TaxTMI 
TaxTMI 
Minutes of the 28th GST Council Meeting held on 21 July, 2018
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Decisions/recommendations of IT Grievance Redressal Committee for information of the Council 5. Review of Revenue Position 6. Issues recommended by the Law Committee for consideration of the GST Council i. Proposals for amendments in the CGST Act, 2017, IGST Act, 2017, UTGST Act, 2017 and GST (Compensation to States) Act, 2017 ii. Creation of GST Appellate Tribunal (GSTAT) iii. Simplification of GST Returns 7. Issues recommended by the Fitment Committee for consideration of the GST Council 8. Reports/recommendations of different Committees/Group of Ministers (GoMs) for information/approval of the Council: i. Recommendations of the Committee on Lottery ii. Recommendations of the Committee on IGST iii . Recommendations of the Report of the Task Force to suggest measures for creating an Eco-System for Seamless Road Transport Connectivity iv. Recommendations of the Group of Ministers on Digital Payments v. Interim report of the Group of Ministers on imposition of Sugar Cess vi. Recommendations of the Group of Ministers on Reverse Charge Mechanism 9. Minutes of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed to public participation and support of 125 crore people of India for this reform. He expressed that upon completion of one year of GST, the Council should resolve to thank 125 crore people of India who adopted GST despite some small initial problems. He also stated that tile Council should thank all the States who made GST a success for the benefit of tile people, going beyond political considerations. 3.1. The Hon'ble Chairperson further added that it was a matter of great pride now that there was one nation, one law and one procedure in the indirect taxation system of India. He stated that GST would impart respect for honesty and transparency in the country. e-Way bill system was a big step in improving compliance and all the Hon'ble Members of the Council deserved the highest accolade for introducing this reform in a phased manner and organized fashion. He further appreciated that growth had been maintained in the GST structure. He stated that the tax collection was at a reasonable level and expressed confidence that GST revenue would grow with greater ease of operation and record maintenance, lower tax rates and simplification of processes. He also expressed confi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Council had no option to fail in its work and hoped that its work would lead India to become a super power soon. He stated that during the Council meetings, Punjab had many times ignored its own interest for the higher interest of the country. He stated that he as well as the Hon'ble Minister from West Bengal had written to the Hon'ble Chairperson earlier and also highlighted that the detailed agenda notes for this Meeting run into more than 400 pages and covered issues such as amendment to GST laws, rules, rates, returns, GIC, etc. These were very important issues and it was humanly impossible to go through 400 pages in a short time of three days. They needed more time to study the proposals to first convince themselves and then to convince the State Cabinet and then their people in the State. He recalled that in the 25th Meeting of the Council held on 18 January 2018, the Council gave in principle approval to the proposed amendments in GST Laws and asked the Law Committee to get it vetted by the Law Ministry. He stated that many proposals of the Law Review Committee were not being reflected without any mention of reason thereof. He requested to defer the law amendment ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng of the Council held on 10 March, 2018, there was an Agenda note (Agenda Item 5) to put IGST amount lying in balance at the end of a Financial Year into the Consolidated Fund of India (CFI), and to be devolved as per Article 270 of the Constitution. This proposal was not accepted by Delhi and many other Members and accordingly this Agenda item was deferred. However, now Rs. 1.60 lakh crore of IGST revenue was put in the CFI. He stated that the tax collected from Delhi should go to Delhi but since it had gone to the CFI, Delhi did not get any devolution out of this amount. He questioned whether the Central Government could take unilateral decision to put this amount in the CFI when the Union Territory with legislature also have the status of a State for the purpose of GST revenue. He stated that the Minutes of this Council Meeting should specifically record his opposition to this unilateral decision of the Government of India to put Rs. 1.60 lakh crore of IGST revenue in the Consolidated Fund of India when an Agenda item on this issue was withdrawn during the 26th Meeting of the Council. He added that today's agenda on IGST settlement was a welcome move and after disbursing Rs....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and Orders issued by the Central Government 6. The Secretary stated that the deemed ratification of the notifications, circulars and orders issued, based on the decisions taken during the 27^th Meeting of the Council, issued after 4 May, 2018 and till 16 July, 2018 were presented during the Officers meeting on 20 July 2018. He suggested that the same may be approved by the Council. He also suggested that the notifications, circulars and orders issued by all the Member States, which are pari materia with the notifications, circulars and orders of the Central Government may also deemed to be ratified. The Council approved the suggestion. 7. For Agenda item 2, the Council approved the deemed ratification of the following notifications, circulars and orders, which are available at www.cbic.gov.in Act/Rules Type Notification/Circular Nos. CGST Act/CGST Rules Central Tax 22 to 29 of 2018 Central Tax (Rate) 11 and 12 of2018 IGST Act Integrated Tax (Rate) 12 and 13 of2018 UTGST Act Union Territory Tax 07 to 11 of2018 Union Territory Tax (Rate) 11 and 12 of2018 Circulars Under the CGST Act 44 to 49 of2018 Under the IGST Act ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....igration/registration were examined by GSTN and analysis presented before the ITGRC. ITGRC allowed 122 taxpayers to file their TRAN-1/TRAN-2 and 406 taxpayers to complete their migration process. The ITGRC also directed the Law Committee to examine and map the consequential issues that may arise relating to such filing of TRAN-1/TRAN-2 and migration and suggest ways to handle such situations, wherever required, in a time bound manner. He also referred to different categories of TRAN-1/TRAN-2 and migration cases approved by the ITGRC. He added that as on 15 July, 2018, approximately 3500 cases of grievances relating to migration /registration/ TRAN-1/TRAN-2/GSTR-3B/GSTR-1/ITC-01/lTC-04, etc. had been received by the GSTN's Nodal Officer. In the first list, approximately 918 cases were examined and presented to IRGRC. Another lot of around 1200 cases had been examined by GSTN and would be put up before the ITGRC. The remaining cases were under investigation with respect to cause and checking of logs in GST system. He also referred to some challenges faced in the examination of cases i.e. the SOP was not being followed such as no prima facie examination was being done by the nodal....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t the date for receiving requests of taxpayers to migrate to GST could be taken as 31 August, 2018 instead of 14 August 201 8. The Council agreed to this proposal. 11. For Agenda item 4, the Council approved the following: (i) To allow migration of those taxpayers to GST, who have submitted Part A of REG-26 but could not complete the migration process, and whose applications were received by the Principal Nodal officers/ Nodal officers of the Central and State Governments till 31 August, 2018; (ii) In order to give effect to the decision at (i) above, ITGRC's mandate will be to allow migration of even those taxpayers who could not migrate due to reasons other than technical glitches and an order under Rule 24 of CGST/SGST Rules, 2017 will be issued by the Commissioner extending the time limit for furnishing the information as required therein; (iii) To waive the late fee (by way of reversal in electronic ledger and crediting the amount in the relevant tax head from the fee head) for filing of returns for the months of July, 2017 to August, 2018 by such taxpayers who complete their migration process as per this decision; (iv) To allow filin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or June 2018, it was Rs. 15, 676 crore for CGST and Rs. 14, 662 crore for SGST. He further informed that there was an ad hoc provisional settlement of Rs. 25, 000 crore each of CGST and SGST in the month of June 2018. He stated that with this ad hoc IGST settlement of Rs. 50, 000 crore, there was negative balance in the IGST account for the period April-June, 2018. 12.1. The Joint Secretary, DoR also presented a chart of the average revenue trends of the States from August 2017 to June 2018 which showed that all India percentage shortfall of revenue was 13%. He also presented a Return filing analysis till due date and on cumulative basis till date. He pointed out that the return filing percentage had shown an increasing trend till December 2017 but it declined thereafter, which was a matter of concern. 12.2. The Hon'ble Chairperson observed that those States which had a return filing percentage of less than 60% of the registered taxpayers needed to examine as to how many taxpayers were not actually in the tax net. He stated that it might be the case that during the roll out of GST, many taxpayers below the threshold limit would have taken registration, who in the first place ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ue of Uttarakhand would be examined separately. 12.5. The Hon'ble Minister from Tamil Nadu stated that the process of collating the details of unutilized credit of IGST would take time and may not be resolved fully even if more time was taken. He suggested to make an interim arrangement to distribute the accumulated credit. He proposed that 90% of accumulated IGST relating to Financial Year 2017-18 as at the end of March 2018 should be settled immediately on the same basis as the two provisional settlements of Rs. 35,000 crore and Rs. 50,000 crore made so far and treated as 2017-18 revenue. 90% of accumulated IGST for 2018-19 as on 31 July 2018 should also be settled on the same basis. During the Financial Year 2018-19, 90% of the IGST amount accumulated each month may be apportioned to the States with a lag of one month. He also requested that figures of IGST accumulation should be shared transparently with the States every month. He stated that retention of 10% of the huge initial balance plus 10% of the IGST accumulated each month was likely to be sufficient to meet any contingency of recovery of excess settlement to the States. 12.6. The Hon'ble Minister from Punj....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of States of Punjab, Himachal Pradesh, Uttarakhand, Jammu & Kashmir and Puducherry to analyse reasons for low revenue. The Council approved this proposal. Shri Tuhin Kanta Pandey, Additional Chief Secretary (ACS), Odisha stated that the States which derived their revenue from metals and minerals suffered a specific problem. Secretary stated that report of the CEA on Bihar would be reviewed and that could form the basis for study for other States. The Hon'ble Chairperson stated that the work of study of revenue gap of the States of Punjab, Himachal Pradesh, Uttarakhand and Jammu & Kashmir as well as that of Puducherry should be completed in 45 days. 12.8. The Secretary stated that States were concerned as to what would happen once the compensation ceased after 4 years. In his assessment, after 3 years, as the compliance under GST improved, no State might need to be compensated. 12.9. The Hon'ble Minister from Meghalaya stated that percentage of returns filed in the States of North-East was very low. He stated that in their State, legal requirement of registration was annual turnover of Rs .10 lakh and about 5, 000 taxpayers were between the annual turnover of Rs. 10 la....
