UNION BUDGET-2019

ANALYSIS OF INDIRECT TAXES

A Presentation by
CA. BRIJESH PITODA
M.COM, ACA
2

GOODS AND SERVICES TAX

3 Definition of Adjudicating Authority
[Amendment in Section 2(4)]

Existing At present, Adjudicating Authority” means

any authority, appointed or authorised to pass
any order or decision under this Act, but does
not include the Central Board of Excise and
Customs, the Revisional Authority, the
Authority for Advance Ruling, the Appellate
Authority for Advance Ruling, the Appellate
Authority and the Appellate Tribunal;

Proposed It is now Proposed to include “the National

Appellate Authority for Advance Ruling”
under the definition of Adjudicating Authority.
4
Constitution of National Appellate
Authority for Advance Rulings (‘NAAAR’)
• NAAAR is to be constituted with effect from such date as
may be notified
• An appeal can be filed before NAAAR in case of
conflicting advance rulings pronounced in two or more
States / Union Territories. Such appeals can be filed either
by an officer authorized by the Commissioner or by the
taxpayer
• Time limit for filing an appeal:
Appellant No. of days

Taxpayer Within 30 days* from the date the last conflicting

advance ruling is communicated to the
applicant
Officer authorized by Within 90 days* from the date the last conflicting
Commissioner advance ruling is communicated to the officer
5 Composition Scheme
[Amendment in Sec. 10(2) & consequential Insertion of Sec. 10 (2A)]

 At present, only Manufacturers or Dealers of goods,

and Restaurants (not serving alcohol) having annual
turnover up to Rs. 1.5 crores can opt for composition
scheme. Registered Person who is engaged in Supply
of Services (except Restaurants) are not eligible to opt
for Composition Scheme.
 Now, Separate composition scheme is introduced for
the taxpayers providing services, not eligible for the
existing composition scheme and having an annual
turnover up to Rs. 50 Lakhs in the preceding financial
year, subject to certain conditions – The scheme was
introduced w.e.f. 1 April 2019 vide Notification No.
2/2019 – Central Tax (Rate) dated 7 March 2019
6 Composition Scheme (Continue..)

Particulars Section 10(2) Section 10(2A)

Person eligible to opts Manufacturers or Traders Supplier of services or
for Composition of goods, and mixed suppliers of
Scheme Restaurants (not serving goods or services
alcohol)
Threshold aggregate Rs.1.5 crores in Rs.50 lakhs in
Turnover limit to opt preceeding financial preceeding financial
for Composition year year
Scheme

Turnover limit up to
which Composition Up to Rs. 1.5 crores Rs.50 lakhs
Scheme is applicable
7 Composition Scheme (Continue..)
Particulars Section 10(2) Section 10(2A)
a) Tax Rates for 1% (i.e. 0.5% CGST & SGST) NA
Manufactures &
Traders

b) Tax Rates for for 5% (i.e. 2.5% CGST & SGST) NA

Restaurants (not
serving alcohol)

c) Tax Rates for Supplier

of services or mixed NA 6% (i.e. 3% CGST & SGST)
suppliers of goods
or services

Value of taxable supplies +
Aggregate Turnover Exempt supplies + exports +
includes Inter-State suppliers on all
India basis having same PAN
Value of taxable
supplies + Exempt
supplies + exports +
Inter- State suppliers on
all India basis having
same PAN
 Particulars Section 10(2) Section 10(2A)
a) engaged in making non- a) engaged in making non-
8 taxable supply; taxable supply;

b) engaged in making any b) engaged in making any inter-

Person not inter-State outward supplies
eligible to opt of goods or services;
Composition
Scheme c) engaged in making any
supply of goods or services
through an electronic
commerce operator;
State outward supplies of
goods or services;
c) engaged in making any
supply of goods or services
through an electronic
commerce operator;

d) engaged in manufacturer d) engaged in manufacturer of

of notified goods; notified goods;

e) a casual taxable person or a e) a casual taxable person or a

Non- Resident taxable
person
f)
f) if all registered persons having
same PAN opt for payment
for Composition levy.
Non- Resident taxable person
if all registered persons having
same PAN opt for payment for
Composition levy.
 Notes: -
9

 For the purpose of applying composition scheme to any

registered taxable person, the aggregate turnover shall
include the value of supplies made by a person from 1st
April of a financial year upto the date he becomes
liable for registration under GST;

 Exempt supply shall not include supply of services by

way of extending deposits, loans or advances in so far
as the consideration is represented by way of interest or
discount.

 Above amendment shall come into force w.e.f. 1st April

2019 vide Notification No. 02/2019-Central Tax (Rate),
dated 7th March 2019.
10
Increase in the Threshold limit for obtaining
registration for exclusive supplier of goods
[Amendment in Section 22 (1)]
 Comparison of Threshold exemption limit for obtaining registration
by supplier of goods or services (other than special category
States) in the State or Union territory is tabulated as under: -

Person Engaged in the Existing Provisions Proposed Amendment

Business of

Supply of Goods only Rs. 20 Lakhs Up to Rs. 40 Lakhs

Supply of Service Only Rs. 20 Lakhs Rs. 20 Lakhs

 Note: - 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.
11 Amendment to Registration Procedure
[Amendment in section 25]

At Present, for obtaining Registration under GST Act, it is a

Existing pre requisite for the Applicant to hold PAN Card issued
under Income Tax Act.

It is now Proposed to make Aadhar authentication

mandatory for specified class of new taxpayers and to
prescribe the manner in which certain class of registered
taxpayers are required to undergo Aadhar
authentication.

Proposed It is also Proposed that in case where Aadhar number is

not assigned, the Government would offer alternate and
viable means of identification.

It is also Proposed that failure to undergo authorization

will render the allotted registration invalid.
12 Facility of digital payment by the recipient
[Insertion of Section 31A]

At present there is no specific mode of

payment prescribed in the Act in case of
Existing payment by recipient of goods or services
to supplier of goods or services.

It is now Proposed to provide that

specified class of suppliers shall make
available prescribed specified electronic
Proposed
mode of payment to recipient of supply of
goods or services for making payment.
 Amendment in Provisions related to furnishing
13 of Returns, payment of tax to align with new
return filing system [Amendment in Section 39]

Composition Taxpayer (i.e. Registered person paying tax

under Composition scheme under section 10 of the Act)

Particulars Existing Proposed

Periodicity of filing of Return of

Outwards Supplies and Inwards Quarterly Annually
supplies attracting Reverse Charges

Periodicity of Payment of Taxes Quarterly

 Commissioner empowered to issue
14 Extension Notification for Annual Return
& Reconciliation Statement
[Amendment in Section 44]
At present, every registered person other than specified
person shall be required to file Annual Return (i.e.
GSTR9/9A) and Reconciliation Statement (i.e. GSTR 9-C)
within due date as may be prescribed.
Existing
However, Commissioner has no power to extend due
date of furnishing of Annual Return (i.e. GSTR 9/9A) and
Reconciliation Statement (i.e. GSTR9-C) by registered
taxpayer.

It is now Proposed that to empower Commissioner to

extend due date of furnishing of Annual Return (i.e.
Proposed GSTR 9/9A) and Reconciliation Statement (i.e. GSTR9-C)
by registered taxpayer.
 Transfer of amount within head lying
15 in Electronic Cash ledger
[Amendment in Sec. 49 & consequential insertion of
Sec. 53A of CGST Act and Sec. 17A of IGST Act]

Existing At present, Registered person is not allowed to

transfer of amount of tax, interest, penalty or
any other amount lying in one head (i.e. CGST
or SGST or IGST) to other head internally, even
if there is sufficient cash balance lying in one
head and liability in other head at the same
time.
Proposed It is now Proposed to provide that registered
person shall be allowed to transfer any
amount of tax, interest, penalty, fee or any
other amount lying in Electronic Cash ledger
from one head to other head subject to
prescribed condition.
 Example:
16 Existing Proposed
Particulars Provision Amendment
Net CGST Tax Liability Rs. 1,000/- Rs. 1,000/-

Net SGST Tax Liability Rs. 1,000/- Rs. 1,000/-

IGST Balance as per Electronic Rs. 2,500/- Rs. 2,500/-

Cash Ledger
Amount Transferred from IGST
Electronic Cash Ledger to CGST NIL Rs. 1,000/-
Electronic Cash Ledger

Amount Transferred from IGST

Electronic Cash Ledger to SGST NIL Rs. 1,000/-
Electronic Cash Ledger

Final CGST and SGST Liability needs

to be paid by depositing amount in Rs. 2,000/- NIL
Electronic Cash Ledger
17

Proposed It is also Proposed that transfer of any amount lying

in electronic cash Ledger from one head to other
head shall be deemed to be a refund from
electronic cash ledger.

