GST council meet decision as on 06th October, 2017

Posted on 20 April 2023 Category : GST exemptions

06th October 2017, GST COUNCIL MEET DECISION

TDS and TCS under GST provisions postponed

Registration and operationalization of TDS and TCS under GST postponed to 31^st March 2018

As per the GST council meet on 6^th October, 2017, registration and operationalization of TDS/TCS provisions shall be postponed till 31.03.2018.

GST E-way bill system in staggered manner from April 1, 2018

e-way Bill under GST

According to GST council meet on 6^th October, 2017, the e-way bill system shall be introduced in a staggered manner with effect from 01.01.2018 and shall be rolled out nationwide with effect from 01.04.2018. This is in order to give trade and industry more time to acclimatize itself with the GST regime.

The last date to file GSTR 4 extended

The last date to file GSTR 4 extended to 15^th November, 2017.

As per GST council Meet held on 6^thOctober, 2017, the last date for filing the return in FORM GSTR-4 by a taxpayer under composition scheme for the quarter July-September, 2017 shall be extended to 15.11.2017.

The last date to file GSTR 6 extended

The last date to file GSTR 6 extended to 15^th November, 2017.

The GST council Meet on 6^th October, 2017 decided to extend last date for filing the return in FORM GSTR-6 by an input service distributor for the months of July, August and September, 2017 to 15.11.2017.

GST EXPORT PACKAGE

The GST Council under Chairmanship of Union Finance Minister Shri Arun Jaitley has in its 22nd Meeting held at Delhi on 06^th October, 2017 approved a major relief package for exporters.

Mindful of the difficulties faced by exporters post-GST leading to a decline in export performance and export competitiveness, the Council had last month set up a high power Committee on Exports under Revenue Secretary Shri Hasmukh Adhia to recommend suitable strategies for helping this sector. This Committee had five senior Government functionaries from the Centre and an equal number from the States as members.

After wide ranging discussions with major Export Promotion Councils including FIEO, AEPC, GJEPC, EEPC, CLE, CHEMEXIL, PARMAEXCIL and Handicrafts EPC etc. and interacting with all stakeholders the Committee presented its recommendations to the Council today.

The Council identified the major difficulties constraining the export sector are on account of delays in refunds of IGST and input taxes on exports and working capital blockage as exporters have to upfront pay GST on inputs and capital goods for export production or for procuring goods for export. Another difficulty was that the duty credit scrips such as MEIS was losing value due to its reduced usability as it could no longer be used to pay IGST / GST.

The Council was unanimous that it is in the national interest to take all possible measures to support the exporting community, which earns valuable foreign exchange and provides significant employment especially in the small and medium sector. Accordingly, the Council approved the following package of relief and incentives for exporters with immediate affect:–

a. Within the next 4 days i.e. by 10.10.2017 the held-up refund of IGST paid on goods exported outside India in July would begin to be paid. The August backlog would get cleared from 18.10.2017 and refunds for subsequent months would be handled expeditiously. Other refunds of IGST paid on supplies to SEZs and of inputs taxes on exports under Bond/LUT, shall be processed from 18.10.2017 onwards. For this, the Council agreed to suitably empower Central and State GST officers so that exporters get refunds from one authority only. Related matters of settlement of funds are being resolved.

b. To prevent cash blockage of exporters due to upfront payment of GST on inputs etc. the Council approved two proposals, one for immediate relief and the other for providing long term support to exporters. Immediate relief is being given by extending the Advance Authorization (AA) / Export Promotion Capital Goods (EPCG) / 100% EOU schemes to sourcing inputs etc. from abroad as well as domestic suppliers. Holders of AA / EPCG and EOUs would not have to pay IGST, Cess etc. on imports. Also, domestic supplies to holders of AA / EPCG and EOUs would be treated as deemed exports under Section 147 of CGST/SGST Act and refund of tax paid on such supplies given to the supplier.

c. Merchant exporters will now have to pay nominal GST of 0.1% for procuring goods from domestic suppliers for export. The details would be released soon.

d. The permanent solution to cash blockage is that of "e-Wallet" which would be credited with a notional amount as if it is an advance refund. This credit would be used to pay IGST, GST etc. The details of this facility would be worked out soon. The Council desired that the “e-Wallet” solution should be made operational w.e.f. 1st April 2018.

e. Exporters have been exempted from furnishing Bond and Bank Guarantee when they clear goods for export.

f. Specified banks and Public Sector Units (PSUs) are being allowed to import Gold without payment of IGST. This can then be supplied to exporters as per a scheme similar to Advance Authorization. g. To restore the lost incentive on sale of duty credit scrips, the GST on salepurchase of these scrips is being reduced from 5% to 0%. h. GST on bunker fuel is being reduced to 5% for both coastal vessels and foreign going vessels. This will boost coastal shipping. It will also improve India's competitiveness.

