48th Meeting of the GST
Council 17th December, 2022
***
PRESS RELEASE
The 48th Meeting of the GST Council
was held on 17th December, 2022 through Video
Conference, under the chairpersonship of the Union Finance & Corporate Affairs
Minister Smt. Nirmala
Sitharaman.
Tax rates
1.
The GST Council has, inter-alia, made following
recommendations for changes in GST rates:
|
Sr. No. |
Description |
From |
To |
|
Goods |
|||
|
1. |
Husk of pulses including chilka and concentrates including chuni/churi,
khanda |
5% |
Nil |
|
2. |
Ethyl alcohol supplied to refineries for blending with
motor spirit (petrol) |
18% |
5% |
2.
It was also decided to include supply of Mentha
arvensis under reverse charge mechanism as has been done for Mentha Oil.
3.
It was decided to clarify
that:
·
Rab (rab-salawat)
is classifiable under CTH 1702
which attracts GST at the rate of
18%.
·
fryums manufactured using the process of extrusion is
specifically covered under CTH 19059030 and attract GST at the rate of 18%.
·
The higher rate of compensation cess of 22% is applicable to motor vehicle
fulfilling all four conditions, namely, it is popularly known as SUV,
has engine capacity exceeding 1500
cc, length exceeding 4000 mm and a ground clearance of 170 mm or above
·
goods falling
in lower rate category of 5% under schedule I of notification No. 1/2017-CTR imported for petroleum operations will attract lower rate of 5% and the rate of 12%
shall be applicable only if the general rate is more than 12%
4.
As a relief measure, the Council decided to regularise
the intervening period starting from the date of issuance
of Circular (3.08.2022) in respect of GST on ‘husk of pulses including
chilka and concentrates including chuni/churi, khanda’ on “ as
is basis” on account of genuine
doubts.
5.
No GST is payable where the residential dwelling is
rented to a registered person if it is rented
it in his/her personal capacity for use as his/her own residence and on his own account
and not on account of his business.
6.
Incentive paid to banks by Central Government under
the scheme for promotion of RuPay Debit
Cards and low value BHIM-UPI transactions are in the nature of subsidy and thus not taxable
Measures for facilitation of trade
1.
Decriminalization under GST: The Council has recommended to -
·
raise the minimum threshold of tax amount for
launching prosecution under GST from
Rs. One Crore to Rs. Two Crores, except for the offence of issuance of invoices
without supply of goods or
services or both;
·
reduce the compounding amount from the present range
of 50% to 150% of tax amount to the
range of 25% to 100%;
·
decriminalize certain offences
specified under clause
(g), (j) and (k) of sub-section
(1)
of section 132 of
CGST Act, 2017, viz.-
o
obstruction or preventing any officer in discharge of his duties;
o
deliberate tempering of material evidence;
o
failure to supply
the information.
2.
Refund to
unregistered persons: There is no procedure for claim of refund of tax borne by the unregistered buyers in cases
where the contract/ agreement for supply of services, like construction of flat/house and long-term insurance policy,
is cancelled and the time period of issuance of credit note by the concerned supplier
is over. The Council recommended amendment in CGST Rules, 2017,
along with issuance of a circular, to prescribe
the procedure for filing application of refund by the unregistered buyers in
such cases.
3.
Facilitate
e-commerce for micro enterprises: GST Council in its 47th meeting had granted
in-principle approval for allowing unregistered suppliers and composition taxpayers to make intra-state supply of goods through E-Commerce
Operators (ECOs), subject to certain
conditions. The Council approved the amendments in the GST Act and GST Rules, along with issuance of relevant
notifications, to enable the same. Further, considering the time required for
development of the requisite functionality on the portal as well as for providing sufficient time for preparedness by the
ECOs, Council has recommended that the
scheme may be implemented w.e.f. 01.10.2023.
4.
Paras 7, 8(a) and 8(b) were inserted in Schedule III
of CGST Act, 2017 with effect from 01.02.2019
to keep certain transactions/ activities, such as supplies of goods from a
place outside the taxable territory
to another place outside the taxable territory, high sea sales and supply of warehoused goods before their
home clearance, outside
the purview of GST. In order to remove the doubts and
ambiguities regarding taxability of such transactions/ activities during the period 01.07.2017 to 31.01.2019, the
Council has recommended to make the
said paras effective from 01.07.2017. However,
no refund of tax paid shall be available
in cases where any tax has already been paid in respect of such transactions/ activities during the period
01.07.2017 to 31.01.2019.
5.
The Council has recommended to amend sub-rule (1) of
rule 37 of CGST Rules, 2017 retrospectively
with effect from 01.10.2022 to provide for reversal of input tax credit, in terms of second proviso to section 16 of
CGST Act, only proportionate to the amount not
paid to the supplier vis a vis the value of the supply, including tax payable.
6.
