49th GST Council Meeting: New Rates and Amendments to GST Laws

Kiran Malik

05 Jun, 2024

Recently, the 49th GST Council Meeting was held on 18th Feb 2023 at Vigyan Bhawan, New Delhi, under the Union Finance and the Corporate Affairs Minister, Smt. Nirmala Sitharaman. The council discussed several important issues related to GST & made some significant decisions. Let’s take a look at the key highlights of the GST Council Meeting meeting:

Clearance of pending GST compensation – GST Council

The Indian Government has decided to clear the entire pending balance GST compensation of Rs. 16982 crore for June 2022. Since there is no such amount in the GST Compensation Fund, Centre decided to release such amount from its own resources & the same will be restored from the upcoming compensation cess collection. With this annoucement, the Centre would clear the provisionally admissible compensation due for 5 years as expected in the GST (Compensation to States) Act 2017. Additionally, the Centre would also clear the admissible full & final GST compensation to those states who have given the revenue figures as certified or authorised by the Accountant General (AG) of the States amounting to Rs. 16,524 crores.

GST Appellate Tribunal – GST Council

The GST Council adopted the report of GoM with certain changes. The final draft of amendments to the GST laws shall be distributed to members for their comments or suggetions. The Chairperson has been authorised to finalize or complete the same. Approval Report of GoM on Capacity-Based Taxation,Special Composition Scheme in Certain Sectors on GST

The GST Council approved the recommendations or suggestions of the GoM on capacity-based taxation & special composition scheme in certain sectors on GST. The objective of this decision is to plug leakages and improve the revenue collection from commodities like pan masala, gutkha, and also chewing tobacco. The recommendations include compliance and tracking measures to be taken to plug leakages or evasions, exports of such commodities to be allowed against LUT (Letter or Undertaking) with consequential refund of accumulated ITC & compensation cess levied on commodities to changed from ad valorem to specific tax-based levy to boost the first-stage collection of the revenue.

Recommendations relating to GST rates on Goods & Services under GST Council Meeting

Following are some recommendations relating to GST Rates on Goods and Services under GST Council Meeting:

1. The GST rate on ‘rab’ should be reduced from 18% -5% if sold prepackaged and labelled, & to nil if sold otherwise.
2. The GST rate on pencil sharpener should be reduced from 18% to 12%.
3. The payment of GST on ‘rab’ during the past period should be regularised on an “as is basis” on account of doubts over its classification & applicable GST rate.
4. Notification No. 104/94-Customs should be amended so that if a device like tag-tracking device or the data logger is already affixed on a container, no separate Integrated Goods and Services Tax shall be levied on such affixed device & ‘nil’ IGST treatment available for the containers under the notification shall also be available to such affixed device subject to the current conditions.
5. Entry Sl. No. 41A of notification No. 1/2017-Compensation Cess (Rate) should be amended so that exemption benefit covers both coal rejects supplied to & by a coal washery and arising out of coal on which the compensation cess has been paid & no Input Tax Credit (ITC) thereof has been availed by any person.
6. The exemption available to educational institutions & Central & State educational boards for the conduct of entrance examination should be extended to any authority, board/a body set up by the Central Government of India or State Government including National Testing Agency or NTA for conduct of entrance examination for admission to educational institutions.
7. The dispensation available to Central Government of India, State Governments, Parliament & State Legislatures regarding payment of GST under reverse charge mechanism (RCM) should be extended to the Courts and Tribunals also concerning the taxable services supplied by them like renting of premises to telecommunication companies for installation of towers and renting of the chamber to lawyers etc.

Recommendations to facilitate trade

The GST Council has made several recommendations to facilitate trade, which are:

• Extension in the time period for application for revocation or cancellation of registration and one-time amnesty for past cases.
  • Time limit for revocation of registration to be increased from 30 days to 90 days.
  • Time period may be further extended by the Commissioner/an officer authorized by him for a further period not exceeding 180 days.
  • An amnesty may be provided for past cases where registration has been cancelled on account of non-filing of returns.
• Amendment to Section 62 of Central Goods and Services Tax Act, 2017 to extend timelines under sub-section (2) thereof and one-time amnesty for past cases.
  • Time period for filing of return to be increased from 30 days to 60 days for enabling deemed withdrawal of best judgment assessment order.
  • The time period is extendable by another 60 days subject to certain conditions.
  • An amnesty scheme is recommended for conditional deemed withdrawal of assessment orders in past cases.
• Rationalization of Late fee for Annual Return.
  • Late fee to be rationalized for delayed filing of annual return in the Form GSTR-9 for Financial Year 2022-23 onwards.
  • Late fee for registered persons having a total turnover of up to Rs. 5 crores in the said F.Y. (Financial Year) to be Rs 50 per day subject to a maximum of an amount calculated at 0.04% of his turnover.
  • Late fee for registered persons having a total turnover of more than Rs. 5 crores & up to Rs. 20 crores in the said Financial Year (F.Y.) to be Rs 100 per day subject to a maximum of an amount calculated at 0.04% of his turnover.
• Amnesty regarding pending returns in Form GSTR-4, Form GSTR-9 & Form GSTR-10.
  • Conditional waiver or reduction of late fee recommended for pending returns in Form GSTR-4, Form GSTR-9 & Form GSTR-10.
• Rationalization of the provision of place of supply of services of transportation of products or goods.
  • Provision of the place of supply for services of transportation of products or goods to be rationalized by deletion of section 13(9) of IGST Act, 2017.
  • The place of supply of services of the transportation of goods/products in cases where location of supplier of services/location of recipient of services is outside India or overseas shall be the location of the recipient of services.

Conclusion

The 49th GST Council Meeting has introduced several key changes to the GST rates and compliance requirements. The new rates and measures are aimed at providing relief to various sectors and promoting the growth of the economy. As a business owner or taxpayer, it is important to stay updated on these changes and ensure compliance with the new regulations. Additionally, it is advisable to seek professional assistance to navigate the complex GST landscape and ensure smooth business operations.

Also Read:
Key Highlights of the GST Council Meeting
Key Points of the 39th GST Council Meeting
38th GST Council Meeting: A Complete Overview