LATEST AMENDMENTS TO CGST RULES

Vide Notification No. 21/2018-Central Tax, dated 18.04.2018 the Central Government made the amendments to the Central Goods and Services Tax Rules, 2017, which is called as ‘Central Goods and Services Tax (Fourth Amendment) Rules, 2018.

Amendment to Rule 89

Rule 2(i) proposed to substitute new rule for Rule 89(5).  The newly substituted rule provides that in case of refund on account of inverted duty structure, refund of input tax credit shall be granted as per the following formula-

Maximum Refund Amount = {(Turnover of inverted rate supply of goods and services) x Net

ITC / Adjusted Total turnover} – tax payable on such inverted rate

Supply of goods and services.

The explanation to the rules defines the expression ‘Net ITC’ and ‘Adjusted Total Turnover’.  The express ‘Net ITC’ means input tax credit availed on inputs during the relevant period other than the input tax credit availed for which refund is claimed under sub rules (4A) or (4B) or both. The expression ‘Adjusted Total Turnover’ means the turnover in a State or a Union territory, as defined under clause (112) of section 2, excluding –

• the value of exempt supplies other than zero-rated supplies and
• the turnover of supplies in respect of which refund is claimed under sub rules (4A) or (4B) or both, if any, during the relevant period;

Amendment to Rule 97

Rule 2(ii) substituted Rule 97 which deals with Consumer Welfare Fund (‘Fund’ for short).

Credit to the Fund

The newly substituted Rule 97 (1) provides that all amounts of duty/central tax/integrated tax/Union territory tax/cess and income from investment along with other monies as specified below shall be credited to the fund-

• Section 12C(2) of Central Excise Act, 1944 – This section dealt with the Consumer welfare fund.  This section provides that there shall be credited to the Fund, in such manner as may be prescribed-

•  the amount of duty of excise referred to in section 11B (2) or section 11C (2) orsection 11D (2);
•  the amount of duty of customs referred to insection 27 (2) orsection 28A (2), orsection 28B(2) of the Customs Act, 1962;
• any income from investment of the amount credited to the Fund and any other monies received by the Central Government for the purposes of this Fund.
• the surplus amount referred to section 73A (6)of the Finance Act, 1994.

• Section 57 of CGST Act read with section 20 of IGST Act, 2017 – This section provides that the following shall be credited to the Consumer Welfare Fund-

• the amount referred to insection 54 (4);
•  any income from investment of the amount credited to the Fund; and
• such other monies received by it,

Section 20 of IGST Act, 2017 provides that the provisions of CGST Act are applicable to IGST Act also.

• Section 21 of UTGST Act, 2017 -  This section provides that the provisions of CGST Act are applicable to UTGST Act, 2017.
• Section 12 of the Goods and Services Tax (Compensation to States) Act, 2017.

Further an amount equivalent to 50% of the amount of integrated tax determined under section 54(4) of CGST Act, 2017 read with Section 20 of IGST Act, 2017 shall be deposited to the Fund.

Repayment

Where any amount, having been deposited to the Fund, is ordered or directed to be paid to any claimant by the proper officer, appellate authority or court, the same shall be paid from the Fund.

Audit

The Accounts of the Fund maintained by the Central Government shall be subject to audit by the Comptroller and Auditor General of India.

Standing Committee

The Government shall, by an order, constitute a committee called as Standing Committee.  The Committee shall have a Chairman, Vice Chairman, a Member Secretary and such other members as it may deem fit.  The Committee shall make recommendations for proper utilization of the money credited to the Fund for welfare of the consumers.

Meeting of the Committee

The provisions relating to the meeting of the Committee are as follows-

• The Committee shall meet as and when necessary, generally four times in a year.
• The Committee shall meet at such time and place as the Chairman or in his absence by the Vice Chairman.
• The meeting of the Committee shall be presided over by the Chairman or in his absence by the Vice Chairman.
• The meeting shall be called, after giving at least 10 days’ notice in writing to every member.
• The notice of the meeting shall specify the place, date and hour of the meeting and shall contain statement of business to be transacted thereat.
• No proceedings shall be valid, unless it is presided over by the Chairman or Vice Chairman and attended by a minimum of three other members.

