The 53rd GST Council Meeting, chaired by Finance Minister Nirmala Sitharaman, convened in New Delhi on June 22, 2024, with representatives from states and Union Territories. The meeting focused on addressing various challenges faced by taxpayers and clarifying GST regulations. Here are the major outcomes:
1. Interest Exemption on Cash Ledger: Interest under section 50 will not be charged in respect of delayed filing of GSTR-3B return on the amount available in the cash ledger which is debited while filing the GSTR-3B, reducing financial implications for taxpayers. (Amendment in Rule 88B)
2. Introduction of Form GSTR-1A: New Form GSTR-1A introduced to amend the details in GSTR-1 for a tax period or declare additional details before filing GSTR-3B of the said tax period, to ensure that correct liability is auto-populated in FORM GSTR-3B.
3. Waiver of Interest and Penalty on demand: Interest and penalty waived on demand notices issued under Section 73 for FY 2017-18, 2018-19, and 2019-20, provided the full tax is paid by March 31, 2025. The waiver does not cover demand of erroneous refunds. This relief aims to ease financial burdens resulting from early GST implementation challenges. (New section 128A)
4. Extended Time Limit for ITC: Time limit extended to avail Input Tax Credit (ITC) under Section 16(4) for FY 2017-18, FY 2018-19, FY 2019-20 and FY 2020-21 where Taxpayers availed the ITC through GSTR 3B returns filed up to November 30, 2021. (Requisite amendment in section 16(4), retrospectively, w.e.f. 01.07.2017)
5. Extension of GSTR-4 Filing Deadline: Deadline extended to file GSTR-4 for composition taxpayers from 30th April to 30th June applicable from FY 2024-25 onwards, providing additional time for eligible taxpayers to comply with GST return filing requirements. (Amendment in Rule 62(1)(ii))
6. Reduction in TCS Rate for Electronic Commerce Operators: Tax Collected at Source (TCS) rate for Electronic Commerce Operators (ECOs) reduced from 1% to 0.5% (0.25% CGST + 0.25% SGST/UTGST or 0.5% IGST). This adjustment aims to alleviate financial pressures on suppliers utilizing ECO platforms for their taxable supplies.
7. Reduced threshold limit of B2CL supplies: The threshold for reporting of B2C inter-State supplies (B2CL) invoice-wise in Table 5 of FORM GSTR-1 was recommended to be reduced from Rs 2.5 Lakh to Rs 1 Lakh.
8. Fixing Monetary Limits for filing Appeals by department
- Monetary limits set for appeals by the tax department:
1. GST Appellate Tribunal (GSTAT): Rs. 20 lakhs
2. High Court: Rs. 1 crores
3. Supreme Court.: Rs. 2 crores
This move is aimed at reducing litigation and providing relief to smaller taxpayers. (Amendment Section 112)
9. Reduced Pre-Deposit for Appellate Authority: Maximum pre-deposit amount reduced from Rs. 25 crore to Rs. 20 crore each for CGST and SGST for filing appeals before the appellate authority, facilitating easier access to appeal processes and to ease cash flow and working capital blockage for the taxpayers.(Amendment in Section 107)
10. Reduced Pre-Deposit for Appellate Tribunal: Pre-deposit for filing appeals before the Appellate tribunal reduced to 10% of the disputed tax amount or Rs. 20 crore each for CGST and SGST, whichever is lower, further easing financial requirements for taxpayers. Earlier limit was 20% with maximum amount with maximum of Rs. 50 crore each for CGST and SGST. (Amendment in Section 112)
11. Amendment in Appeal Time Limits: Amendment proposed to allow the three-month period for filing appeals before the Appellate Tribunal to start from a date to be notified by the Government. This will give sufficient time to the taxpayers to file appeal before the Appellate Tribunal in the pending cases.
12. Biometric Aadhaar Authentication: Phased implementation of biometric-based Aadhaar authentication across India, aiming to strengthen GST compliance and authentication processes. This will strengthen the registration process in GST and will help in combating fraudulent input tax credit (ITC) claims made through fake invoices.
