49th GST Council Meeting Recommendations I Press Release I Summary I Key Highlights

49th GST Council Meeting was held in  New Delhi on 18th Feb 2022 . The GST Council has made several recommendations related to GST compensation, GST Appellate Tribunal, approval of the Report of Group of Ministers on Capacity Based Taxation and Special Composition Scheme in certain Sectors on GST, recommendations relating to GST rates on Goods and Services and other measures for facilitation of trade. The key points are:

Read also Amendments in GST after the recommendations of the 49th GST Council Meeting

Key Points, Summary  and Highlights of 49th GST Council Meeting Recommendations

1. GST Compensation: The Government of India will clear the entire pending balance GST compensation of Rs. 16,982 crore for June 2022 from its own resources, and the same will be recouped from the future compensation cess collection. The entire provisionally admissible compensation due for five years as envisaged in the GST (Compensation to States) Act 2017 will be cleared.
2. GST Appellate Tribunal: The Council adopted the report of Group of Ministers with certain modifications. The final draft amendments to the GST laws shall be circulated to Members for their comments. The Chairperson has been authorised to finalise the same.
3. Approval of the Report of GoM on Capacity Based Taxation and Special Composition Scheme in certain Sectors on GST: The Council approved the recommendations of the GoM to plug the leakages and improve the revenue collection from commodities like pan masala, gutkha, chewing tobacco. Compliance and tracking measures will be taken to plug leakages/evasions, and exports of such commodities will be allowed only against LUT with consequential refund of accumulated ITC. The compensation cess levied on such commodities will be changed from ad valorem to specific tax-based levy to boost the first-stage collection of revenue.
4. Recommendations relating to GST rates on Goods and Services: The GST rates on goods and services will be changed, including a reduction in the GST rate on “rab” from 18% to 5% if sold prepackaged and labelled, and to nil if sold otherwise. The GST rate on pencil sharpeners will be reduced from 18% to 12%.
5. Revocation of GST Cancellation: The Council has recommended the extension of the time limit for making an application for revocation of cancellation of registration from 30 days to 90 days. Where the registered person fails to apply for revocation of cancellation of registration within 90 days, the cancellation of registration shall be deemed to have been revoked from the date of the order of revocation, and not from the date of application for revocation.
6. GST Exenption : The Council also decided to extend the exemption available to educational institutions and Central and State educational boards for the conduct of entrance examinations to any authority, board, or body set up by the Central Government or State Government.
7. GST Reverse Charge : The dispensation available to the Central Government, State Governments, Parliament, and State Legislatures with regard to payment of GST under reverse charge mechanism will be extended to the Courts and Tribunals also in respect of taxable services supplied by them.
8. Late Fees in GST  : Presently, late fee of Rs 200 per day (Rs 100 CGST + Rs 100 SGST), subject to a maximum of 0.5% of the turnover in the State or UT (0.25% CGST + 0.25% SGST), is payable in case of delayed filing of annual return in FORM GSTR-9. The Council recommended to rationalise this late fee for delayed filing of annual return in FORM GSTR-9 for FY 2022-23 onwards, for registered persons having aggregate turnover in a financial year upto Rs 20 crore, as below:
   1. Registered persons having an aggregate turnover of up to Rs. 5 crores in the said financial year: Rs 50 per day (Rs 25 CGST + Rs 25 SGST), subject to a maximum of an amount calculated at 0.04 per cent. of his turnover in the State or Union territory (0.02% CGST + 0.02% SGST).
   2. Registered persons having an aggregate turnover of more than Rs. 5 crores and up to Rs. 20 crores in the said financial year: Rs 100 per day (Rs 50 CGST + Rs 50 SGST), subject to a maximum of an amount calculated at 0.04 per cent. of his turnover in the State or Union territory (0.02% CGST + 0.02% SGST).
9. GST Amnesty Scheme in respect of pending returns in FORM GSTR-4, FORM GSTR-9 and FORM GSTR-10: To provide relief to a large number of taxpayers, the Council recommended amnesty schemes in respect of pending returns in FORM GSTR-4, FORM GSTR-9 and FORM GSTR-10 by way of conditional waiver/ reduction of late fee.
10. Rationalization of provision of place of supply of services of transportation of goods: Council recommended to rationalize the provision of place of supply for services of transportation of goods by deletion of section 13(9) of IGST Act, 2017 so as to provide that the place of supply of services of transportation of goods, in cases where location of supplier of services or location of recipient of services is outside India, shall be the location of the recipient of services.

