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Minutes of the 48th Meeting of GST Council held on 17th December, 2022
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....t Committee for making changes in GST rates or for issuing clarifications in relation to goods - Annexure-I b) Issues where no change has been proposed by the Fitment Committee in relation to goods - Annexure-II b) Issues where no change has been proposed by the Fitment Committee in relation to goods - Annexure-III d) Recommendations made by the Fitment Committee for making changes in GST rates or for issuing clarifications in relation to services - Annexure-IV e) Issues where no change has been proposed by the Fitment Committee in relation to services - Annexure-V f) Issues deferred by the Fitment Committee for further examination in relation to services - Annexure-VI 4 Report of the Committee on Levy of penal interest on delayed remittances of GST by the Banks to the Government Accounts in RBI during the initial period of GST implementation. 5 Performance Report of the NAA (National Anti-profiteering Authority) for the 1st quarter (April, 2022 to June, 2022) and 2nd quarter (July,2022 to September. 2022) along with monthly performance report for the months of October and November, 2022 for the information of the Council 6 Ad-hoc Exemptions Orders issued under Section 2....
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....ication regarding treatment of the difference in ITC availed in GSTR-3B as compared to that available in GSTR-2A for FY 2017-18 and 2018-19 XIV. Clarification regarding the treatment of statutory dues under GST law in respect of the taxpayers for whom the proceedings have been finalised under the Insolvency and Bankruptcy Code, 2016 XV. Amendment in provisions related to OIDAR Services under the IGST Act, 2017 xvi. Amendment in Section 17 of the CGST Act, 2017 regarding ITC in respect of CSR (Corporate Social Responsibility) expenditure xvii. Issues related to place of supply in terms of the proviso to Section 12(8) of the IGST Act, 2017 8 Issues recommended by GSTN: 1. Proposed Changes in HR Policies and Transition Management from GSTN 2. Proposal for Changes in the Revenue Model of GSTN and transition to the new Revenue Model 3. Waiver of Interest on delayed receipt of Advance User Charges (AUC) from a few states and CBIC 4. Data Archival Policy for the GST System 5. Implementation of facility to Generate Document Identification Number in GST Back Office for Model 2 States incompliance with the Hon'ble Supreme Court judgement in W.P 320 of 2022. 9 Report of Group of ....
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....Secretary, on behalf of the Council, thanked the following former Hon'ble Members of the Council for their immense contribution - 1. Shri Tarkishore Prasad, ex Member from Bihar 2. Shri Ajit Pawar, ex Member from Maharashtra 3. Shri Sukh Ram Chaudhary, ex Member from Himachal Pradesh He further extended a warm welcome to the incoming Hon'ble Members of the GST Council to the 48th meeting of the GST Council- 1. Sh. Devendra Fadnavis, Hon'ble Deputy Chief Minister, Maharashtra 2. Sh. Vijay Kumar Chaudhary. Hon 'ble Finance and Commercial Tax Minister, Bihar and thanked ex. Revenue Secretary, Sh. Tarun Bajaj for his contributions. 1.5 The Secretary stated that in its 47th meeting at Chandigarh, the Council had formed a GoM on Goods and Services Tax Appellate Tribunal with Sh. Dushyant Chautala, Hon'ble Deputy Chief Minister of Haryana as the Convener and Hon'ble Ministers from States of Andhra Pradesh, Goa, Rajasthan, Uttar Pradesh and Odisha as Members. He stated that the GoM had submitted their recommendations in the form of a report which was placed as an agenda before the Council. He thanked all the Hon'ble Members of the GoM for their valuable recommendati....
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....yana, Kerala and Andhra Pradesh suggested that items could be prioritized and the Tribunal agenda could be discussed on priority. Hon'ble Member from West Bengal stated I that she was agreeable with any decision taken by the Council in that regard. 1.12 The Secretary stated that the majority view appears to be that the meeting could be concluded by 01:30p.m. He informed that the officers meeting on 16th December was concluded by 03:00 p.m. even when the Law Committee agenda was discussed at length. He suggested that a call could be taken around 1:30 p.m. as the meeting progressed. The Hon'ble Chairperson accorded permission to start with the agenda. 2. Agenda Item 1: Confirmation of the Minutes of the 47th Meeting of the GST Council The first agenda item pertained to confirmation of the minutes of the 47th GST Council meeting held on 28th and 29th June, 2022 at Chandigarh. The Secretary stated that some comments had been received from few States which were basically editorial changes which had been carried out and the revised minutes incorporated in the agenda and circulated to all the Hon'ble Members. The Council adopted the Minutes of the 47th meeting of the GST ....
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....rough a brief presentation on the recommendations of the Fitment Committee. 4.3 Joint Secretary, TRU stated that the agenda note dealt with proposals regarding GST rates and clarifications relating to supply of goods and services. The proposed changes emanated from the recommendations made by the Fitment Committee on the basis of representations received from various stakeholders including Ministries and other offices of Centre and States, seeking changes in GST rates/ issuance of clarifications regarding classification and GST rates applicable on supply of certain goods and services. 4.4 She further informed that the Fitment Committee had examined the representations on 12th & 23th September, 2022 and 28th October, 2022. After examination, the Fitment Committee had recommended changes in GST rates or issue of clarifications, in relation to certain goods and services. Further, the Fitment Committee had recommended no change in respect of certain goods and services. On certain issues, Fitment Committee was of the view that further examination would be required before making any recommendation to the GST Council and thus those issues had been deferred. 4.5 Accordingly, Fitme....
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....ion be issued to regularize the matter of the intervening period on as is basis from the date of issuance of the last Circular (that is, consequent to 47th GST Council Meeting) on account of genuine doubts. 4.10 The Hon'ble Member from Madhya Pradesh supported the proposal to exempt the by-products of milling of dal/pulses like Kanda, Churi (also known as Chuni), Chilka from GST, irrespective of their end use. 4.11 The Hon'ble Chairperson suggested that there could be full presentation on agenda 3 (a) and then the floor would be opened for discussion. 4.12 JS, TRU then presented the issue relating to SUV cars wherein doubts had been raised as to whether aU four conditions viz. engine capacity exceeding 1500 cc, popularly known as SUV, a motor vehicle of length exceeding 4000 mm and having ground clearance of 170 mm and above need to be satisfied for levying higher cess rate as per entry 52 B of Compensation Cess Notification No. 1/2017 - Compensation Cess (Rate) dated 28.6.2017 or the conditions in Explanation to the entry are optional. Fitment Committee recommended that a clarification be issued to clarify that all four conditions need to be fulfilled for levy of higher compens....
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....g GST @ 18%. 4.17 She presented the next issue regarding clarification sought on applicable IGST rate on items imported for petroleum operations under Notification No. 3/2017-Integraied Tax (Rate) wherein the Fitment Committee had noted that the said Notification provided a concessional rate of duty to such products which attracted a higher rate of GST when those goods were imported for petroleum operations. The Fitment Committee recommended that a clarification could be issued that a taxpayer could claim the lower rate for specific items as given in the Schedule. 4.18 The next item presented was for extending concessional rate of 5% on Ethyl alcohol supplied to refineries for blending with motor spirit (petrol). JS TRU stated that the National Policy on Biofuels - 2018 provided an indicative target of 20% ethanol blending under the Ethanol Blended Petrol (EBP) Program by 2030. Further, during the Budget exercise of 2022- 23, additional Basic Excise Duty @ Rs. 2 per litre was levied on Unblended Petrol and Unblended Diesel to promote blending in petrol and diesel in the country. The concessional GST rate of 5% was available only to Oil Marketing Companies (OMCs) like IOCL, BPCL a....
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.... where the definition of SUV was derived. JS, TRU responded that the definition of SUV was carried forward from the Central Excise regime. The Hon'ble Chairperson enquired about how the issue of compensation cess in case of other variants of vehicles like MUV that were available in the market would be addressed, JS, TRU responded that that aspect was yet to be seen. 4.26 The Chairman, CBIC suggested that other types of vehicles could also be included which satisfy the other three conditions as pointed out by the Hon'ble Member from Haryana. The Hon'ble Chairperson further enquired about the treatment of MUVs under that proposal. 4.27 The Chairman, CBIC suggested that MUVs might also be included in the Explanation for levy of higher rate of compensation cess @ 22% like SUVs. The Hon'ble Chairperson enquired whether the suggestion of Chairman, CBIC would satisfy the query of the Hon'ble Member from Haryana. The Hon'ble Member from Haryana responded that there was a need to restudy this proposal and bring that back in the future GST Council meetings to avoid any instances of tax evasion. 4.28 The Hon'ble Chairperson proposed that an additional line might be inserted in the clarific....
