TaxTMI 
TaxTMI 
Minutes of the 35th GST Council Meeting held on 21st June, 2019
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....isions of the GST Implementation Committee (GIC) for information of the Council 5. Review of Revenue Position 6. Issues recommended by the Law Committee for the consideration of the GST Council i. Amendments in GST Laws ii. Update on the status of the issues referred to the Law Committee by the GST Council iii. Proposal for e-ticketing for cinema tickets iv. Clarification regarding taxability of services provided by an office of an organisation in one State to the office of that organisation in another State, both being distinct persons v. Proposed timeline for introduction of New Return system vi. Staggered extension of due date of filing returns in FORM GSTR-9, FORM GSTR-9A and reconciliation statement in FORM GSTR-9C vii. Proposal to extend the due date for filing of declaration in FORM GST ITC-04 for the period July 2017 to June 2019 7. Issues recommended by the Fitment Committee for the consideration of the GST Council i. Recommendations of Group of Ministers on Lottery ii. Changes in GST rate on electric vehicles and related supplies iii. Informing GST Council ....
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....r Union Finance Minister and Chairperson, GST Council in the roll out of GST; Having reflected upon the leadership exhibited by him during discussion on the design of GST, in forging a consensus between the Centre and the States which had been elusive for more than a decade and half; Noting the immense patience and erudition shown by him in ensuring that all contentious issues were discussed threadbare before arriving at a solution acceptable to all; Having recollected the many number of instances in which his legal acumen guided the Council in its deliberations on difficult legal issues; Expresses its gratitude and appreciation for the exemplary contribution made by him in making the GST Council a shining example of Cooperative Federalism that it has become today." 3.2. Shri Mauvin Godinho, Hon'ble Minister from Goa, suggested to add the following lines in the last sentence of the proposed resolution: " ... which was also greatly responsible for rekindling a new nationalistic fervour cutting across political spectrum." The Council agreed to add this additional sentence in the resolution. Shri V. Narayanasamy, Hon'ble Chief Minister of Puduc....
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....unanimously approved the resolution along with the proposed addition. Thereafter, she made brief opening remarks. 3.8. In her opening remarks, she expressed her pleasure in welcoming her colleague, Minister of State of Finance, Shri Anurag Thakur, the Members of the GST Council from different States and UTs with legislatures, which also included two Hon'ble Chief Ministers and four Hon'ble Deputy Chief Ministers of States. She also welcomed all the senior officials from the Centre and the States. 3.9. She stated that since the inception of the GST Council on 15^th September, 2016, it has done tremendous work and ushered in the most landmark indirect tax reform in the post- independent India. The benefits of GST were already visible. It has simplified the indirect tax landscape of the country, which was earlier marked by a completely bewildering variety of Central and State Tax levies. It has helped to consolidate and enhance tax collection. It has also led to a uniform, modern IT enabled tax administration which is uniform across the entire country. She added that they needed to carry forward the good work of the Council. There was more work to do on simplification of....
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....ly rotation of 1/3^rd of the GIC members, the oldest making way for the new. Further, barring some urgent issues, the matters such as interpretations of law should be placed before the Council for decision. Any circulars issued with the approval of GIC should first be sent to all States for comments. He also observed that one common refrain during the last one year had been that issues of interest to the States were not satisfactorily replied to or being included in the Agenda. He stated that it was suggested earlier also that the issues raised by different States, whether or not taken as an Agenda item, should be circulated for information to all States in a tabular form before a GST Council meeting. He further suggested that the Council should move towards creation of its own Secretariat with domain experts from economics and public finance. This would give a lot of domain knowledge to the Council, which would be useful as some of the decisions of the Council would be challenged in the Courts. He further recalled that they had earlier (in the 34^th GST Council Meeting held on 19^th March 2019) raised the issue of levy of GST on long* term leasing of land, which was to be referred....
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.... follows the organisational structure of the audited entity. So, in pre-GST regime, separate revenue audit reports were tabled in Parliament and State legislature based on the tax laws administered by the Centre (Central Excise and Service Tax) and the State (VAT). She stated that in GST regime, there were areas of overlap in the functions of tax administrations due to cross empowerment. She pointed out that CGST, SGST and IGST was administered by both the Central and the State Tax officers and audit findings on either Central or State Tax Department might impact the Consolidated Fund of India as well as the Consolidated Fund of one or more States. She added that observations on GSTN' s role and its IT system would be relevant for the Centre and all the States. She further stated that with uniform processes and procedures of audit across the country, it was proposed to have an all-India report on systemic issues, which would be presented in the Parliament. This Report would deal with systemic lapses, observations on implementation issues impacting policy decisions, findings on audit of GSTN, results of audit carried out with pan-India focus and findings on tax administration of....
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....States needed to ensure that CAG had access to data available with GSTN including through Data Scheduler. The scope of data should be as required by CAG for performing his duties under the DPC Act (Duties, Powers and Conditions of Service Act). She added that to begin with, the data would be drawn in respect of all States and CBIC though the API Scheduler and once area for audit was identified, at the unit level, full access to transaction level data would need to be provided to the audit team. In addition, access was also needed to review the back-office functions and reports being generated by CBIC and the States. It was also highlighted that CAG was agreeable to implement and maintain security procedures and measures in order to ensure the protection of data shared against the risks of unauthorised access. She added that once Tax Department was fully automated, they could conduct audit online. 4.5. The Deputy CAG stated that during the Officers meeting held on 20^th June 2019, a few apprehensions were expressed like access to live data; whether the CAG should be looking at the entire data which may not be seen by the Tax officers and the need to take note that GST was in a tr....
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....mmittee for further deliberations. Agenda Item 2: Confirmation of the Minutes of the 34^th GST Council Meeting held on 19^th March 2019 6. The Secretary stated that during the Officers meeting held on 20th June 2019, only one comment had been received on the Minutes of the 34^th Council Meeting (hereinafter referred to as the Minutes) from the State of Odisha suggesting a change in paragraph 14.2 of the Minutes with regard to the version of the Principal Secretary (Finance), Government of Odisha. They had suggested to replace the presently recorded version ("Shri Ashok Meena, ACS Finance, Government of Odisha stated that for Odisha, they would like to propose 2 Benches, one at Bhubaneshwar and the other at Cuttack, and that this information would be sent in writing too.") with the following: "Shri Ashok K.K. Meena, Principal Secretary, Finance Department, Government of Odisha, stated that for Odisha, they would like to propose State Bench either at Bhubaneswar or at Cuttack, and that this information would be sent in writing too." The Council agreed to the suggestion. 7. For Agenda item 2, the Council decided to adopt the Minutes of the 34^th Meeting of the GST Council wit....
