Minutes of the 50th Meeting of GST Council held on 11th July, 2023

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....y Group of Ministers (GoM) on implementation of E-way bill requirement for movement of Gold/ Precious stones under chapter 71.   ii. Capacity based taxation and Special Composition Scheme in certain Sectors in GST.   iii. Clarification on charging of interest under section 50(3) of the CGST Act, 2017, in cases of wrong availment of IGST credit and reversal thereof   iv. Issues pertaining to interpretation of Section 10 of IGST Act, 2017   v. Clarification with respect to applicability of e-invoice w.r.t. supplies made by a registered person to Government Departments or establishment/ Government agencies / local authorities/ PSUs registered solely for the purpose of TDS   vi. Clarification on refund related issues   vii. Clarification to deal with difference in Input Tax Credit (ITC) availed in FORM GSTR-3B as compared to that detailed in FORM GSTR-2A for the period 0 1.04.2019 to 31.12.2021   viii. Mechanism to deal with differences in ITC between GSTR-2B and GSTR-3B, along with draft rules and proposed FORM DRC-0lC for implementing the same   ix. Procedure for Recovery of Tax and Interest in terms of Rule 88C(3)   x. ....

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....nline Gaming 6. Recommendations of the l 8th & 19th IT Grievance Redressal Committee for approval/decision of the GST Council   a. Decisions/recommendations of the 18th meeting of the ITGRC   b. Decisions/recommendations of the 19th meeting of the ITGRC 7. Scheme of budgetary support under GST regime in lieu of earlier excise duty exemption schemes to eligible manufacturing units under different Industrial Promotion Schemes of the Government of India 8. Ad-hoc Exemptions Orders issued under Section 25(2) of the Customs Act, 1962 to be placed before the GST Council for information. 9. Report of 3rd Meeting of the Group of Ministers (GoM) on GST System Reforms 10. Proposal for creation of State Co-ordination Committee comprising of the GST authorities from the State and the Central Tax Administrations 11. Implementation of GSTAT consequent to passing of Finance Act, 2023 11. (Addendum) Addendum to Annexure-A of the Agenda item 11 12. Performance Report of Competition Commission of India (CCI) for month of December, 2022 and 4th quarter of the F.Y 2022-23 along with Performance Reports of State Level Screening Committee (SLSC), Standing Committee (SC) and....

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....mitted its 2nd report which was being placed before the Council for deliberations. He thanked all the Hon'ble Members of this GoM for their valuable recommendations. 1.8 The Secretary further stated that the GoM on GST System Reforms had submitted the report of its third meeting which was being placed before the Council for deliberations. He thanked the Hon'ble Convenor of this GoM from Maharashtra and other Hon'ble Members of this GoM from Haryana, Delhi, Assam, Andhra Pradesh, Odisha, Tamil Nadu and Chhattisgarh. 1.9 The Secretary informed the Council that a National Coordination Meeting was held on 24th April, 2023 with the officers from Center, States, Union Territories, GST Council Secretariat and G$TN wherein various issues on greater coordination on GST administration and sharing of best practices by both Center and states were discussed. The agenda of this meeting involved greater use of technology for GST compliance and tackling tax evasion. One of the outcomes of this meeting was All India drive against fake registrations from 16th May, 2023 to 15th July, 2023. The coordinated effort from both Central and State GST administrations had yielded excellent results. ....

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....he Judicial Members and Technical Members of the State Bench. The Secretary stated that the same would be recorded. He requested that minutes be approved Decision: The Council adopted the Minutes of the 49th meeting of the GST Council. 3. Agenda item 2: Ratification of the Notifications, Circulars and Orders issued by the GST Council and decisions of GST Implementation Committee for the information of the Council 3.1 The Secretary took up the next agenda pertaining to the Ratification of the Notifications, Circulars and Orders issued by the GST Council and decisions of GST Implementation Committee for the information of the Council (Page 92-104 of the agenda). He stated that this agenda was discussed in the officers meeting held yesterday and there was consensus. He requested the Council to ratify the Notifications, Circulars and Orders issued by the GST Council and take note of the decisions of the GST Implementation Committee (GIC). Decision: The Council ratified the Notifications, Circulars and Orders issued by the GST Council and took note of the decisions of GST Implementation Committee. 4. Agenda Item 3: Issues recommended by the Law Committee for the consideration o....

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....tified for restricting the IGST Refund route in respect of certain supplies or suppliers for exports. Further, tobacco, pan masala and similar items (as recommended by GoM) and mentha oil may be notified under section 16(4) of IGST Act, 2017 as the goods, on the export of which IGST refund route will not be available. 4.5 He also mentioned that this was discussed in Officers' meeting and was agreed to. Officers also suggested 01. l 0.2023 as the date from which the provisions of Section 123 of the Finance Act, 2021 may be brought into effect. Decision: The Council agreed with the recommendations of the Law Committee detailed along with the proposed notification and amendments in CGST Act, 2017 and IGST Act, 2017 and recommended to bring the provisions of Section 123 of the Finance Act, 2021 into effect from 01.10.2023. Agenda Item 3(iii) Clarification on charging of interest under section 50(3) of the CGST Act, 2017, in cases of wrong availment of IGST credit and reversal thereof 4.6 Pr. Commissioner, GST Policy informed that Law Committee has proposed a circular to clarify that in the cases where IGST credit has been wrongly availed and subsequently reversed on a certa....

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....l to another State to take advantage of lower registration charges and road tax, which vary from State to State. To resolve this issue, Law Committee has recommended a new formulation where the unregistered consumers could declare their address on the tax invoice, which would determine the PoS for the said supply. In cases of in-migration, the State may gain but in out- migration it would lose. It is a zero-sum gain. Other than for major goods like automobiles, consumers will not mention their address. So, overall, the losses and gains would not be substantial. 4.10 The Hon'ble Member from Himachal Pradesh thanked the Chairperson stating that the said amendment would benefit smaller States which have very limited resources and that consumer State would get the revenue as per the principle of destination-based taxation. Decision: The Council agreed with the recommendations of the Law Committee along with proposed amendments. Agenda Item 3(v) Clarification with respect to applicability of e-invoice w.r.t supplies made by a registered person to Government Departments or establishment/ Government agencies/ local authorities/ PSUs registered solely for the purpose of TDS. 4.11 P....

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....ifications in the above circular and the Annexure A to the said circular. 4.17 Issue No 3: Clarification regarding determination of value of adjusted total turnover in the formula under Rule 89(4)- 4. I 8 Pr. Commissioner, GST Policy informed that Law Committee has recommended to clarify through the circular that consequent to the Explanation having been inserted in sub - rule (4) of rule 89 of the CGST Rules vide Notification No. 14/2022-CT dated 5.7.2022, the value of goods exports to be included in the calculation of the adjusted Total turnover shall be the same as per the said explanation. Decision: The Council agreed with the recommendations of the Law Committee, along with the Circular. 4.19 Issue No 4: Clarification on the scope and computation of the refund on account of inverted duty structure as provided in sub-section (3) of section 54 and in rule 89 (5) of the CGST Rules, 2017: 4.20 Pr. Commissioner, GST Policy informed that Law Committee has recommended that clarification be given regarding refund of accumulated input tax credit in cases of inverted duty structure in respect of items like fertilizers, where subsidy is given by the government. Law Committee ha....

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....rary to the provisions of the Act. 4.28 The Hon'ble Member from Meghalaya stated that the reason of litigation is due to lack of clarity in the Law and therefore, Council should not wait for the decision of the Court. He added that the Council should interpret the law and if needed, the Act should be amended for bringing more clarity. He further agreed to the concern raised by Hon'ble Member from Goa. 4.29 The Hon'ble Chairperson directed that in all such cases, where there is lack of clarity in the law, the Law Committee should come up with clarificatory note in time to avoid matter going to the Courts. Decision: The Council agreed that the issue may be referred back to the Law Committee for re-examination of the same based on the provisions of the law, and after taking inputs from State of Karnataka also. 4.30 Issue No 5: Clarification in respect of admissibility of refund where an exporter applies for refund subsequent to compliance of the provisions of sub-rule (I) of rule 96A. 4.31 Pr. Commissioner, GST Policy explained that the issue pertains to giving the benefit of zero rating in cases where the goods are actually exported or the payment is realised in case....

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.... is being devised which would allow system-based intimation to the taxpayer about the excess availment of ITC in FORM GSTR-3B vis-a-vis that reported in FORM GSTR-2B, above a particular threshold and with provision for self-compliance on the portal by the said taxpayer. Accordingly, certain amendments in Rules and Forms are required for devising such mechanism. He further, informed that Law Committee has recommended that Rule 88D may be inserted in the CGST Rules to give a system-based intimation to the registered person in those case where difference between the ITC availed as per Form GSTR-3B and that available as per Form GSTR-2B exceeds such amount and such percentage as may be recommended by the Council. In such cases, the registered person shall be directed to pay an amount equal to the said excess amount of ITC availed along with interest or to give a reasonable explanation and if neither of these is done, then the amount can be demanded under Section 73 or section 74. Further, a new clause (e) has been recommended to be inserted in sub-rule 59(6) of CGST Rules to block subsequent GSTR-1 or IFF, unless the said amount has been paid or the requisite explanation has been furni....

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....tee recommended that the relaxatons provided in FY 2021-22 in respect of various tables of FORM GSTR-9 and FORM GSTR-9C may be continued for FY 2022-23. Law Committee also recommended to insert separate rows for the newly introduced tax rate of 6% (for brick kilns) in table 9, 11 and Pt. V of FORM GSTR-9C. Law Committee further recommended that the filing of annual return (in FORM GSTR-9/9A) for the FY 2022-23 may be exempted for taxpayers having aggregate annual turnover upto two crore rupees, as per the relaxation extended in previous FYs. Decision: The Council agreed with the recommendations of the Law Committee, along with draft notification detailed in the agenda note. Agenda 3 (xi)- Amendment in CGST Rules, 2017 regarding registration 4.40 Pr. Commissioner, GST Policy informed that the next agenda 3(xi) is regarding the amendments in CGST Rules 2017 pertaining to registration. He stated that a significant number of cases have been detected where unscrupulous elements have mis-utilized the facility of registration to take fake registration. He mentioned that Law Committee deliberated on the issue and has recommend amendments in various provisions of CGST Rules to strengt....

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....n high risk cases and pilot was approved for State of Gujarat. Puducherry has also requested to have a pilot for the same implemented in Puducherry. In this regard, approval is needed for issuing the following notifications: i. The State of Puducherry will need to substitute rule 8(4A) of Puducherry SGST Rules on the lines of corresponding substitution of Rule 8(4A) of CGST Rules vide notification no. 04/2023-Central Tax dated 31.03.2023; ii. Further, the State of Puducherry will also need to amend rule 8(5) and rule 9 of Puducherry SGST Rules on the lines of corresponding amendments in CGST rules notified vide notification no. 26/2022- CT dated 26.12.2022; iii. The Central government will be required to further amend Notification No. 27/2022- CT dated 26.12.2022 for specifying that the proviso to rule 8( 4A) will apply to the State of Puducherry as well. 4.47 Further, it was proposed that the Council may authorize the Chairperson to extend the said pilot project, if required, in other States and/ or Union territories which may be willing to conduct pilot for biometric authentication of Aadhaar for high-risk registration applicants. 4.48 The Hon 'hie Member from An....

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.... by the Council, may be amended further to provide for situations involving multiple ECOs, as suggested in Annexure B to the agenda. Decision: The Council agreed with the said recommendations of the Law Committee, along with the circular and notification-. Agenda 3 (xiii)- Clarification on availabilitv of ITC in respect of warranty replacement of parts and repair services during warranty period. 4.53 Pr. Commissioner, GST Policy informed that the agenda is regarding a clarification in respect of those cases where the manufacturer provides warranty replacement or repair services for some items during the warranty period without any additional consideration. Issues were raised whether in these cases, the supply of replacement parts is liable to tax or not or whether ITC is required to be reversed or not. Therefore, a clarification has been recommended by the Law Committee in form of a circular to cover various scenarios. Decision: The Council agreed with the recommendation of the Law Committee to issue the clarificatory circular. Agenda 3 (xiv)- Amendments in CGST Rules consequent to amendment in CGST Act vide Finance Act 2023 4.54 Pr. Commissioner, GST Policy Wing informe....

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....s' meeting regarding date from which provisions of Finance Act, 2023 will come into effect. Agenda 3 (xv)- Goods and Services Tax Appellate Tribunal (Appointment and Conditions of Service of President and Members) Rules, 2019. 4.60 Pr. Commissioner, GST Policy informed that Agenda 3 (xv) is regarding Goods and Services Tax Appellate Tribunal (Appointment and Conditions of Service of President and Members) Rules, 2019. He informed that the draft rules as recommended by Law Committee are detailed in the agenda. He added that the issue was deliberated in detail in Officers' meeting, wherein officer from State of Maharashtra suggested that in sub rule 5 of proposed rule 3 of the said Rules, the word "as well as adjudicating" may be replaced by the word "and" and that Sr. No. 9 of Annexure-1 of the said Rules may be deleted. The same was agreed by the Officers. Decision: The Council agreed with the said recommendation of the Law Committee, along with the amendments suggested in the Officers' meeting. Agenda 3 {xvi)- Seeking clarity on taxability of share capital held in subsidiary company by the parent company. 4.61 Pr. Commissioner, GST Policy stated that the Agenda ....

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....Amendment in CGST Rules, 2017 4.67 Pr. Commissioner, GST Policy stated that the Agenda is about various amendments in CGST Rules. He added that that a number of these amendments are just procedural in nature for alignment with various provisions requiring change or omission. 4.68 Following amendments in CGST Rules have been proposed as detailed in the Agenda: 1. Omission of clause (c) of Explanation (1) to Rule 43: This is an amendment consequential to lapsing of an exemption. 2. Amendment in proviso to rule 46(f): Law Committee has recommended that proviso to rule 46(f) of CGST Rules may be amended to provide that the tax invoice may contain the name of the State of the recipient only and the name and address of the recipient along with its PIN code may not be mandatory to be declared on the tax invoice. 3. Amendment in Rule 64 and FORM GSTR-5A: Law Committee has recommended amendment in rule 64 and in FORM GSTR-5A so as to also include details of supplies made by the OIDAR service provider located outside India to registered persons other than hon-taxable online recipient in India in his return for tracking of payment of tax on RCM basis by registered taxpayers. 4. Ame....

