TaxTMI 
TaxTMI 
Minutes of the 31st GST Council Meeting held on 22nd December 2018
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.... for information of the Council 4. Decisions/recommendations of the lT Grievance Redressal 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 31^st 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 S....
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....of Goods and Services Tax Network (GSTN) based on decision of the GST Council to convert it into a 100% Government-owned entity 9. Status report of work of GoM on Revenue Mobilisation 10. Status report of passage of SGST (Amendment) Bill, 2018 in various States and Union Territories with Legislatures 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....
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....cil to brief the Council regarding the suggested changes. 4.1. The Joint Secretary, GST Council, stated that a written communication had been received from the State of Odisha requesting to correct a typographical error in the version of the Hon'ble Minister from Odisha recorded in line 6 of paragraph 14.9 of the Minutes (' ... in addition to 5% as entry tax ... ') 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 21^st 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....
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....n Law Ministry for legal opinion. He suggested that the Council could agree to include the name of Shri B.B. Vyas, Advisor to the Governor of Jammu & Kashmir in Annexure I 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 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 30^th 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 S....
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....IC members. He stated that this Agenda item was discussed during the Officers meeting held on 21^st December, 2018 and there were no comments from the officers on the Agenda item. A presentation covering the issues is attached as Annexure 3. The Secretary invited comments, if any, from the Members of the Council. There were no comments. 9. For Agenda item 3, the Council took note of the decisions taken by the GIC during the period from 28^th September, 2018 to 13^th 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 3^rd meeting held on 26^th 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,....
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..... For Agenda item 4, the Council took note of the decisions taken during the 3^rd meeting of the lTGRC held on 26^th October, 2018. The Council further agreed that the issue regarding expanding the mandate of the ITGRC to cover non-technical glitch cases shall be discussed in the next meeting of the Law Committee where the Commissioner of State Tax, Tamil Nadu and any other Commissioner of State Tax wanting to attend the meeting shall be invited. Agenda Item 5: Review 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,....
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....and SGST, which would lead to regular apportionment for IGST amount. He stated that now ad hoc settlement of IGST was being done even if the input tax credit was lying in the taxpayers' credit ledger. The Hon'ble Deputy Chief Minister of Delhi agreed that in the system being presently followed, all the States including Delhi and Puducherry were getting the due money (b but Delhi did not get the full amount due to it before March, 2018. The Secretary stated that there 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 31^st 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 exp....
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....Deputy Chief Minister of Delhi raised a point that if Rs. 1.6 lakh crore had not been put in the Consolidated Fund of lndia, Delhi would have got a higher share of revenue. He suggested that a workable solution could be found out by discussion between the Revenue Secretary and the concerned Secretaries of Delhi and Puducherry. The Hon'ble Chief Minister of Puducherry stated that this amount could have been kept in a separate account as the two Union Territories could not be deprived 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 ....
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....Kerala, concurred with the points raised by the Hon'ble Minister from Punjab and stated that the revenue position should be thoroughly reviewed. He added that the complaint of the Hon'ble Chief Minister of Puducherry should be seriously deliberated and a Group of Minister (GoM) should be constituted to look into ad hoc distribution of IGST. He further stated that the overall revenue position of GST was below expectations, even more so for the Central Government, which raised a serious 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 ....
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....ducherry, Himachal Pradesh, Uttarakhand, Bihar, Punjab etc. The previous Union Finance Secretary had visited the top six revenue shortfall States and had analysed the reasons for the shortfall. He observed that some of the big gainers of revenue were the North-Eastern States. Some of the larger States like Maharashtra, Tamil Nadu, Telangana and Andhra Pradesh were also doing better than the national average. The Hon'ble Chairperson observed that States like Haryana, Uttar Pradesh, Rajasthan, 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 du....
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....ates. He added that the CBIC had country wide data and they should bring out an analytical report. He further stated that prior to GST, Service Tax collection was suboptimal due to paucity of staff in CBIC. The revenue collection from Services could be improved in the GST era and for this, they needed Service Tax collection data of the pre-GST period which should be shared by CBIC with the States. He added that revenue for consuming States would be based on IGST which in tum depended upon effectiveness 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....
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....e stated that Punjab, UT of Chandigarh, Uttar Pradesh Gujarat etc. had shown a high level of return filing whereas some Union Territories and the North-Eastern States had shown a low return filing rate as some of them did not have VAT before GST. 12.18. Shri Nitinbhai Patel, Hon'ble Deputy Chief Minister of Gujarat, raised a question as to why revenue collection in some States like Punjab was low even when return filing percentage was high in these States. The Hon'ble Minister from Punjab stated that 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 t....
