TaxTMI 
TaxTMI 
TaxTMI 
Minutes of the 36th GST Council Meeting held on 27 July, 2019
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....ST rate on electric vehicles and related supplies. 5. Any other agenda item with the permission of the Chairperson. 6. Date of the next meeting of the GST Council. Preliminary discussion 3. Shri Satpal Maharaj, Hon'ble Minister from Uttarakhand, Shri Niranjan Pujari, Hon'ble Minister from Odisha, Thiru D. Jayakumar, Hon'ble Minister from Tamil Nadu, Dr. Amit Mitra, Hon'ble Minister from West Bengal, Shri Mauvin Godinho, Hon'ble Minister from Goa, Shri T.S. Singh Deo, Hon'ble Minister from Chhattisgarh, Shri Manpreet Singh Badal, Hon'ble Minister from Punjab and Shri K.K. Sharma, Advisor to Governor, Jammu & Kashmir greeted the Chairperson and Shri Anurag Singh Thakur, Minister of State (Finance), Government of India. The Chairperson also reciprocated the same. Shri Sushil Kumar Modi, Hon'ble Deputy Chief Minister of Bihar also congratulated the Chairperson for presenting a good Budget and stated that due to an urgent meeting on floods in Bihar, he might be excused early. The Chairperson assured that she would try to conclude the meeting in time. After the preliminary discussions, the Hon'ble Chairperson requested Dr. Ajay Bhushan Pandey, the Union Revenue Secretary and the ....
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....30, for the last line of the paragraph 27.25 being read as "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 the only bet amount could be decided"; might be read as "the only proposal was that this matter could be referred to the Fitment Committee or the Law Committee so that the methodology and the tax on net amount or Gross Gaining Revenue (GGR) could be decided." The Council agreed to the suggestion. 4.1. The Hon'ble Finance Minister from West Bengal stated that he was unable to attend the last meeting of the Council and hence apologised for the same. He congratulated the Chairperson since he had met her for the first time after she became Union Finance Minister, a very important position. He stated that as regards the Minutes of the last meetings. Shri H. K. Dwivedi ACS, Finance, Government of West Bengal had stated some contra views, which were recorded very accurately on both occasions. He thanked the Council Secretariat and the Secretary for the same. The Chairperson and the Secretary also thanked the Hon'ble minister for acknowledging the same. 5. For Agenda item 1, the Council d....
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....dure for export of jewellery, manner of utilization of Input Tax Credit, Place of Supply Rules etc. He further added that on 22nd July 2019, after the agenda was circulated, another circular was issued which was 109 of 2019 on 22nd July 2019 regarding issues related to Resident Welfare Association (RWA), might also be added for ratification by the Council. A presentation (attached as Annexure 3 to the Minutes of the meeting) on it was mailed to all the States. The Secretary proposed that the Council might grant deemed ratification to the Notifications, Circulars and Orders. The Council agreed to the proposal. 7. For Agenda item 2, the council approved the deemed ratification of the Notifications, Circulars and Orders issued after 12th June 2019 and till 19th July, 2019, under the GST laws by the Central Government, which are available on www.cbic.gov.in Act/Rules Type Notification/Circular/Order Nos CGST Act/CGST Rules Central Tax 25 to 34 of 2019 Central Tax (Rate) 11 of 2019 UTGST Act Union Territory Tax (Rate) 11 of 2019 IGST Act Integrated Tax (Rate) 10 to 11 of 2019 Goods and Services (Compensation to States) Act, 2017 Compensation Cess (Rate) 1 of 2019 Circ....
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.... been issued, was placed before Council for information. The JS, TRU-Il also stated that if a formal letter could be sent by Odisha, they would examine and respond on the issue. Shri Ashok Meena, Finance Secretary, Odisha stated that he would send a note indicating the difference between the Circular and the Statute, which might be discussed, and final view be taken thereafter. 9. For Agenda item 3, the Council took note of the decision taken by the GIC between 11th May, 2019 and 19th July, 2019. Agenda Item 4: Issues recommended by the Fitment Committee for the consideration of the GST Council: Agenda Item 4 (i): Changes in GST rate on electric vehicles and related supplies 10. The Secretary introduced the agenda and stated that the agenda note was earlier placed before the 35 GST Council containing proposal to reduce GST rates on the supply of electric vehicle, electric vehicle chargers and exemption from GST rate on hiring of electric buses by local authorities. Thereafter, as per the 35th GST Council meeting decision, it had been examined by the Fitment Committee also and the recommendations were now before the Council. The Secretary thereafter, asked Shri G.D. Lohani, Jo....
