TaxTMI 
TaxTMI 
TaxTMI 
Minutes of the 31st GST Council Meeting held on 22nd December 2018
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....edressal Committee (ITGRC) for information of the Council 5. Review of Revenue position 6. Issues recommended by the Fitment Committee for the consideration of the GST Council 7. Issues recommended by the Law Committee for the consideration of the GST Council i. Extension of the due date for furnishing the statement in FORM GSTR-8 by electronic commerce operator for the months of October, November and December, 2018 ii. Extension of last date for allowing migration of taxpayers who received Provisional Identification Number (PID) till 31st December, 2017 iii. FAQ on Banking, Insurance and Stock Brokers Sector iv. Amending SOP issued on TDS - Issues on furnishing of return in FORM GSTR- 7 by registered persons required to deduct tax at source under section 51 of the CGST Act for period during which the deductor was not registered v. Update on the implementation status of the issues referred to the Law Committee by the GST Council vi. Request for exemption from provisions relating to Tax Deduction at Source (TDS) in case of taxable supplies between Government Authority to another Government Authority or to PSU and vice versa vii. Amendments to the CGST....
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....gislatures 11. Reconstitution of membership of the Law Committee, Fitment Committee and IT Committee for information of the Council 12. Any other agenda item with the permission of the Chairperson i. Notification to be issued to extend the due date for filing of returns in FORM GST ITC-04 for the period July 2017 to December 2018 ii. Ad hoc Exemptions Order(s) issued under Section 25(2) of Customs Act, 1962 to be placed before the GST Council for information iii. Proposals for boosting real estate sector under GST regime by providing a composition scheme for residential construction units iv. Proposal to increase the threshold exemption limit for supplier of Goods (manufacturers and traders) under GST from existing turnover of Rs. 20 lakh to Rs. 75 lakh and from Rs. 10 lakh to Rs. 20 lakh for Special Category States in a year v. Proposal for removal of differential rate of GST on lottery run by State Government and lottery authorized by the State Government 13. Date of the next meeting of the GST Council Page 2 of 85 Preliminary discussion 3. The Hon'ble Chairperson welcomed the GST Council Members. At the outset, he placed on record the gratitude of the Coun....
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....9;) as follows: ' ... in addition to 0.5% as entry tax ... '. The Council agreed to record the revised version of the Hon'ble Minister from Odisha in line 6 of paragraph 14.9 of the Minutes. 4.2. The Joint Secretary, GST Council, informed that during the Officers meeting held on 21st December, 2018, the Commissioner of State Tax, Kerala had requested to correct a typographical error in the version of the Hon'ble Minister from Kerala recorded in line 3 of paragraph 14.15 of the Minutes (' ... and 18% of consumer products were imported from other (States ... ') with the following: ' ... and 80% of consumer products were imported from other States ... ' . The Council agreed to record the revised version of the Hon'ble Minister from Kerala in line 3 of paragraph 14.15 of the Minutes. 4.3. The Joint Secretary, GST Council, informed that another written communication had been received from the State of Jammu & Kashmir informing that Shri B.B. Vyas, the then Advisor to the Hon'ble Governor (I/C Finance) of Jammu & Kashmir had attended the 30th Council Meeting but his name was not included in the list of participants. The communication had also poi....
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....nor of Jammu & Kashmir. The matter regarding exact status of the Advisor to the Governor in the GST Council was under consideration in consultation with the Union Ministry of Law' . The Council agreed to this suggestion 5. For Agenda item 1, the Council decided to adopt the Minutes of the 30th Meeting of the Council with the following changes: 5.1. In line 6 of paragraph 14.9 of the Minutes, to replace the existing version of the Hon'ble Minister from Odisha with the following:' ... in addition to 0.5% as entry tax ... '; 5.2. In line 3 of paragraph 14.15 of the Minutes, to replace the existing version of the Hon'ble Minister from Kerala with the following: ' ... and 80% of consumer products were imported from other States ... '; 5.3. To include the name of Shri B.B. Vyas, Advisor to Hon'ble Governor (I/C Finance) of Jammu & Kashmir in Annexure 1 of the Minutes (which contains the names of the Hon'ble Ministers attending the Meeting) with the following note: 'The representative from Jammu & Kashmir attended the Meeting on behalf of the Hon'ble Governor of Jammu & Kashmir. The matter regarding exact status of the Advisor to the Governo....
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...., 2018 to 13th December, 2018. Agenda Item 4: Decisions/recommendations of the IT Grievance Redressal Committee (ITGRC) for information of the Council 10. The Secretary informed that under this Agenda item, decisions of the IT Grievance Redressal Committee (ITGRC) taken during its 3rd meeting held on 26th October, 2018 were placed before the Council for information. The Hon'ble Chairperson desired that the Council should be briefed regarding the decisions taken by the IT-GRC. Shri Upender Gupta, Commissioner (GST Policy Wing), CBIC, made a presentation on this subject (attached as Annexure 3). He informed that the TTGRC was responsible for resolving problems of taxpayers, who have not been able to fi le their documents, such as TRAN 1, GSTR-3B, GSTR-1 or Registration/Migration, etc. due to technical glitches at the common portal (GST Portal) and it affects a large section of taxpayers. In this regard, Government had issued circular 39/13 dated 3/4/2018 prescribing the procedure for taxpayers for lodging their grievance due to technical glitch in the GST system. He stated that the GSTN had issued a Standard Operating Procedure (SOP) dated 12.04.2018, which had to be followed ....
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....w of Revenue position 12. The Secretary invited Shri Ritvik Pandey, Joint Secretary, Department of Revenue (DoR), to make a presentation on this Agenda item. The Joint Secretary, DoR gave a broad picture of the GST revenue from September, 2018 to November, 2018 and also the trend of return filing of GSTR-3B till due date and till date for the return period upto October, 2018. He also informed that a corrigendum had been issued and circulated in Volume-3 of the Detailed Agenda Notes making corrections in Table 4 of the Agenda item showing trend of GSTR-3B filing where the figures in the last two columns had got jumbled up inadvertently. On the revenue position, he stated that the total GST revenue during September, 2018 was Rs. 94,442 crore, during October, 2018, it was Rs. 1,00,710 crore and during November, 2018, it was Rs. 97,637 crore. He further stated that the IGST settlement during September, 2018 was Rs. 29,210 crore, during October, 2018, it was Rs. 62,597 crore and during November, 2018, it was Rs. 33,966 crore. He informed that the ad hoc settlement was now being done once in every two months and this would continue in future too. He stated that the balance IGST availab....
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....was only one ad hoc settlement during the last financial year and the net amount accounted in the Consolidated Fund of India had to be devolved to the States by 31st March 2018. He explained that from the current year onwards, the situation would be different as ad hoc settlement was being done regularly. The Hon'ble Deputy Chief Minister of Delhi stated that earlier too, he had raised this issue several times in the Council. He stated that it was earlier decided that Rs. 1.60 lakh crore of IGST would not be kept in the Consolidated Fund of India but the same was suddenly taken in the pool of the Consolidated Fund of India and got devolved to all States except Delhi and Puducherry. Joint Secretary, DoR explained that as per Constitutional provisions, IGST has to be credited to the consolidated Fund of India at the first instance itself and it is not the case that IGST amount was transferred to the Consolidated Fund at some later stage. 12.3. The Hon'ble Chairperson stated that during the first year under GST regime, there was a high backlog of IGST and there was only one ad hoc settlement due to which net amount of Rs. 1.6 lakh crore was accounted under the IGST head. He o....
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....ived of their rights. The Hon'ble Chairperson stated that it was done by virtue of the Constitutional provision. 12.6. Shri D. Jayakumar, Hon'ble Minister from Tamil Nadu, stated that on this issue, they had also written to the Hon'ble Prime Minister to settle the issue of ad hoc settlement. He added that their estimate was that they would get additional Rs. 3,000 crore for the previous year alone. Dr. T.V. Somanathan, Commissioner (State Tax), Tamil Nadu stated that the issue was not only for the Union Territories; 50% of the balance amount lying implicitly comprised SGST. If it had been settled in ad hoc manner, 50% would have gone to the States including Union Territories and 50% would have gone to the Centre. He added that when it is devolved, 58% goes to the Centre and 42% goes to States and nothing goes to the Union Territories. He further stated that in the case of Tamil Nadu, if the money would have been disbursed by virtue of ad hoc settlement, they would have not needed any compensation and instead would have got additional Rs. 2000 crore last year in GST. He requested that the required correction may be made after adjusting compensation both for Union Territ....
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....ious question regarding the so-called revenue neutral rate concept that one was supposed to have. He stated that the trend of overall revenue had been on the downward side and it crossed Rs. 1 trillion only two times since GST implementation. He added that in the last two months, the revenue trend had come down further. He stated that the revenue trend had been further affected due to slashing of the tax rates in the Council and the way of implementing it. He observed that as the Finance Minister of a State, he would not have found it appropriate to slash the rates as frequently as had been done in the Council. He cautioned that one had to also look at the situation beyond 2022 when there would be no compensation to the States. He added that during the 28th GST Council Meeting held on 21st July, 2018, (which he could not attend and which was not chaired by the current Hon'ble Chairperson the rates of tax on a large number of goods were reduced competitively and without going through the process of examination by the Fitment Committee. 12.9. The Hon'ble Minister from Kerala further observed that earlier, the principle of fitment of rates used to be with reference to pre-GST....
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...., West Bengal and Sikkim had also improved their revenue performance during April, 2018 to November, 2018 as compared to that during August, 2017 to March, 2018. He observed that as compared to last year, the overall revenue performance was better this year but some States like Delhi had shown a poor performance this year compared to the last year. 12.11. The Hon'ble Deputy Chief Minister of Delhi stated that one of the reasons for revenue shortfall in his State was that during pre-GST era, sales from godowns were taxed at the first point of sale. However, in GST regime, even though the goods were being consumed in Delhi, the big dealers were setting up their godowns in other States due to competitive land prices and rentals. He added that there was also loss of revenue on account of lack of input tax credit matching. 12.12. Dr. Amit Mitra, Hon'ble Minister from West Bengal, stated that it was assumed that in GST, the consuming States would be better off. However, the data available in GST had not been analysed in the way it should have been through the technical processes available. There was a need to relook at the data as to why many consuming States were in a bad reve....
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.... of e-Way bill system and curbing of large-scale under-valuation of goods like marbles, garments, building material, etc. which would help to augment GST revenue. He informed that Kerala had earlier a floor price system which had gone and this was encouraging under-valuation as there was no such system in place. He suggested to review the rules of e-Way bill system regarding valuation and also address the problem of double run on the same e-Way bill. 12.15. The Hon'ble Chairperson stated that revenue from Service Tax post-GST was a disappointment but there were certain factors responsible for it. He asked Shri Manish Sinha, Joint Secretary (TRU-ll), CBIC, to explain the reasons for the declining trend of revenue from services. The Joint Secretary (TRU-ll), CBIC, stated that at a broader level, three services, namely real estate, telecom and airlines were not performing well. In addition, revenue from smaller service providers had gone down, which was partly due to monthly return system, tax rate on services and hike in the annual turnover threshold for registration from Rs. 10 lakh pre GST to Rs. 20 lakh in GST. Further, small scale service providers were keeping away from GST....
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....t they were also not able to clearly figure out the reason for this. The Hon'ble Chairperson stated that he had received feedback that in Punjab, bulk of the revenue even on the direct tax side, came from the public sector undertakings; the local trade and industry was contributing marginally to the direct tax collection. The Hon'ble Chairperson asked Shri V.K. Garg, Advisor (Financial Resources) to the Chief Minister, Punjab, to explain the reasons for Punjab's low revenue collection. 12.19. The Advisor (Financial Resources) stated that the National Institute of Public Finance and Policy (NIPFP) had conducted two studies in the run up to GST - one in 2011 and the other in 2013 - where they had indicated that there could be no uniform revenue neutral rate for GST for the entire country. At that time, States like Gujarat, Chhattisgarh, Himachal Pradesh and Goa had expressed apprehension that GST would cause a big loss of revenue as they believed themselves to be the origin States. NIPFP report had indicated that applying a uniform revenue neutral rate for the entire country would lead to loss of revenue to some States and had suggested a high revenue neutral rate for so....
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.... Purchase Tax. Since his State was getting lesser revenue than anticipated as per its share of GOP, this indicated some structural problems. One such problem could be in the Place of Supply (POS) Rules due to which some revenue of Punjab was going to other States. He gave an example of POS Rules for international travellers for which the place of supply was where the passenger embarks on the aircraft, which was mostly a metropolitan city. Similarly, in telecom sector, for prepaid electronic recharges done through Paytm, if address of the subscriber was not given, it was deposited in the headquarters of Paytm at NOIDA whereas revenue should have accrued to the consuming State. He added that as highlighted by the Hon'ble Finance Minister from Punjab, such distortions should be looked into by a Committee and the revenue should flow as per the destination principle. 12.21. The Hon'ble Chief Minister of Puducherry stated that his State was a big loser of revenue under GST. He stated that earlier, his State attracted consumers from other States and several warehouses were located in his State. The previous Finance Secretary had met officers during GST roll out and he had indicat....
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....being made and a holistic approach was needed to address this problem. He suggested that instead of ocularly looking at data and comparing them, there should be an analysis through statistical tools like chi square to analyse any statistical difference of collection figures between the two periods indicated in Table 3 of Agenda notes. 12.24. The Hon'ble Minister from West Bengal further observed that the Hon'ble Ministers from Punjab and Kerala had rightly observed that the GST rates were being varied without much logic. He stated that West Bengal has a metropolitan city and therefore it is a consuming hub but they also had manufacturing and digitisation. He wondered whether they could say that they were doing better. He observed that there were some heuristic reasons for revenue shortfall like re-location of warehouses from Delhi due to lesser land prices in neighbouring States but we lacked analysis of such reasons. He added that during last year, the States were compensated to the tune of Rs. 48,000 crore which could be even higher during the current year and it needed consideration whether GST rate reduction was also a cause for this shortfall. He recalled that during ....
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....s should consist of three things namely data mining like chi square test, causal modelling through regression analysis and examination of the structure under which it is happening i.e. the IT structure. He suggested that either a white paper should be published on GSTN or a GoM should be constituted to examine these issues. He added that about 300 crore invoices were supposed to be uploaded per month on GSTN portal and these were supposed to be matched but we had not been able to go to the stage of GSTR-2 and therefore frauds were being committed. He also observed that no single test or pilot project was done before launching GST. 12.28. The Hon'ble Chairperson requested the Joint Secretary, DoR to also show the monthly revenue trends of GST collection. The Joint Secretary, DoR stated that from August 2017 to 31st March 2018, revenue collection was fluctuating. During August 2017, the collection was Rs. 95,633 crore but it had gone down to Rs. 94,064 crore during September 2017. He added that November 2017 showed the lowest revenue collection of Rs. 83,780 crore and thereafter, there was an increasing trend in revenue. The Hon'ble Minister from Kerala stated that GDP to ta....
