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TMI BlogMinutes of the 21st GST Council Meeting held on 09 September, 2017X X X X Extracts X X X X X X X X Extracts X X X X ..... es) Act, 2017 5. Issues recommended by the Law Committee for consideration of the GST Council i. Notification with respect to sub-section 6 of Section 54 of Central Goods and Services Tax Act, 2017 (Category of Registered Persons not eligible for refund) ii. Extension of date for opting for composition till 30 September, 2017 in respect of such migrated taxpayers, who have not exercised their option till 16 August, 2017 iii. Exemption from the requirement of registration to the persons making supplies of handicraft goods in different states iv. Exemption to a job-worker making inter-State supply of services to a registered person from the requirement of obtaining registration under clause (i) of Section 24 of the CGST Act, 2017 and consequential amendments v. Notifying the date from which Section 51 of the CGST Act, 2017 shall come into force as 18.09.2017 and notifying certain persons or category of persons as deductors under clause (d) of sub-section (1) of Section 51 of the said Act vi. Constitution of the Standing Committee, Screening Committees and National Anti-profiteering Authority (NAA) vii. Transitional provisions and filing of FORM GST-TRAN-1 v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the Minutes of the 20 th GST Council meeting held on 5 August, 2017 5. The Hon'ble Chairperson invited comments of the Hon ble Members on the draft Minutes of the 20th Meeting of the Council held on 5 August, 2017 (hereinafter referred to as the 'Minutes'). 5.1. The Hon'ble Minister from Punjab stated that in paragraph 15.3 of the Minutes regarding discussion on changes to Central Sales Tax (CST) Rules, there was a reference that States could work out a scheme where all States should have a low rate of Value Added Tax (VAT) (say 5%) on those petroleum products which were presently out of GST, when they were used as inputs for manufacture of any other product. He stated that a uniform decision was required to be taken at an early date as otherwise interest of some States would get adversely affected. Dr. Hasmukh Adhia, Secretary to the Council (hereinafter referred to as the 'Secretary') stated that the observations recorded in paragraph 15.3 of the Minutes were only suggestions from the Council and this issue would need to be discussed separately by the Hon'ble Finance Ministers of the States in the Empowered Committee of the State Finan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erved that if the judgment of the Hon'ble Supreme Court was delivered prior to the implementation of GST, its applicability post-GST period would need to be examined. He stated that the judgment of the Hon'ble High Court of Karnataka, being a later one, needed to be considered. Shri Ritvik Pandey, Commissioner, Commercial Tax (CCT), Karnataka, stated that the judgment of the Hon'ble High Court of Karnataka was only an interim order to permit issue of Form 'C' for goods used for manufacture of products other than petroleum products but the order had a caveat that if the petition was dismissed, the tax would have to be paid at the normal rate. 5.3. Dr. P.D. Vaghela, CCT, Gujarat, stated that the report of CCTs on CST may be considered by the Council which has recommended that issuance of Form 'C' should be left to the wisdom of the States as no State would like to hurt the interest of its own tax-payers. In the absence of Entry Tax, the local tax-payers of the States would suffer as these goods would be brought from other States on Form 'C'. Also, the State revenue from petroleum goods and natural gas would be reduced considerably if this issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne these items. He stated that besides sal, siali leaves and sabai grass, he had also raised the issue of cups and plates stitched or made of sal, siali leaves and sabai ropes and also for exempting handicrafts. He requested to replace his version recorded in paragraph 4 1.4 of the Minutes with the following version: 'The Hon'ble Minister from Odisha stated that tax on sal and siali leaves and cups and plates made thereof and sabai grass and sabai rope should be exempt as taxing these goods would affect the livelihood of the tribals of Mayurbhanj district and suggested that the Fitment Committee should examine these items. He further stated that the Finance Department of the State of Odisha had written a letter to the GST Council requesting to consider exemption of handicraft goods. He requested that the Fitment Committee should examine to exempt handicraft goods as poor artisans are engaged in making handicraft articles.' The Council agreed to add the version of the Hon'ble Minister from Odisha in paragraph 4 1.4 of the Minutes. 5.6. The Hon'ble Minister from Goa stated that his version was not recorded correctly in paragraph 41.3. of the Minutes. He did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efined in Clause (1 19) of Section 2 of the CGST/SGST Acts supplied to the Government, a local authority or a Governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of~ (i) a civil structure or any other original works predominantly for use other than for commerce, industry, or any other business or profession; (ii) a structure meant predominantly for use as an educational, clinical, art or cultural establishment; (i ii) a residential complex predominantly meant for self-use or for use of employees; (iv) a road, bridge, tunnel, or terminal for road transportation for any purpose (e.g. services provided for construction of road to BSF for exclusive military use, construction of runway for Air Force, construction of jetty and allied infrastructure for Navy).He pointed out that the above composite supply of works contract shall attract a tax rate of 18% instead of 12% which was against the decision of the Council. He suggested that keeping in view the deliberations in the Council in its 20th Meeting held on 5 August 2017, the Minutes should be amended accordingly and works contract s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'ble Minister from Uttar Pradesh stated that the rate of tax for construction of Government building should be reduced from 18% to 12%. He stated that contracts relating to earth work, etc. should not be taxed. He also supported the proposal that the bodies that execute projects based on grant of budgetary provision from the Government should be covered within the definition of State. The Hon'ble Minister from Rajasthan stated that the rate of tax on labour intensive works like irrigation should be 5%. 5.13. The Hon'ble Minister from Telangana stated that the Hon'ble Chief Minister of his State had written to the Hon'ble Union Finance Minister that earlier there was Central Excise exemption for pipes above I 0 em diameter for drinking water, irrigation and sewerage. He pointed out that the cost of irrigation projects in his State was about ₹ 1,800 crore and there would be additional tax burden of about ₹ 200 crore if the rate of tax was not reduced. He stated that the tax rate on works relating to irrigation, sewerage, etc. should be kept at the pre GST level and the burden of embedded tax could be shared between the Centre and the States. The Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IGST Act, 2017, 'Governmental authority' means an authority or Board or any other body set up by an Act of Parliament or a State legislature; or established by Government with 90% or more participation by way of equity or control, to carry out any function entrusted to a municipality under Article 243W of the Constitution. He stated that the same definition was provided under Notification No.12/2017-Central Tax (Rate) dated 30.06.2017 and the effect of this definition was that it excluded a Governmental authority from tax exemption which carried out functions of a Panchayat as provided under Article 243G of the Constitution. He suggested to modify the definition provided under Notification 12/2017-Central Tax (Rate) dated 30.06.2017 by explicitly incorporating reference in the definition of the Governmental authority to Article 243W as well as Article 243G of the Constitution. 