GST Updates May 2019, Latest GST News till May 2019 (all news)

GST Updates Upto May 2019, Latest GST News till May 2019 (all news) . check latest GST news related to goods and service tax act. The Lok Sabha and the Rajya Sabha cleared four crucial GST Bills i.e. CGST, IGST, UTGST and Compensation Cess Bill paving the way for early rollout of GST.

GST Updates May 2019

From 21.06.2019, The GST e-waybill portal shall not allow to generate e-waybill by or in fvaour of a tax payer who has not filed GST return for consecutively 2 tax periods. (Rule -138 of CGST Rule)(Notification number 22/2019-Central Tax, dt. 23-04-2019).

From the FY-2019-2020 and onward all taxpayers under composition scheme (Traders, Manufacturers, Restaurant Owners, Service Providers etc) need to file two GST returns as below:-

GST ReturnFrequencyDue dateLate Fees
CMP-8-Payment of self assessed taxQuarterlyWithin 18th of next month ending the quarterRs.20.00 per day (10+10) for Nil return

Rs.50.00 per day (25+25)for taxable

GSTR-4AnnuallyWithin 30 April after ending the FYRs.20.00 per day (10+10) for Nil return

Rs.50.00 per day (25+25)for taxable

Notification No.21 /2019 – Central Tax dated 23.04.2019

GST March 2019 Updates

Services under Reverse Charge Mechanism

Central Government vide Notification No. 29/2018- CT (R) dated 31st Dec, 2018 notified the following amendments in the Notification No. 13/2017- CT (R) dated 28th June, 2017, namely:-

1. Insertion of proviso to item (g) serial number 2: “Provided that nothing contained in this entry shall apply to services provided by a goods transport agency, by way of transport of goods in a goods carriage by road, to, –

  • (a) a Department or Establishment of the Central Government or State Government or Union territory; or
  • (b) local authority; or
  • (c) Governmental agencies,

which has taken registration under the Central Goods and Services Tax Act, 2017 (12 of 2017) only for the purpose of deducting tax under section 51 and not for making a taxable supply of goods or services.”;

Comment: Services provided by GTA to Government departments/local authorities exempted which have taken registration only for the purpose of deducting tax under Section 51 not liable under RCM

GST Amendment Act, 2018 applicable from 1st day of February, 2019

The Central Government vide Notification No. 02/2019 – CT dated 29th Jan, 2019 has provided that the provisions of the CGST (Amendment) Act, 2018 (31 of 2018), except the following shall be applicable from 1st February, 2019:

  • clause (b) of section 8, section 17, section 18,
  • clause (a) of section 20,
  • sub-clause (i) of clause (b) and sub-clause (i) of clause (c) of section 28,

Comment: Please note that these provisions are relatable to the newly inserted section 43A and the changes to section 39 and 140. Care may be taken to identify the effect of the delay in implementation of these provisions as rest of the Amendment Act comes into effect from 1 Feb, 2019.

GST Update- GST rate on real estate sector

GST Council in the 34 meeting held on 19 March, 2019 at New Delhi discussed the operational details for implementation of the recommendations made by the council in its 33 meeting for lower effective GST rate of 1% in case of affordable houses and 5% on construction of houses other than affordable house. The council decided the modalities of the transition as follows. Option in respect of ongoing projects:

2. The promoters shall be given a one -time option to continue to pay tax at the old rates (effective rate of 8% or 12% with ITC) on ongoing projects (buildings where construction and actual booking have both started before 01.04.2019) which have not been completed by 31.03.2019.

3. The option shall be exercised once within a prescribed time frame and where the option is not exercised within the prescribed time limit new rates shall apply

New tax rates:

4. The new tax rates which shall be applicable to new projects or on-going projects which have exercised the above option to pay tax in the new regime are as follows.

