GST council meet in New Delhi for their 31st meeting of the council. This meeting was chaired by Mr. Arun Jaitley ji , Union Finance Minister, and he said that this meeting focused on providing relief to common man and small & medium enterprises (SME).
Outcome of the Meeting could be grouped in 4 broad categories as follows:
1. Certain important issues referred by GST Council to various Committees / Group of Minister (GoM)
2. In-Principle approval given for Law Amendments
3. Rate Cut on various Items
4. Other Recommendations made by GST Council
Summary of decisions is as follows:
1. *Certain important issues referred by GST Council to various Committees / Group of Minister (GoM)*
1.1. Council decided to extend the Composition scheme to small service providers. New Rate & rate of tax and threshold limit to be proposed. This proposal has been referred to => *Law Committee and Fitment Committee*.
1.1.1. “`Role of Fitment Committee“` => The rate fitment committee, which comprises tax officials of the central and state governments, is tasked with evolving a principle and a subsequent methodology to determine rates for various supplies under GST.
1.1.2. “`Role of Law Committee“` => As the name suggests Law Committee is basically assigned with tasks as follows:
126.96.36.199. Preparing all the draft Rules
188.8.131.52. Drafting of all notifications
184.108.40.206. Trouble shooting and simplifying business process design.
220.127.116.11. Examining all representations of trade on Legal issues.
1.2. *Taxation of residential property in real estate sector* referred to Law Committee and Fitment Committee.
1.3. Decision wrt *Threshold limit of exemption* under GST regime has been referred to *GoM on MSMEs*.
1.3.1. GoM on MSMEs was formed in pursuance of decision in the 29th Meeting of GST Council held on 4th August’2018. Role of GoM on MSMEs is as follows:
18.104.22.168. Identify the measures to be taken after examination the Recommendations of the Law Committee, the Fitment Committee & the IT Committee received before 29th meeting and propose new suggestions & representations received including procedural changes.
22.214.171.124. Identify any other measures to be taken to provide conductive environment for the growth of MSME.
126.96.36.199. Estimate & project revenue impact of their recommendations, wherever relevant.
1.4. Decision on Tax Rates on Lotteries referred to Committee of State.
2. *In-Principle approval given for Law Amendments*
2.1. *Creation of a Centralised Appellate Authority for Advance Ruling (AAAR)* to deal with cases of conflicting decisions by two or more State Appellate Advance Ruling Authorities on the same issue.
2.1.1. This is a welcome decision and demand of time as we had seen contrary decisions coming on same issue from different AAR’s.
2.2. Amendment of section 50 of the CGST Act to provide that interest should be charged only on the net tax liability of the taxpayer, after taking into account the admissible input tax credit, i.e. interest would be leviable only on the amount payable through the electronic cash ledger.
3. *Rate Cut on various Items* : GST Council has recommended rate cuts on various items. Whole list is lengthy, so we are sharing Summary of few items is as follows:
3.1. *Rate reduction on Goods*
3.1.1. *Items shifted from 28% to 18%*
188.8.131.52. Pulleys, transmission shafts and cranks, gear boxes etc., (HSN 8483)
184.108.40.206. Monitors and TVs of upto screen size of 32 inches
220.127.116.11. Re-treaded or used pneumatic tyres of rubber
18.104.22.168. Power banks of lithium ion batteries. Please Note:- Lithium ion batteries are already at 18%. This will bring parity in GST rate of power bank and lithium ion battery.
22.214.171.124. Digital cameras and video camera recorders
126.96.36.199. Video game consoles and other games and sports requisites (HSN 9504.)
3.1.2. *Items shifted from 28% to 5%*
188.8.131.52. Parts and accessories for the carriages for disabled persons
3.1.3. *Items shifted from 18% to 12%*
184.108.40.206. Cork roughly squared or debagged
220.127.116.11. Articles of natural cork
18.104.22.168. Agglomerated cork
3.1.4. *Items shifted from 18% to 5%*
22.214.171.124. Marble rubble
3.1.5. *Items shifted from 12% to 5%*
126.96.36.199. Natural cork
188.8.131.52. Walking Stick
184.108.40.206. Fly ash Blocks
3.1.6. *Items shifted from 12% to NIL*
220.127.116.11. Vegetables, (uncooked or cooked by steaming or boiling in water), frozen, branded and put in a unit container.
18.104.22.168. Vegetable provisionally preserved (for example by sulphur dioxide gas, in brine, in sulphur water or in other preservative solutions), but unsuitable in that state for immediate consumption.
3.1.7. *GST on solar power generating plant and other renewable energy plants*
22.214.171.124. GST rate of 5% rate has been prescribed on renewable energy devices & parts for their manufacture (bio gas plant/solar power based devices, solar power generating system (SGPS) etc) [falling under chapter 84, 85 or 94 of the Tariff]. Other goods or services used in these plants attract applicable GST.
