17.12.2022: Key highlights of the 48th GST Council Meet held on 17th December, 2022

The 48th GST Council meeting was held in Delhi on December 17, 2022 under the chairmanship of the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman. The GST Council has inter-alia made the following recommendations relating to changes in GST tax rates, measures for facilitation of trade and measures for streamlining compliances in GST. The key highlights of the meeting are as under:

  1. Rate of Tax
  2. Reverse charge mechanism
  3. Taxability of GST
  4. Decriminalization under GST
  5. Ease of doing business
  6. Removal of legal disputes on certain issues
  7. Miscellaneous

1. Rate of Tax

 A. Change in rate of tax 

S.No. Description of goods From To
1.       Husk of pulses including chilka and concentrates including chuni/churi, khanda 5% Nil
2.       Ethyl alcohol supplied to refineries for blending with motor spirit (petrol)  18% 5%

B. Clarification on GST rates:

  • Rab (rab-salawat) is classifiable under CTH 1702 which attracts GST at the rate of 18%.
  • Fryums manufactured using the process of extrusion is specifically covered under CTH 19059030 and attract GST at the rate of 18%.
  • The higher rate of compensation cess of 22% is applicable to motor vehicle fulfilling all four conditions, namely, it is popularly known as SUV, has engine capacity exceeding 1500 cc, length exceeding 4000 mm and a ground clearance of 170 mm or above.
  • Goods falling in lower rate category of 5% under schedule I of notification No. 1/2017-CTR imported for petroleum operations will attract lower rate of 5% and the rate of 12% shall be applicable only if the general rate is more than 12%.

2. Reverse charge mechanism: To include supply of Mentha arvensis under reverse charge mechanism as has been done for Mentha Oil.

3. Taxability:

  • No GST is payable where the residential dwelling is rented to a registered person if it is rented it in his/her personal capacity for use as his/her own residence and on his own account and not on account of his business.
  • No GST on incentive paid to banks by Central Government under the scheme for promotion of RuPay Debit Cards and low value BHIM-UPI transactions, as they are in the nature of subsidy.

 4. Decriminalization under GST: 

  • Raising the minimum threshold of tax amount for launching prosecution under GST from Rs. One Crore to Rs. Two Crores, except for the offence of issuance of invoices without supply of goods or services or both;
  • Reduce the compounding amount from the present range of 50% to 150% of tax amount to the range of 25% to 100%
  • Decriminalize certain offences specified under clause (g), (j) and (k) of sub-section (1) of section 132 of CGST Act, 2017, viz.-
    • obstruction or preventing any officer in discharge of his duties;
    • deliberate tempering of material evidence;
    • failure to supply the information.

5. Ease of doing business with GST

  • To prescribe the mechanism for reversal of input tax credit by a registered person in the event of non-payment of tax by the supplier by a specified date and mechanism for re-availment of such credit, if the supplier pays tax subsequently. This would ease the process for complying with the condition for availment of input tax credit under section 16(2)(c) of CGST Act, 2017.
  • To provide clarity on the requirement of submission of certified copy of the order appealed against and the issuance of final acknowledgment by the appellate authority. This would facilitate timely processing of appeals and ease the compliance burden for the appellants.
  • To provide the facility for withdrawal of an application of appeal up to certain specified stage. This would help in reducing litigations at the level of appellate authorities.

6. To remove ambiguity and legal disputes on various issues:

  • Procedure for verification of input tax credit in cases involving difference in input tax credit availed in FORM GSTR-3B vis a vis that available as per FORM GSTR-2A during FY 2017-18 and 2018-19.
  • Clarifying the manner of re-determination of demand in terms of sub-section (2) of section 75 of CGST Act, 2017.
  • Clarification in respect of applicability of e-invoicing with respect to an entity.

7. Miscellaneous: 

  • Refund to unregistered persons: To prescribe the procedure for filing application of refund by the unregistered buyers, as there is no procedure for claim of refund of tax borne by the unregistered buyers in cases where the contract/ agreement for supply of services, like construction of flat/house and long-term insurance policy, is cancelled and the time period of issuance of credit note by the concerned supplier is over.
  • Facilitate e-commerce for micro enterprises: The GST Council has inter-alia made the recommendation to allow unregistered suppliers and composition taxpayers to make intra-state supply of goods through E-Commerce Operators and to implement the scheme w.e.f. October 01, 2023, for development of the requisite functionality on the portal as well as for providing sufficient time for preparedness by the E-Commerce Operators.
  • Issuance of clarification relating to clarify on No Claim Bonus offered by the insurance companies to the insured is an admissible deduction for valuation of insurance services.
  • Facility to TDS deductor and TCS collector: To provide for facility to the registered persons, who are required to collect tax at source under section 52 or deduct tax at source under section 51 of CGST Act, 2017, for cancellation of their registration on their request.

 The Press release can be accessed at https://pib.gov.in/PressReleasePage.aspx?PRID=1884399



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