CA Nitish Agnihotri

CA Nitish Agnihotri

GST Council meeting held at New Delhi on 21st July 2018 has made recommendations/ decisions on issues relating to policy, law and procedures, including key recommendations on ‘reduction in GST rates of more than 50 items, rationalisation of return filing system for small taxpayers, further deferring RCM upto 30 Sept. 2019. CBEC issued series of notification on 26th July 2018 to give effect to the recommendation of GST Council.

Below mentioned is the summary detailing the summary of important notifications issued by CBEC on 26th July 2018:-

S.No Notification No. and effective date Coverage of the notification Summary of the notification
1 Notification No- 13/2018-  Central Tax (Rate)

(Effective date- 27th July 2018)

 

Amendment in notification No- 11/2017 last amended by notification no-1/ 2018  Two explanations has been inserted under S.No- 7(i) to clarify the places where such services can be supplied and it specifically excludes supplies covered in S. No. 5. I.e. outdoor catering.

A new item (ia) has been inserted in S.No-7 wherein an option has been given by way of insertion of item (ia) to tax “supply of goods, being food or any other article for human consumption or any drink, by the Indian Railways or Indian Railways Catering and Tourism Corporation Ltd. or their licensees, whether in trains or at platforms” at 5% without claiming input tax credit.

The word “declared tariff” wherever occurred has been substituted with the word “value of supply” providing a major relief to the hotel industry wherein rate of tax on accommodation services shall be based on transaction value instead of declared tariff.

The description contained in item (v) in S. No. 7 dealing with outdoor catering services has been rationalized to include only those supplies by way of or as part of any service, of goods, being food or any other article for human consumption or any drink, at Exhibition Halls, Events, Conferences, Marriage Halls and other outdoor or indoor functions that are event based and occasional in nature.

A new item (via) has been included in S. No- 9 wherein tax rate of 12% has been prescribed where there is multi modal transportation of goods.

In S.No-22, a specific rate of 5% has been prescribed on supply of e- books.

2 Notification No- 14/2018-  Central Tax (Rate)

(Effective date 27th July 2018)

 

Amendment in notification No- 12/2017 last amended by notification no-2/ 2018 · Central government has included the below services in exemption notification:-

1. Services by an old age home run by Central Government, State Government or by an entity registered under Section 12AA of the Income-tax Act, 1961 to its residents (aged 60 years or more) against consideration upto twenty-five thousand rupees per month per member.

2. Services supplied by electricity distribution utilities by way of construction, erection, commissioning, or installation of infrastructure for extending electricity distribution network upto the tube well of the farmer or agriculturalist for agricultural use.

3. Services by Coal Mines Provident Fund Organization to persons governed by the Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948

4. Services by National Pension System (NPS) Trust to its members against consideration in the form of administrative fee.

5. Services supplied by Central Government, State Government, Union territory to their undertakings or PSUs by way of guaranteeing the loans taken by such undertakings or PSUs from the financial institutions.

6. Services by way of licensing, registration and analysis or testing of food samples supplied by the Food Safety and Standards Authority of India (FSSAI) to Food Business Operators.

7. Services by way of artificial insemination of livestock (other than horses).

8. Services supplied by a State Government to Excess Royalty Collection Contractor (ERCC) by way of assigning the right to collect royalty on behalf of the State Government on the mineral dispatched by the mining lease holders.

9. Services provided by an unincorporated body or a non-profit entity registered under any law for the time being in force, engaged in –

  • activities relating to the welfare of industrial or agricultural labour or farmers; or
  • promotion of trade, commerce, industry, agriculture, art, science, literature, culture, sports, education, social welfare, charitable activities and protection of environment,
  • To its own members against consideration in the form of membership fee upto an amount of one thousand rupees (Rs 1000/-) per member per year.
  •  Some important changes and clarifications are also made and some of them are:-
  • The word ‘declared tariff’ has been replaced with ‘value of supply’ in serial no. 14 to exempt services by a hotel, guest house etc. for residential or lodging purposes, where value of supply is less than Rs. 1000 per day or equivalent.

In S. No. 19A and 19B the sunset clause has been extended to September 30, 2019 for service by way of transportation of goods by an aircraft/ Vessel from customs station of clearance in India to a place outside India.

Supply of services provided by State and Central educational boards to students for conduct of examination will be exempt.

3 Notification No- 15/2018-  Central Tax (Rate)

(Effective date- 1st

Amendment in Notification No- 13/2017 last amended by notification no-3/ 2018 Tax shall be paid under RCM wherein services are supplied by Individual Direct Selling Agents (DSAs) other than a body corporate, partnership or limited partnership firm to a banking and NBFC, located in taxable territory.

Explanation has been inserted in order to clarify the meaning of “Renting of immovable property” as means allowing, permitting or granting access, entry, occupation, use or any such facility, wholly or partly, in an immovable property, with or without the transfer of possession or control of the said immovable property and includes letting, leasing, licensing or other similar arrangements in respect of immovable property.

