47th GST Council meeting chaired by Hon'ble Union Minister of Finance Nirmala Sitaraman has concluded today in Chandigarh which was attended by Union Minister of State for Finance Shri Pankaj Chaudhary besides Revenue Secretary Shri. Tarun Bajaj, Chairman of the CBIC Shri. Vivek Johri, Member of the CBIC Shri. D P Nagendra Kumar, Sandeep Kumar and Sanjay Agarwal and other senior officers from the Finance Ministry and the CBIC with Finance Ministers of States & UTs and Senior officers from Union Government & States.
As per Press release, The GST Council has made the following recommendations relating to changes in GST rates on supply of goods and services and changes related to GST law and procedure:
A. Rate Rationalization to remove inverted duty structure [Approval of recommendations made by GoM on rate rationalization]
S. No. | Description | From | To |
GOODS | |||
1. | Printing,writingor drawing ink | 12% | 18% |
2. | Knives with cutting blades, Paper knives, Pencil sharpeners and blades therefor, Spoons, forks, ladles, skimmers, cake-servers etc | 12% | 18% |
3. | Power driven pumps primarily designed for handling water such as centrifugal pumps, deep tube-well turbine pumps, submersible pumps; Bicycle pumps | 12% | 18% |
4. | 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% |
5. | Machines for cleaning, sorting or grading eggs, fruit or other agricultural produce and its parts, Milking machines and dairy machinery | 12% | 18% |
6. | LED Lamps, lights and fixture, their metal printed circuits board; | 12% | 18% |
7. | Drawing and marking out instruments | 12% | 18% |
8. | Solar Water Heater and system | 5% | 12% |
9. | Prepared/finished, leather/chamois, leather / composition leathers | 5% | 12% |
10. | Refund of accumulated ITC not to be allowed on following goods:
| ||
Services | |||
S. No. |
Description |
From |
To |
1. | Services supplied by foreman to chit fund | 12% | 18% |
2. | Job work in relation to processing of hides, skins and leather | 5% | 12% |
3. | Job work in relation to manufacture of leather goods and footwear | 5% | 12% |
4. | Job work in relation to manufacture of clay bricks | 5% | 12% |
5. | Works contract for roads, bridges, railways, metro, effluent treatment plant, crematorium etc. | 12% | 18% |
6. | 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% |
7. | Works contract supplied to central and state governments, union territories & local authorities involving predominantly earthwork and sub-contracts thereof | 5% | 12% |
B. Other GST rate changes recommended by the Council
S. No. | Description | From | To |
Goods | |||
1. | Ostomy Appliances | 12% | 5% |
2. | 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% |
3. | Tetra Pak (Aseptic Packaging Paper) | 12% | 18% |
4. | Tar (whether from coal, coal gasification plants, producer Gas plants and Coke Oven Plants. | 5%/18% | 18% |
5. | IGST on import of Diethylcarbamazine (DEC) tablets supplied free of cost for National Filariasis Elimination Programme | 5% | Nil |
6. | Cut and Polished diamonds | 0.25% | 1.5% |
7. | IGST on specified defence items imported by private entities/vendors, when end-user is the Defence forces. | Applicable rate | Nil |
Services | |||
S. No. |
Description |
From |
To |
1. | Transport of goods and passengers by ropeways. | 18% | 5% (with ITC of services) |
2 | Renting of truck/goods carriage where cost of fuel is included | 18% | 12% |
C. Withdrawal of exemptions [Approval of recommendations made by GoM on rate rationalization]
C1. 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.
C2. In case of the following goods, exemption from GST will be withdrawn:
S. No. | Description of goods | From | To |
GST rate changes | |||
1. | Cheques, lose or in book form | Nil | 18% |
2. | Maps and hydrographic or similar charts of all kinds, including atlases, wall maps, topographical plans and globes, printed | Nil | 12% |
3. | Parts of goods of heading 8801 | Nil | 18% |
C3. In case of the following goods, the exemption in form of a concessional rate of GST is being rationalized:
S. No. | Description of goods | From | To |
GST rate changes | |||
1. | Petroleum/ Coal bed methane | 5% | 12% |
2. | Scientific and technical instruments supplied to public funded research institutes | 5% | Applicable rate |
3. | E-waste | 5% | 18% |
C4. In case of Services, following exemptions are being rationalized:
S.No. | Description |
1. | Exemption on transport of passengers by air to and from NE states & Bagdogra is being restricted to economy class |
2
| Exemption on following services is being withdrawn.
|
3. | 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 |
4. | Hotel accommodation priced upto Rs. 1000/day shall be taxed at 12% |
5. | 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. |
6. | 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. |
D. GST on 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 terms of reference based on further inputs from States and submit its report within a short duration.
E. Clarification on GST Rates
E1. Goods
E2 .Clarification in relation to GST rate on Services
Other miscellaneous changes
The rate changes recommended by the 47th GST Council will be made effective from 18th July, 2022.
II. Further, the GST Council has inter alia made the following recommendations relating to GST law and procedure:
A. Measures for Trade facilitation:
I. 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.
- thep erson is not making any inter State taxable supply
II. 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.
2. 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
a. 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.
3. 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 is a violation of provisions of Customs Act, the refund claims in respect of export of goods are suspended/withheld.
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.
4. 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.
5. 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-
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.
6. 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:
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.
7. 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.
8. Issuance of the following circulars in order to remove ambiguity and legal disputes on various issues, thus benefiting taxpayers at large:
9. Exemption from filing annual return in FORM GSTR-9/9A for FY 2021-22to be provided to taxpayers having AATO upto Rs. 2 crores.
10. 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.
11. 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.
12. 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.
13. 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.
14. Supplies from Duty Free Shops (DFS) at international terminal to outgoing international passengers to be treated as exports by 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.
B. Measures for streamlining compliances in GST
C. 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.
D. 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.
E. 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 risk to exchequer.
Encl:
