TaxTMI 
TaxTMI 
Minutes of the 16th GST Council Meeting held on 11th June 2017
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....g of the GST Council 3. The Hon'ble Chairperson welcomed all the Hon'ble Members to the 16^th Council Meeting. Discussion on Agenda Items Agenda Item 1: Confirmation of the Minutes of the 15^th GST Council Meeting held on 3 June, 2017: 4. The Hon'ble Chairperson invited comments of the Hon'ble Members on the draft Minutes of the 15^th Meeting of the Council (hereinafter referred to as 'Minutes') held on 3 June, 2017 before its confirmation. 4.1.1. The Secretary informed that a written request had been received from the Commissioner of Commercial Tax (CCT), Odisha, to replace the version of the Hon'ble Minister from Odisha recorded in the following paragraphs of the Minutes: (i) In paragraph 9.8.8, to replace the version recorded in the Minutes ('the Hon'ble Minister from Odisha suggested that handloom should be charged to Nil rate of tax ........ that the products of handloom were used by common people') with the following version: 'Handloom fabrics and handicraft goods were exempt in Odhisha. Livelihood of more than 3.5 lakh artisan families depended on it. Handloom product were not only in demand outside the State, but were also used by the common people. He sta....
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....the morning today, Shri Raghwendra Kumar Singh, Commissioner, Commercial Taxes (CCT), Madhya Pradesh, had pointed out that in paragraph 9.10.4 of the Minutes, the statement attributed to the Hon'ble Minister from Madhya Pradesh regarding expressing a preference for taxing gold at the rate of 5% was actually made by the CCT, Madhya Pradesh, and suggested to make a suitable modification in the paragraph to this effect. The Council agreed to this suggestion. 4.1.4. The Hon'ble Minister from Punjab stated that in paragraph 4.4.1 with reference to the discussion on licence fee for liquor in the GST regime, it was recorded that 'the ACS, Haryana, stated that the decision of the Hon'ble Chairperson was that for the transition phase some decision would be taken so that the States did not lose financially'. He observed that the Hon'ble Chairperson had also agreed to the suggestion of the ACS, Haryana, and this should be recorded in the Minutes. The Council agreed to this suggestion and to record the following: 'The Hon'ble Chairperson observed that the officers of the Central Government and the State Governments should sit together and take a view on the issue'. 5. In view of the abov....
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....s Rules; (ii) Accounts and Records Forms: 6.1. Introducing this Agenda item, the Secretary stated that the draft GST Rules on Accounts and Records were put in the public domain for comments of the stakeholders. He stated that based on the comments received, the Law Committee of Officers had suggested certain changes to the Rules. He added that two additional changes were proposed during the meeting of officers of the Central Government and the State Governments held on 11 June, 2017 and these were circulated in writing to the Hon'ble Members of the Council just before the start of the Meeting. He invited Shri Upender Gupta, Commissioner (GST Policy Wing), CBEC, to brief the Council about the changes proposed. The Commissioner (GST Policy Wing), CBEC, stated that four important changes had been proposed by the Law Committee and two changes were proposed today during the officers' meeting which were as follows: (i) Sub-rule rule (2) of Rule provided that accounts and records shall be maintained separately for each activity like manufacturing, trading and provision of services. The trade had represented that this would be very cumbersome and the relevant rule was proposed ....
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....nsit by him along with GSTIN of the registered consignor or consignee, for each of his branches. 6.2. After discussion, the Council approved the Rules and related Forms on Accounts and Records including the changes made therein. 7. For agenda item 2, the Council approved the GST Rules on Accounts and Records and the related Form along with the amendments proposed by the Law Committee of Officers and during the officers' meeting held just prior to the Council meeting on 11 June 2017 as enumerated at 7aragraph 6 above. Agenda Item 3: Rate adjustments, if any, based on representations received from Trade and Industry: Discussion on GST rates for goods: 8.1. Introducing the above agenda item, the Secretary recalled that during the 15^th Meeting of the Council (held on 3 June, 2017), it was decided that all representations regarding reduction in rates were to be submitted within a day or two of the conclusion of the 15^th Council Meeting, and these were to be considered by the Fitment Committee and its recommendations were to be placed before the Council in its next Meeting. He informed that the Fitment Committee met on 7-8 June, 2017 and examined the representations rece....
