52nd GST Council meeting took place on 7th October 2023 at Sushma Swaraj Bhawan, New Delhi. The meeting was presided by Smt Nirmala Sitharaman, the Union FM and attended by MoS (F) Shri Pankaj Chaudhary, the Revenue Secretary, Chairman CBIC, Member CM, Member GST, Member TP and senior officers from Union Government and States.
The 52nd GST Council meeting is being held about two months after the 51st GST Council meeting on 2nd August 2023. Read further to get the latest updates on the GST Council meeting.
Highlights from the 52nd GST Council meeting
The GST Council concluded it's discussion and briefed the press at 3:30 P.M on 7th October 2023 for the outcomes, as follows-
Top Recommendations by the GST Council
- A GST Amnesty Scheme to extend the appeal filing time till 31.01.2024 against the three-month time limit under the law for all the orders passed till March 2023 with 12.5% pre-deposit of tax, out of which 2.5% is paid in cash. A GST Amnesty Scheme to extend the appeal filing time till 31.01.2024 against the three-month time limit under the law for all the orders passed till March 2023 with 12.5% pre-deposit of tax, out of which 2.5% is paid in cash. A GST Amnesty Scheme to extend the appeal filing time till 31.01.2024 against the three-month time limit under the law for all the orders passed till March 2023 with 12.5% pre-deposit of tax, out of which 2.5% is paid in cash. A GST Amnesty Scheme to extend the appeal filing time till 31.01.2024 against the three-month time limit under the law for all the orders passed till March 2023 with 12.5% pre-deposit of tax, out of which 2.5% is paid in cash.
- CGST Section 159 to be amended: Automatic restoration of provisionally attached property after completion of one year.
- Clarified that no GST would apply on personal guarantee offered by directors to the bank against the credit limits/loans sanctioned to the company.
- Defined the taxable value for corporate guarantee provided between related persons (a holding company to its subsidiary) as 1% of the amount of such guarantee offered, or the actual consideration, whichever is higher.
- The GST Council has ceded the right to tax the Extra Neutral Alcohol (ENA) used in liquor for human consumption to states.
Rules defined for Composition of GSTAT
- Minimum age limit is 50 years while the maximum is 70 years for the President and 67 years for members of GSTAT.
- Advocates with 10 years experience can only be appointed as judicial members.
Clarifications given on Key Issues
- The District Mineral Foundation Trust (DMFT) in mineral mining are eligible for the same GST exemptions as other government authorities.
- Job work services to process barley into malt attract 5% GST and not 18%, being "job work in relation to food and food products”.
- 18 states have passed the amendments to charge 28% GST on gaming companies w.e.f 1.10.2023 along with the GST Rules while 13 are yet to notify changes.
GST Rate changes on goods
- Millet flour in powder form is blended with any other atta with 70% composition of millets under (HS1901) to attract 0% GST if sold loose and 5% GST if sold pre-packaged and labelled.
- GST on molasses has been reduced from 28% to 5%.
- GST on ENA for industrial use to attract 18% by a separate tariff HS code.
- 5% GST on imitation zari thread or yarn made out of metallised polyester film or plastic film (HS 5605) without refund due to inversion.
GST Rate changes on services
- GST exempted on water supply services, public health, etc., supplied to the government authorities, including composite services with up to 25% of the above services.
- A conditional IGST exemption is given to a foreign flag and foreign going vessel when it converts to coastal run subject to its reconversion in six months.
- GST exempted on pure and composite services to Central/State/UT governments and local authorities for Panchayat/Municipality functions.
- Bus operator companies selling through e-commerce are excluded from CGST Section 9(5) to allow them to pay GST and avail ITC claims.
- All services provided by Indian Railways will be subjected to forward charge, with ITC available for discharging liabilities.
Expectations from the 52nd GST Council meeting
Establishing GST Appellate Tribunals
The GST Council has already approved the setting up of the GST Appellate Tribunals (GSTATs) in various states and UTs through the 50th GST Council meeting in July 2023. GSTAT is the forum of the second appeal under the GST laws and the first common dispute resolution forum between the Centre and States.
All appeals against the orders in the first appeals issued by the Appellate Authorities under the CGST and SGST Laws lie before the GST Appellate Tribunal, common under both the Central and State GST Acts.
Being a common forum, the GST Appellate Tribunal will ensure uniformity in the dispute redressal under GST and, therefore, in the implementation of GST across India. Furthermore, the delay in setting up these tribunals had burdened the Writ Courts, which had to take up more fact-based cases which could have been dealt with by the GSTAT.
The GST Council recommended the rules around the appointment and conditions of the President and members of the tribunals. In September 2023, the Finance Ministry made further progress by notifying the constitution of 31 tribunals nationwide. The first set of these tribunals will begin to operate sometime between November 2023 and January 2024.
Three tribunal benches are being set up in Uttar Pradesh, the highest number allocated for a state. Karnataka and Rajasthan have two benches each. Maharashtra and Goa have three benches together for hearing appeals, whereas Tamil Nadu and Puducherry have two benches together. Each of the northeastern states has one tribunal bench.
In the 52nd GST Council meeting, the GST Council will deliberate on all technical aspects around setting up the GST Appellate Tribunals.
Implementation of a 28% GST levy on Online Gaming
The GST Council had fixed 28% GST for online gaming transactions on face value in the 50th and 51st GST Council meetings. There were certain rules defined for its implementation as well. Necessary amendments were needed in the Central GST and state GST laws. In this meeting, the GST Council may review if all the states have passed necessary law amendments by 1st October 2023.
Other expectations
The GST Council is also expected to go through the progress made by different states/UTs in amending the state GST laws for various recommendations passed in the past by the Council, such as removing provision on the mandatory GST registration for e-commerce sellers and e-way bill rules for the intrastate movement of gold and precious stones e-way bill for gold to mention a few.
Reports also suggest that the GST Council may decide on reducing GST rates for all the millet products to the nil category. Further, the GST rate on health insurance for certain categories, such as senior citizens, may be reduced from 18% to 12%. The GST Council Fitment Committee rejected the proposal to reduce the GST rate on Electric Vehicles (EV) batteries from 18% to 5%, most likely bringing up this matter before the GST Council in this upcoming meeting.
Furthermore, the GST Council may also pick up the taxability of personal guarantees given by directors to the bank against the credit limits or loans sanctioned to the company.
Stay tuned in this space to learn more about the highlights, latest updates and news on the 52nd GST Council meeting.