Video Explaining 49th GST Council Meeting in Hindi

Here is the Govt Press Release on 49th GST Council Meeting

Government of India to clear entire pending balance GST compensation of Rs. 16,982 crore for June’2022

GST Council adopts report of Group of Ministers (GoM) on GST Appellate Tribunal with certain modifications

GoM report on Capacity Based Taxation and Special Composition Scheme in certain Sectors on GST approved

Changes in GST rates of “Rab” and Pencil Sharpner

The 49th GST Council met under the Chairpersonship of Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman in New Delhi today. The meeting was also attended by Union Minister of State for Finance Shri Pankaj Chaudhary besides Finance Ministers of States & UTs (with legislature) and senior officers of the Ministry of Finance & States/ UTs.

The GST Council has, inter-alia, made the following recommendations relating to GST compensation, GST Appellate Tribunal, approval of the Report of Group of Ministers (GoM) on Capacity Based Taxation and Special Composition Scheme in certain Sectors on GST, recommendations relating to GST rates on Goods and Services and other measures for facilitation of trade:

GST Compensation

1. Government of India has decided to clear the entire pending balance GST compensation of Rs. 16,982 crore for June’2022 as shown in the table below. Since, there is no amount in the GST compensation Fund, Centre decided to release this amount from its own resources and the same will be recouped from the future compensation cess collection. With this release, Centre would clear the entire provisionally admissible compensation due for five years as envisaged in the GST (Compensation to States) Act’2017. In addition, Centre would also clear the admissible final GST compensation to those States who has provided the revenue figures as certified by the Accountant General of the States amounting to Rs. 16,524 crore.

• 2. GST Appellate Tribunal

The Council adopted the report of Group of Ministers with certain modifications. The final draft amendments to the GST laws shall be circulated to Members for their comments. The Chairperson has been authorised to finalise the same.

• 3. Approval of the Report of GoM on Capacity Based Taxation and Special Composition Scheme in certain Sectors on GST:

With a view to plug the leakages and improve the revenue collection from the commodities like pan masala, gutkha, chewing tobacco, the Council approved the recommendations of the GoM including, inter alia, that

• • the capacity based levy not to be prescribed;
  • compliance and tracking measures to be taken to plug leakages/evasions;
  • exports of such commodities to be allowed only against LUT with consequential refund of accumulated ITC;
  • compensation cess levied on such commodities to be changed from ad valorem to specific tax based levy to boost the first stage collection of the revenue

• 4. Recommendations relating to GST rates on Goods and Services

1. Changes in GST rates of Goods and Services

Other changes relating to Goods and Services

2. It has been decided to regularize payment of GST on ‘rab’ during the past period on “as is basis” on account of genuine doubts over its classification and applicable GST rate.
3. It was decided to suitably amend notification No. 104/94-Customs dated 16.03.1994 so that if a device like tag- tracking device or data logger is already affixed on a container, no separate IGST shall be levied on such affixed device and the ‘nil’ IGST treatment available for the containers under notification No. 104/94-Customs shall also be available to the such affixed device subject to the existing conditions.
4. It has been decided to amend entry at Sl. No. 41A of notification No. 1/2017-Compensation Cess (Rate) so that exemption benefit covers both coal rejects supplied to and by a coal washery, arising out of coal on which compensation cess has been paid and no input tax credit thereof has been availed by any person.
5. It has been decided to extend the exemption available to educational institutions and Central and State educational boards for conduct of entrance examination to any authority, board or a body set up by the Central Government or State Government including National Testing Agency for conduct of entrance examination for admission to educational institutions.
6. It has been decided to extend the dispensation available to Central Government, State Governments, Parliament and State Legislatures with regard to payment of GST under reverse charge mechanism (RCM) to the Courts and Tribunals also in respect of taxable services supplied by them such as renting of premises to telecommunication companies for installation of towers, renting of chamber to lawyers etc.

