Major Recommendations as per 23rd GST council Meeting
Ms. Pooja Salunke
UJA Indirect Tax Team
Changes recommended in Composition Scheme
|(a)||GST Composition Rate
|(b)||Taxpayer also providing Services with supply of Goods||Composition Scheme not allowed to Taxpayer who is supplying any Services||Supply of Services by Composition taxpayer upto Rs.5 Lakh per annum will be allowed by exempting the same|
|(c)||Eligibility for Composition Scheme||Composition Scheme allowed upto turnover of Rs.1 crore||Annual turnover eligibility for composition scheme will be increased to Rs.2 crore from the present limit of Rs.1 crore under the law.
Thereafter , eligibility for composition will be increased to Rs.1.5 crore p.a
The Changes in at (2) & (3) above will be implemented only after the necessary amendment to the CGST & SGST Acts.
Exemption to small service provider through E-Commerce making inter- state taxable supplies from registration for turnover upto basic threshold.
Anyone making inter-State taxable supplies, except inter-State job worker, is compulsorily required to register, irrespective of turnover.
In an earlier meeting of the GST Council, it was decided to exempt those service providers whose annual aggregate turnover is less than Rs. 20 lakhs (Rs. 10 lakhs in special category states except J & K) from obtaining registration even if they are making inter-State taxable supplies of services.
As a further measure towards taxpayers’ facilitation, it has been decided to exempt such suppliers providing services through an e-commerce platform from obtaining compulsory registration provided their aggregate turnover does not exceed twenty lakh rupees. As a result, all service providers, whether supplying intra-State, inter-State or through e-commerce operator, will be exempt from obtaining GST registration, provided their aggregate turnover does not exceed Rs. 20 lakhs (Rs. 10 lakhs in special category States except J & K).
Exemption from GST Rate –Specified Services
- GST on services by way of admission to “protected monuments” to be exempted
Reduction in GST Rate – Specified Services
|Sr. No.||Description of services||Earlier||Now|
|1||Restaurants Services||Non AC – 12%
With AC – 18%
|All stand- alone restaurants irrespective of air conditioned or otherwise will attract 5% GST without ITC|
|2||Restaurants Services in hotel premises||18%||Restaurants in hotel premises having room tariff of less than Rs. 7500 per unit per day will attract GST of 5% without ITC|
|3||Restaurants Services in hotel premises||28%||Restaurants in hotel premises having room tariff of Rs. 7500 and above per unit per day (even for a single room) will attract GST of 18% with full ITC.|
- Outdoor catering will continue to be at 18% with full ITC.
- GST rate on job work services in relation to manufacture of those handicraft goods in respect of which the casual taxable person has been exempted from obtaining registration, to be reduced to 5% with full input tax credit.
Exemption from GST Rate – Specified Goods
- Exemption from IGST on imports of life saving medicine supplied free of cost by overseas supplier for patients, subject to certification by DGHS of Centre or State and certain other conditions
- Exemption from IGST on imports of goods (other than motor vehicles) under a lease agreement if IGST is paid on the lease amount.
- To extend IGST exemption presently applicable to skimmed milk powder or concentrated milk, when supplied to distinct person under section 25(4) for use in production of milk for distribution through dairy cooperatives to where such milk is distributed through companies registered under the Companies Act.
- Exemption from IGST on imports of specified goods by a sports person of outstanding eminence, subject to specified conditions
- Exemption from GST on specified goods, such as scientific or technical instruments, software, prototype supplied to public funded research institution or a university or IISc, or IITs or NIT.
- Coverage of more items, such as temporary import of professional equipment by accredited press persons visiting India to cover certain events, broadcasting equipments, sports items, testing equipment, under ATA carnet system. These goods are to be re-exported after the specified use is over.
Reduction in GST Rate – Specified Goods
- Rates on 177 tariff items are proposed to be reduced to 18% from earlier 28%.