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....th May, 2019 were placed before the Officers during the meeting held on 20^th June, 2019 as a part of the presentation (attached as Annexure 4 to the Minutes) for information. He added that the decisions of GIC were placed before the Council for information. 11. For Agenda item 4, the Council took note of the decisions taken by GIC between 18^th March, 2019 and 10^th May, 2019. Agenda Item 5: Review of Revenue Position 12. The Agenda note covering the details of GST revenue during 2017-18, 2018-19 and April-May, 2019 and trends in return filing up to April, 2019 was placed before the Council for information. 12.1. Shri D. Jayakumar, Hon'ble Minister from Tamil Nadu, stated that he had circulated a written speech in which certain outstanding issues relating to IGST settlement were highlighted. ln the written speech, the request of Tamil Nadu was reiterated for early settlement of the outstanding IGST amount due to the State for the Financial Year (FY) 2017- 18. The net loss to Tamil Nadu from the incorrect dispensation adopted by the Union Ministry of Finance was estimated at Rs. 4,459 crore. It was also brought to the notice of the Hon'ble Chairperson that a sum....
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....viders was granted up to 30^th April, 2019 by way of a circular. As these taxpayers are small having an annual turnover of Rs. 50 lakh, they may file quarterly return, and, therefore, while taking up the proposal to amend Section 10, the time limit for exercising option by small service providers may be extended up to 31^st July, 2019. The Hon'ble Chairperson suggested that the proposal of the Hon'ble Minister from Tamil Nadu could be approved. The Council agreed to the same. Serial No.4: Section 25 -Procedure for Registration 13.2. The Hon'ble Minister from Uttar Pradesh stated that the provision of authentication of GST registration through Aadhaar number could get challenged in the court of law. He also expressed doubt regarding the efficacy of this provision as someone could give his servant's Aadhaar number as the proprietor of a company and carry out fraudulent transactions in crores of rupees. Subsequently there would hardly be any property available to recover the evaded tax from such fraudulent registrants. He suggested that physical verification of registrants should be considered seriously as a large number of ' laptop companies' were operat....
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....of the sudden changes in rates of GST followed by periodic rationalisation. Calculating profiteering involved ambiguities, and therefore, it might not be fair to impose penalty in every case. In view of this, further discussion was needed in the Council. It needed to be considered whether a new third authority should be empowered in GST for imposing any penalty. 13.6. The Hon'ble Minister from Punjab raised a query whether the amendment was proposed to be from retrospective effect. The Secretary clarified that it was not proposed to be from a retrospective date. Shri V.K. Garg, Advisor (Financial Resources) to the Chief Minister of Punjab stated that there were ongoing investigations by the anti-profiteering body where a complaint might have been filed six months back when there was no penal provision at that point of time but by the time the issue came up before NAA, the penalty provision might have been enacted. So, the question was, could penalty be imposed in such a case. He stated that generally penalty could not be imposed for acts done prior to enactment of the relevant penal provision. Further by the time power was given to NAA, its tenure might come to an end, thus ....
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....during the Officers meeting held on 20^th June, 2019, the proposal for extension of the tenure of the NAA was discussed and considering the number of pending cases and the likelihood of more rate changes in future, it was recommended to extend the tenure of the NAA by two years and to also explore in parallel as to what options were available to have an anti-profiteering mechanism on a permanent basis. 13.10. The CST, Tamil Nadu, stated that they did not have strong objection to the proposal and could go along with the decision of the Council on the subject of penalty for profiteering. However, to illustrate the complications involved, he gave an example of a restaurant where the GST rate had changed from 18% with input tax credit to 5% without input tax credit. On such an issue, profiteering became difficult to calculate, and therefore, penalty would become subject to greater legal scrutiny. The Hon'ble Chairperson stated that if a person against whom profiteering was established did not pay the penalty amount within 30 days, he also had the option to file an appeal. 13.11. Shri Arvind Agarwal, ACS, Gujarat, stated that the tenure of the NAA should be extended by two yea....
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....ng the transition period of conversion from old regime to the GST regime. There would be companies who would make extra profits and might not pass on the benefits which was the main purpose of bringing in GST as the benefits must reach the end consumer. So originally, the Council felt that it had to be a transition provision but it might be needed for some more time. Thus, the sunset clause was provided only in the Rules. However, since the Council was constantly revising the rates of various commodities/services, this would lead to opportunities for making undue profit and so long as the Council was revising the rates, this authority would be needed. Thus, the intent of the Council, while forming NAA was always that it could not exist in eternity and one day would have to come to an end when GST would function smoothly on its own and would be able to take care of profiteering by itself. 13.13. The Hon'ble Deputy Chief Minister of Bihar stated that there was a provision for four Technical Members in the NAA i.e. two from the Central Government and two from the States. For representation from the States, the requirement was that an officer should have served as a Commissioner....
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....w was framed, the intention of the law was clearly to pay interest on the delayed payment on the gross amount of the tax payable. If now a relaxation was being proposed and if it was done with retrospective effect, it would lead to floodgates of refund claims. The Hon'ble Deputy Chief Minister of Bihar stated that the amendment should be on prospective basis in order to avoid potential complications. The Secretary observed that in taxation matters, even the orders of Hon'ble Courts were mostly with prospective effect and suggested that this provision should be enacted with prospective effect. The Council agreed to this suggestion. 13.16. Shri Somesh Kumar, Principal Secretary (Finance), Telangana, stated that interest was normally chargeable on the gross amount of tax and it was incumbent upon everyone to file return on time. He suggested that some more amendment should be carried out in law to charge differential rates of interest for non-payment of tax. If tax was paid late by say three months, the rate of interest could be 18%; and if tax was paid even later, say beyond six months, the rate of interest could be 24%. He further added that the interest amount should be ....
