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TMI BlogMinutes of the 38th GST Council Meeting held on 18th December 2019X X X X Extracts X X X X X X X X Extracts X X X X ..... . Issues recommended by the Fitment Committee for the consideration of the GST Council 6. Issues recommended by the Law Committee for the consideration of the GST Council i. Standard Operating Procedure to be followed in case of non-filers of returns ii. Proposed amendments in the CGST Act. 2017 7. Creation of Public Grievance Redressal Committee as per Hon ble High Court of Delhi s order in the case of Sales Tax Bar Association 8. Status of Group of Ministers (GoMs) constituted for various agenda items 9. Deemed ratification by the GST Council of Notifications, Circulars and Orders issued by the Central Government 10. Decisions of the GST Implementation Committee (GIC) for information of the Council 11. Decisions/Recommendations of the IT Grievance Redressal Committee for information of the Council 12. Quarterly Report of the NAA for the quarter July to September 2019 for the information of the GST Council 13. Presentation on developments regarding implementation of i. GST EWB System - FASTag Integration ii. New Return System iii. Integrated refund system with disbursal by single authority iv. Generation of electronic Invoice Reference Num ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ember. 2019 4. The Secretary informed that the first agenda item was the confirmation of the Minutes of the 37 th GST Council Meeting (hereinafter referred to as Minutes) held on 20 th September, 2019 in Goa. He stated that the Minutes was circulated to all the States in advance and sonic corrections had been suggested by the States during the Officers Meeting held on 17 th December, 2019. 4.1. The following three changes were proposed by the State of Odisha to the version of the Hon ble Member from Odisha recorded in the Minutes: i. In paragraph 4.23 of the Minutes, to replace the presently recorded version (They also suffered loss to the tune of ₹ 600 crores on account of Sales Tax.) with the following version: They also suffered loss of VAT to the tune of ₹ 600 crores on account of paddy and pulses. ii. In paragraph 22 of the Minutes, to replace the last line (The Hon ble Minister from Odisha suggested that there should be a check in (1 st System where a registered taxpayer should not be allowed to file FORM GSTR-3B unless he/she had file FORM GSTR-1 in previous month.) with the following version: The Hon ble Minister from Odisha suggested th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith The Hon ble Minister from Odisha stated that if any taxpayer did not provide the Aadhar number, his refund should be restricted, till he complies. 5.4. To replace the sentence He further stated that Puducherry was entitled to 71% of the IGST amount collected by the Centre. in paragraph 14.4 of the Minutes with He further stated that Puducherry was entitled to 0.27% of the lGST amount apportioned to the States which would work out to ₹ 219 crore. 5.5. To substitute the words revenue implication in paragraph 34.9 of the Minutes with the word turnover . 5.6. The Secretary also requested to be allowed to formally sign the already confirmed Minutes of the 34 th GSTnd articles of textiles fall Council Meeting held under the Chairmanship of the then Hon ble Finance Minister and Chairperson of the Council, Late Arun Jaitley, on 19-3-2019 in New Delhi so that it can be put in public domain. Agenda Item 2: Issues concern in GST on Lottery 6. The Secretary invited Shri Manish Kumar Sinha. Joint Secretary, TRU-lI to brief the agenda to the Council. 6.1. Dr. Thomas T M Isaac, the Hon ble Minister from Kerala intervened and stated that he and few other Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. Therefore, the States should be reassured again as to what was the status of the single Member State and if a State had any issue and raised it to be included as an agenda, did it not merit a response. He further requested the Chairperson to reassure the Members that the issues which were of obvious importance would be taken up. The Hon ble Minister from Kerala stated that the suggestion made by the Hon ble Deputy Chief Minister of Bihar was acceptable and the issue of compensation to States could be clubbed along with Agenda item3. The Hon ble Chairperson stated that there was absolutely no hesitation in discussing this issue; that she would like to quell any worry that Centre did not want to discuss compensation. She added that it had been told to her that the issues on revenue augmentation was discussed during the Officer s Meeting held on 17 th December 2019 and a presentation was to be made in this regard as part of Agenda item 3 and compensation issues would be discussed as part of that Agenda in an elaborate manner. The Council agreed to discuss the issues related to revenue and compensation in Agenda item 3 and continued with discussion on issues concerning GST on Lotte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the matter be placed before the GST Council and the Council decide appropriate rate structure on the supply of lottery Given that this is a sin good, rate of tax should be high i.e. 28% or 18%. (ii) The constitutional challenge to the dual rate structure should be defended forcefully. The JS, TRU-Il stated that in the 35th GST Council Meeting held on 20th June 2019, the Council was directed to seek legal opinion from Learned Attorney General of India as to whether differential rate could be levied on lottery and whether it would violate Article 304 of the Constitution. He drew the attention to the opinion furnished by the learned Attorney General of India that there would be no impediment arising from the Constitution of India to the levy of a uniform rate of GST on State Run Lotteries and State Authorised Lotteries ; that Article 304 of the Constitution of India had no bearing on the levy of differential GST on State Run Lotteries and State Authorised Lotteries ; and that these two lotteries could be treated as different goods. 