The 52nd GST meeting held on 7th October 2023 in New Delhi. Here are the details of all recommendations were made the council today.
- GST Council’s recommendation for amendments in conditions of appointment of President and Member of the proposed GST Appellate Tribunals regarding eligibility and age
- GST Council recommends nil rate for food preparation of millet flour in powder form and containing at least 70% millets by weight when sold in loose form, and 5% if sold in pre-packaged and labelled form
- GST Council recommends to keep Extra Neutral Alcohol (ENA) used for manufacture of alcoholic liquor for human consumption outside GST
- GST Council recommends reducing GST on molasses from 28% to 5% in relief to cane farmers for faster clearance of dues and to reduce cost of manufacturing cattle feed
- To promote tourism, GST Council recommends conditional and limited duration IGST exemption to foreign flag foreign going vessel when it converts to coastal run.
A. Recommendations relating to GST rates on goods and services
I. Changes in GST rates of goods
- GST rates on “Food preparation of millet flour in powder form, containing at least 70% millets by weight”, falling under HS 1901, with effect from date of notification, have been prescribed as:
- 0% if sold in other than pre-packaged and labelled form
- 5% if sold in pre-packaged and labelled form
- To clarify that imitation zari thread or yarn made out of metallised polyester film /plastic film, falling under HS 5605, are covered by the entry for imitation zari thread or yarn attracting 5% GST rate. However, no refund will be allowed on polyester film (metallised) /plastic film on account of inversion.
- Foreign going vessels are liable to pay 5% IGST on the value of the vessel if it converts to coastal run. GST Council recommends conditional IGST exemption to foreign flag foreign going vessel when it converts to coastal run subject to its reconversion to foreign going vessel in six months.
II. Other changes relating to Goods
- GST Council recommended to keep Extra Neutral Alcohol (ENA) used for manufacture of alcoholic liquor for human consumption outside GST. Law Committee will examine suitable amendment in law to exclude ENA for use in manufacture of alcoholic liquors for human consumption from ambit of GST.
- To reduce GST on molasses from 28% to 5%. This step will increase liquidity with mills and enable faster clearance of cane dues to sugarcane farmers. This will also lead to reduction in cost for manufacture of cattle feed as molasses is also an ingredient in its manufacture.
- A separate tariff HS code has been created at 8 digit level in the Customs Tariff Act to cover rectified spirit for industrial use. The GST rate notification will be amended to create an entry for ENA for industrial use attracting 18% GST.
III. Changes in GST rates of services
- Entries at Sl. No. 3 and 3A of notification No. 12/2017-CTR dated 28.06.2017 exempts pure and composite services provided to Central/State/UT governments and local authorities in relation to any function entrusted to Panchayat/ Municipality under Article 243G and 243W of the Constitution of India. The GST Council has recommended to retain the existing exemption entries with no change.
- Further, the GST Council has also recommended to exempt services of water supply, public health, sanitation conservancy, solid waste management and slum improvement and upgradation supplied to Governmental Authorities.
IV. Other changes relating to Services
- To clarify that job work services for processing of barley into malt attracts GST @ 5% as applicable to “job work in relation to food and food products” and not 18%.
- With effect from 1st January 2022, liability to pay GST on bus transportation services supplied through Electronic Commerce Operators (ECOs) has been placed on the ECO under section 9(5) of CGST Act, 2017. This trade facilitation measure was taken on the representation of industry association that most of the bus operators supplying service through ECO owned one or two buses and were not in a position to take registration and meet GST compliances. To arrive at a balance between the need of small operators for ease of doing business and the need of large organized players to take ITC, GST Council has recommended that bus operators organised as companies may be excluded from the purview of section 9(5) of CGST Act, 2017. This would enable them to pay GST on their supplies using their ITC.
- To clarify that District Mineral Foundations Trusts (DMFT) set up by the State Governments across the country in mineral mining areas are Governmental Authorities and thus eligible for the same exemptions from GST as available to any other Governmental Authority.
- Supply of all goods and services by Indian Railways shall be taxed under Forward Charge Mechanism to enable them to avail ITC. This will reduce the cost for Indian Railways.
B. Measures for facilitation of trade:
i) Amnesty Scheme for filing of appeals against demand orders in cases where appeal could not be filed within the allowable time period:
The Council has recommended providing an amnesty scheme through a special procedure under section 148 of CGST Act, 2017 for taxable persons, who could not file an appeal under section 107 of the said Act, against the demand order under section 73 or 74 of CGST Act, 2017 passed on or before the 31st day of March, 2023, or whose appeal against the said order was rejected solely on the grounds that the said appeal was not filed within the time period specified in sub-section (1) of section 107. In all such cases, filing of appeal by the taxpayers will be allowed against such orders upto 31st January 2024, subject to the condition of payment of an amount of pre-deposit of 12.5% of the tax under dispute, out of which at least 20% (i.e. 2.5% of the tax under dispute) should be debited from Electronic Cash Ledger. This will facilitate a large number of taxpayers, who could not file appeal in the past within the specified time period.
ii) Clarifications regarding taxability of personal guarantee offered by directors to the bank against the credit limits/loans being sanctioned to the company and regarding taxability of corporate guarantee provided for related persons including corporate guarantee provided by holding company to its subsidiary company: The Council has inter alia recommended to:
(a) issue a circular clarifying that when no consideration is paid by the company to the director in any form, directly or indirectly, for providing personal guarantee to the bank/ financial institutes on their behalf, the open market value of the said transaction/ supply may be treated as zero and hence, no tax to be payable in respect of such supply of services.
