Minutes of the 50th Meeting of GST Council held on 11th July, 2023 - GST - 50th GST Council Meeting

Minutes of the 50 th Meeting of the GST Counci l held on 11 th July, 2023 The 50 th meeting of the GST Council was held on 11 th July , 2023 under the Chairpersonsh ip of the Hon ble Un i on Finance Minister , Smt. Nirma la Sitharama n at Vigyan Bhawan , New Delhi. The list of Hon'ble Members of the Council who attended the meeting is at Annexure-1. The list of the officers of the Centre, States, Un i on Territories with legislature , GST Council Secretariat and GSTN who attended the meeting is at Annexure-2. 1.2 T he following agenda items were listed for discussion in the 50th meeting of the GST Counc il: TABLE OF CONTENTS SI. No. Agenda Item l. Confirmation of Minutes of 49th GST Counci l Meeting held on 1 8th February , 2023 2 . Ratification of the Notifications, Circulars and Orders issued by the GST Counci l and decisions of GST Implementation Committee for the information of the Council 3. Issues recommended by the Law Committee for the consideration of the GST Council i. Rules Amendment in accordance with the recommendations made by Group of Ministers (GoM) on implementation of E-way bill requirement for movement of Gold/ Precious stones under chapter 71. ii. Capac it y based taxation and Spec ial Composition Scheme in certain Sectors in GST. iii. C larifi catio n on charging of int erest under section 50(3) of the CGST Act, 2017 , in cases of wrong availment of I GST credit and rever sa l thereof iv. I ss ue s pertaining to interpretation of Section 10 of IGST Act , 2017 v. Clar i fication with respect to applicability of e- in voice w.r.t. supplies made by a registered person to Government Departments o r establishment/ G ove rnment agencies / l ocal authorities / PS Us registered solely for the purpo se of TDS vi. Clarification o n refund related issues vii. C l arification to deal with difference in Input Tax Credit (ITC) avai l ed in FORM GSTR - 3B as compared to that detailed in FORM GSTR-2A for the period 0 1.04.2 0 19 to 31.12 . 2021 viii. Mechan i sm to dea l with differences in ITC between GSTR-2B and GSTR - 3B, along with draft ru l es and proposed FORM DRC - 0lC fo r impleme n ting the same ix. Procedure for Recovery of Tax and I nterest in terms of Rule 88C(3) x. Ann u al Ret urn s for FY 2022-23 x i. Amendment in CGST Rules, 2017 regarding registration xi(a) Pilot P roject for biometric-based Aadhaar authentication of registration applica n ts in Pudu c herry xii. C l arificatio n o n TCS li abi li ty under Sec 52 of the CGST Act, 2017, in case of multiple E-commerce Operators (ECOs) in one transaction xiii. Cla rifi cat i on on ava il abi l ity of ITC in respect of warranty rep l acemen t of parts and repair services during warranty per i od xiv. Amendme n ts in CGST Rules co n sequent to ame ndm ent in CGST Act vi de Finance Act 2023 xv. Goods a n d Services Tax Appellate Tribuna l (Appo intment and Condit i o n s of Service of President and Members) Rules, 2019 xvi. Seek in g cla r ity on taxability of share ca pit al held in subsid i ary com p any by t h e parent company xvii . Amendment in CGST Rules , 2017 xv ii i. Proposal to provide a s pecial proce dur e to file appeal against the orders passed in accordance with the Ci r cular No . 1 82/14/2022-GST, dated 10.11.2022, pursuant to the directions issued b y the Hon ' b l e Sup r eme Court in the Union of India v/s F ilc o Trade Centre Pvt. Ltd. xix. I ss ues pertaining to I S D m ec hanism and taxability of serv ices prov id ed by one distinct person to anot h er d i s tinct person 4 . Recommendation s of th e F i t m ent Com mi ttee fo r the co n s i deratio n of the GST Council a) Recommendations made by the Fitment Committee fo r making changes in GST rate s or for issuing clarifica ti ons in re l a t ion to goo d s -Annexure- I b) I ss u es where no cha n ge has been proposed by the Fitment Committee in relation to goods - Annexure- U c) Issue s deferred by the F i t m e nt Comm itt ee for further exam inati on in re l ation to goods - Annexure-III d) Re comme ndation s made by t h e Fitment Co mmit tee for makin g changes in GST rates or for i ssuing clarifications in relation to services - Annexure - IV e) Issues where no c h ange has been proposed by the Fitment Co mmi ttee in re la t i on to services - Annexure-V f) I ss u es d eferred by the F i t m e n t Co mmitt ee for further exa minat ion in relation to services - Annexure-VI g) Recommendation s of Fitment Committee on posit i ve li st of services to be specified m Sr. No. 3/3A of Notificat i on No. 12 /2 017-CT(R)) dated 28.06.2017 5. Second Report of the Group of M ini sters (GoM) on Casinos, Race Courses and Onlin e Gaming 6. Recommendations of the l 8th 19th IT Gr i evance Redressal Committee for approval/decis i on of the GST Co un cil a. D ecis i o ns / recommendations of the 18th m eet in g of t h e I TGRC b. D ecisions/recommendations of the 19th meeting of the ITGRC 7 . Scheme of budgetary support under GST regime in li e u of ea rli er exc i se duty exempt i on schemes to e li g ib le manufacturing units und e r di ffe r en t Indu strial Pro m otion Schemes of the Govern m ent of India 8. Ad- h oc Exe m pt i o n s Orders i ss u ed under Sect i o n 25(2) o f the Customs Act, 196 2 to be placed before the GST Counc il for in for m a ti on. 9. Report of 3 rd Meeting of the Gro up of M ini sters (GoM) on GST System Reforms 10 . Proposal for creation of State Co-ordination Committee comprising of the GST authorities from the State and t h e Ce n tral Tax Admin i strations 11. Implementation of GSTAT conseq u e n t to passing of Finance Act, 2023 11. ( Addendum) Addendum to Annexure-A of the Agenda item 11 12. P erfo rmance R epo r t of Competition Comm is s i o n of Indi a (CC I ) for month o f December, 2022 and 4th quarter of the F . Y 2022 - 23 a l o n g with Performance R epo rt s of State Level Screening Co mmitt ee (SLSC), Standing Committee (SC) an d Direct orate General of Ant i-P rofiteer in g (DGAP) for 3rd quarter and 4th quarter of the F. Y 2022 - 23. 13. Request for extensio n of due dates for fi li ng GSTR-7, GSTR-1 GSTR - 3 B for t he month s of A pril , May a nd June 2023 and extension of Amnesty Schemes in the State of Man ipur 14. R ev i ew of revenue p os iti o n under Goods and Se rvi ces Tax 15. Any ot h e r agenda w ith the permi ssion of the C h a ir 1 .3 The Secretary to the GST Council, welcomed all the Hon ble M e mb ers of the Co un c il and part i c i pating office r s to th e l andmark 50th meet i ng of the GST Council. 1. 4 The Secretary on be h alf of the Co un c i l we l come d the fo ll ow in g in coming Hon ble Members to the 50 th M ee ting of the GST Counci l a. Ms. A tishi Marlena , Financ e Minister, Delhi b. Shri Krishn a B yre Gow da, Minister for Revenue Department , Karnataka c . Sh. S udhir M un gantiwar, Hon 'bl e Minister of Forests , Maharashtra d . S hri A. T. Mondal , Ca binet Minister, Com munity and Rural Development, Power and Taxation Departments, Meghala y a e. S hri K. G. Ken ye, Minister for Power a nd Parliament Affa ir s, Naga land f . Shri Bikram Keshari Arukba, Minister for F inance , Odisha g . Shri Thangam T henn arasu, Minister for F inance and H uman Resource Management , Tam il Nadu 1. 5 The Secretary in fo rm ed th e Co uncil that a s h o rt film titled 'GST Counci l : 50 steps towards a jo urn ey ' h as been prepared by GST Co uncil Sec r eta ri at in collaboration wit h Directorate General of Taxpayer Services, CBIC. The film was screened with the permission of the Hon'ble Chairperson. The Secretary informed that the film has been prepared in Hindi , English and various regional languages. 1.6 Further, the first set of a special postal cover and customized my stamp designed by the GST Council Secretariat through Department of Posts was presented by Smt. Manju Kumar , Chief Post Master General (CPMG) , Delhi to the Hon'ble Chairperson of the GST Council to mark the occasion. All Hon ble M e mbers joined the release ceremony. The Secretary thanked the CPMG, Delhi and her team. 1.7 The Secretary stated that a GoM on Casinos, Race Courses and Online Gaming was formed to examine the issue of valuation of services and related aspects with Sh. Conrad Sangma, Hon ble Chief Minister , Meghalaya as Convenor and Hon'ble Members from Maharashtra , West Bengal, Gujarat, Goa, Tamil Nadu, Uttar Pradesh and Telangana as Members. The GoM had submitted its 2nd report which was being placed before the Council for deliberations. He thanked all the Hon ' ble Members of this GoM for their valuable recommendations. 1.8 The Secretary further stated that the GoM on GST System Reforms had submitted the report of its third meeting which was being placed before the Council for deliberations. He thanked the Hon'ble Convenor of this GoM from Maharashtra and other Hon ble Members of this GoM from Haryana , Delhi , Assam, Andhra Pradesh, Odisha, Tamil Nadu and Chhattisgarh. 1.9 The Secretary informed the Council that a National Coordination Meeting was held on 24 th April , 2023 with the officers from Center, States, Union Territories , GST Council Secretariat and G$TN wherein various is s ues on greater coordination on GST administration and sharing of best practices by both Center and states were discussed. The agenda of this meeting involved greater use of technology for GST compliance and tackling tax evasion. One of the outcomes of this meeting was All India drive against fake registrations from 16 th May , 2023 to 15 th July , 2023. The coordinated effort from both Central and State GST administrations had yielded excellent result s. He appreciated the outstanding efforts and excellent performance of both the State and Central GST officers. 1.10 The Secretary also appreciated the efforts of the State and Central GST administrations in revenue augmentation as the revenue in first quarter of 2023-24 was 12 % higher than the revenue in same period for 2022-23. 1.11 The Secretary informed that the agenda for the 50th meeting of the GST Council was discussed in detail during the Officers Meet in g a day before which wo u ld help immensely in steering the agenda today . 1.12 The Sec r eta r y soug h t the permission of the chair to begin deliberations on each agenda item. 2. Age nda Item 1: Confirmation of the Minutes of the 49 th M e eting of the GST Council 2.1 The first agenda item pertained to confirmation of the minutes of t h e 49 th Meeting of t h e GST Council which was held on 18 th February , 2023 at New D e lhi . The Secretary stated that the minutes were circulated to a ll Hon ble Members and suggestions were r ece i ved from States of Haryana and Tamil Nadu. The minutes of the 49 th meeting of the GST Council after incorporating the changes suggested by the States were p l aced before the Council for confirmation . 2.2 The Hon'ble Member from Tamil Nadu stated that the s u ggestions made by the former Finance Minister of Tamil Nadu during the last meeting have . not been incorporated. In regard to selection of Technical Members for GST AT Benches , the States should be taken into account keeping in v i ew the spirit of federa li sm. The State Search-cum - Se l ection Committee should be empowered to select both the Judici a l Members and Techn i ca l Members of the State B e nch . The present syste m w ill pose a h ercu l ean task for the Centre. The Sec r eta r y clarified that th e agenda it em was di scussed in detail, a nd it was agreed that a draft would be pre pa r e d by the Secretariat and circulated. The Cha ir pe r son was authorized to take a fina l v i ew. The minutes have been recorded accord in g l y . Action was a l so taken accordingly - a draft law was prepared , it was circu l ated, comments rece i ved and incorporated and then approval of the Chairperson taken. The final draft Act has also been circulated to Sta t es, based on w hi ch they have taken actions such as passing the State Act. The Hon'ble Memb e r from the State of Tamil Nadu reiterated that the State Search-cu m -Se l ectio n Com mi ttee shou ld be empowe r e d for select ion of both the Judici a l Members a nd Technical Members of the State Bench. The Secretary stated th at the same wo ul d be r ecorded. He req u ested that minutes be approved Decision: The Council adopted the M inutes of the 49 th m e eting of the GST Council. 3. Agenda item 2: Ratification of the Notifications, Circulars and Orders issued by the GST Council and decisions of GST Implementation Committee for the information of the Council 3.1 The Sec ret ary took up the n ext agenda pertaining to the Ratification of the Notifications, C i rcu lar s and Orders issued by the GST Counci l and decisions of GST Implementation Committee for the information of the Council (Page 92-104 of the agenda). He stated that this agenda was discussed in the officers meeting held yesterday and there was consensus. He requested t h e Counc il to ratif y the Notifications, Circulars and Orders issued by the GST Council and take not e of the decisions of the GST Implementation Committee (G I C) . Decision: The Council ratified the Notifications, Circulars and Orders issued by the GST Council and took note of the decisions of GST Implementation Committee. 4. Agenda Item 3 : Issues recommended by the Law Committee for the consideration of the GST Council 4.1 The Secretary took up the next Agenda for the conside ration of the GST Council. He informed that these agendas were discussed in the Officers ' Meeting he l d on 10 th July , 2023 and there was an agreement among the all officers on most of the issue s . Then , the Principal Commissione r , GST Policy Wing made the detailed presentati o n (attached as Annexure-3) giving overview of the recommendations made by the Law Committee, as well as the gist of the discussions h e ld in the Officers ' meeting on 10 th July 2023. Agenda Item 3(i): Rules Amendment in accordance with the recommendations made by Group of Ministers (GoM) on implementation of E-way bill requirement for movement of Gold/ Precious stones under Chapter 71 4.2 Pr. Comm i ssioner, GST Policy in formed that the as per the recommendation of GoM regarding amendment in Rules for implementation of E-Way Bill requirement for movement of Gold/Precious stones , Law Committee has recommended in sert ion of Rule 138F in the CGST Rules 2017 as we ll as in SGST Rules , 2017 for those States w ho wa nt to mandate the requirement of e-way bill for intra-state Movement of go ld and precious stones under Chapter 71 as specified at SI. No. 4 and 5 of the Annexure appended to sub rule 14 of Rule I 38. He also mentioned that this wa s agreed to in the Officers ' meeting. Decision: The Council agreed with the recomm endat ions of the Law Committee along with the proposed amendments in CGST Rules, 2017 and in concerned SGST Rules, 2017. Agenda Item 3(ii): Capacity based taxation and Special Composition Scheme in certain Sectors in GST 4.3 Pr. Commissioner, GST Policy informed that for implementation of the recommendations made by GoM on Capacity based taxation and Special Composition Scheme in certain Sectors, Law Committee has proposed to notify special procedure under section 148 of the CGST Act, 2017 to be followed by the manufacturers of commodities recommended by GoM for registration of the machines, maintenance of records of inputs and production, and submission of special monthly statement. Law Committee has also recommended inse1tion of Sect i on 122A in CGST Act, 2017 to provide for penalty for non -declaration of machines by such manufacturers. 4.4 Law Committee further recommended that the amendment made to Section 16 of IGST Act, 2017 through the Section 123 of the Finance Act , 2021 ma y be notified for restricting the IGST Refund route in respect of certain supp l ies or suppliers for exports. Further , tobacco , pan masala and similar items (as recommended by GoM) and mentha oil may be notified under sect i on 16(4) of IGST Act, 2017 as the goods, on the export of which IGST refund route will not be available. 4.5 He also mentioned that this was discussed in Officers' meeting and was agreed to. Officers a l so suggested 01. l 0.2023 as the date from which the p r ovisio n s of Section 123 of the Finance Act, 2021 may be brought into effect. Decision: The Council agreed with the recommendations of the Law Committee detailed along with the proposed notification and amendments in CGST Act, 2017 and IGST Act, 2017 and recommended to bring the provisions of Section 123 of the Finance Act, 2021 into effect from 01.10.2023. Agenda Item 3(iii) Clarification on charging of interest under section 50(3) of the CGST Act, 2017, in cases of wrong availment of IGST credit and reversal thereof 4.6 Pr. Commissioner, GST P o li cy informed that Law Committee ha s proposed a circular to c l arify that in the cases where IGST cred it has been wrongly availed and subsequently reversed on a certa in date, there will not be any interest liability under Section 50(3) of the CGST Act , if during the time period starting from such avai l ment and upto such reversal, the balance Input Tax Cred it in the electronic credit ledger of IGST, CGST and SGST taken together , has not fallen below the amount of such wrongly availed credit. However , if the balance of the electronic credit ledger in IGST, SGST and CGST taken together falls below such wrongly availed IGST credit, then it would amount to utili sat ion of the wrongly availed IGST credit and will attract interest as per section 50(3) of the CGST Act read with Section 20 of the IG ST Act and Rule 88B(3) of the CGST Rules. L aw Comm itt ee has proposed to clarify the same through a circular. Decision: The Council agreed with the recommendations of the Law Committee as detailed in the agenda along with the proposed Circular. Agenda Item 3(iv) issues pertaining to interpretation of Section 10 of IGST Act, 2017 4.7 Pr. Commissioner, GST Policy informed that agenda pertains to clarification regarding the in terpretation of Section 10 of the I GST Act for determining the Place of Supply (PoS) in case of goods purchased Over-the-Counter in one State and thereafter transported to another State by the recipient. The issue was discussed in the 37 th GST Council Meeting but it was referred back to Law Committee for further deliberation. The Law Committee, after obtaining the opinion of the States, has proposed an amendm e nt in Section 10 of IGST Act for supp li es made to unregistered persons , broadly considering the destination-based principle. The recommendation was agreed to in the officer's meetin g . 4.8 The Hon'ble Member from Tamil Nadu suggested that place of supply should be place of supp lier citing examples of migrant workers and others who come to the State t o purchase something and if they mention the address from where they are coming, then revenue will go to that State where these migrant workers and tourists come from , and hence their State wou ld be deprived of the Revenue. 4.9 The Secretary mentioned that decision has to be taken by the Council. Migration hap pens either way and people travel in a nd out of the States. There are disputes about PoS in such over-the-counter supplies. He also informed that the i ss ue ca m e up especially with regard to automobile sector in which residents of a State may travel to another State to take advan tage of l ower registration charge s and road tax, which vary from State to State. To resolve this issue , Law Committee ha s recommended a new formulation where the unregistered consumers could declare their address on the tax in voice, which would determine the PoS for the said supp l y . In cases of in-migration , the State ma y ga in but in out - migration i t would lose. I t is a zero-sum gain. Other than for major goods like automobiles , consumers will not mention their address. So , overa ll , the losses and gains would not be substant ial. 4.10 The Hon ble Member from Himachal Pradesh thanked the Chairperson stating that the said amendment would benefit smaller States which have very limit ed resources and that consumer State would get the revenue as per the principle of destination-based taxation. Decision: The Council agreed with the recommendations of the Law Committee along with proposed amendm e nts. Agenda Item 3(v) Clarification with respect to applicability of e-invoice w.r.t supplies made by a registered person to Government Departments or establishment/ Government agencies/ local authorities / PSUs registered solely for the purpose of TDS. 4.11 Pr. Commissioner, G ST Po l icy informed that Law Comm itt ee has recommended to cla ri fy through a circu lar that e-invo icin g would be required in a ll such suppl i es made by the regi s tered persons, whose turnover exceed s the prescribed threshold for generat in g e - invoices under Rule 48(4) of the CGST Rules , to th e Government Departments or establishment / Governmen t agencies / l ocal author iti es '/ PSUs who are reg i stered so l ely for the purpose of tax deduction at Source under section 51 of the CGST Act , 2017. H e added that this was agreed to in the Officers ' meeting. Decision: The Council agreed with the recommendations of the Law Committee along with proposed circular for clarification. Agenda Item 3(vi) Clarification on refund related issues 4 .1 2 Pr. Commissione r , GST Policy further stated that the next agenda 1s regarding clarification on various refund related i ssues . 