6.5. The JS, TRU-II also drew attention to a Writ Petition (C) No. 961/2018 filed in the Hon ble Supreme Court relating to levy of GST on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouncil might call for division and decide the issue of differential treatment of the lotteries. Dr. Himanta Biswa Sarma,. the Hon ble Minister from Assam stated that there had been enough debate on this issue. He added that he appreciated the views expressed by the Hon ble Minister from Kerala but the North Eastern States too had their own view point on the issue. He stated that Kerala Government run its own lottery (State Run Lottery); however, the North-Eastern States did not have requisite infrastructure to run their own lotteries. Therefore, they had to outsource it to someone to run their lotteries. He likened it to State-operated bus service where the State also outsourced the bus service to private agencies to operate it under the State s banner and the consumer did not have to pay differential rate for using the bus services irrespective of it being State run or State authorised. Similarly, there was no difference between the two kinds of lotteries, He added that irrespective of the argument of continuing the differential rate structure on lotteries, by having two different GST rates on lotteries, North-Eastern States were being discriminated. Therefore, he supported a Divi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red us to give an opinion by 15.01.2020 then the Council should decide on the issue. He also observed that till now all the decisions related to GST had been taken by consensus in the Council and till now it had never happened that a decision was taken by the Courts instead of the Council. He also stated that till date none of the decision on any issue had been done by division and requested the Council to decide something on the issue in hand by consensus again. He stated that in his view one standard rate could he prescribed for lottery. Further, as lottery was a sin good, it should attract higher GST rate of 28% so as to increase revenue for the Centre and the State simultaneously. The Hon ble Deputy Chief Minister of Delhi requested JS, TRU-Il to reiterate the advice furnished by the learned Attorney General of India. The JS, TRU-Il stated that the Learned Attorney General had clarified that the two types of lottery could be intelligibly classified as two different goods but he also clarified that there was no bar in keeping the rate uniform. Thereafter, the Hon ble Deputy Chief Minister of Delhi stated that two perspectives were being discussed on the issue, the first being in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsensus and not by having division on the matter. The Hon ble Deputy Chief Minister of Bihar stated that GST Council had been discussing this issue since long. He added that as stated by some of the Members, Goa and the North-Eastern States had been losing revenue due to this differential rate while they did not have many other sources of revenue. He observed that most of the States had given their opinion on the issue and the mood of the Council could be ascertained. He stated that personally he was of the opinion that Lottery should be banned across the country as it was a sin good. However, in the given context he supported a uniform higher rate for lotteries. He called upon the Council Members to move from unanimity (sarvaanumati) to consensus (sarvasahmati) and also to not insist for division of votes on the proposal. 6.12. Shri Metsubo Jamir, the Hon ble Minister from Nagaland stated that the Hon ble Member from Assam and Goa had explained the problems of North Eastern States and the smaller States vis- -vis differential rates of GST on the two types of lotteries. He added the issue was not about lottery here, but the fact that because the apex body on GST matters i.e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wondered as to what if the Council decided something on the matter and the same got challenged/decided otherwise in the awaited decision of the Hon ble Supreme Court. Therefore, he suggested to arrive at any decision by consensus. Shri Dushyant Chautala, the Hon ble Deputy Chief Minister of Haryana stated even though lottery was banned in Haryana but since it was a sin good, it should be taxed in highest rate slab. He also stated that in line with tradition of the Council and its smooth functioning. It would be better if the matter could be decided by consensus instead of division of votes. 6.15. The Hon ble Minister from West Bengal stated that the State Authorised Lotteries of North-Eastern States competed very well with State Run Lottery in tile State of West Bengal. He observed that almost 92% of the revenue accruing to the State of West Bengal was from lotteries were generated from State Authorised lotteries. (This is shown in page 138 of the Detailed Agenda Notes - Volume. 1). He observed that many States did not have paper lottery or might had only online lottery. Therefore, he suggested that the States where lottery was not banned might be allowed discretion on whether t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he GoM on Lottery, they had earlier recommended to have a uniform GST rate on State Run Lottery and State Authorised Lottery and he reiterated the same. He further stated that they endorsed the views expressed by the Hon ble Minister from Assam with respect to the North East. Shri Jishnu Dev Varma, the Hon ble Deputy Chief Minister of Tripura stated that though his State also did not have any lottery, he also supported a single rate of lottery as the North Eastern States were smaller States with limited resources and they should have parity with the mainland States. Shri V. Hangkhanlian, the Hon ble Minister from Manipur stated that even though they did not have lottery, still they also supported single GST rate on lottery. Shri Lalchamliana the Hon ble Minister of Mizoram also supported the views of Hon ble Minister from Assam for the North Eastern States. He stated that their State also supported single GST rate on lottery. 6.18. Shri C P Singh, the Hon ble Member from Jharkhand stated that his State had no lottery and he was of the opinion that lottery should be banned in the entire country. However, he supported uniform GST rate on lotteries. Shri Basavaraj Bommai, the Hon b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... run the Council by consensus and we should try to continue the same. The Hon ble Minister from West Bengal suggested that if the Council felt that it would let the States do what they had with respect to taxation on lottery or change it as they wished. It could lead us to the solution of this impasse. The Hon ble Chairperson once again on the behalf of the Council appealed to the Hon ble Minister from Kerala to reconsider his demand for division. However, the Hon ble Member from Kerala insisted on division. 6.20. The Hon ble Chairperson requested the Secretary to follow the rules in this regard. The Secretary then read out the relevant Rule 14 i.e. 6 Decision on proposals in Chapter V from the Procedure and Conduct of Business Regulations of the Goods and Services Tax Council to the Members of the Council which reads as follows: All proposals before the Council shall be discussed threadbare. Thereafter, the Chairperson shall put the question and invite the Members of the council to cast their votes by show of hands. In case Member seek division on any proposal, the Chairperson shall put the proposal to vote through secret ballot The Hon ble Chairperson directed the Secr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Pradesh supported 28% GST on lottery. The GST Council thereafter decided to levy 28% GST on lottery by consensus. The Hon ble Minister from Telangana also requested the Chairperson to include the State of Telangana in the GoM on Lottery. The Hon ble Minister from Kerala requested for grace period of two months for implementing the new rate of 28% so as to enable printing of fresh lottery tickets and exhaust the already printed lottery tickets. The Secretary proposed that the Council may approve that 28% rate of lottery would apply from 01.03.2020. 7. For Agenda item 2 , the Council decided to apply a single uniform rate of 28% on supply of State Run Lottery as well as State Authorised Lottery with effect from 01.03.2020. 7.1. The Council also decided to refer the pending matters relating to casino, horse racing and online gaming to the Law Committee/Fitment Committee. Agenda Item 3: CST Revenue Augmentation Recommendations of the GoM on Revenue Analysis and Deliberations of the Committee of Officers on Revenue Augmentation 8. The Secretary requested the Hon ble Deputy Chief Minister of Bihar, the Convenor of the GoM on Revenue Analysis to present the recommendation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than those currently under implementation; and any other measure to augment revenue. A meeting had also been convened of the Committee of Officers to suggest measures to augment GST revenue collection and administration on 10.12.2019 where valuable inputs had been obtained from the SGST officials. Several States had also provided written suggestions on the above. 