It is also Proposed that any amount lying in

electronic cash ledger transferred from one head
to another head shall be deemed to be deposited
in the said electronic cash ledger.

It is also Proposed that due to amendment in

section 49 of the Act by allowing transfer of any
amount from one head to another head in the
electronic cash ledger, Government shall transfer
amount, equal to any amount transferred from one
head to another head from electronic cash ledger
between Centre and State.
 Interest on delayed payment of tax
18 [Amendment in section 50]
Existing
At present, interest is being charged on gross tax liability without deducting
any input tax credit.
Many taxpayers are getting notices from the GST Department regarding
late filing of return. The GST Department is charging interest on gross tax
liability and charging heavy penalty on the same.
The GST Council in its 31st meeting on December 22, 2018 recommended
changing the law to provide that interest should be charged only on the
net liability of a taxpayer, after taking into account the admissible input tax
credit. However, The Telangana High Court in the case of “M/s. Megha
Engineering and Infrastructure Ltd.” declined to take into account the
council‟s decision because the law hasn‟t been amended accordingly.
The Telangana High Court held that until a return is filed (self-assessed), the
taxpayer is not entitled to an input tax credit. The tax becomes an input tax
credit only when a claim is made in the returns. Because of the taxpayer‟s
delay in filing the return in this instance, the payment of the tax liability—
partly in cash and partly in the form of a claimed input tax credit—was
made beyond the period prescribed, and thus the taxpayer was liable for
interest on the gross GST liability.
19

Proposed

To overcome litigation with respect to charging interest on

gross tax liability it is now Proposed to amend Section 50 of
the Act. It provides that charging of interest only on the net
cash tax liability, except in those case where returns are
filed subsequent to initiation of any proceeding under the
Act.
 Commissioner empowered to issue extension
20 notification for monthly and statement by
Electronic Commerce Operator
[Amendment in Section 52]
At present, Every Electronic Commerce Operator who is
required to collect tax at source shall furnish monthly
statement in Form GSTR 8 and Annual statement in Form
GSTR- 9B electronically within due dates as may be
prescribed.
Existing
However, Commissioner has no power to extend due date
of furnishing of monthly statement in Form GSTR 8 or Annual
statement in Form GSTR-9B by Electronic Commerce
operator.

It is now Proposed that the Commissioner is empowered to

extend due date of furnishing of monthly statement in Form
Proposed GSTR 8 or annual statement in Form GSTR-9B by Electronic
Commerce operator.
 Disbursal of refund of SGST
21
[Amendment in Section 54]

Existing At present, if Registered person claim any

refund of tax then refund of state tax shall
be disbursed by State Government only.

Proposed It is now Proposed that Central Government

may disburse the refund of state tax in such
manner as may be prescribed.
 Anti-profiteering measure
22 [Amendment in Section 171]

As per existing Provision, the suppliers of

goods and services should pass on the
benefit of any reduction in the rate of tax
or the benefit of input tax credit to the
recipients by way of commensurate
reduction in prices. The wilful action of not
passing on the above benefits to the
recipients in the manner prescribed is
known as “profiteering”.
 The National Anti-Profiteering Authority (NAPA) has
the power to identify the registered person who has
23 not passed on the benefit of reduction in tax rate
or input tax credit by way of commensurate
reduction in prices and it may order reduction in
prices and return to the recipient, an amount
equivalent to the amount not passed on by way of
commensurate reduction in prices along with
interest and also have power of cancellation of
registration of the supplier and imposition of
penalty on them.

It is now Proposed to empower the NAPA to impose

penalty equivalent to 10% of the profiteered
amount.

It is also Proposed that No penalty shall be leviable

if the profiteered amount is deposited within 30days
of the date of passing of order by the NAPA.
 Retrospective Amendment to Rate
24
Existing Supply of Uranium Ore Concentrate was
exempted from GST

w.e.f. 14th November 2017 through Notification No.

