To clarify that job work services for processing of barley into malt attracts GST @ 5% as applicable to "job work in relation to food and food products” and not 18%
To tax supply of all goods and services by Indian Railways under Forward ChargeMechanism to enable them to avail ITC.
With effect from 1st January 2022, liability to pay GST on bus transportation services supplied through Electronic Commerce Operators (ECOs) has been placed on the ECO under section 9(5) of CGST Act, 2017 as a trade facilitation measure to alienate the GST compliance burden on small bus operators. Now it has been recommended that bus operators organised as companies may be excluded from the purview of section 9(5) of CGST Act, 2017 to enable them to pay GST on their supplies using their ITC
Entries at Sl. No. 3 and 3A of notification No. 12/2017-CTR dated 28.06.2017 exempts pure and composite services provided to Central/State/UT governments and local authorities in relation to any function entrusted to Panchayat/ Municipality under Article 243G and 243W of the Constitution of India. The GST Council has now recommended to extent the exemption to services of water supply, public health, sanitation conservancy, solid waste management and slum improvement and upgradation supplied to Governmental Authorities also.
The Council has recommended providing an amnesty scheme through a special procedure under section 148 of CGST Act, 2017 for taxable persons, who could not file an appeal under section 107 of the said Act, against the demand order under section 73 or 74 of CGST Act, 2017 passed on or before the 31st day of March, 2023, or whose appeal against the said order was rejected solely on the grounds that the said appeal was not filed within the time period specified in sub-section (1) of section 107. In all such cases, filing of appeal by the taxpayers will be allowed against such orders upto 31st January 2024, subject to the condition of payment of an amount of pre-deposit of 12.5% of the tax under dispute, out of which at least 20% (i.e. 2.5% of the tax under dispute) should be debited from Electronic Cash Ledger
The Council has recommended to issue a circular clarifying that :
(a) when no consideration is paid by the company to the director in any form, directly or indirectly, for providing personal guarantee to the bank/ financial institutes on their behalf, the open market value of the said transaction/ supply may be treated as zero and hence, no tax to be payable in respect of such supply of services.
(b) to insert sub-rule (2) in Rule 28 of CGST Rules, 2017, to provide for taxable value of supply of corporate guarantee provided between related parties as one per cent of the amount of such guarantee offered, or the actual consideration, whichever is higher.
(c) to clarify through the circular that after the insertion of the said sub-rule, the value of such supply of services of corporate guarantee provided between related parties would be governed by the proposed sub-rule (2) of rule 28 of CGST Rules, 2017, irrespective of whether full ITC is available to the recipient of services or not.
Further Trade facilitation measures recommended by the Council:
To amend sub-rule (2) of Rule 159 of CGST Rules, 2017 and FORM GST DRC-22to provide that the order for provisional attachment in FORM GST DRC-22shall not be valid after expiry of one year from the date of the said order to facilitate release of provisionally attached properties after expiry of period of one year, without need for separate specific written order from the Commissioner.
To issue a Circular to clarify the place of supply in respect of the following supply of services:
(i) Supply of service of transportation of goods, including by mail or courier, in cases where the location of supplier or the location of recipient of services is outside India;
(ii) Supply of advertising services;
(iii) Supply of the co-location services.
To clarify that export remittances received in Special INR Vostro account, as permitted by RBI, for the purpose of consideration of supply of services will qualify as export of services in terms of the provisions of sub-clause (iv) of clause (6) of section 2 of the IGST Act, 2017
To give clarification regarding admissibility of refund in cases where export of goods, or the realization of payment for export of services, as the case may be, is made after the time limit provided under rule 96A of CGST Rules, 2017.
To amend Notification No. 1/2023-Integrated Tax dated 31.07.2023 w.e.f. 01.10.2023 so as to allow the suppliers to a Special Economic Zone developer or a Special Economic Zone unit for authorised operations to make supply of goods or services (except the commodities like pan masala, tobacco, gutkha, etc. mentioned in the Notification No. 1/2023-Integrated Tax dated 31.07.2023) to the Special Economic Zone developer or the Special Economic Zone unit for authorised operations on payment of integrated tax and claim the refund of tax so paid.
IV. Other measures pertaining to law and procedures recommended:
To bring suitable amendments in section 110 of the CGST Act, 2017 for Alignment of provisions of the CGST Act, 2017 with the provisions of the Tribunal reforms Act, 2021 in respect of Appointment of President and Member of the proposed GST Appellate Tribunals.
To bring amendments in Section 2(61) and section 20 of CGST Act, 2017 as well amendment in rule 39 of CGST Rules, 2017 to the effect that ISD (Input Service Distributor) procedure as laiddown in Section 20 of the CGST Act, 2017 may be made mandatory prospectively for distribution of ITC inrespect of input services procured by Head Office (HO) from a third party but attributable to both HO andBranch Office (BO) or exclusively to one or more BOs.