53rd GST Council Meeting: Important highlights for SMEs

On June 22 in New Delhi 2024, the GST Council held its 53rd meeting. Multiple recommendations were presented during the meeting to improve tax rates and service exemptions under the GST framework. Union Finance Minister Nirmala Sitharaman chaired the conference and discussed several measures to streamline GST application across commodities and services.

53rd GST council meeting key highlights.

Modifications to GSTR-1 will be accepted going forward within the same tax period: The GST Council has approved the creation of a new form, GSTR-1A, with the functionality to enable taxpayers to add or amend information missing from GSTR-1 of the current tax period (IFF) for the first and second months of the quarter before filing GSTR-3B.

GSTR-1 reporting for B2C supplies: The threshold of Rs. 2.5 lakh to Rs. 1 lakh will be the new threshold for reporting Business-to-Consumers (B2C) interstate supplies invoice-wise in Table 5 of GSTR-1.

Revision of GSTR-4 due date: An extension has been granted to the composition taxable persons' GSTR-4 reporting deadline, moving it from the current 30th of April to the 30th of June 2024 which would be applicable from FY 2024–2025,

TCS Rate Reduction: In accordance with Section 52(1) of the CGST Act, Electronic Commerce Operators (ECOs) were required to collect Tax Collected at Source (TCS) at 1% (0.5% each under CGST and SGST/1% under IGST) on net taxable supplies. Reducing this to 0.5% (0.25% under CGST, 0.25% under SGST/UTGST, and 0.5% under IGST) is advised.

Application of GSTR-9/9A filing: For the fiscal year 2023–2024, taxpayers with an annual revenue of up to Rs. 2 crore are not required to file an annual return in GSTR-9/9A.

Amendment to CGST Rule 88B: The GST Council has recommended not to charge interest on the amount available in the electronic cash ledger on the due date of filing GSTR-3B and is debited while filing the said return in cases of delayed filing of GSTR-3B.

Changes to Sections 73 and 74: A similar time restriction will be established for filing demand notifications and orders under both clauses, without distinguishing situations as fraud or non-fraud. The time restriction for taxpayers to seek the benefit of a lower penalty by paying the tax and interest will be extended from 30 to 60 days.

IGST Refund owing to upward price revisions after exports: A method is being developed to allow taxpayers to claim refunds for any additional IGST paid as a result of an upward revision in the price of goods after export.

No refund of IGST in specified cases: Where export duty is payable, IGST would not be repaid by modifying Sections 16 and 54. This applies to both exports and supplies to the SEZ unit/developer, whether or not tax is paid.

Biometric-based Aadhaar Authentication: Applicants who have chosen Biometric-based Aadhaar authentication at the GST Suvidha Kendra will be gradually rolled out for GST registration across India.

Section 122(1B) is to be amended: The amendment will take effect retrospectively on October 1, 2023, to clarify that penal provision applies only to e-commerce operators who are obligated to collect TCS under Section 52, not to other e-commerce operators.

Changes in GST Rates for Goods & Services.

1. The GST Council has now suggested a change to sub-section (1) of Section 9 of the CGST Act, 2017, to exempt Extra Neutral Alcohol from GST when used to make alcoholic liquor for human consumption.

2. A uniform rate of 12% is recommended for all milk cans (different materials), regardless of use.

3. A 12% GST is recommended on all carton boxes and cases of both corrugated and non-corrugated paper board (to assist J&K apple growers).

4. All forms of sprinklers, including fire water sprinklers, will attract 12%.All solar cookers, whether single or dual energy source, will be charged a 12% GST.

5. All solar cookers, whether single or dual energy source, will be charged a 12% GST.

6. Exemptions apply to services supplied by Indian Railways to the general public for the sale of platform tickets, cloak rooms, and battery-operated car services, as well as intra-railway goods.

7. Hostel housing is currently not exempt if provided outside of an educational institution. It is now exempted, just as it is within educational institutions. The measure of relief for students and working professionals is limited to Rs. 20,000 per person per month, provided service is delivered for a continuous period of 90 days, including privately owned hostels.

8. Taxation of horse racing and online gaming were not on the agenda.

9. A GoM will be formed to conduct a thorough analysis of GST on fertilisers.

10. The issue of establishing the GST rate on petrol and fuel was not discussed at this meeting.

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