CBIC notifies transition plan w.r.t J&K re-organisation w.e.f. October 31, 2019

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Background:

CBIC vide Notification No. 62/2019- Central Tax dated November 26, 2019 has notified that those persons whose principal place of business or place of business lies in the erstwhile State of Jammu and Kashmir (“J&K”) till October 30, 2019 and lies in the Union territory (“UT”) of Jammu and Kashmir or in the Union territory of Ladakh from October 31, 2019 onwards, as the class of persons who shall follow a following special procedure till December 31, 2019 (“transition date”), for their transition.

Notification:

  • The said class of persons shall have to ascertain the tax period as per section 2(106) of the CGST Act, 2017 (“said Act”) for the purposes of any of the provisions of the said Act for the month of October 2019 and November 2019 as below:

            (a) October 2019: October 01, 2019 to October 30, 2019;

            (b) November 2019: October 31, 2019, to November 30, 2019;

  • Irrespective of the particulars of tax charged in the invoices, or in other like documents, raised from October 31, 2019, till the transition date, they shall have to pay the appropriate applicable tax in the return under section 39 of the said Act;
  • Further, the said class of persons shall have an option to transfer ITC from the registered GSTIN till October 30, 2019, in the State of J&K, to the new GSTIN in the UT of J&K or in the UT of Ladakh from October 31, 2019, by:(a) Intimating the jurisdictional tax officer of the transferor and transferee regarding the transfer of ITC within 1 month of obtaining a new registration.(b) Such transfer of ITC shall be carried out through the return under section 39 of the said Act for any tax period before the transition date and the transferor GSTIN would be debiting the said ITC from its electronic credit ledger in Table 4(B)(2) of Form GSTR-3B and the transferee GSTIN would be crediting the equal amount of ITC in its electronic credit ledger in Table 4(A)(5) of Form GSTR-3B.

    Note: The ITC shall be transferred on the basis of the ratio of turnover of the place of business in the UT of J&K and in the UT of Ladakh;

  • Furthermore, the balance of State taxes in electronic credit ledger of the said class of persons, whose principal place of business lies in the UT of Ladakh from October 31, 2019, shall be transferred as the balance of Union territory tax in the electronic credit ledger.
  • The provisions of section 24(i) of the said Act shall not apply on the said class of persons making interstate supplies between the UTs of J&K and Ladakh from October 31, 2019, till the transition date.

The Notification can be accessed at: http://www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-62-central-tax-english-2019.pdf

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