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....nd to address the inconsistency. to address the inconsistency. The Hon'ble Chairperson further clarified that the proposal was only for removal of inversion in duty rate structure and to streamline the tax structure on the item. She stated that the inversion scenario on the item, quantum of refunds being given etc. could be examined in detail by the Fitment Committee and then a fresh proposal brought as to whether a lower rate of GST on pencil sharpeners could be considered. 4.35 Further, the Secretary stated that the Council may approve the existing proposals in Agenda-3 (a) whereas the issues raised by the Members regarding the lower tax rate on pencil sharpener; compensation cess on vehicles which were similar to SUV and fulfilling the mandated conditions; and lower GST rate on Rab would be taken up in the upcoming GST Council meetings after detailed deliberation by the Fitment Committee. 4.36 The Hon'ble Chairperson instructed that issues regarding enhanced Compensation Cess on vehicles which were similar to SUV, rate of tax on Rab and on pencil sharpeners because of duty inversion would be examined by the Committee again and brought back to the Council for de....
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....ncentive paid by MEITY to the Banks under the Scheme for promotion of RuPay Debit Cards and low value BHIM-UPI transactions. * To clarify the applicability of GST when the residential dwelling is rented by a person who is the proprietor of a proprietorship firm in his personal capacity for use as his own residential dwelling, The proposal was to amend the entry as well as insert an Explanation to the entry No. 12 of Notification No. 12/2017-CTR * To specify a positive list of services under Sr. No. 3 & 3A of Notification No. 12/2017-Central Tax (Rate). 4.43 The Secretary informed the Council that on the issue of clarificatory circular regarding applicability of GST on Air Force Officers' Mess, a suggestion was received during the officers' meeting to include similarly placed messes also. He stated that if the Council agrees, the proposed circular may be suitably amended to include similarly placed messes. 4.44 JS, TRU informed the Council that pursuant to the suggestions received in the Officers' meeting it was proposed that only Explanation could be inserted in entry No. 12 of Notification No. 12/2017-CTR and the same could be issued only in respect of pro....
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.... Uttar Pradesh, Gujarat, Goa, Tripura and Assam supported the proposal of the Fitment Committee to have a positive list of specified Services. 4.52 The Hon'ble Member from Andhra Pradesh requested to exempt pure manpower services which were hired by the Government or Government agencies and that in case of local bodies, entire services mentioned in Eleventh and Twelfth Schedules of the Constitution should be exempted. 4.53 The Hon'ble Member from Kerala suggested to take the issue later as it required more discussion. 4.54 The Secretary stated that in GST regime there were no end use-based exemption in case of supply of goods to Government. However, in case of services during the Service Tax regime, the tax was collected by the Centre and appropriated by the Centre. Thus, there were certain end use-based exemptions available in case of specific services rendered to Central and State Governments. Under GST regime, the distinction between the Goods and the Services had been removed. He opined that end use exemption in the case of services should also be not there. He stated that the list of 12 services identified by the Fitment Committee covers 90% of the services rendered by the ....
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....28% and there was no possibility of inverted duty structure. 4.63 The Hon'ble Chairperson requested the Hon'ble Members from Odisha and Telangana to forward their submissions to the Fitment Committee which in turn would study the issue in detail. 5. Agenda item 4: Report of the Committee on Levy of penal interest on delayed remittances of GST by the Banks to the Government Accounts in RBI during the initial period of GST implementation The Secretary presented the Agenda No. 4 pertaining to the Report of the Committee on Levy of penal interest on delayed remittances of GST by the banks to the Government Accounts in RBI during the initial period of GST implementation and informed that this agenda was presented by the Joint Secretary, GST Council Secretariat during the officers meeting held on 16.12.2022 and there was unanimous acceptance by everyone on the proposal being made in that agenda (The detailed presentation attached as Annexure-5). The Council took note of the same and approved the agenda. 6. Agenda item 5: Performance Report of the NAA (National Anti-Profiteering Authority) for the 1st quarter (April, 2022 to June, 2022) and 2nd quarter (July, 2022 to September, 2022....
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.... there was an agreement in the Officers' meeting on most of the issues. He stated that in the Officers' meeting, concerns were raised on the agenda item pertaining to deletion of clause (d) of sub-rule (14) of Rule 138 of CGST Rules which was proposed for providing a uniform threshold for intra-state movement of goods and it was suggested that the agenda item need not be considered for approval by the Council. He requested Principal Commissioner, GST Policy Wing to make a presentation on the recommendations of the Law Committee and the discussions held in Officers' meeting on 16" December, 2022 on the same. The Principal Commissioner, GST Policy Wing accordingly made the detailed presentation (attached as Annexure-4) giving overview of the recommendations made by the Law Committee and the discussions in Officers' meeting on the said agenda. 8.1 Agenda Item 7(i): Amendment in the CGST Rules, 2017 for Aadhaar based Biometric authentication of the registrants A. Biometric-based Aadhaar authentication and physical verification for new registration 8.1.1 Principal Commissioner, GST Policy Wing informed that Rule 8 (4A) of the CGST Rules, 2017 inserted vide Notification No. 94/2020-....
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....ication be raised to 90 days as many fake companies get deemed registered after a period of 30 days. He requested the council to increase the time limit for verification to either 90 days or to 60 days in order to enable the officers to physically verify those companies. 8.1.4 The Secretary clarified that the time limit for processing of the application of registration in cases, where Aadhaar number was not authenticated, had been kept at 30 days in line with ease of doing business for providing registration as quickly as possible. B Incorporation of details of electricity bill and property registration in FORM GST REG-01 8.1.5 Principal Commissioner, GST Policy Wing informed that the Group of Ministers on GST System Reforms in its first report had approved the proposal to include Electricity Bill meta data (CA No.) as a data field during registration by new taxpayers and that the CA Number shall be verified to improve the quality of registered address. The States of Maharashtra and Madhya Pradesh had agreed to carry out the pilot project for the same. Besides, the State of Madhya Pradesh had also volunteered for the pilot project for validation of the property registration det....
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....ght be captured and recorded in FORM GST REG-01 and further, OTP based verification in Part-A of FORM GST REG-01 might be done only on PAN-linked mobile and email address, instead of authorised signatory's self-declared mobile number and email address. 8.1.11 Accordingly, Law Committee proposed amendments in CGST Rules and FORM GST REG-O1 as detailed in the agenda note. The Council agreed with the said recommendations of the Law Committee in agenda item 7(i). 8.2 Agenda Item 7(ii): Refund to unregistered persons 8.2.1 Principal Commissioner, GST Policy Wing stated that representations had been received from unregistered buyers/recipients for providing a facility to such unregistered buyers/ recipients for claiming refund of amount of tax borne by them in the event of cancellation of the contract/agreement for supply of service of construction of flats/buildings or on termination of long-term insurance policy etc. wherein they had paid the consideration/premium in full/part, along with the applicable tax. 8.2.2 Those issues were discussed in the Law Committee and it was observed that under Section 54(1) of CGST Act, 2017, there was no restriction under GST law for any unregist....
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...., GST Policy Wing informed that the issue of decriminalization of various laws, including GST law, to reduce compliance burden on the taxpayers, was discussed in the meeting of Committee of Secretaries (CoS) on Decriminalization of existing Acts/Rules. It was also deliberated that there might be a need to examine whether any enhancement was required in the threshold for prosecution of offences under Section 132 of the Central Goods and Services Tax Act, 2017. 8.3.2 Accordingly, Law Committee deliberated on the various provisions pertaining to prosecution and compounding in the CGST Act, 2017, so as to rationalize the same and to remove ambiguity, if any, and also to make compounding provisions more attractive in GST for the taxpayers. The Law Committee proposed several amendments in GST law as detailed out in the agenda note for decriminalizing various provisions of the GST Act. 8.3.3 The Law Committee recommended that the offences specified in clauses (g), (j) and (k) of sub-section (1) of Section 132 are specifically covered and are punishable under Indian Penal Code, and therefore, these types of offences may be excluded from prosecution under the CGST Act, 2017.....
