GST News and Updates – June 2022
47th GST Council Meeting
Recommendations relating to GST rates on goods and services – To be implemented from 18th July
- Rate Rationalization to remove inverted duty structure
- Printing, writing or drawing ink will attract 18 per cent
- Knives with cutting blades, Paper knives, Pencil sharpeners and blades therefor, Spoons, forks, ladles, skimmers, cake-servers etc will attract 18 per cent
Power driven pumps primarily designed for handling water such as centrifugal pumps, deep tube-well turbine pumps, submersible pumps; Bicycle pumps will attract 18 per cent
- GST Rate increase –
- Kitchen utensils, led lights, farm machinery, solar water systems as well as services like work contracts for roads, irrigation projects, hospitals and educational institutions would now be charged at 18 per cent from an earlier rate of 12 per cent
- Increase in tax on petroleum and coal bed methane to 12 per cent from 5 percent
- GST on e-waster was revised from current 5 per cent to 18 per cent.
- Withdrawal of exemptions –
- GST was exempted on specified food items, grains etc when not branded, or right on the brand has been foregone. It has been recommended to revise the scope of exemption to exclude from it prepackaged and pre-labelled retail pack in terms of Legal Metrology Act, including pre-packed, pre-labelled curd, lassi and butter milk
- Maps, and hydrographic or similar charts of all kinds, including atlases, wall maps, topographical plans and globes, printed will invite a 12 per cent GST. All these products were earlier charged nil.
- The government will now impose a 18 per cent tax on cheques, lose or in book form and parts of goods of heading 8801
- Exemption on transport of passengers by air to and from NE states & Bagdogra is being restricted to economy class.
- Exemption on many services like transport by railway, services by RBI,IRDA,SEBI,FSSAI,GSTN, services by cord blood banks, fumigation in a warehouse of agricultural produce and Renting of residential dwelling to business entities have been rationalized
- Hotel accommodation priced upto Rs. 1000/day shall be taxed at 12%. Room rent exceeding Rs 5000 per day per patient shall be taxed 5% without ITC.
- GST on casinos, race course and online gaming
- The council decided to further deliberate on the tax rate and the method of valuation of taxation on such services.
- Clarification on GST rate
- Electric vehicles, space for advertisement in souvenirs published in the form of books, supply of ice-cream by ice-cream parlors and stones to attract 5% GST Rate
- Mango, Renting of vehicle with operator for transportation of goods attract 12% GST Rate
- Application fee charged for entrance or for issuance of eligibility certificate for admission or issuance of migration certificate by universities is exempt from GST.
- Sale of land after leveling, laying down of drainage lines etc. is sale of land and does not attract GST
- Renting of motor vehicles for transport of passengers to a body corporate for a period (time) is taxable in the hands of body corporate under RCM
- All taxable service of Department of Posts would be subject to forward charge.
- Goods transport agency (GTA) is being given option to pay GST at 5% or 12% under forward charge
Recommendations relating to GST law and procedure
Measures for Trade facilitation
- Relaxation in the provisions for suppliers making supplies through E-Commerce Operators (ECOs) to be implemented from 1 Jan 2023
- Waiver of requirement of mandatory registration under section 24(ix) of CGST Act for person supplying goods through ECOs if the aggregate turnover on all India basis does not exceed the turnover specified under sub-section (1) of section 22 of the CGST Act and the person is not making any inter-State taxable supply
- Composition taxpayers would be allowed to make intra-State supply through e-commerce operators
- Amendment in formula prescribed in sub-rule (5) of rule 89 of CGST Rules – Change in formula for calculation of refund to take into account utilization of ITC on account of inputs and input services for payment of output tax on inverted rated supplies in the same ratio in which ITC has been availed on inputs and input services during the said tax period
- Amendment in CGST Rules for handling of pending IGST refund claims (Rule 96 of the CGST Rules): where the exporter is identified as risky exporter, or where there is a violation of provisions of Customs Act, the refund claims in respect of export of goods are suspended/withheld. Amendment has been recommended to provide for transmission of such IGST refund claims on the portal in a system generated FORM GST RFD-01 to the jurisdictional GST authorities for processing.
- Re-credit of amount in electronic credit ledger to be provided in those cases where erroneous refund amount sanctioned to a taxpayer on account of accumulated ITC or on account of IGST paid on zero rated supply of goods or services, in contravention of rule 96(10) of the CGST Rules, is deposited by him along with interest and penalty, wherever applicable. A new FORM GST PMT-03A is introduced for the same.
