“Discover the key recommendations from the 50th GST Council Meeting held on July 11, 2023. Uncover changes in GST tax rates, trade facilitation measures, and streamlined compliance initiatives. Stay informed on crucial updates for a comprehensive understanding of the evolving GST landscape.”
The 50th Meeting of the GST Council was held on 11th July 2023 at Vigyan Bhawan, New Delhi, under the chairpersonship of the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman. In this 50th meeting of the GST Council, Hon’ble Chairperson released
1) A short video film titled ‘GST Council- 50 steps towards a journey’ in the august presence of the Hon’ble Members of the Council. The film depicts the journey of the Council and has been made in Hindi, English and many regional languages, which will be available on many social media handles.
2) Besides the film, the first set of a special cover and customised ‘My Stamp’ were also presented on this occasion to Hon’ble Chairperson and Hon’ble Members of the Council by the Chief Post Master General, Delhi.
The GST Council inter-alia made the following recommendations relating to three major points that are:
1. Changes in GST tax rates,
2. Measures for facilitation of trade, and
3. Measures for streamlining compliances in GST.
The Details on the above points are as follows as per the Press Release:
1. CHANGES IN GST TAX RATES:
I. RECOMMENDATIONS RELATING TO GST RATES ON GOODS:
A. CHANGES IN GST RATE OF GOODS:
B.
|
Sl. no |
Description | Old GST Rate | New GST Rate |
| 1 | Uncooked/unfried snack pellets | 18% | 5% |
| 2 | Imitation zari thread or yarn | 12% | 5% |
| 3 | LD slag | 18% | 5% |
| 4 | Fish soluble paste | 18% | 5% |
C. OTHER CHANGES RELATING TO GOODS:
> Exemption in provided in these two cases:
1. IGST on Dinutuximab (Quarziba) medicine when imported for personal use
2. IGST on medicines and Food for Special Medical Purposes (FSMP) used in the treatment of rare diseases enlisted under the National Policy for Rare Diseases, 2021 when imported for personal use subject to existing conditions. Similarly, IGST exemption is also being extended to FSMP when imported by Centres of Excellence for Rare Diseases or any person or institution on recommendation of any of the listed Centres of Excellence.
> Supply of raw cotton, including kala cotton, by agriculturists to cooperatives is taxable under reverse charge mechanism and to regularize issues relating for the past period on “as is basis”
> Amend the entry 52B in compensation cess notification to include all utility vehicles by whatever name called provided they meet the parameters of Length exceeding 4000 mm, Engine capacity exceeding 1500 cc and having ground Clearance of 170 mm & above and to clarify by way of explanation that ‘Ground clearance’ means Ground Clearance in un-laden condition
> Regularize the matters relating to trauma, spine and arthroplasty implants for the period prior to 18.07.2022 on “as is basis” in view of genuine interpretational issues
> Regularize the matters relating to dessicated coconut for the period 1.7.2017 to 27.7.2017 on “as is basis” in view of genuine interpretational issues
> On pan masala, tobacco products etc, where it is not legally required to declare the retail sale price, the earlier ad valorem rate as was applicable on 31st March 2023 may be notified in order for levy of Compensation Cess
> Include RBL Bank and ICBC bank in the list of specified banks for which IGST exemption is available on imports of gold, silver or platinum and update the list of banks /entities eligible for such IGST exemption as per Annexure 4B (HBP) of Foreign Trade Policy 2023
> Consequential changes in notifications may be carried out in view of new Foreign Trade Policy 2023
> Regularize the issues relating to GST on plates and cups made of areca leaves prior to 01.10.2019
> Regularize the issues relating to GST on biomass briquettes for the period 01.7.2017 to 12.10.2017
II. RECOMMENDATIONS RELATING TO GST RATES ON SERVICES:
A. CHANGES IN GST RATE OF SERVICES:
> GST exemption on satellite launch services supplied by ISRO, Antrix Corporation Limited and New Space India Limited (NSIL) may be extended to such services supplied by organizations in private sector also to encourage start ups
B. OTHER CHANGES RELATING TO SERVICES:
> As a trade friendly measure, it has been decided that GTAs will not be required to file declaration for paying GST under forward charge every year. If they have exercised this option for a particular financial year, they shall be deemed to have exercised it for the next and future financial years unless they file a declaration that they want to revert to reverse charge mechanism (RCM)
> The last date of exercising the option by GTAs to pay GST under forward charge shall be 31stMarch of preceding Financial Year instead of 15th 1st January of preceding Financial Year shall be the start date for exercise of option
> Services supplied by a director of a company to the company in his private or personal capacity such as supplying services by way of renting of immovable property to the company or body corporate are not taxable under RCM. Only those services supplied by a director of company or body corporate, which are supplied by him as or in the capacity of director of that company or body corporate shall be taxable under RCM in the hands of the company or body corporate under Notification No. 13/2017-CT(R) (Sl. No. 6) dated 28.06.2017
> Supply of food and beverages in cinema halls is taxable as restaurant service as long as (a) they are supplied by way of or as part of a service and (b) supplied independently of the cinema exhibition service. Where the sale of cinema ticket and supply of food and beverages are clubbed together, and such bundled supply satisfies the test of composite supply, the entire supply will attract GST at the rate applicable to service of exhibition of cinema, the principal supply
III. SECOND REPORT OF GROUP OF MINISTERS (GOM) ON CASIONS, RACE COURSES AND ONLINE GAMING:
> A Group of Ministers (GoM) was constituted to look into the issues related to taxation on casinos, horse racing and online gaming.
> The GoM submitted its first report in June, 2022 and it was placed before the GST Council in its 47th GST Council meetingwherein, it was decided that the GoM may relook into all the issues once again.
> The GoM submitted its report and it was placed before the 50thGST Council meeting. The GoM, in its second report has recommended that since no consensus could be reached on whether the activities of online gaming, horse racing and casinos should be taxed at 28% on the full-face value of bets placed or on the Gross Gaming Revenue (GGR)
> The GST Council has deliberated on the issues and has recommended the following:
- To include online gaming and horse racing in schedule III as taxable actionable claims by making suitable amendments in the GST Law.
- Casino, Horse Racing and Online gaming to be taxed at the uniform rate of 28%.
- GST Rate of 28% will be applicable on
1) The face value of the chips purchased in the case of casinos
2) On the full value of the bets placed with bookmaker/totalisator in the case of Horse Racing
3) On the full value of the bets placed in case of the Online Gaming.
2. MEASURES FOR FACILITATION OF TRADE:
1. FORMATION OF GSTAT:
The Council has recommended:
> TheRules governing appointment and conditions of President and Members of the proposed Goods and Services Tax Appellate Tribunal for enabling its smooth constitution and functioning.
> Provisions of Finance Act, 2023 pertaining to GST Appellate Tribunal may be notified by the Centre with effect from 01.08.2023, so that the same can be brought into operation at the earliest.
> Chief Secretary of Maharashtra to be nominated as one of the members of the Search cum selection committee as per Section 110(4)(b)(iii) of CGST Act 2017.
> Regarding the number of State Benches, it was decided to start them in a phase wise manner.
2. GSTR-9 ANNUAL RETURNS:
> The Council has recommended that the relaxations provided in FY 2021-22 in respect of various tables of FORM GSTR-9 andFORM GSTR-9C be continued for FY 2022-23.
> Exemption from filing of annual return in FORM GSTR-9/9Afor taxpayers having aggregate annual turnover upto Rs 2 crore.
3. ISD MECHANISM MANDATORY FOR DISTRIBUTION OF ITC OF COMMON INPUT SERVICES PROCURED FROM THIRD PARTIES:
The Council has recommended to
> Clarify issues regarding taxability of internally generated services provided by one distinct person to another distinct person.
> Necessary amendment may be made in GST law to make ISD mechanism mandatory prospectively for distribution of input tax credit of such common input services procured from third parties.