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....d into as decided in the 47th GST Council meeting. Agenda 3 (xviii)-Proposal to provide a special procedure to file appeal against the orders passed in accordance with the Circular No. 182/14/2022-GST, dated 10.11.2022, pursuant to the directions issued by the Hon'ble Supreme Court in the Union of India v/s Filco Trade Centre Pvt. Ltd. 4.72 Pr. Commissioner, OST Policy stated that the agenda is regarding a special procedure to be provided in cases where Tran-1 and Tran 2 claims were filed in pursuance of direction given by Hon'ble Supreme Court during two months' window of 01.10.2022 to 30.11.2022. The Law Committee recommended to provide a special procedure under Section 148 of CGST Act for filing of appeals manually against the orders passed in accordance with Circular No. 182/14/2022-GST. A draft notification providing the special procedure to be followed by a person desirous of filing an appeal against an order passed by the proper officer in accordance with Circular No. 182/14/2022-GST which was issued pursuant to the directions issued by the Hon'ble Supreme Court in the Union of India v/s Filco Trade Centre Pvt. Ltd., SLP(C) No.32709-32710/2018 has been formulated b....

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....e distributed through ISD route. This will require amendment in law which the Law Committee may formulate in due course. 4.77 For internally generated services: Law Committee recommended to clarify through the Circular that in cases where full input tax credit is available to the recipient, the value of such supply of services declared in the invoice by HO to BOs may be deemed as open market value, irrespective of the fact whether cost of any particular component of such services, like employee cost etc., has not been included in the value of the services in the invoice, or not. It may be further clarified that in cases where full input tax credit is available to the recipient if the invoice is not issued with respect to any internally generated services by the HO to the BO, the value of such services may be deemed to be declared as Nil by HO to BO, and may be deemed as open market value in terms of second proviso to rule 28 of CGST Rules. 4.78 Pr. Commissioner, GST Policy also stated that the Law Committee could not make any recommendation for taxability and valuation of internally generated services in cases where full input tax credit is not available to the recipient. 4.7....

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....ges in GST rates or for issuing clarifications in relation to Services; the fifth Annexure listed the services where no tax rate changes were being recommended and the sixth Annexure where the issues were deferred by the Fitment Committee for further examination in relation to services. 5.2 The Secretary then asked the Joint Secretary, TRU, DoR to take the Council through the brief presentation on the recommendations of the Fitment Committee. 5.3 JS, TRU stated that a total of 35 issues in respect of goods were examined. Out of these, on 14 issues, recommendations were made for tax rate changes or issuance of clarifications, on 17 issues no tax rate change or status-quo was recommended and on 4 issues, the Fitment Committee has recommended deferring the issues for further examination. She further stated that a total of 16 issues in respect of services were examined, out of which, on 7 issues recommendations were made for tax rate changes or clarifications, on 3 issues, no tax rate changes or status-quo was recommended and on 6 issues the Fitment Committee had recommended deferring the issues for further examination. The presentation made by JS, TRU is attached as Annexure-4. 5....

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....t and definitely act accordingly. 5.10 It was informed by JS, TRU that an appeal has been preferred against the said judgement. Hon 'ble Member from Chattisgarh enquired whether a stay has been obtained and if not, then whether the option of exemption was still being exercised. 5.11 The Hon'ble Chairperson sought a report on the entire issue within a week's time. 5.12 The Hon 'ble Member from Goa thanked the Council for considering this issue. Decision: The Council agreed with the recommendation of the Fitment Committee to reduce the tax rate on Fish Soluble Paste from 18% to 5% and regularize the issue for the past period on 'as is where is' basis. 5.13 JS, TRU then presented the third issue pertaining to IGST exemption on the cancer medicine Dinutuximab (Quarziba) used for treatment of Neuroblastoma when imported for personal use. She stated that during the officers' meeting on 10.07.2023, one of the suggestions was to check from the Ministry of Health and Family Welfare whether the said medicine is manufactured in India and that it has been informed by the Ministry of Health and Family Welfare that it is not approved for manufacture in India ....

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....en paid @5% or 12% in view of genuine interpretational issues. Decision: The Council agreed with the recommendation of the Fitment Committee w.r.t. rate on Trauma, Spine and Arthroplasty implants. 5.17 JS, TR U presented the sixth issue pertaining to request for clarification on raw cotton supplied by agriculturists to cooperatives. Fitment Committee recommended to clarify that supply of raw cotton, including kala cotton, from agriculturists to cooperatives is a taxable supply and attracts 5% GST under reverse charge mechanism since cooperatives are registered persons, and also recommended to regularize for the past periods on "as is basis" in view of genuine doubts regarding taxability. She also informed the Council that in the officers' meeting no objections were raised on the recommendations of the Fitment Committee on this issue. Decision: The Council agreed with the recommendations of the Fitment Committee w.r.t. raw cotton. 5.18 JS, TRU then presented the seventh issue pertaining to consequential changes after the new Foreign Trade Policy coming into force. She stated that the Foreign Trade Policy 2023 came into force with effect from 1st April, 2023 and that the ....

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....itment Committee had recommended status quo earlier which is in line with the decision taken by the Council to tax essential commodities at 5% and that other for other items the tax rate should be kept at 18%, and therefore this recommendation of the Fitment Committee is at variance with that adopted in 45th GSTCM. The Hon'ble Member from Odisha requested that the issue be referred back to the Fitment Committee and Odisha may be invited to give its views on the same. 5.23 The Hon'ble Member from Delhi enquired about the quantum of LD slag produced in the country versus the offtake, because the decision would be taken on that basis. 5.24 JS TRU stated that for 10 MT of steel production, 1.8 MT LD slag is produced, and since the National Steel Policy envisages 300 million tonnes of steel production by 2030, India will produce 99 million tonnes of BF slag and 54 MT of LD slag, that while steel industry will consume significant amount of BF slag, there would be few takers for LD slag at high GST rate, and dumping of LD slag will result in environmental hazard. She stated that the offtake is now 25%. 5.25 The Hon'ble Member from Karnataka stated that dis-incentivizing ....

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.... pertaining to applicability of compensation cess on utility vehicles such as MUV/XUV /MPV with length more than 4000 mm, engine capacity more than 1500 cc and ground clearance of 170 mm and above. She stated that during the discussion in the 48th meeting of GST Council held in December, 2022 on agenda item relating to issuance of clarification on compensation cess leviable on SUVs, Hon'ble Member from Haryana had suggested that compensation cess on other utility vehicles such as MUV might also be deliberated upon. The Council directed the Fitment Committee to examine the same. She stated that earlier, based on the recommendation of the 21st GST Council, a higher rate of compensation cess of 22% was notified on "Sports Utility Vehicles (SUVs) (of length more than 4-metre, engine capacity more than 1500 cc and ground clearance 170 mm)". Fitment Committee has now recommended to amend the entry to include all utility vehicles by whatever name called provided they met the parameters of length greater than 4000 mm, engine capacity more than 1500 cc and ground clearance of 170 mm& above and further recommended to insert an explanation to clarify for the purposes of the said notificat....

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....rem rate as was applicable on 31st March, 2023 for such goods by amending the said Notification in cases where it is not legally required to declare RSP. 5.36 The Hon'ble Chairperson asked Hon'ble Member from Uttar Pradesh if he is in agreement with the recommendations of the Fitment Committee as the particular issue was raised by State of Uttar Pradesh. 5.37 The Hon'ble Member from Uttar Pradesh stated in the affirmative. 5.38 The Hon'ble Member from Karnataka inquired about the value difference between the calculation of ad-valorem rate and a weighted average of the RSP. 5.39 JS, TRU informed that there is no difference in the rate as the ad valorem rates were converted to specific rates based the recommendations of the GoM. 5.40 Hon'ble Member from Karnataka expressed his apprehension that if there was a significant rate difference, it might create an arbitrage and provide an incentive to move from RSP based levy to an ad valorem rate. 5.41 The Secretary mentioned that there may be a difference and that is why in order to plug revenue leakages, the GoM had recommended the levy of cess on pan masala, chewing tobacco etc. be based on RSP instead of the earli....

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.... GST rate to Nil on solid bio-fuel pellets / Biomass briquettes or pellets on the basis that they have a mandate to use 5% for coal firing and also promote its uptake. She further stated that Fitment Committee had recommended status quo which was placed before the GST Council in 37th and 47th GST Council Meeting, and the GST Council did not recommend further reduction in rate to Nil. She said that Gujarat had suggested regularizing the issue relating to GST on biomass briquettes for the period from 1.7.2017 to 12.10.2017. 5.47 The Hon'ble Member from Punjab suggested that GST rate on Agro based biomass pellets may be reduced to Nil keeping in mind the environment issues as pollution is a huge problem in north India and many NGOs and Courts are also involved. 5.48 The Secretary noted that only Punjab appeared to be in favour of reducing the rate to Nil. 5.49 The Hon'ble Member from Uttar Pradesh informed that this issue is already discussed in earlier GST Council Meeting and Fitment Committee has also not recommended the same. 5.50 The Secretary informed that this product goes into the exempt sector that is production of electricity and therefore, exempting this would....

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....same. Decision: The Council agreed with the recommendation of the Fitment Committee to maintain status quo on the rate and regularize the issue relating to biomass briquettes for the period 1.7.2017 to 12.10.2017 on "as is basis". 5.61 JS, TRU then presented the second issue regarding request for increase in GST rate of De-Oiled Rice Bran from Nil to 5%. She informed that recommendation had been received from the Department of Food and Public Distribution to impose 5% GST Rate on DORB. She informed that prior to the 25th Council Meeting Rice Bran (HS 2302) for use as feed was at Nil and for other uses was at 5%. The GST Council in its 25th Meeting held on l 8.01.2018, decided to levy 5% GST on Rice Bran, irrespective of end use, and Nil GST on De-Oiled Rice Bran. This was notified w.e.f. 25.01.2018. The interim report of GoM on rate rationalization also did not recommend bringing all goods under chapter 23 to 5% GST Rate and hence Fitment Committee recommended for status-quo. Decision: The Council agreed with the recommendation of the Fitment Committee to maintain status quo w.r.t. De-Oiled Rice Bran. 5.62 JS, TRU then presented the third issue pertaining to products fallin....

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....ry and automatic reeling machinery; all Sports goods & fitness products and Mega Power Projects. All agreed to the same. Decision: The Council agreed with the recommendations of the Fitment Committee to maintain status quo w.r.t. agenda as detailed in para 5.65 above. 5.67 The Secretary then requested for the comments of the Hon'ble Members of the Council on the recommendations put forth by the Fitment Committee on the issues of Apple Carton Boxes. The Hon'ble Member from Himachal Pradesh requested that corrugated boxes of specified dimensions can be put in the lower tax bracket. He informed that 90% of the apple carton boxes used in the State of Himachal Pradesh have capacity from 10 Kg to 20 Kg which have specific dimensions different from the industrial packages and requested to reconsider the issue as the growers are being affected in small horticulture States like Himachal Pradesh and reduce the GST rate from 18% to 12%. He informed that in the last Council meeting, Maharashtra had come out in support of the issue. 5.68 Jammu and Kashmir informed that mostly corrugated boxes are being used in Jammu and Kashmir which was earlier taxed at 12% but for the sake of uniformity ....

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....t an early date as this is the International year of Millets as declared by the Government of India and secondly, increasingly it is part of nutrition supplied by most of the Anganwadis and thirdly, it is a very healthy food option. 5.78 The Secretary assured that a decision on this would be taken as early as possible. 5.79 The Hon'ble Member from Karnataka supported the view of Delhi and informed that lifestyle diseases are on the rise due to imbalanced diets and millets are a healthier alternative also they use little water and consume very litt le chemical fertilizers so their environmental footprint is very minimal too. Millets are climate resilient crops and highly nutritious as they are naturally fortified. He requested for a positive and early decision on this as this was the International Year of Millets and Government of India has already taken other decisions to promote the use of millets. 5.80 The Secretary directed the Fitment Committee to come up with their recommendations expeditiously. 5.81 The Hon'ble Member from Uttar Pradesh stated that the tax rate related to steel scrap and Millet based products needs to be decided on an urgent basis. JS, TRU info....

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.... to omission of clause (h) of explanation to the entry at SI. No. 24 (i) of the notification No. 11 /2017 CTR. On the recommendation of GST Council in its 47th meeting, exemption entry at sl. No. 53A of the notification No. 12/2017 CTR dated 28.06.2017 which covered "'services by way of fumigation in a warehouse of agricultural produce" was omitted vide notification No. 04/2022-CTR dated I 3.07.2022. However, a parallel entry at clause (h) of explanation to the entry at SI. No. 24 (i) of the notification No. 11/2017 CTR dated 28.06.2017 for the same service had not been omitted. Fitment Committee recommended that the same may be omitted. Decision: The Council agreed with the recommendations of the Fitment Committee w.r.t. omission of an entry at clause (h) of explanation to the entry at SI. No. 24 (i) of the notification No. 11/2017 CTR dated 28.06.2017. 5.85 The Secretary informed the Council that agenda Item listed at Sr. No. (4)(a) of Annexure IV related to exercise of option by Goods Transport Agencies (GT As) to pay GST under Forward Charge Mechanism (FCM). Fitment Committee recommended that the requirement to exercise option to pay GST under forward charge every year ....

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....fication No. 13/2017-CTR (SI. No. 6) dated 28.06.2017. The said entry covers only those services supplied by a director of company or body corporate, which are supplied by him as or in the capacity of director of that company or body corporate and shall be taxable under RCM in the hands of the company or body corporate. Decision: The Council agreed with the recommendations of the Fitment Committee as detailed in agenda items listed at Sr. No. (4)(a), (4)(b), (5) and (6) of Annexure IV. 5.89 The Secretary stated that the last issue listed at Sr. No. 7 of Annexure IV pertains to issuance of clarification that supply of food and beverages in cinema halls is taxable as restaurant service and leviable to GST at 5%. Fitment Committee recommended that a clarification may be issued by way of a circular that food or beverages served in a cinema hall is taxable as restaurant service as long as (a) they are supplied by way of or as part of a service and (b) supplied independently of the cinema exhibition service. Where the sale of cinema ticket and supply of food and beverages are clubbed together, and such bundled supply satisfies the test of composite supply, the entire supply will attr....

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....eting and it was suggested by one of the States that this agenda item should be taken up. Officers from the States of Punjab and Bihar had requested to defer this agenda item. The Secretary stated that the Council could take a call on whether to discuss or defer the agenda item. He further stated that there exists an ambiguity around the phrase 'in relation to' and one of the suggestions received was to delete this phrase from the entries in notification no. 12/2017 related to pure services and Composite supplies provided to Central Government, State Government or Local Authority. The Hon'ble Chairperson opened the floor for discussion in case the States wished to deliberate upon the agenda or the States might put forth their views during the Fitment Committee meetings in case of deferment. 5.94 The Hon'ble Member from Delhi expressed her desire to discuss the agenda and the issues emanating from it as Delhi had some concerns regarding the same. The Hon'ble member from Karnataka seconded it and stated that the proposition to remove the phrase "in relation to" put forth by the Secretary to the Council might be deliberated upon to see if any consensus could be b....

