GST Council Meetings Update

1. Key Decisions taken in 32^nd GST Council Meeting dated 10.1.2019

Changes to existing Composition scheme

• Threshold limit for composite taxpayers, who are opting to pay tax u\s 10 of CGST Act will be increased from existing 1 crore to 1.5 crore, which is to be effective from 1^st April 19.

• Tax to be paid Quarterly and GST Returns to be filed annually.

New composition scheme for service provider

• A new composition scheme shall be available with effect from 1st April 2019 for service provider with the tax rate of 6% (3% CGST+ 3% SGST) having annual aggregate turnover in preceding financial year upto RS 50 lakhs.

• The above scheme shall be available to both service provider as well as supplier of goods and service, who are not eligible for the presently available composition scheme for goods.

Changes to threshold limit for suppliers of goods

•  There would be two threshold limits for getting mandatory registration under GST i.e. Rs 20 lakhs and Rs 40 lakhs for supplier of goods. States would have an option to decide one of the above limits with in one weeks’ time.

• There is no change in threshold limit for the service provider.

Levy of Cess in Kerala - GST Council approved levy of Cess on intra state supply of goods and services at a rate not exceeding 1% for the period not exceeding 2 years within the state of Kerala.

 

2. Key Decisions taken in 31st GST Council Meeting dated 22^nd December, 2018

Extension of Due dates 

• Due dates of following returns have been extended as under:

Return	Period	Extended Due Date
Annual return in FORM GSTR-9, FORM GSTR-9A and reconciliation statement in FORM-9C (Audit Report).	July 2017 to March 2018	30.06.2019
GSTR 8 (TCS return to be filed by E-commerce operator)	October 2018 upto December 2018	31.01.2019
GST ITC-04 (Job-work return)	July 2017 upto December 2018	31.03.2019

 

Availment of ITC pertaining to FY 2017-18 

• Government has issued Order No. 02/2018-Central Tax dated 31.12.2018, to provide that ITC in relation to invoices issued by the supplier during FY 2017-18 can be availed by the recipient till the due date for furnishing of FORM GSTR-3B for the month of March, 2019, subject to the condition that details of such supplies have been uploaded by the supplier till the due date of filing of GSTR-1 for the m/o March 2019.

• Further, the rectification of details already furnished in GSTR-1 for the period FY 2017-18 would be allowed till the due date of filing of GSTR-1 for the m/o March 2019.  

One more window for completion of Migration process

•  The due date for furnishing the requisite details to the jurisdictional nodal officer for the taxpayers who did not file the complete FORM GST REG-26 but received only a Provisional ID (PID) till 31.12.2017 has been extended till 31.01.2019.
• The due date for furnishing FORM GSTR-3B and FORM GSTR-1 for the period July,2017 to February,2019/quarters July,2017 to December, 2018 by such taxpayers have been extended till 31.03.2019. 
• Further, late fee for all taxpayers who would file GSTR1, GSTR 3B and GSTR 4 after 22.12.2018 but on or before 31.03.2019 for the period July’17 to September’18 have been waived. However, late fees which has already been deposited by the assessee would not be credited/ refunded

 

Simplification of Refund procedures 

•  Government has issued Circular No. 79/53/2018-GST dated 31.12.2018 giving various clarifications on refund related issues. Further, it has been clarified that all the supporting documents/invoices in relation to a claim for refund in FORM GST RFD-01A would be uploaded electronically on the common portal at the time of filing of the refund application itself and there would be no requirement to visit department physically.

Reverse Charge Mechanism (RCM)

• Services provided by GTA to Government departments/local authorities (which have taken registration only for the purpose of deducting tax under Section 51) would not be required to deposit tax under RCM.

• The following services have been brought under the purview of RCM:

1. Security services (supply of security personnel) provided to a registered person by any person other than body corporate. In other words, if the service provider is a body corporate, then reverse charge would not be applicable. Further, RCM would not be applicable incase such services are rendered to Government Departments which have taken GST registration for TDS purpose only and entities registered under composition scheme.
2. · Services provided by a Business Facilitator (BF) to a Banking Company located in taxable territory.
3. · Services provided by Agent of Business Correspondent (BC) to Business 
4. Correspondent (BC) located in taxable territory.

Amendment in Goods & Services Tax rates

The Government has issued various notifications vide which tax rates have been changed on various goods & services (which are in line with the decisions taken in the 31st GST Council Meeting held on 22nd December, 2018). Some of the relevant tax rate changes have been captured here under for your ready reference:

GST rates reduction from 28 % to 18% (Goods):

• Monitors and TVs of upto screen size of 32 inches.
• Re-treaded or used pneumatic tyres of rubber;
• Digital cameras and video camera recorders
• Pulleys, transmission shafts and cranks, gear boxes etc., falling under HS Code 8483.

