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Minutes of the 22nd GST Council Meeting held on 6 October 2017
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....ST) and Compensation paid to States for the period July - August, 2017 5. Report and Recommendations of the Committee on Exports 6. Issues for consideration for relief to small taxpayers i. Proposal for increasing the aggregate annual turnover threshold under Composition scheme from Rs. 75 lakh (Rs. 50 lakh in Special Category States except Uttarakhand and Jammu & Kashmir) to Rs. one crore; and not taxing the exempt supplies made by a composition dealer ii. Proposal for quarterly filing of returns along with quarterly payment of taxes by taxpayers having annual turnover up to Rs. 1.5 crore iii. Proposal for suspension of application of provisions of sub-section (4) of section 9 till 31 March, 2018 iv. Proposal for deciding the date for the operationalization of provisions of nationwide e-Way bill 7. Issues recommended by the Fitment Committee for consideration of the GST Council i. GST Rate in respect of government works contract services having high labour content ii Definition of Governmental Authority and GST on Government Grants iii Rate of tax on car leasing, sale of leased cars, sale of old and used cars and reverse charge mechanism on sale of used/seized ....
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....n GST rates on certain goods and exemption from IGST in certain cases iv. Issue of Annuity being given in Place of Toll Charges to Developers of Public Infrastructure-exemption thereon v. Additional relief to Small Tax Payers- Composition Scheme vi. GST on development charges collected by Gift City Company Limited for allotment of land on long term lease (of 30 years or more) to developers for development of commercial and residential spaces vii. Additional relief to Small Tax Payers - GTA to unregistered persons 14. Date of the next meeting of the GST Council 3. The Hon'ble Chairperson welcomed the Members of the Council. He stated that originally this Meeting was proposed to be held through video conferencing but as various letters and suggestions were received from States and other stake holders, a regular Meeting was being held . He commenced discussion on the agenda items. Discussion on agenda items: Agenda item I: Confirmation of the Minutes of the 21st GST Council meeting held on 9 September, 2017 4. The Hon'ble Chairperson requested the Chairman, CBEC to inform regarding corrections suggested in the draft Minutes of the 21st Meeting of the Council held o....
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....the issue of works contract even when these two issues have been discussed in relation to works contract also'. The Council agreed to add the version proposed by the State of Gujarat. 4.5. The AS, GSTC informed that the State of Gujarat had requested to replace the first sentence of paragraph 5.22 of the Minutes with the following: '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%'. The Council agreed to add the version proposed by the State of Gujarat. 4.6. The AS, GSTC informed that the State of Odisha had suggested to replace the version of the Hon'ble Minister from Odisha recorded in paragraph 33.2 (ii) of the Minutes ('The Hon'ble Minister from Odisha stated that fly ash was a very important commodity and that tax on it should be Nil') with the following: 'Fly Ash caused environmental pollution. There was no consideration for fly ash. 1f it was kept in taxable category, e-way bill would be required for movement/transportation and this would cause harassment. He suggested that Fl....
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....reed not to make amendments in paragraphs 33(vi) and 34.1(iv) of the Minutes. 4.10. The Hon'ble Minister from Punjab drew attention to the Council's decision recorded in paragraph 7.1 of the Minutes that the issue of Form 'C' under the Central Sales Tax (CST) Act shall be examined further in light of the court decision and requested that this issue should be examined urgently and issue necessary clarification as another judgment had been delivered by the Hon'ble Mumbai High Court on this issue. Shri Udai Singh Kumawat, Joint Secretary, Department of Revenue, (DOR) informed that an amendment proposed in Section 8(3) of the CST Act was presently being examined by the Union Law Ministry and the same would be issued shortly. 5. In view of above discussion, for agenda item 1, the Council decided to adopt the Minutes of the 21st Meeting of the Council with the changes as recorded below: 5.1. To suitably add the following version in paragraph 5.3 of the Minutes: 'Dr. P.D. Vaghela, CCI', 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 ....
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.... to fill in licence details. He said that this was necessary to make the software compatible with the GST law as Section 22(2) of the CGST Act, 2017 prescribed that holding of licence was pre-requisite for filing registration application. He also requested the Council to authorise GSTN to carry out the needful modification.' 5.7. To amend the version of the Hon'ble Minister from Punjab recorded in paragraph 31.2 of the Minutes with the following: 'He suggested that similar goods should attract same rate and in one chapter there should not be more than three rates and that...' Agenda item 2: Decisions of the GST Implementation Committee (GIC) for information of the Council 6. The Chairman, CBEC invited Shri Upender Gupta. Commissioner, (GST Policy), CBEC, to make a presentation on the decisions taken by the GST Implementation Committee (GIC) since the 21 Meeting of the Council held on 9 September, 2017. The presentation made by the Commissioner (OST Policy), CBEC is at Annexure 3 of the Minutes. 6.1. In his presentation, the Commissioner (GST Policy), CBEC informed that between the 21st and the 22st Meeting of the Council, GIC took some decisions by circulation due to urgency o....
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....rmed that return filing was getting stabilised and about 13 lakh Returns were filed on 20 September 2017, and in one hour, more than one lakh Return had been filed. He informed that the GoM had also decided that technical team from Infosys should be deployed in each State and that Infosys had already deployed some people but in the next two weeks, this deployment would be beefed up by deploying more technical persons. He added that the GoM had also asked Infosys to deploy separate team for development of Backend Applications for Model 2 States (27 in number) for which Infosys was developing the backend facility of the tax administration. 8.1. The Hon'ble Chairperson desired to have a briefing about the main IT related problems being faced by the taxpayers and how these were being addressed. Shri Prakash Kumar, Chief Executive Officer (CEO), GSTN made a presentation on this issue which is attached as Annexure 4. 8.2. In the presentation, the CEO, GSTN, gave an update on the number of Registrations, Returns, Invoices, daily collection statistics and daily filing status of GSTR-3B. He informed that as on 4 October 2017, 25.96 lakh new registrations had been approved. As on 5 October....
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....rated values) format: (a) Enrolment Report-Daily incremental is being shared after sharing of complete data dump ; (b) New Registration Report - Daily incremental is being shared after sharing of complete data dump; (e) Return Filer- Daily incremental is being shared after sharing of complete data dump; (d) Dealers complete Address list- Complete data dump (one time) shared for both, migrated as well as newly registered ones; (e) GSTR 3B filer-Complete data dump (one time); (iii) Sharing of data with Model 1 States -the root cause for difference in data reported and records (registration form, returns etc.) pulled by CBEC/Model I States has been found and corrective action taken; (iv) Enabling tax payers stuck at submit stage to edit the same and file GSTR-3B (2.2 lakh taxpayers); (v) Amendment of core and non-core items of Registration form rolled-out on the portal; (vi) Tran-1 Filing (Negative Credit issue) resolved for future use. Cases done in past are being dealt with separately by data fix; (vii) Suo moto Registration rolled-out on the portal having following functionalities: (a) ID creation, (b) Create Challan and (c) Making Payment; (viii) Opt-out from Composition scheme ro....
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....sed, fine and penalty should be deferred. The Hon'ble Minister from Odisha stated that there should be a one-time measure not to impose fine and penalty. The Hon'ble Chairperson observed that if fine and penalty was deferred for the next six months, then no one would file Returns. He observed that the sanctity of dates for filing Returns should be maintained. The Hon'ble Deputy Chief Minister of Bihar suggested that this issue could be decided at a later date. 8.6. The Secretary informed that late fee was waived for July, 2017 Return but no late fee waiver was announced for August Return as it could discourage filing of Returns leading to loss of revenue. He observed that the amount of late fee leviable was not very high. The Hon'ble Chief Minister of Goa stated that those taxpayers who paid tax in July, 2017 but could not file their Returns due to glitches in the System should not be penalised for late filing of the Returns for the month of August, 2017. The Secretary observed that filing of GSTR-3B was necessary for fund settlement, and therefore, this could not be postponed indefinitely. He suggested that an additional 10 days' time could be given for filing Return by those reg....
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....ion threshold, etc. The Hon'ble Minister from Karnataka stated that before taking decision on revising the dates for filing Returns, one should wait for one cycle of GST Return filing to be completed. He observed that once offline utility was fully operational in the next two weeks, the time spent by a taxpayer on the System for filing Return could come down from 40 minutes to 5-10 minutes and the throughput of the System would go up substantially. The Secretary stated that some modification in timelines for filing Returns by small taxpayers was already in the agenda of this Meeting [Agenda item 6(ii)]. 8.9. The Hon'ble Deputy Chief Minister of Delhi raised three issues. First, he suggested that GSTN should also look at the capacity of the income tax IT System for accepting the number of Returns every hour and the load of Return filing that it can withstand on the last day of the Return filing. Second, he observed that there was no service level agreement with GSTN for delivery of services in a time bound manner and an action plan for not following the agreed upon timelines. Third, he observed that Infosys was a vendor of GSTN and Ministers should deal with GSTN and not its vendor....
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....d the revenue collection in the month of August, 2017. He stated that revenue figures for the State of Rajasthan were also being further verified as the revenue collection figure reported by the State was very low. 10.1. The Hon'ble Minister from Assam stated that in order to ensure full transparency, the Department of Revenue of the Government of India should share the calculation sheet for compensation to the States. The Hon'ble Minister from Rajasthan stated that compensation for his State should not have been withheld on account of variation in the figures of revenue as the law was very clear in this regard. He observed that the Department of Revenue could ask reasons for variation but there was clear and categorical protection of law for not stopping compensation. The Joint Secretary, Department of Revenue, informed that the officers from Rajasthan had informed that they would clarify the issue shortly. The Secretary stated that as the difference in the revenue figure was high, there was a risk of giving extra compensation of about Rs. 500 crore and hence compensation was withheld for a few days awaiting clarification from the State. The Hon'ble Chief Minister of Goa stated t....
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.... requirements of compensation. The Hon'ble Minister from West Bengal stated in his written comments that the downturn in revenue and reduction in the number of Returns filed for the month of August. 2017 as compared to the month of July, 2017 showed that there were serious procedural issues and shortcomings in the GSTN framework plaguing the implementation of GST, thereby adversely affecting the small and medium enterprises and this precarious situation required serious correction. 10.4. The CEA stated that there should be transparency in respect of compensation and each State should know the compensation given to other States including those States which had surplus revenue. The Secretary pointed out that the Hon'ble Minister from Assam had already made a similar demand. He added that revenue of the first two months would not show a reliable trend. The Hon'ble Minister from Punjab requested to share data of tax collection and compensation of other States to enable States to benchmark with each other. The Hon'ble Chairperson suggested that a chart showing revenue figure of each State and its compensation requirement (including the calculation for the same) should be prepared for e....
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....e GST collection for August and September, 2017. The Council also agreed that a chart showing revenue figure of each State and its compensation requirement (including the calculation for the same) shall be prepared on bi-monthly basis and shared with all the States while disbursing the compensation amount to the States. Agenda item 5: Report and Recommendations of the Committee on Exports 12. The Chairman, CBEC, invited Shri Sandeep M. Bhatnagar, Director General, Directorate General of Export Promotion (DGEP), CBEC and Member Secretary of the Committee on Exports to brief the Council on the report and the recommendations of the Committee. DG, DGEP, made a presentation on the report of the Committee on Exports, which is attached as Annexure 5. He informed that the Committee and its Sub-groups met six times between 19 September, 2017 and 29 September, 2017. He further informed that there was wide scale consultations within and outside the Government which included the Commerce Secretary, CEA, GSTN, Controller General of Accounts (CGA), Principal Chief Controller of Accounts (Pr. CCA), CBEC and the major Export Promotion Councils, such as Federation of Indian Export Organizations ....