Powers of the Committee

The Committee shall have the following powers-

• to require any applicant to get registered with any authority as the Central Government may specify;
• to require any applicant to produce before it, or before a duly authorized officer of the Central Government or the State Government, as the case may be, such books, accounts, documents, instruments or commodities in the custody and control of the applicant, as may be necessary for proper evaluation of the application;
• to require any applicant to allow entry and inspection of any premises, from which activities claimed to be for the welfare of consumers are stated to be carried on, to a duly authorized officer of the Central Government or the State Government;
• to get the accounts of the applicants audited, for ensuring proper utilization of the grant;
• to require any applicant, in case of any default, or suppression of material information on his part, to refund in lump sum with accrued interest, the sanctioned grant to the Committee, and to be subject to prosecution under the Act;
• to recover any sum due from any applicant;
• to require any applicant or class of applicants to submit a periodical report, indicating proper utilization of the grant;
• to reject an application placed before it on account of factual inconsistency or inaccuracy in material particulars;
• to recommend minimum financial assistance, by way of grant to an applicant, having regard to his financial status, and importance and utility of the nature of activity under pursuit, after ensuring that the financial assistance provided shall not be misutilized;
• to identify beneficial and safe sectors, where investments out of Fund may be made, and make recommendations accordingly;
• to relax conditions required for the period of engagement in consumer welfare activities of an applicant;
• to make guidelines for the management, and administration of the fund.

The Committee shall not consider an application, unless it has been required into, in material details and recommended for consideration accordingly, by the Member Secretary.

Who is an applicant?

The term ‘applicant’ means-

• the Central Government or State Government;
• regulatory authorities or autonomous bodies constituted under an Act of Parliament or the Legislature of a State or Union Territory;
• any agency or organization engaged in consumer welfare activities for a minimum period of three years, registered under the Companies Act, 2013 or any other law for the time being in force;
• village or mandal or samiti or samiti level co-operatives of consumers especially Women, Scheduled Castes and Scheduled Tribes;
• an Educational or research institution incorporated by an Act of Parliament or the Legislature of a State or Union Territory in India or other educational institutions established by an Act of Parliament or declared to be deemed as a University under section 3 of the University Grants Commission Act, 1956 and which has consumers studies as part of its curriculum for a minimum period of 3 years; and
• a complainant as defined under section 2(1)(b) of the Consumer Protection Act, 1986 who applies for reimbursement of legal expenses incurred by him in a case instituted by him ina consumer dispute redressal agency.

Recommendations of the Committee

The Committee shall make recommendations-

• for making available grants to any applicant;
• for investment of money available in the Fund;
• for making available grants for reimbursing legal expenses incurred by a complainant, or class of complainants in a consumer dispute, after its final adjudication;
• for making available grants for any other purpose recommended by the Central Consumer Protection Council;
• for making available up to 50% of the funds credited to the Fund each year, for publicity/consumer awareness on GST, provided the availability of funds for consumer welfare activities of the Department of Consumer Affairs is not less than ₹ 25 crores per annum.

Amendment in Form GST ITC – 03

Rule 2(iii) substitutes a new instruction against the existing instruction after entry 5(e) of the ITC – 03.  The newly substituted instruction states that the value of capital goods shall be the invoice value reduced by 1/60^th per month or part thereof from the date of invoice.

Insertion of Form GSTR – 10

Rule 2(iv) proposed to insert the new form GSTR -10 after Form GSTR – 8.  This new form is created under Rule 81 which deals with the filing of Final Return.

Substitution of Form GST DRC – 07

Rule 2(v) proposed to substitute a new form for the existing GST DRC – 07 under rule 142(5) which deals with the summary of the order passed.