5.16. The CCT, Gujarat stated that a second important issue to be addressed was that the transfer of budgetary grant by the Government to entities like Boards/Corporations/Societies/Institutes created by the State to implement various schemes of the Government and to carry out functions on its beha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of revenue. He further expressed that the issue should be examined by the Fitment Committee. The Hon'ble Minister from Karnataka concurred that the Governmental bodies should be only such bodies which were entrusted with sovereign functions like building roads, irrigation works, etc. 5.18. The Hon'ble Minister from Telangana stated that they had sent written comments that during the 20th Meeting of the Council, the Hon'ble Chairperson had mentioned that lowering of rate of tax further to 5% on certain types of Works Contracts and the issue of rate of tax in the case of on-going works would be examined and taken up in the next meeting of the Council but th is assurance of the Hon'ble Chairperson was not mentioned in the relevant paragraphs, namely, paragraphs 13.7 to 13.13, of the Minutes. The Hon'ble Chairperson observed that the implication regarding suggestion to reduce the rate of tax further to 5% needed to be studied by the officers. The Secretary stated that the Works where labour was pre-dominantly involved, the question was as to what was the material component in such Works Contracts. The Fitment Committee would need to examine it. He informed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her the rate of tax for such works could be taken to 5% by working out the actual incidence of embedded taxes and the headline rate. For that, he asked the States to submit the component of labour and material (on actual basis) in a works contract which is labour intensive. He stated that this issue could be examined by the Fitment Committee. He added that the second issue to be considered by the Fitment Committee related to the definition of Governmental authority. He stated that both these issues could be examined by the Fitment Committee instead of taking an adhoc decision in this meeting of the Council. 5.22. The CCT, Gujarat, stated that if a Government corporation or authority or board was allotted grants by the State government (for example, grant allocated to construct a jail or police line, etc.), such transaction should not attract GST at the rate of 18%. He stated that he had already submitted two agenda points on this issue for consideration of the Fitment Committee. The Hon'ble Minister from Punjab observed that in Governmental contracts, work done was shoddy, and therefore, for future works, no rate reduction should be considered. The Hon'ble Minister from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Council could authorise the GST Implementation Committee (GIC) to decide on the basis of the recommendations of the Fitment Committee. He added that no distinction could be made between the existing contracts and the new ones and that the only point of examination by the Fitment Committee would be the relative component of materials vis-a-vis labour in the labour intensive contracts on actual basis which could be studied by the Fitment Committee and brought before the Council in the next meeting. He added that in today's meeting, the Council could take a decision that the rate of tax for Works Contract for construction of Government buildings shall be 12%. The Hon'ble Chief Minister of Puducherry stated that the rate of tax for drainage schemes for Government should also be at the rate of 12%. The Hon'ble Minister from Karnataka expressed that the issues framed by the Secretary reflected the sentiment of the Council and he expressed support for the same. 5.24. The Hon'ble Minister from West Bengal stated that the issue could be considered by the GIC after which the Council could consider the issue through video conference. The Hon'ble Chairperson sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Fitment Committee should examine these items. He further stated that the Finance Department of the State of Odisha had written a letter to the GST Council requesting to consider exemption of handicraft goods. He requested that the Fitment Committee should examine to exempt handicraft goods as poor artisans are engaged in making handicraft articles.' 6.4. To replace the version of the Hon'ble Minister from Karnataka recorded in paragraph 37.5 of the Minutes with the following: 'The Hon' ble Minister from Kamataka suggested that the Members of the Council should also get an opportunity to interact with the learned Attorney General of India on the subject of Extra Neutral Alcohol and to convey their views to him.' 7. The Council also decided the following while discussing the Minutes of the 20 th Meeting of the Council: 7.1. The issue of Form C under the Central Sales Tax Act shall be examined further in light of the Court decisions. 7.2. The rate of tax on services provided to the Central Government, State Government, Union Territory, a local authority or a Governmental authority (a) by way of construction, erection, commissioning, installat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Minister from Punjab stated that excessive delegation to GIC should be avoided. The Secretary stated that the purpose of GIC was that for urgent issues where it was not possible to wait for the Council Meeting, GIC could decide and the decision could be notified. The Hon'ble Minister from Kerala stated that the Council could decide urgent matters through video conferencing. The Hon'ble Chairperson suggested that the GIC could decide on issues of routine nature, but if there was a substantial policy related issue, the Council could decide, either through video conferencing or by a physical meeting. 8.2. The Hon'ble Minister from Kerala stated that the CBEC had issued a circular clarifying that if there was an air-conditioned room in a restaurant, then the entire billing by the restaurant would have to be done at the rate of 18% whereas the rate for non-air-conditioned restaurant was 12% and also food from take away counters of such AC restaurant would attract tax at the rate of 18%. He observed that before issuing such clarification, it should also be considered by the States. The Secretary stated that such clarifications were normally examined by the Fitment Committe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Council agreed to the suggestion. 