Recommendations made during 31 Meeting of the GST Council

The GST Council in its 31 meeting held today at New Delhi made the following policy recommendations: 

1. There would be a single cash ledger for each tax head. The modalities for implementation would be finalized in consultation with GSTN and the Accounting authorities.

2. A scheme of single authority for disbursement of the refund amount sanctioned by either the Centre or the State tax authorities would be implemented on pilot basis. The modalities for the same shall be finalized shortly.

3. The new return filing system shall be introduced on a trial basis from 01.04.2019 and on mandatory basis from 01.07.2019.

4. 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.

5. 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:

i. 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’;
ii. All returns in FORM GSTR-1&FORM GSTR-3B have to be filed before filing of FORM GSTR-9&FORM GSTR-9C;
iii. All returns in FORM GSTR-4 have to be filed before filing of FORM GSTR-9A;
iv. 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;
v. Additional payments, if any, required to be paid can be done through FORM GST DRC-03 only in cash;
vi. ITC cannot be availed through FORM GSTR-9 &FORM GSTR-9C;
vii. 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;
viii. 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;
x. Verification by taxpayer who is uploading reconciliation statement would be included in FORM GSTR-9C.

6. 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.

7. The due date for submitting FORM GST ITC-04 for the period July 2017 to December 2018 shall be extended till 31.03.2019.

8. 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.

9. All the supporting documents/invoices in relation to a claim for refund in FORM GST RFD01A shall be uploaded electronically on the common portal at the time of filing of the refund application itself, thereby obviating the need for a taxpayer to physically visit a tax office for submission of a refund application. GSTN will enable this functionality on the common portal shortly.

10. The following types of refunds shall also be made available through FORM GST RFD-01A: i. Refund on account of Assessment/Provisional Assessment/Appeal/Any Other Order; ii. Tax paid on an intra-State supply which is subsequently held to be inter-State supply and vice-versa; iii. Excess payment of Tax; and iv. Any other refund.

11. In case of applications for refund in FORM GST RFD-01A(except those relating to refund of excess balance in the cash ledger)which are generated on the common portal before the roll out of the functionality described in point (10) above, and which have not been submitted in the jurisdictional tax office within 60 days of the generation of ARN, the claimants shall be sent communications on their registered email ids containing information on where to submit the said refund applications. If the applications are not submitted within 15 days of the date of the email, the said refund applications shall be summarily rejected, and the debited amount, if any, shall be re-credited to the electronic credit ledger of the claimant.

12. One more window for completion of migration process is being allowed. The due date for the taxpayers who did not file the complete FORM GST REG-26 but received only a Provisional ID (PID) till 31.12.2017 for furnishing the requisite details to the jurisdictional nodal officer shall be extended till 31.01.2019. Also, the due date for furnishing FORM GSTR-3B and FORM GSTR-1 for the period July, 2017 to February, 2019/quarters July, 2017 to December, 2018 by such taxpayers shall be extended till 31.03.2019.

13. Late fee shall be completely waived for all taxpayers in case FORM GSTR-1, FORM GSTR3B &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.

14. 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.

15. Clarifications shall be issued on certain refund related matters like refund of ITC accumulated on account of inverted duty structure, disbursal of refunds within the stipulated time, time allowed for availment of ITC on invoices, refund of accumulated ITC of compensation cess etc.

16. 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.

 The requisite Notifications/Circulars for implementing the above recommendations of the GST Council shall be issued shortly. 

Is your consultant Not providing you userID and password of GST? Here is the solution!!

Complaints are being received from taxpayers that the intermediaries who were authorized by them to apply for registration on their behalf had used their own email and mobile number during the process. They are now not sharing the user credentials with the taxpayer on whose behalf they had done the registration in the first place and the taxpayer is at their mercy.

With a view to address this difficulty of the taxpayer, a functionality to update email and mobile number of the authorized signatory is available in the GST System. The email and mobile number can be updated by the concerned Jurisdictional tax authority of the taxpayer as per the following procedure:


Steps to be followed:-


Taxpayer is required to approach the concerned jurisdictional Tax Officer to get the password for the GSTIN allotted to the business.


https://www.gst.gov.in

,>. Allotted jurisdiction is displayed in red text>


Taxpayer would be required to provide valid documents to the tax officer as proof of his/her identity and to validate the business details related to his GSTIN.


