In the 47th GST Council meeting held on 28th June and 29th June 2022, GST Council recommended various amendments in GST Rate on goods and services to streamline GST refund due to inverted duty structure, removed various exemptions on goods and services, suggested changes to facility smooth trade operations. To give effect to GST amendments suggested by GST Council, CBIC has issued various notifications and circulars.
Following is the gist of notifications issued to give effect to GST Council suggestions:
1. Waiver from filing GSTR-9 (N/No. 10/2022–Central Tax dated 05.07.2022)
Filing of GSTR-9 (Annual return) has been exempted for FY 2021-22 for the registered person whose aggregate turnover is up to 2 Crores during the year.
2. Extension of Due dates of CMP 08 and GSTR 4
|Form||Period||Original Due Date||Extended Due Date||Notification|
|GST CMP-08||April to June 2022||18th July 2022||31st July 2022||N/No. 11/2022- Central Tax|
|GSTR-4||2021-22||30th June 2022||28th July 2022||N/No. 12/2022- Central Tax|
3. Central Goods and Service Tax (Amendment) Rules, 2022 (N/No. 14/2022–Central Tax dated 05.07.2022)
3.1 Automatic Revocation of suspension of GST Registration
- Presently, proper officers may suspend GST registration if GST returns are not filed for more than 6 months and upon the furnishing of GST returns, the assessee has to file an application for revocation of suspension.
- However, as per amendment in Rule 21A(4) of CGST Rules, suspended GST registration will automatically become revoked upon furnishing all pending returns by the assessee.
3.2 Transfer of balance lying in Electronic Cash Ledger to Electronic cash ledger of a distinct person
- Till now no option is available to transfer the balance lying electronic cash ledger of one GSTIN to the Electronic Cash Ledger of another GSTIN.
- Therefore, a person having GST registration in more than one state was genuinely facing the hardship of working capital blockage because he may have a balance lying in the cash ledger in one state and he is required to deposit GST liability in another state in cash.
- Now an option is provided to transfer the balance lying in the electronic cash ledger under CGST & IGST of one GSTIN to CGST/IGST of another GSTIN of distinct persons.
- However, no such transfer shall be allowed if the said registered person has any unpaid liability in his electronic liability register.
- Distinct person means GST registration of the same person in the same or different states, i.e., GSTINs with the same PAN.
3.3 Interest on Delay payment of Taxes
Manner of calculation of interest on delayed payment of GST is provided in new Rule 88B in the following manner:
- Delay filing of GST Return:
- In case of delay in filing of GST return, Interest shall be payable on such amount of GST liability which is paid through cash ledger.
- Interest shall be calculated from the due date of filing of return till the actual date of filing of return.
- Wrong availment and utilization of ITC
- In case of wrong availment of ITC, interest shall be payable only on the amount of ITC which is wrongly availed as well as utilized. Therefore, ITC availed but not utilized shall not attract any interest liability.
- Interest shall be calculated from the date of utilization of ITC till the date of reversal of ITC.
- ITC shall be considered as utilized only if the balance in electronic credit ledger falls below the amount of ITC wrongly availed. The utilized amount shall be the difference of ITC wrongly availed and balance lying in electronic credit ledger.
- ITC wrongly availed: INR 1,50,000
- Balance lying in electronic Credit Ledger: INR 1,25,000
- Wrong ITC utilized: INR 25,000
- Date of the utilization of ITC shall be the earlier of the following dates for the month in which the balance in Electronic Credit ledger is utilized:
- Due date of filing return of GSTR-3B
- Actual Date of filing of return of GSTR-3B.
- All other cases:
- In all other cases, Interest shall be paid on taxes that remain unpaid and interest shall be calculated from the due date of payment of taxes till the date of actual payment of tax.
- E.g. Supplier charged GST on the sale of goods @ 12% instead of 5%. Interest shall be payable on 7%.
Note: Provisions of this rule shall come into effect retrospectively from 1st July 2017
3.4 Other Changes
- For the purpose of computing of value of exempted supplies to determine reversal of Input tax credit under Rule 43, the value of supply of Duty Credit Scrips shall not be considered.
- As per amendment in Rule 46, In a case where the registered person is not required to generate an e-invoice even when his aggregate turnover exceeds the threshold limit he shall give the below declaration on an invoice:
“I/We hereby declare that though our aggregate turnover in any preceding financial year from 2017-18 onwards is more than the aggregate turnover notified under sub-rule (4) of rule 48, we are not required to prepare an invoice in terms of the provisions of the said sub-rule.”:
- GST can be deposited through IMPS or UPI from any bank.
4. Amendment in GST Rates
As Suggested by GST Council, the Department has amended various GST rates on goods and services vide Notification No. 3/2022-CGST Rate to Notification No. 11/2022-CGST Rate dated 13th July 2022.
Amendments in GST rates of goods and services are as follows:
4.1 Rate Rationalization to remove inverted duty structure
- An inverted duty structure is when the GST rate on inputs is higher than GST rate on output and it results in the accumulation of Input Tax Credit.
