Recommendations of GST Council are only recommendatory and not binding on Union and State: Supreme Court

The Supreme Court has ruled that the central government and states have equal powers to legislate on the Goods and Service Tax (GST).

As a result, the GST council must work together to reach a workable solution between the Centre and the States, according to the Supreme Court.

In particular, the Court ruled that the GST Council’s recommendations are not binding on states, but merely have persuasive value.

“States and Centre can equally legislate on matters of GST. All recommendations of GST council is not binding on State legislature,” the Supreme Court held.

The Supreme Court further added  “Article 246A treats State and Centre as equal. Article 279 says state and center cannot act independent of each other. This also points towards competitive federalism”

Further, in addition to above, the Supreme Court also made important observations on co-operative federalism. The Supreme Court said “Indian federalism is a dialogue between cooperative and non-cooperative federalism. Indian federalism is a dialogue in which States and Centre always engages in a dialogue”

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GST Registration Services India: A Guide To GST

“A Guide to GST Registration Services India” is an article about the GST registration process, with an overview of the registration process.

What is GST?

GST is a comprehensive, indirect, multi-stage, and destination-based tax that would be levied on each value addition. Goods and services would be taxed at a variety of rates under the new tax code, including 0%, 5%, 12%, 18%, and 28%. Rough semi-precious and precious stones would be subject to a 0.25 percent tax. Gold would be subject to a 3% GST. GST would apply to all firms, regardless of size or sector.

GST is a tax system that replaces the value-added tax (VAT) system. The main features of the GST system are as follows:

  1. GST is an indirect tax system that applies to all types of goods and services.
  2. The tax rate for each type of good or service is fixed at 4%, with a lower rate of 3% applying to items that are considered essential for daily living. This means that most items that consumers purchase will be subject to the 3% rate.
  3. There are no exemptions or deductions allowed under the GST Registration Online. However, there are certain exemptions for various essential items such as food and educational services, foreign aid, agricultural inputs such as fertilizers and seeds, health care services and the supply of passenger vehicles and railway coaches.
  4. GST is levied on all supplies made to consumers by businesses within India. These supplies cover many categories of goods and services including all types of products except alcohol, cigarettes and petroleum products.

Importance of GST

GST is one of the most important legislations of India and it has come as a major overhaul in the way taxes are levied in India. With the implementation of GST, businesses operating in India will have to abide by new tax rules and regulations.

Here are Some Important Points To Know About GST:

-GST is a tax levied on products and services at the state level. It replaced all the existing indirect taxes, including Central Sales Tax (CST), State Sales Tax (SST), Value Added Tax (VAT) and Service Tax.

-GST is a federal law and every state in India is required to implement it within a certain timeframe. The rollout date for GST in each state is different, but all states are expected to be fully operational by April 1, 2020.

-GST will help reduce corruption and paperwork burdens for businesses. It will also help reduce cross-state duplication of taxes.

– There are two main types of taxes that will be collected under the GST regime – central component and state component. The central component of GST is levied on goods and services while the state component is levied on goods only.

If you are a business in India with a turnover of over Rs.20 crore, you are required to register under the GST regime and collect tax at the central component level.

– The central component of GST is levied at four rates: 0%, 5%, 12% and 18%. The rate of tax can be altered by the government through an amendment for any special circumstances. Another key aspect about GST is that it will have a transitional period of five years that will allow businesses to adapt to the new regime. Its implementation will also help avoid a cascading effect of multiple taxes.

GST is expected to reduce the country’s tax burden by around Rs.1.5 lakh crore over the next five years and is also expected to increase government revenue by over Rs.10,000 crore annually. With this, the empowered committee of state finance ministers (EC) has approved the draft of GST Law for formulation of a single Goods and Services Tax (GST).

Related Read: Importance of GST | GSTR-2B

Process of Taxation in India

The Goods and Services Tax (GST) came into effect from 1 July 2017. The GST is a nationwide indirect tax which replaces all the existing central and state taxes. The GST is levied at a uniform rate of 18% on all goods and services across India.