• 5. Measures for facilitation of trade:

1. Extension of time limit for application for revocation of cancellation of registration and one time amnesty for past cases: The Council has recommended amendment in section 30 of CGST Act, 2017 and rule 23 of CGST Rules, 2017 so as to provide that –

• • the time limit for making an application for revocation of cancellation of registration be increased from 30 days to 90 days;
  • where the registered person fails to apply for such revocation within 90 days, the said time period may be extended by the Commissioner or an officer authorised by him in this behalf for a further period not exceeding 180 days.

The Council has also recommended that an amnesty may be provided in the past cases, where registration has been cancelled on account of non-filing of the returns, but application for revocation of cancellation of registration could not be filed within the time specified in section 30 of CGST Act, by allowing such persons to file such application for revocation by a specified date, subject to certain conditions.

2. Amendment to Section 62 of CGST Act, 2017 to extend timelines under sub-section (2) thereof and one time amnesty for past cases: As per sub-section (2) of section 62 of CGST Act, 2017, the best judgment assessment order issued under sub-section (1) of the said section is deemed to be withdrawn if the relevant return is filed within 30 days of service of the said assessment order. The Council recommended to amend section 62 so as to increase the time period for filing of return for enabling deemed withdrawal of such best judgment assessment order, from the present 30 days to 60 days, extendable by another 60 days, subject to certain conditions.

The Council has also recommended to provide an amnesty scheme for conditional deemed withdrawal of assessment orders in past cases where the concerned return could not be filed within 30 days of the assessment order but has been filed along with due interest and late fee upto a specified date, irrespective of whether appeal has been filed or not against the assessment order, or whether the said appeal has been decided or not.

3. Rationalisation of Late fee for Annual Return: Presently, late fee of Rs 200 per day (Rs 100 CGST + Rs 100 SGST), subject to a maximum of 0.5% of the turnover in the State or UT (0.25% CGST + 0.25% SGST), is payable in case of delayed filing of annual return in FORM GSTR-9. The Council recommended to rationalise this late fee for delayed filing of annual return in FORM GSTR-9 for FY 2022-23 onwards, for registered persons having aggregate turnover in a financial year upto Rs 20 crore, as below:

• • Registered persons having an aggregate turnover of up to Rs. 5 crores in the said financial year: Rs 50 per day (Rs 25 CGST + Rs 25 SGST), subject to a maximum of an amount calculated at 0.04 per cent. of his turnover in the State or Union territory (0.02% CGST + 0.02% SGST).
  • Registered persons having an aggregate turnover of more than Rs. 5 crores and up to Rs. 20 crores in the said financial year: Rs 100 per day (Rs 50 CGST + Rs 50 SGST), subject to a maximum of an amount calculated at 0.04 per cent. of his turnover in the State or Union territory (0.02% CGST + 0.02% SGST).

4. Amnesty in respect of pending returns in FORM GSTR-4, FORM GSTR-9 and FORM GSTR-10: To provide relief to a large number of taxpayers, the Council recommended amnesty schemes in respect of pending returns in FORM GSTR-4, FORM GSTR-9 and FORM GSTR-10 by way of conditional waiver/ reduction of late fee.

5. Rationalization of provision of place of supply of services of transportation of goods: Council recommended to rationalize the provision of place of supply for services of transportation of goods by deletion of section 13(9) of IGST Act, 2017 so as to provide that the place of supply of services of transportation of goods, in cases where location of supplier of services or location of recipient of services is outside India, shall be the location of the recipient of services.

Note: The recommendations of the GST Council have been presented in this release containing major item of decisions in simple language for information of the stakeholders. The same would be given effect through the relevant circulars/ notifications/ law amendments which alone shall have the force of law.

(CA Satbir Singh Contact us Taxheal@gmail.com)

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Infosys also submitted suggestions for smooth rollout of the new return filing system and to address the system related issues that are currently being faced by the taxpayers on the GST portal.