As per the present provisions of GST Law, ISD mechanism is not mandatory for distribution of ITC of common Input Services procured from third parties to the distinct persons.
4. GST LIABILITY TO REVERSE ITC IN CASES INVOLVING WARRANTY REPLACEMENT OFPARTS AND REPAIR SERVICES DURING WARRANTY PERIOD WITHOUT CONSIDERATION:
Circular to be issued to provide clarity on various issues pertaining to the GST liability as well as the liability to reverse input tax credit in cases involving warranty replacement of parts and repair services during warranty period without any consideration from the customers, clarifying inter alia that no GST is chargeable by the manufacturer on such replacement of parts and/ or repair service and also, no reversal of input tax credit is required to be made by the manufacturer.
5. VARIOUS REFUND RELATED ISSUES: Circular to be issued to clarify various refund related issues:
(a) The refund of accumulated input tax credit (ITC) under Section 54(3) of CGST Act, 2017 for a tax period to be restricted to ITC on inward supplies reflected in FORM GSTR-2Bof the said tax period or any previous tax period.
(b) The value of export goods to be included while calculating “adjusted total turnover” in the formula under rule 89(4), will be determined as per the said explanation
(c) Admissibility of refund in cases where export of goods, or the realization of payment for export of services, as the case may be, is made after the time limit provided under rule 96A of CGST Rules, 2017
6. TCS LIABILITY UNDER SEC-52:
Clarification is required via Circular regarding TCS liability under Sec 52 of the CGST Act, 2017 in cases where multiple E-commerce Operators (ECOs) are involved in a single transaction of supply of goods or services or both.
7. RULE 46(f) NEEDS TO BE AMENDED:
Rule 46(f) of CGST Rules, 2017 needs to be amended so as to provide for requirement of only name of the State of the recipient on the tax invoice, and not the name and full address of the recipient in cases of supply of taxable services by or through an ECO or by a supplier of OIDAR services to an unregistered recipient.
8. CIRCULAR NEEDS TO BE ISSUED IN ORDER TO REMOVE AMBIGUITY AND LEGAL DISPUTES ON VARIOUS ISSUES: Various Circulars are need to be issued to clarify the below issues in order to remove ambiguity and legal disputes on various issues to benefit taxpayers at large: –
a. ISSUANCE OF E-INVOICE: The registered person, whose turnover exceeds the prescribed threshold for generation of e-invoicing, are required to issue e-invoices under rule 48(4) of CGST Rules for the supplies made to Government Departments or establishments / Government agencies / local authorities / PSUs, etc., registered solely for the purpose of TDS,
b. MANNER OF CALCULATION OF INTEREST:The manner of calculation of interest amount liable to be paid under section 50(3) of CGST Act, 2017 in respect of wrongly availed and utilized IGST credit, clarifying inter alia that in cases of wrong availment of IGST credit, the balance of input tax credit (ITC) in electronic credit ledger, under the heads of IGST, CGST and SGST taken together, has to be taken in consideration while calculating such interest liability as per rule 88B of CGST Rules, 2017,
c.SCOPE OF SUPPLY:Mere holding of securities of a subsidiary company by a holding company cannot be treated as a supply of services and therefore, cannot be taxed under GST.
9. CIRCULAR TO BE ISSUED TO PROVIDE FURTHER RELIEF FOR VERIFICATION OF ITC OF FY 2017-18 AND FY 2018-19:
The Council recommended for further issuance of a circular to provide procedure for verification of input tax credit in cases involving difference in Input Tax Credit availed in FORM GSTR-3B vis a vis that available as per FORM GSTR-2A during the period 01.04.2019 to 31.12.2021.
Circular No 183/15/2022 dated 27.12.2022was issued to provide for the procedure for verification of input tax credit in cases involving difference in Input Tax Credit availed in FORM GSTR-3B vis a vis that available as per FORM GSTR-2A during FY 2017-18 and 2018-19
10. SPECIAL PROCEDURE TO BE PROVIDED U/S 148 TO ENABLE MANUAL FILING OF APPEAL WITH REGARD TO TRAN-1 AND TRAN-2:
Special procedure to be provided under section 148 of CGST Act, 2017 to enable manual filing of appeal against the orders passed by proper officers in respect of TRAN-1/ TRAN-2 claims of the registered persons, filed in pursuance of the directions of Hon’ble Supreme Court in case of the Union of India v/s Filco Trade Centre Pvt. Ltd.
