Minutes of GST Council Meeting (June 22, 2024)

Introduction

The 53rd GST Council meeting has been convened on June 22, 2024, approximately 7-8 months after its last session, focusing on significant tax-related updates. Finance Minister Nirmala Sitharaman unveiled several key measures during this meeting, including the introduction of Aadhaar-based biometric authentication for GST registration. Changes were proposed for GST rates on milk cans and the inclusion of petrol and diesel under GST consideration. Additionally, exemptions were announced for platform tickets and hotel accommodations. The Council also introduced central support and conditional loans for states and extended the deadline for filing GSTR-4 for small taxpayers.

The GST Council has made several key recommendations and amendments. The highlights of 53rd GST Council meeting are as under:

Appeals before GSTAT

The GST Council recommended amending Section 112 to set a 3-month time limit for filing appeals before the GST Appellate Tribunal, effective from a date to be notified by the government, likely by August 5, 2024.

New Provisions Introduced in 53rd GST Council Meeting

• • IGST Refund for Price Revisions: A mechanism is introduced for claiming IGST refund on exports where goods’ prices increase after export, enabling taxpayers to claim refunds for additional IGST paid.

• • No IGST Refund in Specific Cases: IGST will not be refunded where export duty is payable, applicable to both exports and supplies to SEZ units/developers, with or without tax payment, under modified Sections 16 and 54.
  • A new provision, Section 11A, allows regularization of underpaid or unpaid GST due to common trade practices.

Procedural Updates

• • Biometric Aadhaar Authentication: Biometric-based Aadhaar authentication for GST registration will be phased in across India, conducted at GST Suvidha Kendras.

• • DRC-03 Circular: A circular will outline procedures for adjusting demand amounts paid through DRC-03 against pre-deposit requirements for filing GST appeals.

• • Amendment to Section 122(1B): Section 122(1B) will be amended retrospectively from October 1, 2023, clarifying its application to e-commerce operators required to collect TCS under section 52, excluding others.

Relaxation and Waivers

• • Amendment to CGST Rule 88B: Interest will not be charged on the amount available in the electronic cash ledger on the due date of filing GSTR-3B, debited during delayed filing of the return.

• • New Section 128A: Waiver of interest and penalties for demand notices issued under section 73 of CGST for fiscal years 2017-18, 2018-19, and 2019-20, excluding cases involving fraud, suppression, or misstatement. Taxpayers can avail this waiver by paying the full amount by March 31, 2025.

Changes in Taxation Procedures

• • Changes in Section 73 and 74: Common time limits will be set for issuing demand notices and orders under both sections, irrespective of fraud classification. Taxpayers can benefit from reduced penalties by paying the tax demanded plus interest within 60 days, extended from 30 days.

Monetary Limits and Pre-deposit Reduction

• • Monetary Limits for GST Appeals: Recommended monetary limits for department appeals are Rs. 20 lakh for GST Appellate Tribunal, Rs. 1 crore for High Court, and Rs. 2 crore for Supreme Court.

• • Amendments to Sections 107 and 112: Maximum pre-deposit amounts for filing appeals will be reduced. For CGST and SGST, pre-deposit limits will decrease from Rs. 25 crore to Rs. 20 crore, and for GST Appellate Tribunal, it will reduce from 20% to 10% with a maximum of Rs. 20 crore.

Sunset Clauses and Exemptions

• • Sunset Clause for Sections 109 & 117: A sunset clause is introduced for anti-profiteering cases, with pending cases to be shifted from CCI to the principal bench of GSTAT. No new applications regarding anti-profiteering will be accepted after April 1, 2025.

• • Changes in GSTR-1: A new form, GSTR-1A, will allow taxpayers to add or amend details in GSTR-1 for the current tax period or IFF for the first two months of a quarter before filing GSTR-3B.

• • Reporting B2C Supplies: The threshold for reporting interstate B2C supplies invoice-wise in Table 5 of GSTR-1 is reduced from Rs. 2.5 lakh to Rs. 1 lakh.

• • GSTR-4 Due Date Extension: The due date for filing GSTR-4 by composition taxable persons is extended from April 30 to June 30, starting from FY 2024-25 onwards.

• • TCS Rate Reduction: The TCS rate collected by Electronic Commerce Operators under Section 52(1) of the CGST Act is proposed to be reduced from 1% to 0.5% (0.25% under CGST and 0.25% under SGST/UTGST, or 0.5% under IGST).

• • Compulsory GSTR-7 Filing: GSTR-7 must be filed even if no TDS is deducted, reported invoice-wise, and no late fee will be charged for nil filing.

• • Exemption from GSTR-9/9A: Taxpayers with annual turnover up to Rs. 2 crore are exempted from filing GSTR-9/9A for FY 2023-24.

• • Modification to Section 16(4): The time limit to claim Input Tax Credit (ITC) for invoices or debit notes in any GSTR-3B filed up to November 30, 2021 (applicable for FY 2017-18 to 2020-21), is deemed to be November 30, 2021, retrospectively from July 1, 2017. Section 16(4) is relaxed for filing returns within thirty days of revocation of registration cancellation.

Proposed GST Rate Changes

• Amendment recommended in Section 9(1) of the CGST Act, 2017 to exempt Extra Neutral Alcohol used for manufacturing alcoholic liquor for human consumption from GST.
• Uniform GST rate of 12% proposed on all milk cans regardless of material used.
• Uniform 12% GST recommended on carton boxes and cases made from both corrugated and non-corrugated paper board, benefiting apple growers in Jammu and Kashmir.
• All types of sprinklers, including fire water sprinklers, to attract 12% GST.
• 12% GST to be applied on all solar cookers, irrespective of whether they are single or dual energy source.
• Services provided by Indian Railways to the common man, such as platform tickets, cloak rooms, battery-operated car services, and intra-railway supplies, are exempted from GST.
• Hostel accommodation services, currently not exempted if outside educational institutions, will now be exempted similar to those within educational institutions. The exemption applies up to Rs. 20,000 per person per month, provided the service is provided for a continuous period of 90 days, including privately run hostels.

Ongoing Discussions and Analyses

• GST on Fertilizers: Analysis initiated by forming a Group of Ministers (GoM).
• Petrol and Fuel Rates: Not discussed in this meeting.
• Corporate Guarantees: Clarification on GST applicability for goods and services with full ITC available.

Conclusion

The 53rd GST Council meeting on June 22, 2024, introduced significant updates including Aadhaar-based biometric authentication for GST registration, rate changes for various goods, and procedural amendments to improve compliance and efficiency. Key measures included tax exemptions, relaxed filing deadlines, and new provisions for refund claims. The Council’s recommendations aim to streamline GST processes, reduce tax burdens, and enhance support for businesses and taxpayers. Ongoing discussions on GST for fertilizers and corporate guarantees indicate continued efforts to refine the GST framework.