Key Takeaways of 22nd GST Council Meet

Highlights of 22nd GST Council Meet held at New Delhi on 06-10-2017

KEY TAKEAWAYS

1. Composition Scheme

2. Exporters benefits

3. Small and Medium Enterprises

4. Reverse charge mechanism

5. GST on Advance

6. TDS and TCS Provisions

7. Revision of Tax rates for various Items

8. Other Measures

1. Composition Scheme

1. Threshold limit for availing Composition Scheme has increased from Rs. 75 Lakhs to Rs. 1 Crore for all the States except North Eastern States.

2. For North Eastern States (states with Special Status) Threshold limit for availing Composition Scheme has increased from Rs. 50 Lakhs to Rs. 75 Lakhs.

3. However, for J&K and Uttarakhand (States with Special Status), Threshold limit for availing Composition Scheme is Rs. 1 Crore.

4. The facility for opting Composition scheme is extended from 16/08/2017 to 31/03/2018.

5. Due date for filing of returns by a Composite dealer (Quarterly) has extended from 18th October 2017 to 15th November, 2017.

6. Assesses who are engaged in supply of Exempted Service are also eligible for availing Composition scheme.

7. Whereas, no option for availing Composition scheme exists for the Assesses engaged in Supply of Service except restaurant Service.

8. “Assesse engaged in supply of Restaurant Service as well as exempted  Service, for the purpose of calculation of Turnover for availing Composition scheme, turnover pertains to Exempted Service is not to be included.”

9. New entrants to the scheme shall file GST return in Form GSTR-4 only for the portion of the quarter from when scheme becomes applicable and shall file returns as regular dealers for the preceding tax period.

10. Composition scheme shall be effective from the succeeding the month in which application for opting of composition is made.

11. Facility to avail composition scheme, under the increased threshold, shall be available up to March 31, 2018 to both migrated as well as new taxpayers.

12. Persons who are otherwise eligible for composition scheme but are providing any exempt service (such as extending deposits to banks for which interest is being received) were being considered ineligible for the said scheme. It has been decided that such persons who are otherwise eligible for
availing the composition scheme and are providing any exempt service, shall be eligible for the composition scheme.

13. A Group of Ministers (GoM) shall be constituted to examine measures to make the composition scheme more attractive

2. EXPORTERS & EXPORTS

> Refund to be paid for exporters

Month	Due date
July 2017	10th October
August 2017	18th October

> An E-Wallet for all the Exporters for every Exporter through which notional amount of Refund will be credited soon.

1. The held-up refund of IGST paid on goods exported outside India in July 2017 would begin to be paid by October 10, 2017. The August backlog would get cleared from October 18, 2017 and refunds for
subsequent months would be handled expeditiously.

2. Other refunds of IGST paid on supplies to SEZs and of inputs taxes on exports under Bond/LUT, shall be processed from October 18, 2017 on wards.

3. Relief is being given by extending the Advance Authorization (AA) / Export Promotion Capital Goods (EPCG) / 100% EOU schemes to sourcing inputs etc. from abroad as well as domestic suppliers.
Holders of AA / EPCG and EOUs would not have to pay IGST, Cess etc. on imports.

4. Domestic supplies to holders of AA / EPCG and EOUs would be treated as deemed exports under Section 147 of CGST/SGST Act and refund of tax paid on such supplies given to the supplier.

5. Merchant exporters will now have to pay nominal GST of 0.1% for procuring goods from domestic suppliers for export.

6. Introduction of “e-Wallet”with a notional amount as an advance refund would be made operational w.e.f. 1st April 2018 and can be used to pay taxes.

7. GST rate on sale & purchase of duty scrips under HSN 4907 is being reduced from 5% to 0%.

3. Small and Medium Enterprises

1. Exemption to service providers whose annual aggregate turnover is less than INR 20 lakhs (INR 10 lakhs in Special category States except the State of Jammu & Kashmir) from obtaining registration even if they are making inter-state supplies of services.

2. Small and medium business having annual aggregate turnover up to INR 150 lakhs shall be required to file GST returns in Form GSTR-1, 2 & 3 and pay due taxes, on quarterly basis starting from the quarter October to December 2017.

3. The due dates for quarterly returns shall be announced in due course.

4. Registered buyers from such small business would be eligible to avail input tax credit on monthly basis.

5. Meanwhile, all taxpayers will be required to file FORM GSTR3B on a monthly basis till December, 2017.

6. All taxpayers are also required to file FORM GSTR-1, 2 & 3 for the months of July, August and September, 2017.

7. No change in due dates for filing the returns for the month of July, 2017 which is notified vide Notification No. 30/2017 date 11/09/17.

