E - B O O K L E T

CH A R TMA S T E R ' S

AM E N DM E N T

E - B OO K L E T

S T A T U T O R Y U P D A T E S F O RM A Y / J U N E 2 0 2 1C A I N T E R / I P C C

I D T - G S T

C A R A M E S H S O N I

I N C L U D I N G C R U X O FA M E N D M E N T S F O R

B E S T U N D E R S T A N D I N G& S U M M A R Y R E V I S I O N

Applicable for CA Inter/IPCC - May/June 2021 CHARTMASTER’s IDT - Statutory updates

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Index

Supply ................................................................................................................................ 2

Schedule II, Para 4 amended to omit the words “whether or not for a consideration” ................................. 2

Nature of supply ................................................................................................................. 3

Union territory: Section 2(114) of CGST act – Definition amended to merge Dadra and Nagar Haveli and

Daman and Diu and include UT of Ladakh. ............................................................................................ 3

Charge of GST ..................................................................................................................... 4

Circular No: 140/10/2020 – GST dt. 10.06.20: Clarification in respect of levy of GST on Director’s

remuneration .................................................................................................................................... 4

Composition Levy ............................................................................................................... 6

Rule 7: Rate of tax of the composition levy (under CGST) – amended to include rate of tax u/s 10(2A) to be

3% CGST + 3% SGST ........................................................................................................................ 6

Registration........................................................................................................................ 7

Rule 8: Application for registration – Sub rule (4A) substitute to provide for date of submission of application

if applicant opts for AA. ...................................................................................................................... 7

Rule 9 - Verification of the application and approval ............................................................................... 8

Rule 25: Physical verification of business premises in certain cases – due to failure of Aadhaar authentication

+ “or due to not opting for Aadhaar authentication” added. .................................................................... 9

Exemption under GST ....................................................................................................... 11

Entry No. 19A. Transportation of goods by aircraft from CS – Exemption extended till 30.09.21 ................ 11

Entry No. 19B: Transportation of goods by a vessel from CS – Exemption extended till 30.09.21............... 11

Entry No. 19C: Satellite launch services by ISRO, Antrix or NSIL – New exemption entry ......................... 11

Tax Invoice, Credit and Debit note ................................................................................... 13

Rule 48: Manner of Issuing Invoice – Proviso inserted empowering commissioner to exempt a person/class of

person from e-invoicing .................................................................................................................... 13

Notification Seeks to notify certain class of registered persons required to issue e-invoice [NNo. 13/2020– CT

dt. 21.03.20 (Effective 01.10.20)] – RP (except SEZ + BGPM) + ATO > 500 cr + B2B supplies or exports .. 14

Rule 46: Particulars to be stated in a tax Invoice – If e-invoicing done, QR code to be mentioned in tax

Invoice ........................................................................................................................................... 15

Rule 46: Particulars to be stated in a tax Invoice – 1st Proviso substituted to empower CBIC to notify class of

supply for which specified digit of HSN shall be mention by all RPs......................................................... 15

HSN code – new notification issued. HSN to be mentioned by all RPs issuing B2B invoice from 01.04.21 –

amendment not applicable for May 21 exams. ..................................................................................... 16

Rule 46 – 6th proviso inserted – Govt may notify, that the tax invoice shall have QR code ......................... 16

Notification Seeks to notify class of registered persons required to capture dynamic QR code [NNo. 14/2020–

CT dated 21.03.20 – Effective 01.12.20] – RP (except BG-PMO) + ATO > 500 cr + B2C supplies. ............. 17

E Way Bill ......................................................................................................................... 18

Rule 138A: Documents and devices to be carried by a person-in-charge of a conveyance - QR code having

embedded IRN, can be presented for verification by PO ........................................................................ 18

Payment of Tax ................................................................................................................ 19

Section 50: Interest on delayed payment of Tax – In case of belated return, Interest on net tax liability. ... 19

Returns ............................................................................................................................ 21

Rule 67A: Manner of furnishing of return or details of outward supplies by short messaging service facility –

Introduced for Nil GSTR 3B/GSTR 1/GST CMP-08. ................................................................................ 21

Clarification regarding optional filing of annual return under NNo. 47/2019- CT dt 9.10.19 further amended

by NNo. 77/2020 – CT dt 15.10.20 - AR optional for RP with ATO upto 2 cr ............................................ 21

Rule 80: Annual return – For FY 19-20, GST audit only if ATO > 5 crores................................................ 22

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Supply

Schedule II, Para 4 amended to omit the words “whether or not for a consideration”

Section 7(1A): Where certain activities or transactions constitute a supply in accordance

with the provisions of sub-section (1), they shall be treated either as supply of goods or

supply of services as referred to in Schedule II;

Schedule II, Para 4: Transfer of Business Assets

(a) where goods forming part of the assets of a business are transferred or disposed of by or under

the directions of the person carrying on the business so as no longer to form part of those assets, 1whether or not for a consideration, such transfer or disposal is a supply of goods by the

person;

(b) where, by or under the direction of a person carrying on a business, goods held or used for the

purposes of the business are

- put to any private use or

- are used, or made available to any person for use, for any purpose other than a purpose of

the business,

- 2whether or not for a consideration, the usage or making available of such goods is a

supply of services;

(c) where any person ceases to be a taxable person,

- any goods forming part of the assets of any business carried on by him

- shall be deemed to be supplied by him in the course or furtherance of his business immediately

before he ceases to be a taxable person,

unless-

(i) Business is transferred as a going concern to another person; or

(ii) Business is carried on by a personal representative who is deemed to be a taxable person.

Example:

1. Ram bought a projector, availed ITC and later donated the same for charity.

- Activity resulted in supply – section 7(1)(c), Schedule I, Para 1

- Supply of Goods – Section 7(1A), Schedule II, Para 4(a)

2. Ram bought a car, did not avail ITC and later donated the same for charity.

- Activity does not result in supply – does not fall in section 7(1)(c), Schedule I

- Hence question of determining whether supply of goods or supply of service does not arise,

- But as per Schedule II, Para 4(a) - Supply of Goods.

