The 31st GST Council Meeting was held on 22 December 2018. Following recommendations and rate cuts have been agreed upon in the meeting:
A. Policy Recommendations
The GST Council in its 31st meeting held today at New Delhi made the following policy recommendations (The requisite Notifications/Circulars for implementing the recommendations of the GST Council shall be issued shortly)
- There would be a single cash ledger for each tax head. The modalities for implementation would be finalised in consultation with GSTN and the Accounting authorities.
- The new return filing system shall be introduced on a trial basis from 01.04.2019 and on a mandatory basis from 01.07.2019.
- The due date for furnishing the annual returns in FORM GSTR-9, FORM GSTR-9A and reconciliation statement in FORM GSTR-9C for the Financial Year 2017 – 2018 shall be further extended till 30.06.2019.
- The following clarificatory changes, inter-alia, shall be carried out in the formats/instructions according to which the annual return/reconciliation statement is to be submitted by the taxpayers
- Amendment of headings in the forms to specify that the return in FORM GSTR-9 &FORM GSTR-9A would be in respect of supplies etc. ‘made during the year’ and not ‘as declared in returns filed during the year’;
- All returns in FORM GSTR-1&FORM GSTR-3Bhave to be filed before filing of FORM GSTR-9&FORM GSTR-9C;
- All returns in FORM GSTR-4have to be filed before filing of FORM GSTR-9A;
- HSN code may be declared only for those inward supplies whose value independently accounts for 10% or more of the total value of inward supplies;
- Additional payments, if any, required to be paid can be done through FORM GST DRC-03only in cash;
- ITC cannot be availed through FORM GSTR-9 &FORM GSTR-9C;
- All invoices pertaining to previous FY (irrespective of month in which such invoice is reported in FORM GSTR-1) would be auto-populated in Table 8A of FORM GSTR-9;
- Value of “non-GST supply” shall also include the value of “no supply” and may be reported in Table 5D, 5E and 5F of FORM GSTR-9;
- Verification by taxpayer who is uploading reconciliation statement would be included in FORM GSTR-9C.
- The due date for furnishing FORM GSTR-8 by e-commerce operators for the months of October, November and December 2018 shall be extended till 31.01.2019.
- The due date for submitting FORM GST ITC-04 for the period July 2017 to December 2018 shall be extended till 31.03.2019.
- ITC in relation to invoices issued by the supplier during FY 2017-18 may be availed by the recipient till the due date for furnishing of FORM GSTR-3B for the month of March 2019, subject to specified conditions.
- The late fee shall be completely waived for all taxpayers in case FORM GSTR-1, FORM GSTR-3B & FORM GSTR-4 for the months/quarters July 2017 to September 2018, are furnished after 22.12.2018 but on or before 31.03.2019.
- Taxpayers who have not filed the returns for two consecutive tax periods shall be restricted from generating e-way bills. This provision shall be made effective once GSTN/NIC make available the required functionality.
- Clarifications shall be issued on certain refund related matters like a refund of ITC accumulated on account of inverted duty structure, disbursal of refunds within the stipulated time, the time allowed for availment of ITC on invoices, refund of accumulated ITC of compensation cess etc.
- Changes made by CGST (Amendment) Act, 2018, IGST (Amendment) Act, 2018, UTGST (Amendment) Act, 2018 and GST (Compensation to States) Amendment Act, 2018 and the corresponding changes in SGST Acts would be notified w.e.f. 01.02.2019.
B. Rate changes and clarification in Goods
GST Council in the 31st meeting held on 22nd December 2018 at New Delhi took the following decisions relating to changes in GST rates, and clarification (on Goods). The decisions would be given effect through Gazette notifications/ circulars which shall have the force of law.
- GST rate reduction on goods which were attracting GST rate of 28%
- 28% to 18%: Monitors and TVs of up to a screen size of 32 inches, Re-treaded or used pneumatic tyres of rubber; Power banks of lithium-ion batteries, Digital cameras and video camera recorders, Video game consoles and other games and sports requisites falling under HS code 9504.
- 28% to 5%: Parts and accessories for the carriages for disabled persons
- 18% to 12%: Cork roughly squared or debagged, Articles of natural cork, Agglomerated cork
- 18% to 5%: Marble rubble
- 12% to 5%: Natural cork, Walking Stick, Fly ash Blocks
- 12% to Nil: Music Books
- 5% to Nil: Vegetables, (uncooked or cooked by steaming or boiling in water), frozen, branded and put in a unit container, Vegetable provisionally preserved (for example by sulphur dioxide gas, in brine, in sulphur water or in other preservative solutions) but unsuitable in that state for immediate consumption.
- Exemption from GST on supply of gold by Nominated Agencies to exporters of article of gold Jewellery.
