23rd September 2019
The GST Council in its 37th meeting held on 20th of September has recommended revision of GST rates on various goods and services. Many relaxations in various compliances and procedures have also been recommended by the GST Council.
Rate revision on various goods and services
While GST rates will be reduced on slide fasteners, marine fuel, wet grinder (containing stone as a grinder), dried tamarind, plates and cups made up of leaves/ flowers/bark, cut and polished semi- precious stones, GST rate is set to increase on railway wagons, coaches, rolling stock (without refund of accumulated ITC), and on caffeinated beverages.
Exemption from GST has been recommended on imports of specified defence goods not being manufactured indigenously, supply of goods and services to specified persons for purpose of organizing Under-17 Women’s Football World Cup in India, and on supply of goods and services to Food and Agriculture Organisation (FAO) for specified projects in India.
Further, Compensation Cess will be reduced on passenger vehicles of engine capacity 1500 cc in case of diesel, 1200 cc in case of petrol and length not exceeding 4000mm designed for carrying upto 13 persons.
The reduced rates were earlier available to passenger vehicles of such length and engine capacity but designed to carry upto 9 persons only.
As per the Press Release of Ministry of Finance, aerated drink manufacturers will be excluded from composition scheme.
In respect of job work services, rate of GST will be reduced on supply of such services in relation to diamonds and on supply of machine job work such as in engineering industry, except supply of job work in relation to bus body building.
Rates of GST on hotel accommodation service have also been recommended to be reduced, with the highest being 18% in case where the room tariff is Rs. 7501 or more/per day. GST on outdoor catering services other than in premises having daily tariff of unit of accommodation of Rs. 7501, is also set to be reduced.
Further, exemptions have been recommended in respect of services by way of storage or warehousing of cereals, pulses, fruits, nuts and vegetables, etc. While GST exemption on export freight for transportation of goods by air or sea has been recommended to be extended till 30-9-2020, services provided by an intermediary to a supplier of goods or recipient of goods when both the supplier and recipient are located outside the taxable territory, have been exempted.
The GST Council has also recommended certain clarifications on classification and rates of GST in respect of certain goods and services.
The revised rates will come into effect from 1-10-2019 when notifications in this regard are also issued by the CBIC.
Changes in law and procedures
In respect of annual returns for the period 2017-18 and 2018-19, while requirement of filing Form GSTR-9A has been waived for composition taxpayers, taxpayers having aggregate turnover upto Rs. 2 crore will be given option not to file Form GSTR-9.
The new monthly return system will now be introduced from April, 2020 and not from October 2019.
The GST Council has also recommended introduction of the integrated refund system with disbursal by single authority from 24th September, 2019.
In principle decisions have been taken to prescribe reasonable restrictions on passing of credit by risky taxpayers including risky new taxpayers, and to link Aadhar with registration of taxpayers under GST.
As per the Press Release, input tax credit to the recipients in cases where details of outward supplies are not furnished by the suppliers in the statement under Section 37 of the CGST Act, 2017, will be restricted.
Further, Circular No.105/24/2019-GST, dated 28-6-2019, which was issued in respect of post-sales discount, will be rescinded.
Rate revision on various goods and services
While GST rates will be reduced on slide fasteners, marine fuel, wet grinder (containing stone as a grinder), dried tamarind, plates and cups made up of leaves/ flowers/bark, cut and polished semi- precious stones, GST rate is set to increase on railway wagons, coaches, rolling stock (without refund of accumulated ITC), and on caffeinated beverages.
Exemption from GST has been recommended on imports of specified defence goods not being manufactured indigenously, supply of goods and services to specified persons for purpose of organizing Under-17 Women’s Football World Cup in India, and on supply of goods and services to Food and Agriculture Organisation (FAO) for specified projects in India.
Further, Compensation Cess will be reduced on passenger vehicles of engine capacity 1500 cc in case of diesel, 1200 cc in case of petrol and length not exceeding 4000mm designed for carrying upto 13 persons.
The reduced rates were earlier available to passenger vehicles of such length and engine capacity but designed to carry upto 9 persons only.
As per the Press Release of Ministry of Finance, aerated drink manufacturers will be excluded from composition scheme.
In respect of job work services, rate of GST will be reduced on supply of such services in relation to diamonds and on supply of machine job work such as in engineering industry, except supply of job work in relation to bus body building.
Rates of GST on hotel accommodation service have also been recommended to be reduced, with the highest being 18% in case where the room tariff is Rs. 7501 or more/per day. GST on outdoor catering services other than in premises having daily tariff of unit of accommodation of Rs. 7501, is also set to be reduced.
Further, exemptions have been recommended in respect of services by way of storage or warehousing of cereals, pulses, fruits, nuts and vegetables, etc. While GST exemption on export freight for transportation of goods by air or sea has been recommended to be extended till 30-9-2020, services provided by an intermediary to a supplier of goods or recipient of goods when both the supplier and recipient are located outside the taxable territory, have been exempted.
The GST Council has also recommended certain clarifications on classification and rates of GST in respect of certain goods and services.
The revised rates will come into effect from 1-10-2019 when notifications in this regard are also issued by the CBIC.
Changes in law and procedures
In respect of annual returns for the period 2017-18 and 2018-19, while requirement of filing Form GSTR-9A has been waived for composition taxpayers, taxpayers having aggregate turnover upto Rs. 2 crore will be given option not to file Form GSTR-9.
The new monthly return system will now be introduced from April, 2020 and not from October 2019.
The GST Council has also recommended introduction of the integrated refund system with disbursal by single authority from 24th September, 2019.
In principle decisions have been taken to prescribe reasonable restrictions on passing of credit by risky taxpayers including risky new taxpayers, and to link Aadhar with registration of taxpayers under GST.
As per the Press Release, input tax credit to the recipients in cases where details of outward supplies are not furnished by the suppliers in the statement under Section 37 of the CGST Act, 2017, will be restricted.
Further, Circular No.105/24/2019-GST, dated 28-6-2019, which was issued in respect of post-sales discount, will be rescinded.