The GST Council, in its meeting, recommended the following Law & Procedure-related changes:
- Relaxation in filing of Annual Returns (GSTR-9 and GSTR-9A) for MSMEs for FY 2017-18 and FY 2018-19 as under:
- Waiver of filing FORM GSTR-9A for Composition Taxpayers for the said tax periods;
- Filing of FORM GSTR-9 for taxpayers with aggregate turnover up to Rs. 2 crores made optional;
- To constitute Committee of Officers for simplification of Annual Return and reconciliation statement.
- Extension of filing of appeals against orders of Appellate Authority before the GST Appellate Tribunal as the Appellate Tribunals are yet not functional.
- Imposition of restrictions on availment of ITC by the recipient in case where outward supplies are not furnished by him.
- Proposed to introduce new system of return filing w.e.f. April 2020 which was earlier proposed from October 2019 to give opportunity to taxpayers to adopt new system, accordingly due dates for GSTR-3B & GSTR-1 are specified from October to March 2020
- Issuance of circulars for uniformity in application of law across all jurisdictions:
- procedure to claim refund in FORM GST RFD-01A subsequent to favorable order in appeal;
- Eligibility to file a refund FORM GST RFD-01A for a period and category under which a NIL refund application has already been filed; and
- Clarification regarding supply of Information Technology enabled Services being made on own account or as intermediary.
- Rescinding of Circular No.105/24/2019-GST dated 28.06.2019, ab-initio, which was issued in respect of clarifications on inclusion of post-sales discounts in value of supply in certain cases.
- Examining the possibility of making Aadhaar mandatory for claiming refunds
- Imposing reasonable restrictions on passing of credit by risky taxpayers to avoid fake invoices & fraudulent refunds
Changes in GST Rate on Services
Rate reduction sector wise:
To reduce the rate of GST on hotel accommodation service as below: –
| Transaction Value per Unit (Rs) per day |
GST Rate w.e.f. 01.10.2019 |
GST Rate till 30.09.2019 |
| Rs 1000 and less |
Nil |
Nil |
| Rs 1001 to Rs 7500 |
12% |
18% |
| Rs 7501 and more |
18% |
28% |
To reduce GST rate on outdoor catering services other than in premises having daily tariff of unit of accommodation of Rs 7501 from present 18% with ITC to 5% without ITC. The rate shall be mandatory for all kinds of catering. Catering in premises with daily tariff of unit of accommodation is Rs 7501 and above shall remain at 18% with ITC.
- Job work service: To reduce rate of GST from 18%to 12% on supply of machine job work such as in engineering industry.
Sectorial Exemptions:
- Warehousing: To exempt prospectively services by way of storage or warehousing of cereals, pulses, fruits, nuts and vegetables etc.
- Transportation: To increase the validity of conditional exemption of GST on export freight by air or sea by one year i.e. till exemption is available till 30.09.2020
- Export promotion: To exempt services provided by an intermediary to a supplier of goods or recipient of goods when both the supplier and recipient are located outside the taxable territory
- Export promotion benefit to Pharma Sector: To issue a notification to provide place of supply of specified R&D Services (for e.g. Integrated discovery and development, Evaluation of the efficacy of new chemical/ biological entities in animal models of disease etc) provided by Indian Pharma companies to Foreign Service recipients as the place of effective use and enjoyment of service i.e. location of the service recipient. Subject to other condition being fulfilled, this clarification would make the Specified R&D Services by Indian Pharma Companies to Foreign Service recipient as “Export of Services”.
- Chip Design Software R&D services: Clarification to be issued for Place of Supply for services provided by Indian Companies to foreign clients by using Sample kits in India would be the Place of Service recipient i.e. place of Foreign Client. Subject to other condition being fulfilled, this clarification would make the Chip Design Software R&D Services by Indian Companies to Foreign Service recipients as “Export of Services”.
Note: It is proposed to issue notifications giving effect to these recommendations of the Council on 1st October, 2019.
Changes in GST Rate on Goods
The council took the following decisions in respect to rates relating to goods:
GST rates reduction:
| S.No. |
Particulars |
Old Rate |
New Rate |
| 1 |
Parts of Slide Fasteners |
18% |
12% |
| 2 |
Marine Fuel |
18% |
5% |
| 3 |
Wet Grinders |
12% |
5% |
| 4 |
Dried Tamarind & plates & cups made up of leaves / flowers / bark |
5% |
0% |
| 5 |
cut and polish semi-precious stones |
3% |
0.25% |
Exemptions from GST/IGST on:-
- imports of specified Defence goods not being manufactured indigenously (up to 2024);
- Supply to FIFA & specified persons for organizing Under-17 Women’s Football World Cup in India;
- Supply to Food and Agriculture Organization (FAO) for specified projects in India.
GST rates have been recommended to be increased from:
| S.No. |
Particulars |
Old Rate |
New Rate |
| 1 |
Goods (covered in chapter 86 of tariff) like railway wagons, coaches, rolling stock |
5% |
12% |
| 2 |
Caffeinated Beverages |
18% |
28%+12% Cess |
A uniform GST rate of 12% on Polypropylene/Polyethylene Woven and Non-Woven Bags and sacks, whether or not laminated, of a kind used for packing of goods (from present rates of 5%/12%/18%)
GST concessional rate of 12% during the period 1.07.2017 to 31.12.2018, on pulley, wheels and other parts (falling under Heading 8483) and used as parts of agricultural machinery
Passenger vehicles of engine capacity 1500 cc for diesel & 1200 cc for petrol with length <= 4000mm which carries up to 9 persons to attract compensation cess of 3% and 1% respectively.
Other miscellaneous Changes:
- Aerated drink manufacturers shall be excluded from composition scheme;
- Restriction on refund of compensation Cess on tobacco products (for inverted duty structure);
- Prescribing modalities for concessions on spare parts imported temporarily by foreign airlines for repair of their aircraft, while in India in terms of the Chicago Convention on Civil Aviation;
- All “mechanical sprayers” falling under HS Code 8424 would attract 12% GST;
- Parts like Solar Evacuation tubes for solar power based devices like solar water heater, solar steam, generation systems, would be eligible to 5% GST rate;
- Imported stores for Navy would be entitled to exemption from IGST.
Note: The rate changes shall be made effective with effect from 1st October 2019.
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Last Updated: 22nd September 2019
This article is contributed by:
Vaibhav Matta
Assistant Director, Taxation
