CGST Amendment Act, 2018: Amendments to Sections 12, 13, 16, 17, 20 and 22
The Central Goods and Services Tax (Amendment) Act, 2018 (Act No. 31 of 2018) amended several provisions of the Central Goods and Services Tax Act, 2017. This article reproduces and explains the amendments relating to sections 12, 13, 16, 17, 20 and 22 of the principal Act.
Amendment of Section 12 of the CGST Act, 2017
Section 12 deals with the time of supply of goods, which determines the point of time at which liability to pay GST on a supply of goods arises.
Section 6 of the CGST (Amendment) Act, 2018: In section 12 of the principal Act, in sub-section (2), in clause (a), the words, brackets and figure "sub-section (1) of" shall be omitted.
The amendment removed an unnecessary cross-reference from section 12(2)(a). It was a drafting change to the provision governing the time of supply of goods.
Amendment of Section 13 of the CGST Act, 2017
Section 13 deals with the time of supply of services, which identifies when GST liability arises in relation to a supply of services.
Section 7 of the CGST (Amendment) Act, 2018: In section 13 of the principal Act, in sub-section (2), the words, brackets and figure "sub-section (2) of" occurring at both the places, shall be omitted.
This amendment similarly removed redundant cross-references in the time-of-supply provision for services.
Amendment of Section 16 - Input Tax Credit
Section 16 lays down the basic eligibility and statutory conditions for a registered person to take input tax credit (ITC). The 2018 amendment expanded the deemed-receipt rule so that specified bill-to/ship-to arrangements for both goods and services could satisfy the receipt condition.
Section 8 of the CGST (Amendment) Act, 2018: In section 16 of the principal Act, in sub-section (2), -
(a) 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.";
(b) in clause (c), for the word and figures "section 41", the words, figures and letter "section 41 or section 43A" shall be substituted.
Amendment of Section 17 - Apportionment and Blocked Input Tax Credit
Section 17 governs apportionment of credit where goods or services are used partly for business or taxable supplies and partly for other purposes or exempt supplies. Sub-section (5) identifies categories commonly described as blocked credits, subject to statutory exceptions.
Section 9 of the CGST (Amendment) Act, 2018: In section 17 of the principal Act, -
(a) in sub-section (3), the following Explanation shall be inserted, namely: -
"Explanation. - For the purposes of this sub-section, the expression 'value of exempt supply' shall not include the value of activities or transactions specified in Schedule III, except those specified in paragraph 5 of the said Schedule.";
(b) 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 flying 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 specified 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 specified 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 fitness centre; and
(iii) travel benefits 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.".
The amendment substantially recast the blocked-credit rules for motor vehicles, vessels and aircraft and their related insurance, servicing, repair and maintenance services. It also specified exceptions for certain employee-related and inward supplies.
Amendment of Section 20 - Input Service Distributor
Section 20 historically dealt with the manner in which an Input Service Distributor (ISD) distributed eligible input tax credit to recipient units. The 2018 amendment changed a constitutional-entry reference used in the Explanation.
Section 10 of the CGST (Amendment) Act, 2018: In section 20 of the principal Act, in the Explanation, in clause (c), for the words and figures "under entry 84,", the words, figures and letter "under entries 84 and 92A" shall be substituted.
Amendment of Section 22 - Persons Liable for GST Registration
Section 22 sets out the threshold-based liability for GST registration, subject to the Act, notifications and special rules applicable to particular persons, supplies and States or Union territories.
Section 11 of the CGST (Amendment) Act, 2018: In section 22 of the principal Act, -
(a) in sub-section (1), after the proviso, the following proviso shall be inserted, namely: -
"Provided further that the Government may, at the request of a special category State and on the recommendations of the Council, enhance the aggregate turnover referred to in the first proviso from ten lakh rupees to such amount, not exceeding twenty lakh rupees and subject to such conditions and limitations, as may be so notified.";
(b) in the Explanation, in clause (iii), after the words "State of Jammu and Kashmir", the words "and States of Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand" shall be inserted.
The amendment enabled an enhanced threshold for specified special category States on their request and on the recommendations of the GST Council. Registration thresholds and their application have subsequently been affected by later statutory changes and notifications, so current eligibility should be verified separately.
Why the 2018 Amendments Matter
These provisions addressed practical GST issues involving time of supply, deemed receipt for ITC, blocked credits, ISD credit distribution and registration thresholds. For historical interpretation, the amending text is important because it shows precisely how Parliament changed the original CGST Act. For current compliance, however, the consolidated CGST Act must be read with later Finance Acts, notifications, rules and CBIC circulars.
Official Legal Sources
For authoritative statutory text, refer to the official India Code copies of the Central Goods and Services Tax (Amendment) Act, 2018 and the Central Goods and Services Tax Act, 2017. For GST administration material, notifications, circulars and guidance, see the official CBIC GST portal.