4 Notification No- 16/2018-  Central Tax (Rate) Amendment in notification no-14/2017 Central Government, State government, union territory or any local authority in which they are engaged as public authority by way of services in relation to a function entrusted to a Panchayat, Municipality under the article 243W of the constitution shall be treated neither supply of goods nor a supply of service
5 Notification No- 17/2018-  Central Tax (Rate) Amendment in notification no- 11/2017 last amended by notification no- 1/2018 An explanation has been inserted in S.No- 3(vi)(a) in order to clarify the meaning of ‘business’ to state that the term ‘business’ shall not include any activity or transaction undertaken by the CG, SG or any local authority in which they are engaged as public authorities.
6 Notification No- 18/2018-  Central Tax (Rate) Amendment in Notification No- 1/2017 last amended by notification no- 6/2018 Central Government has amended Notification No. 01/2017-Central Tax (Rate) dated June 28, 2017 dealing with list of applicable tax rates on various goods, to provide revised list of rate classification.

A brief of change in tax rate of some specified items are as follows:-

GST rates reduction on items:-

A. From GST @ 28% to GST @18% 

1. Paints and varnishes (including enamels and lacquers)

2. Glaziers’ putty, grafting putty, resin cements

3. Refrigerators, freezers and other refrigerating or freezing equipment including water cooler, milk coolers, refrigerating equipment for leather industry, ice cream freezer etc.

4. Washing machines, Lithium-ion batteries, Vacuum cleaners

5. Domestic electrical appliances such as food grinders and mixers & food or vegetable juice extractor, shaver, hair clippers etc.

6. Storage water heaters and immersion heaters, hair dryers, hand dryers, electric smoothing irons etc.

7. Televisions upto the size of 68 cm

8. Special purpose motor vehicles. e.g., crane lorries, fire fighting vehicle, concrete mixer lorries, spraying lorries

9. Works trucks [self-propelled, not fitted with lifting or handling equipment] of the type used in factories, warehouses, dock areas or airports for short transport of goods.

10. Trailers and semi-trailers.

11. Miscellaneous articles such as scent sprays and similar toilet sprays, powder-puffs and pads for the application of cosmetics or toilet preparations.

B. From GST @ 28/18% to GST@ 12%

1. Fuel Cell Vehicle.

2. Slide fasteners.

3. Brass Kerosene Pressure Stove.

C. From GST@ 12/18% to 5%

1. Footwear having a retail sale price upto Rs 1000 per pair.

2. Article of apparel and clothing accessories or cap/topi, knitted or crocheted, of sale value not exceeding Rs 1000 per piece.

7 Notification No- 19/2018-  Central Tax (Rate)

(Effective date 27th July 2018)

Amendment in Notification No- 1/2017 last amended by notification no- 6/2018 Central Government has amended Notification No. 02/2017-Central Tax (Rate) dated June 28, 2017 dealing with list of exempted services.

Items added in the exemption notification are:-

1. Stone/Marble/Wood Deities

2. Rakhi [other than that of precious or semi-precious material of chapter 71]

3. Sanitary Napkins,

4. Coir pith compost

5. Sal Leaves siali leaves and their products and Sabai Rope

6. PhoolBhariJhadoo [Raw material for Jhadoo]

7. Khali Dona.

8. Circulation and commemorative coins, sold by Security Printing and Minting Corporation of India Ltd [SPMCIL] to Ministry of Finance.

8 Notification No- 20/2018-  Central Tax (Rate)

(Effective date- 1st August 2018)

Amendment in Notification No- 5/2017  Central Government has amended Notification No. 5/2017-Central Tax (Rate), dated June 28, 2017, where under list of goods were mentioned in respect of which no refund of unutilized input tax credit was allowed where the credit has accumulated on account of inverted duty structure.

In the said notification, list of items contained in serial numbers 1, 2, 3, 4, 5, 6, 6A, 6B, 6C and 7 (pertaining to fabric sector) has been amended so as to allow refund of accumulated ITC arising on account of inverted duty structure on supplies received on or after August 01, 2018. In respect of any supplies received before such date, the accumulated ITC shall lapse.

9 Notification No- 21/2018-  Central Tax (Rate)

(Effective date- 27th July 2018)

Amendment in Notification No- 1/2017 Central Government has amended notification No. 01/2017-Central Tax (Rate), dated June 28, 2017 to provide for concession in rate of GST on handicraft goods.
10 Notification No- 2/2018 Compensation Cess (Rate)

(Effective date- 27th July 2018)

Amendment in Notification No- 1/2017- Compensation Cess (Rate) No GST compensation cess would be levied on fuel cell motor vehicles and on coal rejects supplied by a coal washery.

 

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