11. For agenda item 3, the Council approved the following: - (i) Henceforth, all nominations by States on the Board of Directors of GSTN shall be made by the GST Council; and (ii) The Hon'ble Chairperson shall suitably nominate a Director on the Board of Directors of GSTN on the basis of nominations to be received from the State Governments. Agenda item 4: List of Acts from the Central and State Governments as per Section 5(4) of the GST (Compensation to States) Act, 2017 12. Introducing this agenda item, the Secretary informed that this issue was discussed in detail during the meeting of the officers of the Central Government and the State Governments held on 8 September, 2017 in Hyderabad. He informed that written comments on this agenda item were received from the States of Himachal Pradesh and Maharashtra. He further informed that during the Officers' meeting, the States of Uttar Pradesh, Odisha, Andhra Pradesh, Goa and Telangana had also raised the issue that some of the Acts listed were not repealed by their States in entirety but only certain Sections were omitted or that some Acts were missing or needed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ster from West Bengal stated that while provisional refund of 90% within seven days could be denied to persons who defaulted in filing returns for three consecutive months but it was not proper to deny 90% provisional refund within seven days to those exporters who were registered under the GST or under the existing law within six months. He stated that several exp01ters were start-up companies and they should be allowed the facility of provisional refund. He pointed out that the Chief Economic Advisor, in his presentation (which is recorded under agenda item 9), had dwelt upon the means to encourage export but this proposal went against this spirit. The Commissioner (GST Policy Wing), CBEC, explained that this provision was meant to exclude fly by night operators from availing the benefit of this provision. The Hon'ble Minister from West Bengal observed that the worst scenario should not be taken as the basis for making law. Shri Arun Mishra, Additional Secretary, Commercial Taxes, Bihar, stated that as input tax credit was allowed for two months, there was a risk that some people could claim refund and then vanish. Shri R.K. Tiwari, Additional Chief Secretary (ACS), Uttar Pra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Committee on Exports consisting of officers from the Centre and four to five major exporting States to recommend to the Council suitable strategy for helping the export sector in the post-GST scenario. Agenda item 5(ii): Extension of date for opting for Composition till 30 September, 2017 in respect of such migrated tax payers, who have not exercised their option till 16 August, 2017 17. The Commissioner (GST Policy Wing), CBEC explained during the presentation that the Composition scheme for migrated tax payers had closed on 16 August, 2017 and many people could not register or avail of th is scheme. In view of this, it was proposed to extend the date for opting for Composition scheme for migrated taxpayers till 30 September, 2017 and to implement it by introducing Rule 3(1) (A) in the CGST Rules and by also making a small consequential change in Rule 3(5) of the CGST Rules. He also explained that those who avail of the new deadline would be eligible for Composition benefits from 1 October, 2017. He explained that once the scheme was availed under the CGST Act, 2017, it would automatically be available under the other Acts, namely SGST Act and UTGST Act and vice versa. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement of registration under Section 24(ii) of the CGST Act, 2017 for casual taxable person. To give effect to these exemptions, two notifications were proposed to be issued. He added that for such persons, PAN and e-way bill shall be mandatory and they would need to generate e-way bill, irrespective of the value of consignment being transported. He informed that during the Officers' meeting held on 8 September, 2017, a few States had expressed concern that it would reduce the number of registered tax payers. 19.1. The Hon'ble Minister from Jammu Kashmir stated that this was a very important issue for his State as about 11 lakh people (almost 10% of the population of the State of Jammu Kashmir) sold their products in other States and they were adversely affected due to GST, including high rate of tax. He suggested that there should be no monthly cap of turnover and that there should be on ly an annual turnover cap. The Hon'ble Minister from Madhya Pradesh stated that art galleries were not allowing display of paintings of small artists until they took GST registration. The Hon'ble Minister from West Bengal supported the observation of the Hon'ble Minister ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Hon'ble Minister from West Bengal supported th is suggestion and added that folk painting should also be added to the list of handicrafts items to which the Secretary responded that this was already covered as handicraft. The list of items of handicrafts could be taken from paragraph 5 of Agenda Item 8(i). 19.4. After discussion, the Council approved the suggestion to exempt from registration the suppliers of handicrafts with annual turnover of up to ₹ 10 lakh for the Special Category States (other than the State of Jammu Kashmir) and up to ₹ 20 lakh for other States making inter-State supply under Section 24(i) as also making supply as a casual taxable person under Section 24(ii). The Council also agreed that there shall be no monthly limit of turnover for handicraft suppliers to avail the benefit of this provision. It was also agreed that the list of handicraft items listed in paragraph 5 of Agenda Item 8(i) shall be taken as a basis for drawing the list. 20. For agenda item 5(iii), the Council approved the following: (i) to exempt from registration the suppliers of handicrafts making inter-State supply under Section 24(i) as also making supply as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery case, the principal would pay tax on reverse charge basis. The Hon'ble Chairperson echoed the view of the Hon'ble Minister from West Bengal that relief should be given to persons with small turnover even at the cost of loss of some taxpayer base. 21.2. Shri Sanjeev Kaushal , ACS, Haryana, stated that a similar demand could come in respect of goods as well. He stated that for movement of goods between Delhi and Gurugram (Gurgaon), splitting of transactions was easy and cautioned against allowing such an exemption. The Hon'ble Deputy Chief Minister of Gujarat stated that a distinction should be made between an industrial job work and other types of job worker. He cautioned that there was a lot of movement of goods between Vapi and Mumbai and such an exemption would lead to large amount of tax evasion. The Commissioner (GST Policy Wing), CBEC reiterated that even if there was splitting of turnover, tax would be paid on reverse charge basis and also reminded that the provisions of e-way bill Rules would apply for movement of such goods. The Secretary observed that as jewellery, goldsmiths' and silversmiths' wares and other articles under Chapter 71 were exclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as tax deductors under clause (d) of sub-section (1) of Section 51 of the CGST Act, 2017: - (a) an authority or a board or any other body - (i) set up by an Act of Parliament or a State Legislature; or (ii) established by any Government, with fifty-one per cent or more participation by way of equity or control, to carry out any function; (b) society established by the Central or State Government or a local authority under the Societies Registration Act, 1960; (c) public sector undertakings. 