4.13 Issue no 1: Refund of accumulated inpu t tax credit (ITC) under Section 54(3) on th e basis of that available as per FORM GSTR 2B. 4.14 Pr. Commissioner, GST P o li cy informed that since the ava ilm ent of ITC has now been link ed w ith FORM GSTR-2B w.e .f. 01.01.2022 , Law Com mitt ee h as recommended that the availabi lit y of refu nd under Section 54(3) of the CGST Act also needs to be restricted to those invoices which are reflected in FORM GSTR - 2B for t he concerned or earlier tax periods and on which IT C is availab l e to the applicant. Corresponding amendments have been proposed in the Circular No 135 / 05 / 2020-GST da ted 3 1.0 3.2020 a nd Circular No .139 /0 9 /2020 -G ST dat ed 10.06.2020 which wo uld be applicable for refund c laim s fo r the tax period J a nuary , 2022 o n wards. Decision: The Council agreed with the recommendation s of the Law Committee for issuing the said clarificat i on. 4.15 Issue No 2 : Requirement of the undertaking in FORM RFD 0 1 inserted vide Circular No . 1 25/44/20 1 9- GS T dated 18.11. 2019 4.16 Pr. Commissioner , GST Policy informed that Law Committee has recommended that in view of the omission of Sectio n 42 of the CGST Act , a mendm e nt in Section 41 of t he CGST Act a nd om i ss i on of Form GSTR-2 a n d GST R -3 from the CGST Rul es, 2 017 , para 7 of the Circular No 125 / 44/20 1 9 dated 18.11.2019 and it s Annexure A are required to be mod i fied to om it th e references to the said Section and Rules. Decision: The Council agreed with the recommendations of the Law Committee for making necessary modification s in the above circular and the Annexure A to the said circular. 4.17 Issue N o 3: C l arification regarding determ ina tion of value of adjusted total turnover in th e fo rmula und er Rule 89(4)- 4. I 8 Pr. Comm i ss i oner, GS T Policy informed that Law Commi tt ee has r ecom m ended to clarify through the circular that consequent to the Exp l anation ha v in g been in serted in sub - rule (4) of rul e 89 of the CGST Rules v id e Notification No. 14 /2022-C T dated 5.7.2022 , the va lu e of goo d s exports to be incl uded in the calcu la t i on of the adjusted T otal t urnove r s h all be the sa m e as per the sa id exp l anation. Decision: The Council agreed with the recommendations of the Law C ommitte e, along with the Circular. 4.19 Issue No 4 : C larification on t h e scope and co mput at ion of the r efund on account of inverted dut y str u cture as prov id ed in sub-sectio n (3) of section 54 a nd in rule 89 (5 ) of the CGST Rul es, 20 17: 4.20 Pr . Comm i ssio n er , GST Policy informed that Law Co mmi ttee ha s r ecommended that c l arificat i on be given regarding refund of accum ul ated input tax credit in cases of i nverted duty st ructur e in respect of items li ke fert ili zers , where subs id y i s g iv en by the governme n t. Law Committee has rec o mm ended that refund w ill be available in all such cases as l ong as there i s some inversion of tax rate irr espective of the fact t h at accumulation of input tax credit may also be on account of taxable value of output supply being lowe r than the value of inputs because of subsidy . Law Committee also recommended that refund be ca l culated as per t h e formula prescribed under rule 89(5) of CGST Rules , 2017. 4 . 21 The Hon'ble Member from Karnataka stated that he had reservations on the recommendat i on of Law Committee on account of Law and adve r se Revenue implication s in the State. He further informed that matter i s under litigation between their State a nd concerned comp ani es. He in s i sted that since the matter is sub-judice , it wou l d not be advisab l e to take the decision at this stage. He t h erefore suggested that Counc il may await the order o f the Court on the issue as it would ha v e huge revenue impli cat i on of around Rs 300 - 500 Cro r e for the State . H owever , if the Council strongly fe lt t h at a decision needs to be taken on the issue, then the law cou ld be required to be amended and it may not be clar i fied by issuance of a circ ular. 4.22 The Sec r etary suggested that the Council may either refer the matter back to Law Committee or it could be approved so that all authorities actually take a uniform view . He reiterated th a t it i s on l y a recommendation for the Counc il to decide but th ing s shou l d not be ke p t pending for c l ar ification. 4 . 23 The H on ' ble Chai rpe rson , so u ght the op in ion of the h ouse on the suggestions made by Revenue Secretary 4 . 24 The Hon ble Minister of Karnataka agreed to the proposition suggested by t h e Revenue Secretary. 4.25 The Hon ble Member from Uttar Prades h questio n ed the w i sdom of taking a decision on a matter that i s al r eady sub- ju dice . Revenue Secretary informed that though the matte r is sub - j ud ice but si n ce it is no t stayed, the issue cou ld be decided . 4.26 The Hon'ble Member fro m Goa mentioned that i f the Cou ncil waits for the Co u rt orders , then the matter would remain pending. H e requested that the issue needs to be clarified at the earliest and th e r efore, may be referred back to the Law Co mmi ttee . 4.27 The Hon'ble Member from Chhattisgarh did not agree to the recommendation of Law Committee and stressed t h at Law Committee should be advised to follow the sp iri t of legislature and not recommend anything contrary to the prov i sions of the Act. 4.28 The Hon'ble Member from Meghalaya stated that the reason of lit igation is due to lack of clarity in the Law and therefore , Council should not wait for the decision of the Court. He added that the Council should interpret the law and if needed, the Act should be amended for bringing more clarity. He further agreed to the concern raised by Hon ble Member from Goa. 4 . 29 The Hon'ble Chairperson directed that in all such cases , where there is lack of clarity in the law, the Law Committee should come up with clarificatory note in time to avoid matter going to the Courts. Decision: The Council agreed that the issue may be referred back to the Law Committee for re-examination of the same based on the provisions of the law, and after taking inputs from State of Karnataka also. 4.30 Issue No 5: Clarification in respect of admissibility of refund where an exporter applies for refund subsequent to compliance of the provisions of sub-rule (I) of rule 96A. 4.31 Pr. Commissioner , GST Policy explained that the issue pertains to giving the benefit of zero rating in cases where the goods are actually exported or the payment is realised in case of export of services , even if it is beyond the time frame prescribed under rule 96A(l) (a) or 96A(l)(b) of CGST Rules. Law Committee has recommended to clarify through the circular that in such cases, subsequent to the export of goods or realisation of payment in case of export of services, as the case may be, the said exporters would be entitled to refund of the tax paid earlier. The refund may be claimed under excess payment of tax and till that functionality is available on the portal, it may be under the category Any Other . However , no refund of interest would be given in such cases. Decision: The Council agreed with the recommendations of the Law Committee along with proposed circular as detailed in the agenda. Agenda Item 3(vii): Clarification to deal with difference in Input Tax Credit {ITC) availed in FORM GSTR-3B as compared to that detailed in FORM GSTR - 2A for the period 01.04.2019 to 31.12.2022. 4.32 Pr. Commissioner , GST Policy informed that guidelines were issued on manner of reconciliation of the difference in ITC availed in FORM GSTR-3B as compared to that detailed in FORM GSTR-2A for the period 2017-18 and 2018-2019 consequent to the decision of the Council in the 48th GST Council Meeting. However , after that, representations have been received for clarification to deal with the difference in ITC availed i n FORM GSTR-3B as compared to that detailed in FORM GSTR-2A for the period 0 1.04.2019 to 31.12.2021. Since rule 36(4) of the CGST rules allowed additional c r edit to the tune of 20% , 10% and 5% of the e ligible credit available in GSTR-2A durin g the period 9.10.19 to 31.12 .19 , 1.1.20 to 31.12.20 and 1.1.21 to 31.12 . 21 respectively , subject to payment of tax by the supplier , ther efo r e, the guidelines are proposed by the Law Committee to be issued for manner of verification and reconciliation of the difference in ITC for the period 01.04.2019 to 31 .1 2.2021 a l so. The gu ideline s recommended by th e Law Committee in form of a circular were agreed to in the Officers' Meeting. Decision: The Council agreed with the recommendations of the Law Committee along with proposed circular as detailed in the agenda. Agenda Item 3(viii): Mechanism to deal with differences in ITC between GSTR-2B and GSTR-3B, along with draft rules and proposed FORM DRC-0lC for implementing the same. 4.33 Pr. Commissioner, GST Policy informed that a mechanism is being devised wh i ch wou ld allow system-base d intimation to the taxpayer about the excess availment of ITC in FORM GSTR-3B vis-a-vis that reported in FORM GSTR-2B , above a particular threshold and with provision fo r se lf-c o mpliance on the portal by the said taxpayer. Accordingly, certain amendments in Rules and Forms are requir ed for devising such mechanism. He further , informed that Law Committee has recommended that Rule 88D may be inserted in the CGST Rules to give a system-based intimation to the registered person in th ose case where difference between the ITC availed as per Form GSTR-3 B a nd that ava il ab le a s per Form GSTR-2B exceeds such amount and such percentage as may be recommended by the Council. In such cases , the regi stered person shall be directed to pay an amount equal to the sa id excess amount of IT C availed along with interest or to give a reasonable explanatio n and if neither of these is done , then t he amount can be demanded und er Section 73 or sect ion 74. Further , a new clause (e) has been recomm ended to be inserted in sub-ru l e 59(6) of CGST Rules to block subsequent GSTR-1 or IFF , unless the said amount has been paid or the requisite explanation has been furni s hed. 4.34 La w Comm i ttee ha s also recomm ended to insert a new FORM GST DRC-0I C in CGST Rules as required under sub-rule (1) of the proposed rule 88D. 4.35 Law Committee further recommended that to begin with , such intimation may be given in those cases to the concerned registered person under proposed rule 88D where the difference between the input tax credit availed in FORM GSTR-3B that available as per FORM GSTR-2B is more than 20% as well as more than Rs. 25 lakhs. 4 . 36 Pr. Commissioner added that this was discussed in Officers ' meeting and was agreed to. 4 . 37 The Hon ble Member from Tamil Nadu suggested that only one criteria of more t han Rs 25 lakh should be adopted . Revenue Secretary clarified that it is only the beginning and based on the experience , the threshold could be changed or reduced at later stage . Otherwis e, it may cause massive disruption in the business. The Council agreed with the recommendations of the Law Committee along with . proposed rule and proposed FORM DRC-0lC. Agenda Item 3(ix): Procedure for Recovery of Tax and Interest in terms of R ule 88C(3). 4.38 Pr. Commissioner , GST Policy informed that in cases where the output tax liability reported in Form GSTR-1 exceeds the output tax liability reported in GSTR-3B and has been communicated to the taxpayer but the amount has either not been paid fully/partially or satisfactory explanation of the difference has not been not given by the taxpayer , or wh e re interest ha s not been paid by the taxpayer , then , a procedure has been recommended by the Law Committee in those cases for creation of the liability in Electronic Liability Ledger and for recovery of this differential amount by insertion of new rule 142B and a new Form DRC- 01D. He added that in the Officers ' meeting, officer from the State of Gujarat proposed that words or interest may be inserted in proposed sub-rule (3) of rule 142B after the words tax , which was agreed to by the Officers. Decision: The Council agreed with the recommendations of the Law Committee, with the amendment proposed by the State of Gujarat, along with proposed rules. Age nda Item 3(x): Annual Returns for FY 2022-23 4.39 Pr. Commissioner, GST Po l icy informed that for filing Annua l Return for FY 20 2 2- 23 , last date of filing is 31.12.2023 and accordingly, FORM GSTR-9 and FORM GSTR-9C for FY 2022-23 need to be notified. Law Committee recommended that the relaxatons provided in FY 2021-22 in respect of various tables of FORM GSTR-9 and FORM GSTR-9C may be continued for FY 2022-23 . Law Committee also recommended to insert separate rows for the newly introduced tax rate of 6% (for brick kilns) in table 9, 11 and Pt. V of FORM GSTR-9C . Law Committee further recommended that the filing of annual return (in FORM GSTR-9/9A) for the FY 2022-23 may be exempted for taxpayers having aggregate annual turnover upto two crore rupees, as per the relaxation extended in previous FYs. Decision: The Council agreed with the recommendations of the Law Committee, along with draft notification detailed in the agenda note. Agenda 3 (xi)- Amendment in CGST Rules, 2017 regarding registration 4.40 Pr. Commissioner, GST Policy informed that the next agenda 3(xi) i s regarding the amendments in CGST Rules 2017 pertaining to registration. He stated that a significant number of cases have been detected where unscrupulous elements have mis-utilized the facility of registration to take fake registration . He mentioned that Law Committee deliberated on the issue and has recommend amendments in var i ous provisions of CGST Rules to strengthen the registration process in GST. 4.41 Amendment in rule 10 A: Law Committee has proposed that rule 10A of CGST Rules may be amended to provide that the details of bank account may be required to be furnished within 30 days of the grant of the registration or before filing of statement of outwards supply under section 37 of CGST Act in FORM GSTR-1/ IFF , whichever is earlier. 4.42 Amendment to s ub-rule (2A) of rul e 21A: Further , Law Committee has proposed that amendment be made in Rule 21A(2A) to provide for system based suspension of the registration in respect of such registered persons who do not furnish details of valid bank account under rule 1 0A of CGST Rules within the time period prescribed in the said rule. It has also been recommended to provide for automatic revocation of suspension in such cases upon compl i ance with provisions of rule 10 A. 4.43 Amendment to sub-ru l e (6) of rule 59: Law Committee has further r ecommended that clause (e) may be inserted in sub-ru l e (6) of rule 59 to prov id e that in cases where a registered person has not furn i shed details of a valid bank account under rule 10A as per provisions of rule 10A, the said registered person may not be allowed to furnish the details of outward supplies in FORM GSTR-1 o r using IFF. 4.44 Amend m e nt in CGST Rules regarding physical verification of business premises: The Law Committee a l so deliberated that the physical verification of business premises needs strengthen i ng in high ri s k cases. Th e Law Co mmittee recommended that the requirement of the presence of t h e applicant for phy s ical verification of bus i ness premises may be done away with Further , Law Committee also recomm en d ed to make a provision in rule 25 for ph ys i ca l verification i n high-risk case s even where Aadhaar has been authenticated. For this purp ose, Rul e 9( 1 ) and Rule 25 may be amended as proposed in the Agenda. 4.45 Pr. Commissioner added that this was discu ssed in Officer s' meeting and was agreed t o . Decision : The Counci l agreed w i th the said recommendations of the Law Committee . Agen d a 3 xi ( a) - Pi l ot Pro j ect for biometric - based Aad h aar a ut henticat i on of r eg i stration applicants in Puducherry. 4.46 Pr . Commissioner, GST Policy informed that the agenda 3 xi(a) is a l so related t o age nda 3(xi) pertaining to registration. He sta t e d that Council had already agreed to have a biometr i c ba se d Aadhaar authent i cat i o n in hi g h risk cases and pilot was approved for State of Gujarat. Puducherry ha s also requested to have a pilot for th e same implemented in Puducherry. I n this re ga rd , approval i s needed for issu i n g the following notifications: i. The State of Puducherry will need to subst itute rul e 8(4A) of Puduch e rry SGST Rule s on the lines of corresponding s ubstitution of Rule 8(4A) of CGST Rul es v ide notification no. 04/2023-Central Tax da te d 31.03.2023; ii. Further , the State of Puducherry will also need to amend ru l e 8(5) and rule 9 of Puducherry SGST Rule s o n the lines of correspond ing amendments in CGST rul es notified vide notification n o. 26/2022- CT dated 26.12.2022; i i i. The Centra l gove rnmen t will be required to further amend Notification No. 27/2022- CT dated 26.12.2022 fo r spec if y in g that the proviso to rule 8 ( 4A) w i ll apply to the State of Puduch erry as well. 4.47 Further , it was proposed that the Council may authorize the Chairperson to ex t e nd the sa id p i l o t project, if required , in other States and/ or Union territories which may be willing to conduct p i l o t for biometric authentication of Aad haar for high-risk r eg istration applicants. 4.48 The Hon 'hie Member from Andhra Prade s h stated that they are also int e re s t ed in taking up thi s pilot project , which was agreed. The Rev e nue Secretary agreed t o the same . 4.49 Pr. Commissioner, GST Policy stated that amendments in rul e 8 (5) , rule 9(1) and rule 9(2) o f CGST Rule s 2017 ha ve been notified by the Centre and State of Gujarat, but ot h e r States are a l so required to noti fy the same so that m a ndatory phy sica l verification can be conducted in high-risk category identified by the Common portal, despite having Aadhaar authenticated. 4.50 He added that this was discussed in Officers ' meeting a nd was agreed to. Decision: The Council agreed with the said recommendations made in the agenda as also to the request of Andhra Pradesh to include it in the pilot for biometric Aadhar based authentication. Agenda 3 (xii)- Clarification on TCS liability under Sec 52 of the CGST Act, 2017, in ca se of multiple E -commerce Operators (ECOs) in one transaction 4.51 Pr. Commissio n er , GST Policy informed that the agenda 3(xii) is a circula r for clarification rega rding TCS liability in the cases in volv in g multip le e lec tro ni c comme r ce operato r , especially in the case of Op en Network Digital Comme r ce platform. The Law Comm itt ee recommended t h at it may be clarified through a c i rcu lar that in a s i tuat i on where multiple ECOs a r e i n volve d in a s in gle tra n saction t hr ough EC O pl atform, the complia n ces under sect i on 52 of CGST Act, including co ll ection of TCS, is t o be done by the supp li er-side ECO who finally releases th e payment to the supplie r for a p art icul a r supply made by the sa i d su ppl ie r through him. 4.52 He also added that an in-principle approval was gra n te d by GST Counci l in 47 th meeting inter a li a for waive r of r equi r ement of mandatory registration under section 24(ix) of CGST Act for person making intra- sta te taxable supp l y of goods t hrou gh E COs , subject to certain conditions. In order to im p l e m ent the same , issuance of notifications under section 23(2) and section 148 of CGST Act , 2017 has also been recommended by the Council in its 48th meeting. As per the r eco mm endat i o n s of the Counc il , t he sa m e i s to be implemented w . e.f. 01.1 0. 2 0 23. However, it is f elt that the said draft notification a l so needs to cover the sit u ations involving model of multiple ECOs in a s ingle supp l y of goods through ECO p l atfo rm. Law Committee recommended t h at the said draft notification, as approved b y the Cou n c il , may be ame nd ed further t o provide for s i tuations involving multiple ECOs, as suggested in Annexure B t o the agenda. Decision: The Council agreed with the said recommendations of the Law Committee, along with the circular and notification-. Agenda 3 ( x iii)- Clarification on availabilitv of ITC in respect of warranty replacement of p arts and repair services during warranty period. 4.53 Pr. Commissioner, GST Policy informed that the agenda is regarding a clarification in respect of those cases where the manufacturer provides warranty replacement or repair services for some items during the warranty period without any additional consideration. Issues were raised whether in these cases , the supply o f replacement parts is liable to tax or not or whether ITC is required to be reversed or not. Therefore, a clarification has been recommended by the Law Committee in form of a circular to cover various scenarios. Decision: The Council agreed with the recommendation of the Law Committee to issue the clarificatory circular. Agenda 3 (xiv)- Amendments in CGST Rules consequent to amendment in CGST Act vide Finance Act 2023 4.54 Pr. Commissioner, GST Policy Wing informed that this agenda is regarding amendment to CGST Rules subsequent to amendment in CGST Act carried out through Finance Act, 2023. 