9911796707
Advanced Search 
TMI BlogMinutes of the 53rd Meeting of the GST Council held on 22nd June, 2024X X X X Extracts X X X X X X X X Extracts X X X X ..... end the CGST Act, 2017 and IGST Act,2017: I Amendment of Section 9 of CGST Act, 2017 regarding non-applicability of Goods and Services Tax on Extra Neutral Alcohol (ENA) used for manufacture of alcoholic liquor for human consumption. II Insertion of Section 11A in CGST Act, for granting power not to recover duties not levied or short-levied as a result of general practice under GST Acts. III Law Amendments in Section 13 and Section 31 of the CGST Act, 2017 regarding time of supply and issuance of invoices in respect of RCM supplies. IV Amendment in Section 16 of IGST Act, 2017 along with corresponding provisions in Section 54 of CGST Act, 2017, to curtail refund of IGST in cases where export duty is payable, and also to rationalize the said provisions. V Amendment in section 70 of the CGST Act, to provide clarity regarding appearance by authorised representative in response to summons. VI Amendment of sub-section (1B) of section 122 of the CGST Act, 2017 with respect to penalty provisions for non-compliant electronic commerce operators. VII Amendment of section 140(7) of CGST Act to provide for transitional credit in respect of invoices pertaining to services provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating to place of supply of goods to unregistered persons. xiv) Providing a mechanism for adjustment of payments made through FORM DRC-03, in respect of a demand against pre- deposit as well as for adjustment of liability in Electronic Liability Register (Amendment in Rule 142 of CGST Rules, 2017 along with clarification circular). xv) Clarification on valuation of supply of import of services by a related person where recipient is eligible to full input tax credit. xvi) Clarification regarding applicability of provisions of Section 16 (4) of CGST Act, 2017, in respect of invoices issued by the recipient under RCM. xvii) Clarification in case of taxability of corporate guarantee provided between related persons after insertion of Rule 28(2) of CGST Rules, 2017. xviii) Clarification on mechanism for providing evidence of compliance of conditions of Section 15(3)(b)(ii) of the CGST Act, 2017 in respect of post-sale discounts by the suppliers. xix) Court matter regarding extending amnesty scheme for filing of appeals in respect of cases under Sections 129 and 130 of CGST Act. xx) Amendment in Rules 110 and 111 of the CGST Rules, 2017 pertaining to filing and processing of appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeals under GST. xl) Change in Payment table of Form GSTR-3B to provide for a separate table for RCM supplies and Section 9(5) supplies. xli) Notifying Annual Return in FORM GSTR-9 for Financial Year 2023-24 and extending exemption from filing FORM GSTR-9 for taxpayers with turnover up to Rs. 2 crores. xlii) Rolling out of Biometric based Aadhar Authentication of registration on Pan-India basis. 4. Recommendations of the Fitment Committee for the consideration of the GST Council a) Recommendations made by the Fitment Committee for making changes in GST rates or for issuing clarifications in relation to goods (17 issues) - Annexure-I b) Issues where no change has been proposed by the Fitment Committee in relation to goods (3 issues) - Annexure-II c) Issue in relation to goods placed before the Council for information (1 issue) Annexure-III d) Recommendations made by the Fitment Committee for making changes in GST rates or for issuing clarifications in relation to services (9 issues) - Annexure-IV e) Issues where no change has been proposed by the Fitment Committee in relation to services (1 issue)- Annexure-V 5 Issues recommended by GSTN a) All India roll-out of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ortant agenda on law amendment proposals recommended by Law Committee to amend the CGST Act and IGST Act would be taken up along with various Fitment Committee recommendations on tax rate changes and clarifications on certain Goods and Services besides some other agenda. 1 .5 The Secretary informed the Council that the agenda for 53rd Council meeting was discussed in detail during the Officers' Meeting a day before which would immensely benefit the Council in its deliberations. 1.6 The Secretary' sought the permission of the Chair to begin deliberations on each agenda item. 2. Agenda item 1: Confirmation of the Minutes of 52nd meeting of the GST Council held on 7th October 2023 2.1 The Secretary' informed the Council that the draft minutes of 52nd meeting of the GST Council were circulated to all States and requests for changes were received from some States which were accepted and incorporated in the draft minutes. The revised minutes were circulated in the agenda. 2.2 The Hon'ble Member from Karnataka stated that their intervention in the 52nd meeting of the GST Council were accurately recorded and there is no discrepancy in the same. He further drew attention of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f GST on Extra Neutral Alcohol (ENA) used for manufacture of alcoholic liquor for human consumption 42 The Pr. Commissioner, GST Policy Wing stated that issue of Taxation of rectified spirit/Extra Neutral Alcohol (ENA) under GST was deliberated by the GST Council in 52nd Meeting and the following recommendations were made by the Council on the taxability of rectified spirit/ Extra Neutral Alcohol (ENA) under GST: i. To place before Supreme Court that GST Council has no intention to levy GST on ENA for manufacture of alcoholic liquors for human consumption. ii. To make suitable amendment in law to exclude ENA (both grain-based and molasses-based) from ambit of GST when supplied for manufacture of alcoholic liquors for human consumption. iii. To reduce GST on Molasses from 28% to 5%. iv. TO notify GST rate of 18% for new tariff item at 8-digit level created for Rectified spirits (ENA) for industrial use (HS 2207 10 12). 4.3 He further informed that as regards recommendation of Council at S. No. ii above, Law Committee in its meeting held on 18.10.2023 recommended amendment in sub-section (1) of Section 9 of the CGST Act, 2017 for not levying GST on Extra Neutral Alcohol use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lead to further litigation and would drain the resources. He also suggested that necessary amendments, as proposed in the agenda, should be made to enable the States to continue collecting VAT in the future. 4.8 The Hon'ble Member from Karnataka welcomed the remarks made by the Revenue Secretary, stating that the decision has been made after several years of discussion. He advised against reconsidering the original decision but mentioned that lingering issues should be addressed by the COO. 4.9 The Hon'ble Members from Meghalaya and Goa also welcomed the remarks made by the Secretary and expressed their agreement with the proposal. 4.10 The Secretary urged the COO members to expedite their study and analysis and provide recommendations for the taxation of ENA under GST for the past period. He also informed that filing the Interlocutory Application in the Supreme Court would help resolve the dispute pending before the Court. 4.11 The Chairperson directed the CoO to thoroughly examine the lingering issues and come back with their findings by the next meeting. Decision; The Council agreed with the said recommendations of the Law Committee regarding the amendment to Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 11A in the CGST Act. 2017, as detailed in the agenda note. 4.16 Further. Law Committee also recommended similar provision to be inserted in other GST Acts as detailed below: * Section 6A in Integrated Goods and Services Tax Act. 2017. In this Act, references to "central tax" in the proposed section will have to be replaced with "integrated tax". * Section 8A in Union Territory Goods and Services Tax Act. 2017. In this Act. References to "central tax" in the proposed section will have to be replaced with "Union territory tax' * Section 8A in Goods and Services Tax (Compensation to States) Act. 2017. In this Act. references to "central tax" in the proposed section will have to be replaced with "cess". * Also, pari-materia amendments need to be made in State GST Acts. 4.17 He further stated that in the Officers' Meeting held on 21st June 2024. it was recommended that sub-section (2) of the proposed section 11A of the CGST Act, which provides that no refund to be given in respect of tax already collected which would not have been collected had the notification issued under sub-section (1) of the proposed sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id sub-section to cover the said scenario. Further, amendment may also be required in the proviso to the said sub-section. The amendment as recommended by the Law Committee are detailed in the agenda note. 4.20 Further, Law Committee also observed that there is a lack of clarity in clause (f) of sub-section (3) of section 31 of the CGST Act, read with rule 47 of CGST Rules, 2017, regarding the time period within which the invoice is required to be issued by the recipient in case of RCM supplies. Therefore, Law Committee recommended that amendment, as detailed in the agenda note, may be made in section 31(3)(f) of the CGST Act. 2017 to specifically provide for the same. 4.21 Further. Law Committee also recommended that such time period for issuance of invoice by the recipient in case of RCM supplies may be prescribed in the CGST Rules, 2017. Accordingly, Law Committee recommended for insertion of Rule 47A in CGST Rules, 2017 providing for the same. Also. Law Committee recommended that the second proviso to Rule 46 of CGST Rules, 2017 may be omitted as the same is not relevant now, as very few supplies have been notified under section 9(4) of CGST Act. 2017. 4.22 Law Committee als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to be applicable on refund of integrated tax in respect of goods exported out of India on payment of integrated tax or on goods supplied to a Special Economic Zone developer or a Special Economic Zone unit for authorized operations. 4.27 The Law Committee felt that since the purpose of imposing export duty is to ensure that domestic availability of goods is met and price of such goods are stable/ retained in domestic economy i.e. curb on inflationary tendency, therefore, it is desirable that refund in respect of goods which are subjected to export duty should be prohibited irrespective of the fact that whether the said goods are exported without payment of taxes or with payment of taxes, and such prohibition should also be applicable if such goods are supplied to a Special Economic Zone developer or a Special Economic Zone unit for authorized operations. 