The Council is confident that these measures would provide immediate relief to the export sector and enhance export competitiveness of India. The Council also decided to continue to monitor the situation closely so that going forward all required support continues to be extended to this important sector.

GST relief for Small and Medium Enterprises issued on 06th October, 2017

Presently, anyone making inter-state taxable supplies, except inter-State job worker, is compulsorily required to register, irrespective of turnover. It has now been decided to exempt those service providers whose annual aggregate turnover is less than Rs. 20 lacs (Rs. 10 lacs in special category states except J & K) from obtaining registration even if they are making inter-State taxable supplies of services. This measure is expected to significantly reduce the compliance cost of small service providers.

To facilitate the ease of payment and return filing for small and medium businesses with annual aggregate turnover up to Rs. 1.5 crores, it has been decided that such taxpayers shall be required to file quarterly returns in FORM GSTR-1,2 & 3 and pay taxes only on a quarterly basis, starting from the third quarter of this financial year i.e. October-December, 2017. The registered buyers from such small taxpayers would be eligible to avail ITC on a monthly basis. The due dates for filing the quarterly returns for such taxpayers shall be announced in due course. Meanwhile, all taxpayers will be required to file FORM GSTR-3B on a monthly basis till December, 2017. All taxpayers are also required to file FORM GSTR-1, 2 & 3 for the months of July, August and September, 2017. Due dates for filing the returns for the month of July, 2017 have already been announced. The due dates for the months of August and September, 2017 will be announced in due course.

The reverse charge mechanism under sub-section (4) of section 9 of the CGST Act, 2017 and under subsection (4) of section 5 of the IGST Act, 2017 shall be suspended till 31.03.2018 and will be reviewed by a committee of experts. This will benefit small businesses and substantially reduce compliance costs.

The requirement to pay GST on advances received is also proving to be burdensome for small dealers and manufacturers. In order to mitigate their inconvenience on this account, it has been decided that taxpayers having annual aggregate turnover up to Rs. 1.5 crores shall not be required to pay GST at the time of receipt of advances on account of supply of goods. The GST on such supplies shall be payable only when the supply of goods is made.

It has come to light that Goods Transport Agencies (GTAs) are not willing to provide services to unregistered persons. In order to remove the hardship being faced by small unregistered businesses on this account, the services provided by a GTA to an unregistered person shall be exempted from GST.

The GST Council, in its 22nd meeting held at New Delhi on 6th October 2017, has recommended the following facilitative changes to ease the burden of compliance on small and medium businesses:

Composition Scheme

The composition scheme shall be made available to taxpayers having annual aggregate turnover of up to Rs. 1 crore as compared to the current turnover threshold of Rs. 75 lacs. This threshold of turnover for special category States, except Jammu & Kashmir and Uttarakhand, shall be increased to Rs. 75 lacs from Rs. 50 lacs. The turnover threshold for Jammu & Kashmir and Uttarakhand shall be Rs. 1 crore. The facility of availing composition under the increased threshold shall be available to both migrated and new taxpayers up to 31.03.2018. The option once exercised shall become operational from the first day of the month immediately succeeding the month in which the option to avail the composition scheme is exercised. New entrants to this scheme shall have to file the return in FORM GSTR-4 only for that portion of the quarter from when the scheme becomes operational and shall file returns as a normal taxpayer for the preceding tax period. The increase in the turnover threshold will make it possible for greater number of taxpayers to avail the benefit of easier compliance under the composition scheme and is expected to greatly benefit the MSME sector.

Persons who are otherwise eligible for composition scheme but are providing any exempt service (such as extending deposits to banks for which interest is being received) were being considered ineligible for the said scheme. It has been decided that such persons who are otherwise eligible for availing the composition scheme and are providing any exempt service, shall be eligible for the composition scheme.

A Group of Ministers (GoM) shall be constituted to examine measures to make the composition scheme more attractive.

