TaxTMI 
TaxTMI 
Minutes of the 37th GST Council Meeting held on 20th September, 2019
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....019 3. Deemed ratification by the GST Council of Notifications, Circulars and Orders issued by the Central Government 4. Decisions of the GST Implementation Committee (GIC) for information of the Council 5. Decisions/Recommendations of the IT Grievance Redressal Committee for information of the Council 6. Review of Revenue position 7. Issues recommended by the Law Committee for the consideration of the GST Council: i. Proposal for extension of last date for filing of appeals against orders of Appellate Authority before the GST Appellate Tribunal due to non-constitution of benches of the Appellate Tribunal ii. Exemption to small taxpayers from filing of Annual Return iii. Issues pertaining to interpretation of Section 10 of the IGST Act, 2017 iv. Restrictions in availing input tax credit in respect of outward supplies not furnished under Section 37 of the CGST Act, 2017 v. Proposed clarifications on refund related issues vi. E-way bill for movement of Gold vii. Proposed amendment to sub-rule (5) of Rule 61 of the CGST Rules, 2017 relating to FORM GSTR-3B vii. Specifyi....
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....ed amendments of rule 91 of the CGST Rules iv. Doubts raised on treatment of secondary or post-sales discounts under GST 23. Date of the next meeting of the GST Council Preliminary discussion 3. The Hon'ble Chairperson expressed deepest condolences on behalf of the Council on passing away of Shri Arun Jaitley, erstwhile Union Finance Minister, who had Chaired 32 GST Council Meetings. She stated that Shri Jaitley would always be remembered in this country as the person who made GST happen. He was a politician, statesman, legal luminary and above all a consensus builder and it was what the country needed to make GST a reality. He had his unique way of bringing most complex issues to the solution where no one ever felt aggrieved and left out from the decision-making process. As the first Chairperson of the GST Council, he had a challenging role cast out for him, which he carried out wonderfully by taking along everyone with him. The warmth that he brought to the GST Council melted most of the strongest stand taken on various issues. She added that he had a very special relationship with many of us including every Member of the GST Council cutting across the....
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....3.3. After the preliminary discussions, the Hon'ble Chairperson thanked the Hon'ble Chief Minister of Goa and requested Dr. ABP Pandey, the Union Revenue Secretary and the Secretary to the Council (hereinafter referred to as the Secretary) to take up the individual agenda items for consideration of the Council. Agenda Item 1: Address/Presentation by the Chairman, Finance Commission, regarding need for a consultative mechanism between the GST Council and the XV Finance Commission 4. The Secretary informed that the first Agenda Item was address by the Chairman, XV Finance Commission (FFC) Shri N. K. Singh and requested him to make his address. Chairman, FFC while expressing his gratitude to the Hon'ble Chairperson of the GST Council for having acceded to the FPC's request for granting them an audience before the Council, stated that it was a privilege and opportunity to share their thoughts and the way in which they were looking at macroeconomic framework, with the GST Council. At the outset, he stated that the FFC had a stake in the decisions taken by the GST Council emanating from the Constitution of India and the terms of reference of the FFC. He explained th....
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....ementation of the GST was only about 8 to 9% per annum whereas the compensation rate was determined at the rate of 14%. Therefore, in view of the relatively better macro-economic condition, the rate of compensation (14%) may not have been too difficult to accommodate which meant a tax revenue buoyancy in excess of one. Post-facto, with the containment of inflation under the targeting regime and some sluggishness in economic activity, the nominal GDP growth itself has been lower than expectations. Hence, the protection of revenues to the States at the annualized rate of 14% has placed a substantial demand on the GST system. 4.3. He further stated that the award period of the FFC was for a period of five years starting with FY 2020-21 and ending with 2024-25. While compensation to the State had been assured till 2022, the calculations by FFC had taken into account revenue growth of 14% for the remaining three years also. This will undoubtedly put a big burden on the Union's Finances. If the GST revenues of the States did not grow at the rate of 14% per annum on account of low tax buoyancy arising from lower efficiency gains then the Central Government and the State Governments....
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....re all were seeking competitively lower and lower rates on each commodity. This resulted in a cluttered rate structure, enormous challenges of compliance, challenges of technology. Therefore, he stated that the time had come to go back to the drawing board in spite of the fact that this may or may not be the appropriate time for it or else from where would the FFC consider its awards and devolutions to States. Apart from this, the threshold turnover and exemption limits had also been changed. He added that the multiple downward adjustments in the rate structure had two consequences. First, it had affected the revenue stream. Secondly, there was no clarity on the effective weighted GST rate currently in vogue. It was hence important to re-establish the revenue neutral rate. The Chairman, FFC suggested that rate rationalization was the need of the hour by simplifying the rate structure considerably around a three rate structure consisting of a Standard rate, a higher rate on luxury and sin goods, and, a lower Merit Rate with a view to configure everything around the standard rate which could be, say, 17%. 4.5. He added that the Council also needed to revisit the exemptions to reca....
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....ell the Council as to where we were headed. He also felt that it had been rightly pointed by Chairman, FFC that all the States should get rightful and equal devolution. He stated that unfortunately Delhi was not considered for the purpose of devolution by the Central Finance Commission since the last 18 years while they were being asked to set up State Finance Commission to devolve funds to the local bodies. He added that this Council treated Delhi as a State while the Central Finance Commission treated it as Union Territory. He stated that while the devolution by the Finance Commission to the States had increased from 32% to 42%, the amount given to Delhi has remained static at Rs. 325 crore since 2011. Therefore, both Delhi and Puducherry should be treated as States by the Finance Commission for the purpose of devolution of funds. 4.8. Shri V. Narayanasamy, the Hon'ble Chief Minister of Puducherry offered his condolences to late Shri Arun Jaitley, the former Chairperson, GST Council and the Union Finance Minister of lndia and stated that Shri Jaitley was able to carry the entire Council with him. Therefore, this was the opportune time to recognise and remember his services....
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....essed by the Chairman, FFC regarding the current slowdown in the economy in terms of GDP growth. However, he disagreed with his views that because of slowdown the tax collection would remain low, leading to widening of compensation gap and therefore, we might need to re-work the compensation for the States in *view of the burden on the finances of the Union. He stated that the Centre and States came together to bring GST based on consensus and in view of certain circumstances it should not be compromised. He was in agreement with the view that Union Finances should not be burdened but there was a mechanism in the Constitution itself to address the issue by which it can be addressed. Further, the Central Government could even borrow from the market which could be recouped by extending the period of levy of compensation cess for an year or two. He added that even during the times of slowdown/recession there is a need to address the concerns of the State but they did not have the right to borrow. Therefore, if the promises were not fulfilled then it would be difficult for the States carry on these obligations. 4.10. The Hon'ble Minister from Kerala stated that he agreed with th....
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....proximately 25% than the pre-GST regime. Therefore, there was a need to look at the entire gamut of tax rates and structural changes in tax rates may be carried out, if necessary. He observed that GST was a product of tremendous trust which the States had reposed in the Union. One of the contributing factor for the trust was that the States were given an assurance of 14% growth in revenue year-on-year. In his view, it appeared from this year's budget, the commitment was getting diluted indirectly. While total amount collected through Cesses and Surcharges had grown by 100% during the last year, there was no money available for the States through devolution. Therefore, he too agreed with the views expressed by Hon'ble Minister from Kerala that the tax rates should be revenue neutral in addition to bringing out more clarity on the devolution formula with respect to surcharges and cess. 4.12. Shri Suresh Khanna, the Hon'ble Minister from Uttar Pradesh stated that he agreed with the Hon'ble Chairperson of the GST Council on what she said about Late Shri Arun Jaitley and he offered his tributes to him. He stated that the concerns expressed by the Chairman, FFC were in....
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....e State entirely and then there was a VAT of 5% which accrued to revenue of the State but with the new GST regime the GST rate was same as that of VAT rate i.e. 5% and Chhattisgarh got 2.5% as its share. Therefore, there was huge loss on account of revenue from Coal to the State. It was therefore, not desirable to have a discussion regarding having or not having compensatory framework to States at this stage and they might end up losing Rs. 5500 to Rs. 6000 crore by the year 2022. 4.14. Shri Nitinbhai Patel, the Hon'ble Deputy Chief Minister of Gujarat stated that Chairman, FFC had presented a general view with respect to GST implementation. However, he felt that the discussion regarding review of entire GST framework was not needed as it would undo the work done by the Council in its last 36 Council Meetings. Therefore, he suggested that the Council, based on the suggestions of Chairman, FFC, can discuss a fullfledged agenda separately in the Council. The Hon'ble Chairperson noted the suggestion of Hon'ble Minister from Gujarat and suggested that some more States might like to express their views about address of Chairman; FFC and they should be heard as well. 4.....
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....as over. He felt that one solution could be by way of increasing devolution to States now or probably by extending the Compensation to States by three years at a lower rate, say 10%, beyond 2022 till the year 2025. He felt that may be by that time the GST structure would stabilise. In this backdrop, he wondered as to whether the Finance Commission could recommend extension of the period of Compensation to States till GST structure stabilised. He further suggested that in the meantime as suggested by Chairman, FFC there was a need to go back to the drawing board. Therefore, he requested to provide the States with a head room because GST was not likely to stabilize for a few more years. As opposed to this, VAT stabilized in three years. The Hon'ble Minister from Gujarat agreed with views expressed by the Hon'ble Minister from West Bengal regarding the .possibility that Finance Commission may recommend to the GST Council or the Central Government to extend the period of compensation so that the States were assured that the Centre would continue to help the States for few more years beyond 2022. 4.17. Shri Sushil Kumar Modi, the Hon'ble Deputy Chief Minister of Bihar exp....
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....sues were related to simplification of processes and rationalisation of rates and the Council was working on those lines already. He stated that when decision regarding rate of compensation was being taken, the subsumed taxes growth rate was about 11% but compensation to States was guaranteed at 14% as grand bargain. He strongly felt that assurance given by the Act of Parliament should be abided and the compensation rate should not be reduced from 14% at any cost for five years, otherwise faith of States would be affected. He added that he would send separate memorandum to FFC with regard to notes circulated earlier on behalf of the FFC. He requested Chairman, FFC Finance Commission to recommend continuation of compensation Cess till the term of FFC .i.e. 2025. 4.19. Dr. Himanta Biswa Sarma, the Hon'ble Minister from Assam stated that it was a historic day for Indian economy as corporate tax rate had been reduced from 30% to 22%/15% and a new era of growth would begin. He felt that there should be no increase in GST tax rate on this historic day. He stated that he was optimistic about the Indian economy and he did not feel that last few months should be made the basis to car....
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.... had serious revenue implication. Further, the pre-GST rates on these items were at the same level as in post-GST era. It was suggested that rationalisation should be considered only when there was high buoyancy in tax revenue and the economic conditions were conducive. Further, Tamil Nadu did not support any withdrawal of exemptions as they were very sensitive and based on items either produced or consumed by vulnerable sections. Tamil Nadu was, in principle, strongly opposed to bringing petroleum products and electricity under the scope of levy of GST as an issue of State's fiscal autonomy. Further that Tamil Nadu did not support any differential treatment of States by FFC. This was for the reason that there was no differential impact on the States arising from GST since compensation was being paid to all the States in proportion to the amount in the base year. It was stated that one of the reasons for the persistent shortfall in GST revenue could be due to repeated reduction in the rates of tax made by the Council in the past two years since the roll out of GST. Therefore, Tamilnadu also strongly favoured continuation of compensation to States even after the mandatory five-y....