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....ns like National Institute of Public Finance and Policy (NIPFP) to analyse revenue related issues and the structural reasons for shortfall keeping in view the suggestions made by the Members. Agenda Item 6: Issues recommended by the Fitment Committee for the consideration of the GST Council 14. Some preliminary remarks were made before substantive discussion on this Agenda item took place. The Hon'ble Minister from West Bengal stated that he had written a formal letter to the Hon'ble Chairperson, GST Council on 21st December 2018 regarding the statement made by the Hon'ble Prime Minister on 18th November 2018, as reported in the newspapers. The Hon'ble Prime Minister of India's suggestion on 28% rate slab was like preempting the discussion on fitment issues in the GST Council. He pointed out that under Article 279A of the Constitution, the Council was authorised to discuss rate structure of GST and stated that this should not happen in future as this undermines the GST Council. 14.1. Dr. Himanta Biswa Sanna, Hon'ble Minister from Assam objected to these observations and stated that the comments of the Hon'ble Prime Minister should not be discussed in....
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....Tax. 14.4. After this preliminary discussion, the Secretary introduced the Agenda Item 6. The Hon'ble Minister from Punjab stated that the Agenda Item listed at S.No.4 of Annexure II regarding GST on licence fee charged for liquor licences stood withdrawn but he recalled that the issue regarding tax on liquor was discussed and decided during the Meeting of the Council held in Jammu & Kashmir but the implementing circular or notification was yet to be issued to clarify the matter. Joint Secretary, TRU-ll stated that it was decided in the Officers' meeting on 21st December 2018 that on merit, no decision was needed and only implementation instrumentality needed to be worked out which would be done at the officers' level that whether it should be done by way of a Circular or by way of an exemption notification. He stated that if liquor licence fee collected by the States was certified as the tax revenue of State excise by all the States, then it would be easy to issue the required circular. He added that issuing such a circular for the period relating to erstwhile service tax would tantamount to annulling judgements of some High Courts on this issue without any new eviden....
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....ent Committee on 21st December, 2018 as there was near consensus in its last meeting on 15th December, 2018 and after further discussion, the Fitment Committee had reached an agreement on these issues. 14.8. The Hon'ble Chief Minister of Puducherry enquired regarding the number of items that were presently in the tax slabs of 18% and 28%. Shri G.D. Lohani, Joint Secretary (TRUI), CBIC, informed that at four-digit HSN level, there are altogether 1,216 entries for goods and 48 entries for services. He stated that as regards the contribution of revenue from different rate slabs, 60% of the revenue came from items in 18% rate slab, 13% of revenue came from items in 12% slab, 22% of revenue from items under 28% and rest of the revenue came from 5%, 3% and 1% slabs. He added that 340 tariff lines were taxed at the rate of 5%, 174 tariff lines at the rate of 12%, 517 tariff lines at the rate of 18% and 34 tariff lines in goods are at the rate of 28% and rest are at lower rates. He further added that sometimes one tariff line may spread into different slabs for example parts of auto, etc. The Hon'ble Chairperson stated that in 28% tax slab, there were broadly three categories of 3....
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....9;ble Minister from Karnataka further stated that when the State was solely responsible for its tax policy, its revenue growth was high and it was expected that in GST, there would be greater tax buoyancy whereas now the revenue growth stood at 7%-8% in nominal terms. The State had surrendered its sovereignty by implementation of GST on the understanding of higher revenue gains. He stated that as per the present rate of revenue shortfall, in 2022, the State would suffer a sudden drop of revenue of about Rs. 10,000 crore. He stated that there was not enough convincing answer that the structural issues would be addressed. He added that the solution was to reach revenue neutrality and for this, monthly revenue collection should be between 1.08 lakh crore to Rs. 1.10 lakh crore for the country. Karnataka, on its part, was committed to work towards achieving this goal. He stated that the tax rate rationalisation could be looked at after the targeted revenue was assured. He stated that the Hon'ble Chief Minister of Karnataka was worried as to how to mobilise revenue after 2022. He was very seriously concerned about the evolving medium-term financial condition of Karnataka. He suggest....
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....now more than one year had passed since the implementation of GST and the impact of the rates on the revenue trend and on the people at large could be seen. He advised that the process of rate rationalisation should not be stopped and suggested that the proposals of the Fitment Committee should be discussed one by one and decision taken on each of them. He stated that tax rate of 28% was not desirable for all items and recalled that initially, there was a demand in the Council not to keep the tax slab of 28%. Now, when the Hon'ble Chairperson and the Fitment Committee bad suggested to reduce the rate of 28% on some items, it should be considered where ever the agreement could * be reached. He added that such reduction would help to boost business turnover resulting in more revenue, more compliance and lesser evasion. 14.14. The Hon'ble Chief Minister of Puducherry wondered how revenue shortfall of the States could be met if tax rates were reduced even if their original demand was to lower the rates. He added that States had revenue protection for five years out of which one year was already over. There would be no compensation to States after five years. He supported the v....
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....tion of VAT, compensation was only for three years, that too in a graded manner. However, the experience was that after two years, no State needed compensation. He observed that in GST too, the revenue shortfall had declined from 20% to 10%. The smaller States had done well in revenue collection. The manufacturing States, who were most fearful about revenue prospects in GST, bad also done well. The Hon'ble Minister from Karnataka pointed out that the figure of 10% was not a weighted average figure and so it did not reflect the total revenue, and that the weighted average for the same period was 16% and 13% respectively. The Hon'ble Chairperson observed that there was improvement over the last year even though the figures were not pro rata for the States. The Hon'ble Deputy Chief Minister of Bihar continued and stated that going by his experience of VAT, he expected that revenue shortfall in GST would gradually come to zero. He added that the Fitment Committee had recommended reduction in tax rate on items like fly ash blocks, walking sticks, agglomerated cork, etc. There was a consistent demand for rationalisation of rate in the case of footwear and in the recommendatio....
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....s billiards but there could be no objection to reduce the rate of tax on items like walking sticks, fly ash blocks, etc. He expressed his support for the proposals for tax reduction. He also suggested that the small print media should be exempted from tax while they should continue to pay tax on advertisements, ink boxes, etc. He further stated that the chambers of commerce had indicated that interest for short payment of tax was being charged for the full amount of tax whereas, it should be charged only on the amount outstanding for payment. The Hon'ble Minister from West Bengal clarified that he did not oppose reduction in the rate of tax on walking sticks. 14.19. Captain Abhimanyu, the Hon'ble Minister from Haryana, stated that he had attended all 31 GST Council meetings and was privileged to learn from the diversity of views expressed by the Members of the Council and there was always an occasion to learn from the senior Members. Consensus had been established as a convention in the Council. His Stat was also a fiscally prudent State. When GST was introduced, it was a plunge into e unknown. Originally, the GST rate proposed across the political spectrum was 18%. Slowly....
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....ailway wagons. The tax on inputs for wagon making was at the rate of 18% whereas wagons were taxed at the rate of 5%, which led to accumulation of input tax credit. For textiles, refund of input tax credit had been correctly allowed and the same should also be considered for wagons. He stated that in its absence, big producers as well as SMEs would collapse. The Fitment Committee should take up this item and any other item of this nature where no tax refund was permitted due to inverted duty structure. 14.22. The Hon'ble Minister from Kerala stated that those Agenda items for change in rate, which had not gone through the due process of examination by the Fitment Committee should not be taken up at all. If the Hon'ble Chairperson decided that the Council should look at the recommendations of the Fitment Committee, he was willing to go along with that. He added that in the real estate sector, works contract contributed almost 20% of the revenue to their State and one had to understand its implications before any decision was to be made. 14.23. Shri Shashi Bhusan Behera, Hon'ble Minister from Odisha, stated that his State was a consuming State, and after five quarters o....