23.1. He informed that during the Officers' meeting held on 8 September, 2017, there was a view that Section 52 of the CGST Act, 2017 relating to Tax Collection at Source (TCS) should also be notified but it was pointed out that if Section 52 was notified, then tax collection at source would have to be started, which might not be feasible immediately. He stated that taking this into account, it was suggested that registration for TCS could be started by issuing a circular to this effect rather than by notifying Section 52. The Council agreed to the suggestion to notify Section 51 to start registration for tax deductors at source but to notify the requirements of tax deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 127 of the CGST Rules, 2017, as discussed above. The Council also agreed that the Technical Members of the NAA shall have at least one year's experience as Commissioner. 25.2. The Hon'ble Minister from Kerala stated that Maximum Retail Price (MRP) had not been reduced on new stocks and it was important to demand that MRP on new stocks should be reduced as the Anti-profiteering bodies would take some time to get operational. The Secretary stated that this issue was raised during the last meeting of the Council and the Hon'ble Chairperson had made a public appeal to reduce the price of fresh stocks. He also explained that State-level complaints relating to State-level companies would be forwarded to the State-level Screening Committee and multi-State complaints would be forwarded to the Standing Committee, and thereafter, if needed, after investigation by the DG (Safeguards), CBEC, these would be placed before the NAA. The Hon'ble Minister from Kerala observed that there was no reduction in MRP of consumer goods and no serious warning had been given for reducing the MRP. The Secretary observed that the Anti-profiteering mechanism had been set up and State-level Sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit flowing from Section 145(9) of CGST Act, 2017 and that this issue related only to CGST credit and not to SGST credit. Another proposed change relating to the CGST credit only was in the heading of Table 7(a) to allow flow of credit available through Credit Transfer Document (CTD). He further informed that during the Officers' meeting held on 8 September, 2017, it was also recommended that filing of GST TRAN-1 should be extended by one month i.e. till 31 October, 2017 and one revision in TRAN-1 could be done upto 31 October, 20 I7. The Additional Secretary (Commercial Tax), Bihar, cautioned against permitting revision of GST TRAN-1 as CGST credit of ₹ 62,000 crore had already been taken by the business community. The Secretary observed that as on ly one revision was being allowed in GST TRAN-1, there could also be a downward revision of the credit claimed under TRAN-1. The Hon'ble Minister from West Bengal supported the proposal under this agenda item. 27.1. The Council approved the proposed changes, namely inserting a new rule in the CGST and the SGST Rules to permit one revision of FORM GST TRAN-1 ; amendment in the heading of Table 5(a) to include CGST cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He further stated that the present rate structure was more or less based on the pre-GST tax incidence and that any future review of the GST rate structure would be based on the policy objectives which the Council would seek to achieve from the GST rate structure of goods, rather than a mere fitment exercise. He stated that in the above context, the following basic principles regarding GST rates on goods could be relevant for any future review of rates: - (1) To ensure a free flow of ITC, exemptions which break the ITC chain and result in cascading of input taxes should be kept to a bare minimum. (2) If any particular State desires to incentivize certain goods of local importance (for dealers with turnovers beyond the Threshold Exemption and Composition Scheme), it would be desirable that the same is done using a direct subsidy, rather than exemption from GST or reduction in GST rate. (3) As Nil GST on manufactured goods results in negative protection for the domestic goods, and thus goes against ' Make in India' policy, as a rule, no manufactured goods should be fully exempt from GST. (4) As concessional GST rate on any goods ( lower than the GST rate on inputs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s which satisfy the following criteria may not be considered for review, namely: i. Goods that yield high revenue; ii. Luxury goods; iii. Goods having negative externality; iv. Sin goods. (b) Goods which satisfy any of the following criteria may be considered for review subject to the revenue yardstick, namely: - i. Goods of mass consumption I public interest; ii. Intermediate goods which are in the nature of B2B supplies; iii. Goods predominantly manufactured in the un-organised MSME sector; iv. Export related items. (c) Based on the above criteria, the Council may consider suitable guidelines for review of 28% rate, with an aim to rationalise rate, with priority to items of consumption by common man and keeping in view the revenue impact of such changes. 31.1. Starting discussion on this agenda item, Dr. Arvind Subramanian, Chief Economic Advisor (CEA), Ministry of Finance, stated that he always had reservation regarding the 28% rate slab and he expected that the rates would be reduced in the range of 12% to 18%. He observed that he was encouraged by this Paper and it was a good framework to think where the rates of tax could be headed for in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tourists permanently. He added that other than the lower tax rates, the South East Asian countries had many other facilities/attractions to offer like clean beaches and better infrastructure. He, therefore, suggested that instead of waiting for three months, the rate of tax on hotels should be reduced to 18% now itself since the high rates were actually punitive for the tourists. He stated that his State was trying to provide better infrastructure to bring in high value tourist traffic 31.5. The Hon'ble Minister from Rajasthan stated that the share of tourists coming to India was not very significant and the high tax rates had further harmed the growth of tourism. He noted that tourism gave foreign exchange, employment, etc. and suggested that the rate of 18% should be applied to room tariff up to ₹ 10,000 per day. The Hon'ble Minister from Odisha supported the observations of the Hon'ble Minister from Goa and stated that the high rates of tax would discourage tourism industry. 