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....is industry. However, post-GST, revenue from brick kilns had declined to Rs. 50-55 crore per annum. He stated that if brick kiln was removed from the Composition scheme, it would be very difficult to carry out checks by the tax machinery and there was a likelihood that even the present amount of revenue would be lost. In this view, he suggested to continue brick kilns under the Composition scheme. He also suggested that the best that could be done was to either increase the rate of tax under composition scheme or to introduce an element of capacity size on the brick kilns and the large brick kilns could be brought out of the composition scheme and normal GST rate could be levied. As regards menthol and sand mining, he stated that his State had no objection to them being removed from the Composition scheme. 15.2. The Hon'ble Deputy Chief Minister of Bihar stated that under VAT, brick kilns and sand mining had a separate tax regime, which was mostly capacity based. Now under GST, they were paying very little tax. It was also difficult to track them because most of them were located in rural areas. Therefore, a separate Composition scheme for brick kiln, sand mining, stone crus....
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....lso invite officers from Kerala during this meeting and then put up the proposal before the Council. The Hon'ble Minister from Haryana stated that on the proposal of having encrypted e-Way bill, GSTN should also come up with some suggestions/guidelines and a time frame for its implementation. The Hon'ble Chairperson suggested that both these issues could be discussed in the Law Committee. The Council agreed to the same. 16. For Agenda item 6(ii), the Council approved the following: (i) To constitute a Committee of Officers (which should have representation from the States of Bihar, Haryana, Odisha, Uttar Pradesh and any other willing State) to examine a special Composition scheme for sand mining, brick kilns, stone crushing and menthol. (ii) The Law Committee to re-examine introduction of e-Way bill system for movement of gold and to take the views of the State of Kerala on the same. The Law Committee to also examine to modalities of introducing an encrypted e-Way bill system for movement of gold in consultation with GSTN along with a suggested timeframe. Agenda Item 6(iii): Proposal for e-ticketing for cinema tickets 17. The Principal Commissione....
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....54(4A) of the CGST Rules, which stated that a supplier of such service in a screen other than multiplex screens, may at his option, follow the above procedure. He stated that this would allow Kerala to exercise some flexibility in taking action for compulsory e-ticketing. The CST, Tamil Nadu stated that this option was made available to theatre owners and not to the State. The Hon'ble Chairperson stated that at this stage, let the option be operated at the theatre-owner level and suggested that the proposed rules could be approved. The Council agreed to the same. 18. For Agenda item 6(iii), the Council approved the proposed insertion of sub-Rule 4A to Rule 54 and insertion of clause (c) in the fourth proviso to Rule 46 of the CGST Rules, as presented in the Agenda notes subject to legal vetting by the Union Law Ministry. Pari materia changes would also be required in the respective SGST Rules. Agenda Item 6(iv): Clarification regarding taxability of services provided by an office of an organisation in one State to the office of that organisation in another State, both being distinct persons 19. The Principal Commissioner (GST Policy Wing), CBIC, stated that during the ....
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....ly for all types of taxpayers. 23.1. The Secretary explained the rationale for the proposed staggered timeline. He stated that by 20^th June, 2019, the monthly return would be filed and then Composition and Quarterly return filing would take place. In view of this, extension was proposed on a staggered timeline basis. He added that during the Officers meeting held on 20^th June, 2019, it was pointed out that different dates could create complications. 23.2. The Hon'ble Deputy Chief Minister of Bihar suggested that only one date for filing of annual return should be kept and suggested that this date should be 30^th September, 2019. The Hon'ble Chairperson observed that instead of staggering the date for filing annual return, it could be extended with one timeline. She further stated that income tax returns were also filed around this time, and therefore, suggested that the date for filing of annual return could be 31^st August, 2019. The Hon'ble Minister from Kerala supported the proposal and stated that annual return should be filed as early as possible as its assessment would augment GST revenue. Shri Ashok K.K. Meena, Principal Secretary (Finance), Odisha, suppo....
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....e returns was extended to 31st August, 2019. Agenda Item 6(vii): Proposal to extend the due date for filing of declaration in FORM GST ITC-04 for the period July 2017 to June 2019 25. The Principal Commissioner (GST Policy Wing), CBIC, stated that during discussion on this Agenda item in the Officers meeting held on 20^th June, 2019, the CST, Tamil Nadu, had suggested (i) to waive the requirement of filing FORM ITC-04 for the first Financial Year (i.e. 2017-18), and to make it applicable from 1^st April, 2018; and (ii) to extend the date for filing the FORM ITC-04 to 3 P1 August, 2019. He informed that as the last date for filing FORM ITC-04 was 30th June, 2019, it would be advisable to extend the date for filing FORM ITC-04 to 31 st August, 2019 and then to examine the suggestion of Tamil Nadu separately in the Law Committee. The Council agreed to this suggestion. 26. For Agenda item 6(vii), the Council approved to extend the date for filing of FORM ITC-04 to 31 51 August, 2019 and the Law Committee to examine whether the requirement of filing FORM ITC-04 should be waived for the Financial Year 201 7-18 and place its recommendations before the Council. Agenda Item 7: I....
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....e Minutes. He stated that as per terms of reference of the GoM, the following issues were placed before the GoM: a. Whether two rates for GST on lottery should continue; b. Whether private persons were misusing the lower GST rate of 12%; c. To examine enforcement issues including legal and appropriate tax rates to address the problem; d. Issues referred by Hon'ble Supreme Court in WP (C) No. 961/2018. Out of the 4 listed issues, the last one refers to a Supreme Court Writ Petition where the Hon'ble Court took a note that there was a GoM on Lottery and directed that the GoM might give its views on the issues raised in the Writ Petition. 27.3. The prevailing tax structure of lottery and issues related to it were explained by him as follows: i. When the lottery was supplied from State A to State B, the tax rate applicable was 28% under reverse charge. ii. When it was supplied within the State, then if it was (a) State lottery, the rate applicable was 12% and (b) if it was Authorized by State, the rate applicable was 28%, iii. In case of inter-State supply, some difficulty was being noticed, in relation ....