4.55 Rule corresponding to the Explanation to section 17(3) of CGST Act, 2017: The Law Committee recommended that the activities or transactions of paragraph 8(a) of Schedule III of CGST Act , the value of which shall not be excluded from exempt supply as per amended Explanation to sub-section (3) of section 17 of CGST Act, 2017 , need to be prescribed by amending CGST Rules , 2017 by way of Insertion of Explanation 3 to rule 43 of the CGST rules. 4.56 Amendment to rule 162 of CGST Rules 2017: Subsection (2) of section 138 of CGST Act, 2017 provides for prescribing the amount for compounding various offences under CGST Act through CGST Rules , 2017. Therefore , Law Committee has recommended that sub-rule 3A may be inserted in rule 162 of CGST Rules to prescribe compounding amount for various offences. Consent Based Sharing of Information 4.57 To implement the provisions of the newly inserted section 158A of CGST Act, rules need to be framed and implemented. The Law Committee has recommended insertion of new Rule l 63 in CGST Rules , 2017 for the purpose of consent-based sharing of data available on the common portal with other systems. 4.58 The Law Committee has also recommended that account aggregators may be notified as the systems with which information may be shared by the common portal based on consent under Section 158A of the CGST Act, 2017. The draft notification under sect i on 158A of CGST Act in this regard is enclosed as Annexure-II with the agenda note. 4.59 Pr. Commissioner, GST Policy further mentioned that Council ne e d s to fix the da te on which provi s i ons of Finance Act, 2023 pertaining to GST will come into effect. He informed that the issue was deliberated in the Officers ' meeting and it was suggested that 01.08.2023 may be fixed as the date on wh ich provisions of the Finance Act, 2023 p e rtaining to GST Appellate Tribunal may be notified by the Cen tre at least, so that the work for setting up of Tribunal s can be initiated at the earliest. Furthe r , it was s ugg est ed in Officers ' meetin g that all other provisions of the F inanc e Act, 2023 may be notified with effect from 01.10.2023. Decision: The Council agreed with the said recommendation of the Law Committee, along with the suggestions made in Officers ' meeting regarding date from which provisions of Finance Act, 2023 will come into effect. Agenda 3 (xv) - Goods and Services Tax Appellate Tribunal (Appointment and Conditions of Service of President and Members) Rules, 2019. 4 . 60 Pr. Commiss i oner, GST Policy informed that Agenda 3 (xv) is re gar ding Good s and Services Tax Appellate Tribunal (Appointment and Conditions of Service of President and Memb e rs) Rule s, 2019. He informed that the draft ru l es as recommended by Law Committe e are detailed in the agenda . He added that the issue was d e liberated in detail in Officers ' meeting , where in officer from State o f Maharashtra suggested that in sub rule 5 of proposed rule 3 of the said Rules , the word as well as adjudicating may be replaced by the word and and that Sr. No . 9 of Annexure-1 of the said Rules may be deleted. The same was agreed by the Officers. Decision: The Council agreed with the said recommendation of the Law Committee, along with the amendments suggested in the Officers' meeting. Agenda 3 {xvi)- Seeking clarity on taxability of share capital held in subsidiary company by the parent company . 4.61 Pr. Commissioner, GST Poli cy stated that the Agenda i s about clarity on the issue of taxability of share capital held in subsidiary company by the parent company. but the Law committee deliberated on the i ssue and has recommended to clarify through a circular that mere holding of the s h ares of s ub sidiary company by the ho ldi ng company cannot be treated as su pply of se rvices b y the holding company to the subs idiary co mpan y and cannot be taxed under GST accordingly. 4 . 62 The Hon ble Me mb ers from Karnataka and C hhatti sgar h requested to expla in the proposal in greater detail. 4.63 Pr. Comm i ss i oner , GS T P olicy i nformed that the issue i s regarding clar ifi cat i on as to whethe r holdin g of s h ares in a s ub s idi ary company by the parent compa ni es to be treated as supp l y of se r vice under GST or not. Field format i on are rai s in g demand that th e share capital held in s ub sid i ary companies are covered u n der SAC code 997 17 1 and accordingly leviable to GST. As secur i t i es are neither treated as goods nor treated as serv i ces, mere holding of s h ares of subs idi ary company by the holding company cannot be treated as supply of serv i ces. However , there may be in dependent s uppl y of othe r serv ic es by holding company to s ub s idiary company lik e pro viding a bank g uarante e, etc. 4.64 The Hon 'b l e Member from Karnataka agreed to the recommendation. H owever , he fe l t that Law Comm itt ee s h ould examine the iss u e of taxab ili ty of other activities/ services by holding company for subsidiary company. He furthe r suggested that the circular may mention that 'o ther advantages or serv i ces w ill be l ooked int o sepa r ately . 4.65 The Hon'ble Members from Meghalaya and Uttar Pr adesh stated that the propo sa l of the Law Committee is on l y clar i fying that the mere holdi n g of securit i es of a subsidiary compa n y by h o ldin g company cannot b e treated as supp l y of se r v ic es and t h ere is no a mbi gu ity in i t, and therefore , there is no need for any amendment in the sa id proposed c i rcula r. 4.66 The Hon'ble Chairperson concluded the discuss ion by advising that wh ile the issue of other advantages and services may be looked into separate l y, mentioning th e sa m e in the circular may l ead to further litigation. Decision: The Council agreed with the said recommendation of the Law Committee along with the circular . Law Committee will further exa mine the issue w.r.t. o ther advantages and se rvices provided by companies to its subsidiaries. Agenda 3 (xvii)-Amendment in CGST Rules, 2017 4.67 Pr. Commissioner , GST Policy stated that the Agenda i s about various amendments in CGST Rules. He added that that a number of these amendments are just procedural in nature for alignment with various provisions requiring change or omiss i on. 4.68 Following amendments in CGS T Rules have been proposed as detailed in the Agenda : 1. Omission of clause (c) of Explanation (1) to Rule 43: This is an amendment consequent ial to lapsing of an exemption. 2. A mendment in proviso to rule 46(f): Law Committee has r ecommended that proviso to rul e 46( f) of CGST Rules may be amended to provide that the tax invoice may contain the name of t h e State of the r ecip i ent only and the name and address of the recipient along with i ts PIN code may not be mandatory t o be dec l a r ed on the tax invoice. 3. Amendment in Rule 64 and F ORM GSTR -5A: Law Co mmit tee has r ecommended amendment in rule 64 and in FORM GST R -5A so as to also include details of supplies made by the OIDAR serv i ce provider lo cated outside I ndia to registered persons other than hon-taxable online recipient in I ndi a in hi s return for tracking of payment of tax on RCM basis by reg i stered taxpayers. 4. Amendment in rule 89(1): Law Comm i ttee recommended to al i gn t h e word in g of the third prov i so of rule 89(1) w i t h the Section 49(6) so that the casua l taxpayer can fi l e h i s refund claim fo r the balance remaining out of the advance tax paid which is i n the n ature of excess balance in e l ectronic cash ledger only and w hi c h can be claimed as refund after filing of the l ast r e turn. 5. Amendment in Rule 89(2)(k) to inc lu de refund of in te r es t and othe r amounts as per the Section 54(8) in case of refund o f excess payment of tax . 6. Omission of 1st and 2nd proviso to sub-rule (2) of rule 96 as they do not serve any purpose after the amendments in CGST Act. 7. Amendment in rule 108 and rul e 109 of CGST Rules to provide a fac ili ty for fili n g appea l manually in certai n specified c ir cu m sta n ces. 8. Amendment in FORM GSTR-3A for providing for notic e for n o n-filin g of Annual Return in FORM GSTR-9 or FORM GSTR-9A. 4.69 Pr. Commiss i oner mentioned that the issue was delib erated in detail in Officers meeting, wherein offic er from State of Maharashtra s u ggested th at in respect of amendment in rule 108 and 109 of CGST Rules , the words or due to non-availability of the facility ma be deleted from the proposed provisos to rule 108(1) and 10 9(1) . T h e same was agreed by the Officers. 4.70 The Hon ' ble M em b e r from Te lan gana mentioned that after the bifurcation of the State , becau se of wrong mention of place of su pply , ta x has been credited to other States. He gave the example of ICICI , in w hi ch Maharashtra h as been wro n gly c redi ted R s . 80 Crore. Therefore, some mechanism needs to b e built to correct it. In 4 7th GST Council meeting assurance was give n to constitute a Committee of officers to resolve the issue an d the same may be done. H e also s u ggested that on wrong c redit , ad ju stment shou l d b e mad s ub seq u en tly. 4.71 The Hon'ble Chairperson stated that because there was a decision taken in th e 47 th council meeting on the concern raised by Telangana, the officer's committee must tab le report to the Council in the next meeting, highlighting chal l e nge s, possibility or impossibility of th e implementation of the issue raised by Telangana. Decision: The Co uncil agreed w i th the said recommendation of the Law Committee, a lon g with the amendment suggested in the Officers' meeting . Moreover , the issue raised by the Member, Telangana re garding wrong credit may be looked into as decided i n the 4 7t h GST Coun cil meeting . Agenda 3 (xviii)-Proposal to provide a special procedure to file appeal against the orders passed in accordance with the Circular No. 182/14/2022-GST, dated 10.11.2022, pursuant to the directions issued by the Hon ble Supreme Court in the Union of India v/s Filco Trade Centre Pvt. Ltd. 4.72 Pr. Commissioner, OST Policy stated that th e agenda is r egarding a special procedure to be provided in cases where Tran-1 and Tran 2 claim s were filed in pursuance of direction given by Hon ble Supreme Court d uring two months' window of 01.10.2022 to 30.11.2022. Th e Law Committee recommended to provid e a special procedure under Se cti on 14 8 of CGST Act for filing of appea l s manually agains t th e orders passed in accordance with C ircular No. 182/14/2022-GST. A draft notification providing th e spec ial procedure to b e followed by a person desirous of filing an appeal against an order passed by the proper office r in accor danc e with Circu lar No. 182/14 / 2022-GST which was issued pursuant to th e direct i ons issued by the Ho n 'b l e Supreme Court in t h e Unio n of Indi a v/s F i lco Tra d e Centre Pvt. Ltd . , SLP(C) No.32709-32710 / 2018 has been formulated by the Law Committee and is detailed in the agenda. Decision: The Council ag reed with the s aid recommendation of the Law Committee. Agenda 3 (xix)- Issues pertaining to ISD mechanism and taxability of se rvices pro v ided one d is tinct person to another distinct per s on . 4.73 Pr . Commissioner , GST P olicy stated the agenda concerns the ISD mechanism and taxability of services between distinct persons. This issue was ear li er deliberated by the OST Council and was referred back to th e Law Committee for further examination. 4.74 He informed that there are two aspects for conside r at i on- regarding the common input services procured from third parties and the int erna ll y gene ra ted services . The Law Committee proposed to issue a circular to c l arify the issue in respect of both of such cases. 4.75 The Law Committee took a view that th ere i s no inten t in the p r esent provision of CGST Act to make I SD mechanism mandatory , and accordingly, it may be clarified through a circular that i t i s not mandatory to follow ISD procedure laid down in Section 20 of CGST Act read with rule 39 of the Ce ntr al Goods and Serv ic es Tax Rules, 2017 for distribution of ITC in respect of input services procured by HO from a third party but attribu t able to both HO and BO or exclusively to one or more BOs and that such credit can also be passed on by HO by i ss uin g tax invoices under section 3 1 of CGST Act to the concerned BO s. In cases, here HO wants to distribute credit through I SD mechanism , it sha ll b e required to get it self registered mandatorily as per provisions of section 24(viii) of CGST Act. Further , it may also be clarified that HO can distribute the ITC to a BO t hrough ISD mechanism or can issue voice under sect ion 31 to a BO in respect of an input services rec eived from a third party only if the sa id services are being suppl i ed to the concerned BO . 4. 76 F or prospectiv e periods: Law Committee took a view that ISD procedure, as laid own i n Section 20 of CGST Act r ead with rule 39 of the CGST Rules , may be made mandatory prospectively for di s tr i bution of ITC in respect of inp ut services procured by Head Office (HO) from a thi rd part y but attribu t able to both HO a nd Branch Office (BO) or exclusively to one or more BOs. Further , ITC on account of input services received from a third party, where such input services are liable to tax on reverse charge basis , should also be required to be distributed through ISD route. Th i s will require amendment in l aw which the Law Comm i ttee may formulate in due course. 4.77 For internally generated services: Law Committee recommended to clarify through the Circular that in cases where full input tax credit is available to the recipient , the value of such supply of services declared in the invoice by HO to BOs may be deemed as open market value , irrespective of the fact whether cost of any particular component of such services , like employee cost etc . , has not been included in the value of the services in the in voice, or not. It may be further clarified that in cases where full input tax credit is available to the recipient if the inv oice is not issued with respect to any internally generated services by the HO to the BO, the value of s uch services may be deemed to be declared as Nil by HO to BO, and may be deemed as open market value in terms of second proviso to rule 28 of CGST Rules. 4.78 Pr . Comm i ssioner, GST Policy also stated that the Law Committee cou ld not make any recommendation for taxability and valuation of internall y generated services in cases where full input tax credit is not avai labl e to the r ecipient. 4. 79 He mentioned that the issue was deliberated in detail in the Officers ' meetin g. The officers agreed with al l the recommendations made by the Law Committee. However , in the Officers ' meeting , discu ss i ons were also held on the issue of taxability of internally generated services in cases where full input tax credit was not available to the recipient. He mentioned that it was broadly discussed in the Officers ' meeting to clarify in the circular that in r espect of internally generated services , the cost of sa lary of employees involved in providing the said services, may not be required to be mandatorily included while comput in g the taxable value of the supp l y of such se rvi ces, in cases where full input tax credit i s not available to the recipient. He sought approval of the Council for incorporation of the suggestion made in Officers' meeting in the draft circu lar recommended by the Law Committee. 4.80 The Hon'ble Member from Karnataka suggested that Law Com mitt ee may also consider the possibility of allowing taxpayers to apportion costs of supp li es according to their discretion without making it overly burdensome. The aim i s to facilitate compl i ance and avoid the need for meticulous breakdown and apportionme nt of every cost. He also added that there is a need for caution as thi s is liable for different interpretations and may give rise to disputes. Decision: The Council agreed with the said recommendation of the Law Committee, along with the suggestion made in the Officers' meeting regarding taxability of internally generated services in cases where full input tax credit was not available to the recipient. 5. Agenda item 4: Recommendations of the Fitment Committee for the consideration of the GST Council 5.1 The Secretary introduced t h e agenda it e m relating to the recommendations of the Fitment Committee. These recommendations had been given in six (06) Annexures, the first three related to Goods and the other three related to Services . The first Annexure l isted is s ues relating to goods where tax rate changes or clarifications were recommended; the second Annexure listed it ems related to Goods where no tax rate changes were recommended and the third Annexure listed items related to Goods where the issues were deferred by the Fitmen t Committee for further examination. The fourth Annexure l isted the r ecommendations for making changes in GST rates or for issuing clarifications in relation to Services; the fifth Annexure listed the services where no tax rate changes were being recommended and the sixth Annexure where the i ssues were deferred by the Fitment Committee for further examination in relation to serv i ces. 5 . 2 The Secreta r y then asked the Joint Secretary , TRU , DoR to take the Council through the brief presentation on the recommendations of the Fitment Committee. 5.3 JS , TRU stated that a total of 35 issues in respect of goods were examined. Out of thes e, on 14 issues, recom m endations were made for tax rate changes or issuance of clarifications, on 17 issues no tax rate change or status-quo was recommended and on 4 issues , the Fitment Comm itt ee has recommended deferring the issues for further examination. She further stated that a total of 16 issues in respect of services were examined , out of which , on 7 issues recommendat ion s were made for tax rate changes or clarification s, on 3 i s su e s , no tax rate changes or status -qu o was recommended and on 6 issues the Fitment Committee had recommended deferring the issues for further examination . The presentation made b y JS , TRU is attached a s Annexure-4 . 5.4 JS , TRU started with the agenda items pertaining to goods wh e re c han ge in rat e s or issuance of c l arification (14 issues) had been recommended by the Fitment Committe e (Annexure -1). 5.5 Th e first issue pertained to tax rate change on uncooked/unfried snack pellets manufactured through extrusion process where the Fitment Committee recommended to reduce GST to 5% on uncooke d/unfried extruded products by whatever name cal l ed . Fitment Committee also recommended to regularize for past period on ' as i s where is ' basis due to genuine doubts. She further informed that the said i ssue was also discussed in detail in the Officer ' s Meeting o n 10.07.2023 and no objections were raised. Decision: The Council agreed with the recommendation of the Fitment Committee to reduce the tax rate on uncooked/unfried snack pellets manufactured through extrusion process by whatever name called from 18% to 5% and regularize the issue for the past period on 'as is where is' basis. 5.6 The Hon ble Member from Delhi thanked the Counci l for the decision. 5.7 JS , TRU then presented the second issue pertaining to Fish Soluble Paste where Fitment Comm itt ee recommended that si nc e the final product fish meal attracts 5% , there appears to be merit in the argument that by waste generated as a by-product during the process of manufacture of fishmeal should not attract 18% and recommended t o reduce GST rate on Fish So lubl e Pa ste (2309) to 5%. Fitment Committee also recommend ed to regularize the matter for the past period on as i s basis in view of genuine interpreta tional issues. 5.8 The Hon'ble Member from Goa thanked the Counci l for reducing the tax rate on Fish Sol ubl e Paste. He further c it ed the judgment of Hon ble High Court of Madras in the case of J enefa India vs GOI and informed that only the taxpayers of State of Tam i l Nadu are getting benefit of exemption on Fish meal whi l e the taxpayers of rest of the States are paying 18 %. He added that the exchequer is incurrin g substantial l oss of revenue bec ause of this anomaly and requested GST Council to ensure a uniform l evy. He also requested that the practice in the State of Karnataka may a l so be rechecked in this regard. 5.9 The Hon ble Member from Tamil Nadu stated that if there is something by which exchequer is incurrin g l oss of revenue then the State of Tamil Nadu will collect all the information about it and definitely act accordi n gly. 5.10 It was informed by JS , TRU that an appeal has been preferred against the s aid judgement. Hon 'ble Member from Chattisgarh enquired whether a stay has been obtained and if not, then whether t he opt i o n of exemption was st ill being exercised. 5.11 The Hon'ble Chairperson sought a r e port on the ent ir e issue within a week ' s time. 5.12 The Hon 'ble Member from Goa thanked the Council for considering this issue. Decision: The Council agreed with the recommendation of the Fitment Committee to reduce the tax rate on Fish Soluble Paste from 18% to 5% and regularize the issue for the past period on 'as is where is ' basis. 