The 50th GST Council Meeting

 

The 50th GST Council Meeting: A Comprehensive Overview

 

The 50th GST council meeting, held recently, saw the introduction of several important decisions that will impact taxpayers and businesses across the country. These decisions are aimed at reducing compliance burden, providing clarity on various issues, and making it easier for businesses to operate. In this article, we will take a closer look at these decisions and what they mean for you.

 

Read more – E-Invoice System Under GST

 

Transporters and GST

 

One of the key decisions taken at the meeting was that transporters will no longer be required to file a declaration for paying GST under forward charge every year. This move is expected to reduce the compliance burden on transporters and make it easier for them to do business.

 

Under the current system, transporters are required to file a declaration every year stating that they are paying GST under forward charge. This means that they are responsible for paying GST on the services they provide, rather than their customers being responsible for paying GST under reverse charge. This declaration must be filed every year, which can be a time-consuming and burdensome process for transporters.

 

The decision taken at the 50th GST council meeting will do away with this requirement, meaning that transporters will no longer have to file this declaration every year. This is expected to save them time and effort, and make it easier for them to comply with GST requirements.

 

Reverse Charge Mechanism

 

Another important decision taken at the meeting was that there will be no Reverse Charge Mechanism (RCM) on services supplied by a director of a company to the company in his private or personal capacity, such as renting immovable property to the company. This move is expected to provide relief to directors who supply services to their companies in their private or personal capacity.

 

Under the current system, if a director of a company supplies services to the company in his private or personal capacity, such as renting immovable property to the company, then the company is required to pay GST under reverse charge. This means that the company is responsible for paying GST on these services, rather than the director being responsible for paying GST under forward charge.

 

The decision taken at the 50th GST council meeting will do away with this requirement, meaning that there will be no RCM on services supplied by a director of a company to the company in his private or personal capacity. This is expected to provide relief to directors who supply services to their companies in this manner.

 

Input Tax Credit

 

The government has extended the special procedure for mismatch in Input Tax Credit (ITC) availed in GSTR-3B and 2A for two more years, i.e., 2019-20, 2020-21, and up to 31.12.21. This move is expected to provide relief to taxpayers who have been facing difficulties due to mismatch in ITC availed in GSTR-3B and 2A.

 

Under the current system, if there is a mismatch between the ITC availed by a taxpayer in their GSTR-3B return and the ITC reflected in their GSTR-2A return, then they may face difficulties in claiming ITC. This can happen if their suppliers have not filed their returns correctly or if there are errors in the returns filed by their suppliers.

 

The special procedure introduced by the government allows taxpayers to claim ITC even if there is a mismatch between their GSTR-3B and GSTR-2A returns. This procedure was initially introduced for a limited period of time but has now been extended for two more years. This is expected to provide relief to taxpayers who have been facing difficulties due to mismatch in ITC availed in GSTR-3B and 2A.

 

Amnesty Schemes

 

Amnesty schemes notified on 31.03.2023 regarding non-filers of FORM GSTR-4, FORM GSTR-9 & FORM GSTR-10 returns, and revocation of cancellation of registration have been extended until 31.08.2023. This move is expected to provide relief to taxpayers who have not filed their returns or whose registration has been cancelled.

 

Under these amnesty schemes, taxpayers who have not filed their FORM GSTR-4, FORM GSTR-9 & FORM GSTR-10 returns can file these returns without having to pay any late fees or penalties. Additionally, taxpayers whose registration has been cancelled can apply for revocation of cancellation without having to pay any fees or penalties.

 

These amnesty schemes were initially introduced for a limited period of time but have now been extended until 31.08.2023. This is expected to provide relief to taxpayers who have not filed their returns or whose registration has been cancelled.

 

Physical Verification

 

The requirement for physical verification of business premises to be conducted in the presence of the applicant has been removed. This move is expected to make it easier for businesses to get their premises verified. However, physical verification will still be provided in high-risk cases even where Aadhaar has been authenticated.

 

Under the current system, if a business applies for GST registration, then their business premises must be physically verified by a GST officer. This verification must be conducted in the presence of the applicant, which can be a time-consuming and burdensome process for businesses.