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....SGST) and VAT rate of 6% (together with similar cascading) had become 2.5% or 6% SGST at the most. This had an impact on the revenue front. He stated that Punjab's primary problem was the mismatch between ratio of Punjab's share of GOP in the Country's GOP when compared 'with Punjab's GST revenue vis-a-vis country's total GST revenue. He added that share of Punjab in the country's GDP was 2.8% but its share of GST revenue was only 2.4%. This automatically neutralized all factors such as 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 Sta....
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....t it was true that his State had performed better in revenue collection. This was partly due to large scale use of e-taxation prior to GST roll out which was also acknowledged by the Government of India. He stated that this had led to easier migration of middle and larger level VAT registrants and the number of new taxpayers had also climbed up rapidly. He added that a lot of work had also been done by officers for augmenting revenue. However, due to nonmatching of invoices, lot of false claims of input tax credit were 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. ....
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....ike theirs was not as expected. He added that due to strong enforcement, they had collected about 21% more revenue from IGST and SGST during September-October 2018. His State had a better national average of e-way bill generation as compared to the registered taxpayers in the State. He expressed that in the next three months, with better enforcement, their revenue performance should improve. He also supported the formation of GoM for revenue analysis. I 12.27. The Hon'ble Minister from West Bengal stated that the analysis 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 Ch....
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....Central and State Governments and research organisations like NIPFP could be constituted to analyse the revenue collection and structural issues relating to revenue shortfall keeping in view the suggestions made by the Members. The Council agreed to this suggestion. 13. For Agenda item 5, the Council took note of the presentation on the revenue collection for the months of September to November 2018. It also agreed to constitute a 7- Member Group of Ministers along with experts from Central and State Governments and research organisations 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 21^st December 2018 regarding the statement made by the Hon'ble Prime Minister on 18^th November 2018, as reported in th....
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.... discussion could move on. 14.3. The Hon'ble Chief Minister of Puducherry stated that the Members should be allowed to make observations. The Hon'ble Minister from Assam stated that indirectly the Members were making avoidable observations on the views expressed outside the Council. He added that many things had been stated against GST and it would be advisable not to bring outside issues into the Council. The Hon'ble Minister from Goa added that all Members should think and work in a constructive spirit with a view of one Nation, one 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 21^st December 2018 that on merit, no decision was needed and only im....
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.... issuance of clarification in relation to goods; Annexure H contained recommendations for making changes in GST rates or for issuance of clarification in relations to Services; Annexure III contained issues where no change had been proposed by the Fitment Committee in relation to goods; Annexure TV contained Issues where no change has been proposed by the Fitment Committee in relation to services and Annexure V contained issues relating to services referred to GST Council for decision. He added that issues covered in Annexure V were again discussed by the Fitment Committee on 21^st December, 2018 as there was near consensus in its last meeting on 15^th 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% ....
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....s 17% in 2013-14 and today it stood at 18.7%. He stated that in 2014-15, the revenue growth was 13.91% and in 2015-16, it was 9.8%. He added that the State had now been suffering a consistent revenue shortfall of 21%- 22% below the protected revenue rate. He added that the revenue protection was below the previous VAT growth rate. In the pre-GST period, the VAT growth rate for various years was as follows: 19.43% (2006-07), 15.75% (2007-08), 5.25% (2008-09), 11.98% (2009-10), 27% (2010-11), 23.90% (2011-12), 13.70% (2012-13) and 14.98% (201 3-14). 14.10. The Hon'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....
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....on or populist decisions. In this regard, he drew attention to the proposal regarding reduction in the rate of tax on marbles, and stated that the differential between marble pieces and marble slabs would cause a problem. 14.13. The Hon'ble Deputy Chief Minister of Gujarat stated that at the beginning of the implementation of GST, it was decided to keep a rate slab of 28% and to review the same as per need and experience. The changes in tax rates could be considered based on representations received from customers, manufacturers, or other stakeholders. He added that 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% o....
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....d returns were being rationalised. In the long run, one should try to have one rate except for sin goods, as is prevalent in other countries. 14.16. Shri Rajesh Kumar Agarwal, Hon'ble Minister from Uttar Pradesh, stated that GST Council is a Constitutional body. The Fitment Committee had made its recommendations after due consideration and these should be accepted, particularly for items like fly ash. Shri Sushi! Kumar Modi, Hon'ble Deputy Chief Minister of Bihar, stated that he worked as Finance Minister during introduction of VAT in 2005 and at the time of implementation 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 ....