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.... four sessions of GST Council. He stated that smaller States like Puducherry has been disadvantaged in GST arising from loss from CST and the change in principle of taxation from origin to destination. Therefore, the suggestion from Chairman, FFC that the compensation to States should be revisited in view of the prevalent macro-economic situation may not be prudent. 4.25. Shri Basavaraj Bommai, the Hon'ble Minister from Karnataka expressed his condolences to Late Shri Arun Jaitley. He stated that the Chairman, FFC had raised two fundamental questions, the first being on Compensation and the other being on rates. In his view, the intention of the FFC was to look into the ways and means to achieve the desirable results. He stated that compensation was the bonding spirit for GST and was critical to the States. He further stated that the growth in revenues during the VAT regime was about 13% to 14%. It was, therefore, essential to extend the period of compensation, as demanded by the States. He suggested that to avoid the abrupt fall at the end of compensation period of 2022, there could be a decremental compensation. He stated that rationalisation of rates had to done at the ri....
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....sation being paid to States. He stated that it was a constitutional provision and the Finance Commission was not in a position to decide upon it. He also clarified that the Finance Commission was not giving any signal regarding the rate structure or for raising tax rates, as the decision again vested entirely in the Council. With regard to Cesses and Surcharges, he observed that they were not shareable under the Constitution, and therefore, they could not be devolved. He stated that some of the Members expressed their views on exemptions as to whether it should be continued or not and in his view this feature was again embedded in the Constitution and it was up to the Council as to decide as per the best international practises and its appropriateness. 4.28. The Chairman, FFC stated that the Finance Commission had a broad ranging terms of reference and they were bound to address those obligations. He further stated the Finance Commission was required to strike a balance between various vertical and horizontal imbalances under various macro-economic assumptions. He observed that the revenue deficit grant under Article 275 of the Constitution would depend upon the health of financ....
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....4: Decisions of the GST Implementation Committee (GIC) for information of the Council 10. The Secretary informed the Council that the Agenda Item (presentation attached as Annexure 3 to the Minutes) was discussed in the Officer's Meeting and it was agreed by all. Therefore, he requested the Council to approve the agenda item. 11. For Agenda item 4, the Council took note of the decisions taken by the GIC between 20'" July, 2019 and 6th September, 2019. Agenda Item 5: Decisions/Recommendations of the IT Grievance Redressal Committee for information of the Council 12. Introducing this Agenda item, the Secretary stated that the Minutes containing decisions/recommendations of the 6^th and 7^th Meeting of the IT Grievance Redressal Committee (ITGRC) were circulated to the States (attached as Annexure 1 and 2 respectively of the Minutes of the respective ITGRC Meetings in Agenda item 5). The presentation covering the issues relating to the Agenda item was attached as Annexure 3 to the Minutes. 12.1 . As per the Agenda item, of the 32^nd GST Council Meeting, Council had approved to extend the scope of ITGRC to also consider on merits, the specific cases covered under....
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....t recommendation, hence Committee had directed State/CBIC tax authorities to re-examine these cases and forward properly, only if they fulfil, the parameters/conditions as decided in 32^nd GST Council Meeting. 12.3. The ITGRC in its 7^th Meeting held on 11^th June 2019 decided and recommended the following: - a. To allow filing of TRAN-1 in total 98 cases of Category 'A', as per Annexures mentioned in column No. 3 and 4 of Table-2 (of Minutes) on account of technical/system issues as explained at para 4 of Minutes, in accordance with the Law Committee recommendations regarding consequential benefits related to filing of TRAN 1. b. Not to allow remaining 151 cases of Category 'B' as per Annexures mentioned in column No. 3 and 4 of Table-3 (of Minutes), in absence of any evidence of technical/system errors in these cases as explained at para 5 of Minutes, as was decided in similar cases in past six IT-GRC. c. It was also decided by the committee that in all such cases where Court had directed to allow the filing of TRAN-1 manually or electronically, without giving any consideration to the fact that technical glitches were there or not, jurisdictional tax a....
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.... the projections indicated that compensation amount available at the end of February, 2019 would be close to compensation requirement at the end of January, 2019. He informed that in general the average revenue shortfall for the period April-August, 2019 had gone up. 14.1. The Secretary added that as seen from Table 3 of the Agenda item, the closing balance of compensation collected and compensation released in the year 2018-19 was Rs. 47, 272 crore whereas till end of August 2019, the balance was Rs. 23, 695 crore. He informed the Council that for the month of June-July, 2019, approximately Rs, 28, 000 crore was released as compensation whereas the average monthly collection was around Rs. 7, 000 crore only. The Hon'ble Minister from West Bengal wondered as to what would be the expected shortfall in terms of collection and requirement of compensation to States by February, 2020. The Secretary informed that the shortfall was expected to be around Rs. 10, 284 crore. 14.2. The Hon'ble Minister from Punjab drew attention of the Council to page no 28 of report No 11 of 2019 (Indirect Taxes- Goods & Service Tax) presented by the C&AG wherein it was mentioned that devolutio....
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....nto these issues objectively without any bias and to evolve a mechanism to resolve these disputes in a fair manner. 14.4. The Hon'ble Deputy Chief Minister of Delhi stated that their State had also suffered a loss of Rs. 3,200 crore on account of distribution of IGST between the Union and the States on the basis of the Finance Commission's formula, which should have been done subsequent to settlement of IGST funds based on Place of Supply Rules. He requested the Chairperson to set things right in view of the report of the C&AG and the issue raised by Hon'ble Minister from Punjab. The Hon'ble Chief Minister of Puducherry stated that they had also suffered losses of approximately Rs. 219 crore for reasons similar to that of Delhi. He stated that Delhi and Puducherry were not being considered in the devolution to States by the Central Finance Commission. He further stated that Puducherry was entitled to 0.27% of the IGST amount apportioned to the States which would work out to Rs. 219 crore. However, out of the apportioned IGST amount which was used to give compensation to States, Puducherry and Delhi were left out by the Finance Commission. He too requested the Hon....
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....e apportioned as CGST and the SGST. The SGST component went to the respective States whereas 42% of the CGST amount went to States by way of devolution. Dr. TV Somanathan, Additional Chief Secretary/Commissioner, State Tax, Tamil Nadu stated that the issue regarding settlement of IGST money for the FY 2017-18 had also been raised by Tamil Nadu. He stated that they too had lost substantial amount of IGST money due to them as it was devolved instead of sharing it by way of settlement. Shri V. K. Garg, Advisor (Financial Resources) to Chief Minister, Punjab stated that as clarified, he understood that even if the States got less by way of devolution, the rest of the money was given to the States by way of compensation in FY 2017- 18. He further stated that Joint Secretary (Revenue), DoR had clarified that from FY 2018-19 onwards, the States had been getting the 42% of the Centre's share of the IGST money. However, he stated all these had led to one implication i.e. the States should have got 71% of the IGST amount for the FY 2017-18 but got 42% instead. As a result, the Centre ended up utilising the funds collected from compensation cess to pay to the Centre which actually belonge....
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....t ROD order was' necessitated on account of non-setting up of the GST Appellate Tribunals, which had led to lapsing of the time limit of three months' (six months for appeals by the Government) time for appeals before the Tribunal. 17. For Agenda item 7(i), the Council approved and recommended issuance of Removal of Difficulty Order, as annexed to the said Agenda item so as to extend the period of limitation for filing of appeal by linking it to the date when the President or the State President enters office. Agenda Item 7(ii): Exemption to small taxpayers from filing of Annual Return 18. The Co-Convenor of the Law Committee introduced this Agenda item and stated that the Law Committee had recommended for waiver of the requirement of filing FORM GSTR 9A for Composition taxpayers for the FY 2017-18 and 2018-19 as they would be required to file an annual return only from 2019-20 onwards. With respect to the second proposal of waiver of requirement of filing of FORM GSTR 9 for taxpayers having an aggregate annual turnover up to Rs. 2 crore for FY 2017-18 and 2018- 19, he stated that GSTR-9 filing had been far below expectation. He further stated, it was felt the comp....
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....nister of Delhi stated that we had been extending the dates for filing of these returns and also hope that the taxpayers would be filing these returns in times to come. He stated that almost 80% of taxpayers had not filed these returns for the said period. He wondered as to what could be the legal consequences of non-filing of these returns as to whether non-filing of these returns would affect final IGST settlement. The Joint Secretary (Revenue) stated that very less ITC was involved with the taxpayers with lower turnovers. These taxpayers were mostly traders and he opined that there would be no/less reversals. He stated it would have miniscule effect on settlement. He further stated that IGST settlement was linked to only those taxpayers with Annual Return where they were not entitled for credit but they had not shown reversal in their monthly returns. The Hon'ble Minister from Delhi accepted the explanation in view of the ground reality and very little impact on settlement. The Hon'ble Minister from Uttar Pradesh agreed with the proposal of the Law Committee regarding FORM GSTR-9A and with respect to FORM GSTR 9, he stated that its format needed simplification. For insta....
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....ed that, if the taxpayer had a liability then they had an option to file and make the payment through FORM GST DRC-03, which is independent of the Annual Return. Shri Sanjeev Kaushal, Additional Chief Secretary (E & T), Haryana stated he had been instructed by the Hon'ble Council Member from Haryana that it was apparent from the data that the taxpayers with turnover less than Rs. 2 crore had filed the maximum returns and there was no real demand for the waiver of this requirement. He also observed that during the initial years of any reform there would be some legacy issues. However, if the requirement of filing of these Annual Return were waived off then there would be expectation for waiver in the subsequent years also. Therefore, the Annual Return forms should be retained but we may continue to simplify the returns further. The Hon'ble Minister from Madhya Pradesh stated that FORMS GSTR 9 and 9A should be simplified, particularly column 8 of FORM GSTR 9 should be removed. 18.5. The Secretary summed up the decision of the Members of the Council that while FORM GSTR-9A for Composition taxpayers should be waived off, FORM GSTR-9 for small taxpayers, whose annual turnover....
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....ipient is not registered) in a State other than the State in which the supplier is located, shall be determined in accordance with the provisions contained in clause (a) of sub-section (1) of section 10 of the IGST Act. Accordingly, such supplies would be treated as inter-State supplies. He further stated that the draft Circular is in accordance with the views of States like Punjab and Himachal Pradesh i.e. such OTC supplies may be treated as the intra-State supplies where the supply was made to an unregistered person and the recipient's address was not available on record and inter-State supplies where the address of recipient is available. Shri Amit Kumar Agarwal, Commissioner, E & T, Haryana stated that they were opposed to the proposal as they felt that the proposal went beyond Section 10(1)(a) of the IGST Act and that the proposed Circular would affect the revenue flowing to his State in the form of GST revenue. The Hon'ble Deputy Chief Minister of Delhi also supported the views expressed by Haryana. The Hon'ble Minister from Kerala suggested to follow the destination principle and agreed with the views expressed by State of Punjab. 20.1. The Hon'ble Ministe....
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....restriction imposed was supplier wise or on the total credit available. The Co-Convenor, Law Committee clarified that it was with respect to the total credit available and the wording would be changed accordingly (by the suppliers). The Additional Chief Secretary (E&T), Haryana stated that the credit may not be restricted and instead the existence of the supplier should be verified in a fixed time frame. He added that if the decision was in favour of the proposal then it was acceptable to him. The Hon'ble Minister from Bihar stated that by this proposal the genuine taxpayers who were availing ITC on the basis of FORM GSTR-3B were being encouraged to file FORM GSTR-1. The Hon'ble Minister from Odisha suggested that there should be a check in GST System where a registered taxpayer should not be allowed to file FORM GSTR-1 unless he/she had file FORM GSTR-3B in previous month. 23. For Agenda item 7(iv), the Council recommended imposition of restrictions such that ITC allowed to a registered taxpayer in respect of those invoices, the details of which have not been uploaded by the suppliers as required under sub-section (i) of section 37 of the CGST Act i.e. which is not refl....
