21ST GST COUNCIL MEETING: MAJOR DECISIONS

[Dr. Sanjiv Agarwal]

GST Council (GSTC) which met at Hyderabad on 9^th September, 2017 for 21^st time took may decisions, major ones being hike in Compensation Cess on automobiles (motor cars) and extension of return filing dates for July, 2017.

Following are the key decisions taken by GSTC:

• Return Form GSTR-3B will continue for six months, i.e. upto December, 2017
• Renewed return dates (as on 09.09.2017) for July, 2017:

GSTR-1	10th October, 2017 (others)
GSTR-1	3rd October, 2017 (with > ₹ 100 crore turnover)
GSTR-2	31st October, 2017
GSTR-3	10th November, 2017
GSTR-4	18th October, 2017
GSTR-6	13th October, 2017
TRANS-1	31st October, 2017

•  Time frame for returns for August / September, 2017 to be announced later.
• Option to choose composition scheme can be availed till 30^th September, 2017 which can be availed from 1^st October, 2017.
• Registration of persons liable to be registered for TDS and TCS shall commence on 18^th September, 2017. The exact date of deduction / collection will be notified later.
• Reduction of GST rates in about 40 items of goods such as walnuts, tamarind, roasted gram, some pooja items, plastic raincoats, khadi fabric sold by KVIC, saree fall, clay idols, irrigation nozzles, charkha for yarn, cotton quilts, worked cords, brooms / brushes, table / wood kitchenware, paper mache articles, stone inlay work, statues, ceramic pots etc. (see table below)
• 5% GST on branded pulses, cereals etc registered as on 15.05.2017
• Packaged products bearing some symbol on which actionable claim may be made to suffer 5% GST
• Indigenous handmade musical instruments (134 in number) to attract Nil GST rate.
• Constitution of Group of Ministers to monitor and resolve IT challenges faced in GSTN / GST implementation / filing of returns. This group of members will be a five member team to oversee technical glitches that the tax filing portal, GSTN is presently encountering.
• Compensation cess hiked on motor cess from 2% to 7% except electric cars, hybrid cars and small cars to be effective from 11.09.2017:

• Small cars, 13-seater vehicles & hybrid cars : No change
• Mid-size cars : Cess increased by 2%
• Large cars: Cess increased by 5%
• SUV's : Cess increased by 7%

• GST on construction services (works contracts for public structures) for Government reduced from 18% to 12%.
• Handicraft traders below turnover of ₹ 20 lakhs having inter-state supplies need not register for IGST.
• Supply of heavy and nuclear fuel by Department of Atomic Energy to NPCIL exempt from GST.

Changed timelines for GST Returns

The relaxation in dates for filing various returns under GST for July is also a major decision and the following table indicates the revised timelines for returns pertaining to July, 2017

Details / Return	Tax Period	Revised due date
GSTR-1	July, 2017	10.10.2017
GSTR-1 (turnover > ₹ 100 crore)	July, 2017	03.10.2017
GSTR-2	July, 2017	31.10.2017
GSTR-3	July, 2017	10.11.2017
GSTR-4	July-September, 2017	18.10.2017 (no change)
GSTR-6	July, 2017	13.10.2017

 

Compensation Cess on Vehicles

In case of motor cars, there will be status quo maintained on rates so far as 1200 cc petrol and 1500 cc diesel cars are concerned. There will be no additional burden on such cars. With latest changes in cess, GST Council has introduced for first time the progressive or graded cess levy on different types of motor cars or vehicles. The old and revised compensation cess w.e.f. 11.09.2017 is as under:

Segment	HSN  Code / Heading	Compensation Cess rate (upto 10.09.2017)	Compensation Cess rate w.e.f. 11.09.2017
Passenger Vehicles of heading 8703
Small Cars (length < 4 m ; Petrol<1200 cc)	8703	1%	No change
Small Cars (length < 4 m ; Diesel < 1500 cc)	8703	3%	No change
Mid Segment Cars (engine < 1500 cc)	8703	15%	17%
Large Cars (engine > 1500 cc)	8703	15%	20%
Sports Utility Vehicles (length > 4m ; engine > 1500 cc; ground clearance > 170 mm)	8703	15%	22%
Motor vehicles for transport of not more than thirteen persons, including  the   driver [falling under  sub-headings  8702 10, 8702 20, 8702 30 or 8702 90]	8702	15%	No change
Hybrid Mid Segment Cars (engine < 1500 cc)	8703	15%	No change
Hybrid Large Cars (engine > 1500 cc)	8703	15%	No change
Hybrid Sports Utility Vehicles (length > 4m ; engine > 1500 cc; ground clearance > 170 mm)	8703	15%	No change

Key GST rate variations in select items

S.No.	HSN	Description	Earlier  GST Rate	Revised GST Rate
1.	2106	Roasted Gram	12%	5%
2.	2106	Butters, including idli / dosa batter	18%	12%
3.	3307 4100	Dhoop batti, dhoop, sambhrani and other similar items	12%	5%
4.	3926	Medical grade sterile disposable gloves of plastics	28%	18%
5.	50 to 55	Khadi fabric, sold through Khadi and Village Industries Commission's outlets	5%	Nil
6.	5808	Saree fall	12%	5% (with no refund of ITC)
7.	44, 68, 83	Idols of wood, stone (including marble) and metals (other than those made of precious metals)	28%	12%
8.	7102	Rough industrial diamonds including unsorted rough diamonds	3%	0.25%
9.	9404	Cotton quilts	18%	5% on cotton quilts not exceeding ₹ 1000 per piece, 12% on cotton quilts exceeding ₹ 1000 per piece
10.	9603	Brooms and brushes, consisting of twigs or other vegetable materials, bound together, with or without handles. Note: Phool bahari jhadoo is already at Nil GST.	5%	Nil
11.	4823	Paper mache articles	18%	5%
12.	68	Stone inlay work	28%	12%
13.	6913	Status and other ornamental articles	28%	12%
14.	9601	Worked ivory, bone, tortoise shell, horn, antlers, mother or pearl and other animal carving material and articles of these materials (including articles obtained by moulding), articles of coral	28%	12%

Returns file/ Tax collected so far

GSTC also reviewed filing of returns and noted that over 70% of the eligible taxpayers had filed returns fetching above ₹ 95000 crores as tax. About ₹ 60,000 crore has been claimed as input tax credit.