Ludhiana: Goods and Service Tax changes from July relevant to bizmen

LUDHIANA: The GST council in its recent meeting has made several important changes and clarifications, which hold huge relevance for the city industrialists. The changes are mainly related to provisions governing the levying of interest, reversal of input tax credit (ITC) and refunds of ITC in some cases.
Tax expert N K Thamman said, “In the 47th GST council meeting, one of the much awaited reliefs from interest has been given. With effect from July 1, 2017 provisions relating to interest have been amended to provide that interest is required to be paid only if ITC has been wrongly availed and utilised. Earlier, interest was liable to be paid even on wrong availment of ITC, though not utilised. So, if a taxpayer is having sufficient balance in their electronic credit ledger till the date of reversal of any wrong ITC, he is not required to pay any interest. Second important change is related to sale of duty credit scripts like Merchandise Exports from India Scheme (MEIS) falling under HSN 4907, which is already exempted from GST. However, according to the provisions of Section 17(2) of CGST Act, 2017, the taxpayer is required to reverse proportionate ITC in respect of this exempted supply of duty credit scripts. But with effect from July 5, no ITC is required to be reversed in respect of supply, sale of duty credit scripts as the sale value of scripts is excluded from the definition of value of exempt supply.”
Thamman also added, “A major change has been made in respect of refund of accumulated ITC in case of export of goods. Earlier, the taxpayers are taking value mentioned in tax invoice issued for export of goods for calculation of refund claim. Now, it has been provided that value of goods exported out of India will be taken as the free on board (FOB) value declared in the shipping bill or bill of export form or the value declared in tax invoice or bill of supply, whichever is less. So, in case of cost insurance and freight (CIF) value contracts, where tax invoice is issued for CIF value, now FOB value will be considered for calculation of above refund. The taxpayers are advised to follow this provision in those refunds which are to be filed after July 6.”