TAMIL NADU ORDINANCE NO. 2 OF 2018 - An Ordinance to amend the Tamil Nadu Goods and Services Tax Act, 2017

©

GOVERNMENT OF TAMIL NADU

2018

[Regd. No. TN/CCN/467/2012-14.

[R. Dis. No. 197/2009.

[Price: Rs. 4.80 Paise.

No. 383] CHENNAI, WEDNESDAY, NOVEMBER 14, 2018 Aippasi 28, Vilambi, Thiruvalluvar Aandu–2049

Part IV—Section 2

Tamil Nadu Acts and Ordinances

The following Ordinance which was promulgated by the Governor on the 13th November 2018 is hereby published for general information:—

TAMIL NADU ORDINANCE NO. 2 OF 2018.

An Ordinance to amend the Tamil Nadu Goods and

Services Tax Act, 2017.

WHEREAS the Legislative Assembly of the State is not in session and the Governor of Tamil Nadu is satisfi ed that circumstances exist which render it necessary for him to take immediate action for the purposes hereinafter appearing;

NOW, THEREFORE, in exercise of the powers conferred by clause (1) of Article 213 of the Constitution, the Governor hereby promulgates the following Ordinance:—

1. (1) This Ordinance may be called the Tamil Nadu Goods and

Services Tax (Amendment) Ordinance, 2018.

Short title and commence- ment.

(2) (i) Sections 3 and 30 shall be deemed to have come into

force on the 1st day of July 2017;

(ii) Other sections of this Ordinance shall come into force on such date as the State Government may, by notifi cation in the Offi cial Gazette, appoint:

Provided that different dates may be appointed for different provisions of this Ordinance and any reference in any such provision to the commencement of this Ordinance shall be construed as a reference to the coming into force of that provision.

Tamil Nadu Act 19

2. In section 2 of the Tamil Nadu Goods and Services Tax Act, 2017

of 2017.

Amendment of section 2.

(hereinafter referred to as the principal Act),—

(1) in clause (4), for the expression "the Appellate Authority and the Appellate Tribunal", the expression "the Appellate Authority, the Appellate Tribunal and the Authority referred to in sub-section (2) of section 171" shall be substituted;

383-Ex-IV-2—1

[229]230 TAMIL NADU GOVERNMENT GAZETTE EXTRAORDINARY (2) in clause (16), for the expression "Central Board of Excise and Customs", the expression "Central Board of Indirect Taxes and Customs" shall be substituted;

(3) in clause (17), for sub-clause (h), the following sub-clause

shall be substituted, namely:—

"(h) activities of a race club including by way of totalisator or a license to book maker or activities of a licensed book maker in such club; and";

(4) clause (18) including the Explanation thereunder shall be

omitted;

(5) in clause (35), for the expression "clause (c)", the expression

"clause (b)" shall be substituted;

(6) in clause (69), in sub-clause (f), after the expression

"Article 371", the expression "and Article 371J" shall be inserted;

(7) in clause (102), the following Explanation shall be added,

namely:—

"Explanation.— For the removal of doubts, it is hereby clarifi ed that the expression "services" includes facilitating or arranging transactions in securities.".

Amendment of

3. In section 7 of the principal Act,—

section 7.

(1) in sub-section (1),—

(a) in clause (b), after the expression "or furtherance of

business;", the expression "and" shall be added;

(b) in clause (c), the expression "and" occurring after the

expression "without a consideration;", shall be omitted;

(c) clause (d) shall be omitted;

(2) after sub-section (1), the following sub-section shall be

inserted, namely:—

"(1A) Where certain activities or transactions, constitute a supply in accordance with the provisions of sub-section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II.";

(3) in sub-section (3), for the expression "sub-sections (1) and (2)", the expression "sub-sections (1), (1A) and (2)" shall be substituted.

Amendment of

4. In section 9 of the principal Act, for sub-section (4), the following

section 9.

sub-section shall be substituted, namely:—

"(4) The Government may, on the recommendations of the Council, by notifi cation, specify a class of registered persons who shall, in respect of supply of specifi ed categories of goods or services or both received from an unregistered supplier, pay the tax on reverse charge basis as the recipient of such supply of goods or services or both, and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to such supply of goods or services or both.".

