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Year 2019 - 19 changes to expect in GST - CA. Keshav R Garg












Looking at the various issues being discussed by the GST council we expect following to happen in the year 2019.

S. No.
Brief
Details
1.
Formation of Central Authority for Advance Ruling
Central authority for Advance Ruling might get established to settle difference of opinion in various state level AAR. The decision towards this has been taken in recent GST Council meeting held on 22nd December 2018.

2.
GST Rate to settle at 15%
The GST Tax rate of 18% and 12% might get merged to one rate of 15%. This might come from the political compulsion of the ruling party as the opposition is strongly marketing the idea of one rate under GST.

3.
Simplification of Annual Return
Since the filing of annual return itself has been extended up to 30.06.2019 we can expect major simplification in the GSTR 9 and GSTR 9C return format. The issues relating to bifurcation of ITC in capital goods, inputs, input services or issues related to inward HSN or allowability of amendment at the time of filing of annual return might get introduced.

4.
New monthly Return Filing structure
The new return filing structure as put up by Nandan Nilekani Committee might get introduced from 01.04.2019. Under Phase 1 the purchaser would be able to amend data filed by supplier but in phase 2 to be implemented from 01.10.2019 such correction by the inward supplier may not be allowed.

5.
Notifying the amendments to law as passed by Amendment Act dated 29.08.2018

The government may notify the applicability of amended provisions as per the Amendment Act given assent by president on 29.08.2018.
6.
Simplification of E-way Bill
We can expect further simplification of e-way bills in terms of cancellation, updating vehicle number and introduction of tagging system for monitoring the movement of goods.

7.
Assessment Proceedings to be initiated by the Department
Since it is expected that first annual return under GST shall be filed in the year 2019. The provisions relating to assessment/inspections and prosecutions might get life and enforced by the department based upon such annual return.

8.
Reduction in rate of Cement and Auto Parts
With pressure building up, the council may near to general election can reduce the rates of cement, auto parts, AC, dishwasher from 28% to lower slab rate.

9.
Composition scheme for Service Providers
As the government is mulling over to bring service industry at par with goods, the decision regarding composition scheme in service sector might come soon. This will certainly bring relief to the small scale service providers.

10.
Amendment in Section 50
The government might bring amendment in section 50 of the CGST Act 2017 and other acts respectively for levy of interest only on the cash liability of the taxpayer after utilisation of input tax credit. At present the interest is charged on the gross liability of the taxpayer instead of net cash liability.

11.
Full Automation of refund process
As decided by the GST Council, a trial run is being initiated for fully automated refund mechanism, we can expect the same to be implemented in full force by the end of 2019. This shall reduce the manual intervention, making it easy for both the parties.

12.
Increase in GST Threshold limit to Rs. 50 lakhs
As the GOM is proposing Rs. 75 lakhs as minimum threshold limit for GST Registration, we can expect the things to settle at Rs. 50 lakhs. But as per our view, more is the minimum threshold, tax evasion would increase more.

13.
Introduction of common ledger for payment of tax.
We can expect the introduction of common ledger for payment from where the amount can be adjusted towards various heads of Electronic Cash Ledger. This shall safeguard the taxpayer from depositing the tax under wrong heads saving him from unnecessary procedural complications.

14.
Digital Wallet for the exporters.
A idea of past might get enforced during 2019. The concept of e-wallet for the exporters might get implemented. This shall ease the procedures for the exporters while claiming refund. Also the gap between the export and refund will get reduced by implementing the Digital Wallet.

15.
Budgetary support might get allowed for addition of products.
The department and taxpayers had been in a tussle with respect to the budgetary support on the addition of products made by the exempted unit. We can expect a detailed circular in this regards to settle the actual proposition. Also looking at various judgments we can expect the matter will get settled in 2019.

16.
Further extension in date for filing Annual Return.
The date for annual return had already been extended to 30.06.2019. Since new government after general elections is likely to be formed by end of May 2019, we can expect the further extension of due dates for filing of annual return. Also we can expect the single annual return for FY 2017-18 and FY 2018-19. We expect that date might get further extended to 31.12.2019 looking at income tax returns and audit due on 31.07.2019 & 30.09.2019 respectively.

17.
Suitable amendment to struck down Columbia Asia Hospital judgment
The GST Council might examine the judgment in case of Columbia Asia Hospitals Private Limited. We can expect a suitable amendment in the law to clear the concept of distinct person as per section 25(4) of the act. The judgment has created an issue pertaining to employee cost being borne by head office for rendering of services to branch offices.

18.
Introduction of separate billing to unbundle services in cases involving exempt & taxable supply
The concept of twin billing in case of healthcare/education industry might get introduced. In order to ensure that the tax benefits are passed onto the consumers, government had been mulling over the idea of unbundling the exempt and taxable services specially in healthcare industry. In this regards suitable amendment might come to further elaborate the concept of composite supply under GST.

19.
Enforcement of Reverse Charge on purchases from unregistered person.
The necessary provision to plug the tax leakage might get enforced. The provisions of reverse charge on purchases made from unregistered person might get life. The section 9(4) [CGST Act 2017} & 5(4) [IGST Act 2017] had been deferred since the appointed date. If the same party comes back to rule after 2019 general elections, the provision snoozing since long might wake up immediately.

The above expectations are based upon our understanding and knowledge of GST Law. We shall not be responsible for any loss/gain which might arise to any person forming opinion based upon our expectation. Readers are advised to conduct their own due diligence and study before framing opinion based upon our study.
Regards

CA. Keshav R Garg
(B.Com, FCA, CS, ISA(ICAI))
Author: Bharat's GST Ready Reckoner
            A Handbook on GST

Member: Indirect Tax Committee of CII, 
Founder: MyGst.MyTax Foundation
Adviser: Industries Association of Chandigarh
Adviser: Chambers of Chandigarh Industries

Address: 3328, First Floor, Sector 27 D, Chandigarh, India - 160 019
Phones: +91-172-461-3328, +91-98880-90008


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