Tax Alerts cover significant tax news, developments and changes in legislation that affect Indian businesses. They act as technical summaries to keep you on top of the latest tax issues. For more information, please contact your EY advisor. For more information : http://www.ey.com/in/en/services/ey-goods-and-services-tax-gst

1. 6 June 2017
Tax Alerts cover significant
tax news, developments and
changes in legislation that
affect Indian businesses. They
act as technical summaries to
keep you on top of the latest tax
issues. For more information,
please contact your EY advisor.
Executive summary
The GST Council, in its 15th meeting held on 3 June 2017, has approved GST return rules
and formats along with formats for GST practitioners and mismatch.
The Council has also fixed the GST rate on various goods such as gold, textile and biscuits.
Further, it has decided to set up a committee for addressing anti-profiteering issues.
The Central Board of Excise & Customs (CBEC)has released final return rules and formats
approved by the Council. It has also released the rates schedule for goods covered under
various chapters, further amendments to the earlier rates of goods and list of exemptions
for import of goods under IGST.
The Council is scheduled to meet again on 11 June 2017 and is expected to take up
pending matters, including certain representations received on the current schedule of
rates.
According to media reports, transition and other six draft rules are expected to be
released in public domain in the next few days.
EY Tax Alert
CBEC releases final return rules,
GST rate schedule for certain goods
and IGST exemption list as approved
by GST Council

2. Background
• The Goods and Services Tax (GST) Council, in
its meeting on 18-19 May 2017, had approved
seven GST rules, GST rates for goods and
services, list of exempt services and those
attracting tax under reverse charge.
• The Council, during its meeting held on 3 June
2017, has approved GST return rules and
formats along with formats for GST
practitioners and mismatch. The draft
amended return rules was released in the
public domain on 31 March 2017.
• The Council has also fixed the GST rate on
various goods including gold, textile and
biscuits. Further, it has also decided to set up
a committee for addressing anti-profiteering
issues.
• The rules and formats are released by CBEC on
their website. CBEC has also released rate
schedule for goods covered under various
chapters, further amendments to earlier rate
of goods and list of exemption for import of
goods under IGST1
.
Return Rules
The following are the significant changes in the final
return rules:
Form and manner of furnishing details of
inward supplies
• Part C of GSTR-2A will now reflect credit of both
tax deducted and tax collected at source.
Earlier, credit of TDS was covered under Part C
and credit of TCS was covered under Part D of
GSTR-2A.
• Details of invoices furnished by a non-resident
taxable person in his return in FORM GSTR-5
under Rule 5 shall be made available to the
recipient of credit in Part A of FORM GSTR-2.
Form and manner of submission of
quarterly return by the composition
supplier
• A person shall not be eligible to avail input tax
credit on receipt of invoices or debit notes from
the supplier for the period prior to his opting for
composition scheme.
• A registered person opting to withdraw from the
composition scheme needs to furnish the details
relating to the period prior to his opting for
1
Integrated Goods and Services Tax
payment of tax under section 9 in FORM GSTR-4 till
the due date of furnishing the return for the
quarter ending September of the succeeding
financial year or furnishing of annual return,
whichever is earlier.
Form and manner of submission of
return by person providing OIDAR
services
• Every registered person providing OIDAR services
from a place outside India to a non-taxable person
in India shall file a return in FORM GSTR-5A on or
before 20th
day of the succeeding month.
Matching of claim for reduction in the
output tax liability
• Matching of taxable value is removed from list of
details to be matched for reduction in output tax
liability.
• The claim of reduction in the output tax liability
shall be considered as matched where the amount
of reduced output tax liability is equal to or more
than the claim of reduced ITC.
Earlier, the claim was to be considered as matched
when the amount of reduction claimed is equal to
or less than the claim of reduction in ITC.
Matching of details furnished by the e-
commerce operator with the details
furnished by the supplier
• Only the state of place of supply and net taxable
value shall be matched.
Details such as GSTIN of supplier and recipient,
invoice number, invoice date and tax amount which
were earlier prescribed to be matched are now
removed.
Annual Return
• Every e-commerce operator required to collect tax
at source will have to furnish annual statement in
FORM GSTR-9B.
• Turnover limit for requirement of audit is extended
to INR 2 crore from INR 1 crore earlier.
GST Rates for Goods
• In addition to the rate schedule of GST on
goods released on 18 May 2017, Government
has issued rate schedule for certain goods on
3 June 2017. Item-wise rates are broadly
specified as under:

3. Description of Goods Rate
Chapter – 10 - Cereals Goods i.e.
Wheat and meslin, Rye, Barley, Oats,
Maize (Corn), Rice, Grain sorghum,
Buckwheat, Millet and canary seed
and other cereals such as Jawar,
Bajra, Ragi., put up in unit containers
and bearing a registered brand
name.
5%
Chapter – 11 - Flour, Aata, Maida,
Besan etc. put up in unit container
and bearing a registered brand
name.
5%
Chapter – 19 Biscuits – Sweet
biscuits and other biscuits
18%
Chapter – 24 - Biris (Bidi) 28%
Chapter – 36 - Handmade safety
matches
5%
Chapter – 52 - Cotton, Cotton waste,
Cotton sewing thread, Cotton yarn
(other than khadi yarn), Cotton
fabrics (with no refund of ITC
accumulations)
5%
Chapter – 57 - Carpets and other
textile floor coverings, knotted,
Woven, tufted, not tufted or flocked,
mats and mattings including bath
mats
12%
Chapter – 64 - Footwears having a
Retail Sale Price not exceeding INR
500 per pair
5%
Other foot wears 18%
Chapter – 71 - Pearls, Diamonds,
precious stones, synthetic stones,
dust and powder of precious stones,
silver, gold, platinum, articles of
jewellery and parts thereof, articles
of goldsmiths or silversmiths etc.
3%
Rough diamonds 0.25%
Supplies made by Canteen Stores
Department (CSD) to Unit Run
Canteens and on supplies to final
consumers
0%
50% Concession from applicable GST rate on
supplies to CSD
Addendum to GST Rates for
Goods
• Government has issued Addendum to the GST
rates schedule for goods whereby some
products have been reclassified under
different rate category, some products are
omitted or incorporated newly. Amendment
has been intended to omit obvious errors and
also considering industry representations.
• Government has reclassified various types of
goods from rates perspective. Key changes
are as under:
Nature of goods and
Chapter No.
GST Rates
rescheduled
From To
Mixture of two or more
varieties of edible
vegetable oils [1517]
18% 5%
Erasers [4016] 18% 12%
Glass beads [7018] 18% 5%
Photo voltaic cells,
whether or not
assembled in modules
or made up into panels
[8541]
18% 5%
Other sports (including
table-tennis or outdoor
games, swimming
pools and paddling
pools [9506]
28% 12%
• Goods which were not incorporated in the
original schedule have been now incorporated
as under:
Nature of goods and Chapter No. GST rate
Organic chemicals, being
intermediaries [2939, 2940, 2941
and 2942]
18%
Organic manure put up in unit
containers and bearing a brand name
[3101]
5%
Machinery for cleaning or drying
bottles or other containers,
machinery for filling, closing, sealing
or labelling bottles, cans, boxes,
bags or other containers; machinery
for capsuling bottles, jars, tubes and
similar containers; other packing or
wrapping machinery (including heat-
shrink wrapping machinery);
machinery for aerating beverages
[8422 20 00, 8422 30 00, 8422 40,
8522 90]
18%
LED Lamps [8539] 12%
Other Key Amendments
• Artificial waxes and prepared waxes covered
under 28% rate have been omitted as the same
have already been covered under 18% rate.
• Typographical errors have also been
corrected. E.g. in Chapter 38, in 18% rate
column, for entry no. 18, the entry containing
“3823 Industrial monobolic fatty acids” has
been substituted by “3823 Industrial
monocarboxylic fatty acids”.
• “Other aseptic packaging paper” covered
under Chapter 4811 and classified under18%
rate column has been reworded as “Other than

4. aseptic packaging paper” as “Aseptic
packaging paper [4811]” has already been
covered under 12% rate category.
• Entry under Chapter 6903 for other refractory
ceramic goods covered under 28% rate
category has been omitted as the same entry
has already been covered under 18% rate
category.
IGST Exemptions/
Concessions under GST
• Various exemptions and concessions provided under
Customs for import of goods by privileged persons,
organizations, authorities and foreigners have been
extended to IGST law. It inter-alia includes:
• Goods imported by Diplomatic missions in India
and their families, their personal and household
effects, etc. are exempted from import duties.
• Goods imported for display or use at specified
event (fair, exhibition) subject to re-export within
6 months from date of clearance of imported
goods.
• Goods which were manufactured in India and
where exported for carrying out further
manufacturing process, when re-imported in
India after completion of said processes, custom
duty is leviable on the value of the fair cost of the
said processes carried out abroad (whether such
cost is actually incurred or not), insurance and
freight, both ways and not on the value of goods
exported.
• Exemption for goods in transit to and from Nepal or
Bhutan
• Goods imported from foreign country for
purpose of exports to Bhutan or Nepal
• Goods imported from Bhutan or Nepal into India
for exports to foreign country
• Exemption is provided for few items in line with
Customs Exemption Notification No. 12/2012-
Customs. Few of them are as follows:
• Television equipment, cameras and other
equipment for taking films, imported by a foreign
film unit or television team
• Goods imported for being tested in specified test
centers.
• Goods imported through postal parcels, packets
and letters, the CIF value of which is not more
than one thousand rupees per consignment.
• Exemption is provided on imports by a SEZ unit or
SEZ developer for authorized operations.
• Exemption to bonafide passenger baggage and
transfer of residence.
• Goods imported by a passenger or a member of
a crew in his baggage. It does not apply to motor
vehicles, alcoholic beverages, tobacco and
tobacco products.
• Goods imported by a person of India origin on his
return to India.
• One laptop imported by a passenger of 18 years
or above.
Comments
a. The effort put in by the Council to
clearthe pendingGSTrates on
certain goods andto finalize
balance rules andformats, mainly
involving return andtransition, is
creditable consideringthe targeted
implementation of GST.
b. The increase in the turnoverlimit
foraudit requirement to INR2 crore
is in line with income tax provisions
and may benefit small and medium
enterprises.
c. Early release of the final transition
rules in the public domain
addressing various concerns of
trade and industry should be
crucial.

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