The process of taxation in India depends on the type of product or service being purchased. For example, taxation for services such as healthcare, legal services, etc., is governed by the Indian Income Tax Act of 1961. Whereas taxation for goods such as apparel, food items, cars etc., is governed by the Central Sales Tax Act of 1954.

In order to comply with the new GST regime, businesses need to register for GST registration services with the appropriate authorities. There are three main registration agencies through which businesses can register for GST registration services- the Central Board of Excise & Customs (CBEC), the State Tax Commissioners (STC) and the Integrated Sales Tax Network (ISSN).

How to Register for GST?

If you are an Indian business owner and you want to start or continue doing business in India, then you need to become familiar with the new tax system, the Goods and Services Tax (GST). The GST is a single, nationwide tax that will be implemented from July 1, 2017. Here are some tips on how to register for GST:

The first step is to find out if you need to register for GST. If your business activities fall within the ambit of the 12% GST rate, then you will need to register for GST. If your business activities fall within the 28% or 36% GST rates, then you will only need to collect taxes on those sales made within India.

The next step is to determine which registration form you need to file. There are three types of businesses that will need to file different forms: small companies (with a turnover up to Rs 250 crore), medium-sized companies (with a turnover between Rs 250 crore and Rs 500 crore), and large companies (with a turnover greater than Rs 500 crore). You can find more information about each of these registration forms on the website of the Directorate General of Taxation (DGTA): www.gst.gov.

Online Registration Services in India

If you are looking for an online GST registration service provider in India, there are plenty of options to choose from. You can use the services of a commercial provider or go for a free option. The main advantage of using a commercial service is that they will handle all the paperwork for you and will also provide support if you have any issues. However, if you don’t mind doing a little bit of research yourself and want to save some money, using a free option is the best way to go.

Whatever your choice, make sure to read the instructions carefully before starting the online registration process. Once you have registered with one of these services, be sure to check your account regularly for updates and information about your pending GST returns.

It is strongly advised that you contact us since our professionals will be of the utmost assistance to you.

Conclusion

GST is an important tax reform in India. The introduction of GST has made the tax system more transparent, efficient and fair.

GST is a unique tax system that will bring about significant changes in the way businesses operate in India. The introduction of GST has made it easier for businesses to comply with the tax regulations and payments.

The GST registration services India provide accurate and up-to-date information about the GST regulations, including registration requirements and Form GST 1 and Form GSTR-1.

Businesses should consider using the GST registration services India to ensure compliance with the new tax regulations.

Contact us for GST Registration Process, GST Registration Services India.

Email: taxzona@gmail.com

Contact Number: 9820 4444 77

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GSTR-2B – GST ITC can be claimed or available only when reflected in GSTR 2A/2B wef January 01, 2022 :
GSTR-2B - GST ITC can be claimed or available only when reflected in GSTR 2A/2B wef January 01, 2022 :

GSTR-2B – GST ITC can be claimed or available only when reflected in GSTR 2A/2B wef January 01, 2022 :

GSTR-2B : Hon’ble Finance Minister, Nirmala Sitaraman Ji, in budget 2021-22, proposed changes vide Finance Bill, 202, that amends the Central Goods & Service Tax Act, 2017 to incorporate a fresh condition for availing of ITC. The New Condition to avail ITC is as under :

“It was been proposed to insert the new clause ‘(aa)’, after clause (a), in Section 16(2) of the CGST Act, that provides an additional condition to claim ITC based on GSTR-2A and newly introduced GSTR-2B, i.e., ITC on invoice or debit note can be availed only when details of such invoice/debit note have been furnished by the supplier in his  outward supplies (GSTR-1) and such details have been communicated to the recipient of such invoice or debit note.”

Hence From January 2022 onwards, Input tax credit (ITC) will be available only up to what is reflected in GSTR-2B, To simplify and for a better understanding of the provisions,  here is the flow chart of what to add (+) and what to less (-) from GSTR-2B to arrive at “ITC to be claimed” in GSTR-3B.

