On September 20, 2019, the Ministry of Finance (MoF) conducted the 37th GST Council Meeting in Goa. The meeting primarily focused on recommendations to law and procedure, GST rates on goods, GST rate on services and corporate taxes for domestic companies. It also focused on changes to GST rates, ITC eligibility criteria, exemptions and clarifications.
GST Council provides relaxation for MSME for FY 2017-18 and FY 2018-19 as below mentioned:
- Composition dealer are not required to file GSTR 9A for above mentioned period.
- Taxpayer who are required to file GSTR 9A with a turnover of Rs. 2 Cr. Shall be made optional.
- A committee of officers to be constituted for simplification of returns and forms.
- Restriction on availment of Input Tax Credit by recipient where GSTR-1 not filed by supplier.
- New return system of GSTR-1 and GSTR 3B is to be introduced from April,2020.
- Procedure will be notified to claim a refund through Form GST RFD-01A.
- Eligibility to NIL refund application through Form GST RFD-01A has been filed already.
- As per Circular No.107/26/2019-GST dated on 18.07.2019, the supply of Information Technology enabled Services (ITeS services) shall be made on own account or through an intermediary.
Rate reduction sector wise:
Hospitality and tourism:
- To reduce the rate of GST on hotel accommodation service as below: –
|Room Teriff||Rs 1000 and less||Nil|
|Room Teriff||Rs 1001 to Rs 7500||12%|
|Room Teriff||Rs 7501 and more||18%|
|Services||Tariff Rate per day||GST|
|Catering Services in Premises||Rs. 7501||18% with ITC|
5% without ITC
|Catering Services outside Premises||Rs. 7501||18% with ITC|
Job work service:
|Services||Previous Rate||Present Rate|
|Job Work Services for Diamond||5%||1.5%|
|Catering Services outside Premises||Rs. 7501||18% with ITC|
GST Exemption sector wise:
By way of storage or warehousing of cereals, pulses, fruits, nuts and vegetables, spices, copra, sugarcane, jaggery, raw vegetable fibres such as cotton, flax, jute etc., indigo, unmanufactured tobacco, betel leaves, tendu leaves, rice, coffee and tea.
Validity of conditional exemption of GST on export freight by air or sea has been increased by another year, i.e. till 30.09.2020.
Exemption has been given to “BANGLA SHASYA BIMA” (BSB) crop insurance scheme of West Bengal Government.
- To exempt services provided by an intermediary to a supplier of goods or recipient of goods when both the supplier and recipient are located outside the taxable territory.
IGST Act, Pharma: If the following R&D services provided by Indian Pharma companies to foreign companies shall be exempted from GST charges under Section 13(13) of IGST Act
- Integrated discovery and development
- Evaluation of the efficacy of new chemical or biological entities in animal models of disease
- Evaluation of the biological activity of novel chemical or biological entities in in-vitro assays
- Drug metabolism and pharmacokinetics of new chemical entities
- Safety Assessment/Toxicology
- Stability Studies
- Bio Equivalence and Bio Availability Studies
- Clinical trials
- Bioanalytical studies
IGST Act, Chip Design Software: R&D services provided for chip design software to foreign companies by Indian Companies shall be exempted from GST charges under Section 13(13)(a) of IGST Act, 2017.
- Registered authors are having an option to pay GST on royalty charged from publishers under forward charge and observe regular GST compliance.
- Liquor licence issued by State Governments against payment of license fee shall be treated as “no supply”.
- Exempt services related to FIFA Under-17 Women’s World Cup 2020.
GST Rates Changes – Goods
|Products||Reduced Rate||Original Rate|
|Marine Fuel 0.5% (FO)||5%||18%|
|Wet Grinders (stone)||5%||12%|
|Plates and cups made by leaves, flowers and bark||Nil||5%|
|Cut and Polished semi-polished stone||0.25%||3%|
GST rate of 5% is applicable on specified goods for petroleum operations under Hydrocarbon Exploration Licensing Policy (HELP).
Exemption of Goods from GST/IGST
- Specific defence products imported that is not being manufactured (up to 2024)
- Supply of products related to FIFA Women’s Football World Cup
- Supply of products related to Food and Agriculture Organisation (FAO)
Exemption of Goods from GST/IGST (Export Promotion)
- Imported Silver or Platinum by specified nominated agencies
- Silver or Platinum by specified nominated agencies for exports
- Diamond India Limited (DIL) will be included in the nominated agencies for IGST exemption and Nil GST rates on importing Gold, Silver or Platinum
GST rate of 12% from 5%, 12% and 18% will be applicable for the following products:
- Woven and non-woven bags and sacks
- With or Without lamination (for packing goods)
Increased GST Rates
The following goods falling under chapter 86 shall have an increased GST rate from 5% to 12%
- Railway wagons
- Rolling Stocks (without accumulated ITC refund)
Caffeinated beverages will have an increased GST rate from 18% to 28% + 12% compensation cess
Concession for certain GST products
Exemption to Fish meal is applicable from 01.07.17 to 30.09.19. Although any tax collected during the period should be deposited.
Wheels, pulleys and other parts and used parts of agricultural machinery are exempted (falling under at the GST rate of 12% from 1.07.17 to 30.09.19)
- Passenger vehicles with 1500 cc diesel engine shall have 3% cess
- Passenger vehicles with 1200 cc petrol engine shall have 1% cess and
- Vehicles not exceeding 4000 mm (designed for 9 passengers) shall have 1% cess for petrol and 3% cess for diesel
- Composition scheme will be implemented for Aerated drink manufacturers
- If the petroleum operations that are certified by the Director-General Hydrocarbon (DGH) as non-serviceable, the individual can file at the GST at the rate of 18% (if the GST paid was at 5%)
- Tobacco products will have restrictions on refunds for compensation cess (if it is inverted duty structure)
- Concession on spare parts imported temporarily to fix the airliner by a foreign airliner (in terms of Chicago Convention on Civil Aviation)
- Ingredients such as leguminous vegetables, products to soften or puff the skin and not subjected to other processing ingredients shall be classified under HS code 0713.
- GST rate of 12% will be implemented for mechanical sprayers under HS Code 8424
- GST rate of 5% will be implemented for solar-based devices such as solar water heater, solar stram, generation system
- Medical devices falling under HS code 9018, 9019, 9021 or 9022 will have a GST rate of 12%
- Almond milk will be classified under HS Code 22029990 with 18% GST
- Products imported for Navy shall be exempted from GST
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