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....ST officers. With concurrence of all stakeholders, the Committee had decided certain timelines for dealing with such refund claims. Thus, by 6 October 2017, the GSTN and the DG Systems, CBEC would finalize modalities for CBEC to receive all GSTR-1 and all GSTR-3B; by 10 October 2017, GSTN would make available on the website a new utility form RFD 01A for* refund claimant which would contain a request to debit the credit ledgers for ITC refund being claimed; and by 30 October 2017, GSTN would make available facility in a new form RFD 01B for GST officers to order re-credit of the amount of refund rejected. He informed that Pr. CCA, CGA, CAG, Budget' Division in the Department of Economic Affairs, Department of Revenue and State accounting authorities were finalizing the accounting procedure and settlement of funds. He added that GIC was looking into the cross empowerment of State/Central GST officers for grant of refunds and developing a Standard Operating Procedure (SOP) for the grant of refunds manually till such time the Systems related issues were resolved. 12.3. DO, DOEP, further stated that another major problem identified by the Committee was the working capital blockage....
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....ts thus ensuring that there was no additional burden of working capital. As regards payment of GST on domestic purchases, he explained that thee-Wallet system would permit transfer of balances from the exporter's account to his supplier's account so that GST could be paid by the supplier on the basis of the amount transferred in his e-Wallet by the exporter. He reiterated that balance in e-Wallet would be allowed only to pay taxes. He observed that the working capital requirement in the eco-system would get reduced by the amount of the notional credit given in the e-Wallets. 12.4. DG, DGEP, further informed that another cause of increased transaction cost identified by the Committee was the requirement of bond/letter of undertaking (LUT) for all exports and bank guarantee in certain cases. He stated that the Committee's recommendation was to dispense with the requirement of a bond as well as a bank guarantee and prescribe only a LUT and that this recommendation was endorsed by the GIC and implemented vide Notification No.37/2017-Central Tax dated 04.10.2017. 12.5. DG, DGEP stated that another problem being faced by the exporters was on account of reduced re-usability ....
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....(allowing tax payment through Advance Authorisation/EPCG/EOU schemes) could be implemented and Option-2 (e-Wallet) could be implemented by April, 2018. The Hon'ble Minister from Jammu & Kashmir stated that Option-1 damaged the basic structure of GST of not giving exemptions which also applied for duty exemption schemes for North-Eastern States. He stated that the basic structure of GST should not be tampered with due to operational difficulties which was largely due to delay in the delivery by the IT vendor. He also expressed an apprehension that the vendor would take a long time to develop the system of e-Wallet. He cautioned that if a regime of exemptions was introduced, the GST architecture might collapse. The Hon'ble Minister from Karnataka stated that problems of exporters were critical and solution must be found but the proposed solutions were not the answer to the problems of exporters. He supported the view of the Hon'ble Minister from Jammu & Kashmir and observed that enough compromise had already been made with the original intent of GST and further compromises should be avoided. He stated that a regime of exemption would create a very high arbitrage on both s....
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....sociations and their preference was to have an upfront exemption but once they were explained the GST design, they agreed that 1% tax on supplies to merchant exporters was the best solution. Shri Khalid A. Anwar, Senior Joint Commissioner, Commercial Taxes, West Bengal, stated that the Hon'ble Minister from West Bengal had desired him to convey that exports were in a very bad shape and the Export Promotion Councils had reported that exports had come down drastically. He stated that as e-Wallet would take some time to develop, Option-1 proposing an upfront exemption should be considered. He stated that merchant exporters also enjoyed similar exemption through Form 'H' under VAT and they should not be discriminated against by charging tax at the rate of 1% on supplies made to them. The Hon'ble Deputy Chief Minister of Bihar observed that the officers from the States of Gujarat, Maharashtra, Karnataka, Uttar Pradesh, West Bengal and Tamil Nadu were members of the Export Committee and the recommendations of the Committee were unanimous. He stated that the fundamental question was how to save exports and the proposed exemption was only an interim measure until the scheme....
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....xemption scheme and they would demand its restoration if exemption for exports was permitted. He added that no refund had been given to the industries in Jammu & Kashmir for the last three months and till now he had been explaining to them that it was a systemic reform, and now they would again demand upfront exemption. He observed that e-Wallet was virtual currency and the proposed solution was sectoral in nature and so not desirable. He also expressed worry about the technology to be used for e-Wallet after the experience with the current vender. The Deputy Chief Minister of Gujarat desired to know as to how much money was blocked due to pending refunds on exports. The CEO, GSTN stated that this amount would have to be culled out from the GSTR-3B returns. The Secretary stated that GSTN might not have full data because GSTR-1 had been uploaded only till the month of July 2017. 12.13. The Hon'ble Minister from Assam stated that exporters fell into a different category as they were not required to pay GST on consumption based principle. He, therefore, supported the proposal to give them exemption in the interim period till the system of e-Wallet was developed. The Hon'ble C....
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....ion should be retained for some time. The Hon'ble Minister from Odisha supported the suggestion of the Hon'ble Chief Minister of Goa. The Hon'ble Minister from Chhattisgarh stated that export was exempt from tax as GST was a consumption based tax. He stated that the Committee had given unanimous recommendation and the Council should accept Option-1 as an interim measure and move to Option-2 later. The Hon'ble Minister from West Bengal stated in his written comments that till e-Wallet was introduced, he favoured the time-tested model of exemption like Section 5(3) of the Central Sales Tax Act for not only merchant exporters, but also for manufacturing exporters and EOUs. He further stated that the concern was whether, even after treating the supplies of domestic suppliers to exporters as deemed exports, they would become eligible for provisional refund under Section 54(6) which is meant for zero rated supplies. In his opinion, no discrimination should be made between 'exports' and 'deemed exports'. 12.15. The Hon'ble Minister from Kerala stated that he supported the proposal for temporary accommodation to exporters. However, there was another imp....
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....nvolved creating money to pay tax. The Hon'ble Chairperson stated that this issue could be looked at by officers who were not associated with drafting of the original Law. He stated that a new Committee of officers should review the law and propose changes in the CGST/SGST Acts and the IGST Act taking into account various feedbacks and these proposals could be brought before the Council. The Secretary stated that during the Budget session of the Parliament, changes in the Law could be introduced and for this a new Law Review Committee of officers could be constituted in which the old members of the Law Committee could be called for consultation but decisions should be taken by the new Law Review Committee. He added that the existing Law Committee could continue to look into day-to-day operational issues of the GST law and rules. The Hon'ble Chairperson observed that the Law Committee of officers should also look at the technology issues fore-Wallet. 12.17. The Hon'ble Minister from Jammu & Kashmir reiterated that if exemption mechanism was to be kept for exports till March 2018, then exemption scheme for Special Category States should also be continued till March 2018.....
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....es were approved: (a) The GSTN and the DG Systems, CBEC shall finalize modalities for CBEC System to receive GSTR-1 and GSTR-3B from the GSTN by 6 October 2017; (b) by 10 October 2017, the GSTN would make available on the website a new utility Form RFD 01A for refund claimant which would contain a request to debit the credit ledgers for lTC refund being claimed; (c) by 30 October 2017, the GSTN would make available facility in a new Form RFD 01B for GST officers to order re-credit of the amount of refund rejected; (d) these refunds would be dealt with by jurisdictional Central/State GST officers. (iii) To grant exemption from IGST, Cess, etc. under Section 6 of the IGST Act, 2017 read with Section 25 of the Customs Act, 1962 to import of goods for exporters availing the schemes of Advance Authorisation/Export Promotion Capital Goods/100% Export Oriented Units up to 31 March 2018 and to continue the existing monitoring schemes for exports. (iv) To notify domestic supplies of goods made to exporters as deemed exports under Section 147 of the CGST/SGST Acts, to allow payment of taxes by suppliers and to allow refund of tax so paid to supplier. An Advance Release Order (ARO) shall be....
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....akh (Rs. 50 lakh in Special Category States except Uttarakhand and Jammu & Kashmir) to Rs. 1 crore; and not taxing the exempt supplies made by a Composition dealer 15. The Commissioner (GST Policy), CBEC stated that it was proposed to increase the aggregate annual turnover threshold under Composition scheme from the existing Rs. 75 lakh to Rs. 1 crore. He stated that the limit for the Special Category States could also be discussed by the Council. The facility of availing such increased limit could be extended to both the migrated as well as the new tax-payers and would become valid from the first day of the subsequent month in which the option to migrate to the Composition scheme was exercised. He added that the increase in the turnover threshold would make it possible for greater number of taxpayers to come within the Composition fold and avail its facility of easy compliance and that this was extremely important for the MSME sector. He stated that as per the data circulated during the 9th Meeting of the Council (held on 16 January, 2017), there were about 66 lakh and 74 lakh taxpayers having turnover up to Rs. 50 lakh and Rs. one crore respectively and they contributed around ....
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.... suffered setback after introduction of GST and that while they accounted for large scale employment, barely 5% of total revenue came from them. He stated that there was a need for balance between 5% revenue and employment scenario. In this light, he supported the proposal for increasing the threshold turnover for Composition taxpayers from Rs. 75 lakh per annum to Rs. one crore per annum and to also exclude the exempt supplies from the calculation of the turnover of the Composition dealer. The Hon'ble Chief Minister of Goa, the Hon'ble Ministers from Jammu & Kashmir, Kerala, Odisha, Punjab, Haryana, Madhya Pradesh, Karnataka and Telangana, and the Senior Joint Commissioner (Commercial Taxes), West Bengal supported the proposal to increase the turnover threshold of Composition taxpayers from Rs. 75 lakh to Rs. one crore per annum. The Hon'ble Minister from Karnataka added that the Composition rate was not a lower tax rate but only a mechanism to ease compliance. He observed that the challenge was how to make the compliance easier for regular taxpayers so as to encourage movement of Composition taxpayers into the fold of regular taxpayers as Composition scheme was basica....
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....Raj. He suggested that tax for Composition dealers could be reduced to less than one per cent. The Hon'ble Minister from Assam stated that the fear of arbitrage and return of Inspector Raj was exaggerated. He added that it was not proper to always vilify Inspectors as the Government was paying them salary and they also did good work in expanding the taxpayer base and collecting more revenue. He supported the proposal to exclude the value of exempted goods from the total turnover value for the Composition taxpayers. The Hon'ble Minister from Kerala stated that it would have been desirable to extend the limit of Composition turnover to Rs. 1.5 crore if the law so permitted, but in its absence, it would be better to exclude the exempt turnover, so that the limit of Composition turnover de facto became Rs. 1.5 crore. The Hon'ble Minister from Jammu & Kashmir expressed his reservation on this proposal as it changed the whole scheme of Composition. He warned that if these proposals were implemented, it could create severe economic problem and would increase the need for compensation. 15.6. The Senior Joint Commissioner (Commercial Taxes), West Bengal, stated that Section 10(....
