One of the features of GST has been the ever-so-frequent changes in the laws. These changes do not seem to be stopping anytime soon — recently the GST Council provided a link on its website to a document that proposes 46 amendments to the GST laws. It is apparent that the amendments are being proposed with an eye on the elections next year.

As is becoming common with everything about GST, one needs some time and patience to comprehend these amendments since the proposed amendments are shown in red while strike through has been used to remove words considered irrelevant. As is also becoming common with GST, the amendments are a mixed bag.

Reverse charge

Probably the most welcome proposal is the one proposing to amend Section 9(4) as per which only notified registered persons should be liable to pay GST under reverse charge mechanism for purchases from unregistered dealers. The rationale given for this proposal is that it would benefit small and medium enterprises — in which case the threshold limit should be set quite high.

Yet another proposal that would score top marks for popularity is the one proposing permitting input tax credit on supply of food, transport and insurance provided to employees if it is obligatory for the employer. The flip side of this provision is that employers are going to have a tough time convincing the tax department that providing transport and insurance is their obligation.

Factories registered under the Factories Act, 1948 can get away with the argument that as per that Act they need to run and maintain a canteen. BPO/KPO companies can take shelter under a notification under service tax laws which clarified that for a BPO/KPO company, transporting employees to/from their place of work was permissible for credit.

If the GST Council wants to pre-empt such needless questions from recurring, they should remove the words “ if it is obligatory for the employer” from the above proposal. It is proposed to permit banking companies and financial institutions to get input tax credit for transportation of money.

Revision of return

The proposal to permit revision of the GST returns would be welcomed by all as the inability to revise a return now has caused immense hardship to many a taxpayer. It is proposed that a single credit note can be issued against a bunch of invoices instead of having to tag them to a single invoice as at present. As per the existing provisions, a person seeking registration shall be granted a single registration in a State or Union Territory. However, if he has multiple business verticals in a State or UT, he may obtain separate registration for each business vertical.

It has now been proposed that such persons should be allowed to obtain separate registration for each place of business in a State or UT — a move that will certainly be welcomed. In case of import of goods, IGST would be payable only at the time of clearance of goods from Custom-bonded warehouse for home consumption. This deferment of levy of GST is done so as to avoid double taxation. There are some minor amendments relating to audits and some relaxations for e-commerce operators.

Taxpayers will be glad that lawmakers are willing to lend an ear to genuine grievances. What they will not be glad about is that only a chosen few get the benefit of the relaxations.

The writer is a chartered accountant.

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