X X X X Extracts X X X X
X X X X Extracts X X X X
....odes would further reduce mis-declaration and misuse of the e-Way Bill. 12.12. The Joint Secretary, DoR informed that during the Officers meeting on 20 July 2018, it was also recommended to put the GST revenue collection data in the public domain at macro level with some lag as also the revenue collected by the States in the Financial Year 2016-17 from the taxes subsumed in GST for analysts, media or for general public with a view to increase transparency. He requested that the Council may approve this proposal. The Council approved the same. 13. For Agenda Item 5, the Council: - i) Took note of the revenue position under GST for April to June 2018; ii) Decided that the study conducted by CEA for Bihar regarding its revenue gap shall be used as a basis for conducting similar study for the States of Punjab, Himachal Pradesh, Uttarakhand, Jammu & Kashmir and Puducherry, for which the Union Finance Secretary shall work with the Finance Secretaries of the above mentioned States and submit the Report within 45 days; iii) Decided that the GST revenue data at macro level as well as revenue collected by the States in the Financial Year 2016-17 from the taxes subsumed in GST ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... which were also incorporated in the Presentation. 14.2. The Hon'ble Deputy Chief Minister of Delhi asked whether the report of the LRC was shared with the States and tabled before the Council. Shri Shashank Priya, Joint Secretary, GST Council informed that it was shared with the Convenor of the LC and the GST Policy Wing of CBIC. Hon'ble Deputy Chief Minister, Delhi stated that as a principle, for any Committee set up by the Council, the report should be first submitted to the Council for taking any decision based on its report. 14.3. The Hon'ble Minister from Punjab stated that the Council during its 25^th Meeting held on 18 January 2018 gave in principle approval to the LRC's recommendations for 69 changes in the Law and only legal vetting was to be done but out of these, only 8 proposals were accepted without any change and 15 were accepted with modifications. He asked as to what happened to the rest of the proposals and it is not understood why many proposals were completely dropped. He stated that they were not against changes in Law but it could not be changed frequently and multiple changes would lead to protracted litigation. He suggested that 10 more day....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g that eligibility of zero rating for supply to SEZ would only be for 'authorised operations' . He stated that this issue was already addressed in the GST Rules and the SEZ Act also provided for benefit of zero rating only for ' authorised operations'. If Law was changed at this stage, it could be construed that for the past period, supplies made to SEZ for non-authorised operations would also be eligible for zero rating. 14.7. He further stated that a third example related to the problem of reversal of input tax credit in respect of the services provided by way of extending loans and deposits. He explained that services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount are exempt from GST. In terms of Section 17(2) of the CGST Act, 2017, input tax credit (lTC) is not available in respect of exempt supplies, that is to say, lTC of common inputs and input services used in exempted supplies is required to be reversed. In the service tax regime, as a business-friendly measure, it had been provided in the Cenvat Credit Ru1es that the value for the purpose of reversal of common input tax credit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....x charged under Section 5 of the IGST Act, which implies that IGST charged by any section other than Section 5 is not an IGST. He stated that nine months back, they had raised the issue regarding imported goods as to whether IGST on imported goods was being charged under the IGST Act or the Customs Tariff Act. The IGST Act provides that IGST on imported goods will be charged under Section 3 of the Customs Tariff Act 1975; if a tax was charged under the Customs Tariff Act, then no input tax credit would be available under the CGST/SGST Act. This appeared to be a dual taxation and no reply had been received so far. He further stated that the definition of supply in Section 7 of the CGST/SGST Act required many changes. The definition of supply as it stood today was a matter of doubt and it was not understood why the changes suggested by LRC were dropped. He recalled that earlier too, during July 2016, more than 50,000 representations were received and on 26 November, 2016, only 3 days consultation was permitted with the stake holders. The same mistake was being repeated and only one week's consultation was being allowed for proposed changes in Law, which was inadequate. He stated ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r changes subsequently. 14.12. After these discussions, Commissioner (GST Policy Wing), CBIC proceeded with the Presentation. The discussion in the Council in respect of the specific proposals is summarised as below: (i) S. No. 6 of Presentation relating to Section 7 of CGST/SGST Act: The Commissioner (GST Policy Wing), CBIC explained that Section 7 (1) was proposed to be amended by creating a new sub-section (1A) clarifying that certain activities or transactions, which constituted a supply in accordance with the provisions of sub-section ( 1) of Section 7, shall be treated "either as supply of goods or supply of services as referred to in Schedule II". Advisor (Financial Resources), Punjab stated that the existing provision under Section 7 which made activities under Schedule II as a supply of goods or services was an inadvertent error in law drafting. If it was corrected at this stage prospectively, there would be numerous litigations. In this view, he proposed that this amendment should be carried out with retrospective effect. The Hon'ble Deputy Chief Minister of Bihar cautioned that retrospective amendment could lead to a situation of tax refunds. The Secretary stat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....up to a turnover of Rs. 5 lakh annually. The Commissioner (GST Policy Wing), CBIC stated that once the annual turnover threshold for Composition taxpayers was being increased to Rs. 1.5 crore, 10% of this would become Rs. 15 lakh and therefore the upper limit would now be automatically Rs. 15 lakh as proposed by the Hon'ble Deputy Chief Minister of Bihar. The Hon'ble Chief Minister of Puducherry stated that they had received the agenda only three days in advance of the Meeting and the States that were not part of the Law Committee needed more time to examine this proposal. The Hon'ble Minister from Assam stated that the proposed amendment to Section 10 to increase the annual turnover threshold to Rs. 1.5 crore was already decided in the 23^rd Council meeting held in Guwahati on 10 November, 2017 and the proposed formulation was only its implementation. The Council approved the formulation as proposed in the Presentation. (iv) S.No. 17 of Presentation relating to Section 17(5)(a) and new (aa) and (b) of CGST/SGST Act: The Commissioner (GST Policy Wing), CBIC stated that during the Officers meeting held on 20 July 2018, it was pointed out that there was some contradict....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mes of four more States, namely Arunachal Pradesh, Himachal Pradesh, Meghalaya and Uttarakhand in Explanation to Section 22 of the CGST Act, 2017. (vi) S. No. 46 of Presentation relating to new Section 10 (3A) of GST (Compensation to States), Act, 2017: The Hon'ble Chairperson suggested that the proposed formulation should have more flexibility. Instead of providing that the amount remaining unutilised in the Fund shall be distributed between the Centre and the States, the law should provide that such amount may be distributed between the Centre and the States, as the Council may decide. He suggested to change the phrase 'distribute the amount remaining unutilized in the Fund' to 'distribute such amount remaining unutilized in the Fund'. The Council agreed to this proposal. (vii) S.No.1 of Table relating to Returns: The Hon'ble Chief Minister of Puducherry suggested that this proposal should be examined further. The Hon'ble Minister from Assam stated that this was only an enabling provision and it could be agreed upon. The Council agreed to the formulation shown in the presentation. 14.13. The Hon'ble Deputy Chief Minister of Delhi stated th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....genda Item 6(ii): Creation of Goods and Service Tax Appellate Tribunal (GSTAT) 16. The Secretary invited the Joint Secretary, Department of Revenue, to introduce the agenda item. The Joint Secretary, Department of Revenue, stated that the draft rules of Goods and Service Tax Appellate Tribunal (Appointment and Conditions of Service of President and Members) Rules, 2018 was approved by the GST Implementation Committee (GIC). He informed that during the Officers meeting held on 20 July 2018, Shri Arun Kumar Mishra, Additional Secretary, Commercial Tax Department, Bihar had pointed out that Rule 3 of these Rules would require some modification in view of the fact that the Rule referred to three different Selection Committees, but sub-Rule 4 provided for Convenor for only two Committees and this could be suitably modified. The Council approved this proposal. He further stated that it was proposed to constitute a GST Appellate Tribunal (GSTAT) National Bench at New Delhi and three Regional Benches at Mumbai, Chennai and Kolkata and after seeking the recommendations and approval of the GST Council, approval would be taken for creation of necessary posts of Chairman and Members. 16.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e would be only one monthly return for all taxpayers excluding small taxpayers with annual turnover below Rs. 1.5 crore and Input Service Distributor (lSD), etc. There would be an optional provision of quarterly return filing for small taxpayers with annual turnover below Rs. 1.5 crore, but they would need to pay tax on monthly basis. The due date for filing return by a large taxpayer shall be 20^th of the next month whereas the due date for smaller taxpayers shall be 25^th of the next month. The taxpayers having no output tax liability and no input tax credit would also have a facility to file return through SMS. Facility for continuous upload of invoices by the supplier and viewing by the recipient along with tax payment status of an invoice shall also be available. On locking those invoices, the recipient can avail the input tax credit. In cases where no return is filed after uploading of the invoices, it shall be treated as self-admitted liability of the supplier, after the due date of filing of that return. 18.3. Invoices uploaded by the supplier before 10^th of the next month shall be posted for viewing by the recipient by 11^th of next month. He stated that earlier the pa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ere would be a facility for amendment of invoice and other details filed in the return. Maximum two amendments of return would be allowed for each tax period till the month of September of the next Financial Year. Along with the amendment of return, payment of tax shall also be allowed to save the interest liability of the taxpayer and the negative tax liability would be taken to next tax period. In order to bring in some discipline in .return filing, it was proposed to charge a late fee (after some time of implementation of new return) if the amendment return involved change in liability of tax by more than 10%. He stated that the table for export of goods in return would also contain details of shipping bills, but this information could be filed even after filing the return by using a separate facility for correcting details of Shipping Bills without considering it as amendment, and therefore the taxpayer would not be considered to have exhausted his opportunities for amendment of return. Subsequently, once the data was complete, the same would be transmitted to ICEGATE for processing. He stated that a provision of ' supply side control', that is some limit I red flags wo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....siness took place within the sphere of large taxpayers, 12.3% of the business took place between the large taxpayer and the small taxpayer and transaction between two small tax payers was approximately only 2.2%. The credit utilization by the small taxpayers/ businesses was also lower than that for medium and large businesses. 18.7. The Joint Secretary (TRU-ll), CBIC stated that there would be further simpler quarterly return available for small traders who make only Business to Consumer (B2C) supplies or only Business to Business (B2B) plus Business to Consumer (B2C) supplies. The return format for B2C suppliers was proposed to be called SAHAJ and for B2B plus B2C suppliers, it was proposed to be called SUGAM. He also stated that small taxpayers would have the option to continuously upload the invoices to enable their purchasers to avail input tax credit. He informed that the key feature of SAHAJ and SUGAM would be that some of the details required in other returns had been dropped and such information shall be collected only in the annual return, such as HSN details, details of non-GST supply and capital goods credit. He stated that in this return, there shall be no details fo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....urn format should be placed in public domain so that ideas could be obtained for further simplification. He also stated that adequate time should be given for transition and software development of the new return format. The Hon'ble Chairperson stated that the new return format could be put in public domain for one month. 18.10. On enquiry by the Hon'ble Chairperson regarding tin1e taken for development of software, Shri Prakash Kumar, CEO, GSTN informed that they would need about six months' time to develop the software after specifications are frozen. The Secretary stated that GSTN was already working on the software development and the aim would be to introduce the new return format from 11 January 2019 on best effort basis. The CEO, GSTN stated that the return design should be finalized quickly because it becomes very difficult to first make software and then make further changes. He raised the issue regarding integration of refund process in the new return design which requires deliberation. The Hon'ble Chairperson stated that all s new return format should be finalized expeditiously. The Hon'ble Deputy Chief Minister of Bihar stated that taxpayers should al....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sidered at this stage. He further observed that even Directors of the Companies were jointly and severally responsible. The Hon'ble Chief Minister of Puducherry supported, in principle, the proposal to extend the benefit of filing quarterly returns to taxpayers having annual turnover up to Rs. 5 crore but suggested that it should be further examined. The Hon'ble Deputy Chief Minister of Delhi stated that earlier too, on many occasions, he had suggested to have a system of filing quarterly return and monthly payment of tax for all taxpayers. 18.13. The Secretary stated that 13% of the Revenue came from taxpayers with annual turnover below Rs. 5 crore and if the benefit of quarterly return was extended for taxpayers with annual turnover up to Rs. 5 crore, it would lead to benefit for additional 10% of taxpayers (coverage of taxpayers would increase from 83% to 93%) but the tax involved would be around 13% of the total collection whereas for tax payers up to Rs. 1.5 crore annual turnover, it involved about 6% of total revenue. The Hon'ble Chairperson stated that 7% revenue was not such a high figure and the turnover threshold for filing quarterly return could be increas....