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....d as Annexure-5. The Factsheet encapsulates the factual status, revenue, legal position, present practice and the issues for information and decision of the GST Council. 6.2 Sh. Conrad Sangma, the Honorable Chief Minister from Meghalaya and the Convener of the Group of Ministers (GoM) on Casinos, Race Courses and Online Gaming, apprised the Council that two reports had been submitted so far. However, in the second and final report the views remained inconclusive due to complexity of issue and the different views expressed by the participating States and hence stated that the GoM has recommended Council to take the decision. 6.3 In his address, he provided a contextual background of both reports and threw light on the initial understand ing of actionable claim except lottery, betting, and gambling, which were exempted from Goods and Services Tax (GST). It was assumed that these activities which were under the purview of discussion of GoM fell within the domain of lottery, betting, or gambling. Nonetheless, after engaging with stakeholders, further clarity was gained, leading to the submission of the second report. It became apparent during the discussions that a lack of clarity ....

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....ding whether these are games of skill or chance. Hence, ambiguity has been left to be resolved by the Courts which complicate the matter more. Moreover, the report highlights the dual nature of this issue, where economic growth and job creation stand in contrast to the adverse social impact on the youth. Achieving a delicate balance between these competing interests necessitates a phased approach to tackle this issue. 6.6 He stated that in conclusion, the GoM Report underscores the complexity of the subject matter, urging careful consideration and a comprehensive approach by all the States to address the concerns and interests of all stakeholders. 6.7 The Hon'ble Member from Gujarat concurred with the viewpoint of convenor and acknowledged that the decision at hand on Casinos predominantly affects two States. The Minister highlighted that a team from the Group of Ministers (GoM) had visited the affected areas and in their opinion, the value should be calculated on the Gross Gaming Revenue (GGR). 6.8 The Hon'ble Member from Tamil Nadu expressed the view that the State had already issued a notification prohibiting online gambling and online games of chance. The Minister sug....

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....but rather a game of chance, given that individuals predominantly place bets on it without adequate knowledge or through guesswork. Consequently, he advocated for taxing all such games at the highest tax rate based on their full-face value. 6.11 The Hon'ble Member from Goa disagreed with the views of the other States and emphasized the significance of the matter for their State. He likened the evaluation of different categories of games to the act of comparing apples and oranges. He apprised the Council of the necessity to follow internationally accepted best practices that would prevent the closure of industry. He suggested that the Goods and Services Tax (GST) should be imposed based on GGR. He added that during the preparation of the second report, experts evaluated the matter from various perspectives and varied opinions from stakeholders were also sought which is the main reason for the lack of a firm recommendation from the Group of Ministers (GoM) and the report remaining inconclusive. Furthermore, he asserted that this subject is still evolving over time. He further proposed that the cardinal principle of GST is to align the pre-GST tax regime with the present one. He....

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....le of crypto assets which are not regulated but are still subject to taxation and no Court has challenged this. She further added that these games involve value creation, whether with or without skill. She also stated that the governments have the right to tax that value and there is no legal conflict in doing so. It may be game of skill or game of chance and debate may be going on but tax should be imposed on these activities. She clarified that the Ministry of Electronics and information Technology (MEITY) is in the process of formulating technical regulations related to online gaming. MEITY is working on regulatory framework in that domain. These types of regulations do not affect the GST Council and do not infringe upon its sovereign right to impose tax. 6.16 The Hon'ble Member from Uttar Pradesh reiterated his earlier views and stated that the main purpose of going to Goa is tourism for beaches, environment and only few tourists go to casino. If a person is ready to lose money in casino, he must be ready to pay taxes for the welfare schemes. 6.17 The Hon'ble Member from Maharashtra expressed the opinion that tax should be charged on the full- face value and it is up to....

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....lotteries as it could lead to litigation. He stated that this approach may affect the taxation of other actionable claims. 6.20 The Hon'ble Member from Gujarat noted that the initial consensus in the Group of Ministers (GoM) was to impose the highest tax rate of 28% on all three activities. He expressed the need for a conclusive decision in the meeting as the matter has been dragged on without reaching a resolution. 6.21 The Hon'ble Member from Uttarakhand agreed with the proposal to tax all activities at the highest rate of 28%. 6.22 The Hon'ble Member from Delhi suggested that all three activities should be addressed separately. Since the States of Goa and Sikkim are the only ones directly affected by casinos, their situation should not hinder a decision on other sectors. She emphasized that the online gaming sector is rapidly growing and requires a decision. Furthermore, she stated that in the case of casinos, all States had a strong opinion but the affected States should have a greater say. She recommended that taxation based on the GGR mechanism would involve complex calculations and proposed that the full-face value should be taxed. 6.23 The Hon'ble Member....

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....essed agreement with the views presented by Uttar Pradesh. He highlighted the adverse impact of these activities on our society. He further emphasized the urgency of resolving this matter. It was recommended that a 28% GST rate be levied on the full value of these activities regardless of whether they involve game of chance or skill. 6.27 The Hon'ble Member from Arunachal Pradesh seconded the views of Uttar Pradesh and Meghalaya. He quoted example of Las Vegas and Macau which have no other attraction and where people go to play casino only whereas Goa is not only meant for casino and therefore, the rate of tax does not affect tourism sector of Goa. 6.28 The Hon'ble Member from Andhra Pradesh stressed the importance of considering the specific issues related to each State, keeping in mind the federal nature of the country and one nation one tax. It was stated that larger States have ample resources to generate revenue whereas smaller States are often at a disadvantage. The Hon'ble Member agreed with the views of Delhi and suggested that States like Goa and Sikkim should have some degree of flexibility in raising revenue in absence of other source of revenue. 6.29 T....

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....ll three issues (i) the issue of amending the law to include Casino, Race Course, and Online Gaming in Entry 6 of Schedule Ill of the CGST Act, 2017 alongside Lottery, Betting, and Gambling. This inclusion would help avoid any interpretational confusion. She clarified that the exemption previously granted for GST on actionable claims except for Lottery, Betting, and Gambling in Entry 6, would now be amended so as to remove any confusion, to exclude Online Gaming and Horse Racing from exemption which would be subject to GST without any exemption, (ii) the rate of tax and (iii) the value for supply. 6.33 The Hon'ble Member from Meghalaya expressed his agreement for the amendment deeming it necessary and suggesting that the first report of the GoM (Group of Ministers) would suffice after such amendments. The Revenue Secretary then informed the Council that a few more amendments would be worked out by the Law Committee and circulated to the respective States for amendments in their State GST Act subject to the Council's approval. 6.34 The Hon'ble Member from Karnataka proposed to include an explanation in Entry 6 to incorporate these games rather than amending the entir....

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....activities as it could have far-reaching effects on other services. The Hon'ble Member from Karnataka suggested that the principle of law should be the same for all activities and taxed on face value while the tax rate could vary. The Hon'ble Member from Maharashtra also agreed with this view and proposed taxing Casinos at 28% initially with the possibility of providing an abatement. 6.41 The Hon'ble Member from Nagaland stated that if casino was pan India and same rate would not prevail, then it could have repercussion. As casino is specific to only two States i.e. Goa and Sikkim thus exceptions could be made. Casino is lifeline for these two States and it would have huge impact on their revenue. 6.42 The Hon'ble Member from Andhra Pradesh expressed the belief that only the States of Goa and Sikkim would be affected by this taxation policy and it would benefit them in some way. He suggested that there would be no harm in treating Casinos differently or applying a different tax rate compared to other activities. 6.43 The Hon'ble Member from Meghalaya suggested that since Betting and Gambling were already included in Entry 6 giving different treatment to Cas....

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....Redressal Committee (ITGRC) before the Council. 7.2 JS, GST Council Secretariat then presented the recommendations of the 18th and 19th meetings of the IT Grievance Redressal Committee (ITGRC) on the data fixes carried out by GSTN as per the Standard Operating Procedure approved by the Council, as detailed in the agenda notes. 7.3 The Secretary then sought the comments of the Hon'ble Members of the Council on the recommendations of ITGRC and the Council approved the same. Decision: The GST Council approved the recommendations made by the ITGRC during its 18th and 19th meetings. 8. Agenda Item 7: Scheme of budgetary support under GST regime in lieu of earlier excise duty exemption schemes to eligible manufacturing units under different Industrial Promotion Schemes of the Government of India 8.1 The Secretary introduced the agenda regarding scheme of budgetary support under GST regime in lieu of earlier excise duty exemption schemes. The Secretary informed the Council that the issue arose because of the Hon'ble Supreme Court's judgement dated 17. l 0.2022 in the case of Mis Hero Motocorp Ltd. and Sun Pharma Laboratories Ltd. Vs Union of India & Ors. wherein the ....

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....ra to present Agenda Item 9 i.e. the Report of Group of Ministers (GoM) on OST System Reforms. The Member stated that the Commissioner of State taxes would be making the presentation on the report. 10.2 The Commissioner of State taxes, Maharashtra made a presentation (Annexure -6). He informed the Council that the GoM on GST System Reforms was formed on 18th September, 2021 and the main Terms of Reference were to suggest changes in the business processes and TT Systems to plug revenue leakages, suggest better measure for compliance and revenue augmentation and to co-ordinate between different tax authorities. The GoM comprises Members from the States of Maharashtra, Haryana, Delhi, Assam, Andhra Pradesh, Odisha, Tamil Nadu, and Chhattisgarh. He further stated that this GoM is a Standing GoM and submits its report periodically as and when meetings are held. He informed that the GoM has held three meetings to date and that the report of the 2nd Meeting held on 10th February, 2022 was tabled and accepted by the Council in its 47th Meeting. 10.3 He further informed the Council that the 3rd Meeting of the GoM was held on 13th February, 2023 and that the recommendations of this third....

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....compiled and this can be checked against the details provided by the registered person regarding turnover. He further informed the Council that this recommendation is in its initial stage and that the details need to be worked out. The GoM has recommended forming a committee to develop a detailed methodology and to hold detailed consultations with NPCI and RBI to implement this recommendation. 10.7 The fourth agenda item that was considered by the GoM was regarding the HSN-level reporting in GSTR-1. Commissioner Maharashtra informed the Council that in the init ial phases, the dealers are not disclosing the full turnover commodity wise and therefore, it is proposed to make this compulsory in a phased manner. The GoM has recommended a phase-wise and time-bound approach to be adopted for action against non-compliant taxpayers with nudging messages and e-mails in the initial phase and blocking of GSTR-1 to be considered for failure to fill HSN details in the later phase. 10.8 The fifth agenda item that was considered by the GoM was regarding the proposal for integration of Income Tax, ICEGATE and other data points to address underreporting of supplies and to address the issue of u....

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....l accepted the recommendations made by the GoM on System Reforms. 11. Agenda Item 10: Proposal for creation of State Co-ordination Committee comprising of GST authorities from the State and Central Tax Administration 11.1 The Secretary presented the Agenda No. 10 regarding creation of State Level Co-ordination Committee comprising GST authorities from the State and Central Tax Administration. He informed the Council that the proposal had come up during the National Coordination Committee meeting that was held in April, 2023 with the tax authorities from both Centre and State. 11.2 The Secretary informed the Council that the Committee would be co-chaired by the Chief Commissioner/ Commissioner of CGST/SGST and that they shall be co-convener on rotational basis for one year each. He further stated that the Committee shall meet at least once every quarter or as the co-Chairs decide. He further informed that the committee will deliberate on co-ordination issues relation to enforcement, investigation, audit, grievances and any other matter as agreed to by co-Chairs. He also informed that the agenda was discussed in detail in the Officers' Meeting. 11.3 The Hon'ble Member fro....

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....This had been cleared by the State Cabinet earlier as also discussed by the Council in its 39th and 40th meetings. This may be cleared without reduction. 12.4 The Hon'ble Member from Maharashtra stated that Maharashtra has 20% share in the GST revenue and appealed that as proposed seven Tribunals in their State should be recommended. 12.5 The Hon'ble Member from Tamil Nadu requested for three Tribunal Benches at Chennai, Madurai and either at Coimbatore or Salem considering their population. While the request from the State Government had not been sent earlier, their suggestion may be taken now. 12.6 The Hon'ble Member from Punjab stated that they propose to form two Tribunal Benches. They have communicated for only for one Bench at Chandigarh/Mohali and will be deciding on the location of the second Bench soon and communicate the same. 12.7 The Hon'ble Member from Andhra Pradesh stated that considering the geographical diversity in the State and poor road connectivity in certain areas, they have proposed three Benches. 12.8 The Secretary brought out the total number of Benches suggested by the States is coming to around 50. This means selection of nearly 200 Memb....

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....te Bench and sitting/circuit Bench could be located in different cities for wider geographical representations with two Members each. 12.13 The Hon'ble Member from Chhattisgarh stated they were in agreement with this arrangement and would have two Benches starting with Raipur and then at Bilaspur. 12.14 The Secretary summed up that post discussions the final consensus is to have limited number of Benches to begin in first phase. On the issues of jurisdiction of the Benches, the Secretary informed that the information would be collected from the States which may need to provide the details of jurisdiction of proposed Benches and with the approval of the Hon'ble Chairperson, the same would be placed before the Council for ratification. 12.15 The Secretary further suggested that the Chief Secretary of Uttar Pradesh or Maharashtra may be nominated as a Member of the Search cum Selection Committee. He stated that these two States have the highest number of taxpayers. The Hon'ble Member from Karnataka suggested that Chief Secretary Karnataka may be nominated as a Member of the Search cum Selection Committee. The Secretary stated that if it was agreeable to all, the Chief Se....

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.....1 The Secretary presented the Agenda No. 12 regarding Performance Report of Competition Commission of India (CCI) for month of December, 2022 and 4th quarter of the F.Y 2022-23 along with the Performance Report of State Level Screening Committee (SLSC), Standing Committee (SC) and Directorate General of Anti- Profiteering (DGAP) for 3rd quarter and 4th quarter of the F.Y 2022-23 for the information of the Council. Decision: The Council took note of the same and approved the Agenda. 14. Agenda 13- Request for extension of due dates for filing GSTR-7, GSTR-1 & GSTR- 3B for the month of April, May and June 2023 and extension of Amnestv Schemes in the State of Manipur. 14.1 The Pr. Commissioner, GST Policy stated that a request has been received from State of Manipur for extension of due dates for filing of FORM GSTR 7, FORM GSTR-1 and FORM GSTR-3B for the months of April, May and June 2023 till 31.07.2023 for taxpayers of Manipur, due to prevailing law-and-order situation in the State. He informed that already, extension of due dates for filing of FORM GSTR 7, FORM GSTR-1 and FORM GSTR-3B for the months of April 2023 and May 2023 has been granted till 30th June 2023. 14.2 He ....