Add : Download GSTR-2B form

(Generally it is available in the afternoon of 14th of every month)

Less : Remove ineligible ITC from GSTR-2B form

Such a motor car, food, health insurance, gift, capital expense relating to immovable property etc. Kindly refer Section 17(5) of CGST Act, 2017 for the list of Blocked/Ineligible ITC

Less : Remove ITC claimed in earlier period from GSTR-2B

Example invoice dated 10-12-2021 ITC taken in GSTR-3B of Dec-21, however supplier disclosed same ITC recently and appearing in GSTR-2B of Jan-22.

Less : Remove goods received in next month from GSTR-2B form

Example invoice date 30-01-2022 and also appearing in GSTR-2B of Jan-22 , however goods are received from company 5th Feb 2022 , this ITC is to be claimed in GSTR-3B of Feb 2022

Less : Remove ITC not relating to your business from GSTR-2B form

Example A solds goods to B, but in GSTR-1 shown GSTIN of D , Here D needs to be remove ITC from is GSTR-2B

Add : import ITC to be Taken based on bill of entries from GSTR-2B form

Example in Jan 2022, 3 bill of entries are filled by company, However in GSTR-2B of Jan only 1 bill of entries is reflecting, company can claim ITC of remaining 2 bill of entries too in Jan 2022, even though it is not reflecting in GSTR-2B

Add : pending ITC from GSTR-2B form

Example invoice date 10-11-20 21 supplier filled his GST-R1 & GSTR-3B within due date, However buyer has not taken ITC in Nov / Dec yet, same can be now taken in Jan 2022 Hope the above Summary will help you to compute exact ITC that can be availed in Form GSTR 3B from January 2022. Also, Please note, there is no relevance of 5% limit mentioned in Rule 36(4) of the Central Goods and Services Tax Rules, 2017 (“CGST Rules”)

Notes :

a) It is important that utmost efforts are to be taken to ensure that ITC balance as per books and GST returns is matching. b) It is recommended that reconciliation of ITC as per books and GSTR-2B should be done monthly basis, to keep track of ITC mismatch c) It is only for information

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Important GST And Other Due Date Calendar Month Of October 2021

7-10-2021GST New Update! Due date for deposit of tax deducted/collected for the month of September, 2021.

10-10-2021

GSTR 7 – Summary of Tax Deducted at Source (TDS) and deposited under GST laws for the month of September 2021
GSTR 8 – Summary of Tax Collected at Source (TCS) by e-commerce operators under GST law for the month of September 2021
11-10-2021GSTR 1 – Monthly filling for Assessee having Annual Turnover above Rs. 5 crores for the month of September 2021

13-10-2021

GSTR 1 – Quarterly filling for Assessee having Annual Turnover upto Rs. 5 crores for the month of July to September 2021
GSTR 6 – Details of Input Tax Credit (ITC) received and distributed by an Input Service Distributor (ISD) for the month of September 2021

15-10-2021

Due date for issue of TDS Certificate for tax deducted under section 194-IB, 194-IA & 194M in the month of August, 2021
Quarterly statement of TCS deposited for the quarter ending September 30, 2021
18-10-2021CMP 08 for the period of July to September 2021

20-10-2021

GSTR 3B – Monthly filling for Assessee having Annual Turnover above Rs. 5 crores and Assessee not opted for QRMP Scheme for the month of September 2021
GSTR 5 – Summary of outward taxable supplies and tax payable by the non-resident taxable persons for the month of September 2021
GSTR 5A – Summary of outward taxable supplies and tax payable by Online Information and Database Access or Retrieval Services (OIDAR) provider for the month of September 2021
22-10-2021GSTR 3B – For Assessee opted for QRMP Scheme for Category X State for the month of July to September 2021
24-10-2021GSTR 3B – For Assessee opted for QRMP Scheme for Category Y State for the month of July to September 2021
25-10-2021ITC -04 – Form to be filed by a manufacturer to report the summary of goods sent to or received from a job-worker for the quarter July to September 2021

