The 53rd meeting of the Goods and Services Tax (GST) Council was held on June 22 in New Delhi. Several recommendations were made at the meet to refine tax rates and service exemptions under the GST regime. The meeting, chaired by Union Finance Minister Nirmala Sitharaman, deliberated on various proposals to streamline GST applicability across goods and services.
Here are the key highlights:
1. Aircraft Parts and Tools: 5% IGST on imports of parts, components, testing equipment, tools and tool-kits of aircrafts.
2. Milk Cans: 12% GST on all steel, iron, and aluminium milk cans.
3. Carton Boxes: GST on cartons, boxes, and cases of paper reduced from 18% to 12%.
4. Solar Cookers: 12% GST on all solar cookers whether single or dual energy source
5. Poultry Machinery Parts: 12% GST on parts of poultry keeping machinery.
6. Sprinklers: 12% GST on all types of sprinklers, including fire water sprinklers.
Exemptions
1. Defence Imports: IGST exemption on specified defence items extended until 30th June, 2029.
2. RAMA Programme Imports: IGST exemption on research equipment/buoys under RAMA programme.
3. SEZ Imports: Compensation Cess exemption on imports by SEZ units/developers since 01.07.2017.
Other Goods-related changes:
Additional changes included exemptions on supply of aerated beverages and energy drinks to unit-run canteens under the Ministry of Defence, and ad hoc IGST exemptions on technical documentation for AK-203 rifle kits imported for Indian Defence forces.
The council also proposed critical adjustments concerning services.
• Certain Indian Railways services and intra-railway supplies have been exempted, such as services like platform tickets, retiring rooms, cloak rooms, battery-operated car services, and intra-railway transactions.
• Accommodation Services: Accommodation services exemptions for relief to students and working professionals. Accommodation up to Rs 20,000/month per person for stays of 90+ days have been exempted.
• SPV Services: SPV services to Indian Railway and maintenance services provided by Indian Railways to SPVs have been exempted.
Other recommendations:
Interest and Penalties:
• Waive interest and penalties for Section 73 demand notices for FY 2017-18, 2018-19, 2019-20 if full tax is paid by 31.03.2025.
Input Tax Credit (ITC):
• Time limit for ITC on invoices/debit notes under Section 16(4) for FY 2017-18 to 2020-21 deemed as 30.11.2021 for returns filed by this date.
Monetary limits for GST appeals:
• Monetary limits for department appeals: Rs 20 lakh (GST Appellate Tribunal), Rs 1 crore (High Court), Rs 2 crore (Supreme Court).
Aadhaar Authentication:
The GST Council recommended nationwide implementation of biometric-based Aadhaar authentication for GST registration applicants in phases. This aims to enhance registration integrity, curb fraudulent input tax credit claims via fake invoices.
Reduction in Pre-deposit Amount for GST Appeals:
Pre-deposit amount reduced for filing appeals under GST Act to ease cash flow: maximum reduced to Rs. 20 crores CGST and SGST.
Appeal Filing Period:
• Amend CGST Act to start the three-month period for GST Appellate Tribunal appeals from a notified date.
Interest Burden:
• No interest on delayed return filing if amount is available in Electronic Cash Ledger on the due date.
Anti-Profiteering:
• Sunset clause from April 1, 2025, for new Anti-profiteering applications.
Reduction in TCS Rate by Electronic Commerce Operators (ECOs):
TCS rate by Electronic Commerce Operators (ECOs) reduced from 1% to 0.5% to ease financial burden on suppliers.
Exemption of GST on Extra Neutral Alcohol:
Amendment recommended to exclude Extra Neutral Alcohol from GST when used for manufacturing alcoholic liquor.
Amendment in IGST Act and CGST Act for Export Duty Cases:
Amendments recommended to restrict IGST refund in cases where export duty is payable.
Reduction in Threshold for B2C Inter-State Supplies:
Threshold reduced from Rs. 2.5 lakh to Rs. 1 lakh for reporting B2C inter-State supplies invoice-wise in FORM GSTR-1.
Monthly Filing of GSTR-7:
GSTR-7 to be filed monthly by TDS deductors without late fee for delayed filing of Nil returns.
Common time limits for Demand Notices in CGST Act Amendments:
The GST Council recommended amendments to the CGST Act, 2017 to establish a uniform time limit for issuing demand notices and orders, regardless of whether fraud, suppression, or willful misstatement are involved. This change is aimed at simplifying the enforcement process. Additionally, the time allowed for taxpayers to avail of reduced penalties by paying the tax demanded along with interest has been extended from 30 days to 60 days for FY 2024-25 onwards.
Other changes related to Services
Co-insurance Premium: Declared as no supply under Schedule III with regularization of past cases.
Re-insurance Commission: Also declared as no supply under Schedule III with regularization of past cases.
GST on Reinsurance Services: Regularized on ‘as is where is’ basis for specified insurance schemes.
Retrocession Clarification: Retrocession defined as re-insurance of re-insurance, eligible for exemption.
RERA Collections: Clarified as exempt from GST under entry 4 of Notification No.12/2017-CTR.
RuPay Debit Cards: Sharing incentives not taxable when defined by NPCI in consultation with banks.
Source : https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2027982