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....ompensation paid this year so far in the first 6 months was Rs. 30,000 crore and for the whole year, it was expected to be Rs. 60,000 crore. This indicated that the revenue position was improving. 14.18. Shri C.P. Singh, Hon'ble Minister from Jharkhand, stated that he had been attending the Council Meetings since very beginning and many Members who, in the past, had suggested rate reduction were today expressing reservation to reduce the rates. He stated that this was understandable politically. On merits, there could be reservation for reducing the rate of tax on items such as 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 d....
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....Law Committee. He further stated that the other option was that once the study was completed, action could be taken on the recommendations of the Fitment Committee. He stated that his first preference was to understand the issues after the study was conducted and then the Fitment Committee to make its recommendation. He suggested that in any situation, at least the decision regarding the Table Agendas should not be taken up by the Council. 14.21. The Hon'ble Minister from West Bengal further stated that input tax credit had been allowed on textiles but it was still not allowed for railway 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....
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....h 14% growth rate year-on-year basis in the present conditions. He observed that the recommendations of the Fitment Committee were not very heavy and these were limited to small items like walking sticks, music books, etc. The principle being suggested to first do a study and then consider rate reduction need not be adopted as the Council was competent to take decisions. He stated that today a grim picture was being painted and it was being linked to 2022 and several Members who had earlier supported the rate reductions were opposing it today. He suggested that the recommendations of the Fitment 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 don....
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.... to see what could be done and what need not be done. He added that the revenue impact for the proposed rate reductions would be less than Rs. 500 crore per month. As regards the Table agenda, he stated that the Council should discuss to understand their implications even if it was not decided during this meeting. 14.27. After these discussions, the Secretary invited the Joint Secretary, TRU-1 to take up discussion on the items covered under different Annexures of the Agenda Note. The discussions that took place on specific issues is recorded herein below. Annexure I (Part 'A') Pulleys, 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 item....
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....ncil agreed to reduce the rate of tax on monitors and televisions of size up to 32 inches from 28% to 18%. Power Banks of lithium ion battery (S.No.16): 14.32. The Joint Secretary, TRU-1 stated that it was proposed to reduce the rate of tax on this item from 28% to 18% to reduce litigation and to bring the rate at par with lithium ion battery. He stated that this item was also used in electric vehicles. The Hon'ble Minister from Karnataka inquired whether this rate would also be applied to electric vehicle batteries. The Joint Secretary, TRU-1 clarified 1tbat electric vehicle batteries of lithium ion were already 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 ....
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....ate reduction as well as pre-GST rates. The Council agreed to this suggestion. 14.37. The Hon'ble Minister from Kerala stated that rubber wrappers to collect latex should be taxed at the rate of 5% as it was just a cup. The Hon'ble Chairperson suggested that this could be taken up in the Fitment Committee. He also added that any other suggestion for rate reduction should be given in writing. He also suggested that Council could agree to the proposals on rate reduction where there was consensus amongst officers of the fitment Committee. The Council agreed to this proposal. 14.38. The Council agreed to rate reduction of 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 t....
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....ving maximum selling price not exceeding Rs. 100 per kg. was used by these class of people and was an affordable means of nutrition and was sold in packs of Rs. 2, Rs. 3 and Rs. 5 each. Therefore, a reduced GST rate for biscuits having sale value up to Rs. 100 per kg. would be in the larger interest of the society. He added that such biscuits were earlier exempted from Central Excise. It was also relevant to note that GST rate on footwear, apparels and hotels was also based on price-based classification and a similar provision could be considered for the rate of tax on low priced biscuits (price not exceeding Rs. 100 per kg.). This could be taxed 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 14^th and 15^th December 2018) 14.45. This Annexure contained 46 items relating to services where th....
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....at all cinema tickets should be electronic tickets. He added that the local government had withdrawn from taxation and, therefore, no revenue was accruing from this account. He added that the State should be given right to issue electronic tickets. The Hon'ble Chairperson stated that there should be an enabling power to issue electronic tickets. The Hon'ble Minister from Kerala suggested to frame rules in this regard. The Hon'ble Chairperson suggested that the Council could agree that States are entitled to issue electronic tickets and that the Law Committee should formulate rules in this regard. The Council agreed to the rate reduction and to the suggestion 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 chartere....
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....latex to 5%; (iv) States are entitled to issue electronic tickets and that Law Committee to formulate rules in this regard; (v) 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; (vi) On ENA, status quo to be continued till the Council took a decision on this issue, i.e. Extra Neutral Alcohol supplied for industrial purpose shall attract GST at the rate of 18%. Agenda Item 7: Issues recommended by the Law Committee for the consideration of the GST Council 16. Introducing this Agenda item, the Secretary informed that the issues under this Agenda item were discussed in detail in the Officers meeting held on 21^st 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, ....