30-10-2021

Due date for furnishing of challan-cum-statement in respect of tax deducted under section 194-IA, 194-IB & 194M in the month of September, 2021
Quarterly TCS certificate (in respect of tax collected by any person) for the quarter ending September 30, 2021
Form 8 i.e Statement of Accounts & Solvency of LLP

31-10-2021

Quarterly statement of TDS deposited for the quarter ending September 30, 2021
Payment of tax under the Direct Tax Vivad se Vishwas Act, 2020 with additional charge
Form MSME – All specified companies should file a half-yearly return with the registrar for outstanding payments to Micro, Small and Medium Enterprises for the period April 2021 to September 2021
GSTR 4 for the FY 2020-21
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Things to keep in mind while filing GSTR 1 and GSTR 3B for the month of September 2021
GSTR OWL

Things to keep in mind while filing GSTR 1 and GSTR 3B for the month of September 2021

Return for the period of September is the last Return for making all the amendments & adjustments for the previous year. Suppose, for example for the year 2020-21, GSTR 3B and GSTR 1 is the last return for filling all the amendments of the transactions related to the period April 2020 to March 2021.

The following actions has to be taken before filling GST Return for the month of September :

  1. Reconcile Sales Turnover reported in GSTR 1 with that of Books
  2. Reconcile Sales Turnover reported in GSTR 3B with that of Books
  3. Check whether all the credit notes issues has been declared in GSTR 1 or not and the effect of the same is taken in GSTR 3B.
  4. Reconcile if invoice raised to customers are reported in B2B (customers with GSTIN) or in B2C (Unregistered customer)
  5. Reconcile whether all the advances have been reported in GSTR 3B and GSTR 1
  6. Reconcile whether the GST paid on advances have been adjusted once the invoice is issued or not
  7. Reconciliation of ITC from GSTR 2A/2B with Inward Register
  8. Follow up with the vendors who’s ITC is not appearing in GSTR 2B / GSTR 2A
  9. Check whether all the all the debit notes issued to you have been reflecting in GSTR 2A/2B or not.
  10. Reverse all the ineligible ITC
  11. Reconcile HSN Summary with that of Sales Turnover.

No additional claim of missing ITC may be made available post filing of September GSTR 3B return. Please thoroughly follow the above checklist before you file any September GST Return.

The information provided in the Taxzona Blog does not constitute  any legal, tax or financial advice. It does not take into account your particular circumstances, objectives, legal and financial situation or needs.  Before acting on any information in the Taxzona Blog you should consider the appropriateness of the information for your situation in consultation with a professional advisor of your choosing.

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SC upheld the validity of GST Rule 89(5) read with Section 54(3)(ii)
SC upheld the validity of GST Rule 89

SC upheld the validity of GST Rule 89(5) read with Section 54(3)(ii)

Dear Member,

As we all are that the refund of unutilized Input tax credit of inverted duty (hereinafter referred to as the “ITC”) under GST is dealt under Section 54(3) (ii).

In terms of Section 54(3) of Central Goods and Service Tax (hereinafter referred to as the “CGST Act, 2017”) refund of unutilized input tax credit shall be allowed only in two cases as mentioned below;

  1. ……………………………..

 

  1. In case of Inverted duty structure i.e where GST rate of tax on Inputs being higher than the GST rate on output supplies.

However, Rule 89(5) of the Central Goods and Service Tax Rules,2017 (hereinafter referred to as the “CGST Rules, 2017”) is enacted to provide formula for determining the refund on account of inverted duty structure and a registered taxable person is entitled to refund of the unutilized input tax credit availed during the relevant period.

The provision of Rule 89(5) of the CGST Rules, 2017 as originally introduced was substituted vide Notification No. 21 /2018-CT dated 18.4.2018 prescribed a revised formula for determining the refund on account of inverted duty structure which was given retrospective effect from 1.7.2017 vide Notification No. 26/2018-CT dated 13.6.2018. The revised formula inter alia excluded input services from the scope of ‘net input tax credit’ for computation of the refund amount under the Rule.