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....0 lakh to Rs. 75 lakh in their respective States. The Hon'ble Chairperson suggested that the Council may agree with the proposal to increase the aggregate annual turnover threshold for eligibility for Composition scheme from Rs. 75 lakh to Rs. one crore for normal States and for the two Special Category States, namely Jammu & Kashmir and Uttarakhand. The Council agreed to the suggestion. He further suggested to increase the aggregate annual turnover threshold under Composition scheme for Special Category States other than Jammu & Kashmir and Uttarakhand from Rs. 50 lakh to Rs. 75 lakh. He also suggested that the issue regarding excluding the turnover of exempted goods from the total turnover threshold for levying tax under the Composition Scheme could be examined by a Group of Ministers to be constituted by him and they could submit their recommendation in two weeks. The Council agreed to these suggestions. 15.8. The Hon'ble Deputy Chief Minister of Delhi stated that increasing the turnover limit from Rs. 75 lakh to Rs. one crore would not be very beneficial as it would cover only a small number of taxpayers. He stated that he had flagged an issue regarding Composition in ....
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....s mostly got goods from the neighbouring bigger States like West Bengal and there was hardly any reverse supply from the North-Eastern States to the bigger neighbouring States. He stated that if such a provision was introduced in the law, there should be a provision for its review after five years once the scheme of compensation to the States for loss of revenue came to an end. 15.10. Shri Ritvik Pandey, CCT, Karnataka stated that for supplies made by a normal tax payer, under destination principle, the tax travels to the consuming State when input tax credit is utilised by the seller. For Composition tax payers, as tax was not on supplies but on turnover, no input tax credit was available and therefore taxes paid by Composition taxpayers would get trapped in the origin State. The Hon'ble Chairperson observed that the destination State would also gain tax for supplies made by Composition taxpayers located there and therefore the gains and losses could average out in the long run. He further observed that small taxpayers in any case paid very small amount of tax. The Hon'ble Chairperson suggested that the issue whether Composition scheme can be extended to taxpayers making ....
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.... aggregate turnover of Composition taxpayers in the first year would be inclusive of VAT and as a result, their de facto turnover for benefit of Composition scheme in the first year would continue to be Rs. 75 lakh (even when it is increased to Rs. one crore) in the first year. He suggested to clarify this issue. 15.13. The Hon'ble Deputy Chief Minister of Bihar stated that entities in the MSME (Micro Small and Medium Enterprises) sector availing the Composition scheme also made supplies to registered entities and there should be a provision that the registered buyers should be able to take input tax credit of the purchases made from Composition taxpayers. He suggested that purchases from Composition taxpayers in MSME sector should be allowed 2% input tax credit and they should have a simplified one-page return like the Sara/ Form of Income Tax*. He suggested that a Committee could be formed to simplify the forms and to seek minimal data. He also suggested that the exemption limit for purchases under reverse charge mechanism should be increased from Rs. 5,000 to Rs. 15,000. The Hon'ble Deputy Chief Minister of Gujarat supported the proposal to allow input tax credit on pur....
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....perception problem was because a tax of, say 18%, was being charged on MRP. He suggested that the system of MRP should be abolished in the GST regime. He added that another concern of the taxpayers was the fear of retrospective inquiry regarding their turnover in the pre-GST period and suggested that the Council should clarify that retrospective tax inquiry relating to returns filed during -the pre-GST period shall not be initiated by the Central or State tax administration merely on the basis of returns filed during the GST period. The Hon'ble Chairperson supported this suggestion. The Council agreed to this suggestion. 15.16. The Hon'ble Chief Minister of Goa raised another issue regarding HSN Code. He stated that HSN Code was very confusing for traders due to multiple rate slabs and suggested that the traders should be exempted from the requirement of declaring HSN Code and that this should be declared only by manufacturers. 15.17. The Hon'ble Deputy Chief Minister of Gujarat stated that earlier, there was no tax on textiles and after introduction of GST, goods worth several crore of rupees were lying in warehouses and transporters were demanding double the charge ....
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....ST amongst the consumers. The Hon'ble Minister from Goa stated that this meeting should send a message that the Council cared for the common people. The Hon'ble Ministers from Tamil Nadu and Odisha supported the proposal made by the Hon'ble Ministers from Kerala and Goa. The Hon'ble Chairperson suggested that the proposed Group of Ministers tasked to look into the Composition issue~ could also examine the rate of tax on restaurants. He stated that a uniform rate of tax of 12% with input tax credit could cause revenue loss because aerated drinks attracted tax at the rate of 43% and this could lead to greater compensation requirement for the States. The Hon'ble Minister from Goa stated that input tax credit could be denied to the restaurant but the rate of tax should be kept at 12% to give due deference to public perception. The Hon'ble Chairperson stated that revenue was as important as public perception as the government had to fulfil several obligations including payment of salaries. The Hon'ble Minister from Kerala stated that a person going for a cup of tea in a restaurant also had to pay tax at the rate of 18% which created a very bad image for GST. ....
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....017; (vii) Last date for filing of GSTR-4 for the first quarter may be 15 November, 2017; (viii) Last date for filing of GSTR-6 for July, August and September, 2017 may also be 15 November, 2017. He stated that this would help GSTN and all other partners to make necessary changes in software. He added that GSTN had informed that FORM GSTR-4 and GSTR-6 would be available by 03 November, 2017 and 23 October, 2017 respectively. 16.2. The Hon'ble Minister from Chhattisgarh supported this proposal and suggested to further enhance the value of turnover of taxpayers eligible to file quarterly return. The Hon'ble Deputy Chief Minister of Delhi supported the proposal of quarterly return for small taxpayers. However, he observed that as these taxpayers were also supplying to each other, this provision could lead to complication and suggested that quarterly return should be introduced for all taxpayers while tax should be paid monthly. The Secretary stated that the GST design was such that the tax could not be paid without filing return. The Hon'ble Minister from Uttarakhand supported the proposal of quarterly return filing for all taxpayers. The Hon'ble Chief Minister of Goa....
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....n monthly basis so that the small taxpayer did not keep the tax collected from the buyer with himself for three months. The Hon'ble Minister from Telangana supported the proposal. The Hon'ble Minister from Madhya Pradesh supported the proposal of fi ling quarterly return for taxpayers with turnover up to Rs. 1.5 crore per annum and suggested that this could be implemented from 1 October, 2017. The Senior Joint Commissioner (Commercial Taxes), West Bengal supported the proposal of filing quarterly return for taxpayers with turnover up to Rs.l.5 crore per annum by using the enabling provision under Section 148 of the CGST/SGST Acts, 2017. 16.4. The Hon'ble Deputy Chief Minister of Delhi stated that this proposal would make the working of input tax credit more complex as big taxpayers would not be able to take credit of the taxes paid on purchases from small taxpayers. The Secretary explained that under the Law, credit could be taken by the big taxpayers upon their own declaration and the matching could be done subsequently when the small taxpayer filed his quarterly return. The Hon'ble Minister from Kerala supported the proposal of quarterly return and quarterly tax ....
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....on of provisions of sub-section ( 4) of Section 9 till 31 March, 2018. He added that in the meeting of the officers held on 5 October 2017, it was felt that this would also be required for section 5(4) of the IGST Act. He explained that the provision had virtually eliminated the exemption limit provided to the small taxpayers and increased compliance for larger taxpayers. He added that establishments making small quantity of taxable supplies but substantial quantity of exempt supplies (e.g. educational and religious institutions) were adversely affected. He stated that the provision of exempting purchases up to Rs. 5,000 per day from the purview of this Section was also proving to be difficult to implement as many entities had several business locations in one State. He also explained that the Union Law Ministry had suggested to prescribe an end date for suspension. This provision brought huge compliance burden without commensurate benefits. He stated that the proposed suspension of this provision would give trade and industry time to acclimatize itself with the GST system and allow its compliance matrix to get stabilized. 17.1. The Hon'ble Deputy Chief Minister of Delhi sugge....
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....egistered person making the latter liable to tax under reverse charge mechanism. He stated that because of such uncertainties, large taxpayers were shy of making purchases from smaller taxpayers. The Senior Joint Commissioner (Commercial Taxes), West Bengal recalled that originally, the reverse charge mechanism under Section 9(4) of the CGST/SGST Acts, 2017 was meant only for Composition taxpayers buying from unregistered persons but the Council took a considered decision to apply it to all taxable persons. He pointed out that when small taxpayers raised objection, daily purchases up to Rs. 5,000 from one or more unregistered persons by a registered person had been exempted from this provision. He suggested to raise this limit to Rs. 10,000 to provide more cushion to the small and medium enterprises instead of removing the provision of reverse charge mechanism. The Hon'ble Minister from Andhra Pradesh supported this proposal. 17.3. The Hon'ble Ministers from Haryana and Assam supported the proposal to suspend reverse charge mechanism till 31 March, 2018. The Hon'ble Minister from Haryana added that the basic purpose of this provision was to expand the tax base and the ....
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....ster from Madhya Pradesh stated that e-Way bill should be implemented after the software was developed. The Hon'ble Minister from Punjab suggested that the e-Way bill should be implemented from 1 April, 2018 on goods which are prone to evasion. The Senior Joint Commissioner (Commercial Taxes), West Bengal, stated that e-Way bill system should not be introduced until the existing glitches in the System relating to registration, return and payment were successfully addressed. The Hon'ble Minister from Odisha stated that e-Way bill system should be studied properly before its implementation. The Hon'ble Minister from Haryana stated that e-Way bill system should be introduced as soon as possible and that his State was suffering tax evasion in its absence. 18.2. The Hon'ble Minister from Karnataka stated that in their experience, e-Way bill system reduced harassment. He observed that it was a very simple procedure where supplier of goods requiring e-Way bill has to register, fill up 6 or 7 mandatory fields and the vehicle number, and generate an e-Way permit. On being stopped, the transporter only needed to show e-Way permit which could also be carried on a mobile phone....
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....m 6, the Council took the following decisions: (i) To increase the aggregate annual turnover threshold for eligibility under the Composition scheme from Rs. 75 lakh to Rs. one crore for normal States and for two Special Category States, namely Jammu & Kashmir and Uttarakhand; (ii) To increase the aggregate annual turnover threshold for eligibility under the Composition scheme from Rs. 50 lakh to Rs. 75 1akh for Special Category States other than Jammu & Kashmir and Uttarakhand; (iii) A Group of Ministers to be constituted by the Hon'ble Chairperson to examine the following issues and submit its recommendations in two weeks: (a) whether to exclude the turnover of exempted goods from the total turnover threshold for levying tax under the Composition Schemes; (b) whether Composition scheme can be extended to taxpayers making inter-State outward supplies of goods; (c) whether input tax credit can be made available to registered persons receiving inward supplies from Composition taxpayers; (d) to examine the tax structure of different categories of Restaurants, with a view to their possible rationalisation/reduction; (iv) Retrospective tax inquiry relating to returns fil....
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....recommended by the Fitment Committee for consideration of the GST Council Agenda item 7(i): GST Rate in respect of government works contract services having high labour content 20. Introducing this agenda item, Shri Amitabh Kumar, Joint Secretary (TRU-ll), CBEC, stated that some States had requested to levy tax at the rate of 5% on those works contracts which had predominantly labour component and the material component was less than 25%. He stated that the details of various kinds of works provided by the Government of Telangana were examined and it showed that there were broadly eight categories of works contract services having varying content of labour and materials. While in the category of Irrigation and CAD (Command Area Development) i.e. canal works, the effective GST rate seemed to have gone down vis-a-vis the pre-GST rate, the effective GST rate for another category of Irrigation and CAD (Earth Works) had gone up by about 11% (Component of earth work in this work contract as reported by Telangana is 95%). In all other categories, namely, Irrigation and CAD (Electro mechanical Works, Dams and Barrages, Drinking Water Supply Scheme etc.), the incidence in the GST regime....
