GST Rates/Exemptions
Textile Industry (Implementation of new rates deferred by 46th GST Council Meeting on 31-12-2021)
- At present, tax rate on raw material and final product are not uniform. Apparel and clothing up to Rs 1,000 per piece currently attracts 5 per cent GST.
- GST rate will be harmonized across the textile chain after amendment and uniform rate structure across the textile value chain will be at a rate of 12%
- Impact on Sector: The textile sector is certain to require additional working capital now and the final cost will be passed on to the consumer
Footwear Industry
- Earlier Footwear with a sales price of less than Rs. 1000 per pair was taxed at a rate of 5%.
- Now, the footwear industry’s inverted rate structure is being corrected. Footwear (of any value) will be taxed at a rate of 12%.
Services to Government Authority / Government Entities
- The GST rates of specified works contract services provided to Governmental Authority and Government Entity has been increased from 5%/12% to 18%.
- Exemption removed for Pure services and composite supply of goods and services where goods constitute not more than 25 % value, provided to a Govt. Entity or Govt. Authority.
- Now, Pure services and Composite supply of works contract to Govt. Entity or Govt. Authority will be taxed at a rate of specified rate or 18%.
E-Commerce Operators – Passenger Vehicle Aggregators – Metered Cabs or Auto/e-Rickshaws
- Exemption removed for Non-AC contract Carriage or State Carriage or metered Cabs or Auto/e-rickshaws if supplied through e-commerce operators.
- Transportation of passenger services to passengers identified through such ecommerce platform (i.e. Services by ola, uber etc.), GST will be applicable on the fare collected on such passenger transport services through auto rickshaws.
- Impact of this amendment is auto ride via online mode will be taxable. However an auto ride provided via offline modes such as street hailing will remain exempt.
E-Commerce Operators – Food Delivery aggregators
- Supply made through E-commerce operators(Online food delivery apps like Zomato , Swiggy etc.) is now liable to pay GST.
- The above levy is subject to an exception where such services are supplied by the restaurants, eating joints, etc., located at premises providing hotel accommodation service having declared tariff of any unit of accommodation above Rs. 7,500 per unit per day or equivalent.
- The impact of this amendment is the cost of ordering food online would increase for end users if such orders are made from restaurants that were not registered under GST.
Aadhaar authentication for the registered person will be mandatory for below purpose effective from 01-01-2022 (Vide Notification 38/2021):
- Filing of refund application in Form RFD – 01. (All types of refund application like Refund of Excess Balance in cash ledger, Refund of ITC on Export of goods or services without payment of tax, Refund of ITC on inverted duty structure, Refund of Excess payment of tax, Refund of Export of services with payment of Tax and all other refund applications.
- Refund of the IGST paid on goods exported out of India.
- Filing of application for revocation of cancellation of registration
Implementation of the amendment proposed in the Union Budget 2021 under the GST Law.
| Nature | Description/Impact | Section of
CGST ACT |
Section of
Finance Act, 2021 |
| Supply of goods by association or body of persons to members
(Incorporated or not) |
Para 7 of Schedule II to the CGST Act deeming the supply of goods by an unincorporated association or body of persons to members has been omitted retrospectively w.e.f. 1st July, 2017.
And new clause added to bring such transaction in to scope of supply. Hence, now the activities or transaction by a person, other than an individual, to its members constituents or vice-versa, for cash, deferred payments or other valuable consideration are covered under the ambit of ‘supply’. |
7 (1) and Schedule II of CGST ACT ,2017 | 108 and 122 |
| Availing input tax credit only if its appearing in GSTR 2B | Recipient can be able to claim Input Tax credit only if supplies are reported by the supplier in its GSTR-1 and after which such supplies are reflected in the GSTR-2A/2B of the recipient.
Once the above provision comes into effect, the Rule 36(4) of CGST Rules, 2017 which allows the provisional ITC of 5% can be said to have been discontinued. |
16 | 109 |
| Recover of Tax where there is difference in liability reported in GSTR-1 and actual tax discharged in GSTR-3B for the relevant period | The ambit of self-assessed tax is now widened to include details of outward supplies reported in GSTR-1/1FF but not included in GSTR-3B.
Power is given to department for recovery of Tax in situation where there is difference between output liability reported in GSTR1 and actual tax discharged in GSTR-3B for the relevant period. |
75 | 114 |
| Co-notices of section 129 and 130 need separate conclusion | Proceedings under Section 129 & 130(Detention, seizure and release of goods and conveyances in transit.) of CGST are no more deemed to be concluded even if the same proceedings against the taxpayer are concluded under Section 73(Determination of tax in non-fraud case) and Section 74(Determination of tax fraud case). | 74 | 113 |
| Extend the Scope of Provisional Attachment | The powers of provisional attachment of property under has been increased to include any proceedings under Chapter XII (Assessment), Chapter XIV (Inspection, Search, Seizure & Arrest) or Chapter XV(Demands & Recovery). | 83 | 115 |
| Pre deposit equivalent to 25% of penalty to file an appeal for E-WAY BILL | Section amended to provide that an appeal against an order of detaining or seizing goods or conveyances (Section 129(3)) shall be filed only when a sum equal to 20% of the penalty has been paid by the appellant | 107 | 116 |
| Enhanced penalty under section 129 | 200% penalty is required to be paid to release the goods which are seized for violation of E-way bill related to provisions and for not carrying proper documents.
*Detail changes in Section 129 is given below. |
129 | 117 |
| Empower the Jurisdictional commissioner to call for information | Commissioner’s power to collect statistics has been substituted with the power to call for information. | 151 | 119 |
| Use of information | It is now permissible to use information gathered under Sections 150 or 151 after giving the person concerned with an opportunity to be heard. | 152 | 120 |
Changes in Detention, seizure and release of goods and conveyances in transit (Section 129):
| Enhanced penalty under section 129 in case of taxable goods | Existing | After Amendment |
| When owner comes forward | Tax + Penalty 100% of tax payable. | 200% of tax payable. |
| When owner does not come forward | Tax + 50% of value of goods reduced by tax paid. | 50% of value of goods or 200% of the tax payable on such goods w.e.i. higher. |
- The goods seized under section 129 will not be released, on a provisional basis, upon execution of a bond and furnishing of a security. Penalty imposed by the officer will have to be paid in cash by the taxpayer.
- Period of issuing notice and passing order is also specified. (Notice within 7 days of detaining the goods and order should also pass in next 7 days after issuing notice)
- No penalty shall be determined without giving the person concerned an opportunity of being heard. Earlier opportunity of being heard was given also to determine Tax and interest.
- The goods or conveyance detained or seized shall become liable to be sold or disposed off in the manner prescribed in case the payment of imposed penalty is not made within 15 days from the date of receipt of copy of the order imposing such penalty.
- Further, conveyance used for transportation of the goods may be released on payment of penalty or INR 1 Lakh whichever is less.
Disclaimer: This article is only a knowledge-sharing initiative and is based on the Relevant Provisions as applicable and as per the information existing at the time of the preparation. In no event, RMPS & Co. or the Author or any other persons be liable for any direct and indirect result from this Article or any inadvertent omission of the provisions, update, etc if any.
Published on: December 27, 2021