Proposed changes in enactment
1. Insertion of Section 128A in the CGST Act, 2017 to provide for conditional waiver of interest or penalty or both on full payment of tax demand before March 31, 2025, raised in notices issued under Section 73 for FY 2017-18 to FY 2019-20 The waiver does not apply to demands for erroneous refunds.
HNA comments: Positive move by the government to address the genuine concerns of many taxpayers, especially in the earlier years of GST implementation. The benefit is confined only to Section 73 cases, though many cases are adjudicated by Department 74 incorrectly. Benefits should be allowed in such cases as well. It would further require that a refund be claimed for the past period where interest or penalty has already been paid, whether pending writs, appeals, etc. are required to be withdrawn, etc. Benefits should have been given in refund cases as well.
Action Points: Identify all open cases at various levels, i.e., audits, SCNs, appeals, writs, etc., to strategize the next course of action. Evaluate the merit of the case, the quantum of liability vs. saving on interest or penalty, etc., to make a final decision.
2. Monetary limits have been fixed for filing appeals under GST by the Revenue Department in the following manner:
- GSTAT: Rs.20,00,000
- High Court: Rs. 1,00,00,000
- Supreme Court: Rs. 2,00,00,000
HNA comments: Currently, no monetary limit is provided under Section 120. This is a welcome move to reduce mounting litigation. Have been in line with the policy of the government under the past indirect tax regime as well. However, there is a likelihood that the amendment would have a specific mention that non-filing of an appeal by the Department on monetary limits shall not be considered a legal precedent. Also, based on past experience, it is likely that some of the issues, i.e., valuation, classification, place of supply, etc., having wider ramifications, may be litigated by the department, irrespective of the amount involved.
Action Points: In cases of recurring issues, small businesses could benefit, as liability in many cases would likely be below the threshold.
3. The pre-deposit for filing appeals under GST is to be reduced as follows:
a. The maximum pre-deposit for filing an appeal with the appellate authority has been reduced from Rs. 25 crore CGST and SGST each to Rs. 20 crore CGST and SGST each.
b. The pre-deposit for filing an appeal with the Appellate Tribunal has been reduced from 20% with a maximum amount of Rs. 50 crores in CGST and SGST each to 10% with a maximum of Rs. 20 crores in CGST and SGST each.
HNA comments: A reduction in the amount of pre-deposit would ease the working capital burden on taxpayers; though, considering various frivolous matters being litigated by the department, the limit could have been lower for the initial 3–4 years of GST implementation.
4. Amendment proposed in Section 9(1) of the CGST Act, 2017 to exclude from the levy of GST the supply of extra neutral alcohol used for the manufacture of alcoholic liquor for human consumption.
HNA comments: This would directly reduce the cost of manufacturing liquor for human consumption. However, ENA for industrial usage would continue to be liable for GST. It would be interesting to see whether amendments are brought retrospectively or prospectively, as many cases are in dispute at various levels.
5. The TCS rate has been reduced to 0.5% from the present 1% to ease the financial burden on the suppliers making supplies through ECOs.
HNA comments: Many suppliers end up claiming refunds of amounts lying unutilized in their electronic cash ledger on account of TCS deductions by E-com. The proposed move would possibly reduce the requirement of claiming refunds from such suppliers.
6. Section 112 of the CGST Act, 2017 to be amended to allow the three-month period for filing appeals before the Appellate Tribunal to start from a date to be notified by the government in respect of appeal or revision orders passed before the date of said notification.
HNA comments: The time limit for filing an appeal before the Tribunal within 3 months of the President of GSTAT entering into office as per Circular No. 132/2/2020. GST had gained a lot of interpretation issues since the assumption of office by the Tribunal president. Technically, there was a need to file an appeal within 3 months of such a date; it had been practically impossible on account of the non-constitution of state benches, the non-availability of an online or offline filing system, and the absence of rules and procedures for filing an appeal. Now, the filing timeline would count from the date of notification to be issued by the government in the future in this regard.
