53rd GST Council Meeting Recommendations 22nd June,20

Changes In GST Tax Rates

GST rates on Goods

On imports of ‘Parts, components, testing equipment, tools and tool-kits of aircrafts, irrespective of their HS classification – a uniform rate of 5% IGST, subject to specified conditions (to provide a fillip to MRO activities)

All milk cans (of steel, iron and aluminium) irrespective of their use – 12% GST

Carton, boxes and cases of both corrugated and non-corrugated paper or paper-board’ – reduced from 18% to 12% (HSN 481910; 481920)

All solar cookers whether single or dual energy source – 12% GST

Parts of Poultry keeping Machinery – 12% GST (to regularise past practice on ‘as is where is’ basis in view of genuine interpretational issues)

Sprinklers including fire water sprinklers – 12% GST (to regularise the past practice on ‘as is where is’ basis in view of genuine interpretational issues)

Extend exemption on imports of specified items for defence forces for a further period of five years till June 30, 2029

Extend exemption on imports of research equipment/buoys imported under the Research Moored Array for African-Asian-Australian Monsoon Analysis and Prediction programme, subject to specified conditions

Exempt Compensation Cess on the imports of in SEZ by SEZ Unit / Developers for authorised operations with effect from July 1, 2017

Exempt Compensation Cess on supply of aerated beverages and energy drinks to authorised customers by Unit Run Canteens under Ministry of Defence

Provide exemption on imports of technical documentation for AK-203 rifle kits imported for Indian Defence forces

GST rates on Services

Exempt services provided by Indian Railways to general public, namely, sale of platform tickets, facility of retiring rooms / waiting rooms, cloak room services and battery-operated car services and exempt the intra-Railway transactions (issue for past period will be regularized from October 20, 2023, to the date of issue of exemption notification)

Exempt GST on the services provided by Special Purpose Vehicles (SPV) to Indian Railway by way of allowing Indian Railway to use infrastructure built & owned by SPV during the concession period and maintenance services supplied by Indian Railways to SPV (issue for past will be regularized on ‘as is where is’ basis for the period from July 1, 2017, till the date of issue of exemption notification)

Exempt accommodation services having value of supply of accommodation upto INR 20,000 per month per person subject to the condition that the accommodation service is supplied for a minimum continuous period of 90 days (to extend similar benefit for past cases)

Changes relating to Services

1. Co-insurance premium apportioned by lead insurer to the co-insurer for the supply of insurance service by lead and co-insurer to the insured in coinsurance agreements, be declared as ‘no supply’ (past cases be regularized on ‘as is where is’ basis)

2. Transaction of ceding commission / re-insurance commission between insurer and re-insurer be declared as no supply (past cases be regularized on ‘as is where is’ basis

3. GST liability on reinsurance services of specified insurance schemes covered by Sr. Nos. 35 & 36 of Notification No. 12/2017-Central Tax (Rate) dated June 28, 2017, be regularized on ‘as is where is’ basis for the period from July 1, 2017, to January 24, 2018

4. GST liability on reinsurance services of the insurance schemes for which total premium is paid by the Government that are covered under Sr. No. 40 of Notification No. 12/2017-Central Tax (Rate) dated June 28, 2017, be regularized on ‘as is where is’ basis for the period from July 1, 2017, to July 26, 2018

5. Clarify that retrocession is ‘re-insurance of re-insurance’ and therefore, eligible for the exemption under Sl. No. 36A of Notification No. 12/2017-Central Tax (Rate) dated June 28, 2017

6. Clarify that statutory collections made by Real Estate Regulatory Authority are exempt from GST under Entry 4 of Notification No. 12/2017-Central Tax (Rate) dated June 28, 2017

7. Clarify that further sharing of the incentive by acquiring bank with other stakeholders, where the sharing of such incentive is clearly defined under incentive scheme for promotion of RuPay Debit Cards and low value BHIM-UPI transactions and is decided in the proportion and manner by NPCI in consultation with the participating banks, is not taxable.

Measures for facilitation of Trade

1. Waiver of interest and penalty relating to demand notices issued under Section 73 of CGST Act for FY 2017-18, 2018-19 and FY 2019-20 in cases where the taxpayer pays the full amount of tax demanded in the notice upto March 31, 2015. Waiver shall not cover demand of erroneous refunds.​

2. To reduce government litigation prescribe following monetary limits, subject to certain exclusions, for filing of appeals by the GST authorities before –
– GST Appellate Tribunal – INR 20 lakhs
– High Court – INR 1 crores
– Supreme Court – INR 2 crores.

3. Reduce the amount of pre-deposit required to be paid for filing of appeals – maximum amount for filing appeal with the appellate authority be reduced from INR 25 crores CGST and INR 25 crores SGST to INR 20 crores CGST and INR 20 crores SGST. Further, the amount of pre-deposit for filing appeal with GST Appellate Tribunal be reduced from 20% with a maximum amount of INR 50 crores CGST and INR 50 crores SGST to 10% with a maximum of INR 20 crores CGST and INR 20 crores SGST.

