48th GST Council Meeting Highlights

Monisha Chaudhary

30 Mar, 2024

The Goods and Services Tax Council (GST Council) is a body set up under Article 279A of the Constitution of India. The purpose of the GST Council is to make recommendations to the Union and State on matters about GST. To fulfil this purpose, the GST Council conducts periodic meetings. The 48^th GST Council Meeting was convened on the 17^th of December, 2022. It was run virtually and was chaired by the Union Finance Minister Smt. Nirmala Sitharaman. As the 48^th GST Council Meeting was conducted after a gap of almost 5-6 months, many items were on its Agenda. To know more about the 48^th GST Council Meeting, continue reading this blog.

Changes in GST Rate

Measures to Facilitate Trade

There were 15 Agendas, out of which only 8 Agendas were discussed as the Meeting was concluded early due to the time constraints of most of the GST Council members. The summary of key highlights of the 48^th GST Council meeting is as follows:

1. Decriminalization of offences under GST- The GST Council has:
2. Increased the minimum threshold of tax amount for floating prosecution under GST from INR 1 crore to INR 2 crores except for the offence of issue of invoices without the supply of goods or services or both;
3. Reduced the compounding amount to the range of 25% to 100% from the present capacity of 50% to 150% of the tax amount;

• Decriminalized certain offences provided under section 132 (1) (g), (j) and (k) of CGST Act 2017 viz;

1. Obstructing or preventing any officer from discharging his duties;
2. Deliberate tampering of material evidence; and
3. Failure to supply the information.
4. Refund to unregistered persons- No procedure had been prescribed for claiming of refund of tax suffered by the non-registered buyers in cases where the contract or agreement for the supply of services like construction of a flat or house and long-term insurance policy is cancelled, and the duration of issuance of credit note by the concerned supplier is over. So, the GST Council recommended amendments in CGST Rules, 2017 and the issue of a circular describing the procedure for applying for a refund by the unregistered buyers in such cases.
5. Facilitate e-commerce for micro-enterprises- The GST Council permitted the approval granted by the qualified authority allowing non-registered suppliers and composition taxpayers to make the intra-state supply of goods via E-Commerce Operators (ECOs) subject to certain conditions. The GST Council approved to amend GST Act, GST Rules, and the issuance of relevant notifications to enable the same. After analyzing the time required for the development of the requisite functionality on the portal and providing plenty of time for preparedness by the ECOs, the GST Council recommended that the scheme may be implemented w.e.f. 01.10.2023.
6. The GST Council inserted para 7, 8(a) and 8(b) in Schedule III of the CGST Act of 2017 w.e.f. 01.02.2029 to keep certain transactions and activities outside the purview of GST. These transactions and activities include the supply of goods from one place beyond the taxable territory to another beyond the taxable part, high sea sales, and the supply of warehoused goods before their home clearance. To remove any doubts and ambiguities regarding the taxability of such transactions or activities from 01.07.2017 to 31.01.2019.
7. The GST Council has recommended the retrospective amendment of Rule 37 (1) of the CGST Rules 2017 from 01.10.2022 to provide for the turnaround of input tax credit in terms of section 16 proviso II of the CGST Act. The reversal of ITC should be proportionate to the amount unpaid to the supplier versus the value of the supply, including tax payable.
8. Rule 37A in CGST Rules, 2017 was recommended to be inserted by the GST Council prescribing the reversal mechanism for the input tax credit by a registered person in case of non-payment of tax by the supplier on a stipulated date and manner for re-availing of such credit if the supplier pays tax subsequently. This step aimed to ease the procedure to comply with the condition for availing of input tax credit u/s 16 (2)(c) of the CGST Act, 2017.
9. The GST Council has suggested amendments of rules 108 (3) and 109 of the CGST Rules 2017. This will clarify the submission of a certified copy of the order against whom the appeal has been filed and the issuance of final acknowledgement by the appellate authority. This amendment aims to expedient the appeal process and ease the compliance burden for the appellants.
10. Insertion of Rule 109C and FORM GST APL-01/03 W in the CGST Rules, 2017 will allow an appeal application to be withdrawn up to a particular specified stage. This would reduce litigations at the level of appellate authorities.
11. The GST Council recommended that a circular be issued to clarify whether the no Claim Bonus offered by the insurance companies is an admissible deduction for the valuation of insurance services.
12. The GST Council has recommended an amendment of Rule 12 (3) of the CGST Rules, 2017. This aims to provide the facility to the registered persons. The registered persons must collect TCS under section 52 or deduct TCS under section 51 of the CGST Act, 2017 to cancel their registration upon request.
13. Circular to be issued to clarify the treatment of statutory dues under GST law towards taxpayers whose proceedings have been finalized under the Insolvency and Bankruptcy Code, 2016¹. Rule 161 of CGST Rules and FORM GST DRC-25 are to be amended to facilitate the same.
14. To clarify the issues relating to the place of supply of services or transportation of goods and availability of ITC to the recipient of such supply as per provision of section 12(8) of the IGST Act, 2017, a circular is issued. It has also been recommended that the proviso to section 12 (8) of the ICGST Act 2017 may be omitted.
15. In order to remove ambiguities and legal disputes on various issues and to benefit the taxpayers at large, the following circulars have been issued:
16. Process for verification of ITC where the difference in ITC is availed in FORM GSTR-3B vis a vis that available as per FORM GSTR -2A during the Financial Year 2017 to 18 and 2018 to 19.
17. Clarify the manner of re-determination of demand about section 75 (2) of CGST Act 2017.

• Clarification in respect of the applicability of e-voicing with respect to an entity.

Measures to streamline GST compliance

1. Biometric-based Aadhaar authentication: Amendment to rules 8 and 9 of the CGST Rules, 2017. This amendment will facilitate bio-metric-based Aadhaar authentication and risk-based physical verification of registration applicants and ensure no risk of fake and fraudulent registrations.
2. Form REG-01 will capture PAN-linked mobile numbers and email IDs : PAN-linked mobile number and email address will be charged and recorded in Form GST REG-01. OTP-based verification will be carried out during registration on a PAN-linked mobile number along with an email address to prevent misuse of PAN without the knowledge of the said PAN-holder.
3. Amendment to restrict the filing of returns: GST Council has recommended amendments to sections 37, 39, 44, and 52 of the CGST Act 2017. This will be done to restrict the filing of returns or statements for a maximum duration of 3 years from the due date of filing of relevant returns or reports.
4. Amendment to Form GSTR-1: To provide for reporting details of supplies made through ECOs covered under section 52 and section 9(5) of the CGST Act, 2017, by the supplier and reporting by the ECO about supplies made under section 9(5) of the CGST Act, 2017, FORM GSTR-1 will be amended.
5. Insertion of CGST Rule 88C and form DRC-01B: To intimate the taxpayer about any tax liability difference between GSTR-1 and GST-3B for a tax period over a defined amount, CGST Rule 88C and form DRC-01B have been inserted.
6. Amendment of the definition of “non-taxable online recipient”: To reduce interpretation issues and litigation on the taxation of OIDAR Services, the definition clause 2(16) of the IGST Act of “non-taxable online recipient “has to be amended.

Conclusion

In Conclusion, it can be said that the GST Council meets to discuss tax agendas and to keep the GST law updated as per the need of the environment. In the 48^th Meeting, the GST Council recommended certain changes in GST tax returns, took measures to facilitate trade and streamline compliances in GST.

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1. https://www.mca.gov.in/Ministry/pdf/TheInsolvencyandBankruptcyofIndia.pdf