- Clause (c) of section 110 and section 111 of the Finance Act, 2022 to be notified by Central Government
- retrospective amendment in section 50(3) of CGST Act, with effect from 01.07.2017,to provide that interest will be payable on the wrongly availed ITC only when the same is utilized;
- amendment in sub-section (10) of section 49 of CGST Act to provide for transfer of balance in electronic cash ledger of a registered person to electronic cash ledger of CGST and IGST of a distinct person.
- Waiver of late fee for delay in filing GSTR-4 for FY 2021-22 and extension of due date for filing FORM GST CMP-08 for Q1 of FY 2022-23
- Issuance of the circulars to remove ambiguity and legal disputes
- Claiming refund under inverted duty structure where the supplier is supplying goods under some concessional notification.
- Issues relating to applicability of demand and penalty provisions in respect of transactions involving fake invoices.
- Mandatory furnishing of correct and proper information of inter-State supplies and amount of ineligible/blocked Input Tax Credit and reversal thereof in return in GSTR-3B.
- Issues pertaining to refund claimed by the recipients of supplies regarded as deemed export;
- Issues relating to interpretation of section 17(5) of the CGST Act;
- Issue of perquisites provided by employer to the employees as per contractual agreement;
- Utilization of the amounts available in the electronic credit ledger and the electronic cash ledger for payment of tax and other liabilities.
- Exemption from filing annual return in FORM GSTR-9/9A for FY 2021-22 to be provided to taxpayers having AATO upto Rs. 2 crores.
- Explanation 1 after rule 43 of CGST Rules to be amended to provide that there is no requirement of reversal of input tax credit for exempted supply of Duty Credit Scrips by the exporters.
- Present exemption of IGST on import of goods under AA/EPCG/EOU scheme to be continued and E-wallet scheme not to be pursued further.
- UPI & IMPS to be provided as an additional mode for payment of Goods and Services Tax to taxpayers under Rule 87(3) of CGST Rules.
- In respect of refunds pertaining to supplies to SEZ Developer/Unit, an Explanation to be inserted in sub-rule (1) of rule 89 of CGST Rules to clarify that “specified officer” under the said sub-rule shall mean the “specified officer” or “authorized officer”, as defined under SEZ Rules, 2006.Amendment in CGST Rules to provide for refund of unutilized Input Tax Credit on account of Export of Electricity. This would facilitate the exporters of electricity in claiming refund of utilized ITC on zero rated supplies.
- Amendment in CGST Rules to provide for refund of unutilized Input Tax Credit on account of Export of Electricity. This would facilitate the exporters of electricity in claiming refund of utilized ITC on zero rated supplies.
- Supplies from Duty Free Shops (DFS) at international terminal to outgoing international passengers to be treated as exports by DFS and consequential refund benefit to be available to them on such supplies. Rule 95A of the CGST Rules, Circular No. 106/25/2019-GST dated 29.06.2019 and related notifications to be rescinded accordingly.
Measures for streamlining compliances in GST
- Provision for automatic revocation of suspension of registration in cases where suspension of registration was done by the system under Rule 21A(2A) of CGST Rules, for non-compliance in terms of clause (b) or clause (c) of sub-section (2) of section 29[continuous non-filing of specified number of returns], once all the pending returns are filed on the portal by the taxpayer. (Amendment in rule 21A)
- Proposal for comprehensive changes in GSTR-3B to be placed in public domain for seeking inputs/suggestions of the stakeholders.
- Time period from 01.03.2020 to 28.02.2022 to be excluded from calculation of the limitation period for filing refund claim by an applicant under section 54 and 55 of CGST Act, as well as for issuance of demand/ order (by proper officer) in respect of erroneous refunds under section 73 of CGST Act. Further, limitation under section 73 for FY 2017-18 for issuance of order in respect of other demands linked with due date of annual return, to be extended till 30th September, 2023
The GST Council approved ad-hoc apportionment of IGST to the extent of Rs. 27,000 crores and release of 50% of this amount, i.e. Rs. 13,500 crore to the States.
Addition of 6% tax rate in GSTR-1 online
- 6% tax rate has been added in the item details of GSTR-1, except HSN table 12. In case your outward supplies attracts 6% tax rate, taxpayers are required to upload the details against 6% tax rate in the item details section.
- In respect to HSN table 12 ,the HSN details of supplies attracting 6% tax rate should be under tax rate 5% by updating the values/tax amounts as per the actual supplies.