I-T Department raids wellness group, uncovers illicit income of Rs 500 Cr (See 'TOG News')DRDO inks pact with 16 firms for transfer of technology (See 'TOG News')INTL - Payment received with reference to sale, distribution & exhibition of cinematographic films cannot be considered as royalty: ITAT (See 'TOG Latest')I-T - Penalty imposed u/s 271D is sustainable where loans taken & paid are not substantiated with requisite evidence: ITAT (See 'TOG Latest')Central Excise - It is trite law that credit lying in balance as on date of de bonding of 100% EoU & conversion to DTA unit can be transferred to the latter: CESTAT (See 'TOG Latest')Service Tax - Service tax is not payable on surrender charges upon substitution of Explanation to Section 65(105)(zzzzf): CESTAT (See 'TOG Latest')NITI Aayog launches India Innovation Index 2019; Karnataka tops listChinese economic growth slower than expected in Q3Turkey agrees to halt offensive in Syria after deal with US; permits Kurdish withdrawalVenezuela wins seat on UN Human Rights CouncilSatellites to monitor whale strandings from spacePan-India fingerprint database to help nail criminals faster: MoS (See 'TOG News')TP - Government companies are generally unfit for purposes of comparison against private companies driven by profit motive: ITAT (See 'TOG Latest')I-T - Cash received for treatment under medical emergency cannot be held as transaction of loan or advance in contravention of Sec 269SS: ITAT (See 'TOG Latest')Central Excise - What is of essence in a decision is its ratio & not every observation found therein nor what logically follows from various observations made in it: HC (See 'TOG Latest')Customs - Duty rate & tariff applicable on imported goods cleared from warehouse are to be at rate & valuation as on date on which BoE is presented for their home consumption: HC (See 'TOG Latest')Plastic is hazardous for Planet: Reddy (See 'TOG News')
Tax on Go
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Budget 2019 – 7 Key points from indirect tax perspective
By CA Vaishali Kharde [Sr. Manager with CA Pritam Mahure and Associates]
Jul 06, 2019

UNION Budget 2019 was the first budget of second term of the Modi Government presented by H'ble Finance Minister Nirmala Sitharaman. The Budget has proposed certain changes from Indirect Tax perspective as discussed below:

1. Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (LDRS)

H'ble Finance Minister during her Budget Speech highlighted that more than 3.75 lakh crore is blocked in the litigations of Service Tax and Excise. Thus, to address the pending issues of pre-GST period and expediate the closure of pending litigation LDRS is introduced by the Finance Bill, 2019.

[refer Clause 119 to 134 of Finance Bill, 2019]

2. New Return methodology is prescribed

The transition of new GST returns was discussed in the earlier GST Council meetings [refer Press Release dated 11th June 2019]. As per said Press Release, new GST Return are expected to be applicable, on trial basis, from July 2019 and in-phased manner, from October 2019. Thus, the CGST Act is amended to accommodate provisions pertaining to the proposed New GST return process.

[refer Clause 96 of Finance Bill, 2019].

3. Liability paid under one head can be transferred to another head

Earlier, in case of payment of tax in incorrect head (say in penalty head instead of Late fees) then the taxpayer was unable to adjust the same and was required to undergo the tedious process of refund.

Now, it is proposed that the taxpayers can transfer / inter-change the amounts within the heads such as , interest, penalty, fee etc in the electronic cash ledger under the Act to the electronic cash ledger for Integrated tax, Central tax, State tax or Union territory tax or Cess by following prescribed process. Further, if any amount has been transferred to the electronic cash ledger as per said provisions then such amounts shall be deemed to be deposited in the said ledger only.

[refer Clause 98 of Finance Bill, 2019].

4.Interest is payable on net amount instead gross amount

Recently, the Hon'ble Telangana High Court held that interest will be leviable on the gross amount instead of net amount (i.e. gross liability less ITC available) [refer Writ Petition No.44517 of 2018].

Now, Section 50 of the CGST Act, is proposed to be amended to include proviso that in case of delay in filing of GST return interest is to be levied on the portion of the tax that is paid by debiting the electronic cash ledger. However, this relief will not be available in case the return is furnished after commencement of proceeding under section 73/ 74 of CGST Act.

[refer Clause 99 of Finance Bill, 2019].

5.Increasing the threshold limit for registration under GST from 20 lakhs to 40 lakhs

Section 2 of the CGST Act, is amended to increase the turnover limit from INR 20 lakhs to INR 40 lakhs in case of supplier who is engaged exclusively in the supply of ‘goods' subject to the prescribed conditions.

[refer Clause 93 of Finance Bill, 2019].

6.Constitution of National Appellate Authority for Advance Ruling

It is proposed to constitute the National Appellate Authority for Advance Ruling so as to address the challenge of conflicting Advance Rulings as given by the separate Advance Ruling Authorities of States. [refer Clause 101A and 101B of Finance Bill, 2019].

7. Certain rate related changes in the Central Excise and Custom Act

The Excise rate and custom rates for certain commodities are undergo a change. Like BCD on Cashew Kernel, Marble Slabs is increased.

Additionally, there are certain other changes under Indirect tax like option of composition scheme is now available to service provider under GST subject to certain condition, retrospective exemption of service tax prescribed for liquor license upfront amount paid towards long term lease etc.

In the year of continuous changes in GST everyone was expecting there could be minimal changes under indirect tax in Budget. However, many changes are announced in Budget, thus, it appears that the momentum of change will continue!

[Author has Co-authored two books on GST, Views expressed are strictly personal]