The 47th Meeting of GST Council was scheduled to be held in However, due to security clearances, the same was later on decided to be held in Chandigarh.
In its 47th Meeting at Chandigarh on 28th and 29th June, 2022, several recommendations were made by the Council, the details of the same in brief are as forward in the
For rate changes, the effective date will be 18th July,
For other changes, the effective date will be
For Supplying goods through ECOs
- Presently every person supplying goods through ECOs (Eco Commerce Operators) needs to obtain mandatory registration u/s 24(ix) of CGST / SGST
- Therefore, it is proposed in the Council meet that;
- – there will be waiver of mandatory registration for person supplying goods through ECOs provided his t/o on all India basis doesn’t exceed the t/o specified u/s 22(1) and he will not be making any inter-state
- – Composition taxpayers will also be allowed to make intra-state supply through
Amendment in formula prescribed under Rule
89(5) for calculation of refund of unutilized ITC on a/c of Inverted rate structure
- Rule 89(5) allows refund of unutilized ITC on inputs due to inverted rate
- However, in the case of VKC Footsteps India Pvt. Ltd., the Division bench of Hon’ble Gujarat HC upheld to include input services also in the above formula. Contrary in the case of Transtonnelstroy Afcons Joint Venture, Division bench of Hon’ble Madras HC restricted the refund to inputs only.
- Later, on departmental appeal in the case of VKC, SC upheld the appeal and thus refund will be restricted to inputs only but at the same time, it suggested the Council to consider revision in
- In the present council meeting, change in formula for calculation of refund under rule 89(5) 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 This would help those taxpayers who are availing ITC on input services also.
Re-credit of amount in electronic credit ledger
- Many a times, inadvertently, refund amount is 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) by way of debiting electronic credit
- Later on, the said amount is deposited by him with interest and penalty, if
- However, after depositing it back, the same amount should reflect in electronic credit ledger which is not at present.
- Thereby, a new FORM GST PMT-03A is introduced for the
- This will enable the taxpayers to get re-credit of the amount of erroneous refund, paid back by them, in their electronic credit
Amendment in CGST Rules for handling of pending IGST refund claims:
- In some cases where the exporter is identified as risky exporter requiring verification by GST officers, or where there is a violation of provisions of Customs Act, the refund claims in respect of export of goods are suspended/withheld.
- Amendment in rule 96 of the CGST Rules 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
- This would result in expeditious disposal of such IGST refund claims, after due verification by GST officers, thus benefitting such exporters
Others related to refund:
- 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.
- 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 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 Rule 95A of the CGST Rules, Circular No. 106/25/2019-GST dated 29.06.2019 and related notifications to be rescinded accordingly
- 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,
Duty Credit Scrips
- Duty credit scrips attract Nil GST rate.
- 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
Section 50(3) – Interest on ITC wrongly availed & Utilized – Retrospective amendment
- There may be a situation where ITC has been wrongly availed by a taxpayer but the same has not been utilized by
- However, still Section 50(3) levies interest on such wrongly availed ITC even though it’s not utilized and in actual there is no loss to the
- To overcome this difficulty, Section 50(3) amended by the Finance Act, 2022 to provide for interest only if ITC is wrongly availed AND the same is utilized.
- In the meeting, it has been decided that the rules providing for the manner of calculation of interest under section 50 of CGST Act have also been recommended for more clarity.
Section 49(10) – Transfer of balance in electronic cash ledger between different GSTIN of a same PAN
- There may be a situation where there is unutilized balance in electronic cash ledger in a particular in GSTIN of a registered person and on the other hand there is liability in electronic liability ledger for a registered person for a different GSTIN of the same
- Ultimately, the cash ledger balance is of a same unit of an entity against other unit of the same entity and thereby unnecessary blockage of working capital.
- To overcome this, in the Finance Act, 2022, it was proposed that a registered person may transfer any amount in the electronic cash ledger to a district person as specified u/s 4 or 5 of Section 25. However, this provision is not being notified
- In the council meeting, it has been proposed to notify this provision at the earliest.
Relaxation with respect to return filings & tax payments
- For tax payments
UPI & IMPS to be provided as an additional mode for payment of Goods and Services Tax to taxpayers under Rule 87(3) of CGST
- For Composition taxpayers
Waiver of late fees in delay in filing Form GSTR 4 for FY 21-22 till 28.07.2022 from 04.2022 (Many composition dealer are facing negative cash ledger balance in their common portal and thereby to resolve that, the late fees has been waived.
Extent the due date for filing Form CMP 08 for the Q1 of FY 22-23 to 07.2022 from 18.07.2022
- For Normal Taxpayers
Exemption in filing annual return in Form GSTR 9/9A for FY 21-22 for taxpayers having AATO upto 2 Crores.
Relaxation with respect to compliance
* Automatic revocation of suspension of registration
- As per Rule 21A(2A), registration will be suspended if there is continuous non filing of specified number of returns as per Clause (b) /(C) of Section 29(2).
