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11 January 2020

Recent Amendments in GST Provisions

Recently, Government of India has issued some notifications and clarifications to bring amendment in current provisions, which are summarized as below:

Restriction on ITC on invoices not reflecting in GSTR-2A reduced from 20% to 10%  ITC can be availed by the recipient of supply in case of invoice or debit note, the details of which is not uploaded by the supplier in the GSTR-1 has been reduced from  20% to 10%  of the eligible ITC, the details of which have been reflected in GSTR 2A. via NN 75/2019-CT.
Restrictions on use of ITC available in the electronic credit ledger  Rule 86A via NN 75/2019-CT
The said rule put restrictions on use of ITC available in the electronic credit ledger of recipients in certain cases. The restriction can be imposed for 1 year by proper authority not below the rank of an Assistant Commissioner in case ITC has been fraudulently availed or is ineligible. The restriction can be withdrawn if they will be satisfied that the condition subject to which the restriction was imposed has no longer existed. In following cases, the restriction can be imposed.
 
(a) (i) Supplier does not exist or not conducting any business from its registered place; or
(ii) Without receipt of goods or services or both; or
(b) Tax charged has not been paid to the government; or
(c)  Recipient does not exist or not conducting any business from its registered place; or
(d) Recipient is not in possession of tax invoice, debit note or any other document prescribed under rule 36. 
Lease of land service provided by government or any other entity in which the govt. has ownership of 20% or more. 
Entry 41 of exemption notification has earlier states that where the government or any other entity in which the government has 50% or more ownership providing long term lease of 30 years or more of a industrial plot or plots for development of infrastructure for financial business to Industrial units is exempt from payment of GST.
W.e.f. 01.01.2020, via NN-28/2019 CT (Rate) the ownership of the government in the entity shall be reduced to 20% or more and subject to the following conditions.
 
a) Lease land should be used for industrial or financial activity in an industrial or financial business area.
b) State Government shall monitor and enforce the above condition. 
c) In case of any violation or subsequent change of land use, the parties to the said agreement shall be jointly and severally liable to pay GST along with interest and penalty. 
d) Any Lease agreement or sale agreement entered into for lease or sale of such plots shall incorporate in its terms and conditions, the fact that the central tax was exempted on long term lease of the plots subject to above condition and that the parties to the said agreements undertake to comply with the same.
RCM on Renting of motor vehicle amended via NN 29/2019- CT (Rate).  RCM on renting of motor vehicle was made applicable vide NN 22/2019- CT (Rate) dated 30.09.2019.
For better understanding in the above provision an amendment has been made via NN 29/2019- CT (Rate) along with clarification in circular no. F.No.354/189/2019-TRU dated 31.12.2019 which states that RCM shall be applicable on the service by way of renting of any motor vehicle designed to carry passengers where the cost of fuel is included in the consideration charged from the service recipient only if the supplier fulfils all the following conditions:-
(a) is other than a body-corporate; 
(b) does not issue an invoice charging GST @12% from the service recipient;
(c) supplies the service to a body corporate.

Wavier of late fee on GSTR-1 vide NN 74/2019-CT & 04/2020-CT The late fee has been waived off for not filling of GSTR-1 for the month/quarter from July, 2017 to Nov, 2019 if the same has been furnished from 19th Dec, 2019 to 17th Jan, 2020.