The recommendations shall come into effect on issuance of relevant circulars or notifications by the Central Government. The highlights of the key recommendations of the 39th GST Council meeting are enumerated below:-

		Relaxation to be granted to taxpayers having aggregate turnover below Rs. 5 crores from furnishing of Reconciliation Statement in Form GSTR-9C for the F.Y. 2018-19.
		Extension of due date for filing the Annual return and the Reconciliation Statement for F.Y. 2018-19 to 30-6-2020.
		Waiver of late fees for delayed filing of the Annual return and the Reconciliation Statement for F.Y. 2017-18 and F.Y. 2018-19 for those taxpayers having aggregate turnover of less than Rs. 2 crores.

		Increasing the GST rate on Mobile Phones and specified parts to 18% from the present 12%.
		GST rate on all types of matches including handmade matches and other than handmade matches to be rationalised to uniform rate of 12%.
		GST rate on Maintenance, Repair and Overhaul (MRO) services in respect of aircraft to be reduced from 18% to 5% with full ITC. Further, place of supply for B2B MRO services to be changed to the location of recipient. This change will assist in setting-up of MRO services in India.

		Restrictions to be imposed on passing of the ITC in case of new GST registrations before physical verification of premises and Financial KYC of the registered person. This action is proposed to curb the menace of fake invoicing and fraudulent passing of ITC.
		Exemptions from IGST and Cess on the imports made under the AA/EPCG/EOU schemes to be extended up to 31-3-2021.
		A special procedure to be prescribed for registered persons who are corporate debtors under the provisions of the Insolvency and Bankruptcy Code, 2016 and are undergoing the corporate insolvency resolution process. The procedure will enable such registered persons to comply with the provisions of GST Laws during the CIRP period.
		A new facility called ‘Know Your Supplier’ to be introduced. This facility will provide every registered person basic information about the suppliers with whom they conduct or propose to conduct business.

The 39^th GST Council met under the Chairmanship of Union Finance & Corporate Affairs Minister Smt Nirmala Sitharaman here today  . The meeting was also attended by Union Minister of State for Finance & Corporate Affairs Shri Anurag Thakur besides  Finance Ministers of States & UTs and seniors officers of the Ministry of Finance.

GST Council took following decisions relating to changes in GST rates on supply of goods and services.

1.         The recommendation of the Fitment Committee for calibrating the GST rate structure to correct the inverted duty structure on various items like Mobile phones, Footwear, Textiles and Fertilizers was placed before the GST Council for discussion. The Council had a detailed discussion on the matter. Upon discussion the Council made the following recommendations:-

1. To raise the GST rate on Mobile Phones and specified parts presently attracting 12% to 18%.

2. To deliberate the issue of calibrating the rate in other items for removing inversion in future meetings with further consultation and examination of issue.

2.         GST rate on all types of matches (Handmade and other than Handmade) has been rationalised to 12% (from 5% on Handmade matches and 18% on other matches). This would address the classification issues. This issue was deliberated earlier in the 37^th meeting and was pending for decision.

3          To reduce GST rate on Maintenance, Repair and Overhaul (MRO) services in respect of aircraft from 18% to 5% with full ITC and to change the place of supply for B2B MRO services to the location of recipient. This change is likely to assist in setting up of MRO services in India. Domestic MRO will also get protection due to 5% tax paid under section 3(7) of the Customs Tariff Act, 1975 on most imported goods (sent abroad for repairs) as this tax is not available as credit.

Note: It is proposed to issue notifications giving effect to these recommendations of the Council on 01^st April, 2020.

[This note presents the decision of the GST Council in simple language for easy understanding which would be given effect to through Gazette notifications/ circulars which shall have force of law.]

37th GST Council Meeting  held on 20th September 2019 (FRI) in GOA

Following are the Key Decisions :-

1. Changes in GST Rate on Goods as Recommended by 37th GST Council Meeting

2. GST Rate on Services as Recommended by The GST Council in Its 37^th Meeting

3. Recommendations of GST council related to law &procedure

Changes in GST Rate on Goods as Recommended by 37th GST Council Meeting

The 37^thGST Council met in Goa today under the Chairmanship of Union Finance & Corporate Affairs Minister Smt Nirmala Sitharaman  . The meeting was also attended by Union Minister of State for Finance & Corporate Affairs Shri Anurag Thakur besides Chief Minister of Goa Shri Pramod Sawant,  Finance Ministers of States & UTs and seniors officers of the Ministry of Finance .

The council   took the following decisions in respect to rates relating to goods.

1. GST rates reduction, –

1. 18% to 12% on parts of Slide Fasteners

2. 18% to 5% on Marine Fuel 0.5% (FO)

3. 12% to 5% on Wet Grinders(consisting stone as a grinder)

4. 5% to Nil on:-

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

5. 3% to 0.25% on cut and polished semi- precious stones

6. Applicable rate to 5% on specified goods for petroleum operations undertaken under Hydrocarbon Exploration Licensing Policy (HELP)

7. Exemptions from GST/IGST on:-

1. imports of specified defence goods not being manufactured indigenously (upto 2024)
2. supply of goods and services to FIFA and other specified persons for organizing the Under-17 Women’s Football World Cup in India.
3.  supply of goods and services to Food and Agriculture Organisation (FAO) for specified projects in India.

2. GST rates have been recommended to be increased from, –

1. 5% to 12% on goods, falling under chapter 86 of tariff like railway wagons, coaches, rolling stock (without refund of accumulated ITC). This is to address the concern of ITC accumulation with suppliers of these goods.
2. 18% to 28% +12% compensation cess on caffeinated Beverages

3. Measures for Export Promotion

1. Exemption from GST/IGST:-

1. at the time of import on Silver/Platinum by specified nominated agencies
2. supply of Silver/Platinum by specified nominated agency to exporters for exports of Jewellery,

2. Inclusion of Diamond India Limited (DIL) in the list of nominated agencies eligible for IGST exemption on imports of Gold/ Silver/Platinum so as to supply at Nil GST to Jewellery exporters.

4. A uniform GST rate of 12% on Polypropylene/Polyethylene Woven and Non- Woven Bags and sacks, whether or not laminated, of a kind used for packing of goods (from present rates of 5%/12%/18%)

5. GST concession in certain cases for specific period: –

1. Exemption to Fishmeal for the period 01.07.17 to 30.09.19. There were doubts as regards taxability offishmeal in view of the interpretational issues. However, any tax collected for this period shall be required to be deposited.

2. 12% GST duringthe period 1.07.2017 to 31.12.2018, on pulley, wheels and other parts (falling under Heading 8483) and used as parts of agricultural machinery.

6. Passenger vehicles of engine capacity 1500 cc in case of diesel, 1200 cc in case of petroland length not exceeding 4000mm designed for carrying upto 9 persons attract compensation cess of 1% for petrol and 3% for diesel vehicle. Council recommended same compensation cess rate for vehicles having these specifications (length and engine capacity) but designed for carrying more than 10 persons but upto 13 persons. (Presently these vehicles attract compensation cess at the rate of 15%)

7. Other miscellaneous Changes:

• Aerated drink manufacturers shall be excluded from compositionscheme.
• Option to pay GST at the rate of 18% on transaction value at the time of disposal of specified goods for petroleum operations (on which concessional GST rate of 5% was paid at the time of original supply) provided that the goods are certified by Director General Hydrocarbon(DGH) as non-serviceable.
• Restriction on refund of compensation cess on tobacco products (in case of inverted duty structure)
• Prescribing modalities for allowing concessions on spare parts imported temporarily by foreign airlines for repair of their aircraft, while in India in transit in terms of the Chicago Convention on Civil Aviation.
• Certain other changes of technical nature for the sake of clarity in application of notification.

8. Clarifications as regards applicability of GST rate in respect of certain goods recommended by GST Council which inter-alia includes: 
   1. 1. Mere heating ofleguminous vegetables (gram/lentil) for removing moisture, or to soften and puff it or removing the skin, and not subjecting to any other processing or addition of any other ingredients (salt, oil etc.) would be classified under HS code 0713.

2. All “mechanical sprayers” falling under HS Code 8424 would attract 12% GST.
3. Parts like Solar Evacuation tubes for solar power based devices like solar water heater, solar steam, generation systems, would be eligible to 5% GST rate.