126.96.36.199. Certain disputes have arisen regarding GST rates where specified goods attracting 5% GST are supplied along with services of construction etc and other goods for solar power plant.
188.8.131.52. To resolve the dispute the Council has recommended that in all such cases, *the 70% of the gross value shall be deemed as the value of supply of said goods attracting 5% rate and the remaining portion (30%) of the aggregate value of such EPC contract shall be deemed as the value of supply of taxable service attracting standard GST rate.*
3.2. *Rate Reduction in GST rates/exemptions on services*
3.2.1. Cinema tickets above Rs. 100 shall be reduced from 28% to 18% and on cinema tickets upto Rs. 100 from 18% to 12%.
3.2.2. Third party insurance premium of goods carrying vehicles ~18~ 12%
3.2.3. Services supplied by banks to Basic Saving Bank Deposit (BSBD) account holders under Pradhan Mantri Jan Dhan Yojana (PMJDY) shall be exempted.
3.2.4. Air travel of pilgrims by non-scheduled/charter operations, for religious pilgrimage facilitated by the Government of India under bilateral arrangements shall attract the same rate of GST as applicable to similar flights in Economy class (i.e. 5% with ITC of input services).
4. *Other Recommendations*
4.1. There would be a single cash ledger for each tax head.
4.2. The new return filing system shall be introduced on a trial basis from 01.04.2019 and on mandatory basis from 01.07.2019
4.3. The due date for furnishing the annual returns in FORM GSTR-9, FORM GSTR-9A and reconciliation statement in FORM GSTR-9C for the Financial Year 2017 – 2018 shall be further extended till 30.06.2019.
4.4. *Further some clarifications were issued* which are as follows
4.4.1. *With Respect to Annual Returns*
184.108.40.206. In FORM GSTR-9 &FORM GSTR-9A wrt supplies heading ‘as declared in returns filed during the year’ to be read as *‘made during the year’*
220.127.116.11. All returns in FORM GSTR-1&FORM GSTR-3B have to be filed before filing of FORM GSTR-9&FORM GSTR-9C
18.104.22.168. All returns in FORM GSTR-4 have to be filed before filing of FORM GSTR-9A
22.214.171.124. HSN code may be declared only for those *inward supplies whose value independently accounts for 10% or more* of the total value of inward supplies.
126.96.36.199. *Additional payments*, if any, required to be paid *can be done through FORM GST DRC-03 only in cash*
188.8.131.52. *ITC cannot be availed through FORM GSTR-9 &FORM GSTR-9C*
184.108.40.206. All invoices pertaining to previous FY (irrespective of month in which such invoice is reported in FORM GSTR-1) would be auto-populated in Table 8A of FORM GSTR-9.
220.127.116.11. Value of “non-GST supply” shall also include the value of “no supply” and may be reported in Table 5D, 5E and 5F of FORM GSTR-9
18.104.22.168. Verification by taxpayer who is uploading reconciliation statement would be included in FORM GSTR-9C
4.4.2. *Due Date Extensions*
22.214.171.124. The due date for furnishing FORM GSTR-8 by e-commerce operators for the months of October, November and December, 2018 shall be extended till 31.01.2019.
126.96.36.199. The due date for submitting FORM GST ITC-04 for the period July 2017 to December 2018 shall be extended till 31.03.2019.
188.8.131.52. *ITC in relation to invoices issued by the supplier during FY 2017-18 may be availed by the recipient till the due date for furnishing of FORM GSTR-3B for the month of March, 2019, subject to specified conditions.*
4.5. Late fee shall be completely waived for all taxpayers in case FORM GSTR-1, FORM GSTR-3B &FORM GSTR-4 for the months / quarters July, 2017 to September, 2018, are furnished after 22.12.2018 but on or before 31.03.2019.
4.6. Taxpayers who have not filed the returns for two consecutive tax periods shall be restricted from generating e-way bills. This provision shall be made effective once GSTN/NIC make available the required functionality.
4.7. Clarifications shall be issued on certain refund related matters like refund of ITC accumulated on account of inverted duty structure, disbursal of refunds within the stipulated time, time allowed for availment of ITC on invoices, refund of accumulated ITC of compensation cess etc.
4.8. One more window for completion of migration process is being allowed. The due date for the taxpayers who did not file the complete FORM GST REG-26 but received only a Provisional ID (PID) till 31.12.2017 for furnishing the requisite details to the jurisdictional nodal officer shall be extended till 31.01.2019. Also, the due date for furnishing FORM GSTR-3B and FORM GSTR-1 for the period July, 2017 to February, 2019/quarters July, 2017 to December, 2018 by such taxpayers shall be extended till 31.03.2019.
Thanks & Regards
& Abhishek Raja “Ram”
Author of *“Appeals & Litigations in GST”* & *“The Way to Conquer Litigations, Pleadings & Proceedings in GST!”*
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