KEY HIGHLIGHTS OF 50TH GST COUNCIL MEETING

The 50th meeting of the GST Council witnessed the release of a short video film titled ‘GST Council- 50 steps towards a journey,’ highlighting the Council’s progress. The film, available in Hindi, English, and regional languages, will be shared on various social media platforms. Additionally, the Council recommended changes in GST tax rates, trade facilitation measures, and compliance streamlining measures during the milestone meeting.

Changes in GST rates of goods

Changes in GST rates of services:

• Extension of GST exemption on satellite launch services to private sector organizations, in addition to ISRO, Antrix Corporation Limited, and New Space India Limited, to encourage start-ups.

• GTAs (Goods Transport Agencies) will no longer be required to file a declaration for paying GST under forward charge annually.

• The last date for GTAs to exercise the option of paying GST under forward charge will be 31st March of the preceding financial year instead of 15th March. The start date for exercising the option will be 1st January of the preceding financial year.

• Clarification that services supplied by a director of a company to the company in their private or personal capacity, such as renting immovable property, are not taxable under RCM.

• Clarification that the supply of food and beverages in cinema halls will be taxable as a restaurant service if they are supplied as part of a service and independently of the cinema exhibition service.

• All three activities, namely casinos, horse racing, and online gaming, should be taxed at a uniform rate of 28%.

• Suitable amendments to the law should be made to include online gaming and horse racing in Schedule III as taxable actionable claims.

• Tax will be applicable based on the face value of chips purchased in the case of casinos, the full value of bets placed with bookmakers/totalisators in the case of horse racing, and the full value of bets placed in the case of online gaming.

Measures for facilitation of trade:

• Goods and Services Tax Appellate Tribunal: The GST Council recommends the Rules for appointing and setting conditions for the President and Members of the GST Appellate Tribunal, with provisions of the Finance Act, 2023 to be notified from 1st August 2023.

• FORM GSTR-9 and FORM GSTR-9C: Continuing relaxations for FY 2022-23 in respect of various tables of FORM GSTR-9 and FORM GSTR-9C, as well as exemption from filing annual return for taxpayers with turnover up to two crore rupees.

• ISD mechanism: It is not mandatory for distributing input tax credit of common input services from third parties to distinct persons. It also suggests clarifying the taxability of internally generated services between distinct persons and making the ISD mechanism mandatory prospectively for distributing input tax credit of common input services from third parties.

• Clarification that no GST is chargeable and no reversal of input tax credit is required by the manufacturer in cases of warranty replacement of parts and repair services during the warranty period without consideration from customers.

• Circular to be issued to clarify various refund related issues:
  • Restriction of refund of accumulated input tax credit (ITC) under Section 54(3) of CGST Act, 2017 to ITC on inward supplies reflected in FORM GSTR-2B or any previous tax period.
  • Inclusion of export goods value in the calculation of “adjusted total turnover” for refund purposes, as per the explanation in rule 89(4) of CGST Rules.
  • Clarification on admissibility of refund in cases where export of goods or realization of payment for export of services occurs after the time limit provided in rule 96A of CGST Rules, 2017.

• Clarification on TCS (Tax Collected at Source) liability under Section 52 of the CGST Act, 2017 in transactions involving multiple E-commerce Operators (ECOs) for the supply of goods or services.

• Only the name of the State of the recipient, and not the full address, will be required on the tax invoice for supply of taxable services by or through an E-commerce Operator (ECO) or by a supplier of OIDAR services to an unregistered recipient.

• The GST Council has recommended issuing the following circulars to address various issues and minimize legal disputes, providing clarity and benefiting taxpayers:
• a. Clarification that registered persons with a turnover exceeding the prescribed threshold for e-invoicing must issue e-invoices for supplies made to Government Departments, agencies, local authorities, PSUs, etc., registered solely for TDS purposes.
• b. Clarification on the calculation of interest under Section 50(3) of the CGST Act for wrongly availed and utilized IGST credit, stating that the balance of ITC in the electronic credit ledger (IGST, CGST, and SGST) should be considered while determining the interest liability.
• c. Clarification that the holding of securities by a holding company in its subsidiary company does not qualify as a supply of services and is not taxable under GST.

• ITC MISMATCH RELATED CIRCULAR: In case of ITC mismatch, government has issued circular 183/15/2022-GST dated 27th December, 2022 allowed the ITC benefit, submit to submission of Ledger confirmation/ CA-CMA certification for 2017-18 and 2018-19. Now benefit of said circular is extended for more two years upto 31.03.2021.

• Special procedure to enable manual filing of appeals against orders on TRAN-1/TRAN-2 claims as directed by the Supreme Court in Union of India v/s Filco Trade Centre Pvt. Ltd.

• Amendments to rules for manual filing of appeals under specified circumstances.

• Extension of amnesty schemes for non-filers of GSTR-4, GSTR-9, GSTR-10 returns, revocation of registration cancellations, and withdrawal of assessment orders until 31.08.2023.

• Due date extension for filing GSTR-1, GSTR-3B, and GSTR-7 for April, May, and June 2023 in Manipur until 31.07.2023 due to the prevailing law and order situation in the state.

• Biometric Aadhaar authentication pilot project in Puducherry, with Andhra Pradesh expressing interest after initial testing. system’s readiness is tested in the state of Gujarat and U.T. of Puducherry.

• Mechanism to deal with differences in ITC between FORM GSTR-2B and FORM GSTR-3B.

• OIDAR service providers to provide the details of supplies made to registered persons in India in his return in FORM GSTR-5A.

• 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.

• The Council has recommended insertion of new rule:
  • To establish a procedure for the recovery of tax and interest. This procedure is applicable when the output tax liability declared in FORM GSTR-1 exceeds the output tax liability reported in FORM GSTR-3B by a specified threshold.
  • who want to mandate the requirement of generation of e-way bills for intra-State movement of gold and precious stones under Chapter 71 within their States.
  • To prescribe the compounding amount for various offences
  • To provide for manner and conditions of consent-based sharing of information of registered persons available on the common portal with other system
  • To clarify the place of supply in respect of supply of goods to unregistered persons.

• The GST Council has recommended to form a State level coordination Committee comprising of GST officers from both State and Central GST administrations for knowledge sharing on GST matters and coordinated efforts towards administrative and preventive measures.

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.

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.

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