Key Highlights of Circular No. 76/50/2018

2025-03-03 08:55:13 02March

02March

Key Highlights of Circular No. 76/50/2018 - GST

<h2><strong>1. GST on Sale of Used Vehicles, Seized Goods, Waste & Scrap by Government Departments</strong></h2><h3><strong>Clarification:</strong></h3><p>✅ <strong>Government departments</strong> (Central/State/Local authorities) selling <strong>used vehicles, seized goods, waste, or scrap</strong> must <strong>pay GST</strong> on such sales.<br>✅ <strong>If the sale is to a registered person</strong>, GST is payable under <strong>reverse charge mechanism (RCM)</strong> as per <strong>Notification No. 36/2017 & 37/2017-Central Tax (Rate)</strong>.<br>✅ <strong>If the sale is to an unregistered person</strong>, the <strong>government department itself must register and pay GST</strong> (if turnover crosses the threshold as per <strong>Section 22 & 24 of CGST Act</strong>).</p><hr><h2><strong>2. No Penalty under Section 73(11) for Late Filing of GSTR-3B</strong></h2><h3><strong>Clarification:</strong></h3><p>✅ <strong>Section 73(11) imposes a penalty</strong> when a taxpayer <strong>does not pay self-assessed tax</strong> within <strong>30 days</strong> of the due date.<br>✅ <strong>However, this penalty does not apply</strong> if tax was paid <strong>late but before the issuance of a show cause notice (SCN)</strong>.<br>✅ <strong>Only general penalties under Section 125</strong> may be imposed in such cases after following due process.</p><hr><h2><strong>3. GST Rate on Debit & Credit Notes Issued After GST Implementation</strong></h2><h3><strong>Clarification:</strong></h3><p>✅ <strong>If a price revision occurs after July 1, 2017</strong>, requiring a <strong>debit or credit note</strong>, the applicable <strong>GST rate will be as per GST law</strong> (not the pre-GST regime).<br>✅ This is because <strong>Section 142(2) of the CGST Act</strong> deems such revisions as <strong>supplies made under GST</strong>.</p><hr><h2><strong>4. Applicability of TDS Under GST (Section 51) & Notification No. 50/2018</strong></h2><h3><strong>Clarification:</strong></h3><p>✅ <strong>TDS under GST (Section 51)</strong> applies <strong>only to authorities, boards, or bodies</strong> that are:</p><ul><li>Set up by an <strong>Act of Parliament/State Legislature</strong>, OR</li><li>Established by any <strong>Government</strong> with <strong>51% or more Government participation</strong> (equity/control).<br>✅ Any entity <strong>not meeting these conditions is not liable</strong> to deduct TDS under GST.</li></ul><hr><h2><strong>5. GST on Tax Collected at Source (TCS) Under Income Tax Act</strong></h2><h3><strong>Clarification:</strong></h3><p>✅ <strong>Section 15(2) of CGST Act</strong> states that the <strong>value of supply includes all taxes, duties, fees, and charges (except GST itself)</strong>.<br>✅ <strong>TCS collected under the Income Tax Act must be included in the taxable value</strong> for GST calculation.<br>✅ <strong>Example:</strong></p><ul><li>If an item costs <strong>₹10,000</strong> and TCS under Income Tax Act is <strong>₹100</strong>, GST will be calculated on <strong>₹10,100</strong> (not ₹10,000).</li></ul><hr><h2><strong>6. Definition of "Owner of Goods" for Detention Cases (Section 129(1))</strong></h2><h3><strong>Clarification:</strong></h3><p>✅ <strong>If an invoice or relevant document is available</strong> with the consignment, then:</p><ul><li><strong>The consignor or consignee</strong> will be treated as the <strong>owner</strong>.<br>✅ <strong>If no invoice or document is available</strong>, the <strong>proper officer will determine</strong> the owner based on available evidence.</li></ul><hr><h2><strong>7. Trade Notices & Implementation</strong></h2><ul><li><strong>CBIC has directed tax authorities</strong> to issue trade notices for awareness.</li><li>Any <strong>challenges in implementation</strong> should be reported to CBIC.<a href="https://cms.plasament.com/storage/shubham-pathak/circular-no-76.pdf">circular-no-76</a><br> </li></ul>