MINISTRY OF LAW AND
JUSTICE
(Legislative Department)
New Delhi, the 30th August, 2018/Bhadrapada 8, 1940 (Saka)
The following Act of Parliament received the assent of the President on the 29th
August, 2018, and is hereby published for general information:—
THE CENTRAL GOODS AND SERVICES TAX
(AMENDMENT)
ACT, 2018
(NO. 31 OF 2018)
[29th August, 2018]
An Act further to amend the Central Goods and
Services Tax Act, 2017.
BE it enacted by Parliament in the Sixty-ninth Year of the
Republic of India as follows:—
Short title and commencement
1. (1) This Act may be called the Central Goods and Services Tax
(Amendment) Act, 2018.
(2) Save as otherwise provided, the
provisions of this Act shall come into force on such date as the Central
Government may, by notification in the Official Gazette,
appoint:
Provided that different dates may be appointed for different provisions of this
Act and any reference in any such provision to the commencement of this Act
shall be construed as a reference to the coming into force of that provision.
Amendment of section 2.
2. In
section 2 of the Central Goods and Services Tax Act, 2017 (hereinafter
referred to as the principal Act),––
(a) in clause (4),––
(i)
for the words “Central Board of Excise and Customs”, the words “Central Board of
Indirect Taxes and Customs” shall be substituted;
(ii) for the words “the Appellate Authority and the Appellate Tribunal”, the
words, brackets and figures “the Appellate Authority, the Appellate Tribunal and
the
Authority referred to in sub-section (2) of
section 171” shall be
substituted;
(b) in clause (17), for sub-clause (h), the
following sub-clause shall be substituted, namely:—
“(h)
activities of a race club including by way of totalisator or a license to book
maker or activities of a licensed book maker in such club; and”;
(c) clause (18) shall be omitted;
(d) in clause (35), for the word, brackets and letter “clause (c)”, the word,
brackets and letter “clause (b)” shall be substituted;
(e) in clause (69), in sub-clause (f), after the word and figures “article 371”,
the words, figures and letter “and article 371J” shall be inserted;
(f) in clause (102), the following Explanation shall be inserted, namely:––
‘Explanation.––For the removal of doubts, it is hereby clarified that the
expression “services” includes facilitating or arranging transactions in
securities;’.
Amendment of section 7.
3. In
section 7 of the principal Act, with effect from the 1st day of July,
2017,––
(a) in sub-section (1), ––
(i) in clause
(b), after the words “or furtherance of business;”, the word “and” shall be
inserted and shall always be deemed to have been inserted;
(ii) in
clause (c), after the words “a consideration”, the word “and” shall be omitted
and shall always be deemed to have been omitted;
(iii) clause
(d) shall be omitted and shall always be deemed to have been omitted;
(b) after sub-section (1), the following sub-section shall be
inserted and shall always be deemed to have been inserted, namely:––
“(1A) where certain activities or
transactions constitute a supply in accordance with the provisions of
sub-section (1), they shall be treated either as supply of goods or supply of
services as referred to in Schedule II.”;
(c) in sub-section (3), for the words, brackets and figures
“sub-sections (1) and (2)”, the words, brackets, figures and letter
“sub-sections (1), (1A) and (2)” shall be substituted.
Amendment of section 9.
4. In
section 9 of the principal Act, for sub-section (4), the following
sub-section shall be substituted, namely:––
“(4) The Government may, on the
recommendations of the Council, by notification, specify a class of registered
persons who shall, in respect of supply of specified categories of goods or
services or both received from an unregistered supplier, pay the tax on reverse
charge basis as the recipient of such supply of goods or services or both, and
all the provisions of this Act shall apply to such recipient as if he is the
person liable for paying the tax in relation to such supply of goods or services
or both.”.
Amendment of section 10.
