GST Council Gives Major Relief To Business Entities
November, 14th 2017
The GST Council held its 23rd Council meeting on 10.11.2017 at Guwahati. The decisions taken in that council meeting and the recommendations of the GST Council come in light. We can feel the major relief among business entities on the recommendations of the GST Council which are expected to come into force with effect from 15.11.2017 by which the Government will issue necessary notifications in this regard.
The Committee recommended the reduction of tax rates as detailed below-
The Council has recommended reduction in GST rate from 28% to 18% on goods falling in 178 headings at 4 digit level (including 4 tariff heading that are partially pruned).After these changes, only 50 items will attract GST rate of 28%;
The Council has recommended in reduction in GST rate from 28% to 12%for-
Wet grinders consisting of stone as grinder;
Tanks and other armored fighting vehicles;
The GST Council has recommended in reduction of GST rate from18% to 12% for nearly 13 items including condensed milk, pasta, printing ink, spectacles frame, furniture wholly made of bamboo or cane etc.,
The GST Council has recommended in reduction of GST rate from 18% to 5% for nearly 6 type of goods including puffed rice chikki, chutney power, fly ash etc.,
The GST Council has recommended in reduction of GST rate from 12% to 5% to nearly 8 types of goods including desiccated coconut, idli, dosa batter etc.,
The GST Council has recommended in reduction of GST rate from 5% to NIL for the following-
Hope cane (other than grounded, powdered or in pellet form)
Certain dried vegetables such as sweet potatoes, mania;
Unworked coconut shell;
Fish frozen or dried (not put up in unit container being a brand name)
GST rates on aircraft engines from 28/18 % to 5%;
Aircraft tyres from 28% to 5%;
Aircraft seats from 28% to 5%;
Bangles of lac/shellac from 3% to NIL.
The GST Council has recommended for exemption from IGST/GST in certain specified cases as detailed below-
Exemption from IGST-
On imports of lifesaving medicine supplied free of cost by overseas supplier for patients, subject to certification by DGHS of Centre or State and certain other conditions;
On imports of goods (other than motor vehicles) under a lease agreement if IGST is paid on these lease amount;
To extend IGST exemption presently applicable to skimmed milk power or concentrated milk on supplyingto distinct person for use in production of milk for distribution through dairy cooperatives to where such milk is distributed through companies;
On imports of specified goods by a sports person of outstanding eminence, subject to specified conditions;
Exemption from GST on specified goods, such as scientific or technical instruments, software, prototype supplied to public funded research institution or a university or IISC or IITs or NIT;
Coverage of more items, such as temporary import of professional equipment by accredited press persons visiting India to cover certain events, broadcasting equipments, sports items, testing equipment under ATA carnet system.These goods are to be re-exported after the specified use is over.
Clarification of issues
To clarify that inter-state movement of goods like rigs, tools, spares and goods on wheel like cranes, not being in course of furtherance of supply of such goods does not constitute supply;
The GST on supply of raw cotton by agriculturist will be liable to be paid by the recipient of such supply under reverse charge;
Supply of e-waste attracts 5% GST.
Changes relating to GST rates on certain services
All stand alone restaurants irrespective of air conditioned or otherwise, will attract 5% without input tax credit.Food parcels will attract 5% GST without input tax credit;
Restaurants in hotel premises having room tariff of less than 7500 per unit per day will attract GST of 5% without input tax credit;
Restaurants in hotel premises having room tariff of 7500 and above per unit per day will attract GST of 18% with full input tax credit.This is applicable to single room also.
Outdoor catering will continue to be at 18% with full input tax credit;
GST on services by way of admission to ‘protected monuments’ is exempted;
GST on job work services in relation to manufacture of those handicraft goods in respect of which casual taxable person has been exempted from obtaining registration, to be reduced to 5% with full input tax credit.
The existing exemption entries with respect to services provided by Fair price shops to the Central Government, State Governments or Union Territories by way of sale of good grains, kerosene, sugar, edible oil etc., under Public Distribution System against consideration in the form of commission or margin, is being rationalized so as to remove ambiguity regarding list of items and the category of recipients to whom the exemption is available;
It is proposed that irrespective of whether permanent transfer of intellectual property is a supply of goods or service-
permanent transfer of intellectual property other than information technology software attracts GST @ 12%; and
permanent transfer of intellectual property in respect of information technology software attracts GST @ 18%.
The GST Council has recommended the following in respect of the composition scheme-
Uniform rate of tax @ 1% for manufacturing and traders;
For traders turnover will be counted only for supply of taxable goods;
No change for composition scheme for restaurant;
Supply of services by composition taxpayer up to 5 lakh per annum will be allowed by exempting the same; (will be effected only after the amendment of CGST and SGST Acts)
Annual turnover eligibility will be increased to 2 crore from the present limit of 1 crore.Thereafter the eligibility will be increased to 1.5 crore per annum; (will be effected only after the amendment of CGST and SGST Acts)
The GST Council recommended the following in respect of filing of returns-
All taxpayers would file return in Form GSTR 3B along with payment of tax by 20th of the succeeding month till March 2018;
For filing of GSTR – 1, the taxpayers are divided into two categories – having annual turnover up to 1.5 crores and having annual turnover more than 1.5 crores;
The GSTR -1 is to be filed on quarterly basis for the taxpayers having annual turnover up to 1.5 crores as detailed below-
July 2017 to September 2017 – 31.12.2017;
October 2017 to December 2017 – 15.02.2018;
January 2018 to March 2018 – 30.04.2018.
The GSTR – 1 is to be filed on monthly basis for te taxpayers having annual turnover more than 1.5 crore as detailed below-
July 2017 to October 2017 – 31.12.2017;
November 2017 – 10.01.2018;
December 2017 – 10.02.2018;
January 2018 – 10.03.2018;
February 2018 – 10.04.2018;
March 2018 – 10.05.2018.
The late fee is waived for not filing Form GSTR – 3B within due date for the months of July 2017, August 2017 and September 2017;
If the taxpayer paid such late fee, it will be re-credited to their electronic cash ledger under ‘tax’ head instead of ‘fee’ head so as to enable them to use that amount for discharge of their future tax liabilities;
From October 2017 onwards the amount of late fee payable will be 20/- per day.
A facility for manual filing of application for advance ruling is being introduced for the time being.
Exemption from registration
The suppliers providing services through an e-commerce platform are exempted from obtaining compulsory registration.
Extension of ITC benefit
Export services to Nepal and Bhutan have already been exempted from GST.It has now been decided that such exporters will also be eligible for claiming input tax credit in respect of goods or services used for effecting such exempt supply of services to Nepal and Bhutan.
Extension of dates for filing returns
The GST Council has decided to extend the due dates for filing the following the returns due to late availability or non availability of the said form in the common portal as detailed below-
GST ITC – 4 for the quarter July 2017 to September 2017 – the due date 25.10.2017 is extended to 31.12.2017;
GSTR – 4 for the quarter July 2017 to September 2017 – the due date 18.10.2017 is extended to 24.12.2017;
GSTR – 5 for July 2017 – the due date 20.08.2017 or 7 days from the last date of registration whichever is earlier is extended to 11.12.2017;
GSTR – 5A for July 2017 – the due date 20.08.2017 is extended to 15.12.2017;
GSTR – 6 for July 2017 – the due date 13.08.2017 is extended to 31.12.2017;
TRAN – 1 – the due date 30.09.2017 is extended to 31.12.2017 with one time option of revision .