Outcome of the 47th GST Council Meeting held on 28th and 29th June, 2022
GST Council held its 47th meeting on 28th and 29th June, 2022 in Chandigarh. In the meeting, GST Council has recommended changes relating to GST rates on supply of goods and services and changes related to GST law and procedure.
Key Recommendation of the GST Council are:
A. Recommendations relating to GST law and procedure:
1. Exemption from filing annual return in FORM GSTR-9/9A for FY 2021-22 to be provided to taxpayers having turnover up to INR 2 crores.
2. Extend timeline for filing GSTR-4 for FY 21-22 without late fees by composition dealers likely to be extended till 28th day of July, 2022 instead of earlier deadline 30th day of June, 2022.
3. Extend the due date of filing of FORM GST CMP-08 by composition dealers for the 1st quarter of FY 2022-23 from 18th day of July, 2022 to 31st day of July, 2022.
4. Amendment in CGST Rules to provide that there is no requirement of reversal of input tax credit for exempted supply of Duty Credit Scrips by the exporters.
5. Exemption of IGST available on import of goods under Advance Authorisation /Export Promotion of Capital Goods /Export Oriented Units scheme to be continued and E-wallet scheme not to be pursued further.
6. Amendment in CGST Rules for handling of pending IGST refund claims. In cases where the exporter is identified as risky exporter requiring verification by GST officers, or where there is a violation of provisions of Customs Act, the refund claims in respect of export of goods are suspended/withheld. Amendment in CGST Rules has been recommended to provide for transmission of such IGST refund claims on the portal in a system generated FORM GST RFD-01 to the jurisdictional GST authorities for processing.
7. 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, is deposited by him along with interest and penalty, wherever applicable. A new FORM GST PMT-03A shall be introduced for the same.
8. UPI and IMPS to be provided as an additional mode for payment of Goods and Services Tax to taxpayers.
9. Relaxation in provisions for suppliers making supplies through E- Commerce Operators (ECOs):
a. Requirement of mandatory registration for person supplying goods through ECOs shall be waived, subject to fulfilment of certain conditions.
b. Composition taxpayers would be allowed to make intra-State supply through ECOs subject to certain conditions.
The scheme would be tentatively implemented with effect from 1st day of January, 2023.
10. Amendment in formula for calculation of refund unutilized Input Tax Credit of inputs and input services for payment of output tax on account of inverted rated structure.
11. Proposal for comprehensive changes in FORM GSTR-3B to be placed in public domain for seeking inputs/suggestions of the stakeholders.
12. Amendment in CGST Rules to provide for refund of unutilized Input Tax Credit on account of Export of Electricity.
13. 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.
14. Amendment in CGST Rules relating to provision for automatic revocation of suspension of registration in cases where suspension of registration was done by the system, for non-compliance in terms continuous non-filing of specified number of returns, once all the pending returns are filed on the portal by the taxpayer.
15. Time period from 01.03.2020 to 28.02.2022 to be excluded for determining two year period to file refund claims and for issuance of demand by the department in respect of erroneous refunds. Further, limitation period for FY 2017-18 for issuance of order in respect of other demands linked with due date of annual return, to be extended till 30th September, 2023.
B. Recommendations relating to GST rates on goods and services
1. Rate rationalisation to remove inverted duty structure in respect of certain goods and services (Refer Annexure 1 for details and rates of items and services).
2. Other rate changes with respect to goods and services. (Refer Annexure 2 for details and rates of items and services).
3. Withdrawal of Exemptions on certain goods and services:
a. GST was exempted on specified food items, grains etc when not branded, or right on the brand has been foregone. It has been recommended to revise the scope of exemption to exclude from it pre-packaged and pre-labelled retail pack in terms of Legal Metrology Act, including pre-packed, pre-labelled curd, lassi and butter milk.
b. In case of certain goods and services the exemption from GST or exemption in form of concessional rate of GST is been withdrawn/rationalised (Refer Annexure 3 for details and rates of items and services
4. Clarification on GST rate in relation to Goods and services:
a. Electric vehicles whether or not fitted with a battery pack, are eligible for the concessional GST rate of 5%.
b. All fly ash bricks attract same concessional rate irrespective of fly ash content Stones covered in S. No.123 of Schedule-I (such as Napa stones), even if they are ready to use and polished in minor ways [not mirror polished], attract concessional GST rate of 5%.
c. The GST rate on all forms of mango under CTH 0804, including mango pulp (other than mangoes sliced, dried) attract GST at the 12%. Raw or fresh mangoes continue to be exempt.
d. 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).
e. Nicotine Polarilex Gum attracts a GST rate of 18%.
f. Due to ambiguity in GST rates on supply of ice-cream by ice-cream parlours, GST charged @ 5% without ITC on the same during the period 1.07.2017 to 5.10.2021 shall be regularized to avoid unnecessary litigation.
g. Application fee charged for entrance or for issuance of eligibility certificate for admission or issuance of migration certificate by universities is exempt from GST.
h. Ginned or baled fibre is covered in entry 24B of notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 in the category of raw vegetable fibres. The exemption under this entry is being rationalized.
i. 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.
j. Activity of selling of space for advertisement in souvenirs published in the form of books is eligible for concessional GST at 5%.
k. 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%.
l. Allowing choice of location of a plot is part of supply of long term lease of plot of land. Therefore, location charge or preferential location charges (PLC) are part of consideration charged for long term lease of land and shall get the same treatment under GST.
m. Services provided by the guest anchors to TV channels in lieu of honorarium attract GST.
n. Additional fee collected in the form of higher toll charges from vehicles not having Fastag is essentially payment of toll for allowing access to roads or bridges to such vehicles and shall be given the same tax treatment as given to toll charges.
o. Services in form of Assisted Reproductive Technology (ART)/ In vitro fertilization (IVF) are covered under the definition of health care services for the purpose of exemption under GST.
p. Sale of land after levelling, laying down of drainage lines etc. is sale of land and does not attract GST.
q. 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.
5. 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.
The rate changes recommended above shall be made effective from 18th day of July, 2022.
Source: Press Information Bureau (PIB)