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.... c. As far as online lottery was concerned, the recommendation of GoM was that the experience of the State Government of Kerala and West Bengal indicated that banning of online lottery had led to the increase in revenue. Therefore, other State governments might consider examining that aspect. Maharashtra had volunteered to submit a draft on regulation of online lottery, which would be examined in consultation with Ministry of Home Affairs with whom the subject lies at present. d. As far as multiple representations from Associations on other issues were concerned, like the rate and valuation issues of Casinos, Horse Racing, Online Gaming, Betting, although, a little beyond the terms of reference, but having received those representations, the GoM had directed that they might be forwarded to the Fitment Committee and Law Committee . . Once the recommendations of the Fitment Committee and the Law committee on the subject were received, they would be brought before the Council either through GoM or directly as directed by the Union Finance Minister. 27.5. JS TRU II concluded his presentation with the submission that there was no unanimity on the rate of tax on lottery, whe....
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....d'. There had been other means of discrimination based on price mechanism, such as hotel accommodation, type of restaurant etc. but no product had been discriminated on the grounds of where it was produced. 27.8. He further stated that the differentiation between a State-run lottery and a lottery authorized by a State had been upheld by the Hon'ble Supreme Court in the case of J.K. Bharti vs State of Maharashtra, for the purpose of regulation and control for its proper conduct. However, it seemed that the differentiation in the said case was in the context of regulation and control and not specifically in terms of differential tax structure. He added that there was reference in the agenda note to the J.K. Bharti case, but it was delivered in a different context i.e. licensing and regulations of lottery and not on tax rates. Thus, to the understanding of the Punjab Government, two rates in lottery might continue for the time being and this issue might be referred for the opinion of the Attorney General who would anyway argue the case in the Supreme Court. Hence, Punjab recommended that an opinion from Attorney General of India should be sought on this issue and tax rate t....
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....Court had clearly opined that there could be two rates and it was not illegal to charge two rates. Therefore, the present system should continue. 27.11. The Hon'ble Chairperson stated she would like to have a view on the issue from each State. She further stated that as rightly pointed out by the Hon'ble Chief Minister of Puducherry, a lot of discussion had already been held on this issue, so it would be interesting to know the views of each of the States. 27.12. Shri H.K. Dwivedi, ACS, Finance, West Bengal stated that Dr. Amit Mitra, Hon'ble Finance Minister, West Bengal was one of the members of the GoM on Lottery. West Bengal was the highest tax collecting State as far as lottery was concerned, and it was more than Rs. 3000 crore. There was no illegality in having two rates on lottery, one on lottery directly run by the State Government and the other authorized by the State Government as the matter had already been upheld by the Hon'ble Kolkata High Court. Although, the matter was now before the Hon'ble Supreme Court, his State would like the present system to continue, unless it was held ultra vires of Article 305 of Constitution. In case the Council c....
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....stated that it should be one nation, one tax and that he expressed solidarity with the views of States of Assam, Arunachal Pradesh, Goa and Maharashtra in supporting a single rate of GST on lottery. In his written statement, he stated that there was no denying the fact that irrespective of the lottery being run by the State or authorized by the State, it was a good having negative social impact. From this point of view, a lower rate of tax prescribed at the rate of 12% on even one type of lottery was not justified. Hence, he requested the Council to prescribe a single rate of GST at the rate of 18% all across the country for all categories of lottery. The dual rate of GST on lottery had put the lottery trade of smaller States in competitively disadvantageous position. The meagre source of revenue of the geographically deprived North Eastern States had actually dried up, since sale of lottery had dropped consistently, after introduction of GST. 27.18. The Hon'ble Minister from Kerala stated that he would like the status quo to continue. He stated that lottery was not a normal good but it was a sin good and hence there were stringent regulations under the Central Lottery (Regu....
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....ten speech, he further stated that the higher rate of GST on the lotteries authorized by State Governments in no way affected the revenue of the small State Governments. The States that conducted their lottery through the agencies (Distributors) got the Minimum Guaranteed Revenue (MGR) and not the net sales proceeds. The MGR as per the agreement with the agencies was paltry and this had been pointed out by the Comptroller & Auditor General of India. Kerala conducted its Lottery through the Lottery Department of the State Government. The entire sales proceeds were remitted to the Consolidated Fund of the State Government and the expenses including the prize money was met from the Consolidated Fund and the same has been lauded in Comptroller & Auditor General Reports. The C&AG reports reflecting misuse of lottery system and revenue loss by Marketing Agents (MAs) through far less payments of MGR to the Government exchequer were already in the public domain. He, therefore, submitted that the differential rate of GST on the State-run lotteries and the State authorized lotteries, which was conducted through the MAs might be considered in the background of the above discussed facts and au....
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....o print "For SALE IN_ONLY" on each paper lottery ticket. Accordingly, the State of Kerala had framed the rules. The above recommendations were aligned with the Lotteries (Regulation) Act and Rules. Unlike other businesses, the supply chain and accounts of lotteries was specially determined by the Lotteries Regulation Act and Rules. Recognizing this type of subcontracting in GST law would be ultra vires to the Lottery Regulation Act and Rules. Thus, any deviations from the decision of the GST Council would amount to recognizing a supply chain in lotteries which was illegal under the Lotteries Regulation Act. This would also result in inefficient control mechanisms by the organizing States as they would get only a paltry amount to their exchequer. 27.23. Thus, in his written speech, he stated that the position of his State on the issues for consideration before the Council was summarized as below: a. The differential rate of GST for State organized lotteries and State authorized lotteries ( 12% and 28% respectively) should continue. b. Regarding the place of supply rules for paper lotteries, decision of the 28th GST Council Meeting should be strictly adhered t....
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.... by the Council through consensus. However, the problem was regarding methodology and procedure for deciding the value for tax purpose i.e. face value or bet amount. It would be fair if net amount or Gross Gaming Revenue (GGR) was taxed, whereas, as on date, it was being taxed on face value. Hence, effectively, it was taxed at every bet or round; which would result in closure of casino. After mining had been stopped in Goa, the casino was a major source of revenue to the State and had also become a huge employment generating industry. The only proposal was that this matter should be referred to the Fitment Committee or the Law Committee so that the methodology and the tax on net amount or Gross Gaming Revenue (GGR) could be decided. 27.26. Shri Suresh Bhardwaj, the Hon'ble Minister from Himachal Pradesh, Capt. Abhimanyu, the Hon'ble Minister from Haryana, Shri Buggana Rajendra Nath, the Hon'ble Minister from Andhra Pradesh and the Secretary and Commissioner, State Tax from Chattisgarh submitted that lottery was banned in their States and its tax rate did not impact them. Shri Chowna Mein, the Hon'ble Minister from Arunachal Pradesh stated that lottery was a major....
