Advisory for Taxpayers regarding Generation of EWB where the principal supply is Supply of services.
One of the common issued faced by taxpayers who are dealing with composite supply where there is requirement to ship goods also when executing a service contract. To address this GSTN has issued an advisory on the same.
1. Representations have been received from various trade bodies stating that they are not able to generate EWB bill for movement of those goods where their principle supply is classifiable as a service, since there is no provision for generating E-way Bill by entering SAC (Service Accounting Code-Chapter 99) alone on the E- way bill portal.
2. To overcome this issue, the taxpayers are advised as below:
a) Rule 138 of CGST Rules, 2017, inter alia, states “Information to be furnished prior to commencement of movement of goods and generation of e-way bill.-(1) Every registered person who causes movement of goods of consignment value exceeding fifty thousand rupees….” Thus, E way bill is required to be generated for the movement of Goods.
b) Therefore, in cases where the principal supply is purely a supply of service and involving no movement of goods, the e-way bill is not required to be generated.
c) However, in cases where along with the principal supply of service, movement of some goods is also involved, e-way bill may be generated. Such situations may arise in cases of supply of services like printing services, works contract services, catering services, pandal or shamiana services, etc. In such cases, e-way bill may be generated by entering the details of HSN code of the goods, along with SAC (Service Accounting Code) of services involved.
Recommendations of the 42nd GST Council Meeting
The 42nd GST Council met under the Chairmanship of Union Finance & Corporate Affairs Minister Smt Nirmala Sitharaman through video conferencing here today. The meeting was also attended by Union Minister of State for Finance & Corporate Affairs Shri Anurag Thakur besides Finance Ministers of States & UTs and senior officers of the Ministry of Finance& States/ UTs.
The GST Council has made the following recommendations:
1. Levy of Compensation Cess to be extended beyond the transition period of five years i.e. beyondJune, 2022, for such period as may be required to meet the revenue gap. Further details to be worked out.
- Centre is releasing compensation of ₹ 20,000 crore to States today towards loss of revenue during 2020-21 and an amount of about ₹ 25,000 crore towards IGST of 2017-18 by next week.
- Enhancement in features of return filing:In its 39th Meeting held in March 2020, the Council hadrecommendedan incremental approach to incorporate features of the new return system in the present familiar GSTR-1/3B scheme. Various enhancements have since been made available on the GST Common Portal. With a view to further enhance Ease of Doing Business and improve the compliance experience, the Council has approved the future roadmap for return filing under GST. The approved frameworkaims to simplify return filing and further reduce the taxpayer’s compliance burden in this regard significantly, such that the timely furnishing of details of outward supplies (GSTR-1) by ataxpayer and his suppliers would –(i) allow him to view the ITC available in his electronic credit ledger from all sources i.e. domestic supplies, imports and payments on reverse charge etc. prior to the due date for payment of tax, and (ii) enable the system to auto-populate return (GSTR-3B)through the data filed by the taxpayer and all his suppliers. In other words, the timely filing of GSTR-1 statement alone would be sufficient as the return in FORM GSTR-3B would get auto prepared on the common portal.To this end the Council recommended / decided the following:
- Due date of furnishing quarterly GSTR-1 by quarterly taxpayers to be revised to 13th of the month succeeding the quarterw.e.f. 01.1.2021;
- Roadmap for auto-generation of GSTR-3B from GSTR-1s by:
- Auto-population of liability from own GSTR-1 w.e.f. 01.01.2021; and
- Auto-population of input tax credit from suppliers’ GSTR-1s through the newly developed facility in FORM GSTR-2B for monthly filers w.e.f. 01.01.2021 and for quarterly filers w.e.f. 01.04.2021;
- In order to ensure auto population of ITC and liability in GSTR 3B as detailed above, FORM GSTR 1would be mandatorily required to be filed before FORM GSTR3Bw.e.f. 01.04.2021.
- The present GSTR-1/3B return filing system to be extended till 31.03.2021 and the GST laws to be amended to make the GSTR-1/3B return filing system as the default return filing system.
- As a further step towards reducing the compliance burden particularly on the small taxpayers having aggregate annual turnover < Rs. 5 cr., the Council’s earlier recommendation of allowing filing of returns on a quarterly basis with monthly payments by such taxpayers to be implemented w.e.f. 01.01.2021. Such quarterly taxpayers would, for the first two months of the quarter, have an option to pay
35% of the net cash tax liability of the last quarter using an auto generated challan.