Though, the Division bench of Hon’ble High court of Gujarat in M/s VKC Footsteps India Pvt. Ltd. v. Union of India dated 24.07.2020 held that;

“Explanation (a) to Rule 89(5) which denies the refund of “unutilized input tax” paid on “input services” as part of “input tax credit” accumulated on account of inverted duty structure is ultra vires the provision of Section 54(3) of the CGST Act, 2017.”

The High Court therefore directed the Union Government to allow the claim for refund made by the petitioners before it, considering unutilized ITC on input services as part of “Net ITC” for the purpose of calculating refund in terms of Rule 89(5), in furtherance of Section 54(3)

On the other hand, in a similar case the Division Bench of the Madras High Court passed a contrary judgment in M/s Tvl. Transtonnelstroy Afcons Joint Venture v. Union of India. The Madras High Court has concluded that;

“63…

(1) Section 54(3)(ii) does not infringe Article 14. (2) Refund is a statutory right and the extension of the benefit of refund only to the unutilized credit that accumulates on account of the rate of tax on input goods being higher than the rate of tax on output supplies by excluding unutilized input tax credit that accumulated on account of input services is a valid classification and a valid exercise of legislative power.”

The writ petitions challenging the validity of Rule 89(5) on the ground that it is ultra vires Section 54(3)(ii) were dismissed.

Thereafter, SLP(C) filed before the Hon’ble Supreme Court of India by the Union of India against the order passed by the Hon’ble Gujarat High Court in M/s VKC Footsteps v. Union of India, 2020 and filed by Assessees against the Hon’ble Madras High Court judgement in M/s TVL. Transtonnelstroy Afcons Joint Venture V. Union of India, 2020,

Now, the Hon’ble Supreme Court of India vide Civil Appeal No. 4810/2021 dated 13.10.2021 affirmed the view of Division bench of Hon’ble Madras High Court and disapproved the view of the Hon’ble Gujarat High Court.

The Hon’ble Supreme Court of India held that;

  • The appeals 55 filed by the Union of India against the judgment of the Gujarat High Court dated 4 July 2020 in VKC Footsteps India Pvt. Ltd. (supra) and connected cases are allowed and the judgment shall be set aside;

 

  • The appeals 56 filed by the assessees against the judgment of the Madras High Court in Tvl. Transtonnelstroy Afcons Joint Venture (supra) and connected cases dated 21 September 2020 shall stand dismissed. As a consequence, the writ petition filed by the assessees shall also stand dismissed

 

The observations in paragraphs 104 to 111 shall be considered by the GST Council to enable it to take a considered view in accordance with law.

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Key Recommendations of 45th GST Council Meeting

45tMeeting of the GST Council, Lucknow

17tSeptember, 2021

The GST Council’s 45th meeting was held today in Lucknow under the chairmanship of the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman. The GST Council has inter-alia made the following recommendations relating to changes in GST rates on supply of goods and services and changes related to GST law and procedure:

  1. Recommendations relating to GST rates on goods and services
  2. COVID-19relief measure in form of GST rate concessions
  3. Extension of existing concessional GST rates (currently valid till 30th September, 2021) on following Covid-19 treatment drugs, up to 31st December, 2021, namely-
  4. Amphotericin B -nil ii. Remdesivir – 5%

iii.      Tocilizumab -nil

  1. Anti-coagulants like Heparin – 5%
  2. Reduction of GST rate to 5% on more Covid-19 treatment drugs, up to 31st December, 2021, namely-
  3. Itolizumab
  1. Posaconazole iii. Infliximab
  2. Favipiravir
  1. Casirivimab & Imdevimab vi. 2-Deoxy-D-Glucose

vii.     Bamlanivimab & Etesevimab

 

 

  1. Major recommendations on GST rate changes in relation to Goods [w.e.f 1.10.2021 unless otherwise stated]

 

S. No.

Description

From

To

GST rate changes

1.

Retro fitment kits for vehicles used by the disabled

Appl. rate

5%

 

S. No.

Description

From

To

2.

Fortified Rice Kernels for schemes like ICDS etc.

18%

5%

3.

Medicine Keytruda for treatment of cancer

12%

5%

4.

Biodiesel supplied to OMCs for blending with Diesel

12%

5%

5.

