Summary of the changes made vide Notification issued on 30.09.2019

[Ganeshan Kalyani]

Some of the changes made in GST is summurised below:

Change in GST rate on goods w.e.f 01.10.2019. Ref. Notification no. 14/2019-CTR dated 30.09.2019

1. GST rate on “Tamarind dried” is exempted. It was taxable @5%.
2. Woven and non-woven bags and sacks of polyethylene or polypropylene strips or the like, whether or not laminated of a kind used for packing of goods falling under HSN 3923 is reduced to 12% from 18%. However, the said HSN is still kept in 18% rate schedule which implies that plastic bags other than polyethylene or polypropylene strips or the like is still taxable @18%. 
3. GST rate on “Caffeinated beverages” falling under HSN 2202 9990 is increased to 28% GST + 12% Compensation cess from 12% GST rate.

Change in GST rate on Services w.e.f 01.10.2019 made vide Notification no. 20/2019-CTR dated 30.09.2019

1. Supply of “hotel accommodation‟ having tariff of ₹ 1000/- and up to ₹ 7500/- per unit per day or equivalent is taxable @12%.
2. Supply of “hotel accommodation‟ having tariff above ₹ 7500/- per unit per day or equivalent is taxable @18%. 
3. A residual entry attracting 12% GST on the services by way of “job work in relation to inputs owned by others” is being added. The existing residual entry stating “manufacturing services on physical inputs (goods) owned by others” attracting 18% GST is not removed. From the underlined text it implies that residual tax rate of 12% is applicable to job work which does not amounts to manufacture and residual rate of 18% GST is applicable if the process amounts of manufacture.

Change in GST exemption on Services w.e.f 01.10.2019 made vide Notification no. 21/2019-CTR dated 30.09.2019

1. The exemption notification has an entry “Storage or warehousing of agricultural produce”. In addition to this a specific entry is now inserted which states “Services by way of storage or warehousing of cereals, pulses, fruits, nuts and vegetables, spices, copra, sugarcane, jaggery, raw vegetable fibres such as cotton, flax, jute etc., indigo, unmanufactured tobacco, betel leaves, tendu leaves, coffee and tea..

Change in GST RCM Services w.e.f 01.10.2019 made vide Notification no. 22/2019-CTR dated 30.09.2019

1. Renting of motor vehicle has been added under reverse charge mechanism. The service provider should be other than body corporate and the recipient should be a body corporate. Also, the service provider opts for 5% GST rate with input tax credit only of input service in the same line of business.
2. Services of lending of securities under Securities Lending Scheme, 1997 (“Scheme”) of Securities and Exchange Board of India (“SEBI”), as amended, is added under reverse charge mechanism.
   1. Recipient: a borrower i.e. a person who borrows the securities under the Scheme through an approved intermediary of SEBI.
   2. Lender i.e. a person who deposits the securities registered in his name or in the name of any other person duly authorised on his behalf with an approved intermediary for the purpose of lending under the Scheme of SEBI.

Withdrawal of Circular No. 105/24/2019-GST dated 28.06.2019 regarding Clarification on various doubts related to treatment of secondary or post-sales discounts under GST.

1. The cited circular clarified that when post-sale discount is given to the customer with a condition that the customer should carry out sales drive, advertisement campaign etc. then it will not qualify as discount. It will be assumed that the customer has rendered the service of advertising etc. for the supplier. Hence an invoice with GST should be raised by the customer on the supplier. 

Clarification is given to file refund application afresh in case the taxpayer had mistakenly filed NIL return vide Circular No. 110/29/2019 – GST dated 03.10.2019.

1. Several registered persons have inadvertently filed a NIL refund claim for a certain period under a particular category on the common portal in FORM GST RFD-01A/RFD-01. It is clarified that the tax payer may again apply for refund under “Any Other” category. It is emphasized that the tax payer can apply only if he has filed NIL return or have not filed the application for that period.

Clarification is given on refund application in case appeal was filed against the rejected refund claim vide Circular No. 110/29/2019 – GST dated 03.10.2019.

1. An example is given where an applicant has filed refund claim for ₹ 100/-. The authority has sanctioned refund of ₹ 70/-. The applicant filed appeal for ₹ 30/-. Out of which ₹ 10/- was allowed as refund rejecting ₹ 20/-. While filing refund application the applicant had reversed ₹ 100/- from his Electronic Credit Ledger. It is clarified that ₹ 20 which is rejected in appeal unless appeal to higher forum is made by the applicant the authority should re-credit it to the applicants electronic credit ledger allowing him to avail the credit.

Compensation cess on motor car is reduced from 15% to 1% & 3%. Notification No. 2/2019-Compensation Cess (Rate) dated 30.09.2019.

1. The compensation cess for up to 13 seater motor vehicle is reduced from 15% to :
   1. 1% if engine of petrol variant is up to 1200 CC and length is up to 4000 mm
   2. 3% if engine of diesel variant is up to 1500 CC and length is up to 4000 mm

Discussions to this article

[KASTURI SETHI]

Dear Sh.Ganeshan Kalyani Ji,

Your article has motivated me to delve into job-work processes deeply. Govt. should remove the gap between two rates tax of 18% and 12%. There should be one rate of tax i.e.12% on job-work process whether amounts to manufacture or not. The concept of two-rates will generate avoidable litigation which is uncomfortable for tax payers. Two rates will waste precious time, money and energy of the assessees, Govt. and various Courts. The Trade should make representation to the GST Council for relief which will be in the interest of the nation in the long run.