39th GST Council Meeting – Recommendations of GST council related to changes in GST rates on supply of goods and services

39 GST Council met under the Chairmanship of Union Finance & Corporate Affairs Minister Smt Nirmala Sitharaman 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 seniors officers of the Ministry of Finance.
GST Council took following decisions relating to changes in GST rates on supply of goods and services.
1. The recommendation of the Fitment Committee for calibrating the GST rate structure to correct the inverted duty structure on various items like Mobile phones, Footwear, Textiles and Fertilizers was placed before the GST Council for discussion. The Council had a detailed discussion on the matter. Upon discussion the Council made the following recommendations:-
i. To raise the GST rate on Mobile Phones and specified parts presently attracting 12% to 18%.
ii. To deliberate the issue of calibrating the rate in other items for removing inversion in future meetings with further consultation and examination of issue.
2. GST rate on all types of matches (Handmade and other than Handmade) has been rationalised to 12% (from 5% on Handmade matches and 18% on other matches). This would address the classification issues. This issue was deliberated earlier in the 37 meeting and was pending for decision.
3 To reduce GST rate on Maintenance, Repair and Overhaul (MRO) services in respect of
aircraft from 18% to 5% with full ITC and to change the place of supply for B2B MRO services to the location of recipient. This change is likely to assist in setting up of MRO services in India.
Domestic MRO will also get protection due to 5% tax paid under section 3(7) of the Customs Tariff Act, 1975 on most imported goods (sent abroad for repairs) as this tax is not available as credit.
Note: It is proposed to issue notifications giving effect to these recommendations of the Council on 01 April, 2020.
01 April, 2020.

39th GST Council Meeting – Recommendations of GST Council related on IT Roadmap

Posted On: 14 MAR 2020 7:40PM by PIB Delhi
The 39 GST Council met under the Chairmanship of Union Finance & Corporate Affairs Minister Smt Nirmala Sitharaman 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 seniors officers of the Ministry of Finance.
In the GST Council meeting, Shri Nandan Nilekani, on behalf of Infosys, made a presentation addressing the system related issues that are being faced by the taxpayers in the GST system. He first gave the summary of the recently observed IT issues and the way forward to resolve them.
He suggested that in order to smoothen the rollout of the new return system, and to ensure a better uptake of the new return, the transition to the new return system may be made in an incremental manner. He suggested that the process may be initiated by addressing the compliance related issues first so that the problem of tax evasion and gaming of the system due to non-linking of FORM
GSTR-1 and FORM GSTR-3B is addressed immediately. The journey could start with linking of the details of the statement of outward supplies in FORM GSTR-1 to the liability in FORM GSTR-3B. This would be followed by the linking of the input tax credit in FORM GSTR-3B to the details of the supplies reflected in the FORM GSTR-2A. In order to tackle evasion and preventing the gaming of the system, implementation of Aadhaar authentication and spike rules would also be initiated.
He informed the Council that to augment the capacity of the IT system to concurrently handle 3 lakh taxpayers from the present level of 1.5 lakh taxpayers, hardware procurement process has been initiated which is slightly impacted by the Covid-19 pandemic.
The GST Council further made the following suggestions after due discussionsa.
Shri Nandan Nilekani would attend the next 3 meetings of the GST Council and update the council of the status of implementation of the decisions taken by the Council and assist the Council in taking appropriate decisions on technology related issues,
b. To support the timely implementation of various initiatives, the Council gave a go ahead for deployment of additional manpower (60 in number) on T&M basis and assured that both on procurement of additional hardware and hiring of manpower, expeditious approvals would be given however the return filing experience of the taxpayers and removal of technical glitches needs to be carried out urgently.
Shri Nandan Nilekani assured that he would personally monitor the progress of the GSTN project and also agreed to attend the IT-GoM for the next 6 months or till such time the initiatives are implemented. The GST Council expects these initiatives to be implemented by the 31 of July, 2020.
RM/KMN