Action Points: Without waiting for the notification, the businesses should get the appeals prepared for filing before the tribunal to avoid a last-minute rush.
7. Relaxation in condition for availment of ITC under Section 16(4) of the CGST Act, 2017:
a) The time limit to avail input tax credit in respect of any invoice or debit note under Section 16(4) of the CGST Act, through any return in FORM GSTR 3B filed up to November 30, 2021, for the financial years 2017–18, 2018–19, 2019–20, and 2020–21, may be deemed to be November 30, 2021.
HNA comments: Better late than never. This is a big relief for many taxpayers who could not file GSTR-3B within the statutory due date in the initial period of GST implementation. All pending matters are to be closed once the amendment is made to the Act. In the case of taxpayers who had already paid or reversed the credit in the department proceedings, they should be given the opportunity for a refund (though the possibility appears very bleak as all GST amnesties have been without refund benefits).
b) Retrospective amendment to be made in Section 16(4) of the CGST Act, w.e.f. July 1, 2017, to conditionally relax the applicability of the provision in cases where returns for the period from the date of cancellation of registration or the effective date of cancellation of registration till the date of revocation of cancellation of the registration are filed by the registered person within thirty days of the order of revocation.
HNA comments: Businesses should not be penalized for not being able to file returns during the cancellation period. Welcome move to provide that restriction of Section 16(4) would not be applicable where returns could not be filed due to registration of cancellation.
8. Change in due date for filing of return in FORM GSTR-4 for composition taxpayers from 30 April to 30 June following the end of the financial year. This will apply for returns for the financial year 2024–25 onwards.
HNA comments: Beneficial for small taxpayers as they would be getting some more time to file returns.
9. Rule 88B of the CGST Rules to be amended to provide that an amount that is available in the Electronic Cash Ledger on the due date of filing the return in FORM GSTR-3B and is debited while filing the said return shall not be included while calculating interest under Section 50 of the CGST Act in respect of the delayed filing of the said return.
HNA comments: Trade facilitation move by the GST Council wherein unnecessary interest burden would not be there for taxpayers who had the balance in electronic cash ledger but could not file return timely. This is also in line with the ruling of the Madras HC in the case of Eicher Motors Limited, which held that GST deposited in the E-Cash Ledger would amount to payment to the government and interest cannot be levied merely because GSTR-3B was not filed.
Action Points: In case of any ongoing dispute in such a matter, re-examine the interest liability, considering the total balance available in the electronic cash ledger as well as the electronic credit ledger. If interest has already been paid in the past, wait for the amended rule to evaluate if any restrictions are imposed on claiming refunds. If restrictions are imposed, the possibility of a refund may still be considered and pursued through court proceedings.
10. A new Section 11A in the CGST Act, 2017 to be inserted to give powers to the government, on the recommendations of the Council, 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.
HNA comments: A new provision was introduced to overcome the legislative lacuna. Many amnesty benefits have been given by the government over the period on an “as is, where is” basis, even if there were no statutory powers for the government to do it. Insertion of a new section would validate and empower the government to take such steps. In line with similar provisions under the Central Excise and Customs Act. The section should clearly provide for the grant of refunds subject to enjust enrichment in cases where taxes have been paid in the past voluntarily or consequently to some legal proceedings.
11. The GST Council recommended prescribing a mechanism for claiming refunds of additional IGST paid on account of an upward revision in the price of the goods subsequent to their export.
HNA comments: There may be an upward revision in the export prices wherein original exports were made on payment of taxes. There is no automated system to claim refunds of taxes on such an upward revision in the export price. The Council may provide for manual filing of refund claims by developing a new form or utility or claiming the refund under “any other category." The time limit for such a refund should be the same as provided under Section 54, i.e., within 2 years of the relevant date.
Action Points: Evaluate if any past export price escalations have resulted in the blockage of taxes due to the non-processing of refunds thereon. The refund should be filed for all such past cases, and a system or process should be developed for claiming such refunds in the future through the new route.