- Hence to rectify such ambiguity, the words “whether or not for a consideration” were omitted.

Crux:

The words “whether or not for a consideration” in schedule II para 4, were creating

ambiguity and hence omitted vide finance act 2020 with retrospective effect from 01.07.17.

1 Words "whether or not for a consideration," omitted by the Finance Act, 2020 w.r.e.f 1-7-2017 2 Words "whether or not for a consideration," omitted by the Finance Act, 2020 w.r.e.f 1-7-2017



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Nature of supply

Union territory: Section 2(114) of CGST act – Definition amended to merge Dadra and Nagar

Haveli and Daman and Diu and include UT of Ladakh.

Union territory means the territory of—

(a) the Andaman and Nicobar Islands;

(b) Lakshadweep;

(c) Dadra and Nagar Haveli; Dadra and Nagar Haveli and Daman and Diu; 3

(d) Daman and Diu; Ladakh

(e) Chandigarh; and

(f) other territory.

Explanation-for the purposes of this Act, each of the territories specified in sub-clauses (a) to (f)

shall be considered to be a separate Union territory;

Crux:

• The Dadra and Nagar Haveli and Daman and Diu (Merger of Union Territories) Bill

provides for the merger of the Union Territories (UTs) of Dadra and Nagar Haveli, and Daman and

Diu into a single UT. Definition of UT amended to give effect to the same.

• The state of J&K was bifurcated into 2 UTs i.e., Jammu and Kashmir and Ladakh. Jammu and

Kashmir, became an UT with legislature, whereas Ladakh being an UT without a legislature.

Definition of UT amended to include the UT of Ladakh.

• Note: J & K is UT with legislature hence to be classified as state under GST.

3 Substituted for ―(c) Dadra and Nagar Haveli; (d) Daman and Diu; by The Finance Act, 2020 w.e.f 30.06.2020.



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Charge of GST

Circular No: 140/10/2020 – GST dt. 10.06.20: Clarification in respect of levy of GST on

Director’s remuneration

Issue: Whether the remuneration paid by companies to their directors falls under the ambit of entry

in Schedule III of the CGST Act i.e., “services by an employee to the employer in the course of or in

relation to his employment” or whether the same are liable to be taxed in terms of notification No.

13/2017 – Central Tax (Rate) dated 28.06.2017 (entry no.6).

The issue of remuneration to directors has been examined under following two different

categories:

(i) leviability of GST on remuneration paid by companies to the independent directors defined in

terms of section 149(6) of the Companies Act, 2013 or those directors who are not the employees

of the said company; and

(ii) leviability of GST on remuneration paid by companies to the whole-time directors including

managing director who are employees of the said company.

Clarification: Leviability of GST on remuneration paid by companies to the independent

directors or those directors who are not the employee of the said company

The primary issue to be decided is whether or not a “Director‟ is an employee of the company. In this

regard, from the perusal of the relevant provisions of the Companies Act, 2013 it can be inferred that:

a. the definition of a “whole time-director” u/s 2(94) of the Companies Act, 2013 is an inclusive

definition, and thus he may be a person who is not an employee of the company.

b. the definition of “independent directors‟ u/s 149(6) of the Companies Act, 2013, read with

Rule 12 of Companies Rules, 2014 makes it amply clear that such director should not have been

an employee or proprietor or a partner of the said company, in any of the 3 FYs immediately

preceding the financial year in which he is proposed to be appointed in the said company.

Therefore, in respect of such directors who are not the employees of the said company, the services

provided by them to the Company, in lieu of remuneration as the consideration for the said services,

are clearly outside the scope of Schedule III of the CGST Act and are therefore taxable. In terms of

entry at Sl. No. 6 of the Table annexed to notification No. 13/2017 – CT(R) dated 28.06.17, the

recipient of the said services i.e., the Company, is liable to discharge the applicable GST on it on

reverse charge basis.

Accordingly, it is hereby clarified that the remuneration paid to such independent directors, or those

directors, by whatever name called, who are not employees of the said company, is taxable in hands

of the company, on reverse charge basis.

Leviability of GST on remuneration paid by companies to the directors, who are also an

employee of the said company

Once, it has been ascertained whether a director, irrespective of name and designation, is an

employee, it would be pertinent to examine whether all the activities performed by the director are in

the course of employer-employee relation (i.e., a “contract of service”) or is there any element of

“contract for service”. The issue has been deliberated by various courts and it has been held that a

director who has also taken an employment in the company may be functioning in dual capacities,

namely, one as a director of the company and the other on the basis of the contractual relationship of

master and servant with the company, i.e., under a contract of service (employment) entered into

with the company.

It is also pertinent to note that similar identification and treatment of the Director’s remuneration is

also present in the Income Tax Act, 1961 wherein the salaries paid to directors are subject to TDS



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under Section 192 of the Income Tax Act, 1961. However, in cases where the remuneration is in the

nature of professional fees and not salary, the same is liable for deduction u/s 194J of the IT Act.

Accordingly, it is clarified that the part of Director’s remuneration which are declared as “Salaries‟ in

the books of a company and subjected to TDS under Section 192 of the IT Act, are not taxable being

consideration for services by an employee to the employer in the course of or in relation to his

employment in terms of Schedule III of the CGST Act, 2017

It is further clarified that the part of employee Director’s remuneration which is declared separately

other than “salaries‟ in the Company’s accounts and subjected to TDS u/s 194J of the IT Act as Fees

for professional or Technical Services shall be treated as consideration for providing services which

are outside the scope of Schedule III of the CGST Act, and is therefore, taxable. Further, in terms of

notification No. 13/2017 – Central Tax (Rate) dated 28.06.2017, the recipient of the said services i.e.,

the Company, is liable to discharge the applicable GST on it on reverse charge basis.