(i) New rate of 1% without input tax credit (ITC) on construction of affordable houses shall be available for,

  • (a) all houses which meet the definition of affordable houses as decided by GSTC (area 60 sqm in metros / 90 sqm in non- metros and value upto RS. 45 lakhs), and
  • (b) affordable houses being constructed in on-going projects under the existing central and state housing schemes presently eligible for concessional rate of 8% GST (after 1/3 land abatement).

(ii) New rate of 5% without input tax credit shall be applicable on construction of,-

  • a. All houses other than affordable houses in on-going projects whether booked prior to or after 01.04.2019. In case of houses booked prior to 01.04.2019, new rate shall be available on instalments payable on or after 01.04.2019.
  • b. All houses other than affordable houses in new projects.
  • c. Commercial apartments such as shops, offices etc. in a residential real estate project (RREP) in which the carpet area of commercial apartments is not more than 15% of total carpet area of allapartments.

Conditions for the new tax rates:

5. The new tax rates of 1% (on construction of affordable) and 5% (on other than affordable houses) shall be available subject to following conditions,-

  • a. Input tax credit shall not be available,
  • b. 80% of inputs and input services (other than capital goods, TDR/ JDA, FSI, long term lease (premiums)) shall be purchased from registered persons. On shortfall of purchases from 80%, tax shall be paid by the builder @ 18% on RCM basis. However, Tax on cement purchased from unregistered person shall be paid @ 28% under RCM, and on capital goods under RCM at applicable rates.

Transition for on-going projects opting for the new tax rate:

Ongoing projects (buildings where construction and booking both had started before 01.04.2019) and have not been completed by 31.03.2019 opting for new tax rates shall transition the ITC as per the prescribed method.

6.2 The transition formula approved by the GST Council, for residential projects (refer to para 4(ii)) extrapolates ITC taken for percentage completion of construction as on 01.04.2019 to arrive at ITC for the entire project. Then based on percentage booking of flats and percentage invoicing, ITC eligibility is determined. Thus, transition would thus be on pro-rata basis based on a simple formula such that credit in proportion to booking of the flat and invoicing done for the booked flat is available subject to a few safeguards.

6.3 For a mixed project transition shall also allow ITC on prorata basis in proportion to carpet area of the commercial portion in the on-going projects (on which tax will be payable @ 12% with ITC even after 1.4.2019) to the total carpet area of the project. Treatment of TDR/ FSI and Long term lease for projects commencing after 01.04.2019

The following treatment shall apply to TDR/ FSI and Long term lease for projects commencing after 01.04.2019.

7.1 Supply of TDR, FSI, long term lease (premium) of land by a land owner to a developer shall be exempted subject to the condition that the constructed flats are sold before issuance of completion certificate and tax is paid on them. Exemption of TDR, FSI, long term lease (premium) shall be withdrawn in case of flats sold after issue of completion certificate, but such withdrawal shall be limited to 1% of value in case of affordable houses and 5% of value in case of other than affordable houses. This will achieve a fair degree of taxation parity between under construction and ready to move property.

7.2 The liability to pay tax on TDR, FSI, long term lease (premium) shall be shifted from land owner to builder underthe reverse charge mechanism (RCM).

7.3 The date on which builder shall be liable to pay tax on TDR, FSI, long term lease (premium) of land under RCM in respect of flats sold after completion certificate is being shifted to date of issue of completion certificate.

7.4 The liability of builder to pay tax on construction of houses given to land owner in a JDA is also being shifted to the date of completion. Decisions from para 7.1 to 7.4 are expected to address the problem of cash flow in the sector

Amendment to ITC rules:

8. ITC rules shall be amended to bring greater clarity on monthly and final determination of ITC and reversal thereof in real estate projects. The change would clearly provide procedure for availing input tax credit in relation to commercial units as such units would continue to be eligible for input tax credit in a mixed project.

9. The decisions of the GST Council have been presented in this note in simple language for easy understanding. The same would be given effect to through Gazette notifications/ circulars which alone shall have force of law.

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