TMI BlogSector Wise GST Council Meeting- Proposed Changes/ ClarificationsX X X X Extracts X X X X X X X X Extracts X X X X ..... Sector Wise GST Council Meeting- Proposed Changes/ Clarifications - By: - Rachit Agarwal - Goods and Services Tax - GST - Dated:- 7-7-2022 - - Sector Wise GST Council Meeting- Proposed Changes/ Clarifications Printing Industry Description From To Printing, writing, or drawing ink 12% 18% Description of goods From To Maps and hydrographic or similar charts of all kinds, including atlases, wall maps, topographical plans and globes, printed Nil 12% Machines and Tools Description From To Knives with cutting blades, Paper knives, Pencil sharpeners and blades therefor, Spoons, forks, ladles, skimmers, cake-servers etc 12% 18% Power driven pumps primarily designed for handling water such as centrifugal pumps, deep tube-well turbine pumps, submersible pumps; Bicycle pumps 12% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18% Machines for cleaning, sorting or grading, seed, grain pulses; Machinery used in milling industry or for the working of cereals etc; Pawan Chakki that is Air Based Atta Chakki; Wet grinder; 5% 18% Machines for cleaning, sorting or grading eggs, fruit or other agricultural produce and its parts, Milking machines and dairy machinery 12% 18% Electrical LED Lights Description From To LED Lamps, lights and fixture, their metal printed circuits board; 12% 18% Drawing Instruments: Description From To Drawing and marking out instruments 12% 18% Heater Industries: Description From To Solar Water Heater and system; 5% 12% Leather Industry: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Description From To Prepared/finished leather/chamois leather / composition leathers; 5% 12% Job work in relation to processing of hides, skins and leather 5% 12% Job work in relation to manufacture of leather goods and footwear 5% 12% Banking services: Description From To Services Services supplied by foreman to chit fund 12% 18% Cheques, lose or in book form Nil 18% Exemption on following services is being withdrawn- Services by RBI, IRDA, SEBI, FSSAI, GSTN. Tax Rates on Job Work services: Description From To Services Job work in relation to processing of hides, skins and leather ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5% 12% Job work in relation to manufacture of leather goods and footwear 5% 12% Job work in relation to manufacture of clay bricks 5% 12% Tax Rates on Works Contract Services: Description From To Services Works contract for roads, bridges, railways, metro, effluent treatment plant, crematorium etc. 12% 18% Works contract supplied to central and state governments, local authorities for historical monuments, canals, dams, pipelines, plants for water supply, educational institutions, hospitals etc. sub-contractor thereof 12% 18% Works contract supplied to central and state governments, union territories local authorities involving predominantly earthwork and sub-contracts thereof 5% 12% Health Industry: Description From ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... To Ostomy Appliances 12% 5% Orthopedic appliance- Splints and other fracture appliances; artificial parts of the body; other appliances which are worn or carried, or implanted in the body, to compensate for a defect or disability; intraocular lens 12% 5% IGST on import of Diethylcarbamazine (DEC) tablets supplied free of cost for National Filariasis Elimination Programme 5% Nil Exemption on following services is being withdrawn- Services provided by the cord blood banks by way of preservation of stem cells Like CETPs, common bio-medical waste treatment facilities for treatment or disposal of biomedical waste shall be taxed at 12% so as to allow them ITC Room rent (excluding ICU) exceeding Rs 5000 per day per patient charged by a hospital shall be taxed to the extent of amount charged for the room at 5% without ITC. Services in form of Assisted Reproductive Technology (ART)/ In vitro fertilizatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n (IVF) are covered under the definition of health care services for the purpose of exemption under GST. Packaging Industry Description From To Tetra Pak (Aseptic Packaging Paper) 12% 18% Tar Manufacturing Industry: Description From To Tar (whether from coal, coal gasification plants, producer Gas plants and Coke Oven Plants. 5%/18% 18% Diamond Industry: Description From To Cut and Polished diamonds 0.25% 1.5% Defence Items: Description From To IGST on specified defence items imported by private entities/vendors, when end-user is the Defence forces. Applicable rate Nil Transport services: Description From To ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Transport of goods and passengers by ropeways. 