The 47th GST Council Meeting under the Chairmanship of Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman was held on 28th & 29th June 2022. The council deliberated upon various burning issues under GST and made various recommendations. The council also accepted the recommendations of the Group of Ministers (GoMs) constituted on various issues such as rate rationalization, GST system reforms, and the movement of gold and precious stones.
The major recommendations of the council can be grouped under following broad heads
1. Recommendations relating to GST rates on goods and services:
- The GST Council has recommended rate rationalization on various goods and services to remove inverted duty structure.
- At the same time, the council has accepted the recommendations of the GoMs for withdrawal of exemption on various items such as food grains in prepackaged and pre-labelled retail pack in terms of Legal Metrology Act, cheques (lose or in book form) etc.
- The council also provided clarifications regarding GST rates on various goods and services. Some of the relevant clarifications have been listed below:
- Electric vehicles whether or not fitted with a battery pack, are eligible for the concessional GST rate of 5%.
- All fly ash bricks attract same concessional rate irrespective of fly ash content.
- Stones covered in S. No.123 of Schedule-I (such as Napa stones), even if they are ready to use and polished in minor ways [not mirror polished], attract concessional GST rate of 5%.
- The GST rate on all forms of mango under CTH 0804, including mango pulp (other than mangoes sliced, dried) attract GST at the 12%. Entry is also being amended to make this amply clear. Raw or fresh mangoes continue to be exempt.
- Sewage treated water is exempted from GST and is not the same as purified water provided in S. No. 99 of notification 2/2017-CT(Rate). The word ‘purified’ is being omitted to make this amply clear.
- Nicotine Polarilex Gum attracts a GST rate of 18%.
- Due to ambiguity in GST rates on supply of ice-cream by ice-cream parlours, GST charged @ 5% without ITC on the same during the period 1.07.2017 to 5.10.2021 shall be regularized to avoid unnecessary litigation.
- Application fee charged for entrance or for issuance of eligibility certificate for admission or issuance of migration certificate by universities is exempt from GST.
- Activity of selling of space for advertisement in souvenirs published in the form of books is eligible for concessional GST at 5%.
- Renting of vehicle with operator for transportation of goods on time basis is classifiable under Heading 9966 (rental services of transport vehicles with operators) and attracts GST at 18%.GST on such renting where cost of fuel is included in the consideration charged is being prescribed at 12%.
- Services provided by the guest anchors to TV channels in lieu of honorarium attract GST.
Other significant changes recommended by the council are as follows
- All taxable service of Department of Posts would be subject to forward charge. Hitherto certain taxable services of Department of post were taxed on reverse charge basis.
- Goods transport agency (GTA) is being given option to pay GST at 5% or 12% under forward charge; option to be exercised at the beginning of Financial Year. RCM option to continue.
- Service provided by Indian Tour operator to a foreign resident for a tour partially in India and partially outside India is to be subject to tax proportionate to the tour conducted in India for such foreign tourist subject to conditions that this concession does not exceed half of tour duration.
- All these recommendations shall be effective from 18th July 2022.
2. Recommendations relating to GST law and procedure:
The GST Council has inter-alia made the following recommendations relating to GST law and procedure
A. Measures for Trade Facilitation includes:
- Waiver of requirement of mandatory registration under section 24(ix) of CGST Act for person supplying goods through E-Commerce Operators, subject to conditions.
- Composition taxpayers would be allowed to make intra-State supply through e-commerce operators subject to certain conditions.
- 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.
- Amendment in CGST Rules for handling of pending IGST refund claims.
- A new FORM GST PMT-03A for re-credit of amount in electronic credit ledger.
- Retrospective Amendment in 50(3), 49(1) to be notified.
- GSTR-4 due date extended till 28-07-2022 and CMP -08 for Q1 FY 2022-23 till 31-07-2022
- Present exemption of IGST on import of goods under AA/EPCG/EOU scheme to be continued.
- Exemption from filing annual return in FORM GSTR-9/9A for FY 2021-22 to be provided to taxpayers having AATO up to Rs. 2 crores.
- No ITC reversal on Sale of MEIS Scrips.
- UPI & IMPS to be provided as an additional mode for payment of GST.
B. Measures for streamlining compliances includes:
- Provision of Automatic Revocation of Registration post Filing of GST Returns.
- 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.
- GoM shall be constituted for Constitution to address various concerns raised by states in relation to constitution of GST Apellate Tribunals.
- 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 crore to the States.
- To weed out non-compliant taxpayers, the GoM on IT reforms recommended that 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.