4.28 The Law Committee recommended that second proviso to sub-section (3) of Section 54 of CGST Act may be omitted and sub-section (15) may be inserted in the said section, along with the insertion of sub-section (5) in Section 16 of IGST Act, 2017, as detailed in the agenda note, to provide that no refund of unutilized input t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) of section 16 of IGST Act may specifically provide for claim of refund on payment of IGST in respect of zero- rated supplies in accordance with provisions of section 54 of the Central Goods and Services Tax Act or the rules made thereunder, subject to such conditions, safeguards and procedure as may be prescribed. Decision: The Council agreed with the said recommendations of the Law Committee. Agenda Item 3(i)(V): Amendment in section 70 of the CGST Act, to provide clarity regarding appearance by authorised representative in response to summons. 4.32 The Pr. Commissioner, GST Policy Wing stated that as section 70 of the CGST Act does not mention the words 'authorised representative', doubts have been raised as to whether the summoned person may appear through an authorised representative in response to a summon issued under section 70 of CGST Act. 4.33 Ministry of Law & Justice has opined that to expand the provisions of section 70 of CGST Act to include 'authorised representative' or 'oath' by placing reliance on provisions of section 116 of the CGST Act may tantamount to rewriting the provisions of section 70 and may [not withstand Judicial scrutiny. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been provided in respect of ECOs. who are required to ensure compliance with the conditions of supply of goods by unregistered suppliers and compositions taxpayers through them, as provided vide the said concerned notifications. Such compliance is required from the ECOs who are required to collect tax at source under section 52 of the CGST Act and not from other category of ECOs. who are not required to collect tax at source under section 52 of the CGST Act. 4.39 The Law Committee recommended that the applicability of sub-section (IB) of section 122 of CGST Act may be restricted to ECOs, who are required to collect tax at source under section 52 of CGST Act, by making the amendment in section 122(1B) of CGST Act. As detailed in the agenda note, retrospectively with effect from 01.10.2023 (i.e. date from which section 122(1B) of CGST Act has come into effect). Decision: The Council agreed with the said recommendations of the Law Committee. Agenda Item 3(i)(VII): Amendment in section 140(7) of the CGST Act to provide for transitional credit in respect of invoices pertaining to services provided before appointed date and where invoices were received by ISD before the appointed d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch services are received before, on or after the appointed day. Decision: The Council agreed with the said recommendations of the Law Committee to amend sub-section (7) of section 140 of CGST Act, 2017, retrospectively with effect from 01.07.2017, along with the suggestion made in the Officers' Meeting to modify the draft amendment in the said sub-section, as detailed in Para 4.44. Agenda Item 3(ii): Law Amendment regarding time of filing appeal in GST Appellate Tribunal 4.44 The Pr. Commissioner, GST Policy Wing stated that the President of the Principal Bench of the GST Appellate Tribunal (GSTAT) has entered office on 6th May. 2024. As per the Central Goods and Services Tax (Ninth Removal of Difficulties) Order 2019. the period for filing appeals to GSTAT as per section 112 of CGST Act would start from this date. However, as the appointment of other Judicial and Technical Members of the Principal Bench and various State Benches may take further time, therefore, there was a need to revise the time limit for filing appeals. 4.45 The said issue was deliberated by the Law Committee and the Law Committee recommended amendment in sub-section (i) and sub-section (3) of section 112 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scope of cases that can be heard by the Principal Bench of GST AT only. 4.48 The Pr. Commissioner, GST Policy Wing informed that substantial time-period has passed since the introduction of the GST law, and now it is prudent to re-assess the relevance of the Anti-profiteering provisions which were meant to be transitional provision post the implementation of GST regime in 2017. He further informed that the number of cases coming before Anti profiteering authority are very less in number and therefore, such provisions may no longer be necessary. He added that National Anti- Profiteering Authority (NAA) was constituted to handle the cases relating to anti- profiteering. NAA was operational until November 2022. Vide Notification dated 23rd November. 2022. the Competition Commission of India (CCI) was empowered to examine the anti-profiteering cases w.e.f. 01.12.2022. However. CCI has expressed its inability to handle anti-profiteering cases and has requested that adjudication of anti- profiteering matters may be given to an appropriate GST authority. 4.49 The issue was deliberated by the Law Committee and the Law. Committee recommended amendment in sub-section (2) of section 171 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecifically in GST law and were extremely necessary at that time considering the monumental transformation brought about by the GST regime. He hoped that now, as GST has already stabilized, market forces would take care of the reduction in prices in case of rate reduction. 4.55 The Hon'ble Chairperson slated that the concern of the Hon'ble Member of Kerala is valid and showed her concern that if the benefits of rate reduction do not accrue to the ultimate consumer then through redressal mechanism, justice could be given to the consumer who is not benefited by such rate reduction. She assured that such redressal could be done by the GST Appellate Tribunal and in case it does not happen, the Council can anytime bring the issue for discussion at the forum. 4.56 The Hon'ble Member from Meghalaya supported the viewpoint of Hon'ble Member from Kerala, however, concurred with the recommendation of Law Committee and agreed to implementing the provision recommended by the Law Committee. Decision: The Council agreed with the recommendations of the Law Committee along with the draft Notification. Agenda Item 3 (iv) Amendments in Section 73 and Section 74 of CGST Act, 2017 and insertio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cers for the adjudication process. 4.61 Law Committee further recommended that the limitation period for issuing demand notices, may be made forty two months from the relevant date, and the time limit for issuance of demand orders may be kept at twelve months from the date of issuance of the demand notice, irrespective of whether the charges of fraud, suppression or willful misstatement of facts are invoked or not. It was also recommended that some flexibility of time limit for issuance of demand order may be provided in cases where the proper officer is not able to issue the order within the period specified above due to some situations, and in the deserving cases, the Commissioner, or an officer authorized by the Commissioner senior in rank to the proper officer but not below the rank of Joint Commissioner of Central Tax, may extend the said period further by a maximum of six months, alter recording the reasons in writing. 4.62 He further mentioned that there is a need to have a relook at the time period provided for payment of entire tax demanded along with interest and reduced penalty by the taxpayer for concluding the proceedings under the said sections. He stated that the L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing input tax credit (ITC) on taxes paid in cases involving fraud. 4.67 In response. Pr. Commissioner, GST Policy Wing clarified that penalties differ significantly between fraud and non-fraud cases, with fraud cases attracting a 100% penalty on the tax demanded compared to 10% for non-fraud cases. He stated that the issue is whether recipient should be denied credit altogether where tax has been paid along with interest and higher penalties are being charged from the taxpayer. The Law' Committee deliberated on this and felt that consequent of having a single provision for demands in cases involving fraud and not involving fraud, there may not be a case for blocking input tax credit on the tax paid. 4.68 Responding to the concern raised by the Hon'ble Member from West Bengal, the Secretary staled that denying ITC could lead to double taxation and excessively harsh penalties, including penal interest at 18% per annum. This coupled with a 100% penalty on tax demands, would discourage compliance, if input tax credit is also denied to the recipient. He proposed allowing ITC where taxes have been paid, arguing that penalties arc different between fraud and non-fraud cases to ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GST Rules and FORM GSTR- 7, and issuance of a notification to waive late fee for delayed filing of Nil FORM GSTR-7 return, as detailed in the agenda note. Decision: The Council agreed with the said recommendations of the Law Committee along with the draft Notification. Agenda Item 3(vn: Relaxation in condition of section 16(4) of the CGST Act with respect to cases where returns have been filed after revocation for initial years of implementation of GST. 4.73 The Pr. Commissioner. GST Policy Wing informed that several representations have been received from the trade and industry requesting for relaxation of the timelines stipulated in section 16(4) of CGST Act. 2017 for availment of input tax credit in respect of:- a. initial years of GST i.e. FY 2017-18. FY 2018-19, FY 2019-20 and FY 2020-21; and b. cases where the returns for the period from date of cancellation of registration/effective date of cancellation of registration till the date of revocation of cancellation of registration are filed after revocation of cancellation of registration. 