GST Updates: Highlights of 53rd GST Council Meeting

The 53^rd GST council meeting held on 22^nd June 2024 saw several recommendations and measures that aimed to reduce the legal and tax burden on the taxpayers. Let’s take a quick look at the major announcements in the 53^rd GST council meeting.

1. GST Rate Based Changes

1.a) Changes in the GST Rates of Goods

Following changes in GST rates of goods have been prescribed in the GST council meeting announcement:

Particulars	Proposed Changes in GST Rate or Exemption
Imports of ‘Parts, components, testing equipment, tools and tool-kits of aircraft, irrespective of their HS classification to provide a fillip to MRO activities subject to specified conditions.	5% IGST
All milk cans (of steel, iron and aluminium) irrespective of their use	12%
Carton, boxes and cases of both corrugated and non-corrugated paper or paper-board’ (HS 4819 10; 4819 20)	Reduced from 18% to 12%
All solar cookers whether single or dual energy source	12%
To amend existing entries covering Poultry keeping Machinery attracting 12% GST to specifically incorporate “parts of Poultry keeping Machinery” and to regularise past practice on an ‘as is where is’ basis in view of genuine interpretational issues.	12%
To clarify that all types of sprinklers including fire water sprinklers will attract 12% GST and to regularise the past practice on an ‘as is where is’ basis in view of genuine interpretational issues.	12%
IGST exemption on imports of specified items for defence forces	Extended for 5 years till 30th June 2029
IGST exemption on imports of research equipment/buoys imported under the Research Moored Array for African-Asian-Australian Monsoon Analysis and Prediction (RAMA) programme subject to specified conditions	Extension is proposed
Compensation Cess on the imports in SEZ-by-SEZ Units/developers for authorised operations	Exemption proposed w.e.f. 01-07-2017
Compensation cess on supply of aerated beverages and energy drinks to authorised customers by Unit Run Canteens under the Ministry of Defence	Exempted
Imports of technical documentation for AK-203 rifle kits imported for Indian Defence forces.	Ad-hoc IGST exemption provided

 

1.b) Changes in the GST Rates of Services

Following were the changes in GST rates and exemption details announced in the GST council meeting:

Particulars	Proposed Changes in GST Rate or Exemption
Services provided by Indian Railways to the general public, namely, sale of platform tickets, facility of retiring rooms/waiting rooms, cloakroom services and battery-operated car services and intra-railway transactions. Note: The issue for the past period will be regularised from 20-10-2023 till the date of issuing of exemption notification.	Exempted
GST on the services provided by Special Purpose Vehicles (SPV) to Indian Railway by way of allowing Indian Railway to use infrastructure built & owned by SPV during the concession period and maintenance services supplied by Indian Railways to SPV. Note: The issue for the past period will be regularised on an ‘as is where is’ basis for the period beginning from 01-07-2017 till the date of issuing of exemption notification.	Exempted
Accommodation services have the value of supply of accommodation up to Rs. 20,000/- per month per person subject to the condition that the accommodation service is supplied for a minimum continuous period of 90 days. To extend similar benefits for past cases.	Exemption by creating a separate entry in the notification No. 12/2017- CTR 28.06.2017 under heading 9963

1.c) GST on Extra Neutral Alcohol (ENA): The GST council meeting has recommended an amendment in Section 9(1) of the CGST Act, 2017 for not levying GST on Extra Neutral Alcohol (ENA) for manufacturing of alcoholic liquor for human consumption.

1.d) Reduction in TCS collected by ECOs: The Electronic Commerce Operators (ECOs) are required to collect Tax Collected at Source (TCS) on net taxable supplies. The GST council has recommended to reduce the rate from 1% (0.5% CGST + 0.5% SGST/UTGST or 1% IGST) to 0.5% (0.25% CGST + 0.25% SGST/UTGST or 0.5% IGST).

2. Monetary & Limit Based Changes

2.a) Conditional waiver of interest or penalty: Considering the difficulties faced by the taxpayers during the initial years when GST was implemented, the council has recommended the waiver of interest and penalties for demand notices that are issued under Section 73 for the financial years 2017-18, 2018-19 and 2019-20 if the taxpayer pays the full amount of tax demanded in the notice up to 31-03-2025. However, the waiver does not cover the demand for erroneous refunds.

2.b) Fixation of monetary limits for GST appeals: The council has prescribed the monetary limits for filing of appeals by the GST department before the GST Appellate Tribunal (GSTAT), High Court and Supreme Court in order to reduce the litigation by the GST department. The following are the limits prescribed:

• GSTAT: 20 lakhs
• High Court: 1 crore
• Supreme Court: 2 crores

2.c) Reduction in the amount of pre-deposit required for filing GST appeal: The GST council meeting has recommended reducing the pre-deposit for filing the appeal in order to reduce the blockage of working capital for businesses. The maximum amount for filing an appeal with the GST authority has been reduced from Rs. 25 crores to Rs. 20 crores, each under CGST and SGST. Further, the amount for filing of appeal with the GST Tribunal has been reduced from 20% with a maximum amount of Rs. 50 crores, each under CGST and SGST to 10% with a maximum amount of Rs. 20 crores, each under CGST and SGST.

