GST Council conducted its 50th meeting in New Delhi. In the meeting, GST Council has recommended changes related to GST law and procedure.
Key recommendation of GST Council are:
Measures for streamlining compliances in GST:
i. Taxpayers having aggregate annual turnover upto INR 2 crore rupees are exempted from filing of annual return in Form GSTR-9.
ii. Insertion of FORM GST DRC-01 D 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.
iii. 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. For this purpose, 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.
iv. Extension in 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 31st July,2023.
v. Extension of the amnesty schemes regarding non-filers of FORM GSTR-4, FORM GSTR-9 & FORM GSTR-10 returns, revocation of cancellation of registration and deemed withdrawal of assessment orders issued under Section 62 of CGST Act, 2017, till 31st August, 2023.
vi. 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.
vii. Amendment in Rule 64 and form GSTR-5A of CGST Rules, 2017 to provide the details of supplies made to registered persons in India by OIDAR service providers in his return in FORM GSTR-5A.
viii. Explanation 3 to be inserted after rule 43 of CGST Rules, 2017 to prescribe that 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.
ix. Following amendment to be inserted in CGST Rules, 2017 regarding registration:
a. Amendment in rule 10A- 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 3rd proviso 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.
x. Risk-based biometric-based Aadhaar authentication of registration applicants to be introduced by conducting pilot in the Union Territory of Puducherry.
xi. 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 and 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.
xii. 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.
xiii. Insertion of Rule 138F in CGST Rules, 2017 to mandate the requirement of generation of e-way bills for intra-State movement of gold and precious stones.
xiv. To insert special procedure to be followed by the manufacturers of tobacco, pan masala and other similar items inter alia for registration of machines and for filing of special monthly returns.
xv. Restriction to be imposed on IGST refund route in respect of exports of tobacco, pan masala and other similar items as well as mentha oil.
xvi. Issuance of Circular to clarify:
a. Input Services Distributor (ISD) mechanism is not mandatory for distribution of input tax credit of common input services procured from third parties to the distinct persons as per the present provisions of GST law, and also to clarify issues regarding taxability of internally generated services provided by one distinct person to another distinct person.
b. 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.
c. 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-2B of the said tax period or any previous tax period.
d. Value of export goods, to be included while calculating “adjusted total turnover” in the formula under rule 89(4).
e. Clarification regarding admissibility of refund in cases where export of goods, or the realization of payment for export of services, is made after the time limit provided under rule 96A of CGST Rules, 2017.
f. To provide clarification 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.
g. Clause (f) of rule 46 of CGST Rules, 2017 to be amended to provide for requirement of only name of the State of the recipient, and not the name and full address of the recipient, on the tax invoice in cases of supply of taxable services by or through an ECO to an unregistered recipient.
h. Manner of calculation of interest amount 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.
i. Clarification regarding 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.
j. 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 1st April, 2019 to 31st December, 2021.
Changes in GST Tax Rates:
i. Reduction in the rate on uncooked/unfried snack pellets to 5%.
ii. 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 organisations in private sector also to encourage start ups.
iii. Reduction of GST rate on LD slag from 18% to 5%.
iv. Reduction of the GST rate on fish soluble paste from 18% to 5%.
Other changes relating to GST:
i. Amendment in 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.
ii. Online gaming, Casino and Horse Racing to be taxed at the uniform rate of 28%.
iii. Exemption of IGST on Dinutuximab (Quarziba) medicine when imported for personal use.
iv. Exemption of 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.
v. Supply of raw cotton, including kala cotton, by agriculturists to cooperatives is taxable under reverse charge mechanism.
vi. Reduction of GST on imitation zari thread or yarn known by any name in trade parlance from 12% to 5%
vii. Regularisation of the matters relating to trauma, spine and arthroplasty implants for the period prior to 18.07.2022.
viii. Compensation Cess to be levied on pan masala, tobacco products etc, where it is not legally required to declare the retail sale price.
ix. Inclusion of RBL Bank and ICBC bank in the list of specified banks for which IGST exemption is available on imports of gold, silver or platinum.
x. Goods Transport Agency/Agencies (GTAs) will not be required to file declaration for paying GST under forward charge every year.
xi. 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 instead if it provided in the capacity of Director than it is taxable under RCM.
xii. 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.
Source: Press Information Bureau (PIB)
