As regards the recommendations made by the GST Council in its 23rd Meeting held on 10th November, 2017 at Guwahati, Ministry of Finance dated issued three press releases on 10-November-2017. It is proposed to issue notifications [giving effect to these recommendations of the Council] on 14th/15th November, 2017, to be effective from 00 hrs on 15th of November, 2017.
Important features of these press releases can be categorized as follows:
- Changes in rates of goods.
- Exemption from IGST/GST on some goods along with some clarifications thereof.
- More goods under RCM.
- Changes in rates of some services specially Restaurant Services.
- Clarifications on GST on some services.
- Changes recommended in Composition Scheme.
- Simplification of Return filing procedure.
- Manual Filing of Advance Rulings.
- ITC available for export of services to Nepal & Bhutan.
- Exemption from registration for Services provided through E-commerce platform in case aggregate turnover is below threshold limit.
- Extension of various due dates.
- Centralized UIN to every Foreign Diplomatic Mission / UN Organization.
All these recommendations are now discussed in detail as below.
Changes in rates of Goods
The Council recommended major relief in GST rates on certain goods and services. These recommendations are spread across many sectors and across commodities. As per these recommendations, the list of 28% GST rated goods is recommended to be pruned substantially, from 224 tariff headings to only 50 tariff headings.
Goods on which the Council has recommended reduction in GST rate from 28% to 18% include:
- Wire, cables, insulated conductors, electrical insulators, electrical plugs, switches, sockets, fuses, relays, electrical connectors
- Electrical boards, panels, consoles, cabinets etc for electric control or distribution
- Particle/fibre boards and ply wood. Article of wood, wooden frame, paving block
- Furniture, mattress, bedding and similar furnishing
- Trunk, suitcase, vanity cases, brief cases, travelling bags and other hand bags, cases
- Detergents, washing and cleaning preparations
- Liquid or cream for washing the skin
- Shampoos; Hair cream, Hair dyes (natural, herbal or synthetic) and similar other goods; henna powder or paste, not mixed with any other ingredient;
- Pre-shave, shaving or after-shave preparations, personal deodorants, bath preparations, perfumery, cosmetic or toilet preparations, room deodorisers
- Perfumes and toilet waters
- Beauty or make-up preparations
- Fans, pumps, compressors
- Lamp and light fitting
- Primary cell and primary batteries
- Sanitary ware and parts thereof of all kind
- Articles of plastic, floor covering, baths, shower, sinks, washbasins, seats, sanitary ware of plastic
- Slabs of marbles and granite
- Goods of marble and granite such as tiles
- Ceramic tiles of all kinds
- Miscellaneous articles such as vacuum flasks, lighters,
- Wrist watches, clocks, watch movement, watch cases, straps, parts
- Article of apparel & clothing accessories of leather, guts, furskin, artificial fur and other articles such as saddlery and harness for any animal
- Articles of cutlery, stoves, cookers and similar non electric domestic appliances
- Razor and razor blades
- Multi-functional printers, cartridges
- Office or desk equipment
- Door, windows and frames of aluminium.
- Articles of plaster such as board, sheet,
- Articles of cement or concrete or stone and artificial stone,
- Articles of asphalt or slate,
- Articles of mica
- Ceramic flooring blocks, pipes, conduit, pipe fitting
- Wall paper and wall covering
- Glass of all kinds and articles thereof such as mirror, safety glass, sheets, glassware
- Electrical, electronic weighing machinery
- Fire extinguishers and fire extinguishing charge
- Fork lifts, lifting and handling equipment,
- Bull dozers, excavators, loaders, road rollers,
- Earth moving and levelling machinery,
- Escalators,
- Cooling towers, pressure vessels, reactors
- Crankshaft for sewing machine, tailor’s dummies, bearing housings, gears and gearing; ball or roller screws; gaskets
- Electrical apparatus for radio and television broadcasting
- Sound recording or reproducing apparatus
- Signalling, safety or traffic control equipment for transports
- Physical exercise equipment, festival and carnival equipment, swings, shooting galleries, roundabouts, gymnastic and athletic equipment
- All musical instruments and their parts
- Artificial flowers, foliage and artificial fruits
- Explosive, anti-knocking preparation, fireworks
- Cocoa butter, fat, oil powder,
- Extract, essence ad concentrates of coffee, miscellaneous food preparations
- Chocolates, Chewing gum / bubble gum
- Malt extract and food preparations of flour, groats, meal, starch or malt extract
- Waffles and wafers coated with chocolate or containing chocolate
- Rubber tubes and miscellaneous articles of rubber
- Goggles, binoculars, telescope,
- Cinematographic cameras and projectors, image projector,
- Microscope, specified laboratory equipment, specified scientific equipment such as for meteorology, hydrology, oceanography, geology
- Solvent, thinners, hydraulic fluids, anti-freezing preparation
Goods on which the Council has recommended reduction in GST rate from 28% to 12% are:
- Wet grinders consisting of stone as grinder
- Tanks and other armoured fighting vehicles
Goods on which the Council has recommended reduction in GST rate from 28% to 5% are:
- aircraft engines from both 28% & 18% to 5%
- aircraft tyres from 28% to 5%
- aircraft seats from 28% to 5%.