8.2. Continuing the presentation, JS TRU-Il stated that monthly GST collection in the year 2019-20 was higher than that of 2018-19 except during the months of September, 2019 and October, 2019. He stated that the revenue in the month of November, 2019 was more than that of November, 2018 and the short period of negative growth in GST collection was already over. The JS, TRU-I stated that while the growth rate of GST collection for April, 2019 - November, 2019 on domestic supplies was 8.3%, the same for IGST collection on import of goods showed a decline of 7.2%. He stated that imports have witnessed compression as well. He further stated that the combined growth rate (GST and Cess collection on domestic supplies and imports) was 3.7% which was less than the expected rate of growth. He presented the projection of requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be based on the rate-structure, the compliance levels and the current slow-down in the economy. These three factors would determine the compensation gap and thus, a simple linear projection might not give the complete picture. He stated that there was a short-term problem that had created this gap. He highlighted that the then Chairperson of the GST Council, Shri Arun Jaitley had stated in one of the Council Meetings that GST Council could borrow to fund the compensation Cess requirement and also decide to extend it from 5 years to 6 years. The problem would arise around February, 2020. He then wanted to know as to why there was a delay in disbursement of compensation Cess when money was available. He stated that the bi-monthly disbursal of compensation as backed by the law. This problem could recur and this would lead to non-fulfilment of expenditure requirement by the States. He further highlighted that in the 7 th GST Council Meeting, an assurance was given by the then Chairperson, which had been duly minuted. 8.5. The Hon ble Minister from West Bengal enquired about the expected rate of growth and stated that they would first like to understand and examine all the inform ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as observing a decrease in tax realization from ₹ 550 crores in VAT regime to ₹ 75 crores in GST regime. He stated that all such anomalies in different products might be observed and be corrected through capacity-based levy or such methods. He further requested that Uttar Pradesh should be included in the Group of Ministers on Analysis of Revenue from GST. He further stated that while the parts of mobile phone were charged at 18%, the finished product of mobile phone was charged at 12%. He stated that such anomalies might also be corrected in a way to ensure the revenues for both the States and the Centre. He stated that the States of Uttar Pradesh did well in GST regime and that they were optimistic that the States would continue to do well in the future. Ideally, the GST rate should take care of 10% increase in the VAT collections. 8.9. The Hon ble Minister from Punjab stated that we had reached mid-way in the assured compensation regime. He highlighted the fact that the rates were predominantly decided in the 14 th GST Council Meeting held on 18 th 19 th May 2017 in Srinagar. Further, in the subsequent meetings, there had been several rate reductions withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at he was happy with the compensation given because prior to GST, the VAT revenues of Assam were growing at the rate of 9%. while GST had given them an additional 5% through way of assured growth rate of 14% for compensation. He felt that before questioning the Central Government, the States also needed to look at as to what was the growth in VAT revenue prior to GST and also whether the Slates had done enough to improve their GST collections. He finally requested to make a more in-depth constructive presentation on revenue which should be forwarded to State Governments seven days in advance of the next GST Council Meeting. 8.12. The Hon ble Deputy Chief Minister of Bihar stated that the steepest reduction in the GST rates was effected in the 23 rd GST Council Meeting held in Guwahati on 10.11.2017 when GST rate of 28% on 243 items was reduced to 18%. He stated that any shortfall in tax collection because of this reduction in rates, should have been observed within the following months and not after two years. Hence, the current fall in GST collections should not be attributed to the rate reduction undertaken in earlier years. He further stated that the increase in threshold li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son informed the Council that the States of Uttar Pradesh and Jammu Kashmir (UT with Legislature) would be making presentations on the best practices in GST and measures taken by the Govt. of Jammu Kashmir to improve revenue collections. Thereafter, the Hon ble Minister from Uttar Pradesh asked Shri Alok Sinha, Additional Chief Secretary, Commercial Tax Department, Uttar Pradesh to make the presentation (attached as Annexure 5 ). This was followed by a presentation by Shri K K Sharma, Advisor to Lt. Governor, Jammu Kashmir on measures taken by them to improve revenue collections (attached as Annexure 6 ). 9. For Agenda item 3 , the Council took note of the presentation made by JS TRU-I and TRU-Il and the suggestions made by the Hon ble Members. The Council also took note of the presentations made by the State of Uttar Pradesh and UT of Jam mu Kashmir. Agenda Item 4: Report of GoM on Real Estate on boosting Real Estate Sector 10. The Secretary asked Shri Manish Kumar Sinha, JS, TRU-Il i.e. Secretary to the GoM on Real Estate to apprise the Council about the developments in the GoM and their recommendations by way of a presentation (attached as Annexure 7) on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and severally from the entity that had availed the exemption originally and all lessees who had subsequently purchased or entered into agreement with original supplier and subsequent buyers / owners. iii. The condition above (si. no. ii) should be monitored and enforced by the State Government. iv. GST @ 5% might be levied on long term lease of land (thirty years, or more) of industrial plots or plots for development of infrastructure for financial business, provided by a private person or entity, or an entity having less than 20% ownership of the Government. Similar safeguards as at sl. no. (ii) and (iii) above shall apply to this clause as well. * The term private person shall be clarified by way of a Circular. The existing Explanation appended in the present notification would also apply and the number 50% therein should be suitably substituted by 20% . 