Relief to Business in GST 23rd Council Meeting

23rd GST Council Meeting

1. Introduction

The GST Council, in its 23rd GST council meeting held at Guwahati on 10th November 2017, has recommended the following facilitative measures for taxpayers the GST 23rd council meeting.

2. Return Filing:

  1. Various relaxation has been given in following manner.
  1. All taxpayers would file monthly return in Form GSTR-3B along with payment of taxes by the 20th of the succeeding month till March, 2018.
  2. For filing of details in Form GSTR-1 till March 2018, taxpayers would be divided into two categories. Details of these two categories along with the last date of filing GSTR 1 are as follows:
  3. Taxpayers with annual aggregate turnover up to Rs. 1.5 Crore need to file GSTR-1 on a quarterly basis as per the following frequency:
Jul – Sep31st Dec, 2017
Oct – Dec15th Feb, 2018
Jan – Mar30th April, 2018
  1. Taxpayers with annual aggregate turnover more than Rs. 1.5 Crore need to file GSTR-1 on monthly basis as per following frequency:
Jul – Oct31st Dec, 2017
Nov10th Jan, 2018
Dec10th Feb, 2018
Jan10th Mar, 2018
Feb10th Apr, 2018
Mar10th May, 2018
  1. The time period for filing GSTR-2 and GSTR-3 for the months of July, 2017 to March, 2018 would be worked out by a Committee of Officers. However, filing of GSTR-1 will continue for the entire period without requiring filing of GSTR-2 & GSTR-3 for the previous month/ period.

Revised Late Fee

Late fees would be payable as per below chart.

1Whose tax liabilities is NIL10 per day10 per day20 per day
2All other taxpayer25 per day25 per day50     per day

3. Treatment of Late fees paid for July, August and September 2017

It has been decided in the  23rd GST Council Meeting that where late fees were paid for July, August, and September, it will be re-credited to their Electronic Cash Ledger under “Tax” head instead of “Fee” head so as to enable them to use that amount for discharge of their future tax liabilities.

4. Extension of dates for furnishing Forms

Taking cognizance of the late availability or unavailability of some forms on the GSTN portal, it has been decided in the GST 23rd council meeting that the due dates for furnishing the following forms shall be extended as under:

S. No.Form and DetailsOriginal due datesRevised due dates
1.GST ITC-04, containing details of Inputs & CG sent to Job Workersfor the quarter July-September, 201725.10.2017     31.12.2017    
2.GSTR-4 for the quarter July-September, 2017 by Composition Dealer18.10.201724.12.2017
3.GSTR-5 for July, 2017 by Non-Resident Taxable Person20.08.2017 or 7 days from the last date of registration whichever is earlier11.12.2017
4.GSTR-5A for July, 2017 by OIDAR Service Providers20.08.201715.12.2017
5.GSTR-6 for July, 2017 by ISD13.08.201731.12.2017
6.TRAN-130.09.201731.12.2017 (One-time option of revision also to be given till this date)

Revised due dates for subsequent tax periods will be announced in due course.

5. Manual Filing of Application for Advance Ruling

A facility for manual filing of an application for advance ruling is being introduced for the time being in the GST 23rd council meeting.

Benefits for Service Providers

  1. Exporter of services to Nepal and Bhutan are now eligible to claim Input Tax Credit in respect of input goods and services used for effecting such exempt supply of services to Nepal and Bhutan. Further exports to Nepal and Bhutan already been exempted from GST.
  2. All Supplier of services with annual aggregate turnover up to 20 lacs (Rs. 10 lakhs in special category States except J & K) exempted from taking registration even if suppling via an e-commerce platform. Earlier such suppliers were exempted from registration while making supplies to inter-state.
  3. GST on services by way of admission to “protected monuments” to be exempted.
  4. GST rate on job work services in relation to the manufacture of those handicraft goods in respect of which the casual taxable person has been exempted from obtaining registration, to be reduced to 5% with full ITC.

6. Benefits for Diplomatic Missions/ UN organizations under GST 23rd council meeting

  1. In order to lessen the compliance burden on Foreign Diplomatic Missions/ UN Organizations, a centralized UIN will be issued to every Foreign Diplomatic Mission/ UN Organization by the Central Government and all compliance for such agencies will be done by the Central Government in coordination with the Ministry of External Affairs.
  2. Relevant notifications for all of the above decisions will be issued shortly, so as to be effective from 15.11.2017.

7. Benefits for Composition Dealer

  1. Uniform rate of tax @ 1% under composition scheme for manufacturers and traders (Tax to be paid on Taxable turnover excluding exempt supply of goods). No change for composition scheme for restaurant.
  2. Composition Dealers will be allowed to make Supply of services upto Rs. 5 Lakhs per annum within overall limit of composition dealer.
  3. As of now composition scheme is restricted to a person with an annual turnover of Rs. 1 crore and it is recommeded to increaseed upto 1.5 cr. Fuether, it is now fix the upper limit of Rs. 2 cr in the law.

