GST is about to get a year old. And post discussions and reviews, the Central Government is set to introduce a total of 35 amendments. While the new amendments in addition to clearing the ambiguities will further refine the GST provisions. The key changes could be in provisions for composition scheme, reverse charge mechanism (RCM) and returns filing. Furthermore, the amendments would also clarify compensation process for manufacturers.
Reverse Charge Mechanism Applicability Extension
Reports suggest that one of the amendments could introduce provisions for bringing any transactions under RCM. This could first be introduced for the composition scheme.
The GST Council had however postponed tax liabilities under RCM till June 30. Presently unregistered suppliers are not liable to pay GST. Registered recipients are liable for paying GST on Goods or services or both availed from unregistered suppliers via RCM. However, new amendments will pave for insertion of composition scheme under the RCM mechanism for the unregistered supplies
Compensations Act Under GST
The GST (Compensation to States) Act, 2017 will go through a few updates to ensure clarity on refund process for export goods Manufacturers. “The amendment will bring in more clarity. Say, an automobile manufacturer is selling the car to an exporter, he would have paid cess on it. But, since it is meant to be exported, cess would need to be refunded. So, certain tweaking of the law is required…” said an official.
Amendments in Composition Scheme Threshold
The threshold limit under the composition scheme will also be increased. One of the amendments proposes Rs 2 crore annual turnover eligibility for taxpayers under composition scheme. This would be an increase of 50 lakhs on the present threshold limit. The amendment may also facilitate the supply of services up to Rs 5 lakh per year for composition taxpayers.
Last but not the least, Forward Charge Mechanism will continue to exist for taxation on government (state as well as centre) immovable properties rented by unregistered person. While RCM will be applicable for registered taxpayers renting fixed government property.
The final draft of the 35 amendments is being prepared. It would be presented in the Next 28th GST Council Meeting. Post the approval of the Union Cabinet, It would be introduced to the Floors during the Parliament’s Monsoon Session.