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....f the value of the works contract) supplied to the Central Government, State Governments, Iocal authority or a governmental authority shall be reduced to 5%. In view of decision in respect of agenda item 7(ii), this reduced rate on works contract service would also apply to Government Entity. Agenda item 7(ii): Definition of Governmental Authority and GST on Government Grants 21. Introducing this agenda item, Joint Secretary (TRU-ll), CBEC, recalled that in the 21st Meeting of the Council (held on 9 September, 2017), the State of Gujarat had pointed out that the existing definition of Governmental Authority was limited to those authorities which have been entrusted with the functions of municipality under Article 243 W of the Constitution and that reference to authorities entrusted with the functions assigned to Panchayat under Article 243G of the Constitution was missing. Consequently, the above-mentioned works contract services provided to a body which has been entrusted with the functions of a Panchayat may not be able to get the benefit of the lower rate of GST of 12%. He stated that another issue raised in the 21st Meeting of the Council was that instead of equity of 90%, a....
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.... supply of service specified in column (3) of the entry at item (i) against serial no. 3 of the Table above involving transfer of property in land or undivided share of land, as the case may be, the value of supply of service and goods portion in such supply shall be equivalent to the total amount charged for such supply less the value of land or undivided share of land, as the case may be, and the value of land or undivided share of land, as the case may be, in such supply shall be deemed to be one third of the total amount charged for such supply." The said paragraph referred to only the service specified at item (i) against serial no. 3 of the Table of the said notification as at the time of issue of the said notification, only the service specified therein involved transfer of property in land or undivided share of land. However, subsequently, works contract services have been specified at other items against Sl. No. 3 at GST rate of 12%, which may involve transfer of property in land or undivided share of land, such as construction of low cost houses under scheme of affordable housing in partnership or Pradhan Mantri Awas Yojana. In view of this, it was proposed that provision....
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....he recommendations of the Law Committee could be accepted with certain modifications as highlighted in bold letters below: (a) Grants given by Central Government, State Government or a local authority to a "Government Entity" may be exempt under GST. "Government Entity" may be defined as an authority or a board or any other body including a society, trust, corporation which is, - (i) set up by an Act of Parliament or State Legislature, or (ii) established by any government, with ninety per cent or more participation by way of equity or control, to carry out a function entrusted by the Central Government, State Government or a local authority". 21.5. He stated that it was further proposed that the reduced rate of 12% on specified works contract services supplied to the Central Government, State Government, Union Territory, Local Authority and Governmental Authority may also be extended to a Government Entity, where such specified works contract services have been procured by the government entity in relation to the work entrusted to it by the Central Government, State Government, UT or Local Authority. 21.6. The Joint Secretary (TRU-ll), CBEC, further stated that the Law C....
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....o.5 of notification No. 12/2017-CT (Rate) dated 28.06.2017 may be amended along the lines of entry at Sl. No. 4 to include services provided by Central Government, State Government, Union Territory and local authority in addition to those provided by governmental authority. Corresponding IGST, UTGST and SGST notifications may also be amended. (iv) Provision in paragraph 2 of notification No. 11 /2017-CT dated 28.06.2017 may be made applicable to services specified against serial no. 3 at item (i), item (iv) [sub-item (b), sub-item (c), sub-item (d)], item (v), [sub-item (b), sub-item (c) and sub-item (d)] and item (vi) [sub-item (c)] in column (3) of the Table of the said notification and item (vi), [sub-item (c)], involving transfer of property in land or undivided share of land. (v) The word "Government" appearing in column (3) of the entry at item (iii) against serial No.3 of the Table Notification No. 11/2017-CT dated 28.06.2017 as amended by notification No. 20/2017-CT dated 22.08.2017, may be replaced with "Central Government, State Government, Union territory". Corresponding IGST, UTGST and SGST notifications may also be amended accordingly. II. Exemption from GST on G....
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....r, 2017 (i.e. after GST), the contractor was not in a position to pay tax at the new rate of 12% when his profit was only around 9%. The Secretary stated that such contracts would need to be renegotiated taking into account the new tax liability and that a Committee of officers could be constituted for the same. The Hon'ble Minister from Punjab suggested to exempt on-going works contract from the new rate of tax. The Secretary stated that big projects like Sardar Sarovar Dam Project was being built through an SPY and would need to pay tax at the rate of 12% and continuing with old tax rate would lead to loss of revenue. The Hon'ble Deputy Chief Minister of Delhi questioned as to why a Governmental authority should have 10% non-Government equity stake as then profit to this extent would go to a non-Government entity. The Secretary clarified that this provision existed under the Service Tax and could be continued under GST. 21.9. After further discussion, the Council approved the proposals at paragraph 21.7 and the formulation for exemption suggested by the Joint Secretary (TRU-ll), CBEC, in paragraph 21.8 above. Agenda item 7(iii): Rate of tax on car leasing, sale of lease....
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....t it was also proposed that the vehicles covered by such leases (i.e. leases of vehicles purchased and leased prior to I July, 2017 and registered as commercial vehicles prior to that date or within 15 days of leasing), when disposed of/sold shall also be taxed at 65% of the applicable GST plus Cess rate. 22. I. He further stated that the Fitment Committee proposed that the rate of tax should be extended to old private car leasing (leased prior to 1 July 2017) apart from commercial leased vehicles with a sunset clause of 3 years from the appointed date (i.e, 1 July 2017) for availing the reduced rate of tax. He stated that another recommendation was that the sale of second hand vehicles by a registered person who had procured the vehicles prior to 1 July, 2017 and had not availed the input tax credit of Central Excise Duty, VAT or any other taxes paid on such vehicles, should also attract tax at the rate of 65% of the applicable GST and Cess rates. He added that one more recommendation was that sale by way of auction etc. of used vehicles, seized goods, scrap, etc. by Government Departments should be taxed on reverse charge basis, at the hands of the buyer, under Section 9(3) of t....
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....ation No.ll /2017-Central Tax(Rate) dated 28 June, 2017, the rate of tax for transport of passengers by motor cab, where the cost of fuel was included in the consideration charged for the services from the recipient, was 5% without input tax credit (lTC) of goods and services and 12% with full lTC. Similarly, for renting of motor cab where the cost of fuel is included in the consideration charged from the service recipient, the rate of tax was 5% without ITC and 12% with ITC. He stated that several representations had been received to apply these GST rates not only for transport of passengers by motor cab or for renting of motor cabs but also for maxi cab, tempo traveller, buses, etc. as the same was permitted earlier under the Service Tax regime. He stated that the Fitment Committee recommended that the rate of tax of 5% without input tax credit and 12% with input tax credit as presently applied for transport of passengers by motor cab or for renting of motor cab may also be applied for service provided by using any other motor vehicle designed to carry passengers. 23.1 . He further stated that representations were received that GST rate of 5% without input tax credit for renting....
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....da item, the Joint Secretary (TRU-ll), CBEC, stated that representations had been received from various quarters to reduce the rate of tax on job work in certain services or to rationalise the rates of tax for different types of job work in the same sector like printing industry. 24.1. He stated that there was a proposal to reduce the rate of tax on job work services on imitation jewellery, on the ground of maintaining parity in rates in respect of goods and job work services. He pointed out that the imitation jewellery industry was labour intensive in nature (employed about 27 lakh work force where 60% were women) and had a high element of labour cost (about 50% to 55%) of the total cost of imitation jewellery. There was also a fear that high rate of tax could make exports internationally uncompetitive particularly vis-avis machine made imitation jewellery from China. He added that in imitation jewellery, value addition was 300% to 400% while real jewellery had value addition of only 10% to 15%. As 18% rate was applicable on the value addition while 3% rate was applicable to the final value, there was a possibility of credit accumulation. Keeping this in view, in order to bring p....
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....f the HS Code; (ii) To prescribe a rate of 5% on job work services in relation to products falling under Chapter 23 of the HS code except for dog and cat food put up for retail sale (Chapter Heading 2309 1000); (iii) To reduce the rate of tax on job work services in relation to manufacturing of umbrellas from 18% to 12% as the rate of tax on umbrella was 12%; and (iv) To reduce the rate of tax on job work services in relation to manufacturing of clay bricks falling under Chapter 6900 0010 from 18% to 5% as the rate of tax on sand and clay bricks (CTH 6901 0010) was 5%. 24.4. He stated that the Fitment Committee did not recommend reduction in the rate of tax for job work in marble industry as marble blocks and marble slabs attracted tax at the rate of 12% and 28% respectively and reduction in the rate of tax for job work services might lead to misuse and loss of revenue. 24.5. He stated that the printing industry had represented to reduce the rate of tax on job ~ work services as the rate of 18% was too high to bear as compared to pre-GST rate and was disruptive for MSME industry. It was represented that the printing industry had a large range of products like books, newspap....
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.... at 12% [(Heading 9989), item (i) may be amended accordingly]. [It would not result in ITC overflow as most of the paper, paperboard attracts GST at the rate of 12%. It would also not result in any tax disadvantage to the printer because a recipient of such supply having in-house printing would have also suffered incidence of 12% on paper and paperboard]; (e) GST rate on services by way of printing of all goods falling under chapter 48 and 49 which attract GST at the rate of 12%, where only content is supplied by the publisher and the physical inputs including paper used for printing belong to the printer, may also be prescribed at I 2%. (It would not result in lTC overflow as most of the paper, paperboard attracts GST at the rate of 12%). (f) GST rate on services by way of printing of all goods falling under chapter 48 and 49 which attract GST at the rate of 18% or above, where only content is supplied by the publisher and the physical inputs including paper used for printing belong to the printer, may continue at 18%. (g) It may be clarified that the supply of books, pamphlets, brochures, envelopes, cartons, boxes, etc. printed with logo, design, name, address or other cont....
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....t availed and under GST, all textiles, whether hand-made or machine-made, were charged to tax at the rate of 5% or 12%. The job works services in relation to textile items attracted 5% tax while it was exempted under Service Tax regime and this 5% GST on jobwork was being agitated by the hand-made carpet industry on the ground of increased cost of the final products thus making the Indian carpets uncompetitive in global market. He stated that the Fitment Committee had considered these aspects and recommended to continue with the existing rate of 5% tax on job work services for making of carpets, as applicable to all textile goods. 24.7. The Hon'ble Minister from West Bengal stated in his written comments that he supported the reduction of tax on job work on imitation jewellery to 5% and that thousands of workers from West Bengal were engaged in job work of imitation jewellery. He further added that in printing industry, the rate of tax of job work for printing on goods belonging to others in all cases should be reduced to 5% and where only content was supplied by the publisher and the printer supplied paper etc., the rate of tax on job work should be 12%. 24.8. The Council ag....
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.... (ii) GST be levied at the rate of 12% with lTC OR 5% without ITC for transportation of natural gas through pipeline. 25.4. The CCT, Karnataka suggested that the option of 5% rate of tax might not be given. The Secretary stated that as there was no GST on output, to prevent cascading, this option was required to be given. The CCT, Karnataka stated that pre-GST also, there was cascading in this sector. Shri P.K. Jain, DG (Audit), CBEC, stated that the rate of tax for transport service by road was 5%, and through pipeline, it was 18% and the Government policy was that more and more transportation should be encouraged through pipeline in view of environmental concern. The Secretary stated that if the rate of tax was 5% on all modes of transport, then the same rate of tax should apply on transport service through pipeline. The Hon'ble Minister from West Bengal stated in his written comments that the rate of tax on transportation of natural gas should be kept at the same rate like transportation of goods by GT A i.e. 5% without input tax credit and 12% with input tax credit. The Council agreed to the suggestion made at paragraph 25.3 above. Agenda Item 7(vii): Reverse charge mech....