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....ster from Uttarakhand in his written speech stated that there was considerable delay on the part of the Government in making payments due to paucity of funds and also the urgency in discharge of welfare commitments. There is a continuous complaint from works contractors providing services to the Government about the consistent delay in receiving their payments and it was affecting them adversely. He stated that it would be in the interest of these contractors to make the proposed amendment in order to avoid blockage of capital and to prevent them from becoming liable to pay late fee and interest. He, therefore, urged the Council to reconsider this issue. 16.4. After this preliminary discussion, Shri Upender Gupta, Commissioner (GST Policy Wing), CBIC made a presentation on the five issues where consensus was not reached during the Officers meeting held on 21^st 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 deci....
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....l changes in the GST 'Laws should be prepared and recommended by the Law Committee and the same could be brought in the next Finance Bill. He added that the corresponding draft should be prepared for States also. 16.7. The Hon'ble Deputy Chief Minister of Gujarat stated that if two different rulings were given by AAR of two States, a time-limit should be prescribed to decide the appeal. The Hon'ble Chairperson stated that one should not have provisions to encourage further appeal. Appeal should only lie in cases of conflicting decisions of two or more AAARs. For hearing appeals in such cases of conflicting decisions of AAARs of different States, the centralised Appellate Authority for Advance Ruling (CAAAR) could have a part-time 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 statu....
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....nister from Uttar Pradesh stated that agreeing to this proposal would -f benefit the medium and small enterprises. The Hon'ble Minister from Karnataka stated that already a very significant concession had been given to small taxpayers to file quarterly return and now a mid-course correction would destabilise the system. He added that, since a new return system was in pipeline, these taxpayers should continue to make monthly payments and multiple changes in the system should be avoided. The Hon'ble Minister from Kerala stated that if input tax credit was allowed without payment of tax, this could lead to loss of revenue as some taxpayers could vanish. The Hon'ble Minister from West Bengal also suggested that tax payment should be made on 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. Th....
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....sted that the issue should be considered afresh and requested to drop this entire proposal pending further examination. The Hon'ble Chairperson suggested that this could be further discussed in the Law Committee. The Council agreed to this suggestion. (iv) Agenda Item 7(xxi): Reduction in amount of late fee leviable on account of delayed furnishing of FORM GSTR-1, FORM GSTR-3B & FORM GSTR-4 for the months/quarters from July 2017 to September 2018 , 16.14. The Commissioner (GST Policy Wing), CBIC stated that two alternative proposals were discussed by the officers during the meeting on 21^st December 2018. The first alternative was that the late fee may be completely waived off for FORM GSTR-1, FORM GSTR-3B and FORM GSTR-4 for the months/quarters from July 2017 to September 2018 which will be furnished from 22nd December, 2018 but latest by 31^st 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 22^nd December....
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....eme on the lines available for the small traders. This composition scheme could be limited to a smaller annual turnover of Rs. 50 lakh and tax rate could be 5% or 12% given the fact that about 50% of the tax was normally paid through input tax credit. He added that those in favour of taxing such composition taxpayers at the rate of 12% had, instead, agreed to create a new rate of 9%. However, it would be better to continue with an existing rate, say 5%. 16.17. The Hon'ble Minister from West Bengal observed that the proposed annual turnover of Rs. 50 lakh was very low. The Hon'ble Chairperson inquired whether the limit of annual turnover should be increased to Rs. 1 crore. The Hon'ble Minister from West Bengal stated that if the rate of tax was lower, there 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, Mahara....
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....n given to the restaurant services. This would make the procedure simpler. Earlier in the pre-GST regime also, there was a composition scheme for contractors to pay in lump sum in lieu of tax. He urged the Council to consider this provision. 16.22. The Hon'ble Minister from West Bengal stated that he was strongly in favour of a composition scheme for small service providers but the data regarding the revenue from such service providers was not clear and one should look at the numbers as to how many pure service suppliers would be covered, if their annual turnover was taken as Rs. 50 lakh and Rs. 1 crore. He stated that in-principle he agreed to have a composition scheme for small service providers. The Hon'ble Chairperson stated that the Council could give in-principle 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 p....
