The 50th Meeting of the GST council was held on 11th July, 2023 under the chairpersonship of the Union Finance & Corporate Affair Minister Smt. Nirmala Sitharaman.
The GST Council has proposed some exciting changes to taxation, aiming to simplify processes and promote growth in various sectors. Here are the key recommendations:
🎲🏇 Uniform Tax Rate for Gaming and Horse Racing: The Council suggests applying a flat 28% tax on the full face value for Casino, Horse Racing, and Online gaming, streamlining tax procedures in these recreational activities.
🔍🗄️ GST Appellate Tribunal Notification: Effective from 01.08.2023, the Centre will establish a GST Appellate Tribunal, easing the resolution of disputes related to GST.
💉🥗 Tax Exemption for Essential Medical Goods: Good news for healthcare! The Council recommends exempting GST on medicines like Dinutuximab (Quarziba) and Food for Special Medical Purposes (FSMP) when imported for personal use, under existing conditions. This exemption also extends to FSMP imported by Centres of Excellence for Rare Diseases, bringing relief to patients and institutions.
🍿🎣 Rate Reduction on Select Items: To encourage certain industries, the GST rates on four items will drop from 18% to 5%. These items include uncooked, unfried, and extruded snack palettes, fish soluble paste, LD slag (on par with blast furnace slag), and imitation zari thread. This move could stimulate production and consumption.
📋🧾 Simplified Compliances: The Council has proposed various measures to streamline GST compliances, making it easier for businesses to adhere to taxation rules and enhance overall efficiency.
With these exciting proposals, the GST Council is set to pave the way for a more straightforward, fair, and vibrant taxation system. These changes aim to support businesses, improve healthcare access, and bring cheer to the gaming and recreational sectors! 🌟💼🏥🎉
In the latest 50th GST Council Meeting, a series of recommendations were proposed to revamp GST tax rates and facilitate trade, making things easier for businesses and consumers alike. Let's dive into the key changes:
Changes in GST Rates for Goods
A. Lower Tax Rate for Uncooked/Unfried Snack Pellets: The GST rate for uncooked/unfried snack pellets, regardless of their name, will be reduced to just 5%. Additionally, businesses will be able to regularize their GST payments for past transactions on an "as is basis." 🍿🔻
B. Exemptions for Essential Medicines and Rare Diseases Treatment
1. GST on Dinutuximab (Quarziba) medicine will be exempted when imported for personal use.
2. Medicines and Food for Special Medical Purposes (FSMP) used in the treatment of rare diseases enlisted under the National Policy for Rare Diseases, 2021, will also be exempt from IGST when imported for personal use. This exemption extends to FSMP imported by Centres of Excellence for Rare Diseases or recommended by any of the listed Centres of Excellence. 💊🆓
C. Lower Tax on Various Products
1. The GST rate on imitation zari thread or yarn will be reduced from 12% to 5%, and GST payments for past transactions related to this matter will be regularized on an "as is basis."
LD slag will see a decrease in GST rate from 18% to 5%, aiming to promote its better utilization and environmental protection.
2. Fish soluble paste will enjoy a reduced GST rate from 18% to 5%, and past GST payments on this item will be regularized.
D. Regularization of Past Issues and Interpretational Matters
1. Issues related to trauma, spine, and arthroplasty implants before 18.07.2022 will be regularized based on genuine interpretational issues.
2. Matters concerning dessicated coconut for the period 1.7.2017 to 27.7.2017 will also be regularized on an "as is basis" due to genuine interpretational concerns.
3. The matters concerning GST on plates and cups made of areca leaves before 01.10.2019 will be regularized to resolve previous uncertainties.
4. For the period 01.7.2017 to 12.10.2017, issues related to GST on biomass briquettes will be regularized, bringing clarity to this matter.
E. Facilitation for Trade
1. Ground Clearance Explanation: The entry 52B in compensation cess notification will now include all utility vehicles meeting specific parameters. An explanation of "Ground clearance" in un-laden condition will also be provided.
2. On products like pan masala and tobacco, where retail sale price declaration is not legally required, the earlier ad valorem rate applicable on 31st March 2023 will be notified for the levy of Compensation Cess.
3. IGST Exemption for Specified Banks: RBL Bank and ICBC bank will be included in the list of specified banks eligible for IGST exemption on imports of gold, silver, or platinum as per Annexure 4B (HBP) of Foreign Trade Policy 2023. Consequential changes will be carried out accordingly.
💼🚀 Revamping GST Rates for Services and Trade-Friendly Measures 📊🛍️
The 50th GST Council Meeting has brought some exciting changes to GST rates for services, focusing on promoting startups and easing trade procedures. Let's dive into the key recommendations:
Changes in GST Rates for Services
A. Encouraging Private Sector Satellite Launch Services: To support startups and promote space-related ventures, the GST exemption on satellite launch services supplied by ISRO, Antrix Corporation Limited, and New Space India Limited (NSIL) will be extended to similar services provided by organizations in the private sector as well. 🛰️🚀
B. Trade-Friendly Measures for Services
1. Simplified GST Procedure for Goods Transport Agencies (GTAs): As a trade-friendly measure, GTAs will no longer be required to file a declaration every year for paying GST under forward charge. Once they exercise this option for a particular financial year, it will be deemed to continue for subsequent years unless they declare their intent to revert to the reverse charge mechanism (RCM). The last date for GTAs to exercise this option will be 31st March of the preceding financial year, starting from 1st January.
