Key Recommendations in 47th Meeting of the GST Council – 28th and 29th June ,2022

The GST COUNCIL has made the following recommendation relating to changes in the GST rates on supply of goods and services and changes related to GST law and procedures:

RECOMMENDATIONS RELATING TO GST RATES ON GOODS AND SERVICES

• Refunds of accumulated ITC will not be allowed on Edible oils and Coal
• Rate Rationalization to remove the inverted duty structure has been recommended by the council.
• Important GST Rate Changes are as per the below table:

A.Measures of Trade Facilitation

E-commerce operators (ECOs) :

• Waiver  of  requirement   of  mandatory  registration 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 the CGST Act and notifications issued thereunder.
• The person is not making any inter-State taxable supply
• 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.

Changes Related to Refunds

• Change in formula for calculation of refund under 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. (Rule 89(5)
• 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.
• 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-03Ais 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.
• 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.
• 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.
• 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.

Changes for Composition Taxpayer

• Waiver of late fee for delay in filing FORM GSTR-4 for FY 2021-22- Extended till 28.07.2022 and extension of due date from 18.07.2022 to 31.07.2022 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.

Issuance of the Following Circulars for benefiting taxpayers at large

• Clarification on issue of claiming refund under inverted duty structure where the supplier is supplying goods under some concessional notification.
• Clarification on various issues relating to applicability of demand and penalty provisions under the CGST Act in respect of transactions involving fake invoices.
• Clarification on mandatory furnishing of correct and proper information of inter-State supplies and amount of ineligible/blocked Input Tax Credit and reversal thereof in return in FORM GSTR-3B.
• Clarification on the issues pertaining to refund claimed by the recipients of supplies regarded as deemed export;
• Clarification on various issues relating to interpretation of section 17(5) of the CGST Act;
• Clarification on the issue of perquisites provided by employer to the employees as per contractual agreement;
• Clarification on utilization of the amounts available in the electronic credit ledger and the electronic cash ledger for payment of tax and other liabilities.

Annual Return: Exemption from filing annual return in FORM GSTR-9/9A for FY 2021-22to be provided to taxpayers having AATO upto Rs. 2 crores.

Other Recommendations:

• 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.
• There  is no requirement of reversal of input tax credit for exempted supply of Duty Credit Scrips by the exporters.
• 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.

B. Measures for streamlining compliances in GST

• Provision for automatic revocation of suspension of registration in cases where suspension of registration was done by the system under Rule 21A(2A) of CGST Rules, for non-compliance in terms of clause (b) or clause (c) of sub-section (2) of section 29[continuous non-filing of specified number of returns], once all the pending returns are filed on the portal by the taxpayer. (Amendment in rule 21A)

• Proposal for comprehensive changes in FORM GSTR-3B to be placed in public domain for seeking inputs/suggestions of the stakeholders.

• Time period from 01.03.2020 to 28.02.2022 to be excluded from calculation of the limitation period for filing refund claim by an applicant under section 54 and 55 of CGST Act, as well as for issuance of demand/ order (by proper officer) in respect of erroneous refunds under section 73 of CGST Act. Further, limitation under section 73 for FY 2017-18 for issuance of order in respect of other demands linked with due date of annual return, to be extended till 30th September, 2023.

Others:

• The Council has decided to constitute a Group of Ministers to address various concerns raised by the States in relation to the constitution of GST Appellate Tribunal and make recommendations for appropriate amendments to the CGST Act.

• 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.

Press Release on recommendations of 47th GST Council Meeting:

https://pib.gov.in/PressReleasePage.aspx?PRID=1838020

Note: The recommendations of the GST Council have been presented in this release containing major item of decisions in simple language for information of all stakeholders. The same would be given effect through relevant Circulars/ Notifications/ Law amendments which alone shall have the force of law.

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