On April 5, 2019, the Central Board of Indirect Taxes & Customs (‘CBIC’) has issued a circular clarifying a previous notification issued on 7th March regarding CGST on First Supplies which came into effect on April 1, 2019.
What does the March 7 notification provide?
As per the circular, a person registered has the option to pay CGST @ 3% on first supplies of goods or services or both upto an aggregate turnover of Rs 50 Lakhs made in any financial year, provided the registered person does not have aggregate annual turnover exceeding Rs 50 lakhs in the preceding financial year.
First supply of goods or services for the purpose of determining the eligibility to pay tax @ 3% rate includes the supplies in the period starting from April 1 of a given financial year.
What does the April 5 Circular say?
CBIC has clarified that registered persons who wish to opt for paying CGST @ 3% must file intimation in Form GST CMP-02 latest by 30th April, 2019. This is in a bid to bring uniformity between those paying tax under Section 10 ie Composition Levy, and @ 3% CGST.
The procedures for intimating CBIC is as under:
- In FORM GST CMP-02, the registered person must select the category of registered person as “Any other supplier eligible for composition levy”
- Secondly, the registered person shall furnish the statement in FORM GST ITC-03 regarding input tax credit availed within a period of sixty days from the commencement of the relevant financial year.
- Further, any person who applies for registration and who wants to opt for payment of CGST @ 3%, if eligible, may do so by indicating the option at serial no. 5 and 6.1(iii) of FORM GST REG-01 at the time of filing of application for registration.
- The option of payment of CGST @3% shall be applicable to all places of business in the State or Union Territory registered on the same Permanent Account Number. This means that for the purpose of calculating turnover, all such businesses under one PAN shall be taken together.
- The option to pay CGST @ 3% would be effective from the beginning of the financial year or from the date of registration in case new registration has been obtained during the year.
Click here for the circular.
Click here for the previous post.