12. Section 140(7) of the CGST Act is to be amended retrospectively w.e.f. July 1, 2017 to provide for transitional credit in respect of invoices pertaining to services provided before the appointed date and where invoices were received by the input service distributor (ISD) before the appointed date.
13. The Council recommended providing a new optional facility by way 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 their return in FORM GSTR-3B for the said tax period.
HNA comments: Result of the continuous efforts of the council in plugging the tax leakage through improvised compliance processes. The new Form GSTR-1A would permit the taxpayers to make suitable amendments to liabilities declared in GSTR-1 without waiting for next month's GSTR-1. This would make sure that the liability declared in R-1 and R-1A matches the liability in GSTR-3B.
Action Points: Redefine the business compliance process to integrate the GSTR-1A into the system to report such transactions. All GSP-ASPs would need to integrate new features into their systems at the earliest.
14. Filing of annual return in FORM GSTR-9/9A for FY 2023–24 may be exempted for taxpayers having aggregate annual turnover up to two crore rupees.
HNA comments: In line with earlier years relaxation for small taxpayers.
15. Section 122(1B) of the CGST Act is to be amended retrospectively w.e.f. October 1, 2023, so as to clarify that the said penal provision is applicable only to those e-commerce operators who are required to collect tax under Section 52 of the CGST Act and not for other e-commerce operators.
HNA comments: There is no TCS mandate on e-commerce operators in respect of supplies made by unregistered or composition supplier taxpayers through such e-commerce. Also, in respect of e-commerce operators who only provide for the platform but do not collect consideration on behalf of suppliers, they are also not required to deduct TCS. The amended provision aims to rectify an anomaly in the language to make sure that there are no penal implications for operators who are not required to collect TCS. It should have retrospective application.
16. The Council recommended an amendment to Rule 142 of the CGST Rules and the issuance of a circular to prescribe a mechanism for the adjustment of an amount paid in respect of a demand through FORM GST DRC-03 against the amount to be paid as a pre-deposit for filing an appeal.
HNA comments: Presently, there is no system to consider the amount paid through DRC-03 earlier or during the appeal filing stage against the pre-deposit required to be made for the filing of appeals. This creates an extra burden for the taxpayer to pay an additional pre-deposit. The proposed mechanism aims at linking the amount paid through DRC-03 at any stage as a valid payment for making a pre-deposit for filing an appeal.
There are many other issues with respect to the filing of DRC-03. It is expected to get clarifications on such other issues as well.
17. Amendments in Section 73 and Section 74 of the CGST Act, 2017 and insertion of a new Section 74A in the CGST Act to provide for a common time limit for the issuance of demand notices and orders from FY 2024–25, irrespective of whether the case involves fraud, suppression, willful misstatement, etc., or not. Also, the time limit for the taxpayers to avail themselves of the reduced penalty by paying the tax demanded along with interest has been recommended to be increased from 30 days to 60 days.
HNA comments: Historically, since the time of the erstwhile indirect taxation law, there have always been differences in the treatment of bona fide and wilful defaulter cases. One of the bases of such differentiation was to provide a higher time limit to initiate cases against defaulting taxpayers. Similar provisions existed under Sections 73 and 74 of the GST..
The proposed amendment eliminates the distinction between both categories of taxpayers, thus leaving the uncertainty open for a longer period for genuine taxpayers. Also, treating both types of taxpayers under the same category may be challenged before courts in the time to come.
The Council should make sure that even in the new provisions, differential treatments are given for penalty amounts for bona fide and other categories of taxpayers.
An increase in the time limit from 30 days to 60 days is a welcome move, as it would give sufficient time for the businesses to evaluate whether the penalty should be paid in order to close the case.
18. The Council recommended amendments in sections 171 and 109 of the CGST Act, 2017 to provide a sunset clause for anti-profiteering under GST and to provide for the handling of anti-profiteering cases by the principal bench of the GST Appellate Tribunal (GSTAT).
HNA comments: Anti-profiteering provisions are no longer relevant after 7 years of GST implementation. The proposal aims to provide for the sun-set clause in such anti-profiteering cases. Moreover, the disposal of anti-profiteering matters presently handled by CCI is proposed to be transferred to the GSTAT principal bench.
