JANUARY 02, 2019

By Vijay Kumar

GST has to be simple and consumer friendly:

PRIME Minister in his first interview to a news channel on the first day of the New Year stated,

-  GST has to be simple and consumer friendly. Work is constantly going on in this direction;

-  We are committed to hearing all issues being faced by people and placing them in front of the GST council. Feedback of the people is most important for us. Our approach is to keep taking feedback constantly and work on the GST too is happening like this;

-  The GST council has a wide range of members. There are state Governments too, many of them where BJP is not in power. Whatever is happening is happening through consensus;

-  Earlier, there were so many hidden taxes. The tax rates were also high. GST has made things simpler. It has also brought down the taxes on so many commodities.

The Prime Minister seems to be sincerely believing that GST is indeed a Simple Tax. It is of course reassuring to know that he is willing to get feedback and sort out problems. The problem of the Prime Ministers is that they get only the kind of feedback that the supplier of feedback believes the PMs would like. Since Modi has declared that GST is a good and simple tax, the feedback to him would be that it is indeed a good and simple tax.

It is still heartening to note that the Government has reacted to the feedback and the decisions of the GST Council and issued 41 notifications 6 circulars and 3 orders, just a day prior to the PM's interview. The total of these government missiles issued in 2018 were:

191 Notifications

82 Circulars

4 Orders

And the CGST Rules were amended 14 times.

If the tax was so simple, why so many changes and how can a consumer keep track of so many changes and is this what you call consumer friendly? Perhaps the consumer in GST is the Government and the tax is government friendly, which means it is really consumer friendly. As usual, the PM is always right.

The CBIC has a new Chief this week and the outgoing Chairman has mentioned these consumer friendly changes in his last weekly letter on his date of retirement - 31.12.2018. He says, "As always, I would request Zonal Pr. Chief/Chief Commissioners to be acquainted with these trade friendly decisions and keep guiding trade and industry."

GST is indeed the Golden Super Track for the future tax highway. Let's face it, GST is here to stay; it is an irreversible irritant and when it is inevitable, why not relax and enjoy?

Some interesting clarifications: In the process of making the tax simpler, the CBIC has issued certain clarifications in six circulars.

GST on Confiscated goods: intra-State and inter-State supply of used vehicles, seized and confiscated goods, old and used goods, waste and scrap made by the Central Government, State Government, Union territory or a local authority is a taxable supply under GST. It has been notified that intra-State and inter-State supply respectively of used vehicles, seized and confiscated goods, old and used goods, waste and scrap by the Central Government, State Government, Union territory or a local authority to any registered person, would be subject to GST on reverse charge basis as per which tax is payable by the recipient of such supplies. A doubt has arisen about taxability of intra-State and inter-State supply of used vehicles, seized and confiscated goods, old and used goods, waste and scrap made by the Central Government, State Government, Union territory or a local authority to an unregistered person. It is clarified that the respective Government departments (i.e. Central Government, State Government, Union territory or a local authority) shall be liable to get registered and pay GST on intra-State and inter-State supply of used vehicles, seized and confiscated goods, old and used goods, waste and scrap made by them to an unregistered person subject to the provisions of sections 22 and 24 of the CGST Act.

Credit Noted GST: As per the provisions of section 142(2) of the CGST Act, in case of revision of prices of any goods or services or both on or after the appointed day (i.e., 01.07.2017), a supplementary invoice or debit/credit note may be issued which shall be deemed to have been issued in respect of an outward supply made under the CGST Act. It is clarified that in case of revision of prices, after the appointed date, of any goods or services supplied before the appointed day thereby requiring issuance of any supplementary invoice, debit note or credit note, the rate as per the provisions of the GST Acts (both CGST and SGST or IGST) would be applicable.

What is that Long Line?: A doubt has arisen about the applicability of long line mentioned in clause (a) of notification No. 50/2018- Central Tax dated 13.09.2018. It is clarified that the long line written in clause (a) in notification No. 50/2018- Central Tax dated 13.09.2018 is applicable to both the items (i) and (ii) of clause (a) of the said notification.

What is this long line in the notification? All the lines in the Notification appear to be of the same length!

(Please see   TDS Mechanism and its contradictions in GST - Part II)

Who is the owner of goods?: It is hereby clarified that if the invoice or any other specified document is accompanying the consignment of goods, then either the consignor or the consignee should be deemed to be the owner. If the invoice or any other specified document is not accompanying the consignment of goods, then in such cases, the proper officer should determine who should be declared as the owner of the goods.

Damned Exports: ABC Ltd. India has received an order for supply of services amounting to $ 5,00,000/- to a US based client. ABC Ltd. India is unable to supply the entire services from India and asks XYZ Ltd. Mexico to supply a part of the services (say 40% of the total contract value). ABC Ltd. India shall be the exporter of services for the entire value if the invoice for the entire amount is raised by ABC Ltd. India. The services provided by XYZ Ltd. Mexico to the US based client shall be import of services by ABC Ltd. India and it would be liable to pay integrated tax on the same under reverse charge and also be eligible to take input tax credit of the integrated tax so paid.

Is it really necessary to complicate matters so much? A company in India has to pay GST on services exported by a company in Mexico to a company in USA, then take credit subject to all restrictions and disputes!

GST Officer among top 10 officers whose Initiatives Made 2018 Better: "Better India" has recognised Hyderabad GST Joint Commissioner B Raghu Kiran as one of the top 10 Officers Whose Initiatives Made 2018 Better. www.thebetterindia.com says, "Unwilling to be stifled by red-tapism, these 10 dedicated civil servants went above and beyond their duty in 2018 to change India for the better. It adds,

	Realising that most citizens don't know if a trader is supposed to collect GST in the first place, techie-turned-IRS officer B Raghu Kiran decided to put his software skills to good use - he utilised his own money and off-duty hours to develop an app (called GST Verify). Every time one shops/eats /buys, they can simply check the bill and use the app to verify whether or not a trader is authorised to collect the tax!
	"The benefits of GST can reach the people only if they are protected from fraudulent traders. So I decided to empower them with information. I made the app without any institutional support but with the demand increasing sharply, it will be great if the government can take over its management!", says Raghu, speaking to The Better India.
In 2019, B Raghu Kiran plans to harness technology to improve and fine-tune other aspects of the GST infrastructure.

The former Chairman of the CBIC has mentioned Kiran's achievement in his newsletter and commented, "I am confident that there will be other officers who would soon emulate his incredible achievement and "Out of the Box" initiative!", but he doesn't mention anything about the government taking over the management of the app. That is how government works.

On a personal note it is a kind of déjà vu for me. 18 years ago, along with some colleagues, I made an Electronic Tariff for Central Excise which would cost 2 paise per copy when printed copies were being bought (even by Government) at Rs. 400/- per copy. I gave it to the Government and suggested that all assessees and officers should be given free copies, which would have costed the government just one percent of the money it was spending on these tariff books. No effort was spared by the powers that be to kill the project, which they ultimately did successfully.

The just retired Chairman of CBIC in his last newsletter says, "whether it is formulation of laws, rules and procedures in GST, simplification of procedures, co-ordination with other State Authorities and other stakeholders - the officers and staff of CBIC, I'm sure, will re-dedicate themselves in the New year to perform their mandate with integrity, professionalism and tax-payer service orientation."

On that positive note, a Happy New Year of GST.