4. Exclusive parts and accessories suitable for use solely or principally with a medical device (falling under headings 9018, 9019, 9021 or 9022) would fall in respective headings and attract GST at the concessional rate of 12%.
5. Almond milk is classifiable under HS code 22029990 and attracts GST rate of 18%.
6. Imported stores for Navy would be entitled to exemption from IGST

The rate changes shall be made effective with effect from 1^st October, 2019.

[This note presents the decision of the GST Council in simple language for ease of understanding, which would be given effect to through Gazette notifications/circulars, which shall have force of law.]

GST Rate on Services as Recommended by The GST Council in Its 37^th Meeting

The 37^thGST Council met in Goa today under the Chairmanship of Union Finance & Corporate Affairs Minister Smt Nirmala Sitharaman  . The meeting was also attended by Union Minister of State for Finance & Corporate Affairs Shri Anurag Thakur besides Chief Minister of Goa Shri PramodSawant,  Finance Ministers of States & UTs and seniors officers of the Ministry of Finance .

GST Council took following decisions relating to changes in GST rates, ITC eligibility criteria, exemptions and clarifications on connected issues.

(A)         EXEMPTIONS / CHANGES IN GST RATES / ITC ELIGIBILITY CRITERIA:

Rate reduction sector wise:

Hospitality and tourism:

1. To reduce the rate of GST on hotel accommodation service as below: –

Transaction Value per Unit (Rs) per day	GST
Rs 1000 and less	Nil
Rs 1001 to Rs 7500	12%
Rs 7501 and more	18%

1. To reduce rate of GST on outdoor catering services other than in premises having daily tariff of unit of accommodation of Rs 7501 from present 18% with ITC to 5% without ITC.  The rate shall be mandatory for all kinds of catering. Catering in premises with daily tariff of unit of accommodation is Rs 7501 and above shall remain at 18% with ITC.

Job work service:

1. To reduce rate of GST from 5% to 1.5% on supply of job work services in relation to diamonds.
2. To reduce rate of GST from 18%to 12% on supply of machine job work such as in engineering industry, except supply of job work in relation to bus body building which would remain at 18%.

Exemption sector wise:

Warehousing:

1. To exempt prospectivelyservices by way of storage or warehousing of cereals, pulses, fruits, nuts and vegetables, spices, copra, sugarcane, jaggery, raw vegetable fibres such as cotton, flax, jute etc., indigo, unmanufactured tobacco, betel leaves, tendu leaves, rice, coffee and tea.

Transportation:

1. To increase the validity of conditional exemption of GST on export freight by air or sea by another year, i.e. till 30.09.2020.

Insurance:

1. To exempt “BANGLA SHASYA BIMA” (BSB) crop insurance scheme of West Bengal Government.

1. To exempt services of life insurance business provided or agreed to be provided by the Central Armed Paramilitary Forces (under Ministry of Home Affairs) Group Insurance Funds to their members under the respective Group Insurance Schemes of these Central Armed Paramilitary forces.

Export promotion:

1. To exempt services provided by an intermediary to a supplier of goods or recipient of goods when both the supplier and recipient are located outside the taxable territory.

1. To issue a notification under Section 13(13) of IGST Act notifying the place of supply of specified R&D services (such as Integrated discovery and development, Evaluation of the efficacy of new chemical/ biological entities in animal models of disease,Evaluation of biological activity of novel chemical/ biological entities in in-vitro assays,Drug metabolism and pharmacokinetics of new chemical entities,Safety Assessment/ Toxicology,Stability Studies,Bio Equivalence and Bio Availability Studies, Clinical trials,Bio analytical studies) provided by Indian pharma companies to foreign service recipients, as the place of effective use and enjoyment of a service i.e. location of the service recipient.

1. To clarify that the place of supply of chip design software R&D services provided by Indian companies to foreign clients by using sample test kits in India is the location of the service recipient and section 13(3)(a) of IGST Act, 2017 is not applicable for determining the place of supply in such cases.

Miscellaneous

1. To allow the registered authors an option to pay GST on royalty charged from publishers under forward charge and observe regular GST compliance.
2. To notify grant of liquor licence by State Governments against payment of license fee as a “no supply” to remove implementational ambiguity on the subject.
3. To exempt services related to FIFA Under-17 Women’s World Cup 2020 similar to existing exemption given to FIFA U17 World Cup 2017.