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.... to time indicating the revenue position. The Secretary to the Council informed that there is growth in the revenue of about 12% annually. 15.2 The Director (State Taxes), DoR stated that the average monthly collection of GST comes to about Rs. 1.70 Lakh Crore. Regarding unsettled IGST, the Director (State Taxes), DoR informed that compared to last year this year the balance is negative. However, the situation was improving. The Compensation Account was also in negative. 15.3 The Secretary informed the Council that the Compensation amount to all the States who had submitted AG Certificate had been released and there was no pendency. The Secretary requested the other States who had not submitted their AG Certificates to submit it on priority so that their payments could also be released in time. 15.4 The Hon'ble Member from Telangana stated that their IGST settlement and Compensation payment were still pending. To this, the Director (State Taxes), DoR informed that the amount as per the original AG Certificate submitted by the State had been released. The amount as per revised AG Certificate would be released in due course as and when revised Certificate was received in DoR. Fu....

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....Agenda or a GoM might be constituted for deeper analysis. The matter may then be taken up in the next Council meeting and the implementation of the notification be deferred till that time. 16.7 The Hon'ble Member from Karnataka stated that since the issue involved sharing of data with GSTN, it was incumbent upon the Council to discuss the matter. 16.8 The Secretary to the Council clarified that the Notification under scrutiny is under Prevention of Money Laundering Act and is not under GST law. Secondly, the purpose of the notification was to equip and empower tax administration. As per the notification, Director, Financial Intelligence Unit would share information with GSTN regarding suspicious transactions filed by financial institutions. He read out the provisions of section 66, PMLA under which notification was issued and clarified that under these provisions of the Act, GSTN would only get information and the said reaction does not mandate GSTN to share any information. Such information shared by FIU would be further shared with concerned State and Central GST authorities and that information would empower the authorities to decide further course of action depending on....

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....== Document 1 Shipra MINUTE BOOK Annexure-1 List of Hon'ble Ministers from States/Uts who participated in the 50th Meeting of the GST Council held on 11th July, 2023 Centre/States/Uts No. Name of Hon'ble Minister Smt. Nirmala Sitharaman 1 GOI 2 GOI Shri. Pankaj Chaudhary 3 Andhra Pradesh Shri Buggana Rajendranath Shri Chowna Mein 4 Arunachal Pradesh 5 Assam Smt. Ajanta Neog 6 7 Chhattisgarh Delhi Shri T.S.Singh Deo Smt. Atishi Marlena 8 Goa Shri Mauvin Godinho 9 Gujarat Shri Kanubhai Desai 10 Himachal Pradesh 11 Jammu and Kashmir 12 Jharkhand Shri Harshwardhan Chauhan Shri Rajeev Rai Bhatnagar Dr. Rameshwar Oraon 13 Karnataka 14 Kerala Shri Krishna Byre Gowda Shri K. N. Balagopal Shri Sudhir Mungantiwar 15 Maharashtra 16 Manipur Dr. Sapam Ranjan Singh Charge Union Finance Minister Minister of State for Finance Minister for Finance, Planning, Legislative Affairs, Commercial Taxes and Skill Development & Training Hon'ble Deputy Chief Minister- cum-Finance Minister Finance Minister Deputy Chief Minister Finance Minister Minister for Industries, Transport, Panchayati Raj and Protocol Minister for Finance In....

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....ry (GST Council Secretariat) Principal Commissioner India 8 GSTN Shri Manish Kumar Sinha CEO 9 GSTN Shri Dheeraj Rastogi EVP 10 11 12 Government of India Government of India Government of India Ms. Limatula Yaden Joint Secretrary Ms. Ashima Bansal Joint Secretary Ms. B.Sumidaa Devi Joint Secretary 13 Government of India Shri Surjit Bhujabal Principal Director General, DGGI 14 Government of India Shri Nitish Kumar Sinha Government of 15 Shri S.S. Nakul 16 India Government of India Government of Shri Sernya Bhutia 17 18 India Government of India Government of Shri Kumar Ravikant Singh Shri Dhruv Narayan Srivastav Principal Additional Director General, DGGI (Hqrs.) PS to FM 1ST PA TO FM PS to MoS Finance 1st PA to MoS Finance 19 India Shri Deepak Kapoor OSD to Revenue Secretary CHAIRMAN'S INITIALS Page 73 of 194 MINUTE BOOK 20 20 Government of India Shri D. P. Misra Government of 21 Dr N Gandhi Kumar OSD to Chairman, CBIC Director (State Taxes) India 22 22 Government of Shri Alok Kumar Additional Commissioner India Government of 23 Shri Raghavendra Pal Singh Additional Commissioner India Governm....

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....ST Council Secretariat Ms. Priya Sethi Superintendent 60 60 GST Council Secretariat Shri Dharambir Superintendent 61 GST Council Secretariat Shri Irfan Zakir Superintendent GST Council Shri Naveen Kumar 62 Superintendent Secretariat CHAIRMAN'S INITIALS Page 75 of 194 MINUTE BOOK Shipra 63 GST Council Secretariat Shri Sachin Goel Superintendent 64 GST Council Secretariat Ms. Ambika Rani Superintendent 55 65 GST Council Secretariat Shri Niranjan Kishore Superintendent 99 66 GST Council Secretariat Shri Rakesh Joshi Superintendent 67 GST Council Secretariat Shri Vijay Malik Inspector GST Council 68 Shri Padam Singh Inspector Secretariat GST Council 69 Shri Rohit Sharma 69 Inspector Secretariat 70 70 GST Council Secretariat Shri Ashwani Sharma ASO GST Council Shri Karan Arora ASO 71 Secretariat 72 GST Council Secretariat Shri Pankaj Dhaka Tax Assistant GST Council 73 Shri Paresh Garg Secretariat GST Council 74 Shri Shyam Bihari Meena Tax Assistant Secretariat Tax Assistant 1 75 GST Council Secretariat Shri Vikas Kumar Tax Assistant 76 Andhra Pradesh Shri N. Gulzar Secretary Finance(CT) 76....

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....xcise Additional Commissioner State Taxes and Excise Principal Secretary, Finance Department Additional Commissioner Secretary, Commercial Taxes Commissioner, Commercial Taxes Commissioner Commercial Tax 109 Karnataka Dr. Ravi Prasad Additional Commissioner CT 110 111 Kerala Shri Ajit Patil Kerala Shri Abraham Renn S 112 Kerala 113 Dr. Shyjan D 114 Madhya Pradesh Shri Lokesh Kumar Jatav 115 Madhya Pradesh Shri Manoj Kumar Choubey 116 Maharashtra Ms Shaila A Maharashtra 117 118 Maharashtra 119 Maharashtra Maharashtra 120 Shri Rajeev Mital Shri Manoj Kumar Narayanwal Shri Sudhir Rathod Shri Rahul Gangurde Maharashtra Shri Babasaheb Gore 121 CHAIRMAN'S INITIALS Page 78 of 194 Commissioner, State GST Department Additional Commissioner-1 PS to Hon'ble Minister for Finance Commissioner of Commercial Tax Additional Commissioner, State Tax Principal Secretary (Financial Reforms) Commissioner of State Tax Deputy Commissioner OSD to the Hon'ble Minister OSD to the Hon'ble Minister OSD to the Commissioner of State Tax Shipra Shipra MINUTE BOOK Maharashtra 122 Anju Nimsarkar 123 124 125 Manipur Manipur Meghalaya M....

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.... Secretary, Finance Principal Secretary/Commissioner of Commercial Taxes Joint Commissioner (Policy & Planning) Commissioner of Commercial Taxes Additional Commissioner (ST)(Legal) Deputy Commissioner (ST) EIU Chief Commissioner of State Tax GST Nodal Officer Secretary Finance Commissioner of State Tax Additional Commissioner Joint Commissioner Additional Chief Secretary, State Tax Commissioner, State Tax Deputy Commissioner, State Tax P.S. to Hon'ble Finance Minister, UP Additional Chief Secretary, Finance Department Commissioner of State Tax Senior Joint Commissioner of Revenue OSD to Hon'ble Minister Shipra Document 2 Shipra MINUTE BOOK Presentation on issues pertaining to GST law and procedures 50th Meeting of GST Council NEW DELH Annexure-3 11th July 2023 NATION TAX MARKET Summary of discussions in Officers' Meeting held on 10th July 2023 Page 81 of 194 CHAIRMAN'S INITIALS MINUTE BOOK Agenda No 3(1) [Vol 1- Pg. 105- 108] Issue/Proposal Rules Amendment in accordance with the recommendations made by Group of Ministers (GoM) on implementation of E-way bill requirement for movement of Gold/ Precious stones under chapter 7....

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....t in section 10 of IGST Act for the supplies made to registered persons. For the supplies made to unregistered persons, insertion of a new clause (ca) after clause (c) of sub-section (1) of section 10 of the IGST Act providing that PoS be: â– the location as per the address of the said person recorded in the invoice issued in respect of the said supply, and âš« the location of the supplier, where the address of the said person is not recorded in the invoice. Clarification with respect to applicability of e-invoice w.r.t supplies made by a registered person to Government Departments or establishment Government agencies / local authorities/ PSUs registered solely for the purpose of the registered person, whose tumover exceeds the prescribed threshold for generation of e-invoicing, are required to issue e-invoices for the supplies made to such Government Departments or establishments / Government agencies/local authorities / PSUs, etc under rule 48(4) of CGST Rules. Agreed Agreed Agenda No 3(vi) [Vol I- Pg. 147- 162] Issue Proposal Clarification on refund related issues Issue 1: Clarification on Refund of accumulated input tax credit under Section 54....

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....ated supply cannot be denied due to delayed export or delayed receipt of payment for export, as the case may be. â–  refund of IGST paid in compliance of the provisions of sub-rule (1) of rule 96A of CGST Rules may also be given, but no refund of interest paid can be given in such cases. Status during Officers Meeting Agreed Agenda No 3(vii) [Vol 1- Pg. 163- 169] 3(viii) [Vol 1- Pg. 170- 174] Issue/Proposal Clarification to deal with difference in Input Tax Credit (ITC) availed in FORM GSTR-3B as compared to that detailed in FORM GSTR-2A for the period 01.04.2019 to 31.12.2021 Status during Officers Meeting Since rule 36(4) of CGST Rules providing for restriction in availment of ITC vis a vis that available in FORM GSTR-2A came into effect from 09.10.2019 only, the guidelines provided by Circular No. 183/15/2022- GST dated 27th December, 2022 shall be applicable. in toto. for the Agreed period from 01.04.2019 to 08.10.2019; For the period from 09.10.2019 till 31.12.2021. guidelines vide Circular No. 183/15/2022-GST dated 27.12.2022 shall be applicable for verification of the condition of Section 16(2)(c) of CGST Act, subject to the condition th....

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.... 2022- 23. Separate rows to be provided for the new tax rate of 6% for brick kiln taxpayers in table 9. 11 and Pt. V of FORM GSTR-9C. The filing of annual return (in FORM GSTR-9/9A) for the FY 2022-23 may be exempted for taxpayers having aggregate annual turnover upto two crore rupees, as per the relaxation extended in previous FYs. Amendment in CGST Rules, 2017 regarding registration Amendment in rule 10A to provide that the details of bank account may be required to be fumished within 30 days of grant of registration, or before filing of statement of outwards supply under section 37 of CGST Act in FORM GSTR-1/ IFF. which ever is earlier. Amendment to sub-rule (2A) of rule 21A to provide for system based suspension of the registration in respect of such registered persons who either do not furnish details of valid bank account under rule 10A of CGST Rules within the time period prescribed in the said rule. Insertion of 34 proviso in sub-rule (4) of rule 21A to provide for automatic revocation of suspension upon compliance with provisions of rule 10A. Agreed Agreed Page 85 of 194 CHAIRMAN'S INITIALS MINUTE BOOK Agenda No 3(xi) [Vol 1- Pg. 190- 194] 3(....

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....upply made Agreed by the said supplier through him. where the Supplier-side ECO is himself the supplier of the said supply. the compliances under section 52 of CGST Act, including collection of TCS, is to be done by the Buyer-side ECO. CHAIRMAN'S INITIALS Page 86 of 194 Shipra Shipra MINUTE BOOK Agenda No 3(xiii) [Vol 1- Pg. 202- 208] 3(xiv) [Vol 1- Pg. 209- 214] Issue/Proposal Clarification on availability of ITC in respect of warranty replacement of parts and repair services during warranty period Status during Officers where the manufacturer provides replacement of parts and or repair services to the customer during the warranty period, without separately charging any consideration at the time of such replacement repair services, no GST is chargeable on such replacement of parts and or repair service and also. no reversal of input tax credit is required to be Agreed made by the manufacturer. Clarification regarding the taxability and requirement of availment reversal of ITC in situations where distributor provides replacement of parts and/or repair services to the customer, as part of warranty on behalf of the manufacturer. Amendments in CGST R....

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....) [Vol III- Pg. 26- 31] MINUTE BOOK Issue/Proposal Seeking clarity on taxability of share capital held in subsidiary company by the parent company Statue during Officers Meeting the issue may be clarified through a circular, specifying that mere holding of securities of a subsidiary company by a holding Agreed company, whether located in India or abroad, cannot be treated as a supply of services and therefore, cannot be taxed under GST Proposal for amenidas ent Rule/FO Proposal RM 3(xvi) [Vol III- Pg. 32-44] Omission Reversal of ITC in respect of supply of services by way of of clause transportation of goods by a vessel from customs station of (c) of clearance in India to a place outside India is not required w.e.f. Explanati 01.10.2022 on (1) to Rule 43 Proviso to rule 46(f) to provide that only name of the State of the recipient may be sufficient to be provided on the tax invoice for deeming as address on record, and that name, address and PIN code of the recipient may not be required to be declared on the tax invoice where any taxable services is supplied by or through an ECO or by a supplier of OIDAR services to an unregistered recipient. Agr....