5.13 JS, TRU then presented the third issue pertaining to IG ST exemption on the cancer medicine Dinutuximab (Quarziba) used for treatment of Neuroblastoma when imported for personal use. She stated that during the officers' meeting on 10.07.2023, one of the suggestions was to check fro m the Ministry of Health and Family Welfare whether the said medicine is manufactured in India and that it has been inform ed by the Ministry of Health and Family Welfare that it is n ot approved for manufacture in India and the country ' s needs are met by import. Decision: The Council agreed with the recommendation of the Fitment Committee to exempt IGST on Dinutuximab (Quarziba) when imported for personal use. 5 .1 4 JS , TRU then presented the fourth issue pertaining to medicines and Food for Special Medical Purposes (FSMP) used in the treatment of rare d i seases and informed that the Fitment Committee recommended to exempt I G ST on such medicines used in the treatment of rare diseases enlisted under the National Po l ic y for Rare D iseases (NPRD) , 202 1 which are imported for personal use sub ject to th e exis tin g conditions and when imported by Centre of Exce l lence o r any person or institution o n r ecommendation of any of the listed Centre of Excellence. She also informed the Counci l that post Budget 2023-24, Basic Customs Duty (BCD) exemption has been g i ven to drugs and Food for Spec ial Medical Purposes (FSMP) when ' imported for personal use for treatment of rare diseases en li sted in the National Policy for Rare Diseases , 2021 . The BCD exemption current ly ava ilabl e for drugs used in treatment of rare diseases imported by Centres of Excel len ce for Rare Diseases or any person or institution on r ecommendation of any of the li sted Centre of Excellence was also expanded to include Food for Special Medical Purposes (FSMP) Decision: The Council agreed with the recommendation of the Fitment C ommittee to exe mpt the IGST on medicines and Food for Special Medical Purposes (FSMP) used in the treatment of rare diseases enlisted under the National Policy for Rare Diseases (NPRD),2021 which are imported for personal use subject to existing condition s and when imported by Ce ntres of Exce llence or a n y person or in st itution on recommendation of any of the listed Centre of Exce llence . 5.15 JS, TRU then presented the fifth agenda pertaining to issuance of clarification about GST rate on Trauma , Spine and Arthropla s ty implants falling under heading 902 1 , for the period prior to the 18.07.2022. She informed that earlier there we re two entries @ 5% and 12% for sim ilar goods under 9021, which was causing confusion. On the recommendations of 47th meeting of the GST Council, a GST rate of 5% was fixed on all goods falling under heading 9021 w.e.f. 18.07.2022. 5.16 Fitment Comm itt ee recommended to regularize the matter for the period prior to 18.07.2022 on as is basis provided tax had been paid @ 5% or 12% in view of genuine int erp retati onal issues. Decision: The Council agreed with the recommendation of the Fitment Committee w.r.t. rate on Trauma, Spine and Arthroplasty implants. 5.17 JS, TR U presented the s i xth issue pertaining to req u est for clarification on raw cotton supplied by agriculturists to cooperatives. Fitment Committee recommended to clarify that supp l y of raw cotton , including kala cotton , from agricu l turists to cooperat i ves is a taxable supply and attracts 5% GST under reverse charge mechanism s in ce cooperatives are registered persons, and a l so recommended to regularize for the past periods on as is ba s is in view of genuine doubts regarding taxability. She also informed the Council that in the officers ' meeting no object i ons were rai s ed on the recommendations of the Fitment Committee on this issue. Decision: The Council agreed with the recommendations of the Fitme nt Committee w.r.t. raw cotton. 5.18 JS , TRU then presented the seventh i ssue pertaining to consequential changes after the new Foreign Trade Policy comi n g into force. She stated that the Foreign Trade Policy 2023 came int o fo r ce with effect from 1 s t Apr i l , 2023 and that the changes mostly involved updating the references of relevant paragraphs in various Customs and J OST notifications. Fitment Comm itt ee recommended for consequential c h anges to be carried out in notifications which would be mostly technical in nature. Decision: The Council agreed with the recommendation of the Fitment Committee w.r.t chan ges in view of the new FTP. 5. 1 9 J S, T R U then presented the eighth issue pertain i ng to the issue c l arificat i on of appl i cable GST rate - on imit at i on zari thread to avo i d amb i gu i ty prevailing on the app l icable rate of GST on s uch goods. Fitme n t Committee r ecommended to reduce GST rate to 5% on imitation zar i thread or yarn known by a n y name in trade parlance and further recommended that the issue may regularized for the past per i od on as is where is basis. D e cision: The Council agreed with the recommendation of the Fitment Committee w.r.t. imitation zari thread or yarn known by a ny name in trade parlance. 5.20 J S, TRU then presented the ninth issue pertaining to LD Slag whe re Fitment Comm itt ee recomm e nded to reduce the tax rate from 18% to 5% considering that co n s umption of LD s l ag n eeds to be encouraged for bett er utilization of this waste and prot ect ion of environ m ent a nd to bring parity w i th Bla st Furnace Slag ( BF S) a nd Fly Ash. JS , TR U state d t h at LD slag is a by- product of steel indu stry. She further i nfo rm ed that in the Officers meetin g, office r s from Orissa and Punj ab had pointed out t h at the i ss ue had a l so been discussed in 48th me et in g of the GS T Counc il whe re in the recommendation for reduction of rate was not agreed to s in ce IT C wou ld be available to cement manufact ur ers. It was explained t h at LD slag i s n ot preferred by the cement indu stry due to excess lime content and for uptake in cement industry they have to do further processing. Karnataka had also clarified that other by products of stee l already attract 5% and t her efore on gro und s of pa r ity the rate might be considered fo r r ed u ction. On other by products too the rate was reduced on gro und s of e n vironmenta l conce rn s . 5.21 Hon'b l e M e mb er from Maharas h tra pointed o ut that if the r e is no offtake, the i ss ue of taxing at 18% h as n o meaning . 5.22 Th e H o n ' ble M e mb e r from Orissa state d that t h e pre-GST incid e n ce of tax o n LD s l ag was 17.5% (12 . 5% centra l excise a nd 5% VAT) . Pr esent rate of 1 8 % in lin e wit h pre GST tax incid e nce. He stated that t h e F itm e nt Committee had recommended status quo ea rli er which is in line w ith the deci s ion taken by the Council to tax esse nti a l com m od i ties at 5% and that other for othe r it ems the tax rate s h ould be kep t at 1 8%, and the r efore thi s recommendation of the Fitme nt Committee i s at var ianc e w i t h that adopted in 45t h GS T CM. The Hon'b l e Member from Odisha requested that the issue be referred back to the Fitment Committee and Odisha may be invited to give its views on the same. 5.23 The Hon'ble Member from Delhi enquired about the quantum of LD slag produced in the country versus the offtake , because the decision would be taken on that basis. 5.24 JS TRU stated that for 10 MT of steel production, 1.8 MT LD s la g is produced, and since the National Steel Policy envisages 300 million tonnes of stee l production by 2030, India will produce 99 million tonnes of BF slag and 54 MT of LD s l ag, that while steel industry will consume significant amount of B F slag, there would be few takers for LD slag at high GST rate, and dumping of LD slag will result in environmental hazard. She stated that the offtake is now 25%. 5.25 The Hon'ble Member from Karnataka stated that dis-incentivizing the usage of LD slag by keeping the GST rate at 18% would not be in the interest of the environment. He stated that if cement manufacturers use LD slag, whether the tax rate was 5% or 18% , benefit of ITC would be available to them and hence there wou ld be no loss to the exchequer. Now , since the rate is at 18% , the road making industry is dis-incentivized from using LD s l ag. By lowering the rate to 5% if we can encourage some end usage of this product, it would be in the larger social and env ir onmental interest. 5.26 The H on ' ble Member from Kerala stated that while there is a revenue ang l e , for example Odisha was producing LD slag and therefore their revenues might be affected , the environmenta l angle was equally an i ssue. So if the usage was in the cement industry, it might be okay but wh il e promoting usage of LD slag in roads, environme nt al issue needs to be kept in mind. H e further stated that in Kerala LD s la g was not being u sed in construction of roads as t h ey do not have steel industry but considering the fact that l00 MT of LD slag was go in g to be produced in the future, whether it w ill create some other environmental issue i f used in roads needs to be kept in mind. 5.27 The Hon'ble Chairperson stated that argument was to reduce the rate to incentivize the use of LD slag which would result in co ll atera l benefits of be reducing the harmful effects of dumping this waste product. 5.28 The Hon'ble Member from Telangana stated that they were able to use 100% of fly ash produced in their State for bricks and for use in highway construction and no hazards were reported. 5.29 The Hon'ble Member from UP agreed to the levy of 5% GST on LD slag. Based on discussions, Hon'ble Member from Odisha also agreed to the levy of 5% GST on LD slag . Decision: The Council agreed with the recommendat i on of the Fitmeot Committee w.r.t. LD slag. 5.30 JS, TRU presented the tenth issue pertaining to amend the exemption notification No. 50/2017- Customs dated 30 . 06 . 2017. Fitment Committee r ecommended to update list 34 in Notification 50/2017- Customs so as to include RBL Bank and ICBC Bank and update list 34 as per the updated Appendix 4B of FTP-2023 subject to confirmation from DGEP and DGFT. Decision: The Council agreed with the recommendation of the F i tment Committee to include RBL Ba n k and ICBC Ba n k. 5.31 JS , TRU presented the eleventh issue pertaining to applicability of compensation cess on utility vehicles such as MUV/XUV /MPV with length more than 4000 mm, eng i ne capacity more than 1500 cc and ground clearance of 170 mm and above. She stated that during the discussion in the 48th meeting of GST Council held in December , 2022 on agenda item relating to issuance of clarification on compensation cess leviab l e on SUVs , Hon'ble Member from Haryana had suggested that compensation cess on other utility vehicles such as MUV might also be deliberated upon . The Council directed the Fitment Committee to examine the same . She stated that earlier, based on the recommendation of the 21st GST Council, a higher rate of compensation cess of 22% was notified on Sports Utility Vehicles (SUVs) (of length more than 4-metre , engine capacity more than 1500 cc and ground clearance 170 mm) . Fitment Committee has now recommended to amend the entry to include all utility vehicles by whatever n ame called provided they met the parameters of length greater than 4000 mm, engine capacity more than 1500 cc and ground clearance of 170 mm above and further recommended to insert an exp l anation to clar i fy for the purposes of the said notification entry that Ground C l earance in entry 52B mea n s Ground Clearance in un-laden condition. 5.32 Sec r e tar y, Ha r y ana sta t e d th a t arou n d 40% of t h e SUVs a r e s till fa llin g u n d er the 20% Cess s l a b a nd du e to l a d e n h e i g ht co nd i ti o n , 2% Cess i s b e in g lo s t w hi c h am o unt s t o a great l oss o f the r e venu e. H e fu rth er a dd e d th a t th e r e i s a diff e ren c e in t h e way th e gro u n d cl ea r a nc e i s b e in g ca lcul ate d as pe r BIS s t anda rd a nd F it m e n t C ommitt ee r eco mm e n da t io n a n d sugges t e d t o fi x th e cess a t 22% for a ll SUVs. 5.33 J S, T RU inform e d tha t th e Sta t e of Haryana h ad ra i se d th e iss u e in t h e meet in g o f the F itm e n t C ommi ttee . S h e state d t h a t th e s u gges ti o n to m erge t h e e n t ri es 52 A a nd 52B of No tification No . l/201 7- Co mp e n s a t i o n Cess ( ra te) int o o n e c at ego r y t o m ake Co mp e n sat i on Cess rat e uniform at 22% w o uld be t aken up in the n ex t F itm e nt Committ ee . S h e s t a t e d that thi s p a rt ic ul ar c l ar ifi c a t i o n as r eco mm e nd e d by th e F i tmen t C o mmitt ee wo ul d cover some m ode l s o f ve hi cles . M o r e d ata is r e qui re d to a n alyze t he reve nu e im pac t of m e r g in g 20% an d 22% cess s lab s , as suggested b y the State of H a r ya n a. 5.3 4 The Hon ble C hairp e r so n req u ested H a r ya n a to p rovi de additi o n a l d a t a t o th e F i tme nt Co mmitt ee and for no w th e r eco mm en dati o n of th e F itm e n t Co mmit tee m ay be ac c e pt e d. Decision: The Council agreed with the recommendation of the Fitment Committee and a ccordingly agreed to amend the entry 52B in the compensation cess notification to i nclud e all utility vehicles by whatever name call e d provided they meet the parameter s of length exceeding 4000 mm , engine capacity e x ceeding 1500 cc and ha v ing gr ound cle a rance of 170 mm above and to clarif y by wa y of inserting an explanation that ' ground clearance' me a n s ground clearanc e in unladen condition. 5 . 35 J S, TRU t h en prese n te d the twe lfth iss u e p e rt a inin g t o Com p e n s a t i on Cess r ate on P a n M asa l a c h ew in g t obacco etc . J S , T R U in fo rm ed th a t the l evy of co m pe n satio n cess on t hese p ro du cts was co n verte d fr o m a d va l o r e m tax to s p ec i fic t a x base d l evy l inke d t o reta il sa l e p ri ce ( R S P ) on s u c h produ cts t o i m p l e m e nt th e r eco mm e n dat i o n s m a d e by t h e GST Cou n c i l in it s 49th m ee tin g. S he sta t e d th at t he y h ave b ee n rece ivin g r ep r es ent a ti o n s a b o ut th e c h a ll e n ges in d e t e rminin g the ra t e of com p e n sa ti o n cess in ca s e s wher e it i s n ot l ega ll y req uir e d t o d e clar e th e R SP . Th e F itment Co m m itt ee has th e re fo re r eco mm e n de d to not i fy th at th e ea rli e r ad va l o r e m r ate as was app l icab l e o n 31 s t M a r c h , 2023 for such goods by ame ndin g th e sa id No t i fi cat i on i n cases w h e r e it i s not l ega ll y r e qu i r ed to d ec l a r e R S P. 5.36 The Hon'ble Chairperson asked Hon ble Member from Uttar Pradesh if he is in agreement with the recommendations of the Fitment Committee as the particular issue was raised by State of Uttar Pradesh. 5 . 37 The Hon 'ble Membe r from Uttar Pradesh stated in the affirmative . 5.38 The Hon'ble Member from Karnataka inquired abo ut the value d iffe r ence between the calcu l at i on of ad-va l orem rate and a weighted average of the RSP. 5.39 JS, TRU informed that there i s no difference in the rate as the ad valorem rates were converted to specific rates based the recommendations of the GoM. 5.40 Hon ble M e mber from Karnataka expressed hi s apprehension that if there was a sign i ficant rate difference, it might create an arbitrage and provide an incentive to move from RSP based levy to an ad valorem rate . 5.41 T h e Secretary mentioned t ha t there may be a difference and that is why in order to plug revenue leakages, the GoM had recommended the levy of cess on pan masala, chewing tobacco etc. be based on RSP in stead of the earlier ad va l orem based l evy. He s t ated that th e re was a possibil i ty that the whole value chain may not be captured for revenue purposes if we revert to t h e ea rli er system, but where t here is no lega l requirement to have a RSP , t her e i s no other opt i o n other than go for ad valorem rate. 5.42 He stated that the concerns raised by Hon'b l e Member from Karnataka could only be addressed by enforcement measures. The Hon'ble Member from Karnataka sugges ted that the ad-valorem l evy cou ld be made equal to the we i ghted RSP t o prevent arbitrage. Decision: The Council agreed with the above recommendation of the F itment Comm ittee w.r.t. compensation c ess rate on tobacco product s. 5.43 JS, TRU presented the thirteenth issue pertaining to desiccated coconut for the period 01.07.2017 to 27 .07 .2017. She stated that pri o r to 27.07.17 there was no specific entry fo r Desiccated Coconut and the taxpayers ass u med that it was exempt. Representations had been received requesting to regularize the in t ervening period between issue of orig in a l notification and i ss ue of corrigendum to notification 1/2017 - CT(R) dated 27.7.20 17 prescribin g 1 2% GST rate. Fitment Committee recommended to regularize the period 01.07.2017 to 27.07.2017 on as is where is basis on account of genuine interpretational is s ue s . Decision: The Council agreed with the recommendation of the Fitment Committee w.r.t. desiccated coconut. 5.44 JS, TRU presented th e fourteenth issue pertaining to Areca Leaf plates and cups. She stated cups and plates made of areca l eaf are already exempt. Fitment Committee had examined it and s ugge sted that no action i s required on the representation r ece i ved but during the officers' meeting i t was clarified that the request was not for exemption but for regularizing the period prior to the exemption i. e . prior to 1.10.2019 , on as i s basis and the same was discussed in the officers' meeting and t herefor e, recommended for i ts regularization. Decision: The Council agreed with the recommendation w.r.t. areca leaf plates and cups. 5.45 JS, TRU then presented the agenda pertaining to goods (17 i ssues) where no changes or stat u s quo had been recommended by the Fitment Committee (Annexure-II). 5.46 She presented the fir st i ss ue i.e , reduction of GST rate on Agro-based biomass pellets fro m 5% to N il. She informed that Ministry of P ower has requested for reduct ion of GST rate to Nil on solid bio-fuel pellets / Biomass briquettes or pellets o n the basis that they have a mandate t o use 5% for coal firing and also promote its uptake. S h e further stated that Fitment Com mittee had recommended status quo which was placed before the GST Council in 37th and 47 th GST Co un cil Meeting, and the GST Counc il did not recommend further r ed ucti on in rate to Nil. She said that G ujarat had suggested regu larizing the issue relating to GST on biomass briquettes for the period from 1.7.2017 to 12.10.2017. 5.47 The Hon'ble Memb er from Punjab s ug gested that GST rate on Agro based biomass pellets may be reduc ed to Nil keeping in mind the environment issues as p o lluti on is a huge problem in north India and many NGOs and Courts are also involved. 5.48 The Secretary n oted that on l y Punjab appeared to be in favo ur of reducing the rate to N il. 5.49 Th e Hon'ble Member from Utta r Pradesh in formed that this issue is already discussed in earlier GST Counci l Meeting and Fitment Committee has also not recommended the same. 5.50 The Secretary inform ed that this product goes into the exempt sector that is production of e l ectric ity and therefore , exempting th i s would mean a l oss of revenue to the government. 5.51 The Hon ble Member from Delhi inquired about the quantum invo l ved. 5.52 JS , TRU informed that as pe r Ministry of Power , demand of Agro-based biomass pellets has increased upto l lakh MT per day . However , the present capacity i s 7000 to 8000 MT , so the req u est is to increase its uptake. She furthe r informed that s i nce this product is primarily used in the elect ri c ity sector , it will amount to zero rating supply whic h is usually for export. 5.53 The Hon ble Member of De l hi said that i ssue is s imil ar to the LD slag issue and it is an environmental issue and suggested reducing the tax rate from 5% to Nil to inc rease the off take. 5.54 JS , TRU informed that there i s a difference between LD s la g and Agro-based biomass pellets where the first one is part of the GST chai n whi l e the l atter one becomes a zero rated supply and goes ou t of the GST chai n. 5.55 Th e H on'ble C hairperson appreciated the point about environme n ta l concerns but stated that zero rating i s meant for exports as taxes are not expo rt ed. She stated that rate fo r L D slag was not being brought t o zero and the recommendation was to tax it at 5%. Here a l so the tax rate suggested is 5%. 5 . 56 The Hon'ble Member from Punj ab requested that issue may be referred b ack the i ssue to F it ment Comm i ttee. 5.57 The Hon'ble C hairp erson app r ec i a t ed the v i ew of Member from Delhi and reiterated that zero rat i ng sup pl y i s for exports. She in fo rm ed that Fitment Co mmitt ee suggested for 5% GST Rate for LD s l ag not Zero. Here too env ir o nm ent co nc e rn s a taken into account and t h e tax rate is being reco mmend ed to be fixed at 5%. 