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.... Committee should be discussed one by one and the Council should reject those proposals for rate reduction where the revenue loss was high. Rejecting all the proposals would lead to loss of dynamism of the Council. As regards the Table Agenda, he stated that the proposal to raise the exemption threshold for GST was not a Fitment Committee issue and could come like any other agenda. He observed that in the garb of some principle, the rate reduction should not be stopped. He added that, as observed by the Hon'ble Minister from Jharkhand, it was understood politically why this was being done. He also added that some persons had suggested that all items should be taxed at the rate of 18%. 14.25. The Hon'ble Chairperson observed that the practice in the Council was to remain detached from the debate that went outside the Council and to decide the issues on merit and after a frank discussion. The Hon'ble Minister from Punjab stated that the bottom line was that India should become a super power in their own life time. He added that mother India had several sons, with different names, like Punjab, Jharkhand, Assam, etc. Nobody had come in the Council to insult others and that....
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....Transmission shafts and cranks, gear boxes etc. (S.No. 1): 14.28. The proposal was to reduce the rate of tax on these goods from 28% to 18%. The Hon'ble Minister from Kerala inquired whether all auto parts would now be taxed at the rate of 18%. The Secretary informed that only the listed items (under HSN 8483) would attract the rate of 18% whereas others would continue to be taxed at the rate of 28%. He added that if all auto parts were brought into the rate slab of 28%, the revenue impact would be around Rs. 20,000 crore in a year. The Chairperson added that since these items were being used in agriculture sector, it was being removed from the 28% slab. The Council agreed to the proposed reduction in rate of tax on these goods from 28% to 18%. Footwear (S. No. 5): 14.29. The Joint Secretary, TRU-T stated that the proposal of the Fitment Committee was that the rate of 5% and 18% on footwear should be applied on the basis of transaction value as was the case for garments and hotels, the other two cases were differential tax rate was applied based on the value of supply. The Hon'ble Minister from Kerala inquired as to what would be the revenue loss by this change. The Jo....
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....lready taxed at the rate of 18%. The Council agreed to the proposal to reduce the rate of tax on Power Banks of lithium ion battery from 28% to 18%. Digital cameras and video camera recorders (S.No.17): 14.33. The Hon'ble Minister from Kerala inquired regarding the rationale for reducing the rate of tax on these goods. The Joint Secretary, TRU-I stated that in today's time, everyone was using mobile phone for taking pictures and the sale of video camera had come down drastically and revenue from these goods was very low. The Hon'ble Chairperson stated that the revenue collection on video cameras was only to the tune of around Rs. 5 crore and on digital cameras was about Rs. 3 crore and in this view, the proposed rate reduction may be accepted. The Hon'ble Minister from Kerala stated that he did not share the enthusiasm to clean up the 28% tax slab but for the sake of consensus, he was agreeable to the proposal. Objects used in Billiards and Snookers (S.No.20): 14.34. The Joint Secretary, TRU-I stated that most items falling under this heading were taxed at the rate of 12% while some were taxed at the rate of 18%. He added that billiards and 6 snookers were nor....
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....all the items listed at S.No. 1 to 22 of Part 'A' of Annexure I with the addition in Sl. No. 11 that exemption of GST on auction proceeds should also apply to gifts received by public servants which would cover Members of Parliament, MLAs as well as government officials. It also agreed that the proposals of the Fitment Committee involving rate reduction shall have a column regarding the amount of revenue involved and also the combined pre-GST rate. It further agreed that the proposal to reduce the rate of tax on rubber wrappers to collect latex to 5% shall be considered by the Fitment Committee. Annexure I (Part 'B') 14.39. The Joint Secretary, TRU-I explained that the proposals in Part 'B' of Annexure I related to clarifications, valuation proposals and proposals for consequential changes. The issues discussed are recorded herein below. Solar power generating System and other renewable energy system supplied under Erection, Procurement and Commissioning (EPC) (S.No. 1): 14.40. The Joint Secretary, TRU-l explained that this proposal was regarding assigning value to the supplies falling under S.No.234 of Schedule I in Notification No. 1/2017-Central Tax....
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....at the rate of 5%. He suggested that the recommendation of the Fitment Committee rejecting the proposal for reduction in the rate of biscuits should be reconsidered. 14.44. The Hon'ble Chairperson stated that any other request for reconsideration of change in GST rate could be sent in writing and then these could be reconsidered. Annexure IV (Issues on services where no change has been proposed by Fitment Committee on 14th and 15th December 2018) 14.45. This Annexure contained 46 items relating to services where the Fitment Committee did not recommend any change. The Council took note of it. 14.46. The Hon'ble Chairperson stated that any request for reconsideration of change in GST rate should be sent in writing and then these could be reconsidered. Annexure V (Proposals referred by Fitment Committee 1on 14th and 15th December 2018 for decision by GST Council): 14.47. The Joint Secretary, TRU-ll informed that the issues contained in Annexure V were discussed again by the Fitment Committee on 21st December 2018 and the Committee had reached a consensus on these issues. The points discussed in the Council on this Annexure is recorded as below: Reduction in t....
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....n made by the Hon'ble Chairperson. To exempt or reduce GST rate on transport of passengers by air travelling in chartered flights in respect of religious pilgrimage facilitated by the Government of India under bilateral arrangement from 18% to 5%. 14.50. The Hon'ble Chairperson stated that this rate reduction was proposed for all religious pilgrimages facilitated by the Government of India under bilateral arrangement. The Council agreed to reduce the rate of tax on air transport of passengers in chartered flights, on such pilgrimages from 18% to 5%. Annexure VI Approval of the decisions of the Law Committee pertaining to taxability/GST rate on services: 14.51. The Council agreed to the proposals contained in this Annexure. 14.52. Extra Neutral Alcohol (ENA) under GST should be taken at an early date. He added that the earlier decision of the Council in its 20th Meeting (held on 5th August 2017) was to continue with the status quo on this issue till the opinion of the Attorney General of India was received. He added that the opinion of the Attorney General of India had been received months back which said that GST could be levied for use of ENA for industrial purpos....
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....cers meeting held on 21st December 2018 and a presentation was also made (attached as Annexure 4). He informed that except for six issues, the officers were in agreement with the other proposals under this Agenda item. He stated that if the Council agreed then except the six issues, the Council may approve the rest of the proposals. The Council agreed to this proposal. He invited Commissioner (GST Policy Wing), CBIC to present five issues and Joint Secretary, DoR, to present one issue for the consideration of the Council. 16.1. The Hon'ble Minister from Punjab stated that before commencement of discussion on these issues, he wanted to draw the attention of the Council to a few issues. He stated that for Agenda Item 7(v) (Issue No.2) regarding introducing a provision in the GST Law to allow a buyer to pay tax for the supplies received from a new or unknown buyer, he had been approached by the rolling mills manufacturers of the Mandi Gobindgarh area, and they requested to allow them to make payment on reverse charge basis. He added that this proposal could add substantial amount of revenue and also contribute to ease of doing business. The Hon'ble Chairperson requested to se....
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.... Policy Wing), CBIC made a presentation on the five issues where consensus was not reached during the Officers meeting held on 21st December 2018. (i) Agenda Item 7(xiv): Proposal for centralized Authority for Advance Ruling (AAR) and centralized Appellate Authority for Advance Ruling (AAAR) under GST 16.5. The Commissioner (GST Policy Wing), CBIC stated that the Authority for Advance Ruling (AAR) in different States were giving conflicting decisions on similar issue involving similar facts. This caused confusion amongst the taxpayers as well as the tax officials. In view of this, in-principle approval of the Council was sought to replace the existing State specific AARs with a centralized AAR having a national bench with different regional benches across the country. A taxpayer having the same PAN registered in different States could approach the regional bench of the centralized AAR where the head office of the taxpayer was located. He informed that the Law Committee was not in favour of a centralized AAR but there was agreement to create a centralised Appellate Authority for Advance Ruling (AAAR) having a national bench with regional benches. The Hon'ble Minister from Ker....
