GST Trends

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April 2018

2

The year gone by was a transitional year and

undoubtedly, a roller coaster ride in terms of fire

fighting with the complexities in GST regime. The new

financial year could bring a stable GST regime.

Top Trends

• Authority for Advance Rulings (AAR) constituted in

various states have begun to pronounce their

decisions.

• Return simplification – Action underway with the

Group of Ministers (GoM) inviting stakeholders

consultations for the design of new return filing

mechanism.

• Exemption of IGST and compensation cess

available under Advance Authorisation (AA),

Export Promotion Capital Goods (EPCG) and

Export Oriented Unit (EOU) till 1 October 2018.

• Letter of Undertaking (LuT) (for exports without

payment of IGST):

Application of LuT for the financial year 2018-

19 has been made online. No manual

submission of any documents required;

Late filing of LuT in the financial year 2017-18 -

condoned and the facility for export under LuT

can be allowed on a retrospective basis taking

into account the facts and circumstances of the

case (Circular No. 37/11/2018-GST).

• Action points for assesses in the new financial

year:

Determine the periodicity of GSTR-1

New invoice series

e-Way Bill for inter-state movement of goods

(>INR 50,000)

Annual reconciliation of books and GST returns

ITC reversal as per Section 16(2) of the CGST

Act (Payment within 180 days).

Judicial Pronouncements

Issue Ruling SKP Comments

Classification of skin care preparation as Medicament under heading 3004 of the Customs Tariff Act, 1975 [West Bengal-AAR(GST)]

• Merely manufacturing a skin care preparation using an Ayurvedicauthoritative text book does not imply that the product is a medicament.

• Its curative and therapeutic use are also to be considered.

• In the given case, the skin care preparation products were classified as medicament or cosmetic product post consideration of various factors.

With the multiple rate structure under GST, classification disputes are set to rise. This ruling shows that in order to verify the classification of any product, it is necessary to consider the raw materials used, the output derived, the end use of the output, etc.

GST Trends – April 2018

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Issue Ruling SKP Comments

Whether canteen services provided by the employer to employee qualify as supply of service under GST[Kerala AAR (GST)]

(Canteen services inside the factory premises -Mandatory requirement under the Factories Act, 1948)

• AAR has referred to Schedule II of the CGST Act, 2017 which describes the activities to be treated as a supply of goods or supply of services. In accordance with the said schedule, supply of food shall be treated as a supply of service.

• Furthermore, the recovery of cost from the employees is a consideration for the supply.

• Therefore, it was held that irrespective of whether the activity is undertaken for profit or not, the canteen services is a supply of service, and chargeable under GST.

The AAR has opened many doors of interpretations under GST perspective. Various services are provided by the company to its employees, e.g., house rent/boarding and lodging, travelling, etc. It would be interesting to watch the impact of this verdict on such other transactions between employee and employer and to which extent the tax net would cover such transactions. Also, since employee and employer are related parties, the valuation of such services would lead to further disputes.

GST Implication on high sea sales[Kerala AAR (GST)]

• The definition of import of goods means bringing goods into India from a place outside India. Furthermore, IGST is levied on import of goods into India.

• In case of the applicant, the goods were never imported into India at any stage. Thus, IGST would not be applicable.

This AAR decision is a re-confirmation to the Circular No. 33/2017-Customs.

It clarifies that IGST would levied only when the goods are imported in India and IGSTwould be payable at the time of importation. Therefore, the transaction of high sea sale when the goods are not physically imported in India would not be taxable.

GST on one time lease premium(Writ Petition – Bombay High Court)

• One time lease premium consideration on any lease or letting out building, including commercial, industrial or residential complex for business, either wholly or partly, would qualify as supply under Section 7 of CGST Act, 2017. In accordance with the same, the one time lease payment would attract GST.

The argument of the petitioner was that one time lease payment is similar to sale of immovable property as the owner loses the right to use the property for a long period of time. However, the revenue held that the lease transaction qualifies as a supply and therefore falls under the ambit of GST. This could have an impact on similar agreements routinely entered by developers.

GST Trends – April 2018

It is to be noted that an Advance Ruling is binding

only on the applicant who had sought it and the

concerned jurisdictional authority, i.e., an Advance

Ruling is specific to an applicant and shall not be

applicable to other taxpayers facing similar issues.

However, the above mentioned Advance Rulings

provides clarity about the issues being faced and

provide persuasive value in matters before the tax

authorities.

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Form Applicable to Period Due Date

GSTR-1 (Quarterly) Taxpayers with annual

aggregate turnover

upto INR 15 million

Jan-Mar 2018 30 April 2018

TRAN-1 Taxpayers who failed to

file TRAN-1 due to IT

glitches

- 30 April 2018

GSTR-1 – Outward

supplies (monthly)

Taxpayers with annual

aggregate turnover

more than INR 15

million

March 2018 10 May 2018

GSTR-4 Composition scheme April 2018 18 May 2018

GSTR-3B All registered taxpayers April 2018 20 May 2018

GSTR-5 Non-resident taxable

persons

April 2018 20 May 2018

GSTR-5A Online Information and

Database Access or

Retrieval (OIDAR)

April 2018 20 May 2018

GSTR-1 – Outward

supplies (monthly)

Taxpayers with annual

aggregate turnover

more than INR 15

million

April 2018 31 May 2018

GSTR-6 Input service

distributors

July-April 2018 31 May 2018

GST Trends – April 2018

Upcoming GST Due Dates

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GST Trends – April 2018

Other Key Aspects

GST from a Macro Perspective

GST Monthly Revenue FY 17-18 (In INR Billion)

Aug’17

936930

951

859837

889

880

892

Sep’17

Oct’17

Nov’17

Dec’17

Jan’18

Feb’18

Mar’18

GST revenue has witness a fall from November 2017. The government is taking anti-evasion measures to plug revenue leakages.

Annual GST collections vis-à-vis estimates

ParticularsCGST

(in INR billion)

IGST

(in INR billion)

SGST

(in INR billion)

Comp cess

(in INR billion)

2017-18 revised budget estimates1 2,214 1,619 613.31

2018-19 budget estimate2 6,039 500 900

2017-18 actuals3 1,190 3,660 1,720 620.21

Add - IGST settlement3 (1,190) 1,190

2017-18 actual (after IGSTsettlement)3 1,190 2,470 2,910

Add - comp to states3 411.47 (411.47)

Net 2017-18 actuals (after compensation to

states)

1,190 2,470 3,321.47 208.74

2017-18 – State’s receipt of GST – 3,321.47

2017-18 – Center’s receipt of GST – 3,868.74

1 https://www.indiabudget.gov.in/ub2018-19/rec/tr.pdf2 https://www.indiabudget.gov.in/ub2018-19/rec/tr.pdf3 PIB Press release dated 27 April 2018

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GST Trends – April 2018

Anti-Evasion Measures

e-Way Bill

e-Way Bill would help to keep a track on all

movements of goods, thus ensuring that the same

are falling under the GST boundaries.

Post the smooth rollout of the e-Way Bill system for

inter-state movement of goods, the government is

gradually implementing the system for intra-state

movement of goods in the following manner:

1

3

3

3

3

33

4

4

4

4

4

2

2

2

2

2

5

1 1 April 2018

2 15 April 2018

3 20 April 2018

4 25 April 2018

5 31 May 2018

e-Way Bill – A snapshot

• A total of 1,096,905 taxpayers have

registered on e-Way Bill Portal.

• 19,796 transporters, who are not registered

under GST, have enrolled themselves on the e-

Way Bill Portal.

• More than 13.3 million e-Way Bills have been

successfully generated till 17 April 2018.

• More than 0.6 million e-Way Bills have been

generated between 15 to 17 April 2018.

• The Central helpdesk of GST has made special

arrangements with 100 agents exclusively

dedicated to answer queries related to e-Way

Bills.

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GST Trends – April 2018

GST disclosure in income tax return forms

Income tax Return (ITR) forms have been released

for the first time after implementation of the GST

and GST has not failed to mark its impact on ITR.

Following forms would require disclosure of GST

related information:

ITR Form For Details

ITR 4 For Presumptive Income from Business and Profession

GSTR No. and turnover as per GST returns filed

ITR 3 Individuals and HUFs having income under the head business or profession

Detailed information of outward GST paid, Input Tax Credit (ITC) claimed, GST payable, GST accounts balances in books of accounts, etc.

ITR 5 For persons other than (i) individual (ii) HUF (iii) company and (iv) person filing Form ITR-7

ITR 6 For companies other than companies claiming exemption under Section 11

These measures taken by the government are aimed towards inter-departmental coordination, sharing of

information and anti-evasion measure.

This alert contains general information which is provided on an “as is” basis without warranties of any kind, express or implied and is not intended to address any part icular situat ion. The information contained herein may not be comprehensive and should not be construed as specif ic advice or opinion. This alert should not be subst ituted for any

professional advice or service, and it should not be acted or relied upon or used as a basis for any decision or act ion that may af fect you or your business. I t is also expressly clarif ied that this alert is not intended to be a form of solicitat ion or invitat ion or advert isement to create any adviser -client relat ionship.

Whilst every ef fort has been made to ensure the accuracy of the information contained in this alert , the same cannot be guaranteed. We accept no liability or responsibility to any person for any loss or damage incurred by relying on the

information contained in this alert .

© 2018 SKP Business Consult ing LLP. All rights reserved.

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