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....for refund. The same process would be carried out under GST. He added that the refund sanction would be done by the respective tax authorities only and the GST refund system could be connected to PFMS. The processing of refund claim would be done by the officers and then the payment advice would go through GSTN to PFMS. The Hon'ble Deputy Chief Minister of Bihar stated that the proposed new system would be much better as the applicant would get refund payment from one authority. He suggested that the Council may agree to it. The Hon'ble Minister from West Bengal stated that in case of export refund, a physical paper was being dealt with whereas it should be automatic and digital. 16.26. The Hon'ble Deputy Chief Minister of Gujarat stated that after sanction of refund, the refund 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 re....
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.... and issue could be revisited, if required, when the new return filing system was in place; 17.5. For Agenda item 7(xvi), the Law Committee to work on a formulation that wherever an exempted service was supplied which involved transfer of taxable goods to the service recipient, the service provider shall be liable to pay tax on such goods; 17.6. For Agenda item 7(xxi), to completely waive off the late fee for FORM GSTR-1, FORM GSTR-3B and FORM GSTR-4 for the months/quarters from July 2017 to September 2018 allowed to be furnished from 22^nd December, 2018 but latest by 31^st March 2019, but no refund of late fee to be given to those taxpayers who have already furnished such details/returns; 17.7. For Agenda items 7(xxii), the Council agreed in-principle to have a composition scheme for small service 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 thro....
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....he written 5peech circulated during the Council Meeting stated that he was, in principle, agreeable to the State-specific additional cess on the SGST of the particular State for the purpose of creating additional resource for funding for natural calamities and disasters through GST. He cautioned that such a cess or additional rate of tax should not be for an indefinite period and should be levied within the respective State and not be applicable on IGST payable on the goods when exported from that State. He added that system changes should not adversely affect the functioning of GSTN IT system in other States or cause compliance burden in other States. 20.3. The Hon'ble Minister from Uttarakhand in the written speech circulated during the Council Meeting stated that views of Uttarakhand on the questionnaire circulated 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....
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....uducherry and Telangana had not yet a the SGST (Amendment) Act. During the Officers meeting held on 21^st December, 2018, it was informed that the Legislative Assemblies of Puducherry and Delhi had also passed the Amendment Bills on 18^th and 21^st December, 2018 respectively. The Amendment Bills were also expected to be passed shortly by the States of Meghalaya and Telangana. ln view of this, it was proposed to notify the Amendment Acts on 1^st February, 2019. The Council agreed to the proposal. 23. For Agenda item 10, the Council took note of the status of the passage of the SGST Amendment Bills, 2018 and decided that the amendment CGST Act, IGST Act, GST (Compensation to States) Act and SGST Acts shall be notified on 1^st February, 2019. Agenda Item 11: Reconstitution of membership of the Law Committee, Fitment Committee and IT Committee 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 n....
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....eguards were suggested, like 80% of inputs, capital goods and input services other than TDR (transfer of development rights) or similar rights shall be purchased from a GST registered supplier only and for purchases which are below 80% benchmark and are procured from unregistered persons, GST at the rate of 12% on reverse charge basis should be paid in cash by the registered person without any input tax credit. 30.1. The Hon'ble Chairperson stated that this Agenda item on real estate sector was placed before the Council in order to give boost to this sector. He stated that about 7 to 8 lakh apartments were lying unsold, which had caused blockage of funds for the real estate developers. He explained that if a purchaser invested in a flat under construction, he had to pay GST at the rate of 12% and even though input tax credit was available, psychologically buyers 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 ....
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.... view of this, it was proposed to increase the threshold exemption limit for suppliers of goods (manufacturers and traders) from the existing annual turnover ofRs. 20 lakh to Rs. 75 lakh and from Rs. 10 lakh to Rs. 20 lakh for 'Special Category' States. 32.1. The Hon'ble Chairperson stated that this was an important issue and this could be considered in the GoM on MSME. The Council agreed to the same. 33. For Agenda item 12(iv), the Council approved to refer this issue to the GoM on MSME for consideration and making available their recommendations to the Council. Agenda Item 12(v): Proposal for removal of differential rate of GST on lottery run by State Government and lottery authorized by the State Government 34. Introducing this Agenda item, the Secretary stated that representations had been received from All India Federation of Lottery Trade and Allied 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 lo....
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....urprisingly this had not been done. He urged the Council to resolve this matter. He expressed agreement with most of the recommendations of the Law Committee, but on the proposal of single interface for disbursal of refund amounts, he stated that GSTN must devise a glitch-free module for refund. The State would prefer that the existing system of allowing claims of refund based on invoices which find place in FORM GSTR-2A should continue. He also suggested that the Hon'ble Chairperson should look into the matter of constituting the GST Appellate Tribunal at the earliest as there were several litigations pending, challenging the qualifications prescribed for the members of the proposed GST Appellate Tribunal. 36.2. In the written speech circulated by the Hon'ble Minister from Uttarakhand, it was highlighted that the State of Uttrakhand is a landlocked Himalayan State and there was 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....