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....n and expressed that this would help the SMEs. The Hon'ble Minister from Maharashtra suggested that the turnover availing Composition scheme for manufacturers and restaurants should be increased to Rs. 1 Crore. The Hon'ble Minister from Telangana supported this proposal. The Secretary stated that the Composition scheme might not be attractive to relatively bigger units as they could not avail the input tax credit on their purchases and their buyers could not get input tax credit on sales made by them. The Hon'ble Minister from Chhattisgarh stated that the traders had the choice not to opt for the Composition scheme. The Secretary invited comments from the officers as well. The Hon'ble Chairperson stated that discussion on this subject should also cover the revenue aspect. 8.4. Shri R.K. Tiwari, Additional Chief Secretary (ACS), Uttar Pradesh, stated that his State had a large number of SMEs falling within the annual turnover of Rs. 1 crore and if all of them opted for Composition scheme, they would suffer a very large-scale revenue loss to the tune of about Rs. 5.000 crore. The Hon'ble Deputy Chief Minister of Gujarat stated that his State also had a very large number of SMEs. H....
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....marble was kept very high, it would lead to large scale evasion of tax and there were also chances of the consumer shifting from local marble to imported marble. The Hon'ble Minister from Uttarakhand suggested to keep the turnover limit of Composition scheme at Rs. 1.5 crore and to reduce the rate of tax to 1% as otherwise the SME sector would collapse. The Hon'ble Chairperson enquired regarding the revenue impact of this suggestion. The Hon'ble Minister from Uttarakhand stated that if the rate was kept low, the turnover of these units should increase and more revenue would come to the State. The Hon'ble Minister from West Bengal stated that there was a need to strike a balance between safeguarding revenue for the States and to protecting the interest of SMEs. He expressed his support for the proposal made by the Hon'ble Minister from Chhattisgarh. He observed that manufacturers with turnover below Rs. 1.5 crore did not pay any Central Excise duty but units with turnover above Rs. 10 lakh were paying VAT, and hence there was justification to levy some tax on them. He suggested that the turnover limit for Composition scheme could be kept at Rs. 75 lakh. He observed that if the schem....
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....placed before the Council. He observed that if a dealer had a daily turnover of Rs. 15,000, he would cross the threshold of Rs. 20 lakh and would start paying tax. He observed that 28% tax rate for hotels with room rent above Rs. 5000 per night would affect the business of hotels and suggested that hotels with rent between Rs. 5,000 and Rs. 10,000 per night should be charged at the rate of 18% and hotels with room room rent above Rs. 10,000 per night should be charged at the rate of 28%. The Principal Secretary, Telangana, stated that the main problem was in calculating the incidence of tax. He informed that the granite industry was willing to pay tax at the rate of 14.5% but for units with turnover below Rs. 1.5 crore, the tax rate of 28% was very high. He suggested that to calculate the tax incidence for units with turnover below Rs. 1.5 crore, only the tax incidence of VAT should be taken into account and as a general principle, such units should be charged tax at one slab lower than the presently proposed rate. The Hon'ble Minister from Kerala stated that the revenue of the consuming State should also be protected and the proposed reduction in the rate of ax would adverse....
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....n apprehension that this gave an opportunity to the units to split their books of account. He further stated that if the Composition limit was increased to Rs. 1 crore, their State would suffer a loss of revenue of about Rs. 7,000 to Rs. 10,000 crore. He suggested that if the turnover limit under the Composition scheme was proposed to be increased to Rs. 1 crore, the Composition rate for manufacturing units should be fixed at the rate ranging from 7% to 10% to make the rate revenue neutral. 8.11. The Hon'ble Deputy Chief Minister of Delhi pointed Out that for manufacturers of goods like electrical fittings, footwear and toys, there was strong competition from goods imported from China. Even a slight increase in the rate of tax would make them uncompetitive vis-à-vis the imported goods leading to closure of SMEs in Delhi which in turn would lead to loss of jobs and decline in consumption and people might even move out of Delhi. The Hon'ble Deputy Chief Minister of Gujarat stated that imports from China would also attract IGST, and therefore, they would not become cheaper. The Hon'ble Chairperson enquired whether the proposal was to increase the Composition limit only for m....