5.58 The Hon ' ble Member from Uttar Pradesh stated that ther e h as been no change in circumsta n ces since the decision of th e GST Counc il and therefore , the is s ue s hould not have b ee n reopened. 5.59 JS TRU exp l ained that based on VIP references / Ministry reference i ssues get r eopened. 5.60 T h e Secretary s u ggested that an issue which is approved in the recent p ast shou ld not be brought back to the Counci l until there are new facts or changed ci r cumstances. He so ught permission of the Chair and the approval of the Co un cil to reply to suc h references about the dec i s i on taken a n d not bring t h e i ssue over and over again before the Cou n ci l unle ss the material change in circu m stances is brought on record. C h airperson agreed to the same. Decision: The Council agreed with the recommendation of the Fit ment Committee to maintain status quo on the rate and regularize the issue r e lating to bioma ss briquettes for the period 1.7.2017 to 12.10 .2 017 on as i s basis . 5.61 J S, TRU then presented the second i ss u e regarding request for incr ease i n GST rate of De-O il ed Rice Bran fro m Ni l to 5%. She informed that recommendation had been r eceived from the Department of Food and Public Di st ribution to im pose 5% GST Rate on DORB. She informed that prior to the 25th Council Meeting Rice Bran (HS 2302) for use as feed was at Nil and for other uses was at 5%. T he GST Cou n ci l in its 25th Meeting held on l 8.01.2018 , dec i ded to l evy 5% GST on R i ce Bran , ir respective of end u se, and N il GST on De-Oiled Rice Bran. Th is was notified w . e.f. 25.01.20 1 8. The interim repo rt of GoM o n rate rationa li zation also did not recomm end bringing all goods und er chapter 23 to 5% GST Rate and hence Fitment Committee recommend ed for status-quo. Decision: The C ouncil agreed with the recommendation of the Fitment Co mmitt ee to maintain status quo w .r.t. De-Oil e d Rice Bran. 5.62 JS , TRU then presented the third issue pertainin g to products falling under any c hapt e r , prepared or manufactured by the inmates of Keral a Prison and Correctional Serv i ces Department. She i nformed t h at recommendation was rece i ved fo r Nil GST Rate. Fitment Comm i ttee recommended for status-quo . 5.63 The Hon'ble Member from Andhra Pradesh suggested that Council needs to look at the i ssue from different perspective and at such correctional facilities instead of hard labour now train in g on vocational ski ll s is being imparted. Mostly three kinds of products are be in g supplied : cloth, bakery products and furniture /s teel products and the amount in question is also very littl e. He stated that the request has been turned down o n the apprehension that there might be revenue leakages. H e requested that the exemption might be considered that the sale happens only through a few centra l prison s, each State having 4-5 such prisons. He requested to exclude such product s from GST bearing in mind that these products need to be competitive in the market and that the inmates need to be imparted some skill so as to enab l e them to eke out their livelihood after leavin g prison and keep themselves occupied while serving their time in jail. 5.64 State of Kerala supported the view of Andhra Pradesh. 5.65 The Hon'ble Member from Maharashtra was of the v i ew that there were other ways to support such goods such as making mandatory procurement of such goods by Government departments and did not support tax concession. Decision: The Council agreed with the recommendation of the Fitment Committee to maintain status quo w.r.t. proposal pertaining to Kerala Prison and correctional Services Department. 5 .6 6 JS , TRU stated that th e next i ssue pertain e d to bio-fertilizers and ot h er such o r ganic inputs and the issue of rate reduction on the same had a lr eady been examined in the 31 st 39 th 45th and 47th Co un cil meetings but the Council did not recommend any change in the rate s of bio-fertilizers and other suc h organ i c inp ut s. The Fitment Committee recommended maintaining s tatu s quo. The Secretary then requested for the comments of the Hon 'ble Members of t h e Co uncil on the recommendations put forth by the Fitment Comm itt ee on the . issues pertaining to GST r ate reduction on Sungudi Saree; upfront exemp tion from payment of IG ST and refund mechanism to be done away w ith fo r IAEA; GST rate reduction for Av gas; machinery used in Sericulture Industry and automat i c r eel in g machinery; all Sports goods fitness products and Mega Power Projects. All agreed to the same. Decision: The Council agreed with the recommendations of the Fitment Committee to maintain status quo w.r.t. agenda as detailed in para 5.65 above. 5 .6 7 The Secretary then requested for the comments of the Hon ble Members of the Counc il on the recommendations put forth by t h e Fitment Committee on the issues of Apple Carton Boxes. The Hon ble Member from Himachal Pradesh requested that corrugated boxes of spec ifi ed dimensions can be put in the lower tax bracket. He informed that 90% of the apple carton boxes used in the State of Himachal Pradesh have capacity from 10 Kg to 20 Kg wh i ch have specific dimensions different from the industria l packages and requested to reconsider t he i ssue as the growers are being affected in sma ll horticulture States like Himachal Pradesh and reduce the GST rate from 18% to 12%. He in formed that in the last Counc il meeting, Maharashtra had come out in suppo rt of the issue. 5.68 Jammu and Kashmir informed that mostly corrugated boxes are being used in Jammu and Kashmir which was earlier taxed at 12% but fo r the sake of uniformity the tax rate was increased to 1 8%. He requested to reduce the G ST rate on corrugated boxes to 1 2%. 5 . 69 The Secretary n oted that this item had been deliberated earlier multiple t i mes and had come up for discuss i o n in the last meeting and stated that this wi ll be difficult to adm in ister as the same boxes could be put to multiple uses. The Hon ble Member fr om Maharashtra stated that the boxes were going to be used for various items and therefore, if tax rate is to be redu ced, the reduction has to be g iven irrespective of end use . Therefore, it is n ot feasible to reduce the tax rate in this case . 5.70 Hon'ble Member from G ujarat stated that industrial products cou ld also be packed in such boxes. 5.71 Hon ble Member from Himachal Pradesh requested to r educe the GST rate on carton boxe s from 18 % to 1 2%. 5 . 72 The Hon 'ble Member from Uttar Pradesh suggested to maintain the stat u s quo on this i ssue. 5 . 73 Co n s iderin g the aspect of usage of such boxes in agro- industry , the Hon ble Chairpe r son referred it back to the Fitment Comm itte e for re-examination after obta inin g the v i ews of the States of Jammu Kashmir and Himacha l P radesh . Decisio n: The Council referred back the issue of GST on carton boxes to the Fitment Com mittee for re-examin a tion. 5.74 The Secretary then presented the issue of GST rate and compensation cess rate reduction for two whee l ers and four wheeler Flexi Fuel Vehicles a nd sought the comments of the Hon'ble Members of the Counc il , if any. Decision: The Council agreed with the recommendations of the Fitment Committee w.r.t. flexi fuel vehicles to maintain sta tu s quo. 5.75 The Secretary then presented the issues pertaining to GST rate reduction in agr i cultural products; utensils made of brass; Heavy feedstock, Vac uum Gas Oil , reformates, etc.; al l bakery prod u cts manufactured and sold by MSME and so u ght t h e comments of the Hon'b l e Members of the Counc il , if any. Decision: The Council agreed with the r ecommen dation s of the Fitment Committee w.r.t. age nda as detailed in para 5.74 above to maintain status quo. 5.76 The Secretary then presented the agenda pertaining to the goods (4 issues) where fitment h as deferred the issues for further examination (Annex ure-III) . 5 .7 7 On the issue of Millet based products, the Hon'ble Member from Delhi suggested that the decision on the Millet ba sed products may be take n at an early date as this is the International year of Millets as declared by the Government of Ind i a and second l y, increasingly it i s part of nutrit i on supp l ied by most of the Anganwadis a nd thirdly, it is a very healthy food option. 5.78 The Secretary assu r ed t hat a decision on this wou ld be taken as early as possible. 5.79 The Hon'ble Member from Karnataka supported t h e view of Delhi and informed that lifestyle diseases are on the rise due to imbalanced diets and millets are a healthier alternat i ve a l so they use little water and consume very lit t l e chem i ca l fert i l i zers so their environmental footpr int i s very minimal too. Millets are climate resilient crops a nd highly nutritious as they are naturally fort ifi ed. He r equested for a posit i ve and ear l y dec i s i on on this as t h is was the International Year of M ill ets and Government of India has already taken ot h er decisions to promote t h e use of millets. 5.80 The Secretary directed the Fitment Committee to come up with their recommendations expeditiously. 5.81 The Hon'ble Member from Uttar Pradesh stated that the tax rate related to steel scrap and Millet based products needs to be decided on an urgent basis. JS , TRU informed the Council that a sub-committee has been constituted by the Fitment Committee to deliberate upon the issue pertaining to steel scrap. JS , TRU further informed that the agenda related to steel scrap and millet based products would be taken up in the upcoming Council meeting. The Secretary in formed that the issue pertaining to steel scrap and m ill ets would be taken up and brought before the Council in the upcoming meeting. 5.82 JS , TRU introduced the next Agenda item 4(d) where recommendations were made by the Fitment Committee for making chang e s in GST rates or for issuing clarifications in relation to services (Annexure IV). She stated that the first issue wa s related to exempting GST on satellite launch services provided by private organizations and that satellite launch services by ISRO, Antrix Corporation Ltd. and New Space India L imi ted are already exempt from GST. The Fitment Committee recommended that exemption may be extended t o satellite l aunch services provided by privat e organizations with a view to provide level playing field and encourage start-ups. Decision: The Council agreed with the recommendations of the Fitment Committee to exempt GST on satellite launch services provided by private organizations. 5.83 Joint Secretary, TRU informed that the second issue listed at Sr. No. 2 of Annexure IV related to rectification in it em at SI. No. 3(ie) of notification No . 11/2017-CTR which continued to have reference to some of th e housing schemes etc. figuring under erstwhile sl. No . 3(iv), (v) and (vi) of the sa id notification in order to take care of the real estate projects which commenced prior to 01.04.2019. The items at sl. No. 3( i v), (v) and (vi ) of the above notification were omitted v id e notification No. 03/2022-CTR dated 13.07 . 2022. The Fitment Committee recommended that the anomaly be rectified by inserting suitable explanation to effect that the item at sl. No. 3(ie) of the said n ot ific ation refers to sub-items of the item (iv) , (v) and (vi) of the notification as they existed in notification prior to their om i ssion vide notification No. 03/2022-CTR dated 13.07.2022. Decision: The Council agreed with the recommendations of the F itment Committee w.r.t. insertion of an explanation at SI. No. 3(ie) of notification No. 11/2017-CTR 5.84 The Secretary informed the Council that the third issue listed at Sr. No . 3 of Annexure IV related to omission of clause (h) of explanation to the entry at SI. No. 24 (i) of the notification No. 11 / 2017 CTR. On the recommendation of GST Council in its 47th meeting, exemption entry at sl. No. 53A of the notification No. 12 / 2017 CTR dated 28.06.2017 which covered 'services by way of fumigation in a warehouse of agricultural produce was omitted vide notification No. 04 / 2022-CTR dated I 3.07.2022. However, a parallel entry at clause (h) of explanation to the entry at SI. No. 24 (i) of the notification No. 11 / 2017 CTR dated 28.06.2017 for the same service had not been omitted. Fitment Committee recommended that the same may be omitted. Decision: The Council agreed with the recommendations of the Fitment Committee w.r.t. omission of an entry at clause (h) of explanation to the entry at SI. No. 24 (i) of the notification No. 11/2017 CTR dated 28.06.2017. 5.85 The Secretary informed the Council that agenda I tem listed at Sr. No. (4)(a) of Annexure IV related to exercise of option by Goods Transport Agencies (GT As) to pay GST under Forward Charge Mechanism (FCM). Fitment Committee recommended that the requirement to exercise option to pay GST under forward charge every year may be done away with and it may be provided in the notification that GT As who have exercised option to be under FCM during a particular Financial Year shat I be deemed to have exercised it for the next and future Financial Years unless they file a declaration that they want to revert to Reverse Charge Mechanism (RCM). 5.86 The Secretary further informed the Council that for agenda [tern listed at Sr. No. (4)(b) of Annexure IV, GSTN has requested that a start date for filing of option by GTA may be provided for subsequent Financial Years; otherwise the default date for exercise of option for a Financial Year shall be 1 s t April of the preceding Financial Year. Having start date for exercise of option for a Financial Year as 1st April of the preceding Financial Year is not desirable as this may give rise to false impression to the GT As that they have exercised option for the current financial year. Fitment Committee recommended that the start date may be prescribed as 1 st January of the preceding F i nancial Year. Fitment Committee also recommended that the last date for filing the option may be changed from 15th March to 31st March of preceding Financial Year . 5.87 JS, TRU stated that agenda Item listed at Sr. No . (5) of Annexure IV related to amendment to be made to notification No. 8 / 2017-ITR and notification No. 10 / 2017-ITR to remove redundant provisions pursuant to amendments in Finance Act, 2023 subsequent to Hon'ble Supreme Court judgement in Moh it Minerals case in 2022. Fitment Committee recommended that the provisions which were introduced to provide level playing field to Indian Shipping Lines have lost relevance and thus needs to be amended / deleted. The proposed amendments / deletions shall be synchronized with Section 162 of Finance Act , 2023 which is to come into effect from a date to be notified. 5.88 JS TRU stated that agenda Item listed at (6) of Annexure IV pertained to clarification for the services supplied by a director of a company / body corporate to the company / body corporate in his private or personal capacity. Fitment Committee recommended to clarify by way of the circular that the services supplied by a director of a company or body corporate in private or personal capacity such as services by way of renting of immovable property to the said company or body corporate are not taxable under Reverse Charge Mechanism (RCM) under notification No. 13 / 2017-CTR (SI. No. 6) dated 28.06.201 7. The said entry covers only those services supplied by a director of company or body corporate , which are supplied by him as or in the capacity of director of that company or body corporate and shall be taxable under RCM in the hands of the company or body corporate. Decision: The Council agreed with the recommendations of the Fitment Committee as detailed in agenda items listed at Sr. No. (4)(a), (4)(b), (5) and (6) of Annexure IV. 5 . 89 The Secretary stated that the last issue listed at Sr. No. 7 of Annexure IV pertains to is s uance of clarification that supply of food and beverages in cinema halls is taxable as re s taurant service and leviable to GST at 5%. Fitment Committee recommended that a clarification may be issued by way of a circular that food or beverages served in a cinema hall is taxable as restaurant service as long as (a) they are supplied by way of or as part of a service and (b) supplied independently of the cinema exhibition service. Where the sale of cinema ticket and supply of food and beverages are clubbed together, and such bundled supply satisfies the test of composite supply, the entire supply will attract GST at the rate applicable to service of exhibition of cinema, the principal supply. Decision: The Council agreed with the recommendations of the F itm ent Committee for issuance of clarific at ion with respect to supply of food and beverages in cinema halls. 5 . 90 Th e Secretary informed the Council that on 3 is sues, no changes have been proposed by the Fitment Com mitt ee in relati on to services (Annexure V): IGST exemption on purchase of a ircraft and aircraft lease payment , GST exemption o n services by the way of granting affiliation to schoo l s by Cen tral Board of Secondary Education (CBSE) for conduct of secon dary stage exa mination s in sc hool s and on digital news subsc rip t ion. Decision: The Council agreed with the recommendations of the Fitment Comm i ttee as detailed in A nn ex ure-V of agenda. 5.91 The Secretary informed the Council that the Fitment Committee deferred following 6 issues (Annexu r e VI) rel ated to clarification o n i. whether the serv ic e by way of ho ste l accommodatio n, service apartments/ hot e l s booked for lon ger period were service of renting of residential dwelling for use as residence and exempted as per entry number 12 of the notificati o n no . 1 2/20 17- CT(R) dated 28 . 06 . 2017 ii. exemption from GST to serv ic es provided by District Min era l Foundations , iii. whether reimbursement of e l ectr i c i ty charges received by the R ea l estate companies , malls , airport operators etc. from their lessees/occupants we r e exempt fro m GST , iv . whether ITC of other business vert i ca l s cou l d be u sed to discharge GST on outward li ab ili ty in re s pect of r estaurant service, v. w h ether job work activity towards proce ssing of Barley into Ma l ted Barley attracts GST @ 5% a nd in case it was held that GST @ 18% is le v iab le, t o regularize for past on 'as is basis ', and v i. whe ther uniform GST rate of 5% was to be appl i ed on Bu s in ess Correspondent serv ic es provided in both rural/urban areas. 5.92 The Secretary ca ll e d upon th e Fitment Committe e to bring the deferred agenda i tems to the Council for a decision in the n ext meeting. 5.93 The Secretary the n introduced t h e age nda item on posit i ve list of services to be specified in S I. No. 3/3A of Notification No . 12/2017-CT (R) dated 28.06 .2017 which wa s deferred in the 48th Counc il Meeting held on 17.1 2.2022. The Sec r etary in formed the Council that the agenda it em was deliberated in th e office.rs m eet in g and it was s ug gested by one of t he States that this agenda it em should be taken up . Officers from the S tat es of Punjab and Bihar had requested to defer this agenda i tem. T h e Secretary stated that the Co un c il cou ld take a call on whether to d i scuss or defer the agenda item. He further stated that there exists an ambig uity around t h e phra se 'in r e l atio n to ' and one of the suggest i ons received was to delete this phrase from the entries in notification no. 12/2017 related to pure services and Compos it e supplies provided to Central Government, State Government or Local Authority. The Hon'ble Chairperson opened the floor for discussion in case the States wished to deliberate upon the agenda or the States might put forth their views during the Fitment Committee meetings in case of deferment. 5.94 The Hon'b l e Member from Delhi expressed her desire to discuss the agenda and the issues emanating from it as Delhi had some concerns regarding the same. The Hon'ble member from Karnataka seconded it and s tated that the proposition to remove the phrase in rel ation to put forth by the Secretary to the Counci l might be deliberated upon to see if any consensus could be built on striking out the phrase in relation to from Entry Nos 3 and 3A and the agenda item passed in the meeting itself in case there were no other issues. 5.95 The Hon ble member from Karnataka stated that in cities like Bangalore and Delhi , t here were specialized agencies which delivered municipal services. Therefore , services lik e garbage collection , water supply, etc. attract GST @ 18% which was not in public interes t at all. Therefore , if the Council agreed to remov e the phrase in relation to from Entry No. 3 and 3A that would resolve the issue for the State of Karnataka. Any other issue, if pointed out by any other State may be deliberated upon in Fitment Committee meeting s post deferment of the age nd a item. 5.96 The Hon ble Chairperson sought the opinion of other Hon'ble Members on th e suggestion of Hon ble Member from Karnataka . In case, the issue related to removal of phrase in relation to was the only issue and consensus was built in the Council, the Counci l might agree to pass the agenda by incorporating the decision of the Council. In case of any substantial is s ues , the agenda item might be deferred. 