Measures for facilitation of trade:

  • Amnesty Scheme for filing of appeals against demand orders in cases where appeal could not be filed within the allowable time period: filing of appeal by the taxpayers will be allowed against such orders upto 31st January 2024, subject to the condition of payment of an amount of pre-deposit of 12.5% of the tax under dispute, out of which at least 20% (i.e., 2.5% of the tax under dispute) should be debited from Electronic Cash Ledger. This is a golden opportunity for those taxpayers who might have missed the appeal deadline. This will facilitate a large number of taxpayers, who could not file appeal in the past within the specified time period.
  • Rule 159 of the CGST Rules, 2017 to be amended: Automatic restoration of provisionally attached property after completion of one year. The Council has recommended an amendment in sub-rule (2) of Rule 159 of CGST Rules, 2017 and FORM GST DRC-22 to provide that the order for provisional attachment in FORM GST DRC-22 shall not be valid after expiry of one year from the date of the said order.
  • Clarified that no GST would apply on personal guarantee offered by directors to the bank against the credit limits/loans sanctioned to the company.
  • Defined the taxable value for corporate guarantee provided between related persons (a holding company to its subsidiary) as 1% of the amount of such guarantee offered, or the actual consideration, whichever is higher.
  • The GST Council on Saturday recommended to keep Extra Neutral Alcohol (ENA) used for manufacture of alcoholic liquor for human consumption outside GST.
  • Allowing supplies to SEZ units/ developer for authorised operations for IGST refund route by amendment in Notification 01/2023-Integrated Tax dated 31.07.2023: A Special Economic Zone unit for authorised operations to make supply of goods or services (except the commodities like pan masala, tobacco, gutkha, etc. to the Special Economic Zone developer or the Special Economic Zone unit for authorised operations on payment of integrated tax and claim the refund of tax so paid.

Rules defined for Composition of GSTAT

  • Minimum age limit is 50 years while the maximum is 70 years for the President and 67 years for members of GSTAT.
  • Advocates with 10 years’ experience can only be appointed as judicial members.

Clarifications given on Key Issues

  • The District Mineral Foundation Trust (DMFT) in mineral mining are eligible for the same GST exemptions as other government authorities.
  • Job work services to process barley into malt attract 5% GST and not 18%, being “job work in relation to food and food products”.
  • 18 states have passed the amendments to charge 28% GST on gaming companies w.e.f. 01.10.2023 along with the GST Rules while 13 are yet to notify changes.
  • Supply of all goods and services by Indian Railways shall be taxed under Forward Charge Mechanism to enable them to avail ITC. This will reduce the cost for Indian Railways

GST Rate changes on goods

  1. GST rates on “Food preparation of millet flour in powder form, containing at least 70% millets by weight”, falling under HS 1901, with effect from date of notification, have been prescribed as: a. 0% if sold in other than pre-packaged and labelled form b. 5% if sold in pre-packaged and labelled form
  2. To clarify that imitation zari thread or yarn made out of metallised polyester film /plastic film, falling under HS 5605, are covered by the entry for imitation zari thread or yarn attracting 5% GST rate. However, no refund will be allowed on polyester film (metallised) /plastic film on account of inversion.

GST Rate changes on services

  1. Whether supply of pure services and composite supplies by way of horticulture/horticulture works (where the value of goods constitutes not more than 25 per cent of the total value of supply) made to CPWD are eligible for exemption from GST under Sr. No. 3 and 3A of Notification no 12/2017-CTR dated 28.06.2017.
  2. A conditional IGST exemption is given to a foreign flag and foreign going vessel when it converts to coastal run subject to its reconversion in six months.
  3. GST exempted on pure and composite services to Central/State/UT governments and local authorities for Panchayat/Municipality functions.
  4. All services provided by Indian Railways will be subjected to forward charge, with ITC available for discharging liabilities.

Author – Akhil Agarwal and Diksha Agarwal, CA | Advisor – Taxation