Click To View Archives Of Articles


Recommendations / decision of the GST Council Meeting on 17/12/2022


S. Sivakumar

Senior Consultant, STVAT Consulting

In the 48th meeting of GST Council held through video conference on December 17, 2022 recommendations regarding changes in GST Rates on certain goods, certain proposals / decisions on issuance of clarificatory circulars and changes in law / procedures towards trade facilitation measures and streamlining compliance of GST Law provisions have been made.

Here are the highlights of the recommendations / decisions

(I) Proposal on GST rate on Goods

(1) GST on Husk of pulses including chilka and concentrates including chuni/churi, khanda to be reduced to NIL from 5%. Further, the Council decided to regularise the intervening period starting from the date of issuance of Circular (3.08.2022) in respect of GST on ‘husk of pulses including chilka and concentrates including chuni/churi, khanda’ on “ as is basis” on account of genuine doubts

(2) GST Ethyl alcohol supplied to refineries for blending with motor spirit (petrol) to be reduced from 18% to 5%

(3) to include supply of Mentha arvensis under reverse charge mechanism as has been done for Mentha Oil.

(II) Decisions to issue Clarification on classification / GST Rates

   Rab (rab-salawat) is classifiable under CTH 1702 attracting GST @ 18%


   Fryums manufactured using the process of extrusion is specifically covered under CTH 19059030 and attract GST @18%.


   The higher rate of compensation cess of 22% is applicable to motor vehicle fulfilling all four conditions, namely,

- it is popularly known as SUV,

- has engine capacity exceeding 1500 cc,

- length exceeding 4000 and

- with ground clearance of 170 mm or above

   Goods falling in lower rate category of 5% under schedule I of notification No. 1/2017-CTR imported for petroleum operations will attract lower rate of 5% and the rate of 12% shall be applicable only if the general rate is more than 12%

   No GST is payable where the residential dwelling is rented to a registered person in his/her personal capacity for use as his/her own residence and on his own account and not on account of his business.

   Incentive paid to banks by Central Government under the scheme for promotion of RuPay Debit Cards and low value BHIM-UPI transactions are in the nature of subsidy and thus not taxable

(III) Measures for facilitation of trade

(A) Recommendations on Amendment to ACT and Rules

(a) Decriminalization under GST - The Council has recommended to

• To raise the minimum threshold of tax amount for launching prosecution under GST from Rs. One Crore to Rs. Two Crores, except for the offence of issuance of invoices without supply of goods or services or both;

• To reduce the compounding amount from the present range of 50% to 150% of tax amount to the range of 25% to 100%;

• To decriminalize certain offences specified under clause (g), (j) and (k) of sub-section (1) of section 132 of CGST Act, 2017, viz.- obstruction or preventing any officer in discharge of his duties; deliberate tempering of material evidence; failure to supply the information.

(b) Procedure for Refund of Tax to Unregistered Persons upon Cancellation of Services: To prescribe the procedure for filing application of refund by the unregistered persona in cases where the contract/ agreement for supply of services, like construction of flat/house and long-term insurance policy, is cancelled and the time period of issuance of credit note by the concerned supplier is over by amending the CGST Rules, 2017 along with issuance of a circular

(c) Intra-State Supplies by unregistered persons and composition dealers-E-Commerce The Council approved the amendments in the GST Act and GST Rules, along with issuance of relevant notifications, to enable the in principle approval for allowing unregistered suppliers and composition taxpayers to make intra-state supply of goods through E-Commerce Operators (ECOs), subject to certain conditions as decided 47th GST Council Meeting. Further considering the time required for development of the requisite functionality on the portal as well as for providing sufficient time for preparedness by the ECOs, Council has recommended that the scheme may be implemented w.e.f. 01.10.2023

(d) Amendment of Paras 7, 8(a) and 8(b) of Schedule III of CGST Act, 2017: Paras 7, 8(a) and 8(b) were inserted in Schedule III of CGST Act, 2017 with effect from 01.02.2019 to keep the following transactions/ activities outside the purview of GST, such as

- supplies of goods from a place outside the taxable territory to another place outside the taxable territory,

- high sea sales and supply of warehoused goods before their home clearance.

In order to remove the doubts and ambiguities regarding taxability of such transactions/ activities during the period 01.07.2017 to 31.01.2019, it is recommended to make the said paras effective from 01.07.2017. However, where any tax has already been paid in respect of such transactions/ activities during the intervening period 01.07.2017 to 31.01.2019 no refund of tax paid shall be available in such cases.

(e) Amendment in Rule 37(1) of the CGST Rules: To amend sub-rule (1) of rule 37 of CGST Rules, 2017 retrospectively with effect from 01.10.2022 to provide for reversal of input tax credit, in terms of second proviso to section 16 of CGST Act, only proportionate to the amount not paid to the supplier, including tax payable.

(f) Mechanism for reversal of input tax credit in the event of non-payment of tax by the supplier by a specified date and for re-availment of such credit: To insert Rule 37A in CGST Rules, 2017 to prescribe the mechanism for reversal of input tax credit by a registered person in the event of non-payment of tax by the supplier by a specified date and mechanism for re-availment of such credit, if the supplier pays tax subsequently.

