53^rd GST Council Meeting – Highlights of certain measures covering trade facilitation and law & procedure

GST Council Meeting presided by the Hon’ble Union Finance Minister was held on 22 June 2024 in New Delhi. The Council meeting held after more than 8 months, and the first after the General Elections, has recommended many trade facilitation measures along with many other measures relating to GST law and procedures. The Council has also recommended many changes in the GST rates for both goods and services.

Some of the important recommendations are highlighted below:

Trade facilitation measures

• Interest and penalty waived for Section 73 demands for FYs 2017-18 to 2019-20 if tax demanded is paid till 31 March 2025
• Monetary limits prescribed for filing Departmental appeals – INR 10 lakh for Tribunal, 1 crore for High Court, and 2 crores for Supreme Court
• Quantum of pre-deposit reduced – Maximum INR 20 crores of CGST and SGST each for Appellate Authority, and 10% with maximum INR 20 crores of CGST and SGST each for Appellate Tribunal
• No GST on Extra Neutral Alcohol for manufacture of alcoholic liquor for human consumption
• Rate of Tax Collected at Source (TCS) by Electronic Commerce Operators to be halved (from 1% to 0.5%)
• Appeal to Appellate Tribunal – 3 months period for filing appeal to start from a date to be notified
• Time-limit for claiming Input Tax Credit relaxed in certain cases pertaining to period 2017-18 to 2020-21, and where returns filed after revocation of cancellation of registration
• No interest on delayed filing of return, on the amount available in electronic cash ledger on due date of filing of said return
• Refund available of additional IGST paid due to increase in price of goods subsequent to exports
• Transitional credit made available in respect of invoices pertaining to services provided before appointed date where invoices received by ISD before the said date
• Optional facility of GSTR-1A to be available to amend details in GSTR-1

Measures relating to law and procedures

• Biometric-based Aadhaar authentication of GST registration applicants to be implemented
• Common time-limits for issuance of demand notices and orders under both Sections 73 and 74 (both with and without involvement of fraud, wilful misstatement, suppression, etc.)
• Reduced penalty benefit available if tax demanded along with interest paid within 60 days (not 30 days)
• Anti-profiteering – New applications to be accepted only till 1 April 2025. Anti-profiteering cases to be handled by Principal Bench of GST Appellate Tribunal
• No refund on export of goods liable to export duty – Restriction also applies to exports to SEZ developer or unit
• GSTR-1, Table 5 – Threshold of reporting B2C inter-State supplies invoice-wise reduced to INR 1 lakh
• GSTR-7 to be filed every month irrespective of deduction of tax during said month – Further invoice-wise details may be required

GST rate changes

• 5% IGST on imports of parts, components, testing equipment, tools and tool kits of aircrafts, irrespective of HSN classification
• 12% GST on milk cans of steel, iron or aluminium
• 12% GST on carton, boxes and cases of both corrugated and non-corrugated paper or paperboard
• 12% GST on all solar cookers – whether single or dual energy source
• 12% GST on parts of poultry keeping machinery
• 12% GST on all sprinklers including fire water sprinklers
• Exemption on specified imports for Defence forces extended till 30 June 2029
• Exemption from Compensation Cess on imports by SEZ units/developers for authorised operations, with effect from 1 July 2017
• Exemption provided for service provided by Indian Railways to general public, and also with respect to intra-railway transactions
• Exemption provided for accommodation services with value up to INR 20,000 per month per person, if supplied for minimum continuous period of 90 days

Certain clarifications

• Valuation of service imported from related person where domestic entity eligible for full credit - Value in invoice will be deemed to be open market value, if invoice issued. If no invoice used, NIL value deemed to be the open market value.
• ITC is not restricted under Section 17(5)(c) and (d) on ducts and manhole used in network of optical fibre cables
• Place of supply of Custodial services by Indian Bank to foreign portfolio investors is to the location of recipient
• Valuation of corporate guarantee by related person – Rule 28(2) not applicable on exports and where recipient eligible for full ITC
• Time-limit for ITC when supply received by taxpayer from unregistered person is the financial year in which invoice is issued by the recipient