5. In
section 10 of the principal Act,—
(a) in sub-section (1) —
(i) for the
words “in lieu of the tax payable by him, an amount calculated at such rate”,
the words, brackets and figures “in lieu of the tax payable by him under
sub-section (1) of section 9, an amount of tax calculated at such rate” shall be
substituted;
(ii) in the
proviso, for the words “one crore rupees”, the words “one crore and fifty lakh
rupees” shall be substituted;
(iii) after
the proviso, the following proviso shall be inserted, namely:––
“Provided further that a person who opts to pay tax under clause (a) or clause
(b) or clause (c) may supply services (other than those referred to in clause
(b) of paragraph 6 of Schedule II), of value not exceeding ten per cent. of
turnover in a State or Union territory in the preceding financial year or five lakh rupees, whichever is higher.”;
(b) in sub-section (2), for clause (a), the following clause
shall be substituted, namely:––
“(a) save as
provided in sub-section (1), he is not engaged in the supply of services;”.
Amendment of section 12.
6. In section 12 of the principal Act, in sub-section (2), in clause (a), the
words, brackets and figure “sub-section (1) of ” shall be omitted.
Amendment of section 13.
7. In section 13 of the principal Act, in sub-section (2), the words, brackets
and figure “sub-section (2) of ” occurring at both the places, shall be omitted.
Amendment of section 16.
8. In section 16 of the principal Act, in sub-section (2),––
(a) in clause (b), for the
Explanation, the following Explanation shall be substituted, namely:—
“Explanation.—For the purposes of this clause, it shall be deemed that the
registered person has received the goods or, as the case may be, services––
(i) where the
goods are delivered by the supplier to a recipient or any other person on the
direction of such registered person, whether acting as an agent or
otherwise,
before or during movement of goods, either by way of transfer of documents of
title to goods or otherwise;
(ii) where
the services are provided by the supplier to any person on the direction of and
on account of such registered person.”;
(b) in clause (c), for the word and
figures “section 41”, the words, figures and letter “section 41 or section 43A”
shall be substituted.
Amendment of section 17.
9. In section 17 of the principal Act,––
(a) in sub-section (3), the following
Explanation shall be inserted, namely:––
‘Explanation.—For the purposes of this sub-section, the expression ‘‘value of
exempt supply’’ shall not include the value of activities or transactions
specified in Schedule III, except those specified in paragraph 5 of the said
Schedule.’;
(b) in sub-section (5), for clauses
(a) and (b), the following clauses shall be substituted, namely:—
“(a) motor vehicles for transportation of persons having approved seating
capacity of not more than thirteen persons (including the driver), except when
they are used for making the following taxable supplies, namely:—
(A) further supply of such motor
vehicles; or
(B) transportation of passengers; or
(C) imparting training on driving
such motor vehicles;
(aa) vessels and aircraft except when they are used––
(i) for
making the following taxable supplies, namely:—
(A) further supply of such vessels or aircraft; or
(B) transportation of passengers; or
(C) imparting training on navigating such vessels; or
(D) imparting training on flying such aircraft;
(ii) for
transportation of goods;
(ab) services of general insurance,
servicing, repair and maintenance in so far as they relate to motor vehicles,
vessels or aircraft referred to in clause (a) or clause (aa):
Provided that the input tax credit in respect of such services shall be
available—
(i) where the motor vehicles, vessels or aircraft referred to in clause (a) or
clause (aa) are used for the purposes specified therein;
(ii) where received by a taxable person engaged—
(I) in the manufacture of such motor vehicles, vessels or aircraft; or
(II) in the supply of general insurance services in respect of such motor
vehicles, vessels or aircraft insured by him;
(b) the following supply of goods or
services or both—
(i) food and beverages, outdoor catering, beauty treatment, health services,
cosmetic and plastic surgery, leasing, renting or hiring of motor vehicles,
vessels or aircraft referred to in clause (a) or clause (aa) except when used
for the purposes specified therein, life insurance and health insurance:
Provided that the input tax credit in respect of such goods or services or both
shall be available where an inward supply of such goods or services or both is
used by a registered person for making an outward taxable supply of the same
category of goods or services or both or as an element of a taxable composite or
mixed supply;
(ii)
membership of a club, health and fitness centre; and
(iii) travel
benefits extended to employees on vacation such as leave or home travel
concession:
Provided that the input tax credit in respect of such goods or services or both
shall be available, where it is obligatory for an employer to provide the same
to its employees under any law for the time being in force.”.
Amendment of section 20.
10. In section 20 of the principal
Act, in the Explanation, in clause (c), for the words and figures “under entry
84,”, the words, figures and letter “under entries 84 and 92A” shall be
substituted.
Amendment of section 22.
