TaxTMI 
TaxTMI 
Minutes of the 48th Meeting of GST Council held on 17th December, 2022
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....ittee 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 25(2) o....
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....rding 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 Ministers on....
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.... 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 recommendations. 1.6 Further, he stated....
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.... 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 Council. 3. Agenda Item 2; Ratification of the Notificati....
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....itment 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, Fitment Agenda for consideration of the GST Council was summarized in....
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....sis 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 compensation cess rate of 22%. 4.13 JS, TRU further explained that interim Report....
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....cable 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 and HPCL under entry 102A of Schedule I of Notification No. 1/2017-Central Tax (Rate) da....
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....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 clarification that that was applicable only to SUVs and as regards other descriptions of vehicle like MUVs,....
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....posal 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 decision as fresh proposals. The Council approved the proposals as detailed in Agenda 3(a). 4.37 JS, TRU further informed the C....
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....pplicability 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 proprietorship concern, if agreed to by the Council. Further, it could be clarified that incentives paid to banks under the scheme for promotion of RuPay D....
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.... 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 local authorities. Further, he suggested that certain works like construction of tanks etc. had more component of goods and including them would make it....
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....rward 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) along with monthly performance report for the month of. October, 2022 and November, 2022 for the information of the Council The Secretary presented ....
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.... 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-Central Tax dated 22.12.2020 provided for biometric-based Aadhaar authentication but the said provision is yet to be notified. He informed tha....
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....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 details from the Land Revenue department. 8.1.6 The issue was deliberated by the Law Committee and recommended that the details of Electricity c....
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....ked 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 unregistered person from claiming refund. Further, it was observed that Section 54(8)(e) of the said Act, provides that the refund would be paid to th....
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....ed 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. It further recommended deletion of clause (iii) of sub-section (1) of Section 132 of the CGST Act, 2017 so that the monetary limit for prosecution is raised to Rs two ....
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....d 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. 8.3.10 The Hon'ble Member from Tamil Nadu stated that besides CBIC, States were also filing prosecutions for GST offences. He also mentioned that whether prosecuted or not, the deterrence value of criminality ....
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....a 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. 8.3.18 The Hon'ble Member from Tamil Nadu stated that he fully agreed with the Hon'ble Chairperson. The Council agreed with the recommendation of the Law Committee in agenda item 7(iii) with modification that the threshold for prosecution be increase....
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....tice 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 that as per existing provisions of the Act, there were different time limits to issue notices under Sections 73 and 74 respectively and that many cases were being unearthed due to advanced techniques of Data Analytics and various GST related portals and accordingly to protect the revenue interest of....
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....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 credit proportionate to the amount not paid by the recipient to the supplier vis a vis the invoice value. The Council agreed with the recommendation of the Law Committee. III. Insertion of Rule 37A 8.6.6 Principal Commissioner, GST Policy Wing informed that sub-section (2) of Section 41 of the CGST Act, 2017, as s....
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....sses 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 come up with some rectification/clarification. 8.6.10 The Secretary clarified that the present proposal in the agenda item was to take care of. such cases and that after the amendment proposed in that agenda item, the name, address and other details of recipient i.e. user would be required to be provided by the supplier of service....
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....ll 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 Wing further mentioned that in terms of Section 107 (1) of the CGST Act, 2017, any person aggrieved by any decision or order passed by an adjudicating authority may appeal to the concerned appellate authority within three months from the date of communication of the said decision or order to such person. Similar provision exists under sub-section (2) of Section 107 of CGST Act to provide....
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....ule 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 the appellant to file application for withdrawal of appeal application. The Council agreed with the recommendation of the Law Committee. IX. Deletion of clause (d) of sub-rule (14) of Rule 138 8.6.22 The Principal Commissioner, GST Policy Wing informed the Council that in the Officers' meeting held on 16th December 2022, the officers from the States of Tamil Nadu, Punjab, Rajasthan, Maharashtra, Delhi, Kerala and Chhattisga....
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....ces 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 recommended incorporating the proposal made by GSTN at the end of FORM GST REG-17. The Council agreed with the recommendation of the Law Committee. XII. Amendment in FORM GST DRC-03 8.6.28 Principal Commissioner, GST Policy mentioned that Circular No. 174/06/2022-GST dated 06.07.2022 prescribes the manner for re-credit of amount of erroneous refund deposited by the taxpayer, in terms of provisions of sub-rule (4B) of Rule 87 of CGST Rules, 2017 in electronic credit ledger using FORM GST ....
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....dition, 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 Section 122 of CGST Act, 2017 providing for penal provisions in cases of violation of compliances on part of the ecommerce operators in respect of the supplies made by unregistered persons and Composition taxpayers through them. Further, Law Committee also recommended that considering the time required for development of requisite functionality on the portal as well as preparedness by ECOs, the implementation of scheme might be deferred to 01.10.2023. 8.7.3. The Hon'ble Member from Haryana stated that there was requirement ....
