Important amendments as per 47th GST Council meeting - Amendments, Exemptions & Rate Changes

[Ashwarya Agarwal]

Summary of some important amendments made in line with recommendations made in 47th GST Council meeting is as below:

E-Invoicing – Declaration required

1. As per newly inserted clause (s) to Rule 46, every taxpayer having aggregate turnover in any preceding financial year from 2017-18 onwards more than 20 Crore, but is not required to issue e-invoice (eg. Govt. Dept, Bank, NBFC, Goods Transport Agency, etc.) should contain following declaration on its tax invoice:

“I/We hereby declare that though our aggregate turnover in any preceding financial year from 2017-18 onwards is more than the aggregate turnover notified under sub-rule (4) of rule 48, we are not required to prepare an invoice in terms of the provisions of the said sub-rule.”

Electronic Cash Ledger

2. UPI and IMPS have been included as new modes of payment for depositing amount in Electronic Cash Ledger of taxpayer;
3. As per newly inserted sub-rule (14) to Rule 87, a taxpayer can transfer the amount available in Electronic Cash Ledger of one GSTIN to another GSTIN of same PAN (i.e. Distinct persons) in Form GST PMT 09. This facility is available for CGST & IGST only.

Interest Calculation

4. As per recent substituted sub-section (3) of section 50, it has been made clear that in case of Input Tax Credit (ITC) wrongly availed, interest shall be applicable only in case of ITC wrongly availed and utilized. In order to bring more clarity, new rule 88B is inserted to prescribe the manner of calculation of interest in case of delayed payment of tax. It also prescribes manner of calculation interest in case of ITC wrongly availed & utilized.

GSTR 3B – Amended

5. Section 9(5) read with Notification 17/2017-CGST(R) provides categories of services supplied through electronic commerce operator, and the tax on supply of which shall be paid by the electronic commerce operator under Reverse Charge. This includes services like Taxi, Hotel Accommodation, Restaurant and House Keeping.

Now Form GSTR 3B is amended to insert a new table 3.1.1 which requires separate disclosure of above-mentioned supplies made through Electronic Commerce Operator (ECO) and applicable tax thereon.

6. Further amendments are made which now requires separate disclosure of ITC reclaimed and ITC in-eligible as per section 16(4).

Service-Related Changes in Rate and exemptions (w.e.f 18.07.22)

7. Government Construction service provided as Works contract, as principal contractor or sub-contractor shall be taxable @ 18%;
8. Exemption given to Hotel Accommodation service having room rent upto Rs. 1,000 per day is now withdrawn;
9. Now a Goods Transport Agency (GTA) shall have option to itself charge and collect GST @ 5% on its invoice. This option is subject to following conditions:

1. GTA shall not be eligible take credit of input tax paid on goods and services used in supplying the service,
2. This option to pay GST itself on the services supplied by it during a FY shall be exercised by making a declaration in Annexure V on or before the 15th March of the preceding FY. Option for the current FY 2022-2023 shall be exercised on or before the 16th August, 2022, and
3. This option once exercised shall not be allowed to be changed within a period of one year from the date of exercising the option and will remain valid till the end of the financial year for which it is exercised.

10. GST 2 5% levied on Hospital rooms (other than ICU) having room charges exceeding Rs. 5,000 per day to a person receiving health care services. This levy is subject to no ITC;
11. Exemption on Renting of Residential dwellings to GST Registered person is withdrawn. However, as a relief, the applicable GST on this service is to be paid by the registered recipient under reverse charge;
12. There has been value-based exemption of Rs. 750 & Rs. 1,500 on services provided by Goods Transport Agency (GTA) for small consignments. This exemption is now withdrawn.
13. Exemption on services provided by way of storage or warehousing of nuts, spices, copra, sugarcane, jaggery, raw vegetable fibres such as cotton, flax, jute etc., indigo, unmanufactured tobacco, betel leaves, tendu leaves, coffee and tea is withdrawn. Now this exemption shall continue only for cereals, pulses, fruits and vegetables.
14. Exemptions on service provided by various Government bodies like RBI, SEBI, IRDA, FSSAI & GSTN is now being withdrawn;
15. Definitions of following terms inserted in paragraph 4 of Notification 11/2017-CT(R ):

1. Print media
2. Clinical establishment
3. Health care services
4. Goods transport agency

Goods-Related Changes in Rate and exemptions (w.e.f 18.07.22)

16. Exemption on various non-branded food items like Wheat, Rice, Flour, Paneer, Honey, Gur, etc which are pre-packaged and labelled has been withdrawn. As per notification, the meaning of term ‘pre-packaged and labelled’ is to be derived from term ‘pre-packaged commodity’ as defined in Legal Metrology Act, 2009.

After combined reading of provisions of the Legal Metrology Act, 2009 and rules, it is understood that the term ‘pre-packaged commodity’ does not include following packages:

1. Packages more than 25 kgs.;
2. Packages more than 50 Kgs in case of agricultural farm produce;
3. Packages of 10gm or 10ml or less; and
4. Packages meant for Industrial and / or Institutional consumers.

Hence packages other than above mentioned list shall become taxable. Few illustrations for easy understanding is as below:

• Wheat bag of 25 kg meant for sale to consumer – Taxable
• Wheat bag of 25 Kg for sale to wholesaler for further sale – Taxable;
• Wheat bag of 25 Kg for Industrial use – Exempt;
• Wheat sold loose – Exempt.

No Refund in case of Inverted Duty u/s 54

17. Amendment made to Notn. 5/2017-CT(R) to notify additional list of items on which no refund of unutilised input tax credit (ITC) shall be allowed u/s 54(3), where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on the output supplies of such goods. Such items include various types of Edible Oils, Edible Mixture, Coal, Briquettes, ovoid’s and similar solid fuels manufactured from coal, Lignite & Peat.

Fly Ash Bricks – Clarification and Changes

18. There has been long confusion on classification and GST rate on Fly Ash bricks. This confusion was due to an adverse Advance Ruling decision which gave an interpretation that the condition related to 90% percentage of Fly Ash content in fly ash aggregates, would be applicable for Fly ash bricks also.

This confusion is now put to an end by removing the condition related to fly ash content.

19. There is further amendment made in law related to supply of Fly Ash Bricks, Fly ash Aggregates and Fly ash Blocks, to impose following:

1. Supplier of Fly Ash Bricks, Fly ash Aggregates and Fly ash Blocks is not eligible for benefit of exemption from registration, if turnover does not exceed 40 Lacs. The supplier will be liable for registration is his turnover exceeds 20 Lacs; and
2. Supplier cannot opt for composition scheme.

Extension of time limits for Adjudication and Refund Application

20. CBIC has issued Notn. 13/2022-CT to extend following time limits:

1. extends the time limit specified under section 73(10) for issuance of order under section 73(9), for recovery of tax not paid or short paid or of input tax credit wrongly availed or utilized, in respect of a tax period for the financial year 2017-18, up to the day of September, 2023;
2. excludes the period from the 1st day of March, 2020 to the 28th day of February, 2022 for computation of period of limitation under section 73(10) for issuance of order under section 73(9), for recovery of erroneous refund;
3. excludes the period from the 1st day of March, 2020 to the 28th day of February, 2022 for computation of period of limitation for filing refund application under section 54 or section 55

Annual Return – GSTR 9 / 9A

21. Notn. 10/2022-CT has been issued to exempt the registered person whose aggregate turnover in the financial year 2021-22 is up to two crore rupees, from filing annual return for the said financial year.