42/2017- Central Tax (Rate) dated 14th November,
2017.
Proposed It is now Proposed to retrospectively exempt
Supply of Uranium Ore Concentrate from 01st
July 2017 to 13th November 2017 by making
amendment in Notification No. 2/2017-Central
Tax (Rate) dated the 28th June, 2017.

It is also Proposed to provide similar retrospective

amendment was made to Exempt Uranium Ore
Concentrate from levy of GST under IGST Act, 2017
and UTGST Act, 2017.
25

CENTRAL EXCISE
26  Nominal Basic Excise Duty (BED) imposed on the
following products to resolve the dispute pertaining to
levy National Calamity Contingency Duty (NCCD):
−Petroleum crude
−Various tobacco products
 •Special Additional Excise Duty, and Road and
Infrastructure Cess increased by INR 1 per liter each on
petrol and diesel. The existing and revised effective duty
rates are mentioned below:
27

CUSTOMS
28
1. Now the ‘Departure Manifest’ can be furnished by
any other person as may be notified by the
Government.
2. Earlier only person-in-charge (PIC) includes
Master, commander, conductor, driver or other
person-incharge,was required to furnish the same
to the proper officer before he departs from the
port, airport or custom station.
3. In order to curb smuggling a new concept of
‘Verification of Identity and Compliance’ is
introduced by verifying the identity of a person
through Aadhaar number or any other alternative
means. This will empower custom officers to carry
out verification of a person for ascertaining
compliance with the Customs Act.
29
1. Now the proper officer can scan or screen any
person with the previous approval of Asst.
Commissioner or Dy. Commissioner, in case such
person has secreted goods (liable to be
confiscated) inside his body. He can directly
furnish the report of the said screening or
scanning to the nearest magistrate if such goods
are found secreted inside the body, so that
magistrate can take appropriate action on the
basis of such report.

2. Custom officers are now empowered to arrest a

person who has committed an offence outside
India or Indian Customs waters.
30

4. Category of offence Cognizable offences

Category of offence Cognizable Bailable/

offences Non-
bailable
offence

Fraudulently availing drawback or any Yes Non-

exemption from duty of more than Rs. Bailable
50 lakhs offence
Fraudulently obtaining and utilizing an Yes Non-
instrument under this Act or the Foreign Bailable
Trade (Development and Regulation) offence
Act, 1992, where duty exceeds Rs. 50
lakhs.
 Basic customs duty (BCD) rates revised for the following
products to give a push to the Make in India initiative or
31 provide a level playing field to domestic manufacturing:
BCD Rates BCD Rates increased for
reduced/exempted for
Inputs and raw materials in the Various chemical, plastic and rubber
nature of select chemicals, textile, products, optical fiber cables, electronic
steel, other base metals, etc. goods, automobile parts, completely built
units of vehicles, and steel products.

Capital goods used in Precious metals

manufacturing electronic items,
such as populated PCBA, parts of
mobile phones, and set top boxes

Select parts of electric vehicles Select military equipment and their parts
imported by the Ministry of Defense or
armed forces

Raw material, parts and Specified electronic goods, such

accessories used in as
manufacturing artificial kidneys switches, sockets, plugs, connecters, and
relays
Petroleum crude
32

SERVICE TAX
 Retrospective exemption granted to the
33
following services for the respective periods:

 No service tax on licence fee for grant of liquor

licence for the period April 2016 to June 2017.

 No service tax on certain programmes of IIM for the

period July 2003 to March 2016.

 No service tax on salami or development charges for

the period October 2013 to June 2017.

It is also Proposed that application for refund of service

tax arising due to aforesaid retrospective exemption to
be made within a period of 6 months from the date on
which this Finance Bill receives assent of the President.
34

Sabka Vishwas
(Legacy Dispute Resolution) Scheme 2019
35 Key highlights of this scheme

A dispute resolution-cum-amnesty scheme called

‘Sabka Vishwas Legacy Dispute Resolution
Scheme’ has been introduced for resolution and
settlement of legacy cases of Central Excise,
Service Tax and other specified Acts.

