Key changes in 55th GST Council Meeting

Pre-deposits for filing appeals involving penalty

The pre-deposit amounts for filing appeals under Section 107(6) and Section 112(8) of the CGST Act in cases involving only demand of penalty without involving the demand of tax are proposed to be reduced to 10% of the penalty amount.

Temporary Identification Number (TIN)

Persons who are not required to obtain registration under CGST Act but are liable to make any payment, can be granted TIN by tax officers in terms of Rule 87(4) of the CGST Rules. However, generation of TIN requires an amendment to the registration related provision and the relevant form.

Amendment in provisions pertaining to Input Services Distributor (ISD) mechanism

Provisions pertaining to the ISD mechanism are proposed to be amended to include inter-State transactions that are subjected to reverse charge, under the ISD framework. These changes will be effective from 01 April 2025.

ITC reversal by electronic commerce operators

The GST Council has recommended that electronic commerce operators (ECOs) are not required to proportionally reverse ITC under Section 17(1) or Section 17(2) of the CGST Act, for supplies on which they are obligated to pay tax under Section 9(5) of the CGST Act.

ITC on supply of goods ex-works

The GST Council recommended clarifying that in an ex-works contract, where goods are handed over by the supplier to the recipient or transporter at the supplier's business premises, and ownership of the goods transfers to the recipient at that point, the goods are deemed to be "received" by the recipient under Section 16(2)(b) of the CGST Act. Accordingly, the recipient may claim IT on such goods, subject to the satisfaction of conditions specified in Sections 16 and 17 of the CGST Act.

Applicability of late fee on delayed filing of Form GSTR-9C for the financial years (FYs) 2017-18 to 2022-23

The GST Council recommended issuing a circular to clarify that late fees under Section 47(2) of the CGST Act, are applicable for delay in filing the complete annual return under Section 44 of the CGST Act. This includes both Form GSTR-9 (Annual Return) and Form GSTR-9C (Reconciliation Statement), where applicable.

For annual returns for the FYs 2017-18 to 2022-23, the GST Council also recommended issuing a notification under Section 128 of the CGST Act, to waive the late fee amount for delays in filing Form GSTR-9C. The waiver applies to the portion of the late fee exceeding the amount payable up to the filing date of Form GSTR-9 for the respective years, provided Form GSTR-9C is filed by 31 March 2025.

Capturing correct details for B2C supplies

The GST Council has recommended issuance of a circular to clarify that for the supply of "Online Services," such as online money gaming and OIDAR services to unregistered recipients. The supplier is required to mandatorily record the name of the recipient's State on the tax invoice. The recorded State name will be deemed to be the "address on record" of the recipient for the purposes of Section 12(2)(b) of the IGST Act, read with the proviso to Rule 46(f) of the CGST Rules.