4.74 He informed that in respect of cases at (b) above, the Law Committee observed that as such return for the period from date of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les i.e. if the taxpayer fails to file returns pertaining to the period from date of cancellation of registration/ effective date of cancellation of registration till the date of revocation of cancellation of registration, within 30 days of revocation of cancellation of registration. 4.77 He further stated that as regards the cases referred in (a) of Para 4.74. i.e. the cases where the returns for initial years of GST viz. FY 2017-18, FY 2018-19, FY 2019-20 and FY 2020-21 were filed delayed, by when, the time limit to avail input tax credit under section 16(4) had already expired. The Law Committee deliberated upon the three options by retrospective amendment of section 16(4) of CGST Act, with effect from 01.07.2017, for providing relief to such taxpayers who filed delayed returns during these initial years, by which time limit under section 16(4) had expired: Option 1: The time limit to avail input tax credit under Section 16(4) of CGST Act, through any FORM GSTR 3B filed till 30.11.2021 for the financial years 2017-18,2018-19,2019-20 and 2020-21, may be deemed to be 30.11.2021. Option 2: The time limit to avail input tax credit under Section 16(4) of the CGST Act for the fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om small taxpayers. He further stated that it was also deliberated in the Law Committee and it was observed that recovery would be challenging in these cases. Therefore, it may be desirable to go ahead with option I as suggested in Officers' Meeting, as it would not only provide relief to the taxpayers for the initial years, but will also reduce the work load of the officers by reducing unnecessary litigation, specially when recovery would be difficult. 4.82 The Hon'ble Member from Uttar Pradesh stated that taxpayers are already being received relief of interest and penalty through another amnesty scheme mentioned in the agenda notes. Providing another such amnesty would not be appropriate and could open a Pandora's box. 4.83 The Secretary clarified that several late fee amnesty schemes were notified for the initial years, as per which the waiver/ reduction of late fee for delayed filing of returns was provided after detailed deliberation in the Council. The reduction in late fees was a small amount. Despite this, taxpayers still had to file returns, pay tax and interest @18% per annum. However, no parallel relaxation of conditions under Section 16(4) of the CGST Act was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... na concurred with the proposal. 4.90 The Hon'ble Chairperson subsequently sought the opinion of the Hon'ble Member from Uttar Pradesh, who then agreed with the perspectives shared by other members and endorsed the proposal as given in the concerned Agenda notes, along with view taken in the Officers' meeting regarding going ahead with Option 1. Decision: The Council agreed with the recommendations of the Law Committee, along with the suggestion made in the Officers' Meeting for option 1, as detailed in Para 4.78, in respect of cases at para 4.74 (a). Agenda Item 3(vii): Insertion of Section 128A in CGST Act, to provide for conditional waiver of interest or penalty or both relating to demands raised under Section 73. for FY 2017-18 to FY 2019-20. 4.91 The Pr. Commissioner. GST Policy Wing stated that a large number of representations have been received seeking relief from interest and penalties, considering the challenges faced by taxpayers during the initial years of implementation of GST. and to encourage compliance and support businesses to move forward. 4.92 He stated that Law Committee deliberated on this issue and recommended providing a waiver of interest and penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ggested including demands pertaining to FY 2020-21 in the waiver, considering the impact of the pandemic. 4.96 The Secretary responded that the demands for FY 2020-21 are not yet finalized, making it challenging to assess the potential benefits of extending the Amnesty to that period. He proposed waiting until the finalization of payments and demands for FY 2020- 21. If necessary, the matter can be reconsidered at later stage. 4.97 The Hon'ble Member from Tamil Nadu supported the proposal, highlighting that it encourages taxpayers to settle their dues, thus enabling the government to realize the full tax amount. He further suggested that enhancing the IT system to distinguish the demand raised under section 73 of the CGST Act, 2017, and the payment made towards it in the demand collection register to study the revenue implications as this data is crucial for accurately assessing revenue implications. Currently, the amount paid through FORM GST DRC-03 towards the demands raised is not readily available in MIS reports. 4.98 The Secretary requested the State of Tamil Nadu to submit a formal proposal. Upon consideration, necessary amendments in the forms may be examined by the Law C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... favor of the taxpayer. 4.104 The Pr. Commissioner, GST Policy Wing clarified that the proposed monetary limit is only for the department to file appeal and not taxpayers. He further clarified that proposed Circular to be issued provides for exclusion of cases from the monetary limit where Acts, Rules. Circulars or Notifications are challenged or when a recurring issue involves interpretation. Additionally, the Board (or the Commissioner, in case of States) can order an appeal in the interest of revenue, regardless of the monetary limit. 4.105 The Hon'ble Member from Tamil Nadu agreed in principle for setting monetary limit for filing appeals but raised the concern that the proposed monetary limit is on higher side which may lead to benefit for the taxpayers. He also informed that Tamil Nadu has a separate litigation policy under the existing laws with monetary limits set at Rs. 1.00.000 for the Tribunal Rs. 5,00.000 for the High Court and Rs. 20,00,000 for the Supreme Court. However, in the proposed amendment. the limit is proposed as Rs. 20.00.000 even for the Tribunal. The Hon'ble Member further suggested to set the limit at Rs. 5.00,000 for the Tribunal Rs. 10.00.000 for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... item regarding the introduction of a new optional facility by way of FORM GSTR-1A which would allow a taxpayer to add any particulars of outwards supply of the current tax period missed out in reporting in FORM GSTR-1 of the current tax period or to amend any particulars already declared in FORM GSTR-1 of the current tax period, before filing of the return in FORM GSTR-3B of the current tax period. 4.114 He informed that currently, such amendment can be carried out only in a FORM GSTR-1 of a subsequent tax period. He added that such functionality will facilitate the taxpayers to make corrections in the liability reported in FORM GSTR-1, before filing of the return in FORM GSTR-3B, so that the correct liability is auto-populated in FORM GSTR-3B. This will prevent flagging of the difference in liability in FORM GSTR-1 and FORM GSTR-3B by the system. 4.115 He stated that introduction of new optional FORM GSTR-1A would streamline the filing of FORM GSTR-3B by auto-populating tax liability from FORM GSTR-1 and would facilitate locking the liability in FORM GSTR-3B from the liability declared in FORM GSTR-1 (along with amendments done through FORM GSTR-1A) in future, to minimize manual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such amounts for delayed filing of return appears unfair and amounts to levying interest on funds already lying with the Government. 4.120 Law Committee observed that as the amount credited in Electronic Cash Ledger is already available with the Government, it would be desirable to modify the interest provisions to provide that interest is not payable in respect of the amount available in the Electronic Cash Ledger of the taxpayer on the due date of filing return, where GSTR 3B return for a tax period is filed beyond the due date. Accordingly, Law Committee recommended that rule 88B of CGST Rules, 2017, which provides for the manner for calculation of interest on delayed payment of tax, may be amended by inserting a proviso to the sub-rule (1) of rule 88B of CGST Rules, 2017 to provide that in cases of delayed filing of return, any amount which is already available in the Electronic Cash Ledger on the due date of filing of the said return and which is subsequently debited from the said ledger along with the return, shall not be included while calculating the interest under section 50 of the CGST Act. Decision: The Council agreed with the recommendations of the Law Committee and p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the goods mentioned in the Schedule to the said notification, including pan masala, chewing tobacco, gutkha, etc. with effect from 15.05.2024. The said special procedure requires the taxpayer to file two FORMS, viz. one, for registration and disposal of the machines i.e. FORM SRM-I and the second, for filing monthly details of inputs and outputs i.e. FORM SRM-II. Representations have been received from trade and industry requesting for clarification about various issues pertaining to the said special procedure. 4.126 He further stated that the Law Committee felt that certain issues raised by industry in representations need to be clarified through a Circular. The Law Committee recommended issuance of a Circular for inter alia clarifying the following: a. If the make, model number and machine number is not available for a particular machine, then any numeric number can be declared for the said machine as machine number and make will be the year of purchase of the machine. b. In cases where the electricity consumption rating of the packing machine is not available in specifications of the machine, then the manufacturer may get such electricity consumption per hour of the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f IGST Act, shall be the address of delivery of goods recorded on the invoice. Besides, where the billing address and delivery address are different in cases of supply of goods to an unregistered person, the supplier may record the delivery address as the address of the recipient on the invoice for the purpose of determination of place of supply of the said supply of goods. 