(g) Amendment in Rule 108(3) and Rule 109 of CGST Rules, 2017: Sub-rule (3) of rule 108 and rule 109 of the CGST Rules, 2017 to be amended to provide clarity on the requirement of submission of certified copy of the order appealed against and the issuance of final acknowledgment by the appellate authority.

(h) Enabling Facility for Withdrawal of an Application of Appeal; Rule 109C and FORM GST APL-01/03 W to be inserted in the CGST Rules, 2017 to provide the facility for withdrawal of an application of appeal up to certain specified stage . 

(B) Recommendations on issuance of clarificatory Circular

  Circular to be issued to clarify that ‘No Claim Bonus’ offered by the insurance companies to the insured is an admissible deduction for valuation of insurance services.

  Circular to be issued for clarifying the issue of treatment of statutory dues under GST law in respect of the taxpayers for whom the proceedings have been finalised under Insolvency and Bankruptcy Code, 2016. Rule 161 of CGST Rules, 2017 and FORM GST DRC-25 also to be amended for facilitating the same.

  Sub-rule (3) of rule 12 of CGST Rules, 2017 to be amended to provide for facility to the registered persons, who are required to collect tax at source under section 52 or deduct tax at source under section 51 of CGST Act, 2017, for cancellation of their registration on their request.

  Circular to be issued for clarifying the issues pertaining to the place of supply of services of transportation of goods in terms of the proviso to sub-section (8) of section 12 of the IGST Act, 2017 and availability of input tax credit to the recipient of such supply. It has also been recommended that proviso to sub-section (8) of section 12 of the IGST Act, 2017 may be omitted.

   Issuance of the following circulars in order to remove ambiguity and legal disputes on various issues, thus benefiting taxpayers at large:

- Procedure for verification of input tax credit in cases involving difference in input tax credit availed in FORM GSTR-3B vis a vis that available as per FORM GSTR-2A during FY 2017-18 and 2018-19.

- Clarifying the manner of re-determination of demand in terms of sub-section (2) of section 75 of CGST Act, 2017.

- Clarification in respect of applicability of e-invoicing with respect to an entity.

(IV) Measures for streamlining compliances in GST

Aadhaar Authentication and Physical Verification of Registration Applicants: Proposal to conduct a pilot in State of Gujarat for Biometric-based Aadhaar authentication and risk based physical verification of registration applicants. Amendment in rule 8 and rule 9 of CGST Rules, 2017 to be made to facilitate the same. This will help in tackling the menace of fake and fraudulent registrations.

Verification of Permanent Account Number (PAN) at the time of GST Registration PAN-linked mobile number and e-mail address (fetched from CBDT database) to be captured and recorded in FORM GST REG-01 and OTP-based verification to be conducted at the time of registration on such PAN-linked mobile number and email address to restrict misuse of PAN of a person by unscrupulous elements without knowledge of the said PAN-holder.

Restriction on Filing of Returns / Statements Registration Section 37, 39, 44 and 52 of CGST Act, 2017 to be amended to restrict filing of returns/ statements to a maximum period of three years from the due date of filing of the relevant return / statement.

Amendment in Form GSTR-1 FORM GSTR-1 to be amended to provide for reporting of details of supplies made through ECOs, covered under section 52 and section 9(5) of CGST Act, 2017, by the supplier and reporting by the ECO in respect of supplies made under section 9(5) of CGST Act, 2017.

Intimation of Differential Liability between Form GSTR-1 and GSTR-3B Rule 88C and FORM GST DRC-01B to be inserted in CGST Rules, 2017 for intimation to the taxpayer, by the common portal, about the difference between liability reported by the taxpayer in FORM GSTR-1 and in FORM GSTR-3B for a tax period, where such difference exceeds a specified amount and/ or percentage, for enabling the taxpayer to either pay the differential liability or explain the difference. Further, clause (d) to be inserted in sub-rule (6) of rule 59 of CGST Rules, 2017 to restrict furnishing of FORM GSTR-1 for a subsequent tax period if the taxpayer has neither deposited the amount specified in the intimation nor has furnished a reply explaining the reasons for the amount remaining unpaid. This would facilitate taxpayers to pay/ explain the reason for the difference in such liabilities reported by them, without intervention of the tax officers.

Amendment in definition of ‘Non-Taxable Online Recipient’ and ‘Online Information and Database Access or Retrieval Services’ under IGST Act

Amendment in definition of “non-taxable online recipient” under section 2(16) of IGST Act, 2017 and definition of “Online Information and Database Access or Retrieval Services (OIDAR)” under section 2(17) of IGST Act, 2017 so as to reduce interpretation issues and litigation on taxation of OIDAR Services.

It is to be noted that the recommendations of the 48th GST Council Meeting noted herein above shall come into effect and have the force of law, only after issuance of relevant circulars/ notifications/ law amendments.

Dated : December 26, 2022