18% 5% (with ITC of services) Renting of truck/goods carriage where cost of fuel is included 18% 12% Exemption on transport of passengers by air to and from NE states Bagdogra is being restricted to economy class Exemption on following services is being withdrawn- Transportation by rail or a vessel of railway equipment and material. Services associated with transit cargo both to and from Nepal and Bhutan are covered by exemption under entry 9B of notification No. 12/2017-CT(R) dated 28.06.2017. Renting of vehicle with operator for transportation of goods on time basis is classifiable under Heading 9966 (rental services of transport vehicles with operators) and attracts GST at 18%.GST on such renting where cost of fuel is included in the consideration charged is being prescribed at 12%. Additional fee collected in the form of higher toll charges from vehicles not having Fastag is essentially payment of toll for allowing access to roads or brid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ges to such vehicles and shall be given the same tax treatment as given to toll charges. Renting of motor vehicles for transport of passengers to a body corporate for a period (time) is taxable in the hands of body corporate under RCM. The expression public transport used in the exemption entry at SI No. 17(d) of notification No. 12/2017-CT(R) , which exempts transport of passengers by public transport other than predominantly for tourism purpose, in a vessel between places located in India, means thatsuch transport should be open to public for point to point transport [e.g. such transport in Andaman and Nicobar islands]. Goods Transport Agency Goods transport agency (GTA) is being given option to pay GST at 5% or 12% under forward charge; option to be exercised at the beginning of Financial Year. RCM option to continue. Service provided by Indian Tour operator to a foreign resident for a tour partially in India and partially outside India is to be subject to tax proportionate to the tour conducted in India for such foreign tourist subject to conditions that this concession does not exceed half of tour duration. Food Produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts Industry: Hitherto, GST was exempted on specified food items, grains etc when not branded, or right on the brand has been foregone. It has been recommended to revise the scope of exemption to exclude from it prepackaged and pre-labelled retail pack in terms of Legal Metrology Act, including pre-packed, pre-labelled curd, lassi and butter milk. The GST rate on all forms of mango under CTH 0804, including mango pulp (other than mangoes sliced, dried) attract GST at the 12%. Entry is also being amended to make this amply clear. Raw or fresh mangoes continue to be exempt. Nicotine Polarilex Gum attracts a GST rate of 18%. Sewage treated water is exempted from GST and is not the same as purified water provided in S. No. 99 of notification 2/2017-CT(Rate). The word 'purified' is being omitted to make this amply clear. Non-powered Aircraft Industry: Description of goods From To Parts of goods of heading 8801 Nil 18% Petroleum Industry: Description of goods From ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... To Petroleum/ Coal bed methane 5% 12% Scientific Instrument Industry: Description of goods From To Scientific and technical instruments supplied to public funded research institutes 5% Applicable rate Tax Rate on E-Waste: Description of goods From To E-waste 5% 18% Renting and Warehousing Services: Allowing choice of location of a plot is part of supply of long term lease of plot of land. Therefore, location charge or preferential location charges (PLC) are part of consideration charged for long term lease of land and shall get the same treatment under GST. Exemption on following services is being withdrawn. Renting of residential dwelling to business entities (registered persons Storage or warehousing of commodities which attract tax (nuts, spices, copra, jaggery, cotton etc.) Fumigation in a warehouse of ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ricultural produce. Hospitality: Hotels Description Hotel accommodation priced upto Rs. 1000/day shall be taxed at 12% Tax exemption on training or coaching in recreational activities relating to arts or culture, or sports is being restricted to such services when supplied by an individual. Ice-cream Parlours: Due to ambiguity in GST rates on supply of ice-cream by ice-cream parlours, GST charged @ 5% without ITC on the same during the period 1.07.2017 to 5.10.2021 shall be regularized to avoid unnecessary litigation. Education Industry: Tax exemption on training or coaching in recreational activities relating to arts or culture, or sports is being restricted to such services when supplied by an individual. Application fee charged for entrance or for issuance of eligibility certificate for admission or issuance of migration certificate by universities is exempt from GST. Entertainment Industry: Casinos, Race Course and Online gaming The Council directed that the Group of Ministers on Casino, Race Course and Online Gaming re-examine the issues in its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms of reference based on further inputs from States and submit its report within a short duration. Guest Anchors to TV Channels Services provided by the guest anchors to TV channels in lieu of honorarium attract GST. Automobile Industry: Electric vehicles whether or not fitted with a battery pack, are eligible for the concessional GST rate of 5%. Clarifications on Supply impacting Construction Industry: All fly ash bricks attract same concessional rate irrespective of fly ash content The condition of 90% fly ash content with respect to fly ash bricks applies only to fly ash aggregate, and not fly ash bricks. As a simplification measure, the condition of 90% content is being omitted. Stones covered in S. No.123 of Schedule-I (such as Napa stones), even if they are ready to use and polished in minor ways [not mirror polished], attract concessional GST rate of 5%. Sale of land after leveling, laying down of drainage lines etc. is sale of land and does not attract GST. Advertisement Industry: Activity