Recommendations of the 42nd GST Council Meeting
The 42nd GST Council met under the Chairmanship of Union Finance & Corporate Affairs Minister Smt Nirmala Sitharaman through video conferencing 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 senior officers of the Ministry of Finance& States/ UTs.
The GST Council has made the following recommendations:
1. Levy of Compensation Cess to be extended beyond the transition period of five years i.e. beyondJune, 2022, for such period as may be required to meet the revenue gap. Further details to be worked out.
- Centre is releasing compensation of ₹ 20,000 crore to States today towards loss of revenue during 2020-21 and an amount of about ₹ 25,000 crore towards IGST of 2017-18 by next week.
- Enhancement in features of return filing:In its 39th Meeting held in March 2020, the Council hadrecommendedan incremental approach to incorporate features of the new return system in the present familiar GSTR-1/3B scheme. Various enhancements have since been made available on the GST Common Portal. With a view to further enhance Ease of Doing Business and improve the compliance experience, the Council has approved the future roadmap for return filing under GST. The approved frameworkaims to simplify return filing and further reduce the taxpayer’s compliance burden in this regard significantly, such that the timely furnishing of details of outward supplies (GSTR-1) by ataxpayer and his suppliers would –(i) allow him to view the ITC available in his electronic credit ledger from all sources i.e. domestic supplies, imports and payments on reverse charge etc. prior to the due date for payment of tax, and (ii) enable the system to auto-populate return (GSTR-3B)through the data filed by the taxpayer and all his suppliers. In other words, the timely filing of GSTR-1 statement alone would be sufficient as the return in FORM GSTR-3B would get auto prepared on the common portal.To this end the Council recommended / decided the following:
- Due date of furnishing quarterly GSTR-1 by quarterly taxpayers to be revised to 13th of the month succeeding the quarterw.e.f. 01.1.2021;
- Roadmap for auto-generation of GSTR-3B from GSTR-1s by:
- Auto-population of liability from own GSTR-1 w.e.f. 01.01.2021; and
- Auto-population of input tax credit from suppliers’ GSTR-1s through the newly developed facility in FORM GSTR-2B for monthly filers w.e.f. 01.01.2021 and for quarterly filers w.e.f. 01.04.2021;
- In order to ensure auto population of ITC and liability in GSTR 3B as detailed above, FORM GSTR 1would be mandatorily required to be filed before FORM GSTR3Bw.e.f. 01.04.2021.
- The present GSTR-1/3B return filing system to be extended till 31.03.2021 and the GST laws to be amended to make the GSTR-1/3B return filing system as the default return filing system.
- As a further step towards reducing the compliance burden particularly on the small taxpayers having aggregate annual turnover < Rs. 5 cr., the Council’s earlier recommendation of allowing filing of returns on a quarterly basis with monthly payments by such taxpayers to be implemented w.e.f. 01.01.2021. Such quarterly taxpayers would, for the first two months of the quarter, have an option to pay
35% of the net cash tax liability of the last quarter using an auto generated challan.
- Revised Requirement of declaring HSN for goods and SAC for services in invoices and in FORM GSTR-1w.e.f. 01.04.2021 as under:
- HSN/SAC at 6 digits for supplies of both goods and services for taxpayers with aggregate annual turnover above Rs. 5 crores;
- HSN/SAC at 4 digits for B2B supplies of both goods and services for taxpayers with aggregate annual turnover upto Rs. 5 crores;
- Government to have power to notify 8 digit HSN on notified class of supplies by all taxpayers.
- Amendment to the CGST Rules: Variousamendments in the CGST Rules and FORMS have beenrecommended which includes provision for furnishing of Nil FORM CMP-08 through SMS.
- Refund to be paid/disbursed in a validated bank account linked with the PAN &Aadhaar of the registrant w.e.f. 01.01.2021.
- To encourage domestic launching of satellites particularly by young start-ups, the satellite launch services supplied by ISRO, Antrix Corporation Ltd. and NSIL would be exempted.
Note:- The decisions of the GST Council have been presented in this note in simple language for easy understanding. The same would be given effect to through Gazette notifications/ circulars which alone shall have force of law.
(Release ID: 1661827)
The 37thGST 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.
- GST rates reduction, –
- 18% to 12% on parts of Slide Fasteners
- 18% to 5% on Marine Fuel 0.5% (FO)
- 12% to 5% on Wet Grinders(consisting stone as a grinder)
- 5% to Nil on:-
- Dried tamarind
- Plates and cups made up of leaves/ flowers/bark
- 3% to 0.25% on cut and polished semi- precious stones
- Applicable rate to 5% on specified goods for petroleum operations undertaken under Hydrocarbon Exploration Licensing Policy (HELP)
- Exemptions from GST/IGST on:-
- imports of specified defence goods not being manufactured indigenously (upto 2024)
- supply of goods and services to FIFA and other specified persons for organizing the Under-17 Women’s Football World Cup in India.
- supply of goods and services to Food and Agriculture Organisation (FAO) for specified projects in India.
- GST rates have been recommended to be increased from, –
- 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.
- 18% to 28% +12% compensation cess on caffeinated Beverages
- Measures for Export Promotion
- Exemption from GST/IGST:-
- at the time of import on Silver/Platinum by specified nominated agencies
- supply of Silver/Platinum by specified nominated agency to exporters for exports of Jewellery,
- 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.
- 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%)
- GST concession in certain cases for specific period: –
- 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.
- 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.
- 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%)
- 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.
- Clarifications as regards applicability of GST rate in respect of certain goods recommended by GST Council which inter-alia includes:
- 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.
- All “mechanical sprayers” falling under HS Code 8424 would attract 12% GST.
- 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.
- 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%.
- 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
The rate changes shall be made effective with effect from 1st 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.]
(Release ID: 1585717)
Section 6.1 of GSTR – 3B, details of payment for GST has to be shown. Amount of Tax Payable, Amount of Tax paid under GST utilizing the ITC and balance amount in cash has to be shown along with interest and late if any payable for CGST, SGST, UTGST, IGST and Cess.
As per the Determination of Value Supply, Open Market Value has to be considered for some transactions and OMV is “open market value” of a supply of goods or services or both means the full value in money, excluding the integrated tax, central tax, State tax, Union territory tax and the cess payable by a person in a transaction, where the supplier and the recipient of the supply are not related and price is the sole consideration, to obtain such supply at the same time when the supply being valued is made.
As per CGST Act, all taxes, levies, and charges collected from the buyer should be part of the valuation except for the taxes under GST (SGST UTGST & Cess), if buyer and seller are not related parties.
The tax rate for Cess under GST as part of the Goods and Services Tax (Compensation to States) Act, 2017, starts from 15% to 190% in case of sin goods on ad valorem basis and in the case of goods, it is on per ton basis like coal, peat etc at the rate of Rs 400 per ton.
Input tax credit for cess being levied under Goods and Services Tax (Compensation to States) Act, 2017, is eligible only for the making the output tax liability of the Cess under the same act and not for payment of any other taxes output liability under GST.
Under the Goods and Services Tax (Compensation to States) Act, 2017, Cess will be levied on all interstate and intra-state transactions on the supply of goods and service notified by the GST council from time to time. Cess is not applicable to be paid by persons who have opted for registration under composition scheme.