Recommendations of 49th GST Council Meeting

49th GST Council Meeting Summary

In this post , We’ll talk about the suggestions made at the 49th GST Council meeting with regard to GST compensations and other related topics. Let’s look at it.

key points:

  • Government of India to clear the entire pending balance GST compensation.
  • The GST Council adopts the report of the Group of Ministers (GoM) on GST Appellate Tribunal with certain modifications.
  • GoM report on Capacity Based Taxation and Special Composition Scheme in certain Sectors on GST approved.
  • Changes in GST rates of “Rab” and Pencil Sharpener.
A number of recommendations have been made by the GST Council, including those regarding GST compensation, the GST Appellate Tribunal, approval of the (GoM) Group of Ministers’ Report on Capacity Based Taxation and Special Composition Scheme, recommendations relating to GST rates and other trade facilitation measures:

GST Compensation

  1. In June 2022, the Government of India will clear the entire pending GST compensation of Rs. 16,982 crore. As there is no GST compensation fund, the Centre decided to release the money from its own resources and recover the money through the future compensation cess.
  2. The Council adopted the report of the Group of Ministers with certain modifications. The final draft amendments to the GST laws shall be circulated to Members for their comments. The Chairperson has been authorised to finalise the same.
  3. Approval of the Report of GoM on Capacity Based Taxation and Special Composition Scheme in certain Sectors on GST: 
With a view to plug the leakages and improve the revenue collection from the commodities like pan masala, gutkha, chewing tobacco, the Council approved the recommendations of the GoM including, inter alia, that
  • the capacity based levy not to be prescribed; 
  • compliance and tracking measures to be taken to plug leakages/evasions;
  • exports of such commodities to be allowed only against LUT with consequential refund of accumulated ITC; 
  • compensation cess levied on such commodities to be changed from ad valorem to specific tax based levy to boost the first stage collection of the revenue.  
  1. Recommendations relating to GST rates on Goods and Services 
A, Changes in GST rates of Goods and Services 
Sr.NoDescription FromTo 
1.‘Rab’18%5% – if sold prepackaged and labelled Nil – if sold otherwise
2.Pencil Sharpener 18%12%
B, It has been decided to regularise payment of GST on ‘rab’ during the past period on “as is basis” on account of genuine doubts over its classification and applicable GST rate. C, It was decided to suitably amend notification No. 104/94-Customs dated 16.03.1994 so that if a device like tag- tracking device or data logger is already affixed on a container, no separate IGST shall be levied on such affixed device and the ‘nil’ IGST treatment available for the containers under notification No. 104/94-Customs shall also be available to the such affixed device subject to the existing conditions.  D,  It has been decided to amend entry at Sl. No. 41A of notification No. 1/2017-Compensation Cess (Rate) so that exemption benefit covers both coal rejects supplied to and by a coal washery, arising out of coal on which compensation cess has been  paid and no input tax credit thereof has been availed by any person.  E, It has been decided to extend the exemption available to educational institutions and Central and State educational boards for conduct of entrance examination to any authority, board or a body set up by the Central Government or State Government including National Testing Agency for conduct of entrance examination for admission to educational institutions.  F,  It has been decided to extend the dispensation available to Central Government, State Governments, Parliament and State Legislatures with regard to payment of GST under reverse charge mechanism (RCM) to the Courts and Tribunals also in respect of taxable services supplied by them such as renting of premises to telecommunication companies for installation of towers, renting of chamber to lawyers etc.
    Measures for facilitation of trade: 
A,  Revocation of cancellation of registration and one-time amnesty for past cases: The Council has recommended amendment in section 30 of CGST Act, 2017 and rule 23 of CGST Rules, 2017 so as to provide that –
  • Increasing the time limit for revocation of cancellation of registration from 30 to 90 days;
  • If the registered person does not apply for such revocation within 90 days, the Commissioner or another officer authorised by him may extend the time period not exceeding 180 days.
  • Also, the Council recommended that registrations cancelled in the past because of non-filing returns may be granted amnesty in those cases. When a cancellation application could not be filed within the specified period in section 30 of the CGST Act, it was permitted to be filed by a specified date, subject to certain conditions, for revocation. 
B,  Amendment to Section 62 of CGST Act, 2017: As per sub-section (2) the assessment order is deemed to be withdrawn if the relevant return is filed within 30 days of service of the assessment order. The Council recommended to increase the time period for filing of return  for enabling deemed withdrawal from the present 30 days to 60 days.  The Council also recommended to provide an amnesty of conditional deemed withdrawal of assessment orders for past cases where return could not be filed within 30 days of the assessment order but has been filed along with due interest and late fee upto a specified date. C,  Rationalisation of Late fee for Annual Return: Currently Rs 200 per day (Rs 100 CGST + Rs 100 SGST) is the late fee, subject to a maximum of 0.5% of the turnover is payable in case of delayed return filing of Form GSTR-9. It was recommended by the council to rationalise the late fee for FY 2022-23, for those having a turnover upto 20 Cr as below
  • Taxpayers having an aggregate turnover of up to Rs. 5 crores in the financial year: Rs 50 per day (Rs 25 CGST + Rs 25 SGST), subject to a maximum of an amount calculated at 0.04% of the turnover.
  • Taxpayer having an aggregate turnover of more than Rs. 5 crores and up to Rs. 20 crores in the financial year: Rs 100 per day (Rs 50 CGST + Rs 50 SGST), subject to a maximum of an amount calculated at 0.04 per cent. of the turnover 
D,  The Council recommended amnesty schemes in respect of pending returns in FORM GSTR-4, FORM GSTR-9 and FORM GSTR-10 by way of conditional waiver/ reduction of late fee. E,  The Council recommended to rationalise the provision of place of supply for services of transportation of goods by deletion of section 13(9) of IGST Act, 2017 so as to provide that the place of supply of services of transportation of goods, in cases where location of supplier of services or location of recipient of services is outside India, shall be the location of the recipient of services.
For further details, please view the attached document: Press Information Bureau