31.6. The Hon'ble Minister from Telangana stated that granite, bidi and tendupatta were very important goods and requested to reduce the tax rates on them. 31.7. The Hon'bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rooms, the rate of 19% was the net tax and some States had a higher rate of tax. 31.10. The Secretary suggested that the Fitment Committee should not carry out an exercise for revision of rates until the Approach Paper was finalised except when rate revision is urgently required. The Hon'ble Deputy Chief Minister of Gujarat stated that the sufferings of industry and rise in unemployment should also be kept in mind while discussing the rate structure. He pointed out that the small-scale industry was suffering due to high rates of tax, and therefore, the rate related discussion should not be postponed. The Secretary stated that the proposed rates for goods listed for this meeting could be considered but the subsequent suggestions for any change in the rates should be based on the agreed Approach Paper. The Hon'ble Minister from Chhattisgarh suggested to add one more principle in the approach paper, namely, to watch revenue and employment situation for next three months and see if revenue was low or employment was high or vice versa, and then the rate of tax on that product could be re-examined. The Hon'ble Minister from Karnataka suggested that the Council should not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... marind dried (Sr. No. 2): The proposal of the Fitment Committee was to reduce the rate of tax from 12% to 5%. The Hon'ble Minister from Chhattisgarh stated that dried tamarind was not a processed good as it only involved removal of seeds and pressing the fruits. He added that it was not a spice and it should be exempted from tax. He added that this product did not yield much revenue and it was connected to employment in the Bastar region. The Hon'ble Ministers from Maharashtra and Telangana supported the proposal of the Hon'ble Minister from Chhattisgarh. The Hon'ble Chairperson stated that revenue was also an important consideration while considering the rate proposals. The Hon'ble Minister from Telangana responded that revenue yield from this good would not be much and it was consumed by the poorer sections of the society. The Secretary stated that exemption should be given to limited products and tamarind dried was a processed good and was used as a spice like jeera, etc. The Hon'ble Minister from Tamil Nadu stated that this was not a processed good and it was only dried under sunlight. Shri Anurag Goel, CCT, Assam stated that even if tax on this product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tee recommended to reduce the rate of tax from 12% to 5%. The Hon'ble Minister from Chhattisgarh suggested that roasted gram should be exempted as there was no tax on gram and also no tax on the end product of roasted gram, i.e. sattu. He stated that roasted gram was an intermediate product, it should also be exempt from tax and the revenue yield from this product would be very low. He added that as this product was supplied inter-State, it would also not enjoy the benefit of the threshold exemption of ₹ 20 lakh. He added that exempting this product from tax would help to generate employment. The Hon'ble Chairperson observed that the suppliers of roasted gram would be using some inputs which would be taxable such as mobile phone and they would be able to claim input tax credit on the same, if the product was taxed at the rate of 5%. After further discussion, the Council agreed not to exempt the tax on roasted gram, but to reduce the same from 12% to 5% as recommended by the Fitment Committee. (iv) Oil Cakes (Sr. No.7): The Joint Secretary (TRU-1), CBEC stated that the Fitment Committee proposed to tax oil cakes other than cotton seed oil cakes at 5% and to exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and other types of metal and the latter could be taxed at one rate. He added that the idols made of clay could be kept at a lower rate. The Hon'ble Minister from West Bengal also suggested to keep one rate of tax for idols made of precious metals and another rate for idols made of other metals. The Hon' ble Deputy Chief Minister of Bihar suggested to keep a rate of tax for idols made of marble but to exempt idols made of clay. The Hon'ble Minister from Maharashtra stated that supply of idols should be exempted from tax as temple was not a place of business. The Hon' ble Chairperson pointed out that cement, electrical fittings etc. used in construction of temples was also chargeable to tax . The Hon' ble Minister from Odisha observed that if idols were taxed, the artisans would suffer. CCT, Assam suggested to exempt clay idols but to tax idols of other materials as their inputs would be taxed. The ACS, Uttar Pradesh stated that exempting idols from tax would not hurt the domestic industry as large quantities of idols were also being imported. The Hon' ble Minister from West Bengal stated that tax on idols was a ground level issue linked to political economy a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... piece and 12% for blankets with sale value exceeding ₹ 1000 per piece. The Council agreed to this suggestion. (ix) Worked corals (Sr. No. 25) :The Fitment Committee recommended to reduce the rate of tax from 28% to 5%. The Hon' ble Minister from Rajasthan stated that corals were also in the nature of precious stones and they should be taxed at the rate of 3%. The Joint Secretary (TRU-1), CBEC, stated that tax rate of 3% was applicable only for goods falling under Chapter 71 of HSN Code namely natural or cultured pearls, precious or semi-precious stones, precious metals, etc. whereas worked corals was classifiable under Chapter heading 9601. The Hon'ble Minister from Rajasthan suggested that rate of tax on worked corals should be kept at par with gems. The Joint Secretary (TRU-1), CBEC, stated that handicrafts made of shells and coral s were excluded from thi s Chapter heading. The Hon' ble Chairperson observed that poor people did not buy corals and suggested to keep the rate of tax at 5%. The Council agreed to reduce the rate on worked corals, (other than articles of corals), from 28% to 5% as recommended by the Fitment Committee. (x) Walnuts (New propos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir diet, including for pregnant women, a large quantity of nutritious food was supplied to children and pregnant women under the ICDS and tax on them should be reduced from 18% to at least 5%, at par with the rate of tax on roasted gram. He stated that the current rate of tax was causing a loss of ₹ 600 crore to his State. The Secretary suggested that this issue could be again discussed in the Fitment Committee. The Council agreed to this suggestion. (ii) The Council approved al l other recommendations of the Fitment Committee contained in Annexure-IIA of agenda item 7 of the 21 st Council Meeting. Annexure-IIB 33.2. The Secretary stated that Annexure-IIB contained a list of goods on which the Fitment Committee did not agree to the recommendation to reduce the present rate of GST. The Council discussed some specific products and the record of discussion is as below. (i) Farshi Paththar (Flooring Stone) (Sr. No. 41): The Fitment Committee did not recommend reduction of tax on this product from 28% to 5% on the ground that the GST rate of 28% for goods falling in Chapter 68 was as per pre-GST tax incidence and that it would not be advisable to lower the tax r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bricks and blocks (12%) was lower than the pre-GST tax incidence and that there was no economic justification for further reduction in rate. The Hon' ble Minister from Odisha stated that fly Ash caused environmental pollution. There was no consideration for fly ash. If it was kept in taxable category, e-Way bill would be required for movement/transportation and this would cause harassment. He suggested that Fly ash should be exempted under GST. (iii) Carpets and floor coverings of coir (Sr. No. 50): The Fitment Committee did not recommend reduction of the existing rate of 12% on these products and felt that in order to achieve the larger goal of a single rate of GST, it might not be appropriate to tweak GST rates of goods which were already at 18% or below. The Hon' ble Minister from Kerala stated that