9911796707
TMI BlogMinutes of the 28th GST Council Meeting held on 21 July, 2018X X X X Extracts X X X X X X X X Extracts X X X X ..... ouncil 5. Review of Revenue Position 6. Issues recommended by the Law Committee for consideration of the GST Council i. Proposals for amendments in the CGST Act, 2017, IGST Act, 2017, UTGST Act, 2017 and GST (Compensation to States) Act, 2017 ii. Creation of GST Appellate Tribunal (GSTAT) iii. Simplification of GST Returns 7. Issues recommended by the Fitment Committee for consideration of the GST Council 8. Reports/recommendations of different Committees/Group of Ministers (GoMs) for information/approval of the Council: i. Recommendations of the Committee on Lottery ii. Recommendations of the Committee on IGST iii . Recommendations of the Report of the Task Force to suggest measures for creating an Eco-System for Seamless Road Transport Connectivity iv. Recommendations of the Group of Ministers on Digital Payments v. Interim report of the Group of Ministers on imposition of Sugar Cess vi. Recommendations of the Group of Ministers on Reverse Charge Mechanism 9. Minutes of 9th Meeting of Group of Ministers (GoM) on IT Challenges in GST Implementation for information of the Council and discussion on GSTN issues 10. Ad hoc exemption order issued under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed GST despite some small initial problems. He also stated that tile Council should thank all the States who made GST a success for the benefit of tile people, going beyond political considerations. 3.1. The Hon'ble Chairperson further added that it was a matter of great pride now that there was one nation, one law and one procedure in the indirect taxation system of India. He stated that GST would impart respect for honesty and transparency in the country. e-Way bill system was a big step in improving compliance and all the Hon'ble Members of the Council deserved the highest accolade for introducing this reform in a phased manner and organized fashion. He further appreciated that growth had been maintained in the GST structure. He stated that the tax collection was at a reasonable level and expressed confidence that GST revenue would grow with greater ease of operation and record maintenance, lower tax rates and simplification of processes. He also expressed confidence that the Council would continue its high tradition of taking decisions by consensus. 3.2. Dr. Hasmukh Adhia, Union Finance Secretary and Secretary to the Council (hereinafter referred to as the Secretary) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r interest of the country. He stated that he as well as the Hon'ble Minister from West Bengal had written to the Hon'ble Chairperson earlier and also highlighted that the detailed agenda notes for this Meeting run into more than 400 pages and covered issues such as amendment to GST laws, rules, rates, returns, GIC, etc. These were very important issues and it was humanly impossible to go through 400 pages in a short time of three days. They needed more time to study the proposals to first convince themselves and then to convince the State Cabinet and then their people in the State. He recalled that in the 25th Meeting of the Council held on 18 January 2018, the Council gave in principle approval to the proposed amendments in GST Laws and asked the Law Committee to get it vetted by the Law Ministry. He stated that many proposals of the Law Review Committee were not being reflected without any mention of reason thereof. He requested to defer the law amendment proposals by two weeks for wider consultation with the stakeholders. 3.6. The Secretary stated that the agenda notes other than that relating to Fitment of rates of tax were discussed in detail from 10.00 a.m. to 8.00 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 270 of the Constitution. This proposal was not accepted by Delhi and many other Members and accordingly this Agenda item was deferred. However, now ₹ 1.60 lakh crore of IGST revenue was put in the CFI. He stated that the tax collected from Delhi should go to Delhi but since it had gone to the CFI, Delhi did not get any devolution out of this amount. He questioned whether the Central Government could take unilateral decision to put this amount in the CFI when the Union Territory with legislature also have the status of a State for the purpose of GST revenue. He stated that the Minutes of this Council Meeting should specifically record his opposition to this unilateral decision of the Government of India to put ₹ 1.60 lakh crore of IGST revenue in the Consolidated Fund of India when an Agenda item on this issue was withdrawn during the 26th Meeting of the Council. He added that today's agenda on IGST settlement was a welcome move and after disbursing ₹ 50,000 crore to States, Delhi had received ₹ 1050 crore. Had ₹ 1.68 lakh crore been disbursed as per this formula, Delhi would have got ₹ 3300 crore. He observed that, till now, all decisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , issued after 4 May, 2018 and till 16 July, 2018 were presented during the Officers meeting on 20 July 2018. He suggested that the same may be approved by the Council. He also suggested that the notifications, circulars and orders issued by all the Member States, which are pari materia with the notifications, circulars and orders of the Central Government may also deemed to be ratified. The Council approved the suggestion. 7. For Agenda item 2, the Council approved the deemed ratification of the following notifications, circulars and orders, which are available at www.cbic.gov.in Act/Rules Type Notification/Circular Nos. CGST Act/CGST Rules Central Tax 22 to 29 of 2018 Central Tax (Rate) 11 and 12 of2018 IGST Act Integrated Tax (Rate) 12 and 13 of2018 UTGST Act Union Territory Tax 07 to 11 of2018 Union Territory Tax (Rate) 11 and 12 of2018 Circulars Under the CGST Act 44 to 49 of2018 Under the IGST Act 3 of2018 The notifications, circulars and orders issued by all the Member States, which are pari materia with the above notifications, circulars and orders were also deemed to have been ratified. Agenda Item 3: Decisions of the GST Implementation Committee (G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may arise relating to such filing of TRAN-1/TRAN-2 and migration and suggest ways to handle such situations, wherever required, in a time bound manner. He also referred to different categories of TRAN-1/TRAN-2 and migration cases approved by the ITGRC. He added that as on 15 July, 2018, approximately 3500 cases of grievances relating to migration /registration/ TRAN-1/TRAN-2/GSTR-3B/GSTR-1/ITC-01/lTC-04, etc. had been received by the GSTN's Nodal Officer. In the first list, approximately 918 cases were examined and presented to IRGRC. Another lot of around 1200 cases had been examined by GSTN and would be put up before the ITGRC. The remaining cases were under investigation with respect to cause and checking of logs in GST system. He also referred to some challenges faced in the examination of cases i.e. the SOP was not being followed such as no prima facie examination was being done by the nodal officers, cases being sent without any remarks, nontechnical issues, duplicate entries etc., while forwarding the taxpayer's grievances relating to technical glitches. 