The GST Council in its 31 meeting held today at New Delhi made the following policy recommendations

The new return filing system shall be introduced on a trial basis from 01.04.2019 and on mandatory basis from 01.07.2019.

There would be a single cash ledger for each tax head.

Analysis It means that there shall be no separate column for fee, interest or penalty and all will be paid through single head. This will remove the technicality of payment of amount on various heads.

A scheme of single authority for disbursement of the refund amount sanctioned by either the Centre or the State tax authorities would be implemented on pilot basis. The modalities for the same shall be finalized shortly.

Analysis Currently, refund is processed by both the authorities. State tax is paid by State GST department and Central as well as Integrated Tax is paid by Central GST Department. This results in delay in disbursement of refunds.

The new return filing system shall be introduced on a trial basis from 01.04.2019 and on mandatory basis from 01.07.2019.

Analysis: It will be better to run the new scheme on pilot basis but if it is not mandatory then will it mean that dealer would need to file 2 returns for this period if he is willing to file return under new method or return filing under old scheme or new scheme both will be valid and any one will suffice the filing compliance. This would need to be clarified.

The due date for furnishing the annual returns in FORM GSTR-9, FORM GSTR-9A and Reconciliation statement in FORM GSTR-9C for the Financial Year 2017 – 2018 shall be further extended till 30.06.2019.

The following clarificatory changes, inter-alia, shall be carried out in the formats/instructions according to which the annual return / reconciliation statement is to be submitted by the taxpayers:

  • Amendment of headings in the forms to specify that the return in FORM GSTR-9 & FORM GSTR- 9A would be in respect of supplies etc. ‘made during the year’ and not ‘as declared in returns filed during the year’;
  • All returns in FORM GSTR-1 & FORM GSTR-3B have to be filed before filing of FORM GSTR- 9&FORM GSTR-9C;
  • All returns in FORM GSTR-4 have to be filed before filing of FORM GSTR-9A;
  • HSN code may be declared only for those inward supplies whose value independently accounts for 10% or more of the total value of inward supplies;
  • Additional payments, if any, required to be paid can be done through FORM GST DRC-03 only in cash
  • ITC cannot be availed through FORM GSTR-9 & FORM GSTR-9C;
  • All invoices pertaining to previous FY (irrespective of month in which such invoice is reported in FORM GSTR-1) would be auto-populated in Table 8A of FORM GSTR-9;
  • Value of “non-GST supply” shall also include the value of “no supply” and may be reported in Table 5D, 5E and 5F of FORM GSTR-9; ix. Verification by taxpayer who is uploading reconciliation statement would be included in FORM GSTR-9C

The due date for furnishing FORM GSTR-8 by e-commerce operators for the months of October, November and December, 2018 shall be extended till 31.01.2019.

The due date for submitting FORM GST ITC-04 for the period July 2017 to December 2018 shall be extended till 31.03.2019.

ITC in relation to invoices issued by the supplier during FY 2017-18 may be availed by the recipient till the due date for furnishing of FORM GSTR-3B for the month of March, 2019, subject to specified conditions. This is a big relief for the tax payers. Hope amendment in GSTR 01 will be star soon from December 2018 returns.

All the supporting documents/invoices in relation to a claim for refund in FORM GST RFD-01A shall be uploaded electronically on the common portal at the time of filing of the refund application itself, thereby obviating the need for a taxpayer to physically visit a tax office for submission of a refund application. GSTN will enable this functionality on the common portal shortly. This will be a big relief if personal interface will not be required and refunds will be issued within the time as mentioned in the law.

The following types of refunds shall also be made available through FORM GST RFD-01A: i. Refund on account of Assessment/Provisional Assessment/Appeal/Any Other Order;
ii. Tax paid on an intra-State supply which is subsequently held to be inter-State supply and vice- versa;

iii. Excess payment of Tax; and
iv. Any other refund.

In case of applications for refund in FORM GST RFD-01A (except those relating to refund of excess balance in the cash ledger)which are generated on the common portal before the roll out of the functionality described in point (10) above, and which have not been submitted in the jurisdictional tax office within 60 days of the generation of ARN, the claimants shall be sent communications on their registered email ids containing information on where to submit the said refund applications. If the applications are not submitted within 15 days of the date of the email, the said refund applications shall be summarily rejected, and the debited amount, if any, shall be re- credited to the electronic credit ledger of the claimant.

One more window for completion of migration process is being allowed. The due date for the taxpayers who did not file the complete FORM GST REG-26 but received only a Provisional ID (PID) till 31.12.2017 for furnishing the requisite details to the jurisdictional nodal officer shall be extended till 31.01.2019. Also, the due date for furnishing FORM GSTR-3B and FORM GSTR-1 for the period July, 2017 to February, 2019/quarters July, 2017 to December, 2018 by such taxpayers shall be extended till 31.03.2019. This is a big relief for the tax payers.