10.3. Proposal 2 -To exempt the supply of construction services provided by the Co-operative Housing Society to its members. 10.3.1. It was requested from State of West Bengal to provide more data and examples to explain that no value addition is involved and that there would be no loss of revenue in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be levied GST rate of 5% and the Council could decide on the applicable rate. He also requested Hon ble Minister from Punjab to present his views. 10.9. The Hon ble Minister from Punjab stated that the rationale behind the proposal and Punjab s request was long term leasing of land from the point of view of Punjab s New Industrial Policy and the role this exemption could play in promoting the Make-in-India campaign. He further stated that presently there was double taxation on lease of land (i.e. stamp duty of around 5-7% in various States and GST of 18% on the same transaction) which was a major hurdle in promoting industry in Punjab. He added that it would also lead to creation of employment and generation of revenue. He therefore, requested the Council to agree with the suggestion of the GoM. 10.10. The Additional Chief Secretary. Commercial Tax Department, Uttar Pradesh stated that the suggestion from Uttar Pradesh regarding exempting GST in the case of private person or entity offering land on lease for development of infrastructure for financial business, the associated condition should be that it should have been approved by the Government because in their industrial p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r implementation of the recommendation of the Council above could be from 1 st January 2020.The issues discussed in proposal 2, proposal 3 and proposal 4 as per the report of the GoM were still pending before the GoM on Real Estate. The Council agreed to the same. For Agenda item 4 , the Council recommended the following: - a. to exempt the transactions along with the two associated conditions i.e. i. Upfront amount payable in respect of service by way of granting of long term lease of land (thirty years, or more) of industrial plots or plots for development of infrastructure for financial business, provided by the State Government Industrial Development Corporations) Undertakings or any other entity having 20% or more ownership of Central Government, State Government, Union Territory to (a) industrial units or (b) developers in any industrial or financial business area, might be exempted from GST. ii. In case of breach of land use subsequently, (i.e. from industrial use to any other use), the exemption might be withdrawn and GST with interest and penalty might be recovered jointly and severally from the entity that had availed the exemption originally and all lessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... putes continued and were aggravated due to multiple divergent Advance Rulings passed. To resolve the issue, the Council recommended a uniform rate of 12%. However, subsequent requests had been received from the trade associations stating that the major basic constituent ingredient for these bags was HDPE/PP granule which attracted 18% GST. They had further stated that 12% GST rate on woven and non-woven bags and sacks of polypropylene and polyethylene was leading to inverted duty structure and increasing the compliance burden and efforts for seeking refund on small manufacturers of these bags. This would make investment in the sector unviable. These woven and non- woven bags and sacks of polypropylene and polyethylene (whether or not laminated) were used in a number of applications such as packaging of cement, fertilizer, sugar, sponge iron/mineral packing etc. Increase of GST rate to 18% might not increase the cost of the bags to the end-consumer as this was a B2B product and full ITC of the GST paid on bags was available to the user industry. In fact, it would remove the inverted duty structure and accumulation of ITCs with the manufacturers of these bags. Moreover, FIBC classifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 020. Agenda Item 6: Issues recommended by the Law Committee for the consideration of the GST Council Agenda Item 6(i): Standard Operating Procedure to be followed in case of non-filers of returns 14. The Secretary asked Shri Yogendra Garg, Principal Commissioner, GST Policy Wing, CBIC to initiate the discussion on the issues recommended by the Law Committee for the consideration of the GST Council. The Principal Commissioner, GST Policy Wing, CBIC initiated the discussion by stating that the recommendations of the Law Committee were discussed in detail in the Officers Meeting on 17 th December 2019. The presentation made in this regard is annexed as Annexure 8. He stated that the rationale of recommendations