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....me Chairman from the legal background along with one officer from the Central Government and one from the State Government having worked in the revenue department in the past. It should work only as a part-time CAAAR. 16.8. The Hon'ble Minister from Tamil Nadu stated tha.t the existing two-tier authority at the State level would suffice and a move to create the centralized authority would tantamount to depriving the States of their statutory rights and he was not in favour of such a mechanism. The Hon'ble Chairperson stated that there would be finality of ruling of AAR at the State level and this mechanism was only for conflicting decisions of AAARs for the same taxpayer registered in different States. The Hon'ble Deputy Chief Minister of Gujarat stated that since HSN codes were also given, there should be no reason for conflicting decisions. The Hon'ble Chairperson stated that classification disputes in central excise were common. Summing up, the Secretary stated that from the discussion it emerged that both AAR and AAAR would continue . However, where there were conflicting decisions of two or more AAARs in relation to a taxable person registered in two or more S....
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....monthly basis. The Hon'ble Chairperson stated that since the Members favoured monthly payment, the existing provisions could continue and the issue could be revisited, if required, when the new return filing system was in place. The Council agreed to this suggestion. (iii) Agenda Item 7(xvi): Circular to clarify taxability of medicines and consumables supplied to in-patients in hospitals during the course of treatment 16.11. The Commissioner (GST Policy Wing), CBIC stated that doubts had been raised on the issue of taxability on medicines and consumables like implants, stents, etc. supplied to inpatients in the hospitals (which were exempted from GST) during the course of medical treatment. He stated that Hospitals were charging patients on the basis of MRP which included GST but the Hospital were not paying GST to the Government nor they were claiming Input Tax Credit. In view of this, it was proposed to clarify that supply of medicines etc., whether part of a package deal or otherwise, shall be taxable under GST with proportionate input tax credit as this was not a composite supply. Hospitals were categorised as retailers under the Drug Price Control Order (DPCO) and Drugs....
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.... July 2017 to September 2018 which will be furnished from 22nd December, 2018 but latest by 31st March 2019. However, no refund of late fee to be given to those taxpayers who have already furnished such details/returns. The second alternative was that the maximum amount of late fee payable may be reduced. In case of GSTR-1/GSTR-3B/GSTR-4 for the months of July 2017,to September 2018 which will be furnished from 22nd December, 2018 but latest by 31st March 2019 in case of taxpayers with nil tax liability, to charge a reduced late fee of Rs. 500 + Rs. 500 per return i.e. under CGST and SGST Acts instead of the present limit of Rs. 5,000 + Rs. 5,000. For other taxpayers, the limit may be kept at Rs. 1,000 + Rs. 1,000 per return. However, no refund of late fee may be given to those taxpayers who have already furnished such details/returns. The Hon'ble Deputy Chief Minister of Bihar stated that since it was a one-time waiver and a large number of returns were pending on account of small taxpayers, it would be desirable to completely waive off the late fee. He added that there would not be much revenue implication but this would improve compliance. He suggested that the Council shoul....
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....e would be greater chance of compliance. He also inquired that if the annual turnover was kept at Rs. 50 lakh, what would be the loss of revenue. The Hon'ble Chairperson stated that the revenue loss would not be substantial. He stated that the State of Maharashtra had done some study on this issue and invited Shri Rajiv Jalota, Commissioner, State Tax to give details. 16.18. The Commissioner, State Tax, Maharashtra stated that in his State, there were about 2 lakh service providers with annual turnover upto Rs. 50 lakh whose taxable turnover was approximately Rs. 32030 crore and total tax liability was Rs. 5053 crore out of which the amount paid through cash was Rs. 3800 crore and payment through input tax credit was Rs. 1368 crore. He added that if the tax rate was made to be 5%, then the revenue earned would be around Rs. 3000 crore, out of which revenue in cash will be about Rs. 1700 crore. The Secretary stated that the data of the Central Government was in relation to pure service providers and enquired whether the data of 2 lakh service providers in Maharashtra also included those who made some supply of goods. 16.19. Shri Prakash Kumar, CEO, GSTN stated that the data of....
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.... approval to the proposal to have a composition scheme for the small service providers but turnover threshold and the rate of tax should be discussed by the Law Committee and the Fitment Committee and should be brought before the next Council meeting. The Council agreed to this proposal. (vi) Agenda Item 7(xxiv): Single interface for disbursal of refund amounts 16.23. The Joint Secretary, DoR made a presentation on this issue. He stated that currently refund order for a taxpayer was being issued by a single authority for all four taxes but disbursement of tax was taking place from two different sources. In some cases, taxpayers had to follow up for release of the fund amount from two different administrations. He stated that it was proposed that disbursement process should be automated and should happen from one source i.e. integration of refund order system of the GSTN with PFMS (Public Financial Management System) of the Central Government. He stated that initially disbursement could happen from the Central Government cash account and the data could directly flow from GSTN to PFMS of the Central Government. The amount paid could be settled with the States on a monthly basis. H....
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....efund order went to the treasury and the money was released from the treasury. If the State had no money in treasury and refund order was issued, then one needed to think how the situation would be dealt with. The Joint Secretary, DoR stated that treasury control of payment was only for payment of large sums of money and not for small individual payments. He added that for exporters, the monthly refund would mostly be in the range of Rs. 1 lakh to Rs. 2 lakh and normally treasury control was not exercised for such small amount. The Hon'ble Deputy Chief Minister of Gujarat suggested to put a ceiling for refund amount so that for larger amounts of refund, it could go with the approval of the treasury officer. He stated that Central Government may also need to have such a check. The Hon'ble Chairperson observed that by automating the system, the income-tax department was giving refund in weeks which earlier took years. The Hon'ble Minister from West Bengal stated that if the entire process of refund was to be digital then he would agree with the proposal. The Hon'ble Chairperson stated that the Central administration was giving 96% of the refund claim whereas States we....
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....ce providers and the Law Committee and the Fitment Committee to recommend the turnover threshold for Composition and the rate of tax to be applied on such composition taxpayers and to bring it up in the next Council .meeting; 17.8. For Agenda item 7(xxiv), the Council agreed to start the new system of single interface for disbursal of refund amount on an experimental basis through a pilot project. Agenda Item 8: Approval of modifications in Articles of Association (AOA) and Memorandum of Association (MOA) of Goods and Services Tax Network (GSTN) based on decision of the GST Council to convert it into a 100% Government-owned entity 18. Introducing this Agenda item, the Secretary informed that a corrigendum had been issued in respect of this Agenda item in which, instead of the proposed allotment of l 0 shares to the GST Council remaining undistributed, after equal number of shares were allocated to all States, the State of Maharashtra had been proposed to be allotted these remaining shares being on top among the States in GST collection and as proposed and approved by the Union Cabinet. He stated that this Agenda item was discussed during the Officers meeting held on 2 pt Decemb....
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....d by the GST Council Secretariat were part of the speech. 20.4. The Hon'ble Chairperson observed that there was already a high-level Committee comprising of Home Minister, Agriculture Minister and himself which deals with budgetary allocation to NDRF (National Disaster Response Fund). He stated that the GoM could consider whether there should be a parallel track for budgetary allocation in the Council or whether it should be subsumed in the NDRF. He added that the total outlay for the entire country for NDRF was about Rs. 10, 000 crore and it needed to be considered how much resources could be collected annually by additional levy on luxury items and what should be distribution mechanism as calamity were of two types. The Hon'ble Deputy Chief Minister of Bihar stated that in the last meeting of the GoM it was also discussed whether the State affected by calamity should only impose the tax or should the entire country share the responsibility. The Hon'ble Chairperson stated that if the State affected by calamity raised the tax, then consumers would suffer. 20.5. The Hon'ble Minister from Kerala stated that his State needed additional resources in view of the calami....