(b) to insert sub-rule (2) in Rule 28 of CGST Rules, 2017, to provide for taxable value of supply of corporate guarantee provided between related parties as one per cent of the amount of such guarantee offered, or the actual consideration, whichever is higher.
(c) to clarify through the circular that after the insertion of the said sub-rule, the value of such supply of services of corporate guarantee provided between related parties would be governed by the proposed sub-rule (2) of rule 28 of CGST Rules, 2017, irrespective of whether full ITC is available to the recipient of services or not.
iii) Provision for automatic restoration of provisionally attached property after completion of one year: The Council has recommended an amendment in sub-rule (2) of Rule 159 of CGST Rules, 2017 and FORM GST DRC-22 to provide that the order for provisional attachment in FORM GST DRC-22 shall not be valid after expiry of one year from the date of the said order. This will facilitate release of provisionally attached properties after expiry of period of one year, without need for separate specific written order from the Commissioner.
iv) Clarification on various issues related to Place of Supply: The Council has recommended to issue a Circular to clarify the place of supply in respect of the following supply of services:
(i) Supply of service of transportation of goods, including by mail or courier, in cases where the location of supplier or the location of recipient of services is outside India;
(ii) Supply of advertising services;
(iii) Supply of the co-location services.
v) Issuance of clarification relating to export of services-: The Council has recommended to issue a circular to clarify the admissibility of export remittances received in Special INR Vostro account, as permitted by RBI, for the purpose of consideration of supply of services to qualify as export of services in terms of the provisions of sub-clause (iv) of clause (6) of section 2 of the IGST Act, 2017.
vi) Allowing supplies to SEZ units/ developer for authorised operations for IGST refund route by amendment in Notification 01/2023-Integrated Tax dated 31.07.2023: The Council has recommended to amend Notification No. 1/2023-Integrated Tax dated 31.07.2023 w.e.f. 01.10.2023 so as to allow the suppliers to a Special Economic Zone developer or a Special Economic Zone unit for authorised operations to make supply of goods or services (except the commodities like pan masala, tobacco, gutkha, etc. mentioned in the Notification No. 1/2023-Integrated Tax dated 31.07.2023) to the Special Economic Zone developer or the Special Economic Zone unit for authorised operations on payment of integrated tax and claim the refund of tax so paid.
C. Other measures pertaining to law and procedures:
i) Alignment of provisions of the CGST Act, 2017 with the provisions of the Tribunal Reforms Act, 2021 in respect of Appointment of President and Member of the proposed GST Appellate Tribunals: The Council has recommended amendments in section 110 of the CGST Act, 2017 to provide that:
- an advocate for ten years with substantial experience in litigation under indirect tax laws in the Appellate Tribunal, Central Excise and Service Tax Tribunal, State VAT Tribunals, by whatever name called, High Court or Supreme Court to be eligible for the appointment as judicial member;
- the minimum age for eligibility for appointment as President and Member to be 50 years;
- President and Members shall have tenure up to a maximum age of 70 years and 67 years respectively.
ii) Law amendment with respect to ISD as recommended by the GST Council in its 50th meeting: GST Council in its 50th meeting had recommended that ISD (Input Service Distributor) procedure as laid down in Section 20 of the CGST Act, 2017 may be made mandatory prospectively for distribution of ITC in respect of input services procured by Head Office (HO) from a third party but attributable to both HO and Branch Office (BO) or exclusively to one or more BOs. The Council has now recommended amendments in Section 2(61) and section 20 of CGST Act, 2017 as well amendment in rule 39 of CGST Rules, 2017 in respect of the same.
Note: The recommendations of the GST Council have been presented in this release containing major item of decisions in simple language for information of the stakeholders. The same would be given effect through the relevant circulars/ notifications/ law amendments which alone shall have the force of law.
48th Council Meeting on 17.12.2023
17.12.2022: The 48th GST Council meeting has taken place today in New Delhi. The meeting was held under the chairmanship of Smt. Nirmala Sitharaman. The GST Council GST Council recommends decriminalizing certain offenses u/s 132. But it also recommends increasing the threshold amount of tax for prosecution, and reduction in the amount of compounding in GST.
Therefore, it is not wrong to say that with the new rules the tax defaulter may get some relaxation as far as the punishment of imprisonment is concerned as per section 132. However, in return, he may have to pay the excess penalty amount to take the benefit of punishments like imprisonment. So below are the recommendations of the council related to this topic.