Goods on which the Council has recommended reduction in GST rate from 18% to 12% are:
- Condensed milk
- Refined sugar and sugar cubes
- Pasta
- Curry paste, mayonnaise and salad dressings, mixed condiments and mixed seasoning
- Diabetic food
- Medicinal grade oxygen
- Printing ink
- Hand bags and shopping bags of jute and cotton
- Hats (knitted or crocheted)
- Parts of specified agricultural, horticultural, forestry, harvesting or threshing machinery
- Specified parts of sewing machine
- Spectacles frames
- Furniture wholly made of bamboo or cane
Goods on which the Council has recommended reduction in GST rate from 18% to 5% are:
- Puffed rice chikki, peanut chikki, sesame chikki, revdi, tilrevdi, khaza, kazuali, groundnut sweets gatta, kuliya
- Flour of potatoes put up in unit container bearing a brand name
- Chutney powder
- Fly ash
- Sulphur recovered in refining of crude
- Fly ash aggregate with 90% or more fly ash content
- aircraft engines from both 28% & 18% to 5%
Goods on which the Council has recommended reduction in GST rate from 12% to 5% are:
- Desiccated coconut
- Narrow woven fabric including cotton newar [with no refund of unutilised input tax credit]
- Idli, dosa batter
- Finished leather, chamois and composition leather
- Coir cordage and ropes, jute twine, coir products
- Fishing net and fishing hooks
- Worn clothing
- Fly ash brick
Goods on which the Council has recommended reduction in GST rate from 5% to NIL are:
- Guar meal
- Hop cone (other than grounded, powdered or in pellet form)
- Certain dried vegetables such as sweet potatoes, maniac
- Unworked coconut shell
- Fish frozen or dried (not put up in unit container bearing a brand name)
- Khandsari sugar
Goods on which the Council has recommended reduction in GST rate from 3% to NIL are:
- Bangles of lac/shellac
Exemption from IGST/GST in certain specified cases:
Exemption from IGST on imports of following goods subject to conditions mentioned therein:
| S.No. | Goods | Condition |
| 1. | Life saving medicine supplied free of cost by overseas supplier for patients. | (subject to certification by DGHS of Centre or State and certain other conditions) |
| 2. | Goods (other than motor vehicles) under a lease agreement. | ( if IGST is paid on the lease amount.)
|
| 3. | Specified goods by a sports person of outstanding eminence. | (subject to specified conditions)
|
| 4. | Items such as temporary import of professional equipment by accredited press persons visiting India to cover certain events, broadcasting equipments, sports items, testing equipment, under ATA carnet system. | (These goods are to be re-exported after the specified use is over.)
|
Exemption from GST on supply of:
Specified goods, such as scientific or technical instruments, software, prototype supplied to public funded research institution or a university or IISc, or IITs or NIT.
Earlier as per notification no. 30/ Integrated Tax (Rate) IGST exemption was provided on supply of skimmed milk powder or concentrated milk by any person to distinct person under section 25(4), if such skimmed milk powder or concentrated milk was to be used in production of milk for distribution through dairy cooperatives only , now this exemptions is also recommended to be available where such milk is distributed through companies registered under the Companies Act also.
Other changes / Clarifications on GST on Goods.
To clarify that inter-state movement of goods like rigs, tools, spares and goods on wheel like cranes, not being in the course of furtherance of supply of such goods, does not constitute a supply. This clarification gives major compliance relief to industry as there are frequent inter-state movement of such kind in the course of providing services to customers or for the purposes of getting such goods repaired or refurbished or for any self-use. Service provided using such goods would in any case attract applicable tax.
Supply of e-waste attracts 5% GST rate. Concerned notification to be amended to make it amply clear that this rate applies only to e-waste discarded as waste by the consumer or bulk consumer.
It is being clarified that credit of GST paid on aircraft engines, parts & accessories will be available for discharging GST on inter–state supply of such aircraft engines, parts & accessories by way of inter-state stock transfers between distinct persons as specified in section 25 of the CGST Act.
Additional goods under RCM under section 9(3) of CGST Act and other corresponding sections under respective GST Acts:
Supply of raw cotton by agriculturist will be liable to be paid by the recipient of such supply under reverse charge.
Changes in rates of services
On the services side also, the Council recommended changes in GST rates to provide relief to aviation & handicraft sectors and restaurants.
All stand-alone restaurants irrespective of air conditioned or otherwise, will attract 5% without ITC.
