47th GST Council Meeting – 1st Day i.e 28th June 2022 highlights
The two-day meeting of the GST Council is underway in Chandigarh chaired by Hon’ble Union Minister of Finance Nirmala Sitaraman is being attended by Union Minister of State for Finance Shri Pankaj Chaudhary besides Revenue Secretary Shri. Tarun Bajaj, Chairman of the CBIC Shri. Vivek Johri, Member of the CBIC Shri. Sanjay Agarwal and other senior officers from the Finance Ministry and the CBIC with Finance Ministers of States & UTs and Senior officers from Union Government & States.
As per sources, the following were the key highlights of first day of the meeting. Please note that the Ministry is yet to officially make announcements at the time of publishing this piece of tax bite.
Compliance :
- GST Council allows e-commerce suppliers to register under the composition scheme, simplify their GST registration process and reduce their tax outflow.
- The government-run NIC may act as another platform for registering e-invoices. The Council agrees to have six invoice registration portals come into action in the next six months.
- GST Council allowed taxpayers to carry out amendments in GSTR-3B (Summary return for regular taxpayers). The taxpayers may be entitled to auto-populate details in their Form GSTR-3B and GST annual returns for improved and convenient compliance.
- Both the Centre and States may issue show cause notice despite the taxpayer’s jurisdiction as a measure to plug revenue leakage.
- Upcoming GST annual returns in Form GSTR-9 for FY 2021-22 may be notified with minimal changes with some continued relaxation and modifications. GSTR-9 for FY 2021-22 may continue to be exempted for those with the previous year’s threshold turnover falling below Rs.2 crore.
- GST Council allowed amounts in electronic credit ledger and electronic cash ledger to be utilised for payment of output GST dues in GST returns. However, the money cannot be used to settle any penalties, late fees, or interest.
- The GST Council indicated that the new return system of Form GST RET-1, ANX-1, and ANX-2 is to be entirely withdrawn as it is no longer relevant.
- GST Council extended the GST due dates for the following compliance by the composition taxpayers:
- GSTR-4 deadline for FY 2021-22 up to 28th July 2022 from 30th June 2022
- CMP-08 deadline for Apr-Jun 2022 (Q1 of FY 2022-23) up to 30th July 2022 from 18th July 2022
- With regard to e-way bill generation on intra-state movement of gold, gold jewellery and precious stones to check evasion, the Council recommended that states can decide on the threshold above which the electronic bill is to be made mandatory.
A panel of state ministers had recommended the threshold to be Rs 2 lakh and above.
National Anti-profiteering Authority(NAA)
- A comprehensive review of the National Anti-profiteering Authority (NAA) was carried out.
- The Solicitor General will defend the NAA wherever its constitutional validity is questionable.
- The government may soon appeal in the apex court for cases where any state courts have remanded the NAA against its orders.
- The Council pointed out that the NAA has established an advocates panel to assure justice to consumers where profiteering occurred.
Refunds
- GST Council approved a period waiver from the filing of refund claims by condoning the two-year COVID period starting from 1st March 2020 up to 28th February 2022. The Council decided to permit tax officers to file appeals against erroneous refund claims without considering the two-year period.
- Relaxation in refund claims was provided for the export of electricity and select concessional goods with an inverted tax structure.
System Reforms
- The GST Council accepted the recommendations of the Group of Ministers (GoM) formed for system reforms.
- Availability of the outcome of any verification to the tax officers.
- GST Network (GSTN) to make information related to all bank accounts linked to a particular PAN available to authorities.
- GSTN to take necessary steps to make information on the development of a feedback mechanism available for capturing the feedback of leads generated by systems to alert tax authorities.
- Using Mandatory Biometric authentication for high-risk applicants for GST registration.
- Artificial Intelligence (AI) based interdiction to generate the report for officers for high-risk applicants for GST registration.
- Online or site verification with the help of Geo-coding to obtain the correct address of taxpayers and to allow a smooth physical verification of high-risk taxpayers.
- Inclusion of Electricity bill metadata (CA No.) as a data field in the GST registration application and be verified to improve the quality of addresses in GST system.
- Real-time validation of Bank accounts through integration of GST system with the National Payments Corporation of India (NPCI).
Rate rationalisation
In the meeting on Tuesday, the Council accepted the interim report of the group of state finance ministers, headed by Karnataka Chief Minister Basavaraj S Bommai, on rate rationalisation, including correction of inverted duty structure and removing tax exemption on some items, to simplify the rate structure which means 14 goods and 22 services could undergo rate revision. Some of the rate revision cases are as follows-
- 5% – Unroasted coffee beans, unprocessed green leaves of tea, wheat bran, de-oiled rice bran, Room rent (excluding ICU) charged for hospitalised patients where the hospital room charges are above Rs 5,000 per day
- 12% – Host of services including on hotel accommodation of less than Rs 1,000 per day
- 18% on e-waste (earlier 5%), cheques, loose or in book form
- Higher rate – Petroleum/coal bed methane (earlier 5%)
- GST Exemptions have been withdrawn for essential consumable items.
- No more exemption on packaged curd, lassi, buttermilk, puffed rice, flattened rice, parched rice, pappad, paneer, honey, food grains, cereals, jaggery, and certain veggies.
- No more GST exemption on services such as-
- Reinsurance of exempted insurance schemes,
- Services by RBI, IRDA to insurers, SEBI, GSTN to government, Services by way of registration by FSSAI to food business operators.
- Transport of passengers in business class from airports located in North East states, Transportation of newspapers, magazines and railway equipments by rail/vessel/road.
- No more GST exemption for
- Renting of religious place meant for the general public if the per day rent is above Rs.5,000/day.
- Shops with rent of more than Rs 2,500/month.
Correction in the inverted tax structure
- Decisions for correcting the inverted tax structure were as follows-
- The GST rate for edible oils not to undergo any correction.
- GST rate was increased from 12% to 18% for – Printing, writing, and drawing ink, LED lights, fixtures, and LED lamps.
- GST rate was increased from 5% to 12% for – Solar water heater and system, Finished and composition leather, works contract to government, and tailoring and other textile job works.
Others
- The GST Council has decided to refer the matter of setting up GST Tribunals to GoM to delibrate and come up with a report on detailed structure of GST Tribunals.
- The GST Council deferred the implementation of the GST margin scheme for tour operators and instead indicated studying the proposal in detail.
- The GST Council will study Tax exemption on services to Panchayat & Municipalities
Further, the meeting of the Council, chaired by the Union Finance Minister Nirmala Sitharaman and comprising state counterparts, will also clear levying the highest tax of 28 per cent on online games, casinos and horse racing, besides, measures to curb tax evasion, especially devising ways to tackle high-risk taxpayers in GST.
The Union Finance Minister is expected to address the press and media later in the evening.