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....d should be maintained at Rs. one crore so that there was some fear in dodging the payment of GST especially in case of trading of invoices. 8.3.7. The Hon'ble Member from Kerala stated that the limit for prosecution should continue at the present threshold, especially with regard to the bill trading. He suggested that the existing provisions could be continued as of now and the enhancement of threshold might be considered at a later stage. 8.3.8 The Hon'ble Member from Punjab stated that it would be desirable if the limit for prosecution for fake invoices cases could be brought down to 10 lakh rupees. 8.3.9 The Secretary presented before the Council the statistics of arrest and prosecution cases made by CBIC formations. He informed that a total of 1074 cases of arrest were made by CBIC and that majority of cases were more than Rs. 50 crore i.e. 254 cases and in Rs. 30-50 crore limit, there were 106 cases Thus, the majority of cases pertained to high evasion cases involving amounts of more than Rs 2 crore. The Secretary stated that the Council could consider these statistics while deciding on the issue of threshold limit for prosecution of cases. ....
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....on'ble Member from Chhattisgarh stated that that was a very wise decision for the Chairperson to call for unanimity and he stated that they would go by the decision of the Hon'ble Chairperson. 8.3.14 The Hon'ble Member from Goa stated that there were valid points on both sides and the decision on the said agenda could be left to the decision of the Chairperson of the Council. 8.3.15 The Hon'ble Member from Kerala stated that the Council could continue with the present threshold and in future the matter could be relooked at. He further stated that their State was dealing with large number of cases on bill trading, therefore, deterrence must be there. 8.3.16 The Hon'ble Member from Jharkhand stated that there was no disagreement with the proposal in the said agenda. 8.3.17 The Hon'ble Chairperson stated that while threshold for prosecution might be increased from Rs 1 crore to Rs 2 crore for all other offences, however, for issuance of fake invoices, the threshold limit could be retained at Rs. one crore, instead of raising that to Rs. two crore. The Hon'ble Chairperson left the decision open to the Council and requested the members to speak.  ....
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....17 was not sustainable for the reason that the charges of fraud or wilful misstatement or suppression of facts to evade tax had not been established against the person to whom the notice was issued and directed the proper officer to determine the tax payable by such person deeming the notice to be issued under sub-section (1) of Section 73 of CGST Act, 2017, field formations were seeking clarification regarding the time limit within which the proper officer was required to re-determine the amount of tax payable considering notice to be issued under sub-section (1) of Section 73, specially in cases where the time limit for issuance of order as per sub-section (10) of Section 73 was already over. Doubts had also been expressed regarding the methodology for computation of such amount payable by the notice, deeming the notice to be issued under sub-section (1) of Section 73. 8.5.2 The Law Committee deliberated on the issue and recommended issuance of a circular for clarifying the doubts. The draft Circular had been placed as annexure to the detailed agenda note. 8.5.3. The Hon'ble Member from Madhya Pradesh stated that they agreed with the Circular. He further informed ....
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.... Committee. II. Amendment in sub-rule (1) of Rule 37 8.6.4 Principal Commissioner, GST Policy Wing informed that the second proviso to Section 16 (2) of the CGST Act, 2017 provides for cases where a recipient fails to pay to the supplier the amount towards the value of supply along with tax payable thereon within a period of 180 days. 8.6.5 He mentioned that such recipients had to follow the procedure prescribed in Rule 37(1) of the CGST Rules, 2017. However, the said Rule had been amended with effect from 01.10,2022 vide Notification No. 19/2022 - CT dated 28.09.2022 and the amended Rule 37(1) required the said recipient to pay an amount equal to the input tax credit availed in respect of such supply. That gave an impression that the whole of ITC pertaining to such supply was to be reversed even though a part of the payment could have been made by the recipient to the supplier. That appeared to be an inadvertent departure from the principle of proportionate reversal under the original rule. To rectify the anomaly, the Law Committee recommended that sub-rule (1) of Rule 37 be amended retrospectively with effect from 01.10.2022 to provide for reversal of an amount of input tax c....
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....illDesk etc. He further stated that when the consumers purchased data from the said distributors, those distributors were not allowed to collect the address and the operators did not provide those details to distributors due to TRAI Rules. The Hon'ble Member stated that the TRAI Rules neither allowed the collection of details of addresses nor did that allowed sharing of addresses. He added that the State of Telangana received about Rs. 600 crore on such business transactions and therefore, requested intervention of the Council to address the issue. The Hon'ble Member further cited the example of BillDesk, which was a payment gateway and distributor for telecom, who had declared the Place of supply as their State for last 5 years (July, 2017 - April, 2022) and he stated that after much persuasion the telecom operators had shared the State of consumer and thereafter, BillDesk started paying IGST from May, 2022 onwards. He submitted that the State was then receiving Rs. 8 crore per month from the tax payer. Therefore, he emphasized that there might be cases of similarly placed taxpayers in the State. The Hon'ble Member requested GSTN and Law committee to take note of that issue and to....
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.... paid through e-payment mode to GST System for updating the Electronic Cash Ledger (ECL), the ECL of such taxpayers are updated next day on the basis of RBI e-Scroll file containing the successful payment made against the CINs as shared by banks with RBI. However, there is presently no provision in the CGST Rules, 2017 providing for such updation of ECL based on e-Scroll of RBI. In this regard, CAG has highlighted the need for having a specific provision in law for updation of ECL on the basis of e-Scroll of RBI. 8.6.14 The issue was deliberated by the Law committee and in order to regularize the process of updating ECL of the taxpayer on the basis of e-Scroll data received from the RBI in the cases where payment has been received successfully but bank fails to share the signed CIN with GST System, the Law Committee had recommended for amendment of Rule 87 of CGST Rules by inserting a new proviso to sub-rule (8) of Rule 87 of the CGST Rules, 2017. The proposed amendment to Rule 87 is detailed in the agenda note. The Council agreed with the recommendation of the Law Committee. VII Amendment in Rule 108 and Rule 109 8.6.15 Principal Commissioner, GST Policy W....
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.... on the requirement of submission of certified copy of the order appealed against and the issuance of final acknowledgment by the appellate authority, an amendment might be made in sub-rule (3) of Rule 108 and in Rule 109 of the CGST Rules, 2017 and Form GST APL-02. The details of the same are provided in the agenda note. The Council agreed with the recommendation of the Law Committee. VIII. Insertion of Rule 109C 8.6.20 Principal Commissioner, GST Policy Wing informed that while Sections 107(1) & 107(2) of CGST Act, 2017 provide for filing of appeal before first appellate authority against decision or orders of adjudicating authority by aggrieved person or authorized officer respectively. However, there was no provision in the CGST Act/Rules for withdrawal of such an appeal either by aggrieved person or authorized officers. 8.6.21 The issue was deliberated by the Law Committee and it recommended insertion of Rule 109C in CGST Rules, 2017 to provide for withdrawal of appeal before the issuance of SCN or Order under Section 107 (11), whichever is earlier. Further, Law Committee recommended introduction of FORM GST APL-01/03W in CGST Rules, 2017, to enable th....
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....onal hearing or not to include more scenarios. Further, FORM GST REG-19 also provided for a table for "Determination of amount payable pursuant to cancellation", which may create confusion if no amount was filled in the said table by the officer. 8.6.26 The Law Committee deliberated on the issue and recommended that FORM GST REG-19 may be substituted to include a more elaborate list of options to clarify the order of cancellation and also to include certain other compliances due such as furnishing the pending returns and the final return. The Law Committee also recommended to remove the table for "Determination of amount payable pursuant to cancellation" from FORM GST REG-19. The Council agreed with the recommendation of the Law Committee made in agenda item. XII. Amendment in FORM GST REG-17 8.6.27 Principal Commissioner, GST Policy mentioned that under Rule 22(1) of CGST Rules, 2017, FORM GST REG-17 is regarding show cause notice for cancellation of registration. GSTN proposed that "Kindly refer to the supportive documents attached for case specific details." may be added at the end of FORM GST REG-17. The Law Committee deliberated on this issue and has r....