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.... the State did not have any lottery, but the State had a view on it. As a matter of principle, a single rate would be appropriate because two rates went against the structure of GST. The Hon'ble Chairperson desired to know, how many States would support a single tax rate on lottery whether or not themselves having lottery in the State. The States of Assam, Uttar Pradesh, Telangana, Sikkim, Rajasthan, Punjab, Gujarat, Bihar, Tripura, Odisha, Maharashtra, Manipur, Mizoram, Meghalaya, Nagaland, Goa, Himachal Pradesh, Jharkhand, Arunachal Pradesh and Jammu & Kashmir preferred single rate. The States of Madhya Pradesh, Kerala, Puducherry and Karnataka responded that they preferred two rates. The States of Haryana, Tamil Nadu and Andhra Pradesh responded that they did not have any opinion on the subject. The State of Delhi supported the opinion of Punjab to obtain the opinion of Attorney General before taking any decision. 27.29. The Hon'ble Chairperson then asked Punjab to explain what exactly was the issue on which they would like to have the opinion from the Attorney General. The Advisor (Financial Resources), Punjab stated that in the judgement of the Hon'ble Kolkata H....
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....ear and one could not have different tax rates. However, if they were treated as two different goods, then there could be a different tax rate for each. The Secretary stated that even if the Attorney General opined that it was two different goods, the Council could have a single rate. 27.31. The Hon'ble Chairperson intervened and stated that the Council was the final authority in deciding the rates. Hence, it would not be proper to seek rate question from the Attorney General. The Hon'ble Minister from Kerala stated that while there was no need for the issue to be referred to the Attorney General in view of the fact that the issue of differential rates had been settled by the decision of the Hon'ble High Court of Kolkata, if it all the same was to be referred, it should be limited to the question being framed as proposed by the State of Punjab and not to bring in further complications as being proposed by the State of Gujarat since in any event, even in the current GST regime, there are several goods which have differential rates as for instance footwear, readymade garments, cinema tickets etc., He added that there was another issue on which also the Council might se....
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....tate) on having a direct contract/registration with the organizing State from whom the distributor should get the tickets directly and pay tax on reverse charge mechanism. There shall not be two distributors - one in the organizing State and the other in the consuming State. Thus, the proposal put up in the notes to the GoM and once again incorporated in the Agenda note for the 35^th Council Meeting whereby two distributors were being permitted - one in the organizing State who sold the tickets to the distributor in the consuming State and that the former being exempt from GST while GST to be charged to the latter who discharged it under reverse charge mechanism was a non-starter and would lead to not only revenue leakages but much more importantly, a host of malpractices. He finally concluded that since in any case, the issue of differential rates on State run and State authorized lotteries was being referred to the Attorney General, this issue of ensuring destination principle for State authorized lotteries by allowing two distributors with the distributor in the consuming State having no direct link with or responsibility towards discharge of non-tax revenues to the organizing S....
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....posal was to reduce rate of tax on electric vehicle chargers to 12% which was very essential for operation of electric vehicles. Further, the current production volume of electric vehicles was low and hence the costs were very high. The revenue implication of the proposal was also not significant. The proposal was being placed before the Council in line with the policy of encouraging cleaner vehicles including electric vehicles. 29.2. Starting the discussion on the agenda item, Shri Manu Shrivastava, Principal Secretary, Madhya Pradesh felt that GST on e-vehicle chargers should also be 5%. The Hon'ble Chief Minister of Puducherry also supported this view and felt that electric vehicle chargers should also have equivalent rate of 5%, being the component of the electric vehicle. The Secretary suggested that since the matter had not been examined by the Fitment Committee which was the normal practice of the Council, the proposal should be forwarded to the Fitment Committee for examination and then it might be discussed in the next meeting of the Council. 29.3. The Hon'ble Minister from Goa stated that even though this was a desirable proposal, it had to be kept in mind t....
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....d by the Solar Power Generating Systems dealers and Wind Turbine manufacturers. 31.1. In the past, there were disputes about the applicable tax rate structure. The tax rate structure recommended by the Council in the month of December, 2018 was fixed in such a manner so as to conclude associated disputes. The Advance Ruling Authority in Maharashtra had taken a contrary view; and hence a formulation was recommended by the Council where on deemed basis, the supply was split into two parts i.e. 30% of the project value was apportioned for the services and remaining 70% of the value was apportioned towards the goods. However, writ petitions have been filed before the Hon'ble High Court stating that apportionment of value in 70:30 ratio was adverse to the sector and it should be either 90:10 or 85:15. The Hon'ble Delhi High Court had ordered that both the cases should be heard by the Central Government and after that the representation should be taken to the Council. He informed that one meeting with the petitioners had already been done and the Central Government had sought some information. Solar power association had furnished the information. Information was, however, awa....
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....quired to be paid. In view of this, it was proposed that the status quo be maintained for the period 1^st July 2017 to 12^th October 2017, for which the taxes had already been collected and deposited with the exchequer. In the meeting of the Officers held on 20^th June, 2019, there was a general consensus that this would be the right solution. He suggested that the Council may approve this proposal. The Council approved the same. 34. For Agenda item 7(iv), the Council approved that the status quo be maintained in respect of rate of GST on sale and leasing of motor vehicle for the period from 15^th July 2017 to 12^th October 2017 and no retrospective revision in tax rate need to be carried out. Agenda Item 8: Creation of the State and Area Benches of the Goods and Services Tax Appellate Tribunal (GSTAT) 35. The Secretary introduced the agenda and stated that in terms of Section 109 of the CGST Act, 2017, Goods and Service Tax Appellate Tribunal were required to be constituted by the Government on the recommendation of the GST Council. Further, in the 28^th Meeting held on 21^st July 2018, the Council approved the constitution of Goods and Services Tax Appellate Tribunal (GS....