- Revised Requirement of declaring HSN for goods and SAC for services in invoices and in FORM GSTR-1w.e.f. 01.04.2021 as under:
- HSN/SAC at 6 digits for supplies of both goods and services for taxpayers with aggregate annual turnover above Rs. 5 crores;
- HSN/SAC at 4 digits for B2B supplies of both goods and services for taxpayers with aggregate annual turnover upto Rs. 5 crores;
- Government to have power to notify 8 digit HSN on notified class of supplies by all taxpayers.
- Amendment to the CGST Rules: Variousamendments in the CGST Rules and FORMS have beenrecommended which includes provision for furnishing of Nil FORM CMP-08 through SMS.
- Refund to be paid/disbursed in a validated bank account linked with the PAN &Aadhaar of the registrant w.e.f. 01.01.2021.
- To encourage domestic launching of satellites particularly by young start-ups, the satellite launch services supplied by ISRO, Antrix Corporation Ltd. and NSIL would be exempted.
Note:- The decisions of the GST Council have been presented in this note in simple language for easy understanding. The same would be given effect to through Gazette notifications/ circulars which alone shall have force of law.
(Release ID: 1661827)
As per Notification No. 11/2017-Central Tax (Rate), Central Tax is to be levied at Nil rate for Support services to agriculture, hunting, forestry, fishing, mining and utilities which are falling under HSN / SAC 9986. For details of services falling under 9986 refer to https://indiagstdotin.wordpress.com/2017/07/28/support-services-to-agriculture-hunting-forestry-fishing-mining-and-utilities/
As per Notification No. 11/2017-Central Tax (Rate) – Maintenance, repair and installation (except construction) services falling under SAC 9987, the Central Tax is levied at 9%. The services which are covered are Maintenance and repair services of fabricated metal products, machinery and equipment, Repair services of other goods and Installation services (other than construction).
The list of services falling under HSN / SAC – 9989 are
|Heading no. 9989
||SAC / HSN Number
||Other manufacturing services; publishing, printing and reproduction services; materials recovery services
||Publishing, printing and reproduction services
||Publishing, on a fee or contract basis
||Printing and reproduction services of recorded media, on a fee or contract basis
||Moulding, pressing, stamping, extruding and similar plastic manufacturing services
||Moulding, pressing, stamping, extruding and similar plastic manufacturing services
||Casting, forging, stamping and similar metal manufacturing services
||Iron and steel casting services
||Non-ferrous metal casting services
||Metal forging, pressing, stamping, roll forming and powder metallurgy services
||Materials recovery (recycling) services, on a fee or contract basis
||Metal waste and scrap recovery (recycling) services, on a fee or contract basis
||Non-metal waste and scrap recovery (recycling) services, on a fee or contract basis
As per Notification No. 11/2017-Central Tax (Rate), services falling under HSN / SAC 9991 the Central Tax rate of 9% is levied on services related to Public administration and o provided to the community as a whole; compulsory social security services.
As per Notification No. 11/2017-Central Tax (Rate), services falling under HSN /SAC 9992 i.e Educational Services Central taxes will be levied at the rate of 9%. The following services are covered Pre-primary education services, Primary education services, Secondary Education Services, Higher education services & Other education & training services and educational support services.
As per Notification No. 11/2017-Central Tax (Rate), services like Recreational, cultural and sporting services are taxed at rate of 9% for the central tax for admission or access to circus, Indian classical dance including folk dance, theatrical performance, drama or movie tickets less than Rs 100 and rest of the recreational & sporting services are taxed at 14%. These services are falling under HSN / SAC 9996
As per Notification No. 11/2017-Central Tax (Rate), services falling under HSN / SAC Code 9965 i.e for Goods transport services, the applicable CGST rate is cases for transportation of goods by Rail, Vessel and by GTA it is 2.5% and for Transport of goods in containers by rail by any person other than Indian Railways it is 6% and in all other cases it is 9%.
As per the Final Returns Formats, supplies to B2C have to be shown in Table 7 of GSTR – 1, grouped by Tax Rates only for Intrastate and Interstate supplies. In the case of interstate supplies, it has to be grouped by State Code and then by Tax Rates. HSN Code /SAC Code along with Tax paid on provisional assessment from the old formats given in Table 7.