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....tee for information of the Council 24. Introducing this Agenda item, the Secretary stated that the membership of the Law Committee, Fitment Committee and IT Committee had been reconstituted on account of transfer of some of the erstwhile Members of the Committees. The orders were placed before the Council for information. The Council took note of the reconstitution of these three Committees. 25. For Agenda item 11, the Council took note of the reconstituted membership of the Law Committee, Fitment Committee and IT Committee. Agenda Item 12: Any other agenda item with the permission of the Chairperson Agenda Item 12(i): Notification to be issued to extend the due date for filing of returns in FORM GST ITC-04 for the period July 2017 to December 2018 26. The Secretary informed that this Agenda item as discussed during the Officers meeting held on 2Pt December, 2018 and there was agreement amongst the officers to extend the due date for filing of return in FORM GST ITC-04 for the period July, 2017 to December, 2018 till 31st March, 2019 as development and implementation of the revised FORM GST ITC-04 was expected to take some more time. He proposed that the Council could agree....
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....yers found payment of 12% GST burdensome. He observed that if input tax credit was passed on to the buyers, the incidence of tax was not very high but the psychological factor was still there. 30.2. The Hon'ble Minister from Kerala stated that he needed time to study the proposal. The Hon'ble Minister from Goa suggested that as people in the real estate sector were suffering, it should be implemented early. The Hon'ble Chairperson observed that availability of input tax credit encouraged every transaction in real estate by cheque payment and introduction of composition scheme in the real estate sector had the risk of encouraging transactions in cash. Because of. this, there was a proposal for payment of tax on reverse charge basis if more than 20% of the total construction material was purchased from an unregistered taxpayer. He stated that this suggestion was via media so that the tax could be reduced to 5% with no input tax credit provided if 80% of the inputs are purchased through banking transactions from registered dealers, otherwise the buyer would pay 5% and the builder would pay balance 7%. The Hon'ble Minister from West Bengal stated it would become compli....
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.... Industries that the present two rates of GST on lottery, namely 28% on lotteries authorised by the State Governments and 12% on lotteries run by the State Governments were creating different types of difficulties. It had led to reduction in sales; it was anomalous to have two rates on the same product of lottery when sold in the State itself and when sold in another State and a huge variation of 16% between two rates helped the larger States and exploited customers of smaller States, who could not compete with the former. High differential rates also encouraged noncompliance by small business. In view of this, it was proposed to rationalise the rates by increasing the GST rate of 12% on lotteries authorized by State Governments. The Hon'ble Chairperson enquired as to what was the experience of maintaining two different rates on lottery. The Hon'ble Minister from Kerala suggested that status quo should be maintained and stated that he would prefer to discuss the issue bilaterally with the Hon'ble Minister from Maharashtra, Punjab and West Bengal regarding the problems. He also added that legality of such rationale was unquestionable and this had been upheld by the Hon&#....
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....as a special Central Industrial package for the State, which gave area-based exemption in Central Excise. During the period, a lot many industries were established in the region and there was a huge spurt in growth of revenue in the State. The revenue accruing to the State due to CST was almost 29.5% of the total revenue, which was no more the case (the national average was just 8%). In addition to this, the drop in the rate of tax in GST, when compared to VAT, also impacted the revenue and the contribution from service sector had been minimal. Thus, due to structural reasons, his State had lost out on revenue, which was not recoverable by means of just enforcement action, as it was not a case of tax evasion. Thus, Uttarakhand was in a disadvantageous position, which was also noted by the Hon'ble Chairperson during the earlier Council meeting. In pursuance of this, the former Finance Secretary had recently visited Uttarakhand to study the impact of GST. In his report on the Revenue Gap Analys is, it was stated that Uttarakhand is among the top 5 States in terms of the percentage of revenue shortfall. Up to November, 2018, the average revenue shortfall of Uttarakhand was 34% as ....
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....E POT Estd. 1949 JB JAYNA MINUTE BOOK SI No State/Centre Annexure 1 List of Ministers who attended the 31st GST Council Meeting on 22nd December 2018 Name of Hon'ble Minister Charge 1 Govt of India Shri Arun Jaitley 2 Govt of India Shri S.P. Shukla Andhra Shri Yanamala 3 Pradesh Ramakrishnudu 4 Assam Dr. Ilimanta Biswa Sarma 5 Bihar 6 Delhi Shri Manish Sisodia 7 Goa Shri Mauvin Godinho 8 Gujarat Shri Nitinbhai Patel 9 Haryana Capt. Abhimanyu 10 Jharkhand Shri C.P. Singh 11 Karnataka Shri Krishna Byre Gowda Union Finance Minister Minister of State (Finance) Minister of Finance, Planning, CT and Legislative Affairs Finance Minister Shri Sushil Kumar Modi Deputy Chief Minister Deputy Chief Minister Minister for Panchayat Deputy Chief Minister Excise & Taxation Minister Minister - Department of Urban Development, Housing and Transport Minister for Rural Development, Law and Parliamentary Affairs 12 Kerala Dr. T M Thomas Isaac Finance Minister 13 Maharashtra Prof. Ram Shinde 14 Manipur 15 Odisha Shri Y Joykumar Singh Shri Shashi Bhusan Behera 16 Puducherry Shri V. Narayanasamy 17 Punjab 18 Tamil Nadu 19 ....
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....man, CBIC Member (GST), CBIC Member (Cus), CBIC Member (Budget), CBIC Special Secretary, GST Council Pr. CCA CCA Advisor (GST), CBIC Pr. DG, DG-Audit, CBIC Joint Secretary, TRU I, DOR Joint Secretary, TRU II, DOR Joint Secretary, DoR Commissioner (GST), CBIC ADG, GST, CBIC ADG, GST, CBIC ADG, DG-GST DG (M&C) ADG (M&C) Director, TRUI 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 Technical Officer, TRU-I, DOR Technical Officer, TRU-I, DOR Technical Officer, TRU-I, DOR Technical Officer, TRU-II, DOR Technical Officer, TRU-II, DOR OSD, TRU-II, DOR OSD, TRU-II, DOR Dy. Comm., GST Policy Wing Dy. Comm., GST Policy Wing MINUTE BOOK Shri Mahesh Tiwari Shri Debashis Chakraborty Estd. 1949 JJB 36 Govt. of India Shri Asim Anand 37 Govt. of India Shri Paras Sankhla JAYNA 38 Govt. of India Shri Nikhil Varma 39 Govt. of India 40 Govt. of India 41 Govt. of India 42 Govt. of India 43 GST Council 44 GST Council 45 GST Council 46 GST Council 47 GST Council 48 GST Council 49 GST Council 50 GST Council 51 GST Council 52 GST....
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....89 Delhi 90 Delhi Shri LS Yadav 91 Goa 92 Gujarat 93 Gujarat Dr. P.D. Vaghela 94 Gujarat Shri Ajay Kumar 95 Gujarat Shri Riddhesh Raval 96 Haryana 97 Himachal Pradesh 98 Himachal Pradesh 99 Himachal Pradesh CHAIRMAN'S INITIALS 100 Jammu & Kashmir Shri Sanjeev Kaushal Shri Jagdish Chander Sharma Shri Rajeev Sharma Shri Rakesh Sharma Shri Navin K. Choudhary Page 48 of 85 Commissioner, Vadodara Zone, CBIC Commissioner, Jaipur Zone, CBIC Commissioner, Pune Zone, CBIC Chief Commissioner, Vishakhapatnam Zone, CBIC Commissioner, Mumbai Zone, CBIC Commissioner, Ranchi Zone, CBIC Special Chief Secretary, Revenue Chief Commissioner, State Tax Commissioner, State Tax Commissioner (Tax & Excise) Commissioner, CT Commissioner and Secretary, CTD Additional Secretary, CTD Dy. Commissioner, CTD Commissioner, CT Commissioner, State Tax Additional Commissioner, State Tax Asst. Commissioner, State Tax Commissioner, CT Addl. Chief Secretary, Finance Dept. Chief Commissioner of State Tax Special Commissioner Dy. Commissioner Addl. Chief Secretary, E & T Dept Principal Secretary (E&T) Commissioner of State Tax and Excise Joint Comm., State....
