Exemption from IGST on imports of some pharmaceutical products such as the cancer drug Dinutuximab and Food for Special Medical Purposes (FSMP).
RBL Bank and ICBC Bank will be included in the list of specified banks eligible for IGST exemption on imports of gold, silver, or platinum.
To amend the entry 52B in compensation cess notification to include all utility vehicles by whatever name called provided they meet the parameters of Length exceeding 4000 mm, Engine capacity exceeding 1500 cc and having Ground Clearance of 170 mm & above and to clarify by way of explanation that ‘Ground clearance’ means Ground Clearance in un-laden condition
The council decided that on pan masala, tobacco products etc, where it is not legally required to declare the retail sale price, the earlier ad valorem rate as was applicable on 31st March 2023 may be notified in order for levy of Compensation Cess
It has been decided to clarify that supply of raw cotton, including kala cotton, by agriculturists to cooperatives is taxable under reverse charge mechanism and to regularise issues relating for the past period on “as is basis”.
Issues relating to desiccated coconut for the period 1.7.2017 to 27.7.2017 will be regularized due to genuine interpretational issues.
Plates and Cups made of Areca Leaves: Issues relating to GST on plates and cups made of areca leaves prior to 01.10.2019 will be regularized.
GST on biomass briquettes for the period 01.7.2017 to 12.10.2017 will be regularized.
II. Recommendations relating to GST rates on Services
GST exemption on satellite launch services supplied by ISRO, Antrix Corporation Limited and New Space India Limited (NSIL) may be extended to such services supplied by organisations in private sector also to encourage start ups.
It has been decided that GTAs will not be required to file declaration for paying GST under forward charge every year. If they have exercised this option for a particular financial year, they shall be deemed to have exercised it for the next and future financial years unless they file a declaration that they want to revert to reverse charge mechanism (RCM)
It has been decided to clarify that services supplied by a director of a company to the company in his private or personal capacity such as supplying services by way of renting of immovable property to the company or body corporate are not taxable under RCM. Only those services supplied by a director of company or body corporate, which are supplied by him as or 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
It has been decided to clarify that supply of food and beverages in cinema halls is taxable as restaurant service as long as (a) they are supplied by way of or as part of a service and (b) supplied independently of the cinema exhibition service.
Where the sale of cinema ticket and supply of food and beverages are clubbed together, and such bundled supply satisfies the test of composite supply, the entire supply will attract GST at the rate applicable to service of exhibition of cinema, the principal supply
28% GST rate would be imposed on the full value of gaming, horse racing, and casinos.
III. Recommendations to streamline compliance
(A) Amendment proposed in GST Legislation
Provisions of Section 123 of Finance Act, 2021, amending Section 16 of the IGST Act, to be notified with effect from 1st October 2023 and a notification to be issued under Section 16(4) of the IGST Act, 2017.
A special procedure is to be provided under Section 148 of the CGST Act, 2017 to enable the manual filing of appeals against orders passed by the proper officers in respect of TRAN-1/ TRAN-2 claims of taxpayers.
The Council has recommended insertion of a clause (ca) in sub-section (1) of section 10 of the IGST Act, 2017 to clarify the place of supply in respect of supply of goods to unregistered persons.
(B) Amendment proposed in GST Rules
Amendment in CGST Rules, 2017 regarding registration:
a. Amendment in rule 10A to provide that the details of bank account, in name and PAN of the registered person, to be required to be furnished within 30 days of grant of registration or before filing of statement of outwards supply under section 37 of CGST Act in FORM GSTR-1/ IFF, whichever is earlier.
b. Amendment in rule 21A(2A) to provide for system-based suspension of the registration in respect of such registered persons who do not furnish the details of valid bank account under rule 10A with the time period prescribed under the said rule.
c. Insertion of 3rd proviso in rule 21A(4) to provide for automatic revocation of such system-based suspension upon compliance with provisions of rule 10A.
d. Amendment in rule 59(6) to provide that where a registered person has not furnished details of a valid bank account under rule 10A, the said registered person may not be allowed to furnish the details of outward supplies in FORM GSTR-1 or using IFF.
e. Amendment in rule 9 and rule 25 to do away with the requirement that the physical verification of business premises is to be conducted in the presence of the applicant and also to provide for physical verification in high risk cases even where Aadhaar has been authenticated.
Procedure for Recovery of Tax and Interest in terms of Rule 88C(3):
The Council has recommended insertion of Rule 142B in the CGST Rules, 2017 and insertion of a FORM GST DRC-01D to provide for manner of recovery of the tax and interest in respect of the amount intimated under rule 88C which has not been paid and for which no satisfactory explanation has been furnished by the registered person.
The Council has recommended a mechanism for system-based intimation to the taxpayers in respect of the excess availment of ITC in FORM GSTR-3B vis a vis that made available in FORM GSTR-2B above a certain threshold, along with the procedure of auto-compliance on the part of the taxpayers, to explain the reasons for the said difference or take remedial action in respect of such difference. For this purpose, rule 88D and FORM DRC-01C to be inserted in CGST Rules, 2017, along with an amendment in rule 59(6) of CGST Rules, 2017.
