Amendment to Rule 45 comes into effect from 1 Oct 2021
Amendment to Rule 59 comes into effect from 1 Jan 2022
The GST Council’s 45th meeting was held in Lucknow under the chairmanship of the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman. The GST Council has made the following recommendations :
A. COVID-19 relief measure in form of GST rate concessions –
Extension of existing concessional GST rates (currently valid till 30th September, 2021) on following Covid-19 treatment drugs, up to 31st December, 2021
Reduction of GST rate to 5% on more Covid-19 treatment drugs, up to 31st December, 2021
B. Major recommendations on GST rate changes in relation to Goods [w.e.f 1.10.2021 unless otherwise stated]
| Description | Earlier | Recommended |
| Ores and concentrates of metals such as iron, copper, aluminum, zinc and few others | 5% | 18% |
| Specified Renewable Energy Devices and parts | 5% | 12% |
| Cartons, boxes, bags, packing containers of paper etc. | 12%/18% | 18% |
| Waste and scrap of polyurethanes and other plastics | 5% | 18% |
| All kinds of pens | 12%/18% | 18% |
| Railway parts, locomotives & other goods in Chapter 86 | 12% | 18% |
| Miscellaneous goods of paper like cards, catalogue, printed material (Chapter
49 of tariff) |
12% | 18% |
| Retro fitment kits for vehicles used by the disabled | Appl. Rate | 5% |
| Fortified Rice Kernels for schemes like ICDS etc. | 18% | 5% |
| Medicine Keytruda for treatment of cancer | 12% | 5% |
| Biodiesel supplied to OMCs for blending with Diesel | 12% | 5% |
| IGST on import of medicines for personal use, namely
i.Zolgensma for Spinal Muscular Atrophy ii.Viltepso for Duchenne Muscular Dystrophy iii.Other medicines used in treatment of muscular atrophy recommended by Ministry of Health and Family Welfare and Department of Pharmaceuticals |
Taxable at 12% | Exempted |
| IGST exemption on goods supplied at Indo-Bangladesh Border haats | Taxable at applicable rates | Exempted |
| Unintended waste generated during the production of fish meal
except for Fish Oil |
Nil for period 1.7.2017 to 30.9.19 | |
Supply of mentha oil from unregistered person has been brought under reverse charge.C. Other changes relating to GST Rates of Goods
D. Major GST changes in relation to rates and scope of exemption on Services [w.e.f 1.10.2021 unless otherwise stated]
| Description of service | Earlier | Recommended |
| Licensing services/ the right to broadcast and show original films, sound recordings, Radio and Television programmes [ to bring parity between distribution and licensing services] | 12% | 18% |
| Printing and reproduction services of recorded media where content is supplied by the publisher (to bring it on parity with Color printing of images from film or digital media) | 12% | 18% |
| Transport of goods by vessel and air from India to
outside India |
Exempted | Extension of Exemption
up to 30.9.2022 |
| Services by way of grant of National Permit to goods carriages on payment of fee | Taxable at 18% | Exempted |
| Services related to AFC Women’s Asia Cup 2022. | Taxable @ 18% | Exempted |
| Skill Training for which Government bears expenditure | 100% Govt Funding – Exempt Others – Taxable @ 18% | 75% or More – Exempt Others – Taxable @ 18% |
E. Clarification in relation to GST rate on Goods
1. Pure henna powder and paste, having no additives, attract 5% GST rate under Chapter 14.
2. Brewers’ Spent Grain (BSG), Dried Distillers’ Grains with Soluble [DDGS] and other such residues, falling under HS code 2303 attract GST at the rate of 5%.
3. All laboratory reagents and other goods falling under heading 3822 attract GST at the rate of 12%.
4. Scented sweet supari and flavored and coated illachi falling under heading 2106 attract GST at the rate of 18%
5. Carbonated Fruit Beverages of Fruit Drink” and “Carbonated Beverages with Fruit Juice” attract GST rate of 28% and Cess of 12%. This is being prescribed specifically in the GST rate schedule.
6. Tamarind seeds fall under heading 1209, and hitherto attracted nil rate irrespective of use. However, henceforth they would attract 5% GST rate (w.e.f. 1.10.2021) for use other than sowing. Seeds for sowing will continue at nil rate.
7. External batteries sold along with UPS Systems/ Inverter attract GST rate applicable to batteries [ 28% for batteries other than lithium-ion battery] while UPS/inverter would attract 18%.
8. GST on specified Renewable Energy Projects can be paid in terms of the 70:30 ratio for goods and services, respectively, during the period from 1.7.2017 to 31.12.2018, in the same manner as has been prescribed for the period on or after 1st January 2019.
9. Due to ambiguity in the applicable rate of GST on Fibre Drums, the supplies made at 12% GST in the past have been regularised. Henceforth, a uniform GST rate of 18% would apply to all paper and paper board containers, whether corrugated or non-corrugated.
10. Distinction between fresh and dried fruits and nuts is being clarified for application of GST rate of “nil” and 5%/12% respectively;
11. It is being clarified that all pharmaceutical goods falling under heading 3006 attract GST at the rate of 12% [ not 18%].
12. Essentiality certificate issued by Directorate General of Hydrocarbons on imports would suffice; no need for taking a certificate every time on inter-state stock transfer.
