January 6, 2019

Amendments to the CGST Rules

1. Introduction

The Goods and Services Tax (‘GST’) Council in its 31st Meeting held on 22 December 2018 has made several taxpayer-friendly decisions.

The GST Council has tried to address some of the difficulties faced by taxpayers by making clarificatory amendments to the CGST Rules in response to the representations received from various stakeholders.

In order to give effect to the decisions of the GST Council, the Central Board of Indirect Taxes and Customs has issued Notification No. 74/2018 – Central Tax on 31 December 2018 in relation to various amendments pertaining to CGST Rules, 2017 (Link: )

The summary of the notification is given below for ease of reference:

2. Clarification regarding TDS/ TCS Registration

Some Taxpayers may be required to register in a State/ Union Territory (‘UT’) as a Tax Deductor/ Tax Collector at Source. The taxpayer has to register by filing Form GST REG – 07.

In this process, it is possible that the taxpayers may not have physical presence in the other State/ UT.

In order to address this anomaly, the CGST Rules have been amended and Rule 1A has been inserted.

Now, the taxpayer undertaking registration for compliance with TCS provisions is required to mention the following:

The name of the State/ UT where taxpayer intends to register and there is no physical presence – PART A of Form GST REG-07
The name of the State/ UT where taxpayer has his principal place of business – PART B of Form GST REG-07.
It may be noted that the State/ UT in both Part A and Part B could be different.

3. Relaxation in reporting requirements under Form ITC – 04

As per Rule 45(3) of the CGST Rules, the details of challans by which goods sent from one job worker to another were required to be reported in Form GST ITC – 04.

These provisions resulted in additional reporting requirements and compliances for job workers.

The CGST Rules have now been amended to remove this reporting requirement.

Accordingly, the details of challans in respect of goods sent from one job worker to another are now no longer required to be reported in Form GST ITC – 04.

4. Issue of electronic documents under GST law

The signature or digital signature of the supplier/ authorised representative is required to be affixed on various documents issued under the GST law.

These provisions did not cover the situations where an electronic invoice was being issued.

The CGST Rules have now been amended to provide an exemption from affixing signature/ digital signature where the document is issued electronically in accordance with the provisions of the Information Technology Act, 2000.

Hence, the Rules now permit taxpayers to issue the following documents electronically:

o Tax Invoice in accordance with Rule 46 of the CGST Rules.
o Electronic Bill of Supply in accordance with Rule 49 of the CGST Rules.
o Consolidated Tax Invoice in accordance with Rule 54(2) of the CGST Rules.
o Ticket in accordance with Rule 54(4) of the CGST Rules.

5. Relevant period to claim refund in case of inverted duty structure

In case of an inverted duty structure, taxpayers were eligible for refund of ITC under Rule 89(5) of the CGST Rules. The refund of ITC is computed based on the ratio of the turnover of inverted rated supplies as compared with the adjusted total turnover.

As per the current provisions, there was no reference to ‘Relevant period’ for computing the adjusted total turnover and compute the refund thereon.

The CGST Rules have now been amended to define Relevant Period as “the period for which the refund claim has been filed”.

6. GST audit for part of the year permitted

Earlier, GST audit and assessment by the GST authorities was permitted to be undertaken on the basis of a Financial Year (‘FY’) or multiple FYs thereof.

The Rule 101(1) has now been amended to permit GST audit even for part of the FY.

7. Revisional Authority

Rule 109B has been inserted in relation to the notices and orders passed by the Revisional Authority.

Rule 109B: Notice to person and order of revisional authority in case of revision

Rule 109B has now been inserted in relation to the following action by the Revisional Authority:

If the Revisional Authority has to pass an order in revision under Section 108 and the order is likely to adversely affect the taxpayer, a notice in FORM GST RVN – 01 is required to be served to the taxpayer
The Revisional Authority shoudl The taxpayer should be given a reasonable opportunity of being heard
A summary of the order in FORM GST APL – 04 is required to be issued along with the appellate order under Section 108(1), issue clearly indicating the final amount of demand confirmed.
The formats for FORM GST RVN – 01 and FORM GST APL – 04 have been prescribed.

8. Non-filers of GST returns would not be able to generate e-way bills

Currently, taxpayers are allowed to generated e-way bills even of they have not filed the requisite returns (GSTR – 1 and GSTR – 3B).

In order to enforce discipline in compliance and ensure that genuine buyers are not affected due to the non-compliances by sellers, the CGST Rules have been amended vide insertion of a new Rule 138E.

Rule 138E – Restriction on furnishing of information in PART A of FORM GST EWB-01

A registered taxpayer will not be eligible to generate e-way bill on the GST portal if the taxpayer:

Paying tax under composition scheme has not furnished the returns for two consecutive tax period; or
Other persons (monthly or quarterly return filers) have not filed the return for a consecutive period of 2 months

The Rules further provide for a relaxation of the same by the jurisdictional Commissioner by passing an order in writing, subject to conditions and restrictions as laid down.

9. Form GST RFD – 01 for filing refund claims revised

FORM GST RFD – 01 used for filing refund claims has been replaced with a new form.

DISCLAIMER: The views expressed are strictly of the author and VJM & Associates LLP. The contents of this article are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.

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