GST changes applicable w.e.f. from 01.01.2020


GST changes applicable w.e.f. from 01.01.2020

Through this article, we shall discusses, the changes made by notification of certain sections in the Finance (No 2) Act, 2019 pertaining to CGST & IGST Act, effective from 1st January 2020.

Major amendments are as follows:

1. Amendment of section 10 of CGST Act (Composition Scheme)

a. As per the new explanation inserted, value of exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount shall not be taken into account for determining the value of turnover in a State or Union territory.

b. Casual taxable person and a non-resident taxable person also not eligible for composition scheme

2. Amendment of section 22 of CGST Act (Registration)

a. A proviso and an explanation has been inserted in section 22 of the CGST Act so as to provide for higher threshold exemption limit from Rs. 20 lakhs to such amount not exceeding Rs. 40 lakhs in case of supplier who is engaged in exclusive supply of goods.

b. An explanation has been inserted that a person shall be considered to be engaged exclusively in the supply of goods even if he is engaged in exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount.

3. Amendment of section 25 of CGST Act (Procedure of Registration)

Aadhaar authentication made mandatory for specified class of new taxpayers.

4. Amendment of section 49 of CGST Act (Payment of tax, interest, penalty and other amounts.)

Inter head / Intra head transfer facility

a. a registered person may, on the common portal, transfer any amount of tax, interest, penalty, fee or any other amount available in the electronic cash ledger under this Act, to the electronic cash ledger for integrated tax, central tax, State tax, Union territory tax or cess, in such form and manner and subject to such conditions and restrictions as may be prescribed and such transfer shall be deemed to be a refund from the electronic cash ledger under this Act.

b. Where any amount has been transferred to the electronic cash ledger under this Act, the same shall be deemed to be deposited in the said ledger.

5. Insertion of new section 17A of IGST Act 2017 (Transfer of certain amounts) :-

a. Where any amount has been transferred from the electronic cash ledger under this Act to the electronic cash ledger under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, the Government shall transfer to the State tax account or the Union territory tax account, an amount equal to the amount transferred from the electronic cash ledger, in such manner and within such time, as may be prescribed.

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