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Amendments (Fifth Amendment, 2018) to the CGST Rules, 2017

Circular No.ES/93/ 2018-19                                                                                        14th June, 2018

To: Members of the Council

Sub: Amendments (Fifth Amendment, 2018) to the CGST Rules, 2017

Dear Member,

CBIC has issued Notification No. 26/2018- Central Tax dated 13th June, 2018 by amending the Central Goods and Services Tax Rules, 2017. These rules may be called the Central Goods and Services Tax (Fifth Amendment) Rules, 2018 and they shall come into force on the date of their publication in the Official Gazette.

(A)       The Central Government has notified the amended rules relating to refund on account of inverted duty structure, refund of input tax credit etc.

Relevant extract of the Notification is as follows:-

  • In rule 89

(iii)       with effect from 01st July, 2017, in rule 89, for sub-rule (5), the following shall be substituted, namely:-

“(5)      In the case of refund on account of inverted duty structure, refund of input tax credit shall be granted as per the following formula:-

Maximum Refund Amount = {(Turnover of inverted rated supply of goods and services) x Net ITC ÷ Adjusted Total Turnover} - tax payable on such inverted rated supply of goods and services.

Explanation:- For the purposes of this sub-rule, the expressions –

(a)        Net ITC shall mean input tax credit availed on inputs during the relevant period other than the input tax credit availed for which refund is claimed under sub-rules (4A) or (4B) or both; and

(b)        Adjusted Total turnover shall have the same meaning as assigned to it in sub-rule (4).”

  • In rule 95

(iv)       with effect from 01st July, 2017, in rule 95, in sub-rule (3), for clause (a), the following shall be substituted, namely:-

“(a)      the inward supplies of goods or services or both were received from a registered person against a tax invoice;”;

  • In rule 97

(v)        in rule 97, in sub-rule (1), after the proviso, the following proviso shall be inserted, namely:-

“Provided further that an amount equivalent to fifty per cent. of the amount of cess determined under sub-section (5) of section 54 read with section 11 of the Goods and Services Tax (Compensation to States) Act, 2017 (15 of 2017), shall be deposited in the Fund.”;

  • In rule 133

(vi)       in rule 133, for sub-rule (3), the following shall be substituted, namely:-

“(3)      Where the Authority determines that a registered person has not passed on the benefit of the reduction in the rate of tax on the supply of goods or services or the benefit of input tax credit to the recipient by way of commensurate reduction in prices, the Authority may order-

(a)        reduction in prices;

(b)        return to the recipient, an amount equivalent to the amount not passed on by way of commensurate reduction in prices along with interest at the rate of eighteen per cent. from the date of collection of the higher amount till the date of the return of such amount or recovery of the amount including interest not returned, as the case may be;

(c)        the deposit of an amount equivalent to fifty per cent. of the amount determined under the above clause in the Fund constituted under section 57 and the remaining fifty per cent. of the amount in the Fund constituted under section 57 of the Goods and Services Tax Act, 2017 of the concerned State, where the eligible person does not claim return of the amount or is not identifiable;

(d)        imposition of penalty as specified under the Act; and

(e)        cancellation of registration under the Act.

Explanation: For the purpose of this sub-rule, the expression, “concerned State” means the State in respect of which the Authority passes an order.”;

(B)       Further, in the Central Goods and Services Tax Rules, 2017, amendments are made in the following GSTR forms-

Relevant extract of the Notification is as follows:-

1)         Form GSTR-4,

(viii)     Amendments are made in the Instructions for Serial No. 10

2)         Form GST PCT-01,  

(ix)       Amendments are made in Part B against Serial No. 4 in FORM GST PCT-01.

3)         Form GST RFD-01  

(x)       Amendments are made in Annexure – 1 for Statement 1A relating to Refund Type: ITC accumulated due to inverted tax structure and Statement 5B relating to Refund Type on account of deemed exports given in FORM GST RFD-01.

4)         Form GST RFD-01A 

(xi)      Amendments are made in Annexure – 1 for Statement 1A relating to Refund Type: ITC accumulated due to inverted tax structure and Statement 5B relating to Refund Type on account of deemed exports given in FORM GST RFD-01A.

For more information, members may kindly refer to the Notification No. 26/2018- Central Tax dated 13th June, 2018 and make a note of the same.

Thanking you,

Yours faithfully,

S.BALARAJU
EXECUTIVE DIRECTOR

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