X X X X Extracts X X X X
X X X X Extracts X X X X
....irperson stated that one option was that the taxpayer should make an estimate of his ta-x liability for the quarter and pay one third of the tax every month. Shri Tuhin Kanta Pandey, Additional Chief Secretary (ACS), Odisha stated that taxpayers would not be able to estimate their potential turnover in advance. He also stated that Rs. 1.5 crore annual turnover threshold was based on the threshold limit for Composition scheme. After further discussion, the Council agreed that taxpayers up to annual turnover of Rs. 5 crore would file quarterly return and pay tax monthly and that the Law Committee would examine how to ensure that taxpayers did not pay less amount in the first two months of the quarter. 18.15. The Hon'ble Chairperson also made a reference to 'briefcase companies' who sell goods enabling the recipient to take input tax credit and vanish after 2 to 3 months. He observed that if such companies were not traceable, then the recipient who had used the input tax credit would be liable to pay the tax even though he might have paid the tax to the seller. He suggested that to address this problem, one option could be that when a buyer was purchasing goods from an unkn....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... viii) The Law Committee to examine to introduce a provision in the GST Law to allow a buyer to pay tax for the supplies received from a new or unknown supplier. , Agenda Item 7: Issues recommended by Fitment Committee for consideration of GST Council 20. The Secretary invited Shri G.D Lohani, Joint Secretary (TRU-I), CBIC to introduce the agenda item. The Joint Secretary (TRU-1), CBIC stated that representations received from various stakeholders including Ministries and Secretaries and other officers of the Centre and the States seeking changes in GST rates and clarification regarding applicability of GST rates on supply of goods/services, were considered by the Fitment Committee in its meeting on 9 and 10 July 2018 and its recommendations is at Annexure I of Agenda Note 7. Fitment Committee also considered the GST rate on Handicraft items as identified by the Handicraft Committee and it made certain recommendations for changes in GST rates and for issuing clarification in relation to goods which is at Annexure II of Agenda Note 7. Issues relating to changes in GST rates or for issuance of clarification in relation to Services is at Annexure-III of Agenda Note 7. Iss....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iii) The Hon'ble Minister from Kerala stated that hand operated rubber roller was an agricultural implement and most of agricultural implements were exempted from tax. The Joint Secretary (TRU-1) stated that only agricultural implements such as spades, shovels and hoes falling under Chapter 82 were exempt from tax whereas those falling under the category of machine were taxed at the rate of 18%. He added that in the Fitment Committee, there was no proposal to reduce the rate of tax on Hand Operated Rubber Roller and the issue was only to clarify the correct classification of the item. The Hon'ble Minister from Kerala suggested that this item should be taxed at the rate of 5%. The Joint Secretary (TRU-1) stated that no goods under Chapter 8420 were taxed at the rate of 5% and Chapter 8420 covered a lot of other items. Reduction of tax rate on only item under this Chapter heading could lead to other distortion in rates. CCT, Gujarat stated that other sectors falling under this Chapter heading would also request for reduction of tax rate and suggested that the rate should be kept at 18%. The Hon'ble Minister from Assam stated that since Chapter 8420 contained several other ite....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... reduce tax on Napa slabs, which was similar to Kota stone and, therefore, rate of tax should not be increased. (v) The Hon'ble Minister from Rajasthan stated that sand stones and lime stones were used by relatively lower class of people and this should be taxed at a lower rate whereas mirror polished tiles which are the replacement for high grade granite tiles, etc. could be taxed at the rate of 18%. He also showed physical samples of rough and polished Kota stones. The Hon'ble Chairperson observed that small stones which are not polished should be taxed at the rate of 5%. He stated that the Fitment Committee, in consultation with the officers of Rajasthan and Andhra Pradesh, should work out a definition and scope of polished stone which could be kept at a higher rate while stones which were not polished but cut and smoothened should be kept at 5%. The Hon'ble Minister from Chhattisgarh observed that relatively cheaper stones called 'farshi pathar ' was being taxed at the rate of 18% and as a result, market for such stones had come down leading to loss of employment for almost 50,000 persons. He stated that this item be taxed at the rate of 5%. Hon'ble C....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... it should be considered a little more. She further stated that the initial suggestion was to keep cotton and other natural textile at 5% and to tax manmade textile at the rate of 12% and 18%. However, decision was to keep the rate of tax on textile at 5%, and to block the refund of the input tax credit accumulated as a result of inverted duty structure. If full input tax credit was allowed, it would lead to a situation of large-scale refund. The Hon'ble Deputy Chief Minister of Gujarat stated that in Surat, textile industry was badly affected and almost 50% of the power loom industry had shut down. There was no tax on textile earlier and refund must be given for inverted duty structure on fabrics. The Hon'ble Minister from Rajasthan stated that the current rate structure of yarn to fabric had created a difference in tax treatment between integrated textile units and stand-alone textile units. He suggested that there could be three solutions to this problem namely: (i) yarn be taxed at the rate of 5%; (ii) manmade fabrics be taxed at the rate of 12% instead of 18%; (iii) blocked input tax credit may be released. (ix) The ACS, Odisha stated that workers from his State emp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uggested that rate of tax on fertilizer grade micro nutrients and fertilizer grade phosphoric acid be reduced from 12% to 5%. Secretary stated that micro nutrients and fertilizer grade phosphoric acid, etc. were very broad categories of products and tax reduction should not be considered. The Hon'ble Chairperson stated that the suggestion of Tamil Nadu should be considered for reduction of tax on fertilizer grade phosphoric acid from 12% to 5%. The Council agreed to this suggestion. Pickle (xi) The Hon'ble Minister from Tamil Nadu suggested that pickle should be exempted from tax as was also suggested by the Hon'ble Chief Minister of Puducherry in earlier Council meetings. The Hon'ble Deputy Chief Minister of Bihar and the Hon'ble Minister from Goa suggested that exemption of tax on pickles should be considered by the Fitment Committee. The Hon'ble Chairperson observed that all food processing items should be promoted as total revenue from these items other than from bread and bakery products was not very significant. He stated that tax reduction would encourage the cottage industry in this segment. The Hon'ble Minister from Goa stated that he had ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Nicotine Gum: (xiv) The Hon'ble Deputy Chief Minister of Gujarat stated that to quit smoking habit, Nicotine Polacrilex Gum is used and the present rate of tax on this item was 18% which should be reduced. He added that these products are like medicines and its rate should be reduced to 12%. The Secretary suggested that it may be referred to the Fitment Committee for further discussion. The CCT, Gujarat stated that the Fitment Committee had discussed this proposal and rejected it. The Joint Secretary, TRU-ll stated that this product could not be differentiated from regular chewing gum. The Secretary stated that technical specification could be given for this product based on percentage of nicotine content and then rate reduction could be considered. He suggested that the Fitment Committee could consider this issue afresh on this basis. The Council agreed to this suggestion. (xv) The Hon'ble Chairperson stated that the Hon'ble Minster from Punjab had brought to his notice that the rate of tax on egg was different for different categories. For example, egg was exempt from tax, but egg white was taxed at the rate of 18%. The Secretary suggested that this issue could ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cheduled Caste community worked on leather shoes on job work basis and this should be taxed at the rate of 5%. (xviii) The Hon'ble Minster from Goa suggested that the rate of tax on all shoes should be brought down to 5%. The Hon'ble Chairperson cautioned that this would lead to even big brands like Adidas and Nike getting the benefit of a low tax rate. The Hon'ble Minster from Haryana stated that footwear industry was strong in his State and footwear costing less than Rs. 500 per pair was earlier getting imported in large quantities from China but it was now getting exported from his State to China. He stated that shoes costing more than Rs. 500 per pair were normally used by higher income groups and tax on this item should not be reduced. He suggested that Council should wait for 18 months before considering change in tax rate as this was a high consumption item. He further stated that there was also a need to balance the revenue considerations and that the Fitment Committee should examine this proposal. (xix) The Hon'ble Minster from Odisha stated that they had no leather industry in their State and it was important to see the revenue implication. He suggested ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ar reiterated that 18% tax rate was too high and the loss of revenue would not be substantial if the rate was reduced to 12%. Shri Khalid K. Anwar, Senior Joint Commissioner, West Bengal stated that in the earlier VAT regime, the VAT rate on shoes costing up to Rs. 500 per pair was 5% but for other categories, VAT rate was 14.5%. Now, in GST, tax rate of 18% meant that the State's share was only 9% and if this was reduced to 12%, State's share would further come down to 6%. The Hon'ble Chairperson suggested that tax rate of 5% should be applied for footwear sold for a price upto Rs. 1000 per pair instead of the present R.s.500 per pair while tax rate of 18% should be continued for other categories of footwear. The Council agreed to this proposal. Lower Priced Biscuits (xxii) The Hon'ble Minster from Uttarakhand stated that small biscuit industry which sold biscuits at Rs. 100 per kilo or below was suffering and they were unable to compete with the multinational brands at the current tax rate of 18%. He suggested to bring down the tax rate on biscuits sold at Rs. 100 per Kilogram or below to 5%. He stated that this will help poor people to afford biscuit with t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e than Rs. 1000 per pair and in that case, it would automatically fall under 5% tax bracket. 21. For Agenda item 7 relating to rate of tax on goods, the Council approved the proposals of change in tax rates/clarifications on goods contained in Annexure-I and Annexure-II, along with the changes in the rate of tax on goods as discussed above. 22. The Joint Secretary (TRU-ll), CBIC introduced the changes proposed in the rate of tax on services in Annexure ill to Agenda item 7. He sought the permission of the Council to withdraw the proposal at Sl. No.26 of Annexure III [to exempt from tax skill programmes having certification from Directorate General of Training (DGT) erstwhile Directorate General of Employment and Training (DGET) or Sector Skill Council under GST] as this proposal was subject to confirmation by the Directorate General of Training (DGT) that CREDAI was their training partner. He informed that in the morning today, DGT had clarified that CREDAI was not a training partner of DGT in the Ministry of Skill Development and Entrepreneurship. The Council agreed to withdraw the proposal at Sl. No. 26 of Annexure ill of Agenda item 7. Discussion regarding some other propo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on'ble Minister from Rajasthan stated that they supported the stand of the Hon'ble Minister from Goa of applying 28% tax rate on room rent above Rs. 10,000 only. The Hon'ble Chairperson stated that a big relief was already being given in this Council Meeting for accommodation services by applying the tariff rate on transaction value instead of declared value. Further relaxation regarding increasing the cap on minimum room rent from which the rate of 28% would apply could be examined further by the Fitment Committee. (iii) Sl. No. 12 (Proposal to declare services supplied by Central Government, State Government, Union Territory or Local Authority by way of any activity in relation to any function entrusted to a Municipality under Article 243W of the Constitution as neither supply of goods nor services): The CCCT, Andhra Pradesh stated that the proposal to declare services provided by municipalities as "no supply of goods or services" should be accepted as some Municipalities were smaller than Panchayats. The Senior Joint Commissioner, Commercial Tax, West Bengal stated that under the present GST laws, services provided by Panchayats qualify as "no supply" and in other pla....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d be charged on custom milling of paddy. The Hon'ble Chairperson stated that this could be examined by the Fitment Committee. The Council agreed to this suggestion. Tax on coaching of various sports (v) The Hon'ble Minister from Assam stated that presently there was a tax on sports activity such as coaching for boxing and badminton and he suggested that sports and cultural activities should *be exempted from tax. The Secretary stated that the basic issue related to charging of tax on coaching for sports activities and this could be examined by the Fitment Committee. The Council agreed to this suggestion. 