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

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.


Does GTA Services fall under Notification No.8/2017-Central Tax (Rate)?

Before we go and conclude on the topic “Does GTA Services fall under Notification No.8/2017- Central Tax (Rate)” first let’s understand what is reverse charge? where it is applicable along with in which cases it is exempted.

In the normal course of business, taxes are paid by the recipient of goods or services or both to the supplier of goods or services or both and the supplier, in turn, remits the amount of tax collected to the respective tax authorities. In case of reverse charge, the recipient will pay on behalf of the supplier of goods or services or both.  This is clearly defined in sub-section 98 of Section 2 of CGST Act

“reverse charge” means the liability to pay tax by the recipient of supply of goods or services or both instead of the supplier of such goods or services or both under sub-section (3) or sub-section (4) of section 9, or under sub-section (3) or subsection (4) of section 5 of the Integrated Goods and Services Tax Act;

The category of goods or services on which reverse charge is applicable is clearly defined sub-section (3)  of section 9 of CGST Act

The Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.

 Sub-section (4)  of section 9 of CGST Act defines clearly states that in case of supply of goods from unregistered taxpayers, the recipient should pay taxes.

The central tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.

Notification No.4/2017-Central Tax (Rate), clearly gives the list of goods on which reverse charge is applicable.

RS on Goods1

RS on Goods2
RS Goods_2

Notification No. 13/2017- Central Tax (Rate) provides the list of services under which reverse charge is applicable on the list of services under CGST Act.

RS Services 1

RS Services 2

From the above two notifications, it is clear that Reverse charge is applicable on all inward supplies of goods and services. Previously Reverse Charge was applicable only for the services and now under GST it is applicable for the goods also. As GST is a new and taxpayers who are registered under VAT in the erstwhile regime may or not may not be aware in all the states. In order to provide some ease of doing business, the government has given some exemptions for the applicability of Reverse Charge on inward supplies wide Notification No.8/2017-Central Tax (Rate), the same is given below

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts intra-State supplies of goods or services or both received by a registered person from any supplier, who is not registered, from the whole of the central tax leviable thereon under sub-section (4) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017):

Provided that the said exemption shall not be applicable where the aggregate value of such supplies of goods or service or both received by a registered person from any or all the suppliers, who is or are not registered, exceeds five thousand rupees in a day.

Now in the trade, one question which is asked very frequently is that is reverse charge exemption applicable on services like GTA, hamali charges or other freight charges paid by the taxpayers on day to day basis?

If we go through Notification No.8/2017-Central Tax (Rate), it is given for all the inwards supplies from unregistered tax payers by a registered taxpayer. So the above question does not arise that. If the inward supplies based on the above are below Rs 5000 in a day, then reverse charge is not applicable and benefit of the said notification can be taken.

If you have any different view, please share your views in the comments section so that it will be helpful for coming to a common understanding.

GST Tip – 272

As per Notification No. 11/2017-Central Tax (Rate), services falling under HSN / SAC Code 9965 i.e for Goods transport services, the applicable CGST rate is cases for transportation of goods by Rail, Vessel and by GTA it is 2.5% and for Transport of goods in containers by rail by any person other than Indian Railways it is 6% and in all other cases it is 9%.