39th GST Council Recommendations of GST council related to law & procedure

The 39 GST Council met under the Chairmanship of Union Finance & Corporate Affairs Minister Smt Nirmala Sitharaman 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 seniors officers of the Ministry of Finance.
The GST Council has made the following recommendations on Law & Procedures changes.
1. Measures for Trade facilitation:
a. Interest for delay in payment of GST to be charged on the net cash tax liability w.e.f.
01.07.2017 (Law to be amended retrospectively).
b. Where registrations have been cancelled till 14.03.2020, application for revocation of
cancellation of registration can be filled up to 30.06.2020 (extension of period of
application as one-time measure to facilitate those who want to conduct business).
c. Annual Return:
i. Relaxation to MSMEs from furnishing of Reconciliation Statement in FORM
GSTR-9C, for the financial year 2018-19, for taxpayers having aggregate
turnover below Rs. 5 crores;
ii. Due date for filing the Annual return and the Reconciliation Statement for
financial year 2018-19 to be extended to 30.06.2020; and
iii. Late fees not to be levied for delayed filing of the Annual return and the
Reconciliation Statement for financial year 2017-18 and 2018-19 for taxpayers
with aggregate turnover less than Rs. 2 crores.
d. A new facility called ‘Know Your Supplier’ to be introduced so as to enable every
registered person to have some basic information about the suppliers with whom they
conduct or propose to conduct business.
e. The requirement of furnishing FORM GSTR-1 for 2019-20 to be waived for taxpayers
who could not opt for availing the option of special composition scheme under
notification No. 2/2019-Central Tax (Rate) dated 07.03.2019 by filing FORM CMP-02.
f. A special procedure is being prescribed for registered persons who are corporate debtors under the provisions of the Insolvency and Bankruptcy Code, 2016 and are undergoing the corporate insolvency resolution process, so as to enable them to comply with the provisions of GST Laws during the CIRP period.
g. Extension of due dates for FORM GSTR-3B for the month of July, 2019 to January,
2020 till 24 March, 2020 for registered persons having principal place of business in
the Union territory of Ladakh. Similar extension is also recommended for FORM
GSTR-1 & FORM GSTR-7.

h. Bunching of refund claims allowed across financial years to facilitate exporters.
2. Deferment of E-invoice and QR Code:
a. Certain class of registered persons (insurance company, banking company, financial institution, non-banking financial institution, GTA, passenger transportation service etc.) to be exempted from issuing e-invoices or capturing dynamic QR code; and
b. The dates for implementation of e-invoicing and QR Code to be extended to 01.10.2020.
3. Deferment of e-wallet Scheme:
a. Extension of the time to finalize e-Wallet scheme up to 31.03.2021; and
b. Extension of the present exemptions from IGST and Cess on the imports made
under the AA/EPCG/EOU schemes up to 31.03.2021.
4. Continuation of existing system of furnishing FORM GSTR-1 & FORM GSTR-3B till
September, 2020;
5. Other new initiatives:
a. Seeking information return from Banks;
b. To curb fake invoicing and fraudulent passing of ITC, restrictions to be imposed on passing of the ITC in case of new GST registrations, before physical verification of premises and Financial KYC of the registered person.
6. Issuance of circulars in respect of:
a. Clarification in apportionment of ITC in cases of business reorganization under section
18 (3) of CGST Act read with rule 41(1) of CGST Rules;
b. Appeals during non-constitution of the Appellate Tribunal;
c. Clarification on refund related issues; and
d. Clarification on special procedure for registered persons who are corporate debtors under the provisions of the Insolvency and Bankruptcy Code, 2016, undergoing the corporate insolvency resolution process.
7. Amendments to the CGST Rules: Key amendments are as below:
a. Procedure for reversal of input tax credit in respect of capital goods partly used for affecting taxable supplies and partly for exempt supplies under rule 43 (1) (c);
b. ceiling to be fixed for the value of the export supply for the purpose of calculation of refund on zero rated supplies;
c. to allow for refund to be sanctioned in both cash and credit in case of excess payment of tax;
d. to provide for recovery of refund on export of goods where export proceeds are not realized within the time prescribed under FEMA; and
e. to operationalize Aadhaar authentication for new taxpayers.
8. Certain amendments to be carried out in the GST laws.
*****
Note: The recommendations of the GST Council have been presented in this release in simple
language for information of all stakeholders. The same would be given effect through relevant
Circulars/Notifications or amendment in GST laws which alone shall have the force of law.
RM/KMN

 

38th GST Council Meeting – Presentation on GST Revenue Trends

The 38th meeting of the GST Council met under the Chairmanship of the Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman here today. The meeting was also attended by the Union Minister of State for Finance & Corporate Affairs Shri Anurag Thakur besides Finance Ministers of States & UTs and senior officers of Ministry of Finance.