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....ifications needed to be issued under Section 148 of the CGST Act, 2017 for providing special procedure to be followed by the electronic commerce operators, one in respect of supplies of goods through them by unregistered persons and second, in respect of supplies of goods through them by composition taxpayers. Law Committee also recommended that FORM GSTR-8 might be amended for capturing the information of supplies made by unregistered suppliers through e-commerce operators by insertion of two tables in FORM GSTR-8. In addition, it also recommended that Rule 67(2) of CGST Rules, 2017 might be amended to clearly bring out that the details of TCS furnished by ECOs in FORM GSTR-8 shall be made available only to the registered suppliers, as the supplies by unregistered persons do not attract TCS. For composition taxpayers, to remove the condition restricting registered persons engaged in supplying through electronic commerce operators from opting for the Composition Levy, Law Committee recommended that clause (d) to sub-section (2) and clause (c) to sub-section (2A) of Section 10 of CGST Act, 2017 might be amended. Law Committee further recommended insertion of sub-section (1B) in Sect....
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....on under Section 24 prevail over the exemption under Section 23. 8.8.3 Accordingly, the Law Committee deliberated on this issue and recommended that to avoid any conflict within the said provisions and to provide more clarity, Section 23 may be amended retrospectively w.e.f. 01.07.2017 as detailed in agenda. The Council agreed with the recommendation of the Law Committee. C. Amendments in CGST Act, 2017 to restrict filing of returns/statements after completion of specified time in view of data archival policy 8.8.4 Principal Commissioner, GST Policy mentioned that GST System has completed more than five years. GSTN has informed that the huge data size of all these years is putting an excessive load on the server and compromising performance. Keeping massive data available online slows down the GST system applications and impacts return filing, especially during peak filing days. Therefore, GSTN proposed a data archival policy for the smooth functioning of the GST Portal and also to provide superior experience to the taxpayers. 8.8.5 While deliberating on the proposed data archival policy for GST portal, the Law Committee recommended that the maximum....
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.... by a registered person through e-commerce operators (ECOs) attracting TCS under Section 52 of CGST Act, 2017 are to be reported in various tables of FORM GSTR-1 i.e. 4C, SB, 7A(2), 7B(2), 10A(1) & 10B(1). The details are to be provided invoice-wise and e-commerce operator-wise. However, these tables have not yet been made functional on GST Portal. 8.9.2 Further, amendment has been made in FORM GSTR-3B vide Notification no. 14/2022- Central Tax dated 05.07.2022 to provide that the taxable supplies made by the registered person through e-commerce operator, on which electronic commerce operator is required to pay tax under sub-section (5) of Section 9 of CGST Act, 2017, are required to be reported by both the registered persons as well as the e-commerce operators in their respective returns in FORM GSTR-3B. However, there is no separate table in FORM GSTR-1 to furnish the aforementioned details. 8.9.3 The issue was deliberated by the Law Committee which recommended certain changes in FORM GSTR-1 to capture details of the supplies made through e-commerce operators attracting TCS, as well as those on which e-commerce operator is required to pay tax under subsection (5) of Section 9 o....
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....ady been paid in respect of transactions/supplies covered under Paras 7, 8(a) and 8(b) of Schedule III of CGST Act during the period 01.07.2017 to 31.01.2019, no refund shall be available in respect of such tax paid. The Council agreed with the recommendations of the Law Committee. 8.11 Agenda Item 7 (xi):- Mechanism to deal with differences in liabilities between GSTR-1 and GSTR-3B, along with draft rules and FORM DRC-01B for implementing the same. 8.11.1 Principal Commissioner, GST Policy Wing presented the agenda item before the Council and stated that Law Committee had deliberated upon the ways to safeguard revenue by finding a mechanism for dealing with difference in liability reported in statement of outward supplies between FORM GSTR-1 and FORM GSTR-3B. Further, he informed that the Law Committee felt that the mechanism should be based on system-based identification of the taxpayers based on certain approved risk criteria and a procedure of auto-compliance on the part of the taxpayers to explain/ take remedial action in respect of such difference. After deliberation, the Law Committee recommended that where the tax liability as per FORM GSTR-1 for a tax peri....
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....ation by the officer. He further stated that there may be scenarios wherein the filing of GSTR-1 for subsequent tax period could be allowed even if the taxpayer uploads a blank paper without proper details. He proposed that such cases should be verified by a GST officer as there may be a possibility that the registration can be used for claiming more Input Tax Credit in the later stages. 8.11.6 The Principal Commissioner, GST Policy Wing informed that as also explained in the agenda, a separate procedure would be worked out by the Law Committee for examination and verification of such cases by the tax officers, where the taxpayer deposits the differential tax liability only partly, with or without an explanation for such short payment, and for further action for recovery of the unpaid amount in accordance with the provisions of Section 79, to the extent no satisfactory explanation has been provided by the taxpayer for such differential unpaid amount. 8.11.7 The Hon'ble Chairperson stated that it would be desirable that verification by the officers should not be insisted upon at this stage for filing of GSTR-1 for the subsequent tax period and verification of the res....
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.... authority and those referred in sub-rules (2), (3), (4) and (4A) of Rule 54 of the CGST Rules, 2017 have been exempted from e-invoicing. 8.12.5 Representations had been received from banking companies for clarifying the matter as banks were being subject to investigation by some tax authorities on grounds that e-invoices were required to be generated by banks for movement of goods, including bullion. Tax officers are also claiming that said exemption from generation of e-invoices is available to a banking company only with respect to the banking services provided by it and not for goods or for the Banking Company as a whole. 8.12.6 Law Committee had recommended that it could be clarified through a circular that the exemption from mandatory issuance of e-invoices is with respect to the entity as a whole and not just with respect to the nature of supply/transaction, so as to provide clarity to the trade and field formations and remove ambiguity on these issues. The Council agreed with the recommendation of the Law Committee along with the draft Circular. 8.13 Agenda Item 7(xiii): Clarification regarding treatment of the difference in ITC availed in GSTR-3B a....
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....y him to the said registered person and the tax on said supplies had been paid by the said supplier in his return in FORM GSTR 3B. 8.13.4 Law Committee had recommended issuance of a Circular for detailing the procedure for verification of ITC availed by the registered persons in such cases and for providing clarity to the trade and field formations. The Council agreed with the recommendation of the Law Committee along with the draft Circular. 8.14 Agenda Item 7(xiv): Clarification regarding the treatment of statutory dues under GST law in respect of the taxpayers for whom the proceedings have been finalized under the Insolvency and Bankruptcy Code, 2016. 8.14.1 Principal Commissioner, GST Policy Wing presented the agenda item before the Council and stated that in cases where proceedings are initiated under Insolvency and Bankruptcy Code, 2016 (IBC) against corporate debtor, claims should be filed by the tax officers in respect of government dues pending against such person before the appropriate authority under IBC. On finalization of proceedings under IBC, the amount of government dues, payable by the said taxpayer, could be totally extinguished or could b....
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....asures would be required to be taken in due course for improving compliance under GST for OIDAR services supplied by persons located in non-taxable territory. 8.15.2 To ensure compliance under GST by OIDAR service providers, the Law Committee opined that amendments were required in existing provisions of law so as to reduce the scope of interpretation for deciding whether the said supply is covered under the scope of OIDAR services or not for taxation under GST. 8.15.3 Law Committee deliberated on these issues and recommended amendment in the definition of "non-taxable online recipient" under Section 2(16) of the IGST Act, 2017. Currently, for a service to be classified as OIDAR services under Section 2(17) of the IGST Act, 2017, an essential condition was that the supply of such service must be essentially automated and should involve minimal human intervention. However, there was lack of clarity on the meaning of the term "minimal human intervention" and it was opined that restricting the scope of GST on cross border supply by non-resident suppliers only to those services with minimal human intervention did not provide a level playing field and also gave rise to legal di....