- To avoid an inverted duty structure, GST council has recommended an increase in GST rates on certain items such as:
|Goods||Existing GST Rate||Amended Rate|
|Printing, writing, or drawing ink||12%||18%|
|Machines for cleaning, sorting, or grading, seed, grain pulses; Machinery used in the milling industry or for the working of cereals, etc; Pawan Chakki that is Air Based Atta Chakki; Wet grinder;||5%||18%|
|LED Lamps, lights, and fixtures, their metal printed circuits board;||12%||18%|
- Further, a refund for ITC accumulated on account of inverted duty structure shall not be allowed for the following goods:
- Edible Oil
|Service||Existing GST Rate||Proposed GST Rate|
|Works contract supplied to central and state governments, union territories & local authorities involving predominantly earthwork and sub-contracts thereof||5%||12%|
|Works contract for roads, bridges, railways, metro, effluent treatment plant, crematorium, etc.||12%||18%|
|Job work in relation to the manufacture of clay bricks, leather goods, and footwear and processing of hides, skins, and leather||5%||12%|
4.1.2 Other GST rate changes
- GST Rate of medical equipment has decreased. Whereas, the GST rate on polished diamonds has been increased.
- Major changes are as follows:
|Goods||Existing GST Rate||Proposed GST Rate|
|Tetra Pak (Aseptic Packaging Paper)||12%||18%|
|Tar (whether from coal, coal gasification plants, producer Gas plants, and Coke Oven Plants.||5%/18%||18%|
|Cut and Polished diamonds||0.25%||1.5%|
- Further, GST rate on transport of goods and passenger by ropeway has been reduced from 18% to 5% (with ITC on services) and GST rate on renting of truck/goods carriage (where fuel cost is included) is reduced from 18% to 12%.
4.1.3 Withdrawal of Exemptions
- GST Exemption is withdrawn from Cheques, Maps, or similar charts of all kinds, and GST @ 12%/18% has been imposed.
- Partial Exemption granted Petroleum/Coal Bed Methane, Scientific and Technical Instruments supplied to Public research institute and e-waste has been withdrawn and now GST will be charged at 12%/18%.
- Exemption on various services has been rationalized such as:
4.1.4 Clarification of various issues under GST
- GST Council has clarified GST rates applicable on various goods and services to avoid ambiguity such as :
- Clarification on GST Rate of goods
- Electric vehicles, whether or not fitted with a battery pack, are eligible for the concessional GST rate of 5%.
- All fly ash bricks attract the same concessional rate irrespective of fly ash content
- Sewage-treated water is exempted from GST and is not the same as purified water provided in S. No. 99 of notification 2/2017-CT(Rate). The word ‘purified’ is being omitted to make this amply clear.
- Clarification of GST Rate of Services
- Services associated with transit cargo both to and from Nepal and Bhutan are covered by an exemption under entry 9B of notification No. 12/2017-CT(R) dated 28.06.2017.
- Selling of space for advertisement in souvenirs published in the form of books is eligible for concessional GST at 5%.
- Renting a vehicle with an operator for transportation of goods on a time basis is classifiable under Heading 9966 (rental services of transport vehicles with operators) and attracts GST at 18%. GST on such renting where the cost of fuel is included in the consideration charged is being prescribed at 12%.
4.1.5 GST under RCM
Following new services have been added under Reverse Charge Mechanism
- Goods Transport Agency (GTA)
- Till now, GTA had following two options to pay GST
|GST Rate||Who is liable to pay GST||Whether ITC is admissible to GTA|
|5%||Recipient of service under RCM||No|
|12%||GTA is liable to pay GST under Forward Charge||Eligible for ITC|
- Now, Government has provided an option to the GTA to pay GST under Forward Charge in the following two manners:
|GST Rate||Who is liable to pay GST||Whether ITC is admissible to GTA|
|5%||GTA under Forward Charge||No|
|12%||GTA under Forward Charge||Eligible for ITC|
- For opting to pay GST under forwarding Charge, GTA shall issue the tax invoice to the recipient charging GST at applicable rates and shall also make the following declaration on an invoice:
“I/we have taken registration under the CGST Act, 2017 and have exercised the option to pay tax on services of GTA in relation to transport of goods supplied by us during the Financial Year _____ under forwarding charge.”
- For payment of GST under forwarding Charge, GTA has to exercise the option of payment of GST under forwarding Charge by making a declaration in Annexure V on or before 15th March of the preceding Financial Year. For FY 2022-23, GTA may exercise the option by 16th August 2023.
- Renting of Residential Dwelling
Service of renting of a residential dwelling provided to a registered person is now taxable under Reverse Charge. GST on renting of residential dwelling will be charged in the following manner:
|Nature of Property||Service Provider||Service Recipient||Purpose of renting||GST Applicability|
|Residential Dwelling||Registered Person||Registered Person||Residential||Under RCM|
|Commercial Purpose||Under RCM|
|Commercial Purpose||GST under forwarding Charge|
|Unregistered Person||Registered Person||Residential||Under RCM|
|Commercial Purpose||Under RCM|
|Commercial Purpose||Not Applicable till the threshold limit is not exceeded|
Please note that the above-mentioned list of GST rate amendments is not exhausted and you are suggested to refer to the respective notification to ascertain the applicable GST rate.