Changes proposed in 37th GST Council Meeting held on 20th September 2019

Changes related to Annual Return (for MSME- s) - FY 2017-18 and 2018-19

Sl. No.

Proposal Category

Gist of the recommendations made by the GST Council

1

Waiver of filing Annual Return by Composition Taxpayers

Waiver in filing Annual Return by Composition taxpayers in Form GSTR 9A for the FY 2017-18 and 2018-19

2

Waiver of filing Annual Return by Regular Taxpayers (aggregate Turnover upto Rs 2 Crores)

Filing of Annual Return (in Form GSTR 9) for the FY 2017-18 and 2018-19 made optional for regular taxpayers having aggregate turnover upto Rs 2 crores

3

No change in filing GST Audit Report - in Form GSTR 9C

Taxpayers having aggregate turnover exceeding Rs 2 Crores shall be required to file Annual Return in Form GSTR 9 and GST Reconciliation Statement in Form GSTR 9C. There is no exemption provided to such tax payers.

4

Simplification of Annual Returns and Audit Report

A Committee of Officers to be constituted to examine the simplification of forms for Annual Return and Audit Report (Reconciliation Statement).

Changes related to GST Refunds

Sl. No.

Proposal Category

Gist of the recommendations made by the GST Council

1

Refund against Order

Refund claim procedure against favourable order in appeal or other forum to be notified.

2

Cases where NIL refund is already filed

Eligibility to file refund application in Form GST RFD - 01A for a period and category where NIL refund application is filed shall be notified.

3

Single Authority for Refund

Integrated Refund system for disbursement of refund by single authority to be introduced from 24th September 2019

4

Aadhar for refund

In principle decision taken to link Aadhar for Registration and Refund claims

The effect of the above recommendations to be given through relevant Circulars/ Notifications.

Recommendations on GST Returns and Proposed new Return filing system

Sl. No.

Proposal Category

Gist of the recommendations made by the GST Council

1

Restriction on availing ITC where returns for Outward Supply are not filed (GSTR 1)

GST Council, in order, to increase compliance of filing of GSTR 1 (return for outward supplies) has proposed a restriction in availing ITC by entities who do not file GSTR 1. This is to enhance the compliance of filing return of Outward Supplies in Form GSTR 1.

2

New Return system to be introduced from April 2020

Current return filing system of filing GSTR 1 and GSTR 3B to continue till March 2020. The new return filing system to be introduced from April 2020.

Other Recommendations of the Council

Sl. No.

Proposal Category

Gist of the recommendations made by the GST Council

1

Rescinding of Circular on Post Sales Discount

The Circular No 105/24/2019-GST dated 28.06.2019 issued for Post Sales Discounts is being rescinded ab-initio

2

Clarification regarding supply of ITeS Services)

Clarification regarding supply ITeS services (in supersession of Circular No. 107/26/2019-GST dated 18.07.2019) being made on own account or as intermediary

3

Issues related to fake invoicing and fraudulent refunds

In principle decision on reasonable restrictions on passing of credit by risky taxpayers including risky new taxpayers has been discussed.

Changes in GST Rates on Goods and Services  -

S. No

Item

Current Rate

New Rate

1

Dried Tamarind

5%

NIL

2

Plates and Cups made of Leaves/ flowers/ bark

5%

NIL

3

Cut and Polished semi-precious Stones

3%

0.25%

4

Wet Grinders (stone as a grinder)

12%

5%

5

Outdoor Catering

18%

5% (no ITC)

6

Polypropylene/Polyethylene Woven and Non- Woven Bags and sacks

5%/12%/18%

12%

7

Parts of Slide Fasteners

18%

12%

8

Caffeinated Beverages

18%

28% + 12% (Cess)

9

Railway Wagons, Coaches and Rolling Stocks

5%

12% (no refund of accumulated ITC)

10

Marine Fuel 0.5% (FO)

18%

5%

11

Specified goods for Petroleum Operations under Hydrocarbon Exploration Licensing Policy (HELP)

Applicable Rate

5%

12

Almond Milk

-

18%

13

Parts and Accessories for medical device (under CH 9018, 9019, 9021 or 9022)

18%/ 12%/ NIL

12%

14

Parts like Solar evacuation tubes for Solar Water Heater, Solar System, generation systems

-

5%

15

Mechanical sprayers (CH 8424)

12%

5%

16

Hotels (Room tariff from Rs 1001 to 7500)

18%

12%

17

Hotels (Room tariff Rs 7501 or above)

28%

18%

18

Diamond Job Work

5%

1.5%

19

Other Job Work (Other than Bus Body building Jw)

18%

12%

20

Job Work - Bus Body building

18%

18%

Reduction in Cess on Motor Vehicles -

S. No

Item

Current Rate of Cess

New Rate of Cess

1

Petrol Motor Vehicles (capacity 10-13 passengers) Engine Cap - 1200 cc and Length - 4000 mm   

15%

1%

2

Diesel Motor Vehicles (capacity 10-13 passengers) Engine Cap - 1500 cc and Length - 4000 mm

15%

3%

Exemption/ Reduction/ Clarification in GST Rate - Goods or Services

Sl. No

Service Category

Decision taken by the GST Council

1

Prospective Exemption - Warehousing

• Services of storage or warehousing of cereals, pulses, fruits, nuts and vegetables, spices, copra, sugarcane, jaggery, raw vegetable fibres such as cotton, flax, jute etc., indigo, unmanufactured tobacco, betel leaves, tendu leaves, rice, coffee and tea

2

Transportation

• Increase the validity of conditional exemption of GST on Export Freight by air or sea for one more year (i.e. till 30.09.2020)

3

Export Promotion

• Exemption on services provided by an intermediary to a supplier of goods or recipient of goods when both the supplier and recipient are located outside the taxable territory.

4

Royalty Paid to Authors

• Option to be given to the registered authors to pay GST on royalty charged from publishers under forward charge and observe regular GST compliance.

Services brought under RCM

Sl. No

Service Category

Decision taken by the GST Council

1

Securities Lending Services (Note 1)

RCM on payment of GST payment on securities lending service under RCM at the merit rate of 18%. Also clarified that GST on securities lending service for period prior to RCM period shall be paid on forward charge basis. IGST shall be payable on supply of these services and in cases where CGST/SGST/UTGST have been paid, such taxpayers will not be required to pay tax again

2

RCM on Renting of Vehicles

RCM to Suppliers paying GST @ 5% on renting of vehicles, from registered person other than body corporate (LLP, proprietorship) when services provided to body corporate entities.