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.... shall be deemed to be a registered brand name for the purposes of levy of 5% GST. 27.1. He stated that accordingly, Notifications No. 27/20 17-Central Tax (Rate), 28/2017- Central Tax (Rate), 27/2017-Integrated Tax (Rate), 28/2017-Integrated Tax (Rate), 27/2017- Union Territory Tax (Rate), 28/2017-Union Territory Tax (Rate) and similar notifications under SGST Acts were issued on 22 September, 2017 giving effect to the recommendations of the Council. 27 .2. He also stated that the said amending notifications also provided that 5% rate of tax would not apply if the person concerned voluntarily foregoes any actionable claim or enforceable right on such brand name. The amending notifications provide that the rate of 5% tax shall apply to such goods if: put up in unit container and, - (a) bearing a registered brand name; or (b) bearing a brand name on which an actionable claim or enforceable right in a court of law is available (other than those where any actionable claim or any enforceable right in respect of such brand name has been voluntarily foregone), subject to certain conditions. For this purpose, the phrase "registered brand name" means: (A) a brand registered as on ....
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....lish and the local language, that in respect of such brand name, he (the person owning the brand name) is voluntarily foregoing the actionable claim or enforceable right on such brand name. 27.7. He requested the Council to approve the above proposal. The Council accordingly approved the proposal. Agenda Item 7(ix): Changes in GST rates on certain goods/clarifications to be issued 28. Introducing this agenda item, the Joint Secretary (TRU-1), CBEC, stated that during the 21st Meeting of the Council held on 9 September, 2017, the Council had requested the Fitment Committee to examine two issues - nutritious diet (pusthaahar) distributed under the Integrated Child Development Scheme (ICDS) and all goods falling under Heading 6802 (other than those of marble and granite or those which attract 12% rate of tax) afresh. He stated that in addition, the Fitment Committee examined a number of other issues referred to it by the States of Gujarat, Maharashtra and Uttar Pradesh and the recommendations on these issues were also presented before the Council for consideration. A record of discussion on these issues is as below: 28.1. Food preparations put up in unit containers and intended f....
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....ets, ashtrays, paper weights, artificial fruit and foliage, etc.; other ornamental goods essentially of stone, falling under 6802, should continue to attract 12% GST. 28.4. The Hon'ble Minister from West Bengal stated in his written comments that the rate of tax on all goods falling under Chapter Heading 6802 should be reduced from 28% to 18%. The Hon'ble Minister from Chhattisgarh stated that the proposed rate of tax of 18% was too high and due to this, mining work in his State had stopped leading to large scale unemployment. The Hon'ble Minister from Rajasthan stated that the tax rate of 18% on Napa stone and Kota stone was too high. The Joint Secretary (TRU-1), CBEC, stated that all polished tiles, other than marble and granite stones, were proposed to be taxed at the rate of 18%. The Secretary stated that the rate of tax on these goods should not be brought to 12% if tax on all these goods were to be harmonised. The Hon'ble Minister from Chhattisgarh stated that rate of tax on fly ash bricks was 12% whereas it was 5% on normal bricks. This did not send a good message. The Council agreed to the recommendations of the Fitment Committee in this regard. 28.5. Khak....
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.... under Agenda item 13(iii) circulated in the morning and could be discussed when that agenda item came up for discussion. 28.9. Real zari (not listed): The CCT, Gujarat suggested to reduce the rate of tax on real zari (of silver) from 12% to 5% as the rate of tax on saree was 5%. The Council agreed to this proposal. 28.1 0. The Hon'ble Minister from Jammu & Kashmir suggested that the list of goods attracting tax at the rate of28% should be trimmed as much as possible. The Hon'ble Minister from Tamil Nadu stated that the request of his State for reduction in rate of about 50 items is under consideration by the Fitment Committee and he had highlighted these goods in the 20th Meeting of the Council (held on 5 August 2017) which included items like packaged drinking water, fishnet and fishnet twine, wet grinders, dried fish, kadalaimittai, fire crackers, etc. He suggested that for arriving at pre-GST duty incidence, only the VAT rate where it was listed in the VAT schedule should be taken and that the residuary rate should not be taken as it artificially inflated the rate of VAT. He suggested to take average of only the rate of VAT of the schedules where it was a listed rate.....
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....ation No. 12/2017-CT (Rate) dated 28.06.2017 to be amended along the lines of entry at Sl. No. 4 to include services provided by Central Government, State Government, Union Territory and local authority in addition to those provided by governmental authority. Corresponding IGST, UTGST and SGST notifications to be also amended. 29.5. Provision in paragraph 2 of Notification No. 11/2017-CT dated 28.06.2017 to be made applicable to services specified against serial no. 3 at item (i), item (iv) [sub-item (b), sub-item (c), sub-item (d)], item (v), [sub-item (b), sub-item (c) and sub-item (d)] and item (vi) [sub-item (c)] in column (3) of the Table of the said notification and item (vi), [sub-item (c)], involving transfer of property in land or undivided share of land. 29.6. The word "Government" appearing in column (3) of the entry at item (iii) against serial No. 3 of the Table Notifi cation No. 11 /2017-CT dated 28.06.20 17 as amended by notification No. 20/2017 -CT dated 22.08.2017, to be replaced with "Central Government, State Government, Union territory". Corresponding lGST, UTGST and SGST notifications to be also amended accordingly. D. Exemption from GST on Government grants....
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....cated goods, scrap etc. by Central Government, State Government, Union Territory or a local authority, to any person, shall be subjected to GST under reverse charge under section 9(3) of the CGST/SGST Act and Section 5(3) of the IGST Act. (iv) GST on renting of motor cab and transport of passengers by motor cab services * 29.13. To apply rate of tax of 5% without input tax credit and 12% with input tax credit as presently applied for transport of passengers by motor cab or for renting of motor cab to service provided by using any other motor vehicle designed to carry passengers. 29.14. To allow input tax credit for input service in the same line of business i.e. from another service provider of transporting passengers in any motor vehicle or renting a motor vehicle, at the rate of tax of 5%. 29.15. To allow input tax credit for renting any motor vehicle or transport of passengers by motor vehicles to a person who supplied either of the service- renting of any motor vehicle or transport of passengers by motor vehicles. (v) Reduction in rate of tax on some Job Work Services 29.16. Rate of tax on job work services in relation to all products falling under Chapter 71 shall be red....
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.... issue a clarification that the supply of books, pamphlets, brochures, envelopes, cartons, boxes etc. printed with logo, design, name, address or other content supplied by the recipient of such printed goods, are composite supplies and the question, whether such supplies constitute supply of goods or services would be determined on the basis of what constitutes the principal supply. Principal supply has been defmed in Section 2(90) of the CGST Act as supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary. In case of printing of books, brochures, annual reports, leaflets, pamphlets etc., where only content is supplied by the publisher and the physical inputs including paper used for printing belong to the printer, supply of printing of the content supplied by the recipient of supply is the principal supply and therefore such supplies would constitute supply of service falling under heading 9989 of the scheme of classification of services. In case of supply of printed envelopes, letter cards and printed boxes of un-corrugated paper, tissues, napkins, wall paper etc. f....
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....aim or enforceable right on such brand name, and (b) He has authorised the person (undertaking packing of such goods in unit containers bearing said brand name) to print on such unit containers in indelible ink, both in English and the local language, that in respect of such brand name, he (the person owning the brand name) is voluntarily foregoing the actionable claim or enforceable right on such brand name. (ix) Changes in GST rates on certain goods/clarifications to be issued 29.33. The Council approved the proposals regarding change in the rates of tax as proposed by the Fitment Committee in agenda item 7 (ix) with the following changes/additions: (i) Along with khakra (Sl. No.5), rate of tax on plain roti/chapati to be reduced from 12% to 5%; (ii) To reduce tax on all items falling under Chapter Heading 8305 from 28% to 18%; (iii) To reduce rate of tax on real zari from 12% to 5%. Agenda item 8: Issues recommended by the Law Committee for consideration of the GST Council 30. The Commissioner (GST Policy), CBEC made a presentation on the issues covered under this agenda item and the same are discussed under individual Agenda Items below: Agenda item 8(i): Extension of t....
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....om West Bengal in his written comments supported the proposal to allow issuance of 'invoice cum bill of supply' in order to facilitate the taxpayer to issue only one invoice instead of two. The Hon'ble Deputy Chief Minister of Delhi stated that the first proposal (relating to companies showing cumulative value of items liable to tax at a particular rate when goods and services are supplied to an unregistered person) should not be implemented as it would create problem for audit. The Commissioner (GST Policy), CBEC stated that this was only meant for supplies made to unregistered persons. CCT, Gujarat clarified that the supplier would give total tax value and the rate for all items which had a common rate so that the size of the bill could be reduced by giving the details in a summary form. The Commissioner (GST Policy), CBEC stated that in big bazaar, etc. invoices for consumers were running into several pages. The Hon'ble Minister from Assam supported the proposal. The Hon'ble Deputy Chief Minister of Delhi reiterated that this was not desirable. The Principal Secretary (Finance), Odisha stated that the machines would have been programmed on the basis of the ex....
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....7, dates for filing FORM GSTR-1, FORM GSTR-2 and FORM GSTR-3 for the month of July were extended and the queries were received regarding due date for generation of FORM GSTR-2A and FORM GSTR-IA in light of the said extension of date. He stated that it was proposed to issue a circular clarifying that *(i) the due date with respect to FORM GSTR-2A stands automatically extended since the due dates for furnishing the details in FORM GSTR-1 and FORM GSTR-2 have been extended. The details filed in FORM GSTR-1 will be made available to the recipient in FORM GSTR-2A not later than 11 October, 2017 while they are required to furnish the details of their inward supplies in FORM GSTR-2 not later than 31 October 20 17 and (ii) the due date for finalizing of FORM GSTR-1A also stands automatically extended when the dates for furnishing the details in FORM GSTR-1 and FORM GSTR-2 have been extended. Therefore, only after the details are communicated to the supplier in FORM GSTR-1A, the supplier is required to accept or reject the details communicated to him from 1 November to 2 November, 2017, and accordingly, his FORM GSTR-1 shall stand modified. 33.1. He stated that a circular covering this asp....
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.... State Governments clarifying the following: (i) the due date with respect to FORM GSTR-2A stands automatically extended since the due dates for furnishing the details in FORM GSTR-1 and FORM GSTR-2 have been extended. The details filed in FORM GSTR-1 will be made available to the recipient in FORM GSTR-2A not later than 11 October, 20 17 while they are required to furnish the details of their inward supplies in FORM GSTR-2 not later than 31 October 2017; (ii) the due date for finalizing of FORM GSTR-lA also stands automatically extended when the dates for furnishing the details in FORM GSTR-1 and FORM GSTR-2 have been extended. Therefore, only after the details are communicated to the supplier in FORM GSTR- 1A, the supplier is required to accept or reject the details communicated to him from 1 November to 2 November, 2017, and accordingly, his FORM GSTR-1 shall stand modified. Agenda item 9: Proposal for issuing notifications on cross-empowerment for ensuring single interface under GST 35. The Commissioner (GST Policy), CBEC stated that it was proposed to issue notification on cross-empowerment prepared in accordance with the decisions of the Council taken during its 9th Meet....