Crux:

Independent Director

- Not an employee, GST payable by Company under RCM.

Whole time director/Whole time director

- as per definition under companies act, he may be a person who is not an employee

If Director is working in the capacity of an employee + amount accounted as salary & TDS u/s

192 of IT act is deducted: then the same is falling in schedule III – Not a supply, hence no GST.

If Director is not working in the capacity of an employee + amount paid is in the nature of

professional fees and not salary and TDS u/s 194J of the IT Act is deducted – Supply, GST payable

by co. under RCM.

Illustration from ICAI study material

Arpan Singhania is a director in Narayan Limited. The company paid him the sitting fee

amounting to Rs. 25,000, for the month of January. Further, salary was paid to Arpan

Singhania amounting to Rs. 1.5 lakh for the month of January on which TDS was also

deducted as per applicable provisions under Income-tax law. Tapasya & Associates, in

which Arpan Singhania is a partner, supplied certain professional services to Narayan

Limited in the month of January for an amount of Rs. 2 lakhs. Discuss the person liable to

pay tax in each of the supplies involved in the given case.

Answer:

Sitting fee paid to director – As per reverse charge notification, tax on services supplied by a

director of a company/ body corporate to the said company/ body corporate, located in the taxable

territory, is payable under reverse charge. Hence, in the present case, the sitting fee amounting to

Rs. 25,000, payable to Arpan Singhania by Narayan Limited, is liable to GST under reverse charge

and thus, recipient of service - Narayan Limited – is liable to pay GST on the same.

Salary paid to director - As per Circular No.140/10/2020 GST dated 10.06.2020, the part of

director’s remuneration which is declared as salary in the books of a company and subjected to TDS

under section 192 of the Income-tax Act, are not taxable being consideration for services by an

employee to the employer in the course of or in relation to his employment in terms of Schedule III.

Therefore, in the given case, the salary received by Arpan Singhania of Rs. 1.5 lakh is not liable to

GST.

Services provided by Tapasya & Associates – Tapasya & Associates have rendered certain

professional services to Narayan Limited. The fact that Arpan Singhania is a partner in Tapasya &

Associates and a director in Narayan Limited does not have any impact on the taxability of the

professional services supplied by Tapasya & Associates to Narayan Limited. The professional services

provided by Tapasya & Associates to Narayan Limited are liable to GST under forward charge and

thus, supplier - Tapasya & Associates – is liable to pay GST on the same.



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Composition Levy

4Section 10(2A):

Notwithstanding anything to the contrary contained in this Act, but subject to the provisions of sub-

sections (3) and (4) of section 9,

• a registered person, not eligible to opt to pay tax under sub-section (1) and sub section (2),

• whose aggregate turnover in the preceding financial year did not exceed fifty lakh rupees,

• may opt to pay, in lieu of the tax payable by him under section 9(1),

• an amount of tax calculated at such rate as may be prescribed, but not exceeding 3% of the

turnover in State or turnover in Union territory.

5Rule 7: Rate of tax of the composition levy (under CGST) – amended to include rate of tax u/s

10(2A) to be 3% CGST + 3% SGST

SN Section under which

composition levy is opted

Category of registered persons Rate of tax

1 Sub-sections (1) and (2)

of section 10

Manufacturers, other than

manufacturers of such goods as

may be notified by the Government

½ % of the turnover in

the State/UT


of section 10

Suppliers making supplies referred

to in clause (b) of paragraph 6 of

Schedule II

2 ½ % of the turnover in

the State/UT


of section 10

Any other supplier eligible for

composition levy under sub-

sections (1) and (2) of section 10

½ % of the turnover of

taxable supplies of

goods & services in

the State/UT

4 Sub-section (2A) of

section 10

Registered persons not eligible

under the composition levy

under sub-sections (1) and (2),

but eligible to opt to pay tax under

sub-section (2A), of section 10

three per cent. of the

[turnover of] supplies of

goods and services in

the State or Union

territory.

Crux:

Earlier the rate of tax u/s 10(2A) was borrowed from notification no. 02/2019, now Rule 7

has been amended to provide that the rate of tax on person opting for composition levy u/s 10(2A)

shall be 6% (i.e., 3% CGST & 3% SGST) of supplies of goods and services in the state/UT.

4 Inserted by the Finance (No. 2) Act, 2019, w.e.f. 1-1-2020 5 Table substituted vide Notification No. 50/2020 – CT dated 24-06-2020 w.e.f. 01-04-2020



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Registration

Section 25: Procedure for Registration

Section 25(1): Person liable to be registered shall apply within 30 days

Every person who is liable to be registered u/s 22/24 shall apply for registration in every such

State/UT in which he is so liable within thirty days from the date on which he becomes liable to

registration, in such manner and subject to such conditions as may be prescribed.

Rule 8: Application for registration – Sub rule (4A) substitute to provide for date of submission of

application if applicant opts for AA.

(1) Every person,

• Other than NRTP, TDS Deductor/TCS collector, OIDAR services provider from outside India to

a NTOR

• liable to be registered u/s 25 & seeking voluntary registration u/s 25(3) shall, before

applying for registration,

• Declare his PAN, mobile no, e-mail address, State UT in Part A of FORM GST REG-01 on

common portal,

Proviso: Input service distributor shall make separate registration application as such ISD.

(2) Validation of PAN from CBDT database & mobile no and Email through OTP

(3) On successful verification of PAN, mobile no and Email - a temporary reference number (TRN)

shall be generated and Communicated to the applicant on the said mobile no. & e-mail address.

(4) Submission of Application - in Part B of GST REG-01 duly signed/verified through EVC & docs.

6(4A)The applicant shall, while submitting an application under sub-rule (4), with effect from 01.04.20,

undergo authentication of Aadhaar number for grant of registration.