- Raise the minimum threshold of tax amount for launching prosecution under GST from Rs. 1 Crore to Rs. 2 Crores, except for the offense of issuance of invoices without a supply of goods or services or both;
- Reduce the compounding amount from the present range of 50% to 150% of the tax amount to the range of 25% to 100%;
- Decriminalize certain offenses specified under clauses (g), (j), and (k) of sub-section (1) of section 132 of CGST Act, 2017, viz.-
- Obstruction or preventing any officer in the discharge of his duties;
- Deliberate tempering of material evidence;
- Failure to supply the information.
Refund to Unregistered Persons
There is no procedure for GST refund of tax borne by an Unregistered buyer In cases where the agreement/agreements for the supply of services, such as construction Flat/house and long-term insurance policies, cancellation and period for issue of credit note Related supplier is available. Council recommended an amendment in CGST Rules, 2017 to issue a circular, prescribing the procedure for filing redressal applications for non-registered
In such cases the buyer.
47th GST Council Meeting News updates
30.06.2022: The 47th GST council meeting was held on 29th July 2022. The meeting was held under the Chairmanship of the Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman in Chandigarh. Here is the complete list of recommendations made by the GST council.
GST Rates Updates of 2022
The GST rates on goods and services are revised to remove the inverted duty structure. Here is the list of the affected goods and services.
- Printing, writing, or drawing ink – 12% to 18%
- Knives with cutting blades, Paper knives, Pencil sharpeners, and blades, therefore, Spoons, forks, ladles, skimmers, cake servers, etc – 12% to 18%.
- Power-driven pumps primarily designed for handling water such as centrifugal pumps, deep tube-well turbine pumps, and submersible pumps; Bicycle pumps – 12% to 18%.
- Machines for cleaning, sorting or grading, seed, grain pulses; Machinery used in the milling industry or for the working of cereals, etc; Pawan Chakki that is Air Based Atta Chakki; Wet grinder – 5 % to 18%.
- Machines for cleaning, sorting, or grading eggs, fruit, or other agricultural produce and its parts, Milking machines, and dairy machinery – 12% to 18%.
- LED Lamps, lights, and fixtures, their metal printed circuits board; – 12% to 18%.
- Drawing and marking out instruments – 12% to 18%
- Solar Water Heater and system – 5% to 12%.
- Prepared/finished leather/chamois leather/composition leathers; – 5% to 12%
The Refund of accumulated ITC is not to be allowed on Edible oils and Coal.
|Services supplied by a foreman to chit fund
|Job work in relation to the processing of hides, skins, and leather
|Job work in relation to the manufacture of leather goods and footwear
|Job work in relation to the manufacture of clay bricks
|Works contract for roads, bridges, railways, metro, effluent treatment plant, crematorium, etc.
|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
|Works contract supplied to central and state governments, union territories & local authorities involving predominantly earthwork and sub-contracts thereof
Other GST Rate Changes
|Goods or Service
|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
|Tetra Pak (Aseptic Packaging Paper)
|Tar (whether from coal, coal gasification plants, producer Gas plants, and Coke Oven Plants.
|IGST on import of Diethylcarbamazine (DEC) tablets supplied free of cost for National Filariasis Elimination Programme
|Cut and Polished diamonds
|IGST on specified defense items imported by private entities/vendors, when the end-user is the Defence forces.
|Transport of goods and passengers by ropeways.
|5% (with ITC of services)
|Renting of truck/goods carriage where the cost of fuel is included
46th GST Council Meeting updates & Decisions
Recommendations of the 46th GST Council Meeting
31.12.2021: The today’s GST Council has recommended to defer the decision to change the rates in textiles recommended in the 45th GST Council meeting. Similarly, the existing GST rates in textile sector would continue beyond 1st January, 2022. The amended notification is awaited.
30.12.2021: The 46th GST council meeting is to be held on 31st December 2021 at 11 am in Vigyan Bhavan, New Delhi. The meeting will be chaired by Smt. Nirmala Sitharaman. Besides her Mr. Pankaj Chaudhary and Dr Bhagwat Kishanrao Karad, and other Finance Ministers of States & UTs and Senior officers from Union Government & States will be present.
It is known from reliable sources that the group of ministers will submit the report on duty inversion structure and further decisions will be taken. Also, the taxpayers can expect further GST rate rationalization on a few items.
On the other hand finance minister, Mr. Amit Mitra has tweeted four days back saying:
“Modi Govt will commit another BLUNDER on Jan 1st. By raising GST on Textiles, 5% to 12%, 15 MILLION JOBS WILL BE LOST & 1 lakh units will CLOSE. Modi ji, CALL a GST COUNCIL MEETING NOW & REVERSE DECISION before SWORD OF DAMOCLES FALLS ON HEADS OF MILLIONS OF COMMON PEOPLE”
Also, there are few other Ministers who are pushing the Govt. to reduce the GST rates on day to day used items by the common people.
Press conference by Union Finance Minister Nirmala Sitharaman
FM Smt. @nsitharaman to address a media briefing on the outcomes of 46th GST Council meeting at 3:00 PM (tentative) in New Delhi today.