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....g officers of the Central and State Governments to sanction refund and that an order of refund passed by an officer of the Central or State Government shall cover both the Central tax and the State tax. Similar notification to be issued under the IGST Act by the Central Government; (ii) Until the division of taxpayers is effected between the Central and State administration, an officer of the Central and the State Government was authorised to process any refund claim filed by an applicant under his jurisdiction subject to a declaration being given by the applicant that the same refund claim has not been claimed from the other administration having jurisdiction over the applicant. Agenda item 10: Proposal for deemed ratification of notifications, circulars and orders by the GST Council 37. Introducing this Agenda item, the Commissioner (GST Policy), CBEC stated that the Hon'ble Delhi High Court in its order dated 14 September, 2017 had directed the Central Government and the Government of NCT (GNCT) Delhi to issue a corrigendum to Notification No.13/2017-Central Tax (Rate) dated 28.06.2017 and No. 10/2017-Integrated Tax (Rate) dated 28.06.2017 so as to make them fully consis....
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....ntral Government on deemed basis. Agenda item 11: Procedure for implementing GIC decisions of urgent nature requiring immediate implementation 39. The Additional Secretary, GST Council explained that the GST Implementation Committee (GIC) was formed pursuant to the decision of the Council in its 14'h Meeting held on 18-19 May 2017 and in the 17th Meeting held on 18 June 2017. The Council approved the proposal to delegate its powers to GIC on urgent matters. He stated that a working procedure for the functioning of the GIC was approved and as per this, the decisions taken in GIC shall be circulated amongst the Council Members and their views/comments sought within two days. After suitably incorporating comments/views of the Council members, the decision would be implemented after obtaining the approval of the Hon'ble Chairperson of the Council and the decisions taken by GlC would be put up for information of the Council in its next meeting. He explained that on many occasions, it became difficult to follow the procedure as decided above when important procedural issues were required to be implemented urgently. He, therefore, proposed that the Council could consider slight....
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....d before the Council for approval before implementation. Agenda item 12: Issues carried forward from the 21st GST Council Meeting: - Agenda item 12(i): Approach Paper on principles for Fitment post-implementation of GST 41. The Secretary stated that the Approach Paper along with the comments of the States and responses to the same had been approved by the Fitment Committee and was placed before the Council for approval. He suggested that the Council could approve the Approach Paper along with the comments of the States on the Approach Paper and the written responses to the same. He further suggested that the finalised Approach Paper could have a caveat that the Council may deviate from the principles laid down in the Approach Paper taking into account various considerations and circumstances. The Council approved this proposal. Agenda item 12(ii): Issues listed in Annexure IIB of Agenda item 7 of 21st GST Council Meeting (List of goods discussed by the Fitment Committee where no change in rate of tax was proposed) 42. The Hon'ble Minister from West Bengal stated in his written comments that the rates of tax on following items should be reconsidered: bamboo and cane furni....
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....as mentioned in the Uttar Pradesh SGST Act as taxes being subsumed but was left out inadvertently, was also proposed to be included in the list of Acts to be subsumed. 44.1. The Principal Secretary (Finance), Odisha stated that in addition to the Acts listed in serial no. 21 of the draft notification, one more Act needed to be added in the list of subsumed Acts for Odisha, namely, clause (e) of sub-section (i) of section 131 of Odisha Municipal Act, 1950 relating to Advertisement Tax. He requested to add the same to the list at serial number 21 of the draft notification. The CCT, Punjab stated that Water Act was a Central Act which was not shown to be subsumed and 80% of its revenue came to the States. The Joint Secretary, Department of Revenue stated that only two Central Government Acts had been subsumed. The Council approved the draft notification in the agenda note containing the list of Acts subsumed for different States as per Section 5(4) and Section 5(6) of the GST (Compensation to States) Act, 2017 along with the addition of clause (e) of sub-section ( 1) of section 131 of Odisha Municipal Act, 1950 relating to Advertisement Tax and the United Provinces Sales of Motor Spi....
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....vided for a threshold limit of Rs. 20 lakh for registration to give relief to small taxpayers. However, under Section 24, clause (i), registration was made mandatory for persons making inter-State supply irrespective of the turnover. He stated that due to this, small service providers such as persons teaching occasionally as a guest faculty in different institutions of the country, services of mutual fund agents, etc. had come under the ambit of GST. Keeping in view the difficulties of the small taxpayers, it was proposed to exempt from registration, small service providers, making inter-State supply of services, up to Rs. 20 lakh and up to Rs. 10 lakh for Special Category States other than the State of Jammu & Kashmir. He pointed out that such an exemption had already been provided to services of job workers. 47.1. The Hon'ble Deputy Chief Minister of Delhi supported this proposal. He further suggested to repeal the provision of Section 10(2)(c) of the CGST/SGST Act so that interState supplies could also get the benefit of Composition scheme. The Hon'ble Deputy Chief Minister of Gujarat and the Hon'ble Minister from Jammu & Kashmir also supported this proposal The Cou....
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.... did not want to go through such hassles. He suggested to exempt IGST on gold imports made by 36 banks and 6 public sector undertakings mentioned as nominated agencies in Paragraph 4.41 of the Foreign Trade Policy but to exclude from its ambit nominated agencies like the Star Trading Houses which are also mentioned as Nominated Agencies under Paragraph 4.41 of the Foreign Trade Policy. He stated that with such an exemption, banks would not pay IGST at the time of import and the demand of IGST would be made at the stage when banks and PSUs supplied gold to any person, including exporters. 50.1. The CEA observed that the Council had addressed several procedural dimensions of export but it had not yet touched upon embedded taxes and duty inversion and that the Export Committee should continue to work on these issues. 50.2. The CCT, Karnataka suggested to charge IGST at the rate of 0.25% instead of exempting it so that such imports were reflected in the returns of the importers. The Secretary stated that the rate of gold fluctuated every day but the rate of gold for Customs purposes was fixed for 15 days and therefore it would be a financial burden on the banks and PSUs to pay IGST. ....
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....The Joint Secretary (TRU-1), CBEC, stated that fabrics are classified under Chapters 50 to 55 and attract tax at the rate of 5% with no refund of unutilised input tax credit. Mere cutting and packing of fabrics into pieces of different lengths from bundles and thans would not change the nature of these goods and such pieces of fabrics would continue to be classified under respective chapter headings as fabrics and attract 5% tax. He stated that the proposal was to clarify that unstitched salwar suit is a fabric cut from lumps or thans on which value addition is done with embroidery, handwork, patchwork, etc. and that such pieces of fabrics would continue to be classified under Chapters 50 to 55 of the First Schedule to the Customs Tariff Act, 1975 and attract 5% rate of tax. The Council agreed to the suggestions. Serial No.5: Reference from Finance Minister, Kerala 54. The Joint Secretary (TRU-I), CBEC recalled that in the 6th Meeting of the Council (held on 11 December 2016), it was decided to reduce the rate of tax on coir mats and floor coverings from 12% to 5%. He stated that classification of these products in the relevant entry of the concerned notification was Chapter hea....
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....urnover in a financial year does not exceed Rs. 1.5 crore to issuance of invoice or actual supply of goods if invoice is not issued within stipulated time 57. The Commissioner (GST Policy), CBEC introduced this agenda item and stated that this was essentially proposed to ease the compliance burden on small taxpayers. The Hon'ble Minister from Jammu & Kashmir observed that for advances received by small taxpayers with turnover of less than Rs. 1.5 crore, there should be no distinction between the treatment for supply of goods or supply of services. The Secretary stated that in the services sector, there was an existing provision and it was required as supply of services was intangible in nature whereas supply of goods was tangible. After discussion, the Council agreed to this proposal. Serial No.9: Exemption from IGST on medicines supplied free by international agencies like UNICEF, WHO, Red Cross etc. 58. The Joint Secretary (TRU-1), CBEC stated that the proposal was to exempt IGST on medicines supplied free by international agencies like UNICEF, WHO, Red Cross etc. which currently attract tax at the rate of 12% or 5% in order to make the import less costly for the interna....
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.... value ofRs. 5,000 per parcel. Agenda item 13(iv): Issue of Annuity being given in Place of Toll Charges to Developers of Public Infrastructure - exemption thereon 61. Introducing this Agenda item, the Joint Secretary (TRU-Il), CBEC stated that while toll is a payment made by the users of road to concessionaires for usage of roads, annuity is an amount paid by the National Highways Authority of India (NHAI) to concessionaires for construction of roads in order that the concessionaire did not charge toll for access to a road or a bridge. In other words, annuity is a consideration for the service provided by concessionaires to NHAI. He stated that construction of roads was now subject to tax at the rate of 12% and due to this, there was free flow of input tax credit from EPC (Engineering, Procurement and Construction) contractor to the concessionaires and thereafter to NHAI. He stated that as a result, tax at the rate of 12% leviable on the service of road construction provided by concessionaire to NHA1 would be paid partly from the input tax credit available with them. He stated that the Council may take a view for grant of exemption to annuity paid by NHAI/State Highways Constru....
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.... by way of interest or discount, the said person shall not be ineligible for the Composition scheme under Section 10 and in computing his aggregate turnover in order to determine his eligibility for Composition scheme, value of supply of any exempt services including services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount, shall not be taken into account. Agenda item 13(vi): GST on development charges collected by Gift City Company Limited for allotment of land on long term lease (of 30 years or more) to developers for development of commercial and residential spaces 63. Introducing this Agenda item, Joint Secretary (TRU-ll), CBEC stated that presently the upfront amount charged by State Industrial Development Corporations/Undertakings (known as premium, salami, development charges, etc.) for long term lease (of 30 years or more) of industrial plots to industrial units was exempt from GST. Gift City Company h Limited which is developing international financial services centre (IFSC) in Gujarat has requested for a similar exemption for the amount charged by it for granting development rights to develope....
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....ion. He stated that in order to remove hardship being faced by small unregistered businesses, it was proposed that services provided by a GTA to an unregistered person including an unregistered casual taxable person, other than to the following recipients, may be exempted, namely: (a) Any factory registered under or governed by the Factories Act, 1948(63 of 1948); or (b) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India; or (c) any co-operative society established by or under any law; or (d) any person registered under the Central Goods and Services Tax Act or the Integrated Goods and Services Tax Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act; or (e) anybody corporate established, by or under any law; or (f) any partnership firm whether registered or not under any law including association of persons; or (g) any casual taxable person. 64.1. He stated that exemption may be provided in case of services by GTAs operating under 5% GST rate under Reverse Charge Mechanism and also those paying GST at the rate of 12% under forw....
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....nto account. (vi) GST on development charges collected by Gift City Company Limited for allotment of land on long term lease (of 30 years or more) to developers for development of commercial and residential spaces 65.6. To exempt from tax upfront, amount (called as premium, salami, development charges or by any other name) payable in respect of service, by way of granting of long term lease (30 years or more) of industrial plots or plots for development of infrastructure for financial business, provided by the State Government Industrial Development Corporations/Undertakings or any other entity having 50% or more ownership of Central Government, State Government, Union Territory to (a) industrial units or (b) developers in any industrial or financial business area. (vii) Additional relief to Small Tax Payers-GT A to unregistered persons 65.7. To exempt services provided by a GTA to an unregistered person including unregistered casual taxable person, other than the following recipients, namely: (a) Any factory registered under or governed by the Factories Act, 1948(63 of 1948); or (b) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under a....