5.97 The Hon'bl e Chairper so n sought comments from Hon ble Members of the Council whether they agreed to the proposition of Hon ble Member from Karnataka. The Hon 'b le Member from Tamil Nadu co ncurred with the views of Hon ble Member from Karnataka suggesting for removal of the phrase in relation to from the relevant entry. However , he objected to the actions of pruning of the li st for which tax exemption was ava ilabl e by g i ving a positiv e list. He cited that it l eads to extra financial burden for local bodies and State Government. Further, the Hon ble Memb e r from Punjab sought so me more time to st ud y the list comprehensive l y and once again requested the Chair to defer the agenda it em to be taken up in the next Council Meeting. 5.98 Considering the views of the States of Punjab and Bihar, the Chairperson proposed to defer the agenda item. The Secretary stated that it wou l d be brought before the Council for a decision in the next meeting of the Council. Decision: The Council agreed to defer the agenda item. 6. Agenda Item 5: Second Report of the Group of Ministers (GoM) on Casinos, Race Courses and Online Ga ming 6.1 Joint Secretary , TRU presented a Factsheet on Horseracing , Online Gaming and Casino which has been annexed as Annexure-5. The Factsheet encapsulates the factual status, revenue, le ga l position, present practice and t h e i ssues for information and decision of t h e GST Counci l. 6 . 2 Sh . Conrad Sangma, t he Honorable Ch ief Minister from Megha l aya and the Co n ve n er of the Group of Ministers (GoM) on Casinos , Race Courses and On l ine Gaming, apprised the Council that two reports had been submitted so far. However, in the second and final report the views rema i ned inconclusive due to complex i ty of issue and the different views expressed by the parti cipating States a nd hence sta t ed that the GoM has recommended Council to take the decision. 6.3 In h i s address, he provided a contextual background o f both r eports and threw light on the in iti al understand i ng of actionable claim except lottery, betting , and gamb lin g, which were exempted from Goods and Services Tax (GST). It was assumed that these activities wh i ch were under t h e purview of discussion of GoM fell w ith in the domain of lottery, betting, or ga mblin g . No nethel ess , after e n gag in g with stake hold ers, fu rth e r clar i ty was ga in ed , l ead in g to the subm i ss i on of the secon d r epor t. It became a pp arent during th e discussions that a lack of clarity persists regarding the differentiation between games of skill and games of c han ce . Games of chance fa ll under the ca t egory of betting and gambl in g , whereas games of sk ill do not. Th e absence of clear l eg i s la tive prov i s i ons pertaining to the classification of games ba sed on sk i ll or chance compounds this issue and therefore depends on different Court judgements to defin e game of ski ll or game of c h a n ce . Moreover , he highlighted that the Min i stry of I nformation Techno l ogy (MEITY) is act i ve l y work i ng on formulat in g rule s and classification of online gaming. Unti l such classificat i on i s estab li s hed and comprehensive rul es are framed , it was suggested that t h e Cou n ci l m ay consider deferring any decision in t h is regard , as premature actions m ay adverse l y affect stakeholders turning the attention to the matter of casinos. The Honorable M in ister expressed his opinion t ha t a highest tax rate of 28% shou ld be levied on the Gross Gaming Revenue (GGR) , calcu l ated at the table level rather than on individual transactions. T hi s approach is in line with international practices, as tracking each and every transact i on of an individual may prove to be arduous . Sikk im and Goa are the on l y two States having these casinos and both suggested that rat e of 28% shou l d be levied on the Gross Gaming Revenue (GGR). 6.4 Furthermore, he added that the GoM e n gaged in a n ex ten sive discussion o n whether H orse r ac in g classifies as ga m e of ski ll or chance a nd s h ou ld be t r eated as a separate category or e n co mpas se d wit h in th e realm of betting an d gambling. It was op in e d that there is no distinct classification for games of ski ll , and they s h ou ld be considered as part of the broader b etting and ga mblin g category. The Hon'ble Supreme Court in Dr. K.R. Laks hm a n an case h eld that Horse Racin g is a game of skill however, there i s no legislative provision for mandating it as game of ski ll. There are a l so many cases wh i ch were bought out by West Bengal during the GoM meeting and these cases are related to l otte r y but h orse racing was mentioned in those cases. Acco r di n g l y , a tax rate of 28% on the full face value was recommended by GoM for such games . 6.5 The Conveno r of the GoM acknowledged that despite multiple de li be r ations and expert op in ions , the main c h a ll enge li es in the fact that the GoM addresses three different games compoun d ed by the inherent ambiguity in exist in g l eg i slat i o n regarding whether these are ga m es of ski ll or cha n ce . Hence , ambiguity has been l eft to be resolved by the Co ur ts wh i ch comp lic ate the matter more. Moreover, the report highlights the dual nature of this i ssue, w h e r e econom ic growth and jo b creatio n sta nd in contrast to the a dvers e social impact on the yo uth. Achieving a de li cate balance between th ese co mpetin g int erests necessitates a phased approach to tackle this i ssue . 6.6 He sta t ed t h at in co nclu s i o n , the GoM Report underscores t h e co m p l ex i ty of the subject matter , urging carefu l co n s id erat i on and a comprehensive approac h by a ll the States to address the concerns and interests of a ll stakeho ld ers . 6.7 The Hon ble Member from Gujarat concur r ed w it h the viewpo in t of convenor and acknowledged that the deci s ion at h and on Cas in os predominantly affects two State s . Th e Minister highlighted that a team from the Group of Ministers (GoM) had visited the affected areas and in their opinion, the value shou l d be calculated on the Gross Gaming Revenue (GGR). 6.8 The Hon'ble Member from Tamil Nadu expressed the view that the State had already issued a notification prohibiting online gambling and on l ine games of chance. The Minister suggested that the same could be true for some other States also. As online gambling and onl i ne games of chances are banned in Tamil N adu, any decision by GST Council should conform with such State legislation. Regarding horse racing, the Minister proposed that if it is deemed a game of skill, a tax of 28% should be levied on the GGR value . Conversely , if it is classified as a game of chance, the full value at a tax rate of 28% should be considered. There should be a mechanism to receive and segregate the money. The receipt money should be directly deposited into operator account and an escrow separate account should be t here to hold the prize money for eventual payout. 6.9 The Hon'ble Member from Maharashtra adopted a resolute stance, emphasizing the urgent need to reach a long-awaited decision on the meeting day . The Minister recommended that on line gaming, cas i nos, and horse racing be incorporated into entry 6 of Schedule III of the Central Goods and Services Tax (CGST) Act , 2017 alongside lottery, gambling, and betting as taxable actionable claim. The Minister stated that delving i nto the specifics of what constitutes a game of skill or chance is unnecessary as the law should be straightforward , easy and simp l e . The i nterpretation of games of skill and chance is subjective within the realm of law which would create confusion on tax point of view. In addition , the Minister asserted that activities detrimental to socia l well-being should not be encouraged or promoted. 6.10 The Hon ble Member representing Uttar Pradesh expressed the urgency of taking the decision. He conveyed that two reports have been compiled so far. First report was submitted with th e consensus of al I States. However , after submission of first report in the Council Meeting, the perspect i ve on the matter changed. Uttar Pradesh ma i ntained a steadfast view that a ta x of 28% should be levied on the full-face value. The Minister a l so highlighted the absence of a mechanism for calculating Gross Gaming Revenue (GGR) and that it would generate neg l igible tax revenue. He also asserted that any game involving monetary transactions should be categorized as a game of c h ance rather tha n a game of skill. Moreover , he informed the Council that international jur i sdictions a l so impose multiple taxes in addition to GGR . Furthermore, he expressed hi s belief t h at Horse Racing is not a game of sk ill , but rather a game of chance , g i ven that individua l s predom in ant l y p l ace bets o n it without adequate knowledge o r through guesswork . Consequent l y , h e advocated for taxing all such games at the h ighest tax rate based on the ir full-face va l ue . 6.11 T h e Hon'ble Member from Goa disagreed with the views of t h e other States and emp ha s i zed t h e s ignifi cance of the matter for t h e i r State. He likened the evaluation of d i fferent categories of ga m es to the act o f comparing apples and oranges . He appri s ed the Co un cil of the necessity to fo ll ow internationally accepted best practices that wou ld prevent the closure of indu stry . He suggested that the Goods and Services Tax (GST) should be imp ose d b ased on GGR. He added that during the preparation of th e second report, experts evaluated the matter from various perspectives and varied op ini ons from stakeho ld ers were also sought which is the main reason for the lack of a firm recommendation from the Group of M ini sters (GoM) and the report remaining inconclusive. F urth ermore , he asserted that this s ubjec t i s st ill evo lving over time. H e furthe r proposed tha t t h e ca rdinal principl e of GST is to align the pre-GST tax regime wit h the present one . He informed t h e Counci l that Goa prev i ous l y lev i ed a maximum entertainment tax of 15% on Casi n o indu stry and i t was never 28% or not even 1 8%. 6 .1 2 The Hon ble Member from Goa high li ghted the heavy depend e nce of Goa ' s economy on tourism sector, particularly the Cas i no industry . He raised the issue of the revenue imp licati ons for th e State if t h e dec i sion l ed to the closure of the Casi n o i ndustry strongly emphas i zing the financia l i mpact of such closure of cas i nos on the State. H e also requested that if the co n se n s u s could not b e reached o n taxing the Cas in o indu stry based o n GGR , a new Group of Min i sters shou l d be constit u ted in c ludin g stakeholders as members. He caut i o n ed that without proper regulation, the industry wou ld not cease to exist but rather shift to a grey platform resulting in more adverse conseque n ces . H e furthe r added that there is a new norm com in g for 30% TDS apa r t from 28% of GST and r esu ltin g in 58% of total t ax in case of w inn er. La st l y, he ap p ea l e d for the tax rate to a l ign with th e pre-GST regime an d be set at 28% base d o n GGR and requested the Co un c il to dec i de in favour of Goa and Sikk im due to their dependency on Cas in o industry. 6.13 The Hon ble Member from West Bengal expressed agreemen t with the stance o f M ini s t er of Uttar Pradesh and proposed that the tax rate sho u ld be set at the highest level on the full-face value . She further recommended for amending the Schedule to include Online Gaming, Casinos, and Horse Rac i ng in the e n try of actionab l e claim. 6.14 The Hon ' ble Convenor of GoM stated that there is no dispute regarding the tax slab, as all States agree to tax i t at the highest rate of 28%. The on l y poi n t of contention revolves around the valuation. Furthermore , he explained that the change in perspective from the 1st report occurred due to a major dispute regarding the definition of an actionable claim. Initially, the stance was that all games had a genesis in betting or gambling . However, it later became apparent that these ga m es also involve an element of skill , wh i ch became a subject of legal controversy and this is t h e reason that the definition must be amended . 6.15 The Hon'ble Union F i nance Minister responded that the Hon'ble Courts can decide them to be a game of sk i ll or chance. However, the key question is whether the government can impose taxes on unregulated act i vities. She provided an example of crypto assets which are not regulated but are still subject to taxation a n d no Court has challenged this. She further added that these games involve value creation , whether with or without skill. She also stated that the governments have the right to tax that value and there is no l egal conflict in doing so. It may be game of sk i ll or game of chance and debate may be going on but tax should be imposed on these activities. She clarified that the Ministry of Electronics and information Technology (MEITY) is in the process of formulating technical regulations related to online gaming . MEITY is wo r king on regulatory framework in that doma i n . These types of regulations do not affect the GST Counci l and do not infringe upon i ts sovereign right to impose tax . 6.16 The Hon'ble Membe r from Uttar Pradesh reiterated h i s earlier views and stated that the main purpose of going to Goa is tourism for beaches , environment and only few tourists go to casino. I f a person is ready to l ose money in cas i no, he must be ready to pay taxes for the welfare schemes. 6.17 The Hon ble Member from Maharashtra expressed t h e op in io n that tax should be charged on the full- face va l ue and it is up to the Council to dec i de whether it should be set at 18% or 28%. Before calculating tax , a su i table abatement in face value may be g i ven. Secondly , he firmly stated that online gaming and racecourse are not games of skill on the part of person betting , and they shou l d be taxed on their fu ll value. He further added that the operators who are engaged in these activities are of high economic status a n d they shou l d be treated accordingly. 6.18 The Hon'ble Member from Karnataka supported the views of Uttar Pradesh and Maharashtra. He argued against delving into the question of whether a game is based on skill or chance and stated that there are many court judgments deciding whether an activity is a game of skill or chance . The sovereign has the power to tax regardless of the nature of game. He highlighted that while the GST Council is primarily a body to take decisions on tax , it has also kept in mind the moral and social factors since its inception like imposing environmental cess, cess on sin goods and luxury goods based on moral principles. The tax on tobacco , luxury cars, and other items had somet im es exceeded their manufacturing value taking into account social principles. He suggested that gambling and betting have always been considered undesirable activities in our country and our taxation should be aligned with these social policies. He stated that all these three activities fall under the same legal category and granting the casi n o a n exception tax on gross gaming revenue (GGR) based mechanism could lead to legal disputes in future. He advocated for maintaining a uniform law for all three activities. In addition, he supported views of Tamil Nadu and pointed out that on line gaming has had a negative impact on the youth, becoming an addiction for them. He expressed the v i ew that no concession sho uld be given to these activities and these should be taxed at the highest rate. He stated that h e did not oppose the id ea of treat in g casinos separately, but uni formity would be preferable. He also mentioned that the Karnataka Government bas been taxing race courses based on their gross value under the respective Acts s ince the beginning and litigation had only arisen in recent years even though tax was previously paid on the gross value only. 6.19 The Hon 'ble Member from Kera l a raised concerns abo ut the impact of taxing on the basis of GGR mechanism on lotteries as it could lead to li t i gat i on. He stated that this approach may affect the taxation of other actionable c l aims . 6.20 The H on'ble Member from Gujarat noted that the initial consensus in the Group of Ministers (GoM) was to impose the highest tax rate of 28% on all three activities. He expressed the need for a conc lu sive decision in the meeting as the matter has been dragged on without reaching a resolution. 6.21 The Hon'ble Member from Uttarakhand agreed with the proposal to tax all activities at the highest rate of 28% . 6.22 The Hon ble Member from Delhi suggested that a ll three activities should be addressed separately. S in ce the States of Goa and Sikkim are the only ones directly affected by casinos, their situation should not hinder a decision on other sectors. She emphasized that the onl in e gam ing sector is rapidly growing and requires a decision. Furt herm ore , she stated that in the case of casinos, all States had a strong opinion but the affected States should have a greater say. She recommended that taxation based on the GGR mechanism would involve complex ca l cu lati ons and proposed that the full-face value shou ld be taxed. 6.23 The Hon'ble Member from Nagaland stated that the Goods and Serv i ces Tax (GST) should not be considered as a form of charity but rather as a means to generate tax revenue for the nation. The Hon'ble member drew attention to the fact that gambli n g which encompasses these activities are bet based on either ski ll or chance, with the ultimate intention of earning money. It was suggested that tax should be levied on the full value of these activities without any exemptions as they are profit-oriented sectors. 6.24 The H on'ble Member from Sikkim exp re ssed agreement with the comprehensive and informative report presented by the Convenor , Group of Ministers (GoM). The Hon'ble Member info rm ed the Council that the State of Sikkim aligns it self with the v i ew put forward by Goa as documented in annexure on page 16 of Agenda No. 5 . It was proposed that a GST rate of 28% be imposed based on the Gross Gaming Revenue (GGR) mechanism as this was tried and tested valua ti o n method. Then he apprised the Council that prior to the imp l ementation of GST, Sikkim taxed Casinos at the rate of 10 % on the GGR value. Furthermore, he stated that presently, 28% GS T rate is being charged and if the valuation method i s altered, it wou ld have a severe blow to the casino i ndustry . 6 . 25 The Hon'ble Member then highlighted the distinction between these three activit i es despite their apparent s imil a ri ties as mentioned in 2 nd report of GoM . Specifically, the Hon'ble Member underscored that the unique feature of a casino is that eac h chip purchased by a player does not represent an actionable claim. It was op ined that imposing GST on the full-face value of all ch ip s purchased in a cas in o would be unjustifiable . The Council was in formed that the annual revenue generated by the State of Sikkim from t h ese activities amounts to approximately Rs. 20 cro r es which is a substantia l sum fo r a small State like Sikkim whe r e option of generat ing r evenue is very limit ed. Cas ino indu stry is not bound to any season and it bri n gs people throughout t h e year. He further r equested the Council for separate rule for casino to l evy of GST at the rate of 28 % on GGR . Regarding onl i ne gaming , it was suggested that an effective method for computing the value of the supp l y of onli n e gaming may be determined by an inter-ministerial task force dedicated to this matter. 6 . 26 The Hon'ble Member fro m Chhattisgarh expressed agreement with the views presented by Uttar Pradesh. He highlighted the adverse impact of these activities on our society. He further emphasized the urgency of resolving this matter. It was recommended that a 28% GST rate b e l evied on the full value of these activities regardless of whether they involve game of chance or skill. 6 . 27 The Hon'ble Member from Arunachal Prade s h se conded the views of Uttar Pradesh and Meghalaya. He quoted example of Las Vegas and Macau which have no other attraction and where people go to play casino only whereas Goa is not only meant for casino and therefore, the rate of tax does not affect touri s m sector of Goa. 6 . 28 The Hon'ble Member from Andhra Pradesh stressed the importance of considerin g the specific issues related to each State, keep in g in mind the federal nature of the country and one nation one tax. It was stated that larger States have ample resources to generate revenue whe r eas sma ll er States are often at a d i sa dvantage. The Hon'ble Member agreed with t he views of Delhi and suggested that States like Goa and Sikkim should have some degree of flexibility in raising revenue i n absence of other so urce of revenue. 6.29 The Hon'ble Member from Meghalaya reiterated that the procedures involved in each game are distinct therefore they s hould be taxed based o n their individual intricacies. It was proposed that a s ingle formula for calculation, could not be justified for every game. Addit i onally, the Hon'ble Member recommended making approp ri ate amendments to th e law in accordance with the decision s reached in the Council to avoid any legal disputes. 