- It has been proposed to amend Rule 21A that once all the pending returns are filed on the portal by the taxpayers, there will be automatic revocation of suspension of
* GSTR 3B
- Proposal for comprehensive changes in FORM GSTR-3B to be placed in public domain for seeking inputs/suggestions of the stakeholders
Relaxation with respect to Notice for departmental officers
* Erroneous refund u/s 73 of GST Act
- Time period from 03.2020 to 28.02.2022 to be excluded from calculation of the limitation period for issuance of demand/ order (by proper officer) in respect of erroneous refunds under section 73 of CGST Act
* Extention of period for issuance of order u/s 73 of GST Act
- 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
GST Rate Changes
- Present council meeting has proposed wide range of changes in GST rate structure and withdrawal of exemptions /
- The rate changes even includes charging of GST by hospitals for the room rent (excluding ICU) exceeding 5000 per day per patient.
- Earlier with respect to non branded food items, grains etc. or where right on the brand has been forgone, no GST was there. However, now Non Branded Pre packaged and pre-labelled retail pack in terms of Legal Metrology Act, including pre-packed, pre- labelled curd, lassi and butter milk will be taxed.
- Cut and Polished diamonds will now be taxable at 50% from earlier 0.25%.
- Earlier, there was no GST to be charged by hotel for tariff up to 1000 per day. However, it will be now taxed at 12%.
- Exemption is withdrawn on services by RBI, IRDA, SEBI, FSSAI,
- Presently, renting of residential dwelling is not subject to GST. However, now, renting of the same to registered persons will be chargeable to tax.
- Complete details hence forward:
Rate Rationalization to remove inverted duty structure – Goods
|1.||Printing, writing or drawing ink||12%||18%|
|2.||Knives with cutting blades, Paper knives, Pencil sharpeners and blades therefor, Spoons, forks, ladles, skimmers,
|3.||Power driven pumps primarily designed for handling water such as centrifugal pumps, deep tube-well turbine pumps, submersible pumps; Bicycle pumps||12%||18%|
|4.||Machines for cleaning, sorting or grading, seed, grain pulses; Machinery used in milling industry or for the working of cereals etc; Pawan Chakki that is Air Based Atta Chakki; Wet grinder;||5%||18%|
|5.||Machines for cleaning, sorting or grading eggs, fruit or other agricultural produce and its parts, Milking machines
and dairy machinery
|6.||LED Lamps, lights and fixture, their metal printed circuits board;||12%||18%|
|7.||Drawing and marking out instruments||12%||18%|
|8.||Solar Water Heater and system;||5%||12%|
|9.||Prepared/finished composition leathers;||leather/chamois leather||5%||12%|
|10.||Refund of accumulated ITC not to be allowed on flowing goods:
(i) Edible oils
Rate Rationalization to remove inverted duty structure – Services
|11.||Services supplied by foreman to chit fund||12%||18%|
|12.||Job work in relation to processing of hides, skins and leather||5%||12%|
|13.||Job work in relation to manufacture of leather goods and footwear||5%||12%|
|14.||Job work in relation to manufacture of clay bricks||5%||12%|
|15.||Works contract for roads, bridges, railways, metro, effluent treatment plant, crematorium etc.||12%||18%|
|16.||Works contract supplied to central and state governments, local
authorities for historical monuments, canals, dams, pipelines, plants for water supply, educational institutions, hospitals etc. & sub- contractor thereof
|17.||Works contract supplied to central and state governments, union territories & local authorities involving predominantly earthwork and sub-contracts thereof||5%||12%|
Other Rate Changes
|2.||Orthopedic appliance- Splints and other fracture appliances; artificial parts of the body; other appliances which are worn or carried, or implanted in the body, to
compensate for a defect or disability; intraocular lens
|3.||Tetra Pak (Aseptic Packaging Paper)||12%||18%|
|4.||Tar (whether from coal, coal gasification plants, producer Gas plants and Coke Oven
|5.||IGST on import of Diethylcarbamazine (DEC) tablets supplied free of cost for National Filariasis Elimination Programme||5%||Nil|
|6.||Cut and Polished diamonds||0.25%||1.5%|
|7.||IGST on specified defense items imported by private entities/vendors, when end-user
is the Defense forces.
|1.||Transport of goods and passengers by ropeways.||18%||5% (with ITC of services)|
|2||Renting oftruck/goods carriage wherecostof fuel is included||18%||12%|
Withdrawal of exemption / concession with respect to goods
|S. No.||Description of goods||From||To|
|GST rate changes|
|1.||Non Branded Prepackaged and pre-labelled retail pack in terms of Legal Metrology Act, including pre-packed, pre-labelled curd, lassi and butter milk||Nil||Applicable Rate|
|2.||Cheques, lose or in book form||Nil||18%|
|3.||Maps and hydrographic or similar charts of all kinds, including atlases, wall maps, topographical plans and globes, printed||Nil||12%|
|4.||Parts of goods of heading 8801||Nil||18%|
|5.||Petroleum/ Coal bed methane||5%||12%|
|6.||Scientific and technical instruments supplied to public funded research institutes||5%||Applicable rate|
Withdrawal of exemption / concession with respect to services
|1.||Exemption on transport of passengers by air to and from NE states & Bagdogra is being restricted to economy class|
|2||Exemption on following services is being withdrawn.