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....e of the value of goods. Now with no mandatory provision for online declaration for importing goods, if the consignment is of multiple persons with individual value less than Rs. 50,000, the capacity of the enforcement unit is drastically reduced. He also suggested that for goods, which are high in weight/quantity but low in cost, such as minor minerals, river bed material, soap stone and bricks, thee-Way bill should be based on weight/quantity rather than value. Agenda Item 13: Date of the next meeting of the GST Council 37. The Hon'ble Chairperson stated that the date of the next meeting of the Council would be informed at a later date once the issues referred to the GoM on MSME and the Fitment Committee and the Law Committee were examined and their recommendations were ready. 38. The meeting ended with a vote of thanks to the Chair. ============= Document 1 JAYNA BOOK DE 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 S....
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.... 7 Govt. of India Shri J S Chawla 8 Govt. of India 9 Govt. of India Shri P.K. Mohanty 10 Govt. of India 11 Govt. of India Shri G.D. Lohani 12 Govt. of India 13 Govt. of India 14 Govt. of India 15 Govt. of India 16 Govt. of India 17 Govt. of India 18 Govt. of India 19 Govt. of India 20 Govt. of India 21 Govt. of India 22 Govt. of India 23 Govt. of India 24 Govt. of India 25 Govt. of India Dr. Rajeev Ranjan Shri Manoj Sethi Shri P.K. Jain Shri Manish Kumar Sinha Shri Ritvik Pandey Shri Upender Gupta Shri Yogendra Garg Shri S.K. Rahman Shri Venkat Reddy Shri D.S. Malik Shri Rajesh Malhotra Shri Reyaz Ahmad Shri Parmod Kumar Shri Gaurav Singh Shri Pramod Kumar Shri N Gandhi Kumar Ms Himani Bhayana Shri Amaresh Kumar Shri Rahil Gupta Shri Shikhar Pant Shri Nikhil Goyal 26 Govt. of India 27 Govt. of India 28 Govt. of India 29 Govt. of India 30 Govt. of India 31 Govt. of India 32 Govt. of India 33 Govt. of India CHAIRMAN'S INITIALS 34 Govt. of India Ms Nisha Gupta 35 Govt. of India Shri Vikash Kuma....
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....V C Gupta Shri Kishori Lal Shri Pradeep Kumar Goel Shri Neerav Kumar Mallick Shri Narayana Swamy Shri R.C. Sankhla Shri S. Kannan Asst. Comm., GST Policy Wing OSD to Union Minister OSD to MoS (Finance) PS to MoS OSD to Finance Secretary OSD to Chairman, CBIC Advisor, CBIC Joint Secretary Joint Secretary Director Director Under Secretary Under Secretary Under Secretary Under Secretary Superintendent Superintendent Superintendent Superintendent Superintendent Superintendent Superintendent Superintendent Superintendent Inspector CEO EVP (Services) OSD to CEO ADG, Audit ADG, Systems Commissioner, Chandigarh Zone, CBIC Commissioner, Meerut Zone, CBIC CBIC Commissioner, Bhopal Zone, Commissioner, Bengaluru Zone, CBIC Commissioner, Lucknow Zone, CBIC Commissioner, Chennai Zone, CBIC CHAIRMAN'S Shri Vijay Mohan Jain Commissioner, Rohtak Zone, INITIALS CBIC Page 47 of 85 MINUTE BOOK Shri P.K. Singh Shri Milind Gawai Shri B. Hareram 73 Govt. of India Shri Virender Choudhary 74 Govt. of India 75 Govt. of In....
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.... 116 Odisha Dr. Rajan Khobragade Smt Tinku Biswal Shri Pawan Kumar Sharma Shri Sudip Gupta Shri Manoj Kumar Choube Shri Rajiv Jalota Shri Dhananjay Akhade Shri R. K Khurkishore Singh Shri H. K. Lalhawngliana Shri A. K. K. Meena Shri Saswat Mishra Shri Sahadev Sahoo Shri Dr. V. Candavelou Shri K Shridhar 117 Odisha 118 Puducherry 119 Puducherry 120 Punjab Shri M. P Singh 121 Punjab 122 Punjab 123 Rajasthan 124 Rajasthan 125 Rajasthan 126 Rajasthan 127 Sikkim 128 Tamil Nadu 129 Tamil Nadu 130 Tamil Nadu 131 Telangana 132 Telangana 133 Telangana 134 Tripura Shri V. K. Garg Shri Vivek Pratap Singh Shri Niranjan Arya Dr. Prithviraj Shri Alok Gupta Shri Ketan Sharma Ms Dipa Basnet Shri Ka. Balachandran Dr. T.V Somanathan Shri Gnanasekaran Shri Somesh Kumar Shri Anil Kumar Shri Laxminarayan Jannu Shri Sudip Bhowmik Page 49 of 85 Commissioner, CT Secretary & CCT Addl. Commissioner of State Taxes State Tax officer Commissioner, CT Pr. Secretary CCT Commissioner, CT Jt. Commissioner, CT Dy. Comm, CT Commissioner,....