11.RULE-108(1) AND RULE-109(1) NEEDS TO BE AMENDED:
Rule 108(1) and rule 109(1) of CGST Rules, 2017 to be amended to provide for manual filing of appeal under certain specified circumstances
12. EXTEND THE AMNESTY SCHEME NOTIFIED VIDE NN 8/2023 DT 31.03.2023:
Council has recommended to extend the Amnesty schemes notified earlier on 31.03.2023 from 30.06.2023 to 31.08.2023 in the following matters:
> Non-filers of FORM GSTR-4
> Non-filers of FORM GSTR-9
> Non-filers of FORM GSTR-10
> Revocation of Cancellation of Registration and
> Deemed Withdrawal of assessment orders issued u/s 62
13. EXTEND THE DUE DATES IN THE STATE OF MANIPUR:
The Council recommended to extend the due dates for filing of FORM GSTR-1, FORM GSTR-3B and FORM GSTR-7 for the months of April, May and June, 2023 for the registered persons of State of Manipur till 31.07.2023
3. MEASURES FOR STREAMLINING COMPLIANCES IN GST:
1. IMPLEMENATION OF E-WAY BILL FOR MOVEMENT OF GOLD/PRECIOUS STONES:
The Council has recommended to insert rule 138F in CGST Rules, 2017, as well as in SGST Rules, 2017 of the States, who want to mandate the requirement of generation of e-way bills for intra-State movement of gold and precious stones under Chapter 71 within their States.
2. CAPACITY BASED TAXATION AND SPECIAL COMPOSITION SCHEME:
In accordance with the recommendations of the Group of Ministers (GoM) on Capacity based taxation and Special Composition Scheme approved by the Council in 49th meeting, the Council has made the following recommendations:
(i) issuance of notification under section 148 of CGST Act, 2017 prescribing a special procedure to be followed by the manufacturers of tobacco, pan masala & other similar items inter alia for registration of machines and for filing of special monthly returns;
(ii) insertion of section 122A in CGST Act, 2017 providing for special penalty for non-registration of machines by such manufacturers;
(iii) Provisions of section 123 of Finance Act, 2021, amending section 16 of IGST Act, to benotified with effect from 01.10.2023 and notification to be issued under section 16(4) of IGST Act. 2017 to provide for restriction of IGST refund route in respect of exports of tobacco, pan masala & other similar items as well as mentha oil.
3. AMEDMENT IN CGST RULES, 2017 REGARDING REGISTRATION:
The Council has recommended the following amendments in CGST Rules, 2017 to strengthen the registration process and to effectively deal with the menace of fake and fraudulent registrations in GST:
a. Amendment in rule 10A to provide that the details of bank account, in name and PAN of the registered person, to be required to be furnished within 30 days of grant of registration or before filing of statement of outwards supply under section 37 of CGST Act in FORM GSTR-1/ IFF, whichever is earlier.
b. Amendment in rule 21A(2A) to provide for system-based suspension of the registration in respect of such registered persons who do not furnish the details of valid bank account under rule 10A with the time period prescribed under the said rule.
c. Insertion of 3rdproviso in rule 21A(4) to provide for automatic revocation of such system-based suspension upon compliance with provisions of rule 10A.
d. Amendment in rule 59(6) to provide that where a registered person has not furnished details of a valid bank account under rule 10A, the said registered person may not be allowed to furnish the details of outward supplies in FORM GSTR-1 or using IFF.
e. Amendment in rule 9 and rule 25 to do away with the requirement that the physical verification of business premises is to be conducted in the presence of the applicant and also to provide for physical verification in high risk cases even where Aadhaar has been authenticated.
