GST Amendment laws becomes effective from 1 February, 2019 except some specified provisions

GST Amendment laws becomes effective from 1 February, 2019 except some specified provisions :-

Various amendments under the CGST, IGST, UTGST and GST (Compensation to States) Amendment Acts had received the Presidential assent on 29 August 2018. Based on decision taken by the GST Council in its 31st meeting held on 22 December 2018, the CBIC issued notifications making the provisions of the GST Amendment Acts effective from 1 February 2019.

The Government has notified 1 February, 2019 as the date from when various provisions of the proposed amendments to the GST statutes to come into force. In this article I have summarized major amendments which has come into effect from 1st Feb 2019.

CBIC notifies all provisions of GST Amendment Acts to be effective from 1 February 2019, except the following provisions which have not yet been brought into force:-

CGST (Amendment) Act, 2018

Sec 8(b) – Reference to Section 43A in section 16(2)(c), which prescribes the new return filing procedure.

Sec 17 – Amendment to section 39 with reference to new return filing procedure.

Sec 18 – Section 43A – New return filing procedure.

Sec 20(a) – Reference to Section 43A in section 49(2), which prescribes the new return filing procedure.

Sec 28(b)(i) & 28(c)(i) – Insertion of reference to subsection (1) of Section 140 under Explanation 1 and 2, which defines the term “eligible duties” and “eligible duties and taxes” respectively.

Some of the major amendments which has come into effect are summarised below:

Place of business: The concept of business verticals for separate registrations has been done away with. Now, assessees will be able to obtain multiple registrations in the same State for separate places of business, which was previously possible only for separate business verticals.

The registration for each place of business has to be made in Form GST REG-01 and rules for verification and grant of registration shall mutatis mutandis apply in such case.

Further, at the option of the registered person, the unutilized input tax credit (ITC) in the existing registration can be transferred to the newly registered places of business. For this, Form GST ITC-02A is required to be furnished within 30 days of obtaining such separate registrations.

Definition of supply has been retrospectively amended to provide that the activities listed in schedule II will be taxable only if there is an underlying supply, and the schedule is relevant only for classifying the supply between goods or services.

The transactions of high sea sale, merchant trade, supply of warehoused goods before clearance for home consumption and sale of actionable claims etc. would not require any reversal of common credits.

Credit restrictions on motor vehicles relaxed to allow credit on motor vehicles for transport of passengers having a seating capacity of 13+ persons and also on the special purpose vehicles such as dumpers etc.  However, specific restrictions on credits pertaining to insurance, servicing and repair and maintenance for vehicles, vessels or aircrafts ineligible for credit have been introduced (excluding the credits on in-warranty maintenance expense by manufacturers and credits on repairs etc. of vehicles by general insurance companies).

Transition credit of cesses have been specifically restricted.

A service can be said to be exported even if the consideration is received in Indian rupees wherever permitted by Reserve Bank of India, if other conditions for treating a service as exports of services is fulfilled.

The place of supply for services of transportation of goods, where the transportation of goods is to a place outside India, will be the place of destination of such goods, when the location of the supplier and recipient of services are in India.

Suspension of Registration

The registration of person will be suspended when such person applies for cancellation of registration2 or the proper officer initiates cancellation and proceedings for such cancellation of registrations are pending.

The suspension will be effective from following date:

In case of application of cancellation by a registered person – Submission of application or date from which cancellation is sought, whichever is later.

In case of cancellation by the proper officer – date

Debit Notes and Credit Notes: A single debit/ credit note can now provide reference to corresponding multiple tax invoices. Earlier, separate debit/ credit note had to be issued in respect of each invoice.

Refund: A registered person will have to furnish a declaration that no tax has been collected from SEZ at the time of claiming refund for supply of goods or services to SEZ. This is in line with the amendment to section 54 (8) (a) of the CGST Act which provides that proof of unjust enrichment must be furnished while claiming refund in relation to supplies to SEZ.

Reverse charge mechanism: The Notification exempting the liability of a registered person from paying tax under reverse charge mechanism on making procurements from unregistered person has been rescinded with effect from 1 February 2019. This is done in view of the provisions of the Amendment Acts, basis which reverse charge in respect of supplies from unregistered persons will apply only to specified persons. However, no such class of persons has been notified so far.

Composition Scheme: The Order No. 01/2019-Central Tax, dated 1 February 2019 has been issued to provide that the value of exempt services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount, shall not be taken into account for the following:

For computing aggregate turnover to determine eligibility for Composition scheme.

For determining value of service, which a person opting for composition scheme may supply. Such person may supply services of value not exceeding 10% of the turnover in a State in the preceding financial year or INR 5 lakh, whichever is higher.

Extension of GSTR due dates:

In notification no. 07/2019-Central Tax ,dated .31-01-2019 the due date for filing Form GSTR-7 and GSTR-8 has been extended as below:

Form    Earlier due date           Revised due date

GSTR-7           31 January 2019          28 February 2019.

GSTR-8           31 January 2019          7 February 2019.

The due date for filing Form GST TRAN -1 for registered persons, who could not submit the said declaration within prescribed time on account of technical difficulties and whose cases have been recommended by the Council, has been extended from 31 January 2019 to 31 March 2019.

Analysis of Circular No. 88/07/2019-GST dated 1st Feb 2019

In order to remove inconsistency with the amended GST law, the CBIC has issued Circular No. 88/07/2019-GST, dated 1 February 2019 which modifies earlier circulars as follows:

Circular No. 8/8/2017 dated 4 October 2017 is revised to provide that Letter of Undertaking (LUT) will be accepted for export of services, even if consideration is received in INR, wherever permitted by RBI.

Circular No. 38/12/2018 dated 26 March 2018 is modified in view of the amendments in CGST Act which empowers Commissioner to extend the period for return of inputs and capital goods from the job worker and restrict applicability of reverse charge on procurement from unregistered persons to notified class of persons only.

Circular No. 41/15/2018 dated 13 April 2018 is amended to allow payment of applicable tax and penalty on seizure of goods within 14 days from the date of issue of order of detention, instead of 7 days prescribed earlier.

Circular No. 58/32/2018-GST issued on 4 September 2018, clarified that in case of wrongly availed CENVAT credit under earlier regime or CENVAT credit wrongly transitioned in GST, a taxpayer may reverse such credit through Table 4(B)(2) [ ITC Reversed – Others] of GSTR-3B. The applicable interest and penalty has to be paid through column 9 of Table 6.1[Payment of tax Interest] of GSTR-3B.

The said earlier Circular is now modified to provide that the reversal of wrongly availed credit as specified above is no longer available to the taxpayer. Such liabilities may be discharged by the taxpayer in Form GST DRC-03 [Intimation of payment made voluntarily or made against the show cause notice (SCN) or statement]. The applicable interest and penalty is to be paid in Form GST DRC-03.

Various rules have been amended to give effect to the aforesaid amendments in the GST laws.


With the coming into effect of the amendments in the GST laws, the industry would need to assess the impact on their activities and make necessary amendments in their tax computations and systems.

While the Rules for transfer of unutilized ITC from existing registration to newly registered place of business may benefit the taxpayer, there is still some ambiguity regarding the course of action to be taken by persons who were registered as business vertical but do not have separate place of business.

However, the proposed amendments relating to the revised compliance system have not yet been made effective.

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