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....had reconsidered the proposal and now proposed that location of State bench for Gujarat should be at Ahmedabad with two Area benches at Surat and Rajkot. A written communication in this regard would be sent soon to the GST Council Secretariat. 35.5. Accordingly, the Secretary after taking into account the above modifications, placed the proposal before the Council to: (i) Consider and recommend formation of the State and Area Benches as per the details contained in Table-1 below except for the State of Uttar Pradesh, which shall be considered separately. Table-1: Proposed Location of the State and Area benches of GSTAT S.No. Name of State/ Union Territory Recommend Location for State Bench at Recommend Location for Area Bench at 1 Andhra Pradesh Vijayawada Vishakhapatnam and Tirupati 2 Assam Guwahati No Bench 3 Bihar Patna -Do- 4 Chhattisgarh Raipur -Do- 5 Delhi New Delhi -Do- 6 Goa Panaji -Do- 7 Gujarat Ahmedabad Surat and Rajkot 8 Haryana Hisar No Bench 9 Himachal Pradesh Shimla -Do- 11 Jharkhand Ranchi -Do- 12 Karnat....
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....sidering the benefits of e-invoices and that, at least preparation should start for generation of e-invoice and its reporting on GST portal, because this would help the entire GST eco-system, in the long run. The advantages and salient features of the proposal, as stated in the agenda are summarised as below: a. The e-invoicing can accelerate the business process automation, reduce compliance burden and improve ease of doing business. Moreover, the immediate capture of the details of transaction helps in easing compliance burden, by facilitating auto drafting of returns. Further, under the current system, there was a gap between time of generation of invoices and time of filing of Returns (GSTR-1, GSTR-3B, GSTR-4 etc.), which left scope for misdeclaration or errors in submitting returns. b. For taxpayers, backward integration and automation of tax relevant processes replaces manual and periodic reporting of forms, separate GST declarations, separate tax accounting etc., Thus, tax collection and refund can be done seamlessly and it also results in early settlement of payable and receivables. It also reduces the need for post audit systems of invoice matching drasti....
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.... 37.3. The Secretary stated that the issues of bogus billing and fake invoices were discussed in the meeting of the Officers held on 20^th June, 2019 along with the steps to be taken to curb bogus billing and most of the States had agreed to it. Hence, the officers should go ahead with the suggested measures since no law amendment was required, it being only an issue of enforcement. He further stated that in the next Council meeting, a detailed presentation would be made on it. Further, to consider what changes would be required in the law for curbing bogus billing, a proper proposal would be brought before the Council at appropriate time. He suggested that Council could give in principle approval to launch a pilot project on voluntary basis for online generation of B2B e-invoices from January,2020. The Council approved the same. 37.4. The proposal of generation of e-invoicing as above was placed before the Council for consideration and approval. 38. For Agenda item 9, the Council approved, in principle, to launch a pilot project on voluntary basis for online generation of B2B e-invoices from January 2020. Agenda Item 10: Issues relating to National Anti-profiteering Aut....
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....da Item 10(iii): The Standard Operating Procedure (SOP) for the field formations regarding Anti-profiteering investigations 43. The Secretary stated that this Agenda item had also been discussed in detail in the Officers meeting held 20^th June 2019. The NAA had proposed to issue a Standing Operating Procedure (SOP) for Central GST and State GST officers to strengthen the mechanism of verification of profiteering by the officers as soon as any GST rate reduction /additional ITC benefits was made available to a business. It contained the role to be played by officers posted in CGST and SGST Field Formations/ Investigative Agencies/ Verification Teams and Audit. It also contained details about complaint filing by jurisdictional officers as per Rule 128 of CGST Rules. He suggested that the Council may approve, in principle, the SOP proposed by the NAA. The Council agreed to the same. 44. For Agenda item 10(iii), the Council approved, in principle, the Standard Operating Procedure for the GST field formations regarding Anti-profiteering investigations. Agenda Item 11: Recommendations of Committee of Officers on use of RFID data for strengthening of e-Way bill system under GST ....
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....out under the aegis of a centrally sponsored scheme under suitable cost sharing formula with the assistance of MoRTH (Ministry of Road Transport and Highways). 45.2. Recommendations: a. Based on the above conclusions, the Committee recommended that, FASTag based EWB tracking mechanism should be adopted by GST Council. Integration of NETC system with EWB system would exhibit a classic case of convergence of two flagship programmes of the Government complementing one another. The integration would prove to be beneficial for both the programmes. b. Government could consider formulating a centrally sponsored scheme in this regard, where RFID based tracking infrastructure at identified locations should be installed under the aegis of the centrally sponsored scheme under suitable cost sharing formula with the assistance of MoRTH. 45.3. The Secretary suggested that the Council could give in principle approval to implement the recommendations of the Committee of Officers on use of RFID data for strengthening e-waybill system under GST. The Council agreed to the same. 46. For Agenda item 11, the Council agreed, in principle, to the implementation of the recommenda....
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....ofit; so, if one-time waiver was proposed, he did not see any serious repercussions on this account. 47.4. The Secretary stated that, during the Officers meeting held on 20^th June 2019, it was discussed that some of the States had paid the user charges on time, some had paid in advance also and some had delayed the payment. Even CBIC's payment had been delayed for one instalment. But the fact remained that payment should have been made in time and the Hon'ble Minister from Haryana had pointed out that if Council gave waiver, it might encourage late payments in future, which should not happen. Thus, whatever decision be taken by the Council, late payment should not happen in future. He also suggested that Advance User Charges for FY 2017-18 and 2018-19 should be paid by the States positively by 31^st July 2019 failing which interest on delayed payment may be levied by GSTN as per the approved Revenue Model. 47.5. The Hon'ble Minister from Punjab stated that it was embarrassing to note that Punjab was a defaulter; he felt that his State was also owed money which it had not received till date from the Central Government, and he was agreeable if the amount was deduct....