GST rates reduction from 12 % to 5%:

• Natural cork
• Fly ash Blocks

GST rates reduction from 12 % to NIL:

• Music Books

Others

• Foot-wear: Rate of 5%/18% to be applied based on sale value of footwear instead of MRP.

GST rates reduction from 28 % to 18% (Services):

• GST rate on cinema tickets above Rs. 100 has been reduced from 28% to 18%.

GST rates reduction from 18 % to 12%:

• Tax rate Cinema tickets upto Rs. 100.
• GST rate on third party insurance premium of goods carriage vehicles.

 

3. Key Decisions taken in 29^th GST Council Meeting dated 4^th August, 2018

Digital Payments

• Incentives in the form cashback will be offered on the GST component of the bill for payments made digitally.
•  Digital modes will include payments through –
• · Repay Debit card
• · BHIM UPI
• · UPI Aadhaar
• · USSD (Unstructured Supplementary Service Data)

•  A cashback of 20% on the GST component will be credited to the consumers, which will be limited to Rs. 100 only per transaction.

•  This will be a trial basis process by the GST council to check whether it increases the tax payment compliances or not.

•  It will not be a compulsory adoption by the states. The states will have to volunteer for these processes to be implemented.

4. The key decisions taken by the GST Council in its 28th meeting held on 26th July, 2018 are as under:

• Vide Notification No. 14/2018-Integrated Tax (Rate) dated 26^thJuly2018, hotel industry has been given a major relief by providing that the rate of tax on accommodation service shall be based on transaction value instead of declared tariff.

• Vide Notification No. 14/2018- Integrated Tax (Rate) dated 26^thJuly 2018, entry relating to composite supply of food and drinks in restaurant, mess, canteen, eating joints and such supplies to institutions (educational, office, factory, hospital) on contractual basis has been Rationalize and taxable at the rate of 5%. Further, it has been clarified that scope of outdoor catering defined under entry 7(v) is restricted to supplies in case of outdoor/indoor functions that are event based and occasional in nature.

• Vide Notification No. 15/2018- Integrated Tax (Rate) dated 26^th July, 2018, Services provided by an unincorporated body or a non-profit entity registered under any law for the time being in force, engaged in promotion of trade, commerce, industry, agriculture, art, science, literature, culture, sports, education, social welfare, charitable activities and protection of environment, to its own members against consideration in the form of membership fee up to an amount of one thousand rupees (Rs 1000/-) per member per year shall be liable to GST at NIL rate of Tax.

• In order to reduce compliance cost, it has been decided that Registered persons would not be liable to pay GST under Reverse charge basis, on purchases/inward supplies received from an unregistered supplier. Reverse charge mechanism on account of supplies received from Unregistered suppliers would be suspended till 30.09.2019.(Vide Notification No. 22/2018- Central Tax (Rate) dated 26^thJuly, 2018, Suspension/Deferment of Reverse Charge Mechanism (on account of procurements from Un-registered suppliers) has been extended from 30^th September, 2018 to 30^th September, 2019)
  
  Amendments in Goods & Services Tax Rates:
  Tax rate change in case of number of goods and services have been proposed by the GST Council, some relevant of which are encapsulated as under:
  
  Services: The GST Council has made numerous decisions relating to changes in GST rates and clarification on levy of GST on services.

Some of the important recommendations relating to Changes in GST rates and Newly Inserted are as follows:

Services	Old Rage	New Rate	Condition
(i) Supply, by way of or as part of any service, of goods, being food or any other article for human consumption or any drink, provided by a restaurant, eating joint including mess, canteen, whether for consumption on or away from the premises where such food or any other article for human consumption or drink is supplied, other than those located in the premises of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes having declared tariff of any unit of accommodation of seven thousand five hundred rupees and above per unit per day or equivalent. Explanation 1.- This item includes such supply at a canteen, mess, cafeteria or dining space of an institution such as a school, college, hospital, industrial unit, office, by such institution or by any other person based on a contractual arrangement with such institution for such supply, provided that such supply is not event based or occasional. Explanation 2.- “Declared tariff” includes charges for all amenities provided in the unit of accommodation (given on rent for stay) like furniture, air conditioner, refrigerators or any other amenities, but without excluding any discount offered on the published charges for such unit.	18	5	Provided that credit of input tax charged on goods and services used in supplying the service has not been taken
(ia) Supply, of goods, being food or any other article for human consumption or any drink, by the Indian Railways or Indian Railways Catering and Tourism Corporation Ltd. or their licensees, whether in trains or at platforms.	18	5

Other points of Consideration

• Exemption of GST on import of services by Foreign Diplomatic Missions/ UN & other International Organisations based on reciprocity;
• The words “declared tariff” wherever they occur, the words “value of supply” shall be substituted;
• Services provided by Individual Direct Selling Agent (DSAs), other than by a company, partnership firm or LLP, to a Banking Company or NBFC located in Taxable Territory is to be covered under Reverse Charge Mechanism (RCM) and Banking Company/NBCC shall be liable to discharge GST on reverse Charge Basis;
• Services provided by a Municipality under Article 243W not to be treated as Goods or Services under GST Laws;

New Simplified Return Format

• CBIC released a Draft format of Monthly and Quarterly Simplified GST returns.This brief note lists the salient features of the new GST return format and business process for the information of trade and industry and other stakeholders.

