Key GST changes applicable from April 1, 2019: 7 things to know

 

Key GST changes applicable from April 1, 2019: 7 things to knowGST 7 Key changes from 1st April 2019

The GST Council in the 32nd meeting, held on 10th January 2019, had taken various key decisions which would have the impact of reducing the compliance burden of small taxpayers and which would bring certainty in various ambiguous matters. Some of these decisions have been made effective from April 1, 2019. In respect of certain controversial matters, the CBIC has issued various clarifications which would bring clarity to the taxpayers. Here is an insight of notifications and circulars issued by the CBIC on March 7, 2019.

1. The benefit of composition scheme has been extended to service providers

Currently, the privilege of composition scheme is available only to the suppliers who are into the business of supply of goods. The composition scheme was not available to the service providers except for the restaurant and catering services.

With effect from April 1, 2019, the service providers can also avail the composition scheme. This scheme shall be available subject to some conditions such as supplier is engaged in the supply of goods or services within the same state and the aggregate turnover of supplier does not exceed Rs. 50 lakhs during the financial year. This has been made effective vide Notification No. 02/2019 – Central Tax (Rate) dated March 7, 2019.

The benefit of this scheme shall not be available to service providers who are rendering services in multiples states or through e-commerce websites. Thus, Chartered Accounts, Architects, etc. may not avail this scheme if they have clients in different states.

2. Threshold Limit for composition scheme has been increased to Rs. 1.5 crores

The existing threshold limit on the gross turnover in the previous financial year to avail of the composition scheme has been increased from Rs. 1 crore to Rs. 1. 5 crores. In respect of special category states (North-Eastern States), the threshold limit has been increased from Rs. 50 lakhs to Rs. 75 lakhs. Consequently, the taxable persons can substantially reduce their compliance burden as they would be required to file GST returns on a quarterly basis instead of monthly. This benefit has been extended vide Notification No. 14/2019 – Central Tax dated March 7, 2019.

3. Threshold limit to take registration has been increased to Rs. 40 lakhs

As per Section 23 of CGST Act, every person is required to obtain the GST registration if his turnover from the supply of goods or services exceeds Rs. 20 lakhs. This threshold limit has been increased to Rs. 40 lakhs if the supplier is engaged in the supply of goods. In other words, any person who is engaged in the supply of goods and his total turnover in the current financial year does not exceed Rs. 40 lakhs, he is not required to take registration under GST. This exemption from GST registration is subject to various conditions, inter-alia, he is not making any inter-state supply, he is not a non-resident taxable person, etc. This has been made applicable by Notification No. 10/2019 – Central Tax dated March 7, 2019.

The effect of all changes in the threshold limit for GST registration and composition scheme has been enumerated in the below table.

Nature of supply Turnover or Receipts Registration Composition scheme Rate of tax for composition scheme
Goods Up to 40 Lakhs
More than 40 Lakhs but up to 1.5 crore 1% of the turnover
More than 1.5 crore
Restaurant Services Up to 20 Lakhs
More than 20 Lakhs but up to 1.5 crore 5% of the turnover
More than 1.5 crore
Other services Up to 20 Lakhs
More than 20 Lakhs but up to 50 Lakhs 6% of the turnover
More than 50 Lakhs

4. The due date for filing of GSTR-1 and GSTR-3B for has been announced

The due dates for filing of GSTR-1 and GSTR-3B for the months of April, May, and June of 2019 has been notified, which shall be as follows:

Type of return April 2019 May 2019 June 2019

GSTR-1

(Turnover more than 1.5 crore)

May 11, 2019

June 11, 2019

July 11, 2019

GSTR-1

(Turnover up to 1.5 crore)

July 31, 2019

GSTR-3B

May 20, 2019

June 20, 2019

July 20, 2019

Turnover limit of current or previous financial year shall be considered to determine the eligibility of the supplier for the filing of monthly or quarterly GST return.

This has been made effective by Notification No. 11/2019, Notification No. 12/2019, and Notification No. 13/2019- Central Tax dated March 7, 2019.

5. Clarification issued for levy of GST on various sales promotional schemes.

The CBIC has issued clarifications on chargeability of GST, valuation of goods and reversal of ITC in respect of free samples and promotional goods distributed by a taxable person. This clarification has been issued in Circular No. 92/11/2019-GST.

6. No GST to be levied on TCS component collected by suppliers.

Valuation Rules specify that value of supply shall include any taxes, duties, cesses, fees, and charges levied under any law for the time being in force except GST. Thus, CBIC has clarified that if the supplier collects TCS form the buyer on sale of a product then GST shall not be charged on the TCS component collected by the supplier. This has been clarified in Corrigendum to Circular No. 76/50/2018-GST dated December 31, 2018.

7. GST Annual Return Forms GSTR-9 and 9A are now live on the portal

Annual return in Form GSTR-9 and 9A are now live on the GST 7 Key changes from 1st April 2019portal. The last date for filing of Annual Return for the Financial Year 2017-18 is June 30, 2019.

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