 

The decision taken at the 50th GST council meeting will do away with this requirement, meaning that physical verification of business premises will no longer have to be conducted in the presence of the applicant. This is expected to make it easier for businesses to get their premises verified and obtain GST registration.

 

However, it is important to note that physical verification will still be provided in high-risk cases even where Aadhaar has been authenticated. This means that if a business is considered to be high-risk, then their premises may still be physically verified by a GST officer even if they have authenticated their Aadhaar.

 

Read more – Job Work Under GST

 

System-based Intimation

 

Taxpayers will receive system-based intimation regarding excess availment of ITC in FORM GSTR-3B vis-a-vis that made available in FORM GSTR-2B. This move is expected to help taxpayers keep track of their ITC availment and ensure that they do not avail excess ITC.

 

Under the current system, if a taxpayer avails more ITC in their GSTR-3B return than is reflected in their GSTR-2B return, then they may face difficulties in claiming ITC. This can happen if their suppliers have not filed their returns correctly or if there are errors in the returns filed by their suppliers.

 

The decision taken at the 50th GST council meeting will introduce a system-based intimation that will inform taxpayers if they have availed excess ITC in their GSTR-3B return vis-a-vis that made available in their GSTR-2B return. This is expected to help taxpayers keep track of their ITC availment and ensure that they do not avail excess ITC.

 

Cinema Halls and GST

 

The supply of food and beverages in cinema halls is taxable at 5%. However, if the sale of cinema tickets and supply of food and beverages are clubbed together, then the GST rate of cinema tickets will apply. This move is expected to provide clarity on the applicable GST rate for food and beverages supplied in cinema halls.

 

Under the current system, there has been some confusion regarding the applicable GST rate for food and beverages supplied in cinema halls. Some taxpayers have been applying the 5% GST rate applicable to food and beverages, while others have been applying the higher GST rate applicable to cinema tickets.

 

The decision taken at the 50th GST council meeting clarifies that the supply of food and beverages in cinema halls is taxable at 5%. However, if the sale of cinema tickets and supply of food and beverages are clubbed together, then the GST rate of cinema tickets will apply. This is expected to provide clarity on the applicable GST rate for food and beverages supplied in cinema halls.

 

Casinos and Online Gaming

 

A 28% GST will be applied to the value of chips purchased in casinos and the full value of bets placed in online gaming. This move is expected to bring these activities under the ambit of GST and ensure that they are taxed at the appropriate rate.

 

Under the current system, there has been some confusion regarding the applicability of GST to chips purchased in casinos and bets placed in online gaming. Some taxpayers have been applying a lower GST rate to these activities, while others have been applying a higher rate.

 

The decision taken at the 50th GST council meeting clarifies that a 28% GST will be applied to the value of chips purchased in casinos and the full value of bets placed in online gaming. This is expected to bring these activities under the ambit of GST and ensure that they are taxed at the appropriate rate.

 

GST Appellate Tribunal

 

The GST Appellate Tribunal will be started in a phased manner. This move is expected to provide a mechanism for resolving disputes related to GST.

 

Under the current system, if a taxpayer has a dispute related to GST, then they must approach the relevant authorities for resolution. However, this process can be time-consuming and burdensome for taxpayers.

 

The decision taken at the 50th GST council meeting will introduce a GST Appellate Tribunal that will be started in a phased manner. This tribunal will provide a mechanism for resolving disputes related to GST, making it easier for taxpayers to get their disputes resolved.

 

Relaxations

 

Relaxations provided in FY 2021-22 concerning various tables of FORM GSTR-9 and FORM GSTR-9C will continue for FY 2022-23. Additionally, no GSTR-9 is required for turnover up to 2 crores.

 

These relaxations are aimed at reducing compliance burden on taxpayers and making it easier for them to file their returns. For example, taxpayers with turnover up to 2 crores will no longer be required to file FORM GSTR-9, which is expected to save them time and effort.

 

Input Services Distributor

 

The Input Services Distributor (ISD) mechanism is a system that allows businesses to distribute input tax credit of common input services procured from third parties to distinct persons. This mechanism is designed to make it easier for businesses to claim input tax credit on common input services that are used by multiple units or branches of the business.

