06/29/2022 | Press release | Distributed by Public on 06/29/2022 06:47
The 47th GST Council met under the Chairmanship of Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman here in Chandigarh today. The meeting was also attended by Union Minister of State for Finance Shri Pankaj Choudhary besides Finance Ministers of States & UTs and senior officers of the Ministry of Finance & States/ UTs.
The GST Council has inter-alia made the following recommendations relating to changes in GST rates on supply of goods and services and changes related to GST law and procedure:
I. Recommendations relating to GST rates on goods and services
A. Rate Rationalization to remove inverted duty structure [Approval of recommendations made by GoM on rate rationalization]
S. No. |
Description |
From |
To |
|
GOODS |
||||
Printing, writing or drawing ink |
12% |
18% |
||
Knives with cutting blades, Paper knives, Pencil sharpeners and blades therefor, Spoons, forks, ladles, skimmers, cake-servers etc |
12% |
18% |
||
Power driven pumps primarily designed for handling water such as centrifugal pumps, deep tube-well turbine pumps, submersible pumps; Bicycle pumps |
12% |
18% |
||
Machines for cleaning, sorting or grading, seed, grain pulses; Machinery used in milling industry or for the working of cereals etc; Pawan Chakki that is Air Based Atta Chakki; Wet grinder; |
5% |
18% |
||
Machines for cleaning, sorting or grading eggs, fruit or other agricultural produce and its parts, Milking machines and dairy machinery |
12% |
18% |
||
LED Lamps, lights and fixture, their metal printed circuits board; |
12% |
18% |
||
Drawing and marking out instruments |
12% |
18% |
||
Solar Water Heater and system; |
5% |
12% |
||
Prepared/finished leather/chamois leather / composition leathers; |
5% |
12% |
||
Refund of accumulated ITC not to be allowed on flowing goods:
|
||||
Services |
||||
Services supplied by foreman to chit fund |
12% |
18% |
||
Job work in relation to processing of hides, skins and leather |
5% |
12% |
||
Job work in relation to manufacture of leather goods and footwear |
5% |
12% |
||
Job work in relation to manufactureof clay bricks |
5% |
12% |
||
Works contract for roads, bridges, railways, metro, effluent treatment plant, crematorium etc. |
12% |
18% |
||
Works contract supplied to central and state governments, local authorities for historical monuments, canals, dams, pipelines, plants for water supply, educational institutions, hospitals etc. & sub-contractor thereof |
12% |
18% |
||
Works contract supplied to central and state governments, union territories & local authorities involving predominantly earthwork and sub-contracts thereof |
5% |
12% |
||
B. Other GST rate changes recommended by the Council
S. No. |
Description |
From |
To |
Goods |
|||
Ostomy Appliances |
12% |
5% |
|
Orthopedic appliance- Splints and other fracture appliances; artificial parts of the body; other appliances which are worn or carried, or implanted in the body, to compensate for a defect or disability; intraocular lens |
12% |
5% |
|
Tetra Pak (Aseptic Packaging Paper) |
12% |
18% |
|
Tar (whether from coal, coal gasification plants, producer Gas plants and Coke Oven Plants. |
5%/18% |
18% |
|
IGST on import of Diethylcarbamazine (DEC) tablets supplied free of cost for National Filariasis Elimination Programme |
5% |
Nil |
|
Cut and Polished diamonds |
0.25% |
1.5% |
|
IGST on specified defence items imported by private entities/vendors, when end-user is the Defence forces. |
Applicable rate |
Nil |
|
Services |
|||
1. |
Transport of goods and passengers by ropeways. |
18% |
5% (with ITC of services) |
2 |
Renting of truck/goods carriage where cost of fuel is included |
18% |
12% |
C Withdrawal of exemptions [Approval of recommendations made by GoM on rate rationalization]
C1. Hitherto, GST was exempted on specified food items, grains etc when not branded, or right on the brand has been foregone. It has been recommended to revise the scope of exemption to exclude from it prepackaged and pre-labelled retail pack in terms of Legal Metrology Act, including pre-packed, pre-labelled curd, lassi and butter milk.
C.2 In case of the following goods, exemption from GST will be withdrawn:
S. No. |
Description of goods |
From |
To |
GST rate changes |
|||
Cheques, lose or in book form |
Nil |
18% |
|
Maps and hydrographic or similar charts of all kinds, including atlases, wall maps, topographical plans and globes, printed |
Nil |
12% |
|
Parts of goods of heading 8801 |
Nil |
18% |
C.3 In case of the following goods, the exemption in form of a concessional rate of GST is being rationalized:
S. No. |
Description of goods |
From |
To |
GST rate changes |
|||
Petroleum/ Coal bed methane |
5% |
12% |
|
Scientific and technical instruments supplied to public funded research institutes |
5% |
Applicable rate |
|
E-waste |
5% |
18% |
C4. In case of Services, following exemptions are being rationalized:
S. No. |
Description |
1. |
Exemption on transport of passengers by air to and from NE states & Bagdogra is being restricted to economy class |
2 |
Exemption on following services is being withdrawn.
|
3. |
Like CETPs, common bio-medical waste treatment facilities for treatment or disposal of biomedical waste shall be taxed at 12% so as to allow them ITC |
4. |
Hotel accommodation priced upto Rs. 1000/day shall be taxed at 12% |
5. |
Room rent (excluding ICU) exceeding Rs 5000 per day per patient charged by a hospital shall be taxed to the extent of amount charged for the room at 5% without ITC. |
6. |
Tax exemption on training or coaching in recreational activities relating to arts or culture, or sports is being restricted to such services when supplied by an individual. |
D. GST on casinos, race course and online gaming
The Council directed that the Group of Ministers on Casino, Race Course and Online Gaming re-examine the issues in its terms of reference based on further inputs from States and submit its report within a short duration.