8. Benefits for Restaurants

Following rates of taxes will be applicable on restaurants services as decided in the GST 23rd council meeting:

S NoServicesRate of Tax
1All stand-alone restaurants, whether air conditioned or not5% without ITC
2Food parcels (or takeaways)5% without ITC
3Restaurants in hotel premises having room tariff of less than Rs. 7500/- per unit per day5% without ITC
4Restaurants in hotel premises having room tariff of Rs. 7500/- and above per unit per day18% with full ITC
5Outdoor catering18% with full ITC

Exemption from IGST/GST in certain specified cases:

Exemption from IGST Has been provided for following specified cases.

S NoSpecified Supplies
1Imports of lifesaving medicine supplied free of cost by overseas supplier for patients, subject to certification by DGHS of Centre or State and certain other conditions.
2Imports of goods (other than motor vehicles) under a lease agreement if IGST is paid on the lease amount.
3Supplies of skimmed milk powder or concentrated milk for use in production of milk for distribution, to following person.   To cooperative society To companies registered under Companies Act
4Imports of specified goods by a sports person of outstanding eminence, subject to specified conditions
5Specified goods, such as scientific or technical instruments, software, prototype supplied to public funded research institution or a university or IISc, or IITs or NIT.
6Coverage of more items, such as temporary import of professional equipment by accredited press persons visiting India to cover certain events, broadcasting equipments, sports items, testing equipment, under ATA carnet system. These goods are to be re-exported after the specified use is over.    

Other changes for simplification and harmonisation or clarification of issues

  1. Inter-state movement of goods like rigs, tools, spares and goods on wheel like cranes, not being in the course of furtherance of supply of such goods, does not constitute a supply. Service provided using such goods would in any case attract applicable tax.
  2. To prescribe that GST on supply of raw cotton by agriculturist will be liable to be paid by the recipient of such supply under reverse charge.
  3. Supply of e-waste attracts 5% GST rate. Concerned notification to be amended to make it amply clear that this rate applies only to e-waste discarded as waste by the consumer or bulk consumer.

9. Rationalization of Exemption Entries –

  1. The existing exemption entries w.r.t. services provided by Fair Price Shops to the Central Government, State Governments or Union Territories by way of sale of food grains, kerosene, sugar, edible oil, etc. under Public Distribution System (PDS) against consideration in the form of commission or margin, is being rationalized so as to remove ambiguity regarding list of items and the category of recipients to whom the exemption is available.
  2. In order to maintain consistency, entry at item (vi) of Sr. No.3 of Notification No. 11/2017-Central Tax (Rate) will be aligned with the entries at items (ii), (iii), (iv) and (v) of SI.No.3. [The word “services” in entry (vi) will be replaced with “Composite supply of Works contract as defined in Clause 119 of Section 2 of CGST Act, 2017″].
  3. In order to obviate dispute and litigation, it is proposed that irrespective of whether permanent transfer of Intellectual Property is a supply of goods or service-

  • permanent transfer of Intellectual Property other than information technology software attracts GST at the rate of 12%; and
  • permanent transfer of Intellectual Property in respect of Information Technology software attracts GST at the rate of 18%.

10. Other Clarifications made in GST 23rd Council Meeting:

  1. It is proposed to clarify that credit of GST paid on aircraft engines, parts & accessories will be available for discharging GST on inter–State supply of such aircraft engines, parts & accessories by way of inter-state stock transfers between distinct persons as specified in section 25 of the CGST Act, notwithstanding that credit of input tax charged on consumption of such goods is not allowed for supply of service of transport of passengers by air in economy class at GST rate of 5%.
  2. Circular will be issued clarifying that processed products such as tea (i.e. black tea, white tea, etc.), processed coffee beans or powder, pulses (de-husked or split), jaggery, processed spices, processed dry fruits & cashew nuts, etc. fall outside the definition of agricultural produce given in Notification No. 11/2017- Central Tax (Rate) and Notification No. 12/2017- Central Tax (Rate) (Exemption Notification) and therefore the exemption from GST is not available to their loading, packing, warehousing, etc.
  3. A suitable clarification will be issued that –
  • services provided to the Central Government, State Government, Union territory under any insurance
    scheme for which total premium is paid by the Central Government, State Government, Union territory are
    exempt from GST under Sl. No. 40 of Exemption Notification;
  • services provided by State Government by way of general insurance (managed by the government) to employees
    of the State government/ Police personnel, employees of Electricity Department or students are exempt vide
    entry 6 of Exemption Notification which exempts Services by Central Government, State Government, Union
    territory or local authority to individuals.

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DISCLAIMER: The views expressed are strictly of the author and VJM & Associates LLP. The contents of this article are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.

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