was to improve compliance and simplify processes. He also stated that non-filers and late filers of returns had been a major issue in the GST regime, though some States such as Uttar Pradesh had dealt with the issue well, there had been no uniformity pan India in dealing with the same. Fie stated that the Law Committee recommended to issue a Circular for dealing with non-filers of returns under Sections 39, 44 45 of the GST Act. He further stated that some of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by linking it to the date of issuance of the Debit Note by amending Section 16(4) of the GST Act. The fourth amendment was to allow a taxpayer who had taken voluntary registration to cancel it by amending Section 29 of the GST Act. The next amendment proposed was for amending Section 31 so as to align section 31(2) with 31(1) regarding manner of issue of invoices for services as well. With respect to the sixth amendment proposed, the Principal Commissioner, GST Policy Wing, CBIC stated that in Officers Meeting on 17th December 2019, it was viewed that there was no requirement of amending Section 49(4) of the GST Act, and that it would be prudent that a new rule may be drafted using the existing powers under law and accordingly, it was proposed that Rule 86A might be inserted so as to block ineligible input tax credits and control the menace of fake invoices immediately. The seventh amendment recommended was for providing a system generated Tax Deduction at Source (TDS) certificate by amendment in Section 51(3) and doing away with the late fees requirement by omission of Sub-Section 4 of Section 51 of the GST Act. The eighth amendment proposed was to carry out certain amendments in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Commissioner, GST Policy Wing, CBIC, while introducing the agenda item also made a presentation (attached as Annexure 8). He stated that in view of the Writ petition W.P.(C) 9575/2017 C.M. no. 38987/2017-Sales Tax Bar Association (regd.) ANR in Hon ble High Court of Delhi on non-availability of many functionalities on GST Portal, a proposal for suitable mechanism for grievance redressal at ground level was felt necessary. Therefore, a proposal for creating Grievance Redressal Committee had been placed for approval of the Council. The background details were mentioned in the agenda circulated. 18.1. He further stated that while in the Central Excise/Service Tax regime such an arrangement existed in the form of Regional Advisory Committee at the Zonal level, no such formal arrangement existed, under the GST regime to tackle grievances of specific! general nature at the Zonal Commissionerate/ State level. Accordingly, it was proposed to operationalize a Grievance Redressal Committee (GRC) at Zonal/State level with membership of both CGST and SGST officers, representatives of trade and industry and other relevant officers of GSTN. 18.2. The constitution of the said Grievan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of the Committee - The Committee would meet once every quarter or more often as the Co-chairs may decide. E. Mechanism of Working of the Committee: The stakeholders would send their grievances/ suggestions to the Secretary of the Committee, who would place the same before the Committee. Further, the Secretary of the Committee should also submit a quarterly progress report to the GST Council Secretariat as well as to the GST Policy Wing, CBIC. 18.3. Further, GSTN had also proposed ( Annexure B to the Agenda 7 ) that, a) to ensure transparency and time bound handling of grievances and accountability, they would develop a portal for recording all such grievances (including their scanned images) and their disposal. It would be the responsibility of the Co-chairs lo ensure timely entry of the grievances and updating the status of their disposal on the portal. b) the nodal officers of GSTN, Policy Wing of CBIC and GST Council Secretariat Would also be able to update status of action taken at their end. The details of action taken on all issues would be displayed on the portals which would be available for viewing by all stakeholders to check the status of the resolutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lated amount for the year 2017-18. 21. For Agenda item 8 , the Council decided to continue with the 5 GoMs namely: GoM on IT challenges in GST implementation, GoM for boosting Real Estate Sector under GST regime, GoM on Analysis of Revenue from GST, GoM on movement of Gold and Precious Stones and GoM on IGST settlement. 21.1. The Council also decided to refer the pending matter relating to casinos, horse racing and online gaming to law/Fitment Committee. Agenda Item 9: Deemed ratification by the CST Council of Notifications, Circulars and Orders issued by the Central Government 22. The Secretary asked Principal Commissioner, GST Policy Wing, CBIC to place the agenda before the Council. The Principal Commissioner, GST Policy Wing, CBIC stated that in the 37 th Meeting held on 20.9.2019, the Council had ratified all the notifications, circulars and orders issued before 11.9.2019. He thereafter made a presentation (attached as Annexure 8) listing out all the notifications, rate and non-rate, of CGST, UTGST, lGST and Compensation Cess, Circulars and removal of difficulty orders issued after 11.09.2019 till 13.12.2019, under the GST Laws by the Central Government as ava ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions of the IT Grievance Redressal Committee for information of the Council Decisions/ recommendations of the 8 th IT Grievance Redressal Committee 26. Introducing this Agenda item, the Secretary stated that the 8 th Meeting of the IT Grievance Redressal Committee (ITGRC) was held on 13 th August 20 19 to resolve grievance of the taxpayers arising out of technical and non-technical issues. (Minutes of the Meeting attached as Annexure A of this agenda Item). 