23. For Agenda item 7 related to proposed changes in rate of tax on services, the Council approved the proposals of Annexure-III to Agenda Item No.7 except the item at Sl.No.26 which stood as withdrawn. The Council also agreed that in relation to Sl. No.2, an explanation shall be added to the existing notification 14/2018-Central Tax (Rate) to clarify that services provided by Educational Boards are exempt. 24. In relation to proposals at Annexure IV relating to goods (List of goods which require further examination by the Fitment Committee), on the issue of foo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lation to Annexure-VI of Agenda Note 7 (List of services not recommended for change in GST rate), the Principal Secretary (Finance), Jammu & Kashmir on behalf of His Excellency the Governor of Jammu & Kashmir, brought to the attention of the Council, item at Sl. No.21 (to exempt all kinds of supply of services by Shri Mata Vaishno Devi Shrine Board, Katra from GST) and Sl. No.22 (to exempt all kinds of supply of services by Shri Amarnathji Shrine Board from GST) and requested that the services by both the Shrine Boards should be exempted from tax. The Hon'ble Chairperson stated that the Ministry of Culture had come up with a scheme to reimburse taxes on inputs used in preparing food in langars, etc. when distributed free and they should take advantage of this scheme. He added that upfront exemption of tax on inputs going into preparing food etc. in a religious shrine would not be possible as it would be very difficult to assess as to what items were purchased for use in the temple. 28. After discussion, the Council approved the proposals under Annexure VI (List of Services not recommended for change in GST rate). Discussion on Table Agenda for rate reduction in Goods 29. T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....le Chairperson agreed to this suggestion. He stated that it would send a bad signal to reduce tax rate on games etc. which could be potentially used in casinos and suggested to exclude goods covered under Sl. No. 14 of the Table Agenda from the proposal to reduce tax from 28% to 18%. The Council agreed to the proposal. 29.3. The Hon'ble Minister from Assam suggested that the proposal to reduce tax rate on items listed at Sl.No.11 [special purpose motor vehicles, other than those principally designed/ for the transport of persons or goods (for example, breakdown lorries, crane lorries, fire fighting vehicles, concrete-mixer lorries, road sweeper lorries, spraying lorries, mobile workshops, mobile radiological unit), SI.No. 12 (works trucks, self-propelled, not fitted with lifting or handling equipment, of the type used in factories, warehouses, dock areas or airports for short distance transport of goods; tractors of the type used on railway station platforms; parts of the foregoing vehicles) and Sl. No. 13 [trailers and semi-trailers; other vehicles, not mechanically propelled; parts thereof (other than self-loading or self-unloading trailers for agricultural purposes and ha....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to the Hon'ble Union Finance Minister in November 2017 urging reduction in rate of tax on the items covered under 28% rate bracket and he had conveyed his support to the proposed reduction in rates. The Hon'ble Chairperson stated that he had also talked to the Hon'ble Chief Minister of West Bengal before this Council Meeting and she also supported the proposal to give relief to the middle-class people. 29.7. The Hon'ble Chairperson stated that washing machine falling under Chapter heading 8450 was left out of the Table Agenda. He proposed that tax should be reduced on this item also from 28% to 18% as it was used widely by the middle class. He added that the revenue involved on account of tax reduction on this item was about Rs. 1560 crore. CCT, West Bengal expressed that in India, washing was still done by hand by 75% of the population and also the use of washing machine was bad for environment. The Hon'ble Chairperson stated that a lot of working-class women used washing machines and added that rate reduction on washing machine would come as a great relief to middle class women. The CCT, Punjab supported the proposal. He, however, stated that the estimated revenue los....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t tax credit lying in balance on the date of such notification shall stand lapsed; (ii) To reduce tax on fertilizer grade phosphoric acid from 12% to 5%; (iii) To reduce the rate of tax on ethanol for sale to Oil Marketing Companies for blending with motor spirit from 18% to 5% (iv) To reduce the rate of tax on zip and slide fasteners from 18% to 12% (v) To charge tax at the rate of 5% for footwear sold for a price up to Rs. 1000 per pair instead of the present Rs. 500 per pair, while tax rate of 18% to be continued for other categories of footwear (vi) To reduce the rate of tax rate for knitted cap/topi falling under Chapter Heading 6501 and 6505 and having retail sale value not exceeding Rs. 1000 from 12% to 5% (vii) To exempt from tax rakhi other than those made of precious and semiprecious metal/article; (viii) Fitment Committee to review/consider reduction in rate of tax on pickle cakes different categories of eggs other processed food products (Sl. No.90 of Annexure V) Nicotine Polacrilex Gum (Sl. No.71 of Annexure V) products consumed on cruise liners; biscuits sold at Rs. 100 per Kilogram or below; 30.3. For ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....es) except for the goods covered under Sl. No. 14, 16 and17 and including Washing Machine covered under Chapter Heading 8450. Agenda Item 8: Reports/Recommendations of different Committee/Group of Ministers (GoMs) for information/approval of the Council Agenda Item 8(i): Recommendations of the Committee on Lottery 31. The Secretary invited the Joint Secretary (TRU II), CBIC to brief the Council regarding the recommendations of the Committee on Lottery. The Joint Secretary (TRU II), CBIC stated that the Terms of Reference of the Committee on Lottery was to examine and recommend ways to enable flow of GST to lottery to consuming States, and in this context, to examine issues like continuance of reverse charge on lotteries, exemption from tax for supplies beyond the first stage of lottery distributor, any necessary changes in 'place of supply rules' or Lottery Regulation Act, 1998 and any other connected issues. 31.1. He informed that the report of the Committee was submitted which is part of Annexure A of this Agenda item. The Committee has made the following recommendations for the consideration of the Council: A clarification may be issued that: a. I....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Ritvik Pandey, Joint Secretary, DoR, as its coordinator. He then invited the Joint Secretary, DoR to present the main recommendations of the Committee on IGST. The Joint Secretary, DoR stated that after an analysis of un-apportioned amount of IGST, the Committee on IGST had recommended to make ad hoc settlement of the un-apportioned amount of IGST. In the month of February, 2018, ad hoc settlement of Rs. 35, 000 crore was approved. In March, 2018, the Council constituted a committee on IGST to study and address the problem of IGST accumulation He stated that collection of IGST every month was about Rs. 50,000 crore. Initially, in August, 2017, settlement was of Rs. 11, 000 crore and in June, 2018, settlement was about Rs. 30, 000 crore leaving a gap of about Rs. 20, 000 crore. He stated that as there was no transitional credit of IGST, the settlement of IGST had started right from the start of implementation of GST from the level of Rs. 11,000 crore. However, because of accumulation of IGST credit, two provisional settlements were done, one of Rs. 35,000 crore in February 2018 and the second ofRs. 50, 000 crore in June 2018. 33 .1 . He pointed out certain reasons for accumulati....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ting State would always have a significant balance. This model would not affect the Central Government as it would get the CGST upfront. 33.3. The Secretary further informed that a paper has been written by Shri V. Bhaskar and Shri Vijay Kelkar of Pune International Centre in which it is proposed to make CGST payment immediately and to pay SGST as IGST for settlement with the States. He stated that this model was also fine with the Central Government. He added that the Central Government would not like to keep IGST balance beyond Rs. 1.6 lakh crore and would give provisional settlement to the States for balance exceeding this amount. He suggested that the Committee on IGST could examine both the models, namely payment of CGST and SGST upfront and the model suggested by Shri V. Bhaskar and Shri Vijay Kelkar. The Council agreed to this proposal. 33.4. The Hon'ble Deputy Chief Minister of Delhi stated that in the VAT regime also, there was issue of credit lying in the taxpayer's credit account. The payment of refund was also an issue. He stated that parking of such a large amount of IGST would require a serious rethink of CGST and SGST model. The Hon'ble Chairperson info....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Committee on IGST. However, if accumulation of IGST continued even after these solutions were implemented, then provisional settlement would be done. 33.8. The Hon'ble Deputy Chief Minister of Delhi stated that devolution for the last year was done including the IGST amount ofRs. 1.6 lakh crore up to March 2018. This led to loss of revenue to Delhi as they did not get any revenue. He stated that any decision regarding IGST should be taken with the approval of the Council or the GIC and it could not be unilaterally decided by the Central Government. The Secretary stated that no unilateral decision was taken. In fact, there was no option as the IGST forms part of the Consolidated Fund of India and since it was part of the Consolidated Fund of India, the Central Government had no option but to devolve it to the States. However, Central Government did not have the option to distribute Rs. 1.6 lakh crore as it was a liability for future and it was a liability of the Central Government. He added that in future too this balance would need to be maintained. 33. 9. The Hon'ble Deputy Chief Minister of Delhi stated that they had subsumed entry tax, luxury tax, etc. but there is no ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t, then State finances would be benefitted but one has to be also mindful of the finances of the Central Government. He pointed out that in 2017-18, the total revenue of States was Rs. 3.39 lakh crore, whereas that of the Central Government was only Rs. 2.05 lakh crore. Similarly, in Financial Year 2018-19, the States total revenue including compensation was Rs. 1.39 lakh crore, whereas that of the Central Government was Rs. 1.17 lakh crore. He stated that the revenue position of the Central Government must also be taken into account and it would need to hold Rs. 1.6 lakh crore as a liability for future settlements. 33.12. The Hon'ble Chairperson observed that the amount for compensation would come down if proposal made by Tamil Nadu and Delhi was accepted. The CCT, Tamil Nadu stated that in the year 6 of implementation of GST, the method of IGST settlement would make a big difference. The Hon'ble Chairperson stated that instead of recording disagreement of some States, concerns of Delhi, North-East and Tamil Nadu would need to be addressed. He suggested that a Committee should be formed under Chairman, CBIC, Shri S. Ramesh, to look into these issues and Finance Secretaries ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... was transitory in nature. 34. For Agenda Item 8(ii), the GST Council decided the following: (i) To approve the recommendations of the Committee on IGST to change the order of cross utilisation in the GST Law requiring the taxpayer to first use the IGST credit for payment of CGST / SGST before using CGST / SGST credit and to add a table of reconciliation of input tax credit available and input tax credit availed in the format for annual return; (ii) To set up a Committee under Chairman, CBIC consisting of Finance Secretaries of Delhi, Puducherry, Tamil Nadu, and one each from the States of North East and West along with Principal CCA, CBIC and Joint Secretary, DoR, to address the concerns raised regarding treatment of IGST amount vis-a-vis the Consolidated Fund of lndia. Agenda Item 8(iii): Recommendations of the Report of the Task Force to suggest measures for creating an Eco-System for Seamless Road Transport Connectivity 35. The Secretary invited the Joint Secretary, Department of Revenue (DoR) to make a presentation on this Agenda Item. The Joint Secretary, DoR stated that in order to comprehensively review the benefits of GST to reduce the burden on logistic sec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dation was to dovetail GST and Transport lntemationaux Routiers -so that ID number of TIR CARNET holder can be treated as a valid e-Way Bill. 35.2. The Joint Secretary DoR further stated that the report also recommended to minimize routine checks and the same should be done only on risk assessment. There should be authorization by a significantly high level of officer for conducting such checks and there should be a system of mandatory reporting of checks. The report also suggested rationalization of check posts and a system to avoid routine road checking of vehicles. The report has also suggested integration of various databases like VAHAN, SARATHI and NCRB (National Crime Records Bureau). Separate risk assessment matrix could be developed for each purpose as has done by the Customs Department. 35.3. The report also highlighted the need for real time updation of VAHAN database by Regional Transport Offices (RTOs) to capture fitness certificate, pollution under control, insurance, permit etc. The report has also recommended to harmonize Carriage by Roads Act, 2007 and GST Law. It also suggested electronic payment of toll, all types of payment including on-road penalties to be....