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....e calculated the tax incidence on this sector on a Compounding basis pre-GST, a 3O% value added estimation with 14.5% VAT rate of products made by taxpayers of this sector (as had been mentioned by the Principal Secretary from Uttar Pradesh) translated to 4.35%. If embedded Central Excise duty on the products were added to the tune of about 4%-5% even on a conservative estimate, the tax incidence on this category of tax payers on a compounding basis pre-GST came to 8%-9%. He further mentioned that against this, the Council had already approved a Compounding rate of 2% on taxpayers with turnover below Rs. 50 lakh. Any further increase in threshold for compounding along with the fact that compounding option encouraged taxpayers to split up their units, as the Hon'ble Deputy Chief Minister of Gujarat mentioned, could have serious adverse revenue implications. 8.14. The Hon'ble Minister from Chhattisgarh stated that in order to increase employment in the States. 10 year Sales Tax holiday for large industries was part of the industrial policy of almost all States. Under the GST regime too, to encourage industrial investment, many States were planning to reimburse SGST portion to the ....
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....ounded a note of caution that increasing the turnover limit could lead to traders splitting their units to remain within the threshold limit. The Hon'ble Minister from West Bengal stated that a turnover limit of Rs. 1 crore annually for Composition scheme appeared acceptable though as per their rough calculation, ¡t could lead to loss of revenue of about 3%--4%. He observed that the Composition scheme was voluntary arid many taxpayers in his State chose not to opt for this scheme. As regards rates of tax, lie suggested that traders could be taxed at the rate of 1%-2% and manufacturers at the rate of 3%-4%. The Hon'ble Chairperson stated that rough calculation indicated that products in the 28% rate slab would, in terms of revenue, break even if the Composition rate was fixed at 5% and products in the 18% rate slab would break even, if the Composition rate was fixed at 3%. The Hon'ble Minister from West Bengal stated that this could be a sensible approach but it could lead to complications in the tax regime. 8.16. The Hon'ble Chairperson observed that as rates were prescribed in the law (Section 10 of the CGST Act and the SGST Acts), changing the rate of Composition would r....
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....over limit for Composition was kept at Rs. 1 crore, then a negative list of manufacturing sectors could be kept but if the turnover threshold was Rs. 75 lakh, the revenue loss would not be very high and the Council could take a decision regarding keeping a negative list of manufacturing sectors. The Hon'ble Minister from Telangana once again suggested to keep the turnover threshold for the Composition scheme at Rs. 1 crore. The Hon'ble Chairperson suggested that since the rates under the Composition scheme could not be changed, the annual turnover threshold could be kept at Rs. 75 lakh for all taxpayers eligible for the scheme and to have a list of manufacturers who shall be ineligible for Composition scheme. The Council agreed to these proposals. 8.16A. The Hon'ble Minister from Tamil Nadu circulated a written speech during the meeting. He thanked the Council for having agreed to the request of Tamil Nadu regarding the rates of tax on footear; palmyra jaggery; glass for corrective spectacles and cashew nut. He also commended the decision to levy tax on Textiles at a uniform lower rate of tax. He reiterated that handloom textiles, roasted gram locally known as "fried gram", sago....
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.... rate of tax for pasta and macaroni at the rate of 18%. (ii) Cakes: The Hon'ble Minister from Goa stated that when mithai was to be taxed at the rate of 5%, cakes should also be taxed at the rate of 5% as it was made at every home in Goa. Shri Anurag Goel, CCT, Assam, stated that cakes made at home would be Nil rated and if the tax rate was reduced, the benefit would go to the bakery industry which was not warranted. The Council agreed not to change the already approved rate of tax of 18% for cakes. (iii) Fishnet: The Hon'ble Minister from Goa stated that when tyre cord fabric was proposed to be taxed at the rate of 5%, there was no justification to tax fishnet at the rate of 18%. He further stated that the tax rate of 18% on fishnet would lead to increase in the cost of fish by Rs. 30 to Rs. 50 per kg. The Secretary stated that the raw material for fishnet was polyester which was to be taxed at the rate of 18% and if fishnet was taxed at 5%, large scale refund would arise due to duty inversion. The Hon'ble Minister from Goa stated that they did not want input tax credit on fishnet nor refund due to duty inversion and simply wanted the tax rate to be lowered from 18% to 5%. T....