5. In section 10 of the principal Act,—

Amendment of section 10.

(1) in sub-section (1),—

(a) for the expression "in lieu of the tax payable by him, an amount calculated at such rate", the expression "in lieu of the tax payable by him under sub-section (1) of section 9, an amount of tax calculated at such rate" shall be substituted;

(b) in the proviso, for the expression "one crore rupees, as may be recommended by the Council.", the expression "one crore and fi fty lakh rupees as may be recommended by the Council:" shall be substituted;

(c) after the proviso, the following proviso shall be added,

namely:—

"Provided further that a person who opts to pay tax under clause (a) or clause (b) or clause (c) may supply services (other than those referred to in clause (b) of paragraph 6 of Schedule II), of value not exceeding ten per cent of turnover in the State in the preceding fi nancial year or fi ve lakh rupees, whichever is higher.";

(2) in sub-section (2), for clause (a), the following clause shall

be substituted, namely:—

"(a) save as provided in sub-section (1), he is not engaged

in the supply of services;".

Amendment of 6. In section 12 of the principal Act, in sub-section (2), in

section 12.

clause (a), the expression "sub-section (1) of " shall be omitted.

Amendment of

section 13.

7. In section 13 of the principal Act, in sub-section (2), the expression "sub-section (2) of " in two places where it occurs, shall be omitted.

Amendment of 8. In section 16 of the principal Act, in sub-section (2),—

section 16.

(1) in clause (b), for the Explanation, the following Explanation

shall be substituted, namely:—

"Explanation.— For the purposes of this clause, it shall be deemed that the registered person has received the goods or, as the case may be, services—

(i) where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise;

(ii) where the services are provided by the supplier to any

person on the direction of and on account of such registered person.";

(2) in clause (c), for the expression "section 41", the

expression "section 41 or section 43A" shall be substituted.

Amendment of 9. In section 17 of the principal Act,—

section 17.

(1) in sub-section (3), the following Explanation shall be

added, namely:—

383-Ex-IV-2—1a232 TAMIL NADU GOVERNMENT GAZETTE EXTRAORDINARY "Explanation.—For the purposes of this sub-section, the expression "value of exempt supply'' shall not include the value of activities or transactions specifi ed in Schedule III, except those specifi ed in paragraph 5 of the said Schedule.";

(2) in sub-section (5), for clauses (a) and (b), the following

clauses shall be substituted, namely:—

"(a) motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver), except when they are used for making the following taxable supplies, namely:—

(A) further supply of such motor vehicles; or

(B) transportation of passengers; or

(C) imparting training on driving such motor vehicles;

(aa) vessels and aircraft except when they are used—

(i) for making the following taxable supplies, namely:-

(A) further supply of such vessels or aircraft; or

(B) transportation of passengers; or

(C) imparting training on navigating such vessels; or

(D) imparting training on fl ying such aircraft;

(ii) for transportation of goods;

(ab) services of general insurance, servicing, repair and maintenance in so far as they relate to motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa):

Provided that the input tax credit in respect of such services

shall be available—

(i) where the motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) are used for the purposes specifi ed therein;

(ii) where received by a taxable person engaged—

(I) in the manufacture of such motor vehicles,

vessels or aircraft; or

(II) in the supply of general insurance services in

respect of such motor vehicles, vessels or aircraft insured by him;

(b) the following supply of goods or services or both—

(i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, leasing, renting or hiring of motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) except when used for the purposes specifi ed therein, life insurance and health insurance:

Provided that the input tax credit in respect of such goods or services or both shall be available where an inward supply of such goods or services or both is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply;

(ii) membership of a club, health and fi tness centre;

and

(iii) travel benefi ts extended to employees on vacation

such as leave or home travel concession:

Provided that the input tax credit in respect of such goods or services or both shall be available, where it is obligatory for an employer to provide the same to its employees under any law for the time being in force.".

Amendment of section 20.

10. In section 20 of the principal Act, in the Explanation, in clause (c), for the expression "under entry 84", the expression "under entries 84 and 92A" shall be substituted.