Tax officer will check if the said person is added as a Stakeholder or Authorized Signatory for that GSTIN in the system.


Tax officer will upload necessary proof on the GST Portal in support to authenticate the activity.


Tax officer will enter the new email address and mobile phone number provided by the Taxpayer.


After upload of document, Tax officer will reset the password for the GSTIN in the system.




[PIB Release ID 179956 dated 14th June, 2018]

You can now claim your refund online on excess GST. Want to know How?

The facility to upload statement 4 for refund on account of supplies made to SEZ unit/ SEZ Developer, with payment of tax, and the facility for amendment in Registration of Core fields have been introduced. Facility to claim refund on account of excess payment of tax has been enabled on GST Portal for the taxpayers," the entity announced today. GSTN is a non-profit, non-government company that provides IT infrastructure and services to taxpayers, the Central and State Governments and other stakeholders for implementation of the Goods and Services Tax.

So who is eligible to file refund applications on grounds of excess payment of tax? According to the portal, normal and casual taxpayers filing Form GSTR-3B, composite taxpayers filing Form GSTR-4 and Non-Resident taxpayers filing Form GSTR-5 can file refund applications for amounts of Rs 1,000 or more under the newly-introduced facility.

The user manual on the portal outlines how taxpayers can file an application for refund on account of excess payment of tax. Here's what you need to do:

1. Visit the official GST site

2. On the GST home page, click the Services > Refunds > Application for the refund command

3. When the 'select the refund type' page is displayed, pick the 'excess payment of tax' option

4. Select the financial year and month for which application has to be filed from the drop-down lists and click the 'create' button

5. The GST RFD-01A - Excess payment of tax page will be displayed. Fill in the relevant tax details and submit your bank account details then click the 'save' option.

6. Click the 'preview' button to download the form in PDF format.
7. Tick the Undertaking and Self-Declaration checkboxes and click on the 'proceed' button

8. Click the 'File with DSC' or 'File with EVC' buttons. If you pick the former, just click on 'proceed', select the certificate and click the 'sign' button. 

The Application Reference Number (ARN) receipt will be displayed. Else, in the case of EVC, enter the OTP sent to the email address and mobile number of the Authorized Signatory registered at the GST Portal and click the 'verify' button. The success message is displayed and status is changed to 'submitted'. The ARN receipt is then downloaded and a copy is sent to your registered email address and mobile phone number.

Once the ARN is generated, the refund application would be assigned to Jurisdictional Refund Processing Officers for scrutiny following which the refund will be disbursed. Taxpayers can track the status of refund application using track status functionality.

It is advisable to take benefit of this facility. 

CA Anand Muth

GST Audit Report and Reconciliation Statement Format notified

The CBIC has notified the has notified Form GSTR-9C for Audit Report and Reconciliation Statement vide Central GST (Tenth Amendment) Rules, 2018. 

                                            Click here to Download GSTR-9C

GST Annual Return Form notified GSTR-9

The Government has notified wide notification no. 38/20018 CGST as Central GST (Eighth Amendment) Rules, 2018 wherein it has notified Form GSTR-9 of Annual Return and Form GSTR-9A of Annual Return for composition taxpayers.

Click here to download the notification 

GST rate on Services and Rate cut on several Goods

The GST Council in its 28 meeting held here today under the Chairmanship of Shri Piyush Goyal , Union Minister for Railways , Coal , Finance & Corporate Affairs took following decisions relating to exemptions / changes in GST rates / ITC eligibility criteria, rationalization of rates / exemptions and clarification on levy of GST on services. The decisions of the GST Council enclosed as annexure has been presented in simple language for ease of understanding which would be given effect to through Gazette notifications/ circulars which shall have force of law.

It would be noted that multiple reliefs from GST taxation have been provided to following categories of services –
(i) Agriculture, farming and food processing industry,
(ii) Education, training and skill development,
(iii) Pension, social security and old age support

Hotel industry has been given major relief by providing that the rate of tax on accommodation service shall be based on transaction value instead of declared tariff.