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....3 West Bengal Shri Badal Baidya Shri Alok Sinha Shri Vivek Kumar Shri C. P. Mishra Ms. Sowjanya Shri Piyush Kumar Shri Rakesh Verma Ms. Smaraki Mahapatra Shri Khalid A Anwar Superintendent of State Tax ACS, CT Addl. Commissioner, CT Joint Secretary, CT Commissioner, State Tax Addl. Commissioner State Tax Jt. Comm., State Tax Commissioner, CT Senior Joint Commissioner, CT Page 50 of 85 JAYNA BOOK DE POT MINUTE BOOK Annexure 3 Estd. 1949 JAYNA 2 बाजार Decisions of GIC and Status update for 31st Meeting of GST Council Agenda NATION TAX MARKET Agenda No. 2 - Deemed Ratification of Notification / Circulars issued post 30th Meeting of GST Council Agenda No. 3 - Decisions taken by GIC post 30th Meeting of GST Council Agenda No. 4 - Decisions taken by ITGRC CHAIRMAN'S INITIALS Page 51 of 85 MINUTE BOOK Agenda No. 2 Ratification of Notifications, Circulars & Orders (1/1) • INATION TAX MARKET Ratification of following notifications, circulars & orders issued post 30th meeting (dated 28th September, 2018) of GST Council: Type Act/Rules CGST Act/CGST Central Tax Rules IGST Act UTGST Act Integrated Tax Cir....
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....eting of GSTC (4/7) Decisions in 23rd Meeting of GIC (26.10.2018) • • INATION TAX MARKET Clarification on scope and ambit of principal and agent relationship under Schedule I of CGST Act in the context of del- credere agent (DCA) ✓ Circular No. 73/47/2018-GST dated 05.11.2018 issued Corrigendum to Circular No. 57/31/2018-GST dated 04.09.2018 ✓ Corrigendum dated 05.11.2018 issued • Collection of TCS by Tea Board of India (under Ministry of Commerce and Industry, Government of India) ✓ Circular No. 74/48/2018-GST dated 05.11.2018 issued 7 Agenda No. 3 Decisions of GIC post 30th meeting of GSTC (5/7) INATION TAX MARKET Decisions in 23rd Meeting of GIC (26.10.2018) •>> • Exempting supply from PSU to PSU from applicability of provisions relating to TDS Notification No. 61/2018 -CT dated 05.11.2018 issued Amendments to CGST Rules, 2017 - Rule 83A Examination of GSTP - Rule 142A - Procedure for recovery of dues under existing laws - Insertion of FORM GST DRC-07A and FORM DRC-08A ✓ Notification No. 60/2018 - CT dated 30.11.2018 issued Decision by Circulation (30.10.2018) • Provisional settlement....
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....hnical glitch then send the issues after collating with their remarks/recommendation to the GSTN Nodal officer by email GSTN issued a SOP on 12.04.2018 which is to be followed by the Nodal officers of the States / Center while referring the technical glitches to GSTN IT Grievance Redressal Committee (IT-GRC) meetings • Three meetings of IT-GRC have been held till now . Two meetings were held on 22.06.2018 and 21.08.2018 Third IT-GRC meeting was held on 26.10.2018 and after examination and deliberation on 268 TRAN-1 cases, IT-GRC decided to allow 70 cases 12 Page 56 of 85 JAYNA BOOK DE POT Estd. 1949 JAYNA MINUTE BOOK Agenda No. 4 Decisions/recommendations of the ITGRC (3/3) . INATION TAX MARKET Total 778 TRAN-1 cases (including cases where writ petitions have been filed in various High Courts) were presented to IT-GRC out of which a total of 405 cases have been approved Implementation of the Decisions of ITGRC . . TRAN 1 filing has been enabled for the approved taxpayers in the system E-mails have been sent by GSTN to the taxpayers asking them to file TRAN 1 A total of 1307 cases of TRAN-I have been received from the nodal officers till 17/1....
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....ns/ margin trading facilities are transactions which are in the nature of extending loans or advances & are exempted by virtue of being covered by entry No. 27 of NN 12/2017- CT (R) dated 28.06.2017 NATION TAX MARKET Agenda No. 7 (iv) (1/1) Amendment of SOP issued on TDS Doubts have been raised whether persons required to deduct tax at source who have obtained registration after 01.10.2018 should report the details of tax deducted during the intervening period (i.e. from 01.10.2018 till the date of registration) while filing their first return in FORM GSTR- 7 SOP proposed to be amended to clarify that delay may be condoned and all such deductions may be included in the first return to be furnished by the deductor after obtaining registration, by: Insertion of Para 10.3 after Para 10.2 Insertion of FAQ No. 68 after FAQ No. 67 in SOP Page 60 of 85 JAYNA BOOK DEPOT Estd. 1949 JB JAYNA MINUTE BOOK NATION TAX MARKET Agenda No. 7 (v) (1/5) Update on the implementation status of the issues referred to LC by Hon'ble GSTC • Method to ensure that taxpayers availing the benefit of filing quarterly tax return pay the correct estimated amount of tax eve....
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....uthority (NAA) Page 62 of 85 10 JAYNA BOOK DE POT Estd. 1949 JAYNA MINUTE BOOK NATION TAX MARKET Agenda No. 7 (v) (5/5) Update on the implementation status of the issues referred to LC by Hon'ble GSTC • Examine the problem of small contractors executing works contract for the Government due to time of supply provisions under GST Not advisable to make a special dispensation for works contractors, to the exclusion of other similarly placed small taxpayers ✔Proposal require large scale changes in law Proposal require large scale changes in the proposed new return system also 11 INATION TAX MARKET Agenda No. 7 (vi) (1/1) Exemption from TDS on taxable supplies from one Government Authority to another Government Authority or to PSU & vice versa Section 51 for TDS deduction has been implemented form 01.10.2018 vide NN 50/2018- CT dated 13.09.2018 • Vide NN 61/2018- CT dated 05.11.2018, supply from PSU to PSU has been exempted from TDS deduction requirement •Proposal to extend similar exemption in respect of supply from one Government Authority to another or to PSU & vice versa Page 63 of 85 12 CHAIRMAN'S INITIALS MINUTE BOO....
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.... transporter, e-commerce operator, courier agency not eligible to generate e-way bill In case of those GSTINs who have not filed their returns (for a consecutive period of two months/two tax-periods ✔Jurisdictional Commissioner may allow furnishing e-way bill subject to conditions • Rule to be inserted when GSTN / NIC make available the functionality Page 65 of 85 16 15 CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE BOOK INATION TAX MARKET Agenda No. 7 (vii) (5/10) Amendments to the CGST Rules, 2017 • Amendment to rule 142(5): To include section 75(12) for enabling the officers to issue an order in FORM GST DRC-07 for posting the interest liability in cases detailed above . • Amendment to FORM GST RFD-01: Changes required so as to align FORM GST RFD-01 and FORM GST RFD- 01A 17 INATION TAX MARKET Agenda No. 7 (vii) (6/10) Amendments to the CGST Rules, 2017 Amendment to FORM GST RFD-01A: to include: ✓types of refunds that have been recently introduced by GSTN on the portal e.g. refund on account of assessment/provisional assessment/appeal, excess payment of tax etc. ✓ Changes on account of changes made in rul....