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....he IGST Act, 2017. Further, Proviso to the section 12(8), inserted w.e.f. 01.02.2019, provides that where the transportation of goods is to a place outside India, the PoS shall be the place of destination of such goods, i.e. foreign country. Accordingly, IGST would be payable on the said supply. As the PoS is different from the location of the recipient of services in such cases, doubts are being raised in respect of the admissibility of input tax credit (ITC) to the recipient of such services. 8.17.2 Law Committee had recommended issuance of a Circular for clarifying that in such case ITC would be available to the registered person located in India, in respect of such receipt of services of transportation of goods, where place of supply is outside India in terms of proviso to Section 12(8), subject to fulfilment of other conditions of Sections 16 and 17 of CGST Act, 2017. Also, PoS is to be declared in FORM GSTR-1 on the common portal under the State code "96- Foreign Country" (and not under "97-Other Territory"). 8.17.3 Law Committee had also recommended omission of the proviso to Section 12(8) of IGST Act, 2017, as no useful purpose is being served by insertion o....
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....ions when any investigation is going on in one state for example in Uttar Pradesh and any lead related to other states like Delhi emerges from that investigation, then this data might be shared between the States through GSTN. There should be a mechanism in GSTN that such references might be auto populated or through online mechanism. 9.12 The Secretary took the note of the suggestions from the Hon'ble Member from Delhi and stated that there should be a system to share GST data regarding surveys and investigations between States and Centre and States. 9.13 The Secretary stated that from the deliberations, we can infer that the agenda on data sharing has the approval of the Council. The Council approved the agenda on GST Data sharing with Ministries and Departments. 10. The Hon'ble Member from Haryana requested to take agenda on GST Tribunal. He further stated that if that agenda was delayed, the GST Tribunal would not see light for another one year. 10.1 The Hon'ble Chairperson assured that the GST Council would meet at the earliest. 10.2 The Secretary stated that the meeting could be concluded as per request of many of the Hon'ble Members. In the ....
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....Shri. T. Harish Rao 25 Tripura Shri Jishnu Dev Varma 26 Uttarakhand Shri Prem Chand Agarwal 27 Uttar Pradesh 28 West Bengal Shri Suresh Kumar Khanna Smt. Chandrima Bhattacharya Minister for Public Works Minister of Local Self Government, Urban Development & Housing Minister of Tourism & Civil Aviation and Commerce & Industries Minister for Finance and Human Resources Management Minister for Finance, Health, Medical & Family Welfare Deputy Chief Minister Minister for Finance, Urban Development, Housing, Legislative & Parliamentary Affairs, Reorganization & Census Minister of Finance, Parliamentary Affairs Minister of State for Finance Page 51 of 131 டை CHAIRMAN'S INITIALS Document 2 CHAIRMAN'S INITIALS MINUTE BOOK Annexure-2 List of Officers from Centre and the States/Uts who atttended in the 48th Meeting of the GST Council held on 17th December, 2022 S.No. Centre/States/Uts Name of the Officer Designation/Charge Government of India Shri Sanjay Malhotra Revenue Secretary 2 Government of India Shri Vivek Johri Chairman, CBIC 3 Government of India Ms. V Rama Mathew st Government of India Shri Sanjay Kumar Agarwa....
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.... GST Council Secretariat Shri Joginder Singh Mor Under Secretary 40 GST Council Secretariat Ms. Reshma R. Kurup Under Secretary 41 GST Council Secretariat Ms. Priya Sethi Superintendent 42 GST Council Secretariat Shri Dharambir Superintendent CHAIRMAN'S INITIALS Page 54 of 131 Shipra Shipra - MINUTE BOOK 43 GST Council Secretariat Shri Niranjan Kishore Superintendent 44 GST Council Secretariat Shri Rakesh Joshi Inspector 45 GST Council Secretariat Shri Vijay Malik Inspector 46 GST Council Secretariat Shri Padam Singh Inspector 47 Andhra Pradesh Shri N. Gulzar Secretary Finance(CT) 48 Andhra Pradesh Shri M. Girija Shankar Chief Commissioner(ST) 49 Andhra Pradesh Shri K. Ravi Sankar Commissioner(ST) Policy 50 Arunachal Pradesh Shri Kanki Darang 51 Arunachal Pradesh Shri Tapas Dutta 52 Arunachal Pradesh Shri Nakut Padung 53 Assam Shri Samir K Sinha 54 54 Assam Shri Jayant Narlikar 55 Assam Shri Rakesh Agarwala Commissioner of Commercial Taxes Deputy Commissioner of State Taxes Superintendent Principal Secretary, Finance Department Commissioner & Secretary, Finance Department Principal Commissioner of State....
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....dditional Chief Secretary, Finance Department Commissioner of Commercial Taxes Additional Commissioner of Commercial Taxes Additional Commissioner of Commercial Taxes Additional Chief Secretary (Finance) CHAIRMAN'S INITIALS MINUTE BOOK 88 Kerala Dr. Rathan U Kelkar Secretary (Taxes) Commissioner of State 89 Kerala Shri. Ajit Patil Tax 90 90 Kerala Dr. S Karthikeyan Special Commissioner 91 Kerala Shri. Abraham Renn S Additional Commissioner 92 Madhya Pradesh Ms. Deepali Rastogi 93 Madhya Pradesh Shri Lokesh Kumar Jatav Principal Secretary (Department of Commercial Taxes) Commissioner Commercial Tax 94 Maharashtra Shri Manoj Sounik Additional Chief Secretary (Finance) 95 Maharashtra Ms Shaila A Secretary (Financial Reforms) 96 96 Maharashtra Shri Rajeev Mital 97 Maharashtra Shri Rajendra Adsul Commissioner of State Tax Joint Commissioner of State Tax 98 Maharashtra Ms Vishakha Borse Joint Commissioner of State Tax, HQ-V 99 Manipur Ms. Mercina R. Panmei Commissioner of Taxes 100 Manipur Shri Y. Indrakumar Singh Assistant Commissioner of Taxes 101 101 Meghalaya Ms S A Synrem 102 Meghalaya Shri. L Khongs....
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....Taxes of CHAIRMAN'S INITIALS Page 60 of 131 Shipra Shipra MINUTE BOOK 132 Telangana Ms. K Rupa Soumya Deputy Commissioner of State Taxes 133 Telangana Ms. VDN Sravanthi Deputy Commissioner of State Taxes 134 Tripura Shri Brijesh Pandey Secretary, Finance 135 Tripura Shri Ashin Barman Nodal Officer (GST) Commissioner of State 136 Uttarakhand Dr. Ahmed Iqbal Tax Additional Commissioner 137 Uttarakhand Shri I. S. Brijwal of State Taxes 138 Additional Commissioner Uttarakhand Shri Anil Singh of State Taxes Additional Commissioner 139 Uttarakhand Shri Amit Gupta of State Taxes 140 Uttarakhand Dr. Sunita Pandey Joint Commissioner of State Taxes 141 Uttarakhand Shri Anurag Mishra Joint Commissioner of State Taxes 142 Uttarakhand Shri Praveen Gupta Joint Commissioner of State Taxes 143 Uttarakhand Shri S.S. Tiruwa Deputy Commissioner of State Taxes Assistant Commissioner 144 Uttarakhand Shri Ranjit Singh of State Taxes 145 Uttar Pradesh Shri Nitin Ramesh Gokaran 146 Uttar Pradesh Ms. Ministhy S Page 61 of 131 Principal Secretary, State Tax Commissioner of State Tax CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS ....
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....t for manufacture of cattle feed and attract GST at the rate of 5%. ⚫ By products of milling of dal/ pulses like Khanda, Churi, Chilka have dual use- as animal feed and animal feed ingredients attracting Nil GST when used as cattle feed and attracting 5% when used for manufacture of cattle feed translating to an end use based exemption • To obviate implementation issues, husk of pulses including Chilka and concentrates including chuni/ churi, khanda may be unconditionally exempt from GST. • Clarification may be to regularise the matter of the intervening period on "as is" basis from the date of issuance of last circular (3.08.2022) on account of genuine doubts. CHAIRMAN'S INITIALS Page 65 of 131 MINUTE BOOK Agenda 3(a) (contd.) 3. Issue Clarification for applicability of higher rate of compensation cess of 22% on supply of SUV:(Volume 1, Pages 195-199) • The GST Council in its 21st Meeting held in Sept, 2017 had recommended a higher rate of compensation cess of 22% for SUV. "Sports Utility Vehicles(SUVs) (of length more than 4-metre, engine capacity more than 1500cc and ground clearance 170 mm): To increase the rate of cess from the prese....