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....Agreed ISD mechanism is not mandatory as per the present provision of GST law for passing ITC in respect of common input services procured by HO from a third party which are Agreed attributable to both HO and BO or exclusively to one or more BOS: Registration as ISD mandatory if ITC is to be distributed through ISD mechanism: Distribution of ITC to a BO through ISD mechanism or through issuance of invoice under section 31 only if the said services are actually being supplied to the concerned BO. Agenda No 3(xix) [Vol III- Pg. 50-58] Issue/Proposal Issues pertaining to ISD mechanism and taxability of services provided, by one distinct person to another distinct person (b) For future, ISD mechanism may be made mandatory prospectively by amendment in the law for distribution of ITC in respect of input services procured by HO from a third party but attributable to both HO and BOS or exclusively to one or more BOs, including in cases, where such input services are liable to tax on reverse charge basis. Amendment in GST law for the same to be formulated by the Law Committee. ii) For internally generated services: (a) To clarify through a circular that in cases w....

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....ications and Circulars Page 90 of 194 Shipra Shipra MINUTE BOOK Agenda 2: Ratification of Notifications, Circulars etc. (1/3) [Vol 1- Pg. 92-1041] Ace Pales CGST Act COST Rus Xocations Cinculars Nos Description Remarks Sixteen (16) Central Tax Notifications issued (No. 02/2023 10 17/2023) & Five (05) Central Tax (rate) Notifications issued (No. 01/2023 to 05/2023) UTOST Act Five (05) Union Territory Tax (rate) Notifications issued (No. 01/2023 to 05/2023) Amendments have been carried out in Rule 8 of CGST Rules and notifications have been issued to implement various decisions of GST Council taken in 49 meeting. Some of the important notifications are: Extension of time limit for application for revocation of cancellation of registration ii. Amnesty scheme for deemed withdrawal of assessment orders issued under Section 62. til Amnesty to GSTR-4, GSTR-9 and GSTR-10 non-filers. iv. Extension of limitation under Section 168A of CGST Act v. to implement e-invoicing for the taxpayers having aggregate tumover exceeding Rs. 5 Crore from 1st August 2023 vi. Extension of due dates for famishing FORM GSTR-1, FORM GSTR-3B feld FORM GSTR-7 for April and Ma....

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....integration of GSTN's E-way bill system with ULIP Recommendations of the Law Committee Page 92 of 194 Shipra - Shipra MINUTE BOOK Law Committee Recommendations for Trade facilitation and Reducing litigation Agenda 3(iii): Clarification on charging of interest under section 50(3) of the CGST Act, in cases of wrong availment of IGST credit and reversal thereof [Vol 1-Pg. 130-138] Issue: References received seeking clarification regarding charging of interest under section 50(3) of the CGST Act. 2017 in the cases where IGST credit has been wrongly availed by a registered person. Clarification sought as to whether such wrongly availed IGST credit would be considered to have been utilized for the purpose of charging of interest under section 50(3) of CGST Act. read with rule 88B of CGST Rules. 2017, in cases where though available balance of IGST credit in the electronic credit ledger of the said registered person falls below the amount of such wrongly availed IGST credit, however, the total balance in the electronic credit ledger under heads of IGST, CGST and SGST taken together remains more than such wrongly availed IGST credit, at all times, till the time of....

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....it (ITC) availed in FORM GSTR-3B as compared to that detailed in FORM GSTR-2A for the period 01.04.2019 to 31.12.2021 (2/2) Proposal: [Vol 1-Pg. 163-169]] LC recommended to issue a circular detailing the procedure for verification of ITC availed by the registered persons in cases of such discrepancies during the period from 01.04.2019 to 31.12.2021, inter alia providing that: â–  Since rule 36(4) of CGST Rules providing for restriction in availment of ITC vis a vis that available in FORM GSTR-2A came into effect from 09.10.2019 only, the guidelines provided by Circular No. 183/15/2022-GST dated 27th December, 2022 shall be applicable, in toto, for the period from 01.04.2019 to 08.10.2019; For the period from 09.10.2019 til 31.12.2021. guidelines vide Circular No. 183/15/2022-GST dated 27.12.2022 shall be applicable for verification of the condition of Section 16(2)(c) of CGST Act, subject to the condition that availment of ITC shall not exceed the limit prescribed vide rule 36(4), as applicable during the said period. This would provide clarity to the trade and the field formations and will reduce unnecessary litigation on the issue. CHAIRMAN'S INITIALS Page....

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.... also needs modification to cover such multiple ECOs situations. This would clarify the TCS liability in cases of multiple ECOs in one transaction. CHAIRMAN'S INITIALS Page 95 of 194 MINUTE BOOK Agenda 3(xiii): Clarification on availability of ITC in respect of warranty replacement of parts and repair services during warranty period (1/2) (Vol 1-Pg. 202-208) Issue: Representations have been received from trade and industry that as a common trade practice, the original equipment manufacturers/ suppliers offer warranty for the goods/ services supplied by them. During the warranty period, replacement goods/ services are supplied to customers free of charge and as such no separate consideration is charged and received at the time of replacement. It has been represented that suitable clarification may be issued in the matter as unnecessary litigation is being caused due to contrary interpretations by the investigation wings and field formations in respect of GST liability as well as liability to reverse ITC against such supplies of replacement of parts and repair services during the warranty period without any consideration from the customer. Agenda 3(xiii): Clari....

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...., cannot be treated as a supply of services and therefore, cannot be taxed under GST. The proposal will help in bringing clarity on the issue and in preventing unnecessary litigation. Agenda 3(xviii): Special procedure for filing appeal against the orders passed in accordance with the Circular No. 182/14/2022-GST dated 10.11.2022 pursuant to the directions issued by the Hon'ble Supreme Court in the Union of India v/s Filco Trade Centre Pvt. Ltd. Issue: [Vol III- Pg. 45-49] There is no facility available on the portal, at present, to enable filing of appeals by the taxpayers and tax authorities against the orders issued by the proper officers in respect of TRAN-1/ TRAN-2 claims in accordance with the Circular No. 182/14/2022-GST dated 10.11.2022, pursuant to the directions issued by the Hon'ble Supreme Court in the Union of India v/s Filco Trade Centre Pvt. Ltd. ✰ Further, time period for filing appeals in some of such cases may already have expired. Proposal: Law Committee has recommended for issuance of a notification to provide for a special procedure under section 148 of CGST Act for filing of manual appeals by the taxpayers and tax authorities against su....

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....d copies of invoices entered in Annexure-A whose details are not found in GSTR-2A of the relevant period" wherever required as supporting documents needs to be removed/deleted. Page 98 of 194 Shipra Shipra MINUTE BOOK Agenda 3(vi):: Clarification on refund related issues (3/5) [Vol 1-Pg. 147-162] Issue 3: Determination of value of adjusted total turnover in the formula under Rule 89(4) Clarification has been sought as to whether in view of insertion of Explanation in rule 89(4) of CGST Rules. for the purpose of calculation of "adjusted total turnover" in the formula under rule 89(4), the value of goods exported out of India has to be considered as per Explanation under rule 89(4). Proposal: LC has recommended to clarify through a circular that: Consequent to Explanation having been inserted in rule 89(4) of CGST Rules vide Notification No. 14/2022- CT dated 05.07.2022, the value of export goods to be included while calculating "adjusted total turnover" in the formula under rule 89(4) will be determined as per the said explanation. Agenda 3(vi):: Clarification on refund related issues (4/5) [Vol 1- Pg. 147-162] Issue 4: Clarification on the scope and computatio....

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....A of CGST Rules may also be given, but no refund of interest paid can be given in such cases. The proposal will help in bringing clarity on these refund related issues and in preventing unnecessary litigation. Agenda 3(xvii): Amendment in CGST Rules (1/8) [Vol III-Pg. 32-44] I. Omission of clause (c) of Explanation (1) to Rule 43 Issue: Services by way of transportation of goods by a vessel from customs station of clearance in India to a place outside India was an exempt supply till 30.09.2022, which was not further extended after 30.09.2022. As a result, the said service has become taxable after 30.09.2022. → Clause (c) of Explanation (1) to Rule 43 of CGST Rules provides that aggregate value of exempt supplies for the purpose of reversal of common input tax credit under rule 42 or rule 43 shall exclude value of supply of services by way of transportation of goods by a vessel from customs station of clearance in India to a place outside India. Since, the above service is not an exempt supply w.e.f. 01.10.2022. reversal of ITC in respect of supply of the said services is not required w.e.f. 01.10.2022. Therefore, clause (e) of Explanation (1) to Rule 43 of ....

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....roviding OIDAR services from a place outside India to a person in India other than a registered person. Currently. FORM GSTR-SA does not capture details of supplies made by the OIDAR service provider to registered persons in India. There may be cases where such person registered persons in India may not be paying applicable tax on RCM basis on such supplies received from OIDAR service provider. Accordingly, there may be a need to include details of supplies made by the OIDAR service provider located outside India to registered persons in India in FORM GSTR- SA to keep track of such supplies. Proposal → Law Committee has recommended for amendment in rule 64 and in FORM GSTR-5A 50 as to also include details of supplies made by the OIDAR service provider located outside India to registered persons in India. The proposal will help in improving compliance by registered persons in India paying tax on reverse charge basis on supplies received from OIDAR service providers. CHAIRMAN'S INITIALS Page 101 of 194 CHAIRMAN'S INITIALS MINUTE BOOK Agenda 3(xvii): Amendment in CGST Rules (4/8) IV. Amendment in Rule 89(1): Issue: [Vol III-Pg. 32-44] 3rd proviso to sub....

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....STR-1 were extended. However, now concept of sequential filling of Return has been introduced and Section 37 & Section 39 of CGST Act, 2017 have been amended with effect from 01.10.2022 to provide for mandatory filing of FORM GSTR-1 before filing of FORM GSTR-3B for a tax period. Therefore, 1" & 2nd Proviso to Rule 96(2) of CGST Rules have become redundant. Proposal Law Committee has recommended omission of first and second proviso to Rule 96(2) of CGST Rules as they serve no purpose in light of the amendments in section 37 and 39 of CGST Act. The proposal will remove the redundancy in the legal provisions. Agenda 3(xvii): Amendment in CGST Rules (7/8) [Vol III-Pg. 32-44] VII. Issue: Amendment in rule 108 and rule 109 In terms of sub-rule (1) of rule 108 and sub-rule (1) of rule 109 of CGST Rules, doubts are being raised as to whether an appeal under section 107 can be filed either electronically or manually at the liberty of the Appellant, or the appeal needs to be filed electronically only, if not otherwise notified by the Commissioner. There is a need to provide a clarity in the matter and also to provide for manual filing of appeal in some specific circumst....

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....t is required to be included in the taxable value. Proposal: 수 LC has recommended the following: (i) For common input services procured from third party; To clarify through a circular that • ISD mechanism is not mandatory as per the present provision of GST law for passing ITC in respect of common input services procured by HO from a third party which are attributable to both HO and BO or exclusively to one or more BOS: Registration as ISD mandatory if ITC is to be distributed through ISD mechanism; Distribution of ITC to a BO through ISD mechanism or through issuance of invoice under section 31 only if the said services are actually being supplied to the concerned BO. Page 104 of 194 Shipra Shipra MINUTE BOOK Agenda 3(xix): Issues pertaining to ISD mechanism and taxability of services provided by one distinct person to another distinct person (2/2) [Vol III- Pg. 50-58] Proposal: For future, ISD mechanism may be made mandatory prospectively by amendment in the law for distribution of ITC in respect of input services procured by HO from a third party but attributable to both HO and BOs or exclusively to one or more Bos, including in cases, where suc....

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....er in respect of- ⚫ the amount intimated under rule 88C which is not paid by the registered person and for which no explanation has been furnished or the explanation fumished is not satisfactory, and ⚫the amount of interest This would help in expeditious recovery of due tax liability and interest amount. Agenda 3(viii): Mechanism of dealing with differences in ITC between GSTR- 3B and GSTR-2B (1/2) [Vol 1-Pg. 170-174] Issue: GSTR-3B return of a registered person for a tax period is being auto-populated on the portal from the details in his FORM GSTR-1 and FORM GSTR-2B for the said tax period. However, the registered person is allowed presently to freely edit the same. This may lead to availment of input tax credit by the registered person in GSTR-3B return in excess of that made available in his FORM GSTR-2B. ✰ There is a need to safeguard revenue by finding suitable manner of handling and controlling the difference in ITC availed in FORM GSTR-3B by the registered person and that available as per his FORM GSTR-2B. Law Committee felt that considering large number of taxpayers involved, such a mechanism should be based on system based identification ....

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....ein fraudulent people engage in dubious and complex transactions, causing revenue loss to the government. There is, therefore, a need for further strengthening and streamlining the registration process in GST to tackle the menace of fake registrations. CHAIRMAN'S INITIALS Page 107 of 194 MINUTE BOOK Agenda 3(xi): Amendment in CGST Rules, 2017 regarding registration (2/2) Proposal ¡Vol 1-Pg. 190-1941 LC recommended the following: ■ Amendment in rule 10A to provide that the details of bank account may be required to be furnished within 30 days of grant of registration, or before filing of statement of outwards supply under section 37 of CGST Act in FORM GSTR-1/IFF, which ever is earlier. ■ Amendment to sub-rule (2A) of rule 21A to provide for system based suspension of the registration in respect of such registered persons who either do not furnish details of valid bank account under rule 10A of CGST Rules within the time period prescribed in the said rule. Insertion of 3rd proviso in sub-rule (4) of rule 21A to provide for automatic revocation of suspension upon compliance with provisions of rule 10A. Amendment to sub-rule (6) of rule 59 to provid....

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....e registrations. CHAIRMAN'S INITIALS Page 108 of 194 Shipra Shipra MINUTE BOOK Agenda 3(v): Clarification with respect to applicability of e-invoice w.r.t supplies made by a registered person to Government Departments, etc./ local authorities/ PSUs registered solely for the purpose of TDS [Vol 1-Pg. 143-146] Issue: Representations received seeking clarification with respect to applicability of e-invoicing under rule 48(4) of CGST Rules w.rt supplies made by a registered person, whose turnover exceeds the prescribed threshold for generation of e-invoicing. to the Government Departments or establishments / Government agencies / local authorities/ PSUs, which are registered solely for the purpose of deduction of tax at source as per provisions of section 51 of the CGST Act. Proposal: LC has recommended to clarify through a circular that: â–  the registered person, whose turnover exceeds the prescribed threshold for generation of e- invoicing, are required to issue e-invoices for the supplies made to such Government Departments or establishments / Government agencies/local authorities / PSUs, etc under rule 48(4) of CGST Rules. This will help in bringing cl....

