54th GST Council meeting was held on 09.09.2024 which brought about a number of legal and industry specific changes to the GST Law which have been captured in this article.
I. Trade Facilitation Measures:
1. Section 128A Of The CGST Act, 2017 – Waiver Of Interest & Penalty Under Section 73 Of The CGST Act For FY 2017-18, 2018-19 And 2019-20
- Insertion of Rule 164 in the CGST Rules, 2017 along with certain Forms to provide for terms & conditions to avail the benefit of Section 128A of the CGST Act.
- To notify 31.03.2025 as the date on or before which payment of tax shall be made to avail the benefit of Section 128A of the CGST Act.
- Clarifications to be issued in connection with the availment of benefits under Section 128A of the CGST Act, by way of a circular.
- Section 146 of Finance (No.2) Act, 2024 which provides for insertion of Section 128A in the CGST Act, 2017 to be notified with effect from 01.11.2024.
2. Mechanism For Implementation Of Section 16(5) & 16(6) of the CGST Act, 2017
- To notify special procedures for rectification of orders that were issued confirming wrong availment of ITC in contravention of Section 16(4) of the CGST Act, but ITC is now available under Section 16(5) or 16(6) of the CGST Act, and no appeal has been filed against the said order.
- Clarifications to be issued in connection with the procedure and various issues related to Section 16(5) and 16(6) of the CGST Act, by way of a circular.
- Section 118 and 150 of Finance (No.2) Act, 2024 which provides for insertion of Section 16(5) and 16(6) in the CGST Act, 2017 retrospectively, to be notified at the earliest
3. Amendment To Rule 89 & 96 Of CGST Rules – Clarification In Respect Of IGST Refunds On Exports Where Benefit Of Concessional Exemption Availed On Inputs:
i. Refund of IGST paid on exports shall not be considered to be in contravention of Rule 96(10) of the CGST Rules, 2017 in cases where:
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- Inputs were initially imported without payment of IGST and compensation cess by availing the benefit of Notifications 78/2017 – Customs dated 13.10.2017 or 79/2017 – Customs dated 13.10,2017, but
- IGST and compensation cess were subsequently paid along with interest, and the bill of entry got reassessed through the jurisdictional customs authority to that effect.
ii. Omission of Rule 96(10) and 89(4A) and 89(4B) of the CGST Rules prospectively to facilitate refund on exports in cases where benefit of specified notifications is availed on the inputs.
4. Issuance of clarifications through circulars to remove ambiguity in connection with the following:
- Place of supply of advertising services provided by Indian advertising company to foreign entities.
- Availability of ITC on demo vehicles by dealers of vehicle manufacturers
- Place of supply of data hosting services provided by service providers located in India to cloud computing service providers located outside India.
II. Other Important Measures
5. Rolling out of a pilot B2C e-invoicing
6. Introduction of Reverse Charge Mechanism Ledger, Input Tax Credit Reclaim Ledger, and an Invoice Management System
III. Services
7. Life & Health Insurance: Constitution of Group Of Ministers to look into the issues pertaining to GST on life & health insurance which shall submit its report by October 2024.
8. Renting of commercial property by an unregistered person to a registered person to attract GST under RCM.
9. Transportation Of Passengers By Helicopter:
- To notify 5% GST on transportation of passengers by helicopter on seat sharing basis.
- GST on chartered helicopter to continue at 18%.
10. Flying Training Courses by DGCA approved Flying Training Organizations to be exempt from GST [Clarification by way of a circular].
11. Research & Development Services by a government entity, research organization, university, college or other institution notified under Section 35(1)(ii) or (iii) of the Income Tax Act using government or private grants, to be exempt from GST
12. Preferential Location Charges (PLC) paid along with the consideration for construction services before issuance of completion certificate to be treated as a part of composite supply, wherein construction service is the main supply and PLC is naturally bundled.
13. Affiliation Services:
- By State/Central Educational Boards to Government Schools to be exempt from GST.
- By universities to their constituent colleges to attract GST at 18%.
14. Import of services by an establishment of a foreign airlines company from a related person, exempt from GST when made without consideration.
15. Ancillary services like loading, unloading, packing etc. provided by GTA
- Shall be treated as a part of a composite supply, when provided in the course of transportation of goods with transportation being the main service.
- Shall not be treated as a composite supply if provided and billed separately.
IV. Goods
16. GST rate on Namkeens and Extruded/Expanded Savoury Food Products falling under HSN 1905 90 30 to be reduced from 18% to 12%
17. GST rate of 5% to continue on un-fried or un-cooked snack pellets, manufactured through process of extrusion.
18. GST rate on cancer drugs Trastuzumab Deruxtecan, Osimertinib, and Durvalaumab to be reduced from 12% to 5%
19. Supply Of Metal Scrap:
- RCM to apply on supply of metal scrap by unregistered person to a registered person.
- TDS of 2% on supply of metal scrap by registered person in B2B transactions.
20. Roof Mounted Package Unit (RMPU) Air Conditioning Machines for railways would be classified under HSN 8415 attracting GST at 28%
21. GST on Car seats classifiable under HSN 9401 to be increased from 18% to 28%
V. Other Changes
22. GST on film distributors for the period prior to 01.10.2021 to be regularized on as is where is basis in cases where such distributor acts on a principal basis to acquire and distribute films.
Note: There may be other sector specific recommendations made by the GST Council that may have not been covered in this alert. The purpose of this alert is to highlight the key recommendations of the GST Council. For the complete list of recommendations, kindly refer to the press release posted by the PIB, Government Of India.
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