11. In section 22 of the principal Act,––
(a) in sub-section (1), after the
proviso, the following proviso shall be inserted, namely:—
“Provided further that the Government may, at the request of a special category
State and on the recommendations of the Council, enhance the aggregate turnover
referred to in the first proviso from ten lakh rupees to such amount, not
exceeding twenty lakh rupees and subject to such conditions and limitations, as
may be so notified.";
(b) in the Explanation, in clause
(iii), after the words “State of Jammu and Kashmir”, the words “and States of
Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand”
shall be inserted.”.
Amendment of section 24.
12. In section 24 of the principal Act, in clause (x), after the words “commerce
operator”, the words and figures “who is required to collect tax at source under
section 52” shall be inserted.
Amendment of section 25.
13. In section 25 of the principal Act,––
(a) in sub-section (1), after the proviso and before the
Explanation, the following proviso shall be inserted, namely:––
“Provided further that a person
having a unit, as defined in the Special Economic Zones Act, 2005, in a Special
Economic Zone or being a Special Economic Zone developer shall have to apply for
a separate registration, as distinct from his place of business located outside
the Special Economic Zone in the same State or Union territory.";
(b) in sub-section (2), for the proviso, the following
proviso shall be substituted, namely:––
"Provided that a person having
multiple places of business in a State or Union territory may be granted a
separate registration for each such place of business, subject to such
conditions as may be prescribed.".
Amendment of section 29.
14. In section 29 of the principal Act,––
(a) in the marginal heading after the word “Cancellation”,
the words “or suspension” shall be inserted;
(b) in sub-section (1), after clause (c), the following
proviso shall be inserted, namely:—
“Provided that during pendency of the
proceedings relating to cancellation of registration filed by the registered
person, the registration may be suspended for such period and in such manner as
may be prescribed.”;
(c) in sub-section (2), after the proviso, the following
proviso shall be inserted, namely:—
“Provided further that during
pendency of the proceedings relating to cancellation of registration, the proper
officer may suspend the registration for such period and in such manner as may
be prescribed.”.
Amendment of section 34.
15. In section 34 of the principal Act,––
(a) in sub-section (1),––
(i) for the words “Where a tax
invoice has”, the words “Where one or more tax invoices have” shall be
substituted;
(ii) for the words “a credit note”,
the words “one or more credit notes for supplies made in a financial year” shall
be substituted;
(b) in sub-section (3),––
(i) for the words “Where a tax
invoice has”, the words “Where one or more tax invoices have” shall be
substituted;
(ii) for the words “a debit note”,
the words “one or more debit notes for supplies made in a financial year” shall
be substituted.
Amendment of section 35.
16. In section 35 of the principal Act, in sub-section (5), the following
proviso shall be
inserted, namely:—
“Provided
that nothing contained in this sub-section shall apply to any department of the
Central Government or a State Government or a local authority, whose books of
account are subject to audit by the Comptroller and Auditor-General of India or
an auditor appointed for auditing the accounts of local authorities under any
law for the time being in force.”.
Amendment of section 39.
17. In section 39 of the principal Act,––
(a) in sub-section (1),––
(i) for the words “in such form and
manner as may be prescribed”, the words “in such form, manner and within such
time as may be prescribed” shall be substituted;
(ii) the words “on or before the
twentieth day of the month succeeding such calendar month or part thereof ”
shall be omitted;
(iii) the following proviso shall be
inserted, namely:—
“Provided
that the Government may, on the recommendations of the Council, notify certain
classes of registered persons who shall furnish return for every quarter or part
thereof, subject to such conditions and
safeguards as may be specified therein.”;
(b) in sub-section (7), the following proviso shall be inserted,
namely:––
“Provided
that the Government may, on the recommendations of the Council, notify certain
classes of registered persons who shall pay to the Government the tax due or
part thereof as per the return on or before the last date on which he is
required to furnish such return, subject to such conditions and safeguards as
may be specified therein.”;
(c) in sub-section (9),––
(i) for the words "in the return to
be furnished for the month or quarter during which such omission or incorrect
particulars are noticed", the words "in such form and manner as may be
perscribed" shall be substituted;
(ii) in the proviso, for the words “the end of the financial year”, the words
“the end of the financial year to which such details pertain” shall be
substituted. .