Decisions taken by the GST Council in the 22^ndmeeting held on 6^th October 2017

The following decisions were taken by the GST Council at its 22^nd meeting held in Vigyan Bhavan on 6^th October, 2017. The information is being uploaded immediately after the GST Council’s decision and it will be subject to further vetting during which the list may undergo some changes. The decisions of the GST Council are being communicated for general information and will be given effect to through gazette notifications which shall have force of law.

Relief to small units:

1. GST rates on job work services is being rationalised as follows: -

S.No	Description of Service	Rate
1	Job work services in relation to all products falling in Chapter 71 (including	5%
	imitation jewellery)
2	Job work services in relation to food and food products falling under Chapters	5%
	1 to 22 of the HS Code (except packing of processed milk into packets)
3	Job work services in relation to products falling under Chapters 23 of the HS	5%
	Code except dog and cat food put up for retail sale (CTH 23091000)
4	Job work in relation to manufacture of umbrella	12%
5	Job work in relation to manufacture of clay bricks falling under CTH	5%
	69010010
6	Services by way of printing on job work basis or on goods belonging to others	5%
	in relation to printing of all goods falling under Chapter 48 or 49, which attract
	GST @ 5% or Nil [Heading 9988]
7	Services by way of printing on job work basis or on goods belonging to others	12%
	in relation to printing of all goods falling under Chapter 48 or 49, which attract
	GST @ 12% [Heading 9988]
8	Services by way of printing on job work basis or on goods belonging to others	18%
	in relation to printing of goods falling under Chapter 48 or 49, other than those
	covered by (6) and (7) above, [Heading 9988]
9	Services by way of printing in relation to printing of all goods falling under	12%
	Chapter 48 or 49, which attract GST @ 5% or Nil, where only content is
	supplied by the publisher and the physical inputs including paper used for
	printing belong to the printer [(Heading 9989)]
10	Services by way of printing of all goods falling under Chapter 48 or 49 which	12%
	attract GST @12%, where only content is supplied by the publisher and the
	physical inputs including paper used for printing belong to the printer
11	Services by way of printing of all goods falling under Chapter 48 or 49 which	18%
	attract GST @18% or above, where only content is supplied by the publisher
	and the physical inputs including paper used for printing belong to the printer

12 To issue a clarification with regard to classification of printing products/services.

If a dealer who makes supplies of goods and services referred to in clause (b) of paragraph 6 of Schedule II of CGST Act and /or also receives interest income or makes supply of

any exempt service, (s)he will not be ineligible for the Composition Scheme under Section 10 provided all other conditions are met. Further, in computing his aggregate turnover in order to determine his eligibility for composition scheme, interest income and value of supply of any exempt services shall not be taken into account. Removal of Difficulty order under section 172 of CGST/SGST/UTGST Act will be issued.

The services provided by a GTA to an unregistered person (under GST law) including unregistered casual taxable person other than the recipients liable to pay tax on GTA services under reverse charge shall be exempted from GST.

4.1 Leasing of vehicles purchased and leased prior to 1.7.2017, shall be taxed at 65% of the applicable GST + Cess rate. This reduced rate would be applicable for a period of 3 years with effect from 1^st July 2017;

4.2 The vehicles covered by the above leases (i.e. leases of vehicles purchased and leased prior to 1.7.2017), when disposed off/ sold shall also be taxed at 65% of the applicable GST + Cess rate. This reduced rate would be applicable for a period of 3 years with effect from 1^st July 2017;

4.3 Sale/supply of vehicles by a registered person, who had procured the vehicle prior to 1^st July 2017 and has not availed input tax credit of central excise duty, VAT or any other taxes paid on such vehicles, would be taxed at 65% of the applicable GST + Cess rate. This reduced rate would be applicable for a period of 3 years with effect from 1^st July 2017.

4.4 Sale by way of auction etc. of used vehicles, seized and confiscated goods, scrap etc by Central Government, State Government, Union Territory or a local authority, to any person, to be subjected to GST under reverse charge under section 9 (3) of the CGST Act.

Transport of passengers by motor cab/ renting of motor cab:-

(i) GST of 5% without ITC and 12% with full ITC available to transport of passengers by motor cab/ renting of motor cab shall be extended to any motor vehicle;

(ii) ITC of input services shall be allowed in the same line of business at GST rate of 5%

Other rate changes in services:

Works contract services involving predominantly earth works (that is, constituting more than 75% of the value of the works contract) supplied to Central Government, State Governments, Local Authority, Governmental Authority or Government Entity shall be taxed at 5%.