Food parcels (or takeaways) will also attract 5% GST without ITC.
Restaurants in hotel premises having room tariff of less than Rs 7500 per unit per day will attract GST of 5% without ITC.
Restaurants in hotel premises having room tariff of Rs 7500 and above per unit per day (even for a single room) will attract GST of 18% with full ITC.
Outdoor catering will continue to be at 18% with full ITC.
GST on services by way of admission to “protected monuments” to be exempted.
Earlier vide notification no. 8/2017 Integrated (Tax) exemption was provided to a person making inter-State taxable supplies of handicraft goods from the requirement to obtain registration, Also vide notification no. 32/2017 Central (Tax) exemption was provided to a casual taxable person making taxable supplies of handicraft goods from the requirement to obtain registration. Now, GST rate on job work services in relation to manufacture of only those handicraft goods in respect of which the casual taxable person has been exempted from obtaining registration, is recommended to be reduced to 5% with full input tax credit.
Rationalization of certain exemption entries
Earlier vide notification no. 21/2017 Central (Rate), exemption was provided on service provided by Fair Price Shops by way of sale of specified gods under Public Distribution System (PDS) against consideration in the form of commission or margin, the exemption was as follows:
| Services provided to | By way of sales of |
| Central Government | Wheat, rice and coarse grains. |
| State Governments or Union territories | Kerosene, sugar, edible oil, etc. |
These existing exemption entries is being rationalized so as to remove ambiguity regarding list of items and the category of recipients to whom the exemption is available.
Earlier entry at item (vi) of Sr. No.3 of Rates of GST on Services (notification No. 11/2017-CT(R)) was mentioned as “Construction services”, whereas at items (ii), (iii), (iv) and (v) of SI.No.3 it was mentioned as “Composite supply of Works contract as defined in clause 119 of Section 2 of CGST Act, 2017”, now to remover this ambiguity, The word “services” in entry (vi) will be replaced with “Composite supply of Works contract as defined in clause 119 of Section 2 of CGST Act, 2017”.
In order to obviate dispute and litigation, it is proposed that irrespective of whether permanent transfer of Intellectual Property is a supply of goods or service.-
(i) permanent transfer of Intellectual Property other than Information Technology software attracts GST at the rate of 12%; and
(ii) permanent transfer of Intellectual Property in respect of Information Technology software attracts GST at the rate of 18%.
Clarifications on GST on Services
As per clause (e) of entry no. 54 of list of exempted services provided vide notification no. 12/2017 Central (Rate), Services relating to cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products or agricultural produce by way of loading, unloading, packing, storage or warehousing of agricultural produce is exempt from GST, a Circular will be issued clarifying that processed products such as tea (i.e. black tea, white tea etc.), processed coffee beans or powder, pulses (de-husked or split), jaggery, processed spices, processed dry fruits & cashew nuts etc. fall outside the definition of agricultural produce and therefore the exemption from GST is not available to their loading, packing, warehousing etc.
A suitable clarification will be issued that:
(i) services provided to the Central Government, State Government, Union territory under any insurance scheme for which total premium is paid by the Central Government, State Government, Union territory are exempt from GST under Sl. No. 40 of notification No. 12/2017-Central Tax (Rate);
(ii) services provided by State Government by way of general insurance (managed by government) to employees of the State government/ Police personnel, employees of Electricity Department or students are exempt vide entry 6 of notification No. 12/2017-CT(R) which exempts Services by Central Government, State Government, Union territory or local authority to individuals.
Changes recommended in Composition Scheme
The following changes were recommended in the Composition Scheme:
- Uniform rate of tax @ 1% under composition scheme for manufacturers and traders. (No change for composition scheme for restaurant)
- For traders, turnover will be counted only for supply of taxable goods.
- Supply of services by Composition taxpayer upto Rs 5 lakh per annum will be allowed by exempting the same. (However this will require amendment in CGST & SGST Acts.)
- Annual turnover eligibility for composition scheme will be increased to Rs 2 crore from the present limit of Rupees 1 crore under the law. Thereafter, eligibility for composition will be increased to Rs. 1.5 Crore per annum. (However this will require amendment in CGST & SGST Acts.)
