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Previous Council Meeting (19th) – July 17, 2017 (Delhi)

Today’s Council Meeting (20th) – August 5, 2017(Delhi)

Next Council Meeting (21st) – Sept 9, 2017(Hyderabad)

Agenda of meeting: – After 35 Days into the goods and services tax (GST) regime, the all-powerful GST Council have met on Saturday, August 05, 2017. Main agenda items of the 20th GST Council Meeting include:

  1. To Review the Progress of implementation of the new indirect tax,
  2. Discussion on Anti-Profiteering,
  3. Final Drafting of E-Way Bill

Union Finance Minister Arun Jaitley on Saturday chaired the 20th meeting of the GST Council which has decided:

  • Final Drafting of E way bills
  • Job work of all kinds of textiles will be taxed at 5%. Earlier some types of jobwork were taxed at 18%
  • Rates on tractor parts brought down to 18%
  • Government given work contracts like roads bridges canals will now be taxed at 12% with credits. Earlier this was 18%.
  • Anti profiteering mechanism will get kick started by appointing state wise committees

This was the 2nd meeting of the Council since the launch of the GST on 1 July and the 20th since it was set up in September last year.

Arun Jaitely (Finance Minister) said more than 71 lakh central and state taxpayers have migrated to the Goods and Services Tax (GST) system and have completed registration. Another 15.67 lakh new applications for registration have been received.

1. Final Drafting of E way bills

GST Council finalised the e-way bill that mandates pre-registration of all goods worth over Rs 50,000 before they are moved for sale beyond 10 km.

Briefing reporters after the meeting, Finance minister said the date of application of the e-way bill would be notified shortly.

Exempted goods have been kept out of the purview of e-way bill – a minor relaxation from draft rules which required for all goods to be pre-registered under the e-way bill provision.

The permits thus issued would be valid for one day for movement of goods for 100 km and in same proportion for following days.

As per the draft provision, GSTN would generate e-way bills that will be valid for 1-20 days, depending on distance to be travelled – one day for 100 km, 3 days (100 to less than 300 km), 5 days (300-less than 500 km) and 10 days (500- less than 1,000 km)

“The Council decided to implement E-way bill across country……There will be no check posts and process will be technology driven,” – Arun Jaitley (Finance Minister)

The E-way bill would be rolled out from October 1, said an official.

The minister said E-way bill will not be required to transfer exempted goods.

2. Anti Profiteering Mechanism

The Council also gave in-principle approval to anti-profiteering measures and setting up of a Screening Committee in 15 days to see if tax reductions after implementation of GST have been passed on to consumers. Finance Minister said council members expressed that many business were not passing on the benefit of the input credit system to consumers via price cuts.

The finance minister appealed to the industry to pass on the benefit of the input tax credit to consumers saying that this mechanism is there as a deterrent

“There was a long discussion on anti profiteering…..Some industries not giving benefit of input tax credit. We want market mechanism to compel them to pass on the benefit,” Finance Minister said’.

Finance Minister said states and Centre screening committee that are being created should be used minimal. “But, it should be there as deterrent,” 

3. GST Rate Cut

GST Council decided to tax all job works in the textile sector, from embroidery to weaving, at 5 % instead of previously decided 18 %.

This 5 % will be applicable for job works in apparel, shawls and carpets.

To make farm equipment cheaper, tractor parts would attract the Goods and Services Tax (GST) rate of 18 % instead of 28 % previously.

Government work contracts would attract 12 % GST with input tax credit, Finance Minister said.

4. Revised GST Rate for Certain Services

SN Supply of Services Old Rate New Rate
1 Job work services in respect of the textiles and textile products (including MMF yarn, garments, made-ups, etc. falling in Chapters 50 to 63) 18%/5% 5%
2 Services by way of printing of newspapers, books (including Braille books), journals and periodicals where only content is supplied by the publisher and the physical inputs including paper used for printing belongs to the printer 18% with full ITC 12% with full ITC
3 Services by way of printing of newspapers, books (including Braille books), journals and periodicals using physical inputs owned by others (including an unregistered publisher/supplier) 18% with full ITC 5% with full ITC
4 Works contract services provided to Government, local authority or governmental authority and in respect of post-harvest storage infrastructure for agricultural produce, mechanized food grain handling system 18% with full ITC 12% with full ITC
5 Margin/commission payable to Fair Price Shop Dealers by Central/ State Governments 18% with full ITC NIL
6 Admission to planetarium 28% with full ITC 18% with full ITC

5. New Exemption from GST- Services

SN Supply of Services
1 Goods required by FIFA and Services provided by and to FIFA and its subsidiaries in connection with FIFA U- 17 World Cup to be hosted in India in 2017 shall be exempted from GST
2 New crop insurance schemes Pradhan Mantri Fasal Bima Yojana (PMFBY) introduced from Kharif 2016- 17 in place of National Agricultural Insurance Scheme (NAIS) and Modified National Agricultural Insurance Scheme (MNAIS), and Restructured Weather Based Crop Insurance Scheme (RWCIS) introduced in place of Weather Based Crop Insurance Schemes, shall be extended exemption from GST.

6. Option for GST Rate for Certain Services

SN Supply of Services Option for GST Rate
1 Rent-a-cab service Allowed option of 12% GST with full ITC. 5% GST with no ITC will also continue
2 Goods Transport Agency Service (GTA) Allowed option of 12% GST with full ITC under forward charge. 5% GST with no ITC will also continue. (However, the GTA has to give an option at the beginning of financial year)

7. Decision taken on Certain Services

SN Supply of Services
1 In case of small house-keeping service providers (plumbers/carpenters) providing services through Electronic Commerce Operators (ECO), liability to pay GST placed on ECO
2 Partnership firm or a firm includes LLP (Limited liability Partnership) for the purposes of levy (including exemption there from) of GST on legal services.
3 To clarify that legal services (including representational services) provided by an individual advocate or a senior advocate or a firm of advocates (including LLP) provided to a business entity in taxable territory are covered under reverse charge mechanism

What Next?

Reduction in rate of tax on several other items recommended by the fitment committee would be discussed and decided”.

[Views & Opinions Expressed are strictly personal]

GST rate Schedule for Goods in 2017

Author Bio

Gaurav Agarwal Practicing Chartered Accountant Specialised in upcoming GST and its implementation has vast experience in rendering Taxation & advisory Services. He handled several assignments related to Insurance Companies, Automobile, Real Estate, Manufacturing industries and Banks etc. Mr Ga View Full Profile

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  1. Apoorva Jain says:

    Dear Sir,

    What shall be the rate of GTA service under reverse charge ?? whether input credit shall be available of tax paid under reverse charge on GTA services.

  2. Milind Mehta says:

    Point no.4 Does works contract services include services related to electrical generation, transmission,and distribution provided to Maharashtra State Electricity companies, please clear it.

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