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CA Neha Somani

CA Neha SomaniFollowing is the summary of recommendations of 23rd GST Council made at its meeting held in Guwahati on 9-10th November, 2017

Tax Impact

Rate specific

> The Council has recommended major relief in GST rates on certain goods and services by reduction in GST rate from 28% to 18% on goods falling in 178 headings at 4-digit level. After these changes, only 50 items will attract GST rate of 28%.

> For 15 items, rates reduced to 12% and for 14 items, to 5% ; on 6 items rate reduced to NIL

> Following changes have been made for Restaurants/Hotels :

  • All stand-alone Restaurants (whether AC or Non-AC) will attract 5% GST 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.

Suitable notification will be issued by 15th November, 2017.

23rd GST Council Meeting held in Guwahati on 9-10th November, 2017

The Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley in a group photograph during the 23rd GST Council meeting, at Guwahati on November 10, 2017.
The Minister of State for Finance, Shri Shiv Pratap Shukla and the Finance Secretary, Dr. Hasmukh Adhia are also seen.

Composition scheme specific

> Following changes have been recommended in relation to Composition Scheme :

  • Uniform composite rate (1%) for manufacturers and traders
  • Supply of services upto Rs 5 lakhs may be exempted
  • Aggregate turnover for eligibility may increase to 1.5 crores subject to necessary amendments in CGST Act and SGST Acts.

Necessary changes will be made in law by way of Bill / Ordinance.

Export specific

> Person making export of services to Nepal and Bhutan (who have already been exempted) will also be eligible to claim Input Tax Credit in respect of goods or services used for making such exempt supply of services to Nepal and Bhutan.

Job work related

> The rate of GST on job work services in relation to manufacture of those handicraft goods in respect of which the casual taxable person has been exempted from obtaining registration, shall be reduced to 5% with full ITC.

> All service providers, whether supplying intra- State or inter-State 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).

> A facility for manual filing of application for advance ruling is being introduced for the time being.

Ease of Compliances

Returns related

  • FORM GSTR-3B is required to be filed by all taxpayers along with payment of tax by 20th of the succeeding month till March, 2018.
  • FORM GSTR-1 is required to be filed in following manner:

> Taxpayers having aggregate turnover upto Rs. 1.5 crore need to file GSTR-1 on quarterly basis as follows

Period Dates
July- September 31st December, 2017
October- December 15th February, 2018
January- March 30th April, 2018

Taxpayers having  aggregate turnover more than Rs. 1.5 crore need to now file GSTR-1 on monthly basis as follows:

Period Dates
July- October 31st December, 2017
November 10th  January, 2018
December 10th February, 2018
January 10th March, 2018
February 10th  April, 2018
March 10th  May, 2018

Other relevant returns and forms

Dates for following forms are 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 GST TRAN-1 30.09.2017 31.12.2017 (One-time option of revision also to be given till this date)

Late Fee / Penalty for delayed returns

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) w.e.f returns for October, 2017.

Addition to Exemptions

Council has made addition to Exemptions which are as follows :

  • Exemption from IGST on imports of goods (other than motor vehicles) under a lease agreement if IGST is paid on the lease amount.
  • Exemption from GST on 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.

(Author is Partner at Agarwal Sanjiv & Company, Jaipur)

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