of selling of space for advertisement in souvenirs published in the form of books is eligible for concessional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GST at 5%. Postage Services: All taxable service of Department of Posts would be subject to forward charge. Hitherto certain taxable services of Department of post were taxed on reverse charge basis. E-Commerce Industry: In-principal approval for relaxation in the provisions for suppliers making supplies through E-Commerce Operators (ECOs) Waiver of requirement of mandatory registration under section 24(ix) of CGST Act for person supplying goods through ECOs, subject to certain conditions, such as- The aggregate turnover on all India basis does not exceed the turnover specified under sub-section (1) of section 22 of the CGST Act and notifications issued thereunder. The person is not making any inter-State taxable supply Composition taxpayers would be allowed to make intra-State supply through e-commerce operators subject to certain conditions. The details of the scheme will be worked out by the Law Committee of the Council. The scheme would be tentatively implemented with effect from 01.01.2023, subject to preparedness on the portal as well as by ECOs. Fiber Industry: Ginned or baled fibre is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covered in entry 24B of notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 in the category of raw vegetable fibres. The exemption under this entry is being rationalized Inverted Rated Supplies: Amendment in formula prescribed in sub-rule (5) of rule 89 of CGST Rules, 2017 for calculation of refund of unutilized Input Tax Credit on account of inverted rated structure Change in formula for calculation of refund under rule 89(5) to take into account utilization of ITC on account of inputs and input services for payment of output tax on inverted rated supplies in the same ratio in which ITC has been availed on inputs and input services during the said tax period. This would help those taxpayers who are availing ITC on input services also. Clarification on issue of claiming refund under inverted duty structure where the supplier is supplying goods under some concessional notification. Exporters: Refund for Risky Exporters Amendment in CGST Rules for handling of pending IGST refund claims: In some cases where the exporter is identified as risky exporter requiring verification by GST officers, or where there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a violation of provisions of Customs Act, the refund claims in respect of export of goods are suspended/withheld. Amendment to Rule 96 for IGST Paid Exports Amendment in rule 96 of the CGST Rules has been recommended to provide for transmission of such IGST refund claims on the portal in a system generated FORM GST RFD-01 to the jurisdictional GST authorities for processing. This would result in expeditious disposal of such IGST refund claims, after due verification by GST officers, thus benefitting such exporters. Refund Claims on Deemed Export Sales Clarification on the issues pertaining to refund claimed by the recipients of supplies regarded as deemed export No GST Reversal on sale of Exempted Duty Credit Scrips Explanation 1 after rule 43 of CGST Rules to be amended to provide that there is no requirement of reversal of input tax credit for exempted supply of Duty Credit Scrips by the exporters. Clarification for Sale from DFS to Outgoing International Passgengers Supplies from Duty Free Shops (DFS) at international terminal to outgoing international passengers to be treated as exports by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DFS and consequential refund benefit to be available to them on such supplies. Rule 95A of the CGST Rules , Circular No. 106/25/2019-GST dated 29.06.2019 and related notifications to be rescinded accordingly. Re-Credit of amount in Electronic Credit Ledger for refund in contravention of Rule 96(10) Re-credit of amount in electronic credit ledger to be provided in those cases where erroneous refund amount sanctioned to a taxpayer on account of accumulated ITC or on account of IGST paid on zero rated supply of goods or services, in contravention of rule 96(10) of the CGST Rules , is deposited by him along with interest and penalty, wherever applicable. A new FORM GST PMT-03A is introduced for the same. This will enable the taxpayers to get re-credit of the amount of erroneous refund, paid back by them, in their electronic credit ledger. GST Refund for Exporters of Electricity Amendment in CGST Rules to provide for refund of unutilized Input Tax Credit on account of Export of Electricity. This would facilitate the exporters of electricity in claiming refund of utilized ITC on zero rated supplies. Time Period of 01.03.2020 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28.02.2022 to be excluded from Limitation Period: Time period from 01.03.2020 to 28.02.2022 to be excluded from calculation of the limitation period for filing refund claim by an applicant under section 54 and 55 of CGST Act , as well as for issuance of demand/ order (by proper officer) in respect of erroneous refunds under section 73 of CGST Act. Further, limitation under section 73 for FY 2017-18 for issuance of order in respect of other demands linked with due date of annual return, to be extended till 30 th September, 2023. Notifying of Substituted Section 50(3) - No Interest on Wrongly availed credit but not utilized Clause (c) of section 110 and section 111 of the Finance Act, 2022 to be notified by Central Government at the earliest . These provisions relate to- retrospective amendment in section 50(3) of CGST Act, with effect from 01.07.2017,to provide that interest will be payable on the wrongly availed ITC only when the same is utilized; Transfer of Cash Ledger Balance for Distinct Persons Amendment in sub-section (10) of section 49 of CGST Act to provide for transfer of balance in electronic cash ledger of a registered p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson to electronic cash ledger of CGST and IGST of a distinct person. The rules providing for the manner of calculation of interest under section 50 of CGST Act have also been recommended for more clarity. This will remove ambiguities regarding manner of calculation of interest and will also provide for transfer of balance in CGST and IGST cash ledgers between distinct persons, thereby improving liquidity and cash flows of such taxpayers. Clarification on Fake Invoices and Utilization of Cash Ledger and Credit Ledgers Clarification on various issues relating to applicability of demand and penalty provisions under the CGST Act in respect of transactions involving fake invoices. Clarification on utilization of the amounts available in the electronic credit ledger and the electronic cash ledger for payment of tax and other liabilities. UPI IMPS to be provided as an additional mode for payment of Goods and Services Tax to taxpayers under Rule 87(3) of CGST Rules. IGST Exemption under Advance Authorization/ EPCG Scheme Present exemption of IGST on import of goods under AA/EPCG/EOU scheme to be continued and E-wallet scheme not to be pursued further. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Clarification for Utilization of amount available in Credit/ Cash Ledger Clarification on utilization of the amounts available in the electronic credit ledger and the electronic cash ledger for payment of tax and other liabilities. Clarification on various issues relating to interpretation of section 17(5) of the CGST Act ; GST on Perquisites by Employer to Employee: Clarification on the issue of perquisites provided by employer to the employees as per contractual agreement; Return Filing: GSTR 3B Clarification on mandatory furnishing of correct and proper information of inter-State supplies and amount of ineligible/blocked Input Tax Credit and reversal thereof in return in FORM GSTR-3B. GSTR 9 Annual Return- Small Tax Payers Exemption from filing annual return in FORM GSTR-9 / 9A for FY 2021-22 to be provided to taxpayers having AATO upto Rs. 2 crores. Waiver of Late Fees on Filing of form GSTR 4 Waiver of late fee for delay in filing FORM GSTR-4 for FY 2021-22 and extension of due date for filing FORM GST CMP-08 for Q1 of FY 2022-23: To extend the waiver of late fee under section 47 for delay in filing FORM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GSTR-4 for FY 2021-22 by approximately four more weeks, i.e. till 28.07.2022 ( The existing waiver is for the period from 01.05.2022 till 30.06.2022 ) Extension of filing of GST CMP-08 (Composition Scheme) To extend the due date of filing of FORM GST CMP-08 for the 1 st quarter of FY 2022-23 from 18.07.2022 to 31.07.2022. GSTN has also been asked to expeditiously resolve the issue of negative balance in Electronic Cash Ledger being faced by some of the composition taxpayers. Automatic Revocation of Suspended Registration on account of non Filing of Returns Provision for automatic revocation of suspension of registration in cases where suspension of registration was done by the system under Rule 21A(2A) of CGST Rules , for non-compliance in terms of clause (b) or clause (c) of sub-section (2) of section 29 [continuous non-filing of specified number of returns] , once all the pending returns are filed on the portal by the taxpayer. ( Amendment in rule 21A ) Changes in GSTR 3B after receipt of suggestions from Stakeholders Proposal for comprehensive changes in FORM GSTR-3B to be placed in public domain for seeking inputs/suggestions of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he stakeholders. SEZ Units: In respect of refunds pertaining to supplies to SEZ Developer/Unit, an Explanation to be inserted in sub-rule (1) of rule 89 of CGST Rules to clarify that specified officer under the said sub-rule shall mean the specified officer or authorized officer , as defined under SEZ Rules, 2006. GST Appellate Tribunal: The Council has decided to constitute a Group of Ministers to address various concerns raised by the States in relation to constitution of GST Appellate Tribunal and make recommendations for appropriate amendments in CGST Act. Apportionment of IGST among the States The GST Council approved ad-hoc apportionment of IGST to the extent of Rs. 27,000 crores and release of 50% of this amount, i.e. Rs. 13,500 crores to the States. Non-Compliant Tax Payers: The GoM on IT Reforms, inter alia, recommended that the GSTN should put in place the AI/ML based mechanism to verify the antecedents of the registration applicants and an improved risk-based monitoring of their behavior post registration so that non-compliant tax payers could be identified in their infancy and appropriate action be taken so as to minimize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... risk to exchequer. - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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