Summary of 23rd GST Council Meet
The changes to be made prospectively from 15th November
Changes in the Composition Scheme
a. Composition scheme limit to be increased to Rs 1.5 crore (this can be extended to Rs 2 crore later).
b. 1 % GST rate for the manufacturers & traders
c. Composition tax of 1% on the turnover of taxable goods (the turnover of exempted goods to be excluded)
d. Those who are supplying goods and services (services not exceeding Rs 5 lakhs in total) will be eligible for the compositions scheme
e. Composition Returns, GSTR-4 due date to be extended to 24th December
f. Composition dealers cannot make an inter-state sales. The Input tax benefit not allowed.
Relief in the GSTR compliance
All businesses to file GSTR-1 and GSTR-3B by March 2018.
The GSTR-2 and GSTR-3 filing dates for July 2017 to March 2018 will be worked out later by a Committee of Officers
The turnover under Rs 1.5 Cr to file quarterly GSTR-1
The turnover above Rs 1.5 Cr to file monthly GSTR-1
All businesses have to file GSTR-3B by 20th of next month till March 2018.
Relief for service providers
All service providers with a turnover of up to Rs 20 lakhs exempt from the GST registration. This includes those who supply an inter-state or supply through e-commerce operator, such service providers do not have to register.
Challenges ahead for Restaurants
The GST rate cut to 5% with no input tax credit.
Other taxpayer relief measures
Late Fees reduced – For delayed filing of the NIL returns, the late fee reduced from Rs 200 per day to Rs 20 per day.
Late Fee credit – Late fees for the GSTR-3B of July, Aug and Sept has been waived. Any late fees paid for these months will be credited back into the Electronic Cash Ledger under ‘Tax’ and can be utilized to make the GST payments.
Manual filing for the Advance Ruling application to be introduced
The export of services to Nepal and Bhutan are exempt from the GST and have now been allowed to claim a refund of the input tax credit paid, if any.
TRAN-1 can be filed and revised till 31st December 2017. The revision to be done only once.
Timelines for filing of the GSTR-2 and the GSTR-3 for July to March 2018 to be worked out by a Committee of Officers. However, subsequent month filing of the GSTR-1 will not be impacted.
Others GSTR filing extensions
Revised Due Date
Old Due Date
GSTR-5 (for Non Resident)
15th Dec 2017
Earlier of 20th August 2017 or 7 days from date of registration
GSTR-4 (for Composition Dealers)
24th Dec 2017
18th October 2017
GSTR-6 (for Input Service Distributor)
31st Dec 2017
13th August 2017
ITC-04 (for job work) for quarter of Jul-Sep
31st Dec 2017
25th October 2017
31st Dec 2017
30th September 2017
The GST Rate Changes
28% slab pruning cost to the government= 20,000 crore
% composition rate for the manufacturers & traders
Reduced from 28% to 18% W.e.f. 15th Nov 2017 – Perfume, Shampoo, tiles, watches
Reduced from 28% to 12% – Wet grinders, tanks
Reduced from 18% to 12% – Condensed milk, diabetic food, refined sugar
Reduced from 12% to 5% – Coir products, Desiccated coconut, idli dosa batter
Reduced from 5% to Nil – Duar meal, khandsari sugar, dried vegetables
Restaurants that are within hotels (room tariff <7,500- 5% without ITC Restaurants that are within hotels (room tariff >7,500) still 18% with ITC
Outdoor catering 18% with ITC
As per the 22nd GST Council meeting of 6th October 2017
Lesser burden of the compliance for small businesses
The government has recognised the hardship faced by small businesses with a turnover of within Rs 1.5cr, by delaying their return filing compliance to once a quarter from once a month. The taxes will be paid quarterly.
The small businesses will also have to file the monthly returns for three months – July, August, and September – and switchover to quarterly filing will happen from the cycle starting October 1.
Relief for Service Providers
Exemption from the Registration for a service provider if the aggregate turnover is less than Rs. 20Lacs (10 Lacs in a special category state except for J&K) even if they are making an inter-state supplies of services.
The services provided by a GTA to an unregistered individual shall be exempted from the GST.
The TDS/TCS provisions shall be postponed till 31.03.2018.
The small businesses will also have to file monthly returns for three months – July, August, and September – and switchover to quarterly filing will happen from the cycle starting October 1.
Relief for Exporters
The refund cheques for July exports will be processed by Oct 10 and the refund cheques for August exports will be processed by Oct 18.
Every exporter shall now get an e-wallet. In the e-wallet, there will be a notional amount for credit. The refund they eventually get will be offset from that amount. The e-wallet will be introduced from April next year.
The merchant exporters will pay a nominal 0.1% GST which is applicable on exports to enable their suppliers to claim ITC.
Composition Scheme changes
Individuals otherwise eligible for availing the composition scheme and are providing any exempt services will now be eligible for the composition scheme.
The eligibility of composition scheme raised to Rs 1 crore.
The traders will pay 1%, manufacturers 2% and restaurants 5% under the composition scheme.
