The GST Council held its 37th meeting in Goa on 20th September, 2019. In the meeting, GST Council has broadly taken the following decisions –

1. Recommendation on law and procedural related changes

•  Relaxation in filing of annual returns for MSMEs for Financial Year 2017-18 and 2018-19 as under:
• waiver of the requirement of filingFORM GSTR-9A for Composition Taxpayers for the said tax periods; and
• filing ofFORM 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:

• procedure to claim refund in FORM GST RFD-01A subsequent to favourable order in appeal or any other forum;
• 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
• 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 24th 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.

B. Recommendation on GST Rate related changes in respect of Goods

• GST rates to be reduced-
• from 18% to 5% on Marine Fuel 0.5% (FO);
• from 12% to 5% on Wet Grinders(consisting stone as a grinder;
• from 5% to Nil on – Dried tamarindi and plates and cups made up of leaves/ flowers/barkii;
• from 3% to 0.25% on cut and polished semi- precious stonese;
• Exemptions from GST/IGST on- imports of specified defence goods;supply of goods and services to FIFA and Food and Agriculture Organisation (FAO)

2. GST rates to be increased from-

• 5% to 12% on goods, like railway wagons, coaches, rolling stock (without refund of accumulated ITC);
• 18% to 28% +12% compensation cess on caffeinated Beverages

3. GST concession in certain cases for specific period-

• Exemption to Fishmeal for the period 01.07.17 to 30.09.19;
• 12% GST duringthe period 1.07.2017 to 31.12.2018, on pulley, wheels and other parts and used as parts of agricultural machinery;

4. Other miscellaneous Changes-

• Aerated drink manufacturers shall be excluded from composition scheme;
• Restriction on refund of compensation cess on tobacco products (in case of inverted duty structure);
• All “mechanical sprayers” falling under HS Code 8424 would attract 12% GST;
• Almond milk is classifiable under HS code 22029990 and attracts GST rate of 18%;
• Imported stores for Navy would be entitled to exemption from IGST.

• Recommendation on GST Rate related changes in respect of Services

1. The rate of GST on hotel accommodation service has been reduced on the basis of transactional value per unit (Rs) per day as below-

2. The rate of GST on outdoor catering (other than premises having daily tariff of unit of accommodation Rs7501) has been reduced mandatorily from present rate of 18 % with ITC to 5 % without ITC for all kinds of catering. For catering in premises with daily tariff of unit of accommodation is Rs 7501 and above shall remain at 18% with ITC.

3. The rate of GST on supply of job work services in relation to diamonds has been reduced from 5% to 1.5%.

4. The rate of GST on supply of machine job work (such as in engineering industry) has been reduced from 18% to 12%. However, supply of job work in relation to bus body building would remain at 18%.

5. The services provided 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 has been exempt prospectively.

6. The validity of conditional exemption of GST has been increased on export freight by air or sea by another year, i.e. till 30.09.2020.

7. The 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 has been exempt.

8. The 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 has been exempt in order to promote Export .

9. 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 has been clarified

10. The registered authors has been allowed an option to pay GST on royalty charged from publishers under forward charge and observe regular GST compliance.

11. Grant of liquor licence by State Governments against payment of license fee has been notified as “no supply” to remove implementational ambiguity on the subject.

12. Payment of GST on securities lending service under reverse charge mechanism (RCM) at the merit rate of 18% has been allowed and also it has been clarified 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.

13. Suppliers paying GST @ 5% on renting of vehicles, from registered person other than body corporate (LLP, proprietorship) allowed on RCM when the services are provided to body corporate entities.

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

For more information please refer the attached Press Releases

Source: Press Information Bureau

Share this: