“Insights on 49th GST Council Meet: Key decisions on tax rates, compensation cess, and GST amendments aimed at rationalization and easing compliance.”
The 49th meeting of highly empowered GST Council was held on 18th February, 2023, amid rumors of getting postponed to March first week owing to budget sessions in few states. However, it did took place. While it could not dwell upon taxation of online gaming, the Council did took some important decisions on rationalization of tax rates, late fees, revocation of cancellation of registration, best judgment assessment etc.
Compensation Cess
Central Government has decided to clear the entire pending balance GST compensation of Rs. 16,982 crore for June, 2022. Since, there is no amount in the GST compensation Fund, Centre has decided to release the amount from its own resources and the same will be recouped from the future compensation cess collection. With this release, Centre will be clearing the entire provisionally admissible compensation due for five years as envisaged in the GST (Compensation to States) Act, 2017. Centre shall also clear the admissible final GST compensation to those States who has provided the revenue figures as certified by the Accountant General of the States amounting to Rs. 16,524 crore.
Important Major Decisions
In 49th GST meeting held on 18.02.2023, following important decisions / recommendations were made:
- To clear entire pending balance of Rs. 16,982 crore of June, 2022 of compensation cess from own sources to be recouped from future cess collection.
- Adoption of GoM report on GST Appellate Tribunal with modifications.
- Approval of GoM report on capacity based taxation and special composition scheme for specified sectors (e.g., pan masala, gutkha, chewing tobacco).
- No GST on services by National Testing Agency for conducting entrance examination for admission to educational institutions.
- Time limit for applying for revocation of cancellation of registration to be increased from 30 days to 90 days.
- Rationalization of payment of late fees for annual return
- One time amnesty scheme to be launched for pending returns in Form GSTR-4, GSTR-9 and GSTR-10.
- Payment under reverse charge for services provided by Courts / Tribunals in respect of taxable services supplied by them (e.g. on renting of chambers to lawyers, renting of premises to telecom companies.
- Amendment in best judgment assessment provision (section 62) by extending time limit of 30 days by another 60 days subject to conditions, to enable deemed withdrawal.
- Rationalization of ‘place of supply’ rule for transportation of goods [Section 13(19) of IGST Act, 2017] so as to provide that the place of supply of services of transportation of goods, in cases where location of supplier of services or location of recipient of services is outside India, shall be the location of the recipient of services.
These recommendations / decisions shall be implemented in due course by way of Amendments / Notifications / Circulars.
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