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....T on hiring of electric buses by local authorities. He further stated that future incentive might be considered after taking into consideration the revenue implication and compensation issue. 10.3. Shri Manish Sisodia, Hon'ble Deputy Chief Minister of Delhi stated that all the three proposals were very progressive as well as much needed for Delhi in view of the pollution and supported all the three proposals. However, he suggested that electric chargers should be placed at the rate of 5% instead of 12% as it was an accessory of the electric vehicles. He further stated that although it was a progressive thought, hut the reduction of tax rate on electric vehicle, electric chargers etc. would have an implication on the existing automobile sector which at present was in crisis. Further, increase in sale of electric vehicles would lead to reduction of sales in traditional fuel-based vehicles and this would lead to decrease in VAT revenue from diesel, petrol as well as GST from automobile industry. Delhi Government was promoting it with a target of having at least 25% of all vehicles as electric vehicles in next 5 years, hence it would impact its revenues much more than what had been es....
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....rgers also to 5% in lieu of 12%. JS, TRU-l stated that the Fitment Committee discussed it and proposed the rate of 12% on charger on two counts. One, electric vehicles as on date attracted GST at the rate of 12% while charger attracted GST at the rate of 18%. As such, charger was on a different footing than electric vehicle in as much as charger/charging station was not sold to consumers directly but were items of business to business sale. Taking these aspects into account, the Fitment Committee had recommended that chargers should be kept at 12%. 10.6. Shri Manu Srivastav, Principal Secretary, Finance, Madhya Pradesh stated that the State government had 6 electric vehicles, while the cost of electric-vehicle was ₹ 12 lakh, electric-charger was costing ₹ 1.5 lakh. Since chargers form a very small component of the electric-vehicles, there should not be any differential rates as it would lead to complication but would not have any major revenue impact. He therefore suggested that along with electric vehicles, electric vehicle chargers should also be taxed at 5%. 10.7. Suri Himanta Biswa Sarma the Hon'ble Minister from Assam supported the proposal to bring down the GST ....
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.... misunderstood as a limitation being put to incentive. Further, the Council should go ahead instead of thinking of foregoing revenue of ₹ 60 crore as even if sales of electric vehicles increased five times in three years, it would only forgo annual tax of ₹ 300 crore from overall realization of GST revenue of Rs. one lakh crore a month. Hence, instead of the amount, the encouragement to the industry should be kept in mind. 10.9. The Hon'ble Deputy' Chief Minister of Delhi clarified that he had stated that although it was a progressive step to increase the market of electric vehicles, but the Council should keep in mind the full revenue impact. The State of Delhi collected ₹ 1200 crore of revenue from the automobiles and ₹ 6000 crore VAT on sale of petrol and diesel. He wanted to know that once people moved to substantial quantity of sale of electric vehicles, then how this amount would be compensated and this loss of huge amount of VAT should also be thought of at the moment. He, therefore, suggested that after few years, when revenue from automobile sector and petrol products decreased, the Council might look back to the minutes of this meeting where he ha....
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....1.7 lakh crore. The Council, while deciding should make sure that the transition to electric vehicles happened in a steady, systematic and sustainable manner. The Hon'ble members of the Council might be aware that in USA only 21% sale of vehicles were electric today while in UK it was also close to that number. Thus, most of the developed countries were still not fully geared to shift to electric vehicles in terms of sale. India had 25-billion-dollars automobile industry, i.e. one of the largest; Hence, the Council had to address this issue holistically. He stated that the agenda had been brought before the Council at a short notice, which should have been discussed in a full-fledged meeting. Further, the Council should not neglect the existing industry which was also trying to become less polluting with BS V & BS VI compliant models which lie had detailed in the letter addressed to the Chairperson. 10.14. The Chairperson mentioned that the Government move was intended to leap from BS IV to BS VI in order to combat pollution issue. The Hon'ble Minister from West Bengal lauded the proposal and requested that along with reduction of rate on electric vehicles, the Council should also....
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....as far as the electric chargers were concerned, Fitment Committee had examined ¡t but did not propose steeper cut perhaps taking into account the ITC factor. However, he would be happy to go with the decision of the Council after due deliberation on ITC on it. 10.16. The Chairperson responded to the Hon'ble Minister from West Bengal that his point was well taken that the traditional industry contributed to (lie investment and National GDP significantly and should not be ignored. However, a fundamental question was, that would it not be sending a contradictory message if support was given simultaneously to the fossil fuel- based BS VI vehicles also, along with encouragement to futuristic non-polluting renewable energy-based vehicle. She further stated that if the Council agreed, she might refer the points raised by the Hon'ble Minister from West Bengal to the Fitment Committee to consider the proposal. 10.17. The Hon'ble Finance Minister from West Bengal stated that when Council encouraged electric Vehicles, more electricity would be required which was mostly produced by thermal power plants and thus Council would also be encouraging pollution from carbon emission. Thus, eve....