11. In section 22 of the principal Act,— Amendment of section 22.

(1) in sub-section (1), after the proviso, the following proviso

shall be added, namely:—

"Provided further that where such person makes taxable supplies of goods or services or both from a special category State in respect of which the Central Government has enhanced the aggregate turnover referred to in the fi rst proviso, he shall be liable to be registered if his aggregate turnover in a fi nancial year exceeds the amount equivalent to such enhanced turnover.";

(2) in the Explanation, in clause (iii), the following shall be

added at the end, namely:—

"except the State of Jammu and Kashmir and the States of Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand.".

Amendment of 12. In section 24 of the principal Act, for clause (x), the following

section 24.

clause shall be substituted, namely:—

"(x) every electronic commerce operator who is required to

collect tax at source under section 52.".

Amendment of 13. In section 25 of the principal Act,—

section 25.

(1) in sub-section (1), after the proviso and before the

Explanation, the following proviso shall be inserted, namely:-

"Provided further that a person having a unit, as defi ned in the Special Economic Zones Act, 2005 (Central Act 28 of 2005), in a Special Economic Zone or being a Special Economic Zone developer shall have to apply for a separate registration, as distinct from his place of business located outside the Special Economic Zone in the same State.";

(2) in sub-section (2), for the proviso, the following proviso

shall be substituted, namely:—

"Provided that a person having multiple places of business in the State may be granted a separate registration for each such place of business, subject to such conditions as may be prescribed.".

383-Ex-IV-2—2234 TAMIL NADU GOVERNMENT GAZETTE EXTRAORDINARY Amendment of

14. In Section 29 of the principal Act,—

section 29.

(1) in the marginal heading, after the expression

"Cancellation", the expression "or suspension" shall be inserted;

(2) in sub-section (1), after clause (c), the following proviso

shall be added, namely:—

"Provided that during pendency of the proceedings relating to cancellation of registration fi led by the registered person, the registration may be suspended for such period and in such manner as may be prescribed.";

(3) in sub-section (2), after the proviso, the following proviso

shall be added, namely:—

"Provided further that during pendency of the proceedings relating to cancellation of registration, the proper offi cer may suspend the registration for such period and in such manner as may be prescribed.".

15. In section 34 of the principal Act,—

Amendment of section 34.

(1) in sub-section (1),—

(i) for the expression "Where a tax invoice has", the expression "Where one or more tax invoices have" shall be substituted;

(ii) for the expression "a credit note", the expression "one or more credit notes for supplies made in a fi nancial year" shall be substituted;

(2) in sub-section (3),—

(i) for the expression "Where a tax invoice has", the expression "Where one or more tax invoices have" shall be substituted;

(ii) for the expression "a debit note", the expression "one or more debit notes for supplies made in a fi nancial year" shall be substituted.

16. In section 35 of the principal Act, in sub-section (5), the

Amendment of section 35.

following proviso shall be added, namely:—

"Provided that nothing contained in this sub-section shall apply to any department of the Central Government or a State Government or a local authority, whose books of account are subject to audit by the Comptroller and Auditor-General of India or an auditor appointed for auditing the accounts of local authorities under any law for the time being in force.".

17. In section 39 of the principal Act,—

Amendment of section 39.

(1) in sub-section (1),—

(a) for the expression "in such form and manner as may be prescribed", the expression "in such form, manner and within such time as may be prescribed" shall be substituted;

(b) the expression "on or before the twentieth day of the month succeeding such calendar month or part thereof" shall be omitted;

(c) the following proviso shall be added, namely:—

"Provided that the Government may, on the recommendations of the Council, notify certain classes of registered persons who shall furnish return for every quarter or part thereof, subject to such conditions and safeguards as may be specifi ed therein.";

(2) in sub-section (7), the following proviso shall be added,

namely:—

"Provided that the Government may, on the recommendations of the Council, notify certain classes of registered persons who shall pay to the Government the tax due or part thereof as per the return on or before the last date on which he is required to furnish such return, subject to such conditions and safeguards as may be specifi ed therein.";

(3) in sub-section (9),—

(a) for the expression "in the return to be furnished for the month or quarter during which such omission or incorrect particulars are noticed", the expression "in such form and manner as may be prescribed" shall be substituted;

(b) in the proviso, for the expression "the end of the fi nancial year", the expression "the end of the fi nancial year to which such details pertain" shall be substituted.