Services provided in sectors like banking, IT have been provided relief by exempting services supplied by an establishment of a person in India to any establishment of that person outside India [related party]

As a green initiative, GST on supply of e-books has been reduced from 18 to 5%. For details of major decisions on services, annexure to this press note may be referred. It is proposed to issue notifications giving effect to these recommendations of the Council with effect from27 July , 2018.


ANNEXURE - EXEMPTIONS / CHANGES IN GST RATES AND SERVICES

Sector –Farmers/ Agriculture/ Food Processing
1. Exempt services by way of artificial insemination of livestock (other than horses).
2. Exempt warehousing of minor forest produce in line with exemptions provided to the agricultural produce.
3. Exempt the works of installation and commissioning undertaken by DISCOMS/ electricity distribution companies for extending electricity distribution network upto the tube well of the farmer/ agriculturalist for agricultural use.
4. Exempt services provided by FSSAI to food business operators.

Education/ Training/ Skill Development

5. Reduce rate of GST from 18% to 5% on supply only of e-books for which print version exist.

Social Security/ Pension Security/ Senior Citizens

6. Exempt services provided by Coal Mines Provident Fund Organisationto the PF subscribers from the applicability of GST on the lines of EPFO.

7. Exempt supply of services by an old age home run by State / Central Government or by a body registered under 12AA of Income Tax Act) to its residents (aged 60 years or more) against consideration upto Rupees Twenty Five Thousand per month per member provided consideration is inclusive of charges for boarding, lodging and maintenance.

8. Exempt GST on the administrative fee collected by National Pension System Trust.

9. Exempt services provided by an unincorporated body or a non-profit entity registered under any law for the time being in force, engaged in activities relating to the welfare of industrial or agricultural labour or farmer; or for the promotion of trade, commerce, industry, agriculture, art, science, literature, culture, sports, education, social welfare, charitable activities and protection of environment, to own members against consideration in the form of membership fee up to an amount of one thousand rupees per member per year.

Banking/ Finance/ Insurance

10. Exempt Reinsurance Services provided to specified Insurance Schemessuch as Pradhan Mantri Rashtriya Swasthya Suraksha Mission (PMRSSM) (Ayushman Bharat), funded by Government.

Government Services

11. Exempt services provided by Government to ERCC by way of assigning the right to collect royalty, DMFT etc. from the mining lease holders.

12. Exempt the guarantees given by Central/State Government/UT administration to their undertakings/PSUs.

Miscellaneous
13. ExemptGST on import of services by Foreign Diplomatic Missions/ UN & other International Organizations based on reciprocity.

14. Exempt services supplied by an establishment of a person in India to any establishment of that person outside India, which are treated as establishments of distinct persons in accordance with Explanation I in section 8 of the IGST Act provided the place of supply is outside the taxable territory of India in accordance with section 13 of IGST Act

15. Prescribe GST rate slabs on accommodation service based on transaction value instead of declared tariff which is likely to provide major relief to the hotel industry.

16. Prescribe GST rate of 12% with full ITC under forward charge for composite supply of multimodal transportation.

17. Rationalize thenotificationentry prescribing reduced GST rate on composite supply of works contract received by the Government or a local authority in the course of their sovereign functions.

18. Rationalize entry relating to composite supply of food and drinks in restaurant, mess, canteen, eating joints and such supplies to institutions (educational, office, factory, hospital) on contractual basis at GST rate of 5%; and making it clear that the scope of outdoor catering under 7(v) is restricted to supplies in case of outdoor/indoor functions that are event based and occasional in nature.

 Clarifications

19. Supply of services provided by State and Central educational boards to students for conduct of examination will be clarified to be exempt.

20. To clarify that the courses run by private ITIs for designated trades are exempt under GST whereas non-designated courses are taxable.

21. To clarify that GST on premium paid by the Governments for implementing PradhanMantri Rashtriya Swasthya Suraksha Mission (PMRSSM) (Ayushman Bharat) is exempt from GST.

22. To provide clarification on applicability of Service Tax / GST on services rendered by an Indian Architect- Consultant in relation to immovable property located outside India to Indian Diplomatic Missions/Posts abroad.

23. To clarify to Auroville foundation that‘maintenance’ paid by it to Auroviliansis not liable to GST.

24. To insert an explanation in notification No. 13/2017-Central Tax(Rate) to define the term renting of immovable property.