13. Exemption for GSTR-9/9A: The Council recommended that filing of annual return in FORM GSTR-9/9A for the FY 2023-24 may be exempted for taxpayers having aggregate annual turnover upto two crore rupees (Rs. 2 crores).
14. Nil GSTR-7 filing mandatory: Nil filing of FORM GSTR-7 is mandatory. It is recommended that Form GSTR-7 to be filed by the registered persons who are required to deduct tax at source under section 51 of CGST Act, is to be filed every month irrespective of whether any tax has been deducted during the said month or not.
15. Introduction of Section 74A: The GST Council proposes unified time limits for issuance of demand notices and orders, regardless of fraud charges, effective from FY 2024-25 onwards. It also extends the period for taxpayers to pay tax with interest for reduced penalties from 30 to 60 days. These changes aim to simplify compliance and enhance procedural clarity.
16. Changes in GST Rates of goods
- Various clarifications and adjustments made on GST rates, including uniform rates on items like milk cans, carton boxes, solar cookers, and services by Indian Railways and hostel accommodations.
1. A uniform rate of 5% IGST will apply to imports of ‘Parts, components, testing equipment, tools and tool-kits of aircrafts.
2. All milk cans (of steel, iron and aluminium) irrespective of their use will attract 12% GST.
3. GST rate on ‘carton, boxes and cases of both corrugated and non-corrugated paper or paper board’ (HS 4819 10; 4819 20) to be reduced from 18% to 12%.
4. All solar cookers whether single or dual energy source, will attract 12% GST.
5. To amend existing entry covering Poultry keeping Machinery attracting 12% GST to specifically incorporate “parts of Poultry keeping Machinery” and to regularize past practice on ‘as is where is’ basis in view of genuine interpretational issues.
6. To clarify that all types of sprinklers including fire water sprinklers will attract 12% GST and to regularise the past practice on ‘as is where is’ basis in view of genuine interpretational issues.
7. To extend IGST exemption on imports of specified items for defence forces for a further period of five years till 30th June, 2029.
8. To extend IGST exemption on imports of research equipment/buoys imported under the RAMA programme subject to specified conditions.
9. To exempt Compensation Cess on the imports in SEZ by SEZ Unit/developers for authorized operations w.e.f. 01.07.2017.
10. To exempt Compensation cess on supply of aerated beverages and energy drinks to authorized customers by Unit Run Canteens under Ministry of Defence.
11. To provide Adhoc IGST exemption on imports of technical documentation for AK-203 rifle kits imported for Indian Defence forces.
17. Recommendations relating to GST rates on services
- Various clarifications made in respect of services as follows:
1. Services provided by Indian Railways to the general public, such as platform tickets, retiring rooms/waiting rooms, cloakroom services, and battery-operated car services, are exempt from GST. Past period issues will be regularized from October 20, 2023, onwards.
2. GST exemption on services provided by Special Purpose Vehicles (SPVs) to Indian Railways, including the use of infrastructure during concession periods and maintenance services provided by Indian Railways to SPVs. Past issues will be regularized ‘as is where is’ from July 1, 2017, to the date of exemption notification.
3. Creation of a new entry under heading 9963 in notification No. 12/2017-CTR dated June 28, 2017, to exempt accommodation services where the value of supply does not exceed Rs. 20,000 per month per person, provided the accommodation is for a minimum continuous period of 90 days. Similar benefits will be extended to past cases.
4. Other changes recommended related to services like GST liability on reinsurance services, Co-insurance premium, clarification on sharing of the incentive by acquiring bank etc.
These recommendations from the 53rd GST Council Meeting, held on June 22, 2024, reflect ongoing efforts to streamline GST compliance, reduce litigation, and provide relief to taxpayers amidst evolving economic conditions. The decisions are expected to foster a more transparent and efficient GST regime in India.
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