6.30 Th e Revenue Secretary clarified that an amendment to the law i s neces s ary as o nline gaming companies have argued in various courts that online gaming is an actionable claim but i s not a taxab l e actionable claim in Schedule TII of the Centra l Goo d s and Services Tax (CGST) Act. They contend that it is a game of skill and does not involve any element of gambling o r bett in g. The Council was informed that the GGR is typically only 10-15% re s ulting in an effective tax rate of l-3%. The Secretary stro n gly put across that even food it ems are taxed at a rate of 5% wh i ch is the lowest slab rate. Therefore, clarity must be brought through l eg i s lati ve amendments. It was mentioned that th e draft amendments have been prepared carefully in consu l tat i on with the Additional Solic it or General of India. Furthermore , it was stated that the law shou ld not be subject to int erpretat i on regardin g whether the activities are games of skill o r chance. With regards to the issue of retrospectivity , the Secretary stated that claims for retrospective tax would cont inu e but there would be no matter of dispute with regard to prospective implementation. Finally , it was emphasized that the Council is a taxing body and not a regulatory authority. So , Council should not be concerned with whether these activities are proh i b i ted or regulated. 6 . 31 It was observed that all States are in agreement regarding the necessity of amending the law to provide clarity on these issues. The decision on whether this amendment should be addressed i n the Law and Fitment Committee or brought back to the Council was left to the Council's discretion with the aim of expediting the process . The Secretary suggested that the amendment may be brought through o r d i nance or through legislature in next session so that Revenue could be collected on these activities as soon as possible. 6.32 Thereafter , the Hon'ble Chairperson so u ght confirmation of the Council members on all three iss u es (i) the i ssue of amending the law to include Cas i no, Race Course , and Online Gaming in Entry 6 of Schedule Ill of the CGST Act , 2017 alongside Lottery , Betting, and Gambling. This inclusion wou l d help avoid any interpretat i onal confus i on. She clarified that the exemption previously granted for GST on actionable claims except for Lottery , Betting , and Gambling in E n try 6 , would now be amended so as to remove any confusion, to exclude Online Gaming and Ho r se Rac i ng from exemption which would be subject to GST without any exemption , (ii) the rate of tax and (iii) the value for supply. 6.33 The Hon'ble Member from Meghalaya expressed his agreement for the amendment deeming it necessary and suggesting that the first report of the GoM (Group of Min i sters) would s uffice after such amendments . The Revenue Secretary t h en i nformed the Council that a few more amendments wou l d be worked out by the Law Committee and circulated to t h e respective States fo r amendments in their State GST Act subject to the Council's approval. 6.34 The Hon'ble Member from Karnataka proposed to i nclude an explanation in Entry 6 to incorporate these games rather than amending the entire entry. Similarly, the Hon ' ble Member from T amil Nadu suggested that the final draft of the amendment should be shared w i th all States. In response , t h e Revenue Secretary stated that States like Tamil Nadu and Karnataka who w i shed to be invo l ved, could be included in the Law Comm i ttee to ensure a concurren t dec i sion. 6.35 Taking into consideration the concern raised by Tamil Nadu , the Hon'ble Chairperson sought the Council's wisdom on whether if any State has a Jaw banning ce r tain activities like Online Gaming and the Counc i l deems fit to tax that act i vity then wou ld the amendment contradict the State Law. The Revenue Secretary clar i fied that even current l y, the Counci l imposes taxes o n Gambling and Betting, despite them being banned i n certain States . He ex pla ined that the Counci l cou ld only decide t he taxability of activity and the States regu la te t h ese act i v iti es. The H on'ble Member from Karnataka and Kerala agreed w ith the explanat i on g i ven by Revenue Secre tar y. 6 . 36 Th e R eve nue Sec retar y then req u ested t h e Council to decide the tax rat e and valuat i on method for t h ese activities . He state d that uniformity in ta xatio n for these activit i es was pr efer red , however during co n su ltation s w ith the ASG ( Additi o nal Solicitor General), he indi cated that differ e ntial treatment coul d also be co n s idered. He further mentioned that there was consensus a m ong a ll Sta t es to tax Online Gaming a n d Race Courses at 28% GST on their full val ue. The on l y r emain ing issue was that of Cas in os to be decided upon. 6.37 The Hon'ble Ch airp erson urged the Counc il to focus on executing and implementing the la w o n t he se activ iti es requesting practical and exec u tab l e so lu tions rather than idea li st i c opinions . 6.38 Hon'ble Memb er from G oa and S i kkim s tron gly advocated fo r di ffe r ent i a l taxation of Casi n os based on the Gross Gaming Revenue (GGR) mecha ni sm. 6.39 However , the Hon ble Cha ir person informed t h e Cou n c il that a consensus had been reached among th e States to tax Online Gam in g and Race Courses at 28% on the full-face va lu e. She requested the Co uncil to decide on t h e r equest made by the States of Goa a nd S ikkim to treat Cas in os di fferently and tax them based on the GG R me cha ni sm . 6.40 The Hon'ble Member from C hhatti sgar h , Kerala , and Karnataka expressed their opinion that th e principle o f l aw s hould n ot be different for Casinos co mpar ed to other act i vit ie s as it could have far -re ac hin g effects o n o th er services. The Hon'ble Member from Karn a taka suggested t hat the principle of l aw s hould b e th e same fo r all activities and taxed on face value while t he tax rate could vary. The Hon 'bl e Member from Maharashtra a l so agreed w ith this view and propose d tax in g Cas ino s at 28% initiall y with the possibility of providing an abatement. 6.41 The Hon'b l e Member from Naga l a nd state d t hat if cas in o was pan Indi a and sa m e rate wou ld not prevail , th en i t could ha ve repercussion. As casino i s s pec ific to on l y two States i.e. Goa and Sikkim thus except ion s coul d b e made. Casino i s lifeline for these two States and i t wou ld ha ve hu ge i mpact on t h eir revenue. 6.42 The Hon'ble Member from Andhra Pradesh expressed the belief that only the States of Goa and Sikkim wou ld be affected by th i s taxation policy and it would benefit them in some way. He s u ggested that there would be no harm in treating Casinos differently or applying a different tax rate compared to other activities. 6.43 The Hon'ble Member from Meghalaya suggested that since Betting and Gambling were already includ ed in Entry 6 giving different treatment to Casinos would create confus i on. He proposed that eit h er the two States could tax Casinos outs id e t h e GST regime or the definition of full face-value cou ld be worked upon to su i t the affected States. 6.44 The H on'ble Member from Goa requested that Casinos can be taxed based on the GGR mechanism and suggested that the Council could review this decision if it does not work out as expected. 6.45 Addressing the concerns raised by the Hon'ble Member from Goa, the Hon'b l e Chairperson requested to have trust in the Council and it s functioning, highlighting that the Council i s taking a rigorous approac h to find a so luti on t h at benefits eve r y industry and State. 6.46 In light of the urgency to resolve this l ong-standing i ssue, the Hon'ble Chairperson urged the Council to come to a final decision. T h e Hon ble Cha irper son stressed that the so luti on should not be too burdensome which may l ead to the closure of any industry wh il e also maintain in g m ora l correctness. 6.47 The Hon'ble Member from Goa req u ested that Casinos should be taxed at an abatement of 60% r esu ltin g in an effective tax rate of 11. 2% wh ich i s around 12% and then casino indu stry would survive . 6.48 The Hon'b l e Member from Uttar Pradesh then expressed t h at it i s neither socially nor morally right to suppo rt any State in the name of Cas in o and it wi ll give wrong message to the public. He further added that Goa may be facilitated by other means but not through the measure as suggested. 6.49 Considering the viewpoints expressed by the majority of States , the Hon 'b l e Cha ir person stated that si n ce the proposal of the Hon'ble Member from Goa was not acceptable to th e Council, the decision was to tax Cas in os at the rate of 28% on their full-face value. Decision: The Council decided to clarify that actionable claims supplied in Casinos, Race course and Online gaming are also under the purview of GST to be taxed at the rate of 28% on full face value irrespective of whether the activities are a game of skill or chance. Accordingly, the law m ay be amended to provide clarity on the matter. 7. Agenda Item 6: Recommendations of the 18 th and 19 th IT Grievance Redressal Committee for approval/decision of the GST Council 7 . 1 The Secretary requested JS, GST Council Secretariat to present the agenda item regarding recommendations of the 18 th and 19 th meetings of t he I T Grievance Redressal Committee ( ITGR C) before the Co un cil. 7.2 JS, GST Co uncil Secretariat then presented the recommendations of the 18th and 1 9th meetings of the IT Grievance R edressal Committee (ITGRC) on the data fixes carried out by GSTN as per the Standard Operating Procedure approved by the Council, as detailed in th e agenda notes. 7.3 The Secretary then sought the comments of the Hon'ble Members of the Counc i l on the recommendations of ITGRC and the Council approved the same. Decision: The GST Council approved the recommendations made by the ITGRC during its 18 th and 19 th meetings. 8. Agenda Item 7: Scheme of budgetary s upport under GST regime in lieu of earlier excise duty exemption schemes to eligible manufacturing units under different Industrial Promotion Schemes of the Government of India 8.1 The Secretary int roduced the agenda r egard i ng scheme of budgetary support under GST regime in li eu of earlier excise duty exemption schemes. The Secretary informed the Counci l that the issue arose because of the Hon'ble S uprem e Court's judgement dated 17. l 0.2022 in the case of Mis Hero Motocorp Ltd. and Sun Pharma Laboratories Ltd. Vs Union of India Ors. wherein the Hon'ble Court held that the appellant's claim based on promissory estoppe l was without substance, however, their claim deserved due cons i deration and allowed the appellants to repre s ent before the concerned State Governments and the GST Co uncil. The Hon'ble Co urt d irecte d the Council and the State Governments to consider representations made by the appellants on the s ubject. The Secretary informed t h e Council that the issue had been discussed in an earlier meeting and it had been decided that the decision to cont inu e with any incentive g i ven to specific industries in existing industrial policies of States or through any schemes of the Centra l Government, shall b e with the concerned State or Central Government. 8.2 The Secretary stated th at there appeared to be n o need to revis it the decision and that the Counci l may reject the representations so received in this regard. In the officers' m eet in g, the States had exp r essed their inability to devise suc h a scheme as they were already implementing ot h er in centive schemes. Decision: The Council agreed to continue with the existing scheme of budgetary support whereby reimbursement of 58% of the net CGST and 29% of net IGST was granted to the eligible manufacturing units in specified States and rejected the repre sen tations received for the balance 42% of the net CGST and 21 % of net IGST. 9. Agenda Item 8: Ad-hoc Exemptions Order(s) issued under Section 25(2) of Customs Act, 1962 to be placed before the GST Council for information. 9.1 In the 26 th G ST Cou ncil m ee tin g h eld on 10 th March , 2018, it was d ec id ed that a ll ad hoc exem p tion orders issued with the approval of Hon ble Finance Min i ster as per the gu id el ines contained in C ir cu lar No. 09 /2 014-Cu sto m s dated 19th August, 2014, as was the case prior to the implementation of GST , s hall be placed before the GS T Council for informat i on. 9.2 Accordingly , th e ad ho c exemption orders i ssued on 28 th Ma r ch, 2023 on request from Shri Maneesh P.M. for exemp ti on from payment of IGST under sub- section (7) of section 3 of the Customs Tariff Act, 1 975 o n import of drug Injection Qarziba for baby N iharika G.M. was placed before the Council. Decision: The Council took note of the ad hoc exemption order . 10. Agenda Item 9: Report of Group of Ministers (GoM) on GST System Reforms 10.1 The Sec r etary requested the Hon ble Member from State of Mahara s htra to pre se nt Agenda Item 9 i. e . the Report of Group of Ministers (GoM) o n OST System Reforms. The Member stated that the Commissioner of State taxes would be making the presentation on the report. 1 0.2 T he Commissioner of State taxes , Maharashtra made a presentation (A nnexure -6). He informed the Counci l that the GoM on GST System Reforms was formed on 18 th Se ptember , 2021 and the main Terms of Reference were to suggest changes in the business processes and TT Systems to plug revenue leakages , suggest better measure for compliance and revenue augmentation and to co-o rdin ate between different tax author iti es . The GoM comprises Members from the States of Maharashtra , Haryana, Delhi, Assam, Andhra Pradesh, Odisha, Tamil Nad u, and Chhatt i sgarh. He further stated that this GoM is a Standing GoM and submits it s report periodically as and when meetings are held. He in formed that the GoM has held three meetings to date and that the report of the 2 nd Meeting held on 1 0 th February, 2022 was tabled and accepted by the Council in its 47th Meeting. 10.3 He further inform ed the Council that the 3rd Meeting of the GoM was held on 1 3th February, 2023 and that the recommendations of this third meeting are being tabled before the Council. He stated that the GoM in its third meeting considered 6 agenda items and that they would be taken up individually. 10.4 The first agenda item that was considered by the GoM was regarding the hard l ocking of Tab le-4 of GSTR-3B and it is basically about the credit that is being claimed in FORM GSTR-3B to be locked with the credit that is availab l e in the FORM GSTR-2A. He in formed the Council that the GoM after due deliberations has concluded that the hard lockin g of Table-4 of GSTR-3B is n o t feasible as of now as there are many comer s itu at i ons that would cause inconvenience to the taxpayers if hard lo cki n g is done. The GoM as a first step ha s recommended that a rule based on gap in ITC utili zat ion ca n be implemented in a phased mann er on s imilar lines as mismatch between GSTR-l/3B system which is a lread y under implementation. 10.5 The second agenda item that was considered by the GoM was regarding th e tracking and identifi catio n of Non-Existent Tax Payers (NETP) . He stated that with re spect to fake entities detected there i s a need to have a nati o nal database as it will help in the tracking and recovery of fake ITC flow credit. Having a computer i zed system w ill help in tracking the se fake entities spread across different Stat es . He also stated that many commona lit ies are observed in the se fake e ntiti es such as they use th e same mobile number, PAN number, Aadhar etc. a nd having a common rep os itory will enab le sharing of these data across various States . The major r ecomme nd ations made by the GoM with respect to this agenda item are the need to formulate an SoP for handling these NET P s, a un i form policy of ab-in i tio cancellation of these NET P s across State / CBlC zones and to deve l op a Sys t em driven solution t o faci li tate the declaration of NETPs by the tax administrations a n d to develop a System based commun i cat i on regarding r ec ip ients of ITC from NETP, among the var i o u s States tax admin i strat i ons for smooth coordi n ation of follow -up investigations. 1 0 . 6 . Th e third agenda item that was considered by the GoM was regarding the Report i ng of transactions by payme n t gateways banks. H e stated t ha t the monitoring of B2C transactions is at present weak and that at present GSTN i s unable to val i date these transactions. It was reco mmend e d by the GoM that the data avai l ab l e from NPC l , RuPa y, and V l SA / Master Ca r d can be compi l ed a nd this can be checked aga in st the details provided by the registered person regarding turnover. He further in formed t h e Counc i l that th i s recommendation i s in i ts initial stage a nd that t h e details need to be worked out. The GoM has recommended forming a committee to develop a deta il e d m ethodology and to hold detailed consultat i ons with NPCI and RBI to im p l ement this recommendation . 10.7 The fourth agenda item t ha t was cons id e r ed by the GoM was regarding the HSN-level reporting in GSTR -1. Commissioner Maharashtra informed the Co un cil that in the ini t i al phases , the dealers are not disclosing the full turnover com modit y w i se a nd therefore , it is proposed to make this compulsory in a phased manner . The GoM has recommended a phase-wise and time-bound a pp roach to be adopted for act i on against non-compliant taxpayers with nudging messages a n d e- mail s in the initial phase and blocking of GSTR-1 to be conside r ed for fa ilur e to fi ll H SN d eta i ls in the l ate r phase . 1 0.8 The fifth agenda item that was considered by th e GoM was re gard i ng the proposal for int egration of Income T ax, I CEGATE and other data points to address u nderreporting of supplies and to add r ess the issue of under-reporting of Import of Services . On integration with Income Tax and I CEGATE the GoM suggested that DoR may coordinate the same. The benefit to GST on matching with these data po int s are quite obv i ous. I n th is r egard , the Hon'ble Membe r from Karnataka s u ggested the comm itt ee cou l d also exp l o r e t he possibility of integrating th e data that is ava il ab l e wit h the Mini s tr y of Corporate Affairs . 10.9 Th e Commissioner of State Taxes Maharashtra furthe r stated that at present all supplier data on goods and ,, serv ic es are tria n gu l ated on the domestic side , but for the imp ort of services , there is no triangulation of data as it is an ind e p e nd ent field r eported by the taxpayer. It was also informed to the Council that data is available with RBI for foreign remittance and the proposal was to explore the possibility of triangulating foreign remittance data with RBI with the import of services data reported by the registered person. He further informed the Council that this recommendation is in it s initial stage and that the GoM has recommended forming a committee of Officers from TPRU-1, GSTN, Centre, Maharashtra , and RBI to make a detailed report on this proposal. 10.10 The sixth agenda item that was considered by the GoM was regarding the development of MIS. He also informed the Council that two requests were received from State of Tamil Nadu and Odisha for the development of MIS. The first r equest was from Odisha for the development of MIS for commodities liable for GST under RCM and the second request was from Tamil Nadu for the development of MIS for auto-populated interest on account of late payment of tax in cases where GSTR 3B is filed late. He informed the Counci l that the GoM has approved the development of MIS. 10.11 He further inf ormed the Council that the GoM has felt that the e ntire GST network and system should move towards strengthening the registration process by using biometric val idations and premises verification, controlling the flow of fake ITC at both ends, i.e. the recipient and the supp li er of a supply and also expanding the use of third-party data for better forecasting of turnover and other ver ifi cat i ons of taxpayers . 10.12 The Secretary proposed that the Counci l could accept the report of the GoM and that the recommendations made by the GoM can be implemented by GSTN in consultation with the Law committee. Decision: The Council accepted the recommendations made by the GoM on System Reforms. 11. Agenda Item 10: Proposal for creation of State Co-ordination Committee comprising of GST authorities from the State and Central Tax Administration 11.1 The Secretary presented t h e Agenda No. 10 regarding creation of State Level Co-ordination Committee comprising GST authorities from the State a nd Central Tax Administration. He informed the Council that the proposal had co m e up during the National Coordination Committee meeting that was held in April, 2023 with the tax authorities from both Centre and State. 