Insertion of new 18. After section 43 of the principal Act, the following section shall be

section 43A.

inserted, namely:—

"43A. Procedure for furnishing return and availing input tax credit.— (1) Notwithstanding anything contained in sub-section (2) of section 16, section 37 or section 38, every registered person shall in the returns furnished under sub-section (1) of section 39 verify, validate, modify or delete the details of supplies furnished by the suppliers.

(2) Notwithstanding anything contained in section 41, section 42 or section 43, the procedure for availing of input tax credit by the recipient and verifi cation thereof shall be such as may be prescribed.

(3) The procedure for furnishing the details of outward supplies by the supplier on the common portal, for the purposes of availing input tax credit by the recipient shall be such as may be prescribed.

(4) The procedure for availing input tax credit in respect of outward supplies not furnished under sub-section (3) shall be such as may be prescribed and such procedure may include the maximum amount of the input tax credit which can be so availed, not exceeding twenty per cent of the input tax credit available, on the basis of details furnished by the suppliers under the said sub-section.

(5) The amount of tax specifi ed in the outward supplies for which the details have been furnished by the supplier under sub-section (3) shall be deemed to be the tax payable by him under the provisions of the Act.

(6) The supplier and the recipient of a supply shall be jointly and severally liable to pay tax or to pay the input tax credit availed, as the case may be, in relation to outward supplies for which the details have been furnished under sub-section (3) or sub-section (4) but return thereof has not been furnished.

(7) For the purposes of sub-section (6), the recovery shall be made in such manner as may be prescribed and such procedure may provide for non-recovery of an amount of tax or input tax credit wrongly availed not exceeding one thousand rupees.

(8) The procedure, safeguards and threshold of the tax amount in relation to outward supplies, the details of which can be furnished under sub-section (3) by a registered person,—

(a) within six months of taking registration;

(b) who has defaulted in payment of tax and where such default has continued for more than two months from the due date of payment of such defaulted amount,

shall be such as may be prescribed.".

Amendment of

section 48.

19. In section 48 of the principal Act, in sub-section (2), after the expression "section 45", the expression "and to perform such other functions" shall be inserted.

20. In section 49 of the principal Act,—

Amendment of section 49.

(1) in sub-section (2), for the expression "section 41", the

expression "section 41 or section 43A" shall be substituted;

(2) in sub-section (5),—

(a) in clause (c), the following proviso shall be added,

namely:—

"Provided that the input tax credit on account of State tax shall be utilised towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax.";

(b) in clause (d), the following proviso shall be added,

namely:—

"Provided that the input tax credit on account of Union territory tax shall be utilised towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax.".

21. After section 49 of the principal Act, the following sections shall

be inserted, namely:—

Insertion of new sections 49A and 49B.

"49A. Utilisation of input tax credit subject to certain conditions.— Notwithstanding anything contained in section 49, the input tax credit on account of State tax shall be utilised towards payment of integrated tax or State tax, as the case may be, only after the input tax credit available on account of integrated tax has fi rst been utilised fully towards such payment.

49B. Order of utilisation of the input tax credit.— Notwithstanding anything contained in this Chapter and subject to the provisions of clause (e) and clause (f) of sub-section (5) of section 49, the Government may, on the recommendations of the Council, prescribe the order and manner of utilisation of the input tax credit on account of integrated tax, Central tax, State tax or Union territory tax, as the case may be, towards payment of any such tax.".

Amendment of section 52.

22. In section 52 of the principal Act, in sub-section (9), for the expression "section 37", the expression "section 37 or section 39" shall be substituted.

23. In section 54 of the principal Act,—

Amendment of section 54.

