This is to update you on the recent Press Release issued in respect of 47th GST Council Meeting held on 28th June and 29th June 2022. The recommendations of the GST Council would be given effect through relevant Circulars/ Notifications/ Law amendments which shall have the force of law. The current press release only for the purpose of information.
We
have summarised below the key highlights of the recommendations made in the Press
Release for your ready reference:
1.
Recommendations relating to GST rates on
goods and services
·
GST
rates on certain goods and services have been proposed to be increased for rate
rationalization to remove inverted duty structure. The entry-wise rate changes
can be referred to in detail from the enclosed press release.
·
GST
rates changes on certain other goods and services is also proposed. Among
others, the GST rate on service by way of Renting of truck/goods carriage
where cost of fuel is included is proposed to be reduced from 18% to 12%.
The
entry-wise rate changes for other goods/services can be referred to in detail
from the enclosed press release.
·
GST
Exemption or benefit of GST concessional rate is proposed to be withdrawn on
certain goods and services. Among others,
a)
The
GST Exemption on pre-packaged and pre-labelled retail pack in terms of Legal
Metrology Act, including pre-packed, pre-labelled curd, lassi and butter milk
is proposed to be withdrawn.
b) Benefit of concessional GST rate on E-waste is
proposed to be withdrawn and accordingly the GST rate is proposed to be
increased from 5% to 18%
c)
Exemption
on services of storage or warehousing of commodities which attract tax (nuts,
spices etc) is being withdrawn
The
entry-wise exemption withdrawals for other goods/services can be referred to in
detail from the enclosed press release.
·
Appropriate
clarification on GST rate of certain goods and services is provided, which inter
alia includes-
a) Electric vehicles whether or not fitted with
a battery pack, are eligible for
the concessional GST rate of 5%
b)
The
GST rate on all forms of mango under CTH 0804, including mango pulp (other
than mangoes sliced, dried) attract GST at the 12%. Raw or fresh mangoes
continue to be exempt.
c)
Service by way of 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%.
d)
Service by way of Renting of motor vehicles for transport
of passengers to a body corporate for a period (time) is taxable in the
hands of body corporate under RCM.
Other
clarifications on GST rate of goods/services can be referred to in detail from
the enclosed press release.
·
Goods
Transport Agency (GTA) to exercise the option to pay GST at 5% under reverse
charge or at 12% under forward charge at the beginning of Financial Year.
The aforesaid rate changes recommended by the
GST Council will be made effective from 18 July 2022.
2.
Recommendations relating to GST law and
procedure, for Trade Facilitation
·
In-principal
Approval for relaxation in the GST provisions for suppliers making supplies
through E-Commerce Operators (ECOs)
a)
Requirement
of mandatory registration under section 24(ix) of the CGST Act is waived for
suppliers supplying goods through ECOs, provided that their aggregate turnover
on all India basis does not exceed the threshold limit under GST and they
should not be making any inter-state taxable supply.
b)
Composition
taxpayers would be allowed to make intra-state supply through ECOs subject to
certain conditions. The details of the scheme will be worked out by the Law
Committee of the Council and would be tentatively implemented with effect from
01.01.2023, subject to preparedness on the portal as well as by ECOs.
·
Amendment
in formula prescribed under rule 89(5) for calculation of refund of unutilized
ITC on account of inverted rated structure, 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.
·
Amendment
in Rule 96 of the CGST Rules for expeditious disposal of pending IGST refund
claims, after due verification by the GST officers, in 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 and hence the refund claims
in respect of export of goods are suspended/ withheld.
·
A
new Form GST PMT-03A is introduced for re-credit of amount in electronic credit
ledger in 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.
·
Clause
(c) of section 110 and section 111 of the Finance Act 2022, for retrospective
amendment in section 50(3) w.e.f. 01.07.2017 to levy interest on wrongly
availed ITC only when the same is utilized, is said to be notified by the
Central Government at the earliest. Relevant rules to provide more
clarity.
·
Amendment
in section 49(10) of the CGST Act to provide for transfer of balance in
electronic case ledger of a registered person to electronic cash ledger of CGST
and IGST of distinct person respectively, is said to be notified by the Central
Government at the earliest. Relevant rules to provide more clarity.
·
Late
Fee for delay in filing of Form GSTR-4 for FY 2021-22 is waived from 30.06.2022
till 28.07.2022 and the due date for filing Form GST CMP-08 for Q1 of FY
2022-23 is extended from 18.07.2022 to 31.07.2022.
·
Present
exemption of IGST on import of goods under Advance Authorisation/ EPCG/ EOU
scheme to be continued and E-wallet scheme not to be pursued further.
·
Following
circulars are issued in order to remove ambiguity and legal disputes on various
issues-
a)
Clarification
on issue of claiming refund under inverted duty structure where the supplier is
supplying goods under some concessional notification.
b)
Clarification
on various issues relating to applicability of demand and penalty provisions
under the CGST Act in respect of transactions involving fake invoices.
c)
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.
d)
Clarification
on the issues pertaining to refund claimed by the recipients of supplies
regarded as deemed export;
e)
Clarification
on various issues relating to interpretation of section 17(5) of the CGST Act;
f)
Clarification
on the issue of perquisites provided by employer to the employees as per
contractual agreement;
g)
Clarification
on utilization of the amounts available in the electronic credit ledger and the
electronic cash ledger for payment of tax and other liabilities.
·
Taxpayers
having Annual Aggregate Turnover up to Rs. 2 crores are exempted from filing
Annual Return in Form GSTR-9/ 9A for FY 2021-22.
·
Explanation
1 after Rule 43 of the CGST Rules proposed to be amended to provide that there
is no requirement of ITC reversal for exempted supply of Duty Credit Scrips by
the exporters.
·
UPI
& IMPS to be provided as an additional mode for GST payment under Rule
87(3) of the CGST Rules.
3.
Recommendations relating to GST law and
procedure, for streamlining GST Compliances
·
Rule
21A of the CGST Rules is proposed to be amended to provide 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 to the extent of continuous non-filing of specified number of
returns, once all the pending returns are filed on the portal by the taxpayer.
·
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.
·
The
Council has decided to constitute a Group of Ministers to address various
concerns raised by the States in relation to constitution of GST Appellate
Tribunal and make recommendations for appropriate amendments in CGST Act.
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