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.... Law Committee recommended for: ■ issuance of a notification under section 148 of CGST Act prescribing the special procedure in respect of registration of machines used in manufacturing of tobacco. pan masala and similar items and special monthly returns to be filed by manufacturers of these items. Insertion of a new section 122A in CGST Act to provide for penalty for non- declaration of machines by such manufacturers, in addition to the penalty provisions specified in Section 122 of CGST Act. Agenda 3(ii): Agenda Note for Capacity based taxation and Special Composition Scheme in certain Sectors in GST (2/2) • [Vol 1-Pg. 109-12911 Special registration of machines and filing of special monthly returns to be done on the common portal without any manual interface to prevent any undue harassment of the taxpayers. Amendment to Section 16 of IGST Act made through section 123 of Finance Act 2021 (which provided for enabling provision for restricting IGST Refund route in respect of certain supplies or suppliers) may be notified with effect from 01.10.2023. Tobacco, pan masala & similar items as well as mentha oil may be notified under the proposed section 16(....

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....aw Committee has recommended for: ⚫ insertion of a sub-rule (3A) in rule 162 of CGST Rules to prescribe the compounding amount for various offences under section 132 of CGST Act. ■ amendment of sub-rule (3) of rule 162 to omit the condition that the applicant has cooperated in the proceedings. Page 111 of 194 N CHAIRMAN'S INITIALS MINUTE BOOK Agenda 3(xiv): Agenda Note for Rules Amendment consequent to amendments carried out by Finance Act 2023 (3/3) Issue 3: Insertion of rule 163 [Vol 1-Pg 209-214] ✰ GST Council in its 47th meeting recommended to allow sharing of data available on the portal with the consent of the supplier and also of the recipient in certain cases. Accordingly, a new section 158A has been inserted in the CGST Act through Finance Act, 2023 to provide for prescribing manner and conditions for sharing of information furnished by registered person on the common portal with such other systems, as may be notified. Proposal: Law Committee has recommended for: ■ insertion of rule 163 in CGST Rules to implement the provisions of the newly inserted section 158A in CGST Act regarding consent based sharing of information of regis....

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....POS) in cases where the goods are purchased over the counter (OTC) basis in one state and thereafter transported to another state by the recipient. → The Council recommended to refer the agenda back to the Law Committee for considering the issue afresh after obtaining opinion of the States. Proposal: Law Committee considered the issue afresh after obtaining the opinion of the States and recommended the following- ⚫ No need for amendment in section 10 of IGST Act for the supplies made to registered persons. For the supplies made to unregistered persons, insertion of a new clause (ca) after clause (c) of sub- section (1) of section 10 of the IGST Act providing that Pos be the location as per the address of the said person recorded in the invoice issued in respect of the said supply, and the location of the supplier, where the address of the said person is not recorded in the invoice This will bring clarity for determination of the place of supply in case of OTC sale and will help in reducing disputes on the issue. Other Proposals pertaining to Law and Procedures Page 113 of 194 CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE BOOK Agenda 13: Request f....

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....who have NOT Provided Bank Account till date Date Slab based on Registration Grant Date No.of Tax Payes who got (Current Date-GST Approval Date) No. of Tax Payers %age of Total Registrered on or %age of after 01st Jan 2023 Total Within 10 days 37.366 4.14% 37,366 9.30% 11 to 20 days 32,730 3.63% 32,730 8.15% 21 to 30 days 41,972 4.65% 41,972 10.45% 31 to 45 days 50,767 5.62% 50,767 12.63% More than 45 days 7.40.021 81.96% 2,38,971 59.47% Grand Total 9,02,856 100.00% 4,01,806 100.00% Total Number of Active Tax Payers as on date %age of Defaulters 1,37,82,851 6.55% Total Number New Registration Jan-23 to June-23 Note: %age of Defaulters 10,46,211 38.41% 1. Only Active Tax Payers are considered 2. Only Normal and Composition Tax Payers are considered CHAIRMAN'S INITIALS Page 115 of 194 MINUTE BOOK Return Risk Engine (TC Spike Rule: R3B-R28) DomesboTC availed in GST-R)B compared with DomessofTC accuredin GST-R2 Only Monthly Tax Payers are considered Return Period Above 10 lakhs & 10% No. of GSTINS Mismatch (In Cr.) Above 10 lakhs & 15% Above 10 lakhs & 20% No. of GSTINS Mismatch (in Cr.) No. of GSTINS Above 25 lakhs & 20% Mismatch No, of (in Cr.) GSTINS Mismatch (in Cr.) Oct-22 14.180 ....

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....amination-4 [Agenda 4 (c): Vol-1: Annexure-III pages 238 to 246] • Total 16 issues examined Services Recommendations for making changes in GST rates/ issuing clarifications- 7 -JAgenda 4 (d): Vol-1: Annexure-IV pages 247 to 260] Recommendations for making no change - 3 - [Agenda 4 (e): Vol-1: Annexure-V. pages 261-2641 Issues deferred for further examination - 6 ⚫ Standalone agenda -1 (Sl.No. 3/3A) -[Agenda 4 (f) : Vol-1: Annexure-VI :pages 265 to 274] -[Agenda 4 (Part II) (g): Vol III (addendum) pages 71 to 74] Page 118 of 194 Shipra Shipra MINUTE BOOK Goods-Changes Recommended (14): Agenda No. Issue/Proposal 4(a) (Annexure-I) S.No. 1 Vol-I: Page No. 216 4(a) (Annexure-I) S.No. 2 GST rate on uncooked/unfried extruded snack pellets, by whatever name called, may be reduced to 5% The issue for the past periods may be regularized on as is basis. ➤ GST rate on fish soluble paste (CTH 2309) may be reduced from 18 % to 5%. Vol-1: Page No. 216-217 The issue for the past periods may be regularized on as is basis. Status after officers' meeting No objection No objection Agenda No. 4(a) (Annexure-I) S.No. 3 Vol-1: Page No. 217 4(a) (Annexure-I) S.No. 4 Vol-1: Page No. 217-218....

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....the ground that it can be used in cement industry and ITC can be taken. It was explained that LD slag is not preferred by cement industry due to excess lime content. ......contd. CHAIRMAN'S INITIALS Page 120 of 194 Shipra Shipra MINUTE BOOK Agenda No. 4(a) (Annexure-I) S.No. 9 Vol-1 Page No. 222-223 4(a) (Annexure-I) S. No. 10 Vol-1: Page No. 223 Issue/Proposal Status after officers' meeting GST rate may be reduced on LD slag Karnataka pointed out that other by-products of from 18% to 5%. steel namely, BF Slag & Fly Ash are already at 5%. IGST exemption is available on imports of gold, silver or platinum by specified banks and other entities mentioned in List 34 of S. No. 359A of Notification No. 50/2017 Customs dated 30.06.2017. List no. 34 may be updated as per revised Appendix 4B of FTP 2023 subject to confirmation from DGEP and DGFT. Odisha was asked whether a study has been conducted. Maharashtra pointed out that if offtake is not there, taxing at 18% has no meaning. No objection Agenda No. 4(a) (Annexure-I) S.No. II Vol-1: Page No. 223-224 Issue/Proposal Compensation cess of 22% is applicable on Sports Utility Vehicles (SUVs) (of length more than 4-metre, engine capacity more....

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..... No objection Page 122 of 194 Shipra Shipra MINUTE BOOK Agenda No. 4 (b) (Annexure-II) S.No. 3 Vol-I: Page No. 227 4 (b) (Annexure-II) S.No. 4 Issue/Proposal Request is to exempt products prepared or manufactured by the inmates of Kerala Prison and Correctional Services Department. ➤ End use based exemption is difficult to administer, prone to leakages ➤ Will lead to inverted duty structure on many commodities. > Fitment Committee recommended to maintain status quo. Request is for reduction in GST rate on bio-fertilizers and organic inputs from 12% to 5%. Status after officers' meeting No objection Vol-1: Page No. 228 > Council did not recommend changes in rates in 31st, 39th, 45th and 47th meetings. No objection ➤ Fitment Committee recommended to maintain status quo. Agenda No. Issue/Proposal 4(b) (Annexure-II) ➤ Request is to reduce GST on Sungudi sarees from 5% to S.No. 5 nil. Vol-1: Page No. 228-229 Exempting GST will break ITC chain and entail end use- based exemption which are prone to misuse. 4(b) (Annexure-II) S.No. 6 Vol-I: Page No. 229-230 ➤ Persons under the threshold exemption are exempt from paying GST on their supplies. Fitment Committee reco....

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....194 Shipra Shipra MINUTE BOOK Agenda No. 4(b) (Annexure-II) S.No. 12&14 Vol-1: Page No. 233-234,235 4(b) (Annexure-II) S.No. 13 Vol-1: Page No. 234 Issue/Proposal Present request is to reduce GST and compensation cess on flexi fuel vehicles. Flexi-fuel vehicles not clearly distinguishable and identifiable unlike EVs. ➤ No clear cut definition' of flexi fuel vehicle in the Motor Vehicle Act or any allied Acts. ➤ May lead to mis-classification of vehicles as flexi fuel vehicles for availing benefit of concessional GST rate. > Fitment Committee recommended to maintain status quo. Request is to exempt GST on agricultural products and on agriculture-based items to protect farmers. ➤Farmers do not have to pay tax on supply of fresh fruits and vegetables. Request is general in nature. Fitment Committee recommended to maintain status quo. Status after officers' meeting No objection No objection Agenda No. 4(b) (Annexure-II) S. No. 15 Vol-1 Page No. 235-236 4(b) (Annexure-II) S.No. 16 Issue/Proposal Request is to reduce GST on utensil made up of metals. ➤ Already an inverted duty structure as raw materials attract 18% GST. Cost may increase with ITC accumulation. Fitment....

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....s to cascading of taxes and breakage of audit trail. Suggested measures such as introduction of trace and track mechanism, better registration procedures, registration of e-way bills if that commodity is registered to be supplied, ITC only if invoice is registered etc. State of Punjab: Tax iron and scrap on RCM and exempt supply of scrap in the hands of traders Make e-way bill mandatory for all transactions in scrap irrespective of value. Fitment Committee recommended to defer the issue to create a Committee of officers to study the issue holistically and to come up with workable solutions. Status after officers' meeting No objection Services- Change recommended (7): Agenda No. 4(d) (Annexure-IV) S.No. 1 Vol-1 Page No. 247 4(d) (Annexure-IV) S.No. 2 Vol-1 Page No 247-248 Issue/Proposal ➤Satellite launch services supplied by ISRO, Antrix Corporation Ltd (ACL) and New Space India Ltd (NSIL) are already exempt from GST ➤ GST on satellite launch services provided by private organizations may be exempted to promote start ups. Anomaly may be rectified by inserting an Explanation that item at sl. No. 3(ie) of the notification No. 11/2017-CTR refers to sub-items of the item (iv),....

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....corporate, which are supplied by him as or in the capacity of director of that company or body corporate shall be taxable under RCM in the hands of the company or body corporate under notification No. 13/2017-CTR (Sl. No. 6) dated 28.06.2017. ➤ It may be clarified that supply of food in cinema halls is taxable as restaurant service as long as (a) they are supplied by way of or as part of a service and (b) supplied independently of the cinema exhibition service. Where the sale of cinema ticket and supply of food and beverages are clubbed together, and such bundled supply satisfies the test of composite supply, the entire supply will attract GST at the rate applicable to service of exhibition of cinema, the principal supply. Status after officers' meeting No objection No objection Services-No change recommended (3): Agenda No. 4 (e) (Annexure-V) S.No. 1 Vol-I: Page No. 261 4(e) (Annexure-V) S.No. 2 Vol-I: Page No. 261-263 Issue/Proposal Exempt IGST on purchase of aircraft and aircraft lease payment > The request to abolish GST of 5% on import/purchase of aircrafts and lease payments on leased aircrafts and engines was placed before the 45th GST Council. The Council did not acced....

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....exure-VI) S.No. 4 Vol-1 Page No. 279-271 Issue/Proposal > To clarify whether reimbursement of electricity charges received by the Real estate companies, malls, airport operators etc. from their lessees/occupants is exempt from GST > Members were requested to share practices being followed in their states with regard to levy of GST on such further supply of electricity along with other details. The reply has not been received so far. The matter may be deferred till the receipt of information. > To clarify whether ITC credit of other business verticals can be used to discharge GST on outward liability in respect of restaurant service given the restriction of input tax credit as specified in notification No. 11/2017-CT (Rate) dated 28.06.2017 Data from GSTN is required to be obtained regarding how much tax is being paid by suppliers of restaurant service in cash and credit > Pending the information the matter may be deferred. Status after officers' meeting No objection No objection Services- Deferred Issue (6): Agenda No. 4(f) (Annexure-VI) S.No. 5 Vol-1 Page No. 271-272 4(f) (Annexure-VI) S.No. 6 Vol-1 Page No 272-274 Issue/Proposal To clarify that job work activity for processing of....

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.... 5% > to regularize the issue for the past periods. Fitment Committee recommendations: GST rate on fish soluble paste (CTH 2309) may be reduced from 18% to 5%. ➤ The issue for the past periods may be regularized on as is basis. 1 Agenda 4(a) (Annexure-I) 3. Dinutuximab (Quarziba) medicine: (page 217) • • The estimated cost of the therapy course is around Rupees 63 lakhs and it has to be imported. •Patients and their kin are finding it difficult to pay the IGST rate of 12% since the medicine is already very expensive and the cost of medicine is met through crowdfunding. Some ad-hoc exemptions have already been provided on case-to-case basis ⚫ Representation received: ➤ IGST exemption on import of the cancer medicine. • Fitment Committee recommendations: ➤ IGST may be exempted on Dinutuximab (Quarziba) medicine when imported for personal use. Page 133 of 194 CHAIRMAN'S INITIALS MINUTE BOOK Agenda 4(a) (Annexure-I) 4. Medicines and Food for Special Medical Purposes used in treatment of rare diseases: (pages 217-218) • As part of post Budget 2023-24, Basic Customs Duty (BCD) exemption has been given to drugs/medicines and Food for Speci....

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....GST Act "supply" includes "the activities or transactions, by a person, other than an individual, to its members or constituents or vice-versa, for cash, deferred payment or other valuable consideration." ⚫ Supply includes all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. • Representation received: • >to clarify that raw cotton supplied by agriculturists to cooperatives is not taxable under reverse charge mechanism. Recommendations of Fitment Committee: >May be clarified that supply of raw cotton, including kala cotton, from agriculturists to cooperatives is a taxable supply and such supply to the cooperatives (being a registered person) attracts 5% GST under reverse charge mechanism. > The issue for the past periods may be regularized on as is basis. Agenda 4 (a) (Annexure-I) 7. Consequential changes after introduction of new Foreign Trade Policy 2023: ⚫ New Foreign Trade Policy came into force w.e.f. 01.04.2023. (pages 220-221) ⚫ Several schemes including Advance Authorisation (AA....