- Exemption from IGST/Compensation cess on vehicles imported for temporary purposes under the Customs Convention on the Temporary importation of Private Road Vehicles.
- GST on solar power generating plant and other renewable energy plants
- GST rate of 5% rate has been prescribed on renewable energy devices & parts for their manufacture (biogas plant/solar power based devices, solar power generating system (SGPS) etc) [falling under chapter 84, 85 or 94 of the Tariff]. Other goods or services used in these plants attract applicable GST.
- Certain disputes have arisen regarding GST rates where specified goods attracting 5% GST are supplied along with services of construction etc and other goods for solar power plant.
- To resolve the dispute the Council has recommended that in all such cases, the 70% of the gross value shall be deemed as the value of supply of said goods attracting 5% rate and the remaining portion (30%) of the aggregate value of such EPC contract shall be deemed as the value of supply of taxable service attracting standard GST rate.
- Movement of Rigs, Tools & Spares and all goods on wheels on own account where such movement is not intended for further supply of such goods but for the provision of service does not involve a supply (e.g., movement of testing equipment etc.) and is not be liable to GST
- Concessional GST rate of 5% applies to the LPG supplied in bulk to an OMC by refiners/fractioners for bottling for further supply to household domestic consumer
- Turbo charger is classified under heading 8414 and attracts 18% GST and not 5% GST.
C. GST rate on Services
GST Council in the 31stmeeting held on 22nd December 2018 at New Delhi took the following decisions relating to changes in GST rates, ITC eligibility criteria, exemptions and clarifications on connected issues. The decisions would be given effect to through Gazette notifications/ circulars which shall have the force of law.
- Reduction in GST rates/exemptions on services:
- GST rate on cinema tickets above Rs. 100 shall be reduced from 28% to 18% and on cinema tickets upto Rs. 100 from 18% to 12%.
- GST rate on third party insurance premium of goods carrying vehicles shall be reduced from 18% to 12%
- Services provided by GTA to Government departments/local authorities which have taken registration only for the purpose of deducting tax under Section 51 shall be excluded from the payment of tax under RCM and the same shall be exempted.
- Air travel of pilgrims by non-scheduled/charter operations, for religious pilgrimage facilitated by the Government of India under bilateral arrangements, shall attract the same rate of GST as applicable to similar flights in Economy class (i.e. 5% with ITC of input services).
- With effect from 31st January, 2018 degrees/ diploma awarded by IIMs under IIM Act, 2017 will be exempt from GST
- Leasing of pumps and reservoirs by the OMCs to petrol pump dealers is a mixed supply and the Licence Fee Recovery (LFR) charged for the same shall be leviable to GST @ 28%, the rate applicable to pumps. Leasing of land and buildings along with equipment shall fall under heading 9972 (real estate services) and attract GST rate of 18%
- GST is exempt on the supply of food and drinks by an educational institution when provided by the institution itself to its students, faculty and staff and is leviable to GST of 5% when provided by any other person based on a contractual arrangement with such institutions.
- New RCM Services
- Security services (supply of security personnel) provided to a registered person, except Government Departments which have taken registration for TDS and entities registered under composition scheme, shall be put under RCM.
- Services provided by an unregistered Business Facilitator (BF) to a bank and agent of Business correspondent (BC) to BC shall be put under RCM.
D. Law Amendments
The GST Council in its 31st meeting held today at New Delhi gave in principle approval to the following amendments in the GST Acts. The recommendations of the Council will be made effective only after the necessary amendments in the GST Acts are carried out.
- Creation of a Centralised Appellate Authority for Advance Ruling (AAAR) to deal with cases of conflicting decisions by two or more State Appellate Advance Ruling Authorities on the same issue.
- Amendment of section 50 of the CGST Act to provide that interest should be charged only on the net tax liability of the taxpayer, after taking into account the admissible input tax credit, i.e. interest would be leviable only on the amount payable through the electronic cash ledger.
E. Formation of GoM
GST Council in its 31st meeting held at New Delhi has approved the proposal to form a 7 Member Group of Ministers to study the revenue trend, including analysing the reasons for structural patterns affecting the revenue collection in some of the States. The study would include the underlying reasons for deviation from the revenue collection targets vis a vis original assumptions discussed during the design of the GST system, its implementation and related structural issues.
The Group of Ministers will be assisted by the committee of experts from the Central Government, State Governments and the NIPFP (National Institute of Public Finance and Planning), who would study and share the findings with GoM. The GoM in turn would give its recommendation to the GST Council.
The members of the GoM and the Committee of experts would be announced in due course of time.
To read our coverage on the previous Council Meet decisions, you may refer here:
Other GST Council Meeting