F. Clarification in relation to GST rate on services
1. Coaching services to students provided by coaching institutions and NGOs under the central sector scheme of ‘Scholarships for students with Disabilities” is exempt from GST
2. Services by cloud kitchens/central kitchens are covered under ‘restaurant service’, and attract 5% GST [ without ITC].
3. Ice cream parlor sells already manufactured ice- cream. Such supply of ice cream by parlors would attract GST at the rate of 18%.
4. Overloading charges at toll plaza are exempt from GST being akin to toll.
5. The renting of vehicle by State Transport Undertakings and Local Authorities is covered by expression ‘giving on hire’ for the purposes of GST exemption
6. The services by way of grant of mineral exploration and mining rights attracted GST rate of 18% w.e.f. 01.07.2017.
7. Admission to amusement parks having rides etc. attracts GST rate of 18%. The GST rate of 28% applies only to admission to such facilities that have casinos etc.
8. Alcoholic liquor for human consumption is not food and food products for the purpose of the entry prescribing 5% GST rate on job work services in relation to food and food products.
I. Measures for Trade facilitation:
1. Relaxation in the requirement of filing FORM GST ITC-04: Requirement of filing FORM GST ITC-04 under rule 45 (3) of the CGST Rules has been relaxed as under:
a. Taxpayers whose annual aggregate turnover in preceding financial year is above Rs. 5 crores shall furnish ITC-04 once in six months;
b. Taxpayers whose annual aggregate turnover in preceding financial year is upto Rs. 5 crores shall furnish ITC-04 annually.
2. In the spirit of earlier Council decision that interest is to be charged only in respect of net cash liability, section 50 (3) of the CGST Act to be amended retrospectively, w.e.f. 01.07.2017, to provide that interest is to be paid by a taxpayer on “ineligible ITC availed and utilized” and not on “ineligible ITC availed”. It has also been decided that interest in such cases should be charged on ineligible ITC availed and utilized at 18% w.e.f. 01.07.2017.
3. Unutilized balance in CGST and IGST cash ledger may be allowed to be transferred between distinct persons (entities having same PAN but registered in different states), without going through the refund procedure, subject to certain safeguards.
4. Issuance of the following circulars in order to remove ambiguity and legal disputes on various issues, thus benefiting taxpayers at large:
a. Clarification on scope of “intermediary services”;
b. Clarification relating to interpretation of the term “merely establishment of distinct person” in condition (v) of the Section 2 (6) of the IGST Act 2017 for export of services. A person incorporated in India under the Companies Act, 2013 and a person incorporated under the laws of any other country are to be treated as separate legal entities and would not be barred by the condition (v) of the sub-section (6) of the section 2 of the IGST Act 2017 for considering a supply of service as export of services;
c. Clarification in respect of certain GST related issues:
i. W.e.f. 01.01.2021, the date of issuance of debit note (and not the date of underlying invoice) shall determine the relevant financial year for the purpose of section 16(4) of CGST Act, 2017;
ii. There is no need to carry the physical copy of tax invoice in cases where invoice has been generated by the supplier in the manner prescribed under rule 48(4) of the CGST Rules, 2017;
iii. Only those goods which are actually subjected to export duty i.e., on which some export duty has to be paid at the time of export, will be covered under the restriction imposed under section 54(3) of CGST Act, 2017 from availment of refund of accumulated ITC.
5. Provision to be incorporated in in CGST Rules, 2017 for removing ambiguity regarding procedure and time limit for filing refund of tax wrongfully paid as specified in section 77(1) of the CGST/SGST Act and section 19(1) of the IGST Act.
Measures for streamlining compliances in GST
1. Aadhaar authentication of registration to be made mandatory for being eligible for filing refund claim and application for revocation of cancellation of registration.
2. Late fee for delayed filing of FORM GSTR-1 to be auto-populated and collected in next open return in FORM GSTR-3B.
3. Refund to be disbursed in the bank account, which is linked with same PAN on which registration has been obtained under GST.
4. Rule 59(6) of the CGST Rules to be amended with effect from 01.01.2022 to provide that a registered person shall not be allowed to furnish FORM GSTR-1, if he has not furnished the return in FORM GSTR-3B for the preceding month.
5. Rule 36(4) of CGST Rules, 2017 to be amended, once the proposed clause (aa) of section 16(2) of CGST Act, 2017 is notified, to restrict availment of ITC in respect of invoices/ debit notes, to the extent the details of such invoices/ debit notes are furnished by the supplier in FORM GSTR-1/ IFF and are communicated to the registered person in FORM GSTR-2B.
1. Trade bodies are not able to generate EWB bill for movement of those goods where their principle supply is classifiable as a service, since there is no provision for generating E-way Bill by entering SAC (Service Accounting Code-Chapter 99) alone on the E- way bill portal.
2. To overcome this issue, the taxpayers are advised as below:
a) Rule 138 of CGST Rules, 2017, states “Information to be furnished prior to commencement of movement of goods and generation of e-way bill.-(1) Every registered person who causes movement of goods of consignment value exceeding fifty thousand rupees….” Thus, E way bill is required to be generated for the movement of Goods.
b) Therefore, in cases where the principal supply is purely a supply of service and involving no movement of goods, the e-way bill is not required to be generated.
c) However, in cases where along with the principal supply of service, movement of some goods is also involved, e-way bill may be generated. In such cases, e-way bill may be generated by entering the details of HSN code of the goods, along with SAC (Service Accounting Code) of services involved.