Government also offer to General public to leave comment or give suggestions on such new format of return.

The above stated amendments have been made effective from July27, 2018 vide various Notifications issued by the Government.

5. The key decisions taken by the GST Council in its 27th meeting held on 08th May,2018 are as under:

GST Return Simplification:

• GSTR 1 and GTR 3B will continue and GSTR-2 and GSTR-3 to remain suspended till September, 2018.
• The B2B dealers will have to fill invoice wise details of the outward supply made by them, based on which the system will automatically calculate his tax liability. The input tax credit will be calculated automatically by the system based on invoices uploaded by his sellers.
• New Single-return plan will go live after 6 months. Thus, there will be only 12 returns a year, instead of 36 returns.
• Single return on quarterly basis for Composition dealers and dealers with ‘NIL’ transaction.

Reversal of Input Tax Credit:

• No automatic reversal of ITC for Buyer on non-payment of tax by Seller, i.e. recovery shall be made from the defaulter/ seller, till 30 Sept. 2018. From 1 Oct. 2018, this provisional system of allowing Input Tax Credit to Buyer will not be applicable and the ITC will be based on system calculation, i.e. based on sale transactions and tax details reported by the suppliers.

Incentive to promote Digital Transactions:

• Keeping in view the need to move towards a less cash economy, the Council has discussed in detail the proposal of a concession of 2% in GST rate [where the GST rate is 3% or more, 1% each from applicable CGST and SGST rates] on B2C supplies, for which payment is made through cheque or digital mode, subject to a ceiling of Rs. 100 per transaction, so as to incentivize promotion of digital payment.

• The council has recommended for setting up of a Group of Ministers from State Governments to look into the proposal and make recommendations, before the next Council meeting, keeping in mind the views expressed in GST Council Incentives on digital payments.

6. The key decisions taken by the GST Council in its 26th meeting held on 10th March, 2018 are as under:

Relief provided to Exporters:

• Exporters presently availing various export promotion schemes shall continue to avail such exemptions on their imports up to 01.10.2018, since implementation of the e-Wallet scheme has been deferred by up to 6 months, i.e. up to 01.10.2018. Please note that in 22nd GST Council Meeting, an "e-Wallet" facility was proposed to be brought into effect from 01.04.2018, as a permanent solution to the problem of working capital blockage. The said e-wallet would be credited with a notional amount in the form of an advance refund which would be used to pay GST.

• Further, the GST Council reviewed the progress in the grant of refunds to exporters and directed GSTN to further expedite the process for their immediate sanction and disbursal.

Deferment of Reverse Charge Mechanism (on account of procurements from Un-registered suppliers):

• Reverse charge mechanism on account of supplies received from Unregistered suppliers has been decided to be suspended for another 3 months i.e. upto 30.06.2018. Accordingly, registered persons would not be liable to pay GST under Reverse charge basis, on purchases/inward supplies received from an unregistered supplier upto 30.06.2018.

No consensus on GST return simplification process:

• The GST council discussed the new model for GST return filing system. A new model was discussed extensively and Group of Ministers on IT has been tasked to finalize the same. However, till the said model gets finalized, the existing system of filing of GST returns in Form GSTR-3B and GSTR-1 is decided to be continued for a further period of 3 months, i.e. up to June 2018.

TDS/TCS provisions postponed up to 30th June 2018:

• Operationalization of TDS and TCS provisions under Sections 51 and 52 respectively of the CGST Act, 2017 have been decided to be postponed until 30.06.2018.

E-way bill system to come into force w.e.f. 1st April 2018:

The GST Council has decided to implement the E-way bill mechanism for inter-state movement of goods from 01.04.2018. It was also decided that generation of e-way bills for movement of goods within a state will be adopted in a phased manner, starting with a few states initially, w.e.f a date to be announced in future but not later than 01.06.2018

7. The key decisions taken by the GST Council in its 25th meeting held on 18^th January 2018 are as under:

• Changes in Late Fee amount payable under GST law

  • Late fee payable by any taxpayer for failure to furnish return in FORM GSTR-1 (outward supply details), FORM GSTR-5 (non-resident taxable person) or FORM GSTR 5A (OIDAR) has been reduced to INR 50/- per day (INR 25 per day each under CGST & SGST Act). However, for the taxpayer having ‘NIL’ tax liability for the particular month, late fee charges shall be INR 20/- per day (INR 10 per day each under CGST & SGST Act).
  • Similarly, late fee payable in case of failure to furnish the return in FORM GSTR-6 (Input Service Distributor) has also been reduced to INR 50/- per day (INR 25 per day each under CGST & SGST Act).