19. Amendment in Section 16 of the IGST Act and Section 54 of the CGST Act to curtail the refund of IGST in cases where export duty is payable.
HNA comments: Presently, refunds are restricted under the LUT route in respect of goods subjected to export duty. However, the plain reading of the section does not make any disentitlement for claiming refund under the automated route for the goods subjected to export duty. Based on the language of the press release, it appears that the restriction might be imposed on claiming refunds under the automated route as well, so that there is no distinction between the two categories of exports.
Moreover, the goods, when sold to the SEZ, may also be subject to export duty in some cases. Hence, the proposed provision aims to deny refunds for supplies made to SEZ as well.
The proposal would require amendments to the GST Act.
Action Points: All past exports should be evaluated to determine if refund claims should be filed, unless already filed, to ensure that the refund is not barred once new provisions are implemented.
20. The threshold for reporting 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.
HNA comments: Reporting of high-value B2C supplies ensures the tracking of parties to transactions and ensures revenue accrues to the correct states based on place of supply principles. Reducing the threshold limit for such reporting would increase the compliance burden for taxpayers, but it would ensure a better and more transparent reporting system.
21. The Council recommended that returns in Form GSTR-7, to be filed by the registered persons who are required to deduct tax at source under Section 51 of the CGST Act, be filed every month, irrespective of whether any tax has been deducted during the said month or not. It has also been recommended that no late fee may be payable for delayed filing of the Nil Form GSTR-7 return. Further, it has been recommended that invoice-wise details be furnished in the said Form GSTR-7 return.
22. The GST Council recommended rolling out the biometric-based Aadhaar authentication of registration applicants on a pan-India basis in a phased manner.
HNA comments: Aadhar-based authentication would be rolled out throughout the country for GST implementation after the implementation of the same in Gujarat. However, genuine taxpayers have faced a lot of issues in Gujarat in getting registrations under the Aadhar authentication scheme. Hopefully, genuine taxpayers will not face similar issues when implemented the same way across the country.
Circulars to be issued on the following areas of ambiguity
23. The Council recommends to clarify that in cases where the foreign affiliate is providing certain services to the related domestic entity, for which full input tax credit is available to the said related domestic entity, the value of such supply of services declared in the invoice by the said related domestic entity may be deemed as open market value in terms of the second proviso to Rule 28(1) of the CGST Rules. Further, in cases where full input tax credit is available to the recipient, if the invoice is not issued by the related domestic entity with respect to any service provided by the foreign affiliate to it, the value of such services may be deemed to be nil and may be deemed to be open market value in terms of the second proviso to Rule 28(1) of the CGST Rules.
HNA comments: Industry issues of paying GST liability under RCM on usage of brand names, outsourced manpower by foreign holding companies, and many other intangible services have been put to rest by clarifying that any valuation adopted by an Indian taxpayer for paying RCM liability would be accepted if it is entitled to avail ITC. It would be interesting to see if the benefit of a cross-charge circular to even permit zero value would also be extended in this case.
The real challenge would be determining the valuation of supply in cases where the recipient is not entitled to avail of ITC.
24. The Council recommended clarifying that input tax credit is not restricted in respect of ducts and manholes used in networks of optical fiber cables (OFCs), under clause (c) or clause (d) of sub-section (5) of Section 17 of the CGST Act.
HNA comments: There was an industry issue as to whether these items constitute immovable property and thus are not entitled to ITC, or whether they should be considered plant and machinery and thus eligible for ITC. The Council appears to have taken the view that these items are plants and machinery, and thus ITC is eligible thereon.
25. The Council recommended clarifying that the place of supply of custodial services supplied by Indian banks to foreign portfolio investors is determinable as per Section 13(2) of the IGST Act, 2017.
26. The GST Council recommended amendment of Rule 28(2) of the CGST Rules retrospectively with effect from October 26, 2023, and the issuance of a circular to clarify various issues regarding the valuation of services provided by corporate guarantees. between related parties. It is being clarified, inter alia, that valuation under Rule 28(2) of the CGST Rules would not be applicable in the case of the export of such services or where the recipient is eligible for full input tax credit.