2. Exemption for Directors' Private Services: Services supplied by a director of a company to the company in their private capacity, such as renting immovable property, will not be taxable under RCM. Only services provided by a director in their capacity as a director of the company will be subject to RCM, as per the notification No. 13/2017-CTR (Sl. No. 6) dated 28.06.2017.
3. Taxability of Food and Beverages in Cinema Halls: Services related to the supply of food and beverages in cinema halls will be taxed as a restaurant service if they are provided independently of the cinema exhibition service. However, when the sale of cinema tickets and food and beverages are bundled together as a composite supply, the entire supply will attract GST at the rate applicable to the cinema exhibition service, which is considered the principal supply. 🍿🎥🍔
These changes aim to foster innovation in the space sector, simplify GST procedures for goods transport agencies, and clarify the tax treatment of services in cinema halls and by company directors. As the government focuses on trade-friendly measures, these recommendations are expected to boost business growth and enhance overall trade dynamics! 🌟💼📈
🎰🏇🎮 GST Council's Recommendations on Casinos, Horse Racing, and Online Gaming Taxation 📊💼
The Group of Ministers (GoM) was assigned the task of addressing taxation concerns related to casinos, horse racing, and online gaming. After submitting its first report in June 2022, the GoM revisited the issues and presented its second report at the 50th GST Council meeting. Here are the key recommendations:
1. Taxation Consistency: The GoM acknowledged that reaching a consensus on whether online gaming, horse racing, and casinos should be taxed at 28% on the full-face value of bets or on the Gross Gaming Revenue (GGR) proved challenging. To resolve this, the GoM recommended that the GST Council itself should decide on the appropriate taxation method.
2. Taxable Actionable Claims: The GoM suggested making suitable amendments to the law to include online gaming and horse racing in schedule III as taxable actionable claims. This move aims to ensure a clear and standardized taxation framework for these activities.
3. Uniform Tax Rate of 28%: The GST Council has agreed on a uniform tax rate of 28% for all three categories - Casinos, Horse Racing, and Online gaming. This measure simplifies the taxation process and brings consistency to the industry.
4. Specific Tax Application: The tax will be applicable based on the following factors for each category:
- a. Casinos: Tax will be imposed on the face value of chips purchased.
- b. Horse Racing: Tax will be levied on the full value of bets placed with the bookmaker/totalisator.
- c. Online Gaming: Tax will be applied to the full value of bets placed in online gaming activities.
The GST Council has put forward several measures to ease trade procedures and provide relief to taxpayers. These recommendations aim to enhance compliance, simplify processes, and resolve ambiguities. Let's take a look at the key proposals:
1. GST Appellate Tribunal Rules: The Council recommends the implementation of Rules governing the appointment and conditions of the President and Members of the proposed GST Appellate Tribunal. This move will enable the smooth functioning of the Tribunal. Additionally, provisions of the Finance Act, 2023, pertaining to the GST Appellate Tribunal, are suggested to be notified by the Centre from 01.08.2023, ensuring prompt operation.
2. Annual Returns for FY 2022-23: The relaxations provided in FY 2021-22 for various tables of FORM GSTR-9 and FORM GSTR-9C will be continued for FY 2022-23. Furthermore, to reduce the compliance burden on smaller taxpayers, those with an aggregate annual turnover of up to two crore rupees will be exempted from filing an annual return (in FORM GSTR-9/9A) for FY 2022-23.
3. Input Services Distributor (ISD) Mechanism: A circular will be issued to clarify that the ISD mechanism is not mandatory for distributing input tax credit of common input services procured from third parties to distinct persons. However, it will be made mandatory prospectively for distributing input tax credit of such common input services.
4. Clarity on GST Liability for Warranty Replacements: A circular will be issued to provide clarity on various issues related to GST liability and the reversal of input tax credit for warranty replacements of parts and repair services during the warranty period, where no consideration is charged from customers. This will remove ambiguities and legal disputes on the matter.
5. Refund-Related Issues: The Council recommends issuing a circular to clarify various refund-related issues, such as the restriction of refund of accumulated input tax credit based on the information in FORM GSTR-2B, inclusion of export goods value in calculating "adjusted total turnover" under rule 89(4), and refund eligibility in cases of delayed export or payment realization.
6. TCS Liability for E-commerce Operators: A circular will be issued to provide clarity on TCS liability under Sec 52 of the CGST Act, 2017, in cases where multiple E-commerce Operators (ECOs) are involved in a single transaction of supplying goods or services.
7. Simplifying Tax Invoice Requirements: Rule 46 of CGST Rules, 2017, will be amended to require only the name of the State of the recipient (and not the full address) on tax invoices in cases of taxable service supply through an ECO or OIDAR services to an unregistered recipient.