Where an applicant, other than a person notified u/s 25(6D), opts for authentication of

Aadhaar number, he shall, while submitting the application under sub-rule (4), with

effect from 21st August, 2020, undergo authentication of Aadhaar number and the date

of submission of the application in such cases shall be

the date of authentication of the Aadhaar number, or

15 days from the submission of the application in Part B of GST REG-01 under sub-

rule (4),

whichever is earlier.

(5) Acknowledgement issued to applicant in FORM GST REG-02 on receipt of application.

(6) CTP shall be given temporary reference number for making advance deposit of tax &

acknowledgement shall be issued after deposit.

Crux:

Rule 8(4A) has been substituted: In case applicant required AA + opts for AA.

Date of submission of application: Earlier of

• the date of authentication of the Aadhaar number, or

• 15 days from the submission of the application in Part B of GST REG-01

6 Substituted by the Central Goods and Services Tax (Tenth Amendment) Rules, 2020, w.r.e.f. 1-4-2020.



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Rule 9 - Verification of the application and approval

(1) The Application shall be forwarded to PO - PO to examine application & accompanying

documents – if found to be in order, approve the grant of registration to the applicant within 3

WDs from submission.

7Provided that where a person, other than those notified under section 25(6D), fails to

undergo authentication of Aadhaar number as specified in sub-rule (4A) of rule 8, then

the registration shall be granted only after physical verification of the principle place of

business in the presence of the said person, not later than sixty days from the date of

application, in the manner provided under rule 25 and the provisions of sub-rule (5)

shall not be applicable in such cases.

Provided further that the proper officer may, for reasons to be recorded in writing and

with the approval of an officer not below the rank of Joint Commissioner, in lieu of the

physical verification of the place of business, carry out the verification of such

documents as he may deem fit.

(2) PO to Issue notice to seek clarification in case of deficiency in application by issuing a

notice in GST REG-03 within a 3 WDs & applicant shall furnish clarification, information or

documents (CID) electronically, in GST REG-04, within 7 working days (WDs) from the date of

the receipt of notice.

8Provided that where a person, other than a person notified under section 25(6D), fails

to undergo authentication of Aadhaar number as specified in sub-rule (4A) of rule 8 or

does not opt for authentication of Aadhaar number, the notice in FORM GST REG-03 may

be issued not later than 21 days from the date of submission of the application.

Explanation - For the purposes of this sub-rule, the expression "clarification" includes

modification/correction of particulars declared in the application for registration, other than PAN,

State, mobile number and e-mail address declared in Part A of GST REG-01.

(3) PO Satisfied, approve grant of registration within 7 WDs from date of receipt of such CID.

(4) No reply/PO not satisfied - he shall 9may record reasons & reject application & inform applicant

in GST REG 05.

(5) If the proper officer fails to take any action, —

(a) within a period of three working days from the date of submission of the application; or

(b) within a period of seven working days from the date of the receipt of the clarification,

information or documents furnished by the applicant under sub-rule (2), the application for

grant of registration shall be deemed to have been approved.

10(5)If the proper officer fails to take any action, -

(a) within a period of 3 working days from the date of submission of the application in

cases where a person successfully undergoes authentication of Aadhaar number or

is notified under section 25(6D); or

7 Substituted by the Central Goods and Services Tax (Tenth Amendment) Rules, 2020, w.e.f. 21-8-2020. 8 Inserted by the Central Goods and Services Tax (Tenth Amendment) Rules, 2020, w.e.f. 21-8-2020. 9 Substituted for "shall" by the Central Goods and Services Tax (Tenth Amendment) Rules, 2020, w.e.f. 21-8-2020. 10 Substituted by the Central Goods and Services Tax (Tenth Amendment) Rules, 2020, w.e.f. 21-8-2020.



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(b) within the time period prescribed under the proviso to sub-rule (2), in cases where

a person, other than a person notified under section 25(6D), fails to undergo

authentication of Aadhaar number as specified in rule 8(4A); or

(c) within a period of 21 days from the date of submission of the application in cases

where a person does not opt for authentication of Aadhaar number; or

(d) within a period of 7 working days from the date of the receipt of the clarification,

information or documents furnished by the applicant under sub-rule (2), the

application for grant of registration shall be deemed to have been approved.

Crux: Refer chart below.

Rule 25: Physical verification of business premises in certain cases – due to failure of Aadhaar

authentication + “or due to not opting for Aadhaar authentication” added.

11Where the proper officer is satisfied that the physical verification of the place of business of a person

is required due to failure of Aadhaar authentication 12or due to not opting for Aadhaar

authentication before the grant of registration, or due to any other reason after the grant of

registration, he may get such verification of the place of business, in the presence of the said person,

done and the verification report along with the other documents, including photographs, shall be

uploaded in FORM GST REG-30 on the common portal within a period of fifteen working days following

the date of such verification.

Crux:

Physical verification of business premises before grant of RC can be done:

• Due to failure of Aadhaar authentication or

• Due to not opting for Aadhaar authentication.

11 Substituted by the Central Goods and Services Tax (Third Amendment) Rules, 2020 w.e.f. 23-03-2020. 12 Inserted by the Central Goods and Services Tax (Tenth Amendment) Rules, 2020, w.e.f. 21-8-2020.



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Exemption under GST

Entry No. 19A. Transportation of goods by aircraft from CS – Exemption extended till 30.09.21

Services by way of transportation of goods by an aircraft from customs station of clearance in India

to a place outside India

Exemption is available till 30th day of September, 132021

Entry No. 19B: Transportation of goods by a vessel from CS – Exemption extended till 30.09.21

Services by way of transportation of goods by a vessel from customs station of clearance in India to

a place outside India

Exemption is available till 30th day of September, 2021

Crux: Extension of CGST exemption on services by way of transportation of goods by air or by sea

from customs station of clearance in India to a place outside India, by one year i.e., upto 30.09.2021.

