The 50th GST Council meeting, led by Union Finance Minister Nirmala Sitharaman, was held on July 11, 2023, at Vigyan Bhawan, New Delhi. This meeting focused on rate decisions, clarifications, and recommendations related to GST on goods and services. In this blog post, we will delve into the highlights of the 50th GST Council meeting and explore the key takeaways.
1. Uncooked/unfried snack pellets: Rate reduced from 18% to 5%.
2. Fish soluble paste: Rate reduced from 18% to 5%.
3. Imitation zari threads/yarn: Rate reduced from 12% to 5%.
4. LD slag: Rate reduced from 18% to 5% to be at par with blast furnace slag and fly ash.
1. Dinutuximab (Quarziba) medicine imported for personal use.
2. Medicines and FSMP used in the treatment of rare diseases when imported by Centres of Excellence for Rare Diseases or any recommended person/institution.
Supply of raw cotton by agriculturists to cooperatives, including kala cotton, is taxable under reverse charge mechanism.
1. Raw cotton,
2. Matters related to trauma, spine and arthroplasty implants (prior to 18.07.2022).
3. Dessicated coconut (for the period 1.7.2017 to 27.7.2017).
4. Plates and cups made of areca leaves (prior to 01.10.2019).
5. Biomass briquettes (for the period 01.7.2017 to 12.10.2017).
GST cess has been increased from current 20 percent to 22 percent on MUVs that meet the specific criteria such as length exceeding 4000 mm, engine capacity exceeding 1500 cc, and a ground clearance of 170 mm and above (in an unladen condition).
It has been decided that on pan masala, tobacco products etc, where it is not legally required to declare the retail sale price, the earlier ad valorem rate as was applicable on 31st March 2023 may be notified in order for levy of Compensation Cess.
Note: Earlier, the government has extended the time for levy of GST compensation cess by nearly 4 years till March 31, 2026. As per the Goods and Services Tax (Period of Levy and Collection of Cess) Rules, 2022, notified by the Finance Ministry, the compensation cess will continue to be levied from July 1, 2022 to March 31, 2026.
It was decided to include RBL Bank and ICBC bank for IGST exemption on gold, silver, or platinum imports.
GST exemption on satellite launch services supplied by ISRO, Antrix Corporation Limited, and New Space India Limited (NSIL).
1. Elimination of the requirement for annual declaration filing.
2. Option exercise deadline changed to 31st March of the preceding financial year.
Clarification on non-taxability of services supplied by a director of a company to the company in their personal or private capacity.
It was decided that the food and beverages supplied in cinema halls will be taxable as a restaurant service if supplied independently of the cinema exhibition service and If clubbed together and the same satisfies the test of composite supply, the entire supply will attract GST at the rate applicable to the service of exhibition of cinema, the principal supply.
Last year, a Group of Ministers (GoM) was formed to address taxation concerns regarding casinos, horse racing, and online gaming under GST. In its second report, the GoM proposed that the GST Council decide whether to tax these activities at 28% on the full-face value of bets or on the Gross Gaming Revenue (GGR), due to the lack of a consensus.
It was decided in the 50th GST council meeting that a Uniform tax rate of 28% will be levied on casinos, horse racing, and online gaming activities.
1. Face value of chips purchased in the case of casinos.
2. Full value of bets placed with bookmakers/ totalisators in the case of horse racing.
3. Full value of bets placed in the case of online gaming.
In order to streamline GST compliances and enhance the efficiency of the system, the following measures were recommended during the 50th GST Council meeting:
For intra-state movement of gold and precious stones (Chapter 71): To ensure effective monitoring and control, the council mandated the generation of e-way bills for the intra-state transportation of gold and precious stones under Chapter 71 of the GST Act.
To address specific challenges faced by manufacturers in the sectors of tobacco, pan masala, and similar items, the council recommended the implementation of special procedures for registration and return filing.
To enforce compliance, the council proposed the insertion of Section 122A in the CGST Act, 2017, which would impose a special penalty for manufacturers of tobacco, pan masala, and similar items who fail to register their machines.
The council decided to restrict the IGST refund route for exports of tobacco, pan masala, mentha oil, and other similar items. This amendment will help ensure accurate and timely refunds.
The council recommended amendments to streamline GST registration procedures, which include:
1. Furnishing bank account details in the name and PAN of the registered person within 30 days of grant of registration or before filing Form GSTR-1/IFF, whichever is earlier.
2. System-based suspension of GST registration for taxpayers who fail to furnish a valid bank account within the specified time period.
3. Automatic revocation of system-based suspension upon compliance with bank account details submission.
4. Prohibiting taxpayers who have not furnished a valid bank account from filing their GSTR-1/IFF.
5. Eliminating the requirement of physical verification of business premises, except in high-risk cases.
6. Introducing risk-based biometric-based Aadhaar authentication for registration applicants, piloted in Puducherry.
The relaxations provided in FY 2021-22 in respect of various tables of Form GSTR-9 and 9C will be extended to FY 2022-23, offering relief to taxpayers in terms of compliance requirements.
Small taxpayers, with an aggregate annual turnover up to Rs. 2 crore, will be exempted from filing GSTR-9/9A for FY 2022-23, simplifying the compliance process for these businesses.
A circular will be issued to clarify that the ISD mechanism is not mandatory for the distribution of input tax credit (ITC) of common input services procured from third parties to distinct persons, alleviating any confusion regarding this aspect.
The council recommended the issuance of circulars to provide clarity on various issues, including the treatment of warranty replacements and repair services during the warranty period, refund-related matters, TCS liability for e-commerce operators (ECOs), and invoicing requirements for the supply of taxable services by/through an ECO or OIDAR supplier to an unregistered recipient.
The council proposed the extension of amnesty schemes for non-filing of Forms GSTR-4, GSTR-9, and GSTR-10, revocation of cancellation of registration, and deemed withdrawal of assessment orders until 31st August 2023. Additionally, the due dates for filing GSTR-1, GSTR-3B, and GSTR-7 for taxpayers in Manipur were extended until 31st August 2023, easing the compliance burden.
In conclusion, The significant decisions made by the 50th GST Council Meeting include rate reductions on specific goods, exemptions for medicines and imports, and a uniform tax rate of 28% for casinos, race courses, and online gaming. Streamlining measures were recommended for GST compliance, registration rules, and trade facilitation. The extension of amnesty schemes and due date extensions were proposed, along with the issuance of clarifying circulars. These decisions aim to simplify processes, enhance compliance, and provide clarity in the GST regime.