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.... Circular / Order Nos. 53 to 66 of 2018 3 of 2018 12 to 15 of 2018 66 to 74 of 2018 1 of 2018 3 Agenda No. 3 Decisions of GIC post 30th meeting of GSTC (1/7) Decisions in 22nd Meeting of GIC (10.10.2018) 0 INATION TAX MARKET Extension of due date for filing of FORM ITC-04 for the period from July, 2017 to September, 2018 till 31.12.2018 ✓ Notification No 59/2018 - CT dated 26.10.2018 issued Extension of due date for filing of final return in FORM GSTR- 10, for those taxpayers who got their registration cancelled on or before 30.09.2018, up to 31st December, 2018 Notification No 58/2018 - CT dated 26.10.2018 issued • Standard Operating Procedure (SOP) for processing of Applications for Cancellation of Registration submitted in FORM GST REG-16 ✓ Circular No. 69/43/2018-GST dated 26.10.201 issued 4 CHAIRMAN'S INITIALS Page 52 of 85 JAYNA BOOK DE POT Extd. 1949 JB JAYNA MINUTE BOOK Agenda No. 3 Decisions of GIC post 30th meeting of GSTC (2/7) Decisions in 22nd Meeting of GIC (10.10.2018) • Clarification on certain issues related to refund âœ....
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.... Notification No. 60/2018 - CT dated 30.11.2018 issued Decision by Circulation (30.10.2018) • Provisional settlement of another Rs. 30,000 crore, 50% to Centre and 50% to States ✓ Order No. F. No. S-34011/21/2018-ST-I DOR dated 31.10.2018 issued Page 54 of 85 JAYNA BOOK DE POT Estd. 1949 JAYNA MINUTE BOOK Agenda No. 3 Decisions of GIC post 30th meeting of GSTC (6/7) Decision by Circulation (22.11.2018) -> • NATION TAX MARKET Extending the due date for filing of details of outward supplies in FORM GSTR-1 and returns in FORM GSTR-3B / FORM GSTR-4 by taxpayers registered in the district of Srikakulam in AP and 11 districts of TN ✓ Notification Nos. 62/2018 - CT; 63/2018 - CT; 64/2018 - CT and 65/2018 - CT all dated 29.11.2018 issued Clarifying issues related to challenges faced by e-Commerce operators after implementation of the provisions of Tax Collection at Source Revised FAQs issued on 30.11.2018 9 Agenda No. 3 Decisions of GIC post 30th meeting of GSTC (7/7) Decision by Circulation (22.11.2018) . INATION TAX MARKET Extending the due date for ....
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.... 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 17/12/2018 by GSTN Another lot of around 450 cases of TRAN-1 have been examined by GSTN and will be presented to the IT-GRC for decision shortly Rest of the cases are under investigation and checking of logs in the system 13 CHAIRMAN'S INITIALS Page 57 of 85 CHAIRMAN'S INITIALS MINUTE BOOK Annexure 4 Law/Rules related Agenda Notes 31st Meeting of GST Council Agenda Issues for consideration of the GST Council Page 58 of 85 किर बाजार NATION TAX MARKET 2 JAYNA BOOK DE POT Estd. 1949 B JAYNA MINUTE BOOK INATION TAX MARKET Agenda No. 7 (i) (1/1) Extension of the due date for furnishing the statement in FORM GSTR-8 by ECOS for the months of October, November and December, 2018 till 31.01.2019 â....
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....ll 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 every month and to charge interest where tax paid in any month was less than the value of supply declared in that month ✔Proposal to insert a provision in law to allow monthly payment of tax on self-assessment Va monthly payment statement detailing output liability and credit availed ✓Differential tax payment with interest on filing of quarterly return 7 NATION TAX MARKET Agenda No. 7 (v) (2/5) Update on the implementation status of the issues referred to LC by Hon'ble GSTC Introduce a provision in the GST Law to allow a buyer to pay tax for the sup....