25. To clarify that certain services such as “deposit works(expenses for providing electric line/plant)” related to distribution of electricity provided by DISCOM, attract GST.

Export / other trade facilitation measures

26. Extend the exemption granted on outward transportation of all goods by air and sea by another one year i.e. upto 30th September, 2019 as relief to the exporter of goods.

27. Place liability to pay GST on services provided by individual DSAs to banks/NBFCs under reverse charge on the buying banks/NBFCs. However, services by non-individual NBFCs (corporate, partnership firms) to banks/NBFCs would continue under forward charge, as at present.

 RECOMMENDS GST RATES REDUCTION ON SEVERAL GOODS &for specified handicraft items

GST rates have been recommended to be brought down to Nil on Sanitary Napkins &Rakhi& more Goods 

 Recommends for allowing refund to fabrics on account of inverted duty structure Rate change made in respect of footwear

      I. GST rates reduction on 28% items:

     A. 28% to 18%

• Paints and varnishes (including enamels and lacquers) 
• Glaziers’ putty, grafting putty, resin cements
• Refrigerators, freezers and other refrigerating or freezing equipment including water cooler, milk coolers, refrigerating equipment for leather industry, ice cream freezer etc.
• Washing machines.
• Lithium-ion batteries
• Vacuum cleaners
• Domestic electrical appliances such as food grinders and mixers & food or vegetable juice extractor, shaver, hair clippers etc
• Storage water heaters and immersion heaters, hair dryers, hand dryers, electric smoothing irons etc
• Televisions upto the size of 68 cm
• Special purpose motor vehicles. e.g., crane lorries, fire fighting vehicle, concrete mixer lorries, spraying lorries
• Works trucks [self-propelled, not fitted with lifting or handling equipment] of the type used in factories, warehouses, dock areas or airports for short transport of goods.
• Trailers and semi-trailers.
• Miscellaneous articles such as scent sprays and similar toilet sprays, powder-puffs and pads for the application of cosmetics or toilet preparations.

     

      B. 28% to 12% 

•  Fuel Cell Vehicle. Further, Compensation cess shall also be exempted on fuel cell vehicle. 

         

      II. Refund of accumulated credit on account of inverted duty structure to fabric manufacturers:Fabrics attract GST at the rate of 5% subject to the condition that refund of accumulated ITC on account of inversion will not be allowed. However, considering the difficulty faced by the Fabric sector on account of this condition, the GST Council has recommended for allowing refund to fabrics on account of inverted duty structure. The refund of accumulated ITC shall be allowed only with the prospective effect on the purchases made after the notification is issued.

     III. GST rates have been recommended to be brought down from,-


     A. 18%12%/5% to Nil:

     

• Stone/Marble/Wood Deities      
• Rakhi [other than that of precious or semi-precious material of chapter 71] 
• Sanitary Napkins, 
• Coir pith compost 
• Sal Leaves siali leaves and their products and Sabai Rope 
• PhoolBhariJhadoo [Raw material for Jhadoo] 
• Khali dona. 
• Circulation and commemorative coins, sold by Security Printing and Minting Corporation of India Ltd [SPMCIL] to Ministry of Finance.

      B. 12% to 5%:

• Chenille fabrics and other fabrics under heading 5801 
• Handloom dari 
• Phosphoric acid (fertilizer grade only). 
• Knitted cap/topi having retail sale value not exceeding Rs 1000

      C. 18% to 12%:

•  Bamboo flooring.
• Brass Kerosene Pressure Stove. 
• Hand Operated Rubber Roller.
• Zip and Slide Fasteners.

      D. 18% to 5%:

• Ethanol for sale to Oil Marketing Companies for blending with fuel.
• Solid bio fuel pellets 

     IV. Rate change made in respect of footwear

• 5% GST is being extended to footwear having a retail sale price up to Rs. 1000 per pair 
• Footwear having a retail sale price exceeding Rs. 1000 per pair will continue to attract 18% 

      V. GST rates have been recommended to be brought down for specified handicraft items              [as per the definition of handicraft, as approved by the GST -

      

      A. 18% to 12%:

     

