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Key Highlights: 50th GST CouncilMeeting

I. Recommendations relating to

A. Goods

  • GST has been reduced on
  • uncooked/unfried snack pellets to 5%.
  • imitation zari thread or yarn in trade parlance to 5%
  • LD slag to 5% in order to encourage better utilization and for protection of environment.
  • fish soluble paste to 5%
  • IGST is exempted on import of
  • cancer medicine named Dinutuximab (Quarziba) for personal use.
  • medicines and Food for Special Medical Purposes (FSMP) used in the treatment of rare diseases
    enlisted under the National Policy for Rare Diseases, 2021 for personal use or by Centres of
    Excellence or any person or institution on recommendation of any of the listed Centres of Excellence.
  • on imports of gold, silver or platinum by RBL Bank and ICBC Bank.
  • supply of raw cotton, including kala cotton, by agriculturists to cooperatives is taxable under reverse
    charge mechanism (RCM)
  • amend compensation cess notification to include all the utility vehicles by whatever name called having
    o Length more than 4 m,
    o Engine capacity more than 1500 cc and
    o Ground Clearance of 17 cm & above.

B. Services

  • GST exemption on satellite launch services supplied by ISRO, Antrix Corporation Limited and New Space
    India Limited (NSIL) may extend to private sector.
  • GTAs are not required to file declaration for paying GST under forward charge every year. If they have
    exercised this option once, it shall be deemed to be exercised for the next and future financial years unless
    they file a declaration that they want to revert to RCM.
  • Services supplied by a director to the company or body corporate in his private or personal capacity
    is not taxable under RCM. If the services are provided in the capacity of director of that company or
    body corporate shall be taxable under RCM in the hands of the company or body corporate.
  • Supply of food and beverages in cinema halls is taxable as restaurant service as long as
    o they are supplied by way of or as part of a service and
    o supplied independently of the cinema exhibition service.
    Where the sale of cinema ticket and supply of food and beverages are clubbed together and satisfies
    conditions of composite supply, the entire supply will attract GST at the rate of exhibition of cinema.

II. Taxability in case of Casinos, Race Courses and Online Gaming

The GST Council recommended the following:

  • Online gaming and horse racing as taxable actionable claims
  • Casino, Horse Racing and Online gaming to be taxed at the uniform rate of 28%.
  • Tax will be applicable
  • on the face value of the chips purchased in the case of casinos
  • on the full value of the bets placed with bookmaker/totalizator in the case of Horse Racing and
  • on the full value of the bets placed in case of the Online Gaming.

III. Measures for facilitation of trade

  • The Council has recommended rules governing appointment and conditions of President and Members of the proposed GST Appellate Tribunal for enabling smooth constitution and functioning of the Tribunal. The Tribunal may be notified by the Centre w.e.f 01.08.2023.
  • The Council has recommended that the relaxations provided in FY 2021-22 in respect of various tables of FORM GSTR-9 and FORM GSTR-9C be continued for FY 2022-23. Further, the exemption to smaller taxpayers from filing of annual return having aggregate annual turnover up to two crore rupees also continues.
  • The Council will clarify through a circular that Input Services Distributor (ISD) mechanism is not
    mandatory for distribution of input tax credit (ITC) of common input services procured from third
    parties to the distinct persons. Also, to clarify issues regarding taxability of internally generated services between distinct person.
  • Circular to be issued to clarify
  • refund related issues:
    ▪ w.e.f. 01.01.2022, refund of accumulated ITC for zero rated supplies without the payment of tax to be restricted to ITC on inward supplies reflected in FORM GSTR-2B of the said tax period.
    ▪ value of export goods to be included while calculating “adjusted total turnover”.
    ▪ admissibility of refund in cases where export of goods, or the realization of payment for export of
    services is made after the time limit provided
    ▪ TCS liability in cases where multiple E-commerce Operators (ECOs) are involved in a single
    transaction of supply of goods or services or both.
    ▪ in cases of supply of taxable services by or through an ECO or by a supplier of OIDAR services to an
    unregistered recipient, only the name of the State of the recipient in to be required on the tax invoice.
  • remove ambiguity and legal disputes on various issues related to
    ▪ the registered person crossing the threshold limit required to issue e-invoices for the supplies made to Government Departments or establishments registered solely for the purpose of TDS
    ▪ manner of calculation of interest amount liable to be paid
  • in respect of wrongly availed and utilized IGST credit
  • wrong availment of IGST credit,
  • the balance of ITC in electronic credit ledger, under the heads of IGST, CGST and SGST taken
    together
    ▪ mere holding of securities of a subsidiary company by a holding company cannot be treated as a supply
    of services and therefore, cannot be taxed under GST.
    ▪ to follow similar procedure for verification of ITC in cases involving difference in ITC availed in
    FORM GSTR-3B as compared to FORM GSTR-2A during the period 01.04.2019 to 31.12.2021.
    ▪ GST liability and liability to revers ITC in case of involving warranty replacement of parts and repair
    services during warranty period without any consideration from the customers.
  • Special procedure to be provided to enable manual filing of appeal against the orders passed by proper officers in respect of TRAN-1/ TRAN-2 claims of the registered persons.
  • Extend the amnesty schemes regarding non-filers of FORM GSTR-4, FORM GSTR-9 & FORM GSTR-10 returns, revocation of cancellation of registration and deemed withdrawal of assessment orders.

IV. Measures for streamlining compliances in GST

  • GoM mandate the E-way bill requirement for intra-State movement of Gold/ Precious stones.
  • GoM on capacity based taxation and Special Composition Scheme, council has
  • issuance of notification issuance of notification prescribing a special procedure to be followed by the
    manufacturers of tobacco, pan masala & other similar items for registration of machines and for filing of special monthly returns
  • insertion of section providing for special penalty for non-registration of machines by such manufacturers provisions to provide for restriction of IGST refund route in respect of exports of tobacco, pan masala & other similar items as well as mentha oil w.e.f. 01.10.2023.
  • Amendment regarding registration to strengthen the process and to effectively deal with the menace of fake and fraudulent registrations in GST:
  • To provide that the details of bank account, in name and PAN of the registered person required to be furnished within 30 days of grant of registration or before filing FORM GSTR-1, whichever is earlier.
  • Person who fails to do so, system-based suspension of the registration granted.
  • On compliance to the same, automatic revocation of such system-based suspension.
  • If the bank details provided are not valid, the registered person may not be allowed to furnish FORM GSTR1/IFF.
  • Physical verification of business premises is to be conducted in the presence of the applicant and provide for physical verification in high-risk cases even where Aadhaar has been authenticated.
  • Insertion of a FORM GST DRC-01D to provide for manner of recovery of the tax and interest under rule 88C which has not been paid and for which no satisfactory explanation has been furnished by the registered person.
  • System-based intimation to the taxpayers in respect of the excess availment of ITC in FORM GSTR-3B and available in FORM GSTR-2B above a certain threshold, FORM DRC-01C to be inserted.
  • FORM GSTR-3A to be amended to provide for issuance of notice for failure to furnish Annual Return in FORM GSTR-9/9A by due date.
  • FORM GSTR-5A to be amended to require OIDAR service providers to provide the details of supplies made to registered persons in India.
  • Value of supply of goods from Duty Free Shops terminal in international airports to be included in the value of exempt supplies for the purpose of reversal of input tax credit.
  • Insertion of rule to provide for manner and conditions of consent-based sharing of information of registered persons available on the common portal with other systems. Notification to be released to notify “Account Aggregators” as the systems with which information is to be shared by the common portal.

Ishan Kakkar, Associate-Indirect Tax, SW India

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