4.130 The Pr. Commissioner, GST Policy Wing, presented the draft circular, as recommended by the Law Committee, for the approval of the GST Council. Decision: The Council agreed with the recommendations of the Law Committee for issuance of the proposed circular clarifying the provisions of clause (ca) of Section 10(1) of the Integrated Goods and Service Tax Act, 2017 relating to the place of supply of goods to unregistered persons. Agenda Item 3(xiv): Providing a mechanism for adjustment of payments made through FORM DRC-03, in respect of a demand against pre-deposit as well as for adjustment of liability in Electronic Liability Register (Amendment in Rule 142 of CGST Rules, 2017 along with clarification circular). 4.131 The Principal Commissioner, GST Policy Wing mentioned that when a taxpayer makes a pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C-04, along with insertion of FORM GST DRC-03A, and also issuance of the proposed draft Circular. Agenda Item 3(xv): Clarification on valuation of supply of import of services by a related person where recipient is eligible to full input tax credit 4.134 The Pr. Commissioner, GST Policy Wing informed that representations have been received from the trade stating that demands are being raised by field formations on taxability of certain activities undertaken by the related person based outside India, without any consideration, in the hand of the related person in India as import of services based on the deeming fiction in S. No. 4 of Schedule 1 of CGST Act, 2017. It has ben requested that the same treatment, which is being given to domestic related parties as per clarification provided by Circular No. 199/11/2023-GST dated 17.07.2023, may also be provided in all such cases where a foreign entity is providing service to its related party located in India and where full ITC is available to the recipient located in India. 4.135 He informed that the matter was deliberated by the Law Committee and the Law Committee recommended that it may be clarified through a Circular that in case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 31(3)(f) of CGST Act, subject to payment of tax on the said supply by the recipient and fulfilment of other conditions and restrictions of section 16 and 17 of CGST Act. In case, the recipient issues the invoice after the time of supply of the said supply and pays tax accordingly, he will be required to pay interest on such delayed payment of tax. Further, in cases of such delayed issuance of invoice by the recipient, he may also be liable to penal action under the provisions of Section 122 of the CGST Act. Decision: The Council agreed with the said recommendations of the Law Committee along with the draft circular. Agenda Item 3(xvii): Clarification in case of taxability of corporate guarantee provided between related persons after insertion of Rule 28(2) of CGST Rules, 2017 4.138 The Pr. Commissioner, GST Policy Wing informed that on the recommendations of 52nd GST Council Meeting, sub-rule (2) was inserted in rule 28 of CGST Rules, 2017 vide Notification No. 52/2023-Central Tax dated 26.10.2023 to provide for a specific clause for valuation of supply of services of providing corporate guarantee to any banking company or financial institution by an entity on behalf of a r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icers to verify such reversal of input tax credit by the recipient. In absence of such functionality or any other mechanism to verify such reversal of input tax credit by the recipient, demands are being raised by the field formations on the suppliers alleging that they have failed to produce evidence of compliance of Section 15(3)(b)(ii) of CGST Act. Representations have been received from trade and industry to provide for a suitable mechanism for providing evidence of the compliance of he conditions of Section 15(3)(b)(ii) of CGST Act. 4.143 He added that in view of the above, there is a requirement to develop a functionality on the common portal by GSTN for enabling verification of such reversal of ITC by the recipients. One of the mechanism can be provided for acceptance/ rejection of such credit notes by the recipients on the portal. The tax liability of the supplier may be reduced only in those cases, where such credit notes have been accepted by the recipients, and in such cases, input tax credit of the recipient may be reduced/ reversed in hard lock manner on the portal in FORM GSTR-3B return. Alternate functionality/ mechanism could also be explored by the GSTN on the por ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meeting recommended a one-time relief to taxpayers for filing of appeals against demand orders passed till specified period i.e., orders passed up to 31.3.2023, subject to the condition of payment of an amount of pre-deposit of 12.5% of the tax under dispute by the said person. This scheme was implemented through Notification No. 53/2023-CT dated 02.11.2023, which allowed filing of appeals until 31.01.2024. for those taxpayers who could not file appeals against demand order issued under section 73 and 74 of CGST Act upto 31.03.2023 in due time period. However, Hon'ble High Court, Allahabad in the case of M/s Risansi Industries Ltd. (No. 275 of 2021) has directed the Government to consider inclusion of section 129 and section 130 of CGST Act in the said notification. 4.147 He informed that Law Committee deliberated on the issue and was of the view that said amnesty scheme was considered by the Council only in respect of orders passed under Sections 73 and 74 of the CGST Act, on the basis that a number of such orders under Sections 73 and 74 were issued online on the common portal, without any physical serving to the taxpayers and in a large number of such cases, the common port ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endment in header of FORM GST APL-02 is also required to be made. 4.150 He further informed that during the Officers' meeting held on 21.06.2024, a suggestion was made that in cases where appeals are filed manually on the special orders of Registrar of Tribunal, such appeals should be uploaded on the system within a reasonable time period. For such cases, Circular/ rule may also be required in order to specify a time limit to upload the manually filed appeals so as to make entire process online. It was suggested that Law Committee may separately examine this matter. Decision: The Council agreed with the recommendations of the Law Committee, along with proposed amendment in Rule 110 and Rule 111 of CGST Rules, 2017, amendment in header of FORM GST APL-02 and insertion of new Rule 113A and Form GST APL- 05/07W, along with the suggestions made in the Officers' meeting. Agenda Item 3(xxi): Clarification on taxability of re-imbursement of securities/shares as ESOP/ESPP/RSU provided by a company to its employees 4.151 The Pr. Commissioner, GST Policy Wing informed that trade and industry have represented to clarify as to whether any taxable supply is involved in transfer of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The GST shall be payable by the domestic subsidiary company on reverse charge basis in such a case on the said import of services. The Law Committee recommended to clarify the same through a Circular. Decision: The Council agreed with the recommendations of the Law Committee along with draft Circular. Agenda Item 3 (xxii): Clarification on requirement of reversal of ITC in respect of balance of taxable premium in cases of Life Insurance services after applying valuation rule. 4.154 The Pr. Commissioner, GST Policy Wing informed that representation has been received from Life Insurance Corporation of India seeking clarity as to whether the portion of the premium charged by the insurance company from the insured person/ policy holder, which is not included in the taxable value as per sub-rule (4) of Rule 32 of CGST Rules, 2017, can be treated as an exempt supply/ non-taxable supply and whether the input tax credit availed in respect of the said amount is required to be reversed or not. 4.155 He mentioned that the portion of premium, which is not includible in taxable value as per provisions of Rule 32(4) of CGST Rules, 2017, is neither nil rated, nor wholly exempted from tax u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and repair services during warranty period. However, subsequent to the issuance of the said Circular, queries have been raised by trade and Industry on some other issues. 4.160 The said issues were deliberated by the Law Committee and the Law Committee recommended to clarify through a Circular that: a. Clarification in Circular No. 195/07/2023-GST regarding the liability to pay GST and liability to reverse ITC also applies in cases involving warranty replacement of 'entire goods' (i.e. where goods as such are replaced). b. In cases where the distributor replaces the goods or its parts to the customer under warranty by using his stock and then raises a requisition to the manufacturer for the goods or the parts, which are then provided by the manufacturer to the distributor, without separately charging any consideration, no GST is payable on such replenishment of goods or the parts and no reversal of ITC is required to be made by the manufacturer. c. If the customer enters into an agreement of extended warranty with the supplier of the goods at the time of original supply, then the consideration for such extended warranty becomes part of the value of the composite sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of transaction. Thus, in both cashless mode as well as reimbursement mode, insurance company is the "recipient" of the services of vehicle repair provided by the garage, to the extent of approved repair liability. However, there may be cases, where the invoice also includes an amount in excess of the approved repair liability, wherein the insurance company only pays or reimburses the approved repair liability to the garage after considering the standard deductions viz. the compulsory deductibles to be borne by the insured, depreciation, improvements outside the coverage, value of salvage of the damaged parts of the motor vehicles, etc. The remaining amount is to be paid by the insured to the garage. In such cases, the input tax credit may be available to the insurance company only to the extent of payment made by them to the garage directly, or through reimbursement to the insured, and not on the full invoice value. Also, in cases, where the invoice for the repair of the vehicle is not issued in name of the insurance company, the condition of clause (a) and (aa) of section 16(2) of CGST Act, 2017 may not be satisfied and accordingly, input tax credit may not be available ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enda Item 3(xxvii): - Clarification on availability of input tax credit on ducts and manholes used in network of optical fibre cables (OFCs). 