10.2. He informed that during the Officers meeting held on 20 July, 2018, discussion took place regarding many t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted Part A of REG-26 but could not complete the migration process, and whose applications were received by the Principal Nodal officers/ Nodal officers of the Central and State Governments till 31 August, 2018; (ii) In order to give effect to the decision at (i) above, ITGRC's mandate will be to allow migration of even those taxpayers who could not migrate due to reasons other than technical glitches and an order under Rule 24 of CGST/SGST Rules, 2017 will be issued by the Commissioner extending the time limit for furnishing the information as required therein; (iii) To waive the late fee (by way of reversal in electronic ledger and crediting the amount in the relevant tax head from the fee head) for filing of returns for the months of July, 2017 to August, 2018 by such taxpayers who complete their migration process as per this decision; (iv) To allow filing of TRAN-1 and TRAN-2 in 122 cases, as listed in Annexure 3 of the Minutes of the first meeting of ITGRC held on 22 June, 2018 relating to technical issues with all consequential benefits to the taxpayers. The technical issues would be limited to the below mentioned 4 categories: (a) Cases where the taxpayer receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 50, 000 crore, there was negative balance in the IGST account for the period April-June, 2018. 12.1. The Joint Secretary, DoR also presented a chart of the average revenue trends of the States from August 2017 to June 2018 which showed that all India percentage shortfall of revenue was 13%. He also presented a Return filing analysis till due date and on cumulative basis till date. He pointed out that the return filing percentage had shown an increasing trend till December 2017 but it declined thereafter, which was a matter of concern. 12.2. The Hon'ble Chairperson observed that those States which had a return filing percentage of less than 60% of the registered taxpayers needed to examine as to how many taxpayers were not actually in the tax net. He stated that it might be the case that during the roll out of GST, many taxpayers below the threshold limit would have taken registration, who in the first place who were not required to be registered with the tax administration. Some action could be taken to take these taxpayers out of the tax net, which would automatically improve the return filing percentage. He also stated that those who still wanted to retain the GST regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was taken. He suggested to make an interim arrangement to distribute the accumulated credit. He proposed that 90% of accumulated IGST relating to Financial Year 2017-18 as at the end of March 2018 should be settled immediately on the same basis as the two provisional settlements of ₹ 35,000 crore and ₹ 50,000 crore made so far and treated as 2017-18 revenue. 90% of accumulated IGST for 2018-19 as on 31 July 2018 should also be settled on the same basis. During the Financial Year 2018-19, 90% of the IGST amount accumulated each month may be apportioned to the States with a lag of one month. He also requested that figures of IGST accumulation should be shared transparently with the States every month. He stated that retention of 10% of the huge initial balance plus 10% of the IGST accumulated each month was likely to be sufficient to meet any contingency of recovery of excess settlement to the States. 12.6. The Hon'ble Minister from Punjab stated that his State had the highest revenue gap, both in percentage term and absolute term. He had been flagging this issue in every Council meeting. He stated that there appeared to be structural and operational challenges. He o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... States which derived their revenue from metals and minerals suffered a specific problem. Secretary stated that report of the CEA on Bihar would be reviewed and that could form the basis for study for other States. The Hon'ble Chairperson stated that the work of study of revenue gap of the States of Punjab, Himachal Pradesh, Uttarakhand and Jammu & Kashmir as well as that of Puducherry should be completed in 45 days. 12.8. The Secretary stated that States were concerned as to what would happen once the compensation ceased after 4 years. In his assessment, after 3 years, as the compliance under GST improved, no State might need to be compensated. 12.9. The Hon'ble Minister from Meghalaya stated that percentage of returns filed in the States of North-East was very low. He stated that in their State, legal requirement of registration was annual turnover of Rs .10 lakh and about 5, 000 taxpayers were between the annual turnover of ₹ 10 lakh and ₹ 20 lakh. This constituted almost 50% of the taxpayer base but the revenue coming from them was only 2%. These were small time people having no computer and no facility for return filing. He stated that in his view, the lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue collection data in the public domain at macro level with some lag as also the revenue collected by the States in the Financial Year 2016-17 from the taxes subsumed in GST for analysts, media or for general public with a view to increase transparency. He requested that the Council may approve this proposal. The Council approved the same. 13. For Agenda Item 5, the Council: - i) Took note of the revenue position under GST for April to June 2018; ii) Decided that the study conducted by CEA for Bihar regarding its revenue gap shall be used as a basis for conducting similar study for the States of Punjab, Himachal Pradesh, Uttarakhand, Jammu & Kashmir and Puducherry, for which the Union Finance Secretary shall work with the Finance Secretaries of the above mentioned States and submit the Report within 45 days; iii) Decided that the GST revenue data at macro level as well as revenue collected by the States in the Financial Year 2016-17 from the taxes subsumed in GST shall be put in the public domain on the website of Department of Revenue. Agenda Item 6: Issues recommended by the Law Committee for consideration of the GST Council Agenda Item 6(i): Proposals for amendments in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Secretary, GST Council informed that it was shared with the Convenor of the LC and the GST Policy Wing of CBIC. Hon'ble Deputy Chief Minister, Delhi stated that as a principle, for any Committee set up by the Council, the report should be first submitted to the Council for taking any decision based on its report. 14.3. The Hon'ble Minister from Punjab stated that the Council during its 25th Meeting held on 18 January 2018 gave in principle approval to the LRC's recommendations for 69 changes in the Law and only legal vetting was to be done but out of these, only 8 proposals were accepted without any change and 15 were accepted with modifications. He asked as to what happened to the rest of the proposals and it is not understood why many proposals were completely dropped. He stated that they were not against changes in Law but it could not be changed frequently and multiple changes would lead to protracted litigation. He suggested that 10 more days' time should be given to discuss and consider these proposed changes in the CGST/SGST Law with the stake holders before finalisation. He further observed that since about 1300 suggestions were received with regard to the prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of zero rating only for ' authorised operations'. If Law was changed at this stage, it could be construed that for the past period, supplies made to SEZ for non-authorised operations would also be eligible for zero rating. 