Ores and concentrates of metals such as iron, copper, aluminum, zinc and few others

5%

18%

6.

Specified Renewable Energy Devices and parts

5%

12%

7.

Cartons, boxes, bags, packing containers of paper etc.

12%/18%

18%

8.

Waste and scrap of polyurethanes and other plastics

5%

18%

9.

All kinds of pens

12%/18%

18%

10.

Railway parts, locomotives & other goods in Chapter 86

12%

18%

11.

Miscellaneous goods of paper like cards, catalogue, printed material (Chapter 49 of tariff)

12%

18%

12.

IGST on import of medicines for personal use, namely i.        Zolgensma for Spinal Muscular Atrophy

ii.      Viltepso for Duchenne Muscular Dystrophy

 

iii.      Other  medicines  used  in  treatment  of  muscular atrophy recommended by Ministry of Health and Family Welfare and Department of Pharmaceuticals.

12%

Nil

13.

IGST exemption on goods supplied at Indo-Bangladesh

 

Border haats

Appl. rate

Nil

14.

Unintended waste generated during the production of fish meal except for Fish Oil

Nil (for the

 

period     1.7.2017

 

30.9.2019)

 

  1. Otherchanges relating to GST rates on goods
  1. Supply of mentha oil from unregistered person has been brought under reverse charge.

Further, Council has also recommended that exports of Mentha oil should be allowed only against LUT and consequential refund of input tax credit.

 

  1. Brick kilns would be brought under special composition scheme with threshold limit of Rs. 20 lakhs, with effect from 1.4.2022. Bricks would attract GST at the rate of 6% without ITC under the scheme. GST rate of 12% with ITC would otherwise apply to bricks.
  1. Correction in Inverted Duty structure in Footwear and Textiles sector

GST rate changes in order to correct inverted duty structure, in footwear and textiles sector, as was discussed in earlier GST Council Meeting and was deferred for an appropriate time, will be implemented with effect from 01.01.2022.

 

  1. In terms of the recent directions of the Hon’ble High Court of Kerala, the issue of whether specified petroleum products should be brought within the ambit of GST was placed for consideration before the Council. After due deliberation, the Council was of the view that it is not appropriate to do so at this stage.
  1. Major GST changes in relation to rates and scope of exemption on Services [w.e.f

1.10.2021 unless otherwise stated]

 

No.

Description

From

To

1.

Validity of GST exemption on transport of goods by vessel and air from India to outside India is extended upto 30.9.2022.

Nil

2.

Services by way of grant of National Permit to goods carriages on payment of fee

18%

Nil

3.

Skill Training for which Government bears 75% or more of the expenditure [ presently exemption applies only if Govt funds 100%].

18%

Nil

4.

Services related to AFC Women’s Asia Cup 2022.

18%

Nil

5.

Licensing services/ the right to broadcast and show original films, sound recordings, Radio and Television programmes [ to bring parity between distribution and licencing services]

12%

18%

6.

Printing and reproduction services of recorded media where content is supplied by the publisher (to bring it on parity with Colour printing of images from film or digital media)

12%

18%

7.

Exemption on leasing of rolling stock by IRFC to Indian Railways withdrawn.

8.

E Commerce Operators are being made liable to pay tax on following services provided through them

(i)   transport of passengers, by any type of motor vehicles through it [w.e.f. 1st January,

 

2022]

 

(ii)  restaurant services provided through it with some exceptions [w.e.f. 1st  January,

 

2022]

9.

Certain relaxations have been made in conditions relating to IGST exemption relating to import of goods on lease, where GST is paid on the lease amount, so as to allow this

exemption even if (i) such goods are transferred to a new lessee in India upon expiry or

 

termination of lease; and (ii) the lessor located in SEZ pays GST under forward charge.