4.167 The Pr. Commissioner, GST Policy Wing stated that input tax credit (ITC) is being denied by some field formations on ducts and manholes used in network of optical fiber cables (OFCS) on the ground that the same is blocked under provisions of clause (c) and (d) of sub-section (5) of section 17 of the CGST Act, 2017, read with the Explanation after clause (d) of sub-section (5) of section 17 of CGST Act, being in nature of immovable property (other than Plant and Machinery). Representations have been received seeking clarification on the issue. 4.168 He further stated that if the goods or services or both are used for construction of immovable property, input tax credit is not restricted, if the said immovable property is in nature of plant and machinery as per Explanation at the end of section 17 of CGST Act. 4.169 The Law Committee deliberated on the issue and observed that the ducts and manholes are fundamental components of the Optical Fiber Cable (OFC) network, which is crucial for providing telecommunication services. The OFC ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred above. As per section 13(8) of IGST Act, 2017, the place of supply of the services provided by banks or financial institutions etc. to its account holders in relation to account bearing interest to the depositor, would be the location of the bank. In all other services provided by banks to its customers (other than holders of interest-bearing accounts), place of supply would be governed by the default provision under section 13(2) of IGST Act, i.e. the location of recipient. 4.172 He added that the matter was deliberated by the Law Committee. The Law Committee observed that the custodial services were not considered to be covered under the services provided by bank to account holders, as per the clarification provided through Question 5.9.4 of Education Guide under the Service Tax Law. As the provisions of section 13(8)(a) of the IGST Act are similar to the provisions of Rule 9(a) of the Service Tax Place of Provision of Supply Rules, 2012, the clarification given in the Education Guide under Service Tax regime is equally applicable under GST Regime. Law Committee, therefore observed that the custodial services being provided by the banks/financial institutions to the FPI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ichever is earlier, as per the terms of the contract. 4.174 Law Committee in its meeting dated 09.02.2024 deliberated on the issue. The Law Committee observed that under the HAM contract, the contract is a single contract for construction as well as operation and maintenance of the highway, and the payment terms are so staggered that the concessionaire is held accountable for the repair and maintenance of the highway as well. The concessionaire is bound contractually to complete not only the construction of the highway but also to operate and maintain the same. The said services are in nature of continuous supply of services. The tax liability on the construction portion under the HAM contract would arise at the time of issuance of invoice, or receipt of payments, whichever is earlier, if the invoice is issued on or before the specified date or the date of completion of the event specified in the contract, as applicable. If invoices are not issued on or before the specified date or the date of completion of the event specified in the contract, tax liability would arise on the date of provision of the said service (i.e. due date of payment as per the contract), or the date of recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the Law Committee to amend the rules along with the proposed Forms and Circulars. Agenda Item 3(xxxi): Implementation of functionality for online filing of refund application by Canteen Stores Department (CSD) in GST-RFD 10A. 4.178 The Pr. Commissioner, GST Policy Wing stated that vide notifications No. 6/2017- Central Tax (Rate), No. 6/2017-Integrated Tax (Rate) and No. 6/2017-Union territory Tax (Rate), all dated 28th June 2017, the Central Government has specified that the Canteen Stores Department ("CSD" for short), under the Ministry of Defence, as a person who shall be entitled to claim a refund of fifty per cent. of the applicable Central tax, Integrated tax and Union territory tax paid by the CSD on all inward supplies of goods received by the CSD for the purposes of subsequent supply of such goods to the Unit Run Canteens of the CSD or to the authorized customers of the CSD. Identical notifications have been issued by the State Governments allowing refund of fifty per cent of the State tax paid by the CSD on the inward supply of goods received by it and supplied subsequently. Consequent to the same, Circular No. 60/34/2018-GST dated 4th September 2018 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upply of goods to DTA by the SEZ Units/ Developer, in addition to payment of IGST as duties of Customs under sub-section (7) of Section 3 of Customs Tariff Act, 1975 (CTA, 1975) read with proviso to sub-section (1) of section 5 of the IGST Act, 2017 and section 30 of SEZ Act, 2005, payment of IGST is also required to be made simultaneously as inter-state supplies under sub-section (1) of Section 5 of the IGST Act, 2017 read with section 7(5)(b) of IGST Act. 4.181. The Principal Commissioner, GST Policy Wing mentioned that the Law Committee deliberated on these issues and proposed as follows: a. IGST cannot be levied twice on the same supply of goods from SEZ units to DTA and thus, IGST is payable on such supply only once as duties of customs as per Section 30 of SEZ Act read with sub-section (7) of section 3 of CTA, 1975 and proviso to Section 5(1) of IGST Act; b. The amount of IGST deposited by NSEZ units in their Electronic Cash Ledger through FORM GST PMT-06 challan during the period August 2017 to November 2018 in respect of the DTA clearances may be treated as payment of IGST as part of Customs duty under the provisions of sub-section (7) of section 3 of Customs Tariff Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge GST liability on reverse charge basis. The telecom operators are discharging their GST liability on the said supply at the time of making payment, either upfront fee or annual instalments with interest as specified in the Frequency Assignment Letter, to the Government. However, some of the tax authorities have issued letters to the telecom operators for payment of GST on the entire bid amount payable, irrespective of the payment option adopted by the operators and irrespective of the fact that in case of option for deferred payment scheme exercised by the telecom operator, payment may still be required to be made as per the date of the payment for instalments mentioned in Frequency Assignment Letter/ demand note. 4.183 The Law Committee deliberated on the issue and held that in case where full upfront payment is made by the telecom operator, GST would be payable when the payment of the said upfront amount is made or is due, whichever is earlier, whereas in case where deferred payment is made by the telecom operator, GST would be payable as and when such deferred payments are due or made, whichever is earlier. The Law Committee recommended that the issue of time of supply in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttee recommended to amend rule 96A of CGST Rules, as detailed in the agenda note. Decision: The Council agreed with the recommendations of the Law Committee to amend the said rule. Agenda Item 3(xxxvi): Change in due date for filing of return in FORM GSTR-4 for composition taxpayers from 30th April to 30th June. 4.189 The Pr. Commissioner, GST Policy Wing stated that representations have been received from trade and industry to extend the time limit to furnish FORM GSTR-4, i.e. the return required to be filed by a registered person who opts to pay tax under composition levy. 4.190 The matter was deliberated by the Law Committee and the Law Committee recommended that the due date of filing of FORM GSTR-4 be extended from 30th April of the following year, at present, to 30th June in respect of FORM GSTR-4 to be filed for the financial year 2024- 25 onwards. Accordingly, the required amendment were recommended by the Law Committee in clause (ii) of sub-rule (1) of Rule 62 of CGST Rules and Instructions of the FORM GSTR-4 for returns for financial year 2024-25 onwards, as detailed in the agenda note. Decision: The Council agreed with the recommendations of the Law Committee to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B2C supplies, invoice-wise details are required to be furnished in Table 5 in respect of inter-State supplies with invoice value more than Rs. 2.5 Lakh only, whereas for other B2C supplies, only consolidated details are required to be furnished in Table 7 thereof. It has been represented by some tax administrations that this threshold of invoice value for declaration of invoice-wise details of intra-State supplies may be reduced from Rs. 2.5 Lakh now to facilitate availability of more information to the tax administrations for verification of correct reporting of B2C supplies by the suppliers, thus improving tax compliance, as well as to enable the consumption states to cross-verify the IGST settlement made to them. 4.197 The matter was deliberated by the Law Committee. It was observed that as per rule 46(e) of CGST Rules, a tax invoice of taxable value of Rs. 50,000/- or more, issued to an unregistered person, is required to capture the address of the recipient. Accordingly, the feasibility of reporting for invoices of Rs. 50,000 or more was discussed but it was noted that there would be compliance burden on reducing the threshold to Rs. 50,000 and also there may be increased lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttee which recommended to keep the percentage of pre-deposit for filing appeal with appellate authority at 10% of the tax in dispute, while reducing the maximum amount of pre-deposit to Rs.20 crores each in CGST and SGST and Rs 40 crore in IGST), whereas the amount of pre-deposit to be paid for filing appeals in Appellate Tribunal was recommended to be reduced to 10% of the tax in dispute (subject to a maximum of Rs. 20 crores each in CGST and SGST and Rs 40 crore for IGST). The Law Committee recommended amendment in Section 107 of CGST Act, 2017, Section 112 of CGST Act, 2017 and Section 20 of IGST Act, 2017 for this purpose, along with similar amendment in SGST Act. 4.201 He further added that the Law Committee also recommended consequential amendments in FORM GST APL-01 and FORM GST APL -05. Decision: The Council agreed with the recommendations of the Law Committee to amend the said Acts and the related Forms. Agenda Item 3 (xl): Change in Payment table of Form GSTR-3B to provide for a separate table for RCM supplies and Section 9(5) supplies-reg. 4.202 The Pr. Commissioner, GST Policy Wing informed that presently, even if the taxpayer has a net negative liability in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to-population of the same on the basis of FORM GSTR-2B rather than FORM GSTR-2A. The Principal Commissioner, GST Policy Wing further informed that changes are required in FORM GSTR-9 in view of insertion of Table 14 & 15 and amendment thereof in FORM GSTR-1 vide Notification No. 26/2022 - Central Tax dated 26.12.2022 for reporting supplies made through e-commerce platforms including supplies taxable under section 9(5). 