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....mful product and its re-usage needs to be promoted. ⚫ There is a need for better utilization of this waste and protection of environment. • Representation received: ➤ to reduce GST rate from 18% to 5% to encourage utilization Fitment Committee recommendation: ➤ GST rate may be reduced on LD slag from 18% to 5% CHAIRMAN'S INITIALS Page 136 of 194 1 Shipra Shipra MINUTE BOOK • Agenda 4(a) (Annexure-I) 10. Updating list of banks/entities in notification 50/2017-Cus, eligible for IGST exemption on import of gold, silver or platinum as per annexure 4B of HBP FTP 2023: (page 223) ⚫ IGST exemption is available on imports of gold, silver or platinum by specified banks and other entities mentioned in List 34 of S. No. 359A of Notification No. 50/2017-Customs dated 30.06.2017. • In the 37th GST Council Meeting, dated 20.09.2019, the Council did not recommend inclusion of ICBC and RBL Bank Ltd in the said List 34 as 'Export Committee' had not recommended their inclusion in the said list. ⚫ Now, Directorate General Export Promotion has conveyed that inclusion of PSU or Bank approved by RBI is not required to be discussed in Export Committee and has re....

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....collection of revenue in respect of pan masala, chewing tobacco, etc. ⚫ The rates are linked to retail sale price for such products. ⚫ Representation received: ➤ to determine rate of compensation cess in cases where it is not legally required to declare retail sale price Fitment Committee recommendation: Earlier ad valorem rate as was applicable on 31st March 2023 for such goods may be notified by amending the compensation cess notification. Agenda 4(a) (Annexure-I) 13. Dessicated coconut: (page 225) Entry 47 of Notification 2/2017-Central Tax (Rate) exempted coconuts fresh or dried, whether or not shelled or peeled. ⚫ Vide corrigendum issued on 27-07-2017 to notification 01/2017-CT(R) dated 28.06.2017, dessicated coconut was declared as a taxable product at 12% GST. • ⚫ Between the period 1.7.2017 to 27.7.2017 since there was no specific entry for dessicated coconut, suppliers may not have collected GST from consumers. • Representation received: to regularize the intervening period between issue of original notification & issue of corrigendum prescribing 12% GST rate. • Fitment Committee recommendation: > The issue for the period 1.7.2017....

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....ittee Recommendation: Status quo may be maintained. 1 Agenda 4(b) (Annexure-II) 3. Products prepared or manufactured by the inmates of Kerala Prison and correctional Services Department: (page 227) ⚫ Request is to exempt products prepared or manufactured by the inmates of Kerala Prison and correctional Services Department. ⚫ End use based exemption is difficult to administer, is prone to leakages and needs to be discouraged. ⚫ It would lead to inverted duty structure on many of these commodities and disrupt the ITC chain. • Fitment Committee Recommendation: Status quo may be maintained. N CHAIRMAN'S INITIALS Page 140 of 194 I Shipra Shipra MINUTE BOOK Agenda 4(b) (Annexure-II) 4. Bio-fertilizers and other such organic inputs: (page 228) ⚫ Based on 25th GST Council meeting recommendations, GST rate on 12 specified bio-pesticides was reduced from 18% to 12%. ⚫ In its 31st meeting, the Council did not recommend reduction in GST on agricultural inputs including pesticides, fertilizers and plant growth regulators to avoid a distortion of the ITC chain and inversion of duty structure which would put domestic manufacturers at a disadvantage. ⚫In its 39t....

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....rts goods & Fitness equipment: (page 231-232) ⚫ GST Council in its 14th Meeting held on 18.05.2017 recommended GST rate @ 12% for sports goods classified under CTH 9506 (other than articles and equipment for general physical exercise) (Sl. No. 230 of schedule II of notification 01/2017-Integrated Tax (Rate). • Earlier, Articles and equipment of general physical exercise, gymnastics etc attracted GST @ 28%. GST Council in its 23rd Meeting recommended GST @ 18% (Sl. No. 441 of Schedule III of notification No. 01/2017-Integrated Tax (Rate) for articles and equipment of general physical exercise, gymnastics, athletics, padding pool etc etc. ⚫This would lead to an inverted duty structure as most of the inputs for sports goods like steel, rubber etc attract GST @18%. • Representation received: > The present request has asked for a uniform GST rate of 5% on articles under CTH 9506. Fitment Committee Recommendation: Status quo to be maintained. Page 143 of 194 1 CHAIRMAN'S INITIALS MINUTE BOOK Agenda 4(b) (Annexure-II) 10. Mega power projects: (page 232) ⚫ Before inception of GST, Customs and Central Excise Duty exemption benefit was available to mega power proje....

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....ation-prone. • Representation Received: > to reduce GST rate on apple carton boxes from 18 to 5%. . Fitment Committee Recommendation: > Status quo to be maintained. CHAIRMAN'S INITIALS Page 144 of 194 1 Shipra Shipra • MINUTE BOOK Agenda 4(b) (Annexure-II) 12 & 14. Two-wheeler and 4-wheeler Flexi Fuel Vehicles (FFV): (pages 233-234 & 235) ⚫ Flexi fuel vehicles (FFVS) have an internal combustion engine and are capable of operating on normal petrol and/or any blend of petrol and ethanol. ⚫It has been a clear and consistent policy of decarbonizing the transport sector through various policies and initiatives that support Electric Vehicles (EV), which is evident in the lowest tax rate of 5% GST on EVs in addition to PLI Scheme for Auto Sector & Advance Chemistry Cell (ACC) However, unlike the EV vehicles which is clearly distinguishable and identifiable, this is not the case with flexi fuel vehicle There is no clear cut definition' of flexi fuel vehicle in the Motor Vehicle Act or any allied Acts. This is likely to lead to mis-classification of vehicles as flexi fuel vehicles for availing benefit of concessional GST rate. Representation Received: > to reduce GST ....

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....eutical use, sealing wafers, rice paper and similar products [other than pizza bread, khakhra, plain chapatti or roti, bread, rusks, toasted bread and similar toasted products] attract GST rate of 18%. âš« Small manufacturers/traders in MSME sector have the option to avail threshold exemption and composition scheme. âš« Pre-GST incidence on most bakery products on which rate reduction is sought was 18% or more. . Providing source based exemption to MSME sector for specific products like bakery products will be difficult to monitor and will cause distortion. âš« Representation received > to reduce rate on all bakery products manufactured and sold by MSME to 5%. âš« Fitment Committee Recommendation: A Status quo may be maintained. 1 Agenda 4(c) (Annexure-III): Issue deferred for further examination (pages-238-246) 1. Millet-based products: (pages 238-240) Classification and tax treatment of millet mix at par with cereal flours is likely to affect the classification and applicable tax rate on a large number of similarly placed products/mixes such as idle mix, dosa mix etc entailing significant revenue implication. Representation received: > Request is to prescribe 5% GST r....

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....T on reverse charge mechanism may not be feasible as the same breaks the chain of input tax credit and also leads to cascading of taxes and also breakage of audit trail. > to prevent the evasion and to create conduce business atmosphere, few measures were recommended such as: introduction of trace and track mechanism, better registration procedures, registration of e-way bills if that commodity is registered to be supplied, ITC only if invoice is registered etc. Punjab has inter alia, suggested: ➤ to tax iron and scrap on RCM and exempt supply of scrap in the hands of traders > e-way bill should be mandatory for all transactions in scrap irrespective of value. Fitment Committee Recommendations: ➤ Deferred: to create a Committee of officers to study the issue holistically and to come up with workable solutions. Recommendations of the Fitment Committee: Services Page 149 of 194 CHAIRMAN'S INITIALS จ CHAIRMAN'S INITIALS MINUTE BOOK Agenda 4 (d) (Annexure-IV): Changes in GST rates/ issue clarification (page-247-260) 1. Exempt GST on satellite launch services provided by private organizations (pages 247-247) ⚫ Satellite launch services supplied by ISRO, Antrix Corpor....

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....ion entry at sl. No. 53A of the notf. No. 12/2017 CTR dated 28.06.2017 which covered "services by way of fumigation in a warehouse of agricultural produce" was omitted vide notification No. 04/2022-CTR dated 13.07. 2022. • ⚫ However, a parallel entry at clause (h) of explanation to the entry at Sl. No. 24 (i) of the notification No. 11/2017 CTR dated 28.06.2017 for the same service has not been omitted. Recommendations of Fitment Committee ⚫The anomaly may be rectified by omitting the parallel entry at clause (h) of explanation to the entry at Sl. No. 24 (i) of the notification No. 11/2017 CTR dated 28.06.2017 4(a). Agenda 4(d) (Annexure-IV) Exercise of option by Goods Transport Agencies (GTAs) to pay GST under Forward Charge Mechanism (FCM) (pages 248-250) ⚫ GTAS who want to pay GST under FCM during any Financial Year are required to exercise the option to do so by filing an online declaration on Goods and Services Tax Network (GSTN) portal by 15th March of the preceding financial year. • • This requirement was notified on 13.07.2022 based on the recommendations of the 47th GST Council meeting. Accordingly, the deadline for exercising this option f....

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....f option for a Financial Year shall be 1st April of the preceding Financial Year. For example, the default start date for Financial Year 2024-2025 would be 1st April, 2023. . • Keeping start date for exercise of option for a FY as 1st April of the preceding Financial Year is not desirable as this may give rise to false impression to the GTAs that they have exercised the option for the current Financial Year. Recommendations of Fitment Committee • The start date may be prescribed as 1st January of the preceding Financial Year. ⚫ The last date for filing the option may be changed from 15th March to 31st March of preceding Financial Year. CHAIRMAN'S INITIALS Page 152 of 194 1 Shipra Shipra MINUTE BOOK 5. Agenda 4(d) (Annexure-IV) Amendment to be made to notification No. 8/2017-ITR and notification No. 10/2017-ITR to remove redundant provisions pursuant to amendments in Finance Act, 2023. (pages 250-252) ⚫ The place of supply (POS) for transportation of goods is 'destination of goods'. As a result, transportation service supplied by an Indian Shipping Line (ISL) to a foreign exporter, for transport of goods from foreign port to India do not qualify to be an export....

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....) of CGST Act. ⚫ Issue has been raised whether services supplied by a director of a company in his personal capacity such as renting of immovable property to the company or the body corporate is taxable under Reverse Charge Mechanism. Recommendations of Fitment Committee • It may be clarified by way of circular that services supplied by a director of a company to the company in his private or personal capacity such as supplying services by way of renting of immovable property to the company or body corporate are not taxable under RCM. Only those services supplied by a director of company or body corporate, which are supplied by him as or in the capacity of director of that company or body corporate shall be taxable under RCM in the hands of the company or body corporate under notification No. 13/2017-CTR (Sl. No. 6) dated 28.06.2017. 7. Agenda 4(d) (Annexure-IV) Clarify that the food or beverages supplied at cinema hall is taxable as restaurant service(pages 252-255) • As per Explanation at Para 4 (xxxii) to notification No. 11/2017-CTR dated 28.06.2017, "Restaurant Service" means supply, by way of or as part of any service, of goods, being food or any other articl....

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....ct of secondary stage examinations in schools (pages 261-263) . • Request for granting exemption on services by the way of affiliation services provided by universities/board or other educational organizations to educational institution was placed before the 47th GST Council. The Council did not accept the request. © Earlier, based on the recommendations of the 43rd GST Council, it was clarified vide circular dated 17.06.2021 that such services attract GST at the rate of 18%. • Recommendations of Fitment Committee • Status Quo to be maintained Page 155 of 194 1 CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE BOOK 3. Agenda 4 (e) (Annexure-V) Exempt GST on digital news subscription (pages 263-264) • Services by way of online/digital news subscription comes under the heading 9984 - Telecommunications, broadcasting and information supply services which attract GST @ 18%. Supply of news in digital form is essentially different from the printed news papers in its constitution, distribution and transmission ⚫ Subscription charges for online news vis-à-vis print media have been examined. It is found that subscription of e-papers is cheaper than the subscr....

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.... apartments/ hotels booked for longer period is a service of renting of residential dwelling for use as residence and exempted (contd...)(pages 265-267) Therefore, if the hostel accommodation is considered as the hotel accommodation in line with the circular dated 12.02.2018, it is taxable and if it is considered as residential dwelling, as held by the Hon'ble Karnataka High Court, it is exempt from GST. âš« The department has filed civil appeal before the Hon'ble Supreme Court of India against the Hon'ble Karnataka High judgement. The matter is sub-judice. âš« Recommendations of Fitment Committee âš« Since the matter is sub-judice, it may be deferred. 1 2. . Agenda 4(f) (Annexure-VI) Exempt services provided by District Mineral Foundations (DMFs) (pages 267-268) 45th GST Council (SI.No.7 of Annexure-VI, Agenda No. 14) deferred the matter stating that the issue was not clear. Further, the council directed to obtain details about the nature of activities undertaken by DMF from Odisha. âš« Odisha government was requested to inform the nature of activities undertaken and services supplied by DMF. However, no reply in the matter has been received so far. Recommendations of ....

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....iling benefit of GST exemptions with respect to business correspondents/business facilitators in rural area needs to be ascertained more comprehensively. Further, some more data is required from Department of Financial Services regarding services provided by BC/BF in urban areas. Recommendations of Fitment Committee • The matter may be deferred. Page 159 of 194 1 CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE BOOK Agenda 4(Part II) (g) : Stand alone agenda: deferred from 47th GST Council meeting (Addendum to Vol. III, pages -71-74) ⚫ A proposal to specify a positive list of 12 services under Sr. No. 3/3 A of notification 12/2017-CT(R) dated 28.06.2017 was placed before the 45th GST Council. The Council was of the view that while the approach to specify a positive list of exempt services was agreeable, the list recommended by Fitment Committee needs to be pruned and refined. Entry at Sr. No. 3. exempt supply of pure services supplied to Central Government, State Government or Local Authority, by way of any activity in relation to Municipal or Panchayat functions under Article 243G or 243W of the Constitution Entry 3A exempt composite supplies (goods component 25% or less....

