Synopsis of GST Council Meetings

& 23^rdSeptember, 2016

· Draft Rules of Procedures and Conduct of Business in GST Council.

· Proposed timetable for the implementation of GST.

· Thresholds for exemption and composition under GST.

· Draft Modalities for GST Compensation and draft Compensation Law.

·Provisions for Cross-Empowerment to ensure Single Interface Under GST.

· Discussion on Draft GST Rules on Registration, Payment, Return, Refund and Invoice, Debit/Credit Notes – Synopsis

· Discussion on Treatment of the existing tax incentive schemes of the Central and State Governments

· Discussion on Modalities for compensation to the states for possible revenue loss.

· Discussion on Provision for Cross-Empowerment to ensure Single Interface under GST.

·Discussion on Finalization of the bands of tax rates under GST Regime

·Presentation by GSTN on status of development of GST Portal, Data migration/Enrolment plan, Risk factors and mitigation plan.

·Discussion on Approval of the Draft GST Law, Draft IGST Law and Draft GST Compensation Law.

·Discussion on GST treatment of land & building (real estate).

·Discussion on Definition of “State” in Model GST Law and IGST Law.

· Discussion on Approval of the Draft GST Law, the Draft IGST Law and the Draft GST Compensation Law

·Discussion on Approval of the Draft GST Law, Draft IGST Law and Draft GST Compensation Law

· Discussion on Definition of State, Imposition of Tax on Goods and Services in UTs without Legislature, Territorial Waters and Exclusive Economic Zones and Provisions for authorization of proper officers in States.

· Presentations by representatives of the following sectors – a. Banking and Insurance b. Telecommunication c. Information Technology (IT) & Information Technology Enabled Services (ITeS) d. Civil Aviation e. Railways f. Commerce

· Discussion on Approval of the Draft IGST Law

· Discussion on Approval of the Draft Compensation Law as modified in accordance with the decisions of the GST Council and vetted by the Ministry of Law & Justice, Government of India

·Discussion on issues of considering sale within twelve nautical miles as inter-state or intra-state sale.

·Discussion on Pending items of the previous GST Council meetings.

· Approved the draft CGST Bill and the draft IGST Bill as vetted by the Union Law Ministry.

· Discussion on development of an e-Waybill System by Goods and Services Tax Network (GSTN)

· Discussion on Approval of the Draft UTGST Law as vetted by the Ministry of Law & Justice, Government of India

· Discussion on Amendments to the draft IGST Law

· Discussion on Constitution of a Task Force to suggest measures for creating an eco-system for seamless freight movement (Based on an agenda note received from MoRTH).

· Discussion on Approval of the Draft GST Rules on: (a) Input Tax Credit (b) Valuation (c) Transitional Provisions (d) Composition

· Centre introduces The Taxation Laws (Amendment) Bill, 2017 in Lok Sabha to amend Customs Act, 1962, Customs Tariff Act, 1975, Central Excise Act, 1944 and Finance Act, 2001 & 2005 and repeal certain enactments which are consequential to the enactments proposed to be enacted for the introduction of GST.

· Date for migration of Central Excise & Service Tax assessee to GST extended from 31^st March, 2017 to 30^th April, 2017 as available from www.cbec.gov.in. Further, as per GSTN (www.gst.gov.in), the dates have been extended too 30^th April, 2017

· Approves GST rates for goods and GST Compensation Cess

· The fitment of rates of goods were discussed during the Council meeting.

· The Council has broadly approved the GST rates for goods at nil rate, 5%, 12%, 18% and 28% to be levied on certain goods.

· The Council has also broadly approved the rates of GST Compensation Cess to be levied on certain goods.

Discussion on:

· Presentation on Information Technology (IT)-readiness of GSTN for roll-out of GST

· Approval of amendments to the following draft Goods and Services Tax (GST) Rules and related Forms i. Return Rules and Forms, including GST Tax Practitioner Forms and Mismatch Forms ii. Transition Rules and Forms

· Finalization of the rates of tax and cess to be levied on commodities remaining after the Fitment exercise during the 14th GST Council Meeting

·Presentation on concept note on operationalizing the Anti-Profiteering Clause in GST Law

· Rate adjustments, if any, based on representations received from Trade and Industry

· Relaxation in return filing procedure for first two months of GST implementation

· For the first two months of GST implementation, the tax would be payable based on a simple return (Form GSTR-3B)

· Increase in the Compensation Cess rate on cigarettes to make the total tax incidence on cigarettes in GST regime at par with the total tax incidence in pre-GST regime.