11.2 The Secretary informed the Council that the Committee would be co-chaired by the Chief Commissioner/ Commissioner of CGST / SGST and that they shall be co-convener on rotational basis for one year each . He further stated that the Committee shall meet at least once every quarter or as the co-Chairs decide. He further informed that the committee will deliberate on co-ordination issues relation to enforcement , investigation, audit , grievances and any ot h er matter as agreed to by co-Chairs. He also informed that the agenda was discussed in detail in the Officers ' Meeting. 11.3 The Hon ble Member from Uttar Pradesh welcomed the proposal and stated that Committee would be a welcome step towards co - ordination between tax authorities . 11.4 The Secretary further requested the Council that , once orders are issued for constitution of Committee , to ensure that the Committee meets regularly so that concerted and coordinated efforts can be made towards coordination at State l evel. Decision: The Council approved the proposal for creation of State Co-ordination Committee comprising of GST authorities from the State and Central Tax Ad ministration. 12. Agenda 11: Implementation of GS TAT consequent to passing of F inance Act, 2023 12.1 The following issues under the agenda were placed for consideration of the GST Council: a . The GST Council may recommend a suitable date for notifying the amendments to CGST Act , 2017 made vide Finance Act , 2023. Accord in gly, the States / UTs w ith legislature may also n ot i fy the correspond in g amendments in their respective Acts. The GSTAT would be constituted after these amendments are notified. b. As per Section 11 0(4)(b)(iii) , the Chief Secretary of a State i s to be nominated by the GST Counc il as a Member o f the Search Cum Selec ti on Committee for all other ca s es than the Technical Member (State) of the State Tribunal. c. For States having a common Bench but separate Hi gh Court , it may be clarified that the appea l arising out of GSTAT order in such cases will fall within the jurisdiction of the High Court of the State where the taxpayer is located. d. The proposed Number of Benches along with their juri sd iction in States /UTs with legislature . 12.2 The Secretary presented the agenda and mad e a brief prese n tation. The pre se ntati on (att ached as Annexure-7) s ummari zed the State-wise Benche s reque sted (sorted in descending order of the number of ta x payer s in eac h State) along with domestic GST collection figures from each State i.e. collection s net of IGST on impor ts . He brought to the notice of the Council that each Bench comprises 4 Member s and, thus , each Bench effect i vely means two functional Benches. 12.3 The Hon ' ble M e mber from Uttar Prad es h stated that Uttar Prad es h has the highe st number of taxpayers and the highest population in the country with a wide geographical expanse. He informed the Council that for these reason s th ey have proposed fiv e Benche s at Lucknow , Agra, Prayagraj , Varanasi and Ghaziabad. This had been cleared by the State Cabinet earlier as also discussed by the Council in it s 39th and 40th meet i ng s . Thi s may be cleared without reduction. 12.4 The Hon'ble Member from Maharashtra stated that Maharashtra has 20% s hare in the GST revenue and appealed that as proposed seve n Tribuna l s in their State s hould be recommended. 12.5 The Hon ble Member from Tamil Nadu requested for three Tribunal Bench es at Chennai, Madurai and either at Coimbatore or Salem considering the i r population. While the request from the State Government had not been sent earlier, their suggestion may be taken now . 12.6 The Hon'ble Member from Punjab stated that they propose to form two Tribunal Benches . They have communicated for only for one Bench at Chandigarh/Mohal i and will be deciding on the location of the second Bench soo n and communicate the same. 12.7 The Hon ble Member from Andhra Pradesh stated that considering the geographical diversity in the State and poor road connectivity in certain areas , they have propo sed thre e Benches. 12.8 The Secretary brought out the total number of Benche s s ug geste d by the States i s coming to around 50. This means selection of nearly 200 Members. In the initial days , the workload with the Benche s may not justify this high number. Accordingly, in the Officers ' meeting , States were requested to begin with few Bench es . It needs to be kept in mind t hat one Bench in effect means two functional Benches. If we were to proceed in one go to do these many recruitments, there may be some compromise on the quality. It will be a better idea to proceed in a staggered manner while agreeing to the suggest ion s from the States. 12.9 The Secretary suggested that initially , all the State Capita l s may have one Bench (ot h er than North-Eastern States and Sikkim). In addition, there may be Benches at location of High Court Benches . For instance, U.P. has High Court Benches at Lucknow and Alla habad. They can have two Benches, which will mean four functional Benches. Similarly, Maharashtra and Rajasthan can have two Benches. Thi s is only in first phase an d as they are filled up and made operat i ona l , we can proceed to higher numbers. The requests received can be approved, subject to the condit ion that in the ini tia l phase, the process is started with Benches at State Capitals and places where High Court Benches are located. 12.10 The Hon 'ble Member from Uttar Prade sh sta ted that at least three Benches should be recommended in the first phase and the request made should not be cancelled. 12.11 The Hon'ble Chairperson clarified that the Benches as proposed by the States were not being reduced but th e idea was to start with fewer Benches in the initial phase. The other Benches may be set up s ub seq uen tly. 12.12 The Hon ble Member from Kerala stated that the proposal of Kerala is to set up 3 State Benches with locations at Thiruvananthapuram, Ernakulam and Kozhikode. In the in itial phase , as suggested in this meeting, due t o l esser pendency of cases , two benches even with half the members may be made functiona l at Thiruvananthapuram and Ernakulam. Since the other areas in the state are quite far from these two locations , there may be prov i sions for these benches to conduct sittings in other locations such as Kozhikkode also to hear the cases belonging to those l ocations. Agreeing with th e suggestion, the Revenue Secretary clarified that the same can be done at their level by setting up s ittin g/ circuit Benches. The same can be enabled so that more cities can be cove r ed by one State Bench. He stated that State Bench and sitting/circuit Bench could be located in different cities for wider geographical representations with two Members each . 12.13 The Hon'ble Member from Chhattisgarh stated they were in agreement with this a rran gement and wou ld have two Benches starting with Ra i pur and then at Bilaspur. 12 .1 4 The Secretary summed up that post discussions the final consensus is to have limited number of Benches to begin in first phase. On the i ssues of jurisdiction of the Benches , t h e Secretary informed that the information would be collected from the States which may need to provide the details of jurisdiction of propo s ed Benches and with the approval of the Hon ble Chairperson, the same would be placed before the Counc il fo r ratification. 12.15 The Secretary further suggested that the Chief Secretary of Uttar Pradesh or Maharashtra may b e nominated as a Member of the Search cum Selection Committee. He stated that these two States ha ve the highest number of taxpayers. Th e H on'b le Member from Karnataka s ug ges ted that Chief Secretary Karnataka may be nominated as a Member of the Search cum Selection Committee. The Secretary sta ted that if it was agreeable to a ll , the Ch ief Secretary of Maharashtra may be nominated as a Member o f the Search cum Selection Committee as Maharashtra had the lar gest share in OST revenue and the second lar gest number of GST taxpayers in the country. He also suggested that this nomination may be for o n e year and be made on a rotation basis for subsequent years . H e brough t out that se l ect i ons will be requir ed to be done every year due to constitution of new B enc h es, turnover of members due to re s ign ations, retirements etc. Decisions: a. The Council recommended that provisions of the Finance Act , 2023 pertaining to the GST Appellate Tribunal may be notified by the Centre with effect from 01.08.2023 . This will pave the way for the early setting up of the Benches of the GST Appellate Tribunal. b. Further , the Council recommended that the Chief Secretary of Maharashtra be nominated as one of the Member of the Search cum Selection committee in terms of Section 110(4)(b )(iii) of the CGST Act 2017 for a period of one year. c. It was clarified that for states having a common Bench but separate High Court , an appeal arising out of GSTAT order will fall within the jurisdiction of the High Court of the State where the taxpayer is located. d. Regarding the number of State Benches, the Council recommended constituting the Benches as per proposal of the States. However, they may be operationalized in a phased manner based on the case load. The Council recommended to initially operationalize one Bench each in the major States. However, for States having High Court Benches at two or more places in the State, or large number of tax payers, it recommended to initially operationalize more than one Bench also. Moreover , a Bench may have sitting at more than one location (with two members at each location) which will enable more cities to be covered by the State Benches. e. The jurisdiction of the Benches may be decided in consultation with the States concerned, with the approval of the Hon'ble Chairperson, and placed before the Council for ratification. 13. Agenda Item 12: Performance Report of Competition Commission of India ( CCI) for month of December, 2022 and 4 th quarter of the F . Y 2022-23 along with the Performance Report of State Level Screening Committee ( SLSC), Standing Committee (SC) and Directorate General of Anti- Profiteering (DGAP) for 3rd quarter and 4th quarter of the F . Y 2022-23 13.1 The Secretary presented the Agenda No . 12 regarding Performance Report of Competit i on Commission of Indi a (CCI) for month of December, 2022 and 4th quarter of the F.Y 2022-23 along with the Performance Report of State Level Sc re ening Committee (SLSC) , Stand in g Com mitt ee (SC) and Dir ectorate General of A nti- P rofiteering (DGAP) for 3rd quarter and 4th quarter of the F.Y 2022 - 23 for the information of the Council. Decision : The Council took note of the same and approved the Agenda. 14. Agenda 13- Request for extension of due dates for filing GSTR-7, GSTR-1 GSTR- 3B for the month of April, May and June 2023 and extension of Amnestv Schemes in the State of Manipur. 14.1 Th e Pr. Comm i ss i oner , GST Policy stated that a request has been received from State of Manipur for extension of due dates for fil in g of FORM GSTR 7 , FORM GSTR-1 and FORM GS TR- 3B for the m onths of April , May and June 2023 till 31.07.2023 for taxpayer s of Manipur , due to preva ilin g law-and-order s i tuation in the State. He informed that already , extension of due dates for filing of FORM GSTR 7, FORM GSTR-1 and FORM GSTR-3B fo r the months of April 2023 and May 2023 has been granted t ill 30 th June 2023. 14.2 He a l so informed t hat State of Manipur has a l so requ ested for exte n sion of the Amnesty schemes announced in the l ast Council meeting till 3 1 st Jul y 2023 i n Sta t e of Manipur. He mentioned that these amnesty schemes were notified through notification s dated 31st March , 2023 , on basis of the recommendations of GST Counci l made in 49 th meeting , and the compliances as per the said amnesty schemes were to be done by 30th June, 2023. The details of amnesty schemes are as under: (i) Amnesty to GSTR-4 non-filers was provided vide Notification No. 02/2023-CT; (ii) time limit fo r application for revocation of cance llation of registration was cond i tional l y extended v id e Notification No. 03 / 2023-CT; (iii) Amnesty scheme for deemed withdrawal of assessment orders issued under Section 62 was provided vide Notification No. 06/2023-CT; (iv) Amnesty to GSTR-9 non-filer s was provided vide Notification No. 07/2023-CT ; (v) Amnesty to GSTR-10 non-filers was provided vide Not ifi cation No. 08/2023-CT; 14.3 He a l so added that s imilar representations for extension of date of amnesty schemes have also been received from various other trade associations from other parts of the countr i es also. 14.4 He in formed that the feasibility of implementing these requests was got examined through GSTN (Goods and Services Tax Netwo rk). GSTN has informed that while they can quickly make changes on an all-India basis for the extension of Amnesty schemes, implementing it specifically for a particular State would requ ire more time due to coding requirements. 14.5 The i ssue was deliberated in Officers ' meeting held on 10 th July 2023 and it was recommended by the Officers to extend the due dates for filing of FORM GSTR 7 , FORM GSTR-l and FORM GSTR-3B for the months of April , May and June 2023 till 31.07.2023 for the taxpayers of State of Manipur. The Officers further recommended that the Amnesty schemes notified vide notifications dated 3 1.03.2023, as detailed in the Agenda, may be extended till 31 st August, 2023 for all taxpayers across the country. Decision: The Council agreed with the said recommendation made by the Officers in the Officers' meeting. 15. Agenda Item 14: Review of the Revenue position under Goods and Service Tax 15.1 The Secretary presented the agenda on review of revenue position under GST and informed the Council that there were press releases from time to time indicating the revenue position. The Secretary to the Council informed that there is growth in the revenue of about 12% annually. 15.2 The Director (State Taxes), DoR stated that the average monthly co ll ection of GST comes to about Rs . 1.70 Lakh Cror e. Regarding un se ttled IGST , the Director (State Taxes) , DoR i nformed that compared to last year this year the balance is negative. However , the situation was improving. The Compensation Account was also in negative. 15.3 The Secretary informed the Council that the Compensation amount to a ll the States who had submitted AG Cert i ficate had been released and there was no pendency . The Secretary requested the other States who had not submitted their AG Certificates to submit it on priority so that their pay m ents could a l so be released in time. 15.4 The Hon ble Member from Telangana stated that thei r IGST sett l ement and Compensation payment we r e st ill pending. To this , the D irecto r (State Taxes) , DoR in formed that the amount as per the o ri g in a l AG Certificate sub mi tted by the State had been re l eased. The amount as per revised AG Cert i ficate wou ld be released in due course as a n d when revised Certificate was r eceived in DoR. Further , regarding IGST Settlement, the Director (State Taxes), DoR informed that they were facing certain acco untin g issues. Those issues were discussed w i t h Pr. CCA, CBIC. The amount d u e under [ GST Settlement would be released afte r resolution of the account in g issues. 15.5 The Hon'ble Member from Andhra Pr adesh also po i nted out similar issue for the Financia l Year 2018-19 and 20 19- 20. The D i rector (State Taxes) , DoR informed that CAG had certified the amount but the Cert ifi cate was yet to be received by DoR. T h e due amount wou l d be released after receipt of the Certificate . 16. A genda 15: Any other agenda with the permission of the Chairperson 16.l The Hon ble Member from Delhi brought to attention concerns over recent notification includi n g Goods and Se r v i ces Tax Network (GSTN) under the p urview of the Prevention of Money-laundering Act (PMLA) without any formal discuss i on in the GST Council. T h e Hon'ble Member requested the C h airperson to take up the matter for discussion. 16.2 T he Hon ble Member of Tamil Nadu objected the notification i ssued by Union Government on PMLA that it is aga in st the int erests of traders and against the ba s ic objective of decriminalizin g violations unde r the Goods and services Tax Act . This w ill affect traders across the country. Tam il Nad u i s opposed to this. 16.3 The Hon'ble Member from Punjab also r e qu ested the Council to discuss the matter and address the app r ehe n s i ons of the trade regarding t h e Notification. 16.4 The Hon'ble Member from the West Bengal enquired about the necessity of publishing the notification. She stated that law enforcing agencies cou ld h ave shared the data related to any fraud detection without even having any notification brought to that effect. Therefore , this matter shou ld have necessarily been discussed in the Cou ncil before notifying anything that affects GST agencies. 16.5 The Hon'ble Member from Rajasthan also requested the Counci l to take up the matter for discussion o n an urgent bas i s. Any defaults in tax payments were a lread y being investigated by GST authorities and br in ging enforcement of laws like PMLA in taxat i on matters would further create fear among traders. 16 . 6 T h e Hon ble Member from Telangana informed the Counci l that th ere were many appre h ensions among the i ndustry members about the notification. These apprehensions s h ould be addressed by way of a n Agenda or a GoM might be constituted for deeper analysis. The matter may then be taken up in the next Council meeting and the impl ementation of the notification be defer r ed till that time. 16 . 7 The Hon'ble Member from Karnataka stated that since the issue in volved s h aring of data with GSTN , it was incumbent upon t h e Council to discuss the matter. 16.8 T he Sec r etary to the Cou n cil clar ifi ed that the Notificat i on under scrutiny is under Prevention of Money Laundering Act and i s not under GST l aw. Secondly, the purpose of the notification was to equ ip and empower tax admin i strat i on . As per the notification, Director , Financial In tell i gence Unit wou l d s h are in format i on w i th GSTN regarding suspicious transactions filed by financial institutions. He read o ut t h e provisions of section 66, PMLA under which notification was issued and clarified that under these provisions of the Act , GSTN would o nly get informati on and the sa i d reaction does not mandate GSTN to s h are any information. Suc h inf ormation shared by FIU wou l d be further sha r ed w ith concerned State and Centra l GST authorities and t h at i n format i on would empower the a uth orities to d e cide further course of act i on depending o n merits of the case. Thirdly , t hi s in formation was not circu la ted by Directorate of Enforcement but Director , FIU whose duty was to co ll ect information regarding suspicious persons and suspiciou s transactions and communicate it to l aw enforc in g agencies including ED , CBI , State P olice , income tax and GSTN. This information was already being shared with about 30 other law enforcing agencies and the facility of shari n g was being extended to GSTN so that the information could be shared with State and Central authorit i es too. Instead of s h a rin g this i nformation with each State or Central zone separately, t h e information would be shared w i t h GSTN which was a common node for all tax agenc i es. Tn light of the discuss i ons, it m i ght be concluded that the notification does not give extraord i nary powers to the tax authorit i es. 16.9 The Hon'ble Member from Maharashtra apprised the Council that no representations raising objections against the not i fication were received from any association in the State of Maharas h tra. The Hon'ble Member h ighlighted that s i nce the inception of the law , 5000 cases had been registered for the period 2005 to 2023 . 2200 cases were reg i stered between 2005 and 2014 w hi le 2800 cases were registered between 2014 and 2023. Further , the total number of reg i strations in GST are 1 Crore 40 lakh approximately and the number of cases of violation were 5000 only. 16.10 The Hon'b l e Member from C hh attisgarh po i nted out that when PML Act was brought i nto effect , its preamb l e quoted the ob l igation of the co u ntry under United Nation Convention under which i t was adopted . So, it was not foreseen at t ha t time that such laws had something to do with tax r egimes l i ke GST. The aim was to target ill i cit d rug trafficking, destabi l ization of the country, etc. 16.10 The Secretary to the Counc il reiterated that the provisio n s in the notificat i on were not meant for empowe ri ng any Central tax agency w i th extraordinary powers . The information would be shared by FTU w i th GSTN electronically. The i nformation would , further, be shared w i th Centra l and State GST authorities and it would be upon them to decide i f any action was to be initiated. 17 . I n th e e nd , t h e Se cr etary t h a n ked t h e Un i o n Fina n ce M ini s t er, th e MoS, a ll t he Me mb e r s o f th e Co u nc il , a nd a ll t h e o fficers w h o h ad com e fr o m S t a te s, Ce n tr e , GSTN an d the offi c e rs fr o m Se c reta riat.