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You may wonder the impact of the recommendations of the 47th GST Council Meeting concluded on 29th and 30th June 2022.

We bring a concise summary of changes pursuant to said meeting for better understanding –

What became cheaper
Ostomy Appliances
Orthopaedic appliance, intraocular lens, artificial body parts, body implants
specified defence items
Goods/passenger transport by Ropeway
Renting of truck/goods carriage where cost of fuel is included

What turned dearer
Hotel Stay where room rent is below Rs 1,000 per day
Hospital Room rent (excluding ICU) exceeding Rs 5,000 per day per patient charged by a hospital – 5% (no ITC)
Renting of residential dwelling to business entities
Services by RBI, IRDA, SEBI, FSSAI, GSTN
specified food items, grains (prepackaged) and pre-packed, pre-labelled curd, lassi and butter milk
E-Waste (electronic waste)
Cheques, lose or in book form
Printing, writing or drawing ink
Knives with cutting blades, Paper knives, Pencil sharpeners and blades, Spoons, forks, ladles, skimmers, cake-servers
Pumps – centrifugal, deep tube-well turbine, submersible & Bicycle pumps
LED Lamps, lights and fixture
Drawing and marking out instruments
Solar Water Heater and system
Prepared/finished leather/chamois leather /composition leathers and job work related to leather
Tetra Pak
Tar
Cut and Polished diamonds
CETPs, common bio-medical waste treatment facilities for treatment or disposal of biomedical waste
Nicotine Polarilex Gum
All taxable service of Department of Posts

Important Changes or Clarifications –

> Electric vehicles whether or not fitted with a battery pack, are eligible for the concessional GST rate of 5%.

> Sewage treated water is exempted from GST and is not the same as purified water provided in S. No. 99 of notification 2/2017-CT(Rate).

> Services associated with transit cargo both to and from Nepal and Bhutan are covered by exemption under entry 9B of notification No. 12/2017-CT(R) dated 28.06.2017

> Activity of selling of space for advertisement in souvenirs published in the form of books is eligible for concessional GST at 5%

> Renting of vehicle with operator for transportation of goods on time basis is classifiable under Heading 9966 (rental services of transport vehicles with operators) and attracts GST at 18%. GST on such renting where cost of fuel is included in the consideration charged is being prescribed at 12%.

> Renting of motor vehicles for transport of passengers to a body corporate for a period (time) is taxable in the hands of body corporate under RCM (vehicle hire – Hourly/daily/monthly basis)

> Goods transport agency (GTA) is being given option to pay GST at 5% or 12% under forward charge; option to be exercised at the beginning of Financial Year. RCM option to continue (GTA can pay tax at 5% or 12% on forward charge method i.e. charge tax at 5% or 12% on their Invoice and recipients may avail ITC in both cases)

> Change in formula for calculation of refund under rule 89(5) to take into account utilization of ITC on account of inputs and input services for payment of output tax on inverted rated supplies in the same ratio in which ITC has been availed on inputs and input services during the said tax period. This would help those taxpayers who are availing ITC on input services also.

> Additional time for filing refund claim – Time period from 01.03.2020 to 28.02.2022 to be excluded from calculation of the limitation period for filing refund claim by an applicant under section 54 and 55 of CGST Act

> Form for giving back amount of refund claim wrongly granted – Re-credit of amount in electronic credit ledger to be provided in those cases where erroneous refund amount sanctioned to a taxpayer on account of accumulated ITC or on account of IGST paid on zero rated supply of goods or services, in contravention of rule 96(10) of the CGST Rules, is deposited by him along with interest and penalty, wherever applicable. A new FORM GST PMT- 03A is introduced for the same.

> Present exemption of IGST on import of goods under AA/EPCG/EOU scheme to be continued and E-wallet scheme not to be pursued further

> Clarification to be issued on mandatory furnishing of correct and proper information of inter-State supplies and amount of ineligible/blocked Input Tax Credit and reversal thereof in return in FORM GSTR-3B.

> Clarification on various issues relating to interpretation of section 17(5) of the CGST Act -Blocked/Ineligible ITC

> Clarification on the issue of perquisites provided by employer to the employees as per contractual agreement

> Clarification on utilization of the amounts available in the electronic credit ledger and the electronic cash ledger for payment of tax and other liabilities

> No requirement of reversal of input tax credit (Rule 43) for exempted supply of Duty Credit Scrips by the exporters

> UPI & IMPS to be provided as an additional mode for payment of Goods and Services Tax to taxpayers under Rule 87(3) of CGST Rules

> In respect of refunds pertaining to supplies to SEZ Developer/Unit, clarification to be inserted specifying that “specified officer” shall mean the “specified officer” or “authorized officer”, as defined under SEZ Rules, 2006

> Supplies from Duty Free Shops (DFS) at international terminal to outgoing international passengers to be treated as exports by DFS and consequential refund benefit to be available to them on such supplies.

> Exemption from filing annual return in FORM GSTR-9/9A for FY 2021-22 to continue for taxpayers having AATO upto Rs. 2 crores

> Provision for automatic revocation of suspension of registration in cases where suspension of registration was done by the system, for continuous non-filing of specified number of returns, once all the pending returns are filed on the portal by the taxpayer

Please note that the recommendations of the GST Council have been presented in this release containing major item of decisions in simple language for information of all stakeholders. The same would be given effect through relevant Circulars/ Notifications/ Law amendments which alone shall have the force of law.

You can contact us at: Email: support@taxmarvel.com

Disclaimer: The content of this document is for general information purpose only. TaxMarvel shall not accept any liability for any decision taken based on the advice. You should carefully study the situation before taking any decision.

Author Bio

Rohit is an Enterpreneur and has founded a boutique consulting firm - TaxMarvel Consulting Services LLP. View Full Profile

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