclaimsmaybefiledbytheproperofficerbefore the NCLT in accordance with the provisions of the IBC. Thetaxofficersshallseekthedetailsofsuppliesmade/receivedandtotaltaxduespendingfromthecorporatedebtortofiletheclaim before the NCLT.

Moreover, section 14 of the IBC mandates the imposition of a moratorium period, wherein the institution of suits or continuation of pending suits or proceedings against the corporate debtor is prohibited.

2. Should the GST registration of corporate debtor be cancelled?

ItisclarifiedthattheGSTregistrationofanentityforwhichCIRPhas been initiated should not be cancelled under the provisions ofsection29of theCGSTAct,2017.Theproperofficermay, ifneed be, suspend the registration. In case the registration of an entity undergoing CIRP has already been cancelled and it is within the period of revocation of cancellation of registration, it is advised that such cancellation may be revoked by taking appropriate steps in this regard.

3. Is IRP/RP liable to fi le returns of pre-CIRP period?

No. In accordance with the provisions of IBC, 2016, the IRP/RP is under obligation to comply with all legal requirements for period after the Insolvency Commencement Date. Accordingly, it is clarifiedthatIRP/RParenotunderanobligationtofilereturnsofpre-CIRP period.

GST NEWSLETTER| 29


During CIRP period4. Should a new registration

be taken by the corporate debtor during the CIRP period?

The corporate debtor who is undergoing CIRP is to be treated as a distinct person of the corporate debtor and shall be liable to take a new registration in each State or Union territory where the corporate debtor was registered earlier, within thirty days of the appointment of the IRP/RP. Further, in cases where the IRP/RPhasbeenappointedpriortotheissuanceofnotificationNo.11/2020- Central Tax, dated 21.03.2020, he shall takeregistrationwithinthirtydaysofissuanceofthesaidnotification,witheffectfromdateofhisappointmentasIRP/RP.

5. How to fi le First Return after obtaining new registration?

TheIRP/RPwillbeliabletofurnishreturns,makepaymentoftaxand comply with all the provisions of the GST law during CIRP period.TheIRP/RPisrequiredtoensurethatthefirstreturnisfiledundersection40oftheCGSTAct,fortheperiodbeginningthe date on which it became liable to take registration till the date on which registration has been granted.

6. How to avail ITC for invoices issued to the erstwhile registered person in case the IRP/RP has been appointed before issuance of notifi cation No.11/2020- Central Tax, dated 21.03.2020 and no return has been fi led by the IRP during the CIRP ?

The special procedure issued under section 148 of the CGST Act has provided the manner of availment of ITC while furnishing thefirstreturnundersection40.

Thesaidclassofpersonsshall, inhisfirstreturn,beeligibletoavailinputtaxcreditoninvoicescoveringthesuppliesofgoodsor services or both, received since appointment as IRP/RP and during the CIRP period but bearing the GSTIN of the erstwhile registered person, subject to the conditions of Chapter V of the CGST Act and rule made thereunder, except theprovisionsofsub-section (4) of section 16 of the CGST Act and sub-rule (4) of rule 36 of the CGST Rules. In terms of the special procedure under section148oftheCGSTActissuedvidenotificationNo.11/2020-CentralTax,dated21.03.2020.This exception is made only for the fi rst return fi led under section 40 of the CGST Act.

7. How to avail ITC for invoices by persons who are availing supplies from the corporate debtors undergoing CIRP, in cases where the IRP/RP was appointed before the issuance of the notifi cation No.11/2020 - Central Tax, dated 21.03.2020?

Registered persons who are receiving supplies from the said class of persons shall, for the period from the date of appointment of IRP/RPtillthedateofregistrationasrequiredinthisnotificationor30daysfromthedateofthisnotification,whicheverisearlier,beeligibletoavailinputtaxcreditoninvoicesissuedusingtheGSTIN of the erstwhile registered person, subject to the conditions of Chapter V of the CGST Act and rule made thereunder, exceptthe provisions of sub-rule (4) of rule 36 of the CGST Rules.

8. Some of the IRP/RPs have made deposit in the cash ledger of erstwhile registration of the corporate debtor. How to claim refund for amount deposited in the cash ledger by the IRP/RP?

Any amount deposited in the cash ledger by the IRP/RP, in the existingregistration,fromthedateofappointmentof IRP/RPto thedateofnotificationspecifying thespecialprocedure forcorporate debtors undergoing CIRP, shall be available for refund to the erstwhile registration under the head refund of cash ledger, even though the relevant FORM GSTR-3B/GSTR-1 are not filedforthesaidperiod.

The instructions contained in Circular No. 125/44/2019-GST dt. 18.11.2019standsmodifiedtothisextent.

30 |GST NEWSLETTER

GST NEWSLETTER| 31

1 Asper39thGSTCouncilmeetingheldon14thMarch,2020,GSTonmobilephonesandspecifiedparts has been changed from 12% to ________%.

A. 28 B. 5 C. 0 D. 18

2 Compositiontaxpayerneedstopaytaxandfurnishastatement,everyquarterorpartthereof,asthe case may be, in ________.

And furtherhehas to furnishareturn foreveryfinancialyearorpart thereof,as thecasemaybe, in ________.

A Form CMP-08, Form GSTR-4 C Form CMP-02, Form GSTR-4

B Form CMP-04, Form GSTR-4 D Form CMP-08, Form GSTR-4A

5. A new facility called “________” to be introduced so as to enable every registered person to have some basic information about the suppliers with whom they conduct or propose to conduct business.

AKnowYourClient CKnowYourTaxJurisdictionOfficer

BKnowYourTaxpayer DKnowYourSupplier

4. Due date for annual return in FORM GSTR-9 and reconciliation statement in FORM GSTR-9C for FY 2018-19tobeextendedto________.

3. Due Date of Form GSTR-8 for the month of February, 2020 is __________.

A. 11th March, 2020 B. 13th March, 2020 C. 10th March, 2020 D. 20th March, 2020

A. 30th April, 2020 B. 30th June, 2020 C. 31st July, 2020 D. 31tst May, 2020

GST

Answ

er: Q

1-D

, Q2-

A, Q

3- C

, Q4-

B, Q

5- D

Documents

GST NEWSLETTER 032120 (MARCH ISSUE)2/2019-Central Tax (Rate) dated 07.03.2019 by fi ling FORM CMP-02. f. A special procedure is being prescribed for registered persons who are corporate