Major Decisions by GST Council on 06.10.17
The GST Council, in its 22nd meeting held at New Delhi on 6th October 2017, has recommended the following facilitative changes to ease the burden of compliance on small and medium businesses:
COMPOSITION SCHEME:
The composition scheme shall be made available to taxpayers including Jammu & Kashmir and Uttarakhand having annual aggregate turnover of up to Rs. 1 crore (previously Rs.75 lacs). This threshold of turnover for special category States, except Jammu & Kashmir and Uttarakhand, shall be increased to Rs. 75 lacs from Rs. 50 lacs.
The facility of availing composition under the increased threshold shall be available to both migrated and new taxpayers up to 31.03.2018. The option once exercised shall become operational from the first day of the month immediately succeeding the month in which the option to avail the composition scheme is exercised. New entrants to this scheme shall have to file the return in FORM GSTR-4 only for that portion of the quarter from when the scheme becomes operational and shall file returns as a normal taxpayer for the preceding tax period.
TRADER PROVIDING EXEMPT SERVICE CAN OPT FOR COMPOSITION SCHEME:
Persons who are otherwise eligible for composition scheme but are providing any exempt service (such as extending deposits to banks for which interest is being received) were being considered ineligible for the said scheme. It has been decided that such persons who are otherwise eligible for availing the composition scheme and are providing any exempt service, shall be eligible for the composition scheme based on the turnover excluding turnover of exempted service.
INTERSTATE SERVICE SUPPLIER LIABLE FOR REGISTRATION ONLY IF TURNOVER EXCEEDS RS. 20 LAKHS: It has now been decided to exempt those service providers whose annual aggregate turnover is less than Rs. 20 lakhs (Rs.10 lakhs in special category states except J & K) from obtaining registration even if they are making inter-State taxable supplies of services. This measure is expected to significantly reduce the compliance cost of small service providers.
QUARTERLY RETURNS FOR ASSESSE HAVING TURNOVER UPTO RS. 1.5 CRORES:
GSTR 1, GSTR 2 and GSTR 3 shall be filed quarterly by the assessee having turnover up to Rs. 1.5 crores, from 3rd Quarter Oct-Dec 2017 onwards. However all such taxpayer shall be required to file GSTR 3B atleast upto December 2017. The registered buyers from such small taxpayers would be eligible to avail ITC on a monthly basis.
REVERSE CHARGE:
The reverse charge mechanism under sub-section (4) of section 9 of the CGST Act, 2017 (purchase from unregistred supplier) shall be suspended till 31.03.2018. However the reverse charge mechanism under section 9(3) of the CGST Act (specified goods and services like GTA) will be continued.
RELIEF TO EXPORTERS:
- Exporters have been exempted from furnishing Bond and Bank Guarantee when they clear goods for export.
- To prevent cash blockage of exporters due to upfront payment of GST on inputs etc. Immediate relief is being given by extending the Advance Authorization (AA) / Export Promotion Capital Goods (EPCG) / 100% EOU schemes to sourcing inputs etc. from abroad as well as domestic suppliers. Holders of AA / EPCG and EOUs would not have to pay IGST, Cess etc. on imports. Also, domestic supplies to holders of AA / EPCG and EOUs would be treated as deemed exports under Section 147 of CGST/SGST Act and refund of tax paid on such supplies given to the supplier.
- Merchant exporters will now have to pay nominal GST of 0.1% for procuring goods from domestic suppliers for export. The details would be released soon.
- The permanent solution to cash blockage is that of “e-Wallet” which would be credited with a notional amount as if it is an advance refund. This credit would be used to pay IGST, GST etc. The details of this facility would be worked out soon and may be operational w.e.f. 01.04.2018
- Specified banks and Public Sector Units (PSUs) are being allowed to import Gold without payment of IGST. This can then be supplied to exporters as per a scheme similar to AA.
- By 10.10.2017 the held-up refund of IGST paid on goods exported outside India in July would begin to be paid. The August backlog would get cleared from 18.10.2017 and refunds for subsequent months would be handled expeditiously.
- To restore the lost incentive on sale of duty credit scrips, the GST on sale‑purchase of these scrips is being reduced from 5% to 0%
OTHERS:
- Small dealers (whose turnover is upto Rs. 1.5 Crore) are not required to pay tax on advance received in respect of supply of goods/ services.