The due date of FORM GSTR-4 for the quarter July-September, 2017 is extended to 15th November 2017
The RCM postponed
The RCM applicable for the purchases from the unregistered dealer will be suspended till 31.03.2018.
No GST on the advance receipts for businesses with a turnover under Rs 1.5cr
The taxpayers having an annual turnover upto 1.5 Crore will not be required to pay GST at the time of the receipt of advances on account of supply of goods.
Significant rate changes
The GST on unbranded Ayurvedic medicines has been reduced from 12% to 5%.
The tax rate for man-made yarn has been reduced to 12% from 18%. The decision will have an effect on textiles.
The GST rate on many job work items reduced from 12% to 5%. The GST rate on some the stationery items, diesel engine parts also reduced to 18% from the earlier 28%.
The GST on khakra and unbranded namkeen has been reduced from 12% to 5%. The tax on zari work has been reduced from 12% to 5%.
35% abatement on old leasing contract of vehicle
The printing Job work rate revised from 12% to 5%
E-way bill has been deferred to 1st April 2018
A relief for jewellers as no need to furnish PAN card on jewellery purchase of more than Rs 50,000. The amount of jewellery purchase for which KYC will be needed will be determined later.
35% abatement on old leasing contract of the vehicle
The due date of the GSTR-6 (filed by an input service distributor) for the months of July, August and September 2017 has been extended to 15.11.2017
The Finance Minister Arun Jaitley announced that a group of ministers will relook the tax on AC restaurants. The GST for AC restaurants may become cheaper from 18% to 12%. A group of ministers have been formed to devise the mechanism. The GoM will submit its report in 14 days.
The GoM will also make the composition scheme more attractive
Composition Scheme- Notification 3 & 8/2017
The Composition scheme threshold has been notified to be 75 lakhs. This will be beneficial to the small businesses.
Notification 3 contains the composition scheme rules which had been issued earlier on 17th May.
Reverse Charge- Notification 5/2017
The individuals who only supply the goods/services on which the reverse charge applies are exempted from registering under GST registration.
For example, The Ola Cabs enlist drivers to ply their cars. The drivers are providing chauffeur/driving services to the Ola and Ola is the service receiver.
Ola pays the GST on the drivers’ services on the reverse charge basis. The drivers are not required to register under the GST thus removing burden of tax compliance for individuals with the limited resources (drivers) to large companies (Ola) with enough resources.
Sections coming into force-Notification 1 & 9/2017
With the Notification of 19th June and 28th June, most of CGST Act is now in force. Only sections 51 & 52 (TDS & TCS respectively) aren’t applicable as the government has relaxed the TDS & TCS provisions for the time being to give more time to the e-commerce sellers.
Sections 42(9) & 43(9) aren’t applicable.
These clauses state that if the output tax liability is reduced (or input tax credit is increased) due to a debit note (or a credit note) [mismatch of invoices reconciliation] then such an amount will be refunded by the crediting electronic ledger. This isn’t applicable right now as there will not be any reconciliation for 2 months.
The CBEC has issued the rules on valuation, transition, refunds etc. in a 247 page document.
HSN Codes-Notification 12/2017
Every registered individual with a turnover of more than 1.5 crores must mention the HSN Codes in each and every invoice.
However, numbers of digits to be mentioned in the Invoice depends on the annual turnover in the preceding financial year.
Turnover in previous FY
No. of digits
Upto Rs. 1.50 Cr
More than Rs. 1.50 Cr. & upto Rs. 5 Cr
More than Rs. 5 Cr
This is effective from 1st July, i.e., all the invoices from 1st July must be GST compliant and have details of HSN codes.
The same notifications have also been made under the IGST (notification 5).
Rates of interest-Notification 13/2017
Rates of interest are the same as mentioned in the Act. The notification ratifies the rates.
This notification will come into force from the 1st day of July, 2017
Sec 50(1)- Failure to pay tax
Sec 50(3)- Less tax paid/ excess ITC availed
Sec 54(12)- Interest on refunds withheld in an appeal later given
Sec 56- Interest on delayed refunds
Proviso to 56- Interest on refunds ordered in an appeal
The same notification has also been made under the IGST (notification 6).
Common Portal- Notification 4 /2017
It has been notified that the GST website of the Common Portal is www.gst.gov.in managed by the Goods and Services Tax Network.
Modes of verification-Notification 6 & 11/2017
The modes of verification are-
An Aadhaar based Electronic Verification Code (EVC)
An electronic verification code generated through net banking login on the common portal
An electronic verification code generated on the common portal
[Points ii & iii replacing the earlier Bank account based OTP as per the earlier notification] The Central Tax Rate Notification (28.06.2017)
Most of the goods are kept at the same rates as was announced by the GST council earlier but rough or non-industrial unworked diamond or precious stones shall be charged the CGST at the rate of 0.125%.
A List of goods exempt from the CGST. No change in the list.
Oil, gas, coal and petroleum licenses and the sub-contract licenses and leases will be charged the GST at the rate of 2.5%.