4. AADHAAR AUTHENTICATION OF REGISTRATION APPLICANTS:
Pilot to be conducted in U.T. of Pondicherry for risk-based biometric-based Aadhaar authentication of registration applicants. The State of Andhra Pradesh also expressed its intent to join this pilot after the system’s readiness is tested in the state of Gujarat and U.T. of Puducherry.
5. PROCEDURE FOR RECOVERY OF TAX AND INTEREST IN TERMS OF RULE-88C(3):
The Council has now recommended insertion of Rule 142B in the CGST Rules, 2017 and insertion of a FORM GST DRC-01D to provide for manner of recovery of the tax and interest in respect of the amount intimated under rule 88C which has not been paid and for which no satisfactory explanation has been furnished by the registered person.
6. MECHANISM TO DEAL WITH DIFFERENCE IN ITC BETWEEN FORM-2B AND FORM-3B:
Rule 88D and FORM DRC-01C to be inserted in CGST Rules, 2017, along with an amendment in rule 59(6) of CGST Rules, 2017 in order to provide mechanism for system-based intimation to the taxpayers in respect of the excess availment of ITC in FORM GSTR-3B vis a vis that made available in FORM GSTR-2B above a certain threshold, along with the procedure of auto-compliance on the part of the taxpayers, to explain the reasons for the said difference or take remedial action in respect of such difference.
7. NOTICE TO TAXPAYERS FOR FAILURE IN FILING OF FORM GSTR-9 AND FORM GSTR-9A:
FORM GSTR-3A to be amended to provide for issuance of notice to the registered taxpayers for their failure to furnish Annual Return in FORM GSTR-9 or FORM GSTR-9A by due date.
8. AMENDMENT IN RULE-64 AND FORM GSTR-5A:
Rule 64 and FORM GSTR-5A of CGST Rules, 2017 to be amended to make mandatory for OIDAR service providers to provide the details of supplies made to registered persons in India in his return in FORM GSTR-5A.
This will track the due payment of tax on reverse charge basis by such registered persons in India in respect of supplies received from OIDAR service providers.
9. AMENDMENT IN RULE 43 OF CGST RULES, 2017:
The value of supply of goods from Duty Free Shops at arrival terminal in international airports to the incoming passengers to be included in the value of exempt supplies for the purpose of reversal of input tax credit.
10. AMENDMENT IN RULE-162 OF CGST RULES, 2017:
Sub-rule (3A) to be inserted in rule 162 of CGST Rules, 2017 to prescribe the compounding amount for various offences under section 132 of CGST Act, 2017.
11. INSERTION OF RULE-163 IN CGST RULES, 2017:
The Council has recommended insertion of rule 163 in CGST Rules, 2017 to provide for manner and conditions of consent-based sharing of information of registered persons available on the common portal with other systems. The Council has also recommended issuance of a notification under section 158A of CGST Act, 2017 for notifying “Account Aggregators” as the systems with which information is to be shared by the common portal.
12. CLARIFICATION OF PLACE OF SUPPLY IF GOODS SOLD TO UN-REGISTERED PERSONS:
The Council has recommended insertion of a clause (ca) in sub-section (1) of section 10 of the IGST Act, 2017 to clarify the place of supply in respect of supply of goods to unregistered persons.
13. FORMATION OF STATE LEVEL COORDINATION COMMITTEE:
The GST Council has recommended to form a State level coordination Committee comprising of GST officers from both State and Central GST administrations for knowledge sharing on GST matters and coordinated efforts towards administrative and preventive measures.
14. MEASURES FOR STRENGTHEN OF GST REGISTRATION PROCESS:
The GoM has recommended various measures to curb frauds in GST through System based measures for strengthening registration process in GST, more use of third-party data for risk management and controlling flow of fake Input Tax Credit down the supply chain.
The Recommendations of GST Council would be given effect by way of issuance of relevant Circulars, Notifications and Amendment in GST Law.
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Pl. reply can revocation be applied in case whose registration are canceled upto 30th June 2023
Not under this amnesty scheme, u have time to appeal before appellate authority