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....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 time limit for filing returns/statements be fixed as three years beyond the due date of filing and accordingly, CGST Act, 2017 be amended by inserting sub-section (5) in Section 37 and sub-section (11) in Section 39 of the CGST Act, 2017. Law committee also recommended inserting sub-section (2) in Section 44 and sub-section (15) in Section 52 of the CGST Act, 2017. The Council agreed with the recommendation of the Law Committee. D. Proposal for amendment of sub-section (6) of Section 54 of CGST Act, 2017 8.8.6 Sub-section (6) of Section 54 of the CGST Act, 2017 provides for ....
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....equired 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 of CGST Act, 2017. The changes recommended by the Law Committee in FORM GSTR-1 are enclosed as Annexure to the agenda note. The Council agreed with the recommendation of the Law Committee in relation to FORM GSTR-1. 8.10 Agenda Item 7(x): Retrospective applicability of paras 7, 8(a) and 8(b) of Schedule III of the CGST Act, 2017 8.10.1 Principal Commissioner, GST Policy Wing further mentioned that Para 7 of Schedule III to CGST Act, 2017 provides that supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India, is....
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....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 period exceeds the tax liability as per FORM GSTR-3B for that period by more than a specified extent, the registered person could be intimated on the portal of such difference and be directed to either pay the differential tax liability along with interest, or explain the difference and unless the taxpayer either deposits the amount specified in the said intimation or furnishes a reply explaining the reasons for any amount remaining unpaid, such a person should not be allowed to file FORM GSTR-1/ invoice furnishing facility for the subsequent tax period. 8.11.2 In this regard, Law Committee recommended insertion of a ....
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....s 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 response of the taxpayer may be a separate exercise, as suggested by the Law Committee. The Council agreed with the recommendation of the Law Committee. 8.12 Agenda Item 7(xii): Clarification on various issues in GST. A. Clarification on taxability of No Claim Bonus offered by Insurance companies 8.12.1 Principal Commissioner, GST Policy Wing presented the agenda item before the council and stated that various representations had been received from General Insurance Council and various insurance companies seeking clarity on treatment of No Claim Bonus ('NCB') under GST. It had been represented that NCB is a discount given by insurance companies on....
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....rified 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 as compared to that available in GSTR-2A for FY 2017-18 and 2018- 19 8.13.1 Principal Commissioner, GST Policy Wing presented the agenda item before the Council and stated that during the initial period of implementation of GST, especially during the financial years 2017-18 and 2018-19, many suppliers had failed to furnish the correct details of outward supplies in their FORM GSTR-1. Because of such discrepancies, FORM GSTR-2A of their recipients remained incomplete. However, the concerned recipients might 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 person....
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....d 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 be reduced vis-a-vis the amount claimed by the tax officer. Doubts were being raised by tax authorities regarding the modalities for implementation of the order of the adjudicating/appellant authority under IBC, after finalization of the proceedings thereof, with respect to demand for recovery against such corporate debtor under CGST Act, 2017. 8.14.2 Law Committee deliberated on the issue and was of the view that in cases where a confirmed demand for recovery had been issued by the tax authorities for which a summary had been issued in FORM GST DRC-07/DRC 07A against the corporate debtor, and where the proceedings had been finalized against the corporate debtor under IBC reducing the amount of statutory dues payable by the corporat....
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....as 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 disputes. In view of this, Law Committee recommended amending the definition of OIDAR services under Section 2(17) of the IGST Act, 2017 as detailed in the agenda. The Council agreed with the recommendation of the Law Committee. 8.16 Agenda Item 7(xvi): In Section 17 of the CGST Act, 2017 regarding ITC in respect of CSR (Corporate Social Responsibility) expenditure. 8.16.1 Principal Commissioner, GST Policy Wing presented the agenda item before the Council and stated that doubts had been raised by trade as well field formations in respect of availability of input tax credit on CSR expenditure incurred by companies in accordance with the provisions of Companies Act, 2013 due to various contradictory advance rulings. One view was that CSR expenditure is incurred....
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...., 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 of the proviso to Section 12(8) of IGST Act, 2017 w.e.f. 01.02.2019. The Council agreed with the recommendations of the Law Committee. 9. Agenda Item 12: GST Data sharing with Ministries and Departments 9.1 The Secretary then presented Agenda No. 12 regarding Data Sharing with Ministries and Departments and requested Additional Secretary, DoR to brief the Council regarding the agenda. 9.2 Additional Secretary, DoR informed that the agenda was for sharing of the GST Data which masked individual taxpayer data for the benefit of the Centre and State Government Departments and Agencies. The view behind Data sharing was that a lot of services could be rendered if the GST Data i.e. both aggregated and dis-aggregated data was shared between the Centre/States' departments and agencies through API. He furthe....