14.7. He further stated that a third example related to the problem of reversal of input tax credit in respect of the services provided by way of extending loans and deposits. He explained that services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount are exempt from GST. In terms of Section 17(2) of the CGST Act, 2017, input tax credit (lTC) is not available in respect of exempt supplies, that is to say, lTC of common inputs and input services used in exempted supplies is required to be reversed. In the service tax regime, as a business-friendly measure, it had been provided in the Cenvat Credit Ru1es that the value for the purpose of reversal of common input tax credit shall not include the value of services by way of extending deposits, loans or advances against consideration in the form of interest. A similar provision was, however, not made under GST. The matter was conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o whether IGST on imported goods was being charged under the IGST Act or the Customs Tariff Act. The IGST Act provides that IGST on imported goods will be charged under Section 3 of the Customs Tariff Act 1975; if a tax was charged under the Customs Tariff Act, then no input tax credit would be available under the CGST/SGST Act. This appeared to be a dual taxation and no reply had been received so far. He further stated that the definition of supply in Section 7 of the CGST/SGST Act required many changes. The definition of supply as it stood today was a matter of doubt and it was not understood why the changes suggested by LRC were dropped. He recalled that earlier too, during July 2016, more than 50,000 representations were received and on 26 November, 2016, only 3 days consultation was permitted with the stake holders. The same mistake was being repeated and only one week's consultation was being allowed for proposed changes in Law, which was inadequate. He stated that there should be more consultation and they would revert with their suggestions with full urgency. 14.9. The Convenor, Law Committee stated that as regards Section 7, the current text made entries in Schedule I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as below: (i) S. No. 6 of Presentation relating to Section 7 of CGST/SGST Act: The Commissioner (GST Policy Wing), CBIC explained that Section 7 (1) was proposed to be amended by creating a new sub-section (1A) clarifying that certain activities or transactions, which constituted a supply in accordance with the provisions of sub-section ( 1) of Section 7, shall be treated "either as supply of goods or supply of services as referred to in Schedule II". Advisor (Financial Resources), Punjab stated that the existing provision under Section 7 which made activities under Schedule II as a supply of goods or services was an inadvertent error in law drafting. If it was corrected at this stage prospectively, there would be numerous litigations. In this view, he proposed that this amendment should be carried out with retrospective effect. The Hon'ble Deputy Chief Minister of Bihar cautioned that retrospective amendment could lead to a situation of tax refunds. The Secretary stated that this issue was discussed in the Officers meeting of 20 July 2018 and some officers had also expressed similar apprehension but the Council could take a view on this. After further discussion, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s being increased to ₹ 1.5 crore, 10% of this would become ₹ 15 lakh and therefore the upper limit would now be automatically ₹ 15 lakh as proposed by the Hon'ble Deputy Chief Minister of Bihar. The Hon'ble Chief Minister of Puducherry stated that they had received the agenda only three days in advance of the Meeting and the States that were not part of the Law Committee needed more time to examine this proposal. The Hon'ble Minister from Assam stated that the proposed amendment to Section 10 to increase the annual turnover threshold to ₹ 1.5 crore was already decided in the 23rd Council meeting held in Guwahati on 10 November, 2017 and the proposed formulation was only its implementation. The Council approved the formulation as proposed in the Presentation. (iv) S.No. 17 of Presentation relating to Section 17(5)(a) and new (aa) and (b) of CGST/SGST Act: The Commissioner (GST Policy Wing), CBIC stated that during the Officers meeting held on 20 July 2018, it was pointed out that there was some contradiction in the presently drafted text where transportation of goods was being referred in the sub section which was for motor vehicles for transport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to Section 22 of the CGST Act, 2017. (vi) S. No. 46 of Presentation relating to new Section 10 (3A) of GST (Compensation to States), Act, 2017: The Hon'ble Chairperson suggested that the proposed formulation should have more flexibility. Instead of providing that the amount remaining unutilised in the Fund shall be distributed between the Centre and the States, the law should provide that such amount may be distributed between the Centre and the States, as the Council may decide. He suggested to change the phrase 'distribute the amount remaining unutilized in the Fund' to 'distribute such amount remaining unutilized in the Fund'. The Council agreed to this proposal. (vii) S.No.1 of Table relating to Returns: The Hon'ble Chief Minister of Puducherry suggested that this proposal should be examined further. The Hon'ble Minister from Assam stated that this was only an enabling provision and it could be agreed upon. The Council agreed to the formulation shown in the presentation. 14.13. The Hon'ble Deputy Chief Minister of Delhi stated that the report of the Law Review Committee should be tabled in the Council along with the reasons as to why its 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to introduce the agenda item. The Joint Secretary, Department of Revenue, stated that the draft rules of Goods and Service Tax Appellate Tribunal (Appointment and Conditions of Service of President and Members) Rules, 2018 was approved by the GST Implementation Committee (GIC). He informed that during the Officers meeting held on 20 July 2018, Shri Arun Kumar Mishra, Additional Secretary, Commercial Tax Department, Bihar had pointed out that Rule 3 of these Rules would require some modification in view of the fact that the Rule referred to three different Selection Committees, but sub-Rule 4 provided for Convenor for only two Committees and this could be suitably modified. The Council approved this proposal. He further stated that it was proposed to constitute a GST Appellate Tribunal (GSTAT) National Bench at New Delhi and three Regional Benches at Mumbai, Chennai and Kolkata and after seeking the recommendations and approval of the GST Council, approval would be taken for creation of necessary posts of Chairman and Members. 16.1. He requested the Council to approve the following: i) Constitution of Goods and Service Tax Appellate Tribunal (GSTAT); and ii) Creation of National ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al provision of quarterly return filing for small taxpayers with annual turnover below ₹ 1.5 crore, but they would need to pay tax on monthly basis. The due date for filing return by a large taxpayer shall be 20th of the next month whereas the due date for smaller taxpayers shall be 25th of the next month. The taxpayers having no output tax liability and no input tax credit would also have a facility to file return through SMS. Facility for continuous upload of invoices by the supplier and viewing by the recipient along with tax payment status of an invoice shall also be available. On locking those invoices, the recipient can avail the input tax credit. In cases where no return is filed after uploading of the invoices, it shall be treated as self-admitted liability of the supplier, after the due date of filing of that return. 18.3. Invoices uploaded by the supplier before 10th of the next month shall be posted for viewing by the recipient by 11th of next month. He stated that earlier the paper invoice was adequate to avail the credit but now the uploaded invoices would become a necessary and mandatory condition for availing credit and to that extent, one was moving towards s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he next Financial Year. Along with the amendment of return, payment of tax shall also be allowed to save the interest liability of the taxpayer and the negative tax liability would be taken to next tax period. In order to bring in some discipline in .return filing, it was proposed to charge a late fee (after some time of implementation of new return) if the amendment return involved change in liability of tax by more than 10%. He stated that the table for export of goods in return would also contain details of shipping bills, but this information could be filed even after filing the return by using a separate facility for correcting details of Shipping Bills without considering it as amendment, and therefore the taxpayer would not be considered to have exhausted his opportunities for amendment of return. Subsequently, once the data was complete, the same would be transmitted to ICEGATE for processing. He stated that a provision of ' supply side control', that is some limit I red flags would be introduced for newly registered taxpayers and the taxpayers who had defaulted in payment of tax beyond a time period and/or those who pushed credit in the system beyond a threshold. F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proximately only 2.2%. The credit utilization by the small taxpayers/ businesses was also lower than that for medium and large businesses. 