X X X X Extracts X X X X
X X X X Extracts X X X X
....te them to all the States. He suggested that GSTN should work out as to how many RFID readers would be required in the whole country and what would be their positioning. He added that GSTN should work out the cost for installation of RFID readers and RFID tags. The Hon'ble Chairperson stated that the Ministry of Road Transport and Highways had indicated that about 10,000 readers would be needed and it was proposed to be done centrally. CCT, Kerala, stated that one could go for ANPR (Automatic Number Plate Reader), GPS or RFID but it should be done nationally. The Secretary sated that the technology platform should be common. Shri Rajiv Jalota, CCT, Maharashtra stated that all their inter-State check posts were computerized and RFID enabled and almost 80% of vehicles criss-crossing the State were also RFID enabled. He stated that all data needed by NIC from his State administration for a pilot project for integration of data of e-way bill with data of RFID was being shared with them. The Hon'ble Chairperson observed that Uttar Pradesh, Kerala and Maharashtra had installed RFID readers and installation cost in Uttar Pradesh was only around Rs. 2.10 crore. The RFID system coul....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Kerala and West Bengal. He observed that the concern was right and that the new proposal was aimed to benefit the poor and the lower middle-class persons. He added that one big benefit would be that people would be encouraged to ask for bills while making purchases in order to get advantage of the monetary incentive. 37.1. The Joint Secretary, TRU-1, CBIC informed that the Group of Ministers on Digital Payments constituted by the Council had recommended that its implementation may be deferred for some time as GST had not stabilised; new return process was still work-in progress; GST revenue was still to reach a comfortable level; and that the revenue implications of the proposal were significant. He stated that it was a common view that digital transactions need to be incentivized but concerns were expressed regarding its coverage under GST, revenue implications, targeted beneficiaries of such incentives and implementation modalities. He stated that these aspects were re-examined keeping in .view the fact that digital payments have far reaching positive implications for the economy. He stated that apart from providing visible upfront benefits of making digital payments and ther....
X X X X Extracts X X X X
X X X X Extracts X X X X
....edit cards and debit cards (other than RuPay) would not be eligible for this benefit. He also stated that the benefit would be given as instant cash payment in the bank account of the consumer through NPCI (National Payments Corporation of India). The Hon'ble Chairperson stated that tax would be collected in the formal mode and the money would be paid through NPCI. He observed that RuPay card was used mostly by about 30 crore Jan-Dhan account holders who were comparatively poor people. He stated that the idea was to support such people and that their expenditure on purchases should also become part of the formal economy but without changing the GST rate. 37.6. The Hon'ble Deputy Chief Minister of Bihar stated that had this proposal come to the Group of Ministers on Digital Payment, they would have approved it, as this was a better option. He observed that this proposal did not require tweaking of tax rate. He also appreciated the idea of excluding credit card/debit card and making payment through RuPay. He stated that the GOM on Digital Payment could look into the issue afresh and make recommendation taking into account the new proposal. 37.7. The Hon'ble Minister....
X X X X Extracts X X X X
X X X X Extracts X X X X
....this suggestion and suggested that the revised proposal tabled today could be sent to the GoM on Digital Payments for further examination and refinement and the same could be discussed during the next Council Meeting of 4 August, 2018. The Council agreed to this suggestion. 38. For Agenda Item S(iv), the Council approved that the revised proposal presented in today's Council meeting (Annexure 7 to the Minutes) shall be sent to GoM on Digital Payments for further examination and refinement and to be taken up in the next Council Meeting of 4 August, 2018. Agenda Item 8(v): Interim Report of the Group of Ministers on Imposition of Su2ar Cess 39. Introducing this Agenda Item the Secretary informed that the Group of Ministers (GoM) on Imposition of Sugar Cess had submitted an interim report wherein it has recommended the following: - 1. Power to levy Cess by the Union or States: The GoM is of the view that since the matter is sub judice in the Hon'ble Supreme Court, it would be advisable to wait till the final judgement of the Hon'ble Supreme Court is given on Constitutional validity of imposition of compensation cess under GST. ii. Levy of 1% Agriculture Cess on ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on may be inserted in line with the formulation proposed by the Law Committee and the Law Review Committee which reads as follows: "9 (4) The Government may, on the recommendations of the Council, by notification, specify a class of registered persons who shall, in respect of taxable goods or services or both received from an unregistered supplier, pay the tax on reverse charge basis as the recipient of such goods or services or both, and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. " (ii) The proposed formulation at paragraph 3 (i) above should be modified to also provide for prescribing certain conditions by the GST Council while recommending introduction of RCM on a class of registered persons receiving goods or services or both from an unregistered supplier. Further, there should be a provision to levy tax on RCM basis only on select goods or services or both as may be notified on the recommendations of the Council. (iii) The Law Committee may consider the issue of exclusion of Brick Kilns, Menthol and Sand Mining activities fr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on of Accounting systems of the State Accounting Authorities and PFMS (Public Financial Management System) with GSTN. He further stated that they should also check the state of preparedness of the States to implement IDS and whether to do in stages or at one go. The Secretary further stated that they would also examine that if TDS was to be introduced in stages, whether it would require change in the GST Law. The Council approved these suggestions. The Council also took note of the minutes and approved to introduce Tax Deduction at Source (TDS) from 1 October 2018 subject to verification of readiness of States to implement IDS. 44. For Agenda Item 9, the Council: (i) took note of the Minutes of the 9^th Meeting of Group of Ministers (GoM) on IT challenges in GST implementation held on 14 July 2018; (ii) approved to introduce Tax Deduction at Source (IDS) from 1 October 2018 subject to verification of readiness of States to implement TDS; and (iii) to constitute a Committee under the convenorship of Joint Secretary, DoR and comprising of CEO, GSTN, ACS, Odisha and CCT, West Bengal to examine integration of Accounting system of the State Accounting Autho....