HNA comments: Welcome proposal, as there were many ambiguities on corporate guarantee. There is no GST liability on CG given outside India. There is no need to follow the 1% valuation provision where the recipient is eligible for full ITC. The council should also clarify the taxability where the recipient is not eligible for ITC, the valuation in the case of multiple guarantors, the liability where CG is given but the loan facility is not enjoyed by the borrower, whether 1% is payable annually or over the life of the CG, the retrospective applicability of the 1% rule, etc.
27. The Council recommended clarifying that in cases of supplies received from unregistered suppliers, where tax has to be paid by the recipient under the reverse charge mechanism (RCM) and the invoice is to be issued by the recipient only, the relevant financial year for the calculation of the time limit for the availment of input tax credit under the provisions of Section 16(4) of the CGST Act is the financial year in which the invoice has been issued by the recipient.
HNA comments: Suppose a supply liable to RCM is received in 2019–20, but the taxpayer pays the tax under RCM thereon in 2023–24, along with interest during the department audit. There was confusion as to whether the time limit of 16 (4) days would be applicable in such a case and whether taxpayers would be entitled to claim ITC therefor. The Council has clarified that the time limit in such a case would be applicable from the date of raising the self-invoice, i.e., the date of payment of tax liability. Hence, all past disputes would be resolved.
The Council should have extended a similar benefit to supplies received from registered suppliers, where the recipient is liable to pay RCM.
Action Points: All undischarged RCM liabilities from earlier years should be paid along with interest and a self-invoice raised so that the ITC on the same may be claimed. Also, in respect of RCM liabilities already paid in the course of scrutiny or audit proceedings, the benefit of the proposed clarification should be evaluated.
28. Clarification on the taxability of re-imbursement of securities or shares as ESOP, EPSP, or RSU provided by a company to its employees
HNA comments: We have consistently taken the view that the issuance of shares under the ESOP scheme by the company to its employees or employees of a subsidiary company is not liable to GST as the transactions in securities are treated outside GST. However, if any additional charges are collected between companies for the management or facilitation of such facilities, GST should be applicable. It would be interesting to see the view of the GST Council on the matter.
29. Clarification on the requirement of reversal of input tax credit in respect of the amount of premium in life insurance services, which is not included in the taxable value as per Rule 32(4) of the CGST Rules.
HNA comments: Life insurance companies had received a GST notice on the allegations that a portion of the premium on which GST is not payable under Rule 32 (4) are treated as exempted supplies, and thus there is a need for reversal of ITC to the extent of such turnover. LIC itself had received a GST notice of Rs 806 crore. The view taken by the department was not correct, as the exclusion of certain portions of consideration from valuation for the purpose of levying GST cannot be said to be exempted or non-taxable supplies, and thus there cannot be any ITC reversal requirement on the same. A similar view existed in the service tax regime, where abatement was claimed on certain services from paying service tax.
The view of the Council is yet to be awaited; however, in our view, the above interpretation should be in line with the provisions of the law, and accordingly, the insurance companies should get relief on such a matter.
A similar industry dispute has been in the real estate segment, where departments in initial periods have taken the view that a 1/3 deduction towards the value of land is exempted supplies and thus requires ITC reversal. The clarification on insurance business would equally be applicable to other similar sectors as well.
30. Clarification on the taxability of wreck and salvage values in motor insurance claims
HNA comments: The press release is not giving any clarity on the issue. However, it is expected that the confusion on the taxability of salvage value in different types of insurance contracts will be clarified to avoid interpretational ambiguities.
31. Clarification in respect of the warranty or extended warranty provided by manufacturers to end customers
HNA comments: Circular No. 195/07/2023 clarified various aspects of warranty and extended warranty. There have been certain instances that were not addressed in the earlier circular. It is expected that such scenarios have been clarified through the circular.