(a) Transportation by rail or a vessel of railway equipment and material.
(b) storage or warehousing of commodities which attract tax (nuts, spices, copra, jaggery, cotton etc.)
(c) Fumigation in a warehouse of agricultural produce.
(d) Services by RBI, IRDA, SEBI, FSSAI,
(f) Renting of residential dwelling to business entities (registered persons).
(g) Services provided by the cord blood banks by way of preservation of stem cells
|3.||Like CETPs, common bio-medical waste treatment facilities for treatment or disposal of biomedical waste shall be taxed at 12% so as to allowthem
|4.||Hotel accommodation priced up to Rs. 1000/day shall be taxed at 12%|
|5.||Room rent (excluding ICU) exceeding Rs 5000 per day per patient charged by a hospital shall be taxed to the extent of amount charged for the
room at 5% without ITC.
|6.||Tax exemption on training or coaching in recreational activities relating to arts or culture, or sports is being restricted to such services
when supplied by an individual.
Clarification on GST Rates – Goods
- Electric vehicles whether or not fitted with a battery pack, are eligible for the concessional GST rate of 5%.
- All fly ash bricks attract same concessional rate irrespective of fly ash content
- Stones covered in No.123 of Schedule-I (such as Napa stones), even if they are ready to use and polished in minor ways [not mirror polished], attract concessional GST rate of 5%.
- The GST rate on all forms of mango under CTH 0804, including mango pulp (other than mangoes sliced, dried) attract GST at the 12%. Entry is also being amended to make this amply clear. Raw or fresh mangoes continue to be exempt.
- Sewage treated water is exempted from GST and is not the same as purified water provided in S. No. 99 of notification 2/2017-CT(Rate). The word ‘purified’ is being omitted to make this amply clear.
- Nicotine Polarilex Gum attracts a GST rate of 18%.
- The condition of 90% fly ash content with respect to fly ash bricks applies only to fly ash aggregate, and not fly ash bricks. As a simplification measure, the condition of 90% content is being omitted
Clarification on GST Rates – Services – 1
- Due to ambiguity in GST rates on supply of ice-cream by ice-cream parlours, GST charged @ 5% without ITC on the same during the period 07.2017 to 5.10.2021 shall be regularized to avoid unnecessary litigation.
- Application fee charged for entrance or for issuance of eligibility certificate for admission or issuance of migration certificate by universities is exempt from GST.
- Ginned or baled fibre is covered in entry 24B of notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 in the category of raw vegetable fibres. The exemption under this entry is being rationalized
- Services associated with transit cargo both to and from Nepal and Bhutan are covered by exemption under entry 9B of notification 12/2017-CT(R) dated 28.06.2017.
- Activity of selling of space for advertisement in souvenirs published in the form of books is eligible for concessional GST at 5%.
- Renting of vehicle with operator for transportation of goods on time basis is classifiable under Heading 9966 (rental services of transport vehicles with operators) and attracts GST at 18%.GST on such renting where cost of fuel is included in the consideration charged is being prescribed at 12%.
- Allowing choice of location of a plot is part of supply of long term lease of plot of land. Therefore, location charge or preferential location charges (PLC) are part of consideration charged for long term lease of land and shall get the same treatment under GST.
- Services provided by the guest anchors to TV channels in lieu of honorarium attract
- Additional fee collected in the form of higher toll charges from vehicles not having Fastag is essentially payment of toll for allowing access to roads or bridges to such vehicles and shall be given the same tax treatment as given to toll
- Services in form of Assisted Reproductive Technology (ART)/ In vitro fertilization (IVF) are covered under the definition of health care services for the purpose of exemption under
- Sale of land after leveling, laying down of drainage lines 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.
- The expression ‘public transport’ used in the exemption entry at SI No. 17(d) of notification 12/2017-CT(R), which exempts transport of passengers by public transport other than predominantly for tourism purpose, in a vessel between places located in India, means that such transport should be open to public for point to point transport [e.g. such transport in Andaman and Nicobar islands].
- All taxable service of Department of Posts would be subject to forward
- Goods transport agency (GTA) is being given option to pay GST at 5% or 12% under forward charge; option to be exercised at the beginning of Financial Year. RCM option to continue.
- Service provided by Indian Tour operator to a foreign resident for a tour partially in India and partially outside India is to be subject to tax proportionate to the tour conducted in India for such foreign tourist subject to conditions that this concession does not exceed half of tour duration
The presentation of the same can be downloaded from our linked-in page.