4.207 The Law Committee recommended the following in respect of Annual Return forms for FY 2023-24: (i) The filing of annual return (in FORM GSTR-9/9A) for the FY 2023-24 may be exempted for taxpayers having aggregate annual turnover upto two crore rupees, as per the relaxation extended in previous FYs. (ii) The relaxations provided in FY 2022-23 in respect of various tables of FORM GSTR-9 and FORM GSTR-9C, may be continued for FY 2023-24. (iii) Table 8A of FORM GSTR-9 may be amended as "ITC as per GSTR-2B (table 3 thereof)" along with corresponding entry in para 5 of the Instructions in the said FORM to provide for auto-population of the table 8A on the basis of FORM GSTR-2B rather than FORM GSTR-2A. (iv) Requisite changes in FORM GSTR-9 may be ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions. Law Committee observed that based on the feedback received in the pilot, there may be a requirement to call the applicants, who have not opted for Aadhaar authentication, also to GST Seva Kendras for photo capturing and document verification. It was therefore recommended that sub-rule (4A) of rule 8 of CGST Rules, 2017 may be suitably amended by inserting a second proviso to the said sub-rule so as to make it mandatory for those applicants, who do not opt for Aadhaar authentication, also to visit GST Seva Kendras for photo capturing and original document verification. It was also recommended that in cases where the applicant fails to come for biometric authentication, or where biometric authentication fails, no ARN should be generated on the portal. 4.210 The Law Committee also recommended that the notifications (Notification no. 27/2022- Central Tax dated 26.12.2022 as amended by Notification no.31/2023 dated 31.07.2023 and Notification no. 54/2023 dated 17.11.2023) issued by the Central Government under sub-rule (4B) of rule 8 of CGST, for all States/UTS other than the States of Gujarat, Puducherry and Andhra Pradesh Rules, may be rescinded for enabling All India roll ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gujarat's experience indicates a reduction in discrepancies between Central and State processes. Additionally, findings from Andhra Pradesh corroborated by Gujarat show a significant decrease in fraudulent registration claims. 4.218 The Secretary clarified that not everyone will be required to visit biometric registration stations. Only those identified as high-risk, based on risk parameters and data analysis, will be required to undergo this process. Decision- The Council agreed with the said recommendations of the Law Committee along with amendment in the said rules. 4.219 It was also discussed that as per the recommendations made by the Council, certain amendments have been brought in CGST Act vide Sections 11, 12 and 13 of the Finance Act, 2024. While Section 11 and 12 of the Finance Act, 2024 are for making ISD mechanism mandatory for distribution of the input tax credit (ITC) for common services, section 13 is regarding the penal provisions for manufacturers of specified evasion prone commodities. These sections of the Finance Act, 2024 need to be notified, along with corresponding rules prescribing the mechanism for distribution of common ITC by ISDS. It has been rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Compensation Cess on goods imported in SEZ by a SEZ unit or SEZ developer for authorised operations. JS, TRU stated that prior to introduction of GST, all imports by SEZ units or a SEZ developer for authorized operations were exempt from Basic Customs duty (BCD), CVD in lieu of Central Excise duty and at the time of roll out of GST, exemption with respect to IGST leviable on the such imports were continued vide Notification No. 64/2017-Customs based on the recommendation of GST Council. However, no such notification was issued for continuation of exemption from Compensation Cess leviable on such imports. She stated that all pre-GST exemptions were continued at the time of roll out of GST and therefore, the intent appears to be to continue exemption from Compensation Cess on import of goods to SEZ. The Fitment Committee has therefore, recommended to provide exemption from Compensation Cess leviable on the imports in SEZ by SEZ Unit/developer for authorised operations prospectively from the date of issue of Notification and also provide retrospective exemption for the period from 1st July, 2017 till the date of such notification. Decision: The Council approved the recommendations o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imports of parts/components mentioned in specified five manuals irrespective of their classification subject to conditions similar to Customs Notification No 50/2017-Customs dated 30.06.2017. Decision: The Council approved the recommendations of the Fitment Committee to provide a uniform rate of 5% IGST on import of parts/components mentioned in specified five manuals of aircraft maintenance irrespective of their classification subject to conditions similar to Customs Notification No 50/2017-Customs dated 30.06.2017. 5.7 Joint Secretary, TRU presented the agenda item pertaining to GST exemption for Scientific Equipment required for Research Moored Array for African-Asian-Australian Monsoon Analysis and Prediction (RAMA) programme. She stated that the Ministry of Earth Sciences has requested to exempt IGST on research instruments/buoys imported under RAMA programme which is an inter-governmental technical cooperation programme between India & USA which is valid till July 2026. Earlier, imports under the RAMA programme were availing benefit of concessional IGST rate under Notification No. 47/2017-Integrated Tax (Rate) dated 14.11.2017 and Notification No. 51/96-Customs. On the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d attracted a concessional GST rate of 12%. She stated that the GST Council in its 45th meeting held in September, 2021 had recommended that all such items falling under HSN 4819, irrespective of whether they were corrugated or non- corrugated, shall attract a uniform GST rate of 18%. In the 49th and 50th Council Meetings, Himachal Pradesh and Jammu & Kashmir had requested to re-examine the matter and to provide concessional rate for cartons used for packing apples and other similar horticulture products. She stated that the matter was re-examined by the Fitment Committee and the Fitment Committee has recommended a uniform GST rate of 12% on cartons, boxes and cases of corrugated paper or paper-board as well as of non-corrugated paper or paper-board falling under heading 4819 10 and 4819 20 respectively. 5.10 The Hon'ble Member from Himachal Pradesh expressed his gratitude to the Hon'ble Chairperson for suggesting re-examination of the issue relating to reduction of GST rate on cartons used for packaging of apples. He further stated that the reduction of GST rates would help a large number of farmers and that the benefit is not limited to apple farmers. He stated the unifo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been specifically included in CGST notification at a later stage, which has created ambiguity for entries wherein parts are not explicitly included. The matter was examined by the Fitment Committee and the Fitment Committee has recommended to amend the entry at Sl. No.199 of Schedule II (@ 12%) to Notification No. 1/2017- CT (Rate) to explicitly mention *parts thereof and regularise the past practice on 'as is where is' basis. Decision: The Council approved the recommendation of the Fitment Committee to amend the entry at Sl. No.199 of Schedule II to Notification No. 1/2017- CT (Rate) to explicitly mention 'parts thereof and regularise the past practice on 'as is where is' basis for parts of poultry machinery. 5.14 Joint Secretary, TRU presented the agenda item pertaining to pulses and cereals supplied to or by any agency engaged by Government prior to 17.07.2022. She stated that for the period from 01.07.2017 up to 17.07.2022, supplies of any goods falling under heading 0713 (pulses) or chapter 10 (cereals) attracted GST at the rate of 5%, when such goods were put up in a unit container and bore a registered brand name. She stated that the issue has arisen s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lid, liquid or other source of energy including solar energy and therefore, in light of the description, solar cookers are classifiable under CTH 7321 attracting 18% GST. However, solar cookers with dual energy source i.e solar energy & electricity are classifiable under heading 8516 and attract GST rate of 12%. She stated that to promote renewable energy devices and also to avoid litigation, the Fitment Committee has recommended to provide a uniform GST rate of 12% on all kind of solar cookers and to clarify that solar cookers that work on dual energy sources (solar energy & grid electricity) are classifiable under HS 8516 and already attract GST @ 12%. Decision: The Council approved the recommendation of the Fitment Committee to provide a uniform GST rate of 12% on all kind of solar cookers and to clarify that solar cookers that work on dual energy sources (solar energy & grid electricity) are classifiable under HS 8516 and attract GST @ 12%. 