India: GST Rollout – Significant Decisions Of The GST Council

Last Updated: 4 July 2017
Article by SKP  

The GST Council in its meeting on 18 June 2017 has taken the following decisions:

Implementation date

  • Finance Minister Arun Jaitley, in his press conference, has categorically stated that GST will be implemented from 1 July 2017.
  • The official launch of GST will take place at midnight on 30 June and at a function on 1 July which will be organised in Delhi.

Relaxation in due date of filing of returns

  • The Council has extended the due date of filing certain returns by registered persons for the month of July and August 2017.
  • The revised due dates are:

Returns

Month of returns

Existing Due date

Due date

FORM GSTR-1 (details of outward supplies)

July 2017

10 August

5 September

August 2017

10 September

20 September

FORM GSTR-3B (in lieu of FORM GSTR-3)

July 2017

-

20 August

August 2017

-

20 September

FORM GSTR-2

July 2017

15 August

10 September

August 2017

15 September

25 September

  • In place of the invoice-wise details in GSTR-1 and GSTR-2, a simplified GSTR 3B containing the summary of outward and inward supplies would be required to be furnished.
  • The time limit for filing FORM GSTR-2 (details of inward supplies) will need to be extended accordingly. However, no details in respect of the same have been announced yet.

Turnover limit for composition levy

  • The Council in its previous meeting had recommended the increase of turnover limit for composition levy for CGST and SGST purpose from INR 5 million to INR 7.5 million.
  • The Council has recommended that the turnover limit for composition scheme in case of special category states (except Uttarakhand) shall be INR 5 million.

Negative list for composition levy

  • The Council has recommended that manufacturers of following goods should not be eligible for composition levy:

Classification (Tariff item/chapter)

Description

2105 00 00

Ice cream and other edible ice, whether containing cocoa or not

2106 90 20

Pan masala

24

Tobacco and manufactured tobacco substitutes


GST rates on certain goods and services

  • The GST Council has recommended the GST rates on lotteries as follows:

Description

GST rate

Lottery run by the State governments

12% of the face value of the lottery ticket

Lottery authorised by State governments

28% of the face value of the lottery ticket

  • The GST Council also recommended that the GST rate on dried Singhara and Makhana should be 5%.
  • The GST Council has revised the GST rates for certain services. The details for the same are as follows:

Description of service

Earlier GST rate

Revised GST rate

Supply of Food/drinks in air-conditioned restaurant in 5-star or above-rated hotel

28% with full Input Tax Credit (ITC)

18% with full ITC

  • Furthermore, the Council has also made some changes in the description of certain services, thereby changing the effective rate of tax applicable to them. The details of these changes are as follows:

New description of service

GST rate

Remarks

Renting of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes where room tariff is INR 2,500 and above but less than INR 7,500 per room per day

18% with full ITC

Earlier, the upper limit of room tariff in this entry was INR 5000 per room per day. As a result of this amendment, now room tariff between INR 5,000 to INR 7,500 will also fall under 18% bracket as compared to 28% earlier

Accommodation in hotels including 5 star and above rated hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes, where room rent is INR 7,500 and above per room per day

28% with full ITC

Consequential amendment has been made in this entry to include only room tariffs above INR 7,500 per room per day in the 28% tax bracket

Anti-profiteering and other draft rules

  • The Finance Minister in his press conference said that the Council has approved the rules in relation to anti-profiteering. As per these rules, a standing committee will refer complaints to Directorate of Safeguards for further investigations.
  • Rules relating to advance rulings, appeals and revision, assessment and audit have been approved by the Council.
  • It has been decided that implementation of e-way bills have been left to the states. The states at their discretion may continue the e-way bill mechanism as applicable under the existing law.

Registration window

The registration window which was closed on 15 June 2017 will reopen on 25 June 2017.

SKP's comments

  • The categorical statement by the Finance Minister in respect of the implementation of GST by 1 July 2017 will allay confusions in certain quarters of the industry.
  • The revision of due dates of return filings under GST for the month of July and August 2017 comes as a huge relief to the industry in the transitional phase.
  • The confusion with respect to e-way bills under the GST regime persists as no clear consensus has been reached on the issue. Till the time a consensus is reached, it has been decided that the states shall continue with their existing e-way bill system until such time as provisions of e-way bills under GST is finalised.
  • In a huge relief to the hospitality industry, the Council has reduced the GST rates on certain services of the hotel industry from 28% to 18%.
  • The next meeting of the GST Council is expected to take place on 30 June 2017 to review the final preparation and clear any pending issues with respect to the implementation of GST.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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