32. Clarification regarding the availability of input tax credit on repair expenses incurred by the insurance companies in the reimbursement mode of settlement of motor vehicle insurance claims.
HNA comments: Insurance companies receive invoices from the authorized service center in case of cashless claims and avail ITC thereon. However, in the case of the reimbursement model, the invoice is originally received by the insured, who claims reimbursement from the insurance company, fully or partially, depending upon the
terms and conditions of the policy. There has been an ongoing interpretational issue about whether insurance companies can avail themselves of ITC in such cases. We are of the view that the insurance company can avail of ITC so long as invoices are covered under the insurance policy, to the extent of the claim reimbursed by them. However, the press release does not give any clarity on the same. The council is expected to resolve this issue.
33. Clarification on the taxability of loans granted between related persons or between group companies.
HNA comments: In certain cases, it has been observed that the department has been imposing GST liability on the activity of extending loans, even though the activity of extending loans, etc. is covered by the exemption notification. The circular is expected to clarify this issue as well.
34. Clarification on time of supply on ancillary payments under HAM projects.
35. Clarification regarding time of supply with respect to the allotment of Spectrum to Telecom companies in cases where payment of the license fee and Spectrum usage charges is to be made in instalments.
36. Clarification relating to the place of supply of goods supplied to unregistered persons where the delivery address is different from the billing address
37. Clarification on the mechanism for providing evidence by the suppliers for compliance with the conditions of Section 15(3)(b)(ii) of the CGST Act, 2017 in respect of post-sale discounts, to the effect that input tax credit has been reversed by the recipient on the said amount.
HNA comments: Section 15, read with Section 34, provides that the supplier can claim an adjustment of liability in the event of the issuance of credit notes, provided the recipient is reversed ITC. There is no mechanism to determine if the recipient has reversed ITC or not. The Rajasthan High Court, in the case of Hindustan Unilever Ltd. v. Union of India, has instructed the GST Council to prescribe the manner in which such a determination can be made by the supplier. It is expected that the Council will come up with the procedural manner in which the supplier should ascertain the reversal of ITC by the customer.
The mechanism could possibly increase the compliance burden for the taxpayer unless it is verified through the present return filing compliance mechanism.
It would also be interesting to see if the proposed clarifications would have retrospective effect or not.
38. Clarifications on various issues pertaining to special procedures for the manufacturers of the specified commodities, like pan masala, tobacco, etc.
Rate Rationalization: Changes in GST rates of goods
1. A uniform rate of 5% IGST will apply to imports of ‘Parts, components, testing equipment, tools, and toolkits of aircraft, irrespective of their HS classification, to provide a fillip to MRO activities subject to specified conditions.
2. All milk cans (of steel, iron, and aluminum), irrespective of their use, will attract 12% GST.
3. GST rate on ‘carton, boxes, and cases of both corrugated and non-corrugated paper or paperboard’ (HS 4819 10; 4819 20) to be reduced from 18% to 12%.
4. All solar cookers, whether single or dual energy sources, will attract 12% GST.
5. To amend the existing entry covering poultry keeping machinery attracting 12% GST to specifically incorporate “parts of poultry keeping machinery” and to regularize past practice on an ‘as is, where is’ basis in view of genuine interpretational issues.
6. To clarify that all types of sprinklers, including fire water sprinklers, will attract 12% GST, and to regularize the past practice on an ‘as is, where is’ basis in view of genuine interpretational issues.
7. To extend the IGST exemption on imports of specified items for defense forces for a further period of five years until June 30, 2029.
8. To extend the IGST exemption on imports of research equipment and buoys imported under the Research Moored Array for African-Asian-Australian Monsoon Analysis and Prediction (RAMA) program, subject to specified conditions.
9. To exempt Compensation Cess on the imports in SEZ by SEZ Unit/developers for authorized operations w.e.f. 01.07.2017.
10. To exempt compensation cess on supply of aerated beverages and energy drinks to authorized customers by Unit Run Canteens under the Ministry of Defense.
11. To provide an ad hoc IGST exemption on imports of technical documentation for AK-203 rifle kits imported for Indian defense forces.