18.7. The Joint Secretary (TRU-ll), CBIC stated that there would be further simpler quarterly return available for small traders who make only Business to Consumer (B2C) supplies or only Business to Business (B2B) plus Business to Consumer (B2C) supplies. The return format for B2C suppliers was proposed to be called SAHAJ and for B2B plus B2C suppliers, it was proposed to be called SUGAM. He also stated that small taxpayers would have the option to continuously upload the invoices to enable their purchasers to avail input tax credit. He informed that the key feature of SAHAJ and SUGAM would be that some of the details required in other returns had been dropped and such information shall be collected only in the annual return, such as HSN details, details of non-GST supply and capital goods credit. He stated that in this return, there shall be no details for pending and missing invoices as small taxpayers shall typically have only 10-12 invoices and they would not tend to roll over their input tax credit for the next month. He stated that this s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Chairperson stated that the new return format could be put in public domain for one month. 18.10. On enquiry by the Hon'ble Chairperson regarding tin1e taken for development of software, Shri Prakash Kumar, CEO, GSTN informed that they would need about six months' time to develop the software after specifications are frozen. The Secretary stated that GSTN was already working on the software development and the aim would be to introduce the new return format from 11 January 2019 on best effort basis. The CEO, GSTN stated that the return design should be finalized quickly because it becomes very difficult to first make software and then make further changes. He raised the issue regarding integration of refund process in the new return design which requires deliberation. The Hon'ble Chairperson stated that all s new return format should be finalized expeditiously. The Hon'ble Deputy Chief Minister of Bihar stated that taxpayers should also be given time of 2-3 months to practise the return filing in the new format before legally implementing it. He added that till such time that the new return software was available, the present system of GSTR-3B and GSTR-1 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it of filing quarterly returns to taxpayers having annual turnover up to ₹ 5 crore but suggested that it should be further examined. The Hon'ble Deputy Chief Minister of Delhi stated that earlier too, on many occasions, he had suggested to have a system of filing quarterly return and monthly payment of tax for all taxpayers. 18.13. The Secretary stated that 13% of the Revenue came from taxpayers with annual turnover below ₹ 5 crore and if the benefit of quarterly return was extended for taxpayers with annual turnover up to ₹ 5 crore, it would lead to benefit for additional 10% of taxpayers (coverage of taxpayers would increase from 83% to 93%) but the tax involved would be around 13% of the total collection whereas for tax payers up to ₹ 1.5 crore annual turnover, it involved about 6% of total revenue. The Hon'ble Chairperson stated that 7% revenue was not such a high figure and the turnover threshold for filing quarterly return could be increased. The Secretary stated that one apprehension was that the taxpayers eligible to file quarterly return would pay very nominal amount of tax in the first two months and this would defer collection of 7% of ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chief Secretary (ACS), Odisha stated that taxpayers would not be able to estimate their potential turnover in advance. He also stated that ₹ 1.5 crore annual turnover threshold was based on the threshold limit for Composition scheme. After further discussion, the Council agreed that taxpayers up to annual turnover of ₹ 5 crore would file quarterly return and pay tax monthly and that the Law Committee would examine how to ensure that taxpayers did not pay less amount in the first two months of the quarter. 18.15. The Hon'ble Chairperson also made a reference to 'briefcase companies' who sell goods enabling the recipient to take input tax credit and vanish after 2 to 3 months. He observed that if such companies were not traceable, then the recipient who had used the input tax credit would be liable to pay the tax even though he might have paid the tax to the seller. He suggested that to address this problem, one option could be that when a buyer was purchasing goods from an unknown seller or a new seller, he should obtain his GSTIN and make payment of tax to the Government and pay rest of the amount to the seller. The Joint Secretary (TRU-ll), CBIC stated that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of GST Council 20. The Secretary invited Shri G.D Lohani, Joint Secretary (TRU-I), CBIC to introduce the agenda item. The Joint Secretary (TRU-1), CBIC stated that representations received from various stakeholders including Ministries and Secretaries and other officers of the Centre and the States seeking changes in GST rates and clarification regarding applicability of GST rates on supply of goods/services, were considered by the Fitment Committee in its meeting on 9 and 10 July 2018 and its recommendations is at Annexure I of Agenda Note 7. Fitment Committee also considered the GST rate on Handicraft items as identified by the Handicraft Committee and it made certain recommendations for changes in GST rates and for issuing clarification in relation to goods which is at Annexure II of Agenda Note 7. Issues relating to changes in GST rates or for issuance of clarification in relation to Services is at Annexure-III of Agenda Note 7. Issues where the Fitment Committee felt that further examination was required is at Annexure-IV; issues where no changes were proposed in relation to goods is at Annexure V: and issues where no changes were proposed in relation to services is at Ann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shovels and hoes falling under Chapter 82 were exempt from tax whereas those falling under the category of machine were taxed at the rate of 18%. He added that in the Fitment Committee, there was no proposal to reduce the rate of tax on Hand Operated Rubber Roller and the issue was only to clarify the correct classification of the item. The Hon'ble Minister from Kerala suggested that this item should be taxed at the rate of 5%. The Joint Secretary (TRU-1) stated that no goods under Chapter 8420 were taxed at the rate of 5% and Chapter 8420 covered a lot of other items. Reduction of tax rate on only item under this Chapter heading could lead to other distortion in rates. CCT, Gujarat stated that other sectors falling under this Chapter heading would also request for reduction of tax rate and suggested that the rate should be kept at 18%. The Hon'ble Minister from Assam stated that since Chapter 8420 contained several other items which attracted tax at the rate of 18%, it would be better that the Fitment Committee examined the issue further. Joint Secretary (TRU-1) stated that presently the