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....ed rate of tax for these goods at the rate of 28%. (vii) Other Dry Fruits and Nuts (SI. No. 8 of the List): The Hon'ble Minister from Uttar Pradesh stated that since cashew nut was being taxed at the rate of 5%, singhada and makhana should not be taxed at the rate of 12%. He further stated that as it was consumed by people during fasting, it was exempt from VAT and proposed that it should also be exempted under GST. The Secretary raised a question whether these goods would fall in the category of dry fruits and the ACS, Uttar Pradesh, clarified that they would fall in this category. Joint Secretary (TRU-l), CBEC clarified that fresh singhada (chestnut) was classifiable under HS 0802 and was at 0% rate of tax whereas dried singhada (chestnut) was to be taxed at the rate of 12%, as in the case of other dry fruits (other than cashew and raisins). Similarly, makhana fresh was at 0% whereas makhana dried was at 12%. After discussion, the Council agreed not to make any change in the tax rate of 12% for these products. (viii) MasaIa powder (SI. No. 19 of the List): The Hon'ble Minister from Tamil Nadu stated that curry, other spices and mixture of spice powder known as masala powder....
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....ines should be taxed at a lower rate of 5%. The Secretary stated that the current incidence of tax on ayurvedic medicines was about 13%, and therefore, it would be reasonable to tax them at 12%, as proposed in the agenda notes. The Council agreed to this proposal. (xii) Granite Slabs (SI. No. 29 of the List): The Hon'ble Minister from Telangana stated that presently there was only 2% CST (Central Sales Tax) on granite slabs and levying 28% tax on them was too high. He stated that lakhs of people were employed in this sector and the cost of slabs varied from Rs. 16 per square feet to Rs. 80 per square feet. He suggested to reduce the rate of tax on granite slabs. He further stated that the present incidence of tax on granite slabs was only about 16.32%. and therefore, it should be taxed at the rate of 12%. The Hon'ble Minister from Karnataka stated that it was ironic that on a luxury consumption item like granite slab, there was no Central Excise duty. He added that there could be evasion of tax if the rate of tax was kept at 28%. The Secretary stated that evasion was earlier possible due to lower rate of CST at 2% but now all suppliers of this good supplying inter-State would be....
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....tary stated that for bio gas tax was proposed to be lower at 5% instead of the earlier approved rate of 12% as the current incidence of tax was about 8.6%. The Council agreed to the proposed rate of 5% for bio gas. (xv) Marble slabs (SI. No. 30 of the List): The Hon'ble Minister from Rajasthan stated that there was no Central Excise duty on marble and granite for manufacturers up to an annual turnover of Rs. 1.5 crore and that a tax rate of 28% would make the domestic products very costly. The Secretary stated that imported marble would also be charged to IGST at the rate of 28% and in addition, Customs Duty was also leviable. The Hon'ble Minister from Telangana stated that the current incidence of tax on granite slabs was about 16.32% and enquired why it was proposed to be taxed at the rate of 28%. The Joint Secretary (TRU-l), CBEC, stated that the rate of tax on granite and marble tiles was 28%, and therefore, the intermediate products i.e. the granite and marble slabs were also kept in the tax bracket of 28%. He further clarified that the issue was deliberated during the 14^th Council meeting (held on 18-19 May, 2017)and after discussion, it was decided to prescribe a uniform....
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....fund on the input tax credit on paper leviable to tax at the rate of 12%. The Hon'ble Deputy Chief Minister of Delhi stated that since books were kept at Nil rate, there was no justification to levy tax on children's picture, drawing or coloring books. He added that today young parents from all strata of society gave such books to their children. The Secretary informed that even the producers of books had requested to levy tax on them as they suffered an embedded tax of 8% to 9% but this suggestion was not acted upon as levying tax on books would have caused public uproar as it was connected to the freedom of speech. The Hon'ble Deputy Chief Minister of Delhi stated that text books and picture books did not have much difference. The Hon'ble Deputy Chief Minister of Gujarat stated that in his State, books were given free to about 1 crore children, After discussion, the Council agreed to exempt tax on children's picture, drawing or coloring books instead of the proposed tax rate of I 2%. (xviii) Spectacle Cases; Glasses for Corrective Spectacles and Flint Buttons (Sl No. 49 & 67 of the List): The Hon'ble Deputy Chief Minister of Delhi stated that manufacturers of spectacle cases w....