E. Clarification on GST rate
E1. Goods
E2 .Clarification in relation to GST rate on Services
1. Due to ambiguity in GST rates on supply of ice-cream by ice-cream parlours, GST charged @ 5% without ITC on the same during the period 1.07.2017 to 5.10.2021 shall be regularized to avoid unnecessary litigation.
2. Application fee charged for entrance or for issuance of eligibility certificate for admission or issuance of migration certificate by universities is exempt from GST.
3. Ginned or baled fibre is covered in entry 24B of notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 in the category of raw vegetable fibres. The exemption under this entry is being rationalized
4. Services associated with transit cargo both to and from Nepal and Bhutan are covered by exemption under entry 9B of notification No. 12/2017-CT(R) dated 28.06.2017.
5. Activity of selling of space for advertisement in souvenirs published in the form of books is eligible for concessional GST at 5%.7. Renting of vehicle with operator for transportation of goods on time basis is classifiable under Heading 9966 (rental services of transport vehicles with operators) and attracts GST at 18%.GST on such renting where cost of fuel is included in the consideration charged is being prescribed at 12%.
8. Allowing choice of location of a plot is part of supply of long term lease of plot of land. Therefore, location charge or preferential location charges (PLC) are part of consideration charged for long term lease of land and shall get the same treatment under GST.
9. Services provided by the guest anchors to TV channels in lieu of honorarium attract GST.10. Additional fee collected in the form of higher toll charges from vehicles not having Fastag is essentially payment of toll for allowing access to roads or bridges to such vehicles and shall be given the same tax treatment as given to toll charges.
11. Services in form of Assisted Reproductive Technology (ART)/In vitro fertilization (IVF) are covered under the definition of health care services for the purpose of exemption under GST.
12. Sale of land after leveling, laying down of drainage lines etc. is sale of land and does not attract GST.13. Renting of motor vehicles for transport of passengers to a body corporate for a period (time) is taxable in the hands of body corporate under RCM.
14. The expression 'public transport' used in the exemption entry at SI No. 17(d) of notification No. 12/2017-CT(R), which exempts transport of passengers by public transport other than predominantly for tourism purpose, in a vessel between places located in India, means that such transport should be open to public for point to point transport [e.g. such transport in Andaman and Nicobar islands].
Other miscellaneous changes
1. All taxable service of Department of Posts would be subject to forward charge. Hitherto certain taxable services of Department of post were taxed on reverse charge basis.
2. Goods transport agency (GTA) is being given option to pay GST at 5% or 12% under forward charge; option to be exercised at the beginning of Financial Year. RCM option to continue.
3. Service provided by Indian Tour operator to a foreign resident for a tour partially in India and partially outside India is to be subject to tax proportionate to the tour conducted in India for such foreign tourist subject to conditions that this concession does not exceed half of tour duration.
The rate changes recommended by the 47th GST Council will be made effective from 18th July, 2022.
II. Further, the GST Council has inter-alia made the following recommendations relating to GST law and procedure:
A.Measures for Trade facilitation:
The details of the scheme will be worked out by the Law Committee of the Council. The scheme would be tentatively implemented with effect from 01.01.2023, subject to preparedness on the portal as well as by ECOs.
Amendment in rule 96 of the CGST Rules has been recommended to provide for transmission of such IGST refund claims on the portal in a system generated FORM GST RFD-01 to the jurisdictional GST authorities for processing. This would result in expeditious disposal of such IGST refund claims, after due verification by GST officers, thus benefitting such exporters.
This will enable the taxpayers to get re-credit of the amount of erroneous refund, paid back by them, in their electronic credit ledger.
The rules providing for the manner of calculation of interest under section 50 of CGST Act have also been recommended for more clarity. This will remove ambiguities regarding manner of calculation of interest and will also provide for transfer of balance in CGST and IGST cash ledgers between distinct persons, thereby improving liquidity and cash flows of such taxpayers.
GSTN has also been asked to expeditiously resolve the issue of negative balance in Electronic Cash Ledger being faced by some of the composition taxpayers.
B. Measures for streamlining compliances in GST
C. The Council has decided to constitute a Group of Ministers to address various concerns raised by the States in relation to constitution of GST Appellate Tribunal and make recommendations for appropriate amendments in CGST Act.
D. The GST Council approved ad-hoc apportionment of IGST to the extent of Rs. 27,000 crores and release of 50% of this amount, i.e. Rs. 13,500 crore to the States.
E. The GoM on IT Reforms, inter alia, recommended that the GSTN should put in place the AI/ML based mechanism to verify the antecedents of the registration applicants and an improved risk-based monitoring of their behavior post registration so that non-compliant tax payers could be identified in their infancy and appropriate action be taken so as to minimize risk to exchequer.
Note: The recommendations of the GST Council have been presented in this release containing major item of decisions in simple language for information of all stakeholders. The same would be given effect through relevant Circulars/ Notifications/ Law amendments which alone shall have the force of law.
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RM/MV/KMN