Simplification of Returns filing procedure
Due dates for filing returns in form GSTR-3b, GSTR-1, GSTR-2 & GSTR-03 along with payment of tax are as follows:
| Month | GSTR-3B | Tax Payment | GSTR-01 | GSTR-02 & 03 | |
| Turnover upto 1.50 Cr. | Turnover above 1.50 Cr. | ||||
| July’17 | 25th August’17* | 20th August’17 | Quarterly upto 31.12.17 | 31st Dec 2017 | Date yet to be notified by the Government |
| August’17 | 20th September’17** | 20th September’17 | 31st Dec 2017 | ||
| September’17 | 20th October’17** | 20th October’17 | 31st Dec 2017 | ||
| October’17 | 20th November’17 | 20th November’17 | Quarterly upto 15.02.18 | 31st Dec 2017 | |
| November’17 | 20th December’17 | 20th December’17 | 10th Jan 2018 | ||
| December’17 | 20th January’18 | 20th January’18 | 10th Feb 2018 | ||
| January’18 | 20th February’18 | 20th February’18 | Quarterly upto 30.04.18 | 10th Mar 2018 | |
| February’18 | 20th March’18 | 20th March’18 | 10th Apr 2018 | ||
| March’18 | 20th April’18 | 20th April’18 | 10th May 2018 | ||
*Late fee was waived on 1st September 2017 vide notification no. 28/2017 Central Tax dated 01-09-17. Last date to file GSTR-3B for July 2017 was extended by notification 24/2017 Central Tax dated 21-08-2017.
**Late fee was waived on 24th October 2017 vide notification no. 50/2017 Central Tax dated 24-10-17
Though no last date of filing of form GSTR-3B without payment of penalty for the month of July’17, Aug’17 & Sep’17 were prescribed in these notifications, however a registered person cannot file GSTR-3B for a succeeding month unless he files GSTR-3B for preceding months.
In case where such late fee were paid by the registered person, it will be re-credited to their Electronic Cash Ledger under “Tax” head instead of “Fee” head so as to enable them to use that amount for discharge of their future tax liabilities. The software changes for this would be made and thereafter this decision will be implemented.
For subsequent months, i.e. October 2017 onwards, the amount of late fee payable by a taxpayer whose tax liability for that month was ‘NIL’ will be Rs. 20/- per day (Rs. 10/- per day each under CGST & SGST Acts) instead of Rs. 200/- per day (Rs. 100/- per day each under CGST & SGST Acts).
Manual Filing of advance ruling
A facility for manual filing of application for advance ruling is being introduced for the time being.
ITC available for export of services to Nepal & Bhutan.
As per notification no. 42/2017-Integrated Tax (Rate), dated 27-10-2017, exports of services to Nepal and Bhutan were exempted from GST, however as per CGST Act, ITC is not available for providing exempt services. It has now been decided that such exporters will also be eligible for claiming Input Tax Credit in respect of goods or services used for effecting such exempt supply of services to Nepal and Bhutan.
Exemption from registration for Services provided through E-commerce platform in case aggregate turnover is below threshold limit.
Person making inter-state supplies or making supply through e-commerce operator was compulsorily required to obtain registration under section 24 of CGST Act’2017. However vide notification No. 10/2017 – Integrated Tax dated 13th October’2017, those service providers whose annual aggregate turnover is less than Rs. 20 lakhs (Rs. 10 lakhs in special category states except J & K) were exempted from obtaining registration even if they are making inter-State taxable supplies of services. As a further measure towards taxpayer facilitation, it has been decided to exempt such suppliers providing services through an e-commerce platform from obtaining compulsory registration provided their aggregate turnover does not exceed twenty lakh rupees. As a result, all service providers, whether supplying intra-State, inter-State or through e-commerce operator, will be exempt from obtaining GST registration, provided their aggregate turnover does not exceed Rs. 20 lakhs (Rs. 10 lakhs in special category States except J & K).
Extension of various due dates.
Taking cognizance of the late availability or unavailability of some forms on the common portal, it has been decided that the due dates for furnishing the following forms shall be extended as under:
| S. No. | FORM and Details | Original due date | Revised due date |
| 1 | GST ITC-04 for the quarter July-September, 2017 | 25.10.2017 | 31.12.2017 |
| 2 | GSTR-4 for the quarter July-September, 2017 | 18.10.2017 | 24.12.2017 |
| 3 | GSTR-5 for July, 2017 | 20.08.2017 or 7 days from the last date of registration whichever is earlier | 11.12.2017 |
| 4 | GSTR-5A for July, 2017 | 20.08.2017 | 15.12.2017 |
| 5 | GSTR-6 for July, 2017 | 13.08.2017 | 31.12.2017 |
| 6 | TRAN-1 | 30.09.2017 | 31.12.2017 (One-time option of revision also to be given till this date) |
Revised due dates for subsequent tax periods will be announced in due course.
Centralized UIN to every Foreign Diplomatic Mission / UN Organization.
A centralized UIN will be issued to every Foreign Diplomatic Mission / UN Organization by the Central Government and all compliance for such agencies will be done by the Central Government in coordination with the Ministry of External Affairs.
suggestions invited at khatrimithun@hotmail.com
Author Bio
Dear Sir,
GSTR 4A will be auto populated after filing of GSTR 1,The last date for filing of GSTR 1 for the quarter July to Sept is 31.12.2017. Then how it will be possible to file GSTR 4 for the period July-Sept by 24.12.2017 ….