Highlights from the 50th GST Council Meeting

The Goods and Services Tax (GST) Council conducted its 50th meeting on 11th July 2023 in Delhi. The Council recommended charging 28% GST on online gaming, casinos and horse racing on the full-face value of bets or gross Game Revenue (GGR). Further, the GST Council has made procedural changes in reporting ITC mismatches between GSTR-2B and GSTR-3B.

Let’s take a look at the highlights of the 50th GST Council meeting.

  • GST has been reduced from 18% to 5% on uncooked & unpacked snack pellets, fish, soluble paste, and LD slag. Further, the GST rate on imitation zari threads has been reduced from 12% to 5%.
  • GST exemption is provided for the Dinutuximab (Quarziba), medicines, Food for Special Medical Purposes (FSMP) and satellite services offered by private organisations.
  • Regularised the issues on the taxability of trauma, spine and arthroplasty implants, areca leaves plates and cups, desiccated coconut, and biomass briquettes.
  • Bulk chewing tobacco sales not required to legally declare RSP will be levied cess at ad-valorem rate as of 31st March ’23.
  • DRC-01C will be notified for system-based intimations to taxpayers in case of excess ITC claims in their GSTR-3B compared to GSTR-2B.
  • Also, DRC-01D will be notified to recover the tax and interest intimated to taxpayers when the output tax liability in GSTR-1 is more than that reported in GSTR-3B.
  • With effect from 1st January 2022, the refund of accumulated ITC under Section 54(3) of the CGST Act, 2017, is to be restricted only to the ITC reflected in the GSTR-2B.
  • Exempted small taxpayers (having turnover up to Rs.2 crore) from filing the GSTR-9/9A for FY 2022-23.
  • The Input Services Distributor (ISD) mechanism may no longer be mandatory for distributing common ITC distinct persons under the same PAN.
  • Reverse Charge Mechanism (RCM) will not apply to services supplied by a company’s director to the company in their personal or private capacity.
  • New rule 138F to implement e-way bill requirements for the intra-state movement of gold and precious stones. However, this is the choice of states.
  • The Council recommended issuing a circular to clarify the issues on charging GST and ITC reversal in case of warranty replacements. To clarify, the Council stated that the manufacturers don’t have to charge GST for parts replacement or repair service. Further, they don’t have to do the ITC reversal in these scenarios.
  • The value of export goods should be included in “adjusted total turnover” while calculating the refund of accumulated ITC in case of zero-rated supply of goods or services or both using a bond or letter of undertaking.
  • Export of goods or services under the bond or letter of undertaking, taxpayers can claim a refund only after the expiry of the time limit mentioned under rule 96A of CGST Rules, 2017. The time limit is 15 days after three months in case of export of goods and 15 days after one year in case of export of service, respectively, from the date of the export invoice.
  • Council recommended issuing a circular to clarify the cases where e multiple E-commerce Operators (ECOs) were involved in completing a single transaction, such as who is responsible for collecting the TCS.
  • GST authorities will set up special procedures for the manual filing of appeals against the orders passed by proper officers regarding TRAN-1 and TRAN-2 claims filed by taxpayers.

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For any clarifications/feedback on the topic, please contact the writer at dvsr.anjaneyulu@clear.in

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