HNA comments: The clarifications on these rates would be on the basis of recommendations by GoM in response to the industry representations.
Changes in rates of services
12. To exempt the services provided by Indian Railways to the general public, namely, the sale of platform tickets, the facility of retiring rooms or waiting rooms, cloak room services, and battery-operated car services, and to also exempt the intra-railway transactions. The issue for the past period will be regularized from October 20, 2023, to the date of the exemption notification in this regard.
HNA comments: The Council, in its 52nd meeting, had proposed a levy of GST under the forward charge mechanism. The Council has extended exemption benefits to certain services that are ultimately provided to end users so that rail travel can be made affordable.
13. To exempt GST on the services provided by Special Purpose Vehicles (SPV) to Indian Railway by way of allowing Indian Railway to use infrastructure built and owned by SPV during the concession period and maintenance services supplied by Indian Railways to SPV. The issue for the past will be regularized on an ‘as is, where is’ basis for the period from July 1, 2017 until the date of the exemption notification in this regard.
14. To create a separate entry in notification No. 12/2017-CTR 28.06.2017 under heading 9963 to exempt accommodation services having a value of supply of accommodation up to Rs. 20,000 per month per person, subject to the condition that the accommodation service is supplied for a minimum continuous period of 90 days. To extend a similar benefit to past cases.
HNA comments: An earlier exemption was available for stays in PGs, guest houses, etc. where tariff charges per day were less than Rs 1,000. However, with the withdrawal of this exemption, there was confusion as to whether exemptions could be claimed by hostels, PGs, etc. by treating them as renting residential dwellings.
The Council has now extended the benefit to such hostels, PGs, etc. where the total amount charged is less than Rs. 20,000 per month and the total period of stay is at least 90 days. This is going to give a lot of relief to this industry and to students and alumni who migrate to bigger cities for education or jobs.
15. A co-insurance premium apportioned by the lead insurer to the co-insurer for the supply of insurance services by the lead and co-insurer to the insured in coinsurance agreements may be declared as no supply under Schedule III of the CGST Act, 2017, and past cases may be regularized on an ‘as is, where is’ basis.
16. Transactions of the ceding commission or re-insurance commission between insurer and reinsurer may be declared as no supply under Schedule III of the CGST Act, 2017, and past cases may be regularized on an ‘as is, where is’ basis.
17. GST liability on reinsurance services of specified insurance schemes covered by Sr. Nos. 35 and 36 of notification No. 12/2017-CT (Rate) dated June 28, 2017 may be regularized on an ‘as is, where is’ basis for the period from July 1, 2017 to January 24, 2021.
18. GST liability on reinsurance services of the insurance schemes for which a total premium is paid by the government and that are covered under Sr. No. 40 of notification No. 12/2017-CTR dated June 28, 2017 may be regularized on an ‘as is, where is’ basis for the period from July 1, 2017 to July 26, 2018.
19. To issue clarification that retrocession is 're-insurance of re-insurance' and therefore eligible for the exemption under Sl. No. 36A of the notification No. 12/2017-CTR dated June 28, 2017.
HNA comments: All clarifications for the insurance sector are going to give big relief to the sector and would do away with the industry demands of almost Rs. 5,000 crore.
20. To issue clarification that statutory collections made by the Real Estate Regulatory Authority (RERA) are exempt from GST as they fall within the scope of entry 4 of No. 12/2017-CTR dated June 28, 2017.
21. To issue clarification that further sharing of the incentive by acquiring banks with other stakeholders, where the sharing of such incentive is clearly defined under the incentive scheme for promotion of RuPay debit cards and low-value BHIM-UPI transactions and is decided in the proportion and manner by NPCI in consultation with the participating banks, is not taxable.
Disclaimer: The note has been prepared based on the press release dated June 22, 2024, published by the PIB with the title ‘Recommendation of the 53rd GST Council Meeting’ and the clarification provided by the GST Council during the press conference held on June 22, 2024. Further clarity would emerge once the relevant notifications and circulars were issued.
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