Arjuna (Fictional Character): Krishna, 37th GST Council Meeting was held on 20th September, 2019. Diwali Dhamaka changes were made in Income Tax. On the same day, what were the recommendations for GST in the meeting?

Krishna (Fictional Character): Arjuna, seeing the changes made in Income Tax, same were expected in GST. But only law and procedure related changes were recommended. Also, GST rates related to supply of goods and services were proposed to change.

Arjuna: Krishna, What were the proposed changes in law and procedures?

Krishna: Arjuna, The recommendation in relation with law and procedures are:

1. Relaxation in filing of annual returns for FY 2017-18 and FY 2018-19 as under:

2. Filing of FORM GSTR-9 has been made optional for those taxpayers who have aggregate turnover up to Rs. 2 crores for the said tax periods.

3. Also, waiver to composition Taxpayers has been given from filing FORM GSTR-9A for the said tax periods.

4. The circular dated 28th June, 2019 which was brought to provide clarification on various doubts in relation to post sales discount has been rescinded.

Arjuna: Krishna, What were the recommendations for changes in GST rate for services?

Krishna: Arjuna, The recommendation for changes in GST rate for services are as follows:

  • Hospitality and tourism:

1. The GST rate of tax on hotel accommodation service is nil till transaction value of Rs. 1000 per day. If the transaction value is above Rs. 1000 per day but below Rs. 7500 per day then GST rate of 12% is applicable. Also, GST rate of 18% is applicable if transaction value is above Rs. 7500 per day.

2. The GST tax rate on outdoor catering services other than in premises having tariff of unit of accommodation of Rs 7501 per day has been reduced. It was reduced to 5% without ITC from present 18% with ITC. The rate shall be mandatory for all kinds of catering.

3. Catering in premises with tariff of Rs 7501 and above per day shall remain at 18% with ITC.

  • Job work service: GST rate on supply of machine job work such as in engineering industry has been reduced to 12% from 18%. The supply of job work in relation to bus body building would remain at 18%.
  • Transportation: The validity of exemption of GST on export freight by air or sea has been increased by another year i.e. till 30.09.2020

Arjuna: Krishna, What were the recommendations for changes in GST rate for goods?

Krishna: Arjuna, The recommendation for changes in GST rate for goods are as follows:

  • Reduction in GST rates from 5% to nil on:

1. Dried tamarind

2. Plates and cups made up of leaves/flowers/bark.

  • GST rate on caffeinated beverages has been increased from 18% to 28%+12% compensation cess.
  • Parts like Solar Evacuation tubes for solar power based devices like solar water heater, solar steam, generation systems, would be taxed at 5%.

Arjuna: Krishna, what lesson should one learn from this?

Krishna: Arjuna, to give boost to economy government has given major reliefs in Income Tax. Similarly, major reliefs were expected in GST like lowering of GST rate for automobile sector, option of “revise” return for GST, etc. But it happened other way round, in lighter note someone told, “Suvidha in Income Tax, while Duvidha in GST.”

Also Read relevant Press Releases and Notifications

Taxation Laws (Amendment) Ordinance, 2019

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1. Vice-Chairmen of WIRC of ICAI for the year 2015-2021. 2. Youngest Chairman of Aurangabad Branch of WIRC of ICAI in 2002. 3. Author of Popular Tax articles series based on Krishna and Arjuna conversation i.e “KARNITI” published in Lokmat on every Monday. Till date 335+ weekly articles ha View Full Profile

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  1. Shanti Lal Kothari says:

    Buying a car and selling a car after few years, it will attract heavy GST on both sides, it is demoralizing buyers to purchase the car. No one can pay such a heavy GST on buying as well as on selling. The government should consider it.

  2. Shanti Lal Kothari says:

    Thanks to Tax guru,
    I would like to draw a very much unreasonable processes of income tax. If you are selling long ago tenanted property, you have to pay capital gain tax at the same rate as if it is new property, even he will not get 25% of the new property price. The government must think for these things and I request you to please do some relaxations in these things. It will create more revenue from selling these properties, which is now not possible due to these valuation method.

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