5.16 Joint Secretary. TRU presented the agenda item relating to reduction in GST rate of Steel/Aluminium Milk Cans used in milk dairies. She stated that from the WCO Explanatory Notes for the relevant chapters, it is seen that milk cans f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the previous GST Council meetings, the Fitment Committee has recommended to refer the issue to the GoM on Rate Rationalization to take a holistic view. Decision: The Council approved the recommendation of the Fitment Committee to refer the issue of reduction in rate of GST on fertilizers to the GoM on Rate Rationalization. 5.19 Joint Secretary, TRU presented the agenda item pertaining to lowering of GST rate on raw materials of fertilisers like Sulphuric Acid and Ammonia in view of the recommendations made by Standing Committee on Chemicals & Fertilizers in its 43rd Report and 52nd Report. She stated that the matter was examined by the Fitment Committee and that the Fitment Committee has recommended to refer the issue to the GoM on Rate Rationalization to take a holistic view. Decision: The Council approved the recommendation of the Fitment Committee to refer the issue of lowering the GST rate on fertilizer raw materials like sulphuric acid and ammonia to the GoM on Rate Rationalization. 5.20 Joint Secretary, TRU presented the agenda item relating to reduction of GST rate on micronutrients in view of the recommendations made by Standing Committee on Chemicals & Fertiliz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obacco products back to Fitment Committee for examination. 5.24 Joint Secretary, TRU presented the agenda item relating to clarification on GST rate applicable on agricultural farm produce in packages of more than 25 kg or 25 litres. The Legal Metrology (Packaged Commodities) Rules was amended with effect from 01.01.2018 whereby the provisions applicable to packages intended for retail sale does not apply to agricultural farm produce sold in bags upto and including 50kg. The FAQ issued on 17th July, 2022 to clarify the scope of pre-packaged and labelled for the purposes of GST levy was based on the Legal Metrology (Packaged Commodities) Rules and therefore, it provided that packages of specified food items like cereals, pulses, flour etc. would not fall in the category of pre- packaged and labelled commodity for the purposes of GST if the quantity exceeded 25kg /25 litre and would, therefore, not attract GST. The Fitment Committee observed that the intention of the GST Council was always to tax agricultural farm produce less than or equal to 25 kg. In view of the above, in order to align the GST rate notification with the intention - of the GST Council, the Fitment Committee reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion: The Council approved the recommendation of the Fitment Committee to maintain status quo. 5.27 Joint Secretary, TRU presented the agenda item pertaining to request to increase rate of GST on orthopaedic implants falling under HS 9021 from 5% to 18% on the ground that the inverted duty structure leads to blocking of working capital. She stated that inputs were sought from Ministry of Social Justice & Empowerment with respect to the request for increase in GST rates, which has replied that increase in GST rates would increase the cost of these goods and not be in the interest of persons with disabilities (Divyangjan). Fitment Committee has recommended to maintain the status quo considering inputs from Ministry of Social Justice. Decision: The Council approved the recommendation of the Fitment Committee for maintaining status quo on rate of GST on orthopaedic implants. 5.28 Joint Secretary, TRU stated that the next agenda item is for the information of the Council. She stated that in the 52nd meeting of the GST Council, a general approval was obtained from the Council to update the list of banks/entities eligible for IGST exemption on import of Gold/Silver/Platinum as and whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chedule III of the CGST Act, 2017 and to regularise the past cases on 'as is where is' basis by way of issuance of a Circular. Decision: The Council approved the recommendation of the Fitment Committee to consider supply of services wherein co-insurance premium is apportioned by the lead insurer to co-insurer(s) for the supply of the insurance services made jointly by the lead insurer and co-insurer (s) to the insured in the co-insurance agreement as no supply under Schedule III of the CGST Act, 2017 and to regularize the past cases on 'as is where is basis' by way of issuance of a Circular. 5.31 Joint Secretary, TRU presented the agenda item pertaining to a request to clarify the GST taxability on re-insurance commission. She stated that reinsurance commission is an amount deducted by an insurance company from the reinsurance premium payable to a reinsurer to cover administrative costs, underwriting and business acquisition expenses. The issue was examined by the Fitment Committee and it was observed that the arrangement between the insurance companies and the reinsurer in this transaction is only sharing of expenses. In view of these deliberations, the Fitment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .f. 01.07.2017. She informed that the issue was discussed in the Officers' meeting and there was a request from State of Maharashtra that similar proposals, if it arises in the context of states/UTS should also be considered. She stated that the same has been noted and similarly placed request received from states/UTS will be examined and considered on case to case basis. 5.34 The Hon'ble Member from Tamil Nadu stated that SPV is a separate legal entity and therefore, any transaction between the Ministry of Railways or within SPVS is taxable. He further stated that it was discussed in the 48th GST Council meeting that the transaction between two such organizations is taxable and therefore, if any exemption is given for this particular SPVs then same exemption will have to be extended to similarly placed SPVs which are already in existence in Tamil Nadu. He stated that the same needs to be considered. 5.35 The Secretary clarified that the issue was discussed in the Officers' meeting and the issue raised has been taken note of. 5.36 The representative from Maharashtra stated that case to case basis exemption may be difficult. He stated that he understood the rationale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, transport of agriculture produce or they are chargeable at 5% such as freight services. Therefore, if these exemptions are not provided, then these SPVs might not come up in the future. Many of these SPVs are in joint venture with State governments. He elaborated that this is the reason the Fitment Committee has recommended that these services be exempted from the payment of GST. He further stressed that it is only a B2B service. He also clarified that if there are any such entities they should be considered for same exemption on the same principle. 5.39 The Hon'ble Member from Telangana stated that he appreciates the exemption given for transactions between SPVs and railways. He stated that their request for the same exemption to be extended to the States especially where the state governments are building residential schools and integrated residential schools, with a welfare concept, for the children who are not able to afford their education. He stated that at present GST at 18% is collected on these services and requested that the same may be considered for reduction on similar lines. 5.40 The Hon'ble Member from Kerala stated that there is still no clarity as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... railways is plying a carriage train or a passenger train on that railway line then the railways is levying the applicable GST on the passenger ticket or the freight charges and the same is being paid by the railways. He further elaborated that there is an agreement between the railways and the SPVs for using that railway line and maintenance of same. The complexity in the transaction is that the tax has already been paid. He stated that in this case, railways is Government of India and the SPVs is functioning with the Government of India and the tax payable on the construction cost has been paid by the SPV. Therefore, he stated that this transaction that we are trying to tax as a service may not be adding to revenue but only making the business of railways cumbersome and that is the reason why railways are seeking this exemption. He further stated that this is not similar to the example raised by Telangana. If a school is being built, GST is applicable on the cost of construction by whoever builds it, it may be the PWD or any agency, just as in case of projects done by SPVs created by railways. He further stated that as the Secretary had explained, it is basically a transaction bet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that such cases will be examined, if there are similar situations whether in Maharashtra or Tamil Nadu or Kerala or Telangana or any other State. The Secretary requested the Members of the Council to approve the agenda with this suggestion to examine similar cases on case to case basis in the future. Decision: The Council approved the recommendations of the Fitment Committee to exempt GST on services provided by SPV to Ministry of Railways (Indian Railways) by way of allowing Ministry of Railways (Indian Railways) to use infrastructure built and owned by SPV during the concession period against consideration and maintenance services supplied by Ministry of Railways (Indian Railways) to SPV. The Council also recommended to regularize the past cases on 'as is where is' basis. 