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....e. On the other hand, even though the GST rate on gold was 3%, which was more than the rate under VAT, the annual collection was only Rs. 300 crore in his State. There is, therefore, substantial evasion in gold and the question was how to plug it. On the issue that the sender's and the recipient's identity would be known to every one which was a security risk, it was suggested by the Hon'ble Minister from Kerala that thee-Way bill could be encrypted. If any State felt that the e-Way bill was a security risk, then it may exempt the intra-State movement of gold from e-Way bill. The Hon'ble Minister from West Bengal, however, disagreed with the views of Kerala for the reason that gold was not transported in conventional ways like other commodities and the reason that it would also make transportation of gold for job work very cumbersome. He also stated that West Bengal was the first State to introduce e- bills @ 1% for transportation into the State of West Bengal. However, they did not impose it on gold for two reasons stated above. He, therefore, requested Kerala to reconsider their point of view. 26.2. The Hon'ble Deputy Chief Minister of Gujarat stated that m....
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.... that there was no need to carry forward this agenda item. 26.5. The Hon'ble Minister from West Bengal stated that the matter was not only intra-State issue but an inter-State issue. Therefore, it could not be left to States to implement or not implement the intra-State e-Way bill requirement of movement of gold. The Additional Chief Secretary (Finance), Gujarat supported the views expressed by the Hon'ble Minister from West Bengal and stated that most of the transactions were inter-State transactions as compared to the intra-State transactions. He also stated that the Law Committee was not able to arrive at any conclusion on the issue even after lot of deliberation. The Hon'ble Deputy Chief Minister of Gujarat stated that the business of job workers and karigars from other States coming to their State would be adversely affected if e-Way bill was prescribed for movement of gold. The Hon'ble Minister from Kerala stated that there was loss of revenue to the tune of 70% of the tax revenue potential. He felt that this could be prevented by implementing e-Way bill. He added that the problems of job workers and consumers etc. could be done away with by prescribing e-W....
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....Rule 61 of the CGST Rules, 2017 to say explicitly that FORM GSTR-3B is a return under sub-section (1) of Section 39 of the CGST Act. He added that the proposed amendment was to be carried out retrospectively i.e. from 01.07.2017, so that the legality of tax liability or the interest liability / could not be challenged on this account. It was also decided to challenge the order of the Hon'ble High Court of Gujarat. 29. For Agenda item 7(vii), the Council recommended to amend sub Rule (5) of Rule 61 of the CGST Rules to prescribe FORM GSTR-3B as a return under Section 39(1) of the CGST Act retrospectively with effect from 01.07.2017 as provided in the agenda note. The Council also approved that suitable notifications shall be issued after due vetting by the Union Ministry of Law and that pari materia changes shall also be made in the SGST Rules. Agenda Item 7(viii): Specifying the due date for furnishing of return in FORM GSTR- 3B and details of outward supplies in FORM GSTR-1 for the period October - December, 2019 30. The Co-Convenor of the Law Committee introduced this Agenda item and stated that in view of the revised timelines for introduction of the new return syst....
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....tober, 2019 respectively. Agenda Item 7(ix): Proposal for amendments to CGST Rules, 2017 32. The Co-Convenor of the Law Committee introduced the Agenda item and stated it was discussed in detail during the Officers meeting held on 19^th September, 2019. He stated that there was unanimity on all the amendments proposed (Rule 83A, Rule 97, Rule 117, Rule 142, FORM GST RFD 01, insertion of FORM GST DRC-01A except that of amendment proposed to rule 21A. 32.1. He informed the Council that with respect to the amendment to rule 21A, one view was that the dealer should not be allowed to carry on with the business during the intervening period and the other view was that we should not stop the registered person from doing business, however he should not be issuing taxable invoices during the intervening period. He stated that the Law Committee's proposal was to regularise the intervening period in case where the cancellation got revoked and also to get a consolidated return filed for the entire period based on which the tax could be collected as it was not possible to stop the taxpayers from carrying on his/her business during the period of suspension of his/her registration. T....
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....of duty/ tax rates which lead to distortion in the rate structure of the sector. After the preliminary details as explained by JS, TRU-1, the Secretary proceeded for seeking item-wise approval in respect of Annexure-I. The Council examined the list item wise. 34.3. Item No. 1 to 6 in Annexure -I were approved by the Council as per the recommendations of Fitment Committee. 34.4. On item No. 7 relating to Fishmeal and Meat cum Bone Meal discussion was initiated by the Hon'ble Minister from Goa stated that Fish meal was basically a waste product from fish which the poor fishing community collected, especially in the coastal areas thereby helping in maintaining clean environment. On the basis of circular the Fishmeal manufacturers were being expected to pay tax @ 5% for the period when nobody had collected the tax under the impression of being exempted which led to a strike. Although, the proposal was to make it exempt for the period from 01.07.17 to 31.12.2018, he requested the Council to exempt it from 01.01.2019 to the*present date also. 34.5. The Hon'ble Chairperson intervened and stated that delegations from various coastal States met her on these issues. These de....
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....lthough, he agreed to exempting Fish meal as per recommendations of Fitment Committee, he stated that both the items should not be clubbed together but should be dealt in a separate manner. His State favoured Meat cum Bone Meal to be taxed @ 5% as in Uttar Pradesh alone Meat cum Bone Meal from 01.07 .2017 onwards had turnover of about Rs. 600 crores. ACS (Finance), Gujarat however supported Government of Goa's view regarding exempting Fish meal till 30^th September, 2019 and stated that the proposal merited approval of the Council. 34.10. The Hon'ble Chairperson in response to the submissions of the Hon'ble Minister from Andhra Pradesh stated that there were states like Maharashtra and Telangana where oilseeds were produced along with its by-product oilcake which was used as animal feed. She stated that the Hon'ble Minister from Andhra Pradesh should look at it from the point of view of potential export market awaiting outside the country. If the farmer's producer organisations and groups among fishing women could be formed, they could earn much higher profit by tapping the export market. Hence, it would be better if in place of giving temporary relief by ~ e....
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.... h.ad proposed for rate rationalization to 12%. The Hon'ble Chief Minister of Puducherry stated that since he had also received representations from some MPs of Tamil Nadu, he would look into the matter and bring the issue before the Council for necessary clarification. Hence, in view of the above discussion, the decision on Safety Matches was deferred. 34.15. As regards item No. 13 relating to Polypropylene/Polyethylene Woven and Non-Woven Bags and sacks, whether or not laminated, of a kind used for packing of goods, the ACS Gujarat wanted to know where was the incidence of tax of 5% and 18% on it. The JS-TRU- I explained that 5% tax was leviable on goods under HSN 6305 (below Rs. 1000 per pc); while the same item, if classified under HSN 3923 attracted 18% tax rate. Hence, in order to remove the ambiguity in application of GST tax rate, a uniform tax rate of 12% was proposed. The Council being satisfied, approved the proposal tax rate for items at S. No. 13 of Annexure-I. 34.16. As regards item No. 14 of Annexure-!, JS, TRU-I while explaining the agenda stated that the request was received from Tamil Nadu to reduce the tax on wet grinder and rationalise the tax rate acr....
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.... even if inversion of tax rate was there. He stated that reduction of GST rate on wet grinder may not have significant revenue implication. The Hon'ble Deputy Chief Ministers from Gujarat and Bihar suggested that Wet Grinders may also be placed at GST rate of 5%. The Hon'ble Minister from Punjab also supported the view. All the other Council members agreed to the proposal for which the Hon'ble Minister from Tamil Nadu thanked all the Council members. The Council therefore, approved the GST rate of 5% for Wet Grinders (consisting stone as a grinder). 34.18. For items at Sl. No. 15 to 18 of Annexure-1, the Council after going through the explanation provided in the proposal, approved the recommendations of the Fitment Committee. As regards items at Sl. No. 19 and 20; JS, TRU-I explained that these items were placed before the Council in terms of the Hon'ble High Court's directions where it had asked the Council to examine the representations made by the Solar Power Developer Association and Indian Wind Turbine Manufacturers Association against prescribing manner of valuation of the Solar Power plants and Wind Turbine based plants. The details of the issues were contai....
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....ted Water. These drinks deserve parity in rates with aerated water. He stated that Ministry of Health had also recommended in past higher tax on such products. Hence, the Fitment Committee had recommended increase of cess rate at par with aerated water. The Council being satisfied for item at Sl. No. 2 of part B i.e. Caffeinated Beverages, decided that the GST rate be increased to 28% from existing GST rate of 18% with a compensation cess of 12% being applicable to it. Further, item No. 3 of part B, Annexure-1 being of the nature to plug a loophole in refund arising out of inverted duty structure in compensation cess rates of tobacco products, the Council approved that refund of inverted duty of compensation cess may not be allowed under Sub Section 3 of Section 54 of the CGST Act, 2017 for tobacco products, including the refund claims already filed. 34.22. The JS, TRU-I stated that Sl. No 1 to 9 of the Part C of Annexure-I contained only clarifications in respect of certain products to avoid confusion in levy of the tax. The Council prima facie being satisfied, approved the recommendations of the Fitment Committee, and sought clarification in respect of Sl. No 8 below which was....
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....pproved the Fitment Committee recommendations for the SI.No. 3 to 10 of Annexure-IT. 34.25. ln respect of Annexure-U, the Fitment Committee had deferred its decisions for want of information in respect of certain goods as it required further examination. The Council approved the same from Sl.No. 1 to 10 of Annexure-H. 34.26. From item No. 1 to 11 of Annexure-III, the Council approved the recommendation of Fitment Committee. The Hon'ble Minister from Andhra Pradesh drew attention of the Council to Dried Tamarind i.e. item at Serial No.12 of Annexure III. He maintained that Dried Tamarind was staple food in South lndia, needed for all food preparations and was not considered as spice. Further, in pre-GST era, it was exempted. While in the British era looking at its importance, there was Tamarind Tree Act which banned felling of Tamarind tree so that there was no shortage of an item that was integral part of diet. Moreover, it could not be compared with dried apples, prunes or apricots or with other spices as it was part of poor men's diet. He also suggested that like parched gram, tamarind also did not undergo any change in its form as it was only sundried and hence, sh....
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....ding were taxed at 12%. The Hon'ble Finance Minister from Uttar Pradesh observed that roasted Groundnut and roasted Chana were two distinct products and roasted Groundnut may continue to be taxed at 12% GST rate. The Hon'ble Finance Minister from Punjab stated that if the Council started examining the food items again, then it would not reach any end result and it could be the never-ending process of exempting such item s. Hence, the Council should stick to the agreed principles such as healthy food, unhealthy food etc. while exempting or taxing any food item. The Hon'ble Chairperson also agreed to his views. The Council also did not agree to exempt Roasted Groundnut. 34.30. The Hon'ble Minister from Goa also wanted parity treatment between Bakery items and Sweets which was taxed at 5%. However, the Hon'ble Minister from Kerala reminded that in view of certain principles and the fact that Bakery items and Sweets could not be treated at par because it had huge revenue implications, these items had been distinguished in the past and further suggested that the Council should not be ready to take the brunt of revenue loss when the revenue situation was precarious....