A presentation was made to the 38thGST Council on the issue of revenue, GST rate structure and compensation needs of the States. Before the presentation, the Convenor of GoM on revenue augmentation Sh. Sushil Kumar Modi, Dy CM (Bihar) made opening remarks about the revenue position and future roadmap. The presentation made thereafter was based on discussions in the Committee of officers of State and Centre on revenue augmentation. The revenue trends since inception of GST as shown below was taken note of –

A constructive discussion followed the presentation covered a wide range of issues such as measures for encouraging voluntary compliance, expanding tax base, measures to improve return filing and tax collection and rate rationalisation. Automation measures such as e-invoice, new return system, QR code on bills were also discussed. To exchange knowledge about best practices of tax administration, State of UP and UT of J&K made presentation on their effort to improve GST collection, as in the recent past they have shown a healthy growth in compliance.

GST Council gave necessary guidance on further analysis regarding exemption and concession impact analysis, tax base analysis, sensitivity analysis and compliance measures needed to keep pace with revenue needs. The Council also directed for expeditious implementation of IT and other initiatives.

38th GST Council’s decisions On Rate Changes

The 38th meeting of the GST Council met under the Chairmanship of the Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman here today. The meeting was also attended by the Union Minister of State for Finance & Corporate Affairs Shri Anurag Thakur  besides Finance Ministers of States & UTs and senior officers of Ministry of Finance.  The GSTCouncil recommended the following relating to changes in GST rates, exemptions.

  1. To exempt upfront amount payable for long term lease of industrial/ financial infrastructure plots by an entity having 20% or more ownership of Central or State Government. Presently, the exemption is available to an entity having 50% or more ownership of Central or State Government. This change shall become effective from 1st January, 2020.
  2. To levy a single rate of GST @ 28% on both State run and State authorized lottery. This change shall become effective from 1st March, 2020.
  3. The Council also considered the rate of GST rate on Woven and Non-Woven Bags and sacks  of polyethylene or polypropylene strips or the like , whether or not laminated, of a kind used for packing of goods ( HS code 3923/6305)in view of the requests received post the changes recommended on such goods in last meeting and recommended to raise the GST to a uniform rate of 18%(from 12%) on all such bags falling under HS 3923/6305 including Flexible Intermediate Bulk Containers (FIBC). This change shall become effective from 1st January, 2020.

[This note presents the decision of the GST Council in simple language for easy understanding which would be given effect to through Gazette notifications/ circulars which shall have force of law.]

 

RM/KMN

GST Rate on Services as Recommended by The GST Council in Its 37th Meeting

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 PramodSawant,  Finance Ministers of States & UTs and seniors officers of the Ministry of Finance .

GST Council took following decisions relating to changes in GST rates, ITC eligibility criteria, exemptions and clarifications on connected issues.

(A)         EXEMPTIONS / CHANGES IN GST RATES / ITC ELIGIBILITY CRITERIA:

Rate reduction sector wise:

Hospitality and tourism:

  1. To reduce the rate of GST on hotel accommodation service as below: –

Transaction Value per Unit (Rs) per day GST
Rs 1000 and less Nil
Rs 1001 to Rs 7500 12%
Rs 7501 and more 18%
  1. To reduce rate of GST on outdoor catering services other than in premises having daily tariff of unit of accommodation of Rs 7501 from present 18% with ITC to 5% without ITC.  The rate shall be mandatory for all kinds of catering. Catering in premises with daily tariff of unit of accommodation is Rs 7501 and above shall remain at 18% with ITC.

Job work service:

  1. To reduce rate of GST from 5% to 1.5% on supply of job work services in relation to diamonds.
  2. To reduce rate of GST from 18%to 12% on supply of machine job work such as in engineering industry, except supply of job work in relation to bus body building which would remain at 18%.

Exemption sector wise:

Warehousing:

  1. To exempt prospectivelyservices 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.

Transportation:

  1. To increase the validity of conditional exemption of GST on export freight by air or sea by another year, i.e. till 30.09.2020.