5.45 Joint Secretary, TRU then presented the next agenda item relating to exemption or regularization of payment of GST on reinsurance services of specified general and life insurance schemes such as Pradhan Mantri Fasal Bima Yojana (PMFBY), Rashtriya Swasthya Bima Yojna, Janshree Bima Yojna for the period from 01.07.2017 to 24.01.2018. She stated that the issue of exemption of reinsurance services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... then presented the next agenda item relating to a request to clarify whether the term 'reinsurance as mentioned at Sl. No. 36A of notification No. 12/2017- CT (Rate) dated 28.06.2017 includes 'retrocession' services and therefore whether retrocession services of specified insurance schemes are also eligible for exemption from GST. She stated that the issue was examined by the Fitment Committee and it recommended that the issue may be clarified through a Circular that the term 'reinsurance' as mentioned in Sl. No. 36A of notification No. 12/2017- CT(R) dated 28.06.2017 includes 'retrocession'. Decision: The Council approved the recommendation of the Fitment Committee to clarify that the term 'reinsurance' as mentioned in Sl. No. 36A of notification No. 12/2017- CT(R) dated 28.06.2017 includes 'retrocession' 5.48 Joint Secretary, TRU presented the agenda item pertaining to a request to clarify the taxability of the incentive amount that is shared by acquiring bank with other stakeholders in the digital payment ecosystem. This incentive amount is being paid by MeitY to acquiring banks to boost digital transactions in the country under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Secretary, TRU presented the agenda item pertaining to a request to clarify whether service by way of hostel accommodation, service apartments/hotels booked for longer period is a service of renting of residential dwelling for use as residence and exempted as per entry no. 12 of the notification No. 12/2017-CT (Rate) dated 28/06/2017 and also a request for GST exemption on hostels for poor and middle-class students run by charitable trusts. The Fitment Committee has recommended that a new entry may be inserted under Heading 9963 in the exemption notification to exempt supply of accommodation services up to Rs.15000/- per person per month provided the accommodation service is supplied for a minimum continuous period of 90 days. She stated that during the Officers' meeting, there was a suggestion received that for the past cases, if they meet the current condition, a provision may be inserted for regularizing them on 'as is where is' basis. Further, the Fitment Committee has recommended that an explanation may be inserted in Sl. No. 12 of Notification No. 12/2017-CT(R) dated 28.06.2017 which exempts services by way of renting of residential dwelling for use as residence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sal to insert an explanation is to clear the confusion. Decision: The Council approved the recommendations of the Fitment Committee and modified the same to the extent discussed above: a. To insert a new entry under Heading 9963 in the exemption notification to exempt supply of accommodation services upto Rs. 20,000/- per person per month provided the accommodation service is supplied for a minimum continuous period of 90 days. b. To insert an explanation in Sl. No. 12 of Notification No. 12/2017-CT(R) dated 28.06.2017 which exempts services by way of renting of residential dwelling for use as residence as below: "Explanation,- Nothing contained in this entry shall apply to: * accommodation services for students in student residences; and * accommodation services provided by Hostels, Camps, Paying Guest accommodations and the like." c. To delete Chapter heading 9963 from Column No. 2 in the Sl. No. 12 in the Notification No. 12/2017- CT (R). 5.53 Joint Secretary, TRU presented the agenda item pertaining to Services as mentioned at Annexure-V in the Agenda Volume-II wherein no change has been recommended by the Committee. She stated that the agenda is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 crore and for 2023-24 amounting to Rs. 15.56 crore. He elaborated that these waivers are necessary as they cannot be shown as outstanding entries in the books of accounts as GSTN is being regularly audited by Comptroller and Auditor General (CAG). 6.4 CEO, GSTN further stated that in the presentation made by GSTN before the Council they regularly bring out the functionalities which have been rolled out in recent past and the functionalities which are likely to be rolled out in the due course of time. He further stated that in the interest of time with the permission of the Chairperson, the presentation would be circulated to the Hon'ble Members as it is technical and more in the nature of what has been rolled out and what will be rolled out in due course. He further stated that there is no formal approval required from the Council however, he would like to flag the three important changes made for the information of the Council. 6.5 The first change is that the GST council has approved GSTR-1A. This is a very important facilitation measure because taxpayer will be able to correct GSTR-1 and then file GSTR-3B which will ensure that the mismatch between GSTR-1 and GSTR-3B is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'ble Members of the Council on the recommendations of ITGRC and requested the Council to approve the same. Decision: The GST Council approved the recommendations made by the ITGRC during its 20th meeting and took note of the data fixes carried out by GSTN. 8. Agenda Item 7 (a): Review of revenue position under Goods and Services Tax. 8.1 The Joint Secretary, Department of Revenue presented the Agenda to the Council. He stated that a good growth rate was being seen on the GST front. He informed the Council that for the month of May 2024, revenue of 1.72 lakh crore was recorded reflecting a 10% growth compared to the same month in the previous year. In April 2024, a historic high was achieved with revenue of Rs, 2.1 lakh crore. 8.2 He presented to the Council the details of IGST settlement and informed that the last year saw a negative balance of Rs. 5,516 crore, indicating that the Centre paid more in IGST settlements to the States than the actual IGST collections and that the current year presents a similar challenge, with a negative balance of Rs. 10,304 crore as of the end of May 2024. He further if the negative balance continues, the same shall be recovered from the IG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re a significant portion of goods comes from outside of the State. He mentioned that it is no body's case that IGST due to the States has been retained by Centre. He informed that despite an increase in SGST and intra-state trade, IGST collections have only seen a marginal 3% increase this year, indicating discrepancies in the way IGST settlement is made. He pointed out that many States face challenges in accurate IGST accounting, including issues with State-level transfers, input tax credits, and instances of tax evasion, as highlighted in studies conducted with Kerala. He emphasized the need to address these accounting, GSTN and software-related issues to ensure accurate IGST flows and prevent misuse of IGST benefits without underlying transactions. He underscored the importance of proper apportionment and the need to enhance the GST system, as discussed previously regarding e-commerce and place of supply regulations. 8.8 The Hon'ble Chairperson emphasized the need for better understanding between State and Central officials regarding IGST apportionments. She urged officials to meet and clarify the process, stressing that the Centre has no role in retaining IGST funds me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ST Appellate Tribunal - Status Update and issues for approval 8.14 The Secretary then requested the Joint Secretary (DoR) to update the Council about the current status of GST Appellate Tribunal (GSTAT) and the decisions of the GST Implementation Committee (GIC) in this regard. 8.15 Joint Secretary. DoR stated that the President of GSTAT has been appointed and that he has assumed office on 06th May, 2024. He further stated that the process of appointment of Judicial Members, Technical Members (Centre) and Technical Member (State) to be done by the Centre is also in progress and expected to be completed by July/August, 2024. He stated that the process of setting up of physical and digital infrastructure for the State Benches in the different States is ongoing and requested the States to expedite the process. He further requested the States to prioritise the process of appointment of Technical Member (State) in the state benches so as to enable DoR to make the GSTAT functional at the earliest and to ensure that the first hearing of the Tribunal happens in the present year itself and does not get delayed further. 8.16 He further informed the Council that there have been requests f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hattisgarh the Notification issued in September, 2023 had specified Raipur and Bilaspur as location of Benches but now the State has now requested for deletion of Bilaspur. He stated that these changes be incorporated in the draft Notification placed for approval of the Council and the same may be approved. Decision: The Council took note of the status update with regard to GSTAT and the decisions of GIC with respect to the relaxation in qualifications and eligibility conditions for appointment of Technical Member (State) and approved the draft notifications as proposed by DoR: a. To be issued by States for relaxing the eligibility conditions for Technical Member (State) b. Specifying the location of Benches and sittings associated with the Benches. 9. Agenda Item 8: Performance Report of the Anti-profiteering authorities for the 2nd quarter (July to September 2023) 3rd quarter (October to December 2023) and 4th quarter (January to March, 2024) for the information of the GST Council 9.1 The Secretary presented the Agenda No. 8 regarding Performance Report of Competition Commission of India (CCI) for the 2nd, 3rd and 4th quarter of F.Y 2023-24 along with the Performance R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Council for their participation and stated that she felt humbled to be in their august company. She stated that the GST Council has stood out as an exemplary body even during the pandemic and that she could not thank each one of the Members sufficiently as the Council had worked through trying times and has been a perfect example of co-operative federalism. She assured that she would work together with the Members of the Council to make GST an exemplary tax structure, digitally run and transparent. The Hon'ble Chairperson admired the commitment of the Council Members to prioritize revenue consideration, taxpayer friendliness and not burdening the ordinary taxpayer at all times which have been the only considerations for decision making in the Council.
11.1 The Secretary noted that the Hon'ble Members concurred with the proposal to take up the issue of rate rationalization in the next meeting of the GST Council.
11.2 The Joint Secretary, GST Council Secretariat then thanked the Hon'ble Chairperson, the Hon'ble MoS (Finance), the Hon'ble Members of the GST Council and all the officers for their active participation in the 53rd GST Council Meeting. X X X X Extracts X X X X X X X X Extracts X X X X
|