The Council recommended to insert Rule 37A in CGST
Rules, 2017 to prescribe the mechanism
for reversal of input tax credit by a registered person in the event of non- payment
of tax by the supplier
by a specified date and mechanism for re-availment of such credit,
if the supplier pays tax subsequently. This would ease the process for complying with the condition for availment of input
tax credit under section 16(2)(c) of CGST Act,
2017.
7.
Sub-rule (3) of rule 108 and rule 109 of the CGST
Rules, 2017 to be amended to provide clarity
on the requirement of submission of certified copy of the order appealed
against and the issuance of final acknowledgment by the appellate
authority. This would facilitate timely processing of appeals
and ease the compliance burden
for the appellants.
8.
Rule 109C and FORM GST APL-01/03 W to be inserted in
the CGST Rules, 2017 to provide the facility for withdrawal of an application of appeal up to certain
specified stage. This
would help in reducing litigations at the level of appellate authorities.
9.
Circular to be issued to clarify that No Claim Bonus
offered by the insurance companies to the insured is an
admissible deduction for valuation of insurance services.
10.
Circular to be issued for clarifying the issue of treatment of statutory dues under GST law in respect of the taxpayers for whom the proceedings have been finalised
under Insolvency and Bankruptcy Code, 2016. Rule 161 of
CGST Rules, 2017 and FORM GST DRC-25 also to be amended for facilitating the same.
11.
Sub-rule (3) of rule 12 of CGST Rules, 2017 to be
amended to provide for facility to the registered persons,
who are required
to collect tax at source
under section 52 or deduct
tax at source under section
51 of CGST Act, 2017, for cancellation of their registration on their request.
12.
Circular to be issued for clarifying the issues
pertaining to the place of supply of services
of transportation of goods in terms of the proviso to sub-section (8) of
section 12 of the IGST Act, 2017 and
availability of input tax credit to the recipient of such supply. It has also been recommended that proviso to sub-section (8) of section
12 of the IGST Act, 2017 may be omitted.
13.
Issuance of the following circulars in order to remove
ambiguity and legal disputes on various issues, thus benefiting taxpayers at large:
a. Procedure
for verification of input tax credit in cases involving difference in input tax credit availed in FORM GSTR-3B vis a vis that available as per FORM GSTR-2A during FY 2017-18 and 2018-19.
b.
Clarifying the manner of re-determination of demand in
terms of sub-section (2) of section 75 of CGST Act, 2017.
c. Clarification in respect of applicability of e-invoicing with respect to an entity.
Measures for streamlining compliances in GST
14.
Proposal to conduct
a pilot in State of Gujarat for Biometric-based Aadhaar
authentication and risk-based
physical verification of registration applicants. Amendment in rule 8 and rule 9 of CGST Rules, 2017 to be made to
facilitate the same. This will help in tackling the menace of fake
and fraudulent registrations.
15.
PAN-linked mobile number and e-mail address (fetched
from CBDT database) to be captured and recorded in FORM GST REG-01 and OTP-based verification to be conducted at the time of registration on such PAN-linked mobile number and email address
to restrict misuse of PAN of a person by unscrupulous elements
without knowledge of the said PAN-holder.
16.
Section 37, 39, 44 and 52 of CGST Act, 2017 to be
amended to restrict filing of returns/ statements
to a maximum period of three years from the due date of filing of the relevant return
/ statement.
17.
FORM GSTR-1 to be amended
to provide for reporting of details of supplies made through ECOs, covered under section 52 and
section 9(5) of CGST Act, 2017, by the supplier and reporting by the ECO
in respect of supplies made under section 9(5) of
CGST Act, 2017.
18.
Rule 88C and FORM GST DRC-01B to be inserted in CGST
Rules, 2017 for intimation to the
taxpayer, by the common portal, about the difference between liability reported
by the taxpayer in FORM GSTR-1 and in
FORM GSTR-3B for a tax period, where such difference
exceeds a specified amount and/ or percentage, for enabling the taxpayer to either pay the differential liability or
explain the difference. Further, clause (d) to be inserted in sub-rule (6) of rule 59 of CGST Rules, 2017 to
restrict furnishing of FORM GSTR-1
for a subsequent tax period if the taxpayer has neither deposited the amount specified
in the intimation nor has furnished a reply explaining the reasons for the amount
remaining unpaid. This would facilitate taxpayers to pay/ explain the
reason for the difference in such liabilities reported by them,
without intervention of the tax officers.
19.
Amendment in definition of “non-taxable online
recipient” under section 2(16) of IGST Act, 2017 and definition of “Online Information and Database Access or Retrieval
Services (OIDAR)” under section 2(17) of IGST Act, 2017 so as to reduce
interpretation issues and litigation on taxation of OIDAR
Services.
Note: The
recommendations of the GST Council
have been presented in this release
containing major item of decisions
in simple language
for information of the stakeholders. The same
would be given effect
through the relevant
circulars/ notifications/ law amendments which
alone shall have the force of law.
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