14Entry No. 19C: Satellite launch services by ISRO, Antrix or NSIL – New exemption entry

Satellite launch services supplied by Indian Space Research Organisation, Antrix Corporation Limited

or New Space India Limited.

Crux: Satellite launch services by ISRO, ACL & NSIL, exempted w.e.f. 16.10.2020.

13 Notification No. 04/2020-Central Tax (Rate), dated 30-9-2019, w.e.f. 1-10-2019. 14 Inserted by Notification No. 5/2020-Central Tax (Rate), dated 16-10-2020, w.e.f. 16-10-2020.



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Tax Invoice, Credit and Debit note

Rule 48: Manner of Issuing Invoice – Proviso inserted empowering commissioner to exempt a

person/class of person from e-invoicing

(1) The invoice shall be prepared in triplicate, in the case of supply of goods, in the following manner,

namely, -

a. the original copy being marked as ORIGINAL FOR RECIPIENT;

b. the duplicate copy being marked as DUPLICATE FOR TRANSPORTER; and

c. the triplicate copy being marked as TRIPLICATE FOR SUPPLIER.

(2) The invoice shall be prepared in duplicate, in the case of the supply of services, in the following

manner, namely, -

a. the original copy being marked as ORIGINAL FOR RECIPIENT; and

b. the duplicate copy being marked as DUPLICATE FOR SUPPLIER.

(3) The serial number of invoices issued during a tax period shall be furnished electronically through

the common portal in FORM GSTR-1.

(4) 15The invoice shall be prepared by such class of registered persons as may be notified

by the Government, on the recommendations of the Council, by including such

particulars contained in FORM GST INV-01 after obtaining an Invoice Reference Number

by uploading information contained therein on the Common GST Electronic Portal in such

manner and subject to such conditions and restrictions as may be specified in the

notification.

16Provided that the Commissioner may, on the recommendations of the Council, by

notification, exempt a person or a class of registered persons from issuance of invoice

under this sub-rule for a specified period, subject to such conditions and restrictions as

may be specified in the said notification.

(5) Every invoice issued by a person to whom sub-rule (4) applies in any manner other than

the manner specified in the said sub-rule shall not be treated as an invoice.

(6) The provisions of sub-rules (1) and (2) shall not apply to an invoice prepared in the

manner specified in sub-rule (4).

Crux:

Rule 48(4) makes e-invoicing mandatory for notified class to person. (refer notification

13/2020 below)

Proviso to rule 48(4) inserted empowering Commissioner to exempt a person/class of person from

e-invoicing vide notification. (no notification issued yet)

15 Inserted by the Central Goods and Services Tax (Eighth Amendment) Rules, 2019, w.e.f. 13-12-2019. 16 NOTIFICATION NO. 72/2020–Central Tax dated 30-09-2020



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Notification Seeks to notify the common portal for the purpose of e-invoice. [Notification

No. 69/2019 – Central Tax dated 13.12.19 with effect from the 01.01.2020.]

The CG, on the recommendations of the Council, hereby, notifies the following as the Common GST

Electronic Portal for the purpose of preparation of the invoice in terms of rule 48(4) of the aforesaid

rules, namely: -

(i) www.einvoice1.gst.gov.in;

(ii) www.einvoice2.gst.gov.in;

(iii) www.einvoice3.gst.gov.in;

(iv) www.einvoice4.gst.gov.in;

(v) www.einvoice5.gst.gov.in;

(vi) www.einvoice6.gst.gov.in;

(vii) www.einvoice7.gst.gov.in;

(viii) www.einvoice8.gst.gov.in;

(ix) www.einvoice9.gst.gov.in;

(x) www.einvoice10.gst.gov.in.

Explanation: For the purposes of this notification, the above-mentioned websites mean the websites

managed by the GSTN, a company incorporated u/s 8 of the Companies Act, 2013.

Notification Seeks to notify the class of registered person required to issue e-invoice.

[NNo. 70/2019 – Central Tax dated 13-12-2019 effective 01.04.2020] (suspended).

Notification Seeks to notify certain class of registered persons required to issue e-invoice

[NNo. 13/2020– CT dt. 21.03.20 (Effective 01.10.20)] – RP (except SEZ + BGPM) + ATO > 500

cr + B2B supplies or exports

Notifies Registered person, other than 17a SEZ unit and those referred to in sub-rules (2), (3), (4)

and (4A) of rule 54 of the said rules,

- whose aggregate turnover in a financial year 18any preceding financial year from 2017-18

onwards exceeds one hundred crore rupees 19five hundred crore rupees,

- as a class of registered person who shall prepare invoice and other prescribed documents,

- in terms of rule 48(4) of the said rules in respect of supply of goods or services or both to a

registered person 20or for exports.

This notification shall come into force from the 1st October, 2020

Crux:

Effective 01.10.20:

- RP + whose ATO in any preceeding FY from 17-18 onwards, exceeds 500 crores.

- With respect to: Supply to RP (i.e., B2B supplies) or for exports.

- E-invoicing has been made mandatory.

Following RP exempt from E-invoicing: (Mnemonic - SEZ + BGPM)

1. A SEZ unit

2. Section 54(2): Insurance co, Banking co, FI including NBFC

3. Section 54(3): GTA supplying services in relation to transportation of goods by road

4. Section 54(4): Supplier supplying Passenger transportation service.

5. Section 54(4A): Supplier supplying services by way of admission to exhibition of cinematograph

films in Multiplex screens.