while the intention was to tax floor coverings, carpets, mats and mattings and textiles of rubber at 5%, only HSN codes 5705.00 and 5311.00 were included. He suggested to include HSN codes 5702.20.10, 5702.20.20, 5702.20.90 and 5702.90.20 which appeared to be inadvertently left out. He also stated that while fixing a tax rate of coir ropes at 5%, HSN code 5607.90.10 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntained in the said Annexure IIB) could be referred back by the State or the Centre for reconsideration by the Fitment Committee. The Council agreed to this suggestion. Annexure-III 33.3. This Annexure related to proposals regarding reduction in rate of services which the Fitment Committee did not find acceptable. Due to paucity of time, this Annexure could not be discussed by the Council and was deferred to the next meeting of the Council. Annexure-IV 33.4. The Secretary explained that indigenous handmade musical instruments are exempt from GST. However, doubts were being raised whether or not a particular musical instrument was an indigenous musical instrument. He also explained that the list of musical instruments contained in Annexure IV of the Agenda Note 7 was provided by the CCT West Bengal, as mentioned in Sr. No.9 of Annexure-IIA. The Council agreed to tpe inclusion of this list as an exhaustive list of indigenous musical instruments, which if handmade, would be eligible for the existing exemption from tax. 34. In view of the above discussion, for agenda item 7 relating to recommendation of the Fitment Committee on goods and services (Outstanding Agenda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich if handmade, shall be eligible for the existing exemption from tax. Agenda item 8: OTHER RECOMMENDATIONS OF THE FITMENT COMMITTEE Agenda item 8(i): Alternative approach for GST Rate Structure for Handicrafts 35. Introducing this agenda item, the Joint Secretary (TRU-1), CBEC stated that handicrafts were exempt under Central Excise as per Notification No.76/1986-CE and Notification No. l7/20 11-CE but the articles of jewellery falling under Heading No. 71 13 were excluded from this exemption. He informed that the Hon' ble Supreme Court, in the case of Collector of Central Excise, New Delhi Vs. Louis Shoppe (12.03 .1995) laid down certain criteria to establish whether a particular article merited classification as ' handicraft', like predominantly made by hand, graced with visual appeal in the nature of ornamentation or inlay work or some similar work. He stated that using such criteria would lend an element of subjectivity and would also result in increased interface between administration and tax payers and in disputes. He informed that the website of the Development Commissioner (Handicrafts) under the Ministry of Textiles, Government of India ( http: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s (Chapter Headings 4415, 4416, 44 19 and 4420) would get expensive if these were taxed at the rate of 12% or 18% and suggested that these should be taxed at the rate of 5%. After discussion, it was agreed that as the earlier incidence of Central Excise on carved wood products was 12.5% and VAT was 5% in general, the GST rate on carved wood products could be kept at 12% for goods falling under Chapter heading 4415 and 4416 (carved wood products like boxes, inlay work cases, casks, etc. and under Chapter 4420 (carved wood products). It was also agreed to reduce the rate of tax for goods falling under Chapter 44 19 (carved wood products - table and kitchenware, etc.) from 18% to 12%. 35.4. The Hon'ble Minister from Kerala stated that the question as to what constituted a ' handicraft' remained unresolved. The Hon'ble Chairperson suggested that the tax rate on handicraft items on which the Fitment Committee had reached consensus, could be approved and for others, wherever the States made a suggestion in writing, it could be taken up for discussion by the Fitment Committee again. The Hon'ble Minister from Kerala stated that there was no agreement on products cove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting held on 5 August, 2017 recommended increase in the maximum rate of Compensation Cess on motor vehicles falling under Chapter Heading 8702 and 8703 from 15% to 25%. He stated that the Union Cabinet, in its meeting held on 30 August, 2017 approved promulgation of an Ordinance to amend the Goods and Services Tax (Compensation to States) Act, 2017 so as to increase the maximum rate at which Compensation Cess could be levied from 15% to 25% on motor vehicles for transport of not more than 13 persons including the driver falling under Chapter Heading 8702 I 0, 8702 20, 8702 30 or 8702 90 and motor vehicles falling under Chapter Heading 8703, and an Ordinance was accordingly promulgated on 2 September, 2017 to amend the Schedule to the Goods and Services (Compensation to States) Act, 2017. He explained that the variation in pre-GST tax incidence was primarily on account of variation in dealer's margin and freight for different makes of motor vehicles and higher the dealer's margin and freight, the lower was the tax incidence. He stated that if the rate of Compensation Cess was fixed by taking into account the highest pre-GST tax incidence, it might result in increase in tax o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngth less than 4-metre and engine capacity 1200 cc for petrol and 1500 cc for diesel vehicles). The Council agreed to this suggestion. 37.4. The Hon'ble Minister from Jammu Kashmir suggested that the rate of tax on small cars should be unified into one single rate and this rate could be kept at 30%. The Hon'ble Chairperson informed that the difference in the rate of tax on small cars was kept to disincentivise use of diesel cars. 37.5. The Hon'ble Minister from Karnataka suggested that hybrid cars should not be subjected to any increase in the rate of Cess. The Hon'ble Chairperson agreed to the suggestion. The Secretary stated that no change in the rate of Cess was also suggested for motor vehicles for transport of not more than 13 persons including the driver, falling under sub-headings 8702 I 0, 8702 20, 8702 30 or 8702 90. The Council agreed to this suggestion. 38. For agenda item 8(ii) , the Council approved the increase in the rate of Compensation Cess for the following categories of motor vehicles: (i) Sports Utility Vehicles (SUVs) (of length more than 4-metre, engine capacity more than 1500 cc and ground clearance 170 mm): To increase the ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to this suggestion. 40. For agenda item 8 (iii) , the Council approved to clarify as follows: (i) place of supply of satellite launch services by ANTRIX Corporation Ltd., to international customers would be outside India in terms of Section 13(9) of the IGST Act, 2017 and where such supply meets the requirements of Section 2(6) of the IGST Act, 2017 and thus constitutes export of service, shall be zero rated; (ii) Where satellite launch service is provided to a person in India, the place of supply of satellite launch service is in India and hence taxable. Agenda item 8(iv): Exemption from GST on the supply of nuclear fuel and heavy water by DAE to NPCIL 41. Introducing this item, the Joint Secretary (TRU-II), CBEC, stated that the Cabinet Secretariat had forwarded a letter of the Chairman, Atomic Energy Commission and Secretary, Department of Atomic Energy (DAE), requesting to exempt levy of GST on lease of nuclear fuel and heavy water by the DAE to NPCIL (Nuclear Power Corporation of India Limited). He stated that the DAE had justified the proposal for exemption on the ground that the DAE and the NPCIL were related persons as per the definition of related persons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. However, the Fitment Committee, in its meeting held on 5 September, 2017 recommended to exempt admission to FIFA U-17 Football World Cup-2017 from GST. The Council agreed with the proposal. 