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49th GST Council Meeting

49^th GST Council Meeting

49^th GST Council Meeting was held on 18^th February 2023 under the Chairmanship of Finance Minister of India Smt. Nirmala Sitharaman. The meeting took place in New Delhi.

Notably, topics like amnesty scheme, streamlining of GST compliances, measures to curb tax evasion in chewing tobacco/ pan masala/ gutkha etc., setting up of Tribunal, etc. are some of the important topics discussed during the 49^th GST Council Meeting.

Major highlights of the 49^th GST Council Meeting are taken up and discussed in the present article.

Recommendations relating to changes in GST rates –

Following changes in GST rates of goods are recommended –

Particulars	Old rates	Recommended rates
Rab	18%	5% (if sold prepackaged and labelled) NIL (if sold otherwise)
Pencil Sharpener	18%	12%

Other relevant recommendations –

• Decided to regularize the payment of GST on Rab on ‘as is basis’ during past period in case of genuine doubts over its classification as well as applicability of GST rate.
• Exemption from IGST is available on devices such as tag-tracking device/ data logger which are already affixed on the container. As exemption to container is already available under notification no. 104/94- Customs dated 16^th March 1994.
• To extent exemption, available to educational institutions as well as Central and State educational boards for conducting entrance exams, to any authority/ board/ body set up by Central/ State Government (including National Testing Agency) for conducting entrance exams.
• To amend entry at Sr. No. 41A of Notification No. 1/2017- Compensation Cess (Rate) dated 28^th July 2017 so that the said exemption benefit covers coal rejects supplied to and by the coal washery (arising out of coal) on which compensation cess is paid and input tax credit not availed by any person.
• To extend exemption, available to Central/ State Government, Parliament/ State Legislatures relating to payment of GST under RCM, to Tribunals and Courts also in respect of services supplied by them like renting of premises to Telecommunication Company for installation of towers, renting of chamber to lawyers, etc.

Recommendations relating to sectors dealing in pan masala, chewing tobacco, gutkha, etc. –

GST council approved the following recommendation of Group of Ministers –

• Capacity based levy should not be prescribed in pan masala, chewing tobacco, gutkha, etc.
• Export of pan masala, chewing tobacco, gutkha, etc. should be allowed only against Letter of Undertaking (LUT) with consequential refund of accumulated input tax credit.
• Compensation cess levied on pan masala, chewing tobacco, gutkha, etc. should be changed from ad valorem to specific tax based levy.
• Compliance and tracking measures needs to be taken in order to plug leakages and evasion prevalent in the sector.

Recommendations relating to Amnesty Scheme –

GST council has recommended to announce Amnesty Scheme in the past cases relating to the following matters –

• Registration of the person is cancelled for non-filing of required GST returns and application of revocation of cancellation of GST registration is not furnished within the time limit prescribed under section 30 of the Central Goods and Services Tax Act, 2017.
• Conditional deemed withdrawal of assessment orders (best judgement assessment orders) where relevant returns are not furnished within a period of 30 days from the assessment order.
• Conditional waiver or reduction of late fee in case of pending returns in form GSTR-4, GSTR-9 and GSTR-10.

Recommendations relating to amendments in GST law –

Amendments in GST law are –

1. Extension of time limit for filing an application for revocation of cancellation of registration –

It is proposed to amend provisions of section 30 of the Central Goods and Services Tax Act, 2017 and rule 23 of the Central Goods and Services Tax Rules, 2017 to –

• Amend time limit for filing an application for revocation of cancellation of registration to 90 days (currently it is 30 days).
• Amend extended time limit by Commissioner/ an officer authorized by him to 180 days.

2. Extension of time limit for withdrawal of assessment order (best judgement assessment order) by furnishing of relevant return –

It is proposed to amend provisions of section 62(2) of the Central Goods and Services Tax Act, 2017 so as to amend the time limit for filing of relevant return to 60 days (currently it is 30 days) and extendable by another 60 days.

3. Reduction in late fee for delayed filing of Annual Return (GSTR-9) for Financial Year 2022-2023 –

Particulars	Current late fee payable	Recommended late fee payable
Aggregate turnover up to INR 5 Crores	INR 200 per day [INR 100 CGST + INR 100 SGST] Subject to maximum of 0.5% (0.25% CGST +0.25% SGST) of the turnover in the State/ Union Territory	INR 50 per day [INR 25 CGST + INR 25 SGST] Subject to maximum of 0.04% (0.02% CGST +0.02% SGST) of the turnover in the State/ Union Territory
Aggregate turnover more than INR 5 Crores up to INR 20 Crores	INR 200 per day [INR 100 CGST + INR 100 SGST] Subject to maximum of 0.5% (0.25% CGST +0.25% SGST) of the turnover in the State/ Union Territory	INR 100 per day [INR 50 CGST + INR 50 SGST] Subject to maximum of 0.04% (0.02% CGST +0.02% SGST) of the turnover in the State/ Union Territory
Aggregate turnover more than INR 20 Crores	INR 200 per day [INR 100 CGST + INR 100 SGST] Subject to maximum of 0.5% (0.25% CGST +0.25% SGST) of the turnover in the State/ Union Territory	INR 200 per day [INR 100 CGST + INR 100 SGST] Subject to maximum of 0.5% (0.25% CGST +0.25% SGST) of the turnover in the State/ Union Territory

Other recommendations –

• It is recommended to delete provisions of section 13(9) of the Integrated Goods and Services Tax Act, 2017 in order to rationalize provisions of place of supply of service in case of transportation of goods.

Accordingly, place of supply of service in case of transportation of goods will be location of service receiver, where location of service provider or service receiver is outside India.

• Formation of Appellate Tribunal –
  • GST Council adopted the report of Group of Ministers in respect of formation of Appellate Tribunal with some modifications.
  • The final of draft amendments to GST laws will be circulated to Members for their respective comments.
  • Chairperson has been authorize for finalization of the same.