X X X X Extracts X X X X
X X X X Extracts X X X X
....would obtain representations from small industry and also from the Ministry of Industry. The Secretary stated that it was a good idea to get suggestions from grassroots but spadework needed to be done in advance to find out solutions. He stated that suggestions should be sent in advance so that enough time was available to examine them. The Hon'ble Chairperson stated that all suggestions should be obtained by end of next week. Specific State-related issues should be sent along with possible solution to problems being faced. 49. The meeting ended with a vote of thanks to the Chair. ============= Document 1JAYNA BOOK DEPOT Estd., 1949 JB JAYNA MINUTE BOOK Annexure 1 List of Ministers who attended the 28th GST Council Meeting on 21 July 2018 Name of Hon'ble Minister SI No State/Centre 1 Govt of India Shri Piyush Goyal 2 Govt of India Shri S.P. Shukla 3 Andhra Pradesh 4 Arunachal Pradesh 5 Assam 6 Bihar 7 Chhattisgarh 8 Delhi 9 Goa 10 Gujarat 11 Haryana 12 Kerala 13 Madhya Pradesh 14 Maharashtra 15 Meghalaya 16 Mizoram 17 Odisha 18 Puducherry 19 Punjab 20 Rajasthan 21 Tamil Nadu Shri Yanamala Ramakrishnudu Shri Jarkar Gamlin Dr Hima....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Shri Gaurav Singh Shri Pramod Kumar Shri N Gandhi Kumar Shri Ravneet Singh Khurana Shri Vishal Pratap Singh Ms Himani Bhayana Dr Sumit Garg Ms Bhagwati Charan Shri K S M Geelani Gunjan Kumar Varma Shri Mahipal Singh Shri Harsh Singh Ms Nisha Gupta Shri Siddharth Jain Ms Gayatri PG Shri Vikash Kumar Ms Deepika Singh Page 56 of 126 Charge Finance Secretary Chief Economic Advisor Chairman, CBIC Member (GST), CBIC Member (Budget), CBIC Special Secretary, DoR Advisor (GST), CBIC Pr. DG, DG-Audit, CBIC DG, DG Anti-Profiteering, CBIC Joint Secretary, TRU I, DOR Joint Secretary, TRU II, DOR Joint Secretary, DoR Joint Secretary, Ministry of Law & Justice Commissioner (GST), CBIC ADG, GST, CBIC ADG, GST, CBIC Commissioner, TPRU DG (M&C) ADG (M&C) Director, TRU I Director, TRU II OSD, TRU-II, DOR Deputy Secretary, TRU-I, DOR Deputy Secretary, TRU-II, DOR Deputy Secretary, DoR Joint Comm., GST Policy Wing Joint Comm., GST Policy Wing Joint Comm., GST Policy Wing Dy Comm, TPRU Dy. Comm, TPRU Technical Officer, TRU-I, DOR Technical Officer, TRU-1, DOR Technical Officer, TRU-I, DOR Technical Officer, TRU-II, DOR Dy. Comm., GST Policy Wing Dy.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....OK DEPOT 78 Govt. of India Shri B.K. Mallick Commissioner, Kolkata Zone, CBIC CHAIRMAN'S INITIALS Page 57 of 126 MINUTE BOOK Shri B. Hareram 79 Govt. of India 80 Govt. of India Shri C.K. Jain Shri Milind Gawai 81 Govt. of India 84 82 Govt. of India 83 Govt. of India Andaman & Nicobar Islands Shri Mukesh Rajora 85 Andaman & Nicobar Islands 86 Andhra Pradesh 87 Andhra Pradesh Arunachal Pradesh Shri Sanjay Mahendru Shri Nitin Anand Shri Mohan Saroj Ranjan Shri J.Syamala Rao Shri T.Ramesh Babu Shri Anirudh S Singh 88 89 Assam 90 Assam Shri Anurag Goel Shri Shakeel Saadullah 91 Bihar 92 Bihar 93 Bihar 94 Chandigarh 95 Chandigarh 96 Chhattisgarh 97 Chhattisgarh 98 Chhattisgarh Daman & Diu Delhi 99 100 101 Delhi 102 Delhi 103 Goa 104 Gujarat Ms Sujata Chaturvedi Shri Arun Kumar Mishra Shri Mukesh Kumar Shri Jitendra Yadav Shri Sanjeev Madaan Shri Amitabh Jain Smt Sangeetha P Ms Nimisha Jha Shri Suresh L Kamble Ms Renu Sharma Shri H. Rajesh Prasad Shri Anand Kumar Tiwari Shri Dipak Bandekar Dr. P.D. Vaghela Shri Sanjeev Kaushal Ms Ashima Brar Shri Jagdish Chander Sharma Shri Rajeev Sharma 105 Haryana 106 Haryana 1....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Manoj Rai Shri Ka. Balachandran Dr. T.V Somanathan Shri K Gnanasekaran Shri Anil Kumar Shri N Sai Kishore Shri Ashin Barman Ms Kamini Chauhan Ratan Page 59 of 126 Addl. Commissioner of State Taxes State Tax officer Commissioner, CT Pr. Secretary & Commissioner, State GST Dept. Commissioner, CT Jt. Commissioner, CT Dy. Comm, CT Commissioner, State Tax Jt. Commissioner, State Tax OSD to Finance Minister Commissioner of Taxes Jt. Comm. of Taxes Asst. Commissioner of Taxes Jt. Commissioner, State Tax Asstt. Commissioner, State Tax Commissioner and Secretary to Govt Jt. Commissioner, State Tax Dy Secretary CCT ACS, Finance Commissioner, CT Addl. Commissioner, CT Commissioner (ST) Addl. Chief Secretary-cum- Financial Commissioner (Taxation) Advisor (Financial Resources) to CM Excise & Taxation Commissioner Dy. Excise & Taxation Commissioner Secretary Finance (Revenue) Commissioner, State Tax OSD, Finance Addl. Commissioner, GST, State Tax Dept Addl. Commissioner, CT Prl Secretary, CT & Registration ACS/CCT Addl. Commissioner (Taxation) Commissioner of State Tax Jt. Commissioner, State Tax Superintendent of State Tax Commissioner, CT ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... deposited " . . in the consumer welfare fund pursuant to an order passed by NAPA between Centre and States Rule 97 (1) - to enable distribution of cess ordered to be deposited in the consumer welfare fund pursuant to an order passed by NAPA between Centre and States Rule 138(14)-exempting movement of empty LPG cylinders from E-way Bill Amendment of Instruction No. 10 of FORM GSTR-4 - serial 4A of Table 4 not to be furnished or the first two quarters of 2018 ⚫ FORM GST PCT-01 amended to include a declaration from the applicant to the effect that all conditions laid out in rule 83 (1) are fulfilled ✓ Notification No 26/2018-Central Tax dated 13th June 2018 issued Decisions in 17th Meeting of GIC (15.05.2018) (3/13) NATION TAX MARKET II. Notifying the authority for conducting the exam for GST Practitioners National Academy of Indirect Taxes and Narcotics (NACIN) notified as the authority to conduct the examination for GST Practitioner in terms of Rule 83(3) ✓ Notification No 24/2018 - Central Tax dated 28th May 2018 and Office Memorandum vide F.No. 257/GIC Meetings/GSTC/2018 dated 04th June 2018 issued CHAIRMAN'S INITIALS Page 63 of 126 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g of GIC (28.05.2018) (8/13) NATION TAX MARKET II. Notifying perishable or hazardous goods that may be disposed of after seizure, under section 67(8) of the CGST Act, 2017 Notification No. 27/2018 - Central Tax dated 13th June 2018 issued • III. Issuance of clarificatory Circular on the following issues: refund of accumulated ITC to an independent fabric processor (Job Worker) Circular No.48/22/2018-GST dated 14th June 2018 issued IV. SOP for enrolment of GSTP to expedite & streamline the process of enrolment ✓ SOP circulated on 17th July 2018 11 Decisions of GIC post 27th meeting of GST Council (9/13) INATION TAX MARKET 17 Decision by Circulation (31.05.2018) To extend the due date for filing of return by Input Service Distributors for the months from July, 2017 to April, 2018 by two months, i.e. from 31.05.2018 to 31.07.2018 ✓ Notification No 25/2018 - Central Tax dated 31st May 2018 issued Page 66 of 126 JAYNA BOOK DEPOT MINUTE BOOK Estd. 1949 JAYNA Decisions in 19th Meeting of GIC (05.06.2018) (10/13) ⚫ I. Amendment of CGST Rules, 2017 NATION TAX MARKET ⚫ Rule 58 and insertion of FORM GST ENR-02 to provide for si....
X X X X Extracts X X X X
X X X X Extracts X X X X
....8-Central Tax dated 06th July 2018 issued 15 Decisions of GIC post 27th meeting of GST Council (13/13) INATION TAX MARKET • Decision by Circulation (08.07.2018) 16 To put the draft proposals on Law amendments in public domain Proposals put in public domain https://www.mygov.in/ Page 68 of 126 JAYNA BOOK DEPOT Estd. 1949 JAYNA • MINUTE BOOK IT Grievance Redressal (IT-GRC) • " B NATION TAX MARKET Circular No. 39/13/2018-GST dated 03rd April, 2018 prescribing the procedure for taxpayers for lodging their grievance due to technical glitches in the GST Portal was issued GIC to act as IT Grievance Redressal Committee (IT-GRC) for resolving problems of the taxpayers who have not been able to file their documents such as TRAN-1, GSTR-3B/GSTR 1 or Registration/ migration etc. due to the technical glitches at GST Portal Taxpayers are required to submit their grievance application of technical glitches to the designated field nodal officer of State /Centre Field nodal officer will examine the taxpayer's application and supporting evidence and if it is prima facie found to be a case of technical glitch then send the issue, after collating w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....out receipt of any notice by the taxpayer and faced issues while proceeding after restoration Taxpayer could not migrate due to technical issues such as taxpayer could not access the Portal, was automatically logged out of the Portal, could not upload documents, 0% profile, blank profile etc. Issues faced while attaching DSC Where the taxpayer was unable to migrate, show cause notice was issued and taxpayer failed to respond in time and the registration was cancelled Page 70 of 126 JAYNA BOOK DEPOT MINUTE BOOK Estd. 1949 JB JAYNA Implementation of decisions of IT-GRC & examination of furtherATION Lots MARKET ⚫ GSTN is ready for enabling Enrolment/Migration and filing of TRAN-1 Decision of Law Committee on the start and end date for filing TRAN 1 and subsequently TRAN 2 is awaited B • • • • As on 15th July 2018 a total of around 3500 grievances of Migration /registration / TRAN 1/TRAN 2/ GSTR 3B / GSTR 1/ ITC 01/ITC 04 etc. have been received by GSTN's Nodal officer In the first lot, 918 cases (748 migration and 170 TRAN 1/TRAN 2) cases were presented to the IT-GRC Another lot of around 1200 cases have been examined by GST....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed a broadsheet containing the proposals for amending the law Consolidated proposals for law amendment as finalized by Law Committee (LC) and LRC were discussed in the officers' meeting before the 25th meeting of GST Council held on 18.01.2018 and in-principle approval accorded by the GST Council Page 73 of 126 ay CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE BOOK Introduction (2/3) NATION TAX MARKET Four joint meetings of the LC & LRC were held to finalize the proposals & draft formulations Draft proposals that were agreed upon after the said four meetings were further discussed by the LC on 06.07.2018 Finalized proposals for amending the law were collated in the broadsheet containing a total of 46 proposals for amending ✓ CGST Act, 2017 (38) ✓ IGST Act, 2017 (7) ✓ UTGST Act, 2017 (1) GST (Compensation to States) Act, 2017 (2) Introduction (3/3) NATION TAX MARKET Broadsheet containing the 46 proposals (as finalized by the LC on 06.07.2018) was placed in the public domain (https://www.mygov.in/), with the approval of GIC, from 09.07.2018 to 15.07.2018, for inviting comments from the trade and public A total of 1270 suggestio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oods or services or both such as sale, transfer, barter, exchange, licence. rental. lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business: (b) import of services for a consideration whether or not in the course or furtherance of business; and (c) the activities specified in Schedule I made or agreed to be made without a consideration.; and (d) the activities to be treated as supply of goods or supply of services as referred to-in-Schedule H (1A) Certain activities or transactions, when constituting a supply in accordance with the provisions of sub-section (1), shall be treated either as supply of goods or supply of services as referred to in Schedule IL CHAIRMAN'S INITIALS Page 76 of 126 JAYNA BOOK DEPOT Estd. 1949 JB JAYNA MINUTE BOOK Agenda Note No. 6 (i): Proposed amendments to GST Law CGST Act (Amendment 6 of 48) Sl. No. 6. Section 7 Proposed amendments 7. (2) Notwithstanding anything contained in sub-section (1).- (a) activities or transactions specified in Schedule III: or (b) such activities or transactions undertaken by the Central Government, a State Government or any local authority....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. 9 (4) The Government may, on the recommendations of the Council, by notification, specify a class of registered persons who shall, in respect of supply of such taxable goods or services or both received from an unregistered supplier, pay the tax on reverse charge basis as the recipient of such goods or services or both, and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. Page 78 of 126 12 JAYNA BOOK DE POT Estd. 1919 JAYNA MINUTE BOOK Agenda Note No. 6 (i): Proposed amendments to GST Law CGST Act (Amendment 11 of 48 contd.) Sl. No. 11 Section 10 (1) & (2) Proposed amendments 10 (1) Notwithstanding anything to the contrary contained in this Act but subject to the provisions of sub-sections (3) and (4) of section 9, a registered person, whose aggregate turnover in the preceding financial year did not exceed fifty lakh rupees, may opt to pay, in lieu of the tax payable by him under sub-s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(issued under the Income-tax Act. 1961) (43 of 1961), the registered person shall not be eligible to opt for the scheme under sub-section (1) unless all such registered persons opt to pay tax under that sub-section. 