17 NOTIFICATION No. 61/2020–Central Tax dated 30-07-2020 18 NOTIFICATION NO. 70/2020 – Central Tax dated 30-09-2020 19 NOTIFICATION No. 61/2020–Central Tax dated 30-07-2020 20 NOTIFICATION NO. 70/2020 – Central Tax dated 30-09-2020



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Rule 46: Particulars to be stated in a tax Invoice – If e-invoicing done, QR code to be mentioned

in tax Invoice

Subject to rule 54, a tax invoice referred to in section 31 shall be issued by the RP containing

the following particulars, namely, —

(a) name, address and GSTIN of the supplier;

(b) a consecutive serial number …

(c) date of its issue

(d) name, address and GSTIN or UIN, if registered, of the recipient; (B2B supplies)

(e) …

(f) …

(g) Harmonised System of Nomenclature code for goods or services

(h) …

(i) …

(j) …

(k) …

(l) …

(m) …

(n) …

(o) …

(p) …

(q) …

(r) 21Quick response code, having embedded Invoice Reference Number (IRN) in it, in case

invoice has been issued in the manner prescribed under sub-rule (4) of rule 48.

Crux: If RP is falling under the provisions of e-invoicing under rule 48(4), tax invoice shall have QR

code, having embedded IRN.

Rule 46: Particulars to be stated in a tax Invoice – 1st Proviso substituted to empower CBIC

to notify class of supply for which specified digit of HSN shall be mention by all RPs.

22Provided that Board on recommendation of council , by notification, specify -

(i) the number of digits of Harmonised System of Nomenclature code for goods or services that a

class of registered persons shall be required to mention for such period as may be specified

in the said notification; and or

(ii) a class of supply of goods or services for which specified number of digits of

Harmonised System of Nomenclature code shall be required to be mentioned by all

registered taxpayers; and

(iii) the class of registered persons that would not be required to mention the Harmonised System

of Nomenclature code for goods or services for such period as may be specified in the said

notification:

Crux: CBIC now empowered to notify class of supply of goods or services for which specified digit of

HSN shall be mention by all RPs.

21 Inserted vide NOTIFICATION NO. 72/2020–Central Tax dated 30-09-2020. 22 Substituted vide NOTIFICATION NO. 79/2020 – Central Tax dated 15-10-2020



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HSN code – new notification issued. HSN to be mentioned by all RPs issuing B2B invoice

from 01.04.21 – amendment not applicable for May 21 exams.

Notification No. 12/2017 – Central Tax 28.06.2017 [Position effective till 31.03.2021]

In pursuance of the first proviso to rule 46 of the CGST Rules, 2017, the CBIC, on the

recommendations of the Council, hereby notifies that a RP having annual turnover in the PFY shall

mention the digits of HSN Codes, as specified, in a tax invoice issued by him under the said rules.

ATO in PFY No of digits of HSN code

Upto 1.5 crores Nil

>1.5 crores upto 5 crores 2 digits mandatory

>5 crores 4 digits is mandatory

Note: Importer/Exporters: 8 digits mandatory, SAC code is mandatory for suppliers of service.

23Notification No. 78/2020 – Central Tax dated 15.10.2020 [w.e.f. 01.04.21]

In exercise of the powers conferred by the first proviso to rule 46 of the CGST Rules, 2017, the CBIC,

on the recommendations of the Council, hereby makes the following amendment in the above

notification (No.12/2017 – CT).

With effect from 01.04.21, for the Table, the following shall be substituted, namely, -

ATO in PFY No of digits of HSN code

upto 5 crores 4 digits mandatory (for B2B supply), 4 digits Optional (for B2C supply)

>5 crores 6 digits is mandatory (for B2B & B2C supply)

Provided that a RP having ATO up to Rs 5 Cr in PFY may not mention HSN Code, in a tax invoice

issued by him under the said rules in respect of supplies made to unregistered persons.

Crux:

Amendment not effective till 31.10.20 hence it shall not be relevant for May 21 exams.

Students are advised to follow earlier notification no. 12/2017 dated 28.06.17 (old

notification) for May 21 exams.

Rule 46 – 6th proviso inserted – Govt may notify, that the tax invoice shall have QR code

Provided further that… (2nd Proviso to rule 46)

Provided also that….

Provided also ….

Provided also that…. 24Provided also that the Government may, by notification, on the recommendations of the

Council, and subject to such conditions and restrictions as mentioned therein, specify that

the tax invoice shall have Quick Response (QR) code.

Notification: Seeks to notify the class of registered person required to issue invoice

having QR Code [NN. 72/2019-Central Tax, dt. 13-12-19 effective 01.04.20] (Suspended)

23 Notification No. 78/2020 – Central Tax – dated 15.10.20: Effective 01.04.21 24 Inserted by the Central Goods and Services Tax (Fourth Amendment) Rules, 2019, w.e.f. 1-4-2020.



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Notification Seeks to notify class of registered persons required to capture dynamic QR code

[NNo. 14/2020– CT dated 21.03.20 – Effective 01.12.20] – RP (except BG-PMO) + ATO > 500

cr + B2C supplies.

An invoice issued by a registered person, whose aggregate turnover in a financial year 25any

preceeding financial year from 2017-18 onwards exceeds five hundred crore rupees, other than

those referred to in sub-rules (2), (3), (4) and (4A) of rule 54 of said rules, and registered person

referred to in section 14 of the IGST Act, 2017, to an unregistered person (hereinafter referred to as

B2C invoice), shall have Dynamic Quick Response (QR) code:

Provided that where such registered person makes a Dynamic Quick Response (QR) code available

to the recipient through a digital display, such B2C invoice issued by such registered person containing

cross-reference of the payment using a Dynamic Quick Response (QR) code, shall be deemed to be

having Quick Response (QR) code.

This notification shall come into force from the 1st day of October 1st day of December, 2020.

Crux: Effective 01.12.20:

- RP + whose ATO (in any PFY from 17 – 18) exceeds 500 crores

- With respect to: Supplies to URP (B2C supplies)

- Invoice should have Dynamic Quick Response (QR) code

NA to RP: (Mnemonic - BGPMO)

1. Section 54(2): Insurance co, Banking co, FI including NBFC

2. Section 54(3): GTA supplying services in relation to transportation of goods by road

3. Section 54(4): Supplier supplying Passenger transportation service.

4. Section 54(4A): Supplier supplying services by way of admission to exhibition of cinematograph

films in Multiplex screens.

