37th GST Council Meeting

GST Rate on Goods as Recommended by The GST Council in Its 37th Meeting

In Goa, today the 37thGST Council met under the Chairmanship of Union Finance & Corporate Affairs Minister Smt Nirmala Sitharaman. This meeting was also attended by Union Minister of State for Finance & Corporate Affairs Shri Anurag Thakur along with that the Chief Minister of Goa Shri Pramod Sawant,  and Finance Ministers of States & UTs and senior officers of the Ministry of Finance. This council took the following decisions with respect to amending the rates relating to goods. Below mentioned are the example for the same:

1. GST rates reduction, -

• Parts of Slide Fasteners -18 percent to 12 percent

• Marine Fuel 0.5 percent (FO) - 18 percent to 5 percent

• Wet Grinders(consisting stone as a grinder) -12 percent to 5 percent

• 5 percent to Nil on the below-mentioned items:

• Dried tamarind 

• Plates and cups made up of leaves/ flowers/bark 

• 3 percent to 0.25 percent on cut and polished semi-precious stones. Applicable rate to 5 percent on specified goods for petroleum operations undertaken under Hydrocarbon Exploration Licensing Policy (HELP) 

• Exemptions from GST/IGST as on mentioned below:- 

• Imports of specified defense goods will not be manufactured indigenously (upto 2024) 

• The supply of goods and services to FIFA and other specified persons for organizing the Under-17 Women’s Football World Cup in India. 

• The supply of goods and services to Food and Agriculture Organisation (FAO) for specified projects in India. 

2. The rates of GST have been recommended to be increased from, 

• 5 percent to 12 percent on goods which fall under chapter 86 of a tariff like 

• Railway wagons

• Coaches

• Rolling stock (without refund of accumulated ITC). 

• On Caffeinated Beverages, 18 percent to 28 percent +12 percent compensation cess will be applied

3. Measures for Export Promotion

Exemption from GST/IGST:- 

• Import on Silver/Platinum by specific nominated agencies 

• Supply of Silver/Platinum by specific nominated agency to exporters for exports of Jewellery, 

• Inclusion of Diamond India Limited (DIL) in the list of nominated agencies eligible for IGST exemption on imports of Gold/ Silver/Platinum so as to supply at Nil GST to Jewellery exporters. 

4. A uniform GST rate of 12 percent 

• Polypropylene/Polyethylene Woven Bags

• Non- Woven Bags and sacks

• Whether or not laminated of a kind used for the packing of goods (from present rates of 5 percent/12 percent/18 percent)

 5. GST concession in certain cases for a specific period:

• Exemption to Fishmeal for the period 01.07.17 to 30.09.19. There were doubts as regards the taxability of fishmeal in view of the interpretational issues. In case, any tax collected for this period shall be required to be deposited. 

• 12 percent GST during the period 1.07.2017 to 31.12.2018, the goods falling under Heading 8483 such as pulley, wheels and other parts and used as parts of agricultural machinery. 

6. Compensation Cess Rate for Vehicles:

Passenger vehicles of engine capacity 1500 cc in case of diesel, 1200 cc in case of petroland length not exceeding 4000mm designed for carrying upto 9 persons attract compensation cess of 1 percent for petrol and 3 percent for diesel vehicle. Council recommended the same compensation cess rate for vehicles having these specifications but designed for carrying more than 10 persons but upto 13 persons. Currently, these vehicles attract compensation cess at the rate of 15 percent.

7. Other miscellaneous Changes: 

• Aerated drink manufacturers will be excluded from the composition scheme. 

• There will be an option to pay GST at the rate of 18 percent on transaction value at the time of disposal of specified goods for petroleum operations (on which concessional GST rate of 5 percent was paid at the time of original supply) provided that the goods are certified by Director General Hydrocarbon(DGH) as non-serviceable. 