item was classifiable under Chapter heading 8420 and any change in the rate would need a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e taxed at a lower rate whereas mirror polished tiles which are the replacement for high grade granite tiles, etc. could be taxed at the rate of 18%. He also showed physical samples of rough and polished Kota stones. The Hon'ble Chairperson observed that small stones which are not polished should be taxed at the rate of 5%. He stated that the Fitment Committee, in consultation with the officers of Rajasthan and Andhra Pradesh, should work out a definition and scope of polished stone which could be kept at a higher rate while stones which were not polished but cut and smoothened should be kept at 5%. The Hon'ble Minister from Chhattisgarh observed that relatively cheaper stones called 'farshi pathar ' was being taxed at the rate of 18% and as a result, market for such stones had come down leading to loss of employment for almost 50,000 persons. He stated that this item be taxed at the rate of 5%. Hon'ble Chairperson observed that the rate of tax affected all the States. He observed that rough stones are used by poor people and only after polishing, they become finished stones. He observed that finished stones should be charged to tax at the rate of at 18%, wherea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... block the refund of the input tax credit accumulated as a result of inverted duty structure. If full input tax credit was allowed, it would lead to a situation of large-scale refund. The Hon'ble Deputy Chief Minister of Gujarat stated that in Surat, textile industry was badly affected and almost 50% of the power loom industry had shut down. There was no tax on textile earlier and refund must be given for inverted duty structure on fabrics. The Hon'ble Minister from Rajasthan stated that the current rate structure of yarn to fabric had created a difference in tax treatment between integrated textile units and stand-alone textile units. He suggested that there could be three solutions to this problem namely: (i) yarn be taxed at the rate of 5%; (ii) manmade fabrics be taxed at the rate of 12% instead of 18%; (iii) blocked input tax credit may be released. (ix) The ACS, Odisha stated that workers from his State employed in Gujarat were badly affected because of shutting down of textile industry. The Hon'ble Minister from Assam stated that textile industry was very badly affected and even if there was revenue loss on account of refund of input tax credit on account of inve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not be considered. The Hon'ble Chairperson stated that the suggestion of Tamil Nadu should be considered for reduction of tax on fertilizer grade phosphoric acid from 12% to 5%. The Council agreed to this suggestion. Pickle (xi) The Hon'ble Minister from Tamil Nadu suggested that pickle should be exempted from tax as was also suggested by the Hon'ble Chief Minister of Puducherry in earlier Council meetings. The Hon'ble Deputy Chief Minister of Bihar and the Hon'ble Minister from Goa suggested that exemption of tax on pickles should be considered by the Fitment Committee. The Hon'ble Chairperson observed that all food processing items should be promoted as total revenue from these items other than from bread and bakery products was not very significant. He stated that tax reduction would encourage the cottage industry in this segment. The Hon'ble Minister from Goa stated that he had been consistently requesting for reduction in rate of tax on cake as it was also a cottage industry in his State. The Joint Secretary (TRU-1) informed that pickle attracted 12% rate and all processed food, similarly placed, attracted a tax rate of 12%. Reducing rate of tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reduced to 12%. The Secretary suggested that it may be referred to the Fitment Committee for further discussion. The CCT, Gujarat stated that the Fitment Committee had discussed this proposal and rejected it. The Joint Secretary, TRU-ll stated that this product could not be differentiated from regular chewing gum. The Secretary stated that technical specification could be given for this product based on percentage of nicotine content and then rate reduction could be considered. He suggested that the Fitment Committee could consider this issue afresh on this basis. The Council agreed to this suggestion. (xv) The Hon'ble Chairperson stated that the Hon'ble Minster from Punjab had brought to his notice that the rate of tax on egg was different for different categories. For example, egg was exempt from tax, but egg white was taxed at the rate of 18%. The Secretary suggested that this issue could be discussed in the Fitment Committee. The Hon'ble Minster from Goa stated that egg was also used in cakes and cake was taxed at the rate of 18% while sweets were taxed at 5% which was not logical. The Hon'ble Chairperson suggested that rate of tax on different categories of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad to even big brands like Adidas and Nike getting the benefit of a low tax rate. The Hon'ble Minster from Haryana stated that footwear industry was strong in his State and footwear costing less than ₹ 500 per pair was earlier getting imported in large quantities from China but it was now getting exported from his State to China. He stated that shoes costing more than ₹ 500 per pair were normally used by higher income groups and tax on this item should not be reduced. He suggested that Council should wait for 18 months before considering change in tax rate as this was a high consumption item. He further stated that there was also a need to balance the revenue considerations and that the Fitment Committee should examine this proposal. (xix) The Hon'ble Minster from Odisha stated that they had no leather industry in their State and it was important to see the revenue implication. He suggested that 5% rate of tax should be kept for footwear costing up to ₹ 1000 per pair and other categories of footwear should be taxed at the rate of 12%. The Hon'ble Chairperson suggested that footwear costing up to ₹ 1000 per pair could be taxed at the rate of 5% and those ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to ₹ 500 per pair was 5% but for other categories, VAT rate was 14.5%. Now, in GST, tax rate of 18% meant that the State's share was only 9% and if this was reduced to 12%, State's share would further come down to 6%. The Hon'ble Chairperson suggested that tax rate of 5% should be applied for footwear sold for a price upto ₹ 1000 per pair instead of the present R.s.500 per pair while tax rate of 18% should be continued for other categories of footwear. The Council agreed to this proposal. Lower Priced Biscuits (xxii) The Hon'ble Minster from Uttarakhand stated that small biscuit industry which sold biscuits at ₹ 100 per kilo or below was suffering and they were unable to compete with the multinational brands at the current tax rate of 18%. He suggested to bring down the tax rate on biscuits sold at ₹ 100 per Kilogram or below to 5%. He stated that this will help poor people to afford biscuit with tea. The Hon ' ble Chairperson suggested that this should be looked into by the Fitment Committee. The Council agreed to this suggestion. Caps and Topies (xxiii) The Hon'ble Chairperson stated that he had received representations highli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Annexure-I and Annexure-II, along with the changes in the rate of tax on goods as discussed above. 