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....at inversion of tax rate in the sector, and hence, he requested the Council to approve the rate of 1.5% on job work services on diamonds which was agreed to by the Council. 34.34. He further explained that the item no. 2 of Annexure IV was regarding engineering job work where the GST rate was recommended to be reduced from 18% to 12%. He stated that analysis of data showed that GST tax rate of 18% was high, leading to cash flow problems for the sector. Hence, the Fitment Committee had suggested GST tax rate of 12% and there would not be any cash flow problem, as the cash revenue would shift to the principal from job worker. He also explained that this entry did not cover the body building activity of job work on the chassis supplied by the Motor Vehicle manufacturers. There was sufficient credit available to them on inputs, which were mostly at 18% while output was taxed at 28% (if the vehicle was sold) or at 18% (if the service activity of body building was done). The Council agreed and approved the recommendations of the Fitment Committee for Sl. No. 1 and 2. 34.35. Thereafter, Sl. No. 3 and 4 of Annexure IV were taken up for deliberations in the Council regarding rate rati....
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.... paying any tax. He also stated a similar issue relating to GST tariff on hotels as suggested by the Hon'ble Minister from Goa was pretty similar and connected to this item, so both the items should be discussed together. Moreover, if the recommendation of the Fitment Committee was approved by the Council, compliance would increase due to low incentive for evasion and there would also be no outgo on account of Input Tax Credit (ITC). 34.37. The Hon'ble Minister from Goa stated that the Hon'ble Prime Minister in his speech on 15^th August, 2019 had mentioned that India could become a Tourism hub, so all Indians should promote tourism as more jobs with less investment could be generated in this sector and it would strengthen the economy. He also stated that in various Council meetings, he had already raised the issue that in the interest of tourism and employment generation, the Council should lower the tax on the room rents of Five Star Hotels. He informed the Council that the GST rate had to be competitive in the region; in China tax rate was only 9% while in Thailand and Singapore only 7%. Thus, when tax rates were so low in foreign destinations even the domestic to....
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....ion proposal would have serious revenue consequences for Delhi. He added that in Delhi, there were 37 Five Star Hotels with a capacity of about 10,500 rooms and most of the hotel rooms were charged Rs. 7500 and above per room night. The revenue that accrued to Delhi was around Rs. 360 crore and if GST rate was reduced from 28% to 18%, as suggested, then there would be 35% net Joss i.e. Rs. 120 crores for Delhi city alone. He also stated that the Catering Service in Five Star Hotels should continue at 18%, in view of revenue loss but, Outdoor Caterers might be charged at the rate of $%without ITC in view of rampant evasion in the sector. 34.40. The Hon'ble Minister from Kerala also agreed to the proposal of reducing the rates and stated that at least, the slab of Rs. 7500 should be abolished to have a uniform tax rate across the hotels as it was causing distortion in the sector. The Hon'ble Deputy Chief Minister of Bihar stated that the proposed new slab of Rs. 10,000 to be created by Fitment Committee should not be agreed and the rate of tax should not be more than 18%. It was not a sin to stay in a Five Star Hotel or a good hotel and it looked awkward when tax was charg....
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....n the elasticity of demand of various price points, they only seemed to have done a static analysis of revenue loss of around Rs. 2000 crores. However, as per his intuition, it would generate more revenue on account of increase in room occupancy. He asked the CST, Delhi about what was the aggregate revenue of Delhi from GST, who responded that it was around Rs. 26,000 crores. The Hon'ble Minister from West Bengal then remarked that a loss of Rs. 200 crores on Rs. 26,000 crores would have the impact of only 0.8%, which might be compensated by higher room occupancy. The Advisor (Financial Resources) to Chief Minister, Punjab stated that while the Council was recommending lowering of tax rates in Five Star Hotels, one practical aspect should be kept in mind. He elaborated that in a Five Star Hotel about 23 services were provided which were mostly taxed at 18% and when the GST on Accommodation Service was to be reduced to 12% then it would create a sea of evasion and practice of avoidance of tax. He gave an example that Five Star Hotels would provide both In-door and Outdoor Catering Services and they could be applying different rates to each. He, therefore, stated that in the proc....
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....by them. The CST, Delhi stated that whatever, revenue loss figures, he had stated earlier were based on the proposal of Fitment Committee. However, the instant proposal had gone much beyond that and tax rate applicable was proposed to be brought down to 12% for very high room tariff range. Hence, he would require to go back and do fresh calculations. CST, Delhi further stated that although the Hon'ble Minister from Goa had maintained that there would be more room occupancy if there were lower room rates in Delhi, which could compensate the revenue Joss; he had a different view on it. He stated that in Delhi about 4,000 rooms had already been added in the Aero-city Delhi and it was observed that only 60% hotel rooms were occupied in general in Delhi and therefore, there was already an excess capacity in Five Star Hotels. Further, by nature, the Five Star Hotels were more compliant and the revenue was easily collected from these Five Star Hotels. The Hon'ble Chairperson then requested as to what the Council would recommend for the hotels. The Hon'ble Deputy Chief Minister from Bihar suggested that Council could modify the proposal and recommend following GST rates: - R....
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....commodation in rooms of Rs. 7501 and more from present 18% with ITC to 5% without ITC. It was also agreed that the rate shall be mandatory for all kinds of catering. Further, catering in premises where daily tariff of accommodation in rooms was Rs. 7501 and above, the applicable GST rate shall remain at 18% with ITC. 34.51. Further, as regards Sl. No. 5 to 30 of Annexure IV, the Council after going through the explanation provided in the proposal, approved the recommendation of the Fitment Committee on services. 34.52. The Hon'ble Minister from Goa, thereafter raised the issue pertaining to his State related to Casino which the Secretary explained to him that this would go to GoM on Lottery, as discussed in previous GST Meeting. However, since the Convenor of the GoM on Lottery was the Hon'ble Minister from Maharashtra, it was necessary to appoint a new Convenor as early as possible, since Maharashtra was shortly going to have elections, and the present Convenor might be busy with election related work. The new Convenor of the GoM could then convene meeting of the GoM in the meantime and discuss the issues of Lottery and Casino. Moreover, he stated that no coercive ac....
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.... revenue loss. Further, he was of the view that if the Council decided to recommend a uniform GST rate, he would like the GST rate to be fixed at 28% as Lottery was a 'sin' good. The Hon'ble Minister from Kerala stated that the Ld. Attorney General's view regarding the rates had upheld his views and arguments on the issue, presented in the Council from time to time, that it was absolutely legal to keep two rates in lottery. Thus, the status quo should be maintained. 34.56. The Hon'ble Minister from Assam stated that in North Eastern States, there was no capability to have State-run Lottery, hence they would have to close down the Lottery business and seek compensation from the Government of India for the probable loss of revenue. Further, the proposal of Minister from Kerala, that he had placed in Council earlier stating that he would run the Lottery for North Eastern States; seemed attractive but it undermined the autonomy of State. He added that North Eastern States were having a giant neighbouring State running Lottery and fixing lower rate to State-run Lottery would give protection to neighbouring state run Lottery. Thus, GST rate would protect revenue of....
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.... the MGM offered by the authorised person. Hence, he offered that he can guarantee double the income for every North Eastern States from the MGM, which it would otherwise collect from State authorized lottery. In Kerala State, there would be law and order problem as Lottery had its vices which had to be controlled. The Hon'ble Minister from Assam stated that in that case, Kerala should form an agency and participate in the tender, otherwise how the State would know as to what revenue it was being offered as MGM. 34.59. The Hon'ble Chairperson stated that based on the discussion so far, she would come up with a fair proposition which the Council might consider. She further stated that, since every member was of the view that Lottery was a ' sin' good, it should have a uniform rate and the Council might also suggest to Union Ministry of Home Affairs to amend the Lottery Regulation Act, in order to address the issues relating to Jaw and order, monitoring and compliance etc. She also stated that Council might also recommend banning of online lottery. She then asked the views of the House on this three-pronged proposal. The Hon'ble Minister from Kerala suggested for d....
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....ded to refer the matter to the GoM on lottery along with issues U relating to Horse Racing and Casino. 34.63. ACS/CST, Tamil Nadu raised the Issue of exclusion of aerated waters from the Composition Scheme. Regarding Composition Scheme on aerated water; the JS, TRU-1 explained that this issue had come up for discussion during the Officers' Committee meeting and it was submitted by the officers from various States that there was a lot of evasion in this area. There was a representation from ACS/CST, Tamil Nadu also regarding manufacturers of aerated water to be taken out of the Composition Scheme. He informed that the Fitment Committee had agreed to it and the officers committee on 19.09.2019 had also accepted it. The Council also approved that the manufacturers of Aerated water be henceforth taken out of the benefit of Composition Scheme. 34.64. The Hon'ble Minister from Punjab requested attention of the Hon'ble Chairperson and also of Council regarding the issue of taxation of "Long term Leasing" and stated that the Secretary had informed him that the issue would be taken up in the GoM on Real Estate. The Chairperson agreed that the same might also be referred to....
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.... 1947, Punjab and West Bengal had borne the brunt of partition'. Thereafter, during the 60's and 70's, Punjab saw three wars - 1962, 1965 and 1971, where people of Punjab were affected. Then terrorism too affected the people in Punjab. He also stated that the special concessions given to their immediate neighbouring States like Himachal Pradesh, Jammu & Kashmir and Uttarakhand too affected industrial growth. Hence, he stated that Punjab's economy was always affected due to various associated circumstances. He further stated that now Punjab wanted to industrialise. ' Invest in Punjab' Summit was to be held soon where investors from Dubai, Japan and Singapore would be invited. Further, land was precious and scarce and Punjab would look forward to transfer of land in large industrial estates for investments on Government to Government basis. He requested the Council to consider the issue of levy of tax on lease of land on long term basis. He stated further that in GST, there was no entry where tax could be levied separately by both Centre and the States except for 'long term leasing of land', which attracted 18% GST. Moreover, there was 5% to 7% of Stam....
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....convey the message to the Hon'ble Deputy Chief Minister, Gujarat. However, he made following observations on the issue raised by Punjab. a. If land was leased for long term by a State PSU such as Punjab Industrial Development Corporation or a similar body then GST would not be applicable, as it was already exempted. b. Further, Punjab had taken one of the arguments behind seeking exemption from the long-term lease of land on the grounds that the exemption had been granted to u International Financial Services Centre (IFSC) in Gujarat, which may also be u extended to long term leasing for the industrial purpose. However, IFSC in Gujarat, being the only international financial services hub in India, did not draw any parallel with the exemption to the long-term leasing of land from tax. Hence, this argument might be separated and kept aside. 36.69. The Hon'ble Minister from Madhya Pradesh also agreed to the Punjab's views and stated that in Madhya Pradesh also efforts were being made to encourage tourism industry to develop in Madhya Pradesh. For this purpose, a PSU might be forward and hence issue of long-term leasing of land for developing hotel and ....
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....ards taxability of fishmeal in view of the interpretational issues. However, any tax collected for this period shall be required to be deposited. Council did not agree to make any change for meat cum Bone Meal. iii. The Council in respect of Sl. No 8 of the Part A of the Annexure I approved 12% GST rate during the period 01.07.2017 to 31.12.2018, on pulley, wheels and other parts (falling under heading 8483) and used as parts of agricultural machinery. However, any tax collected at higher rate for this period shall be required to be deposited. iv. The Council deferred the discussion based on Fitment Committee recommendations in respect of Safety Matches appearing at Sl. No 12 of the Part A of the Annexure I and that it would be taken up after the Hon'ble Chief Minister of Pondicherry provided his feedback. b. In respect of Part B of the Annexure I of Agenda item 8, recommending changes in the GST rate as well as Compensation Cess rate of the Goods: i. The Council approved the Fitment Committee recommendations in respect of Sl. No 1 of the Part B of the Annexure I. Passenger vehicles of engine capacity 1500 CC in case of diesel, 1200 CC in case of....