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.... 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 BOOK NATION TAX MARKET Agenda No. 7 (vii) (1/10) Amendments to the CGST Rules, 2017 • Insertion of Rule 12(1A): E-commerce operators may be given the option to provide the address of their HO (which may be located in a different State) while applying for registration in those States where they do not have a physical presence Insertion of Explanation to Rule 4....
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....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 rule 89(5) vide NN 21/2018 - CT dated 18.04.2018 ✓Changes so as to specify GSTIN in case of refund on imports inputs / reverse charge supplies Page 66 of 85 18 JAYNA ....
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....ST 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....
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....t is outside India: As per Rule 4 Page 70 of 85 26 JAYNA BOOK DEPOT Estd. 1949 JAYNA MINUTE BOOK NATION TAX MARKET Agenda No. 7 (viii) (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 unregistere....
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.... in which such intimation/application for withdrawal is being filed) Effective date of denial (by the tax authority) - date including any retrospective date as may be determined by tax authorities (but not prior to the date of contravention of the provisions of the CGST Act or the CGST Rules) Follow up action to levy tax, etc. to be taken by the tax 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)....
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....nd ✓portion of services which has been provided by the supplier located outside India to the recipient of services located outside India would be considered as import of services in the hands of the supplier of services located in India & he would be liable to pay IGST on reverse charge basis on such imports and take credit on the same Page 75 of 85 36 CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE BOOK INATION TAX MARKET Agenda No. 7 (xiii) (1/1) Requirement of submission of invoices for processing of refund claims of unutilised 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 ....
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....age 77 of 85 40 CHAIRMAN'S INITIALS MINUTE BOOK NATION TAX MARKET Agenda No. 7 (xvii) (1/3) Amendments to the CGST Rules, 2017, consequential to notifying the provisions of the CGST (Amendment) Act, 2018, SGST (Amendment) Act, 2018 and IGST (Amendment) Act, 2018 Amendment in heading of Chapter-II 1 10 (Composition Rules) 10 (Composition Rules) Amendment in Rule 7 and FORM GSTR-4 to include service providers (subject to turnover limit) under Composition levy 3 25 (Registration) 4 2(18), 25 5 29 (Cancellation or suspension of registration) Amendment in Rule 8(1) to do away with the requirement for separate registration for units located outside SEZ Amendment in Rule 11 due to omission of concept of "business 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 ....
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....nts to FORM GST APL-05 to cap the amount of deposit and mclude PoS wise details of IGST paid pre- NATION TAX 43 Agenda No. 7 (xviii) (1/2) MARKET Proposal to extend the due date for availing ITC on the invoices or debit notes relating to such invoices issued during the FY 2017-18 under section 16(4) of CGST Act till the due date for furnishing of FORM GSTR-3B for the month upto March, 2019 • Trade and industry were not able to reconcile their ITC as many of their suppliers had not furnished details of invoices debit notes relating to such invoices in FORM GSTR-1 & therefore it did not reflect in FORM GSTR-2A • Hence, request was made to extend the due date for availment of ITC on invoices /debit notes for FY-2017-18 Page 79 of 85 44 CHAIRMAN'S INITIALS CHAIRMAN'S, INITIALS MINUTE BOOK INATION TAX MARKET Agenda No. 7 (xviii) (2/2) • Proposal to allow ITC, in relaxation of the proviso to section 37(3) and as a one time measure, beyond 25.10.2018 till 20.04.2019, subject to the condition that: the recipient would avail credit during the extended period only on those ....
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.... of late fees leviable on account of delayed furnishing of FORM GSTR-1, FORM GSTR-3B & FORM GSTR-4 for the months/quarters from July, 2017 to September, 2018 → 0 Being the first year of implementation of GST, taxpayers were not familiar with the provisions of GST and were not able to furnish returns timely Two alternative proposals: ✓ Alternative - 1: Late fees may be completely waived o In case FORM GSTR-1, FORM GSTR-3B & FORM GSTR-4 for the months / quarters July, 2017 to September, 2018, are furnished after 22.12.2018 but latest by 31.03.2019; and o No refund of late fees to those taxpayers who have already furnished such details/returns 49 NATION TAX MARKET Agenda No. 7 (xxi) (2/2) Reduction in amount of late fees leviable on account of delayed furnishing of FORM GSTR-1, FORM GSTR-3B and FORM GSTR-4 for the months/quarters from July, 2017 to September, 2018 • Two alternative proposals: ✓ Alternative - 2: Late fees payable may be reduced o In case FORM GSTR-1/FORM GSTR-3B/FORM GSTR-4 for the period July, 2017 to September, 2018 are furnished after 22.12.2018 but ....