We present to you key decisions are taken by the GST Council in a meeting held on 21st July 2018. Some decisions will be given effect by way of issuing Notifications and few are to be placed in Parliament to amend the GST Laws.
Simplification - Ease of doing business
• Return Simplification. Quarterly returns for Taxpayers with turnover up to Rs. 5 crores with monthly tax payments. 93% to fall under this category.
GST Rates Reduction
• GST on the supply of e-books reduced from 18 to 5%.
• Composite supply of food and drinks in restaurant, mess, canteen, eating joints and such supplies to institutions (educational, office, factory, hospital) on a contractual basis to be taxed at 5%
• GST exempted on Sanitary pads, Deities made of stone, marble or wood, Raakhis, without any precious metals, the Raw material used in brooms Commemorative coins circulated by the RBI or government, Saal leaves, Fortified milk
• GST reduced from 12% to 5% on Handloom dari, Fertilizer grade phosphoric acids
• GST reduced from 28% to 18 %: Lithium-ion batteries, Vaccum cleaners, Food grinders, mixers, Shavers, hair clippers, Storage water heaters, Electric smoothing irons, Watercooler, Ice cream freezer, Refrigerators, Hand dryers, Cosmetics, Perfumes, Scents, Paint, Varnishes
• GST on Hotel Tariffs based on actual transaction value instead of declared tariff
• Cross border-related party transactions in sectors like banking, IT to be exempted from GST
• Major reliefs/exemptions to service sectors in
(i) Agriculture, farming and food processing industry,
(ii) Education, training and skill development,
(iii) Pension, social security and old age support.
• Refund to fabrics on account of inverted duty structure
• The opening of Migration Window till 31st August 2018 without any late fee.
• The upper limit of turnover for opting for composition scheme to be raised from Rs. 1 crore to Rs. 1.5 crore.
• Composition dealers to be allowed to supply services (other than restaurant services), for up to a value not exceeding 10% of turnover in the preceding financial year or Rs. 5 lakhs, whichever is higher.
• GST under RCM on supplies made by unregistered persons to be restricted to only notified categories and supplies
• The threshold registration exemption limit in the States of Assam, Arunachal Pradesh, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand to be increased to Rs. 20 Lakhs from Rs. 10 Lakhs.
• Taxpayers may opt for multiple registrations within a State/Union territory in respect of multiple places of business located within the same State/Union territory.
• Mandatory registration is required for only those e-commerce operators who are required to collect tax at source.
• Registration to remain temporarily suspended while the cancellation of registration is under process so that the taxpayer is relieved of continued compliance under the law.
• No GST on Supply of goods to any person from outside India before clearance for home consumption
• The scope of input tax credit is being widened, and it would now be made available in respect of the following:
a. Few exempted supplies specified in Schedule III;
b. Motor vehicles for transportation of persons having a seating capacity of more than thirteen (including the driver), vessels and aircraft;
c. Motor vehicles for transportation of money for or by a banking company or financial institution;
d. Services of general insurance, repair and maintenance in respect of motor vehicles, vessels and aircraft on which credit is available; and
e. Goods or services which are obligatory for an employer to provide to its employees, under any law for the time being in force.
• No Interest liability on the reversal of input tax credit on failure to pay to the Supplier by the recipient within 180 days from the date of issue of invoice
• Registered persons may issue consolidated credit/debit notes in respect of multiple invoices issued in a Financial Year.
• Supply of services to qualify as exports, even if payment is received in Indian Rupees, where permitted by the RBI.
The author is a practicing Chartered Accountant in Delhi/NCR specializing in GST, UAE VAT, end-to-end start-up formation and compliances, Corporate Finance and end-to-end business solutions. He is also a GST Trainer and Faculty Member of ICAI. He has conducted various sessions on GST on different topics. He can also be reached at email@example.com.