The individual liable to deduct the TDS as per the GST law supplying intrastate goods or services to an unregistered person will be exempt from the CGST.
Cashew nuts, not shelled or peeled, Bidi wrapper leaves (tendu), Silk yarn, Tobacco leaves, the supply of lottery will have a reverse charge applicable under the GST.
The refund of unutilized the ITC will not be provided in the case of tax on the output being lower than the tax on the inputs for certain goods mainly related to the textile and railways.
The supply of goods by the CSD to unit run canteens and the authorized customers and the supply of goods by the unit run canteens to the authorized customers.
50% of the tax paid on an inward supplies of goods by the CSD for further supply to the unit run canteens or authorized customers can be claimed as refund under GST.
Individuals liable to deduct the TDS as per the GST law supplying the intra goods or services to an unregistered individual will be exempt from the CGST.
The Intrastate supply of second hand goods by a registered individual who deals in selling second hand goods to an unregistered individual will be exempt from the CGST.
Sections in force-Notification No. 3/2017
The Central Government has notified that the provisions of sections 4 to 13, 16 to 19, 21, 23 to 25 of The Integrated Goods and Service Tax Act, 2017 will come into force from 1st July 2017.
Provisions of the CGST will also apply for IGST- Notification No. 4/2017
The Integrated Goods and Services Tax Rules, 2017 has been notified and is deemed to have come into force retrospectively from 22nd June 2017.
The Central Goods and Services Tax Rules, 2017, for carrying out provisions specified in section 20 of the Integrated Goods and Services Tax Act, 2017 will, so far as may be, apply in relation to an integrated tax as they apply in relation to the central tax. Section 20 mentions the CGST provisions that will apply mutatis mutandis for the IGST.
The GST News -Integrated Tax (Rates) Notifications
Cases where the e-commerce operator will pay IGST- Notification No. 14/2017
E-commerce operator will pay IGST in the following services-
Transportation of the passengers by a radio-taxi, maxicab, motorcab, and motor cycle (For example: Ola outstation from Chennai to Bangalore)
Providing accommodation in inns, hotels and other commercial places meant for residential or lodging purposes. Example, a small hotel registered on Oyo rooms. Oyo rooms will pay the IGST .However, if the individual (hotel) supplying such service through e-commerce is liable for the registration under the GST then that person will pay. Example, Ibis Hotel is a large multi-chain hotel and is also registered on Oyo rooms. Then Ibis Hotel will pay.
It will come into force with effect from the 1st July 2017.
Goods on which reverse charge applies-Notification No.4/2017
A list of goods on which the reverse charge applies is issued by the CBEC. When the supply is made by the specified person, then IGST will be payable on the reverse charge basis by the recipient of the intra-state supply of such goods. All the provisions of will apply to such a recipient.
No ITC for Construction- Notification No. 12/2017
No refund of the unutilized ITC will be allowed input tax credit will be allowed for the IGST in construction of a complex, building etc. (works contract). Except in cases where the entire consideration has been received after the issuance of completion certificate or after its first occupation, whichever happens earlier.
This is in keeping with the provision of not allowing the ITC.
This will come into force with effect from 1st day of July 2017.
Reverse Charge- Notification No. 10/2017
List of services on which the reverse charge is applicable is issued. It is the same as issued under the CGST Act.
Army Canteens- Notification No. 6 & 7/2017
In the public interest exempts, the following are exempted from the IGST (& also CGST)-
Supply of goods by the Canteen Stores Department (CSD) to the Unit Run Canteens or
Supply of goods by the CSD/Unit Run Canteens to the authorized customers
The CSD can claim a refund of 50% on the IGST of all the input goods received by it for the subsequent supply of such goods to the Unit Run Canteens or to the authorized customers of the CSD.
This notification will come into force with effect from 1st July 2017.
Inverted Rate Structure- Tax on Inputs>Tax on Outputs- Notification No.5/2017
The refund of the unutilised ITC will NOT be allowed, when the ITC is accumulated the due to the rate of tax on inputs being higher than rate of tax on the output goods (except nil rated or fully exempted goods).
High tax on the imported raw materials compels the manufacturers to raise the price. On the other hand, the foreign finished goods have a lower tax rate. In conclusion, manufactured goods by the domestic industry have become uncompetitive against the imported finished goods.
For UIN & Diplomats Notification No. 13/2017
This notification specifies the conditions applicable –
UN or specified international organisations and
Foreign diplomats in India
Panchayat services- Notification No. 11/2017
The constitutional services of the Panchayat are not covered under the GST.
News on the GST Act
The entire framework of the GST is based on the GST Act. It was devised by the GST Council, which is a committee consisting of the Union Finance Minister (Chairperson), the Union Minister of State, the minister in-charge of finance or taxation or any other minister nominated by each of the State Government.
The GST News – Rule Changes
The GST is a constitutional amendment, and any change in the law will also affect the rules therein. The rules for invoicing, rules for penalty, rules defining the point of taxation – these are just some of the examples of any rule change in the model law.