4. Specific amendment be made in GST law for not levying GST on rectified spirit / Extra Neutral Alcohol used for manufacture of alcoholic liquor for human consumption.

5. Reduce the rate of tax collected at source by Electronic Commerce Operators from present 1% to 0.5%.

6. Allow three-month period for filing appeals before the GST Appellate Tribunal, from a date to be notified, in respect of appeal/ revision orders passed before the date of said Notification.

7. Time limit to avail input tax credit in respect of any invoice or debit note under Section 16(4) of CGST Act, through any return in FORM GSTR 3B filed upto November 30, 2021 for FY 2017-18, 2018-19, 2019-20 and 2020-21, be deemed to be November 30, 2021 (amendment to be made with effect from July 1, 2017).

8. Conditionally relax the provisions of section 16(4) of CGST Act in cases where returns for the period from the date of cancellation of registration/ effective date of cancellation of registration till the date of revocation of cancellation of the registration, are filed by the registered person within thirty days of the order of revocation. (amendment to be made with effect from July 1, 2017).

9. Extend the due date for filing of return in FORM GSTR-4 for composition taxpayers from 30th April to 30th June following the end of the financial year, for returns for the FY 2024-25 onwards.

10. Provide that an amount, which is available in the Electronic Cash Ledger on the due date of filing of return in FORM GSTR-3B, and is debited while filing the said return, be not included while calculating interest under section 50 of the CGST Act in respect of delayed filing of the said return.

11. Insert a new Section 11A in CGST Act to give powers to the Government to allow regularization of non-levy or short levy of GST, where tax was being short paid or not paid due to common trade practices.

12. Prescribe a mechanism for claiming refund of additional IGST paid on account of upward revision in price of the goods after their export.

13. Clarify that in cases where the foreign affiliate is providing certain services to the related domestic entity, for which full input tax credit is available to the said related domestic entity, the value of such supply of services declared in the invoice by the said related domestic entity may be deemed as open market value in terms of second proviso to Rule 28(1) of CGST Rules. Further, in cases where full input tax credit is available to the recipient, if the invoice is not issued by the related domestic entity with respect to any service provided by the foreign affiliate to it, the value of such services may be deemed to be declared as Nil and may be deemed as open market value in terms of second proviso to Rule 28(1) of CGST Rules

14. Clarify that input tax credit is not restricted in respect of ducts and manhole used in network of optical fiber cables, under clause (c) / (d) of section 17(5) of CGST Act.

15. Clarify that place of supply of custodial services supplied by Indian Banks to Foreign Portfolio Investors is determinable basis location of recipient of services.

16. Clarify that the valuation of corporate guarantee under Rule 28(2) of CGST Rules would not be applicable in case of export of such services and also where the recipient is eligible for full input tax credit.

17. Clarify that in cases of supplies received from unregistered suppliers, where tax has to be paid by the recipient under reverse charge mechanism and invoice is to be issued by the recipient only, the relevant financial year for calculation of time limit for availment of input tax credit under the provisions of section 16(4) of CGST Act is the financial year in which the invoice has been issued by the recipient.

18. Provide for transitional credit in respect of invoices pertaining to services provided before July 1, 2017, and where invoices were received by Input Service Distributor (ISD) before July 1, 2017 (retrospectively with effect from July 1, 2017)

19. Provide a new optional facility by way of FORM GSTR-1A to facilitate the taxpayers to amend the details in FORM GSTR-1 for a tax period and/ or to declare additional details, if any, before filing of return in FORM GSTR-3B for the said tax period – i.e. to add any particulars of supply of the current tax period missed out in reporting in FORM GSTR-1 of the said tax period or to amend any particulars already declared in FORM GSTR-1 of the current tax period (including those declared in IFF, for the first and second months of a quarter, if any, for quarterly taxpayers), to ensure that correct liability is auto-populated in FORM GSTR-3B.

20.Filing of annual return in FORM GSTR-9/9A for the FY 2023-24 may be exempted for taxpayers having aggregate annual turnover upto INR 2 crores.

21. Clarify that the penal provision in section 122(1B) of CGST Act is applicable only for those e-commerce operators, who are required to collect tax under section 52 of CGST Act, and not for other e-commerce operators (retrospectively from October 1, 2023).

22. Prescribe a mechanism for adjustment of an amount paid in respect of a demand through FORM GST DRC-03 against the amount to be paid as pre-deposit for filing appeal.

Measures pertaining to GST Law & procedures

1. Roll-out biometric-based Aadhaar authentication of registration applicants on pan-India basis in a phased manner (to combat fraudulent input tax credit claims made through fake invoices).