26.1. As per the agenda note, a total 491 cases of TRAN-1/TRAN-2 had been examined by GSTN (Agenda 1) and presented before the Committee. Out of these, 442 cases were sent by Nodal officers and 49 were court cases. All above cases had been categorized broadly reason-wise in two major categories as A and B by GSTN team. Category A included cases in which the taxpayer could not apparently file TRAN 1/TRAN 2 because of technical glitches while Category B included cases where no technical issues were found from the system logs in filing TRAN 1/TRAN 2. 26.2. In pursuance of decision in 32 nd GST Council Meeting, regarding extended scope of ITGRC, GST Council Secretariat had received another 22 cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C. ii) Committee also accepted the proposal of fourth case to recall the decision of 7 th ITGRC on this case, on account of error reported by GSTN and effectively restoring the decision of 6 th ITGRC of allowing the filing/revision of TRAN-1. Discussion on emerging issues before ITGRC (Agenda 2) 26.5. During the earlier ITGRC proceedings, it was observed that Nodal officers as well as GSTN had received various references and Writ Petitions where non-technical issues were also involved. The ITGRC could not handle those cases, as it was not empowered to take any decision on these issues. Further, on account of no appeal mechanism in respect of Forms TRAN- 1/TRAN-2 under GST law, taxpayers were approaching various Hon ble High Courts for grievance Redressal. In 32 nd GST Council Meeting, it was decided to enhance/expand the scope of the ITGRC to include those cases where no technical glitch/problem was evident and the Commissioners would after examination recommend such cases but GSTN and GST Council Secretariat were receiving cases without proper scrutiny. Till 31 st January, 2019, 62 cases (with incomplete details and not in conformity with the spirit of the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... After being satisfied about the genuineness of the claim, the details should be sent to GSTN with proper recommendation and specific high Court order copy as per 32 GST Council Meeting s decision to enable filing of TRAN-1/TRAN-2. The mode as well as format for such directions and the requisite certificate be finalised by GSTN in order to maintain the audit trail and generate report, if required. e. If deemed necessary, post audit of the taxpayers could be carried out by tax authorities in a time-bound manner, who would claim transitional credit above a particular threshold. f. In light of above, ITGRC could revisit the Category A cases identified as non technical cases placed in Annexure 3 of 6 th ITGRC and Agenda 3 of the 8 th ITGRC, taking inputs as required from GSTN. 26.6. The decisions/recommendations as per attached Minutes of the 8 th ITGRC were placed for information of the Council. 27. For Agenda item 11 , the Council took note of the decisions/recommendations of the 8 th Meeting of the IT Grievance Redressal Committee. Agenda Item 12: Quarterly Report of the NAA for the quarter July to September 2019 for the information of the GST Council 28. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tag Integration ii. New Return System iii. Integrated refund system with disbursal by single authority iv. Generation of electronic Invoice Reference Number v. Linking GST registration with Aadhaar and proposed chances in the GST Law and GSTN System 30. The Secretary stated that a detailed presentation was given by Shri Prakash Kumar, CEO, GSTN in the Officer s Meeting held on 17.12.2019 regarding the GST EWB System - FASTag Integration, status of implementation of New Return System, Integrated Refund System with disbursal by Single Authority, Generation of Electronic Invoice Reference Number and Linking GST registration with Aadhaar. The presentation made so is attached as Annexure 9 to the Minutes. Following were the salient features of the presentation of CEO, GSTN. A. GST EWB System - FASTag Integration 30.1. The MoU withlndian Highways Management Company Limited (IHMPCL) GSTN had been signed on 14.10.2019. a. The MoU was for collaboration and working together for implementation track and trace mechanism to track the goods carrying vehicles through FASTag at the toll plazas across the country. b. NPCI was extending its NPCINet to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interaction plan for-invoicing which included Industry partners, Accounting Software Provider/GST Suvidha Provider Accounting Software companies. E. Linking GST registration with Aadhaar and proposed changes in the GST Law and GSTN System 30.5. As regards linking of GST registration with Aadhar and proposed changes in the GST Law and GST System, CEO, GSTN stated that this project was expected to be rolled out by 1 st February 2020 and mentioned Infosys had completed Proof of Concept (POC) and had also completed the prototypes for the purpose. 