Notification No.: 16/2019 – Central Tax
Date of Notification: 29th March 2019
Relevant Sections and Rules:
- Central GST Act, 2017:
- Section 164 – Power to make rules
- CGST Rules, 2017 (Amendments made):
- Rule 41, Rule 42, Rule 43
- New Rule 88A (utilization of ITC)
- Rule 100, Rule 142
- Substitution of Forms:
- DRC-01, DRC-02, DRC-07, DRC-08
- ASMT-13, ASMT-15, ASMT-16
- Compounding Form CPD-02
- Integrated GST Act: Not applicable
Summary of Notification
- Amendments to Rule 41 (Transfer of Credit on Account of Sale, Merger, etc.):
Inserted clarification that “value of assets” means total business assets, regardless of whether ITC was claimed. This ensures consistency in ITC transfer apportionment during business reorganization. - Comprehensive Amendments to Rule 42 & 43 (Reversal of Credit):
Multiple clarifications and modifications were made, especially for real estate projects, such as:
- Computation of proportionate ITC (E/F) for apartments not booked before completion.
- Requirement to calculate separately for residential and commercial segments.
- Introduction of final reconciliation (D1/D2/C3) project-wise for ongoing and new projects (post 1st April 2019).
- Mandatory reversal of excess ITC using Form GSTR-3B or DRC-03 with interest, if applicable.
- Definitions and methodology adopted from the Real Estate (Regulation and Development) Act, 2016.
- Introduction of Rule 88A – Order of ITC Utilization:
This new rule specifies that IGST credit must be utilized first, followed by CGST/SGST/UTGST, in any order or proportion thereafter. It streamlines utilization across tax heads while ensuring IGST priority. - Substitution of Rule 100 & 142 (Assessment & Demand Procedures):
- Defined structured formats and timelines for issuance and response to orders under Sections 62–64 and others.
- Introduction of revised forms ASMT-13, ASMT-15, ASMT-16 for assessments.
- Replaced DRC-01 to DRC-08 formats with updated templates including Show Cause Notices, summaries, and rectification notices.
- Revised Compounding Table in CPD-02:
The compounding amount table was simplified, with a note that if a person falls under multiple categories, the maximum applicable amount shall be used.