2.d) Interest for delayed filing of return: The 53^rd GST council meeting has recommended amending Section 88B of the CGST Rules following which interest shall not be levied on the portion of the tax that was paid by utilising the balance lying in the electronic cash ledger where the return was filed after the due date of filing the GST return.

2.e) Demand adjustment against pre-deposit: GST council has recommended a mechanism for adjustment of an amount through Form GST DRC-03 in respect of a demand against the amount to be paid as pre-deposit for filing of the appeal.

2.f) Threshold for reporting of B2C interstate supplies: The threshold limit for reporting of the B2C interstate supplies in an invoice-wise manner in Table 5 of Form GSTR-1 is reduced from Rs. 2.5 lakhs to Rs. 1 lakh.

2.g) Regularisation of non-levy or short levy of GST: The GST council meeting has recommended inserting Section 11A in the CGST Act to provide powers to the government to allow regularisation of non-levy or short levy of GST where the tax was short paid or not paid due to common trade practices.

3. Return Based Changes

3.a) The due date for filing of GSTR-4: The GST council has recommended changing the due date for filing of GSTR-4 for composition taxpayers from 30^th April to 30^th June following the end of the financial year. This shall be applicable for the financial years 2024-25 onwards. This will provide sufficient time for the taxpayers to file their returns.

3.b) GSTR-1A allowing amendment of GSTR-1: A major announcement in 53^rd GST council meeting has recommended releasing a new optional facility of Form GSTR-1A to allow the taxpayers to amend the details furnished in GSTR-1 for a particular tax period or even provide additional details before filing of Form GSTR-3B for the said tax period. This will allow the taxpayers to add any particulars of supply or change the same and ensure that correct liability gets reflected in auto-populated GSTR-3B.

3.c) GSTR-9/9A for FY 2023-24: The council has recommended exempting filing of annual returns in Form GSTR-9/9A for FY 2023-24 for taxpayers having aggregate turnover up to Rs. 2 crores.

3.d) Filing of GSTR-7: The GST council meeting has recommended that Form GSTR-7 (to be filed by persons required to deduct TDS as per Section 51 of CGST Act) shall be filed every month irrespective of whether TDS is deducted or not. Further, it has also recommended waiver of late fees in case of delayed filing of NIL Form GSTR-7.

4.Time Limit Based Changes

4.a) Time for filing appeal: The GST council has recommended allowing a 3-month period for filing of appeal before the Appellate Tribunal to provide sufficient time to the taxpayers in pending cases.

4.b) Common time limit for issuance of notices and orders: Currently, the GST law prescribes different time limits for issuance of notices and orders in cases where charges of fraud, wilful misstatement and suppression is involved and in cases where these charges are not involved. The GST council has prescribed a common time limit for both these categories of cases in relation to demands for FY 2024-25 onwards.

4.c) Sunset clause for anti-profiteering: The GST council has recommended providing a sunset clause for anti-profiteering under GST and the recommended sunset date is 01-04-2025 for receiving any new application regarding anti-profiteering. Further, the cases of anti-profiteering can be handled by the Principal bench of the GST Appellate Tribunal (GSTAT).

5. Other Important Changes

5.a) Refund of additional IGST due to upward revision in goods prices after export: The GST council has recommended establishing a mechanism for claiming a refund of additional IGST due to an upward revision of the price of goods after they have been exported.

5.b) ITC on ducts and manholes used in the network of Optical Fibre Cables: The council has recommended clarifying that ITC should not be restricted for manholes and ducts being used in the network of Optical Fibre Cables (OFCs) under clause (c) and (d) of Section 17(5) of CGST Act.

5.c) Valuation of corporate guarantee between related persons: The GST council has recommended amending Rule 28(2) of CGST Rules retrospectively with effect from 26-10-2023 and issuing a circular for clarifying various issues relating to the valuation of services of providing corporate guarantees between related parties.

5.d) Applicability of Section 16(4) of CGST Act where invoice was issued by recipient under RCM: The council has recommended that in cases where the supplies are received from unregistered persons where tax is paid by the recipient under RCM basis and invoice is to be issued by recipient only, the relevant financial year for calculation of time limit for availing of ITC as per Section 16(4) of the CGST Act should be the financial year in which the invoice has been issued by the recipient.

5.e) Amendment for transitional credit: The council has recommended amendment of Section 140(7) of CGST Act retrospectively w.e.f. 01-07-2017 to allow transitional credit in relation to invoices for services provided before the appointed date and where the invoices were received by the Input Service Distributor (ISD) before the appointed date.

5.f) Biometric-based Aadhaar authentication: Another major change in 53^rd GST council meeting is the recommendation for rolling out of biometric-based Aadhaar authentication for GST registration. This will be rolled out across India in a phase-wise manner. This will help strengthen the GST registration process and combat fraudulent ITC claims through fake invoices.

5.g) Curtailing refund of IGST where export duty is payable: GST council has recommended that refund shall be restricted in relation to goods that are subject to export duty irrespective of whether these goods are exported with payment of tax or without payment of tax. Such restrictions shall be applicable even if such goods are supplied to a SEZ developer or a SEZ unit for authorised operations.

All the above recommendations of 53^rd GST Council meeting will be given effect through the issue of relevant notifications and circulars or through the requisite amendment in law.

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