Some of the key recommendations of the Council vide the 48th GST Council Meeting held virtually on December 17, 2022, are as follows:
|Goods||Old Rate||New Rate||Impact|
|Husk of pulses||5%||Nil||GST rate reduced for an essential cattle feed ingredient on account of long demand of the Industry|
|Ethyl alcohol supplied to refineries for blending with motor spirit (petrol)||18%||5%||Reduce dependence on imported crude and promote blending efforts|
– Incentives paid by Central Government for promotion of RuPay Debit Cards and low value BHIM UPI transactions are not taxable. This clarification will bring relief to the banking industry.
– 22% Compensation Cess is applicable to SUVs [engine capacity > 1500 cc; length > 4000 mm and ground clearance >= 170 mm]. This is applicable to motor vehicles fulfilling all four conditions.
– No Claim Bonus offered by the insurance companies to the insured is an admissible deduction for valuation of insurance services.
– Pursuant to the Delhi High Court judgment in the case of Seema Gupta Vs Union of India [2022 142 taxmann.com 564 (Del)], it has been clarified that no GST is payable where the residential dwelling is rented to a registered person in his/her personal capacity for use as his/her own residence and on his own account and not on account of his business.
– Goods falling in lower rate category of 5% under schedule I of Notification No. 1/2017-CTR imported for petroleum operations will attract lower rate of 5% and the rate of 12% shall be applicable only if the general rate is more than 12%. The clarification appears to be limited to goods imported for petroleum operation. The other issue being faced by the oil & gas industry taxability of support services, provided for the petroleum operations, remains unaddressed.
– Place of supply of services of transportation of goods to a place outside India. It has also been recommended that proviso to sub-section (8) of section 12 of the IGST Act, 2017 may be omitted.
– Treatment of statutory dues in respect of the taxpayers under Insolvency and Bankruptcy Code, 2016.
– Verification of ITC in case of mismatch between FORM GSTR-3B and FORM GSTR-2A during FY 2017-18 and 2018-19.
– Applicability of E-invoicing.
– Amendment in definition of “non-taxable online recipient” and “Online Information and Database Access or Retrieval Services (OIDAR)” would be introduced so as to reduce interpretation issues and litigation on taxation of OIDAR Services.
|It is not in doubt that the above-mentioned clarification would offer certainty on the disputed tax positions. Further, despite being an important item in the Agenda, no decision has been taken on a few important issues such as setting up of GST Tribunal, taxability of online gaming and mechanism to curb tax evasion in pan masala and gutkha business. It is hoped that the next Council Meeting would be held shortly and decision on these critical issues are taken at the earliest.|
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