INTEGRATED GOODS AND SERVICES TAX (AMENDMENT) ACT, 2018

The Integrated Goods and Services Tax (Amendment) Bill,2018 was introduced in the Lok Sabha by the minister of finance Mr. Piyush Goyal, and it was passed on August 9, 2018.  It provides for the levy of integrated goods and services tax IGST by the centre on inter-state supply of goods and services, imports and exports, and supplies to and from special economic zones.  

1. Sub-section (4) of Section 5 of the original act The integrated tax on the supply to a registered individual of taxable products or services or both by a supplier who is not registered shall be charged by that person on a reverse charge basis as the purchaser and all the provisions of that act shall extend to that recipient as if he were the person responsible for paying the supply tax in relation to the supply. 

Shall be substituted with "The Government may, on the recommendations of the Council, by notification, specify a class of registered persons who shall, with regard to the supply of specified categories of goods or services or both purchased from a non-registered supplier, the purchaser of the supply of goods or services or both shall pay the reverse charge tax and all the provisions of this act shall apply to the recipient as if he were the person responsible for paying the tax in relation to the supply of goods or services or both.

2. In Section 12 (8) of the principal act the following sub-section shall be inserted

 "Provided that where the transportation of goods is to a place outside India, the place of supply shall be the place of destination of such goods.”

3. In the original act after section 17 (2) the following sub-section shall be inserted 

(2A). "The amount, not allocated under sub-section (1) and sub-section (2) may, for the time being, be allocated, on the recommendation of the Council, to the Central Government at a rate of fifty per cent and as the case may be to the State Governments or the territories of the Union on an ad hoc basis and shall be balanced against the amount allocated under those sub-sections."

4. In section 20 of the principal act after the 4th provision the following provision shall be inserted

"Provided also that where the appeal is to be filed before the Appellate Authority or the Appellate Tribunal, the maximum amount payable shall be fifty crore rupees and one hundred crore rupees respectively.’’

Integrated goods and services tax (Amendment) Act, 2018 was introduced to make amends in the principal Act of 2017. Under amendment act, it allows the central government on the recommendation of the GST council to specify a class of registered people who have to pay tax on receiving specified categories of goods and services from an unregistered person. This compared to the prior provision which didn't specify a group of a registered person as they had to pay the IGST on such supply. The amendment act also clarifies that if the goods are being transported to a place outside India, the place of supply will be the destination of the goods before the insertion of this proviso after section 12(8) the place of supply for transportation services was dependant on location of the service recipient. It also provides for the settlement of any balanced amount in the integrated tax account after the apportionment to the state and centre. On the recommendation of the GST council, this amount is equally distributed between both the centre and the state. Earlier in the principal act, the IGST revenue was apportioned between the centre and the state where the supply goods and services were received. Finally, a clause specifying the amount of pre-deposit payable for filing appeals was also added. The maximum sum payable shall be 50 crores in cases where the appeal is to be lodged before the appealing authority. The maximum sum payable shall be 100 crores if the appeal is to be lodged before the Appellate Tribunal. 

The Integrated Goods and services amendment act, 2018 was enacted to bring changes to the principal act by the settlement of taxes by the government under IGST and compensation cess, by making amendments to bring on par IGST provisions on lines of the amendment made to CGST act. It also proposes not to tax ocean freight by bringing change in law earlier ocean freight on the export of goods becomes taxable because the foreign importer is not a registered person. These changes have been brought to regulate the act in a better way.