44. For agenda item 8(v) , the Council approved to exempt from tax, services by way of right to admission to the events organised under FIFA U-17 World Cup 2017. Agenda Item 9: Any other agenda item with the permission of the Chairperson (i) Discussion on GST Revenues 45. The Hon'ble Minister from Kerala desired that the GST Council be briefed about position on the GST revenues collected and the fund settlement done for the month of July, 2017. The Hon'ble Chairperson requested the Secretary for a briefing on the GST revenues. 45.1. The Secretary stated that for the month of July, 2017, the last date for filing of return was 28 August, 2017. As per data received from GSTN on 29 August, 2017 for taxes collected upto 28 August, 2017, the amount of collection was ₹ 15,033 crore as CGST, ₹ 22,962 crore as SGST and ₹ 48,070 crore as IGST out of which IGST collection on account of import, as per data received from Customs upto 31 August, 20 I 7 was & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the details from the States. The Hon' ble Chairperson pointed out that tax from Composition taxpayers shall also come. The Secretary stated that about 10 lakh persons had opted for the Composition scheme and the revenue from them would also bridge the shortfall. He further explained that it was expected that IGST revenue would build up in the first month because taxpayers who carried out the transaction of purchase in the first month would take the credit but use it in the subsequent months when these goods are sold. He stated that about 21 lakh new registered dealers (including those dealing in textiles) had come into the tax fold during the month of July and August, 2017 and tax from them was also expected to come in the next month. 45.3. The Secretary stated that the amount of Central Excise credit claimed in TRAN-I for CGST was ₹ 61,856 crore and for SGST was ₹ 4,002 crore. He stated that all the transitional credit might not be used in the current month and it could be carried forward to the subsequent months. He added that the Central Government was checking the correctness of the high quantum of CGST credit taken in TRAN- I. The Hon'ble Chairperson s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated that his State needed to track the use of IGST by big firms. The Hon'ble Minister from Assam stated that consuming States were expected to get a larger share of IGST. The CEA stated that at this stage, because of several one off factors, it would not be advisable to make a definitive statement regarding which States were los ing and which were gaining revenue. This could be done after 3-4 months after the System had settled down. He further observed that all States should clearly understand how the IGST settlement was worked out. 45.5. The Hon'ble Minister from West Bengal stated that the liquidity of States was suffering and they were required to borrow much more. He observed that the date for devolution of funds from the Centre to the States had been extended from 1 st to 15 th of the month and the balance amount of IGST was also being kept with the Centre. He suggested that in order to address the liquidity problem of the States, the amount lying in balance under the IGST head needed to be used in some way. The Hon'ble Minister from Telangana stated that his State suffered a shortfall of ₹ 853 crore for the month of July, 2017 and needed support ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4% growth rate for two years) and from 28 August to 9 September, 2017, an additional revenue of ₹ 3,000 crore had accrued, and going by the pattern emerging so far, the SGST collection might be higher than that of CGST and this would reduce the shortfall. He stated that the VAT revenue of the previous month would also contribute to reducing the shortfall. He added that ₹ 7,216 crore had already been collected as Compensation Cess which, unlike IGST, was available for distribution to the States and expressed the hope that the overall gap might not be very large. The Secretary stated that another mitigating factor for the States was that compensation was to be paid on bi-monthly basis, and therefore, the States' revenue would be a combination of the revenue of July and August, 2017. He added that as the revenue of July, 2017 was very buoyant, compensation requirement would be lesser. 45.7. The Hon'ble Deputy Chief Minister of Gujarat stated that in order to strengthen the faith of the business people in GST, it was necessary to have robust mechanism for refunds, like export refund, GST refund and the old VAT refund. The Hon'ble Minister from Telangana state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Secretary stated that the Compensation law provided that compensation would be paid on the basis of actual revenue collected from the date of transition, and therefore, the revenue figure for July and August, 2017 would need to be taken into account. The Hon'ble Chief Minister of Puducherry stated that the spirit of the Compensation Act should be honoured and that they would not get any compensation if tax buoyancy of the pre-GST period was also included for calculating the amount of compensation. He expressed an apprehension that no State would get actual compensation if this method was adopted. The Hon' ble Chairperson observed that the compensation date was given in the law itself. (ii) Presentation by the Chief Economic Advisor, Government of India on 'GST and Exports' 46. The Chief Economic Advisor (CEA) made a presentation on the topic 'GST and Exports'. He gave an overview to the Members on the economic background, embedded taxes on exports in the post-GST regime and the steps needed to make export competitive and to ensure robust growth in exports. (Copy of the presentation is attached as Annexure 4 to the Minutes.) 46.1. The CEA stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... make exports competitive and to ensure its robust growth. In the short run, he suggested that the Central Government could provide immediate, though temporary, relief via the duty drawback scheme, taking into consideration the embedded tax. He suggested that the Council could also take short term and medium-term steps to make exports more competitive. In the short run, the Council could set up a Committee to estimate all embedded taxes both inside and outside GST in all sectors and how the same could be relieved on all exports and how the associated burden could be shared between the Centre and the States. In the medium run, the Council should actively bring electricity, energy, land and real estate into the GST, which would not only have other benefits (like transparency, credit flow, better compliance), but would also reduce embedded taxes on exports. He also presented statistics of the embedded taxes in exports on account of taxes outside GST and due to duty invers ion, which, depending upon the value addition, ranged from 3.2% to 5.9%. 