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....as, 'However, in the interim period the States may go by the decision of GST Council as recorded in the Minutes of the Council Meeting dated 5^th August, 2017'. B. In respect of GST Rate on Services, the Council decided as follows: a. In respect of the Annexure IV of Agenda item 8, recommending changes in the GST rate of the Services or for issuance of clarifications in relation of Services: i. The Council approved the Fitment Committee recommendations in respect of Sl. No 1 and 2 of the Annexure IV. The Council recommended to reduce rate of GST from 5% to 1.5% on supply of job work services in relation to diamonds and to reduce rate of GST from 18% to 12% on supply of all job work services which are not currently eligible for 5% rate, such as in engineering industry, except supply of job work in relation to bus body building. ii. The Council recommended in respect of Sl. No 3 of Annexure IV to reduce rate of GST on outdoor catering services, other than in premises having daily tariff of unit of accommodation of Rs. 7501 from present 18% with lTC to 5% without lTC. The Council also approved that the rate shall be mandatory for all kinds o....
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....liers paying GST at the rate of 5% on renting of vehicles, when supplied by person other than body corporate (LLP, proprietorship etc.) to body corporate entities. ix. In respect of Sl. No 10 of Annexure IV, the Council recommended to issue a clarification, clarifying the scope of the entry 'services of exploration, mining or drilling of petroleum crude or natural gas or both'. x. In respect of Sl. No 11 of Annexure IV, the Council recommended to issue a circular giving appropriate clarification in respect of Sl. No. 3(iv)(a) of the Notification 11/2017- Central Tax (Rate) dated 28.06.2017 that the explanation having been issued under Sub-section 3 of Section 11 of the CGST Act, 2017 was effective from 21.09.2017. xi. In respect of Sl. No 12 of Annexure IV, the Council recommended to delete the word 'Registered' appearing in Para 2A of the Notification No 11/2017- Central Tax (Rate) dtd 28.06.2017. xii. In respect of Sl. No 13 of Annexure IV, the Council recommended to insert an explanation in the Notification No 4/2018- Central Tax (Rate) dtd 25.01.2018 that "nothing contained in this notification shall apply where development ri....
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....x payment. xxii. In respect of Sl. No 26 of Annexure IV, the Council recommended to exempt services related to FIFA Under-17 Women's World Cup 2020 similar to existing exemption given to FIFA U17 World Cup 2017. xxiii. In respect of Sl. No 27 of Annexure IV, the Council recommended to exempt services related to "BANG LA SHASYA BIMA" (BSB) crop insurance scheme of West Bengal* Government xxiv. In respect of Sl. No 28 of Annexure IV, the Council recommended to exempt services related to life insurance business provided or agreed to be provided by the Central Armed Paramilitary Forces (under Ministry of Home Affairs) Group Insurance Funds to their members under the respective Group Insurance Schemes of these Central Armed Paramilitary forces xxv. In respect of Sl. No 29 of Annexure IV, the Council recommended to allow payment of GST on securities lending service under Reverse Charge Mechanism (RCM) at the merit rate of 18% and to clarify that GST on securities lending service for period prior to RCM period shall be paid on forward charge basis. IGST shall be payable on supply of these services and in cases where CGST/SGST/UTGST have been paid, s....
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....fficers' Meeting is attached as Annexure 5. He stated that the status of the Integration of EWB (e-Way Bill) with the FASTag was now placed for the information of the Council. He stated that the Council had earlier agreed, in principle, to the implementation of the recommendations of Committee of Officers (submitted on 2^nd August 2019) on use of RFID data for strengthening of e-Way bill system under GST. In pursuance of that decision, it was requested to NIC and GSTN to coordinate and develop a plan of action and implement it. The present status of the NETC-EWBS integration, as per Agenda item, was as follows: 38.1. Two meetings were held between officers of NHAI, GSTN and NPCl to discuss the modalities to integrate EWB with FASTag. It was also discussed that MoRTH was targeting 100% digital toll payments via FASTag by 1^st December, 2019 and it was suggested that GST Council might also consider preponing the date of FASTag mandate for EWB generation, from existing timeline of 1^st April 2020 to 1^st February 2020. Status of work done so far was as follows: i. Number of APls prepared by NIC: 5 (heartbeat check, FASTag data push, toll plaza data push, transaction da....
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....n of the Committee of Officers on Risk Based Management of taxpayers. The presentation would be shared with the States subsequent to the meeting. Further, the measures suggested in the Agenda item 10(i) were of administrative & procedural nature and the GSTN would also take time to develop these checks into the work flow. Thus, in principle approval of the Council would be required on priority. The Council agreed to discuss the recommendations of the Committee of officers as per Agenda item 10(i). Agenda Item 10(i): Interim recommendations of Committee of Officers on Risk Based Management of taxpayers under GST regime 41. The Secretary introduced the agenda and stated that it was discussed in the Officer's Meeting held on 19.09.19. The presentation was attached as Annexure 3. He stated that it was necessary to place the agenda before the Council as in principal approval of the Council was required on these administrative and procedural matters. He then requested the Shri Yogendra Garg, Principal Commissioner, GST Policy Wing, CBIC to present the agenda item. 41.1. Principal Commissioner, GST Policy Wing, CBIC stated that the Agenda item was proposed as a follow up of a....
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....of GSTN to get an offence database developed and all enforcement wings to share suspect GSTINs, DINs from GST and pre-GST periods in the said database. g. Till new return was rolled out, transpose information from GSTR-1, GSTR-2A and GSTR-3B to identify taxpayers claiming excess ITC or taking ITC of duty/taxes not paid. 41.3. The Principal Commissioner, GST Policy Wing, CBIC, while referring to his presentation, explained that in the recommendations at paragraph 41.2.(d) above, Rs. 20 lakh ITC per month should be read as ITC of Rs. 3 lakh per month (Turnover was wrongly mentioned as TTC). With these changes, he placed the above interim recommendations before the Council for consideration and for in-principle approval, as a lot of IT related procedural issues had to be taken into consideration before a final view was taken. 41.4. The ACS (Finance), Gujarat stated that under-invoicing was a major component of evasion. In the earlier regime, the inspectors could assess the market value, if they thought any item was under invoiced; but for ease of doing business, that provision had not been kept in GST. Thus, in Gujarat, the Hon'ble High Court had quashed the assessm....
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....9 with following implementation schedule: a) ANX-1/2 to replace GSTR-1/2A effective Oct'19 b) Run GSTR-3B and ANX-1 in parallel for 2 months for Monthly Filers c) GSTR-3B would be phased out from Jan'20 for Monthly Filers d) New Return would become functional for all taxpayers from Jan 2020. 43.2. The transition plan envisaging parallel run of old and new system had many challenges, summarised as below: (A) Refund of exports made on payment of IGST would be affected as it was dependent on GSTR 3B and GSTR 1 and would have to undergo multiple time changes which would be a challenge in itself. (B) Facility to amend invoices/documents GST ANX-1A by exporters would also be required to be provided as the exporters might need to make amendment in the earlier reported documents details for the period of transition. (C) ITC Refund was processed on the basis of GSTR-2A and would be impacted if GSTR-2A is not available for the period when GSTR-1 will not be there. In new regime, refund could be processed based on GST ANX-2 (data auto-drafted from GST ANX-1). Since, no GST RET-l would be filed during this period, GST ANX-1 ....
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....o decide on the date of implementation of the New Return, whether 1^st January 2020 or 1^st April 2020. He submitted that since lot of changes were envisaged in the New Return, it would be preferable not to disturb the last quarter of the Financial Year but to start the same from the beginning of a new Financial Year instead of launching it on 1^st January, 2020. 43.6. The Hon'ble Chairperson requested the Council to give their views. The Hon'ble Minister from West Bengal suggested the proposal of launching the New Return from 01.04.2020. However, the Hon'ble Minister from Punjab stated that although he agreed to the proposal but announcement should be made at a later stage as the tax payers might think that this proposal would again be delayed and would go in a lazy mode. The Council members discussed and concluded that the announcement regarding launch of New Return should be made in the press and the effective date should be 1^st April2020. 44. For Agenda item 11, the Council approved the proposal of New return system, earlier proposed from October, 2019, to be introduced from 1^st April, 2020, in order to give ample opportunity to taxpayers as well as the GSTN....
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.... was no validation of the bank account of the taxpayers claiming refund. f. The percentage of upload of RFD-0 1 B on GST portal by tax officers was low and even though they might have sanctioned/rejected claims in manual form (Form RFD- 06), the details were not available in the system. 45.3. The aforementioned limitations were sought to be addressed by making processing of refunds online along with disbursal of refund by single authority. The end-to-end online processing was ready at GST and the tax officer after processing the refund application would issue the payment order on GST System which would be available online to the disbursement authority for making payment of the refunds sanctioned by both the Central and the State tax authority through the Public Financial Management System (PFMS) of the Controller General of Accounts (CGA), Government of India. The PFMS system would ensure that the bank account details were validated before refund was sanctioned to the taxpayer. The settlement of accounts between the Centre and the States would happen through the office of the Pr. CCA. 45.4. The Secretary further informed that the testing of refund functionalities had....
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....rom JSON to enable small taxpayers to directly print from a mobile app to a compatible printer. 47.2. He also stated that the presentation in this regard was made by CEO, GSTN in the Officer's Meeting held on 19.09.2019. However, due to paucity of time the presentation could not be made before the Council. The same would be circulated to the members of the Council and the issue would be discussed in detail in the next Council meeting. The Presentation is attached as Annexure 5. Since implementation of e-invoice would require development, the Secretary placed the Agenda item before the Council for approval. 48. For Agenda item 13, the Council took note and approved the recommendations of the technical subgroup on e- invoice as mentioned in paragraph 4 7 .1. above. Agenda Item 14: Linking GST registration with Aadhar and proposed changes in the GST Law and GSTN System 49. The Secretary stated that a detailed presentation was made during the Officers' Meeting held on 19.09.19 regarding linking GST registration with Aadhar and proposed changes in the GST Law and GST System. He suggested that due to paucity of time the same would be circulated to the States after the....
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.... the Minister from Odisha was adding a new dimension and was suggesting that in addition to Aadhar being made mandatory for registration it should be also made mandatory for refund disbursal, which could be beneficial and required discussion. The Secretary placed the agenda for approval of the Council, to which Council agreed. 50. For Agenda item 14, the Council gave in-principle approval to link Aadhar with registration module of GSTN. Agenda Item 15: Update on change of share capital/ownership structure of Goods and Services Tax Network (GSTN) and transfer of shares of GSTN from Empowered Committee of State Finance Ministers (EC) & Non-Government Institution to Centre, State Governments and Union Territories 51. The Secretary stated that a detailed presentation was given by the CEO, GSTN in the Officers Meeting held on 19.09.19 regarding the latest update on change of share i capital/ownership structure of Goods and Services Tax Network (GSTN) and transfer of shares of GSTN from Empowered Committee of State Finance Ministers (EC) & Non- Government Institution to Centre, State Governments & Union Territories. The same is u attached as Annexure 5. He further stated that th....