22. The Joint Secretary (TRU-ll), CBIC introduced the changes proposed in the rate of tax on services in Annexure ill to Agenda item 7. He sought the permission of the Council to withdraw the proposal at Sl. No.26 of Annexure III [to exempt from tax skill programmes having certification from Directorate General of Training (DGT) erstwhile Directorate General of Employment and Training (DGET) or Sector Skill Council under GST] as this proposal was subject to confirmation by the Directorate General of Training (DGT) that CREDAI was their training partner. He informed that in the morning today, DGT had clarified that CREDAI was not a training partner of DGT in the Ministry of Skill Development and Entrepreneurship. The Council agreed to withdraw the proposal at Sl. No. 26 of Annexure ill of Agenda item 7. Discussion regarding some other proposals relating tax rate in Annexure III to Agenda item 7 and on some other issues is recorded as below: Annexure III and other issues (i) Sl. No. 2 (Request for exempting supply of services to and by Educational Boards to students for conduct of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y being given in this Council Meeting for accommodation services by applying the tariff rate on transaction value instead of declared value. Further relaxation regarding increasing the cap on minimum room rent from which the rate of 28% would apply could be examined further by the Fitment Committee. (iii) Sl. No. 12 (Proposal to declare services supplied by Central Government, State Government, Union Territory or Local Authority by way of any activity in relation to any function entrusted to a Municipality under Article 243W of the Constitution as neither supply of goods nor services): The CCCT, Andhra Pradesh stated that the proposal to declare services provided by municipalities as "no supply of goods or services" should be accepted as some Municipalities were smaller than Panchayats. The Senior Joint Commissioner, Commercial Tax, West Bengal stated that under the present GST laws, services provided by Panchayats qualify as "no supply" and in other place as "exempt services" which had led to ambiguity. If the service provided by Panchayats was to be treated as neither as supply of good nor services, then it would not come under the purview of comput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of various sports (v) The Hon'ble Minister from Assam stated that presently there was a tax on sports activity such as coaching for boxing and badminton and he suggested that sports and cultural activities should ·be exempted from tax. The Secretary stated that the basic issue related to charging of tax on coaching for sports activities and this could be examined by the Fitment Committee. The Council agreed to this suggestion. 23. For Agenda item 7 related to proposed changes in rate of tax on services, the Council approved the proposals of Annexure-III to Agenda Item No.7 except the item at Sl.No.26 which stood as withdrawn. The Council also agreed that in relation to Sl. No.2, an explanation shall be added to the existing notification 14/2018-Central Tax (Rate) to clarify that services provided by Educational Boards are exempt. 24. In relation to proposals at Annexure IV relating to goods (List of goods which require further examination by the Fitment Committee), on the issue of footwear appearing in this agenda item, the Council took a decision as recorded under discussion on Annexure I and agreed to the other proposal of the Fitment Committee. 25. In relation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hmir, brought to the attention of the Council, item at Sl. No.21 (to exempt all kinds of supply of services by Shri Mata Vaishno Devi Shrine Board, Katra from GST) and Sl. No.22 (to exempt all kinds of supply of services by Shri Amarnathji Shrine Board from GST) and requested that the services by both the Shrine Boards should be exempted from tax. The Hon'ble Chairperson stated that the Ministry of Culture had come up with a scheme to reimburse taxes on inputs used in preparing food in langars, etc. when distributed free and they should take advantage of this scheme. He added that upfront exemption of tax on inputs going into preparing food etc. in a religious shrine would not be possible as it would be very difficult to assess as to what items were purchased for use in the temple. 28. After discussion, the Council approved the proposals under Annexure VI (List of Services not recommended for change in GST rate). Discussion on Table Agenda for rate reduction in Goods 29. The Hon'ble Chairperson stated that a Table Agenda was circulated today (attached as Annexure 6 to the Minutes) on the basis of representations received to further prune the present 49 items in the tax brac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 of the Table Agenda from the proposal to reduce tax from 28% to 18%. The Council agreed to the proposal. 29.3. The Hon'ble Minister from Assam suggested that the proposal to reduce tax rate on items listed at Sl.No.11 [special purpose motor vehicles, other than those principally designed/ for the transport of persons or goods (for example, breakdown lorries, crane lorries, fire fighting vehicles, concrete-mixer lorries, road sweeper lorries, spraying lorries, mobile workshops, mobile radiological unit), SI.No. 12 (works trucks, self-propelled, not fitted with lifting or handling equipment, of the type used in factories, warehouses, dock areas or airports for short distance transport of goods; tractors of the type used on railway station platforms; parts of the foregoing vehicles) and Sl. No. 13 [trailers and semi-trailers; other vehicles, not mechanically propelled; parts thereof (other than self-loading or self-unloading trailers for agricultural purposes and hand propelled vehicles (e.g. hand carts, rickshaws and the like); animal drawn vehicles] should be reconsidered due to potential revenue loss. The Hon'ble Chairperson stated that revenue loss involved on these th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person stated that he had also talked to the Hon'ble Chief Minister of West Bengal before this Council Meeting and she also supported the proposal to give relief to the middle-class people. 29.7. The Hon'ble Chairperson stated that washing machine falling under Chapter heading 8450 was left out of the Table Agenda. He proposed that tax should be reduced on this item also from 28% to 18% as it was used widely by the middle class. He added that the revenue involved on account of tax reduction on this item was about ₹ 1560 crore. CCT, West Bengal expressed that in India, washing was still done by hand by 75% of the population and also the use of washing machine was bad for environment. The Hon'ble Chairperson stated that a lot of working-class women used washing machines and added that rate reduction on washing machine would come as a great relief to middle class women. The CCT, Punjab supported the proposal. He, however, stated that the estimated revenue loss due to reduction of tax in 15 items (from 28% to 18%) appeared on lower side. The Secretary stated that revenue implication had been worked out taking into account about l/3rd reduction in tax and it was estimated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blending with motor spirit from 18% to 5% (iv) To reduce the rate of tax on zip and slide fasteners from 18% to 12% (v) To charge tax at the rate of 5% for footwear sold for a price up to ₹ 1000 per pair instead of the present ₹ 500 per pair, while tax rate of 18% to be continued for other categories of footwear (vi) To reduce the rate of tax rate for knitted cap/topi falling under Chapter Heading 6501 and 6505 and having retail sale value not exceeding ₹ 1000 from 12% to 5% (vii) To exempt from tax rakhi other than those made of precious and semiprecious metal/article; (viii) Fitment Committee to review/consider reduction in rate of tax on pickle cakes different categories of eggs other processed food products (Sl. No.90 of Annexure V) Nicotine Polacrilex Gum (Sl. No.71 of Annexure V) products consumed on cruise liners; biscuits sold at ₹ 100 per Kilogram or below; 30.3. For Annexure II, approved the proposed changes in rates of tax with the following amendment: (i) To clarify that Pasoli was a type of famous painting called Basoli in Jammu & Kashmir which was a handicraft item to be taxed at the same rate as other paintings (12%). 