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....er from Kerala stated that rubber wood based board (at SI. No. 51 of the List) should be treated as plywood as they were competitive products. The Hon'ble Minister from Jammu & Kashmir stated that if rate of tax on goods was to be based on goods of special importance in various States, then this %as akin to going back to the VAT regime. The Hon'ble Chairperson stated that if rate was to be reduced on a large number of goods, then one would need to consider how to make up for the lost revenue. The Hon'ble Minister from Haryana stated that taxing ply board at the rate of 18% would improve compliance as a high rate of 28% would make it highly evasion prone commodity. The CCT, Assam observed that while deciding the rates, the interest of the consuming States should also be kept in mind. After discussion, the Council agreed to keep the tax rate on ply board (Particle board, fiber board) and plywood at the proposed rate of 28%. (xx) Laundry detergents and dish washing products (SI. No. 38 of the List): The Hon'ble Minister from Odisha stated that laundry detergent was an item of mass consumption and also played an important role in Swacha Bharart campaign and suggested that it should ....
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....f rate of tax on ply board was reduced. The Council agreed to keep the rate of tax for human hair dressed, thinned, bleached or otherwise worked at Nil. xxiii Bamboo based products (SI. No. 50 of the List): The Hon'ble Minister from Kerala suggested that rate of tax on bamboo based products should be reduced. The Joint Secretary (TRU - I). CBEC stated that the present incidence of tax on these products was about 18.65%. After discussion, the Council agreed to keep the rate of tax for bamboo based products at 18%. (xxiv) Coir mats, matting and floor covering (SI. No. 58 of the list): The Hon'ble Minister from Kerala suggested that the products coming from handloom industry should be exempted and the other categories of coir mats, etc. should be taxed at the rate of 5%. The Secretary stated that handloom was made across various sectors and it was a very big item in the textile industry. He added that it was very difficult to distinguish between textiles made from handloom and power loom, and therefore, all were proposed to be taxed at same rate. He stated that the same logic applied for coir mats etc. The Council agreed to keep the rate of tax for coir mats etc. at 5%. (xxv)....
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....easily distinguishable and were only used in tractors. The Joint Secretary (TRU-l), CBEC, stated that tractor parts that were distinguishable as exclusively being used in tractors were proposed to be taxed at the rate of 18% by taking a carve out in Chapter heading 4011 (tyres and tubes) and in Chapter heading 8708 (parts and accessories of motor vehicles) and other parts, including engines, were proposed to be taxed at the rate of 28% in order to avoid misclassification and duty evasion. The Hon'ble Chief Minister of Puducherry stated that when the rate of tax on fixed speed diesel engines (SI. No.74 of the List) was reduced from 28% to 12%, there was no justification to levy tax on tractor engines at the rate of 28%. The Secretary clarified that for the sake of parity, the rate of tax on submersible pumps and fixed speed diesel engines of up to 15HP was kept at 12%. He further pointed out that tractor engines would get full input tax credit and would be eligible for refund of input tax credit because the final goods, namely, tractors were charged to tax at the rate of 12%. After further discussion, the Council agreed not to further reduce the rate of tax on these goods. (xxix)....
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....he consumers. The Hon'ble from Karnataka reiterated that in addition to the cost of fitting extra equipment, there would be an additional cost for these cars due to imposition of 15% Compensation Cess, which was not desirable for an environment-friendly product. The Hon'ble Minister from Kerala stated that he did not support taxing an environment-friendly product at a high rate. The Hon'ble minister from Goa stated that 15% Compensation Cess should not be imposed on environment- friendly car. The Hon'ble Chairperson stated that the note on hybrid cars should be circulated by the Secretariat to all the Hon'ble Members of the Council after which, if need be, it could be discussed during the next meeting of the Council. (xxxiii) Molasses: The Hon'ble Minister from Karnataka stated that they had concerns on the rate of tax on molasses and invited the CCT, Karnataka, to explain the issue. The CCT, Karnataka, stated that under the VAT regime, the tax paid on molasses was set off against the excise duty on clearance of alcohoIic liquor for human consumption. In the GST regime, as alcoholic liquor for human consumption was out of GST, credit could not be taken for the tax paid on ....