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....and send the same to GSTN. 51.5. The Secretary, therefore, placed the proposal before the Council to take note of the above developments and issue necessary advisory/directions to the remaining State Governments and UTs to accept the proposal within 30 days from the receipt of Share Transfer Notice and to make the Share Purchase Consideration thereafter accordingly, execute necessary documentations including Shareholders' Agreement and send the same to GSTN. 52. For Agenda item 15, the Council took note of the developments and requested the States to complete the requirements for conversion of GSTN into 100% Government owned entity. It also agreed that the necessary advisory would be issued by the GST Council Secretariat to the remaining State Governments and UTs to accept the proposal within 30 days from the receipt of Share Transfer Notice and to transfer the Share Purchase Consideration thereafter; execute necessary documentations including Shareholders' Agreement and send the same to GSTN. Agenda Item 16: Minutes of 11^th and 12^th Meeting of Group of Ministers (GoM) on IT Challenges in GST Implementation for information of the Council and discussion on GSTN is....
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....uarter No. of cases where Profiteering established No. of cases where Profiteering not established No. of cases referred back to DGAP No. of cases Amount (Rs in crore) 41 36 27 13 10 4 50 13 4.38 56. For Agenda item 17, the Council took note of the performance of the National Anti-profiteering Authority. Agenda Item 18: Creation of the State and Area Benches of the Goods and Services Tax Appellate Tribunal (GSTAT) 57. 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 being constituted by the Government on the recommendation of the GST Council. He further stated that the Council in its 35^th Meeting held on 21.06.2019 recommended the creation of State/Area bench as per requests received from States and took note of constitution of Jammu & Kashmir GST Appellate Tribunal in terms of proviso to Section 109(6) of the CGST Act, 2017. 57.1. State and Area benches were accordingly notified vide Notification No. S.O. 3009(E) - [F.No. A.50050/ 150/2018-Ad.1C (CESTAT)] dated 21-08-2019 issued by Department of Revenue. He stated that req....
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....tatus of the erstwhile State of Jammu & Kashmir. He requested the Council to approve the proposal so that the process to amend those laws could be started. The Hon'ble Minister from Punjab enquired as to whether IGST or UTGST would be applicable with respect to Pakistan Occupied Kashmir. The Hon'ble Chairperson stated that the Parliament of India had already claimed rightfully that POK was an integral part of Jammu & Kashmir. Therefore, the point raised by Hon'ble Minister was valid and before framing any laws legal opinion shall be taken. 60. For Agenda item 19, the Council approved the proposed amendments to the CGST Act (as amended), UTGST Act, other States SGST Act and J&K SGST Act which were necessitated on account of changes in the status of the erstwhile State of Jammu & Kashmir. ] Agenda Item 20: Special Composition Scheme for Brick kilns, Menthol, Sand Mining Activities and Stone crushers 61. The Secretary stated that the Agenda was discussed during the Officers' Meeting held on 19.09.2019. He requested Principal Commissioner, GST Policy Wing, CBIC to apprise the Council about the issue. The presentation made during the Officers Meeting held on 19.....
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....genda item 20, the GST Council approved to refer the issue for examination in a joint meeting of the Law Committee and the Fitment Committee so as to decide the entire gamut of the proposed special Composition scheme for brick kilns, sand mining and stone crushers along with the consequent change in the GST rate, if any, and adoption of reverse charge mechanism for collection of GST on supply of mentha-oil. Agenda Item 21: Status of payment of Advance User Charges by the States and CBIC and interest on delayed payment 63. The Secretary stated that in the Officers' Meeting held on 19^th September 2019 in detail the agenda regarding the status of payment of Advance User Charges (AUC) by the States and CBIC and interest required to be paid by each of the shareholders on delayed payment. 63.1. As per the Agenda, GSTN had raised demand for the payment of AUC with the Central and State Governments for the FY 2017-18, 2018-19 and 2019-20. The status of AUC demanded and received as on 31^st August 2019 was as under: (Rs. in crores) Financial Year Amount demanded Amount received Amount Pending from States 2017-18- 1^st Instalment 306.01 306.01 0 ....
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....n FORM GST RFD-01A, who had filed Nil refund claims inadvertently earlier, in accordance with the draft Circular annexed to the said Agenda item. Agenda Item 22(ii): Circular No. 107/26/2019-GST dated 18.07.2019 on supply of Information Technology enabled Services (ITeS) -further clarification 67. The Co-Convenor the Law Committee introduced this Agenda item and stated that the existing Circular No.107/26/2019-GST dated 18.07.2019 issued to clarify various aspects of supply of Information Technology-enabled Services (ITeS) had reportedly led to denial of export benefit in some situations. It was, therefore, necessary to clarify the situation. The Council agreed to the same. 68. For Agenda item 22(ii), the Council approved to issue the Circular annexed to the Agenda item so as to clarify further doubts relating to supply of IT-enabled Services after issuance of Circular No. 107/26/2019-GST dated 18.07.2019. Agenda Item 22(iii): Single disbursement related amendments of Rule 91 of the CGST Rules 69. The Co-Convenor of the Law Committee introduced the agenda item and stated that several amendments, related to the single disbursement process, were carried out in Rule 92 ....
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.... ============= Document 1MINUTE BOOK Annexure 1 List of Hon'ble Ministers who attended the 37th GST Council Meeting on 20th September 2019 SI No State/Centre Name of Hon'ble Minister Charge 1 Govt of India Ms. Nirmala Sitharaman Union Finance Minister 2 Govt of India Shri Anurag Singh Thakur Minister of State (Finance) 3 Andhra Pradesh Shri Buggana Rajendranath Dr. Himanta Biswa Sarma Shri Sushil Kumar Modi Shri T.S. Singh Deo Shri Manish Sisodia 4 Assam 5 Bihar 6 Chattisgarh 7 Delhi 8 Goa Dr. Pramod Sawant 9 Goa 10 Gujarat Shri Mauvin Godinho Shri Nitinbhai Patel 11 12 Himachal Pradesh Jammu & Kashmir Shri Bikram Singh Shri K. K. Sharma 13 Karnataka Shri Basavaraj Bommai 14 Kerala Dr.T.M.Thomas Isaac Minister for Finance and Legislative Affairs Finance Minister Deputy Chief Minister Minister for Commercial Taxes Deputy Chief Minister Chief Minister Minister for Panchayat Deputy Chief Minister Minister (Industries) Advisor to Governor (I/c Finance) Minister for Home Finance Minister 15 Madhya Pradesh 16 Odisha Shri Brajendra Singh Rathore Commercial Tax Minister Finance Minister Shri Niranjan Pujari 17 Puducherry 18 Pun....
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....to Chairman, CBIC Shri Suresh Kumar Shri N Gandhi Kumar Shri Amaresh Kumar Shri Vikash Kumar Shri Siddharth Jain Shri Gaurav Singh Shri Rahil Gupta Shri Shikhar Pant Shri Parmod Kumar Shri Harish YN Dr. Sumit Garg Shri Vivekananda Reddy Shri Satheesh Kumar PA to Chairman, XV Finance Commission Director, DoR Joint Comm., GST Policy Wing Dy. Comm., GST Policy Wing Dy. Comm., GST Policy Wing DS, TRU-I, DOR TO, TRU-I, DOR TO, TRU-I, DOR OSD, TRU-II, DOR OSD, TRU-II, DOR Dy.Comm, TPRU, DOR Dy. Commissioner, CGST, Goa Asst. Commissioner, CGST, Goa CHAIRMAN'S INITIALS Page 67 of 118 SI No State/Centre MINUTE BOOK Name of the Officer Charge 35 GST Council 36 GST Council 37 GST Council 38 GST Council 39 GST Council 40 GST Council 41 GST Council 42 GST Council 43 GST Council 44 GST Council 45 GSTN 46 GSTN 47 GSTN 48 GSTN 49 Andaman & Nicobar Islands 50 Andhra Pradesh 51 Andhra Pradesh 52 Andhra Pradesh Arunachal Pradesh 53 54 Assam 55 Assam 56 Bihar 57 Chandigarh 58 Chhattisgarh 59 Delhi 60 Delhi 61 Goa 62 Goa 63 Goa 64 Goa 65 Gujarat 66 Gujarat 67 Gujarat CHAIRMAN'S INITIALS 68 Haryana 69 Haryana Shri Rajesh Ag....
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....y Ms Tinku Biswal Shri Mansur MI Shri N S. Maravi Shri Avinash Lavania, Ms Harshika Singh Shri Harish Jain Shri Rajiv Jalota Shri Dhananjay Akhade Ms Jaspreet Kaur Shri. Yumnam Indrakumar Singh Shri Arun kumar Kembhavi Shri L. Khongsit Shri Vanlal Chhuanga Shri Kailiana Ralte Shri Kesonyu Yhome Shri Y. Mhathung Murry Shri Wochamo Odyuo Shri Ashok Meena Shri Sushil Kumar Lohani Shri K. Sridhar Page 69 of 118 Principal Secretary (E&T) Commissioner of State Taxes & Excise Jt. Commissioner of State Taxes & Excise Secretary-cum-Commissioner, Commercial Taxes Department Special Secretary, Commercial Taxes Department Commissioner of State Tax Commissioner of Commercial Taxes (Karnataka) Commissioner of State Tax Deputy Commissioner (Internal Audit) Director Commercial Tax Addl. Commissioner Commercial Tax Deputy Secretary Commercial Tax Dept Asst. Commissioner State Tax Commissioner, State Tax Joint Commissioner, State Taxes Commissioner of Taxes Asst. Commissioner of Taxes Commissioner of Taxes Joint Commissioner of Taxes Commissioner & Secretary to the Govt. of Mizoram, Taxation Department Commissioner of State Tax Commissioner of St....
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.... MARKET Presentation for the 37th meeting of the GST Council September 20, 2019 Goa Agenda (1/2) Note No. Description Deemed Ratification of notifications issued post 36th GST Council Meeting S 4 Decisions taken by the GIC post 36th GST Council meeting 5 Recommendations of the IT Grievance Redressal Committee 7(i) 7(ii) Extension of last date of filing of appeal in Appellate Tribunal Exemption from filing of Annual Returns 7(iii) Issues pertaining to interpretation of Section 10 of the IGST Act, 2017 7(iv) Restrictions in availing input tax credit 7(v) Proposed clarifications on refund related issues 7(vi) E-way bill for movement of Gold 7(vii) Proposed amendment to sub-rule (5) of rule 61 7(viii) Extension of FORM GSTR-1 and GSTR-3B INATION TAX MARKET CHAIRMAN'S INITIALS Page 71 of 118 CHAIRMAN'S INITIALS MINUTE BOOK Agenda (2/2) Note No. Description 7(ix) / 22(iii) Proposal for amendments to CGST Rules, 2017 Amendments in GST Acts due to J&K Reorg. Act Special Composition Scheme for Brick kilns etc. Clarification on wrongly filed Nil Refund 19 20 22(i) 22(ii) Circular on treatment of IT/ITeS Services 22(iv) Clarification on Post S....
