Central Tax Circulars

CGST Circular 120/2019

To,

The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/
Commissioner of Central Tax (All) /

The Principal Director Generals/ Director Generals (All)

Madam/Sir,

Subject: Clarification on the effective date of explanation inserted in notification No.
11/2017- CTR dated 28.06.2017, Sr. No. 3(vi) – reg.

1) Representations have been received to amend the effective date of notification
No. 17/2018-CTR dated 26.07.2018 whereby explanation was inserted in
notification No. 11/2017- CTR dated 28.06.2017, Sr. No. 3(vi) to the effect
that for the purpose of the said entry, the activities or transactions under
taken by Government and Local Authority are excluded from the term ‘business’.

2) The matter has been examined. Section 11(3) of CGST Act provides that the
Government may insert an explanation in any notification issued under
section 11, for the purpose of clarifying its scope or applicability, at any
time within one year of issue of the notification and every such explanation
shall have effect as if it had always been the part of the first such
notification.

3) As recommended by GST Council, the explanation in question was inserted vide
notification No. 17/2018-CTR dated 26.07.2018 in exercise of powers under
section 11(3) within one year of the insertion of the original entry
prescribing concessional rate, so that it would have effect from the date of
inception of the entry i.e. 21.09.2017. However, like other notifications
issued on 26.07.2018 to give effect to other recommendations of the GST
Council, the said notification also contained a line in the last paragraph that
the notification shall come into effect from 27.07.2018.

4) It is hereby clarified that the explanation having been inserted under
section 11(3) of the CGST Act, is effective from the inception of the entry
at Sl. No. 3(vi) of the notification No. 11/2017- CTR dated 28.06.2017, that
is 21.09. 2017. The line in notification No. 17/2018-CTR dated 26.07.2018 which
states that the notification shall come into effect from 27.07.2017 does not
alter the operation of the notification in terms of Section 11(3) as explained
in para 3 above.

5) Difficulty, if any, in implementation of this circular may be brought to the
notice of the Board.