This Scheme shall be applicable to enactments like

Central Excise Act, 1944 or the Central Excise Tariff
Act, 1985, Chapter V of the Finance Act, 1994, 26
specified Acts or any other Act that Central
Government may notify in the Official Gazette.
36 Tax Dues eligible under the Scheme
 The amount of duty stated to be payable under a show
cause notice received before 30th June 2019
 The amount of duty payable under any of the indirect
tax enactments which is quantified on or before 30th
June 2019, where an enquiry or investigation or audit is
pending against a declarant
 The amount of duty which is under dispute before an
appellate forum as on 30 June 2019
 The amount which is recoverable on account of an
order for which no appeal has been filed before an
appellate authority before the expiry of the prescribed
time limit
 The amount which is recoverable on account of an
appeal when it attains finality.
 Tax liability admitted in a return filed on or before 30
June 2019
 37 Relief under the Scheme
Ineligible
Situation Tax dues Reliefs available
Declaration
• Total • SCN/Appeal has
amount of been heard finally If the amount of duty is:
duty on or before 30
stated to Jun’19 (a) ≤ INR 50 Lakhs – 70%
Show Cause Notice / be of tax dues
• SCNfor erroneous
Appeal pending to be payable/ refund (b) >INR 50 Lakhs – 50% of
disposed amount in tax dues
dispute • SCNfor rejection of
refund (c) Paid or Nil - Entire
amount of late fee or
• Applications filed penalty (only for SCN)
before the
Settlement
Commission
No appeal having been
filed before the expiry of • Amount in • Order for an If the amount of duty is:
the prescribed time- limit arrears erroneous (a) ≤ INR 50 Lakhs –
• Order attained finality refund
60% of tax dues
• Admitted tax liability
under a return but not (b) > INR 50 Lakhs– 40% of
paid tax dues
 38

Ineligible
Situation Tax dues Reliefs available
Declaration
• Subjected to • Total amount • Under an enquiry or If the amount of duty
enquiry or of duty investigation or is:
investigation or payable audit, where the • ≤ INR 50 Lakhs –
audit (any which has amount of duty 70% of tax dues
scrutiny, been involved has not
verification quantified been quantified on • > INR 50 Lakhs –
and checks) or before 30 June 50% of tax dues
2019

• Voluntary • Total amount • Declaration made • No relief with

Disclosure of duty stated after being respect to tax
in the subjected to dues
declaration
inquiry/investigation
 Eligible persons can make a declaration
39
under this Scheme except following

 who have filed an appeal before the appellate forum

and such appeal has been heard finally on or before
June 30, 2019
 who have been convicted for any offence punishable
under any provision of the indirect tax enactment for
the matter for which he intends to file a declaration
 who have been issued a show cause notice, under
indirect tax enactment and the final hearing has taken
place on or before June 30, 2019
 who have been issued a show cause notice under
indirect tax enactment for an erroneous refund or
refund
40 exceptions (continue..)
 who have been subjected to an enquiry or
investigation or audit and the amount of duty involved
in the said enquiry or investigation or audit has not
been quantified on or before June 30, 2019
 a person making a voluntary disclosure after being
subjected to any enquiry or investigation or audit; or
having filed a return under the indirect tax enactment,
wherein he has indicated an amount of duty as
payable, but has not paid it
 who have filed an application in the Settlement
Commission for settlement of a case
 persons seeking to make declarations with respect to
excisable goods set forth in the Fourth Schedule to the
Central Excise Act, 1944
41 Any amount paid under this Scheme:

 shall not be paid through the input tax credit

account

 shall not be refundable under any

circumstances

 shall not be taken as input tax credit and shall

not entitle any person to take input tax credit,
as a recipient, of the excisable goods or
taxable services
42 Issuance of Statement
 Where the amount to be payable by the
declarant, as estimated by the designated
committee equals the amount declared by the
declarant, then the designated committee shall
issue a statement in electronic form, indicating
the amount payable by the declarant, within a
period of 60 days from the date of receipt of
the said declaration.
 Where the amount to be payable by the
declarant, as estimated by the designated
committee, exceeds the amount declared by
the declarant, then the designated committee
shall issue in electronic form, an estimate of the
amount payable by the declarant within 30
days of date of receipt of the declaration.
43

THANKS!!

CONTACT DETAILS:

CA. Brijesh Pitroda

Manager | Tax Advisory
JLN US & Co. | Chartered Accountants

Address: 330/348, Third Floor | Tower A, Atlantis K-10 |Opp.

Vadodara Central |Sarabhai Main Road |Vadodara- 390023
E-mail: jlnus.finance@gmail.coml | Cell: +91-97734 57503