31. For Agenda item 13 , the Council took note of the latest updates as per the presentation made by CEO, GSTN. Agenda Item 14: Clarification on GST rate on fabrics and articles of textiles fal1in in Chapte₹ 56 to 59 of the tariff pursuant to the order of the Hon ble High Court of Delhi in Writ Petition (Civil) No.597 of 2019 32, The Secretary asked JS, TRU-I to introduce the agenda item to the Council. The JS TRU-l, thereafter, submitted that the Hon ble High Court of Delhi has directed vide its order dated 11.10.2019 to place before the Council the issue agitated before them and also to place a copy of the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the recommendation of the GST Council. The Appellate Tribunal having National / Regional Benches at National level and the State / Area Benches at State level, to hear appeals against orders passed by the Appellate Authority or by the Revisional Authority. He further directed Special Secretary GST Council to brief the Council. 34.1. In order to recapitulate, Special Secretary GST Council stated that the recommendations of the GST Council in respect of creation of the GSTAT and further developments in chronological order were as under: In the 28 th Meeting of the GST Council on 21.07.2018 the Council recommended: Constitution of Goods and Services Tax Appellate Tribunal (GSTAT); and Creation of National Bench of GST Appellate Tribunal at New Delhi and three Regional Benches at Mumbai, Chennai and Kolkata. Union Cabinet approved creation of National Bench of the GST Appellate Tribunal at New Delhi. National Bench at New Delhi had also been notified vide Notification No. S.O. 1359(E)-ENo. 1/2019,[F.No.A.50050/99/201 8-Ad. 1C(CESTAT)] dated 13-03- 2019 issued by Department of Revenue. Till the 37 th Meeting , the Council had recommended setting up of State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of States/Union Territory Location for State Bench 1. Madhya Pradesh Indore 2. Meghalaya Guwahati* (request from Govt. of Meghalaya requested to club State Bench of Assam at Guwahati instead of earlier proposed at Shillong) 3. Punjab Ludhiana* (the Govt. of Punjab requested to change State Bench of Punjab to Ludhiana instead of Chandigarh) Agenda Item 15 (ii): Measures for Revenue Augmentation 1. GSTR-1 Amnesty scheme along with E-Way Bill Blocking for non-filers of GSTR- 1 35. Pr. Commissioner GST Policy Wing, CBIC introduced this agenda by stating that the FORM GSTR-1 filing had been low and had crossed 60% only once in the last six months. This was despite the introduction of sub-rule (4) of Rule 36 which restricted availment of input tax credit in respect of those invoices, the details of which have not been uploaded by the supplier under Section 37 of the CGST Act (in FORM GSTR-1) to 20% of the eligible credit available in FORM GSTR-2A for a taxpayer. Presently late fees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the return which was not happening as the return FORM GSTR-3B were self-assessed and were on a summary basis so it was not possible to determine the exact reason for reversal. There was a facility in the portal which allowed the tax authorities to block utilization of ITC which was being used by State Officers in as many as 25 States/UTs. It was further stated by the Principal Commissioner, (1 st Policy Wing that this issue was discussed in great depth in the Officers Committee meeting on 17 th December 2019. To ensure uniformity and in the interest of revenue, it was proposed that the GST Council, as a measure of revenue augmentation, may approve insertion of a new rule 86A to block the utilization of such credit. 4. Extension of due date for filing of FORM CSTR-9 /9C for FY 2017-18 35.3. Principal Commissioner, GST Policy Wing, CBIC stated that notification No. 56/2019 dated 14.11.2019 was issued to simplify filing of Annual Return (FORM GSTR 9) and Reconciliation Statement (FORM GSTR-9C) for FY 2017-18 and FY 2018-19. Certain changes were required in the offline utility for filing of FORM GSTR9C. It had been informed that the offline utility for tiling of FORM G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rea benches of the Goods and Services Tax Appellate Tribunal (GSTAT) as below: Sl. No. Name of States/Union Territory Location for State Bench 1. Madhya Pradesh Indore 2. Meghalaya Guwahati* (request from Govt. of Meghalaya requested to club State Bench of Assam at Guwahati instead of earlier proposed at Shillong) 3. Punjab Ludhiana* (the Govt. of Punjab requested to change State Bench of Punjab to Ludhiana instead of Chandigarh) ii. (a) Late fees to be waived for the registered persons who failed to furnish the details of outward supplies in FORM GSTR-1 for the months/quarters from July, 2020 and to block E-way Bill generation for non-filing of any two FORM GSTR 1 . (b) to amend the Rule 36(4) of GST Rules to restrict availment of input tax credit in respect of those invoices, the details of which have not been uploaded in the return filed under Section 37 (FORM GSTR-1) to the extent of 10% of the total eligible ITC, the details of which have been upl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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