 

 

  1. Clarification in relation to GST rate on Goods
  1. Pure henna powder and paste, having no additives, attract 5% GST rate under Chapter 14.
  1. Brewers’ Spent Grain (BSG), Dried Distillers’ Grains with Soluble [DDGS] and other such residues, falling under HS code 2303 attract GST at the rate of 5%.
  2. All laboratory reagents and other goods falling under heading 3822 attract GST at the rate of 12%.
  3. Scented sweet supari and flavored and coated illachi falling under heading 2106 attract

GST at the rate of 18%

 

  1. Carbonated Fruit Beverages of Fruit Drink” and “Carbonated Beverages with Fruit Juice” attract GST rate of 28% and Cess of 12%. This is being prescribed specifically in the GST rate schedule.
  2. Tamarind seeds fall under heading 1209, and hitherto attracted nil rate irrespective of use.

However, henceforth they would attract 5% GST rate (w.e.f. 1.10.2021) for use other than sowing. Seeds for sowing will continue at nil rate.

  1. External batteries sold along with UPS Systems/ Inverter attract GST rate applicable to batteries [ 28% for batteries other than lithium-ion battery] while UPS/inverter would attract 18%.
  2. GST on specified Renewable Energy Projects can be paid in terms of the 70:30 ratio for goods and services, respectively, during the period from 1.7.2017 to 31.12.2018, in the same manner as has been prescribed for the period on or after 1st January 2019.
  3. Due to ambiguity in the applicable rate of GST on Fibre Drums, the supplies made at 12% GST in the past have been regularised. Henceforth, a uniform GST rate of 18% would apply to all paper and paper board containers, whether corrugated or non-corrugated.
  4. Distinction between fresh and dried fruits and nuts is being clarified for application of GST

rate of “nil” and 5%/12% respectively;

 

  1. It is being clarified that all pharmaceutical goods falling under heading 3006 attract GST

at the rate of 12% [ not 18%].

 

  1. Essentiality certificate issued by Directorate General of Hydrocarbons on imports would suffice; no need for taking a certificate every time on inter-state stock transfer.

 

  1. Clarification in relation to GST rate on services
  1. Coaching services to students provided by coaching institutions and NGOs under the central sector scheme of ‘Scholarships for students with Disabilities” is exempt from GST
  2. Services by cloud kitchens/central kitchens are covered under ‘restaurant service’, and attract 5% GST [ without ITC].
  3. Ice cream parlor sells already manufactured ice- cream. Such supply of ice cream by parlors would attract GST at the rate of 18%.
  4. Overloading charges at toll plaza are exempt from GST being akin to toll.
  1. The renting of vehicle by State Transport Undertakings and Local Authorities is covered by expression ‘giving on hire’ for the purposes of GST exemption
  2. The services by way of grant of mineral exploration and mining rights attracted GST

rate of 18% w.e.f. 01.07.2017.

 

  1. Admission to amusement parks having rides etc. attracts GST rate of 18%. The GST rate of 28% applies only to admission to such facilities that have casinos etc.
  2. Alcoholic liquor for human consumption is not food and food products for the purpose of the entry prescribing 5% GST rate on job work services in relation to food and food products.

 

  1. On the issue of compensation scenario, a presentation was made to the Council wherein it was brought out that the revenue collections from Compensation Cess in the period beyond June 2022 till April 2026 would be exhausted in repayment of borrowings and debt servicing made to bridge the gap in 2020-21 and 2021-22. In this context various options, as have been recommended by various committees/ forums were presented. The Council deliberated at length on the issue. The Council decided to set up a GoM to examine the issue of correction of inverted duty structure for major sectors; rationalize the rates and review exemptions from the point of view of revenue augmentation, from GST. It was also decided to set up a GoM to discuss ways and means of using technology to further improve compliance including monitoring through improved e-way bill systems, e-invoices, FASTag data and strengthening the institutional mechanism for sharing of intelligence and coordinated enforcement actions by the Centre and the States.

 

III. Recommendations relating to GST law and procedure

 

 

  1. Measures for Trade facilitation:
  1. Relaxation in the requirement of filing FORM GST ITC-04:

Requirement of filing FORM GST ITC-04 under rule 45 (3) of the CGST Rules has been relaxed as under:

  1. Taxpayers whose annual aggregate turnover in preceding financial year is above

Rs. 5 crores shall furnish ITC-04 once in six months;

 

  1. Taxpayers whose annual aggregate turnover in preceding financial year is upto

Rs. 5 crores shall furnish ITC-04 annually.