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.... protection of environment was concerned, there would be similar demand from the competing industries. In addition, he drew attention of the Council to the fact that 12% GST rate was charged on daily basic needs such as pickle, drinking water, jam etc. and it was not equitable to recommend a concessional rate of GST at 5% to electric vehicles where the electric cars would cost 20 lakh each. Further, as far as chargers were concerned, when their parts continued to be taxed at 18%, there would be no point to tax chargers at 5%. Hence Punjab was not in favour of the proposal as the means were as important as the end and the Council was expected to be highly responsible and transparent of any decision ¡t took. He also asked about the fate of the existing automobile industry and the investment that had been made in these industries. He requested to the Chairperson that the Council should look at proposals ¡n a holistic manner instead of knee jerk reaction. Further, the agenda of the Council should be decided very carefully keeping States in mind and the meetings should be physical as the Chairperson was hardly audible during the initial part of discussion. He further stated ....
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....osed by the States to compensate the revenue losses in future. 10.22. Shri Somesh Kurnar, Principal Secretary, Telangana stated that the Hon'ble Finance Minister of Telangana could not attend the meeting hut the Government of Telangana favoured all the three proposals. However, lie highlighted the concern before the Council that it might lead to inverted tax structure and care should be taken to avoid giving any refund on account of it. He also felt that incentive might be limited to a period of three years, after which matter could be reviewed, as the limited period incentive would create a feeling of urgency. 10.23. The Advisor from Jammu & Kashmir supported the proposal of reducing GST rates of all three items as apart from Delhi, Mumbai, Kolkata and Chennai even the smaller cities like Srinagar, .Jammu and Chandigarh were suffering from pollution problem. Thus policy interventions in the form of encouragement to electric vehicles should be given so that pollution free cities evolved and it would address the health issues. He informed that the State Government was spending huge amount of money in the health sector and even if Council members had to sacrifice GST revenue, the s....
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....ion after 2022. Therefore, this should be discussed in the Council in the forthcoming meeting including the extension of compensation for few more years, as was highlighted by the States of Punjab arid Delhi. He also stated that he had written a letter regarding coaching centres to the Hon'ble Chairperson and requested that the rate of 18% on coaching services being very high should be brought down or exempted. 10.26. The Hon'ble Chairperson stated that his above statement seemed contradictory to his worries regarding revenue reduction. He was asking for reduction in tax rates on coaching centres which would have negative impact on revenues of the State on one hand while he was worried about compensation for revenue losses on the other hand due to lowering of taxes on many items. The Hon'ble Minister from Rajasthan responded that these coaching centres produced future in the form of Civil Servants, doctors and engineers due to which the country would ultimately benefit. Hence, the Government should consider reducing the tax rate, while for some items tax could be increased. 10.27. The Hon'ble Deputy Chief Minister of Delhi raised the issue that since he had been hearing that ther....
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....tric vehicles, which would be less polluting, than continuing without a thought for the future. She further stated that the concern raised about Bharat Stage VI vehicles, where lot of industries had invested, were well taken and she appealed to the Hon'ble Ministers from Punjab and West Bengal to understand that Council was not forgetful or unmindful of those who were still producing Bharat Stage VI vehicles and acknowledged their contribution such as investment made by them, jobs provided by them and their contribution to the GDP. However, as a futuristic step, the Council would like to promote electric vehicles and electric chargers by way of bringing tax on it down to 5%. The Council members agreed to the proposition. 10.30. The Hon'ble Minister from West Bengal stated that he would request the Council Secretariat to record his views that, he had proposed for reducing rates for all three types of vehicles, i.e. electric vehicles, BS VI Compliant vehicle and hybrid vehicles. He appreciated what the Chairperson was indicating and also what the sense of the Council was, but still requested the Chairperson to direct the Council Secretariat to minute the proceedings in the manner wh....
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....rson. Agenda Item 5(1): Extension of the last date for filling of FORM GST CMP-02 and FORM GST CMP-08 12. The Secretary introduced the agenda item and requested Principal Commissioner, (GST Policy Wing), CBIC to appraise the Council about the same. The Principal Commissioner, (GST Policy Wing), CRIC mentioned that the additional agenda note for extending the dates for filing FORM GST CMP-02 and FORM GST CMP-08 was circulated to the States. In view of details stated hi the agenda note and in order to provide sufficient time to the taxpayers, it was proposed that the last date for filing of FORM GST CMP-02 might be extended to 30th September 2019, and that for FORM GST CMP-08 to 31st August, 2019. He also stated that as the forms were not available on the common portal, the due date of filing FORM GST CMP-02 would be extended by issuing a corrigendum to Circular No. 97/19/2019-GST dated 05.04.2019. Further, the last date of filing of FORM GST CMP-08 would be extended by amending the proviso inserted vide notification No. 34/2019 -Central Tax dated 18.07.2019. It was also mentioned that States were also required to issue the corresponding notification and corrigendum to the Circul....