5. OIDAR u/s 14 of IGST act.

Purpose of amendment: To enable and encourage digital payments where buyer can scan the

dynamic QR code and make payment from mobile wallet directly.

Today, many shops have static QR code at the payment counter which is scanned by the buyer, but

the buyer has to enter the amount to be paid to the shop in the mobile payment App.

The dynamic QR code, on the other hand, will have the payment details and thus ‘scan and pay’ in

one go is possible.

25 Notification No. 71/2020 – Central Tax dated 30.09.20



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E Way Bill

Rule 138A: Documents and devices to be carried by a person-in-charge of a conveyance -

QR code having embedded IRN, can be presented for verification by PO

(1)PIC to carry Invoice/BOS/DC + EWB in physical form or mapped to RFID

The person in charge of a conveyance shall carry—

(a) the invoice or bill of supply or delivery challan, as the case may be; and

(b) a copy of the e-way bill in physical form or the e-way bill number in electronic form or mapped

to a Radio Frequency Identification Device embedded on to the conveyance in such manner as

may be notified by the Commissioner: (applicable only in case of movement by road)

Provided that nothing contained in clause (b) of this sub-rule shall apply in case of movement of

goods by rail or by air or vessel:

Provided further that in case of imported goods: PIC to carry a copy of BOE filed by importer

& the no. & date of BOE to be indicated in part A of EWB 01.

(2)A registered person may obtain an Invoice Reference Number from the common portal by

uploading, on the said portal, a tax invoice issued by him in FORM GST INV-1 and produce the

same for verification by the proper officer in lieu of the tax invoice and such number shall be valid

for a period of thirty days from the date of uploading.

(2) 26In case, invoice is issued in the manner prescribed under rule 48(4), the Quick

Response (QR) code having an embedded Invoice Reference Number (IRN) in it, may

be produced electronically, for verification by the proper officer in lieu of the physical

copy of such tax invoice.

(3)Information in Part A of FORM GST EWB-01 shall be auto-populated

Where the registered person uploads the invoice under sub-rule (2), the information in Part A of

FORM GST EWB-01 shall be auto-populated by the common portal on the basis of the information

furnished in FORM GST INV-1.

(4)Commissioner to notify class of transporters to obtain a RFID

The Commissioner may, by notification, require a class of transporters to obtain a unique Radio

Frequency Identification Device and get the said device embedded on to the conveyance and map

the e-way bill to the Radio Frequency Identification Device prior to the movement of goods.

(5)EWB not required if notified by commissioner

Notwithstanding anything contained in clause (b) of sub-rule (1), where circumstances so warrant,

the Commissioner may, by notification, require the person-in-charge of the conveyance to carry

the following documents instead of the e-way bill

(a) tax invoice or bill of supply or bill of entry; or

(b) a delivery challan, where the goods are transported for reasons other than by way of supply.

Crux: In case of applicant preparing invoice under rule 48(4) (i.e., e-invoice), QR code

having embedded IRN, can be presented for verification by PO instead of physical copy of

tax invoice.

26 Notification No. 72/2020 – Central Tax dated 30.09.20



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Payment of Tax

Section 50: Interest on delayed payment of Tax – In case of belated return, Interest on net tax

liability.

(1)Failure to pay tax – interest payable @ 18% p.a.

Every person who is liable to pay tax in accordance with the provisions of this Act or the rules

made thereunder but fails to pay the tax or any part thereof to the Government within the period

prescribed, shall for the period for which the tax or any part thereof remains unpaid, pay, on his

own, interest at such rate, not exceeding eighteen percent, as may be notified (notification

13/2017-CT) by the Government on the recommendations of the Council.

27Provided that the interest on tax payable in respect of supplies made during a tax

period and declared in the return for the said period furnished after the due date in

accordance with the provisions of section 39, except where such return is furnished after

commencement of any proceedings under section 73 or section 74 in respect of the said

period, shall be levied on that portion of the tax that is paid by debiting the electronic

cash ledger.

(2)Computation of Interest from the day succeeding the day tax was due

The interest under sub-section (1) shall be calculated, in such manner as may be prescribed, from

the day succeeding the day on which such tax was due to be paid.

(3)Undue/excess claim of ITC or excess reduction in Output tax liability – interest @24%

A taxable person who makes an undue or excess claim of input tax credit under section 42(10) or

undue or excess reduction in output tax liability under section 43(10), shall pay interest on such

undue or excess claim or on such undue or excess reduction, as the case may be, at such rate not

exceeding 24%, as may be notified (notification 13/2017) by the Government on the

recommendations of the Council.

Crux: Proviso to section 50(1) inserted, to provide that in case of belated return, interest on tax

payable shall be levied on that portion of the tax that is paid by debiting the electronic cash ledger

i.e., on net tax liability.

However, where such return is furnished after commencement of any proceedings u/s 73/74 – then

interest payable on gross tax liability.

Note on Effective date for applicability of the amendment: The amendment although made

effective from 01.09.20, The GST council in its 39th meeting, held on 14.03.20 recommended the

amendment of section 50 to be made effective retrospectively w.e.f. 01.07.2017 and in order to

implement the decision of the council administrative instructions has been issued to recover interest

on net tax liability w.e.f. 01.07.2020. (Administrative instruction – F. No. CBEC –

20/01/08/2019 – GST)

27 Inserted by the Finance (No. 2) Act, 2019, Effective from 01.09.2020.



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Illustration from ICAI Study material

M/s ABC Ltd. have belatedly filed GST return (under section 39) for the month of January

after 60 days from the due date for filing such return. Total tax paid in such return is as

below:

Particulars IGST (Rs) CGST (Rs) SGST (Rs)

Output tax payable 4,50,000 2,85,000 2,85,000

Tax payable under reverse charge 18,000 32,000 32,000

Input tax available for utilisation 2,50,000 55,000 55,000

Tax paid through Electronic Cash Ledger 2,18,000 2,62,000 2,62,000

Examine the interest payable as per the provisions of GST law.