46.4. Members of the Council agreed that a Committee of the officers should be constituted by the Hon'ble Chairperson which would examine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As regards Transitional Forms, the following services were available on the GST Portal: (i) Tran Form I - Transitional lTC/ Stock Statement; (ii) Tran Form 3 Credit distribution. 47.2. The CEO presented the statistics of new registration and migration status as on 7 September 2017 in respect of Centre and State Counts. He informed that 11, 30,985 new registrations on Central side and 10,26,960 on State side were approved, besides 61 ,50, 760 fully migrated registrants. In respect of status of filing of GSTR-3B, he stated that 45, 09,561 returns had been filed as on 7 Sept, 2017 and presented the data regarding the frequency of said returns filed on daily basis. In respect of GSTR-1 , the CEO stated that 19,83,342 returns had been filed and further presented frequency of GSTR-1 filed on daily basis. He elaborated that the peak time for filing GSTR-3B during a day was 11.00 am to 12.00 pm and 6.00 pm to 8.00 pm. He also stated that on the first day of GSTR-1 filing, 50,000 returns had been filed. He informed that on 5 and 8 September, 2017, there was a problem in accessing GST Portal because one Bank had filed large number of invoices in format different from that prescribed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per their needs. Replying to a query whether Model-2 States could get the data the way Model-1 did, he clarified that Model-2 States could also put data provided they developed their APIs, as done by Model-l States. ln respect of data of GSTR-1, he informed that GSTR 1 API was available in Prod (production environment) from 1 September, 2017. He stated that reconciliation of payment data shared in reports and those shared in email was being done with Karnataka State first, and its findings would be shared with all States. 47.5. The CEO also presented the future plan of releases as under: (i) Migrated taxpayers processing - 8 September 2017; (ii) Filing of ISD Return - GSTR-6 and GSTR-6A- 11 September 2017; Application of Amendment of Core fields- 13 September 2017; (iii) Processing of GSTP Application- 13 September 2017; (iv) Suo-moto Registration with Payment functionality- 13 September 2017; (v) Filing of Monthly Return GSTR-3- 15 September 2017; (vi) Filing of GSTR-1A-15 September 2017; (vii) Processing of TDS/TCS-22 September 2017; (viii) Registration and Processing of NRFT (non-resident foreign taxpayer)-22 September 2017; (ix) Opt out from Composition scheme-22 Septemb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being resolved and by what date. He observed that there should be better communication in regard to all these issues. He emphasised that States should have equal access to information and data on real time basis and they should be able to download information at each level of administration directly without asking for it from anyone. He proposed that a Group of Ministers (GoM) should be set up to interface with GSTN and to provide a real-time resolution mechanism on IT related issues. 47.9. The CEO, GSTN, informed that the State of Karnataka was a Model-l State and the GSTN only needed to provide it information on Registration, Return and Payment. He stated that they faced some technical challenges in exchange of data on registration/return where all of them were not transferred. The Hon'ble Minister from Karnataka observed that the technical problems should be corrected at the earliest. The Hon'ble Minister from Kerala supported the proposal to create GoM. The Hon'ble Deputy Chief Minister of Bihar congratulated GSTN for carrying out one of the world's biggest task and suggested that instead of GoM, there could be a group of officers to interface with GSTN. He i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion on the progress of work by GSTN so far. He stated that there was some anxiety and restlessness regarding what had not been done till now. He observed that much more could be achieved with the help of the States and expressed the need for active participation of Ministers and officers. He stated that States needed data available with the GSTN and the CBEC in order to analyse migration of taxpayers not done, the number of cancellation of registrations, etc. He also emphasised the need to increase the level of co-ordination between the officers of the Centre and the States. He stated that in order not to miss the bus, these steps must be taken in the next month and a half. 47.12. The Secretary observed that the sense of the House was anxiety on IT related issues. The taxpayers were also finding the IT situation to be difficult and it was taking almost two hours to file a return. He stated that firstly one should admit that there was a problem and then give a deadline to fix the problem to make the IT system work seamlessly. He stated that there was a need to complete the first cycle of GSTR-1 , GSTR-2 and GSTR-3 but keeping in view the experience gained in Jul y, 2017, a longer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on'ble Minister from West Bengal also supported the proposal for creation of a GoM and for extending the deadline for filing various returns. He also suggested to have a core group of officers of States to directly interact with GSTN as the officers of States were not able to work to their full capacity due to absence of data. 47.14. The Hon'ble Minister from Madhya Pradesh suggested that to ameliorate the compliance burden on small taxpayers, return filing could be made quarterly for taxpayers with annual turnover below ₹ 1.5 crore. The Secretary observed that this would require change in law. He expressed that this proposal could be explored for taxpayers making only B2C (Business to Consumer) supplies and that the Law Committee could examine it. 47.15. The Hon'ble Chairperson stated that the Council could agree to the suggestion for the new timelines for filing the returns suggested by the Secretary (in paragraph 47.12). He also suggested to constitute a small Group of Ministers consisting of 4-5 Ministers to monitor and resolve the IT challenges faced in implementation of GST. He also expressed that everyone had equal interest in revenue, and therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... boat functioning as a tour operator should be issued as an advisory of GST Council for information. He also suggested to exempt from tax dry fish, aids and implements used by differentially abled persons, plastic scrap, and IGST on gifts sent by expatriates. He suggested to modify the scope of 'puja samagri' and 'hawan samagri ' to also include vibhuti, rosaries, prayer beads, venthingas and kasuroopam (not made of gold) and robes for holy mass so that they also became exempt from tax. He also suggested to reduce tax on boards made from rubber wood waste from 28% to 12% and on ayurvedic medicines from 12% to 5%. He suggested that GSTN should make its System open source compatible. 49.3. The Hon' ble Chief Minister of Nagaland circulated a written speech. He highlighted some issues and challenges faced by the State of Nagai and in the process of implementation of GST relating to migration, new registrations, filing of returns, interest and related penalties and varying rates of tax on lotteries. He also suggested to share comparative tax incidence on goods and services pre-GST, vis-a-vis GST rates. He also suggested greater sensitisation and publicity to expla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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