Insertion of new section 43A.
18. After section 43 of the principal Act, the following section shall be
inserted, namely:—
Procedure for furnishing return and
availing input tax credit.
“43A. (1) Notwithstanding anything
contained in sub-section (2) of section 16,
section 37 or
section 38, every
registered person shall in the returns furnished under sub-section (1) of
section 39 verify, validate, modify or delete the details of supplies furnished
by the suppliers.
(2) Notwithstanding anything
contained in section 41,
section 42 or
section 43, the procedure for availing of
input tax credit by the recipient and verification thereof shall be such as may
be prescribed.
(3) The procedure for furnishing the
details of outward supplies by the supplier on the common portal, for the
purposes of availing input tax credit by the recipient shall be such as may be
prescribed.
(4) The procedure for availing input
tax credit in respect of outward supplies not furnished under sub-section (3)
shall be such as may be prescribed and such procedure may include the maximum
amount of the input tax credit which can be so availed, not exceeding twenty per
cent. of the input tax credit available, on the basis of details furnished by
the suppliers under the said sub-section.
(5) The amount of tax specified in
the outward supplies for which the details have been furnished by the supplier
under sub-section (3) shall be deemed to be the tax payable by him under the
provisions of the Act.
(6) The supplier and the recipient of
a supply shall be jointly and severally liable to pay tax or to pay the input
tax credit availed, as the case may be, in relation to outward supplies for
which the details have been furnished under sub-section (3) or sub-section (4)
but return thereof has not been furnished.
(7) For the purposes of sub-section
(6), the recovery shall be made in such manner as may be prescribed and such
procedure may provide for non-recovery of an amount of tax or input tax credit
wrongly availed not exceeding one thousand rupees.
(8) The procedure, safeguards and
threshold of the tax amount in relation to outward supplies, the details of
which can be furnished under sub-section (3) by a
registered person,—
(i) within
six months of taking registration;
(ii) who has
defaulted in payment of tax and where such default has continued for more than
two months from the due date of payment of such defaulted amount, shall be such
as may be prescribed.”.
Amendment of section 48.
19. In section 48 of the principal Act, in sub-section (2), after the word and
figures “section 45”, the words “and to perform such other functions” shall be
inserted.
Amendment of section 49.
20. In section 49 of the principal Act,––
(a) in sub-section (2), for the word and figures “section
41”, the words, figures and letter “section 41 or section 43A” shall be
substituted;
(b) in sub-section (5),––
(i) in clause (c), the following
proviso shall be inserted, namely:––
“Provided
that the input tax credit on account of State tax shall be utilised towards
payment of integrated tax only where the balance of the input tax credit on
account of central tax is not available for payment of integrated tax;”;
(ii) in clause (d), the following
proviso shall be inserted, namely:––
“Provided
that the input tax credit on account of Union territory tax shall be utilised
towards payment of integrated tax only where the balance of the input tax credit
on account of central tax is not available for payment of integrated tax;”.
Insertion of new sections 49A and 49B.
21. After section 49 of the principal Act, the following sections shall be
inserted, namely:––
Utilisation of input tax credit subject
to certain conditions.
“49A. Notwithstanding anything
contained in section 49, the input tax credit on account of central tax, State
tax or Union territory tax shall be utilised towards payment of integrated tax,
central tax, State tax or Union territory tax, as the case may be, only after
the input tax credit available on account of integrated tax has first been
utilised fully towards such payment.
Order of utilisation of input tax
credit.
"49B. Notwithstanding anything
contained in this Chapter and subject to the provisions of clause (e) and clause
(f) of sub-section (5) of section 49, the Government may, on the recommendations
of the Council, prescribe the order and manner of utilisation of the input tax
credit on account of integrated tax, central tax, State tax or Union territory
tax, as the case may be, towards payment of any such tax.”.
Amendment of section 52.
22. In section 52 of the principal Act, in sub-section (9), for the word and
figures “section 37”, the words and figures “section 37 or
section 39” shall be
substituted.
Amendment of section 54.
