GST CIR NO.71/45/2018 DATE 26/10/2018
Clarifications of issues under GST related to casual taxable person and recovery of excess Input Tax Credit distributed by an Input Service distributor –Reg.
Representations have been received seeking clarification on certain issues under the GST laws. The same have been examined and the clarifications on the same are as below:
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S. No |
Issue |
Clarification |
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1 |
Whether the amount required to be deposited as advance tax while taking registration as a casual taxable person(CTP)should be 100% of the estimated gross tax liability or the estimated tax liability payable in cashshould be calculated after deducting the due eligible ITC which might be available to CTP? |
1. It has been notedthat while applying for registration as a casual taxable person,theFORMGST REG-1(S. No. 11) seeks information regarding the “estimated nettax liability” onlyandnot the gross tax liability.
2. It is accordingly clarified that the amount of advance tax which a casual taxable person is required to depositwhile obtainingregistration should be calculated after considering the due eligible ITC which might be available to such taxable person. |
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2. |
As per section 27 of the Central Goods and Services Tax Act,2017(hereinafter referred to as the said Act),period of operation by causal taxable person is ninety days withprovision for extension of same by the proper officer for a further period not exceeding ninety days. Various representationshave been received for further extension of the said periodbeyond the periodof 180 days,as mandated in law. |
1. It is clarified that in case of long running exhibitions (for a period more than 180 days), the taxable person cannot be treated as a CTP and thus such personwould be required to obtainregistration as a normal taxable person.
2. While applying for normal registration the said person should upload a copy of the allotment letter granting him permission to use the premises for the exhibitionandthe allotment letter/consent letter shall be treated as the proper document as a proof for his place of business.
3. In such cases he would not be required to pay advance tax for the purpose of registration.
4. He can surrender such registrationonce the exhibition is over. |
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3. |
Representations have been received regarding the manner of recovery of excess credit distributed by an Input Service Distributor (ISD) in contravention of the provisions contained in section 20 of the CGST Act. |
1. According to Section 21of the CGST Actwhere the ISDdistributes the credit in contraventionof the provisions contained in section 20of the CGST Actresulting in excess distribution of credit to one or more recipients of credit, the excess credit so distributed shall be recovered from such recipients along with interestand penalty if any.
2. The recipient unit(s) who have received excess credit from ISD may deposit the said excess amount voluntarilyalongwith interest if any by using FORM GST DRC-03.
3. If the said recipient unit(s) does not come forward voluntarily, necessary proceedings may be initiated against the said unit(s) under the provisions of section 73 or 74 of the CGST Act as the case may be. FORM GST DRC-07can be used by the tax authorities in such cases.
4. It is further clarified that the ISD would also be liable to a general penalty under the provisions contained in section 122(1)(ix) of the CGST Act. |
2. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.
3. Difficulty if any, in the implementation of this Circular may be brought to the notice of the Board. Hindi version will follow.
(Upender Gupta)
Commissioner (GST)
F. No. 349/94/2018-GST
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