(B) RATIONALIZATION/ TRADE FACILITATION MEASURES:

1. To allow payment of GSTon securities lending service under reverse charge mechanism (RCM) at the merit rate of 18% and to clarify that GST on securities lending service for period prior to RCM period shall be paid on forward charge basis. IGST shall be payable on supply of these services and in cases where CGST/SGST/UTGST have been paid, such taxpayers will not be required to pay tax again.
2. To allow RCM to suppliers paying GST @ 5% on renting of vehicles, from registered person other than body corporate (LLP, proprietorship) when services provided to body corporate entities.

(C) CLARIFICATIONS:

1.             To clarify the scope of the entry ‘services of exploration, mining or drilling of petroleum crude or natural gas or both”.
2. To clarify taxability of Passenger Service Fee (PSF) and User Development Fee (UDF) levied by airport operators.

Note: It is proposed to issue notifications giving effect to these recommendations of the Council on 1^st October, 2019.

[This note presents the decision of the GST Council in simple language for easy understanding which would be given effect to through Gazette notifications/ circulars which shall have force of law.]

Recommendations of GST council related to law &procedure

The 37^thGST Council met in Goa today under the Chairmanship of Union Finance & Corporate Affairs Minister Smt Nirmala Sitharaman  . The meeting was also attended by Union Minister of State for Finance & Corporate Affairs Shri Anurag Thakur besides Chief Minister of Goa Shri Pramod Sawant,  Finance Ministers of States & UTs and seniors officers of the Ministry of Finance .

The GST Council, in its meeting  recommended the following Law & Procedure related changes :

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

1. waiver of the requirement of filing FORM GSTR-9A for Composition Taxpayers for the said tax periods; and
2. filing of FORM GSTR-9 for those taxpayers who (are required to file the said return but) have aggregate turnover up to Rs. 2 crores made optional for the said tax periods.

2. A Committee of Officers to be constituted to examine the simplification of Forms for Annual Return and reconciliation statement.
3. Extension of last date for filing of appeals against orders of Appellate Authority before the GST Appellate Tribunal as the Appellate Tribunals are yet not functional.
4. In order to nudge taxpayers to timely file their statement of outward supplies, imposition of restrictions on availment of input tax credit by the recipients in cases where details of outward supplies are not furnished by the suppliers in the statement under section 37 of the CGST Act, 2017.
5. New return system now to be introduced from April, 2020 (earlier proposed from October, 2019), in order to give ample opportunity to taxpayers as well as the system to adapt and accordingly specifying the due date for furnishing of return in FORM GSTR-3B and details of outward supplies in FORM GSTR-1 for the period October, 2019 – March, 2020.
6. Issuance of circulars for uniformity in application of law across all jurisdictions:

1. procedure to claim refund in FORM GST RFD-01A subsequent to favourable order in appeal or any other forum;
2. eligibility to file a refund application in FORM GST RFD-01A for a period and category under which a NIL refund application has already been filed; and
3. clarification regarding supply of Information Technology enabled Services (ITeS services) (in supersession of Circular No. 107/26/2019-GST dated 18.07.2019) being made on own account or as intermediary.

7. Rescinding of Circular No.105/24/2019-GST dated 28.06.2019, ab-initio, which was issued in respect of post-sales discount.
8. Suitable amendments in CGST Act, UTGST Act, and the corresponding SGST Acts in view of creation of UTs of Jammu & Kashmir and Ladakh.
9. Integrated refund system with disbursal by single authority to be introduced from 24^th September, 2019.
10. In principle decision to link Aadhar with registration of taxpayers under GST and examine the possibility of making Aadhar mandatory for claiming refunds.
11. In order to tackle the menace of fake invoices and fraudulent refunds, in principle decision to prescribe reasonable restrictions on passing of credit by risky taxpayers including risky new taxpayers.

Note: The recommendations of the GST Council have been presented in this release in simple language only for immediate information of all stakeholders. The same would be given effect through relevant Circulars/Notifications which alone shall have the force of law.

Read GST Council : Minutes of Meetings and Agenda : updated Till Date