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....ilar edible preparations in ready for consumption form pre- packaged and labelled ⚫ CTH 1905 90 30 specifically includes extruded products, savoury or salted. • It may be clarified that fryums are thus covered under 1905 90 30 which attract 18%. CHAIRMAN'S INITIALS Page 67 of 131 CHAIRMAN'S INITIALS MINUTE BOOK Agenda 3(a) (contd.) 8. Clarification on applicable IGST rate on items imported for petroleum operations: (Volume 1, Pages 201-202) Based on GoM report, 5% concessional rate of GST for goods of all chapters imported for petroleum operations was increased from 5% to 12% (Notification no. 3/2017-ITR) ⚫ However, certain goods including those used for petroleum operations attract 5% GST by virtue of their entry in Schedule I of notification no. 1/2017 of the ITR. • To clarify that if any goods imported for petroleum operations fall in specified list of goods eligible for 12% GST under notification no. 3/2017-ITR but are also eligible for a lower rate under Schedule I of notification no. 1/2017-CTR or any other notification, the importer may claim the lower rate. Agenda 3(a) (contd.) 9. Extend GST rate of 5% on ethanol supplied for bl....
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.... VGF paid by government to airlines for operating RCS flights is not taxable in terms of the said provision of GST Act. Page 70 of 131 Shipra MINUTE BOOK Agenda 3(d) (contd.) 2. Omission of the Entry 23A of Notification No. 12/2017-CTR: (Volume 1 Page no 212) • Entry 23A of Notification No. 12/2017-CTR exempts services, by way of providing access to a road or a bridge, against consideration in the form of annuity. • Based on recommendations of the 43rd GST Council, it was clarified that entry 23A of said notification does not exempt GST on the annuity (deferred payments) paid for construction of roads. However, the Hon'ble Karnataka High Court has held that entry 23A of said notification covers services of construction of road where consideration is paid in the form of annuity. • Access to road or bridge is allowed against consideration in the form of toll which is already exempt under entry at Sr. No. 23. ⚫Entry 23A may be omitted to prevent its misuse. Agenda 3(d) (contd.) 3. Taxability of revenue apportioned by Indian Railways (IR) to Special Purpose Vehicles (SPVs) and O&M costs charged by Indian Railways from SPVs: (Volume 1 Page n....
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.... 3(d) (contd.) 6. GST on renting of residential dwelling by the proprietor of a proprietorship firm in his personal capacity: (Volume 1 Page no 217) • As recommended by 47th GST Council, renting of residential dwelling to a business entity for use of its employees etc. has been made taxable and the present entry in the notification reads as under "Services by way of renting of residential dwelling for use as residence except where the residential dwelling is rented to a registered person". • An issue has arisen whether GST would be payable on renting of a residential dwelling by the proprietor of a proprietorship firm in his personal capacity for use as his residence when the firm is a registered person. • Where the residential dwelling is rented by a person who is the proprietor of a proprietorship firm who rents it in his personal capacity for use as his own residential dwelling, (and such renting is not on account of its business, i.e., not accounted for in the books of account of the firm but is on personal account) the exemption should be available to him. Agenda 3(d) (contd.) • To avoid litigation on this matter, it is proposed that th....
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....ences, public parks and garden, burial ground and crematorium 5. Renting of motor vehicles for carrying out functions listed at Sr. No. 1 to 4 above; 6. Supply of manpower service for carrying out functions listed at Sr. No. 1 to 4 above Agenda 3(d) (contd.) ⚫ Views were sought from the States of Telangana, Andhra Pradesh and Delhi, as per decision of 47th GST Council meeting. • Based on the inputs from the states, the following positive list of services is proposed to be specified in in Sl. No. 3 and 3A of notification No. 12/2017-CTR as follows: 1. Water treatment and/or supply; 2. Public Health activities, Sanitation Conservancy and Solid or Liquid Waste management; 3. Slum Improvement and Up gradation; 4. Maintenance and operation of street lights, bus stops, public conveniences, public parks and gardens, burial ground and crematorium; 5. Education, including primary and secondary schools; Page 75 of 131 CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE BOOK Agenda 3(d) (contd.) 6. Technical training and vocational education; 7. Adult and non-formal education; 8. Libraries; 9. Social Forestry and Farm Forestry; 10. Fire Services; 11. Renting....
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....ities by way of construction and erection of transmission assets for providing power supply to the pump houses which are constructed under a Lift Irrigation Scheme (LIS). • To remove exemption limits on renting of premises by a religious/charitable trust. • Formulating a Margin Scheme for Tour Operators in consultation with stakeholders. • GST on economy class fare may be increased to 12% and on business class to 18% provided ATF is brought under ambit of GST. • To bring parity between express and transport sector. • To exempt GST on All India Permit fee paid for grant of authorization or permit for plying Tourist Vehicles throughout India w.e.f 01.04.2021. Agenda 3(f): Issues deferred for further examination (volume 1, page no 257-260) Committee deferred following issues for further examination: ⚫ To notify a mechanism for availment of ITC where AC bus services are supplied through e-commerce operator (ECO) or to shift the onus of discharging GST on the registered bus operators instead of ECOS. • To clarify the nature and taxability of various supplies in relation to crypto eco-system. • Proposal to clarify that GST is....
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....ions are: i. To notify the provisions of the Finance Act, 2022. ii. To exempt taxpayers having AATO upto Rs. 2 crores from the requirement of furnishing annual return for FY 2021-22. iii. To extend due date of furnishing FORM GST CMP-08 for the quarter ending June, 2022 till 31.07.2022. iv. To extend the waiver of late fee for delay in filing FORM GSTR-4 for FY 2021-22. v. To extend dates of specified compliances in exercise of powers under section 168A of CGST Act. vi. To implement e-invoicing for the taxpayers having aggregate tumover exceeding Rs. 10 Crore from 1st October, 2022. vii. To empower the Competition Commission of India to handle anti- profiteering cases under CGST Act, 2017 w.e.f. 01.12.2022. Notifications to implement various decisions of GST Council taken in 47th meeting CHAIRMAN'S INITIALS Page 83 of 131 CHAIRMAN'S INITIALS MINUTE BOOK Agenda 2: Ratification of Notifications and Circulars [Vol 1- Pg. 147-189] Act Rules Notification Circulars Nes Description/Remarks IGST Act Nine (09) Integrated Tax (rate) Notifications issued (No. 03/2022 to 11/2022) Notifications to implement various decisions of GST Council taken in its 47th mee....
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.... To settle IGST amount of Rs. 22.000 crores for the Financial Year 2022-23 on ad-hoc basis. " B " " Extension of the due date for filing FORM GSTR-3B for the month of September, 2022. by registered person from 20th October, 2022 to 21st October, 2022. Amendment in instructions to FORM GSTR-9. Issuance of clarification regarding the issues relating to refund of umutilised ITC on account of inverted rated structure. To empower the Competition Commission of India to handle anti-profiteering cases under CGST Act, 2017 w.e.f. 01.12.2022 (as per decision of GST Council in 45th meeting). Extension of due date of filing FORM GSTR-1 for month of November, 2022 by taxpayers in 13 districts of State of Tamil Nadu till 13th December, 2022. CHAIRMAN'S INITIALS Page 85 of 131 CHAIRMAN'S INITIALS MINUTE BOOK Shipra Recommendations of the Law Committee Page 86 of 131 Shipra MINUTE BOOK Law Committee Recommendations for Trade facilitation and Reducing litigation CHAIRMAN'S INITIALS Page 87 of 131 CHAIRMAN'S INITIALS MINUTE BOOK Agenda 7(ii): Refund to the unregistered persons in certain cases [Vol 1- Pg. 291-296] Issue: There are cases where unregistered buye....
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....whether it should be treated as a discount by insurance company, to be deducted from the gross premium, for the purpose of calculation of value of supply made by insurer to the insured. " Proposal: â–LC has recommended that it may be clarified through a circular that NCB is not a consideration in respect of any service rendered by the insured to the insurance company, rather it is an upfront discount from the premium payable by the insured for the supply of insurance services by the insurance company to the insured, and therefore. NCB is deductible for the purpose of calculation of value of supply of insurance services under section 15 of CGST Act, 2017. CHAIRMAN'S INITIALS Page 89 of 131 N MINUTE BOOK Agenda 7(xii): Issuance of clarification on various issues pertaining to GST (2/2) Issue 2: Applicability of e-invoicing with respect to an entity [Vol 1- Pg. 378-384] Notification No. 13/2020-Central Tax dated 21.03.2020, as amended, provides the class of registered persons to whom e-invoicing shall be applicable under Rule 48(4) of the CGST Rules, 2017. ➤ SEZ units, government departments, local authority and those referred in sub-rules (2), (3), (4) ....