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....mption may be extended to "Public Authority" and Public authority may be defined as under: "Public Authority means an authority or a board or any other body established and controlled by the Central or State Government to carry out the functions listed in Sl. No. 1 to 10 of the entry." THANK YOU Page 161 of 194 1 CHAIRMAN'S INITIALS Document 4 MINUTE BOOK FACT SHEET Casinos, Race Courses & Online Gaming 50th GST Council Meeting 11th July, 2023 Annexure-5 Legal Framework ⚫ GST - levied on the supply of goods and services. Goods include actionable claims as per section 2(52) of the CGST Act, 2017. • Actionable claim means a claim to any beneficial interest in movable property not in the possession of the claimant where such beneficial interest is existent, accruing, confidential or contingent. As per Entry 6 of Schedule III of the CGST Act, 2017, actionable claims in the form of lottery, betting and gambling are taxable. CHAIRMAN'S INITIALS Page 162 of 194 Shipra Shipra MINUTE BOOK Background • Actionable claims in the form of lottery, betting and gambling attract 28% GST (Entry 228 & 229, Schedule IV, Notf. No. 1/2017-CTR) on full face value ....

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....i. GST [Current tax structure] Rate Pre GST Tax Rate Value Tax Service Tax on tote commission 15% On 20% commission retained by the race club from bets placed in the totalizator. Value Service Tax on allowing access to 15% On the price of entry ticket. race course GST 28% 29% Entertainment tax (weighted On the price of entry ticket Betting/Totalisator tax average) 8%-21% in different states On the full face value of the bets placed Race Courses -Present Practice Race Club Rate Value Royal Western India Turf Club 28% Full value of bet Royal Calcutta Race Club 28% Full value of bet Delhi Race Club 28% Full value of bet 28% . July, 2017 - Jan, 2019-on commission/margin . Bangalore Turf Club • June, 2021 - till date - on commission/margin 28% Mysore Race Club 28% Hyderabad Turf Club Madras Race Club 28% 100% of the face value of the bet or the amount paid into the totalisator Feb, 2019-June, 2021 - on full value of bets [Karnataka HC has ruled in favour of Bangalore Turf Club. Dept has filed appeal in SC] . July, 2017-22nd Jan, 2018 - on commission 23rd Jan, 2018-31 Jan, 2019 - on full value of bets (paid under p....

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....es Gameskraft Decision of High Court 1. Dream 11 is a game of skill. 2. It is an actionable claim but not in the form of betting and gambling. Appeals filed 1. Therefore, it is neither supply of goods nor 2. supply of services, thus clearly exempted from levy of any GST. Dream 11 is a game of skill. [Case was in the context of police laws of the state and UOI was not a party to the case] GST Demand Notice has been set aside.. Appeal filed by State of Maharashtra. The High Court order has been stayed vide Supreme Court vide order dated 06.03.2020. Review petition filed by UOI before the Bombay High Court is pending. An appeal filed by Varun Gumber in the Supreme Court was dismissed. SLP is being filed in Supreme Court on advise of ASG. 19570/2022) [SCN demanding Rs. 20,989 Crore] Myteam 11 Fantasy Sports Vs UOI & Ors (DBCWP 1100/2023) High Court Of Rajasthan at Jaipur GST on online Rummy, poker & other games No coercive action to be taken by GST Authorities. Final order (High Court) is pending. Demand Notices/Litigation Case High Court Issue Decision of High Court Chandresh Sankhla Vs. The State of Rajasthan & Ors High Court "Dream....

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....¢ Ease of administration • Ease of Doing Business CHAIRMAN'S INITIALS Page 170 of 194 18- Shipra - Shipra MINUTE BOOK Issue No.2 Whether to tax online gaming, horse racing and casinos on: Full face value • GGR/platform fees • Deemed Value (e.g. Some exemption from value) Issue No 3 What should be the rate of tax? 28% 18% 12% Page 171 of 194 19 20 CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE BOOK Impact on Lottery Taxation of lottery is settled and are paying 28% on full face value of the lottery ticket. âš« Decisions taken on Online Gaming, Casino horse racing has implications on lottery. Of late, Lottery Trade Associations are representing that 28% GST should be levied on GGR (Revenue after deduction of prize money paid/payable) Revenue Implications Activity Tax Rate Value Potential Revenue* (in Rs. Cr) Full face value 2070 28% GGR/platform fees 310 Full face value 1330 Casinos 18% GGR/platform fees 199 Full face value 887 12 GGR/platform fees 133 Full face value 543 28% GGR/platform fees 98 Full face value 350 Race Courses 18% GGR/platform fees 63 Full face value 234 12% GGR/platform ....

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....85.47 275.93 177.38 118.26 2022-23 (Nov) 80.05 22.41 533.67 149.43 96.06 64.04 Goa (State) 2017-18 583.73 163.45 3891.53 1089.63 700.48 466.98 2018-19 986.35 276.18 6575.67 1841.19 1183.62 789.08 2019-20 974.46 272.85 6496.40 1818.99 1169.35 779.57 2020-21 431.65 120.86 2877.67 805.75 2021-22 739.25 206.99 4928.33 1379.93 517.98 887.10 345.32 591.40 2022-23 (Nov) 987.47 276.49 6583.13 1843.28 1184.96 789.98 Sikkim 2017-18 22.90 6.19 152.67 42.75 27.48 18.32 2018-19 43.58 11.58 290.53 N81.35 52.30 34.86 2019-20 36.46 9.52 243.08 68.06 43.75 29.17 2020-21 19.21 5.16 128.09 35.87 23.06 15.37 2021-22 41.52 11.14 276.80 77.50 49.82 33.22 2022-23 56.78 14.15 378.55 105.99 68.14 45.43 Total 5545.66 1548.79 36971.05 10351.89 6654.79 4436.53 26 "Based on backward calculation taking GGR as 15% of total taxable value Page 174 of 194 Shipra Shipra MINUTE BOOK Potential Revenue - Race Courses If Race Courses are taxed @ 28% / 18% / 12% on full value of the bets placed Horse Racing GST collected Revenue Potential Financial Year Taxable Value GST(Actual) 2017-18 477.04 133.39 *Taxab....

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....reconstituted and TOR revised. Subsumed the earlier GoM on IT challenges and revenue mobilization. TOR 1. Suggest measures to make the system more effective and efficient including changes in business processes; 2. Identify sources of evasion & suggest changes in business processes & IT systems to plug revenue leakage; 3. Identify and suggest use of data analysis towards better compliance/revenue augmentation; 4. Identify mechanisms for better coordination between different tax administrations (States/Centre); Three meetings held after change of composition of GoM w.e.f. September 21,2021 â–  First Meeting held on 21st October 2021 â–  Second Meeting held on 10th February 2022: Recommendations approved in 47th GST Council meeting. â– Third Meeting held on 13th February 2023 Page 177 of 194 NATION TAX MARKET CHAIRMAN'S INITIALS MINUTE BOOK Group of Ministers (GOM) on GST System Reforms The Membership of GoM is as below: INATION TAX MARKET # Designation and State 1 Deputy Chief Minister, Maharashtra Convenor 2 Deputy Chief Minister, Haryana Member 3 Deputy Chief Minister, Delhi Member 4 Minister for Finance, Assam Member Minister for....

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....ism for verification and initiation of action in non-compliant cases is to be provided. d. In subsequent phase, filing of GSTR-1 to be blocked till the officer verifies and approve the reply filed by the taxpayer. INATION TAX MARKET Agenda Item 2: Tracking and identification of Non-Existent Tax Payers (NETP) 7/25/2023 CHAIRMAN'S INITIALS Page 180 of 194 10 Shipra Shipra - MINUTE BOOK Agenda Item: Tracking and identification of Non-Existent Tax Payers (NETP) INATION TAX MARKET Fake / Non-Existent taxpayer denotes the entity which is only engaged in issuance of fake GST invoices i.e. without underlying supply of goods / services. Intent to pass the fake GST credit to defraud the revenue. The business activity declared in registration does not exists. GST registration is obtained by means of fraud or willful mis-statement like: Declare Non-existent or incomplete address at the time registration. Or furnish fake / forged documents of address while taking registration. Identity theft by using of credentials (ADHAR, PAN, etc) of persons without their knowledge. Use of credentials (Mobile linked to ADHAR, PAN, etc) of innocent persons to get registration. Com....

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....oposed to be excluded. 3. The convenor of GOM, directed to constitute an officers group & hold a meeting in this regard in Mumbai to develop a detailed methodology & business process to achieve the stated goal in Consultation with the RBI and the NPCI. Page 182 of 194 Shipra Shipra MINUTE BOOK 7/25/2023 Agenda Item 4: HSN level reporting in GSTR-1 Agenda Item: HSN level reporting in GSTR-1 Agenda Decision of GoM INATION TAX MARKET 15 NATION TAX MARKET 4 HSN level reporting in GSTR-1: Integrating and auto-population of e- invoice/e-way bill data with Table 12 of GSTR1 The GoM approved: a. In first phase, HSN data in Table 12 of GSTR 1, should be auto populated from e-invoice and EWB. (In initial phase AATO Rs. 5 Crore or more to be considered) b. Phase wise and time bound approach to be adopted for action against non-compliant taxpayers with nudging messages and e-mails. c. Blocking of GSTR 1 for failure to fill HSN will be taken up in the later phase. Page 183 of 194 CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS # MINUTE BOOK Agenda Item 5: Integration of Income Tax, ICEGATE and other data points. Improving collection of data on import of servi....

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....h Bench of the Appellate Tribunal to consist of four members i.e. two Judicial Members and two Technical Members, one Member from Centre and one from the State. The report of GoM on GSTAT adopted by the Council with certain modifications. Amendments in CGST Act incorporated through Finance Act, 2023 (refer clause 149-154 of the Finance Act, 2023), by substitution of sections 109, 110 and 114 of CGST Act, 2017 and by amending sections 117, 118 and 119 of CGST Act, 2017. âš« The GST Council may recommend a suitable date for notifying the amendments to CGST Act, 2017 made vide Finance Act, 2023. Accordingly, the States/UTS with legislature may also notify the corresponding amendments in their respective Acts on the same date. The GSTAT would be constituted after these amendments are notified. Page 188 of 194 Shipra - Shipra MINUTE BOOK Search-cum-Selection Committee Section 110 (4) (a) The Search-cum-Selection Committee for Technical Member (State) of a State Bench shall consist of the following members namely:- (i) the Chief Justice of the High Court in whose jurisdiction the State Bench is located, to be the Chairperson of the Committee; (ii) the senior-most ....

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....ghalaya, Manipur and Assam. In case of Arunachal Pradesh and Meghalaya, the GSTAT has been proposed at Guwahati, Assam may be clarified that the appeal arising out of GSTAT order in such cases will fall within jurisdiction of the High Court of the State where the taxpayer is located. Meghalaya has also requested for this clarification. S.No. State Name TOTAL Taxpayer Revenue (Domestic) F.Year 2022-23 Uttar Pradesh Maharashtra 1,798.288 87969 1,676.761 270345 2 Gujarat 1,142,794 114221 Tamil Nadu 1,113.313 104377 Karnataka 985,729 122821 Rajasthan 842,067 45458 Delhi 778.692 55843 West Bengal 717,527 58059 Bihar 602.293 16547 Madhya Pradesh 509.039 36231 Haryans 508.566 86668 12 Telangana 496.953 51830 Andhra Pradesh 414,274 40232 14 Kerala 399.701 27371 15 Punjab 384.053 20949 16 Odisha 320.506 49441 17 Assam 221,656 13710 18 Jharkhand 196,868 32019 19 Uttarakhand 195,150 16845 20 Chhattisgarh 171,573 31968 21 Jammu and Kashmir 136,285 5246 22 Himachal Pradesh 120,679 8778 23 Goa 41,960 5520 24 Chandigarh 30,436 2365 25 Tripura 30.147 863 Meghalays 28,670 2075 Puducherry 23.760 23....

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....,96,953 51830 13 Andhra Pradesh 4,14,274 40232 14 Kerala 3.99,701 27371 15 Punjab 3,84,053 20949 16 Odisha 3,20,506 49441 17 Assam 2.21,656 13710 18 Jharkhand 1,96,868 32019 19 Uttarakhand 1,95,150 16845 20 Chhattisgarh 1,71,573 31968 21 Jammu and Kashmir 1,36,285 5246 22 Himachal Pradesh 1,20,679 8778 23 Goa 41,960 5520 24 Chandigarh 30,436 2365 25 Tripura 30,147 883 26 28,670 2075 27 Puducherry 23,760 2373 28 Arunachal Pradesh 17,137 1022 29 Dadra and Nagar Haveli & Daman and Diu 15,511 3771 30 Manipur 13,891 614 31 Sikkim 10,368 3155 32 Nagaland 10,212 566 33 Ladakh 7,907 333 34 Mizoram 7,534 418 35 Andaman and Nicobar Islands 5.660 373 36 Lakshadweep 347 21 Meghalaya No. of Benches requested by States in Agenda 2(Kolkata) 1 (Patna) 1 (Bhopal) 2 (Hisar & Gurugram) 2 (Hyderabad) 3 (Vijayawada, Vishakhapatnam and Tirupati) 3 (Triruvananthapuram, Ernakulam & Kozhikode) 2 (Chandigarh & Mohali) 1(Cuttack) I State Bench of GSTAT at Guwahati, Assam I (Ranchi) (Dehradum) 2 (Raipur & Bilaspur) I (Jammu & Srinagar on rotational basis) (Shimla) I (Panaji) Common State Bench of....

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....da 2222222233 Jammu and Kashmir 136,285 5246 24 Dadra and Nagar Haveli & Daman and 15,511 3771 Diu 25 Sikkim 10,368 3155 26 Puducherry 23,760 2373 1(Jammu & Srinagar on rotational basis) Common State Bench of Maharashtra (Mumbai) Common Bench with Kolkata 1(Puducherry) 27 Chandigarh 30,436 2365 28 Meghalaya 28,670 2075 Common State Bench of Punjab (Chandigarh) Common State Bench of GSTAT at Guwahati, Assam 29 Arunachal Pradesh 17,137 1022 Common State Bench of GSTAT at Guwahati, Assam 30 Tripura 30,147 883 I(Agartala) 31 Manipur 13,891 614 Nagaland 10,212 566 Mizoram 7,534 418 34 Andaman and Nicobar Islands* 5,660 373 Common State Bench of GSTAT at Guwahati, Assam Proposed one Bench 1 (Aizwal) Common State Bench of WB. (Kolkata) 35 Ladakh* 7,907 333 Common State Bench of Jammu & Kashmir 36 Lakshadweep* 347 21 Common State Bench of Kerala *This has been proposed by GSTCS as these are the UT without legislature. This proposal is on the basis of previous Notification issued by DoR. S.No. State/Union Territory Uttar Pradesh 2 Population (2011 Census) 1995,81432 11.2372.972 10.89/04 637 No. in Crore 30.958 ....