• Amendments in Goods & Services Tax Rates:

Tax rate change in case of number of goods and services have been proposed by the GST Council, some relevant of which are encapsulated as under:

Goods: GST Council in its meeting has revised GST rate on around 29 goods. Further, the Council has increased GST rates on a few goods as well. The council has also recommended the reduction in Compensation Cess on certain goods.

Some of the items along with amended GST rates are as under:

Product list	Chapter/Heading/Sub-heading/Tariff Item	Old Rate of GST	Amended Rate of GST
Old and used motor vehicles [medium and large cars and SUVs] on the margin of the supplier, subject to the condition that no input tax credit of central excise duty/value-added tax or GST paid on such vehicles has been availed by him	87	28%	18%
Buses, for use in public transport, which exclusively run on biofuels.	8702	28%	18%
All types of old and used motors vehicles [other than medium and large cars and SUVs] on the margin of the supplier of subject to the conditions that no input tax credit of central excise duty /value-added tax or GST paid on such vehicles has been availed by him.	87	28%	12%
Drinking water packed in 20 litters bottles	2201	18%	12%
- Tamarind Kernel Powder - Mehendi paste in cones - LPG supplied for supply to household domestic consumers by private LPG distributors	13 1404/3305 2711	18%	5%
Velvet Fabric ( Provided no Input Tax Credit)	5801 37 20	12%	5%
Diamonds and precious stones	7102	3%	0.25%
Cigarette filter rods	5601 22 00	12%	18%

Services: The GST Council has made numerous decisions relating to exemptions/changes in GST rates / ITC eligibility criteria, rationalization of rates/exemptions and clarification on levy of GST on services.

Some of the important recommendations relating to GST exemptions/ Changes in GST rates are as follows:

• Exemption from levy of GST on service of transportation of goods from India to a place outside India, by air or sea, till 30-9-2018.
• Exemption from levy of GST on legal services provided to Government, Local Authority, Governmental Authority and Government Entity.
• Exemption from GST on the supply of services by way of providing information under the RTI Act, 2005.
• In case of housekeeping services rendered by small housekeeping service providers who provide housekeeping service through E-commerce operators, GST at the rate of 5% without ITC is applicable. In this regard, it is pertinent to note that the definition/meaning of Small housekeeping service providers are yet to be notified.
• Threshold limit for exemption from levy of GST for all the theatrical performances like Music, Dance, Drama, Orchestra, Folk or Classical Arts and all other such activities in any Indian language in theatre has been increased from Rs.250 to Rs. 500 per person and extension of the threshold exemption to services by way of admission to a planetarium has also been recommended at the meeting.
• The council proposed to exempt GST on pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to GovernmentEntity. Further,

definition of pure services has been proposed to be amended so as to include composite supply involving predominantly supply of services i.e. upto 25% of supply of goods.

• In case of tour operator services, the council decided to allow ITC of input services in the same line of business at the GST rate of 5%.

GST rates on various services have been amended. Some of such services along with amended GST rates are as under:

Services	Old Rate	New Rate	Condition
Construction, erection, commissioning or installation of original works pertaining to metro and monorail projects	18%	12%	NA
Tailoring services	18%	5%	NA
Services by way of admission to theme parks, water parks, joy rides, merry-go-rounds, go-carting and ballet	28%	18%	NA
Works Contract Services (WCS) provided by sub-contractor to the main contractor providing WCS to Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity, which attract GST of 12% Similarly, in case of WCS attracting 5%GST, their sub-contractor would also be liable to pay 5%	18%	12%/5%	NA
Transportation of petroleum crude and petroleum products	Transportation of petroleum crude and petroleum products	5%/12%	Without ITC/ With ITC
GST rate of Job work Service for manufacture of leather goods (Chapter 42) and footwear (Chapter 64)	18%	5%	NA

Other points of Consideration

• Council has clarified that elephant/ camel joy rides shall not be classified as transportation services and shall attract GST @ 18% with threshold exemption to small Services providers.
• Relaxations in respect of Cancellation of Registration
• Cancellation of registration by voluntary registrants can be applied before the expiry of one year from effective date of registration.
• Cancellation of registration for migrated taxpayers in Form REG-29 has been extended by further three months till 31st March 2018.