23. In section 54 of the principal Act,—
(a) in sub-section (8), in clause (a), for the words
“zero-rated supplies”, the words "export" and "exports" shall respectively be
substituted;
(b) in the Explanation, in clause (2),––
(i) in sub-clause (c), in item (i),
after the words “foreign exchange”, the words “or in Indian rupees wherever
permitted by the Reserve Bank of India” shall be inserted;
(ii) for sub-clause (e), the
following sub-clause shall be substituted, namely:––
“(e) in the
case of refund of unutilised input tax credit under clause (ii) of the first
proviso to sub-section (3), the due date for furnishing of return under section
39 for the period in which such claim for refund arises;”.
Amendment of section 79.
24. In section 79 of the principal Act, after sub-section (4), the following
Explanation shall be inserted, namely:—
‘Explanation.––For the purposes of this section, the word
person shall include “distinct persons” as referred to in sub-section (4) or, as
the case may be, sub-section (5) of section 25.’.
Amendment of section 107.
25. In section 107 of the principal Act, in sub-section (6), in clause (b),
after the words “arising from the said order,”, the words “subject to a maximum
of twenty-five crore rupees,” shall be inserted.
Amendment of section 112.
26. In section 112 of the principal Act, in sub-section (8), in clause (b),
after the words “arising from the said order,” the words “subject to a maximum
of fifty crore rupees,” shall be inserted.
Amendment of section 129.
27. In section 129 of the principal Act, in sub-section (6), for the words
“seven days”, the words “fourteen days” shall be substituted.
Amendment of section 140.
28. In section 140 of the principal Act, with effect from the 1st day of July,
2017,––
(a) in sub-section (1), after the letters and word “CENVAT
credit”, the words “of eligible duties” shall be inserted and shall always be
deemed to have been inserted;
(b) in the Explanation 1—
(i) for the word, brackets and
figures “sub-sections (3), (4)”, the word, brackets and figures “sub-sections
(1), (3), (4)” shall be substituted and shall always be deemed to have been
substituted;
(ii) clause (iv) shall be omitted and
shall always be deemed to have been omitted;
(c) in the Explanation 2—
(i) for the word, brackets and figure
“sub-section (5)”, the words, brackets and figures “sub-sections (1) and (5)”
shall be substituted and shall always be deemed to have been substituted;
(ii) clause (iv) shall be omitted and
shall always be deemed to have been omitted;
(d) after Explanation 2 as so amended, the following
Explanation shall be inserted and shall always be deemed to have been inserted,
namely:—
‘Explanation
3.—For removal of doubts, it is hereby clarified that the expression “eligible
duties and taxes” excludes any cess which has not been specified in Explanation
1 or Explanation 2 and any cess which is collected as additional duty of customs
under sub-section (1) of section 3
of the Customs Tariff Act, 1975.’.
Amendment of section 143.
29. In section 143 of the principal Act, in sub-section (1), in clause (b),
after the proviso, the following proviso shall be inserted, namely:—
“Provided further that the period of
one year and three years may, on sufficient cause being shown, be extended by
the Commissioner for a further period not exceeding one year and two years
respectively.”.
Amendment of Schedule I.
30. In Schedule I of the principal Act, in paragraph 4, for the words “taxable
person”, the word “person” shall be substituted.
Amendment of Schedule II.
31. In Schedule II of the principal Act, in the heading, after the word
“ACTIVITIES”, the words “OR TRANSACTIONS” shall be inserted and shall always be
deemed to have been inserted with effect from the 1st day of July, 2017.
Amendment of Schedule III.
32. In Schedule III of the principal Act, —
(i) after paragraph 6, the following paragraphs shall be
inserted, namely:––
“7. Supply of goods from a place in
the non-taxable territory to another place in the non-taxable territory without
such goods entering into India.
8. (a) Supply of
warehoused goods to any person before clearance for home consumption;
(b) Supply of goods by the consignee to any other person, by endorsement of
documents of title to the goods, after the goods have been dispatched from the
port of origin located outside India but before clearance for home
consumption.”;
(ii) the Explanation shall be numbered as Explanation 1 and
after Explanation 1 as so numbered, the following Explanation shall be inserted,
namely:—
‘Explanation
2.––For the purposes of paragraph 8, the expression “warehoused goods” shall
have the same meaning as assigned to it in the Customs Act, 1962.’.
————
DR. REETA VASISHTA,
Additional Secretary to the Govt. of India.