- On around 13 tariff items, the rates are proposed to be reduced to 12% from earlier 18%.
- On around 6 tariff items, the rates are proposed to be reduced to 5% from earlier 18%.
- On around 8 tariff items, the rates are proposed to be reduced to 5% from earlier 12%.
- Around 6 tariff items are now exempted from tax.
Please click here to check the changed rates.
- Exports of services to Nepal and Bhutan have already been exempted from GST. It has now been decided that such exporters will also be eligible for claiming Input Tax Credit in respect of goods or services used for effecting such exempt supply of services to Nepal and Bhutan
- A facility for manual filing of application for advance ruling is being introduced for the time being
Clarification – Certain Specified Goods
- To clarify that inter-State movement of goods like rigs, tools, spares and goods on wheel like cranes, not being in the course of furtherance of supply of such goods, does not constitute a supply
- This clarification gives major compliance relief to industry as there are frequent inter-State movement of such kind in the course of providing services to customers or for the purposes of getting such goods repaired or refurbished or for any self-use.
- Service provided using such goods would in any case attract applicable tax.
- To prescribe that GST on supply of raw cotton by agriculturist will be liable to be paid by the recipient of such supply under reverse charge
- Supply of e-waste attracts 5% GST rate. Concerned notification to be amended to make it amply clear that this rate applies only to e-waste discarded as waste by the consumer or bulk consumer.
Clarification – Certain Specified Services
- It is being clarified that credit of GST paid on aircraft engines, parts & accessories will be available for discharging GST on inter–State supply of such aircraft engines, parts & accessories by way of inter-State stock transfers between distinct persons as specified in section 25 of the CGST Act, notwithstanding that credit of input tax charged on consumption of such goods is not allowed for supply of service of transport of passengers by air in economy class at GST rate of 5%.
- A suitable clarification will be issued by way of a Circular that processed products such as tea (i.e., black tea, white tea etc.), processed coffee beans or powder, pulses (de-husked or split), jiggery, processed spices, processed dry fruits, processed cashew nuts etc. fall outside the definition of agricultural produce given in notification No. 11/2017-CT(R) and 12/2017-CT(R) and therefore the exemption from GST is not available to their loading, packing, warehousing etc.
- A suitable clarification will be issued that
- Services provided to the Central Government, State Government, Union territory under any insurance schemefor which total premium is paid by the Central Government, State Government, Union territory are exempt from GST under Sl. No. 40 of notification No. 12/2017-Central Tax (Rate);
- Services provided by State Government by way of general insurance (managed by government) to employees of the State government/Police personnel, employees of Electricity Department or students are exempt vide entry 6 of notification No. 12/2017-CT(R) which exempts Services by Central Government, State Government, Union territory or local authority to individuals
Rationalization – Certain Specified Services
In order to obviate dispute and litigation, it is proposed that irrespective of whether permanent transfer of Intellectual Property is a supply of goods or service
- Permanent transfer of Intellectual Property other than Information Technology software attracts GST at the rate of 12%; and
- Permanent transfer of Intellectual Property in respect of Information Technology software attracts GST at the rate of 18%.
Changes Recommended in return Filing Dates
- All taxpayers (except Composition supplier) would be required to file return in FORM GSTR-3B along with payment of tax by 20th of the succeeding month till March, 2018.
- Timeline for filing the details of return in Form GSTR-1is proposed to be as follows:
- Taxpayers with annual aggregate turnover upto Rs. 1.5 crore needs to file GSTR-1 on quarterly basis.
- Taxpayers with annual aggregate turnover more than Rs. 1.5 crore needs to file GSTR-1 on monthly basis
- The time period for filing GSTR-2 andGSTR-3 for the months of July, 2017 to March 2018 would be worked out by a Committee of Officers.
- Filing of form GSTR-1 will continue for the entire period i.e. till March 2018 without requiring the filing of GSTR-2 & GSTR-3 for the previous period.