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....ism would encourage taxpayers to purchase from unregistered sources thereby impacting revenue collection. He added that to curb tax evasion, there was a need to operationalise nation-wide e-way bill. He said that his government supported most of the proposals of the Fitment Committee but it had reservation in respect of the proposal of car leasing. He added that levy of GST at the rate of 65% of GST plus Cess would reduce the share of SGST from the sale of small and medium cars when compared to the earlier VAT at the rate of 14.5% which accrued to the States. On this account, he did not support this proposal. He further added that as regards the proposed amendment to expand the definition of brand name in respect of cereals, pulses and flours, etc. he had consistently advocated to exempt all food grains irrespective of whether put in unit container or whether branded or not. He pointed out that this had caused wide-spread resentment and the present proposal to mandate filing of affidavit by the person having an actionable claim or enforceable right on brand name would further aggravate the resentment amongst small retailers who pack and sell food grains. He stated that as regards t....
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....ister Deputy Chief Minister Finance Minister 13 Ja Jammu & Kashmir 14 Jharkhand Dr. Haseeb Drabu Shri CP Singh 15 Karnataka 16 Kerala Shri Krishna Byre Gowda Dr. Thomas Issac Minister - Commercial Taxes Minister - Excise and Taxation Finance Minister Finance Minister Minister - Agriculture Finance Minister 17 Maharashtra Shri Sudhir Mungantiwar Finance Minister 18 Madhya Pradesh 19 Miz Mizoram Shri Jayant Malaiya Shri Lalsawta Finance Minister Finance Minister 20 Odisha 21 22 22 Punjab Rajasthan Shri Manpreet Singh Badal Shri Rajpal Singh Shekhawat Shri Shashi Bhusan Behera Minister of Finance & Excise Finance Minister Minister Industries Minister for Fisheries and 23 Tamil Nadu Shri D Jayakumar personnel & Administrative Reforms 24 Telangana Shri Etela Rajender Finance Minister 25 Uttar Pradesh Shri Rajesh Agrawal Finance Minister 26 Uttarakhand Shri Prakash Pant Finance Minister Page 74 of 111 Estd. 1949 MINUTE BOOK Annexure 2 List of Officials who attended the 22nd GST Council Meeting on 6 October, 2017 Shri RatanP. Watal Dr. Arvind Subramanian Ms Vanaja Sarna Shri Mahender Singh Shri R.K. Mahajan Shri P K Das Economic Advisory Council Chief Economic Advisor Chairman, CBEC Membe....
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....a Shri Mahesh Kumar Shri Mukesh Gaur Shri Sandeep Bhutani Shri Shekhar P Khansili Shri Vipul Sharma Shri Umed Singh Rawat Shri Manoj Kumar OSD to MoS OSD (DOR) OSD (Rev. Sec) Under Secretary Technical Officer, TRU-I Technical Officer, TRU Joint Commissioner, Policy wing Joint Commissioner, Policy wing Joint Commissioner, Policy wing Dy. Commissioner, Policy wing Asst. Commissioner, GST Policy Asst. Commissioner, GST Policy Asst. Commissioner, GST Policy Asst. Commissioner, GST Policy Asst. Commissioner, GST Policy Additional Secretary Joint Secretary Joint Secretary Additional Commissioner Joint Commissioner Joint Commissioner Assistant Commissioner Assistant Commissioner Assistant Commissioner Superintendent Superintendent Superintendent Superintendent Superintendent Superintendent Page 76 of 111 MINUTE BOOK 56 GST Council Shri Amit Soni Inspector Estd. 1949 57 GST Council Shri Anis Alam Inspector JAYNA 58 GSTN Shri A B Pandey Chairman 59 GSTN Shri Prakash Kumar 60 GSTN 61 GSTN 62 Andhra Pradesh 63 Andhra Pradesh 64 Andhra Pradesh 65 Andhra Pradesh 66 Assam 67 Assam 68 Bihar 69 Bihar 70 Chandigarh 71 Chandigarh 72 Chhattisgarh 73 Chhattisgarh 74 Dadra & Nagar Haveli 75 Delhi 76 De....
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....l Taxes) J.C (Commercial Taxes) 99 Maharashtra 100 Manipur 101 Mizoram 102 Mizoram 103 Nagaland 104 Odisha 105 Odisha 106 Odisha 107 Puducherry 108 Puducherry Dr. V. Candavelou 109 Punjab Shri G. Srinivas Shri M P Singh 110 Punjab Shri V K Garg 111 Punjab Shri V P Singh ETC 112 Punjab 113 Rajasthan Shri Pawan Garg Shri Praveen Gupta DETC Secretary (Finance) Secretary (Finance & Commercial Tax) Commissioner, Commercial Taxes ACS (Taxation) Advisor (Finance) Page 78 of 111 JAYNA BOOK DEPOT MINUTE BOOK Estd. 1949 JAYNA 114 Rajasthan Shri Alok Gupta Shri Ketan Sharma 115 Rajasthan 116 Sikkim 117 Sikkim 118 Tamil Nadu 119 Tamil Nadu 120 Telangana 121 Telangana 122 Telangana Telangana 123 123 Te 124 Tripura 125 Tripura 126 Uttar Pradesh 127 Uttar Pradesh 128 Uttar Pradesh 129 Uttar Pradesh 130 Uttar Pradesh 131 Uttar Pradesh 132 Uttar Pradesh Ms Dipa Basnet Shri Bikash Diyali Dr C Chandra Mouli Shri Palani Shri Somesh Kumar Shri Anil Kumar Shri Laxminarayn Jannu Shri Kashi Visheshwarrao Shri M Nagaraju Shri Ashin Barman Commissioner, Commercial Taxes Joint Commissioner Secretary (Commercial Taxes) Assistant Director ACS (Commercial Taxes) J.C, Commercial Taxes Principal Secretary Commis....
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....cility of supplying goods or services for export without payment of integrated tax under Letter of Undertaking in place of bond to all registered persons ✓ Notification No. 37/2017-Central Tax dated 04.10.2017 issued Preparation of draft circular for Manual filing of Refund and advance ruling applications, documents and Forms by Gujarat ✓ Under preparation Decisions of the 10th GIC Meeting INATION TAX MARKET ■Extension of time limit for intimation of details of stock on the date preceding the date from which the option for Composition levy is exercised in FORM GST CMP-03 ✓ Order No. 04/2017- GST dated 29.09.2017 issued ■No extension of time limit for the submission of GSTR 3B for the month of August 2017 ✓ No action required Page 82 of 111 JAYNA BOOK DEPOT Estd. 1949 JAYNA 7 MINUTE BOOK Agenda Note No. 6(i) (1/2) INATION TAX MARKET Subject: Proposal for increasing the aggregate annual turnover threshold under Composition scheme S. No. Proposed Change Increasing the aggregate annual tumover Rationale Reason 1 2 threshold under composition scheme from The increase in the existing Rs. 75 lakh to Rs. 1 Crore. The limit for turnover threshold will t....
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....turers and dealers who are earning interest from deposits, etc. Agenda Note No. 13(i) NATION TAX MARKET Subject: Exemption from registration for persons making inter-State supply of services upto Rs. 20 lakh to any person Proposed Change The GST law provides for a threshold limit of Rs. 20 lacs. This limit has been given to provide relief to small taxpayers from compliance and collection of GST. But, under Section 24 clause (i) registration was made mandatory for persons making inter-State supplies irrespective of the turnover. It is proposed that an exemption from registration be provided to small service providers, providing inter-State supply of services, upto Rs. 20 lacs and (Rs. 10 lakhs for special category States other than the State of Jammu and Kashmir). • Rationale/Reason With the mandatory registration clause, the purpose of the threshold limit was defeated where the liability of compliance and collection of GST started with Rs. 1. Small service providers such as guest faculty, services by mutual fund agents etc. have come under the ambit of GST. Such exemption has been provided to services of job workers carlier by the Council. 10 Page 84 of 111 JAYNA BOOK DEPOT M....
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....son This step will help provide relief to large number of taxpayers (around 85% contributing not more than 6% revenue) from the onerous responsibility of filing monthly returns. This will also substantially reduce the stress on IT system. 13 Agenda Note No. 6(ii) (2/2) ✓ Proposed Change Discussions in officer's meeting ✓ Option may be given to small taxpayers to file monthly return. ITC on purchases from such taxpayers may be permitted monthly. GSTR-3B may continue to be filed by all till for the month of December as announced earlier. Cycle for July, 2017 returns may be completed by all taxpayers as announced earlier. ✓ Dates for August & September may be announced after seeing experience from July cycle. K Quarterly returns for small taxpayers may start from quarter starting October, 2017. Last date for filing of GSTR-4 for first quarter may be 15.11.2017. Last date for filing of GSTR-6 for July, August & September may also be 15.11.2017. Rationale/Reason NATION TAX MARKET This will help GSTN and all other partners to make necessary changes in software. It has been informed by GSTN that FORM GSTR-4 & GSTR-6 would be available by 03.11.2017 and 23.10.2017 respect....
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....t have any impact on the revenue collection and have been put in the law to create audit trail of transactions. • The success of these provisions depends on the back end systems, training of officers and integration with front end systems. • • Under both these provisions, credit will be transferred on successful filing and linkage with GSTR-2. Therefore, an appropriate date may be recommended after assessing the readiness of the trade, industry, Government Departments & IT Systems. 17 Agenda Note No. 8(i) INATION TAX MARKET ■Time limit for furnishing return in FORM GSTR-5A for the months of July, August and September, 2017 by a person supplying OIDAR services proposed to be extended to 20.11.2017 from 15.09.2017 ■Time limit for filing of FORM GST ITC-01 (for the purpose of claiming input tax credit under section 18(1) of the CGST Act) proposed to be extended to 31.10.2017 18 Page 88 of 111 JAYNA BOOK DEPOT Estd. 1949 JAYNA MINUTE BOOK Agenda Note No. 8(ii) Proposal to amend Rule 46 so as to provide that INATION TAX MARKET ✓ in case of B2C supplies, cumulative value of goods or services or both liable to tax at a particular rate & total tax the....
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....JAYNA BOOK DEPOT Estd. 1949 JAYNA MINUTE BOOK Agenda Note No. 10 (1/2) INATION TAX MARKET â– Vide its order dated 14.09.2017, the Hon'ble High Court directed the Central Government and the GNCT Delhi to issue corrigenda to Notification No.13/2017 Central Tax (Rate) dated 28.06.2017 and No. 10/2017-Integrated Tax (Rate) dated 28.06.2017, so as to make them fully consistent with the decisions of the Council It was contended that there was a difference in the press release issued immediately after the meeting of the Council and the actual notification â– In order to avoid challenges to the legality of the notifications it is proposed that all the notifications, circulars and orders issued by the Central Government shall be forwarded to the GST Council Secretariat, through email, for information and deemed ratification by the GST Council 23 Agenda Note No. 10 (2/2) NATION TAX MARKET Act/Rules CGST Act/CGST Rules IGST Act UTGST Act GST (Compensation to States) Act Type Central Tax Central Tax (Rate) Integrated Tax Integrated Tax (Rate) Union territory Tax Union territory Tax (Rate) Notification Nos. 1 to 36 (37 dt. 04.10.17) 1 to 29 (30 dt. 29.09.17) 1 to 8 1 to 30 (31 dt. 29.....