• Handbags including pouches and purses; jewellery box.
•  Wooden frames for painting, photographs, mirrors etc.
•  Art ware of cork [including articles of sholapith] 
• Stone art ware, stone inlay work 
• Ornamental framed mirrors
•  Glass statues [other than those of crystal] 
• Glass art ware [ incl. pots, jars, votive, cask, cake cover, tulip bottle, vase ] 
• Art ware of iron Art ware of brass, copper/ copper alloys, electro plated with nickel/silver 
• Aluminium art ware.
• Handcrafted lamps (including panchloga lamp).
• Worked vegetable or mineral carving, articles thereof, articles of wax, of stearin, of natural gums or natural resins or of modelling pastes etc, (including articles of lac, shellac)
• Ganjifa card

     B. 12% to 5%:

• Handmade carpets and other handmade textile floor coverings (including namda/gabba) 
• Handmade lace 
• Hand-woven tapestries 
• Hand-made braids and ornamental trimming in the piece
• Toran

    VI. Miscellaneous Change relating to valuation of a supply:

• IGST @5% on Pool Issue Price (PIP) of Urea imported on Govt. account for direct agriculture use, instead of assessable value plus custom duty.
• Exemption from Compensation cess to Coal rejects from washery [arising out of cess paid coal on which ITC has not been taken]. 

    VII. Clarifications/amendments as regards applicability of GST rate in respect of certain                    goods recommended by GST Council which inter-alia includes:

   

      v. Milk enriched with vitamins or minerals salt (fortified milk) is classifiable under HS code                    0401 as milk and exempt from GST. 

      v. 5% GST on both treated (modified) tamarind kernel powder and plain (unmodified) tamarind              kernel powder. 

      v. Beet and cane sugar, including refined beet and cane sugar, (falling under heading 1701)                      attracts 5% GST rate. 

      v. Water supplied for public purposes (other than in sealed containers) does not attract GST. 

      v. Marine engine (falling under sub-heading 8408 10 93) attracts 5% GST rate. 

      v. Kota stone and similar stones [ other than marble and granite] other than polished will attracts             5% GST, while ready to use polished Kota stoneand similar stones will attracts 18%. 

      v. Certain other miscellaneous clarification as regards classification/rate have been recommended

    

[This note presents the decision of the GST Council in simple language for ease of understanding which would be given effect to through Gazette notifications/circulars which shall have force of law.]

GST council approves Simplified GST Return

The GST Council in its 28 meeting held here today under the Chairmanship of Shri PiyushGoyal , Union Minister for Railways , Coal , Finance & Corporate Affairs has approved the new return formats and associated changes in law. It may be recalled that in the 27 meeting held on 4 of May, 2018 the Council had approved the basic principles of GST return design and directed the law committee to finalize the return formats and changes in law. The formats and business process approved today were in line with the basic principles with one major change i.ethe option of filing quarterly return with monthly payment of tax in a simplified return format by the small tax payers. 

All taxpayers excluding small taxpayers and a few exceptions like ISD etc. shall file one monthly return. The return is simple with two main tables. One for reporting outward supplies and one for availing input tax credit based on invoices uploaded by the supplier. Invoices can be uploaded continuously by the seller and can be continuously viewed and locked by the buyer for availing input tax credit. This process would ensure that very large part of the return is automatically filled based on the invoices uploaded by the buyer and the seller. Simply put, the process would be “UPLOAD – LOCK – PAY” for most tax payers. 

Taxpayers would have facility to create his profile based on nature of supplies made and received. The fields of information which a taxpayer would be shown and would be required to fill in the return would depend on his profile. 

NIL return filers (no purchase and no sale) shall be given facility to file return by sending SMS. 

The Council approved quarterly filing of return for the small taxpayers having turnover below Rs. 5 Cr as an optional facility. Quarterly return shall be similar to main return with monthly payment facility but for two kinds of registered persons – small traders making only B2C supply or making B2B + B2C supply. For such taxpayers, simplified returns have been designed called Sahaj and Sugam. In these returns details of information required to be filled is lesser than that in the regular return. 

The new return design provides facility for amendment of invoice and also other details filed in the return. Amendment shall be carried out by filing of a return called amendment return. Payment would be allowed to be made through the amendment return as it will help save interest liability for the taxpayers. 93% of the taxpayers have a turnover of less than Rs 5 Cr and these taxpayers would benefit substantially from the simplification measures proposed improving their ease of doing business. Even the large taxpayers would find the design of new return quite user friendly.