To expand the existing definition of Governmental Authority so as to include any authority set up to carry out any functions entrusted to a Panchayat under Article 243G of the Constitution.

Supply of service or goods by a Government Entity to Central Government, State Government, Union Territory, Local Authority or any person specified by them against consideration received from them in the form of grants, shall be exempted. “Government Entity” shall be defined as an authority or a board or any other body including a society, trust, corporation which is, -

(i) set up by an Act of Parliament or State Legislature, or

(ii) established by any government,

with 90% or more participation by way of equity or control, to carry out a function entrusted by the Central Government, State Government or a local authority.

The reduced rate of 12% on specified works contract services supplied to the Central Government, State Government, Union Territory, Local Authority and Governmental Authority shall be extended to a Government Entity, where such specified works contract services have been procured by the government entity in relation to the work entrusted to it by the Central Government, State Government, Union Territory or Local Authority.

GST shall be levied @ 12% on works contract services in respect of offshore works contract relating to oil and gas exploration and production (E&P) in the offshore area beyond 12 nautical miles.

GST shall be levied @ 12% with ITC or 5% without ITC for transportation of natural gas through pipeline.

Exemption to annuity paid by NHAI (and State authorities or State owned development corporations for construction of roads) to concessionaires for construction of public roads.

Upfront amount (called as premium, salami, cost, price, development charges or by any

other name) payable in respect of service, by way of granting of long term lease of thirty years, or more) of industrial plots or plots for development of infrastructure for financial business, provided by the State Government Industrial Development Corporations/ Undertakings or any other entity having 50% or more ownership of Central Government, State Government, Union Territory to (a) industrial units or (b) developers in any industrial or financial business area, may be exempted from GST .

The services provided by Overseeing Committee members to RBI shall be taxed under the reverse charge mechanism under section 9(3) of the CGST Act, 2017.

Some other technical changes/amendments shall be made in notifications issued under CGST, IGST, UTGST and SGST Acts.

CHANGES IN GST RATE FOR CERTAIN GOODS

AND

IGST RATE ON IMPORTS OF CERTAIN GOODS

[As per discussions in the 22^nd GST Council Meeting held on 6^th October, 2017]

A. GST RATE FOR CERTAIN GOODS

S.	Chapter/		Description		Present	GST Rate
No.	Heading/				GST	Recommended
	Sub-heading/				Rate	by the GST
	Tariff item					Council

1.	0804	Mangoes sliced dried			12%	5%

2.	1905 or 2106	Khakra and plain chapati / roti			12%	5%

3.	19 or 21	Food preparations put up in unit			18%	5 %
		containers and intended for free
		distribution	to economically weaker
		sections of the society under a
		programme duly approved by the
		Central Government or any State
		Government,	subject	to specified
		conditions [Foot note 1]

4.	21	Namkeens other than those put up in			12%	5%
		unit container and, -
		(a) bearing a registered brand name; or
		(b) bearing a brand name on which an
		actionable claim or enforceable right
		in a court of law is available [other
		than those where any actionable claim
		or enforceable right in respect of such
		brand name has been foregone
		voluntarily
		[Foot note 2]

5.	2710	Imposing GST only on the net			18%	18%
		quantity of	superior	kerosene oil		[Clarification to
		[SKO] retained for the manufacture of				[Clarification to
		[SKO] retained for the manufacture of				be issued]
						be issued]

			1

			Linear Alkyl Benzene [LAB]

6.	30		Ayurvedic,	Unani,	Siddha,	12%	5%
			Homeopathy	medicines,	other than
			those bearing a brand name
			[Foot note 3]
7.	3213		Poster Colour			28%	18%

8.	3407		Modelling	pastefor	children	28%	18%
			amusement

9.	3915		Plastic waste, parings or scrap			18%	5%

10.	4004 00	00	Rubber waste, parings or scrap			18%	5%

11.	4017 00	20	Hard Rubber waste or scrap			28%	5%

12.	4707		Paper waste or scrap			12%	5%

13.	4907		Duty credit scrips			5%	Nil

14.	5401		Sewing thread of manmade filaments,			18%	12%
			whether or not put up for retail sale

15.	5402, 5404,		All synthetic filament yarn, such as			18%	12%
	5406		nylon, polyester, acrylic, etc.