Insurance:

  1. To exempt “BANGLA SHASYA BIMA” (BSB) crop insurance scheme of West Bengal Government.
  2. To exempt 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.

Export promotion:

  1. To exempt 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.
  2. To issue a notification under Section 13(13) of IGST Act notifying the place of supply of specified R&D services (such as Integrated discovery and development, Evaluation of the efficacy of new chemical/ biological entities in animal models of disease,Evaluation of biological activity of novel chemical/ biological entities in in-vitro assays,Drug metabolism and pharmacokinetics of new chemical entities,Safety Assessment/ Toxicology,Stability Studies,Bio Equivalence and Bio Availability Studies, Clinical trials,Bio analytical studies) provided by Indian pharma companies to foreign service recipients, as the place of effective use and enjoyment of a service i.e. location of the service recipient.
  3. To clarify that 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.

Miscellaneous

  1. To allow the registered authors an option to pay GST on royalty charged from publishers under forward charge and observe regular GST compliance.
  2. To notify grant of liquor licence by State Governments against payment of license fee as a “no supply” to remove implementational ambiguity on the subject.
  3. To exempt services related to FIFA Under-17 Women’s World Cup 2020 similar to existing exemption given to FIFA U17 World Cup 2017.

(B) RATIONALIZATION/ TRADE FACILITATION MEASURES:

  1. To allow payment of GSTon securities lending service under reverse charge mechanism (RCM) at the merit rate of 18% and to clarify 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.
  2. To allow RCM to suppliers paying GST @ 5% on renting of vehicles, from registered person other than body corporate (LLP, proprietorship) when services provided to body corporate entities.

(C) CLARIFICATIONS:

  1.             To clarify the scope of the entry ‘services of exploration, mining or drilling of petroleum crude or natural gas or both”.
  2. To clarify taxability of Passenger Service Fee (PSF) and User Development Fee (UDF) levied by airport operators.

Note: It is proposed to issue notifications giving effect to these recommendations of the Council on 1st October, 2019.

[This note presents the decision of the GST Council in simple language for easy understanding which would be given effect to through Gazette notifications/ circulars which shall have force of law.]

*****

RM/KMN



(Release ID: 1585718)

GST Rate on Goods as Recommended by The GST Council in Its 37th Meeting

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.

  1. GST rates reduction, –
  2. 18% to 12% on parts of Slide Fasteners
  3. 18% to 5% on Marine Fuel 0.5% (FO)
  4. 12% to 5% on Wet Grinders(consisting stone as a grinder)
  5. 5% to Nil on:-
  6. Dried tamarind
  7. Plates and cups made up of leaves/ flowers/bark
  8. 3% to 0.25% on cut and polished semi- precious stones
  9. Applicable rate to 5% on specified goods for petroleum operations undertaken under Hydrocarbon Exploration Licensing Policy (HELP)

 

  1. Exemptions from GST/IGST on:-

 

  1. imports of specified defence goods not being manufactured indigenously (upto 2024)
  2. supply of goods and services to FIFA and other specified persons for organizing the Under-17 Women’s Football World Cup in India.
  3.  supply of goods and services to Food and Agriculture Organisation (FAO) for specified projects in India.

 

 

  1. GST rates have been recommended to be increased from, –
  1. 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.
  2. 18% to 28% +12% compensation cess on caffeinated Beverages

 

  1. Measures for Export Promotion
  1. Exemption from GST/IGST:-
  1. at the time of import on Silver/Platinum by specified nominated agencies
  2. supply of Silver/Platinum by specified nominated agency to exporters for exports of Jewellery,
  1. 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.
  1. 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%)

 

  1. GST concession in certain cases for specific period: –
  1. 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.

 

  1. 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.

 

  1. 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%)

 

  1. 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.

 

  1. Clarifications as regards applicability of GST rate in respect of certain goods recommended by GST Council which inter-alia includes: 
      1. 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.
  1. All “mechanical sprayers” falling under HS Code 8424 would attract 12% GST.
  2. 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.
  1. 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%.
  2. Almond milk is classifiable under HS code 22029990 and attracts GST rate of 18%.
  3. 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.]

 

RM/KMN

(Release ID: 1585717)