The most awaited 53rd GST Council meeting has held on June 22, 2024 and was chaired by the Hon’ble Finance Minister. Ths GST Council meeting aimed to enhance trade, simplify business operations, and enhance GST compliance.

The GST Council has recommended a series of amendments and clarifications including:

1. changes in GST Rates for certain goods and services, 
2. waiver of interest and penalty in certain cases, 
3. reduced TCS rates to ease financial burdens of taxpayers, 
4. Option to amend GSTR-1

The GST Council recommendation belonged to following groups:

1. Changes in Tax rates
2. Measures to facilitate trades 
3. Measures related to procedures and law

This article discusses measures recommended for facilitation of trade and measures related to procedure and law.

1. Measures For Facilitation Of Trade:

1.1 Waiver of Interest and Penalty determined under form DRC-07:

• Due to implementation of GST in initial years, various demands are raised for FY 2017-18, 2018-19 and 2018-19.
• To provide relaxation to taxpayers, the GST council has recommends waiver of interest and penalties for demand notices issued under Section 73 of the CGST Act for the fiscal years 2017-18, 2018-19 and 2019-20. 
• Waiver shall be granted only if the full amount of tax, as determined by demand order, is paid in by March 31, 2025. 
• Such waiver is not applicable to the demand notices issued under Section 74, i.e., the cases involving fraud, suppression or wilful misstatement, etc. and demand for erroneous refund.
• For this purpose, GST Council has recommended to insert new Section 128A of CGST Act, 2017.

1.2 Extended time limit to avail ITC, amendment in Section 16(4) of CGST Act

a. Extended time limit to avail ITC for FY 2017-18 to FY 2020-21

• As per existing provisions of Section 16(4) of CGST Act, a registered person shall not be entitled to take ITC in respect of any invoice or debit note after 30th November of following financial year to which such invoice or debit note pertains.
• Such amendment was made with effect from 1st October, 2022 vide Notification No. 18/2022-CT dated 28.09.2022.
• Prior to such amendment, ITC was permitted till the due date of return under Section 39 for the month of September of following Financial year.
• GST Council has recommended that time limit to avail ITC under Section 16(4) of CGST Act shall be deemed to be 30th November, 2021 for FY 2017-18 to FY 2020-21.
• For all the ITC claimed in GSTR-3B of FY 2017-18 to FY 2020-21, the due date/ time limit under section 16(4) may been deemed to be November 30, 2021.

b. Extended time limit for filing of pending return post revocation of GST Cancellation

• Post revocation of cancellation of GST registration, taxpayers are required to file all pending return from the date of cancellation till date of revocation.
• GST Council has recommended a retrospective amendment to Section 16(4) of the CGST Act to relax the conditions of Section 16(4) of the CGST Act for taxpayers who have filed their returns within 30 days of the order of revocation. 

1.3 Monetary Limit for Government Litigations

The Council has recommended to setting monetary limits on the Department for filing Appeals before, GST Appellate Tribunal, High Court and Supreme Court  to reduce Government litigation. 

The monetary thresholds recommended are as follows: 

1. GST Appellate Tribunal – INR 20 lakhs. 
2. High Court – INR 1 crore. 
3. Supreme Court – INR 2 crores.

1.4 Reduction in TCS rates to be collected by E-Commerce Operators

E-commerce operators are required to collect TCS @ 1% on sales made through e-commerce platform. The GST Council has recommended to reduce TCS 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). Such step is taken to ease financial burden on the suppliers.

1.5 Reduction in requirement of Pre-deposit for filing appeal

• The GST Council recommends reduction of the quantum of pre-deposit required to be paid for filing of appeals under GST. to ease the cashflows for the taxpayers.
• The Council has recommended following amendment to Sections 107 and 112 of the CGST Act as below:
  • Section 107- Filing of Appeal with GST (appeals)– Maximum amount of pre-deposit to file an appeal with appellate authority has been reduced from INR 50 crores (CGST + SGST or IGST) to INR 40 crores (CGST + SGST or IGST). 
  • Section 112- filing an appeal with the Tribunal- Pre-deposit to file appeal with tribunal has been reduced from 20% to 10% and the cap for maximum pre-deposit has also been reduced from INR 100 Crores (CGST + SGST or IGST) to INR 40 crores (CGST + SGST or IGST).

1.6 No Interest to be charged to the extend balance is lying in Electronic Cash Ledger

GST Council has recommended to amend Rule 88B in provide that no interest under Section 50 shall be levied on the amount lying in electronic cash ledger on the due date of filing of GSTR-3B and to the extend such balance is debited while filing the return.