25 Agenda Note No. 6 (i): Proposed amendments to GST Law CGST Act (Amendment 12 & 13 of 48) Sl. No. 12. Section 12 (2) 13. 13 (2) Proposed amendments 12 (2) The time of supply of goods shall be the earlier of the following dates, namely:- (a) date of issue of invoice by the supplier or the last date on which he is required under sub-section (1) of section 31 to issue the invoice with respect to the supply; or 13 (2) The time of supply of services shall be the earliest of the following dates, namely: - (a) the date of issue of invoice by the supplier, if the invoice is issued within the period prescribed under sub-section (2) of section 31 or the date of receipt of payment, whichever is earlier: (b) the date of provision of service, if the invoice is not issued within the period prescribed under sub- section (2) of section 31 or the date of receipt of payment, whichever is earlier: Page 80 of 126 IE JAYNA BOOK DEPOT Estd. 1949 JAYNA MINUTE BOOK ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building) specified in Schedule III. Trade has represented for retrospective amendment from 01.07.2017. 19 Agenda Note No. 6 (i): Proposed amendments to GST Law CGST Act (Amendment 17 of 48 contd.) Sl. No. Section 17. 17 (5) (a). new (aa) & (b) Proposed amendments 17(5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, input tax credit shall not be available in respect of the following. namely: (a) motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver), vessels and aircraft and other conveyances except when they are used- (i) for making the following taxable supplies, namely:- (A) further supply of such vehicles or vessels or aircraft conveyances; or (B) transportation of passengers; or (C) imparting training on driving, flying, navigating such vehicles, vessels or aircraft or conveyances; (ii) for transportation of goods; and (iii) for transportation of money for or by a banking company or a financial institution. Page 82 of 126 20 JAYNA BOOK DEPOT ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ified in consultation with the Law Committee. 22 CHAIRMAN'S INITIALS Page 83 of 126 CHAIRMAN'S INITIALS MINUTE BOOK Agenda Note No. 6 (i): Proposed amendments to GST Law CGST Act (Amendment 18 & 19 of 48) Sl. No. 18. 19. Section 20. Explanatio n (c) 22 Proposed amendments Clause (c) of Explanation to section 20: (c) the term "turnover", in relation to any registered person engaged in the supply of taxable goods as well as goods not taxable under this Act, means the value of tumover. reduced by the amount of any duty or tax levied under entry entries 84 and 92A of List I of the Seventh Schedule to the Constitution and entries 51 and 54 of List II of the said Schedule. Explanation (in) to section 22 the expression "special category States" shall mean the Explanatio States as specified in sub-clause (g) of clause (4) of article 279A of the Constitution except the State of Jammu and Kashmir, Assam and Sikkim. n 23 Agenda Note No. 6 (i): Proposed amendments to GST Law CGST Act (Amendment 20 & 21 of 48) Sl. No. Section Proposed amendments 20. 24 (x) 21. 25 (2), new second. third and fourth proviso 24 (x) every electronic commerce operator who is ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e registration without giving the person an opportunity of being heard.: Provided further that pending cancellation of registration, the proper officer may suspend the registration of the person subject to such conditions and limitations as may be prescribed. 26 Page 85 of 126 CHAIRMAN'S INITIALS M CHAIRMAN'S INITIALS MINUTE BOOK Agenda Note No. 6 (i): Proposed amendments to GST Law CGST Act (Amendment 24 of 48) Sl. No. Section 24. 34 (1) & 34 (3) Proposed amendments 34(1) Where a tax invoice has one or more tax invoices have been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice the said tax invoices is found to exceed the taxable value or tax payable in respect of such supply, or where the goods supplied are returned by the recipient, or where goods or services or both supplied are found to be deficient, the registered person, who has supplied such goods or services or both, may issue to the recipient a one or more credit notes for supplies made in a financial year containing such particulars as may be prescribed. (2) ... (3) Where a tax invoice has one or more tax invoices have been issued for ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ST Act (Amendment 29 of 48 contd.) Proposed amendments 49 (5) The amount of input tax credit available in the electronic credit ledger of the registered person on account of- Sl. No. Section 29. 49(5)(c) & 49(5)(d) (a) (b) (c) integrated tax shall first be utilised towards payment of integrated tax and the amount remaining, if any, may be utilised towards the payment of central tax and State tax, or as the case may be, Union territory tax, in that order: the central tax shall first be utilised towards payment of central tax and the amount remaining, if any, may be utilised towards the payment of integrated tax; the State tax shall first be utilized towards payment of State tax and the amount remaining, if any, may be utilized towards payment of integrated tax only when the balance of the input tax credit on account of central tax is not available for payment of integrated tax: CHAIRMAN'S INITIALS Page 88 of 126 32 JAYNA BOOK DEPOT Estd. 1949 JAYNA MINUTE BOOK Agenda Note No. 6 (i): Proposed amendments to GST Law CGST Act (Amendment 29 of 48) Sl. No. Section 29. 49(5)(c) 49 (5) & (d) Proposed amendments the Union territory tax shall first be utili....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nput services used in such services, the date of- (f) receipt of payment in convertible foreign exchange or in Indian Rupees where permitted by the Reserve Bank of India, where the supply of services had been completed prior to the receipt of such payment; or (ii) issue of invoice, where payment for the services had been received in advance prior to the date of issue of the invoice: Page 90 of 126 36 JAYNA BOOK DEPOT Estd. 1949 JAYNA MINUTE BOOK Agenda Note No. 6 (i): Proposed amendments to GST Law CGST Act (Amendment 34 of 48) Sl. No. Section 34. 79 (1) Proposed amendments In this section, two one Explanations are proposed to be inserted as under: Explanation.- (1)-For the purposes of this section, the word person shall include "distinct persons" as referred to in sub-section (4) or, as the case may be, sub-section (5) of section 25. (2) For the purposes of this clause, the term "Collector" means the Collector of a revenue district and includes a Deputy Commissioner or a district magistrate or head of the revenue administration in a revenue district. Agenda Note No. 6 (i): Proposed amendments to GST Law CGST Act (Amendment 35 of 48) Sl. No. Section P....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... section 3 of the Additional Duties of Excise (Textile and Textile Articles) Act, 1978;" (v)... Explanation 3.-For removal of doubts, it is clarified that the expression "eligible duties and taxes" excludes any cess which has not been specified in Explanation 1 or Explanation 2 above and any cess which is collected as additional duty of customs under sub-section (1) of section 3 of the Customs Tariff Act, 1975. This is proposed to be a retrospective amendment w.e.f. 01.07.2017. Agenda Note No. 6 (i): Proposed amendments to GST Law CGST Act (Amendment 38 of 48) Sl. No. 38. Section 143 (1). new proviso Proposed amendments (1) A registered person (hereafter in this section referred to as the "principal") may under intimation and subject to such conditions as may be prescribed. send any inputs or capital goods. without payment of tax, to a job worker for job work and from there subsequently send to another job worker and likewise, and shall, (a) bring back inputs, after completion of job work or otherwise, or capital goods. other than moulds and dies, jigs and fixtures, or tools, within one year and three years, respectively, of their being sent out, to any of hi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... a municipality under article 243 W of the Constitution". Agenda Note No. 6 (i): Proposed amendments to GST Law IGST Act (Amendment 41 of 48) SI. No. 41. Section 5(4) Proposed amendments 5(4) The integrated tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. 5 (4) The Government may, on the recommendations of the Council, by notification, specify a class of registered persons who shall, in respect of supply of such taxable goods or services or both received from an unregistered supplier, pay the tax on reverse charge basis as the recipient of such goods or services or both, and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. 4在 CHAIRMAN'S INITIALS Page 95 of 126 CHAIRMAN'S INITIALS MINUTE BOOK Agenda Note No. 6 (i):....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rtioned to the State Government on ad hoc basis and shall be adjusted against amounts apportioned under clauses (a) to (f). Agenda Note No. 6 (i): Proposed amendments to GST Law GST (Compensation to States) Act (Amendment 46 of 48) Sl. No. 46. Section New 10 (3A) Proposed amendments 10(3A) (a) Notwithstanding anything contained in sub-section (3), the Central Government may, at any point of time in a financial year, on the recommendations of the Council, distribute the amount remaining unutilized in the Fund amongst the Centre and the States in the manner provided for in sub section (3). (b) In case of shortfall in the amount collected in the Fund against the requirement of compensation to be released under section 7 for any two month period, the same shall be adjusted recovered from the amount released Central and State Government. from the Fund under clause (a). Page 97 of 126 49 CHAIRMAN'S INITIALS Ñл MINUTE BOOK Agenda Note No. 6 (i): Proposed amendments to GST Law GST (Compensation to States) Act (Amendment 47 of 48) Sl. No. 47. Section Section Proposed amendments 7(4)(b)(ii) the integrated goods and services tax apportioned to that State, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt. Agenda Note No. 6 (i): Proposed amendments to GST Law UTGST Act (New amendment) SL. No. Section Proposed amendments 2. New Notwithstanding anything contained in this Chapter, the Government may, on the section 9A recommendations of the Council, prescribe the order of utilization of input tax credit after of integrated tax, central tax, State tax or Union territory tax, as the case may be, towards payment of any such tax. section 9 54 53 Page 99 of 126 CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE BOOK Table Agenda: Proposed amendments to CGST Act (1/7) Sl. No. Section 1. 39(1) Proposed amendments 39 (1) Every registered person, other than an Input Service Distributor or a non-resident taxable person or a person paying tax under the provisions of section 10 or section 51 or section 52 shall, for every calendar month or part thereof, furnish, in such form and manner and within such time as may be prescribed, a return, electronically, of inward and outward supplies of goods or services or both, input tax credit availed, tax payable, tax paid and such other particulars as may be prescribed:, on or before the twentieth day of the month succeeding s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Distributor, a non- insertion resident taxable person and a person paying tax under the provisions of section 10 or section 51 or section 52, shall electronically in the return furnished under section 39, in addition to the details of outward supplies or the inward supplies furnished, verify, validate, modify or delete supplies, for which details have been furnished by the suppliers. (2) Notwithstanding anything contained in section 41, section 42 or section 43, the procedure for availing of input tax credit by the recipient and verification thereof shall be such as may be prescribed. (3) The procedure for furnishing the details of a tax invoice by the supplier on the common portal, for the purposes of availing input tax credit by the recipient shall be such as may be prescribed. 