(1) in sub-section (8), in clause (a),—

(a) for the expression "on zero-rated supplies", the

expression "on export" shall be substituted;

(b) for the expression "such zero-rated supplies", the

expression "such exports" shall be substituted;

(2) in the Explanation, in clause (2),—

(a) in sub-clause (c), in item (i), after the expression "foreign exchange", the expression "or in Indian rupees wherever permitted by the Reserve Bank of India" shall be inserted;

(b) for sub-clause (e), the following sub-clause shall be

substituted, namely:—

"(e) in the case of refund of unutilised input tax credit under clause (ii) of the fi rst proviso to sub-section (3), the due date for furnishing of return under section 39 for the period in which such claim for refund arises;".

Amendment of 24. In section 79 of the principal Act, after sub-section (4), the

section 79.

following Explanation shall be added, namely:—

"Explanation.— For the purposes of this section, the word person shall include "distinct persons" as referred to in sub-section (4) or, as the case may be, sub-section (5) of section 25.".

Amendment of section 107.

25. In section 107 of the principal Act, in sub-section (6), in clause (b), after the expression "arising from the said order,", the expression "subject to a maximum of twenty-fi ve crore rupees," shall be inserted.

Amendment of section 112.

26. In section 112 of the principal Act, in sub-section (8), in clause (b), after the expression "arising from the said order," the expression "subject to a maximum of fi fty crore rupees," shall be inserted.

Amendment of section 129.

27. In section 129 of the principal Act, in sub-section (6), including the proviso, for the expression "seven days", in two places where it occurs, the expression "fourteen days" shall be substituted.

Amendment of section 143.

28. In section 143 of the principal Act, in sub-section (1), in clause (b), after the proviso, the following proviso shall be added, namely:—

"Provided further that the period of one year and three years may, on suffi cient cause being shown, be extended by the Commissioner for a further period not exceeding one year and two years, respectively.".

Amendment of

Schedule I. 29. In Schedule I of the principal Act, in paragraph 4, for the expression "taxable person", the expression "person" shall be substituted.

Amendment of Schedule II.

30. In Schedule II of the principal Act, in the heading, after the expression "ACTIVITIES", the expression "OR TRANSACTIONS" shall be inserted.

31. In Schedule III of the principal Act,—

Amendment of Schedule III.

(1) after paragraph 6, the following paragraphs shall be

inserted, namely:—

"7. Supply of goods from a place outside India to another

place outside India without such goods entering into India.

8. (a) Supply of warehoused goods to any person before

clearance for home consumption;

(b) Supply of goods by the consignee to any other person, by endorsement of documents of title to the goods, after the goods have been dispatched from the port of origin located outside India but before clearance for home consumption.";

(2) The existing Explanation shall be numbered as Explanation 1 and after Explanation 1 as so numbered, the following Explanation shall be added, namely:—

"Explanation 2.— For the purposes of paragraph 8, the expression "warehoused goods" shall have the same meaning as assigned to it in the Customs Act, 1962 (Central Act 52 of 1962).".

13th November 2018.

BANWARILAL PUROHIT, Governor of Tamil Nadu.

EXPLANATORY STATEMENT.

The Tamil Nadu Goods and Services Tax Act, 2017 (Tamil Nadu Act 19 of 2017) was enacted with a view to make a provision for levy and collection of tax on intra-State supply of goods or services or both by the State Government.

2. The Tamil Nadu Act 19 of 2017 provides for certain provisions for smooth transition of existing tax payers to new goods and services tax regime. However, the new tax regime had faced certain diffi culties. One of the major inconveniences caused to the ta payers, especially small and medium enterprises, was the process of fi ling return and payment of tax under the Goods and Services Tax laws. In this regard, the proposed new return fi ling system, envisages quarterly fi ling of return and tax payment for small tax payers along with minimum paperwork.

In order to implement the new return fi ling system, and also to overcome the above diffi culties, the Government have decided to amend the said Tamil Nadu Act 19 of 2017.

3. The Ordinance seeks to give effect to the above decision.

(By order of the Governor)

S.S. POOVALINGAM,

Secretary to Government,

Law Department.

PRINTED AND PUBLISHED BY THE DIRECTOR OF STATIONERY AND PRINTING, CHENNAI ON BEHALF OF THE GOVERNMENT OF TAMIL NADU