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.... Tax (Rate) NATION TAX MARKET Agenda Item 4:GIC decisions post 36th GST Council Meeting (1/3) Decisions of 31st GIC meeting (13.08.19) ⚫ Waiver of recording of UIN on invoices for Foreign Diplomatic Missions / UN Organizations ° ✓ Corrigendum to Circular No. 63/37/2018-GST issued on 06.09.20.19 Empower jurisdictional Commissioner to exercise powers for extension of time for receiving back raw materials sent for job work related issue under Section 143, CGST Act, 2017 ✓ Removal of Difficulties Order yet to be issued as Law Ministry has opined against issuance of the RoD ⚫ Proposal to waive the requirement of filing declaration in FORM ITC-04 for the Financial Year (2017-18 and 2018-19) ✔Notification No. 38/2019 - CT dated $1.08.19 issued • Extension of date for filing of FORMS TRAN-1 and TRAN-2 for cases recommended by the ITGRC ✓ Matter to be discussed in the GST Council Meeting INATION TAX MARKET CHAIRMAN'S INITIALS Page 73 of 118 as CHAIRMAN'S INITIALS MINUTE BOOK NATION TAX MARKET Agenda Item 4: GIC decisions post 36th GST Council Meeting (2/3) Decision by circulation (17.08.19) ⚫ Delay in introd....
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.... TRAN-1 cases (including 327 cases where writ petitions have been filed in various High Courts) were presented and discussed in IT-GRC out of which a total of 1057 cases have been approved. • Total 259 TRAN-2 cases have also been approved. TRAN 1/TRAN 2 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/TRAN 2. 10 Page 75 of 118 J CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE BOOK INATION TAX MARKET Agenda Item 5: ITGRC Recommendations (3/3) Pending cases with GSTN • Around 75 cases of TRAN-1 and 149 cases of TRAN-2 received from Nodal ° officers till 31.03.2019 (through e-mail/letters) have been technically analysed and will be presented before the next IT-GRC for decision Apart from the above around 35 court cases are also under process of analysis Proposal for extension of dates for approved taxpayers The last date of filing TRAN-1 and TRAN-2 for the taxpayers approved was 31-03-19 and 30-04-19 respectively ⚫ The dates are now proposed to be extended until 31-12-2019 and 31-01-2020, respectively, to enable filing of TRAN-1/TRAN-2 for ....
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....9142 201460 2.18% 38.07% 4 10.00 Lakhs to 20.00 Lakhs 712554 265557 2.87% 37.27% 5 20.00 Lakhs to 30.00 Lakhs 469566 167116 1.80% 35.59% 6 30.00 Lakhs to 40.00 Lakhs 338846 114754 1.24% 33.87% 7 40.00 Lakhs to 50.00 Lakhs 260051 84491 0.91% 32.49% 8 50.00 Lakhs to 70.00 Lakhs 377170 116449 1.26% 30.87% 9 70.00 Lakhs to 1.00 Cr 360810 104090 1.12% 28.85% 10 1.Cr to 1.5 Cr 342789 87443 0.94% 25.51% 11 1.5 Cr to 2.0 Cr 201322 41483 0.45% 20.61% 12 2.0 Cr. To 3.0 Cr 233793 39654 0.43% 16.96% 13 3.0 Cr to 4.00 Cr 133157 21769 0.24% 16.35% 14 4.0 Cr to 5.0 Cr 87642 14252 0.15% 16.26% 15 5.0 Cr to 8.0 Cr 146719 23273 0.25% 15.86% 16 8.0 Cr to 10.0 Cr 52956 8273 0.09% 15.62% 17 10.0 Cr to 20.0 Cr 111063 16975 0.18% 15.28% 18 20.0 Cr to 50.0 Cr 69032 10292 0.11% 14.91% 19 50.0 Cr to 100 Cr 23997 3550 0.04% 14.79% 20 100.0 Cr to 500 Cr 20236 3105 0.03% 15.34% 21 Above 500 Crores GRAND TOTAL 5232 6417465 991 0.01% 18.94% 2166557 (33.76%) 23.40% 33.76% 14 Note: only Active Tax Payers and never opted for composition in 2017-18 have been considered CHAIRMAN'S INITIALS Page 77 ....
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....g Reconciliation Statement in States with Nil turnover :There may be cases where a taxpayer is registered in more than one State, but he may have nil turnover in one State while all his taxable turnover is in another State. In such cases, to save on the cost of getting his books of account audited for the State where turnover is NIL, it has been recommended that filing of reconciliation Statement in FORM GSTR-9C may be exempted for GSTINS with nil turnover. 17 Agenda Item 7(iii): Issues pertaining to interpretation of Section 10 of the IGST Act INATION TAX MARKET ⚫ A recipient from State S1 procures over the counter supply from State S2 and gives the GSTIN/address of State S1 in the invoice. There has been representations seeking clarification whether the supply is chargeable of CGST/SGST or IGST Sub-section (1) of Section 10 of the IGST Act provides that the place of supply of goods, where the supply involves movement of goods, whether by the supplier or the recipient or by any other person, shall be the location of the goods at the time at which the movement of goods terminates for delivery to the recipient • It is proposed that a circular may be i....
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....atched credit 12% of total credit in the system is umatched 170261 FY 2017-18 GSTR-38 Credit GSTR-2A credit FY 2018-19 Difference All figures in Crores. The dataset used for the analysis have only those taxpayers which have more credit in their FORM GSTR-3B than their FORM GSTR-2A. Negative values have been ignored. 21 Agenda Item 7(iv): Insights from difference between GSTR-3B and GSTR-2A (4/4) Taxpayers percentage across various turnover slabs shows consistent trend over the two years.. 45% 19 130 % of taxpayers in a particular turnover 139 0-20 Lacs 20 Lacs to 50 50 Lacs to 1 Cr 1 Cr to 1.5 Cr 1.5 Cr to 2 Cr 20 to 5 Cr Except the two outliers, it is observed that higher Lacs 2396 296 29 unmatched credit is being availed at higher turnover... % of contribution of every turnover slab to total 3B/2A difference 1010 4566 5 to 10 Gr to 25 25 Cr to 50 Cr 50 Cr to 100 Cr Above 100 16 1% 0-20 Lacs Lars to 50 Lacs to 1 Cr 10 to 15r 150 to 20 20 to 5 Cr FY 2017-18 FY 2018-19 22 NATION TAX MARKET Page 81 of 118 N CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE BOOK NATION TAX MARKET Agenda Item 7(v): Clarification on refund related issues ....
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....d in the server and only authorised officials have access to this data-though the angadias (transporter) would get to know about content and value of package Accordingly, serial numbers 4, 5 and 8 of Annexure to rule 138(14) may be omitted Page 83 of 118 26 CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE BOOK NATION TAX MARKET Agenda Item 7(vii):Proposed amendment to Rule 61(5) of CGST Rules, 2017 (1/3) • Hon'ble High Court of Gujarat in its order dated 24.06.2019, in the case of AAP & India Vs Union of India, has quashed Para 3 of the press release dated 18th October 2018 ⚫ The press release clarified that the last date for availing input tax credit in relation to the invoices issued by the corresponding supplier(s) during the period from July 2017 to March 2018 is the last date for the filing of return in FORM GSTR-3B for the month of September, 2018 ⚫ The Court has opined that FORM GSTR-3B is not a return under sub- section (1) of section 39 of the CGST Act and FORM GSTR-3 is the return under the said section. Therefore, the last date for availment of credit shall be in accordance with FORM GSTR-3 and not FORM GSTR-3B 27 Agenda Item 7....
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....iled by 11th of succeeding month Taxpayers with aggregate turnover less than Rs. 1.5 Crore may furnish quarterly return for the months of October, November and December 2019 to be filed by 31st January 2019 Page 85 of 118 30 CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE BOOK Agenda Item 7(ix): Amendments in GST Rules (1/3) INATION TAX MARKET Rule to be amended Rule 21A Rationale In case of revocation of suspension of registration, provisions of clause (a) of sub-section (3) of section 31 of the CGST Act in respect of the supplies made during the period of suspension and the procedure specified in that behalf shall apply. It is proposed to amend and insert sub-rule (5) in rule 21A to specify the same. âš« Rule 83A There is an ambiguity in the CGST Rules in respect of provisions of rule 83A(1) vis-Ã -vis rule 83A(6)(i). Presently the examination is to be conducted only for practitioners on whom clause (b) of sub-rule (1) of rule 83 of the CGST Rules apply (practitioners in existing law). Rule is amended to remove such ambiguity. Rule 97 Sub-rule (4) of rule 97 prescribes that the Government shall constitute a Standing Committee which shall make reco....
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....4) NATION TAX MARKET ⚫ Jammu and Kashmir Reorganization Act, 2019 seeks to reorganize the existing State of Jammu and Kashmir for formation of Union territory of Ladakh without legislature and Union territory of Jammu and Kashmir with Legislature ⚫ The Act has received the President's assent and is expected to be notified from 31st October 2019. Consequent changes in the CGST Act, 2017 (as amended), UTGST Act, other States SGST Act and J&K SGST Act are placed for approval of the Council ⚫ These amendments have been recommended by the Law Committee and inputs of the J&K SGST Departments have also been incorporated Page 87 of 118 34 CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE BOOK Agenda Item 19: Amendments in GST Acts due to J&K Reorg. Act (2/4) Changes in CGST Act: INATION TAX MARKET Amendment in Section 2(114) to incorporate Ladakh in the definition of Union territory Amendment in Section 109(6) to enable the Central Government to establish a State Bench of the Appellate tribunal in J&K Changes in UTGST Act: Amendment in Section 1(2) and 2(8) to incorporate Ladakh in the definition of Union territory Changes in SGST Act: •....
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....ITIALS MINUTE BOOK Agenda Item 20: Special Composition Scheme for Brick kilns etc. (2/2) âš« The recommendation of the Committee of Officers are as follows:- 9 INATION TAX MARKET Exclusion from normal composition scheme and introduction of a special composition scheme for taxpayers supplying Brick kilns, Sand Mining Activities and Stone crushers with an increased rate of 6% (similar to the rate for the composition scheme introduced for services/residual suppliers vide notification No. 2/2019-Central Tax (Rate), dated 07.03.2019); Increasing the rate for normal taxpayers supplying Brick kilns, Sand Mining Activities and Stone crushers from the current rate of 5% to 12%; and âš« Notifying the supply of Mentha-oil under the provisions of sub-section (3) of section (9) so that tax shall be paid on reverse charge by the recipient of such supplies. âš« The recommendations are placed before the GST Council for decision 39 INATION TAX MARKET Agenda Item 22(i): Clarification on wrongly filed Nil Refund (1/2) âš« Several registered persons have inadvertently filed a NIL refund claim for a certain period on the common portal in FORM GST RFD-01A inspite of....
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....iteria /features for a particular services to be classified a services as intermediary service 42 Page 91 of 118 CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE BOOK Agenda Item 22(ii): Circular on treatment of IT/ITeS Services (2/2) INATION TAX MARKET ⚫ It has been represented that these features were available in the erstwhile service tax regime. It is felt that the same features may help ascertain whetehr a service is an intermediary service or not. • Number of parties: Intermediary service involves minimum three parties and the service provider providing intermediary service is typically involved with two supplies at any one time • ⚫ Nature and value: An intermediary cannot alter the nature or value of the services or goods, the supply of which he facilitates on behalf of his principal, although the principal may authorize the intermediary to negotiate a different price Separation of value: The value of an intermediary's service is invariably identifiable from the main supply of service or goods that he is arranging. Generally, the amount charged by an agent from his principal is referred to as "commission". • Identity and ti....