• Refund of compensation cess on tobacco products will be restricted (in case of inverted duty structure) 

• Modalities will be prescribed for allowing concessions on spare parts imported temporarily by foreign airlines for the repair of their aircraft, while in India in transit in terms of the Chicago Convention on Civil Aviation. 

• Certain other changes of technical nature for the sake of clarity in the application of notification. 

8. Clarifications, as regards applicability of GST rate in respect of certain goods recommended by GST Council which inter-alia, includes:  

• Mere heating of leguminous vegetables (For eg. gram/lentil) for removing moisture, or to soften and puff it or removing the skin, and not subjecting to any other processing or addition of any other ingredients (salt, oil, etc.) would be classified under HSN code 0713. 

• All 'mechanical sprayers' falling under HSN Code 8424 would fall under 12 percent GST tax rates. 

• Parts such as Solar Evacuation tubes for solar power based devices like a solar water heater, solar steam, generation systems, would fall under a 5 percent GST rate. 

• Exclusive parts and accessories suitable for use solely with a medical device (falling under headings 9018, 9019, 9021 or 9022) would fall in respective headings and attract GST at the concessional rate of 12 percent. 

• Almond milk is classifiable under HSN code 22029990 and attracts a GST rate of 18 percent. 

• Imported stores for Navy would be entitled to exemption from IGST

Annual GST return waived for Taxpayers below 2 cr turnover for FY 17 

In the 37th GST meeting council the following Law & Procedure related changes were recommended :        

                 1. The pressure for filing of annual returns for MSMEs for FY 2017-18 and FY 2018-19 as under is reduced: 

• Waiver of the requirement of filing FORM GSTR-9A for Composition Taxpayers for the said tax periods; and filing of FORM GSTR-9 for those taxpayers who have an annual turnover up to Rs. 2 crores made optional for the said tax periods.

2. For the simplification of Forms for Annual Return and reconciliation statement, a Committee of Officers to be constituted to examine.

3. Extension of the last date for filing of appeals against orders of Appellate Authority before the GST Appellate Tribunal as the Appellate Tribunals are yet not functional. 

4. In order to nudge taxpayers to timely file their statement of outward supplies, the imposition of restrictions on availing of the input tax credit by the recipients in cases where details of outward supplies are not furnished by the suppliers in the statement under section 37 of the CGST Act, 2017. 

5. New return system now will be introduced from April, 2020 (earlier proposed from October, 2019), in order to give an ample amount of opportunity to taxpayers as well as the system to adapt and accordingly specifying the due date for furnishing of return in FORM GSTR-3B and details of outward supplies in FORM GSTR-1 for the period October, 2019 - March, 2020. 

6. Issuance of circulars for uniformity in the application of the law across all jurisdictions: 

• Procedure to claim a refund in FORM GST RFD-01A subsequent to favorable order in appeal or any other forum; 

• Eligibility to file a refund application in FORM GST RFD-01A for a period and category under which a NIL refund application has already been filed.

• Clarification regarding the supply of Information Technology enabled Services (ITeS services) (in supersession of Circular No. 107/26/2019-GST dated 18 July 2019) being made on own account or as intermediary. 

7. Rescinding of Circular No.105/24/2019-GST dated 28.06.2019, ab-initio, which was issued in respect of post-sales discount. 

8. Suitable amendments in the CGST Act, UTGST Act, and the corresponding SGST Acts in view of the creation of UTs of Jammu & Kashmir and Ladakh. 

9. Integrated refund system with disbursal by the single authority to be introduced from 24th September 2019. 

10. In principle decision to link Aadhar with the registration of taxpayers under GST and examine the possibility of making Aadhar mandatory for claiming refunds. 

11. In order to tackle the menace of fake invoices and fraudulent refunds, in principle decision to prescribe reasonable restrictions on the passing of credit by risky taxpayers including risky new taxpayers.  

Note: The recommendations of the GST Council meeting have been presented above in this release in a simple language only for giving the information to our stakeholders. The same would be given effect through relevant Circulars/Notifications which alone shall have the force of law.