 

 

  1. In the spirit of earlier Council decision that interest is to be charged only in respect of net cash liability, section 50 (3) of the CGST Act to be amended retrospectively, w.e.f.

01.07.2017, to provide that interest is to be paid by a taxpayer on “ineligible ITC availed and utilized” and not on “ineligible ITC availed”. It has also been decided that interest in such cases should be charged on ineligible ITC availed and utilized at 18% w.e.f. 01.07.2017.

 

  1. Unutilized balance in CGST and IGST cash ledger may be allowed to be transferred between distinct persons (entities having same PAN but registered in different states), without going through the refund procedure, subject to certain safeguards.

 

  1. Issuance of the following circulars in order to remove ambiguity and legal disputes on various issues, thus benefiting taxpayers at large:

 

  1. Clarification on scope of “intermediary services”;
  1. Clarification relating to interpretation of the term “merely establishment of distinct person” in condition (v) of the Section 2 (6) of the IGST Act 2017 for export of services. A person incorporated in India under the Companies Act, 2013 and a person incorporated under the laws of any other country are to be treated as separate legal entities and would not be barred by the condition (v) of the sub-section (6) of the section 2 of the IGST Act 2017 for considering a supply of service as export of services;
  2. Clarification in respect of certain GST related issues:
  1. W.e.f. 01.01.2021, the date of issuance of debit note (and not the date of underlying invoice) shall determine the relevant financial year for the purpose of section 16(4) of CGST Act, 2017;
  1. There is no need to carry the physical copy of tax invoice in cases where invoice has been generated by the supplier in the manner prescribed under rule 48(4) of the CGST Rules, 2017;

iii.      Only those goods which are actually subjected to export duty i.e., on which some export duty has to be paid at the time of export, will be covered under the restriction imposed under section 54(3) of CGST Act,

2017 from availment of refund of accumulated ITC.

 

 

  1. Provision to be incorporated in in CGST Rules, 2017 for removing ambiguity regarding procedure and time limit for filing refund of tax wrongfully paid as specified in section 77(1) of the CGST/SGST Act and section 19(1) of the IGST Act.

 

  1. Measuresfor streamlining compliances in GST

 

  1. Aadhaar authentication of registration to be made mandatory for being eligible for filing

refund claim and application for revocation of cancellation of registration.

 

 

  1. Late fee for delayed filing of FORM GSTR-1 to be auto-populated and collected in next open return in FORM GSTR-3B.

 

  1. Refund to be disbursed in the bank account, which is linked with same PAN on which registration has been obtained under GST.

 

  1. Rule 59(6) of the CGST Rules to be amended with effect from 01.01.2022 to provide that a registered person shall not be allowed to furnish FORM GSTR-1, if he has not furnished the return in FORM GSTR-3B for the preceding month.

 

  1. Rule 36(4) of CGST Rules, 2017 to be amended, once the proposed clause (aa) of section 16(2) of CGST Act, 2017 is notified, to restrict availment of ITC in respect of invoices/ debit notes, to the extent the details of such invoices/ debit notes are furnished by the supplier in FORM GSTR-1/ IFF and are communicated to the registered person in FORM GSTR-2B.
  1. GST Council has also recommended amendments in certain provisions of the Act and

Rules.

 

 

*****

 

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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GST amnesty Scheme 2021

Taxpayers who have failed to file their GSTR-3B for the period from Jul-2017 up to Apr-2021, can avail the benefit of the GST amnesty Scheme and file their pending GSTR-3B for the said period by paying a reduced late of Rs.1000 (Rs.500 in case of return with no tax liability) per return instead of Maximum Late Fees of Rs.10,000/-.
The Finance Ministry has extended the last date for this scheme till November 30, 2021.

CGST notification number 33/2021 dated 29th August 2021.

Earlier, Due date for the scheme was August 31, 2021.
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