37th GST Council meeting held on 20th September 2019 at Goa. GST Council has decided to make changes in CESS, Exemptions, New Return system to be postpone, Changes in GST Rates.
GST Rates and limits changes
- Supply of goods and services to FIFA and other specified persons for U17 Women’s World Cup in India exempted from GST.
- Insurance provided to Central Armed Paramilitary Forces to be exempt from GST.
- Prospectively, warehousing of certain agricultural products has been exempted from GST.
- Supply of silver, platinum from specified agencies to be exempt from GST
- Defence goods not being manufactured indigenously has been exempted from GST/IGST
- Exemption from GST/IGST is being given on import of specified defence goods not being manufactured indigenously, it’s being extended only up to 2024.
- Defence goods not being manufactured indigenously has been exempted from GST/IGST. However, the proposal was to increase GST rates on such beverages from 18% to 28%, and impose an additional cess of 12%.
GST rate Changes
- Hotels with room tariff of Rs. 1000 or less will attract nil GST. Those with Rs. 1,000- Rs. 7,500 will attract 12% GST. Hotels with tariff of Rs. 7,500 and above will be taxed at 18%.
- In a major boost to gems and jewellery sector, GST on cut and polished semi-precious items reduced to 0.25 per cent from 3 per cent.
- Uniform rate of 12 per cent will be levied for woven and non-woven polyethylene bags
- GST rates cut down for outdoor catering to 5% from 18%
- Railway wagons, coaches, rolling stocks to be taxed at 12% instead of earlier 5%
- GST rate on slide fasteners has been reduced from 18% to 12%,
- Marine fuel rate reduced from 18% to 5%
- 12% to 5% on wet grinders consisting of stone as a grinder,
- 5% to nil on dried tamarind
- GST council cuts tax rates on job work in diamond industry to 1.5% from 5%
- Uniform GST rate of 12% to be levied on polypropylene bags and sacks used for packing of goods
- Rates reduced for cups and plates made from leaves and hides to nil.
- 18% GST shall be levied on almond milk
- GST rate hiked on railway wagon, coaches from 5% to 12%
- GST Council recommends lower 12% cess on 1,500 cc diesel, 1,200 cc petrol vehicles with capacity to carry up to 13 people
- Caffeinated drinks will attract 28% with an additional cess of 12%.
- Aerated drinks manufacturers no longer part of composition scheme
Note: All rate changes would be effective from 1 October 2019
Law and Procedural related changes
Relaxation in Filing Annual Return:
GST council has given a big relief to MSMEs by waving the requirement of filing Annual returns for FY 2017-18 and FY 2018-19 in the following cases:
- Form GSTR – 9A in case of Composition dealers
- Form GSTR – 9 in case of the taxpayers having aggregate turnover up to Rs. 2 Crores (However, in this case it is optional for such taxpayers to file returns). Resultantly, Taxpayers having turnover above 2 crore are still required to file GSTR – 9
Simplification of Annual Return forms :
For the simplification of GSTR – 9 forms (Annual Return) and reconciliation statements, a committee of officers will be constituted.
Extension of last file for filing appeal before GST Appellate Tribunal:
An applicant can file the appeal against the order of Appellate Authority before the GST Appellate Tribunal within three months of passing an order; however, the due date for filing of return has been extended as the Appellate Tribunals are yet not functional.
Restriction on availment of ITC
It was decided to Impose the restrictions on availment of input tax credit (ITC) by 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.
Implementation of New GST Return system
- It was earlier decided to implement the new GST return system from October, 2019. However, it has been proposed and now will be introduced from April, 2020.
- This move has been taken to give ample opportunity to taxpayers as well as the system to adapt.
- Consequently, Form GSTR – 3B and Form GSTR – 1 shall be continuing to apply.
Issuance of circulars
Various circulars have been issued for uniformity in application of law across all jurisdictions:
- Procedure to claim refund in FORM GST RFD-01A subsequent to favourable order in appeal or any other forum;
- Eligibility to file a refund application in FORM GST RFD-01A for a period and category under which a NIL refund application has already been filed; and
- Clarification regarding supply of Information Technology enabled Services (ITeS services) (in supersession of Circular No. 107/26/2019-GST dated 18.07.2019) beingmade on own account or as intermediary.
Amendments in CGST, UTGST and SGST Acts
For the creation of Union Territories (UTs) of Jammu & Kashmir and Ladakh, required amendments have been made in three acts CGST, UTGST and SGST accordingly.
Refund by single Authority
Integrated refund system with disbursal by single authority to be introduced from 24th September, 2019.
- In principle decision to link Aadhar with registration of taxpayers under GST and examine the possibility of making Aadhar mandatory for claiming refunds.
- In order to tackle the menace of fake invoices and fraudulent refunds, in principle decision to prescribe reasonable restrictions on passing of credit by risky taxpayers including risky new taxpayers.
- Rescinding of Circular No.105/24/2019-GST dated 28.06.2019, ab-initio, which was issued in respect of post-sales discount.
Note: The above amendments would be given effect through relevant Circulars/Notifications which alone shall have the force of law.