2. Provide for a common time limit for issuance of demand notices and orders in respect of demands for FY 2024-25 onwards, in cases involving charges of fraud or willful misstatement and not involving the charges of fraud or willful misstatement etc. (presently, there is a different time limit). The time limit for the taxpayers to avail the benefit of reduced penalty, by paying the tax demanded along with interest, be increased from 30 days to 60 days.

3. Provide a sunset clause for anti-profiteering and provide for handling of antiprofiteering cases by Principal bench of GST Appellate Tribunal. The sun-set date be April 1, 2025 for receipt of any new application regarding anti-profiteering.

4. Provide that the refund in respect of goods, which are subjected to export duty, is restricted, irrespective of whether the said goods are exported without payment of taxes or with payment of taxes, and such restrictions be also applicable, if such goods are supplied to a SEZ developer or a SEZ unit for authorized operations.

5. The threshold for reporting of B2C inter-State supplies invoice-wise in Table 5 of FORM GSTR-1 be reduced from INR 2.5 Lakh to INR 1 Lakh.

6. No late fee be payable for delayed filing of Nil return in FORM GSTR-7 (this return is to be filed every month by the registered persons who are required to deduct tax at source, irrespective of whether any tax has been deducted during the said month or not). Further, invoice-wise details be required to be furnished in the said FORM GSTR-7 return.

Clarifications to provide clarity to trade and Tax officers to reduce litigation

1. Taxability of re-imbursement of securities/shares as ESOP/ESPP/RSU provided by a company to its employees

2. Requirement of reversal of input tax credit in respect of amount of premium in Life Insurance services, which is not included in the taxable value as per Rule 32(4) of CGST Rules.

3. Taxability of wreck and salvage values in motor insurance claims

4. Warranty/ Extended Warranty provided by Manufacturers to the end customers

5. Availability of input tax credit on repair expenses incurred by the insurance companies in case of reimbursement mode of settlement of motor vehicle insurance claims.

6. Taxability of loans granted between related person or between group companies.

7. Time of supply on Annuity Payments under HAM Projects.

8. Time of supply in respect of allotment of spectrum to telecom companies in cases where payment of licence fee and spectrum usage charges is to be made in instalments.

9. Place of supply of goods supplied to unregistered persons, where delivery address is different from the billing address

10. Mechanism for providing evidence by the suppliers for compliance of the conditions of Section 15(3)(b)(ii) of CGST Act, 2017 in respect of post-sale discounts, to the effect that input tax credit has been reversed by the recipient on the said amount.

11. Various issues pertaining to special procedure for the manufacturers of the specified commodities, like pan masala, tobacco etc.

Note: The above recommendation would be given effect through the relevant circulars/ notifications/ law amendments which alone shall have the force of law.

Information shared at the Press Conference

1. GST Rate rationalisation – the Group of Ministers and Fitment Committee should present their work done in the next meeting. The discussion should accordingly start in the next meeting.

2. Inclusion of petroleum products – The GST law already has the enabler to include the specified petroleum products into GST regime. These products can be brought into GST regime, as and when the States agree for the same.

3. GST Appellate Tribunal – Revenue Secretary would be sitting with one of the judges of Supreme Court and the relevant Committee / Competent Authority to choose the people for the benches for GST Appellate Tribunal.

4. GST on online gaming – This matter was not on agenda today and nothing was discussed on same.

5. Inverted tax structure on Fertilizer – Proposal to reduce the GST rate on fertilisers has been referred to the Group of Ministers.

6. The next GST Council Meeting should be held in mid / end of August 2024.

Our Indirect Tax Partner

Email: amitabh.k@cbva.In
Mobile: +91 98212 98432

“This was the first GST Council Meeting of this year. In a half day meeting, quite number of recommendations have been made. Some of
the key ones are –

1) amnesty from payment of interest and penalty,

2) power to Government to allow regularisation of non-payment of GST due to trade practice,

3) first time allowing amendment of details of outward supply furnished,

4) removal of extended period of limitation for issuance of demand notices,

5) sun-set for anti-profiteering,

6) specific issues identified for issuing clarifications, and

7) preparation for rate rationalisation.”


B2C Business to Consumer
CGST Central Goods and Services Tax
CGST Act Central Goods and Services Tax Act, 2017
CGST Rules Central Goods and Services Tax Rules, 2017
ESOP Employee Stock Ownership Plan
ESPP Employee Stock Purchase Plan
FY Financial Year
GST Goods and Services Tax
HAM Hybrid Annuity Model
HSN Harmonized System of Nomenclature
IFF Invoice Furnishing Facility
INR Indian Rupees
MRO Maintenance, Repair & Operations
No. Number
NPCI National Payments Corporation of India
RSU Restricted Stock Unit
SEZ Special Economic Zone
SGST State Goods and Services Tax