What would be your answer, if entire tax for the month of January has to be paid through

Electronic Credit Ledger except taxes to be paid on reverse charge basis?

Answer:

Proviso to section 50 lays down that the interest on tax payable in respect of supplies made during a

tax period and declared in the return for the said period furnished after the due date in accordance

with the provisions of section 39, except where such return is furnished after commencement of any

proceedings under section 73 or section 74 in respect of the said period, shall be levied on that portion

of the tax that is paid by debiting the electronic cash ledger.

In the given scenario, M/s ABC Ltd. have filed their return belatedly and as per the above provisions,

interest is payable on the tax component paid through Electronic Cash Ledger only. A point relevant

to note here is that tax payable on reverse charge basis also carries interest for the period of delay in

remittance of tax and input tax credit cannot be used to pay the same (i.e., tax payable under reverse

charge has to be paid in cash).

Accordingly, interest under section 50 payable for the tax paid through Electronic Cash Ledger is

computed as below:

IGST: 218,000 *18%*60/365 = 6,450

CGST: 262,000*18%*60/365 = 7,752

SGST: 262,000*18%*60/365 = 7,752

Further, if entire tax payable for January is paid through Electronic Credit ledger, except for

the taxes to be paid under reverse charge basis, then interest under section 50 is applicable only on

the remittance of tax under reverse charge basis and not for tax payable on forward charge basis.

Interest payable is given as below:

IGST: 18,000 * 18% * 60/365 = 532

CGST: 32,000 * 18% * 60/365 = 946

SGST: 32,000 * 18% * 60/365 = 946



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Returns

28Rule 67A: Manner of furnishing of return or details of outward supplies by short

messaging service facility – Introduced for Nil GSTR 3B/GSTR 1/GST CMP-08.

GSTR 3B/GSTR 1/CMP 08 can be furnished through SMS using the registered mobile no.

Notwithstanding anything contained in this Chapter, for a registered person

- who is required to furnish a Nil return u/s 39 in FORM GSTR-3B or

- a Nil details of outward supplies u/s 37 in FORM GSTR-1 or

- a Nil statement in FORM GST CMP-08 for a tax period,

- any reference to electronic furnishing

- shall include furnishing of the said return or the details of outward supplies or statement

- through a short messaging service using the registered mobile number and

- the said return or the details of outward supplies or statement shall be verified by a registered

mobile number based One Time Password facility.

Nil return means a return with no entry in all the tables of GSTR 3B/1/CMP 08

Explanation. - For the purpose of this rule, a Nil return or Nil details of outward supplies or Nil

statement

- shall mean

• a return under section 39 or

• details of outward supplies under section 37 or

• statement under rule 62,

• for a tax period that has nil or no entry in all the Tables in FORM GSTR-3B or FORM

GSTR-1 or FORM GST CMP-08, as the case may be.

Crux:

Nil - GSTR 3B/GSTR 1/CMP 08 can be furnished through SMS using the registered mobile no. & said

return shall be verified by a registered mobile number based One Time Password facility.

Process of filing Nil GSTR 3B through SMS (Just for Knowledge)

1. Send a SMS to 14409 from registered Mobile Number as

NIL<space>3B<space>GSTIN<space>Tax period.

2. Now 6-digit code will be received

3. Type CNF<space>3B<space>Code, Send a SMS to 14409

4. ARN shall be received on the registered mobile no.

Clarification regarding optional filing of annual return under NNo. 47/2019- CT dt 9.10.19

further amended by NNo. 77/2020 – CT dt 15.10.20 - AR optional for RP with ATO upto 2 cr

Crux:

Filing of Annual return was made optional for RP with ATO upto Rs 2 crores, for the FY 17-18, 18-19

and now for FY 19-20.

The annual return shall be deemed to be furnished on the due date if it has not been furnished before

the due date for the financial year 2017-18, 2018-19 & 2019-20.

28 Notification No. 38/2020 substituted NNo. 58/2020, further substituted by NNo. 79/2020 – Central Tax dated 15.10.2020



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Rule 80: Annual return – For FY 19-20, GST audit only if ATO > 5 crores.

(1) RP except ISD, TDS deductor, TCS collector, CTP & NRTP shall furnish AR in GSTR-9

(2) ECO shall furnish Annual statement in GSTR 9B

(3) Every RP other that CG/SG/LA whose ATO > 2 crores shall get accounts audited &

furnish GSTR 9C

Every registered person 29other than those referred to in the proviso to section 35(5),

whose aggregate turnover during a financial year exceeds two crore rupees shall get his accounts

audited as specified under section 35(5) and he shall furnish a copy of audited annual accounts

and a reconciliation statement, duly certified, in FORM GSTR-9C, electronically through the

common portal either directly or through a Facilitation Centre notified by the Commissioner.

30Provided that for the FY 2018-2019 and 2019-2020, every registered person whose

aggregate turnover exceeds five crore rupees shall get his accounts audited as specified u/s

35(5) and he shall furnish a copy of audited annual accounts and a reconciliation statement,

duly certified, in FORM GSTR-9C for the said financial year, electronically through the common

portal either directly or through a Facilitation Centre notified by the Commissioner.

Crux:

For the FY 2019-20, RP to get his accounts audited and furnish GSTR 9C if ATO > 5 crores.

29 Inserted by Central Goods and Services Tax (Amendment) Rules, 2019, w.e.f. 1-2-2019. 30 Substituted vide NOTIFICATION NO. 79/2020 – Central Tax dated 15-10-2020


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