· Decided to extend the due date of filing GSTR 1

· Setting up a committee to examine the issues related to exports.

· Constitution of Group of Ministers to monitor and resolve the IT challenges faced during GST implementation.

· Increase in annual aggregate turnover of up to INR 1 crore for composition scheme.

· Constitution of Group of Ministers (GoM) to examine measures to make the composition scheme more attractive.

· Relief for Small and Medium Enterprises in filing of GSTR 1 on quarterly basis with annual aggregate turnover up to INR 1.5 crores.

· Suspension of RCM under section 9(4)

· Taxpayers having annual aggregate turnover up to INR 1.5 crores shall not be required to pay GST at the time of receipt of advances on account of supply of goods.

· TDS/TCS provisions suspended.

· Rationalization in the rates of tax on services

· Immediate relief is being given by extending the Advance Authorization (AA) / Export Promotion Capital Goods (EPCG) / 100% EOU schemes to sourcing inputs etc. from abroad as well as domestic suppliers. Holders of AA / EPCG and EOUs would not have to pay IGST, Cess etc. on imports. Also, domestic supplies to holders of AA / EPCG and EOUs would be treated as deemed exports under Section 147 of CGST/SGST Act and refund of tax paid on such supplies given to the supplier.

· Merchant exporters will now have to pay nominal GST of 0.1% for procuring goods from domestic suppliers for export.

· The permanent solution to cash blockage is that of “e-Wallet” which would be credited with a notional amount as if it is an advance refund.

· Facility for manual filing of application for advance ruling is being introduced for the time being.

· Relaxation in Return Filing

· All service providers, whether supplying intra-State, inter-State or through e-commerce operator, will be exempt from obtaining GST registration, provided their aggregate turnover does not exceed INR 20 lakhs (INR 10 lakhs in special category States except J & K).

·Benefits for Diplomatic Missions/UN organizations where all compliance for such agencies will be done by the Central Government in coordination with the Ministry of External Affairs.

· Changes in Composition Scheme

· Decides that Inter-State e-way Bill to be made compulsory from 1st of February, 2018

· The Uniform System of e-way Bill for Inter-State as well as Intra-State movement will be implemented across the country by 1st June, 2018.

·Recommendations made on GST Rate changes on services.

· Recommendation of Policy Changes

· Recommendations for Changes In GST/IGST Rate and Clarifications in Respect of GST Rate on Certain Goods

· Recommendations regarding Data Analytics

· Variance between the amount of IGST & Compensation Cess paid by importers at Customs ports and input tax credit of the same claimed in GSTR-3B.

· Major data gaps between self-declared liability in FORM GSTR-1 and FORM GSTR-3B.

· Recommended the introduction of e-way bill for inter-State movement of goods across the country from 1^st April 2018.

· For intra-State movement of goods, e-way bill system will be introduced w.e.f. a date to be announced in a phased manner but not later than 01^st June, 2018.

· Extension of RCM u/s 9(4), TDS and TCS provisions

· GST implementation Committee (GIC) has been tasked with the work of redressing the grievances caused to the taxpayers arising out of IT glitches.

· Decides extension of tax exemptions for exporters for six months up to 1^st October, 2018

· Approves principles for filing of new return design based on the recommendations of the Group of Ministers on IT simplification.

· Change in the shareholding pattern of GSTN i.e. 51% held by the Non-Governmental Institutions in GSTN amounting to INR 5.1 crore, equally by the Centre and the States governments.

· Discussed in detail the proposal of a concession of 2% in GST rate on B2C supplies, for which payment is made through cheque or digital mode so as to incentivize promotion of digital payment.

· Discussed the issue of imposition of sugar cess and reduction in GST rate on ethanol in great detail.

· Two Group of Ministers Constituted to consider the issues relating to “Incentivizing digital payments in the GST regime” & “Imposition of Cess on Sugar under GST”.