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....re not reused. He added that the present rate of VAT on this item varied from 0% to 5%. After discussion, the Council decided not to change the rate of tax on these goods. (xxxvi) IGST Exemptions: The Secretary stated the certain lGST exemptions were proposed to be continued/introduced due to reasons like bilateral commitments between India and Pakistan/Bangladesh for regulation of bus services (notification 4/99-Customs dated 08.01.1999)); technical exemption for temporary import/re-import (notification 40/2015-Cus dated 21.07.2015; 9/2012-Cus dated 09.03.20 12); and declaring inter-State movement of any mode of conveyance for carrying goods or passengers or both or for repairs and maintenance as neither a supply of goods nor a supply of service. The Council approved these proposals. 9. For agenda item 3, the Council approved the rates of GST on supply of goods as presented in the agenda notes with the following modifications: - (i) For Composition scheme, to increase the annual turnover threshold from Rs. 50 lakh to Rs. 75 lakh for eligible taxpayers and to have a list of manufacturers who shall be ineligible for Composition scheme. However, no clear decision was taken r....
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.... any function entrusted to a Municipality under Article 243W of the Constitution. He stated that in the Officers meeting held in the morning, it had been suggested that only supply of pure service contract provided to Government, a local authority or a Governmental authority by way of any activity in relation to any function entrusted to a Panchayat under Article 243G of the Constitution or any function entrusted to a Municipality under Article 243W of the Constitution may be exempted. After discussion, the Council agreed to the proposal. 10.3. The Secretary stated that the third proposal on exemption related to services provided to the Government under any insurance scheme for which total premium was paid by the Government. He informed that the recommendation of the Fitment Committee was to exempt services provided to the Government under any insurance scheme provided 100% premium was paid by the Central Government or the State Government. The ACS, Uttar Pradesh recalled that during the Officers' meeting held today in the morning, he had stated that under some of the Government of India schemes, even if part premium was paid by the Government, Service Tax on the same was exempt....
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....textiles and cut and polished diamonds and gold jewellery and as a result, these job-work services would attract the standard rate of 18%. 10.5.1. The Secretary informed that to resolve this issue, the Fitment Committee had recommended that job work services in relation to (a) textile yarns (other than manmade fibre/filament) and textile fabrics and (b) cut and polished diamonds; precious and semi- precious stones, or plain and studded jewellery of gold and other precious metals, falling under chapter 71 of the HS Code, could be taxed at the rate of 5%. He explained that tax on job-work service charge was with reference to job charges only while tax on supply of goods was with reference to the full value of goods supplied. 10.5.2. The Secretary informed that an additional agenda note had been circulated pointing out similar difficulties for job work services in relation to printing of books, journals and periodicals. He explained that the tax rate on supply of newspapers, journals, periodicals and printed books (including braille books) was Nil and the rate on selling of space for advertisements in print media was at 5%. He recalled that keeping in view the fact that sale of ....
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....input tax credit. However, it was proposed to exempt individual advocates (including senior advocates) from obtaining registration under CGST/SGST Act [section 23 (2) of the CGST Act. 10.6.1. Explaining the rationale for the proposal, he stated that services provided by (i)an individual advocate or a partnership firm of advocates to another advocate or partnership firm of advocates or (ii) an individual advocate or a partnership firm of advocates to any person other than business entity were exempt from tax under GST regime. Services provided by an individual advocate or firm of advocates by way of legal services were under reverse charge for payment of tax. He further explained that a partnership firm did not include an LLP, but a firm of advocates was said to include LLP. Therefore, an individual advocate providing services to LLP would be taxable under reverse charge in the GST regime and legal services provided by an LLP to a business entity would also be liable to tax under reverse charge. He stated that some of the law firms had asked for putting tax liability for them in forward charge instead of reverse charge. He added that in this individual advocates are proposed to b....
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.... Gujarat wanted the rate of tax on admission to cinema theatres to be reviewed and to be reduced from 28% to 18%, so that the local bodies were also able to tax the same. West Bengal wanted a lower rate of tax for regional films or no tax below a certain threshold, say Rs. 100 per ticket for regional films. West Bengal had informed that presently Bengali films attracted lower rate of entertainment tax, and their representative was of the view that a lower rate was required to support and promote the regional film industry. Karnataka stated that they had issued a Government Order that no cinema theatre including multiplexes would charge more than Rs. 200 per ticket for a regional film. Rajasthan and Kerala supported the rate of tax at 28% (as approved by the Council) for admission to cinema theatres for all films. They did not want a carve-out for regional films as ¡t would be distortionary. Haryana wanted to continue with the tax rate of 28% for admission to cinema theatres. Uttar Pradesh did not support a lower rate for regional films and stated that if a lower rate was provided for films in regional language of the States, the benefit should also be extended to Hindi films ....