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....ly 53,36,481 GSTR-38-August 45,14,242 GSTR-1-July 34,90,407 Mode of Invoice Upload 2,77,70,983 5.85,54,297 Invoice Upload Data (as on 5th Evening) In-Process Return Filing Mode GSP Offline GSTR 1 Web Grand Total GIN GSP Offline 154335,236 # Web Invoices Processed Rejected Grand Total 358,054 213,078 4,14,38,692 1,67,59,551 19,82,75,098 5,78,46,060 5,85,56,297 25,63,34,236 8 5,71,140 2,77,62,910 26,74,76,700 7,46,13,660 8,049 2,77,70,967 34,26,61,500 Page 93 of 111 CHAIRMAN'S INITIALS MINUTE BOOK Daily Collection Stats 25000.00 Daily Collection: September 20000.00 15000.00 10000.00 5000.00 0.00 01-09-2017 03-09-2017 05-09-2017 07-09-2017 09-09-2017 11-09-2017 13-09-2017 15-09-2017 17-09-2017 19-09-2017 21-09-2017 23-09-2017 25-09-2017 27-09-2017 GSTR 3B (August) - Daily Filing Status 1600000 1376096 1400000 1200000 1000000 800000 600000 400000 200000 74218 0 GSTR-3B (August) Daily Filing Stats 29-09-2017 213619 57812 167122146632 27905 26624 25007 17626 21552 53277 62921 47923 PATH 28-09-2017 29-09-2017 30-09-2017 01-10-2017 02-10-2017 03-10-2017 04-10-2017 17-09-2017 18-09-2017 19-09-2017 20-09-2017 317353 21-09-2017 22-09-2017 615218 23-09-2017 408085 123805 24-09-2017 25-09-2017 ....
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....BOOK DEPOT Estd. 1949 Some Statistics JAYNA MINUTE BOOK Slab-wise summary of Taxpayers as per Tax Paid as per Return R3B - July 2017 (Excluding Cess) Set of Through Cash Ledger Total Credit Utilised (CGST+SGST+IGST) GIN CGST + SGST + IGST (in rupees) Count of 3B (Tax paid in Cash) Total Cash Paid Percentage (Rs. In Crore) of total Tax paid in cash Count of 3B (Credit Utilized) Total Credit Utilised (Rs. In Crore) 1 to 33000 1637769 1344.01 1.95% 1167540 1311.41 33,001 to 66,000 261831 1227.51 1.78% 332802 1583.8 66,001 to 1 Lakh 121029 982.6 1.42% 189396 1545.66 1 to 5 Lakhs 246359 5205.87 7.54% 505546 11280.92 5 to 10 lakhs 38986 2721.88 3.94% 102424 7154.85 10 to 30 Lakhs 29192 4894.74 7.08% 79053 13211.47 30 lakhs to 1Crore 12738 6767.6 9.80% 31784 16684.1 Above 1 Crore 7617 45944.01 66.50% 14939 73106.62 TOTAL 2355521 69088.21 100.0% 2423493 125878.83 Some Statistics CGST+SGST + IGST Count of Kin rupees) Taxpayers of total who paid tax % of taxpayers Amount of Percentage of Tax paid (Rs total Tax paid in Cr in cash 1 to 33000 1637769 33,001 to 66,000 261831 69.53% 11.12% 1344.01 1.95% 1227.51 1.78% 56,001 to 1 Lakh 121029 5.138% 982.6 1.42% 1 to 5 Lakhs 246359 10.46% 5205.87 7.....
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....e 98 of 111 14 JAYNA BOOK DEPOT Estd. 1949 JAYNA MINUTE BOOK Updates of GoM Review Meetings 3. Out of these 48 items, 4 are in progress with some delay. The list of such items is given below: a) GSTP Registration application Processing b) TDS/TCS Registration Application Processing c) Revised Tran1 (Reopening Tran 1 to enable submission of revised TRAN-1) d) Refund for Export - ICEGATE API 4. For 4 items, release dates have been advanced based on directions of GoM. The list of such items is given below: a) GST PMT-07: Application for intimating discrepancy relating to payment b) GSTR-3B: Enhancement to enable Preview and Print out/PDF Download c) Revocation of RC d) Change of Authorised signatory by tax official Updates of GoM Review Meetings GIN 25 GIN 5. Other Items a) Roll-out of TCS/TDS: Keeping in view the status of development of TCS/TDS module and time taken to process the registration application by tax officers, it was felt that the roll-out of TCS/TDS should be done from 1st Dec '2017 so that filing of the return can be made available from 1st Jan 2018. Since the mismatch logic hasn't been fully finalized, GSTN was asked to go ahead and deploy the TCS/TDS registration pro....
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....wnload from tool 11-Oct-17 11-Oct-17 13 Tran 1 Revised Tran1 (Reopening Transition Form 1 to enable Multiple Submit) 13-Oct-17 24-Oct-17 In Progress Remarks In Progress UAT in progress In Progress Development completed. In Progress Release Testing in progress. Development under progress. Expected deployment for Release Testing by 9th Oct 6a, 6b-dev completed (RT:. 3rd Oct). 9a, 9b (RT: 6th In Progress Oct). 7b-Release Test release 20th Oct. UAT one week post Release Test release 14 Tran 1 CSV Utility for 6a, 6b, 7b, 9a, 9b of TRAN-1 13-Oct-17 20-Oct-17 15 Payment Grievance for Payment not reflecting in Cash Ledger-PMT07 16-Oct-17 13-Oct-17 In Progress Development under progress Creation & Submission of GSTR-SA (OIDAR 16 GSTR 5A 17-Oct-17 20-Oct-17 In Progress supplies) In Release Test from 26th Sep. UAT to start from 12th Oct. 17 ITC01 Application for eligible ITC prior to registration/ withdrawal from compounding scheme ITC 01 17-Oct-17 21-Oct-17 18 GSTR 3B GSTR-3B-Feature Enhancement TBD Not Started In Progress in Release Testing. UAT to start from 13th Oct. Note: This is a major design change and applicable for all Returns. Design change is in progress. Updates on Prioritized Fu....
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....ss 38 GSTR 4 Creation & Submission of Quarterly Return 03-Nov-17 03-Nov-17 by Compounding Taxpayer GSTR-4 39 GSTR 11 Filing of Returns by UIN Holders for Inward Supplies GSTR-11 10-Nov-17 10-Nov-17 40 GSTR 4 View of GSTR-4A (composition supplies) 17-Nov-17 17-Nov-17 In Progress Development under progress. In Progress To be released by 15th Oct however extension in timeline is required. Not Started Development not started To be released by 15th Oct however extension in timeline is required. Updates on Prioritized Functionalities # FORM FORM Components/Details Agreed Date of ETA Status Remarks Deployment 41 GSTR 5 Return for non-resident taxable person 17-Nov-17 17-Nov-17 42 Refunds Refunds Exports WO payment of tax-part of RFD01 20-Nov-17 20-Nov-17 In Progress In Progress Design is in progress. Release testing is in progress 43 Refunds Refunds-BO Processing 20-Nov-17 20-Nov-17 44 Refunds Refunds-Excess Balance in Cash Ledger 01-Dec-17 01-Dec-17 In Progress Design is in progress. Not Started 45 GSTR 7 Creation and Submission of TDS Return GSTR-7 08-Dec-17 08-Dec-17 Development not started Not Started Development not started 46 GSTR 7A View of GSTR-7A (TDS) 08-Dec-17 08-Dec-17 Not Sta....
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....edback. Functionality to change the authorized signatory by tax official to be made available at the earliest. Dummy access to the portal in test environment will be given to states and CBEC so that tax officials can perform some quick test on the new functionalities Status Preview has been done for GSTR1, GSTR2, and GSTR3B, TRAN-1 is in progress. However, eliminating the Submit change is big design change and the entire solution has to be thought through holistically. Discussion in progress and timeline not estimated. Only if the TRAN-1 has been submitted as entries are made in the ITC Ledger and the same can be utilized even if TRAN-1 is not signed and filed and hence the restriction. In Progress In UAT Completed access to Training environment. Access to Production can't be given Page 103 of 111 24 CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE BOOK Annexure 5 Report of the Committee on Exports Placed Before the GST Council 22nd Meeting Delhi 6th October 2017 Background âš« Taking cognizance of the reported difficulties being faced by exporters post-GST, the Council decided to set up a Committee on Exports in its 21st Meeting held on 09.09.2017 at Hyderabad. Mandate . To exam....
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....ment of upfront payment of GST on inputs/ capital goods, and (b) for merchant exporters due to requirement of upfront payment of GST on finished goods. 3. Increased transaction cost due to requirement of bond/letter of undertaking (LUT) and for bank guarantee in certain cases. 4. Reduced usability of duty credit scrips and levy of GST on their sale- purchase. 5. Levy of GST on bunker fuel supplies to foreign going vessels eroding competitiveness. Recommendations of the Committee 1. Delay in Refunds • Main reasons for the delay: • o 0 Grant of refunds is linked to returns (GSTR-1 and GSTR-3/3B), which are held up for various reasons. GSTR-1 which contains transaction level details of export supplies is available for July only. It cannot be filed for August and subsequent months till the cycle of filing GSTR-1, GSTR-2 and GSTR-3 is completed for previous month - a legal requirement and GSTN is designed so. 0 Refund module is not ready in GSTN. Recommended Solution: 0 Process refunds manually till such time the systems related issues are resolved. Page 106 of 111 5 JAYNA BOOK DEPOT MINUTE BOOK Estd. 1949 JB JAYNA I- Refund of IGST paid on goods exported outside India â€....
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....merchant exporters procured export goods free of Central Excise duty (Rule 19 of Central Excise Rules) and VAT (Form-H). Under GST, tax is to be paid This has created need for additional working capital as taxes paid get blocked for entire procurement- export-refund cycle. Recommended solution: The Committee examined two options to address the issue of blockage of working capital of exporters. 9 OPTION-1: For exporters availing Advance Authorization (AA) / Export Promotion Capital Goods (EPCG) / 100% Export Oriented Units (EOU) schemes 1. For imports – Grant exemption from IGST and Cess under Section 6 of IGST Act, 2017 read with Section 25 of Customs Act, 1962. II-(i) For domestic supply - a. Notify supplies as deemed exports u/s 147 of CGST/SGST Act and allow refund of tax paid to supplier. b. Issue Advance Release Order (ARO) in the name of supplier identified c. by exporter having AA/EPCG or EOU status. Existing monitoring mechanism for exports to continue. d. For refund of IGST on inter-state deemed export supplies, settlement mechanism would be required. - (ii) For Merchant Exporters (ME) - a. Supplies of goods to a ME registered with EPC / Commodity Boards) shall be o....
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.... mechanism. Needs time to develop IT platform 12 Page 109 of 111 11 CHAIRMAN'S INITIALS MINUTE BOOK 3. Increased transaction cost due to requirement of bond/letter of undertaking (LUT) for all exports and bank guarantee in certain cases Pre-GST, service exporters as well as merchant exporters were not required to execute any bond/LUT except for the exporters registered with Central Excise. However, Section 16 of IGST Act, 2017 requires zero rated supplies to be made under bond or LUT, subject to such conditions, safeguards and procedure as may be prescribed, without payment of IGST. Thus, statutory requirement is either bond or LUT and a Bank guarantee is part of safeguards and conditions. The Committee's recommendation was to dispense with the requirement of a bond as well as a Bank guarantee and prescribe only a LUT This recommendation was endorsed by the GIC and implemented vide Notification No.37/2017-Central Tax, dated 04.10.2017. CHAIRMAN'S INITIALS 13 4. Reduced re-usability of duty credit scrips Pre-GST, duty credit scrips issued as incentives to exporters by DGFT could be used for debiting Customs duty as well as Additional Custom Duty on imports and Central Excise duty an....