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.... Tax dated 23^rd April, 2019 accordingly. The Principal Commissioner (GST Policy Wing), CBIC informed that this issue was discussed during the Officers meeting held on 20^th June, 2019 and there was unanimity amongst officers to extend the date by two months. He suggested that the Council may also agree to this suggestion. The Council agreed to the same. 50. For Agenda item 13(i), the Council approved to defer introduction of provision of Rule 138E regarding blocking of e-Way bills on account of non-filing of returns for two consecutive tax periods by 2 months and to make this provision effective from 21st August, 2019. Other Issues 51. ACS, Finance, West Bengal stated that the Hon'ble Finance Minister of West Bengal, Dr. Amit Mitra had written a letter to the Hon'ble Union Finance Minister regarding inverted duty structure of 'wagon industry' and he had requested that it might be sent to the Fitment Committee for taking a view. Hon'ble Chairperson acknowledged that she had received the letter and that it would be sent to the Fitment Committee. 51.1. The Hon'ble Ministers from Tamil Nadu, Kerala and Sikkim circulated written speeches during the C....
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....n impact on the protection of interests of locals in the State of Sikkim. The online software does not require an applicant to mention the licence number that permits him to operate the business. The Hon'ble Minister, referring to paragraph 47.10 of the Minutes of 21^st Meeting of the Council held on 9th September, 2017 at Hyderabad, stated that the State of Sikkim had raised the issue and the Council was requested to direct the GSTN to make necessary changes in the registration module. It was further requested that the Council may direct the GSTN to expedite the process of modification of online registration application and create a field for inclusion of licence number also. Another issue raised in the written speech was regarding consignment value for applicability of Way bill provision. It was pointed out that a D.O. letter No.68/CMO/2019 dated 4^th January, 2019 on this subject was addressed by the then Hon'ble Chief Minister of Sikkim to the then Hon'ble Chairperson of the GST Council. It was pointed out that due to variation in the provision of law and corresponding Rule, uncertainty had crept in in understanding the Waybill mechanism. He also requested to arrang....
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....Tamil Nadu Shri D. Jayakumar JAYNA 23 Tripura 24 Uttar Pradesh 25 Uttarakhand Shri Jishnu Dev Varma Commerce and Industries Minister for Fisheries and Personnel & Administrative Reforms Deputy Chief Minister Finance Minister Shri Rajesh Agarwal Shri Satpal Maharaj and Tourism Minister for Irrigation Page 43 of 76 INITIALS CHAIRMAN'S MINUTE BOOK Annexure 2 Officials who attended the 35th GST Council Meeting on 21 June 2019 Dr. Krishnamurthy Subramanian Shri Pranab Kumar Das Dr. John Joseph Shri Sandeep M Bhatnagar SI State/Centre Name of the Officer No 1 Govt. of India Dr. A. B. Pandey 2 Govt. of India 3 Govt. of India 4 Govt. of India 5 Govt. of India 6 GST Council 8 7 Govt. of India Office of CAG of India 9 Office of CAG of India Shri S.K. Jaiswal 10 11 12 Office of CAG of India Office of CAG of India Office of CAG of India Ms. M. Himabindu Shri Satish Sethi 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 G....
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....TRU-II, DOR OSD, TRU-II, DOR Dy. Comm., GST Policy Wing Dy. Comm., GST Policy Wing Dy. Comm., GST Policy Wing Dy. Comm., GST Policy Wing Dy. Commissioner, GST Policy Wing Asst. Comm., GST Policy Wing Additional Commissioner, TPRU PS to Union Finance Minister APS to Union Finance Minister OSD to MoS (Finance) OSD to Finance Secretary OSD to Chairman, CBIC Assistant Director, PIB Joint Secretary Joint Secretary Director Director Director Director Dy. Commissioner Dy. Commissioner Under Secretary JAYNA BOOK DEPOT 53 GST Council Under Secretary CHAIRMAN'S INITIALS Shri Debasish Dutta Under Secretary Page 45 of 76 MINUTE BOOK 54 GST Council Shri Mukesh Gaur Superintendent 55 GST Council Shri Vipul Sharma Superintendent Superintendent Superintendent 56 GST Council 57 GST Council 58 GSTN 59 GSTN 60 GSTN 61 GSTN 62 GSTN 63 GSTN 64 Govt. of India 65 Govt. of India 66 Govt. of India 67 Govt of India 68 Govt of India 69 Shri Sarib Sahran Shri Amit Soni Shri Prakash Kumar Dr. Abhishek Gupta ....
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.... Jammu & Kashmir Jammu & Kashmir Shri P. K. Bhatt Himachal Pradesh Shri Arvind Agarwal Shri Sanjeev Kaushal Shri Amit Agrawal Shri Vijay Kumar Singh Shri Rajeev Chaudhary Shri Jagdish Chander Sharma Shri Rajeev Sharma Shri Rakesh Sharma Dr. Arun Kumar Mehta Chief Commissioner, State Tax Commissioner, State Tax Commissioner (Tax & Excise) Commissioner, State Tax Commissioner and Secretary, State Tax Additional Secretary, State Tax Joint Commissioner, State Tax Excise and Taxation Commssioner Asst. Commissioner, State Tax Secretary and Commissioner, State Tax Commissioner, State Tax Addl. Commissioner (Policy), State Tax Dy. Secretary - Finance Addl. Commissioner, State Tax Addl Chief Secretary, Finance Chief Commissioner, State Tax Dy. Commissioner, State Tax Addl Chief Secretary, E & T Dept Excise & Taxation Commissioner Addl. Commissioner, State Tax Jt. Commissioner, State Tax Principal Secretary (E&T) Commissioner of State Tax & Excise Joint Comm., State Tax & Excise Financial Commissioner Commissioner,....
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....angana Shri Sai Kishore 145 143 Tripura 144 Tripura Uttar Pradesh Shri Sudip Bhowmik Shri Ashin Barman Shri Alok Sinha 146 Uttar Pradesh 147 Uttar Pradesh 148 Uttarakhand 149 Uttarakhand 150 Uttarakhand 151 Uttarakhand 152 West Bengal 153 West Bengal West Bengal 154 Shri C. P. Mishra Shri Sanjay Pathak Ms. Sowjanya Shri Piyush Kumar Shri B. B. Mathpal Shri S. S. Tiruwa Shri H. K. Dwivedi Ms. Smaraki Mahapatra Shri Khalid A Anwar Addl. Commissioner, GST, State Tax Dept Addl. Commissioner, State Tax Principal Secretary ACS/Commissioner State Tax Jt. Commissioner, State Tax Pr. Secretary (Finance) Special Commissioner Joint Commissioner, State Tax Dy Commissioner, State Tax Superintendent of State Tax ACS, State Tax Joint Commissioner, State Tax Joint Commissioner, State Tax Commissioner, State Tax Addl. Commissioner State Tax Addl. Secretary (F) Dy. Comm, State Tax Addl Chief Secretary, Finance Commissioner, State Tax Joint Secretary, Finance Page 49 of 76 CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE B....