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....Minister from Telangana suggested to keep the rate of tax at 12% so that local bodies could impose additional tax and get some revenue. The Hon'ble Minister from Karnataka stated that regional language cinema was a sign of cultural diversity and it should be encouraged. The Hon'ble Chairperson stated that the rate of entertainment tax across the States varied from 20% to 110% and the weighted all-India average rate of entertainment tax was about 31%. He observed that several States granted tax exemption to regional films and it was the only item under GST where local bodies could also impose tax. He observed that States could give refund of GST for regional language films as each State would have different regional language. The Hon'ble Chief Minister of Puducherry stated that States did not have adequate resources to provide reimbursement. The Hon'ble Minister from Uttar Pradesh opposed the suggestion of exempting regional cinema from tax and stated that this would lead to loss of revenue for every State. The Hon'ble Deputy Chief Minister of Delhi stated that the Government as well as the society supported some kinds of cinema and theatre, and this should be encouraged through imp....
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....esirable to keep a lesser rate of tax for them whereas others could be charged tax at the rate of 28%. He suggested to charge tax at a lower rate for tickets sold below Rs. 100. The Hon'ble Minister from Kerala stated that the tax imposed at the level of the producer and the distributor would be 18%, and ¡f tax on the tinal product was 12%, then the question was as to who would bear this extra 6%. He suggested that the minimum rate of tax should be 18%. The Secretary stated that the ticket rate ¡n multiplexes was never less than Rs. 100. The Hon'ble Minister from Kerala reiterated that tax on cinema tickets should not be less than 18% even for tickets sold at a price below Rs. 100. The Hon'ble Ministers from Haryana and Andhra Pradesh supported this proposal. The Hon'ble Minister from Maharashtra reiterated his reservation and suggested that the rate of tax on admission to cinema theatre should be 18%. After further discussion, the Council agreed that the rate of tax on admission to cinema theatres shall be 28% with the exception that the rate of tax shall be 18% if the price of the ticket for admission to cinema theatre was Rs. 100 or less. 11. For agenda item 3, in....
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....Notification of certain sections of the GST Acts; (ii) Amendment in Rule 19 of the Registration Rules for additional method of authentication. He took up discussion on these two agenda items. (i) Notification of certain sections of the GST Acts 12.1. The Secretary recalled that in its 15^th Meeting (held on 3 Jun 2017), the Council had approved to notify with effect from 19 June 2017, the Sections of the CGST Act (as also the SGST Acts in the States where the SGST Acts were enacted) containing provisions relating to registration and composition levy. He stated that some more provisions of the CGST and the SGST Acts needed to be notified. Section 2 of the CGST Act, 2017 and the lGST (Integrated Goods and Services Tax) Act 2017 contained definitions of various terms used in the respective Acts and since some of these defined terms were used in Sections relating to registration and composition levy, these would also need to be notified with effect from 19 June, 2017. Similarly, Section 14 of the lGST Act, which provides for the registration of the supplier of online information and database access or retrieval services under the Simplified Registration Scheme, was required to be....
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....ay 2017), list of services on which reverse charge liability would be created under GST was approved by the GST Council. In some cases, the liability under the Act had been fully cast upon the recipient of supply (100% reverse charge). In terms of Section 9 (3) and Section 5 (3) of the CGST Act and IGST Act respectively, though the supplies were taxable but the liability of payment of tax and compliance with the law had been shifted upon the recipient. Therefore, suppliers, whose supplies were taxable under 100% reverse charge basis, were required to be exempted from registration. Sub-section (2) of section 23 of the CGST Act provided that the Government, on the recommendations of the Council, by notification, specify the category of persons who may be exempted from obtaining registration. 12.1.2 In view of the above, the Secretary proposed that the Council may approve the following: i. notifying Section 2 of the CGST Act and Section 2 of the IGST Act from 19 June, 2017; ii. notifying Section 14 of the lGST Act from 19 June, 2017; iii. notifying Section 146 of the CGST Act with effect from 19 June, 2017; iv. notifying Section 164 of the CGST A....