 

Currently, the ISD mechanism is not mandatory under the present provisions of GST law. This means that businesses are not required to use this mechanism to distribute input tax credit of common input services procured from third parties to distinct persons.

 

However, at the 50th GST council meeting, it was decided that an amendment may be made in GST law to make the ISD mechanism mandatory prospectively. This means that in the future, businesses may be required to use the ISD mechanism to distribute input tax credit of common input services procured from third parties to distinct persons.

 

This move is expected to improve compliance and make it easier for businesses to claim input tax credit on common input services. By making the ISD mechanism mandatory, the government hopes to ensure that businesses are able to accurately distribute input tax credit of common input services procured from third parties to distinct persons.

 

Warranty Replacement

 

At the 50th GST council meeting, it was decided that a detailed circular will be issued to provide clarity on liability to reverse input tax credit in cases involving warranty replacement of parts and repair services during the warranty period.

 

Under the current system, if a business provides warranty replacement of parts or repair services during the warranty period, then they may be required to reverse input tax credit claimed on these parts or services. This can be a complex and confusing process for businesses, and there has been some uncertainty regarding the liability to reverse input tax credit in these cases.

 

The decision taken at the 50th GST council meeting will provide clarity on this issue by issuing a detailed circular that explains the liability to reverse input tax credit in cases involving warranty replacement of parts and repair services during the warranty period. This is expected to help businesses understand their obligations and ensure that they are able to comply with GST requirements.

 

Refund of Accumulated ITC

 

At the 50th GST council meeting, it was decided that refund of accumulated Input Tax Credit (ITC) will be restricted to ITC appearing in FORM GSTR-2B.

 

Under the current system, if a business has accumulated ITC that they are unable to use, then they may be eligible for a refund of this ITC. However, there has been some uncertainty regarding the eligibility criteria for claiming a refund of accumulated ITC.

 

The decision taken at the 50th GST council meeting will provide clarity on this issue by restricting refund of accumulated ITC to ITC appearing in FORM GSTR-2B. This means that businesses will only be able to claim a refund of accumulated ITC if it appears in their FORM GSTR-2B return.

 

This move is expected to improve compliance and make it easier for businesses to claim refunds of accumulated ITC. By restricting refund of accumulated ITC to ITC appearing in FORM GSTR-2B, the government hopes to ensure that businesses are able to accurately claim refunds of accumulated ITC.

 

Tax Invoices

 

At the 50th GST council meeting, it was decided that only the name of the state, not the name and full address of the recipient, is required on tax invoices in cases of supply of taxable services by or through an Electronic Commerce Operator (ECO).

 

Under the current system, if a business supplies taxable services by or through an ECO, then they are required to include the name and full address of the recipient on their tax invoices. This can be a time-consuming and burdensome process for businesses, particularly if they have a large number of customers.

 

The decision taken at the 50th GST council meeting will simplify this process by requiring only the name of the state, not the name and full address of the recipient, on tax invoices in cases of supply of taxable services by or through an ECO. This is expected to save time and effort for businesses and make it easier for them to comply with GST requirements.

 

In conclusion, these decisions taken at the 50th GST council meeting are expected to have a significant impact on taxpayers and businesses across India. They aim at reducing compliance burden, providing clarity on various issues, and making it easier for businesses to operate. The impact on daily life could include simplified processes for claiming input tax credit and refunds, as well as reduced compliance burden for businesses supplying taxable services through an ECO.

 

Here are some top e-books on Goods and Services Tax (GST) available on Amazon:

 

1.    [Goods & Services Tax (GST) in India] by Dr B Viswanathan

 

2.   [Goods & Services Tax (GST)- Got Simple: E-Reckoner on GST (Updated as on 31/05/2022)] by Harshit Murlidhar Kakwani

 

3.   [GOODS & SERVICES TAX] by Dr. Jyoti Rattan

 

These books provide a comprehensive understanding of the GST system in India, including its evolution, structure, and core issues. They are available in both hardcover and Kindle editions. I hope this helps! 😊