Update on 47th GST Council Meeting

GST ON CASINOS, RACE COURSE AND ONLINE GAMING

On taxability of Casino, Race Course and Online Gaming the council to re-examine the issues in its terms of reference based on further inputs from states.

RECOMMENDATIONS RELATING TO GST RATES ON GOODS AND SERVICES

A. Rate Rationalization to Remove Inverted Duty Structure:

Refund of accumulated ITC not to be allowed on flowing goods:

  • Edible Oils
  • Coal
S. No.DescriptionOld RateNew Rate
Goods
1Printing, writing or drawing ink12%18%
2Knives with cutting blades, Paper knives, Pencil sharpeners and blades therefor, Spoons, forks, ladles, skimmers, cake-servers etc
3Power driven pumps primarily designed for handling water such as centrifugal pumps, deep tube-well turbine pumps, submersible pumps; Bicycle pumps
4Machines for cleaning, sorting or grading eggs, fruit or other agricultural produce and its parts, Milking machines and dairy machinery
5LED Lamps, lights and fixture, their metal printed circuits board;
6Drawing and marking out instruments
7Machines 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%12%
8Solar Water Heater and system;
9Prepared/finished leather/chamois leather / composition leathers;
S. No.DescriptionOld RateNew Rate
Services
1Works contract for roads, bridges, railways, metro, effluent treatment plant, crematorium etc.12%18%
2Works contract supplied to central and state governments, local authorities for historical monuments, canals, dams, pipelines, plants for water supply, educational institutions, hospitals etc. & subcontractor thereof
3Job work in relation to manufacture of leather goods and footwear5%12%
4Job work in relation to manufacture of clay bricks
5Works contract supplied to central and state governments, union territories & local authorities involving predominantly earthwork and sub-contracts thereof

B. Other Key GST Rate Changes Recommended by The Council

S. No.DescriptionOld RateNew Rate
Goods
1Ostomy Appliances12%18%
2Orthopedic 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
3Tetra Pak (Aseptic Packaging Paper)
4Cut and Polished diamonds0.25%1.50%
5IGST on specified defence items imported by private entities/vendors, when end-user is the defence forcesApplicable rateNil

C. Withdrawal of Exemptions / Concessional Rate

C.1 GST was exempted on specified food items, grains etc. when not branded, or right on the brand has been foregone. It is recommended to revise the scope of exemption to exclude from it pre-packaged and pre-labelled retail pack including pre-packed, pre-labelled curd, lassi and butter milk.

C.2 In case of the following goods, exemption from GST will be withdrawn:

  S. No.DescriptionOld RateNew Rate
GST Rate Changes
1Cheques, lose or in book formNil18%
2Maps and hydrographic or similar charts of all kinds, including atlases, wall maps, topographical plans and globes, printed12%
3Parts of goods of heading 880118%

C.3 In case of the following goods, the exemption in form of a concessional rate of GST is being rationalized:

S. No.DescriptionOld RateNew Rate
GST Rate Changes
1Petroleum/ Coal bed methane5%12%
2Scientific and technical instruments supplied to public funded research institutesApplicable Rate
3E-waste18%

C4. In case of Services, following key exemptions are being rationalized:

S. No.Description
1Exemption on transport of passengers by air to and from NE states & Bagdogra is being restricted to economy class
2Hotel accommodation priced upto Rs. 1000/day shall be taxed at 12%
3Room rent (excluding ICU) exceeding Rs 5000 per day per patient charged by a hosp
4Tax 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.

E. Clarification on GST rate

E1. Goods

  • Electric vehicles whether or not fitted with a battery pack, are eligible for the concessional GST rate of 5%.
  • The GST rate on all forms of mango including mango pulp attract GST at the 12%. Raw or fresh mangoes continue to be exempt.
  • Sewage treated water is exempted from GST and is not the same as purified water.

E2. Services

  • Application fee charged for entrance or for issuance of eligibility certificate for admission or issuance of migration certificate by universities is exempt from GST.
  • Services associated with transit cargo both to and from Nepal and Bhutan are exempted
  • Activity of selling of space for advertisement in souvenirs published in the form of books is eligible for concessional GST at 5%.
  • Renting of vehicle with operator for transportation of goods on time basis attracts GST at 18%. GST on such renting where cost of fuel is included in the consideration charged is being prescribed at 12%.
  • Services provided by the guest anchors to TV channels in lieu of honorarium attract GST
  • 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 bridges and will be treated same as toll charges.
  • Services in form of Assisted Reproductive Technology (ART)/ In vitro fertilization (IVF) are covered under the definition of health care services and are exempted from GST
  • Sale of land after leveling, laying down of drainage lines etc. is sale of land and does not attract GST.

Changes and recommendation will be effective from 18th July, 2022

Inter-alia Recommendations

A. Measures for Trade Facilitation:

  • Waiver of requirement of mandatory registration under section 24(ix) of CGST Act for person supplying goods through ECOs
  • Amendment in formula for calculation of refund of unutilized Input Tax Credit on account of inverted rated structure
  • 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
  • extend the waiver of late fee for FORM GSTR-4 till 28.07.2022
  • extend the due date of filing of FORM GST CMP-08 to 31.07.2022
  • 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.
  • 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.
  • UPI & IMPS to be provided as an additional mode for payment of Goods and Services Tax to taxpayer

B. Different measures taken for streamlining compliances in GST

C. GoM 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.

Aditi Mittal, Tax Associate, SW India

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