Late fee shall be completely waived for all taxpayers in case FORM GSTR-1, FORM GSTR-3B & FORM GSTR-4 for the months / quarters July, 2017 to September, 2018, are furnished after 22.12.2018 but on or before 31.03.2019. Hope the late fee already paid will be refunded back to the cash ledger of the taxpayer soon.

Taxpayers who have not filed the returns for two consecutive tax periods shall be restricted from generating e-way bills. This provision shall be made effective once GSTN/NIC make available the required functionality.

Clarifications shall be issued on certain refund related matters like refund of ITC accumulated on account of inverted duty structure, disbursal of refunds within the stipulated time, time allowed for availment of ITC on invoices, refund of accumulated ITC of compensation cess etc.

Changes made by CGST (Amendment) Act, 2018, IGST (Amendment) Act, 2018, UTGST (Amendment) Act, 2018 and GST (Compensation to States) Amendment Act, 2018 and the corresponding changes in SGST Acts would be notified w.e.f. 01.02.2019.Changes in Tax Rates:

GST rate reduction on goods which were attracting GST rate of 28%:

A. 28% to 18%:

  • Pulleys, transmission shafts and cranks, gear boxes etc., falling under HS Code 8483
  • Monitors and TVs of upto screen size of 32 inches
  • Re-treaded or used pneumatic tyres of rubber;
  • Power banks of lithium ion batteries. Lithium ion batteries are already at 18%. This will bring parity in GST rate of power bank and lithium ion battery.
  • Digital cameras and video camera recorders
  • Video game consoles and other games and sports requisites falling under HS code 9504.

B. 28% to 5%:
1. Parts and accessories for the carriages for disabled persons
II. GST rate reduction on other goods:

A. 18% to 12%:
1. Cork roughly squared or debagged
2. Articles of natural cork
3. Agglomerated cork
B. 18% to 5%:
1. Marble rubble
C. 12% to 5%:
1. Natural cork
2. Walking Stick
3. Fly ash Blocks
D. 12% to Nil:
1. Music Books
E. 5% to Nil:
1. Vegetables, (uncooked or cooked by steaming or boiling in water), frozen, branded and put in a unit container

2. Vegetable provisionally preserved (for example by sulphur dioxide gas, in brine, in sulphur water
or in other preservative solutions), but unsuitable in that state for immediate consumption.

GST on solar power generating plant and other renewable energy plants:

GST rate of 5% rate has been prescribed on renewable energy devices & parts for their manufacture (bio gas plant/solar power based devices, solar power generating system (SGPS) etc) [falling under chapter 84, 85 or 94 of the Tariff]. Other goods or services used in these plants attract applicable GST.

Certain disputes have arisen regarding GST rates where specified goods attracting 5% GST are supplied along with services of construction etc and other goods for solar power plant.

To resolve the dispute the Council has recommended that in all such cases, the 70% of the gross value shall be deemed as the value of supply of said goods attracting 5% rate and the remaining portion (30%) of the aggregate value of such EPC contract shall be deemed as the value of supply of taxable service attracting standard GST rate.

Reduction in GST rates/exemptions on services:

GST rate on cinema tickets above Rs. 100 shall be reduced from 28% to 18% and on cinema tickets upto Rs. 100 from 18% to 12%.

GST rate on third party insurance premium of goods carrying vehicles shall be reduced from 18% to 12%.

Services supplied by banks to Basic Saving Bank Deposit (BSBD) account holders under Pradhan Mantri Jan Dhan Yojana (PMJDY) shall be exempted.

Air travel of pilgrims by non-scheduled/charter operations, for religious pilgrimage facilitated by the Government of India under bilateral arrangements shall attract the same rate of GST as applicable to similar flights in Economy class (i.e. 5% with ITC of input services)

Amendments in the GST Acts:

Creation of a Centralised Appellate Authority for Advance Ruling (AAAR) to deal with cases of conflicting decisions by two or more State Appellate Advance Ruling Authorities on the same issue.

Amendment of section 50 of the CGST Act to provide that interest should be charged only on the net tax liability of the taxpayer, after taking into account the admissible input tax credit, i.e. interest would be leviable only on the amount payable through the electronic cash ledger. A big relief to the tax payer. Earlier the interest need to be paid on the gross amount which results to the injustice to the cash loss to the government.

Formation of GoM:

The GST Council in its 31 meeting held today at New Delhi has approved the proposal to form a 7 Member Group of Ministers to study the revenue trend, including analyzing the reasons for structural patterns affecting the revenue collection in some of the States. The study would include the underlying reasons for deviation from the revenue collection targets vis a vis original assumptions discussed during the design of GST system, its implementation and related structural issues.

The Group of Ministers will be assisted by the committee of experts from Central Government, State Governments and the NIPFP (National Institute of Public Finance and Planning), who would study and share the findings with GoM. The GoM in turn would give its recommendation to the GST Council.