SKP Group
SKP GST Update
22 June 2017
GST rollout – Anti-Profiteering and other rules finalised

The GST Council in its meeting on 18 June 2017 finalised rules relating to the following:
  • Anti-Profiteering
  • Advance Ruling
  • Appeals and Revisions
  • Assessment and Audit
  • E-Waybill (Provisional till such time the final rule is approved)
 Anti-profiteering Rules
The GST Council has approved the much awaited anti-profiteering rules under the GST regime. Key features of these regulations are as follows:
  • The rules extend to the whole of India except the State of Jammu and Kashmir.
  • A National Anti-profiteering Authority shall be constituted whose duties would consist of:
    1. To identify the registered person and determine whether any reduction in the tax rate on any supply of goods or services or the benefit of the input tax credit has not been passed on to the recipient by way of proportionate reduction in prices.
    2. To order:
      1. Reduction in prices.
      2. Returning to the recipient, an amount equivalent to the amount not passed on by way of benefit on reduction in prices along with interest at the rate of eighteen percent from the date of collection of higher amount till the date of return of such amount.
      3. Imposition of penalty as prescribed under the Act (no penalty has yet been prescribed under the Act).
      4. Cancellation of registration under the Act.
  • The authority would formulate the methodology and procedure for the determination as to whether the benefits by way of commensurate reduction in prices have been passed on.
  • A four tier structure of the Anti-profiteering implementation machinery has been envisaged:
    1. A state level screening committee to receive the application from interested parties, Commissioner, or any other person and to forward the application to Standing Committee.
    2. Standing Committee to refer the matter to Director General (Safeguards).
    3. Director General (Safeguards) shall complete the investigation within three months.
    4. Anti-Profiteering Authority to issue orders within three months of receipt of a report from Director General (Safeguards).
Comparison of Important Revisions in Draft Rules
A comparison of important revisions made in the final rules vis-à-vis the draft rules is as follows:

Advance Ruling
Sr. No. Existing provision as per draft rules Change made in the final rules published Effect of such change
  1.  
Common provision for filing of an appeal, by an assessee or an officer, against the advance ruling issued under sub-section (6) of Section 98 of the Act. This sub-rule has been suitably amended to provide for different procedures for making an appeal against an Advance Ruling by an assessee- applicant and by an officer under the Act. An applicant is required to appeal in FORM GST ARA-2 which shall be accompanied with a fee of INR 10,000.
An officer can appeal in FORM GST ARA-3 and is not required to pay any fees for the appeal.
  1.  
An officer having experience of at least three years in the rank of Joint Commissioner can be appointed as a member of the Authority for Advance Ruling (AAR). The provision of three years experience has been deleted. Any officer in the rank of Joint Commissioner can be appointed as a member of AAR, irrespective of his or her experience in such rank.

Appeals and Revisions
Sr. No. Existing provision as per draft rules Change made in the final rules published Effect of such change
  1.  
An appeal or application to the Appellate. Authority or Appellate Tribunal shall be filed in a suitable form, either electronically or otherwise as may be notified by the Commissioner, and a provisional acknowledgement shall be issued to the appellant immediately. The phrase “along with supporting document” has been added. An appellant or applicant is required to submit supporting documents along with the appeal or application.
 
It appears that the intention of the final rules is to provide for submission of all appeal documents electronically
  1.  
A hard copy of the application or appeal in a suitable form shall be submitted in triplicate or quintuplicate to the Appellate Authority or Registrar respectively and shall be accompanied by a certified copy of the decision or order appealed against along with the supporting documents within seven days of filing of the appeal. The respective sub-rules are suitably amended to delete the requirement of submitting the hard copy of the application or appeal and the submission of supporting documents. Only a certified copy of the decision or order which is being appealed against is to be submitted within seven days of filing of the appeal.
 
It appears that the intention of the final rules is to provide for submission of all appeal documents electronically

Assessment and audit
Sr. No. Existing provision as per draft rules Change made in the final rules published Effect of such change
  1.  
The proper officer may, on receipt of the application requesting for payment of tax on a provisional basis, issue a notice in FORM GST ASMT-02 requiring the registered person to appear in person or furnish additional information or documents in support of his request. The provision of issuing a notice requiring the registered person to appear before the proper officer in person has been deleted. The power of proper officer to ask the applicant to appear in person has been removed.
  1.  
The proper officer on receipt of an application for provisional payment of tax could either reject the application or allow such provisional payment. The phrase “rejecting the application” has been deleted. The proper officer cannot reject an application for payment of tax on provisional basis.
  1.  
In the case of any discrepancy found on scrutiny of returns, the proper officer shall issue a notice informing the registered person of such discrepancy and seeking his explanation thereto within such period not exceeding fifteen days. The words “fifteen days” have been replaced with the words thirty days and the phrase “or such further period as may be permitted by him” has been added. The proper officer can now permit a period of thirty days or even a longer period for seeking an explanation from the registered person under this sub-rule.
  1.  
In an assessment in certain cases, the proper officer had the power to issue a notice to an unregistered taxable person. The word “unregistered” has been deleted. This sub-rule deals only with cases falling under Section 63 of the CGST Act. The said Section deals with the assessment of unregistered persons only. Deletion of the word “unregistered” from this sub-rule appears to have created a conflict between the rule and the corresponding Section.
 
E-Waybill  
  1. Until such time as an E-Waybill system is developed and approved by the Council, the government may, by notification, specify the documents that the person in charge of a conveyance carrying any consignment of goods shall carry while the goods are in movement or in-transit storage.
  2. It appears that if a notification detailing the way forward on E-Waybill is not issued by 1 July 2017, the existing system in some states of check-posts and Waybill will continue under the GST regime until such time as a notification is issued or the E-Waybill rules are approved.
  3. It is pertinent to note that there is no provision of such check posts under GST and hence an amendment in law may be required to grant legality to such a system.
Notifications issued
  • Central government through the Central Board of Excise and Customs has released certain notifications in view of the upcoming date of migration to the GST regime.
  • Certain key points of the said notifications are as follows:
    • Certain provisions of the CGST Act, 2017 and the IGST Act, 2017 have been brought into force w.e.f 22 June 2017.
    • Various officers have been appointed and their jurisdiction has been defined under the GST regime.
    • Rules on composition levy and registration and their respective forms have been notified.
    • The GSTN website www.gst.gov.in has been officially notified.
    • Persons who are only engaged in making supplies of taxable goods or services or both, the total tax on which is liable to be paid on reverse charge basis by the recipient of such goods or services or both, have been exempted from obtaining registration under the aforesaid Act. This is aimed at providing relief to persons such as advocates and transport agencies.
    • The Principal Commissioner of Central Tax, Bengaluru West and all the officers subordinate to him have been empowered to grant registration in case of online information and database access or retrieval services provided or agreed to be provided by a person located in non-taxable territory and received by non-taxable online recipient.
SKP's comments
  • With the much awaited Anti-profiteering rules being approved almost on the eve of GST implementation, the industry needs to gear up and rework the pricing to avoid being examined by the authority. Analysis of GST touch points in the supply chain should help determine benefits that need to be passed on to the customer.
  • The virtual abeyance of E-Waybill provisions shows the intent of the Government that it does not wish to introduce additional procedures and compliances until the initial implementation of GST is stabilised. The industry needs to keep a watch on what individual states decide on the interim system till the E-Waybill rules are finalised.
  • The amendments in rules also signal that the government wishes to further move towards a system where the operation of the law is IT-driven and the discretionary powers of the authorities are reduced.
  • There is now absolutely no uncertainty that GST is arriving on 1 July 2017. 
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