8. The due dates for the months of August and September, 2017 will be announced in due course

9. Reverse charge mechanism as provided under Section 9(4) of the CGST Act, 2017 and Section 5(4) of the IGST Act, 2017 shall be deferred till March 31, 2018 and shall be reviewed by the Committee of Experts.

10. Services provided by the Goods Transport Agency (GTA) to an un-registered person shall be exempt from GST.

4. Reverse charge mechanism:

> As per provision of sub-section (4) of section 9 of the CGST Act, 2017 and under sub-section (4) of section 5 of the IGST Act, 2017, GST has to be paid by the recipient where either Goods or Services are procured from an Unregistered Dealer.

> Recommendations made by the Council in its 22nd GST Council meet held on 06/10/2017 at National Capital was that the above said provisions would be suspended till 31/03/2018.

5. GST on Advances

• There was a provision under Input Tax Credit scheme that GST to be paid on advance received and credit cannot be availed till the final settlement of the bill.

• Taxpayers having annual aggregate turnover of INR 150 lakhs, shall not be required to pay tax on receipt of advances on account of supply of goods. GST on such supplies shall be payable only when supply of goods is made.

6. TDS and TCS Provisions

Operationalization of TDS and TCS provisions so proposed in GST Act are postponed till 31/03/2018.

7. Revision of Tax rates for various Items

1	0804	Mangoes sliced dried	12	5
2	1905 or 2106	Khakra and plain chapati / roti	12	5
3	19 or 21	Food preparations put up in unit containers and intended for free distribution to economically weaker sections of the society under a programme duly approved by the Central Government or any State Government, subject to specified conditions	18	5
4	21	Namkeens other than those put up in unit container and, – (a) bearing a registered brand name; or (b) bearing a brand name on which an actionable claim or enforceable right in a court of law is available [other than those where any actionable claim or enforceable right in respect of such brand name has been foregone voluntarily	12	5
5	2710	Imposing GST only on the net quantity of superior kerosene oil [SKO] retained for the manufacture of Linear Alkyl Benzene [LAB]	18	18
6	30	Ayurvedic, Unani, Siddha, Homeopathy medicines, other than those bearing a brand name	12	5
7	3213	Poster Color	28	18
8	3407	Modelling paste for children amusement	28	18
9	3915	Plastic waste Parings and Scrap	18	5
10	4004 00 00	Rubber waste Parings and Scrap	18	5
11	4017 00 20	Hard rubber waste Parings and Scrap	28	5
12	4707	Paper waste and Scrap	12	5
13	4907	Duty credit scrips	5	Nil
14	5401	Sewing thread of man made filaments, whether or not put up for retail sale	18	12
15	5402, 5404, 5406	All synthetic filament yarn, such as nylon, polyester, acrylic, etc.	18	12
16	5403, 5405, 5406	All artificial filament yarn, such as viscose rayon, Cuprammonium,	18	12
17	5508	Sewing thread of man made staple fibers	18	12
18	5509, 5510, 5511	Yarn of man made staple fibers	18	12
19	5605	Real Zari	12	5
20	6802	All goods falling under heading 6802 [other than those of marble and granite or those which attract 12% GST]	28	18
21	7001	Cullet or other waste or scrap of Glass	18	5
22	8305	Fittings for loose-leaf binders or files, letter clips, letter corners, paper clips, indexing tags and similar office articles, of base metal; staples in strips (for example, for offices, upholstery, packaging), of base metal	28	18
23	8483	Plain Shaft bearing 8483	28	18
24	84	Parts suitable solely for Principally with fixed speed diesel of power not exceeding 15HP	28	18
25	84 or 85	Parts suitable for use solely or principally with power driven pumps primarily designed for handling water, namely, centrifugal pumps (horizontal and vertical), deep tube-well turbine pumps, submersible pumps, axial flow and mixed flow vertical pumps	28	18
26	84 or 85	E-Waste	28/18	5
27	Any Chapter	Biomass briquettes	18	5

8. Other Measures

1. System relating to e-way bill to be introduced in a staggered manner effective from January 01, 2018. Such system to be rolled out nationwide with effect from April 01, 2018.

2. Due date to file return in From GSTR-4 by a taxpayer under composition scheme for the quarter ending September 30, 2017 shall be extended up to November 15, 2017.

3. Due date to file return in Form GSTR-6 by an input service distributor (ISD) for the month of July, August and September 2017 shall be extended up to November 15, 2017.

4. Invoicing rules to be modified to provide relief to certain classes of registered persons.

Source- National Academy of Customs, Indirect Taxes and Narcotics (NACIN), Chennai