30.4. For A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tary invited the Joint Secretary (TRU II), CBIC to brief the Council regarding the recommendations of the Committee on Lottery. The Joint Secretary (TRU II), CBIC stated that the Terms of Reference of the Committee on Lottery was to examine and recommend ways to enable flow of GST to lottery to consuming States, and in this context, to examine issues like continuance of reverse charge on lotteries, exemption from tax for supplies beyond the first stage of lottery distributor, any necessary changes in 'place of supply rules' or Lottery Regulation Act, 1998 and any other connected issues. 31.1. He informed that the report of the Committee was submitted which is part of Annexure A of this Agenda item. The Committee has made the following recommendations for the consideration of the Council: A clarification may be issued that: a. If the organising State is registered in the State in which the organising State's lottery is being sold or has a fixed establishment there, then the supply of lottery by organising State to the lottery distributor or selling agent is an intra-State supply on which CGST and SGST of the consuming State is to be paid under reverse charge by the L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8, ad hoc settlement of ₹ 35, 000 crore was approved. In March, 2018, the Council constituted a committee on IGST to study and address the problem of IGST accumulation He stated that collection of IGST every month was about ₹ 50,000 crore. Initially, in August, 2017, settlement was of ₹ 11, 000 crore and in June, 2018, settlement was about ₹ 30, 000 crore leaving a gap of about ₹ 20, 000 crore. He stated that as there was no transitional credit of IGST, the settlement of IGST had started right from the start of implementation of GST from the level of ₹ 11,000 crore. However, because of accumulation of IGST credit, two provisional settlements were done, one of ₹ 35,000 crore in February 2018 and the second of₹ 50, 000 crore in June 2018. 33 .1 . He pointed out certain reasons for accumulation of balance in IGST credit ledger. He stated that the settlement of IGST depended upon use of IGST credit for payment of CGST and SGST. In April 20 18, the net accumulation in IGST credit ledger was about ₹ 15,000 crore whereas in June 2018, the net accumulation was only about ₹ 4,000 crore which showed a drastic reduction in accumulat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmediately and to pay SGST as IGST for settlement with the States. He stated that this model was also fine with the Central Government. He added that the Central Government would not like to keep IGST balance beyond ₹ 1.6 lakh crore and would give provisional settlement to the States for balance exceeding this amount. He suggested that the Committee on IGST could examine both the models, namely payment of CGST and SGST upfront and the model suggested by Shri V. Bhaskar and Shri Vijay Kelkar. The Council agreed to this proposal. 33.4. The Hon'ble Deputy Chief Minister of Delhi stated that in the VAT regime also, there was issue of credit lying in the taxpayer's credit account. The payment of refund was also an issue. He stated that parking of such a large amount of IGST would require a serious rethink of CGST and SGST model. The Hon'ble Chairperson informed that the officers of Delhi are also a part of the Committee on IGST and they should give their suggestions. The Council agreed to this suggestion. 33.5. The Hon'ble Chief Minister of Puducherry suggested that to wait for settlement till September 2018 and then apportion the shares to States including to Delhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18. This led to loss of revenue to Delhi as they did not get any revenue. He stated that any decision regarding IGST should be taken with the approval of the Council or the GIC and it could not be unilaterally decided by the Central Government. The Secretary stated that no unilateral decision was taken. In fact, there was no option as the IGST forms part of the Consolidated Fund of India and since it was part of the Consolidated Fund of India, the Central Government had no option but to devolve it to the States. However, Central Government did not have the option to distribute ₹ 1.6 lakh crore as it was a liability for future and it was a liability of the Central Government. He added that in future too this balance would need to be maintained. 33. 9. The Hon'ble Deputy Chief Minister of Delhi stated that they had subsumed entry tax, luxury tax, etc. but there is no liability of input tax credit. The Secretary stated that there was a total of ₹ 70, 000 crore balance in SGST ledger as well. 33.10. The Hon'ble Chief Minister of Puducherry stated that the argument of the Secretary was not correct. C&AG could not go against the GST Law. The funds that were collected un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2018-19, the States total revenue including compensation was ₹ 1.39 lakh crore, whereas that of the Central Government was ₹ 1.17 lakh crore. He stated that the revenue position of the Central Government must also be taken into account and it would need to hold ₹ 1.6 lakh crore as a liability for future settlements. 33.12. The Hon'ble Chairperson observed that the amount for compensation would come down if proposal made by Tamil Nadu and Delhi was accepted. The CCT, Tamil Nadu stated that in the year 6 of implementation of GST, the method of IGST settlement would make a big difference. The Hon'ble Chairperson stated that instead of recording disagreement of some States, concerns of Delhi, North-East and Tamil Nadu would need to be addressed. He suggested that a Committee should be formed under Chairman, CBIC, Shri S. Ramesh, to look into these issues and Finance Secretaries of four States covering four different regions, namely, Delhi, Tamil Nadu, and· one each from North East and West along with Principal CCA (Chief Controller of Accounts), CBIC and Joint Secretary, DoR could be part of this Committee. The Hon'ble Chief Minister of Puducherry sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of CGST / SGST before using CGST / SGST credit and to add a table of reconciliation of input tax credit available and input tax credit availed in the format for annual return; (ii) To set up a Committee under Chairman, CBIC consisting of Finance Secretaries of Delhi, Puducherry, Tamil Nadu, and one each from the States of North East and West along with Principal CCA, CBIC and Joint Secretary, DoR, to address the concerns raised regarding treatment of IGST amount vis-a-vis the Consolidated Fund of lndia. Agenda Item 8(iii): Recommendations of the Report of the Task Force to suggest measures for creating an Eco-System for Seamless Road Transport Connectivity 35. The Secretary invited the Joint Secretary, Department of Revenue (DoR) to make a presentation on this Agenda Item. The Joint Secretary, DoR stated that in order to comprehensively review the benefits of GST to reduce the burden on logistic sector, the Council in its 12th Meeting held on 16 March 2017 had decided to constitute a Task Force to Suggest Measures for Creating an Ecosystem for Seamless Road Transport Connectivity across the country. He stated that with the introduction of GST and a uniform nation-wide system o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isk assessment. There should be authorization by a significantly high level of officer for conducting such checks and there should be a system of mandatory reporting of checks. The report also suggested rationalization of check posts and a system to avoid routine road checking of vehicles. The report has also suggested integration of various databases like VAHAN, SARATHI and NCRB (National Crime Records Bureau). Separate risk assessment matrix could be developed for each purpose as has done by the Customs Department. 