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....nces mentioned in clause (g), (j) and (k) of sub-section (1) of section 132 of CGST Act and consequential amendment in clause (/) of sub-section (1) and clause (iv) of sub- section (1) of section 132 of CGST Act. The minimum threshold for launching prosecution to be increased to Rs two crore from the current Rs one crore and accordingly, the clause (iii) of sub-section (1) of Section 132 to be deleted. â– Consequential amendment in sub-section (3) of section 132 of CGST Act to be carried out. â– Range of compounding amount in section 138(2) of CGST Act to be reduced suitably to minimum of 25% of the tax amount to maximum of 100% of tax amount, to make it easier for trade to resort to compounding of offences in GST. To remove anomalies in section 138(1) of CGST Act regarding the exclusion of persons for availing the benefit of compounding provisions who have been accused of committing an offence under CGST Act which is also an offence under any other law in force. To modify the language of clause (a) and (b) of first proviso to section 138(1) to simplify the same. To exclude mastermind of issuance of fake invoices from compounding by inserting a suitable cla....
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....ls of outward supplies in their FORM GSTR-1. Because of such discrepancies. FORM GSTR-2A of their recipients remained incomplete. However, the concerned recipients may have availed input tax credit on the said supplies in their returns in FORM GSTR-3B, as restrictions in availment of ITC up to certain specified limit beyond the ITC available to the registered persons as per FORM GSTR-2A were provided under rule 36(4) only with effect from 9th October 2019. Such discrepancies between the amount of ITC availed in FORM GSTR-3B and the amount available in FORM GSTR-2A of the registered person are being noticed by the tax officers during proceedings such as scrutiny audit investigation etc. and are being considered by them as representing ineligible ITC availed by the registered persons. Various representations have been received from the trade as well as the tax authorities, seeking clarification regarding the manner of dealing with such discrepancies. Proposal LC has recommended issuance of a circular for detailing the procedure for verification of TTC availed by the registered persons in such cases. > This would provide clarity to the trade and field formations and wil....
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....non- taxable territory without such goods entering into India, is an activity which is to be treated as neither supply of goods or services - para 7 supply of warehoused goods to any person before clearance for home consumption, is an activity which is to be treated as neither supply of goods or services - para 8(a) â– supply of goods by the consignee to any other person, by endorsement of documents of title to the goods after the goods have been dispatched from the port of origin located outside India, but before clearance for home consumption (usually termed a High Sea Sales) will be treated neither as supply of goods nor as supply of services - para 8(b) The said notification was not made applicable retrospectively from 01.07.2017 implying that before the said amendment of the CGST Act w.e.f. 01.02.2019, the activities specified in para 7. para 8(a) and para 8(b) of Schedule III of CGST Act were subject to GST. Page 96 of 131 Shipra Shipra MINUTE BOOK Agenda 7(x): Retrospective applicability of para 7, 8(a) and 8(b) of Schedule III of CGST Act (2/2) [Vol 1-Pg. 365-373] However, the taxpayers are taking the plea that the insertion of the para 7. para 8(a) ....
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....C has recommended that: ⚫ in respect of unregistered persons supplying goods through ECOS . • Notification may be issued under section 23(2) of the CGST Act for exempting unregistered persons from obtaining mandatory registration for supplying goods through ECOS Notification may be issued under section 148 of the CGST Act for providing special procedure to be followed by the ECOs in respect of supplies of goods through them by unregistered persons. FORM GSTR-8 may be amended for capturing the information of supplies made by unregistered suppliers through electronic commerce operators. Page 98 of 131 Shipra Shipra MINUTE BOOK Agenda 7(vii): Supplies by unregistered person and composition dealers through e-commerce operators (2/2) [Vol 1-Pg 335-343] Rule 67(2) of CGST Rules, 2017 to be amended to provide that the details of TCS fumished by ECOs in FORM GSTR-8 shall be made available only to the registered suppliers. in respect of the composition taxpayers supplying through electronic commerce operators . . To remove the condition restricting registered persons engaged in supplying through electronic commerce operators from opting for the Composition ....
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.... facilitate updation of ECL of taxpayers based on e-scrolls of RBI, where banks fail to share CIN details with GST System, thus benefiting the taxpayers. 파 CHAIRMAN'S INITIALS Page 100 of 131 Shipra Shipra MINUTE BOOK Agenda 7(vi): Proposal for amendments to CGST Rules, 2017 (2/11) [Vol 1- Pg. 332-334] Amendment in FORM GST DRC-03: Circular No. 174/06/2022-GST dated 06.07.2022 has been issued prescribing the manner of re-credit of amount of erroneous refund deposited by the taxpayer, in terms of provisions of sub-rule (4B) of rule 86, in electronic credit ledger using FORM GST PMT-03A Accordingly, certain changes are required in FORM GST DRC-03, for online transmission of intimation of payment of amount of erroneous refund through FORM GST DRC-03 to the jurisdictional proper officer so as to enable him to issue FORM GST PMT-03A for re-credit of amount in electronic credit ledger of the taxpayer. LC recommended the proposed changes in FORM DRC-03 for capturing the details of erroneous refunds and for development of the functionality for re-credit of amount of erroneous refund in electronic credit ledger using FORM GST PMT-03A. > The amendment would facili....
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.... of a certified copy of such uploaded order by the appellant. " However, where the decision or order has not been uploaded on the common portal. submission of the certified copy by the appellant may be required. LC, accordingly, recommended for amendment in sub-rule (3) of rule 108 and in rule 109 of the CGST Rules, 2017 to provide clarity on the requirement of submission of certified copy of the order appealed against and the issuance of final acknowledgment by the appellate authority. >This amendment will facilitate timely processing of appeals and ease the compliance burden for the appellants. CHAIRMAN'S INITIALS Page 103 of 131 MINUTE BOOK Agenda 7(vi): Proposal for amendments to CGST Rules, 2017 (5/11) Amendment in FORM GST REG-17 and FORM GST REG-19: Issue 1: Proposal for changes in FORM GST REG-19 [Vol 1- Pg. 328-331] More scenarios need to be covered in FORM GST REG-19 (order for cancellation of registration) in order to clearly bring out whether the reply to the show cause notice has been submitted or not and whether the concerned person has appeared for personal hearing or not. Further. "Determination of amount payable pursuant to cancellation" in FOR....
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....hat amount of ITC to be added to the output tax liability which was proportionate to the amount of payment withheld vis-Ã -vis the value of supply. However, the amended rule 37(1) requires the said recipient to pay an amount equal to the input tax credit availed in respect of such supply, giving an impression that the whole of ITC pertaining to such supply is to be reversed even though a part of the payment may have been made by the recipient to the supplier. LC recommended that sub-rule (1) of rule 37 may be amended retrospectively with effect from 01.10.2022 to mandate reversal of ITC proportionate to the amount of payment withheld vis-Ã -vis the value of supply. > This amendment would correct the anomaly and facilitate the taxpayers in compliance of the provision of 2nd proviso to section 16(2). Page 106 of 131 Shipra Shipra MINUTE BOOK Agenda 7(vi): Proposal for amendments to CGST Rules, 2017 (8/11) [Vol 1- Pg. 316-317] Insertion of rule 37A: Sub-section (2) of section 41 provides for prescription of manner of reversal of ITC availed by a registered person where the supplier has not paid the tax payable on the said supply and re- availment of the said ....