- TDS/TCS provisions shall be postponed till 31.03.2018
- The E-way bill system shall be introduced in a staggered manner with effect from 01.01.2018 and shall be rolled out nationwide with effect from 01.04.2018.
- The last date for filing the return in FORM GSTR-4 by a taxpayer under composition scheme for the quarter July-September, 2017 shall be extended to 15.11.2017. Also, the last date for filing the return in FORM GSTR-6 by an input service distributor for the months of July, August and September, 2017 shall be extended to 15.11.2017.
- In order to remove the hardship being faced by small unregistered businesses on this account, the services provided by a GTA to an unregistered person shall be exempted from GST.
- It has now been decided to exempt those service providers whose annual aggregate turnover is less than Rs. 20 lacs (Rs. 10 lacs in special category states except J & K) from obtaining registration even if they are making inter-State taxable supplies of services.
- Invoice Rules are being modified to provide relief to certain classes of registered persons.
- NO PAN is needed for purchase/ sales of jewellery of more than Rs. 50,000 but upto Rs. 2 lacs only.
REDUCTION OF GST RATES:
| Name of commodity | Old Rate | Revised Rate |
| Unbranded Namkeen, Unbranded Ayurvedic/ Homeo, Unani medicine, sliced dried mango, plain chapaati roti and khakra | 12% | 5% |
| Man-made yarn, synthetic yarn, sewing thread of man-made fibre | 18% | 12% |
| Stationery items, stones used for flooring (other than marble and granite), diesel engine parts and pump parts | 28% | 18% |
| E-waste | 28% | 5% |
| Food packets given to school kids under Integrated Child Development Scheme (ICDS) | 12% | 5% |
| Job works like zari, imitation, food items and printing items | 12% | 5% |
| Government contracts involving high amount of labour | 12% | 5% |
| AC Restaurant | 18% | 12% |
| Poster colours | 28% | 18% |
| Modelling paste for children amusement | 28% | 18% |
| Plastic waste, parings or scrap | 18% | 5% |
| Paper waste or scrap | 12% | 5% |
| Duty credit scrips | 5% | Nil |
| Sewing thread of manmade filaments, whether or not put up for retail sale | 18% | 12% |
| All goods falling under heading 6802 [other than those of marble and granite or those which attract 12% GST] | 28% | 18% |
| Cullet or other waste or scrap of Glass, Scrap of Plastic, Rubber waste, Paper waste | 18% | 5% |
| Fittings for loose-leaf binders or files, letter clips, letter corners, paper clips, indexing tags and similar office articles, of base metal; staples in strips (for example, for offices, upholstery, packaging), of base metal | 28% | 18% |
| Plain Shaft Bearing 8483 | 28% | 18% |
| Parts suitable for use solely or principally with fixed Speed Diesel Engines of power not exceeding 15HP | 28% | 18% |
| Parts suitable for use solely or principally with power driven pumps primarily designed for handling water, namely, centrifugal pumps (horizontal and vertical), deep tube-well turbine pumps, submersible pumps, axial flow and mixed flow vertical pumps | 28% | 18% |
| Biomass briquettes | 18% | 5% |
IGST exemption on imports of goods:
| Description | Old Rate | Revised Rate |
| IGST exemption on imports of rigs imported for oil / gas exploration and production projects under lease, subject to the following conditions that:
(i) Integrated tax leviable under section 5(1) of the IGST Act, 2017 on supply of service covered by item 1(b) or 5(f) of Schedule II of the Central Goods and Services Tax Act, 2017; (ii) The rig is not sold without the prior permission of the Commissioner of Customs of the port of importation; (iii) to re-export the goods within 3 months from the expiry of the period for which they were supplied under a transaction covered by item 1(b) or 5(f) of Schedule II of the Central Goods and Services Tax Act, 2017 out of India; (iv) to pay on demand an amount equal to the integrated tax payable on the said goods but for the exemption under this notification in the event of violation of any of the above conditions and applicable interest. |
5% | Nil |
| Exemption from IGST on imports of medicines supplied free by international agencies like UNICEF, WHO, Red Cross etc. | 12%/5% | Nil |
| Exemption from IGST on imports of bona fide gifts upto CIF value limit of Rs. 5000 imported through post or air. | 28% | Nil |