8. Clarity on Specific GST Liabilities: Several circulars will be issued to address uncertainties and legal disputes on specific GST liabilities, including e-invoicing requirements for supplies made to government departments, calculation of interest on wrongly availed IGST credit, and taxation of holding company securities.
9. Verification of Input Tax Credit: To provide relief to taxpayers, a circular will be issued to outline a procedure for verifying input tax credit differences between FORM GSTR-3B and FORM GSTR-2A during specific periods.
10. Special Appeal Procedures: Special procedures will be provided to enable manual filing of appeals for certain circumstances, including TRAN-1/TRAN-2 claims and appeals related to specific rules.
11. Amnesty Scheme Extension: The Council recommends extending the amnesty schemes notified earlier, dealing with non-filers of returns, revocation of registration cancellations, and deemed withdrawal of assessment orders, till 31.08.2023.
12. Extension of Filing Due Dates for Manipur: Due dates for filing FORM GSTR-1, FORM GSTR-3B, and FORM GSTR-7 for April, May, and June 2023 will be extended until 31.07.2023 for registered persons in the State of Manipur due to the prevailing law and order situation.
These facilitation measures are intended to streamline processes, reduce burdens on taxpayers, and enhance the overall efficiency of GST compliance. 🌟💼🏢📝
📃✅ Streamlining Compliances in GST - Council's Recommendations 🛠️📊
The GST Council has put forth a series of recommendations to simplify and enhance compliance procedures in GST. These measures aim to strengthen registration processes, improve tax recovery, and curb fraudulent activities. Let's delve into the key proposals:
1. E-way Bill for Intra-State Movement of Gold and Precious Stones: The Council recommends the insertion of rule 138F in CGST Rules, 2017, allowing States to mandate the generation of e-way bills for intra-state movement of gold and precious stones under Chapter 71 within their territories. This measure seeks to ensure seamless movement and monitoring of valuable goods.
2. Capacity-Based Taxation and Special Composition Scheme: The Council has approved several recommendations proposed by the GoM, including a special procedure for registration and filing of special monthly returns for manufacturers of tobacco, pan masala, and similar items. Additionally, a special penalty for non-registration of machines by such manufacturers will be introduced, along with notification to restrict IGST refund route for exports of these items and mentha oil.
3. Strengthening Registration Process: Several amendments in CGST Rules, 2017 have been recommended to bolster the registration process and combat fake and fraudulent registrations. These amendments include furnishing bank account details within 30 days of registration, suspension of registration for non-compliance, and system-based revocation of suspension upon compliance.
4. Risk-Based Aadhaar Authentication: A pilot project will be conducted in Puducherry for risk-based biometric-based Aadhaar authentication of registration applicants. Andhra Pradesh will also join this pilot once it is tested in Gujarat and Puducherry.
5. Tax and Interest Recovery Mechanism: A mechanism will be introduced under Rule 142B in CGST Rules, 2017, along with FORM GST DRC-01D, to recover tax and interest in cases where the intimated amount under rule 88C remains unpaid without satisfactory explanation by the registered person.
6. ITC Difference Mechanism: To reduce ITC mismatches and misuse, a mechanism for system-based intimation to taxpayers for excess ITC availed in FORM GSTR-3B compared to FORM GSTR-2B will be implemented. Taxpayers will be required to explain the reasons or take remedial action.
7. Discipline in Annual Return Filing: FORM GSTR-3A will be amended to issue notices to registered taxpayers who fail to furnish their Annual Return in FORM GSTR-9 or FORM GSTR-9A by the due date.
8. OIDAR Service Provider Reporting: OIDAR service providers will be required to provide details of supplies made to registered persons in India in their return in FORM GSTR-5A, ensuring the tracking of due tax payment.
9. Duty-Free Shops and Reversal of ITC: The value of supply of goods from Duty-Free Shops at arrival terminals in international airports to incoming passengers will be included in the value of exempt supplies for the purpose of ITC reversal.
10. Penalties for Offenses: A sub-rule (3A) will be inserted in rule 162 of CGST Rules, 2017, to prescribe the compounding amount for various offenses under section 132 of CGST Act, 2017.
11. Information Sharing and Place of Supply Clarification: New provisions will be introduced for consent-based sharing of information and clarifying the place of supply for goods to unregistered persons.
12. State Level Coordination Committee: A State-level coordination committee comprising GST officers from State and Central administrations will be formed for knowledge sharing and coordinated efforts in GST matters.
13. IT System Reforms: The second interim report of the Group of Ministers (GoM) on IT System Reforms was discussed, and various measures were recommended to curb frauds through system-based measures for registration, risk management, and controlling fake Input Tax Credit down the supply chain.
These recommendations aim to streamline processes, enhance data integrity, and strengthen compliance mechanisms, ensuring a more robust and efficient GST framework. 📋💡🚀
Note: The recommendations of the GST Council have been presented in this release containing major item of decisions in simple language for information of the stakeholders. The same would be given effect through the relevant circulars/ notifications/ law amendments which alone shall have the force of law.
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