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....e (14) of rule 138 for uniformity in the threshold for the generation of e-way bill throughout the country. ➤ This will provide a single threshold value pan-India for generation of e-way bill for transportation of goods. rls CHAIRMAN'S INITIALS Page 108 of 131 Shipra Shipra MINUTE BOOK Agenda 7(vi): Proposal for amendments to CGST Rules, 2017 (10/11) Amendment in Entry (5) of Annexure appended to Rule 138(14): ܀ [Vol 1- Pg. 327-327] In terms of clause (a) of sub-rule (14) of Rule 138 of the CGST/SGST Rules, 2017, e-way bill is not required to be generated in case of transportation of goods specified in the Annexure appended to the said sub-rule. ➤ Entry no. 4 & 5 of the aforesaid Annexure cover the entire Chapter 71 of the First Schedule to the Customs Tariff Act, 1975, including Imitation Jewellery, thereby exempting the generation of e-way bill for transportation of imitation jewellery. Field formations are contending that imitation jewellery does not fall in the same genre as jewellery made of Gold and Silver and there is no security concern for them. It has, therefore, been suggested by field formations to exclude Imitation Jewellery from t....
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....75 Issue: [Vol 1- Pg. 308-312] Section 75(2) of CGST Act, 2017 provides that the proper officer shall determine the tax payable by the noticee, deeming as if the notice was issued under sub-section (1) of section 73, in cases where the appellate authority or appellate tribunal or court concludes that the notice issued by proper officer under sub-section (1) of section 74 is not sustainable for reason that the charges of fraud/wilful-misstatement/suppression of facts etc. have not been established. Doubts have been raised by the field formations seeking clarification regarding - Proposal: A the time limit within which the proper officer is required to re-determine the amount of tax payable considering notice to be issued under 73(1), specially in cases where time limit for issuance of order as per 73(10) has already been over; and the methodology for computation of such amount payable by the noticee, deeming the notice to be issued under sub-section (1) of section 73. LC has recommended for issuance of a circular in FAQ form for clarifying the same. Issuance of circular would provide clarity and remove ambiguities on the issue. CHAIRMAN'S INITIALS Page 111 of 131....
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....risk applicants for registration under GST. The pilot for the same is proposed to be conducted by the State of Gujarat Proposal ܀ LC has recommended that- " sub-rule (4A) of rule 8 may be substituted to mandate biometric-based Aadhaar authentication for high-risk applicants who opt for authentication of Aadhaar number sub-rule (4B) may be inserted in rule 8 to provide for exemption from biometric-based Aadhaar authentication in states/UTs where the pilot is not being undertaken sub-rule (5) of rule 8 may be amended to provide that acknowledgement shall be issued to the applicant only after completion of biometric-based Aadhaar authentication rule 9 may be amended to provide for mandatory physical verification of an applicant who has undergone biometric-based Aadhaar authentication and is identified on the common portal, based on data analysis and risk parameters, for carrying out such physical verification of places of business. For conducting pilot in the state of Gujarat: amendments in rule 8(4A), 8(5) and rule 9 may be made at present only in Gujarat SGST Rules and in CGST Rules but not in SGST / UTGST Rules of other states/UTs at present rule 8(4B) may be ....
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....datory, instead of verification of authorised signatory's self-declared mobile number and email address â– Sub-rule (1) of rule 8 and clause (a) to sub-rule (2) of Rule 8 may be amended to provide for OTP- based verification of PAN-linked mobile number and email address and verification of authorised signatory's self-declared mobile number and email address may be done away with. Part-A of FORM GST REG-01 may be amended accordingly. This proposal would streamline the process of registration and help in protecting the interest of honest taxpayers. CHAIRMAN'S INITIALS Page 116 of 131 Shipra Shipra MINUTE BOOK Agenda 7(viii): Proposal for amendments in the CGST Act(1/3) [Vol 1-Pg. 344-345] Issue 1: Amendment in second proviso to section 16 of CGST Act to align with GSTR-1/3B As per recommendations of GST Council, GSTR-1/3B retum filing system has been made as the default return filing system and amendments have been carried out in CGST Act to this effect. However, 2nd and 3rd provisos to section 16(2) of CGST Act also require amendment to align with the GSTR-1/3B system. Proposal LC recommended that 2nd and 3rd provisos to section 16(2) of CGST Act may be amen....
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.... of goods or services or both excluding the amount of input tax credit provisionally accepted. Section 41 of the CGST/SGST Act, 2017, which provided for availment of eligible input tax credit as self assessed in the return on a provisional basis in terms of GSTR-1-2-3 system of return filing, has been amended through Finance Act, 2022 w.e.f. 01.10.2022 by doing away with the provision of availing of input tax credit on a provisional basis. Proposal: LC recommended to omit the words "excluding the amount of input tax credit provisionally accepted." in sub-section (6) of section 54 of the CGST Act. ➤ These amendments will help in aligning various provisions of CGST Act. CHAIRMAN'S INITIALS Page 119 of 131 CHAIRMAN'S INITIALS MINUTE BOOK Agenda 7(ix): Amendment in the tables of GSTR-1 for reporting ECO Supplies attracting TCS under section 52 of CGST Act and those made under section 9(5) of CGST Act [Vol 1- Pg. 347-364] Issue: ■Supplies made by a registered person through e-commerce operators (ECOs) attracting TCS under section 52 of CGST Act are to be reported in various tables of FORM GSTR-1 i.e. 4C, 5B, 7A(2), 7B(2), 10A(1) & 10B(1). However, thes....
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.... GSTR-3B and to request payment of the differential liability or explain the difference. B Insertion of a new clause (d) in sub-rule (6) of rule 59 of CGST Rules to enable blocking of FORM GSTR-1 for a subsequent tax period unless the taxpayer has deposited the amount specified in the intimation or has furnished a reply explaining the reasons for any amount remaining unpaid. FORM GST DRC-01B may be inserted as required under rule 88C(1). To begin with, difference between liability declared in FORM GSTR-1 & that declared in FORM GSTR-3B of more than 20% as well as more than Rs. 25 lakhs may be taken for the purpose of intimation under proposed rule 88C(1). Law Committee to formulate a separate procedure for examination of such cases by the proper officer, where the taxpayer deposits the differential tax liability only partly, with or without an explanation for such short payment, and for further action for recovery of the unpaid amount in accordance with the provisions of section 79, to the extent no satisfactory explanation has been provided by the taxpayer for such differential unpaid amount. This proposal will help in reducing GSTR 1-3B gap by facilitating taxpaye....
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....ns located in non-taxable territory by taking suitable measures such as, information returns by payment gateways/ AD banks or imposition of TCS liability of such payment gateways AD banks. Amendments in law may be required for exploring the abovementioned alternatives so as to reduce the requirement of interpretation for deciding whether the said supply is covered under the scope of OIDAR services or not for taxation under GST. Proposal LC has recommended amendment in: â– Definition of non-taxable online recipient in section 2(16) of IGST Act to remove the condition that service recipient uses the OIDAR services for any purpose other than commerce, industry or any other business or profession â– Definition of online information and database access or retrieval services in section 2(17) of IGST Act to remove the condition that the supply of such service must be essentially automated and should involve minimal human intervention. This would provide clarity to the trade and field formations on the issue and will reduce litigations. Page 124 of 131 Shipra Shipra MINUTE BOOK THANK YOU Page 125 of 131 CHAIRMAN'S INITIALS Document 6 CHAIRMAN'S INITIALS MIN....
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....ication Issued Before issuing final instruction on levy of penal interest, clarification was issued as to which type of holidays should be accepted for waiver of penal interest from agency banks on delayed remittances on account of reporting of GST collections. In this regard, Office Memorandum No. S- 11012/1(6)/Misc./RBD/GBA/2017-18/98-180 dated 30/01/2019 issued by CGA may be referred Back, INA, New Bethi Diffes Meantem Page 127 of 131 PCCACCAC COM GORA, ABI M NAGAR TA FEW 2019 ૧૨. Charg Chil STC STC Cohy CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE BOOK Constitution of Committee Annexure-'A' 1 The Office of Pr. CCA, CBIC brought this issue as an agenda item before the 19th Meeting of the Core Group of Standing Committee held on 2nd November, 2018 at Bhubaneshwar. The meeting was chaired by CGA. ✓ constituted a committee vide OM No. S- 11012/3/PI/CBIC/GBA/194-200 dated 08.02.2019 comprising the following members to examine the requests of the banks and to decide on the issue of waiver of penal interest Custraler Gevel of Mishery of Plance Departments E Bock, INA, New Delh Ema No. 5-118123CHCGRA/1-20 Offer Meta paring....