To improve discipline in filing of annual returns, FORM GSTR-3A to be amended to provide for issuance of notice to the registered taxpayers for their failure to furnish Annual Return in FORM GSTR-9 or FORM GSTR-9A by due date.
Rule 64 and FORM GSTR-5A of CGST Rules, 2017 to be amended to require OIDAR service providers to provide the details of supplies made to registered persons in India in his return in FORM GSTR-5A.
Explanation 3 to be inserted after rule 43 of CGST Rules, 2017 to prescribe that the value of supply of goods from Duty Free Shops at arrival terminal in international airports to the incoming passengers to be included in the value of exempt supplies for the purpose of reversal of input tax credit.
To ease compliance burden of the taxpayers, clause (f) of rule 46 of CGST Rules, 2017 to amended to provide for requirement of only name of the State of the recipient, and not the name and full address of the recipient, on the tax invoice in cases of supply of taxable services by or through an ECO or by a supplier of OIDAR services to an unregistered recipient.
Rule 108(1) and rule 109(1) of CGST Rules, 2017 to be amended to provide for manual filing of appeal under certain specified circumstances
E-way Bill Requirement for Gold : The Council recommended the insertion of rule 138F in the CGST and SGST Rules. This rule allows states to mandate the generation of e-way bills for intra-state movement of gold and precious stones under Chapter 71.
Sub-rule (3A) to be inserted in rule 162 of CGST Rules, 2017 to prescribe the compounding amount for various offences under section 132 of CGST Act, 2017.
The Council has recommended insertion of rule 163 in CGST Rules, 2017 to provide for manner and conditions of consent-based sharing of information of registered persons available on the common portal with other systems.
IV. Measures for facilitation of trade:
'Amnesty schemes' notified vide notifications dated 31.03.2023 regarding non-filers of FORM GSTR-4, FORM GSTR-9 & FORM GSTR-10 returns, revocation of cancellation of registration extended till 31.08.2023
Annual Returns for 2022-23 : The Council has made recommendations to extend the relaxations provided in the previous fiscal year (FY 2021-22) for different tables of FORM GSTR-9 and FORM GSTR-9C to the upcoming fiscal year (FY 2022-23). However, small taxpayers with an annual turnover of up to 2crore rupees will be exempt from filing the annual return (FORM GSTR-9/9A) for FY 2022-23.
ISD : As per the present provisions of the GST law ISD mechanism for the distribution of input tax credit of common input services procured from third parties to distinct persons is not mandatory,. However, an amendment may be made in the GST law to make the ISD mechanism mandatory prospectively for such common input services.
ITC :To give relief to taxpayers by extending the special procedure for addressing mismatches in Input Tax Credit (ITC) claimed in GSTR-3B and available in GSTR-2A to the FY 2019-20 and 2020-21.
Notification on GST Appellate Tribunal
: It is also suggested that the provisions of the Finance Act, 2023 related to the Tribunal should be notified by the Centre starting from 1st August 2023. In addition, the Chief Secretary of Maharashtra has been nominated as a member of the Search cum Selection Committee for the Tribunal. Furthermore, the establishment of State Benches of the Tribunal will occur gradually in a phased manner.
V. Recommendation on issue of clarificatory circulars
Clarification regarding admissibility of refund in cases where export of goods, or the realization of payment for export of services, as the case may be, is made after the time limit provided under rule 96A of CGST Rules, 2017.
Circular to be issued to provide clarification regarding TCS liability under Sec 52 of the CGST Act, 2017 in cases where multiple E-commerce Operators (ECOs) are involved in a single transaction of supply of goods or services or both.
Circular to be issued to provide clarification regarding TCS liability under Sec 52 of the CGST Act, 2017 in cases where multiple E-commerce Operators (ECOs) are involved in a single transaction of supply of goods or services or both.
Clarifying that the registered person, whose turnover exceeds the prescribed threshold for generation of e-invoicing, are required to issue e-invoices under rule 48(4) of CGST Rules. for the supplies made to Government Departments or establishments / Government agencies / local authorities / PSUs, etc., registered solely for the purpose of TDS,
Clarification regarding the manner of calculation of interest amount liable to be paid under section 50(3) of CGST Act, 2017 in respect of wrongly availed and utilized IGST credit, clarifying inter alia that in cases of wrong availment of IGST credit, the balance of input tax credit (ITC) in electronic credit ledger, under the heads of IGST, CGST and SGST taken together, has to be taken in consideration while calculating such interest liability as per rule 88B of CGST Rules, 2017.
Clarifying that 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 provide clarity on the Goods and Services Tax (GST) liability in cases involving warranty replacement of parts and repair services to issue a circular clarifying that manufacturers will not be required to charge GST on warranty replacements or repair services provided to customers during the warranty period, even if no consideration is received from the customers. Furthermore, the manufacturers will not have to reverse any input tax credit related to such cases.