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....2017 • Insertion of FORM GST RVN-01: to operationalize section 108 that would enable Revisional Authority to revise the order passed by a subordinate officer and issue notice to the concerned person • Amendment to FORM GST APL-04: On account of the proposed insertion of rule 109B, changes need to be made in FORM GST APL-04 so that the Revisional Authority can indicate the amount confirmed and include the summary of its order in FORM GST APL-04 Page 68 of 85 22 JAYNA BOOK DE POT Estd. 1949 JAYNA MINUTE BOOK INATION TAX MARKET Agenda No. 7 (viii) (1/5) IGST Rules for apportionment of value among States when service is provided in more than one State/UTs Rule 4: Services in relation to immovable property: Lodging accommodation by a hotel, inn, guest house, etc. (except cases where such property is a single property located in two or more contiguous states and/or UTs) and services ancillary thereto: as per the contract failing which in proportion to the number of nights stayed in such accommodation Other services in relation to immovable property and services ancillary (including lodging accommodation by a hotel, inn, guest house, etc. where s....
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.... (5/5) IGST Rules for determination of Place of Supply • Rule 10: Services by way of admission to or organization of cultural, artistic, sporting, scientific, educational or entertainment event etc. and services ancillary where location of supplier or recipient is outside India: As per Rule 5 Rule 3 to be renumbered as Rule 7 • Amendment in sub rule (h) of rule 3: "(h) in the case of advertisements over internet, the service shall be deemed to have been provided all over India" Rules come into effect from 01.01.2019 27 INATION TAX MARKET Agenda No. 7 (ix) (1/3) Circular to clarify six issues under GST Bb Whether the supply of used vehicles, seized and confiscated goods, old and used goods, waste and scrap by Government departments are taxable under GST? ✓the respective Government departments shall be liable to get registered and pay GST on intra-State and inter-State supply of used vehicles, etc. made by them to an unregistered person subject to the provisions of sections 22 and 24 Whether penalty in accordance with section 73 (11) should be levied in cases where the return in FORM GSTR-3B has been filed after the due date of furnishin....
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....ax authorities on retrospective denial 31 INATION TAX MARKET Agenda No. 7 (xi) (1/4) Circular to clarify refund related issues • Difficulties being faced by taxpayers owing to requirement of manual submission of refund in FORM GST RFD-01A ✔Supporting documents/invoices would be uploaded on the portal itself along with refund application ✔Fifteen days time to start from date of uploading • Interpretational challenges regarding rule 89(5) as to whether for refund on inverted duty structure, refund of inputs at the same or lower rates would be included VITC to be calculated on all inputs (i.e. whether higher or lower rate than rate on output) Page 73 of 85 32 CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE BOOK Agenda No. 7 (xi) (2/4) INATION TAX MARKET Circular to clarify refund related issues • Delays in disbursal of refunds after issuance of sanction order To clarify that officers should complete sanction process within 45 days so that disbursal is complete within 60 days Large number of applications that have been generated on common portal but not yet been received in the jurisdictional tax offices ✓Detaile....
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....lised Input Tax Credit (ITC) in FORM GST RFD- 01A ⚫ Circular No. 59/33/2018-GST dated 04.09.2018 clarified that refund claims shall be accompanied by FORM GSTR-2A of relevant period and wherever details of all the invoices relating to ITC availed not contained in FORM GSTR-2A, the proper officer may call for the hard copies of invoices to sanction refund ⚫ Certain State tax administrations are denying refund of invoices which are not reflected in FORM GSTR-2A Directions sought on whether applications for refund submitted in FORM GST RFD-01A can be processed on the basis of: ✓self-certified copies of invoices submitted by the claimant in case the invoices do not appear in FORM GSTR-2A of the relevant period; or ✓refund would be allowed only to the extent of those invoices which appear in FORM GSTR-2A 37 NATION TAX MARKET Agenda No. 7 (xiv) (1/1) Proposal for centralized Authority for Advance Ruling (AAR) and centralized Appellate Authority for Advance Ruling (AAAR) under GST Conflicting decisions by AAR in different States on similar issues involving similar facts causing confusion among taxpayers as well as tax officials • In-p....
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.... vertical" Insertion of Rule 21A to introduce the concept of "deemed suspension" 41 NATION TAX MARKET Agenda No. 7 (xvii) (2/3) 6 25 (Registration) 8 9 10 20, 54 of the CGST Act & 2(6) of the IGST Act Insertion of Rule 41A for apportionment of unutilized ITC if a person obtains separate registration for multiple places of business within a State Amendment to Rule 42 and 43 so that the term "turnover" excludes any duty/tax levied under Entry 92A of the Constitution 34 (Credit and Debit Notes) for more than one tax invoice Insertion of sub-rule (LA) in rule 53 to allow issuance of credit/debit note 35 (Accounts and other records) Renaming of CBEC to CBIC vide Finance Act, Amendment to sub-rule (3) of rule 80 to exempt Govt. organizations from filing FORM GSTR-9C if their books of a/c are audited by the CAG Amendment to clause (a) of sub-rule (1) of rule 83 2018 11 48 (GST Practitioner) 12 Insertion of 49A and 49B on 13 regarding order of utilisation of ITC Insertion of 49A and 49B regarding order of utilisation of ITC Amendment to sub-rule (8) of rule 83 to prescribe other functions that can be performed by GST practitioner Amendment to Rul....
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.... 25.10.2018 till 20.04.2019, subject to the condition that: the recipient would avail credit during the extended period only on those invoices, etc. which are uploaded by the corresponding suppliers in their statement in FORM GSTR-1 upto the month of March, 2019/quarter January-March, 2019; and the recipient would avail the ITC on the said documents so uploaded in his return in FORM GSTR-3B upto the month of March, 2019 45 INATION TAX MARKET Agenda No. 7 (xix) (1/1) Extension of the due date for furnishing of annual returns in FORM GSTR-9, FORM GSTR-9A and reconciliation statement in FORM GSTR-9C for the Financial Year 2017-2018 âš« This is the first year for furnishing annual return in GST âš« The FORM GSTR9/9A/9C have not been made available till date and therefore, a demand made by trade and industry to extend the due date for furnishing annual return Removal of difficulty order No. 1/2018 - CT dated 11.12.2018 was issued to extend the last date to 31.03.2019 Proposed to further extend the date till 30.06.2019 Page 80 of 85 46 JAYNA BOOK DE POT Extd, 1949 JB JAYNA MINUTE BOOK NATION TAX MARKET Agenda No. 7 (xx) (1/2) Proposal for amendm....
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....ers with NIL tax liability may be limited to Rs.500/- Rs.500/- per return (instead of present limit of Rs. 5000/- + Rs. 5000/); and by other taxpayers may be limited to Rs. 1000/- + Rs.1000/- per return o No refund of late fees to those taxpayers who have already furnished such details /returns Page 82 of 85 50 JAYNA BOOK DE POT Estd. 1949 JB JAYNA MINUTE BOOK INATION TAX MARKET Agenda No. 7 (xxii) (1/1) Proposal to extend benefit of composition levy for small service providers • Composition scheme is not available for service providers, other than restaurant service Consequent to the CGST (Amendment) Act, 2018, composition tax payer may supply services of value not exceeding 10% of turnover in a State/UT in the preceding financial year or five lakh rupees, whichever is higher • In principle approval of the GST Council (as the proposed changes require amendment to CGST as well as SGST Acts) is sought for extending the Composition scheme to small service providers ✔with annual turnover in last year was upto Rs. 50 lacs ✔with a uniform tax rate at 5% ot turnover in the State / UT ✓No ITC 51 NATION TAX MARKET Agenda No....