35.3. The report also highlighted the need for real time updation of VAHAN database by Regional Transport Offices (RTOs) to capture fitness certificate, pollution under control, insurance, permit etc. The report has also recommended to harmonize Carriage by Roads Act, 2007 and GST Law. It also suggested electronic payment of toll, all types of payment including on-road penalties to be made on-line, reforms in Passenger transport segment, alignment of various forms relevant for transport of goods and e-Way Bill. · 35.4. The Hon'ble Chairperson observed that it was a good report and that the transport sector was still facing several difficulties because of w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rperson stated that the Ministry of Road Transport and Highways had indicated that about 10,000 readers would be needed and it was proposed to be done centrally. CCT, Kerala, stated that one could go for ANPR (Automatic Number Plate Reader), GPS or RFID but it should be done nationally. The Secretary sated that the technology platform should be common. Shri Rajiv Jalota, CCT, Maharashtra stated that all their inter-State check posts were computerized and RFID enabled and almost 80% of vehicles criss-crossing the State were also RFID enabled. He stated that all data needed by NIC from his State administration for a pilot project for integration of data of e-way bill with data of RFID was being shared with them. The Hon'ble Chairperson observed that Uttar Pradesh, Kerala and Maharashtra had installed RFID readers and installation cost in Uttar Pradesh was only around ₹ 2.10 crore. The RFID system could be integrated nationally. The Hon'ble Chairperson stated that issues raised by the transporters mainly related to toll plazas, road checks leading to harassment and very high e-Way bill penalties. He referred to a recent case where, for a small mistake in e-way bill filing in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vantage of the monetary incentive. 37.1. The Joint Secretary, TRU-1, CBIC informed that the Group of Ministers on Digital Payments constituted by the Council had recommended that its implementation may be deferred for some time as GST had not stabilised; new return process was still work-in progress; GST revenue was still to reach a comfortable level; and that the revenue implications of the proposal were significant. He stated that it was a common view that digital transactions need to be incentivized but concerns were expressed regarding its coverage under GST, revenue implications, targeted beneficiaries of such incentives and implementation modalities. He stated that these aspects were re-examined keeping in .view the fact that digital payments have far reaching positive implications for the economy. He stated that apart from providing visible upfront benefits of making digital payments and thereby incentivizing digital payments, it would also result in better compliance, gradual formalisation of economy, reduction in cash transactions and consequently buoyancy in revenue. 37.2. He stated that the revised proposal before the Council was:- (i) the GST concessions on digital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted in the formal mode and the money would be paid through NPCI. He observed that RuPay card was used mostly by about 30 crore Jan-Dhan account holders who were comparatively poor people. He stated that the idea was to support such people and that their expenditure on purchases should also become part of the formal economy but without changing the GST rate. 37.6. The Hon'ble Deputy Chief Minister of Bihar stated that had this proposal come to the Group of Ministers on Digital Payment, they would have approved it, as this was a better option. He observed that this proposal did not require tweaking of tax rate. He also appreciated the idea of excluding credit card/debit card and making payment through RuPay. He stated that the GOM on Digital Payment could look into the issue afresh and make recommendation taking into account the new proposal. 37.7. The Hon'ble Ministers from Odisha and Rajasthan stated that they would prefer to study this proposal further. The Hon'ble Chairperson suggested that no announcement be made for this decision immediately. If any Hon'ble Minister found it objectionable, he could personally get in touch with him. 37.8. The Secretary stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncil approved that the revised proposal presented in today's Council meeting (Annexure 7 to the Minutes) shall be sent to GoM on Digital Payments for further examination and refinement and to be taken up in the next Council Meeting of 4 August, 2018. Agenda Item 8(v): Interim Report of the Group of Ministers on Imposition of Su2ar Cess 39. Introducing this Agenda Item the Secretary informed that the Group of Ministers (GoM) on Imposition of Sugar Cess had submitted an interim report wherein it has recommended the following: - 1. Power to levy Cess by the Union or States: The GoM is of the view that since the matter is sub judice in the Hon'ble Supreme Court, it would be advisable to wait till the final judgement of the Hon'ble Supreme Court is given on Constitutional validity of imposition of compensation cess under GST. ii. Levy of 1% Agriculture Cess on certain commodities: It was decided that the idea of levy of an agriculture cess can be further deliberated in detail in the next meeting of the GoM on 21st July, 2018. iii. Reduction of GST on ethanol: GST on ethanol can be reduced from 18% to 12% only when it is supplied to oil marketing companies. 39.1. He stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n unregistered supplier, pay the tax on reverse charge basis as the recipient of such goods or services or both, and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. " (ii) The proposed formulation at paragraph 3 (i) above should be modified to also provide for prescribing certain conditions by the GST Council while recommending introduction of RCM on a class of registered persons receiving goods or services or both from an unregistered supplier. Further, there should be a provision to levy tax on RCM basis only on select goods or services or both as may be notified on the recommendations of the Council. (iii) The Law Committee may consider the issue of exclusion of Brick Kilns, Menthol and Sand Mining activities from the benefit of Composition scheme. (iv) To extend suspension of Section 9(4) of CGST/SGST Acts for another one year beyond 30 September, 2018 i.e. till30 September2019. Agenda Item 9: Minutes of 9th Meeting of Group of Ministers (GoM) on IT challenges in GST implementation for information of the Council and discussion on GSTN issues 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stages, whether it would require change in the GST Law. The Council approved these suggestions. The Council also took note of the minutes and approved to introduce Tax Deduction at Source (TDS) from 1 October 2018 subject to verification of readiness of States to implement IDS. 44. For Agenda Item 9, the Council: (i) took note of the Minutes of the 9th Meeting of Group of Ministers (GoM) on IT challenges in GST implementation held on 14 July 2018; (ii) approved to introduce Tax Deduction at Source (IDS) from 1 October 2018 subject to verification of readiness of States to implement TDS; and (iii) to constitute a Committee under the convenorship of Joint Secretary, DoR and comprising of CEO, GSTN, ACS, Odisha and CCT, West Bengal to examine integration of Accounting system of the State Accounting Authorities, PFMS with GSTN; to check the preparedness of the States to implement TDS; to examine the feasibility of introducing TDS in stages or at one go~ and to examine any changes in GST law required for introducing TDS in stages. Agenda Item 10: Ad hoc exemptions Order(s) issued under Section 25(2) of Customs Act, for information of the GST Council 45. The Secretary stated th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