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.... the whole issue requires holistic examination In the interim, recommendation is to rescind Circular No. 105/24/2019-GST dated 28.06.2019 ab initio 45 NATION TAX MARKET Agenda item 10(i): Risk Based Management of Taxpayers under GST (1/A+ committee was set up for risk based management of taxpayers under GST by the GST Council. The committee has given the following recommendations: • To initiate the Aadhar based verification process of all new taxpayers. • Develop modalities and timelines for similar verification of all the existing taxpayers. In absence of Aadhar validation, compulsory physical verification of the premises ⚫ GST Council Secretariat with help of GSTN to get an offence database developed and all enforcement wings to share suspect GSTINS, DINS from GST and pre-GST periods in the said database. Page 93 of 118 46 NL CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE BOOK Agenda item 10(i): Risk Based Management of Taxpayers under GST NATION TAX MARKET (2/Por the risky new taxpayers (for example Proprietor with new PAN having no Income Tax or Business turnover, no financial credentials) • Restrict ITC on supplies mad....
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....uring April - August, 2019 (Figures in Crore) Apr-19 May-19 June 19 July'19 Aug'19 CGST 21,163 17,811 18,366 17,912 17,733 SGST 28,801 24,462 25,343 25,008 24,239 IGST 54,733 49,891 47,772 50,612 48,958 Domestic 31,444 25,015 25,792 26,366 24,140 Imports 23,289 24,875 21,980 24,246 24,818 Comp Cess 9,168 8,125 8,457 8,551 7,273 Domestic 8,115 7,172 7,582 7,754 6,432 Imports 1,053 953 876 797 841 Total 1,13,866 1,00,289 99,939 102,083 98,202 Page 96 of 118 JAYNA BOOK DEPOT 18% 16% 14% 12% 10% 8% 6% 4% 0% Sep-18 Oct-18 %8 Estd. 1949 JAYNA 17% 120000 MINUTE BOOK Trends in total gross GST Revenues (* crore) 115000 110000 105000 100000 95000 90000 85000 80000 Apr May Jun 12% -2017-18 -2018-19 -2019-20 Jul Jul Aug Sep Oct Nov Dec Jan Feb Mar Month-on-month growth in total gross GST Revenues 14% 13% 16% 10% 7% 5% %9 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Page 97 of 118 વીડ CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE BOOK Net IGST Balance Fig. In Crore Month April'19 May 19 June 19 July 19 August'19 Collections 54,733 49,....
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....ed Till 8th September % Returns filed % 20th May'19 April'19 10233313 6061978 59.24% 8324486 81.35% 20th June'19 May'19 10286063 6518408 63.37% 8277220 80.47% 20th July'19 June'19 10358399 6688664 64.57% 8153056 78.71% 22nd Aug'19 July'19 10426762 7080475 67.91% 7736519 74.20% Page 100 of 118 Karnataka *** FY 2019-20 Chhattisgarh Uttarakhand Jardim and Kashmir п God Hemachal Pradesh Puniata Puducherry JAYNA BOOK DEPOT Estd. 1949 JAYNA MINUTE BOOK Return filing (GSTR-3B) till due date and till date 90% 80% -81.35% 80.47% 78.71% 70% 74.20% 67.91% 63.37% 64.57% 60% -59.24% 50% 40% 30% 20% 10% 0% April 19 May'19 June'19 -Till due date -Till 8th September July'19 Page 101 of 118 CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS STC MINUTE BOOK Annexure 5 INATION TAX MARKET 37th GST Council Meeting SIN GN 20th Sept 2019 Agenda No. 9: Status on RFID EWBS Integration Page 102 of 118 JAYNA BOOK DEPOT MINUTE BOOK Esta. 1949 JAYNA Recommendations of Committee of Officers • Report of Committee of Officers finalized on 02nd August 2019 9 Salient recommendations: ⚫ All States with existing RFID system....
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....OTAE2343 10-02-2019 0455:06 PM Recycling of e-way bills with same Vehicle 503 State Location ANDHRA PRADESH S.No. Date & Time E-Way Bill RFID based on Fastags at Toll Plaza NIC Censie Date Anantapuram Kaser Mar-2019 Go EWB Number Vehicle Entered Date: EWB Validity APC2TA3366 1 12-03-2019-01:1031 AM 421085367390 10-03-2019 04:14:00 AM 23-03-2019 2 15-02-2019-07 20:01 PM 3 22-03-2019 06:57:12 P 4 24-03-2019 10:43:57 PM APORTB4554 6 12-03-2019 02:38:50 AM 15-03-2019 0654:37 PM 311054522456 09-03-2019 11:53:00 PM 01-04-2019 APORTC3447 7. 17-03-2019 04:35:06 PM 651080012002 15-03-2019-03-06:00 PM 01-04-2010 a 20-03-2019 07:25:19 PM APOZTC4298 9 13-03-2019 00:32:26 PM 131111522300 12-08-2019 02:22:00 AM 15-03-2019 10 20-03-2019 10:01:26 PM 151114600131 22-03-2019 10:25:00 PM 26-03-2019 37 Page 104 of 118 Sughout NATION TAX MARKET MINUTE BOOK Estd, 1949 Recycling of e-way bills with different Vehicles JAYNA JAYNA BOOK DEPOT 0 home E-Way Bill RFID based on Fastags at Toll Plaza National NICE INATION TAX MARKET MACHIYA PRADESH S.No Vehicle Number Usertion Cate Guna Guna Feb-2019 Date & Time EWS Number Vehicle En....
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....age 106 of 118 Functionalities Beta Ready Status Offline Prototype May-19 Completed GST ANX-1 Offline - Sahaj. Sugam, Normal Jun-19 In Beta Jul-19 GST ANX-1 JSON upload GST ANX-2 JSON download GST ANX-2 JSON upload GST ANX-2 offline Purchase Register Matching Jul-19 In Beta Jul-19 In Beta Jul-19 In Beta tool GST ANX-1 online - Summary Generation and View Jul-19 In Beta 110 JAYNA BOOK DEPOT Estd. 1949 JAYNA MINUTE BOOK Challenges in the Transition option 1. Transition plan has challenges from refund perspective: If there is no GSTR-1, there would be no GSTR-2A. ITC refund would be impacted if GSTR-2A is phased out. 2. In new regime, refund can be processed based on GST ANX-2 (data auto-drafted from GST ANX-1) as ANX-1 is frozen on filing GST RET-1. Since no GST RET-1 is filed during this period, GST ANX- I will not be frozen till Jan 2020. Thus there will be scope of change in GST ANX-1 after refund is processed in case GSTR-3B is not integrated with GST ANX-1 3. Amendment of invoices through GST ANX-1A is required at the time of Go-live for Export refund. This use case is extremely complex and cannot be implemented by 1st Oct 2019 4. Reconc....
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....t date of upload of ANX-1 may be staggered as 10th and 13th for them. To ensure smooth filing on last three days, accept/reject action of invoices appearing in ANX-2 may be allowed upto 17th and not on 18/19 and 20th of the next month. Page 108 of 118 13 14 JAYNA BOOK DEPOT Estd. 1949 B JAYNA MINUTE BOOK Agenda No 12 Integrated Refund System with Disbursal by Single Authority Goods exported on payment of IGST Fully automated No application Within 6 to 7 days of both return filing Rs 96,456 Crores sent to ICEGATE Rs 93, 416 disposed (97%) Refund Goods/Services exported without Goods/Services Supplied to SEZ Refund of excess cash balance Inverted duty Others payment of IGST Tax Auth Application filed on the Portal State Centre Total Number 3,61,320 2,24,051 Amount 60,466.62 Applications for which provisional/ final order passed Number Online Application filing but manual processing (All amounts in Rs. Crores) Amount rejected % of amount Sanctioned or rejected Amount sanctioned Amount Amount 1,94,872 35,290.50 2,043.80 61.74% 55,024.30 1,29,694 46,848.94 1,975.44 88.73% 5,85,371 1,15,490.92 3,24,566 82,139.44 4,....
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....NA BOOK DEPOT Estd. 1949 JAYNA MINUTE BOOK Refund Applications: Export without payment and Inverted duty FY 18-19 REFUND PERIOD: 2018-2019 EXPORT WITHOUT PAYMENT INVERTED DUTY STRUCTURE 56 age of SLAB ON TURN OVER based No. of Refund age of Sharing Page of Shering on turnover of FY 2018-19 Applications NIL No. of Tax Payers) Amount Claimed Amount ClaiMed] No. of Refund Applications Sharing [No. Mage of Shering of Tax Payers) Amount Claimed (Amount Claffed) 53 0.08% 1.95 0.01% 40 0.10% 0.57 0.00% Upto 5 Lakhs 128 0.18% 3.66 0.01% 99 0.24% 1.32 0.01% 5 to 10 Lakhs 142 0.20% 3.00 0.01% 96 0.23% 1.87 0.02% 10 to 20 Lakhs 365 0.53% 4.67 0.01% 229 0.56% 1.83 0.02% 20 to 30 Lakhs 438 0.63% 7.40 0.02% 260 0.63% 2.47 0.02% 30 to 40 Lakhs 451 0.65% 9.02 0.03% 313 0.76% 4.25 0.04% 40 to 50 Lakhs 477 0.69% 8.18 0.02% 362 0.08% 4.09 0.04% 50 to 70 Lakhs 903 1.30% 23.70 0.07% 721 1.75% 11.48 0.10% 70 Lakh to 1 Crore 1358 1.95% 37.19 0.11% 1239 3.0196 22.80 0.20% 1 Crore to 1.5 Crores 1992 2.87% 58.50 0.17% 1964 4.76% 40.56 0.35% 1.5 Crores to 2 Crores 2020 2.91% 64.53 0.18% 1725 4....
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....tems Receives: • Digitally signed B2B APIs IRN module invoice ⚫E-Way bill GSP, ASP, *Data to be entered Outward Detailed Invoice data Supplies e-Way Bill Module Invoice Data Transmission Inward Supplies update Summary Invoice data update Apps GST system Page 114 of 118 B2B APIs 125 Receives SMS Buyer Digitally signed invoice ⚫ E-Way Bill 28 JAYNA BOOK DEPOT MINUTE BOOK Estd. 1949 JAYNA Approval of Basic Features of the Solution 24X7 operations without any downtime: ⚫ The proposal is to make an invoice legal only if it has a unique reference number and signed by Central portal. That demands no downtime of the system. Hence, multiple agencies to report invoice and sign the same and generate QR Code. Scalability: • Multiple options for uploading the invoice (mobile; accounting software, Excel tool etc.)( ⚫ Multiple agencies to run the system in parallel. Starting first with NIC's system. ⚫ Highly scalable to take care of the increase in number of invoices for next 7 to 9 years with possibility to support B2C transactions, if Government decides to extend it to B2C invoices. Consistency: The unique number....
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....d in case of • the person who is not resident/citizen of India, For existing registrant persons of the above category covered in Phase-1, a screen will be provided for e-KYC authentication from Aadhaar Page 116 of 118 JAYNA BOOK DEPOT Estd. 1949 JAYNA Authentication Process MINUTE BOOK Where Aadhaar is provided • To maintain privacy of promoters, GST System shall send "link" to the concerned persons at their e-mail and mobile to enter Aadhaar and OTP, if the promoter is not willing to share Aadhaar with Auth Signatory. On successful authentication, demographic data of the persons shall be fetched from Aadhaar to GST System, Registration process thereafter, will remain the same as it is today In cases where promoters decline to provide Aadhaar details: Site survey will be done and identification documents will be verified. In such cases, 3 working days upper cap will not be applicable (no deemed registration). Work on changes in existing system has just started. Estimated to become operational from 1st January 2020. Agenda 15 Update on Change of Share Capital/Ownership Structure of GSTN and transfer of shares of GSTN from EC & Non-Government Ins....