16.	5403, 5405,		All artificial filament yarn, such as			18%	12%
	5406		viscose rayon, Cuprammonium,

17.	5508		Sewing thread of manmade staple			18%	12%
			fibres

18.	5509, 5510,		Yarn of manmade staple fibres			18%	12%
	5511
19.	5605		Real Zari			12%	5%

20.			All goods falling under heading 6802			28%	18%
	6802		[other than those of marble and granite
			or those which attract 12% GST]

21.	7001		Cullet or other waste or scrap of Glass			18%	5%

22.	8305		Fittings for loose-leaf binders or files,			28%	18%
			letter clips, letter corners, paper clips,
			indexing tags and similar office
			articles, of base metal; staples in strips
			(for example, for offices, upholstery,
			packaging), of base metal

				2

23.	8483	Plain Shaft Bearing 8483	28%	18%

24.	84	Parts suitable for use solely or	28%	18%
		principally with fixed Speed Diesel
		Engines of power not exceeding 15HP

25.	84 or 85	Parts suitable for use solely or	28%	18%
		principally with power driven pumps
		primarily designed for handling water,
		namely, centrifugal pumps (horizontal
		and vertical), deep tube-well turbine
		pumps, submersible pumps, axial flow
		and mixed flow vertical pumps

26.	84 or 85	E-Waste	28%/18%	5%

27.	Any Chapter	Biomass briquettes	18%	5%

Foot Note:

Reduction in GST rate against S. No 4 above is subject to following condition:

a) If the supplier of such food preparations produces a certificate from an officer not below the rank of the Deputy Secretary to the Government of India or not below the rank of the Deputy Secretary to the State Government concerned to the effect that such food preparations have been distributed free to the economically weaker sections of the society under a programme duly approved by the Central Government or the State Government concerned, within five months from the date of supply of such goods or within such further period as the jurisdictional Commissioner of Central tax or jurisdictional Commissioner of State tax, as the case maybe, may allow in this regard.

For S. No.5 above, the phrase registered brand name means:

a) A brand registered as on 15.05.2017 shall be deemed to be a registered brand for the purposes of levy of 5% GST, irrespective of whether or not such brand is subsequently deregistered.

b) A brand registered as on 15.05.2017 under the Copyright Act, 1957 shall also be treated as a registered brand for the purposes of levy of 5% GST.

c) A brand registered as on 15.05.2017 under any law for the time being in force in any other country shall also be deemed to be a registered brand for the purposes of levy of 5% GST.

For S. No. 7 above, the phrase “brand name” is defined as:

"brand name" or "trade name" means a brand name or a trade name, whether registered or not, that is to say, a name or a mark, such as symbol, monogram, label, signature or invented word or writing which is used in relation to such specified goods for the purpose of indicating, or so as to indicate a connection in the course of trade between such specified goods and some person using such name or mark with or without any indication of the identity of that person.

B. IGST EXEMPTION ON IMPORTS OF GOODS:

S.		Description	Present	Recommended
No			applicable	IGST rate
			IGST rate
1	IGST exemption on imports of rigs imported for oil / gas
	exploration and production projects under lease, subject to the
	following conditions that:
	(i)	Integrated tax leviable under section 5(1) of the IGST
		Act, 2017 on supply of service covered by item 1(b) or
		5(f) of Schedule II of the Central Goods and Services
		Tax Act, 2017;
	(ii)	The rig is not sold without the prior permission of the
		Commissioner of Customs of the port of importation;
	(iii) to re-export the goods within 3 months from the expiry		5%	Nil
		of the period for which they were supplied under a
		transaction covered by item 1(b) or 5(f) of Schedule II
		of the Central Goods and Services Tax Act, 2017 out
		of India;
	(iv) to pay on demand an amount equal to the integrated
		tax payable on the said goods but for the exemption
		under this notification in the event of violation of any
		of the above conditions and applicable interest.

2	Exemption from IGST on imports of medicines supplied free		12%/5%	Nil
	by international agencies like UNICEF, WHO, Red Cross etc.

3	Exemption from IGST on imports of bona fide gifts upto CIF		28%	Nil
	value limit of Rs. 5000 imported through post or air.