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....e enrolment application only with Digital Signature Certificate (DSC) which was costly (approximately Rs. 2500, valid for a period ranging from one year to three years) and cumbersome with several documentary requirements. The companies giving one-time e-signature were limited in number and their quality of service was uneven. The taxpayers in other Slates were able to migrate with Aadhaar based EVC which was free of cost. He stated that it was reported that this had effectively prevented the small and medium dealers of Assam from migrating to GST from the existing tax regime. Similar problem was being faced in the State of Meghalaya where Aadhaar had not yet been implemented. He stated that keeping in view the problems faced by Assam and Meghalaya, it was proposed to provide another alternative for authentication in Rule 19 of the GST Registration Rules, namely, authentication based on bank account of the taxpayer and that a suitable text in this regard as presented, in Rule 19, namely "through electronic verification service provided by banks based on net-banking or any other mode of verification provided by bank." 12.2.1. The Secretary further informed that during the meeting....
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....he problems that might arise. The Hon'ble Minister from West Bengal stated that the date for implementation should be reviewed objectively in the next Meeting of the Council. The Hon'ble Chief Minister of Puducherry stated that after the GSTN website was opened on 1 June, 2017, the dealers were finding it difficult to access it. He added that it was also a problem to get the digital signature certificate. He requested that the technical issues should be resolved. 15. The Hon'ble Deputy Chief Minister of Delhi stated that about six or seven States had not yet passed the SGST Act and this could potentially create problems in GST roll out. The Hon'ble Chairperson stated that all States which had not yet passed the SGST Act had indicated tentative dates by when they were likely to pass their SGST Acts. Agenda Item 5: Date of the next meeting of the GST Council: 16. The Hon'ble Chairperson suggested that the Council could meet again on next Sunday, 18 June, 2017 in New Delhi to take up remaining issues for discussion. The Council agreed to this suggestion. 17. The meeting ended with a vote of thanks to the Chair. ============= Document 1 CHAIRMAN'S INITIALS MINUTE....
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....of India Shri B.N. Sharma 7 Govt. of India Shri P.K. Mohanty 8 Govt. of India Shri P.K. Shrivastava 9 Govt. of India Shri Alok Shukla 10 Govt. of India 11 Govt. of India 12 Govt. of India 13 Govt. of India Shri Manish Kumar Sinha 14 Govt. of India Shri G.D. Lohani 15 Govt. of India Shri Ranjit Kumar 16 Govt. of India Shri D.S.Malik Shri Upender Gupta Shri Udai Singh Kumawat Shri Amitabh Kumar Revenue Secretary Chairman, CBEC Member (GST), CBEC Member (Budget), CBEC Chief Commissioner, (AR), CESTAT, CBEC Additional Secretary, Dept. of Revenue Advisor (GST), CBEC Joint Secretary, Ministry of Home Affairs Joint Secretary (TRU), Dept. of Revenue Commissioner (GST), CBEC Joint Secretary, Dept. of Revenue Joint Secretary (TRU), Dept. of Revenue Commissioner, CBEC Commissioner, CBEC Commissioner, CBEC ADG, Press, Ministry of Finance 17 Govt. of India Shri Hemant Jain OSD to MoS (Finance) 18 Govt. of India Shri Manu Tentiwal PS to MoS (Finance) 19 Govt. of India Shri S.K. Rai 20 Govt. of India Shri....
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....retary Commissioner, Commercial Taxes Asst. Commissioner Principal Secretary (Finance) Commissioner, Commercial Taxes Commissioner, Commercial Taxes Additional Secretary, Commercial Taxes Adviser/Chief Secretary Commissioner Excise & Tax Deputy Resident Commissioner Principal Secretary (Finance) Additional Commissioner, Commercial Taxes JAYNA S No State/Centre 52 Andhra Pradesh Name of the Officer Shri D.Venkateswara Rao 53 Arunachal Pradesh Shri Marnya Ete 54 Arunachal Pradesh Shri Tapas Dutta 55 Assam Dr. Ravi Kota 56 Assam Principal Secretary & 57 Bihar Ms. Sujata Chaturvedi 58 Bihar Shri Arun Mishra 59 Chandigarh Shri Parimal Rai 60 Chandigarh Shri Ajit Joshi 61 Chandigarh 62 Chhattisgarh Shri Bhartendu Shandilya Shri Amitabh Jain 63 Chhattisgarh 49 64 Daman & Diu/Dadra & Nagar Haveli 65 Delhi 66 Delhi 67 Goa 68 Gujarat Dr. P.D. Vaghela 69 Gujarat Ms. Mona Khandhar 70 Haryana Shri Sanjeev Kaushal 71 Haryana Shri Shyamal Misra 72 Haryana Shri Vidya Sag....