58 Page 101 of 126 ay CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE BOOK Table Agenda: Proposed amendments to CGST Act (5/7) Section Sl. No. 4. 43A new Proposed amendments (4) The procedure for availing credit on the basis of invoice not reported in terms of sub-section (3) shall be such as may be prescribed and such procedure may include insertion the maximum amount of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erson by internet banking or by using credit or debit cards or National Electronic Fund Transfer or Real Time Gross Settlement or by such other mode and subject to such conditions and restrictions as may be prescribed, shall be credited to the electronic cash ledger of such person to be maintained in such manner as may be prescribed. (2) The input tax credit as self-assessed in the return of a registered person shall be credited to his electronic credit ledger, in accordance with section 41 or section 43A, to be maintained in such manner as may be prescribed. 52. Collection of tax at source: (1) Where the details of outward supplies furnished by the operator under sub-section (4) do not match with the corresponding details furnished by the supplier under section 37 or section 39, the discrepancy shall be communicated to both persons in such manner and within such time as may be prescribed. (2).... AI Thank You राषà¥à¤Ÿà¥à¤° बाजार Page 103 of 126 CHAIRMAN'S INITIALS Ñи CHAIRMAN'S INITIALS MINUTE BOOK Annexure 5 Presentation on Return Design Page 104 of 126 JAYNA BOOK DE POT Estd. 1949 JAYNA MIN....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ween the recipient and supplier indicating acceptance of the transaction reported in the invoice. Facility for locking of invoice by the recipient before filing of the return shall be available. Locked invoices can not be amended. â–¸ Deemed locking: Invoices can be deemed locked by reporting pending or rejected invoices. IT tool for matching shall have facility to create recipient and seller master list from which correct GSTIN can be matched. Pending invoices: Pending invoices are invoices which have been uploaded by the supplier for which supplies have not been received or the recipient is of the view that the invoice needs amendment. â–¸ Better availability of credit: Where goods or services have been received before filing of a return by the supplier, input tax credit for the same can be availed by the recipient. â–¸ No automatic reversal of credit: There shall not be any automatic reversal of input tax credit at the recipient's end where tax has not been paid by the supplier. > The first response of revenue administration in case of default in payment of tax shall be to recover it from seller. â–¸ In some exceptional circumstances like missin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....am Monthly Quarter Profile -ly Profile 3. Would you like to create a new profile ? Yes No Sr. No. Description Option 1. Have you made B2C supply (table 3A) Yes No 2. Have you made B2B supply (table 3B) Yes No Invoice upload: Uploaded invoices in the annexure of the return shall auto-populate the main liability table of the return. a 138 Main Return Auto-populate Annexure to Main Return eபேரà¯à®™à¯à®• 10 Tak mang sese COM T PT 721 -Sing Stand we charg fa marimah ને OST Part 3 * HARD Page 109 of 126 x w Tina cast Tw T 4 dea CHAIRMAN'S INITIALS MINUTE BOOK Invoice upload Table in Annexure GSTIN/ UIN Place of Supply (Name of Document details Type No. Date Value Tax Taxable rate value Tax amount Integrated Central State/ Cess State) of doc. tax tax UT tax 1 2 3 4 5 6 7 8 9 10 11 12 3B. Supplies made to registered persons (other than those attracting reverse charge) Structure of the return: Upload-lock-pay 1&2 GSTIN & Name 3. Summary of Supplies made and tax liability A. Details of outward supplies B. Details of inward supplies attracting reverse charge 4. Summary ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Capital goods credit. > No pending and missing invoices: Small taxpayers may not be in a position to keep invoices pending as they have fully utilized the credit to keep the cost of business operations low. Also they have only a few supplies so they can avail Input tax credit by ensuring that there are no missing invoices. âš« Lower compliance cost. The benefit of this simplification would be that the compliance cost for small taxpayers would come down as payment declaration form is not a return and minor errors in the same would not lead to initiation of any legal action. * One-time option: Option for filing monthly or quarterly return shall be taken from these small taxpayers once during the beginning of the year. Structure of SAHAJ (only B2C supplies) Tax amount Place of Supply (Name of State) Tax rate Taxable value Integrated tax Central tax State / UT tax Cess Sr. No. Description Value tax Input Tax Credit (ITC) Integrate Central State/ UT d tax Cess tax 1. Inward supplies received net of credit and debit note 2. Inward supplies rejected by > recipient (wrong GSTIN etc.) 3. Reversal & adjustments (+/-) SUGAM (B2B +B2C supplies) Has I....
X X X X Extracts X X X X
X X X X Extracts X X X X
....4 Glaziers' putty, grafting putty, resin cements, caulking compounds and other mastics; painters' fillings; non- refractory surfacing preparations for facades, indoor walls, floors, ceilings or the like 28% 18% 5 8418 9 8508 Refrigerators, freezers and other refrigerating or freezing equipment, electric or other; heat pumps other than air conditioning machines of heading 8415 Vacuum cleaners 28% 18% 28% 18% 7 8509 Electro-mechanical domestic appliances, with self- 28% 18% contained electric motor, other than vacuum cleaners of heading 8508 [other than wet grinder consisting of stone as a grinder] 8 8510 Shavers, hair clippers and hair-removing appliances, with self-contained electric motor 28% 18% CHAIRMAN'S INITIALS 9 8516 Electric instantaneous or storage water heaters and 28% 18% Page 114 of 126 JAYNA BOOK DEPOT MINUTE BOOK Estd. 1949 JB JAYNA 10 8528 11 8705 12 8709 12 13 8716 14 9504 immersion heaters; electric space heating apparatus and soil heating apparatus; electrothermic hair-dressing apparatus (for example, hair dryers, hair curlers, curling tong heaters) and hand dryers; electric smoothing irons; other electr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....red two prices; one with normal GST rates for purchases made through cash payment and the other with 2% lower GST rate for digital payments. (b) The consumer will see visible benefits of making payments [for supplies received by him] through digital mode, in terms of reduction in tax amount payable. 1.1. The said Agenda Note also stated that this concession would not be available to supplies made by registered persons paying tax under the Composition Scheme. 2. The Agenda Note sought in principle approval of the Council for the above proposal, along with authorisation to the GST Implementation Committee [GIC] to approve changes in the CGST/SGST/UTGST Rules necessary for implementing this proposal. 3. Subsequently, an addendum to the said Agenda Note was placed before the GST Council in its 27th meeting (held on the 04.05.2018) [Annexure II]. 4. The GST Council constituted a GOM to look into the issue. The GOM after detailed deliberations concluded that while the proposal is good for the economy, its implementation may be deferred for some time as GST is yet not fully stabilised, the new return process is still work in progress, GST revenue still to reach a comforta....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ordingly, revenue estimation done is as follows. S. No. Description 1 Average value per transaction 2 Weighted average GST rate 3 Amount Rs 1103 14% Rs 1636 cr 4 If 33% of the above stated transactions are eligible for benefit-the revenue implication at the rate of 20% of GST paid would be Value* (33%)*weighted rate (5)*20% If 25% of the transactions are eligible for concession, the implication would be = Total Rs 1239 cr 5 10 If 20% of the transactions get the benefit, the GST concession would be Rs 991 cr 7. In the above background, the Council may consider providing a concession equal to 20% GST paid on B2C supplies, for which payment is made through digital mode of UPI- Unified Payment Interface, BHIM, USSD and RuPay Debit card [10% each from applicable Page 117 of 126 CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE BOOK CGST and SGST rates, or as the case may be, 20% of IGST paid] subject to a ceiling of Rs. 100 per transaction. This concession would, however, not be available to supplies made by registered persons paying tax under the Composition Scheme. 8. The CGST amount given as cash back shall be pooled in by the Centre and SGST amoun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cerns have been expressed as regard its coverage in GST, revenue implications, beneficiary of such incentive, and implementation modalities. 5.2 These aspects have been re-examined. Incentivising digital payments have far reaching positive implications for the economy. Apart from providing visible upfront benefits of making digital payments and thereby incentivising digital payment, it will also result in,- a) better compliance; b) gradual formalisation of economy; c) reduction in cash transactions and d) accordingly, a buoyancy in revenue 5.3 Accordingly, following proposal is placed before the council: Page 119 of 126 ay CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE BOOK 5.4 i) the GST concessions on digital payments be given on the B2C transactions through the modes that are used across the country. Accordingly, it is proposed that to begin with GST concession be given only on the B2C transactions made through RuPay (Debit Card) and UPI-Unified Payment Interface, BHIM, USSD. ii) the GST concession shall be given by way of refund to the consumer in his account through an automated route. iii) the concession shall be 10% of the CGST, 10% of SGST paid subje....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 126 CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE BOOK ANNEXURE-I 100 Incentives to promote Digital Transactions [FOR GST COUNCIL MEETING TO BE HELD ON 10th November, 2017] To incentivise digital transaction it is proposed to provide a concession of 2% in GST rate on B2C supplies, for which payment is made through digital mode [1% each from applicable CGST and SGST rates, if the applicable GST rate is 3% or more] subject to a ceiling of Rs. per transaction. This effectively means that applied rate of GST for such transactions will be 2% lower than the otherwise applicable GST rate, though subject to a ceiling of Rs. 100 per transaction for such incentive. This scheme, however, would not be available to registered persons paying tax under the composition scheme. 2. With this incentive, consumer will be offered two prices; one with normal GST rates for purchases made through cash payment and the other with 2% lower GST rate for digital payments. As a result the consumer will see visible benefits of making payments [for supplies received by him] through digital mode, in terms of reduction in tax amount payable. 3. For example, if the GST rate applicable to sup....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... more] on B2C supplies, for which payment is made through digital mode [1% each from applicable CGST and SGST rates, if the applicable GST rate is 3% or more] subject to a ceiling of Rs. 100 per transaction, interalia, on the following grounds: (a) With this incentive, consumer will be offered two prices; one with normal GST rates for purchases made through cash payment and the other with 2% lower GST rate for digital payments. (b) The consumer will see visible benefits of making payments [for supplies received by him] through digital mode, in terms of reduction in tax amount payable. The said Agenda Note also stated that this concession would not be available to supplies made by registered persons paying tax under the Composition Scheme. 2. The Agenda Note sought in principle approval of the Council for the above proposal, along with authorisation to the GST Implementation Committee [GIC] to approve changes in the CGST/SGST/UTGST Rules necessary for implementing this proposal. 3. Taking the annual number of digital transaction as 1800 crore [which included all modes of digital transactions], the revenue implication of the proposal was estimated as under: Tax rel....