1.7 Amendment in GSTR-1 through GSTR-1A

• The GST Council has recommended to provide a new optional facility of FORM GSTR-1A to facilitate the taxpayers to amend the details in FORM GSTR-1 for a tax period and/ or to declare additional details, if any, before filing of return in FORM GSTR-3B for the said tax period. 
• This will facilitate the taxpayer to add or amend the information furnished in GSTR-1 of current period to ensure that correct liability auto-populates in Form GSTR-3B of such period.

1.8 Granting power not to recover taxes not levied or short levied due to General Trade Practise:

• Recently, various industries were served with heavy GST notices running in thousand crores where GST was short levied or not levied due to general trade practises such as online gaming sector.
• To prevent the taxpayer from genuine hardship, the GST Council has recommended to insert new Section 11A in the CGST Act, to give powers to the Government to allow regularization of non-levy or short levy of GST, where tax was being short paid or not paid due to common trade practices.

1.9 Time for filing appeals in GST Appellate Tribunal:

The GST Council has recommended to amend Section 112 of the CGST Act, 2017 to allow the 3 months for appeals before the Appellate Tribunal to start from a date to be notified by the Government in respect of appeal/ revision orders passed before the date of said notification. This will give sufficient time to the taxpayers to file appeal before the Appellate Tribunal in the pending cases.  

1.10 Other Recommendations:

GST Council has made following other recommendations:

1. Due date filing of GSTR-4, return for dealers opting for composition scheme, has been recommended to extend from 30th April to 30th June of the following year. Extended due date shall apply from FY 2024-25 onwards.
2. No GST shall be levy on Extra Neutral Alcohol used for manufacture of alcoholic liquor for human consumption.   
3. Prescribe a mechanism for claiming refund of additional IGST paid on account of upward revision in price of the goods subsequent to their export. This will facilitate the taxpayer in claiming refund of additional IGST paid on account of upward revision of price subsequent to export.
4. Amend Section 140(7) of CGST Act to provide transitional credit with respect to invoices pertaining to services provided before the date of implementation of GST and where the invoices are received by the ISD before the appointed date. 
5. Exemption to file Annual Return in Form GSTR-9 and GSTR-9A for supplier with aggregate annual turnover upto INR 2 Crores during FY 2023-24
6. The threshold for reporting of B2C inter-State supplies invoice-wise in Table 5 of FORM GSTR-1 was recommended to be reduced from Rs 2.5 Lakh to Rs 1 Lakh.

2. Measures Pertaining To Law And Procedures

GST Council has made several recommendations to smooth the procedures and Law for businesses:

2.1 Rolling out of bio-metric based Aadhaar authentication on All-India basis: 

• For the purpose of GST registration, many states are calling the taxpayers to physically come for the bio-matric authentication and it is cause the genuine hardship to the taxpayers in obtaining GST registration multiple states.
• Considering the representation of Industry, The GST Council has recommended to roll-out the biometric-based Aadhaar authentication of registration applicants on pan-India basis in a phased manner. 
• This will strengthen the registration process in GST and will help in combating fraudulent input tax credit (ITC) claims made through fake invoices.

2.2 Common timelines for issuance of demand notices and orders irrespective of whether case involves fraud, suppression, willful misstatement etc., or not: 

• Presently, notices and demand orders for fraud, suppression, willful misstatement of facts etc. are issued under Section 74 of CGST Act. However, notices on other grounds are issued under Section 73 of CGST Act.
• To simplify the implementation of those provisions, the GST Council has recommended a common time limit for issuance of notices and orders in both of the cases.
• Common time line shall apply from FY 2024-25 onwards.
• Also, as per Section 73 and 74, the taxpayers are not required to pay penalty if the tax determined in Show cause notice is paid alongwith interest within 30 days of issuance of SCN. The GST Council has recommended to increase the time period from 30 days to 60 days.

2.3 Sunset Clause for Anti-profiteering clause

• The GST Council has recommended amendment in section 171 and section 109 of CGST Act, 2017 to provide a sunset clause for anti-profiteering under GST.
• It also provided for of anti-profiteering cases by the Principal bench of GST Appellate Tribunal (GSTAT). 
• Council has also recommended the sun-set date of 01.04.2025 for receipt of any new application regarding anti-profiteering.

2.4 Curtail refund of IGST where export duty is payable: 

• The GST Council has recommended to amendments in section 16 of IGST Act and section 54 of CGST Act to provide that the refund in respect of goods which are subjected to export duty is restricted.
• Such restriction shall apply irrespective of whether the said goods are exported without payment of taxes or with payment of taxes,.
• Further, such restrictions should also be applicable if such goods are supplied to a SEZ developer or a SEZ unit for authorized operations.