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....tory functions carried out by respective tax departments Report structure might might change as GST implementation unfolds further AUDIT APPROACH CHAIRMAN'S INITIALS Page 53 of 76 CHAIRMAN'S INITIALS MINUTE BOOK Section 16 of CAG's DPC Act: Audit of Receipts It is the duty of the CAG to audit all receipts payable into the Consolidated Fund and to satisfy himself that the rules and procedures in that behalf are ✓ effectively designed . to secure a check on the assessment, collection and proper allocation of revenue ✓ and are being duly observed to make for this purpose such examination of the accounts as he thinks fit and report thereon CAG's DPC Act and Regulations CAG is the sole authority to decide the scope and extent of audit and call for data, information, documents and records which might be relevant to audit. The auditable entity shall provide access to all data including computerized systems and databases maintained either by the auditable entity or on their behalf. Page 54 of 76 70 JAYNA BOOK DEPOT Estd. 1949 JAYNA MINUTE BOOK Audit approac....
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.... Circulars Union territory Tax (Rate) Integrated Tax (Rate) Under the CGST Act 3 to 10 of 2019 3 to 9 of 2019 94 to 101 of 2019 Under the CGST Act 4 to 5 of 2019 RoD Orders Under the UTGST Act 3 of 2019 Agenda No. 4 GIC decisions post 34nd GST Council Meeting (1/10) Decision of 26th GIC meeting (22.03.19) INATION TAX MARKET • Extension of due date for filing of declaration in FORM GST ITC-04 for the period July 2017 to March 2019 from 31.03.19 to 30.06.19 NN 15/19 CT dated 28.03.19 issued ⚫ Circular clarifying refund related issues under GST Circular No. 94/13/2019-GST dated 28.03.19 issued Circular regarding verification for grant of new registration Circular No. 95/14/2019-GST dated 28.03.19 issued Page 58 of 76 JAYNA BOOK DEPOT Esta, 1949 JAYNA MINUTE BOOK Agenda No. 4 GIC decisions post 34nd GST Council Meeting (2/10) Decision of 26th GIC (22.03.19) INATION TAX MARKET • Amendment to CGST Rules in respect of apportionment of ITC in case of demerger NN 16/19 CT dated 29.03.19 issued ⚫ Circular to provide clarification in respect of tr....
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..... 99/18/2019-GST dated 23.04.19 issued Effective date for restriction on furnishing of information in PART A of FORM GST EWB-01 as per rule 138E of CGST Rules NN 22/19- CT dated 23.04.19 issued Agenda No. 4 GIC decisions post 34nd GST Council Meeting (7/10) 27th GIC Meeting (15.04.19) Amendment in CGST Rules: Insertion of proviso to sub-rule (1) of rule 23 NATION TAX MARKET ii. Amendment to rule 62 to provide for quarterly payment and filing of annual return by those taxpayers who are availing new composition scheme iii. Insertion of Instruction No. 17 in FORM GST REG-01 to indicate whether taxpayers wants to avail benefit of new composition scheme iv. Insertion of FORM CMP-08 to provide for a quarterly statement for payment of self-assessed tax was needed to be prescribed for registered persons who have opted for existing or new composition scheme NN 20/19- CT dated 23.04.19 issued 10 Page 61 of 76 CHAIRMAN'S INITIALS MINUTE BOOK Agenda No. 4 GIC decisions post 34nd GST Council Meeting (8/10) 27th GIC Meeting (15.04.19) NATION TAX MARKET âš« Clarification on Seed Certific....
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.... (vi) - Extension of due date for furnishing of Annual Returns (vii) - Extension of due date for furnishing of GST FORM ITC-04 Table Agenda Page 64 of 76 NATION TAX MARKET 2 JAYNA BOOK DEPOT Extd. 1919 Agenda No. 6(i) JAYNA MINUTE BOOK Proposed amendments to the CGST Act (1/4) SL. Section No. Proposal INATION TAX MARKET 1. 2 2. 10 3. 22 4. 25 Consequential amendment in view of amendments in Chapter XVII (CAAAR) Proposal to bring into Act, the alterative composition scheme for supplier of services which was earlier introduced w.e.£ 01.04.2019 vide notification No. 2/2019-CT (Rate) dated 07.03.2019 Proposal to bring into Act, the higher threshold exemption limit of Rs. 40 lakhs for supplier of goods which was earlier introduced w.e.f. 01.04.2019 side notification No. 10/2019-CT dated 07.03.2019 Provision to check bogus registrations by linking to AAdhhar Agenda No. 6(i) Proposed amendments to the CGST Act (2/4) Sl. Section No. 5. 31A Proposal NATION TAX MARKET 6. 39 7. 44 8. 49 Provision for supplier to mandatorily offer facility for digit....
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....be explored Page 67 of 76 CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE BOOK Agenda No. 6(iii) Proposal for e-ticketing for Cinema tickets (1/3) . INATION TAX MARKET In the 31st Meeting held on 22.12.2018, Council agreed to the suggestion that States may issue electronic tickets and that the LC to formulate rules in this regard ⚫ LC recommended the following: insertion of sub-rule (4A) of rule 54; and ✓ amendments in the fourth proviso to rule 46 of the CGST Rules ⚫ LC also recommends that e-ticketing may not be mandatory for suppliers other than multiplexes Agenda No. 6(iii) Proposal for e-ticketing for Cinema tickets (2/3) Amendment to Rule 54 $1. Rule Proposed amendments (shown in No. 1. 54 Rule 54: Tax invoice in special cases NATION TAX MARKET "(4A) A registered person supplying services by way of admission to exhibition of cinematograph films, shall be required to issue a tax invoice electronically and for this purpose the electronic ticket issued by him shall be deemed to be a tax invoice for all purposes of the Act, even if such a ticket does no....